THE INCORPORATED OWNERS OF K. K. MANSION (金堅大廈業主立案法團) v. JADE WATER GROUP LTD ( 泓璟集團有限公司)

DCCJ 5343/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.5343 OF 2007

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JUDGMENT

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1.  K K Mansion (“the Building”) is a multi-storey building in Caine Road with shops on the ground floor, car parks in the lower ground floors and residential units in the upper floors.  The Defendant was the occupier, and is now the owner, of Shops 2 and 3 on the Ground Floor, operating a Woodland Montesorri Pre-School and a Children’s Activity Centre at those premises.  Since about April 2004, the Defendant has put up advertising signboards on the surfaces of the external walls outside Shops 2 and 3.  The Plaintiff, the owners’ incorporation for the Building, has requested the Defendant to remove those signboards, on the basis that the external walls are common parts of the Building.  The Defendant has refused to remove the signboards, claiming that it has the right to the exclusive use of such parts of the external walls, including the surfaces, that enclose Shops 2 and 3, to which I shall refer in this judgment, perhaps inelegantly, as “the enclosing walls” for short.

2.  On 3 December 2007, the Plaintiff issued the Writ in this action against the Defendant, seeking declaratory and injunctive relief against the Defendant, and damages or mesne profits for trespass.

3.  The evidence relied on by both parties on the issue relating to the right to use the external walls is mainly documentary, consisting of a number of instruments registered at the Land Registry.  I have been referred to the following documents:

(1)   Assignment dated 8September 1973 (“the First Assignment”)

(2)   Deed of Mutual Covenant dated 8 September 1973 (“the DMC”)

(3)   Deed of Partition dated 10 March 1978 (“the Deed of Partition”)

(4)   Assignment dated 29 September 1981 Memorial No.UB2172469 (“the Shop 2 Assignment”)

(5)   Another Assignment dated 29 September 1981 Memorial No.UB2172468 (“the Shop 3 Assignment”).

History of the Building

4.  The developers of the Building were 2 companies: Lee Hing Investment Co Ltd (“Lee Hing”) and Wing Shing Hing Co Ltd (“Wing Shing Hing”), together called “the Developers”, who owned the land on which the Building was constructed as tenants-in-common in the ratio of about 2:1.  After the development was completed, the land was notionally divided into 1720 shares, for the purpose of selling the individual units.  The first flat that was sold was Flat 14A: see the First Assignment dated 8 September 1973.  On the same day, the parties to the First Assignment executed the DMC.

5.  On the Ground Floor, there were 3 units described as Shops A, B and C.  On each of the First, Second and Third Lower Ground Floors was a car-port.  Underneath the Third Lower Ground Floor was a Covered Playground.  On the upper floors were the flats

6.  In 1977, the Developers, while still holding the shares in relation to the lower floors, decided to split the units on the Ground Floor, formerly Shops A, B and C, into 7 units, to be called Shops 1 to 3, and Flats A, D, E and F.  On 24 June 1977, the Developers assigned Flat F to a purchaser, and these parties entered into a Sub-Deed of Mutual Covenant on the same day.  I should mention that neither party relies on any provisions in this Sub-Deed of Mutual Covenant for the purpose of this case.  I have referred to it only to explain why there came to be Shops 1 to 3.

7.  By 10 March 1978, the Developers still retained 177 out of 1720 shares in the Building, such shares pertaining to the car-ports on the 3 lower ground floors, the Covered Playground, and Shops 1 to 3 on the Ground Floor.  They decided to divide those units between themselves.  Hence the Deed of Partition dated 10 March 1978.  The result was that Wing Shing Hing took the car-port on the Third Lower Ground Floor and Shop 1, while Lee Hing took the rest, including Shops 2 and 3.

8.  By 2 separate Assignments, both dated 29 September 1981, Lee Hing assigned its rights and interests in Shop 2 and Shop 3 respectively, to other parties.  Ultimately, by assignments dated 31 December 2003 and 22 May 2007, the Defendant obtained ownership of Shops 2 and 3.

