THE INCORPORATED OWNERS OF YUE SUN MANSION v. LAKE SIDE ELDERLY CENTRE LIMITED

LDBM 26/2015

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 26 OF 2015

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LDBM 32/2015

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 32 OF 2015

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J U D G M E N T

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Background

1.  The applicant in LDBM 26/2015 and the respondent in LDBM 32/2015 is the Incorporated Owners (“IO”) of Yue Sun Mansion (“the Building”).  The respondent in LDBM 26/2015 (“Lake Side”) is the occupier of Shop C on Ground Floor and whole of First Floor of the Building (“the Premises”).

2.  The applicant in LDBM 32/2015 (“Tong”) is one of the directors and shareholders of Lake Side and the tenant of the Premises.

3.  On 5 February 2015, the IO issued the proceedings in LDBM 26/2015 and according to the Re-Amended Notice of Application, the IO is seeking for an injunction to restrain Lake Side from operating the elderly home at the Premises on the ground that such use was in breach of the Occupation Permit (“OP”), the Government Lease (“Government Lease”) as well as the Deed of Mutual Covenant (“DMC”) of the Building.

4.  On 12 February 2015, Tong filed the Notice of Application in LDBM 32/2015 in the capacity as the tenant of the Premises and she rented the Premises to operate a residential care home for the elderly under the trade name of Lake Side.  It is alleged that the IO had unreasonably interfered with the use and enjoyment by her of the lift inside the Building in breach of section 34I(1)(b) of the Building Management Ordinance (“BMO”) and seeking an order for the IO to reconnect or restore the lift access from G/F to 1/F of the Building.

5.  In the Notice of Opposition filed for LDBM 26/2015 on 6 November 2015, Tong on behalf of Lake Side denied that the Premises had ever been used for the operation of an elderly home and raised the defence that :

a.  the business to be carried out at the Premises is a “treatment and care” centre mainly for the elderly which is of non-domestic use;

b.  denied the use of the Premises as an elderly home is a “non-domestic use” in breach of the OP or the DMC;

c.  the Government Lease imposed no restriction on the use of the Premises and the intended business of Lake Side; and

d.  no nuisance or annoyance ever caused to other occupiers of the Building.

6.  On 5 March 2015, the IO filed the Notice of Opposition in LDBM 32/2015 denying that Tong is entitled to any relief because no lift service had been provided from G/F to 1/F since the occupation of the Building and the current registered owner and/or its predecessors had enclosed the lift lobby of the 1/F by a brick wall.  The IO also relied on the defence of unauthorised change of the permitted use by Tong in breach of the DMC and the OP.

7.  At the trial of LDBM 32/2015 on 8 June 2015, this court was informed of the fact that LDBM 26/2015 was being dealt with by another court in the Lands Tribunal.  At that juncture, LDBM 26/2015 was still in the process of mediation.  In a written ruling dated 11 June 2015, this Tribunal is of the view that the parties in LDBM 26/2015 will be affected by the ruling in LDBM 32/2015 on the common issue on breach of OP and DMC so LDBM 32/2015 was then stayed pending conclusion of mediation for LDBM 26/2015.  By the order dated 11 September 2015, it is directed that the 2 cases to be heard together before this court. 

8.  Even though directions were being made for a joint statement of issues in dispute to be filed 2 days before trial, the parties failed to do so.  At trial, Mr Chong for Tong and Lake Side confirmed that the list of issues prepared by Mr Leung for the IO is accepted.  Having heard the evidence and submissions at this trial, I find the issues to be determined in the 2 cases are :

a.  What is the intended use of the Premises by Tong and/or Lake Side, a residential care home for the elderly (“RCHE”) or a residential care home for disabled persons (“RCHD”)?

b.  Whether the intended use of the Premises a non-domestic use?

c.  Whether the intended use of the Premises in breach of the OP, DMC or Government Lease?

d.  Whether Tong or Lake Side is entitled to ask for the resumption of lift service to 1/F of the Building? and

e.  Whether the IO is in breach of section 34I of BMO?

Undisputed Facts

9.  According to the OP of the Building, the Building is a composite building with 8 shops on the Ground Floor for non-domestic use, office on the 1^st Floor for non-domestic use and 10 tenements per floor on 2^nd to 14^th floor for domestic use (B1/164). 

10.  There are 3 lifts, namely Lift No. 1, Lift No. 2 and Lift No. 3 (collectively the “Lifts”) in the Building, each serving different floors but without access to 1/F.  The Lifts constitute a part of the common area as defined under section 2 and Schedule 1 of BMO.  The lift opening in the lobby of 1/F of the Building (“Lift Opening”) is sealed up by a brick wall.

