LEUNG KIT SANG AND ANOTHER v. THE INCORPORATED OWNERS OF BLOCKS E AND E1 OF NORTH POINT VIEW MANSION

DCCJ 3865/2021

[2025] HKDC 787

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3865 OF 2021

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JUDGMENT

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A.  INTRODUCTION

1.  Since May 1997, the plaintiffs have been the owners of the property described as “Ground Floors and the Roofs in Block E and E1” of North Point View Mansion, No 54 Kai Yuen Street, North Point.

2.  The defendant was incorporated on 21 January 2003. It goes without saying, and it is common ground, that it is the owner of the common parts of Block E and E1 of North Point View Mansion.

3.  In the present case, the plaintiffs argue that, by having assigned the “Ground Floors … in Block E and E1”, they own the part of the ground floor of Block E and E1 of North Point View Mansion, as highlighted in yellow and pink respectively on the plan annexed to the Statement of Claim (“the plaintiffs’ plan”). Throughout the present case, the area highlighted yellow in the plaintiffs’ plan is referred to as the “Open Area”; and the area highlighted in pink, the “Covered Area”.

4.  A copy of the plaintiffs’ plan is appended to this Judgment as Appendix 1.

5.  The defendant says:-

5.1.  The plaintiffs were never assigned the exclusive use and occupation of the Open Area; and

5.2.  They converted the Covered Area to unlawful use.

6.  It is necessary to delve into the conveyancing documents concerning Block E and E1 of North Point View Mansion to understand the disputes separating the parties.

B.  NORTH POINT VIEW MANSION

B1.  The construction of North Point View Mansion

7.  Inland Lot No 2168 (“Lot 2168”) was a piece of land in Tsat Tsz Mui (nowadays North Point). The Government Lease for Lot 2168 was granted on 30 August 1917.

8.  In the 1950s, the then owners of Lot 2168 sought to redevelop their land. First, by way of a Deed of Partition dated 21 August 1950, Lot 2168 was partitioned into Section A of Lot 2168, and the Remaining Portion of Lot 2168. Li Pui Nung was assigned Section A of Lot 2168 under this deed.

9.  By way of a letter dated 21 March 1957, the Land Office granted a modification to the Government Lease relating to Section A of Lot 2168, together with additional land by way of an extension (“the Extension Letter”)[1], approving a redevelopment scheme submitted by Li Pui Nung. In particular:-

9.1.  Under Condition 2(a), the redeveloped building should be no more than 5 storeys tall if its maximum roofed-over area was no more than 45% of the area of the lot; and it should be no more than 6 storeys tall if the maximum roofed-over area was no more than 40% of the area of the lot.

9.2.  Under Condition 2(b), car parking spaces should be provided at a rate of no less than 1 car per flat. Car ports at ground floor level would be permitted under the redeveloped building in addition to the number of storeys stated under Condition 2(a).

9.3.  Under Condition 2(c), the redeveloped building should be in built in accordance with the Buildings Ordinance; plans would have to be submitted to the Building Authority for approval in the usual way.

10.  Although there is no direct evidence before me, Section A of Lot 2168 must have been further subsectioned into 6 adjoining lots. North Point View Mansion, as one continuous building, was constructed on these 6 adjoining lots.

11.  There is no physical barrier in North Point View Mansion that demarcates the boundary of each of the 6 adjoining lots; but the one continuous building is notionally divided up according to the boundaries of the 6 adjoining lots. The part of North Point View Mansion that sits on Section A of Subsection 2 of Section A of Lot 2168 (“the Subject Lot”) is known as Block E and E1. Similarly, Blocks A[2], B, C, D and F each sits on 1 of the 5 remaining adjoining lots.

12.  A Building Completion Report was filled in on 2 May 1961. The related address was stated to be “Block A only” of Section A, Remaining Portion, and the Extension of Lot 2168, ie North Point View Mansion. Parties focus on the following parts of the report:-

12.1.  Under paragraph 8 where it was asked to fill in details for the part of the building which was not completed in accordance with the approved plans, it was stated, inter alia, that steps were formed between car ports and the approved road.

12.2.  Under paragraph 17, the non-domestic portions of the building were stated to be the ground and lower ground floors, with garages and car port.

12.3.  Under paragraph 18, the domestic portions of the building were stated to be “1^st to 6^th floors (35 flats)”.

12.4.  Under paragraph 19, it was stated that there would be no objection to the issue of a permit, if matters stated under paragraph 8 were rectified.

13.  The occupation permit for North Point View Mansion was issued on 8 May 1961. Occupation was permitted for the following purposes:-

13.1.  Lower ground floor: garages for non-domestic use;

13.2.  Ground floor: Car ports;

13.3.  1^st to 5^th floors: for each floor, 6 European type flats for domestic use; and

13.4.  6^th floor: 5 European type flats for domestic use.

14.  Therefore, the 35 flats stated in the Building Completion Report corresponded, in terms of number, to the 35 European type flats for domestic use as stated in the occupation permit.

B2.  The layout of North Point View Mansion as shown in building plans

15.  I have been provided with the approved building plans for North Point View Mansion.

16.  I shall start with the plan showing the northern side and the southern side of North Point View Mansion[3]. On the plan, the ground floor was not enclosed by any external wall. Pillars were drawn in as the means to support the higher floors.