The First Assignment

9.  Under the First Assignment, the Developers assigned 10 equal undivided 1720^th parts or shares in the land to the purchaser, together with:

“the full right and privilege to the use occupation and enjoyment of [Flat 14A] … AND all the estate right title interest property claim and demand whatsoever of the [Developers] therein and thereto EXCEPTING AND RESERVING unto the [Developers] or others the owners for the time being of the other 1710 equal undivided 1720^th parts or shares … the full right and privilege to the exclusive use occupation and enjoyment of the said shops and the other self-contained flats, the said car-ports … , the whole covered playground underneath the Third Lower Ground Floor … and the main and other roofs and the external walls of the said Building (except the said Flat and except such portions of the said Building as are reserved for common use and enjoyment or intended so to be) …”

10.  Mr Koo, counsel for the Plaintiff, submits that clearly the external walls were not included in the grant to the purchaser under the First Assignment.  Instead, they were expressly reserved from, and did not form part of, the grant.

The DMC

11.  At the same time the First Assignment was executed, the parties entered into the DMC, Clause 1 of which gave the Developers:

“the sole and exclusive possession and the full right and privilege to the use occupation and enjoyment of … the Playground, Car-ports, Shops and Flats … and also the Main Roofs … as set out in the First Column of the said Schedule hereto (save and except [Flat 14A] … to the exclusion of the Second Owners.

Clause 2 gave the new owners of Flat 14A the right to use Flat 14A to the exclusion of the Developers.  The Schedule sets out all the different units in the Building, and the number of undivided shares representing each unit.  No mention is made in the Schedule of the external walls.

12.  Clause 6 of the DMC then deals with “common parts and facilities”, giving each owner in common with his co-owners the right of access to and the right to use:

“the common lifts, lift lobbies, the common entrance halls, passages and corridors, staircases and landings of and in the said Building, the said Common Rights of Way, light well, the switch and transformer room, …and all such other installations, apparatus and facilities of the said Building as are intended for the general service of the said Building.”

13.  Under Clause 7 of the DMC, these common parts or facilities were reserved for the common enjoyment and benefit of all the owners, and no owner or group of owners were to have any right to the exclusive use or enjoyment thereof to the exclusion of the others.

14.  Clause 11 of the DMC provided for the apportionment of some of the Building’s outgoings and expenses, each owner’s share being in proportion to the number of shares he holds in the land.  Under Clause 11(iii) each owner would have to pay his due proportion of:

“the cost of keeping in good and tenantable repair and condition the foundation, the side walks, main walls, supports, beams, columns, gutters and fences and all external parts (except such portions of the main and other roofs of the said Building the right to the exclusive use and enjoyment whereof is or are held by any particular owner or owners) of the said Building and all drains, sewers and the said common parts and facilities … Provided that the cost and expenses for keeping in repair the said excepted portions of the main and other roofs shall be borne wholly by the owner or owners for the time being entitled to the exclusive use and enjoyment of such excepted portions.”

15.  Mr Koo argues that although on the one hand the external walls were not expressly included in the “common parts and facilities” under Clause 6 of the DMC, on the other hand they were also left out in Clause 1, Clause 2 and the Schedule which deal with parts of the Building the exclusive use of which is given to the Developers (and their successors-in-title) and the owner of Flat 14A.  However, Mr Koo adds, the owners’ obligation under Clause 11(iii) to share in the cost of upkeep for “all external parts” of the Building, which must include the external walls, is a strong indication that the intention as expressed in the DMC is that the common parts of the Building should include the external walls.

The Deed of Partition

16.  The Deed of Partition in 1978 gave Lee Hing the exclusive use of the Shops 2 and 3 with the benefit of and subject to the DMC.  Again no specific mention was made of the external walls.

The Shop 2 and Shop 3 Assignments

17.  Likewise, the Shop 2 and Shop 3 Assignments gave exclusive use of the Shops to the respective assignees.  Under both assignments, Lee Hing excepted and reserved unto the other co-owners for the time being of the remaining shares in the land “the exclusive right to the use … of the remaining self-contained units of the said Building the Main Roof and Flat Roofs and the Car Parking Spaces and all other parts of the said Building not intended for common use”.  Again no mention was made of the external walls or any part thereof.

