SPM LTD v. APPEAL TRIBUNAL (BUILDINGS ORDINANCE)

CACV 201/2022

[2023] HKCA 275

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 201 OF 2022

(ON APPEAL FROM HCAL NO. 1574 OF 2021)

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J U D G M E N T

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Hon Cheung JA :

I.  Introduction

1.  This appeal raises once again the issue whether the external walls of a multi‑storey building are the common parts of a multi‑storey building and as a result the co‑owners of the building are responsible for their maintenance. This issue arises in this case because the Building Authority had issued a building order requiring the co‑owners of a multi‑storey building known as the Sun’s Group Centre in Gloucester Road, Hong Kong (‘the Building’) to carry out remedial work to the external walls of the Building (‘the External Walls’) specifically the 5^th floor to 30^th floor which the Building Authority considered to be the common parts of the Building. The applicant who is the manager of the Building appointed under the Deed of Mutual Covenant (‘DMC’) challenged the building order and appealed to the Appeal Tribunal (Buildings Ordinance) (‘the Tribunal’). The applicant contended that the External Walls are not the common parts of the Building because they had been assigned to an owner known as Wideland International Ltd (‘Wideland’). The Tribunal dismissed the appeal on the basis that the External Walls are the common parts of the Building. The applicant then challenged the decision by way of judicial review. Coleman J found for the applicant and held that it is entitled to (1) an order of certiorari to bring up and quash the Tribunal’s Determination, and to (2) a declaration that the External Walls, specifically 5^th floor to 30^th floor, do not form part of the common parts of the Building. The Building Authority appeals against the decision.

II.  The Building and the DMC

2.  The Building is a 29-storey commercial building as defined in Section B of the DMC. Under Section B, the ground to the 4^th floors (excluding the two shops) are designated as ‘Garage’; the two shops at the ground floor, the 5^th to 30^th floors, the roof and the upper roof are designated as ‘Commercial Tower’; the areas over the top of the 30^th floor but beneath the upper roof is ‘Roof’, and that over the top of the plant room(s) on the Roof is ‘Upper Roof’. The Building does not have floors numbered 14 or 24.

3.  The Judge summarised the background of the ownership of the External Walls as follows :

‘ 10. The Building is a 29-storey commercial building constructed in 1996 (though there are no floors numbered 14 or 24). The developer and first owner was Fair Capital Properties Ltd (“Fair Capital”). The Building’s former name was Oriental Centre, but it has since been changed to The Sun’s Group Centre.

......

12. Under the DMC, the Building is notionally divided into 234,435 equal undivided shares (each a “Share”). The Shares have been allocated in the manner as set out in Part 1 of the First Schedule to the DMC, as follows:

Floor	Unit/Car Parking Space	Undivided Shares
G/F	Shop 1	4,600
	Shop 2	2,100
	Car Parking Space Nos. 1
	and 2
	(140 Shares each)	280
1/F	Car Parking Space Nos. 3,	2,240
	5, 6, 7, 8, 9, 10, 11, 12,
	13, 15, 16, 17, 18, 19 &
	20
	(140 Shares each)
2/F	Car Parking Space Nos. 21,	2,240
	22, 23, 25, 26, 27, 28, 29,
	30, 31, 32, 33, 35, 36, 37 &
	38
	(140 Shares each)
3/F	Car Parking Space Nos. 39,	2,380
	40, 41, 42, 43, 45, 46, 47,
	48, 49, 50, 51, 52, 53, 55,
	56 & 57
	(140 Shares each)
4/F	Car Parking Space Nos. 60,	980
	61, 62, 63, 65, 66, 67
	(140 Shares each)
Flat Roof on the 4/F		1,400
5/F-13/F   (8,922 Shares on each floor)		80,298
15/F-23/F  (8,922 Shares on each floor)		80,298
25/F-30/F  (8,922 Shares on each floor)		53,532
External Walls		1
Roof and Upper Roof		4,085
Common Areas		1
TOTAL SHARES:		234,435

13.  The 1 Share allocated to the External Walls has had three registered legal owners as shown on instruments registered with the Land Registry. The relevant address is shown on the Land Register as:

EXTERNAL WALLS

THE SUN’S GROUP CENTRE

NO. 200 GLOUCESTER ROAD

HONG KONG

14. The first registered legal owner of the External Walls was Fair Capital. The second was Proper Investor Group Limited (“Proper Invest”). The third was and remains Wideland. The transfers of legal ownership came about as follows.