11.  There are 2 sets of rear staircase at the Building, one to be accessed from the backyard of the Building and the other from the lobby of the Building (“Rear Staircases”) (photo at B1/66 & 71-72).  There is another internal staircase within the Premises which runs from Shop C on Ground Floor to the 1^st Floor of the Building (“Internal Staircase”) (photo at B1/61-62).  So access to the 1/F of the Building can be via the Internal Staircase or the Rear Staircases.

12.  The Building is subject to the terms of the DMC dated 19 October 1964 (B1/200-215). And the IO was incorporated on 4 April 1975 (B1/162).  On 11 June 2010, Silverlite Company Limited (“Silverlite”) became the owner of the Premises.

13.  By a tenancy agreement dated 11 November 2014 between Silverlite and Tong (B2/1-31), the Premises was leased to Tong for a period of 3 years from 15 November 2014 to 14 November 2017.  Upon discovery of the situation of the Lift Opening, Lake Side requested the IO and the management company (“Alico”) on 20 November 2014 (A1/108) to reconnect the Lifts from G/F to 1/F but this was refused by the IO.

14.  On receipt of the written request from Lake Side which disclosed the use of the Premises as an RCHE and the pending application by Tong to the Buildings Department (“BD”) for the change of use, the IO raised objection to such application with the BD and Social Welfare Department (“SWD”) (A1/136-140). Letter was also sent to Silverlite and Lake Side raising the issue that such use was in breach of the OP, the Government Lease and the DMC (A1/131-134).

15.  On 1 December 2014, the BD stated in the reply letter to Lake Side (A1/145-146) that there is no in-principle objection to the proposed change in use of the Premises subject to no objection from the Fire Services Department (“FSD”).

16.  Lake Side denied any breach by a reply letter dated 7 January 2015 from their solicitors (A1/142-143) and also alleged that the IO had deprived its right to use the Lifts in contravention of the DMC and BMO.  Legal proceedings then ensued.

17.  On 24 July 2015, staff from the SWD and the FSD showed up at the Building for inspection and on 4 August 2015, staff of the SWD confirmed that they entered the Building in exercise of their duty under the Residential Care Homes (Persons with Disabilities) Regulations (“RCHD Regulations”).  The IO sought assistance from a District Councillor who wrote a letter dated 6 August 2015 to the SWD asking as to the purpose of the visit on 24 July 2015 (A1/116-117).  In the reply letter dated 5 November 2015 (A1/119-120), the SWD confirmed that the department had received a licence application for the establishment of a RCHD at the Premises and the inspection is part of the assessment process for the licence application.

18.  According to the Business Registration Certificates of Lake Side (“BR Certificate”) for 31 October 2014 to 30 October 2015 and 31 October 2015 to 30 October 2016, the nature of business at the Premises is for “Elderly Home” in the name of Lake Side Elderly Centre (A1/113-114).  The renovation of the Premises was completed on 13 February 2015 but as of the day of the trial, Lake Side had not yet been in business.

Intended Use?

19.  As far as the intended use is concerned, the following is a summary of the case and/or evidence on the part of Lake Side and/or Tong:

