THE INCORPORATED OWNERS OF JING HUI GARDEN v. NG KEI SANG

LDBM 155/2005

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 155 of 2005

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JUDGMENT

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Background

1.  The Applicant is the owners’ corporation of Jing Hui Garden, No. 8 Aberdeen Road, Hong Kong (“the Building”), and the Respondent is the owner of Flat A on the 16^th Floor of the Building (“the Unit”).

2. The Applicant’s case is that the Respondent has since about October 2004 been in breach of Clauses 5.5, 5.18, 5.19 & 5.36 of the Deed of Mutual Covenant of the Building (“the DMC”) by:-

(a) installing an air-conditioner unit and its condenser at the external wall of the Building; and

(b) altering the original water pipe outside the toilet, drilling a hole through the external wall at the light well outside the Unit and installing a new fresh water pipe through the hole and beneath the floor of the living room to the kitchen of the Unit.

3.  The relevant provisions of the DMC are as follows:-

(a) Clause 5.5:

“No Owner or the Manager shall make any structural alternations to any part of the Development owned by him which may damage or affect or interfere with the rights of other Owners … nor shall any Owner make any alternation to any installation or fixture so as to affect or be likely to affect the supply of water, electricity or gas…”

(b)  Clause 5.18:

“No external signs, signboards, notices, … or other projections or structures whatsoever extending outside the exterior of any Flat … shall be erected on, installed at, or otherwise affixed to or projected from any part of the Development.”

(c)   Clause 5.19:

“No Owner shall do or permit to be done any act or thing which may or will alter the external appearance including the colour of any part of the Development without the prior consent in writing of the Manager.”

(d) Clause 5.36:

“No Owner shall install through the windows or external walls of the Development air-conditioning units or plants or any other fixture without the prior written consent of the Manager.”

4. Thus, the Applicant applies for a mandatory injunction to require the Respondent to demolish the aforesaid unauthorized installations and to reinstate the external wall, as well as a prohibitory injunction to restrain the Respondent from making such installations.

5. There is no dispute that the Respondent did install the air-conditioner together with its condenser and alter the fresh water pipe.  There is also no dispute about the terms of the DMC as aforesaid.  However, the Respondent denies any breaches of the DMC on his part.

6. In addition, the Respondent alleges that he had no knowledge of the restrictions imposed by the DMC and the Decoration Guideline of the Building.  The Respondent also alleges that there were 5 representations (“the 1^st to 5^th Representations”) made by the Applicant which would give rise to promissory estoppel, estoppel by representation, estoppel by conduct, estoppel by convention and/or proprietary estoppel.  The Respondent further avers that the Applicant unfairly and inequitably singles him out in making the present application, as there are many other similar breaches in the Building.  The Respondent also counterclaims for the return of the decoration deposit in the sum of $5,040.00 and various declarations which basically suggest that the Respondent can retain the air-conditioner and the water pipe.

7. However, in the closing submission, the Respondent abandons the reliance on the 1^st and 4^th Representations.  Thus, I only need to deal with the 2^nd, 3^rd and 5^th Representations, and I shall deal with the Respondent’s defences in turns below.

No knowledge of the DMC and decoration guideline

8. The Respondent claims that he had no knowledge of the restrictions in the DMC and the Decoration Guideline, as no one (including his lawyer for the purchase of the Unit) had ever explained the restrictions to him.  The Respondent also gives evidence that there was no guidance given to him when he paid the decoration deposit, and a decoration guideline was only given to the owners on 8 December 2004.

9. However, it is trite law that an owner must have imputed knowledge of the DMC.  Ignorance of the DMC, or others’ failure to explain to him the existence and contents of the DMC is no defence at all. Thus, whether or not the Respondent is aware of the terms of the DMC, he is still bound by the DMC.

10. As to the decoration guideline, even assuming the Respondent is unaware of it, it still will not afford any defence to a claim for breach of the DMC.  It is irrelevant whether there was such a decoration guideline or whether the Respondent was given such a decoration guideline, as it will not excuse the Respondent for breaching the DMC.