15. By an assignment dated 30 March 2004, Fair Capital assigned to Proper Invest 5,486 Shares in the Building together with “the exclusive right and privilege to hold use occupy and enjoy”:

FIRST ALL THOSE the external walls of the Building including but not limited to the full and exclusive right to use, occupy and enjoy the external walls of the Ground (save and except the shopfronts of Shop 1 and 2), 1^st, 2^nd, 3^rd and 4^th Floors of the Building and the pillars on the Ground Floor, for advertising purposes and to display, install, erect, affix or permit to be displayed, installed, erected or affixed thereon and thereto such advertising signs, Q-boards or other structures whatsoever (whether illuminated or not) subject to the approval of the relevant Government authorities concerned and with the right to remove, repair, maintain, service or replace the same provided that the same shall not unreasonably interrupt the enjoyment of any unit of the Building as mentioned in Clause 2(ii) of Section D of the Deed of Mutual Covenant, SECONDLY ALL THOSE the Roof and Upper Roof of the Building including but not limited to the full and exclusive right to use, occupy and enjoy the Roof (including the external walls thereof) and Upper Roof (including the external walls thereof) together with all the erections structures and additions thereon including but not limited to the Crown Lighting Pole of the Building and the right to erect or display advertising signs or structures whatsoever (whether illuminated or not) thereon and to grant rights in relation thereto as mentioned in Clause 2(iii) of Section D of the Deed of Mutual Covenant AND THIRDLY ALL THAT the Flat Roof on the 4^th Floor of the Building.

16. In other words, what was assigned by Fair Capital to Proper Invest was the exclusive right to the use and possession of the External Walls (1 Share), the Roof and Upper Roof (4,085 Shares), and the Flat Roof on the 4/F of the Building (1,400 Shares).

17. By further assignment dated 30 November 2010, Proper Invest assigned to Wideland 5,626 Shares in the Building, together with “the sole and exclusive right and privilege to hold use occupy and enjoy” Car Parking Space No. 28 (140 Shares) as well as the External Walls, the Roof and Upper Roof, and the Flat Roof on the 4/F of the Building.’

4.  In order to understand the right of the first owner Fair Pacific to the External Walls, one must turn to Section D, Clause 1 (‘Clause D1’) and Clause 2 (‘Clause D2’) of the DMC which provide that :

‘ Rights attaching   to each Share

1.  Each Share shall during the residue of the term and any renewal thereof subject to the covenants and terms contained in the Crown Lease and in this Deed be held by the person or persons from time to time entitled thereto together with :- (i)  the full and exclusive right and privilege to hold, use and occupy the Unit designated opposite to it in the First Schedule hereto; and (ii)  if and for so long as an Owner of a Shop and/or an Office and/or a Car Parking Space and/or the Roof and/or Upper Roof shall punctually make payment of the Management Charges at the time and in the manner herein provided, the benefit, insofar as applicable, of the easements, rights and privileges set out in Part A of the Second Schedule but subject to the exceptions and reservations set out in Part B of the Second Schedule.