DATE	PARTICULARS	REFERENCE
27-10-2014	BR Certificate for year ending 30 October 2015 showed nature of business being “ELDERLY HOME”	BR Certificate (A1/113)
18-11-2014	Tong asking Silverlite for request to be extended to the IO for resumption of lift service so that Tong can apply to the SWD for the license to run an elderly home	Letter from Tong to Silverlite (A1/107)
20-11-2014	Tong indicated the Premises was being rented for the use of an elderly home and application had been sent to the BD for a change of use of the Premises as an elderly home	Letter from Lake Side to Alico (A1/108)
07-01-2015	Denying the operation of an elderly center is prohibited under the Government Lease and the DMC	Letter from solicitors of Lake Side to IO (A1/110-111)
11-02-2015	Tong rented the Premises for the purpose of operating a RCHE under the trade name of Lake Side Elderly Centre Limited and had already submitted application to the SWD for the licence under the RCHE Ordinance.	§§4-6 of Tong’s Witness Statement in LDBM 32/2015 (B1/23-27)
12-02-2015	Tong avers that she rented the Premises for the purpose of operating a RCHE under the trade name of Lake Side Elderly Centre Limited and licence has to be applied under the Residential Care Homes (Elderly Persons)  Ordinance (“RCHE Ordinance”)	§§4 & 6 of Form 29 in LDBM 32/2015 (B1/3)
24-02-2015	Tong rented the Premises for the purpose of operating a RCHE under the trade name of Lake Side Elderly Centre Limited and licence has to be applied under the RCHE Ordinance. The Premises will accommodate 71 beds in an open area inside and 13 single rooms and 17 double rooms	§§4, 5 & 7 of Tong’s Affirmation in LDBM 32/2015 (B1/28-31)
8-06-2015	Tong confirmed the contents of the witness statement and the affirmation are all true and accurate and adopt as evidence	Oral evidence of Tong at trial of LDBM 32/2015
31-10-2015	BR Certificate for year ending 30 October 2016 showed nature of business being “ELDERLY HOME”	BR Certificate (A1/114)
06-11-2015	Tong avers that Lake Side intended to use the Premises for operation of a “treatment and care” centre for the elderly	§3 of Form 7 in LDBM 26/2015 (A1/25)
04-02-2016	Tong rented the Premises for the purpose of operating a RCHE under the trade name of Lake Side Elderly Centre Limited.  By “residential care home”, she meant a care and attention home reserved for the elderly who suffer from poor health or physical/mild mental disabilities with deficiency in activities of daily living and require personal care and attention and unable to live at their own home.  Service provided is not that the elderly needed a home, but because they needed long term medical care and attention. The inmates staying for medical care that rendered it necessary for the inmates to stay and reside at the centre and each inmate had their unique medical treatment and care, prescriptions, injection etc prescribed by their doctors.  Hospital Authority provided medical outreach services by sending qualified doctors to the centre once a month and sending nurses and health practitioners to the centre almost daily.  Treatment and care provided in the centre must be conducted by medical practitioners or trained health workers under the supervision or permission of a doctor.  Since all elderly persons residing at the centre are chronically ill and/or suffer from disabilities, it is mandatory for them to remain at the care home and receive treatment until their condition improves.  Given the complexity of the medical and care service, it is not possible for persons receiving them as ‘out patients’ and need to stay and reside at the centre.  The service provided is completely different from the requirement of a normal elderly home.	Witness statement of Tong in LDBM 26/2015 (A2/152-170)
28-07-2016	Under cross-examination, Tong confirmed that the application for licence for RCHE had been cancelled and instead had applied for licence to run a high care level RCHD under the RCHD Regulations.  The nature of service provided is more or less the same as the elderly home but without any age restrictions so as to cover a wider scope of clientele.	Oral evidence of Tong at trial

Discussion

20.  As appeared from the summary of Tong’s evidence above, there has been a change of mind on the part of Tong as to the intended use of the Premises, from a RCHE to a RCHD.  Irrespective of the name to be accorded to the business, it is the nature of the business that matters and it is Tong’s evidence that the service provided for both is basically a treatment and care centre with medical treatments provided and given the nature of the treatment, the inmates have to reside at the Premises. 

21.  Mr Chong submitted that this Tribunal should adopt the concept of dominant or primary user laid down in the case of Mexx Consolidated (Far East) Ltd v A.G. [1987] HKLR 1210as the yardstick in considering the nature of the use.  The primary user intended by Lake Side is for the inmate to receive the medical treatment and care.  The fact that the inmates need to reside at the Premises is an ancillary use as it would be practically impossible for them to receive such medical treatment at their home.  This is in line with the legislative intent of enacting the RCHE Ordinance.  The IO’s stance that since someone would ‘live’ at the Premises would, per se, render the use ‘domestic’ is alarming and utterly ignored the concept of dominant and primary user of land.

22.  Mr Leung submitted that the true business nature of the so-called “treatment and care centre” is that of a “residential care home for persons with disabilities”. The intention on the part of Tong to operate a “residential care home” is born out from the pleadings, the BR Certificates, Tong’s evidence and correspondence between Tong and Silverlight.  The actual intended use of the Premises is for accommodation and the change of mind to RCHD by Tong is purely tactical to facilitate her case and to get around the restrictions imposed by the OP.

23.  On the question of what is the intended use to be adopted at the Premises, there is evidence that comes from Tong and the application to the SWD for the relevant licence.  According to Tong, she is minded to run a “care-and-attention home” under the RCHE Ordinance initially but had changed her mind to a “high care level home” under the RCHD Regulations instead.  This is supported by the evidence from the SWD concerning the application for licence to run the different establishment.  I accept the evidence of Tong in this regard.  But since the IO’s application is based on the intended use of a “care-and-attention home” under the RCHE Ordinance, this Tribunal is still required to deal with such intended use even though there is a change of mind already.

24.  A “care-and-attention home” is defined as “an establishment providing residential care, supervision and guidance for persons who have attained the age of 60 years and who are generally weak in health and are suffering from a functional disability to the extent that they require personal care and attention in the course of daily living activities but do not require a high degree of professional medical or nursing care” (A2/183).  A “high care level home” is defined as “an establishment providing residential care for Persons with Disabilities who are generally weak in health and lack basic self-care skill to the extent that they require personal care, attention and assistance in the course of daily living activities but not require a high degree of professional medical or nursing care”.