17.  Another plan viewing the eastern side of North Point View Mansion[4] shows the approach road sloping upwards from left to right in front of the building, until it reached the ground floor level. The main entrance of the building was at the lower ground floor halfway off the approach road. There were parapet walls on the ground floor, with openings on top of those walls.

18.  There were similarly parapet walls with openings on top at the ground floor of the building on its western side[5].

19.  Therefore, for the ground floor of the building, there could be uninterrupted access to the roofed-over area when one entered from the open space to the northern side. Looking at the plaintiffs’ plan, this means there could be free access to the roofed-over area of the building from the open space on the left hand side.

20.  As the plaintiffs’ plan shows, car ports were designated within the roofed-over area of the ground floor of the building, and also at the open space of the Subject Lot.

B3.  The subsequent layout of North Point View Mansion

21.  The ground floor of Block E and E1 of North Point View Mansion was later used in a way apparently different from the approved plans:-

21.1.  The roofed-over area of the ground floor of the building was enclosed. Based on the documentary evidence[6] shown to me, there can be little dispute that the roofed-over area on the ground floor was turned into domestic use. The enclosed roofed-over area, which was turned into domestic use, largely corresponds to the Covered Area in the plaintiffs’ plan. This is still the current use of the Covered Area.

21.2.  The open space of the Subject Lot was no longer used to park cars. Instead, it was enclosed by the boundary wall of North Point View Mansion on the eastern and southern sides; a parapet wall put up on the western side along the boundary of the Subject Lot, and a gate (highlighted in orange on the plaintiffs’ plan, and hence “the Orange Gate”) on the northern side[7]. The ground was tiled. Essentially, it was used as a backyard to the domestic unit on the ground floor of Block E and E1. The open space largely corresponds to the Open Area on the plaintiffs’ plan. The Orange Gate and the parapet wall along the western boundary of the Subject Lot were demolished by the defendant some time in 2020 pursuant to orders by the Buildings Department.

21.3.  Another metal gate was also put up inside the building at the end of the passageway leading to the Open Area. Since this is highlighted in violet on the plaintiffs’ plan, it is known as “the Violet Gate”. It is the plaintiffs’ case that half of the open space[8] between the Violet Gate and the Orange Gate also forms part of the Open Area, and is owned by them.

22.  I shall analyze below whether there is any evidence to show exactly when the ground floor of Block E and E1 was first changed into the subsequent use.

B4.  Assignment of Ground Floors in Block E and E1

23.  There is no dispute that the first assignment selling off individual parts of North Point View Mansion was the one executed on 14 June 1961 between Li Pui Nung as the vendor, and Lee Bak Hung and Irene Lee as the purchasers. On the same day, they also executed a Deed of Mutual Covenant (“the DMC”).

24.  Mr Johnny Ma, SC (leading Ms Julie Lam for the defendant), asks me to pay attention to the way how the DMC was drafted in the following parts:-

24.1.  The first recital to the DMC referred to the Subject Lot and the Government Lease as “the said premises”;

24.2.  The second recital stated that an 8-storey building known as “No 54 Kai Yuen Street, North Point View Mansion comprising of Blocks E and E1”, which was defined as “the said Building” therein, was erected upon “the said premises”.

24.3.  Paragraph 2 provided as follows:-

“Each of the parties hereto shall have access to and shall be entitled to use the passages entrance halls staircases yards and landings of the said Building for the purpose of going to and from the floor hereby allotted to him …”

24.4.  Paragraph 3 provided, inter alia, as follows:-

“Each of the parties hereto shall pay his due proportion of:-

…

(b) The cost of keeping in good and tenantable repair the foundation, the roof, the side walks, walls, supports, beams, gutters, fences, chimneys, cellars, and entrance doors and other external parts of the said Building and … the common entrance halls, staircases, landings or passages thereof …”

(Striking out as in the original)

24.5. In the Schedule, as against Li Pui Nung as the first owner, the following was stated to be exclusively used, occupied and enjoyed by him:-

“Basement, Ground, First, Second, Third, Fourth, Fifth Sixth floors and the Roof in Block E and Basement, Ground, First, Third, Fourth, Fifth, Sixth and the roof of Block E1 …”

25.  On 22 June 1961, Li Pui Nung assigned 4/16^th undivided shares in the Subject Lot to Kwei Ming Hsi, together with the exclusive use and occupation of “Ground Floors, First Floors and the roofs in Block E and E1” of North Point View Mansion (“the 1961 Assignment”).

26.  On 12 September 1972, the administrators of the estate of Kwei Ming Hsi assigned 2/16^th undivided shares in the Subject Lot to Woo Mun Tak, together with the exclusive use and occupation of “Ground Floors and the roofs in Block E and E1” of North Point View Mansion.

27.  On 30 September 1976, Woo Mun Tak sold her 2/16^th undivided shares in the Subject Lot to Mok Siu Lam and Kwong Kam Ping Catherine as joint tenants, again together with the exclusive use and occupation of “Ground Floors and roofs in Block E and E1” of North Point View Mansion.

28.  Finally, on 27 May 1997, Mok Siu Lam and Kwong Kam Ping Catherine sold their 2/16^th undivided shares in the Subject Lot to the plaintiffs as joint tenants, again with the exclusive use and occupation of “Ground Floors and the Roofs in Block E and E1” of North Point View Mansion.

