INCORPORATED OWNERS OF NO. 27A CHATHAM ROAD, KOWLOON v. MR LEE OR UNLAWFUL OCCUPIER (LEE KAI KONG, LO HUNG CHEONG)

[English Translation – 英譯本]

CACV 2238/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 2238 OF 2001

(ON APPEAL FROM LDBM NO. 481 OF 2000)

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JUDGMENT

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Hon Cheung JA (delivering the judgment of the Court):

Facts

1. No. 27A Chatham Road is a multi-storey building (hereinafter “the Building”). The Applicants are the Incorporated Owners of the Building. The Building comprises 15 floors, with the top floor being the 14^th floor, and above it the rooftop. On the ground that the Respondents were illegally occupying the rooftop, the Applicants applied to the Lands Tribunal for the following orders:

(1)   an injunction compelling the Respondents to demolish the unauthorized structure that they had erected on the rooftop and move away from that location and to stop dumping litter on the staircase, and prohibiting them from stealing the public utilities of electricity and drinking water;

(2)   an order requiring the Respondents to pay compensation for the loss and damage arising from their unlawful trespass;

(3)   a costs order; and

(4)   an order as to other damages.

2. On 12 June 2001, Presiding Officer Chow of the Lands Tribunal dismissed the Applicants’ application. On 31 July 2001, after a review hearing, Presiding Officer Chow upheld the ruling. The Applicants now appeal against the ruling.

Amendment of the Respondents’ names

3. In the Notice of Application submitted by the Applicants to the Lands Tribunal, the Respondent was named as “Mr Lee or unlawful occupier”. Subsequently, two persons, namely Lee Kai Kong and Lo Hung Cheong, filed a Notice of Opposition. The Written Ruling of Presiding Officer Chow indicates that, upon his return to Hong Kong from Taiwan in January 1990, Mr Lee Kai Kong of the Respondent began to occupy the rooftop of the Building with the assistance of one Mr Chan Ming Fai (a director of one Ying King Trading Co Ltd) of the 14^th Floor of the Building, and also erected a small house on the rooftop as residence. Mr Lee did these acts without the approval of any of the owners of the Building, and he was not the owner of the rooftop, and hence he was an unlawful occupier of the rooftop.

4. The Presiding Officer said that he would not amend the Respondent’s name as no application had been made on behalf of the Applicants for such amendment. Rule 11 of the Lands Tribunal Rules provides that, at any stage of proceedings and either on or without the application of a party, the Tribunal may add or substitute the name of any person as a party or strike out the name of any party. Mr Chan, Counsel for the Applicants, submitted that the Applicants did, at the review hearing, request the Presiding Officer to amend the Respondent’s name. In our judgment, as Mr Lee Kai Kong and Mr Lo Hung Cheong had both admitted that they were the occupiers of the rooftop, the Presiding Officer should have considered amending the Respondent’s name even in the absence of an application by the Applicants for amendment of the Notice of Application, so as to ensure that both of the occupiers would be bound by the Presiding Officer’s ruling.

5. The Applicants now apply to amend the Respondent’s name, and we allow the application and amend the Respondent’s name to “Lee Kai Kong and Lo Hung Cheong”.

Common parts

6. The Building falls within the purview of the Building Management Ordinance (hereinafter “the Ordinance”). Section 16 of the Ordinance provides that, when the owners of a building have been incorporated under section 8, the rights, powers, privileges and duties of the owners in relation to the common parts of the building shall be exercised and performed by the owners incorporation to the exclusion of the owners.

7. The Applicants submitted that the rooftop of the Building is a common part. Schedule 1 to the Ordinance defines “common parts” to include the roof, i.e. the rooftop. The first issue before us is whether the rooftop of the Building is a common part. Under section 2 (the interpretation section) of the Ordinance, “common parts” means:

(a)     the whole of a building, except such parts as have been specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner; and

(b)     unless so specified or designated, those parts specified in Schedule 1.

On this definition, a part of a building is a common part if it has not been designated as being for the exclusive use of a particular owner. This includes the rooftop of the building.

Registered owner

8. The Applicants are not the registered owners of the rooftop of the Building. The records of the Land Registry show that the owners of, and their respective shares in, the rooftop were:

Name of owner	Share
Kwan Kai Ming	Tenant in common 3/6
Chui Yu Chuen	Tenant in common 1/6
Tseng Cheng	Tenant in common 1/6
Tseng Pei	Tenant in common 1/6

The abovenamed persons became registered owners of the rooftop on 15 August 1957.