25.  According to the definition of these establishments in the relevant legal provisions quoted above, the service provided by both kinds of establishments are similar, ie to provide residential home to the elderly or persons with disabilities (“PWDs”) who are weak in health and require personal care and attention in their daily life but not high degree medical care.  So providing a residential home to the elderly or to the PWDs is the main theme of a RCHE or RCHD but since the intended inmates are generally weak in health, some special care is to be provided during their stay therein.  Such a finding echo with the intention of the legislation in enacting the 2 ordinances.

26.  The long title of the RCHD Ordinance revealed that the intention of the ordinance is to “regulate the residential care home for persons with disabilities by a licensing system”. Section 2 of the RCHD Ordinance defined “residential care home for PWDs” as “any premises at which more than 5 PWDs, who have attained the age of 6 years, are habitually received for the purpose of residential accommodation with the provision of care” (emphasis added).  The same applies to the RCHE Ordinance which is enacted to “regulate homes established for the residential care of persons who had attained the age of 60 years” (emphasis added).  From these statutory provisions, it is beyond doubt that the establishments to be applicable under the 2 ordinances are in the nature of providing residential accommodation which is the main purpose for the establishments and not the provision of medical treatment and care which is only ancillary to the residential element.  The argument by Lake Side or Tong that the RCHE and the RCHD are for treatment purpose and in order for such treatment to be performed, the PWDs are required to reside at the care home is putting the cart before the horse.

27.  In fact, this primary use argument had been advanced before Deputy High Court Judge Muttrie in Winland Finance Limited v Profit Fine Ltd and others (unrep., HCA 1045/2005, 10 January 2006).  The argument in Winland Finance Ltd that the primary use of the premises as an old people’s home is in fact a nursing home, with the provisions of food and accommodation being incidental thereto is rejected and DHCJ Muttrie found that :

“... In this case, the inmates received accommodation and food. So prima facie an old people’s home is kind of boarding house, albeit one restricted to persons over 60 years of age. (at page 13)

...

I realise that it is said in evidence that the primary user was nursing, and that the provisions of food and accommodation was secondary. Now I can envisage a situation where the primary user of premises might be for nursing, such as an intensive care unit in a hospital, or even a hospital generally. Here, however, the service was restricted, not only to the old, but to those who did not require hospital treatment or suffer from infectious disease. As I see it, that would exclude anyone in need of any real nursing care, as distinct from the usual kind of thing provided in an old people’s home, such as assistance, if and when necessary, with washing, dressing and movement within the home. I do not see how, in the circumstances, it can seriously be argued that the inmates were primarily there for the nursing, and that their accommodation and four meals a day were only incidental to that.” (at page 14)

28.  The finding quoted above is also applicable in this case and I shall adopt the same.  Mr Chong had tried to persuade this court that Winland Finance Ltd has no binding effect by submitting that the case is an interlocutory decision on the plaintiff’s application for summary judgment without any trial on the merits when evidence put forward by the parties in the affirmations had never been put to test.  The issue on primary use is one that turns on legal argument only without any factual dispute.  I fail to see how a testing of the evidence after trial would make any difference.  In any event, even if the judgment is not binding, it will definitely have persuasive effect on inferior courts.

29.  Adopting the dominant/primary user purpose suggested by Mr Chong, I found as a fact that be it a RCHE or a RCHD, the dominant/primary use of the Premises is for the service of providing a residential home setting whilst the provision of care and treatment is just ancillary to it. 

Breach of the OP

30.  It is the contention of the IO that, be it RCHE, treatment and care centre or RCHD, all these use involved providing residential care and accommodation to the inmates and this can never be non-domestic use nor can it satisfy the definition of “office” or “shop” required under the OP.  Such permitted use and restrictions on usage as stated in the OP are to be complied with and are not there for “descriptive purposes” only: see IO of Wing Ming Industrial Centre v Mantex Supplies Co Ltd. (unrep., HCA 1505/2007, 3 October 2007).  And RCHD and RCHE are similar to an old age home which was held to fall within the definition of a “boarding house” and regarded as “domestic” in Aberdeen Shopping Plaza Ltd v The IO of Aberdeen Ka Ning Mansion, (unrep., HCA 9319/2000, 13 May 2003).

31.  Mr Chong submitted that since Tong and Lake Side are in the course of applying for a change of use with the BD which had already indicated a “no in-principle objection” subject to compliance with provisions of the licence to be issued, and Lake Side will only commence business at the Premises after the issuance of the licence under the relevant regulations, by the time the licence is being issued, all preconditions would have been complied with so there will not be a breach of the OP.  Furthermore, the IO is relying on the covenant in the DMC against ‘illegal’ use of the Premises but in the case of Wing Hong Investment Co. Ltd v Fung Sok Han & Ors [2016] 1 HKLRD 1, it is held that change of use specified in the OP does not constitute ‘illegality’.

