THE INCORPORATED OWNERS OF HUNG WAI BUILDING v. SUNNY ELEGANT LTD AND OTHERS

CAMP 164/2024, [2025] HKCA 336

On Appeal from [2024] HKLdT 43

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 164 OF 2024

(ON AN INTENDED APPEAL FROM LDBM NO 76 OF 2019)

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D E C I S I O N

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Hon Au JA (giving the Decision of the Court):

1.  This is the 1^st to 4^th Respondents’ application by way of Summons dated 8 October 2024 (“the Interim Stay Summons”) for an interim stay of execution of the judgment (“the Judgment”) of Deputy District Judge S H Lee (“the Judge”) dated 6 June 2024 pending their application for leave to appeal against part of the Judgment. The Judge set out his detailed reasons for the Judgment in his written judgment of the same date (“the Reasoned Judgment”)[1].

2.  Briefly, the applicant is the Incorporated Owners (“the IO”) of Hung Wai Building (“the Building”) in Mongkok.

3.  As to the 1^st to 4^th Respondents (collectively “Rs”, and individually “R1” to “R4”):

(1)  R1 is the registered owner of a shop (“the Shop”) on the G/F and various offices (“the Offices”) on 1/F of the Building.

(2)  R2 was and is the principal tenant of the Shop and Offices.

(3)  R3 and R4 are the subtenants from R2 and occupier of the Shop and Offices, operating a Chinese restaurant and a café thereat.

4.  Relevant for the present purposes, by way of the proceedings below issued in the Lands Tribunal, the IO claims that the relevant external wall (“the External Wall”) and various areas on the G/F and 1/F of the Building (“Disputed Areas”) are common parts. However, they have been occupied and used together with the Shop and Offices by Rs for the operation of the restaurant and café without the permission or consent of the IO. On the other hand, Rs contend that these are not common parts of the Building, and R1 as the owner of the Shop and Offices has exclusive right to occupy and enjoy the External Wall and the Disputed Areas[2].

5.  The IO by way of the action below asks in effect for (a) determination that the External Wall and the Disputed Areas are common parts of the Building, (b) orders that Rs do demolish and remove all existing structures and objects erected on the External Wall and the Disputed Areas, and (c) injunctions to restrain them from using and occupying these spaces.

6.  After trial, the Judge gave judgment in favour of the IO. He found both the External Wall and the Disputed Areas common parts of the Building[3]. By way of the Judgment, he ordered, among others, Rs to within three months (a) demolish and remove all existing structures and objects erected and placed at the Disputed Areas, and (b) demolish and remove the air-conditioner condensers and chimneys erected on the External Wall, and (c) that Rs be restrained from using and occupying the Disputed Areas and from erecting any air conditioning units and/or chimneys on the External Wall.

7.  The Judge later by way of his decision dated 13 August 2024 also dismissed Rs’ applications for leave to appeal and stay of execution of the Judgment pending appeal[4].

8.  On 26 August 2024, Rs by way of Summons (“the CA Summons”) re-applied to this court for leave to appeal and stay of execution of the entire Judgment. It is however important to note that, under the draft Notice of Appeal and the Rs’ Written Statement filed in support of the CA Summons, Rs seek leave to appeal only against the part of the Judgment relating to the Disputed Areas, but not the External Wall.

9.  On 24 September 2024, the IO applied to the Lands Tribunal by summons to enforce the injunctions granted under the Judgment requiring Rs to remove the structures erected on the Disputed Areas and the air conditioning units and chimneys on the External Wall (“the LT Enforcement Summons”).

10.  On 8 October 2024, Rs took out the Interim Stay Summons seeking an interim stay of the entire Judgment pending the determination of their applications for leave to appeal and stay of execution under the CA Summons.

11.  The Judge heard the LT Enforcement Summons on 15 October 2024, and allowed it in respect of the enforcement of the order requiring the removal of the air-conditioning units and chimneys from the External Wall. In respect of the Disputed Areas, the Judge ordered that the matter be adjourned sine die with liberty to restore after determination by this court of Rs’ application for stay of execution.

12.  Given the Judge’s above ruling, the IO for the present purpose is no longer opposing the interim stay of execution of the Judgment in relation to the Disputed Area. However, it still opposes the interim stay of the execution of the Judgment in relation to the External Wall for the simple reason that Rs have not sought leave to appeal against that part of the Judgment.