9. Clause 1 of and Schedule 1 to the Deed of Mutual Covenant of the Building (hereinafter “the DMC”) provide that the abovenamed 4 persons have the right to the exclusive use, occupation and enjoyment of the 4^th Floor, 14^th Floor and Ground Floor (Rear Portion) of the Building (hereinafter “the exclusive right”). Although the ownership of the rooftop by the abovenamed 4 persons has been registered in the Land Registry, Schedule 1 to the DMC does not set out the exclusive right of those persons over the rooftop. Schedule 1 also shows that, save for the abovementioned three floors, each floor of the Building is owned by an individual owner. Schedule 2 to the DMC specifies the shares allocated to the owners of the Building: the owners of 12 floors are each allocated 1/15 shares, another owner is allocated 2/45 shares, and the abovenamed 4 persons are allocated 7/45 shares.

10. As the rooftop is not included in Schedule 1 to the DMC which details the exclusive right over individual floors, the title allocated to the abovenamed 4 persons under Schedule 2 does not extend to the rooftop. In other words, the rooftop has not been allocated any share.

Jumbo King Ltd.

11. In Jumbo King Ltd. v. Faithful Property Ltd. and others (1999) 2 HKCFAR 279, the Court of Final Appeal pointed out that:

(1)   The co-owners of land have the right of possession in common to every part of the land;

(2)   In relation to a multi-storey building, there cannot be a proprietary right to the exclusive possession of part of the building except as an incident of common ownership in the building.

12. In other words, the proprietary right of an owner in a multi-storey building is the right to an undivided share in the building. The above case also pointed out that, where an owner of an undivided share in a multi-storey building also owns parts of the building to which no share has been allocated, the owner is entitled to the exclusive possession of those parts.

13. On the other side of the coin, where a person does not own any undivided share in a building, he is not entitled to the exclusive possession of those parts of the building to which no share has been allocated. This principle has been applied by the Court of First Instance in a number of cases, such as: Modern Sino Ltd. v. Art Fair Co. Ltd. [1999] 3 HKLRD 847, Incorporated Owners of Cheong Wang and Cheong Wai Mansion v. The Government of the HKSAR [2001] 1 HKLRD 483, and Incorporated Owners of Million Fortune Industrial Centre v. Jikan Development Ltd. [2001] 1 HKLRD 463.

The rooftop is a common part

14. The rooftop of the Building has not been allocated any undivided share. Nevertheless, on the authority of Jumbo King, as the 4 owners of the rooftop owned undivided shares to the Ground Floor, 4^th Floor and 14^th Floor of the Building, they enjoyed the right to the exclusive possession of the rooftop when they registered as owners of the rooftop in 1957.

15. The above 4 owners sold the 4^th Floor and the 14^th Floor in 1957 and 1960 respectively. They sold the remaining units on the Ground Floor in 2000. One of them had passed away by then, and the relevant shares were sold by the administrator of the deceased’s estate. Upon sale of the Ground Floor units, the 4 owners no longer owned any undivided share in the Building and, accordingly, no longer had the right to the exclusive possession of the rooftop. It follows that the rooftop had become a common part of the Building latest by 2000.

The Ordinance

16. As the rooftop is a common part, the Applicants are entitled to exercise the rights in relation to the common part in accordance with section 16 of the Ordinance, which provides as follows:

Rights etc. of owners to be exercised etc. by corporation

When the owners of a building have been incorporated under section 8, the rights, powers, privileges and duties of the owners in relation to the common parts of the building shall be exercised and performed by, and the liabilities of the owners in relation to the common parts of the building shall, subject to the provisions of this Ordinance, be enforceable against, the corporation to the exclusion of the owners, and accordingly —

(a)     any notice, order or other document which relates to any of the common parts of the building may be served upon the corporation at its registered office; and

(b)     any proceedings in the tribunal in respect of any of the common parts of the building may be brought and pursued by or against the corporation.

17. Section 34I of the Ordinance prohibits any person from converting any part of the common parts of a building to his own use. The full text of that section is set out below:

(1)        No person may —

(a)     convert any part of the common parts of a building to his own use unless such conversion is approved by a resolution of the owners’ committee (if any);

(b)     use or permit to be used the common parts of a building in such a manner as —

(i)      unreasonably to interfere with the use and enjoyment of those parts by any owner or occupier of the building; or

(ii)     to cause a nuisance or hazard to any person lawfully in the building.

Section 34I

18. Although Presiding Officer Chow accepted that the rooftop is a common part of the Building, he refused to grant any relief to the Applicants on the ground that the term “person” in section 34I referred to a person bound by the DMC; the Respondents merely occupied the rooftop unlawfully and, not being owners of the Building, were not bound by the DMC, and therefore section 34I did not apply to them.