11. Furthermore, I find that the Respondent was in fact aware of the decoration guideline dated 12 January 2004.  There was no dispute that the Applicant issued a decoration guideline after the Building’s main decoration in 2000.  In fact the Respondent was present at the management committee’s meeting on 11 October 2004, and the minutes of that meeting clearly showed that the chairman mentioned at the meeting that a decoration guideline was prepared after the Building’s main decoration.  The decoration guideline was at first dated 28 February 2003 and then re-dated 12 January 2004.  There is no reason that the Applicant would issue such a guideline and yet fail to bring the same to the attention of the owners.  The Applicant’s first witness, Ms. Leung Lai Ping, confirmed in her oral testimony that the decoration guideline had been posted up at the lobby all along.  Likewise, the Applicant’s second witness, Mr. Ho Sing Lam testified that the decoration guideline was posted up at the lift lobby on the Ground Floor, stapled together with the Application Form signed by the Respondent and his contractor, and they were posted up outside the Unit during decoration.  Both the Respondent and his contractor had in fact signed on the Application Form which contained a term stating that they “understand and agree that no unauthorized works are allowed to be carried out”.

12. Although the Respondent explained that he did not often return to the Unit before he moved into the Unit in late October 2004, he did not stay in the lift lobby for long and might not have read the Decoration Guideline posted at the lobby, and that he signed the Application Form without reading the terms and conditions in details, I do not accept that the Respondent was unaware of the requirement that no unauthorized work would be allowed.  The Respondent did receive and should know the contents of the letter dated 27 September 2004 from the Manager, EastPoint Property Management Limited, which clearly stipulated that the Respondent cannot make any structural alterations to damage the external wall.  From the said letter, it is also clear that Mr. Jason Law of the Manager had a telephone conversation with the Respondent on 27 September 2004 discussing about the relocation of the fresh water pipe.  Although the Respondent denies there was such a conversation, I accept the Applicant’s evidence in this regard. I also accept that the Manager had invited the Buildings Department to inspect the Unit and the Respondent was present during the inspection.  It would be very strange that the Respondent was not made aware of the requirement in the DMC or the decoration guideline after all these events, and I do not accept the Respondent’s allegation in this regard.  Even if the Respondent was not aware of the DMC or the decoration guideline before the renovation started in September 2004, it is impossible that he would not be aware of the restrictions after 27 September 2004.

13. It is clear to me that the Respondent had ignored the warnings and insisted on going ahead with the installation of the air-conditioner and the new water pipe, and it is not true that no one had explained to the Respondent about the restrictions under the DMC or the decoration guideline.  Such a defence cannot be substantiated both in law and in fact.

Credibility of the Applicant’s witnesses

14. In his closing submission, Mr. Cheung raises a lot of issues concerning the credibility of the Applicant’s witnesses, but I do not agree with the observations raised by him.  I have the opportunity to observe their demeanour.  I do find them to be truthful and honest witnesses.  There could be discrepancies in their evidence but I do not find them to be material.  Thus, it is not necessary to reject their evidence altogether. 

Whether the DMC has been breached

15. Although the Respondent denies any breach of the DMC, he did not really say why there was no breach.  His defences run mainly along the lines of estoppel and unfairness in singling him out.  He also admits that he did not obtain any prior written consent of the Manger in installing the air-conditioner and the new water pipe.    It is clear to me that the installation of the air-conditioner and the new water pipe has breached Clauses 5.5, 5.18, 5.19 and 5.36, as they did damage the external wall, project outside the exterior of the Unit, alter the external appearance of the Building and were done without any prior written consent of the Manager or the Applicant.  There was suggestion from the Respondent that the installations would not be easily seen from the outside of the Building.  However, I accept the Applicant’s evidence in this regard that they can still be seen from outside and hence has affected the appearance of the Building.