32.  The OP only permits the Premises to be used for “non-domestic” purpose.  Section 2 of the Building Ordinance provided for the definition of “domestic” and “non-dometic”. “Domestic” means a part that is constructed or intended for habitation whilst “non-domestic” means a part that is constructed or intended for use otherwise than for habitation.  “Habitation” is also defined in section 2 to include use of it for hotel, guest-house, boarding house, hostel, dormitory or similar accommodation.  The differentiation between “domestic” and “non-domestic” use is on the element of habitation or residential accommodation.  Given the findings of this court above that both RCHE and RCHD are providing accommodation or habitation to the inmates with care service ancillary to it, this can never be considered a non-domestic use.

33.  I also agree with the findings in the case of Aberdeen Shopping Plaza Limited that “by its natural and ordinary meaning, the Old Age Home is a boarding house albeit restricted to elderly persons.  The fact that there is an age restriction does not take it out of the normal ordinary definition of a ‘boarding house’” (at page 11).  The RCHE and RCHD in this case is analogous to the Old Age Home in Aberdeen Shopping Plaza Limited which is also providing accommodation and food to the inmates and comes within the meaning of a boarding house which is a non-domestic use expressly prohibited by the OP.

34.  What’s more, the OP in this case had stipulated that the G/F of the Building should be for “shops” for non-domestic use and the 1/F should be for “office” for non-domestic use.  With the use of the Premises as RCHE or RCHD, this cannot be considered an office or shop use.  Mr Leung for the IO had adopted the definition in the Town Planning Board (Definition of Terms), I agree. In the Town Planning Board (Definition of Terms), office means “any premises used as a place of business and for conducting clerical, administrative, documenting and other business or industrial related work” whilst shops are defined as “any premises where goods are sold or where services are provided to visiting members of the public”.  The nature of running a RCHE or a RCHD is in no way falls within such definition and hence not in line with the requirement under the OP. 

35.  I found the intended use by Tong and Lake Side is not in line with the use stipulated in the OP, hence amounts to a breach of the OP.  I also agree with the IO’s contention that the permitted use and restriction on usages as stated in the OP are to be complied with and are not there for descriptive purposes only.  However, the crux of the matter is whether the breach of the OP amounts to a breach of the DMC.  I shall deal with this below.  The fact that the Premises had not been put to use and may be able to obtain the approval for change of use is neither here nor there since this court is considering whether the intended use is in breach of the OP and not when Tong or Lake Side obtained the approval.

Breach of the Government Lease

36.  The IO relied on the following terms of the Government Lease :

“any ... person shall not ... use ... the said premises or any part thereof the trade or business of ... tavern keeper ... or any other noisy noisome or offensive trade or business...” (A2/440),

and argue that the operation of a RCHE or RCHD falls within the definition of “tavern keeper” since a tavern means “an inn or public house” according to the Oxford Dictionary of English.  A tavern is similar to an inn which charges lodgers in return for the provision of accommodation services.  And the common feature of tavern, inn, small hotel, guesthouse, boarding house and/or lodging house is that the primary purpose of them is to provide accommodation and for a “domestic” purpose.

37.  Mr Chong submitted that the allegation of breach of Government Lease for intended use of the Premises as “tavern keeper” is ill founded since the Government Lease issued, apart from specifying its size, was unrestricted as to user.  And “tavern keeper” denotes the sale of liquor for consumption on the premises and applying the ejusdem generis rule of construction, the phrase “noisy, noisome or offensive trade or business” must be construed as similar business to “tavern keeper”.  Given the fact that no use has ever commenced at the Premises, the allegation of breach of the Government Lease can never been sustained.

38.  I do not agree with Mr Chong that the Government Lease was unrestricted as to user.  The part of the Government Lease cited by the IO is clearly imposing a restriction on the use by requiring the owners not to use the land for certain business including a tavern keeper. 

39.  Mr Chong had relied on the case of Borazio v Melbourne City Council (2010) 181 LGERA 341 in support of the definition of “tavern keeper”.  But the definition of “tavern” found in Borazio was a definition defined in the Melbourne Planning Scheme.  Such a finding is apparently unique to the factual background of the case and cannot be adopted across the board.  I agree with Mr Leung that one should look for the definition in the dictionary instead.

40.  According to the Shorter Oxford English Dictionary, a tavern means “an inn or public house”. An inn is “a dwelling place, an abode, a lodging, a house” or “a public house providing accommodation, refreshments, etc., for payment, esp for travellers” according to the Dictionary.  So a tavern is similar to an inn which is closely associated with and usually grouped together with hotel, boarding house, apartment house and lodging house which charges lodgers in return for the provision of accommodation services and meals, in a gist providing accommodation and residential services.  This must be for domestic purpose.  The RCHE or RCHD intended to be run by Lake Side and Tong must fall within the definition of “tavern keeper” which is specifically prohibited in the Government Lease, hence in breach of the same.