19. With respect, we do not agree. The word “person” under section 34I simply refers to any person who occupies the common parts. The Ordinance empowers an owners incorporation to manage the common parts, and this certainly includes granting the incorporation the power to take legal proceedings against any person who occupies the common parts. What the Presiding Officer said means that the incorporation would not be able to take legal action against those persons because they were not bound by the deed of mutual covenant. This would run against the legislative intent of empowering the incorporation to manage the common parts.

20. The Presiding Officer cited section 34I(2) of the Ordinance, which states that:

Any person who contravenes subsection (1) shall be deemed to be in breach of an obligation imposed on him by the deed of mutual covenant in respect of the building.

In fact, this provision does not serve to support the Presiding Officer’s interpretation of section 34I(1). The meaning of this provision cannot be simpler and clearer. Any person who contravenes section 34I(1) shall be deemed to be in breach of the deed of mutual covenant even if that person is initially not bound by it. At the same time, the provisions of section 34I are deemed to be part of the deed of mutual covenant.

21. Section 34I is under Part VIA of the Ordinance. Section 34C of that Part provides that Part VIA only applies to a building in respect of which a deed of mutual covenant is in force. As the DMC of the Building is in force, the Applicants may rely on section 34I. Although the existence of a deed of mutual covenant is a pre-condition to the application of section 34I, this does not mean that the word “person” under that section is to be confined to a person bound by a deed of mutual covenant.

22. Furthermore, the Respondents’ defence was that since 1990 they had, by means of various connections, resided at the rooftop, which meant they had been residing there for more than 10 years. Whatever form they took in occupying the rooftop, they were bound by the DMC: see Incorporated Owners of Man Hong Apartment v. Kwong Yuk Ching and others [2001] 3 HKC 116. For this reason, even if section 34I were to be interpreted in the way the Presiding Officer Chow did, the Applicants could still rely on that section as their cause of action against the Respondents.

Tort

23. As a matter of fact, apart from section 34I, the Applicants may rely on the common law of tort as their cause of action against the Respondents in claiming back the rooftop that they have occupied. Section 45 of and Schedule 10 to the Ordinance confers upon the Lands Tribunal the jurisdiction to hear and determine proceedings founded on tort.

Public utilities: water and electricity

24. Under Schedule 1 to the Ordinance, common parts include “water tanks, ducts, downpipes, cables”. If the Respondents steal public electricity and water from public electric wires and water pipes, the Applicants must be entitled to restrain them from doing so.

Clause 2 of the DMC

25. Clause 2 of the DMC defines the extent to which the owners of the Building are entitled to enjoy the common parts:

Each of the parties hereto shall have the right in common with the others of the parties hereto and all others having the like right to use for the purpose of access to and egress from the Floor or Floors so allotted to each of them the entrance hall lifts stair-cases and landings in the said building and such of the passages therein as are not included in any of the other floors of the said building and to use the roof of the said building for lawful and usual purposes.

26. In his Ruling of 12 June 2001, the Presiding Officer pointed out that the phrase in the above clause which had been crossed out indicated that the common parts of the Building did not include the rooftop. In our view, although Clause 2 may be interpreted in the aforesaid manner, we conclude upon analysis that a more reasonable interpretation is that the rooftop is part of the common parts. Section 34C(2) of the Ordinance provides that, in the event of any inconsistency between Part VIA of the Ordinance and the terms of a deed of mutual covenant, the former shall prevail. It follows that where there is a conflict between Clause 2 of the DMC and section 34I, section 34I shall prevail.

Orders

27. For the above reasons, we allow the Applicants’ appeal and make the following orders:

1.    That an injunction in the following terms be granted:

(a)   that the Respondents are to demolish the unauthorized structure that they have erected on the rooftop of the Building;

(b)   that the Respondents are to stop dumping litter on the staircase of the Building; and

(c)   that the Respondents be prohibited from stealing or using the public utilities of electricity and drinking water at the Building.

2.    That within 28 days from the date of delivery of this Judgment, the Respondents are to demolish the unauthorized structure on the rooftop, move out of the rooftop and return the rooftop to the Applicants;

3.    That the Respondents are to pay compensation to the Applicants for the loss and damage suffered by the Applicants as a result of the Respondents’ unlawful trespass, and the amount of such compensation is to be assessed by the Lands Tribunal;

4.    An order nisi that the Respondents are to pay the Applicants’ costs of this appeal and costs of the proceedings at the Lands Tribunal.