29.  In each of the assignments referred to in §§25-28 above, no plan was attached to illustrate or delineate the parts of North Point View Mansion of which the purchasers were granted exclusive use and occupation. And as commonly seen in conveyancing documents in Hong Kong, each of those assignments was executed subject to the DMC.

C.  THE DISPUTES

C1.  Construction of the conveyancing documents

30.  As I stated at the beginning of this Judgment, it is the plaintiffs’ case that their predecessors-in-title were, since 22 June 1961, assigned the exclusive use and occupation of both the Covered Area and the Open Area.

31.  The defendant argues that the plaintiffs and their predecessors-in-title were only granted the exclusive use and occupation of the roofed-over area of the ground floor of Block E and E1, ie the Covered Area, by way of the words “Ground Floors … in Block E and E1” used in the chain of assignments. The Open Area forms part of the common parts of Block E and E1.

32.  The parties agree that their dispute involves a construction of the 1961 Assignment, in the context of the surrounding circumstances, including other conveyancing documents existed by that time.

C2.  Abandonment of argument on adverse possession

33.  When he opened the plaintiffs’ case on the first day of trial, Mr Ernest Koo, appearing for the plaintiffs, confirmed that the plaintiffs no longer relied on the argument that, if the Open Area was the common parts of Block E and E1, they were in adverse possession of the same for more than 20 years prior to the defendant’s objection. He also confirmed that the plaintiffs would no longer argue that the defendant was estopped from recognizing the plaintiffs’ exclusive use and occupation of the Open Area because of its acquiescence.

34.  Those concessions must be right. I agree with the submissions of Mr Ma, SC that it is impossible for the plaintiffs, as a co-owner, to claim the exclusive use and occupation of the common parts in a multi-storey building by adverse possession.

35.  The defendant correctly refers me to the Court of Appeal decision in Incorporated Owners of Man Hong Apartments v Kwong Yuk Ching [2001] 3 HKC 116, which was followed in Mountain View (IO) v Heart Cuisine [2012] 4 HKLRD 628. I think it is sufficient for me to refer to the 1^st paragraph of the headnote of the report in Mountain View, summarizing the Court of Appeal’s views on the claim by the plaintiff incorporated owners for recovery of a service lane, which was said to be the common parts of the building in question:-

“The benefits and burden of the deed of a [sic] mutual covenant (DMC) were expressed and intended to run with the land. Here, P was not claiming possession of the Lane, but was seeking to enforce the rights given to the owners relating to the Lane as a common part under s.34I of the Building Management Ordinance (Cap.344) (the BMO). Thus, ss.4, 7(2) and 17 of the Limitation Ordinance (Cap.347) (the LO) had no application. Any occupier of the Lane was bound by the covenants of the DMC and could not use the Lane to the exclusion of the building’s owners.”

36.  In my judgment, the above passage is squarely applicable to the present case, with respect to the defendant’s claim to recover the Open Area. The plaintiffs cannot defend against such claim by arguing they established adverse possession of the same, as this involves arguing that they, as co-owners of the Building, could somehow obtain rights to use the Open Area, being common parts, to the exclusion of other co-owners.

37.  And on a claim made by an incorporated owners for the recovery of common parts wrongfully occupied by a co-owner, Mayo VP at 124F of the report in Incorporated Owners of Man Hong Apartments held, after referring to various authorities, as follows:-

“The conclusion which can be reached from all of this is that there is no time bar to the claim which is being made by the plaintiff in respect of the claims it is making.”

38.  Therefore, I also find the defendant right when it submits that that there could not be any defence of estoppel by acquiescence against an incorporated owners’ claim to enforce a deed of mutual covenant to recover the common parts from a co-owner.

39.  Upon Mr Koo’s concessions, parties managed to agree that the witness statement of Leung Kit Sang dated 4 August 2022; the witness statement of Kwong Kam Ping dated 22 November 2022; the witness statement of Tope Hung Wai Yeung Fiona dated 4 August 2022; and the witness statement of 黃惠貞, each as partly redacted in the trial bundles, shall be adduced as evidence without cross examination of the witnesses thereof.

D.  THE PLAINTIFFS’ CLAIM

40.  It is trite that the Court of Final Appeal in Jumbo King Ltd v Faithful Properties Ltd & Ors (1999) 2 HKCFAR 279 at 296D-E laid down the court’s approach to construction of documents:-

“… The construction of a document is not a game with words. It is an attempt to discover what a reasonable person would have understood the parties to mean. And this involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve …”

41.  It is thus necessary to consider the physical condition of the ground floor of Block E and E1 of North Point View Mansion as at 22 June 1961, as this is relevant to construing what was assigned away by Li Pui Nung in the 1961 Assignment.

D1.  Physical condition of the building in June 1961

42.  With respect, and this was also recognized by Mr Koo and Mr Ma, SC, none of the factual witnesses can speak of the physical condition of the ground floor of Block E and E1 in June 1961. The earliest time they can speak of only goes back to the 1970s and the 1980s. In my judgment, their evidence is not helpful.

