LEUNG CHIU LAM PAUL and Another v. POON LOI CHEUNG DESMOND and Another

1997 No. M.P. 2641

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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1. By an agreement of the 29th May 1997, the Defendants (as vendors) agreed to sell to the Plaintiffs, apartment A on the ground floor of Bisney Villas, together with car park space No. 2 in the basement, part of the basement, part of the yard and the flower bed in the basement. The subject of the requisition which has led to this vendor and purchaser summons is the space in the basement marked on the basement plan in pink which is bordered by the staircase on the east.

2. The Plaintiffs' contention is that the Defendants have no "sole and exclusive right and privilege to hold, use, occupy and enjoy" that part and so cannot convey it. The Defendants derive their title from an assignment dated the 20th January 1994 which is not amongst the papers but it is not disputed that it purports to vest in them such sole and exclusive right and privilege in respect of the space in the basement. The assignment to the defendants' predecessor in title - Thelma Maria Chan - which is exhibited to the Affirmation of the first Plaintiff, also conveys "full and exclusive right and privilege" in respect of all that space on the basement. That assignment from the developer, Chinsam Enterprises Limited, as first owner, was dated 12th March 1974.

3. By an indenture dated 1st February 1974 Chinsam Enterprises, the first owner, conveyed to Joseph Kwong, the second owner, apartment "A" on the second floor (with corresponding part of the roof) and car parking space No. 3 reserving to itself as first owner, the other individual five equal sixth parts, with exclusive use etc. of all other apartments, car parking spaces, yard on the ground floor, flower beds on the basement, other portion of the roof (i.e. that over apartment B on the second floor), and all other self-contained portions of the said building.

4. Annexed to the indenture are a plan of the second floor, on which Apartment "A" and the corresponding part of the roof are clearly shown, and a plan of the basement which, in error, appears to show car park space 5 (instead of 3) as the designated one. It does however show other self contained portions of the said building including a portion running to the left of the staircase marked "staircase in common use." This is the area described as "space on the basement" and it is also clearly identified in the plan annexed to the assignment to Thelma Maria Chan.

5. I am satisfied therefore, on a clear construction of that assignment that Chinsam, in reserving these specific areas, and the "other self-contained portions" included in the latter, the "space in the basement".

6. The Plaintiffs contend the problem arises in the Deed of Mutual Covenant, executed on the same date as the assignment to Mr. Kwong. The parties are the same. The Deed purports "to define their respective rights and interest of and in the said premises and the said building."

7. Clause 1 recites that the parties have the sole and exclusive ownership (inter alia) of the portion of the building "more particularly described and set out in the Second Column of the First Schedule, "with the appurtenances thereto." Clause 2 deals with common access to and entitlement to use of the common parts - entrance halls, staircases, landings and passages - for the proper use and enjoyment of the portion of which he has exclusive use, occupation and enjoyment.

8. Turning to the first schedule referred to in Clause 1, we find that Mr. Joseph Kwong holds exclusively that which was identified in the assignment (save that car parking space No. 5 is stated, not No. 3). The first owner holds all the other apartments and car parking spaces in the basement, the yard on the ground floor, and the flower beds in the basement. The Plaintiffs contend that because there is no mention of the "space in the basement" it must be regarded as specifically excluded and therefore a common part which could not be assigned for exclusive use, occupation and enjoyment.

9. I do not however consider that is the case. The first assignment, on the same day as the D.M.C. makes it clear what the first owner reserves. In any event the term "with appurtenances thereto" in Clause 1 of the D.M.C. includes the self-contained portion in the basement which was almost six weeks later assigned to Thelma Maria Chan, the Defendants predecessor in title.

10. Accordingly the first owner, the developer, lawfully assigned to Thelma Maria Chan, inter alia, the space on the basement, now nearly 24 years ago. The Defendants therefore have lawful title to all that was conveyed to them in January 1994. In any event the space on the basement cannot be regarded as part of the common parts - it certainly does not fall within the "entrance halls, staircases, landings and common passages .... for all purposes connected with the proper use and enjoyment of the portion in the said building of which he is entitled to the exclusive use occupation and enjoyment and for the purpose of ingress to and egress from such apartment."

11. I have been referred to a number of decisions.

12. Sheenip Industrial Ltd. v. Champion Billion Development Ltd. H.C.M.P. No. 1390 of 1995; Lai Wong Ho & anor. v. Chau Siu Fong H.C.M.P. No. 2835 of 1992; Goodtex Land Co. Ltd. v. Lung Kwong Enporium Co. Ltd.; Woo Turhan & anor. v. Taiwan Fuji Trading (H.K.) Ltd.; and Chiu Shu Choi v. Merrilong Dying Works Ltd. C of A Civil Appeal No. 102 of 1984.

13. None of these cases is entirely on point. They do however illustrate the approach of the courts to the resolution of problems where documents are either in conflict or silent as to a matter raised on requisition. Equity requires regard to the true meaning of the instruments, the intention of the parties and whatever assistance may be derived from plans.

14. It follows from what I have said earlier that I do not find any inconsistency in the instruments referred to; but, if I were wrong on that, applying the equitable approach that the court is required to adopt, the clear intention of the first owner was to reserve the space on the basement to itself on the occasion of the first assignment, that is unequivocally expressed, and then to assign it to the purchaser Thelma Maria Chan, almost six weeks later. The Deed of Mutual Covenant, to the extent that it is arguable that it is inconsistent with the first assignment and the assignment to Thelma Maria Chan, is defective. The space on the basement is unarguably not a common part.

15. Finally the Plaintiffs rely upon the Building Management Ordinance. The "space on the basement" does not fall within the definition of "common parts." It has been specified or designated in an instrument (at least two) in the Land Registry. Section 34I does not apply.

16. The requisition has been properly answered. The Defendants have shown good title. The summons is therefore dismissed with costs to the Defendants to be taxed, if not agreed.

(Conrad Seagroatt)

Judge of the High Court