Rights of First Owner

2.  The First Owner and its successors and assigns shall during the residue of the term and any renewal thereof subject to the covenants and terms contained in the Crown Lease and in this Deed have :- (i)  the full and exclusive right and privilege to hold, use, occupy and enjoy the Land and the Development Together with the appurtenances thereto save only the said Car Parking Space No.28 on the SECOND FLOOR of the Building and the right as stipulated under Clause 3 (ii) of Section D hereof. (ii)  the full　and　exclusive right　to　use　occupy　and　enjoy　the　external　walls　of　the Ground (save and except the shopfronts of Shop 1 and Shop 2), 1st, 2nd, 3rd and 4th Floors of　the Development and the pillars on the Ground Floor, the use, occupation and enjoyment　of　which　has　not　been assigned to any Owner, for advertising purposes and to display, install, erect, affix or permit to be displayed, installed, erected or affixed thereon and thereto such advertising signs, Q‑boards or other structures whatsoever (whether illuminated or not) subject to the approval of the Government Authorities concerned and with the right to remove, repair, maintain, service or replace the same provided that the same shall not unreasonably interrupt the enjoyment of any Unit of the Development; (iii)  the full and exclusive right to use occupy and enjoy the Roof (including the external walls thereof) and Upper Roof (including the external walls thereof) together with all the erections structures and additions thereon including but not limited to the Crown Lighting Pole of the Development and the right to erect or display advertising signs or structures whatsoever (whether illuminated or not) thereon and to grant rights in relation thereto; (iv)  the right at any time to use and operate any part or parts of the Land and the Development including the Common Areas (notwithstanding the provisions in Section C) the exclusive use, occupation and enjoyment of which has not been assigned to any Owner provided that such use and operations shall not contravene the terms and conditions of the Crown Lease and not in any way interfere with the other Owners’ right to hold use occupy and enjoy their respective Units; (v)  the right at any time to alter or amend the allocation of Shares as particularised in the First Schedule hereof Provided that in making such alteration or amendment the interests and rights of the other Owners will not be unduly prejudiced. ’

5.  Section B of the DMC contained the following definitions :

‘ Common   Areas	shall include the Building Common Areas, Commercial Common Areas and Garage Common Areas.’
‘ Building Common Areas	any parts of the Land and the Building other than the Commercial Common Areas and Garage Common Areas, the exclusive use, occupation and enjoyment of which has not been assigned to any Owner including but not limited to the management office and any other space on or in the Land and the Development used for office or other accommodation of watchman or caretakers or other staff employed on or in or for the Land and the Development.’
‘ Commercial   Common   Areas	shall include:- (i)  the lanes, footpaths and pedestrian accesses, loading and unloading areas, entrances, lobbies, staircases, landings, corridors and passages, manholes, channels and tunnels, refuse collection points, machine rooms, pump rooms, transformer and switch rooms, plant and equipment rooms, store rooms, lift pits and voids, lavatories, canopies, skylights and planters and flower beds on or in the Commercial Tower; (ii)  such other parts in the Commercial Tower the exclusive use, occupation and enjoyment of which has not been assigned to any Owner. The Commercial Common Areas shall specifically exclude any of the foregoing, or any part thereof, the exclusive use, occupation and enjoyment of which has been assigned to any Owner.’
‘ Garage Common   Areas	the entrance together with the driveway leading to the 1st Floor, 2nd Floor, 3rd Floor, 4th Floor and those areas in or on the Garage not specifically designated for the parking of motor vehicles.’

6.  Section B also provides the following definition :

‘ Common   Services and   Facilities	Include Building Common Services and Facilities, Commercial Common Services and Facilities and Garage Common Services and Facilities.’
‘ Building   Common   Services and   Facilities	Lighting and sprinkler systems of the Building Common Areas, mechanical ventilation, water pipes, drains, wires, ducts, cables, fire services equipments, communal television antennae for use and benefit of the Building (if any), air - conditioning ducts leading to the Shop(s) and Office(s) and Car Parking Space(s) of the Building (where applicable) and other facilities installed for the use and benefit of the Building and not for the use and benefit of a particular Shop or a particular Office or a particular Car Parking Space or a particular Floor.’
‘ Commercial   Common   Services and   Facilities	shall include:- sewers, gutters, drains, watercourses, wells, pipes and ducts, pumps, tanks and sanitary fittings, wires, cables, electrical installations, fittings, equipment and apparatus; satellite dishes, antennae, communal television and radio aerials and associated equipment (if any) fire protection and fire fighting systems, equipment and apparatus; security systems, equipment and apparatus, refuse disposal equipment, lifts and lift machinery; air - conditioners, condensers, chillers and fans, emergency generators, chimney flues and any other installations, systems, plant, equipment, apparatus, fittings, services and facilities used or installed in or for the use and benefit of the units in the Commercial Tower as part of the amenities thereof and not for the sole benefit of any Owner or group of Owners.’
‘ Garage Common   Services and   Facilities	shall include:- sewers, gutters, drains watercourses, wells, pipes and ducts, pumps, tanks and sanitary fittings, wires, cables, electrical installations, fittings, equipment and apparatus, satellite dishes, antennae, communal television and radio aerials and associated equipment (if any), fire protection and fire fighting systems, equipment and apparatus, security systems, equipment and apparatus, refuse disposal equipment (if any), lifts and lift machinery, air - conditioners (if any), condensers (if any), chillers and fans (if any), emergency generators, chimney flues and any other installations, systems (if any), plant, equipment, apparatus. fittings, services and facilities used or installed in or for the use and benefit of the Car Parking Spaces in the Garage as part of the amenities thereof and not for the sole benefit of any Owner or group of Owners.’