41.  Again, since this court is dealing with whether the intended use is in breach of the Government Lease, the fact that the Premises had not yet put into use is neither nor there.

Breach of the DMC

42.  Clause 10(c) of the DMC reads :

“10. Each party hereto doth hereby covenant with the other as follows :-

...

(c) Not to use or permit or suffer to be used its self-contained portion office or shop for any noisesome, obnoxious, immoral or illegal purpose and not to do, or permit to be done or suffer in the said self-contained portion office or shop or in the said Building anything which may be or become a nuisance or annoyance to the other party or the other occupiers of the said Building or adjoining premises”. (B1/207)

43.  The IO alleged that the intended use of the Premises by Tong and Lake Side amounts to an illegal use since such use is in breach of the OP and the Government Lease and such use cannot be a “proper and lawful” use of the Premises.  The “no in-principle objection” obtained from the BD is unable to rectify or remedy such breach and the BD had made it clear that the letter should not be construed as an acceptance of any building works not shown on the approved plans of the Building.  In the absence of a formal approval of the change of use, Lake Side is clearly in violation of the OP and hence the DMC.  The judgment of Wing Hong Investment Co Ltd is distinguishable which involved different factual circumstances with the change of use remains non-domestic at all times and the findings by L. Chan J is just obiter.

44.  Moreover, the IO also contends that the use of the Lifts in the course of its business for the intended use will become a nuisance or annoyance to other occupiers of the Building in breach of Clause 10(c). 

45.  Mr Chong submitted that there is no specific provision in the DMC of the Building that required a compliance with the OP so any use in variance with the OP is not a breach of the DMC.  And since the Premises had not been put into use, there is no evidence to show how the intended use is likely to become a nuisance or annoyance to other occupiers of the Building.

46.  The IO is relying on the limb of “illegal purpose” and “nuisance or annoyance” in Clause 10(c) of the DMC to substantiate a breach of the same.

47.  For the “illegal purpose” limb, the IO is alleging a breach of the OP and the Government Lease in support. 

48.  It is not in dispute that there is no provision in the DMC which required a compliance of the OP.  The IO is only relying on Clause 10(c) based on the use for “illegal purpose”.  I agree with the finding of L. Chan J in the case of Wing Hong Investment Co Ltd that any use contrary to the user stated in the OP is not illegal.  Wing Hong Investment Co Ltd involved a change of use from a carport to shops and godowns which is contrary to the use stated in the OP.  The defendant IO alleged that such a change of use is in breach of the DMC which is in similar wordings in this case, ie prohibits the owners to use their properties for any illegal purpose.  L. Chan J found at §§234-237 that :

“234. ... It is not a crime to adopt a material change in the user of the premises, but it is an offence under s.40(2) of the Ordinance not to serve a notice under s.25(1).

...

236. If the legislature should have intended to make it an offence for a material change of user without approval from the Building Authority, it would have legislated for it in s.40. ...

237. For the above reasons, I hold that the change of user from carport to shops and godowns on the ground floor was not illegal and did not contravene cl.10 of the DMCs.”

49.  I do not agree with Mr Leung that the case of Wing Hong Investment Co Ltd can be distinguished just because the change of use is still a non-domestic use.  This is never the reason behind the findings of L. Chan J.  Nor do I accept that such a finding is obiter of the judgment.  Even if it is obiter, it still has persuasive authority over this Tribunal.

50.  I find the breach of OP is not illegal, hence not a breach of the Clause 10(c) of the DMC.

51.  The breach of the Government Lease is another matter.  Section 4(25) of the Summary Offences Ordinance Cap. 228 reads :

“(4) Any person who without lawful authority or excuse –

...

(25) uses, exercises or follows, in or upon any premises, or any part of any premises, held under a lease from the Government, in breach of any covenant in such lease, the trade or business of a brazier, glass-blower, slaughterman, soap-maker, sugar-baker, fellmonger, melter of tallow, oilman, butcher, distiller, victualler or tavern-keeper, blacksmith, nightman, scavenger, or any other noisome or offensive trade or business whatever, without the previous licence of the Government signified in writing by the Chief Executive or other person duly authorized in that behalf; (Amended 75 of 1988 s. 40; 29 of 1998 s. 105; 13 of 1999 s. 3);

...

  shall be liable to a fine of $500 or to imprisonment of 3 months.”

52.  So a breach of the Government Lease is against the law which attracts criminal liability and illegal.  The use of the Premises as a RCHE or RCHD is in breach of the Government Lease which is illegal and in breach of Clause 10(c) of the DMC.