Estoppel

16.  The 2^nd and 3^rd Representations relied on by the Respondent were concerning the air-conditioner.  The 2^nd Representation was allegedly made during the management committee’s meeting on 27 November 2004.  The Respondent alleges that at that meeting the representative of the Manager had on behalf of the Applicant promised that the decoration deposit would be refunded to the Respondent immediately, the Applicant would permit the Respondent to retain the air-conditioner and would not sue the Respondent if he would sign an undertaking.  There were 2 independent persons, i.e. District Board member Mr. Shek and District Officer Mr. Cheng also attended the meeting.  At the Respondent’s request, they both confirmed in writing what had happened on that day.  However, in these independent persons’ confirmation letters, they did not mention anything about the purported 2^nd Representation.  They were not called as witnesses to confirm the Respondent’s case about the 2^nd Representation.  On the other hand, the minutes of the meeting on 3 December 2004 did not record such promises.  On the contrary, the contents of the minutes show that at the meeting on 27 November 2007 the Respondent was asked to sign an undertaking within a week to change the position of the water pipe and remove the air-conditioner and that the Respondent had to take all responsibilities in removing the frame of the air-conditioner. The undertaking was given to the Respondent.  The contents of the minutes are consistent with the independent persons’ letters too.  With such strong contemporaneous evidence of the minutes and the 2 independent persons’ evidence, I totally reject the Respondent’s allegation that the 2^nd Representation was ever made.

17. The 3^rd Representation was allegedly made on 3 December 2004 during the management committee’s meeting.  It is alleged that a member representing the Applicant had made similar promises like those in the 2^nd Representation.  The Respondent himself did not attend the meeting but his representative Mr. Cheung did.  Again, the minutes of this meeting shows clearly that the Management Committee told Mr. Cheung that the Respondent must remove the air-conditioner within 14 days or else solicitors’ letter would be issued against him and the deposit would only be refunded after the air-conditioner was removed.  Two undertakings were given to Mr. Cheung to pass to the Respondent and the Respondent must sign them before 7 December 2004.  Thus, the contents of the minutes are contrary to what the Respondent alleges in the 3^rd Representation.  Likewise, I do not accept the Respondent’s allegation in this regard.

18.  The Respondent produced 2 undertakings dated 6 December 2004 and 27 February 2005 respectively.  The Applicant denies receiving the undertaking dated 6 December 2004.  The undertaking dated 27 February 2005 was only addressed to the then vice chairman, Mr. Kong.  However, these undertakings, even if they were given, were to express the Respondent’s willingness to bear responsibilities for compensation if accidents occur.  They were not undertakings to remove the air-conditioner.

19.  In the minutes of the management committee’s meeting on 12 March 2005, it was recorded that Mr. Kong did relate to the management committee the Respondent’s wish that the management committee would accept his undertakings and would not ask him to remove the air-conditioner.  So I think it is possible that Mr. Kong might have received the 2 undertakings on behalf of the Applicant.  Nevertheless, from the same minutes, it is clear that the management committee had rejected the request.  Thus, it does not really matter whether the Applicant had received the undertakings, as the Respondent’s request was clearly rejected by the Applicant.  No representations as alleged by the Respondent would follow.

20.  In view of the evidence, I do not accept that the Respondent has established the alleged 2^nd and 3^rd Representations and his defence in reliance on the 2^nd and 3^rd Representations must fail.

21. The alleged 5^th Representation concerns the new water pipe.  It is alleged by the Respondent that at the management committee’s meeting on 11 October 2004, the Applicant promised to refund the decoration deposit, allow the Respondent to keep the new water pipe and not to take any legal action if the Respondent could sign an undertaking that he would be responsible for any compensation claims arising out of the new water pipe.

22. However, the minutes of that meeting did not match with what the Respondent alleges.  On the contrary, the contents of the minutes show that the Respondent refused to accept the management committee’s suggestion that he should submit an application and sign an undertaking, and the Respondent left the meeting immediately.  Clearly, there was no agreement reached between the parties at the meeting and the Applicant did not promise what the Respondent alleges.   I do not accept the Respondent’s allegation in this regard at all, as it is contrary to the evidence in the contemporaneous record.  I therefore find that the Respondent fails to establish the existence of the alleged 5^th Representation too.