III.  Statutory definition of common parts

7.  Section 2 of the Building Management Ordinance (Cap. 344) (‘BMO’) provides an exhaustive definition of ‘common parts’ :

‘ “common parts (公用部分)” means –

(a)  the whole of the 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.’

8.  Schedule 1 includes Item 1 ‘external walls’.

IV.  The Judge’s Decision

9.  The Judge held that unless an instrument registered in the Land Registry has ‘specified’ or ‘designated’ the External Walls as being for the exclusive use, occupation or enjoyment of an owner, the External Walls should be regarded as common parts of the Building under Section 2 of the BMO. It is common ground between the parties that the relevant instrument to be considered and construed in this case is the DMC. In essence the Judge held that the combined effect of the allocation of one share to the External Walls, and the operation of Clause D1(i) is to give the exclusive rights of the External Walls to Wideland.

V.  Grounds of appeal

10.  The Building Authority is of the view that the external walls of the 5^th to 30^th floors of the Building have not been expressly designated or specified for the exclusive possession by any co‑owner. The statutory definition in Section 2 and Schedule 1 of the BMO shall apply and the external walls of the 5^th to 30^th floors are common parts of the Building. The Building Authority’s stand is that the External Walls in Part I of the First Schedule should only mean the external walls of ‘Garage’ (excluding the shopfronts) and the ‘Roof’ and ‘Upper Roof’ of the Building. Although the Building Authority relied on six grounds of appeal, in essence the real complaint is contained in the first three grounds :

1)  In so construing the DMC, the Judge narrowly focused on the designating clause i.e. Clause D1(i) and the allocation of the one notional undivided share to the ‘External Walls’ in the First Schedule without properly construing the DMC as a whole and by failing to give any or sufficient consideration to the following :

(1)  The only clauses in the DMC that specify the rights to use the external walls of the Building are Clauses D2(ii) and (iii) and such clauses specify the external walls of (i) the Ground Floor (excluding the shopfronts of Shop 1 and Shop 2), the 1^st to 4^th floors, (ii) the Roof and (iii) the Upper Roof of the Building, but not the external walls of the 5^th to the 30^th floors.

(2)  The ‘External Walls’ stated in Part 1 of the First Schedule is not defined in the DMC so its meaning should be ascertained predominantly with reference to Clauses D2(ii) and (iii) which are the only clauses covering external walls.

(3)  The mere allocation of one notional share to the ‘External Walls’ in the First Schedule cannot by itself create any exclusive right of use, occupation and enjoyment thereof. If by the mere allocation of one notional share to the ‘External Walls’ and by Clause Dl(i), the holder of such share would have the full exclusive possession of the entirety of the external walls of the Building, the Judge’s construction would defy common sense and that any interpretation of the DMC should avoid absurdity. It is because ‘Common Areas’ is also allocated with one notional share in Part 1 of the First Schedule and ‘Common Areas’ by its nature must not be regarded as a Unit that can be capable of being designated for the exclusive possession by any co‑owner. In taking the view that whilst the word ‘Unit’ might not ordinarily be understood to be a likely reference to external walls or common parts of the Building, both can be said to constitute a ‘Unit’ for the purposes of the DMC, the Judge failed to consider the observation given by this Court in Kong Wai Hsien and Another v Tai Wai Glamour Garden (IO) [2019] 5 HKLRD 672 at 682 that the external walls of a building should be common parts for enjoyment by all owners because the external walls provide the external framework to the building so to hold and support the building and prevent damage to its interior.