The Plaintiff’s Case

18.  Mr Koo submits that the DMC properly construed gives all the owners the common right to use the external walls.  Alternatively he relies on section 2 of the Building Management Ordinance (Cap.344) which gives the following meaning to “common parts”:

“(a)   the whole of a 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.”

Schedule 1 paragraph 1 includes “external walls”.

19.  Mr Koo submits that none of the relevant instruments gave the exclusive right to use the external walls or any part thereof to any owner.  By virtue of section 2, the external walls form part of the common parts.

The Defence Case

20.  At the beginning of the trial, the defence as set out in Paragraph 1 of the Amended Defence was to the effect that the Defendant, being a co-owner in the land, is by virtue of various instruments entitled to the exclusive use of Shops 2 and 3 inclusive of the enclosing walls.  No averment was made as to which part or parts of such instruments were being relied on, save that Paragraph 2 of the Amended Defence did set out certain clauses of the DMC, none of which made it immediately apparent how they could give exclusive possession of the enclosing walls to the Defendant.

21.  During the Defendant’s opening, Mr Charles Wong of the Defendant’s Solicitors submitted that at the time of the First Assignment and the DMC, the Building Management Ordinance had not come into effect and therefore the common law applied: that a demise of a part of a building would include the external walls enclosing the part so demised.  The principle is derived from a number of English and Hong Kong cases which I will come to later in this judgment.  Therefore, argued Mr Wong, under the assignment in respect of each individual unit (including Shops 2 and 3) in the said Building, the grant of exclusive use of that particular unit would include the grant of exclusive use of the enclosing walls.

22.  The question then arose as to whether such a defence had been sufficiently pleaded, and Mr Koo for the Plaintiff also expressed concern if other lines of defence would be relied on, given the very general and unspecific nature of the defence case as pleaded in the Amended Defence.  The outcome was that I gave leave to the Defendant to re-amend the Defence, so that Paragraph 1 of the Re-Amended Defence now pleads that by virtue of the First Assignment, the DMC, the Shop 2 Assignment, the Shop 3 Assignment and a subsequent assignment of Shop 3, the Defendant is entitled to the exclusive use of the enclosing walls, “by virtue of the common law at the time of the said assignments”.

23.  Further, in order to allay Mr Koo’s concern that the Defendant might rely on other lines of defence, Mr Charles Wong for the Defendant was prepared to and did make the admission or concession (contained in Exhibit P2), that “unless it is found that the Defendant has the right to the exclusive use of the parts of the external walls enclosing Shop 2 and Shop 3, the external walls including, inter alia, the said parts of the external walls enclosing Shop 2 and Shop 3, are common parts of the Building.”

24.  During the hearing, Mr Koo pointed out that the predecessor of the Building Management Ordinance, namely the Multi-Storey Buildings (Owners Incorporation) Ordinance, also Cap.344, which came into effect on 19 June 1970, already contained the same definition of “common parts” in section 2 (except for some minor differences which are immaterial), and the same paragraph 1 in the First Schedule, so that the instruments in this case would still be read subject to the statutory provisions on which he relied.

The First Assignment and Sturge v Hackett

25.  Mr Wong for the Defendant accepts the applicability of section 2 of the Multi-Storey Buildings Ordinance but maintains that his argument is not affected.  He relies on Sturge v Hackett [1962] 1 WLR 1257 and other cases for the above-mentioned common law principle.  Where, under each assignment of the individual units of the Building (such as the First Assignment), the Developers granted the right to the exclusive use of each unit, that grant included with it, by virtue of the principle in Sturge v Hackett, the right to the exclusive use of the enclosing walls.  Mr Koo argues that (1) Sturge v Hackett does not apply to a multi-storey building situation in Hong Kong, or at least to the present case – either by virtue of section 2 of the Building Management Ordinance or because the underlying reasons for that decision do not apply to Hong Kong or the present case; and (2) even if Sturge v Hackett does apply, the express reservation of the external walls by the Developers in those assignments unto the Developers and the co-owners for the time being of the remaining shares in the Building, negates the application of Sturge v Hackett. 

