SUN WEN HSIUNG AND OTHERS v. THE INCORPORATED OWNERS OF GALLANT GARDEN MANSION

DCCJ 1141/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1141 OF 2006

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DECISION

INTRODUCTION

1.  This is an action by 3 owners in the residential property in question against the incorporated owners in connection with an unauthorised structure at the car park.  Defence has been filed.  The Plaintiffs applied for summary judgment.

BACKGROUND

2.  The property in question, namely, Gallant Garden Mansion, is a multi-storey residential building situated at Ho Man Tin, Kowloon (“the Building”).  The Building consists of a car park on the basement and the ground level as well as 12 storeys of residential units.

3.  The car park is divided into various parking spaces.  4 of them are affected in this matter, namely, G6, G7, G8 and G9 which are situated side by side on the ground level (where appropriate, collectively referred to as “the Car Parking Spaces”).  The ownership of the Car Parking Spaces at the commencement of this action is as follows:

(1)	G6:	Tsang Chiu King Katherine (“Tsang”) (since 1998)
(2)	G7:	the 3rd Plaintiff (since 1989)
(3)	G8:	the 2nd Plaintiff (since 1980)
(4)	G9:	the 1st Plaintiff (since 1989)

4.  The Car Parking Spaces are enclosed on three sides by walls, with one wall along one end of the Car Parking Spaces and the other two walls abutting one side of G6 and one side of G9 respectively.  That means cars have to be parked from the only open side into the respective parking spaces.

5.  The delineation of respective parking spaces was not specified in the original ground floor plan or the relevant deed of mutual covenants.

6.  At least by Mid-1980, a concrete chamber of about 8 feet wide x 3 feet deep x 10 feet high was built next to the wall abutting G9 and near the open side of G9.  The chamber then contained a water pump.  On top of the chamber then were 2 water tanks with connecting water pipes.

7.  As a result, the width of G9 had to be enlarged at the expense of G6 to G8.  G9 became wider than the other 3 carports by several inches.  The resultant delineation of the respective parking spaces was marked by white paint on the ground.  No complaint has arisen in connection with such delineation of the Car Parking Spaces until late 1999.

8.  In late 1999, Tsang (of G6) complained about the variation in the width of the respective parking spaces and demanded that all be equalised with the effective enlargement of the width of G6, G7 and G8.  At the time, the 3^rd Plaintiff (of G7) was the Chairman of the Defendant.

9.  In January 2000, the owners of the Car Parking Spaces entered into what was labelled as a gentlemen’s agreement whereby, among other things, it was agreed that the equal width of the respective parking spaces would be delineated by the re-tiling of the ground.  They agreed to jointly demand the Defendant to remove the structure.  Pending the actual removal of the structure, the owners would abide by the white delineation lines painted on top of the tiled ground of the Car Parking Spaces as before.  In other words, the status quo was for the time being maintained.

10.  In a general meeting of the Defendant in late 2001, the Defendant by majority resolved against the removal of the structure.  In the same year, a second pump and a third water tank were added to the structure.  There is no suggestion that the dimension of the structure has thereby changed.

11.  The Buildings Department (“the Department”) was apparently made aware of the existence of the structure.  In January 2002, the Department notified the Defendant that the structure constituted unauthorised building work and recommended its removal.

12.  Apparently by the end of 2001, relationship between Tsang and the 3^rd Plaintiff deteriorated.  Argument developed between them regarding the current delineation of the Car Parking Spaces or more particularly, G6 and G7.  In late 2002, Tsang commenced action against the 3^rd Plaintiff (DCCJ No.7162/2002) (“Tsang’s Action”).  She accused the 3^rd Plaintiff of including part of the width of G6 into G7 by erecting irremovable metal bars between the 2 parking spaces.  The trial Judge took the view that the structure was the root of the problem and the parties agreed.  The case was stayed on the first day of the trial upon the 3^rd Plaintiff’s undertaking to commence action against the Defendant for the removal of the structure.

13.  Hence the present action was commenced.  The 1^st and the 2^nd Plaintiffs joined the 3^rd Plaintiff.

THE CLAIM

14.  The Plaintiffs have the following major complaint:

(1)	The structure obstructed the common parts, in particular, the use of G9.
(2)	The structure is an unauthorised building work.