(4)  The Judge’s finding that ‘Common Areas’ is by definition plainly not expected to be a Unit to which the holder would have full and exclusive rights is circular and is not an answer to the anomaly as set out in paragraph (3) above.

(5)  Clause D1(i) entitles the holder of certain undivided share(s) allocated to such parts of the Building to hold, use and occupy the ‘Unit’ so designated in the First Schedule to the exclusion of the other co‑owners. Under Clause Dl(ii), a Shop, an Office, a Car Parking Space, the Roof and the Upper Roof are each regarded as a ‘Unit’. Each of such specified parts of the Building is separately defined and is expressly included in the definition of ‘Unit’ in Section B. The definition of ‘Unit’ nonetheless does not expressly include the ‘External Walls’ in the First Schedule. The ‘External Walls’ therefore should not be a Unit designated with the full exclusive rights under Clause D1(i).

(6)  Whereas the external walls of the 5^th to 30^th floors of the Building have not been expressly designated or specified for the exclusive use by any co‑owner, such parts should fall within the inclusive definition of ‘Common Areas’ in Section B. In any event, the external walls of the 5^th to 30^th floors fall within the statutory definition in Section 2 and Schedule 1 of the BMO.

2)  The Judge erred in taking the view that the further allocation of one share to ‘Common Areas’ tends to show the intentional drawing of a distinction between ‘External Walls’ on one hand and ‘Common Areas’ on the other without any or sufficient regard to the points in paragraph 1) above.

3)  In finding that the one notional share allocated to the ‘External Walls’ would entitle the owner/the registered owner of such share the exclusive right to use occupy and enjoy that part of the Building, the Judge failed to give any or sufficient consideration to the legal effect of Clause D2(ii) and (iii) which only confer conditional rights to use the specified parts of the external walls for limited purposes. Even if the registered owner of the ‘External Walls’ have the rights to use the entire external walls of the Building, such rights are not the full exclusive rights.

11.  These points are elaborated in the submission of Ms Chan for the Building Authority.

VI.  My view

12.  Likewise for this appeal, it is common ground that whether the External Walls are common parts of the Building is a matter of construction of the DMC. As Litton PJ observed in Jumbo King Ltd. v Faithful Properties Ltd. & Ors (1999) 2 HKCFAR 279 at 296 :

‘ ... the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean.’

13.  Mr. Chan SC (together with Mr. Cheung) for the applicant referred to Merry, Building Management in Hong Kong (3^rd ed) which contained a summary on construing what is and what is not the common part of a building :

‘ 2.87 A part of a building is generally not for common use if undivided shares are attached to that part, together with the right to exclusive use of that part; or it is designated or specified in the assignment, DMC or other document which is contemporaneous with the assignment or the DMC, as an area for the exclusive use of an owner or group of owners and has been so used. On the other hand, the part is for common use if designated or specified as such in the DMC as a common area.’

14.  My view is that ultimately the construction exercise is based on Section 2 of the BMO and the task is to go through the terms of the registered instruments which include the DMC to see whether the External Walls (a term which is not defined in the DMC) have been specified or designated for the exclusive use, occupation and enjoyment of an owner which under Section 2 of BMO will not be a common part. This is the approach this Court adopts in the recent case of Donora Company Ltd. v Incorporated Owners of Tsuen Kam Centre [2023] HKCA 33. In conducting the construction exercise I caution against excessive reliance on authorities because very often the result of each case depends on the language used in the documents in that case.