26.  In Sturge v Hackett, the defendant was a tenant of a flat in a manor house.  While attempting to burn off a swallow’s nest in the cornice under the eaves outside his flat, he negligently caused a fire which almost destroyed the entire house.  He was insured for occupier’s liability, but the underwriters refused to accept liability on the basis that the fire broke out at the cornice (fixed to an external wall outside the flat) which did not form part of the premises of which the defendant was an occupier. Diplock LJ in his judgment referred to the “well-settled law that in the absence of provisions to the contrary in a lease a demise of a part of a building divided horizontally or vertically includes the external walls enclosing the part so demised.”  As the cornice was a fixture attached to an external wall which formed part of the premises demised to the defendant, the cornice itself formed part of the premises so demised, and therefore the defendant was an occupier thereof.

27.  In Hope Brothers Limited v Cowan [1913] 2 Ch 312, the tenant of an office in the first floor of a building affixed flower boxes outside the windows of the office.  The lease allowed the tenant to affix trade signs, to be approved by the landlord, on the outside of the portion of the building occupied by the tenant, but subject to that, the tenant covenanted not to put up any sign or nameplate to the premises.  Joyce J held, at 317, that unless there be an exception or a reservation or something in the context to exclude it, prima facie where there is a demise of a floor or a room or an office bounded in part by an outside wall, the premises demised comprise both sides of the outside wall, and that the provisions in the lease in that case did not sufficiently indicate a contrary intention.

28.  Mr Wong also relies on cases in Hong Kong, in the context of multi-storey buildings, which have followed Sturge v Hackett: Koo Cheuk Son v Tang Wai Chun [1963] 4 HKLR 891, The Incorporated Owners of Wah Ha Factory Building v Wah Ha Realty Company Ltd (unrep, HCA 1576 of 1977, Leonard J, 12 April 1979) and Shine Emperor Ltd v Incorporated Owners of San Po Kong Mansion (unrep, HCA 3444 of 2001, Deputy Judge Mayo, 3 December 2004).  There was an appeal from the Shine Emperor Ltd case, but not on this issue.

29.  Mr Koo for the Plaintiff points out that Koo Cheuk Son v Tang Wai Chun and Shine Emperor Ltd related to instruments pre-dating section 2 of the Multi-Storey Buildings Ordinance, whilst the decision of The Incorporated Owners of Wah Ha Factory Building v Wah Ha Realty Co Ltd failed to deal with section 2 at all, which it should have.

30.  Mr Koo has also cited Incorporated Owners of Elite Garden v Profit More Co Ltd [2002] 2 HKLRD 518 in which Le Pichon JA, at 523E, regarded Hope Brothers Ltd v Cowan as being “of no assistance when one is dealing with the system of landholding in multi-storey buildings, which is peculiar to Hong Kong”.  He also relies on Lily Tse Lai Yin v Incorporated Owners of Albert House (unrep, HCPI 828 of 1997, Suffiad J, 23 December 1997), in which Suffiad J held that in the light of section 2 and Schedule 1 of the Building Management Ordinance, the principle in Hope Brothers Ltd v Cowan and Sturge v Hackett has little or even no application in Hong Kong for the purpose of determining whether the external walls form part of the common parts of a building.

31.  As I will explain later, there is no need in this case for me to decide whether or not the principle as illustrated by Sturge v Hackett and Hope Brothers Ltd v Cowan is applicable to Hong Kong in the context of a multi-storey building with a deed of mutual covenant which governs the rights and liabilities among the co-owners.  I would only observe that in those English cases, the court is concerned with only two parties, the landlord and his tenant.  If the landlord who has exclusive possession of the external walls has not reserved the external walls to himself, then he is taken to have granted exclusive possession of the enclosing walls to the tenant.  In a multi-storey building, the developer, by the first assignment and the deed of mutual covenant, is about to divest of rights and impose obligations relating to land, which will affect not only the developer and that purchaser, but also subsequent owners of other units, each of whom may potentially have a right to use the external walls, exclusively or in common with others.  The assumption underlying cases such as Sturge v Hackett is at least more easily displaced.  Ultimately it is a question of ascertaining the parties’ intention by construing the relevant instruments.  Moreover, where section 2 of the Building Management Ordinance applies, the statutory provision must take precedence: see Lily Tse Lai Yin v Incorporated Owners of Albert House (above).