53.  As far as the “nuisance or annoyance” limb is concerned, terms of the DMC is to prohibit any use “which may be or become a nuisance or annoyance to the other party or other occupiers” (emphasis added) so the term is being framed to prevent any possible nuisance or annoyance likely to be caused and not only for nuisance or annoyance already caused.  Under such circumstances, if the use by Tong or Lake Side may be or become a nuisance or annoyance to other party, it would be in breach of the DMC.

54.  In the Notice of Application, the IO is alleging that “given a very small lift lobby and a very narrow main entrance of the Building, the foreseeable use of an unexpected number of wheelchairs by elderly residents of the Premises would add further nuisance and annoyance to the owners and occupants of the Building” (A1/54).

55.  It is also the undisputed evidence of Madam Tse, the chairlady of the IO that the followings are the reasons in support of the likely nuisance or annoyance caused to the other occupiers:

a.  The capacity of the lifts therein does not meet the requirements of lifts for disabled persons;

b.  The T-shape corridor leading up to the lifts is a very narrow corridor with very limited space hence whenever there will be wheelchairs moving around, that will necessarily cause inconvenience to other occupiers and residents of the Building;

c.  IO had engaged the Shan On Engineering Company Limited (“Shan On”) which confirmed the relevant dimensions of the elevators in the Building and that they do not meet the requirements as lifts for persons with disabilities;

d.  There is no independent lift system serving the Premises and those elderly residents, family members visiting them and employees working there will take up the already limited capacity of the current lift system of the Building and cause nuisance and annoyance to other occupiers.  This is also admitted by Tong in her letter dated 20 November 2014 to the IO (B1/170).

56.  I also agree with the submissions of Mr Leung that even though Tong had stated that only 15% of the inmates of the RCHE would be using wheelchairs, this is just a bare assertion.  It would not be possible and improbable for Tong to confine the inmates using wheelchairs to only 10 numbers since she is running a business.  And since the intended use is no longer for a RCHE but a RCHD instead, one can reasonably foresee that the number of PWDs using wheelchairs will not be just 15% of the inmates.

57.  I found the use of the Premises as a RCHE or a RCHD is likely to cause nuisance or annoyance to other occupiers of the Building.

58.  It is also argued by Mr Chong that since the Premises had never been put into use so there is no breach to remedy or to injunct.  I do not agree that the Premises had not been put into use.  The fact that the Premises had not yet received any inmates does not mean that it had not been put into use.  The Premises is ready for the intended use as a RCHE or a RCHD is crystal clear.  It is all evidenced from the completion of the decoration of the Premises (as revealed by Tong), the application for the change of use, application to the SWD, the BR Certificate and the correspondence between the parties.  Tong and Lake Side is adamant to put the Premises into such use once the licence is approved. 

59.  As held by Madam Justice Mimmie Chan in David Chien v Francis Cheung & Ors (unrep., HCMP 2892/2012, 7 June 2013),

“so long as the court is satisfied that the defendants are about to commit a misfeasance, or that a wrongful act is imminent, the court has jurisdiction and power to grant a quia timet injunction to restrain the wrongful act or misfeasance which is imminent but has not yet commenced, if it is necessary and just to do so”.

60.  The principles governing the grant of quia timet (literally since he fears) injunction has been succinctly set out by the Court of Appeal in the decision of Billion Star Development Ltd v Wong Tak Chuen [2013] 2 HKLRD 714 per Fok JA (as he then was):

“(1)  The plaintiff has the burden of proving that it is reasonably certain what the defendant is threatening and intending to do will cause imminent and substantial damage to him (p.379);

(2)  The criterion by which the degree of probability of future injury must be established depends on all the relevant circumstances and are not fixed. The greater the prejudice or inconvenience that may be caused by the apprehended injury (if it occurs), the more readily will the Court intervene despite uncertainties and deficiencies of proof (p.380);

(3)  In ascertaining that probability, one of the most important indications of the defendant’s intentions is ordinarily found in his own statements and actions (p.380);

(4)  Even in the absence of an express threat, the actions of the defendant may give a sufficiently clear indication of an intention to act unlawfully, and if the defendant has undertaken not to commit a breach, that is an evidentiary matter that weighs against the need for an injunction (p.381);

(5)  Likewise, even if there is no express threat, it may be of importance that the defendant has stated that it is within his rights to do the particular acts complained against (p.381).” (at §34)

61.  From the findings at §57 above, it is clear that by the actions and intentions of Tong and Lake Side, the breach of the OP, the DMC and the Government Lease is imminent and an quia timet injunction is just and necessary on a breach of the DMC even if the Premises had not been put into use.

LDBM 26/2015

62.  Mr Chong submitted that even if this Tribunal accept the IO’s case, a declaration is sufficient to dispose of the application in LDBM 26/2016 and an injunction is not necessary since there is no threatened breach on the part of Lake Side or Tong who had not put the Premises into use.