43.  The parties have also adduced expert evidence from registered architects, viz Mr Lai Wai Man Vincent for the plaintiffs, and Mr Chung Chun Kau for the defendant.

44.  Again, with respect, I derive little assistance from the expert evidence on the physical condition of the ground floor of Block E and E1 in June 1961:-

44.1.  The experts naturally started off from the presumption that North Point View Mansion must have been constructed in accordance with the approved plans; otherwise the occupation permit would not have been granted on 8 May 1961.

44.2.  In their joint statement, the experts more or less agreed it was not impossible for the Covered Area to be enclosed and turned into domestic use by the time Li Pui Nung assigned away the Ground Floor in Block E and E1 on 22 June 1961. But whether this was actually done could not be ascertained.

44.3.  They also could not tell from a study of the conveyancing documents whether the Covered Area was enclosed and turned into domestic use; and/or whether the Open Area ceased to act as car ports by 22 June 1961.

45.  Based on the above, I do not think much weight can be given to the defendant’s submissions that the roofed-over area of the ground floor was slightly elevated as compared to the vehicular access in the open space – something which was pointed out in paragraph 8 of the Building Completion Report (see §12 above) – indicated that the roofed-over area of the ground floor was separate and distinct from the open space. It is simply not known whether such a difference in elevation was removed by the time of the occupation permit was issued and/or by the time the 1961 Assignment was executed. I do not think this piece of evidence can aid the construction of the 1961 Assignment.

46.  In summary, I must construe the conveyancing documents without evidence on the actual condition of the Covered Area and the Open Area as at 22 June 1961.

D2.  Construction of the 1961 Assignment

47.  Mr Koo submits that the phrase “Ground Floors … in Block E and E1 of North Point View Mansion” in the 1961 Assignment must mean that Kwei Ming Hsi (as the purchaser) must have been assigned both the Open Area and the Covered Area, because:-

47.1.  The occupation permit shows that “North Point View Mansion” comprised (i) the residential units from the 1^st to 6^th floors; (ii) 26 car parking spaces on the ground floor[9]; and (iii) garages at the lower ground floor.

47.2.  With the notional subdivision of North Point View Mansion, “Block E and E1 of North Point View Mansion” represented the portion of North Point View Mansion constructed on the Subject Lot, comprising (i) residential units from the 1^st to 6^th floors; (ii) 10 car parking spaces on the ground floor; and (iii) a garage at the lower ground floor.

47.3.  In the DMC, “Block E and E1 of North Point View Mansion” as the portion of North Point View Mansion constructed on the Subject Lot, was defined as “the said building”. Therefore, the reference to “Block E and E1 of North Point View Mansion” or “the said Building” in the DMC must also cover the Open Area. Otherwise, Mr Koo argues, the DMC would have failed to define the co-owners’ respective rights and obligations regarding the Open Area.

47.4.  Li Pui Nung reserved everything other than the exclusive use and occupation of “second floor in Block E1” to himself by way of the first assignment. So, he must have reserved the exclusive use and occupation of the Open Area as well.

47.5.  Since the 1961 Assignment was executed subject to the DMC, the words “Ground Floors … in Block E and E1 of North Point View Mansion” used therein must be similarly understood to include the Open Area.

48.  I disagree with Mr Koo. I agree with the submissions of Mr Ma, SC that the 1961 Assignment did not assign to the plaintiffs’ predecessors-in-title the exclusive use and occupation of the Open Area.

49.  First, the way in which the occupation permit was worded would not have, in my judgment, weighty influence on how one should construe the DMC and the assignments. The occupation permit was drawn up by a different drafter. Its purpose was also different from the DMC and the assignments. It was unlikely for the drafter of the occupation permit to have the same matters in mind as the drafters of the DMC and the assignments regarding what “North Point View Mansion” could and should mean.

50.  Secondly, as set out in §24.2 above, “the said Building”, and thus Block E and E1 of North Point View Mansion, was defined in the second recital of the DMC as describing the “eight storeyed building” erected on the Subject Lot, distinct from the Subject Lot itself. It did not expressly include the open space surrounding the building in the definition. If “the said Building” was intended to mean the entire Subject Lot, it would be superfluous to define the Subject Lot as “the said premises” in the DMC.

51.  A similar distinction was also made in the 1961 Assignment. The Subject Lot was defined as “the said premises”; whereas North Point View Mansion was defined as “the said building”. This distinction was also maintained in the 2 subsequent assignments in 1972 and 1976.

52.  I agree with Mr Ma, SC that the reference to a certain floor in Block E (or Block E1) was the phraseology particularly adopted in the DMC and the assignments to describe the particular residential unit on that floor. Without more, I do not find it natural and logical to assume that “Ground Floors … in Block E and E1” covered the Open Area as well. Since it is not clear whether the Covered Area was turned into domestic use by the time of the 1961 Assignment, I do not think one can derive much by asserting that the ground floor was in a similar or a different nature to the residential units in the upper floors. In my judgment, it is all the more natural to read “Ground Floors … in Block E and E1” as referring only to the Covered Area, following the phraseology adopted in those documents.

53.  I find the above interpretation consistent with the rest of the DMC. As set out in §24.4 above, the language used in paragraph 3 clearly shows that the structures listed under paragraph 3(b) were intended to be the common parts. The reference to side walks and other external parts indicated that the common parts would be found outside of the roofed-over area. It would render the reference to these structures otiose if the ground floor of Block E and E1 were to mean both the Covered Area and the Open Area.