15.  These, according to the pleading, constituted breach of the relevant deed of mutual covenants (“the DMC”), the Building Management Ordinance, Cap. 344 (“the BMO”) and the Building Ordinance, Cap. 123 (“the BO”).

16.  The Plaintiffs claim:

(1)	an injunction ordering the Defendant to remove the structure;
(2)	damages and interest (including the 3rd Plaintiff’s claim for the costs of defending Tsang’s Action); and
(3)	declaration of the boundaries of the respective parking spaces.

DEFENCE

17.  The pleaded defence is essentially as follows:

(1)	The Plaintiffs’ claims are time barred.
(2)	The Plaintiffs have consented to or acquiesced in the erection and the maintenance of the structure and are estopped from making any claim.
(3)	The Plaintiffs are guilty of prolonged, inordinate and inexcusable delay in commencing this action.  It is inequitable and unjust to grant the relief to the Plaintiff.

18.  According to the pleading, there is also the issue whether the 3^rd Plaintiff, after his assignment away of his undivided shares in the Building in 2005, retains any locus standi to enforce the rights under the DMC.  For the purpose of this application, Mr. Law for the Defendant did not argue that.  He also did not argue the limitation defence. 

DISCUSSION

19.  Essentially, I am considering if there are issues or questions in dispute which ought to be tried or if there ought for some other reason to be a trial of this action.  If not, judgment should be given.  In doing so, I remind myself that this is not intended to be a mini-trial of the action on affidavits.  See O.14, rr.3-4 of Rule of the District Court; Hong Kong Civil Procedure 2007 at paras. 14/4/9-14/4/10.

The DMC and the BMO

20.  The DMC stipulates the rights of the owners to access and use, among others, driveways and common passages of and in the property (at clause 5).  There is also the covenant not to obstruct the common parts, car parking spaces and driveways (clause 10(h)).

21.  The Defendant has the duty generally under section 18(1)(c) to do all things reasonably necessary for the enforcement of the DMC for the control, management and administration of the Building; and specifically under section 34I(1)(b) not to use or permit to be used the common part of the property in such a manner as unreasonably to interfere with the owners’ use and enjoyment of those parts.

22.  The Defendant does not really dispute these provisions and the Defendant’s duty.

Obstruction

23.  The Plaintiffs say that the structure was 3 feet and 2 inches away from the front of G9.  This obstructed the use of G9.  They rely on the photographs of the Car Parking Spaces to show the obstruction.  Meanwhile there is contrary evidence from one of the owners who moved into the Building in 1975.  She affirmed that the Car Parking Spaces were parked with cars most of the time, often all at the same time overnight.

24.  Obstruction is a matter of fact and degree and, in view of the evidence in hands, very much a matter for trial.

Acquiescence, waiver and estoppel

25.  The Defendant’s case is that the structure was first erected prior to the issuance of the occupation permit in 1971.  Its surveyor opined that the original water pump and tanks were essential for the issuance of the occupation permit in the first place.  The owner (mentioned above) affirmed that the structure already existed when she moved into the Building in 1975.  The Plaintiffs admitted that the structure came to existence before the end of May 1980.

26.  The Plaintiffs became owners of the respective parking spaces when the structure already existed.  Their knowledge of the structure and its effect on the use of the Car Parking Spaces, including the resultant difference in the respective width of the parking spaces, appears to have existed for years.  The 3^rd Plaintiff admitted such knowledge since he moved into the Building in 1984 though he became owner only afterwards.  There is no evidence of complaint until the end of 1999.

27.  There is evidence which may be construed as that of adoption of the current delineation of the respective parking spaces by the 3^rd Plaintiff even since 1999.  It is true that the 3^rd Plaintiff voted for the removal of the structure in the owners’ meeting in November 2001.  Regretting the contrary majority decision, the owners of the Car Parking Spaces jointly sent a letter to the Defendant demanding the removal of the structure.  However, in less than a month, the 3^rd Plaintiff appeared to change his mind.  In December 2001, he wrote on a copy of that letter and addressed the same to the Defendant and Tsang, declaring his withdrawal his endorsement of that joint letter.  This appeared to coincide with the timing of the dispute between Tsang and the 3^rd Plaintiff.

28.  The Statement of Claim filed in Tsang’s Action (paras.12-13 thereof) alleged that the 3^rd Plaintiff for a period of time erected irremovable metal bars there, which effectively locked Tsang’s vehicle within G6 as she was not able to open the vehicle doors.  By such conduct, the 3^rd Plaintiff appeared to be adopting the current delineation of the respective parking spaces.