32.  I say it is unnecessary for me to decide whether the principle illustrated by the two English cases applies to Hong Kong in the context of a building with multiple owners or to this particular case, because the principle is in any event subject to contrary intention.  The reservation clause in the First Assignment makes it quite plain that the Developers intended to and did expressly reserve, to themselves and other owners, the external walls.  Whether ultimately the external walls are for the exclusive use of any one owner or whether they are for common use is another issue.  What is clear is that the external walls have been reserved from the grant in respect of Flat 14A.  Therefore the assignment of Flat 14A does not carry with it the right to the exclusive use of the enclosing walls.

33.  Mr Wong however goes on to argue that under the reservation clause, the reservation from the grant, of the self-contained units of the Building, the car-ports, the external walls and so on, is itself subject to the words “except the said Flat” (i.e. Flat 14A).  Therefore, since the right to the exclusive use of the Flat includes the right to the exclusive use of the enclosing walls (by virtue of Sturge v Hackett, so Mr Wong contends), the express reservation of the external walls is not effective in reserving the enclosing walls to the Developers or the general body of owners.  It follows that the owner of Flat 14A has the right to the exclusive use of the enclosing walls.  Similarly and based on the same argument, the Defendant has the right to the exclusive use of the enclosing walls for Shops 2 and 3.

34.  This is a circular argument which begs the question of what is included in “Flat 14A” or “the said Flat” in the first place.  In my judgment, the answer is not to be found by presupposing a grant of the exclusive use of the enclosing walls as if the principle in Sturge v Hackett were some inexorable and overriding rule, which it is not.  The answer is to be found by construing the relevant instrument as a whole to see what is included with the grant of “Flat 14A”, which in this case shows an obvious intention to exclude any part of the external walls.

No Exclusive Right for the Defendant

35.  This is the position with Flat 14A under the First Assignment.  Mr Wong’s submission is that all the units in the Building, under their respective assignments, carry with them the exclusive right to use the enclosing walls, based on the same argument he makes in relation to Flat 14A under the First Assignment.  As I have held that his argument fails in relation to the First Assignment, and given the Defendant’s admission or concession in Exhibit P2, that should be the end of the Defence case on this issue.  However, I will deal with the subsequent instruments as well to see if a different conclusion may be drawn in relation to Shops 2 and 3.

Remaining Instruments

36.  The DMC, executed contemporaneously with the First Assignment, does not expressly provide either way, whether the external walls fall within the common parts, or they are to be used exclusively by any owner.  Clause 11(iii) does put the burden of the costs of the upkeep of all external parts of the Building pro rata on all the owners.

37.  Under the Schedule to the DMC, all 1720 undivided shares are exhaustively listed, together with the corresponding parts of the Building the exclusive use of which comes with those shares.  No mention is made of the external walls in the Schedule.  Therefore the right to use the external walls, though reserved from the grant under the First Assignment, has not been linked to or included with any of the units and the shares representing those units, in the Schedule.

38.  The next relevant instrument is the Deed of Partition in 1978.  Prior to this the Developers co-owned 177/1720 shares in respect of the remaining units in the lower floors (including Shops 2 and 3).  They divided up those shares between themselves using the Deed of Partition.  Lee Hing took 122 of those 177 shares and Wing Shing Hing took 55 shares.  Under the First Schedule, Wing Shing Hing gave the exclusive right to use Shops 2 and 3 to Lee Hing.  If the Developers had under the DMC retained the right to the exclusive use of the whole of the external walls for themselves (which in any event never formed part of the Defendant’s case), one would have expected them to deal with that right as well in the Deed of Partition, the object of which was to achieve a clean break from each other in respect of their remaining interests, hitherto held by them as tenants-in-common.  Yet again no mention was made of the external walls.