54.  Further, Mr Ma, SC submits that the reference to “yards” of the said Building in paragraph 2 of the DMC confirms the intention that the Open Area would be considered as the common parts; otherwise there would be no reason to grant co-owners a right of way through the yards.

55.  In this regard, I prefer and accept Mr Chung’s evidence that yards should normally be understood as an area that opens up to the sky with enclosure walls or boundary walls surrounding its sides. Normally, yards are on the ground level. His opinion accords with common sense, and is readily persuasive. It appears to me to be straining the natural meaning of yards when Mr Lai said this could only have meant the lightwell within the building in North Point View Mansion.

56.  I accept Mr Chung’s opinion that the car parking spaces and the open space allowing vehicular access in the Open Area can be considered falling within the meaning of “yards” in the DMC. I accept the defendant’s submissions that this tends to show that the words “Ground Floors … in Block E and E1” only referred to the Covered Area.

57.  Mr Koo submits that the Open Area could not be considered as “yards”, because whether a user of the car parking space in the Open Area would have the right to walk across the Open Area to reach the building would depend on the approval of the owner of the Open Area.

58.  I cannot accept Mr Koo’s submissions. In my view, his submissions turn the logic the wrong way round: they presuppose that the Open Area must fall within the exclusive use and occupation of a particular co-owner. But the exercise of interpreting the DMC is to answer whether this ought to be the case to begin with. I do not think it is helpful to start with the conclusion and work backwards.

59.  Thirdly, I can see no particular reason why the Open Area must be disposed of in an assignment with the Covered Area at the same time. I disagree with Mr Koo that there ought not be any difference between the 3 car parking spaces in the Open Area, and the 7 car parking spaces within the Covered Area. There is no provision in the Government Lease (as subsequently varied), the occupation permit, and/or the other conveyancing documents that the exclusive use and occupation of all car parking spaces must be kept in the hands of the same owner, and dealt with in the same transaction. It was a matter for Li Pui Nung as the first owner to agree with subsequent purchasers as to how these car parking spaces could and should be used – it was also a matter for them to take whatever consequence the drafting of the DMC and other conveyancing document might yield. In my judgment, the fact that the car parking spaces were all planned on the same level does not import the conclusion that they must be considered as one composite subject matter; there is no persuasive basis to read any reference to the ground floor of Block E and E1 as including the Open Area as well.

60.  Mr Ma, SC submits that the above interpretation is fortified by Billion Zone Company Ltd v The Incorporated Owners of May Moon House HCA 15296/1998 & HCA 19488/1998 (Deputy Judge Poon; 11 November 2005).

61.  In Billion Zone, May Moon House was a building with car parking spaces (open and covered) on the ground level within the boundary of the land lot. The ground floor owner (BZ) claimed that it was entitled to the exclusive possession of the entire ground floor, including the caretakers’ room, the meeting area, and the guard house located on that level. The incorporated owners argued that those 3 structures were the common parts of the building which BZ enjoyed no exclusive use and occupation. By way of an assignment executed in 1959, BZ’s predecessor-in-title was assigned the exclusive use and occupation of “the whole of …Ground Floor”.

62.  Deputy Judge Poon (as the Chief Judge of the High Court then was) rejected BZ’s argument that its predecessor-in-title was assigned the entire ground level of the land lot. His reasoning was set out in, inter alia, §§34-39 of the judgment:-

“34. First, on a fair reading, the 1959 Assignment drew a clear distinction between the Lots and the Building. The Ground Floor of the Building obviously means the roof-over area on the ground level. It does not include the entire ground level of the Lots. This construction is consistent with the Approved Ground Floor Plan, which depicts the boundary of the Lots as well as the boundary of the roof-over area on the ground level. If the Ground Floor of the Building were to include the entire ground level of the Lots, the depiction of the boundary of the roof-over area would become superfluous …

…

36. Third, the cases cited by [BZ] do not support [its] proposition. [It] first relies on Governors of St Thomas’s Hospital v Charing Cross Railway Co (1861) J & H 400. That case concerned a sale by the Corporation of London (as Governors of St Thomas’s Hospital) to the Charing Cross Railway Company under the Lands Clauses Act. The issue was whether the garden attached to the hospital formed part of the hospital so that the Railway Company, if intending to take part of the premises, would be bound to take the whole premises which included the hospital and the garden under the legislation. The court held that the garden was part of the hospital. That case is distinguishable for two reasons. It is a case on the construction of a particular English Act, which has no application here at all. Further, the hospital was under a single ownership. The court readily recognized that the position might be different if common ownership were involved. Sir W Page Wood VC said at p.405:

‘In construing the words of the statute I have to consider whether any substantial distinction can be drawn between these buildings and the adjacent land and the rest of the hospital. Where a certain part of the property consists of houses let to under-tenants, the distinction is quite intelligible; so in the case put in argument of a garden which is used in common by the occupants of several distinct houses, the different between that and the actual case is obvious, and it would be a strange contention that taking such a garden was taking a part of each house. As to another analogy mentioned in argument, that of the quadrangle of a college, I should not hesitate to say that it formed part of the college itself. So, here, what is intended to be taken is, in my opinion, part of St Thomas’s Hospital.’