15.  The arguments of the Building Authority are based on the premise that the Judge solely relied on Clauses D1(i) and the allocation of 1 share to the External Walls in coming to his finding that the External Walls are not the common parts of the Building. In my view, the relevant clauses to be considered should include Clause D2(i) as well. Clause D1(i) defines the rights attached to the allocated shares. As one share is allotted to the External Walls, it means the person entitled to that one share is entitled to the ‘full and exclusive right and privilege to hold, use and occupy the unit designated opposite’, namely, the External Walls. But this clause does not tell who is entitled to the External Walls which are allocated that one share. To that, one must turn to Clause D2(i) which confers on the first owner i.e. Fair Capital ‘the full and exclusive right and privilege to hold, use, occupy and enjoy the Land and the Development...’. As defined in the DMC, the Land is where the Building is situated and the Development means the Building with ‘the Common Areas and the Building Common Services and Facilities, Commercial Common Services and Facilities and Garage Common Services and Facilities’. By this definition, (subject to the question whether the External Walls are covered by the group of areas known as ‘Common Areas, Building Common Services and Facilities, Commercial Common Services and Facilities and Garage Common Services and Facilities’ (‘the group of Common Areas’) referred to in the definition of Development), the Development clearly includes the External Walls of the Building. It is self - evident that a building has external walls. Further, by Clause D2(ii) Fair Capital also has the full and exclusive right to use, occupy and enjoy the External Walls of the ground floor and first to fourth floors for advertising purposes. By Clause 2(iii), Fair Capital also has the exclusive right to the external walls of the Roof and Upper Roof and also the right to advertise there. The fact that Clause D2(iii) specifies the external walls of the Roof and Upper Roof does not mean the External Walls are excluded from being specified or designated for the exclusive use of Fair Capital. Clause D2(i) is an embracing provision.

16.  One then turns to see whether the group of Common Areas covers the External Walls so that the External Walls are excluded from the Development to which Fair Capital has the full and exclusive right. The various definition of this group of Common Areas is already set out in [5] above. One can see under the definition of Building Common Areas, it includes those parts of the Building the exclusive use, occupation and enjoyment of which had not been assigned to any owner. Likewise in Clause (ii) of the definition of ‘Commercial Common Areas’, similar language is used. But as seen earlier, the whole Development which includes the External Walls is specified and designated to Fair Capital, thus these two defining provisions do not provide a contrary indication to the view that the External Walls are not common parts. Under Clause (i) of the definition of Commercial Common Areas, External Walls are not included in the various items mentioned there. External Walls are likewise not covered by the definition of Garage Common Areas. External Walls are also not included in the various items identified under the definitions of ‘Building Common Services Facilities’, ‘Commercial Common Services and Facilities’ and ‘Garage Common Services and Facilities’. None of the above indicates that External Walls have not been specified or designated for the exclusive use of any owner and therefore come within the definition of common parts of the Building. Accordingly, by virtue of Clause D2(i), the External Walls are specified or designated for the exclusive use, occupation or enjoyment of Fair Capital and hence excluded from being the common parts of the Building within the definition of Section 2 of the BMO. Properly construed, the External Walls are all the external walls of the Building and not confined to the external walls of the Ground Floor, the 1^st to 4^th floors, Roof and Upper Roof as submitted by the Building Authority. It is by virtue of the rights conferred by Clause D2(i) that Fair Capital was able to assign the External Walls to Proper Invest who in turn assigned them to Wideland.

17.  Although Clause D2(i) was not specifically relied upon by the Judge, he had in fact alluded to it when he referred to the rights of the developer (which in this case must be a reference to the first owner Fair Capital) that :

‘ 51. Indeed, what seems to have happened as a matter of fact in this case was that might be regarded as the outer ‘shell’ of the Building, comprising the External Walls, the Roof on the 4/F, the Roof and Upper Roof have all been retained by the developer for its own use, including for advertising and signage.’

18.  The application of Clause D2(i) was specifically drawn to the parties’ attention during the course of argument before us. In any event I see no objection for this point to be raised in the appeal as it is common ground that the issue is one of construction of the terms of the DMC and the relevant principles of construction are not in dispute. There is no additional evidence required.