39.  Similarly under the Shop 2 Assignment and the Shop 3 Assignment in 1981, the exclusive use of those 2 units was granted under those instruments by Lee Hing to its successors-in-title, and no mention was made of the external walls.

40.  The result is that the right to use the external walls, having been reserved under the First Assignment to the Developers and other owners of the Building, has not been specified or designated as being for the exclusive use of any owner within the meaning of section 2 of the Multi-Storey Buildings Ordinance or the Building Management Ordinance, so that by virtue of that section, they form part of the common parts of the Building: see Incorporated Owners of Summit Court v Full Surplus Investment Ltd [2007] 3 HKLRD 351 and Lily Tse Lai Yin v Incorporated Owners of Albert House (above).  Clause 11(iii) of the DMC also supports that conclusion. 

Trespass and Breach of DMC

41.  The external walls being the common parts of the Building, the next question is whether the Defendant, by erecting the signboards, has been in trespass or in breach of the DMC.  Although the Defendant has pleaded in Paragraph 5 of the Re-Amended Defence that its use did not amount to an ouster of the other co-owners, Mr Wong made little submission in support of this averment.  I find that the Defendant has ousted the other co-owners from those parts of the external walls which the Defendant has occupied to the exclusion to the other owners by erecting the signboards, amounting to trespass and a breach of the DMC.  The Defendant is also in breach of the DMC by virtue of section 34I of the Building Management Ordinance, in that the Defendant has converted parts of the common parts of the Building to its own use without the prior consent of the owners’ committee of the Plaintiff, or alternatively has used parts of the common parts in such a way as unreasonably to interfere with the use and enjoyment of those parts by other owners.

Injunctive Relief

42.  Mr Wong submits that even if the court finds that there has been trespass upon the common parts of the Building, the court should not in the exercise of its discretion grant a mandatory injunction for the removal of the signboards, because (i) no one has suffered any harm; and (ii) there has been undue delay on the part of the Plaintiff in enforcing the DMC.

43.  The delay being relied on is that although the signboards had been erected by about April 2004, proceedings were not instituted until December 2007 and even thereafter, there was inaction on the part of the Plaintiff for at least a year after the close of pleadings.  Mr Wong also relies on Incorporated Owners of Dragon View v Nalpak Ltd (unrep, HCA 3356 of 1986, Godfrey J, 18 January 1989) in which the learned judge refused to grant a mandatory injunction to undo the enlargement of a window which had been undertaken in breach of a deed of mutual covenant, on the basis that no harm had been done to anybody and the building had undergone numerous alterations and additions of features either with or without the consent of the management committee, and the alteration carried out by the defendant in that case made little visible difference to the appearance of the building, so that it would not be just and equitable to order a mandatory injunction.

44.  In this regard, Mr Cheng Ping Cheong Frankie, Assistant Property Asset Manager of the management company employed by the Plaintiff, gave evidence that since 2005, the Plaintiff and the management company had been preparing for a major renovation project for the Building.  The project had engaged much of their time and attention, which involved consulting the views of the owners, raising funds, employing consultants, inviting and studying tenders, appointing contractors, and liaising with all responsible parties.  He also gave evidence that the Developers no longer held any shares in the Building, and the expenses for maintaining the external walls of the Building had always been paid by all the owners.

45.  Mr Koo submits that the ongoing renovation project provides a good explanation why it has taken the Plaintiff so long to bring the proceedings and take it to trial.  He also urges me to take into account the observations made by Ribeiro J in Incorporated Owners of the Lorna Villa v Chan Yan Wah (unrep, HCA 9695 of 1993, 10 September 1999) to the effect that an owners’ incorporation is likely to move slowly in disputes over rights between co-owners, as the committee meets only periodically and is made up of people who have many other commitments.  Views of owners have to be collected, and their financial commitments have to be obtained, before proceedings can be issued.

46.  I accept Mr Cheung’s evidence.  In the nature of things, it is to be expected that an owners’ incorporation would take time to come to a decision to sue a co-owner.  For that to be done amidst a major renovation would inevitably involve a lengthier period.  While these observations should not be taken as giving a carte blanche for dilatory conduct on the part of owners’ incorporations, in this particular case, I find the explanation for the delay reasonable and acceptable, and that in any event the delay has caused no prejudice to the Defendant.