63.  Given the fact that Lake Side and Tong had insisted to pursue with their application for the licence for RCHE and RCHD and the change of use even knowing full well that the IO was against such use, I found a declaration is not sufficient to stop Tong or Lake Side to comply with the DMC.

LDBM 32/2015

64.  In the Notice of Application, Tong alleged that the suspension of lift services to 1/F of the Building constitutes a breach of section 34I(1)(b) of the BMO in that Tong, being the occupier, had been deprived of the use and/or enjoyment of the Lifts and caused a nuisance or hazard to any person lawfully in the Building (B1/4-6). Mr Chong also submitted that Tong is enforcing her right as a tenant for access to the Lifts and it is wrong for the IO to connect such right with the intended use of the Premises since there is no such pre-condition stipulated in the DMC.

65.  The IO alleged that the intended use by Tong and Lake Side is in breach of the OP, the DMC and the Government Lease, thus an improper and unlawful use of the Premises.  The jurisdiction of section 34I(b)(i) of BMO is not engaged due to Tong’s improper and unlawful use of the Premises.  Furthermore, no mandatory injunctive relief should be granted since Tong and Lake Side did not come to equity with clean hands in view of the unlawful use in breach of the OP, the Government Lease and the DMC and the extensive drilling in an attempt to break open the enclosure wall of Lift No. 3 on 17 March 2015 which caused serious damage to the enclosure wall.  There is also no breach of s.34I(1)(b)(ii) of BMO since the IO’s refusal to restore the lift service does not constitute unreasonable interference with Tong and Lake Side’s use and enjoyment of the Premises and the common parts nor give rise to nuisance or hazards to persons lawfully in the Building.

66.  Section 34I (1)(b)of BMO reads:

“(1)  No person may –

(a)  ...

(b)  use or permit to be used the common parts of a building in such a manner as –

(i)  unreasonably to interfere with the use and enjoyment of those parts by any owner or occupier of the building; or

(ii) to cause a nuisance or hazard to any person lawfully in the building.”

67.  It is not in dispute that according to the original design of  the Building in the Building Plan, 1/F should have access to the Lifts since there was the Lift Opening on the 1/F lobby.  However, such opening was sealed up by a wall so access by the Lifts to 1/F had been denied. 

68.  There is also no dispute or indisputable that the Lifts inside the Building had never provided service to 1/F and there was no button for 1/F nor any indicator lamp for 1/F in the lift system.  This is confirmed by Shan On, the long term lift maintenance service provider of the Building (B1/239).  Even when the IO had decided to replace the Lifts in 2008, the previous owner and tenant of 1/F refused to demolish the sealed wall and to restore the lift service to 1/F.  As a result, no replacement of Lift No. 1 can be arranged.

69.  From the undisputable evidence above, irrespective of the original design of the Building, no lift service had ever been provided to 1/F ever since the occupation of the Building.  The sealed wall on 1/F must be an act of or with the consent of the owners of 1/F otherwise no one can build a wall to seal the Lift Opening on 1/F without any complaint from the owners of 1/F for all these years. And from the design of the lift system, it is more likely than not that no lift service is intended for 1/F.  The owners of 1/F had agreed to such an arrangement all these years. 

70.  Judging from the findings above, there can be no unreasonable interference of Tong’s use and enjoyment of the Lifts since the arrangement of suspension of the lift service is an agreed arrangement all along.  The fact that Silverlite was well aware of the condition of the Lifts yet had never raised any complaint with the IO, one can come to the reasonable conclusion that Silverlite also agreed to such an arrangement of the Lifts not providing service to 1/F and with the Lift Opening on 1/F being sealed up.

71.  It is also my finding that neither can Tong prove that there was nuisance or hazard caused to anyone lawfully in the Building.  The allegation that suspension of lift services may delay emergency services is a non-point since the occupants of 1/F should not use the Lifts in case of emergency.

72.  Having said so, I do not agree with the IO that the issue of unlawful use of the Premises should be relevant to the right of the 1/F to have access to the Lifts.  As for the clean hands allegation, I cannot see how the allegation of the unauthorised drilling can be related to Tong’s request for restoration of the Lifts.

73.  I found the allegation by Tong in LDBM 32/2015 had not been substantiated and the application should be dismissed.

Order

74.  I shall make the following orders:

a.  A declaration that the use of the Premises for the operation of either a RCHE or a RCHD is in breach of the OP, the DMC and the Government Lease;

b.  An injunction restraining Lake Side and Tong or their agents, employees, servants and/or other authorized persons by them and/or any other persons from  operating a RCHE or RCHD or any business at the Premises for domestic purposes;

c.  The application in LDBM 32/2015 be dismissed;

d.  Cost order nisi that costs of these 2 applications be to the IO, with certificate for counsel, to be taxed if not agreed on District Court scale.  Unless any of the parties applies by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.