13.  In this respect, Mr Tyrone Tang for Rs however submits that the exercise of discretion must be in favour of granting the interim stay. Counsel’s substantive submissions made in support are essentially two folds.

14.  First, notwithstanding the segregation of issues relating to the intended appeal, it does not distract from the fact that the Shop and Offices together with Disputed Areas and the External Wall have been and are still being used for carrying on the restaurant and café businesses by Rs. The air conditioning units and chimneys erected on the External Wall are necessary and essential for the operation of the businesses. Given that Rs have sought leave to appeal against the Judgment in relation to the Disputed Areas (where the restaurant business are operated), and that the IO has not opposed to an interim stay of execution of that part of the Judgment, to maintain the status quo, there should also be an interim stay of execution of the Judgment in respect of the External Wall. If otherwise, says Mr Tang, any subsequent appeal (if leave is granted) against the Judgment regarding the Disputed Areas would be rendered nugatory as the businesses could not be carried on without the air‑conditioning units and the chimneys[5].

15.  Second, Rs had on 2 October 2024 (ie, after the Judgment and after the LT Enforcement Summons) made a written request to the IO asking for its consent to maintain the air-conditioning units and chimneys on the External Wall for them to carry on with the restaurant businesses[6]. However, the IO has not replied to it. In this respect, Mr Tang submits that the IO (a) cannot withhold consent unreasonably or impose unreasonable conditions on any such consent[7], and (b) could also approve the use of common parts retrospectively under section 34I(1)(a) of the Building Management Ordinance. In the circumstances, the exercise of discretion must also tip in favour of granting the interim stay to protect the status quo[8].

16.  There is nothing in Rs’ contentions.

17.  In relation to the first contention, given that Rs have not sought leave to appeal the part of the Judgment relating to the External Wall, Ms Becky Wong for the IO is plainly correct in her submission that there is simply no basis at all to stay the execution of that part of the Judgment. Mr Tang’s submission that, without the stay of execution of this part of the Judgment, the intended appeal against the part of the Judgment in relation to the Disputed Areas would somehow become nugatory is premised on a false basis. As Rs have only sought to appeal the Judgment in relation to the Disputed Areas, purely for the sake of argument, even if they are eventually successful in that intended appeal, they still would not have any right to use and occupy the External Wall with the erection of the air conditioning units and chimneys, and must still remove them given the Judgment in relation to the External Wall. In the premises, they could not be in a better position now (by way of an interim stay) than what they could have been even if they are successful in the intended appeal.

18.  In relation to the second contention, it is plainly also a red‑herring. The fact is that before the Judgment, Rs had never requested and the IO had never granted or unreasonably withheld any consent to Rs to erect and continue to erect the air conditioning units and chimneys on the External Wall. The mere fact that Rs have after the Judgment requested consent from the IO to do so is neither here nor there. This has nothing to do with the validity and propriety of the Judgment and the order mandating Rs to remove the air conditioning units and chimney from the External Wall. As pointed out by Ms Wong, Rs have been and are still wrongfully occupying and using the External Wall exclusively despite the Judgment and the order. If the IO subsequently grants its consent to Rs, they could reinstall the air conditioning units and the chimney. If IO refuses to do so, and Rs say it is unreasonable for it to do so, Rs could bring an action against the IO asking for relief. In the premises, the court’s exercise of discretion at this stage must be in favour of enforcing a valid court order which is not subject to any pending appeal.

19.  For these reasons, in relation to the Interim Stay Summons, we make the following orders:

(1)  By consent, there be an interim stay of the execution of the part of the Judgment in relation to the Disputed Areas pending determination of the CA Summons.

(2)  The application for an interim stay of the execution of the part of the Judgment relating to the External Wall be refused.

20.  In relation to costs, given that Rs still need to take out the Interim Stay Summons to obtain the stay of execution of the part of the Judgment relating to the Disputed Areas (albeit now by consent), and most of the written submissions rendered by the parties relate to the application relating to the Judgment concerning the External Wall (which the IO has successfully objected to), we think a fair and just costs order in these circumstances is that the IO should have two-thirds of the costs of the Interim Stay Summons, to be taxed if not agreed, and we so order (on a nisi basis). Unless any of the parties applies to vary it, this order shall become absolute 14 days from today.