29.  The factual basis for possible acquiescence, waiver or estoppel in respect of the current delineation of the Car Parking Spaces does exist.

30.  Mr. Kwan for the Plaintiffs submitted that the 3^rd Plaintiff’s stance in Tsang’s Action is not relevant.  In this regard, I may even assume that there would be further explanation and argument by the 3^rd Plaintiff about this.  But this could not be resolved at this stage.  Mr. Kwan for the Plaintiff argued that the Plaintiffs’ rights under the DMC and the BMO could not be waived without their knowledge of them.  As a matter of principle, I agree.  As a matter of fact, I too could not draw a conclusion at this stage in the circumstances mentioned above.

Unauthorised building work

31.  Section 14 of the BO prohibits the commencement and carrying out of any building works without prior approval of the Department.  The structure did not appear in the original building plan.  In early 2002, the Department by letters confirmed that the structure constituted unauthorised building work and recommended its removal.  These are not in dispute.

32.  Under section 18(1)(b) of the BMO, the Defendant is under a duty to carry out such work as may be ordered or required in respect of the common parts by any public officer or body in exercise of the powers conferred by any Ordinance.  The Plaintiffs say that the Defendant’s failure and refusal to remove the structure is in the circumstances breach of its duty under the BMO.

33.  No order under section 24 of the BO has been made in respect of the structure.

34.  According to the materials issued by the Department, the structure apparently does not belong to the categories of new unauthorised works or unauthorised works which pose an obvious hazard to life or property, the removal of which would have been given priority by the Department.  I have not been referred to any authority saying that the Department’s recommendation for the removal of the structure in these circumstances is a ‘requirement’ for the purpose of section 18(1)(b) of the BMO.  This gives rise to the issue of whether the Defendant is in breach.

35.  In any event, there has been no further demand or action from the Department since early 2002, which probably is in line with the Department’s policy.

The authorities

36.  Mr. Law for the Defendant relied on the case of The Incorporated Owners of the Hong Kong House v Senfield Limited, CACV 117/2003 (10 October 2003).  This was an appeal from an O.14 application.  The incorporated owners claimed against the tenant of the lower floors of the building in question for breach of the relevant deed of mutual covenants.  The complaint included unauthorised connection of sprinkler system to the building’s water tank as well as erection of a neon sign on the external wall of the building by the tenant for its restaurant business.  The judge gave unconditional leave to defend in respect of these alleged breaches.  The incorporated owners appealed.

37.  The appeal was dismissed and the following are some of the Chief Judge’s reasons:

(1)	The unauthorised connection of the water tanks to the tenant’s fire sprinkler system took place in 2000.  Yet no action was taken until the incorporated owners’ solicitors wrote to the tenant in 2002.  Whether this could give rise to any defence of waiver, estoppel or laches was a matter which could not easily or comfortably be disposed of at the interlocutory stage.
(2)	The position and conduct of the incorporated owners’ position and the tenant over the relevant period involved matters which ought to be further investigated at trial – an O.14, r.4 kind of case.
(3)	The neon sign was erected where there used to be other signs over the past 30 years.  The neon sign was erected in 1998 but the incorporated owners had taken no action until 2002.
(4)	The correspondence between the incorporated owners and the Department showed that the neon sign was an unauthorised structure.  However the Government had not accorded any priority to its removal.
(5)	In these circumstances and without evidence that the structure caused any danger or that its removal had been insisted on by the Department, it was arguable that the incorporated owners might be estopped from now complaining about the sign or might have waived its right to do so.
(6)	In respect of both the water tank connection and the neon sign, the delay on the part of the incorporated owners as might be found to exist could be relevant to the court’s exercise of discretion to grant an injunction which is an equitable remedy.

38.  Mr. Kwan for the Plaintiff relied on Ng Kee v AG [1977] HKLR 587 at 591 for his argument that delay simpliciter (i.e., without the defendant having altered its position as a result) would not operate as a bar to the equitable relief sought (in that case, a declaration).  He queried the reasoning in the Hong Kong House case for the court of appeal’s failure to consider the case of Ng Kee.

