HOPE BRIGHT LTD v. THE INCORPORATED OWNERS OF KA WING BUILDING

CACV 190/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 190 OF 2007

(ON APPEAL FROM HCA NO. 305 OF 2006)

----------------------

----------------------

--------------------------------------

REASONS FOR JUDGMENT

-------------------------------------

Hon Rogers VP:

1.  I agree with the reasons for judgment of Le Pichon JA.

Hon Le Pichon JA:

2.  This was an appeal from an order made by Yam J on 6 June 2007.  At the conclusion of the hearing, the appeal was dismissed with costs, with reasons to be given which we now do.

3.  By paragraph 3 of an earlier order made by him dated 16 August 2006 (“the first order”), Yam J granted an interlocutory injunction in favour of the plaintiff restraining the defendant (being the Incorporated Owners of the building) from interfering with the plaintiff’s right to connect to the supply of electricity and telecommunications of the building for its property which is a ground floor shop (known as known as Shop 1A) in Ka Wing Building (“the building”) on Nathan Road.  There was no appeal against the first order.

4.  However, all the plaintiff’s attempts to exercise its right to connect to the supply of electricity and telecommunications of the building for its shop were unsuccessful, causing it to issue a further summons in January 2007 to vary paragraph 3 of the first order to include a specified route for connecting to the electricity and telecommunications supplied to the building.  The judge acceded to the plaintiff’s application and varied paragraph 3 of the first order accordingly, finding that “the defendant [had] tried every single means” to stop the plaintiff from exercising its right.

Background facts

5.  The building is a mixed commercial and residential building with the ground to third floors (inclusive) being the commercial or non-residential portion and the fourth floor upwards consisting of domestic/residential units.  It was built in the 70s and the ground floor (if not also the other commercial floors) was occupied by a department store until it ceased business in 1996.  The ground floor was then divided into various units.  The unit in question, i.e. Shop 1A, comprising an area of less than 30 square feet, has a frontage at street level on Nathan Road.  The plaintiff operates a sandwich shop from those premises.

6.  The rights and obligations of the owners of the building are set out in a Deed of Mutual Covenant dated 16 January 1974 (“the DMC”).  The building was divided into 155 equal undivided shares or parts and 48 such shares were allocated to the ground floor.  When the ground floor came to be subdivided, the owners of the various units entered into a Sub-Deed of Mutual Covenant dated 15 September 1997 which, inter alia, allocated the 48 undivided shares among those owners, including the plaintiff’s predecessor-in-title.  The DMC provided for the separate management for the non-domestic portion and the domestic portion of the building: the authority of the managers of the building to manage the building was limited to the domestic units only.  This no doubt may have been a contributing factor to the problem which arose, causing legal proceedings to be instituted.

This appeal

7.  Ms Cheng SC who appeared for the defendant in this court but not below confined her oral submissions to a single point, namely, that in granting the interlocutory injunctions through making the first and second orders, the judge failed to give any consideration to the balance of convenience.  It was said that he never exercised his discretion at all because the only question to which he directed his mind was whether the plaintiff had a right to connect to the supply of electricity and telecommunications to the building.  That, it was submitted, was the wrong question and, accordingly, the second order ought to be set aside and a speedy trial directed.

8.  Miss Cheng referred the court to the transcript of the judge’s reasons for decision given on 6 June 2007 for the second order as well as his reasons given on 16 August 2008 for the first order.  It is unnecessary to rehearse the judge’s reasons here.  Suffice it to say that what comes across forcefully is that the judge had little reason to doubt that the plaintiff would succeed at trial.

9.  Underpinning the defendant’s case is its contention that on the true construction of the DMC, “unit” is confined to those existing and intended for separate use and occupation at the time of the execution of the DMC and as the whole of the ground floor was a “unit” at that time the cables should be laid in and through the other ground floor shops and not through the common parts.

10.  Although the judge did not specifically deal with this point in his reasons, he could not have reached his conclusion as to the plaintiff’s ‘right’ if he considered the defendant’s interpretation of the DMC remotely arguable.  Having regard to the definitions of “owner” and “unit” in the DMC, and its provisions as a whole, I am inclined to agree that the defendant’s reading of the DMC is unsustainable.

11.  It is to be noted that the judge made the second order after a full day’s hearing.  In addition to what had been before him at the hearing in August 2006 which, inter alia, included the DMC, there was further evidence filed by the parties.  This comprised (1) an affirmation dated the 30 December 2006 from a qualified electrician employed by the plaintiff advising on the only feasible route to connect to the electricity supply, exhibiting a floor plan and diagrams showing the proposed route that entailed the laying of wires and cables through and along walls that fall within the common parts of the building, involving the boring of several holes of 25 mm in diameter through some of the walls and no more; (2) an affirmation filed on behalf of the defendant exhibiting the advice of its electrician proposing alternatives; and (3) an affirmation from the plaintiff’s handling solicitor exhibiting a joint expert report from a surveyor and structural engineer employed by the plaintiff.  The expert report (which concluded that the proposed route of the plaintiff was the only practical and feasible route and that it involved no structural alteration) also exhibited the report of an independent sub consultant who addressed the alternative ways suggested by the defendant’s electrician, none of which was considered feasible.

12.  The further evidence showed that faced with the defendant’s continuing intransigence notwithstanding the first order, the plaintiff acted commendably: its conduct was wholly professional and beyond reproach.  On the evidence before him, the judge plainly considered it just and convenient to grant the interlocutory injunction under appeal.  For my part, he was right to do so.  In any event, even if (contrary to my view) there be any merit in the argument that the judge failed to consider the balance of convenience, it would be open to this court to exercise it afresh and were it necessary, I would have no hesitation in exercising it in favour of the plaintiff.

Hon Burrell J:

13.  I agree.