47.  I also hold that it would be just and equitable to exercise my discretion in favour of granting an injunction against the Defendant against further breaches and a mandatory injunction for the removal of the signboards.  They have remained on the external walls since April 2004.  There is a continuing breach by the Defendant, and an injunction should be granted to stop such continuing breach unless there are good reasons not to: JLW Management Services Ltd v Chater Dragon Development Ltd [1995] 2 HKC 591.  As to the mandatory injunction, I do not accept that no harm has been done to anyone.  The signboards are placed on the external walls of the Building and can be easily seen from outside the Building in Caine Road.  As Yeung JA said in Incorporated Owners of Elite Garden v Profit More Co Ltd the outward appearance of a building is one of the common important interests of co-owners regulated by a deed of mutual covenant.  The mere existence of such signboards could be highly objectionable to many an owner.  The facts of Dragon View are quite different, in that the building in that case had been, to quote Godfrey J, “encrusted” with dozens of features over the years, and the defendant’s alteration was not easily noticeable.  The Building in this case has not had the same entrenched history of additions and alterations to its exterior, and the signboards (certainly the one outside Shop 3) are highly noticeable.  Damages would not be a sufficient remedy.  Further, there is no evidence that the Defendant will suffer any particular hardship if it is required to remove the signboards.  In all the circumstances, it is just and equitable to order a mandatory injunction.

Damages

48.  The Plaintiff also claims for damages or mesne profits for trespass.  Mr Wong submits that the Plaintiff has not suffered any loss as it was never going to use the spaces on the external walls anyway.  I agree with Mr Koo that a trespasser ought to pay for his unauthorised use: see Swordheath Properties Ltd v Tabet [1979] 1 WLR 285.

49.  As to quantum, the parties agree that the measure of damages or mesne profits is the market rental values of the areas on the external walls used by the Defendant for erecting the signboards, as advertising spaces.  Although each of the parties has prepared its own expert report, the experts managed, in the course of the trial, to agree on the market rental values at different points in time, from April 2004 to June 2009.  The agreed monthly rentals are in Exhibit P1.  The following is my calculation of the quantum:

50.  For Shop 2, the amount of damages up to and including 16 March, should be:

	Shop 2 agreed monthly rental ($)	Sub-totals ($)
Apr 2004	1,880 (x 12 months)	22,560
Apr 2005	1,980 (x 12 months)	23,760
Apr 2006	2,090 (x 17 months)	35,530
Sep 2007	2,350 (x 7 months)	16,450
Apr 2008	2,410 (x 14 months)	33,740
Jun 2009	2,240 (x 9.5 months)	21,280
	Total =	153,320

51.  For Shop 3, the amount of damages should be:

	Shop 3 agreed monthly rental ($)	Sub-totals ($)
Apr 2004	8,000 (x 12 months)	96,000
Apr 2005	8,410 (x 12 months)	100,920
Apr 2006	8,890 (x 17 months)	151,130
Sep 2007	10,010 (x 7 months)	70,070
Apr 2008	10,250 (x 14 months)	143,500
Jun 2009	9,560 (x 9.5 months)	90,820
	Total =	652,440

52.  The amount of damages up to 16 March 2010 is therefore $153,320 + $652,440 = $805,760.

Conclusion

53.  I therefore give judgment for the Plaintiff and grant the orders in terms of paragraphs (1) to (3) of the prayer for relief in the Statement of Claim.  I also order the Defendant to pay damages or mesne profits calculated up to 16 March 2010 in the sum of $805,760 with interest thereon at the prime rate from the date of the writ to the date of judgment and thereafter at judgment rate until payment, and to pay damages or mesne profits at the monthly rates of $2,240 for the Shop 2 signboard, and $9,560 for the Shop 3 signboard, until the Defendant has complied with the mandatory injunction ordered herein.  I also make an order nisi that the Defendant do pay the costs of this action to the Plaintiff, to be taxed if not agreed, with certificate for counsel.  Finally I would like to express my gratitude to the advocates for both parties for their assistance in this case.\