37. The distinction drawn by Sir W Page Wood VC above (with emphasis supplied tends to support the IO’s case here where there is a multi-storied building standing on the Lots involving common ownership, rather than BZ’s contention.

38. The next case relied on by [BZ] is Doe d Clements v Collins (1788) 2 TR 498. It dealt with the intention of a testator under a will and concerned a house under a single ownership and the areas surrounding it. It is entirely distinguishable from the present case.

39. For the above reasons, I find that under the 1959 Assignment, Madam Wong Yuk acquired exclusive possession of the Ground Floor of the Building, namely, the roof-over area on the ground level only, and not the entire ground level of the Lots as contended by BZ.”

(Emphasis as in original)

63.  In my view, Billion Zone is illustrative in showing that the defendant’s interpretation of the words “Ground Floors … in Block E and E1” is not illogical. Rather, contrary to Mr Koo’s submissions, it should be seen as the natural and reasonable interpretation given the intended divergence of ownership in different parts of Block E and E1 of North Point View Mansion as a multi-storey building to be achieved by, inter alia, the DMC and the 1961 Assignment.

D3.  Conclusion on the plaintiffs’ claim

64.  The plaintiffs fail to establish that they have acquired the exclusive use and occupation of the Open Area. Their claim should be dismissed.

E.  THE DEFENDANT’S COUNTERCLAIM

E1.  The Open Area

65.  Based on my judgment on the plaintiffs’ claim, the Open Area falls within the common parts of the Subject Lot pursuant to section 2 of the Building Management Ordinance (Cap 344) (“BMO”). I agree with the defendant that, insofar as the plaintiffs use and occupy the Open Area to the exclusion of other co-owners of the Subject Lot, this is in contravention of section 34I of the BMO.

E2.  The Covered Area

66.  Under paragraph 8 of the DMC, all co-owners covenanted as follows:-

“Each of the parties hereto shall not make any structural alteration to the said Building or to the floor of which he is entitled to the exclusive use, occupation or enjoyment …”

67.  Further, all co-owners further covenanted under paragraph 10 of the DMC as follows:-

“Each of the parties hereto shall not use or suffer to be used the floor of which he is entitled to the exclusive use, occupation or enjoyment or any part thereof any illegal, unlawful or immoral purpose …”

68.  It is the defendant’s case that, by enclosing the Covered Area and converting it to domestic use, the plaintiffs breached paragraphs 8 and 10 of the DMC.

69.  It is easier to start with the defendant’s arguments with respect to paragraph 10 of the DMC. Mr Ma, SC submits that “unlawful purpose” should receive a wider meaning than criminal acts. He prays in aid Lam Suk Yee & Wu May Ling v The Incorporated Owners of Kam Kin Mansion [2018] HKCFI 2760 (Deputy Judge To; 19 December 2018)[10].

70.  In Kam Kin Mansion, the owners of a covered playground on the ground floor of a multi-storey building enclosed it and converted it to domestic use. The approved plans showed that one side of the external walls encircling the covered playground should have been a parapet wall; but the owners added windows on top of the parapet wall, and also put in partitions, kitchen and toilets.

71.  The learned Judge accepted the incorporated owners’ argument that each of the terms in the phrase “illegal unlawful or immoral purpose” in the deed of mutual covenants in that case carried a different meaning. He held that the word “illegal” would often be used in relation to prohibition under criminal law or statute, while the word “unlawful” would have a wider import and encompass criminality and defiance of the law in general, whether enacted by statute or evolved under common law and whether criminal or civil in nature. The exact meaning of these terms would depend on the context: see §78 of the judgment.

72.  I agree with the defendant that the DMC in the present case should receive a similar interpretation like the one in Kam Kin Mansion. Given the DMC was drafted by lawyers, the presumption must be that the drafters intended each of the terms in the phrase of “illegal, unlawful or immoral purpose” in paragraph 10 of the DMC to carry a different meaning. It is also reasonable to read paragraph 10 as intending to cast the net of prohibition wider than just criminal liabilities as its object was to create a harmonious living environment in the building.

73.  There is no evidence showing that the Government has agreed to any amendment to the user restriction in the Extension Letter and the occupation permit. In my judgment, turning the Covered Area into domestic use, and rendering the maximum roofed-over area of the building to exceed 40% of the area of the Subject Lot[11], was an unlawful use of the Covered Area.

74.  The defendant further argues that the walls, windows and doors enclosing the Covered Area are all unauthorized building works; the plaintiffs have hence breached paragraph 8 of the DMC.

75.  This dispute centers on whether the enclosure of the Covered Area falls within section 41(3) of the Buildings Ordinance (Cap 123) (“BO”), such that no prior approval of the Buildings Department was required. Otherwise, it would fall foul of section 14, and would be liable to be demolished as per section 24(1).

76.  It is trite that section 41(3) covers building works which do not involve the structure of a building. The meaning of the statutory provision has been considered by the Court of Final Appeal in Mariner International Hotels Ltd v Atlas Ltd (2007) 10 HKCFAR 1 at §51:-

“… In my view, Mr Sumption is right in his submission, on the first requirement, that building works added to a building involves its structure if they serve a structural function or are capable for some reason of affecting the integrity of the structure …”

77.  In that case, the Court of Final Appeal accepted that concrete plinths laid on the roof and steel gondola posts fixed to the roof slab were building works involving structure, because the concept of involving the structure of the building would not be limited to holding the building up.