39.  This is in my view an unfair comment.  The court of appeal in Ng Kee held that there should be proof of the defendant’s alteration of position as a result of the plaintiff’s delay before it could be said to be inequitable to grant the equitable remedy.  The court of appeal in Hong Kong House never sought to differ from that.  Rather, at the interlocutory stage, the court should not conclude more than whether there is such an arguable issue.  This explains why the court in Hong Kong House said (at para.14 of the judgment):

“	……the possibility is also to be borne in mind that such delay as may be found to exist in the present case could feature in the court’s discretion whether to grant an injunction, which is of course an equitable remedy.”
	(emphasis added)

40.  The difference between a final determination with all facts established and an O.14 application should also be borne in mind when one refers to the case of Fan Tony v Incorporated Owners of Kung Lok Building [2006] 3 HKC240 (which Mr. Kwan also relied on).  The court there reiterated that injunction should be granted in case of continuing breach of a deed of mutual covenants unless there were good reasons not to.  However that was a hearing of an originating summons in the absence of factual dispute.  The owner there did not acquiesce the incorporated owners’ encroachment into the property, which an owner had the exclusive right to occupy.  The court then found as a matter of fact no good reason to justify the exercise of discretion against the grant of an injunction.  In the present case, I just cannot conclude the same yet at this stage.

41.  The cases of JLW Management Services Ltd v Chater Dragon Development Ltd [1995] 2 HKC 501 and Incorporated Owners of South Seas Centre, Mody Road v Great Treasure Development Ltd [1994] 1 HKC 197 were followed in Fan Tony.  Mr. Kwan for the Plaintiffs also cited them for support.

42.  The South Seas Centre case was an O.29 case where the court granted the interlocutory injunction.  The JLW case was an O.14 case and the court entered judgment and granted the injunction.  However no issue of acquiescence or waiver or estoppel was actually raised or argued in defence in either of these cases.

43.  Mr. Kwan referred to Cadogan v Muscatt [1990] 35 EG 63, which was also an O.14 case.  The court of appeal dismissed the appeal against judgment.  In that case, the court took a strong view about the tenant who flagrantly breached the covenant with the landlord in an almost subversive fashion and in the face of a clear indication from the landlord that no consent would be given to the tenant’s intended work.  That was a peculiar case.  More importantly, there was clearly no issue of acquiescence or waiver or estoppel.

44.  I agree with Mr. Law for the Defendant that the Hong Kong House case provides the correct guidance to my determination in the circumstances of the present case.

Removal or not

45.  There is evidence that the pump and tanks is in fact the only source of water supply for daily use and fire service facilities of the Building.  The Defendant has most recently (i.e., this June) engaged consulting engineer to apply to the Department for acceptance of the structure.  The engineer suggested the possibility of basing the application on the longstanding existence of the structure since the issuance of the occupation permit.  Further, the Defendant’s letter to the Department in January 2005 suggested that the installation of the additional pump and saline water tank in 2001 were carried out with the approval of the Water Services Department and the Fire Services Department.

46.  Whether the intended application to the Department to accept the structure will succeed is unknown.  However, there is room for arguing whether removal of the structure is the only way in which the Defendant could and should in the circumstances of this case discharge its duty under the BMO and the DMC (to do all that are necessary for the management of the Building) in response to what remains to be a recommendation of the Department.  Reasonableness is an element in both sections 18(1)(c) and 34I(1)(b) of the BMO.

47.  While there has been suggestion that the pump and tanks might be relocated to the basement, the actual feasibility and ramification of such relocation should not be assumed but should be investigated in view of the circumstances of this case mentioned above.

48.  These may well be matters which the trial judge could take into account when deciding the position of the Defendant (and other owners) for the purpose of estoppel as well as whether or not the equitable relief should be granted.

CONCLUSION

49.  I am not satisfied that this case could be disposed of summarily.

50.  Mr. Kwan for the Plaintiffs submitted that in such event, there should be leave to defend.  My reservation is that the Plaintiffs took out the application while they were fully aware of, though they disagree with, the issues raised by the Defendant’s pleading.  I see no special reason why the application is not liable to be dismissed with costs to the Defendant in any event: see Hong Kong Civil Procedure 2007 at para.14/7/3.  I so order with such costs to be taxed, if not agreed, with certificate for counsel.  This should be a nisi order but since I have already heard argument on costs, I would not be inclined to vary the costs order unless there is compelling reason for such application within 14 days.