23. There was also an alleged undertaking concerning the water pipe given by the Respondent dated 6 December 2004.  The Applicant denies receiving it.  The undertaking only mentions that the Respondent would be responsible for repair when water leakage occurs.  It made no reference to any promises allegedly made by the Applicant.  It is also contrary to the stance taken by the Respondent at the meeting on 11 October 2004, as the Respondent had then refused to sign any undertaking unless all the other owners who had altered their water pipes would also sign such undertakings.  I find it rather strange that the Respondent would suddenly give an undertaking when he had made it clear at the meeting that he would not sign one unless the other owners also sign.  Thus, I do not believe that this undertaking was given to the Applicant.  However, even if this undertaking was given to the Applicant, it does not substantiate any of the alleged promises.  In fact the absence of any mentioning about the alleged promises shows the contrary, i.e. no such promises were ever made, otherwise the Respondent would not have omitted to mention them at all.

24. Since I do not find the alleged 2^nd, 3^rd and 5^th Representations proved, it follows that the defence of estoppel must fail.

Singled out

25. The Respondent alleges that he just followed what the other owners had done in altering the water pipe and installing the air-conditioner, but the Applicant singled him out arbitrarily for enforcement because of his stance, when he was a member of the management committee at one time, in calling for tenders from management companies which posed a direct threat to East Point’s existing management contract with the Applicant.  I totally reject this allegation, as the evidence shows clearly that the Respondent was given many opportunities to rectify the situations before legal action taken against him.  It was only when the Respondent failed to rectify the situations, then the Applicant had no alternative but to issue the present proceedings.

26. The Applicant’s witness, Ms. Leung, has explained in her evidence that there had been certain water pipes alternations in 1990’s or even earlier.  The Applicant carried out main decoration in 2000.  After that the Applicant laid down the decoration guideline.  After issuing the decoration guideline, the Applicant would still allow alternations of water pipes, but the owner who intends to make such alternations must apply in advance to the Manager and sign the undertaking in the form as provided by the Manager.  The undertaking requires the owner to bear the responsibilities arising out of the possible leakage of water due to the alternations in respect of his own unit and other units that may be affected by the leakage and to waive his claims against the management committee and the Manager for such alternations.  From the minutes of the meetings aforesaid, it is clear that the Applicant has given chance to the Respondent to submit an application and sign an undertaking but as the Respondent refused to cooperate, the Applicant has to issue legal proceedings.

27. As to the air-conditioner, the Respondent alleges that he had followed Units 8H, 14A and 19B of the Building in installing the air-conditioner. However, the Respondent admitted in cross examination that he had already determined to replace the original steel window to aluminum window and to install split type air-conditioner long before the decoration. The change of the window would render him to have insufficient space to install window typed air-conditioner, and he had to install split type air-conditioner. It means that how the other units had installed their air-conditioners were irrelevant to his decision.

28. According to the Applicant’s evidence, Unit 8H did make the application before installing the split air-conditioner.  The Applicant’s concern about Unit 8H, which is the same as in the present case, was that Unit 8H could not be in breach of the DMC by affixing the supporting frame on the external wall.  Unit 8H’s plan and method statement specifically dealt with this problem.  The Manager was assured that no screw would be affixed on the external wall and that the structure would be affixed on the window frame.  After the installation, the Manager’s technical staff inspected Unit 8H and found no breach of the DMC.  The Respondent’s photographs of Unit 8H are not clear as to whether Unit 8H had in fact affixed any screw on the external wall.  Although the Respondent had considered to summon the owner of Unit 8H to testify whether the screws were affixed on the external wall, the owner was not called at the end.  Thus, the Respondent has failed to prove that Unit 8H was in breach of the DMC.

29. Furthermore, Ms. Leung confirmed that after installing the air-conditioner, Unit 8H sealed it with a cupboard so that no one could see it from inside.  Even if Unit 8H had affixed screws on the external wall as alleged, the Applicant might have difficulty to find it out.  However, it does not mean that the Applicant had allowed the owner of Unit 8H to be in breach of the DMC.  At most one may say that the Manager failed in its duty to find out Unit 8H had affixed the screws on the external wall.