78.  In the present case, the experts were asked to opine whether the enclosure of the Covered Area would be exempted from requiring prior approval under section 41(3). I prefer and accept the opinion of Mr Chung, stating that the enclosure did not fall within section 41(3):-

78.1.  Mr Chung referred to section 41(3D) and stated that building works could not have been exempted if they contravened other building regulations. The enclosure changed the usage of the Covered Area because parking cars would not be possible in such an enclosed space. Hence, the enclosure contravened other building regulations. I cannot see any meaningful response from Mr Lai.

78.2.  I disagree with Mr Lai that the enclosure did not involve the structure of the building. I agree with Mr Ma, SC that Mr Lai’s opinion was inherently unreliable, because his comment that the enclosure only involved simple brickwork was based on his visual inspection and guesswork, but not any objective test.

78.3.  I further agree with the defendant that the enclosure obviously involves the structure of the building, because it must have shared some of the load of the upper floors in the way it was connected with the rest of the building, and it must have added further load to the foundation of the building because it was exposed to the elements.

79.  In my judgment, the defendant has proved that the plaintiffs had no right to retain the enclosure of the Covered Area.

E3.  Other unauthorized building works

80.  The defendant also points to a few other structures on the Subject Lot, and says that the plaintiffs are liable to demolish them as unauthorized building works.

81.  First, I stated earlier that the Orange Gate and the parapet wall lining the western boundary of the Subject Lot were demolished in April 2020. The defendant says it demolished them because the Buildings Department issued 2 letters on 19 September 2018, confirming that the Orange Gate and the parapet wall were unauthorized building works.

82.  In its closing submissions, the defendant does not seek to claim damages for the demolition of those structures. I do not see it necessary for me to give a definitive view as to whether the Orange Gate and the parapet wall were unauthorized building works, as they are no longer in existence, and I am not asked to grant any remedy regarding their demolition.

83.  Secondly, the defendant claims that part of the Open Area was in fact enclosed and integrated as part of the Covered Area. In the Defence and Counterclaim, the defendant describes this enclosure as “the Structure”. I append to this Judgment as Appendix 2 a copy of the plan annexed to the Defence and Counterclaim showing the location of the Structure.

84.  When one compares the photo showing the location and the external view of the Structure[12], with the photos showing the interior of the enclosed Covered Area[13], the Structure should correspond to the guest bathroom, or at least part of it.

85.  I agree with the defendant that the Structure was unauthorized building works, because it encloses part of the Open Area in contravention of the approved plans. There is also no evidence showing that the Government has agreed to amend the approved plans to allow the erection of the Structure. Similar to the my findings in Section E2 above with respect to the Covered Area, I also find that the Structure could not have been exempted under section 41(3) of the BO.

E4.  The appropriate remedy

86.  In relation to the Open Area:-

86.1.  The defendant is entitled to a declaration that the Open Area is the common parts of Block E and E1 of North Point View Mansion.

86.2.  I also find it just and equitable to grant the defendant an injunction restraining the plaintiffs, whether by themselves or their tenants, licencees and/or agents, from (a) converting or seeking to convert the Open Area or any part thereof to their own use; and (b) interfering in any manner with the use and/or enjoyment of the Open Area or any part thereof by the other co-owner(s) and/or lawful occupier(s) for the time being of the Subject Lot.

86.3.  There shall similarly be an injunction mandating the plaintiffs to demolish the Structure and reinstate the Open Area in accordance with the approved plans forthwith at their own cost.

86.4.  I accept the submissions of Mr Ma, SC that the defendant is entitled to the above remedies based on the principles explained by the Court of Appeal in Grand Power International Limited v Chan Sing Hoi Enterprises Limited & Ors [2020] HKCA 133 (Kwan VP; Chu & Au JJA; 11 March 2020). I do not think it avails to the plaintiffs to argue that the defendant should be denied an injunction because of the delay in enforcing its rights over the Open Area: see §37 above.

87.  In relation to the Covered Area, the defendant asks for an injunction restraining the plaintiffs, whether by themselves or their tenants, licencees and/or agents, from using the Covered Area for any purpose other than as car ports, unless and until all necessary approval(s) have been obtained from the relevant departments and/or authorities for the change of permitted user of the said part of the building under the BO. It further seeks an injunction mandating the plaintiffs to demolish any unauthorized building works enclosing the Covered Area forthwith at their own cost.

88.  The defendant explains that the exception is added to the injunction regarding the use of the Covered Area, as the learned Judge in Kam Kin Mansion refused to grant an injunction which might affect the owner’s ability to apply for a change of use under the BO: see §90 of the judgment.

89.  In my judgment, such an exception should also be included in the injunction mandating the demolition of the unauthorized enclosure of the Covered Area, as this may also be inconsistent with the possibility that the plaintiffs may manage to obtain an approved change of user before demolition.