19.  Once it is recognized that the rights of Fair Capital and its successors under Clause D2(i) include the right to the External Walls of the Building, then the arguments relied upon by the Building Authority in the following grounds of appeal will fall away :

1)  Grounds 1(1) and (2), namely, Clauses D2(ii) and (iii) do not include the External Walls of the 5^th to 30^th floors;

2)  Ground 1(6), namely, as the 5^th to 30^th floors of the External Walls are not expressly designated or specified for the exclusive use of any co‑owner, they are common parts of the Building;

3)  Ground 2, namely, the Building Authority’s arguments being not properly considered by the Judge; and

4)  Ground 3, namely, Clauses D2(ii) and (iii) only give conditional and not exclusive rights to any co‑owner.

20.  In respect of Ground 1(3), I do not find any absurdity in allocating a separate one share to the External Walls if the External Walls are not Common Areas. This Court in Donora Company Ltd has also addressed the argument based on Kong Wai Hsien referred to in Ground 1(3) as follows :

‘ 39. Mr Man submits that the External Walls were plainly intended for the common use and benefit of the co-owners of the relevant parts of the Building, as they serve the functions of (i) holding and supporting the Building; (ii) preventing damage to the Building’s interior, and (iii) enabling the co-owners to have peaceful enjoyment of their respective individual units of the Building (Kong Wai Hsien, at §40). While we have no difficulty in accepting that the External Walls do serve those functions, it does not follow that the External Walls must therefore be “common parts” of the Building for such functions to be served. As we see it, the specification or designation of the External Walls in a registered instrument as being for the exclusive use, occupation and enjoyment of the Developer and the fulfilment of the aforesaid functions of the External Walls are two separate matters.’

21.  The other substantive argument of the Building Authority in respect of Grounds 1(4) and (5) is on the meaning of the word ‘Unit’ referred to in Clause D1(i) i.e. each share carries with it ‘the full and exclusive right and privilege to hold use and occupy the Unit designated opposite it in the First Schedule hereto;’ Unit is defined in Section B as part of the Development including the shop, office, car parking space, roof and upper roof to which the full and exclusive right and privilege to hold use occupy and enjoy has been or is intended to be assigned to an Owner and ‘his Unit’ in relation to an Owner means the Unit or Units in respect of which the Owner has the full and exclusive right and privilege to hold use occupy and enjoy.

22.  The Judge held :

‘ 47(10) Whilst the word “Unit” might not ordinarily be understood to be a likely reference to external walls or common parts of the building, both can be said to constitute a “Unit” for the purposes of the DMC.’

23.  In my view, the Judge is right. As submitted by Mr. Chan, the definition is facially broad – the only limitation being that the area in question must be ‘part of the Development... to which the full and exclusive right and privilege to hold use and enjoy has been or is intended to be assigned to an Owner’. The External Walls plainly fall within this definition. The reference to ‘including the Shop, Office, Car Parking Space, Roof and Upper Roof’ is merely intended to provide some illustrations of the Units which may be found in the Development. Mr. Chan submitted that non‑exhaustive definitions are usually prefaced by the word ‘include’ or ‘including’: Lewison The Interpretation of Contracts 7^th Ed [5.96]. This aligns with the structure of Clause D1: subclause (i) mentions the exclusive right to hold, use and occupy the relevant ‘Unit’ in the First Schedule, and subclause (ii) then addresses the five specific types of ‘Units’ which are subject to the easements, rights and privileges set out in the Second Schedule.

24.  The Building Authority argued, by reference to Clause D1(ii), that ‘Shop, Office, Car Parking Space, Roof and Upper Roof’ are each individually defined in Section B of the DMC, and that those definitions mention the word ‘unit’ but this is not the case for ‘External Walls’. This argument is not sustainable because the definitions for Roof and Upper Roof also make no mention of the word ‘unit’.

VII.  Conclusion

25.  Accordingly, the appeal is dismissed with costs to the applicant. There will be certificate for one counsel as agreed by the applicant.

Hon G Lam JA :

26.  I agree with the judgment of Cheung JA.

Hon Anthony Chan J :

27.  I agree with the judgment of Cheung JA.