30. As to Unit 14A, the Applicant had already discussed about Unit 14A’s breach in its meeting and issued warning letter to the owner of Unit 14A on 18 August 2005. There were also discussions between the Manager and Unit 14A urging Unit 14A to reinstate the position.  As mentioned by Ms. Leung, but for the Respondent’s persistent opposition to this Application, Unit 14A might have already rectified the breach.  In any event, the Applicant has decided that it would take the necessary action against Unit 14A after the present proceedings.  Although the Respondent alleged that he relied on Unit 14A, under cross-examination, he admitted that he did not ask the owner of Unit 14A nor the Manager before installation about whether Unit 14A’s installation was approved by the Manager.  It is clear to me that there was no connection between the installation of air-conditioner at Unit 14A and the Respondent’s own installation.

31. As to Unit 19B, Ms. Leung frankly admitted that the Manger did not know of the breach at Unit 19B.  Mr. Ho also confirmed that it was difficult to find out such installation within the Building.  There was a similar breach in 1994 by Unit 19B and the Applicant took action to stop it.  It shows that the Applicant had been consistent in enforcing the DMC regarding split type air-conditioner. The letter of the Manager to Unit 19B on 13 July 2005 also shows that the Manager has refused to tolerate any affixing of air-conditioners on the external wall.  Ms. Leung also confirmed that the Applicant would take action against Unit 19B for the present breach.

32. The Respondent also relied on the cases at the Ground Floor shops and the Applicant’s own use of air-conditioners at the podium of the Building.  Again, the Applicant gave clear explanation for these cases.  For Shop 4, Mr. Ho testified that the air-conditioner installed by Shop 4 was a new case.  Shop 4 did in fact remove the air-conditioner and signed an undertaking to the Manager.  For Shop 5, the air-conditioner had been installed long ago. It might be there since the owner first moved in, and still exists.  The Manager finds it difficult to enforce the DMC against Shop 5 due to the long history of such breach.  However, the Manager did talk to the owner of Shop 5 and urged them to remove the same when the main renovation is carried out.  As to the Applicant’s own air-conditioners, Mr. Ho explained that these air-conditioners are all installed at the area not opened to the public or even owners, and two of them are for the use of the lift lobbies.

33. In view of the above, I find that the Applicant has in fact taken actions to enforce the DMC and I do not accept that the Applicant has singled the Respondent out for enforcement.  Even if the Applicant had tolerated the few examples cited by the Respondent regarding air-conditioners, the Applicant has a duty is to enforce the DMC under section 18(1)(c) of the Building Management Ordinance.  It could not reasonably have created an expectation that the Applicant should continue to ignore its duties, or relinquish its right ever in future (see Champion Ray Limited v. The Incorporated Owners of Workingberg Commercial Building, HCA 2926/2004 and The Incorporated Owners of Hoi Luen Industrial Centre v. Ohashi Chemical Industries (Hong Kong) Ltd. [1995] 2 HKC 11).

Conclusion

34. In view of my findings above, the Respondent has not established any defence against the Applicant’s claim, and the counterclaim should also fail.  The decoration deposit would only be refunded if there were no damage caused to the Building, but clearly the external wall of the Building has been damaged.

35. However, despite the fact that the Respondent has failed to establish any defence, I am not prepared to grant mandatory injunction in respect of the water pipe.  From the Applicant’s own evidence, it is clear that if the Respondent had submitted application and signed an undertaking, the alteration of the water pipe would certainly be approved.  In other words, the Respondent has only failed to comply with the formality.  The court has a wide discretion in granting or refusing mandatory injunction.  I am not prepared in the present situation to grant a mandatory injunction for a technical breach.

36. I therefore grant the following orders:-

(1)     The Respondent do within 14 days from the date hereof demolish and/or dismantle the air-conditioner together with its condenser at the external wall of the Unit, and reinstate the damaged part of the external wall caused by the installation of the air-conditioner and its condenser.

(2)     Apart from the water pipe that has already been installed at the Unit, the Respondent whether by himself, his servants or tenants or otherwise be restrained from erecting/installing any air-conditioner, pipes or other fittings at the external wall of the Building which is not provided for under the DMC.

(3)     The counterclaim be dismissed.

(4)     Costs order nisi: Save where previous costs orders have been made, the Respondent do pay costs of the application to the Applicant to be taxed on District Court Scale if not agreed.  The costs order nisi shall become absolute if there is no further costs application within the next 14 days.