90.  Mr Koo submits that this court should not grant these injunctions because it is unjust and inequitable to do so. He argues that the enclosure of the Covered Area existed for decades without causing any injury or prejudice to other co-owners. The defendant was always able to carry out their duty with respect to managing the common parts without any inconvenience or obstruction. Further, since there can now be no vehicular access to the Open Area or the Covered Area, any order requiring the demolition of the enclosure would serve no meaning or benefit.

91.  I cannot accept Mr Koo’s submissions.

91.1.  Technically, whilst estoppel and/or acquiescence on the defendant’s part and on the Government’s part are pleaded in the Reply and Defence to Counterclaim, prejudice to the plaintiffs has not been pleaded as a ground resisting the grant of the injunctions sought by the defendant. I do not think it is fair for the plaintiffs to rely on an alleged lack of prejudice to resist the defendant’s counterclaim when the arguments on estoppel and/or acquiescence have been withdrawn.

91.2.  More importantly, I tend to agree with Mr Ma, SC that there appears to be no unfairness to the plaintiffs in requiring them to only use and occupy their property in accordance with the approved plans and the DMC immediately. Evidence shows that the plaintiffs rented out the ground floor for profit since at least 2002. Their personal circumstances are not prejudiced by the grant of the injunctions; and I do not think it fair to allow them to complain that they will be stripped of the opportunity to benefit from using the Covered Area unlawfully.

92.  I am of the view that the defendant shall be entitled to the above injunctions in relation to the Covered Area as well.

93.  During closing, I asked Mr Ma, SC whether this court has the power to temporarily suspend the effect of the injunctions in relation to the Covered Area for a fixed period of time, analogous the one exercised in public law cases in eg Koo Sze Yiu v Chief Executive of the HKSAR (2006) 9 HKCFAR 441 and W v The Registrar of Marriages (2013) 16 HKCFAR 112. Mr Koo also made submissions on the spot as to the suitable order to be given, if the court would be minded to temporarily suspend the effect of any injunction to be granted.

94.  Upon more mature reflection, I do not think such a course is preferable. Since I only raised this at closing, I do not have the benefit of extensive submissions as to whether a power to suspend the effect of an injunction is available to the court in the context of a dispute purely involving private litigants; and even if such power exists, the circumstances in which the power should be exercised. It is unwise for the court to proceed on such basis without affording parties the opportunity to fully address the court on such a fundamental point. Since it is in my view fair to require the plaintiffs to reinstate the Covered Area forthwith, it is a matter for them whether they wish to take whatever action to regularize the current use of the Covered Area; and whether such course is indeed open to them at all.

95.  The defendant further asks for an injunction that the plaintiffs shall forthwith take action as may be necessary to comply with the building orders, warning letters and/or notices issued by the Buildings Department and the Lands Department, including the letters to the plaintiffs dated 30 October 2019 and 30 December 2019.

96.  The 30 October 2019 letter and the 30 December 2019 letter[14] were issued by the District Lands Office/Hong Kong East of the Lands Department to the plaintiffs, citing a breach of Conditions 2(a) and 2(b) of the Extension Letter. It was stated that further enforcement action might be taken, including the vesting of the 2/16^th undivided shares in the Subject Lot in the Financial Secretary Incorporated.

97.  In my judgment, the defendant is not entitled to the injunction sought, nor is it necessary to grant one to protect the defendant’s interest. On the face of the 30 December 2019 letter, the subject matter the Government stated that might be subject to further enforcement action was the plaintiffs’ interest in the Subject Lot, but not Block E and E1 of North Point View Mansion generally. The defendant does not appear to me to have any interest in preventing the Government from taking enforcement action against the plaintiffs’ undivided shares in the Subject Lot. In addition, the other injunctions granted to the defendant will, in my judgment, purge the breach of the Extension Letter in any event.

98.  Finally, the Defence and Counterclaim asks for damages to be assessed in relation to the unlawful use of the Open Area and the Covered Area. In the absence of evidence substantiating any loss by the defendant, I assess damages in the notional sum of HK$100.00.

Other matters

99.  In case this matter proceeds further, and I am found wrong in my decision, it is the parties’ agreement that the plaintiffs should be awarded HK$4,345.00 per month as mesne profits for their loss of use of the Open Area since 24 September 2019, up to the date the plaintiffs would recover possession of the same. I would also award interest on the mesne profits at half judgment rate, from the date of the service of the Writ herein up to the date of judgment, and at judgment rate thereafter, up to the date the plaintiffs recover possession of the Open Area.

Conclusion

100.  The plaintiffs’ claim is hereby dismissed.

101.  The defendant’s counterclaim is allowed; the defendant is entitled to the remedies set out in paragraphs 86, 87, 89 and 98 above. In order to err on the side of caution, I shall also give liberty to apply with respect to how the injunctions should be worded to reflect my judgment.

102.  I make a costs order nisi that the defendant do have costs of the present case (including all costs reserved, if any), to be taxed if not agreed, with certificate for one counsel. It is a matter for the taxing master as to the reasonable fees the defendant would have notionally incurred for retaining a counsel of requisite seniority to conduct its case. Unless there is any application to vary the costs order nisi within 14 days from this Judgment, the order nisi is to be made absolute.

103.  It remains for me thank counsel for their valuable assistance.

Appendix 1

The plaintiffs’ plan

Appendix 2

The defendant’s plan