WING MING GARMENT FACTORY LTD. v. THE INCORPORATED OWNERS OF WING MING INDUSTRIAL CENTRE and Another

IN THE COURT OF APPEAL

1994, No. 22
(Civil)

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J U D G M E N T

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Mortimer, J.A.:

1. The plaintiff and other occupiers in the Wing Ming Industrial Centre are co-owners. The plaintiff was the original owner. He sold off various parts of the building, having divided it into equal undivided shares. Essman, a company connected with the plaintiff, was appointed manager of the building. Covenants to the other co-owners were subject to a deed of mutual covenant (D.M.C.). The co-owners are tenants in common but have rights of occupation against each other in the deed of mutual covenant. By the D.M.C. the plaintiff has exclusive rights "to hold, use and occupy" certain areas including a specific reservation in respect of a void above car parking spaces 2, 3 and 4 and the reservation of the right to build above there a cockloft.

2. On 24th March 1993 the owners became incorporated and the management committee was elected but since 1992, fire equipment in the building had been defective and nothing had been done about it. A dispute had arisen between the owners and the managers, Essman, concerning the effectiveness of Essman. That culminated with the owners' management committee, the 1st defendant, taking matters into its own hands and instructing the 2nd defendant to install the water supply pipe which passed at near ceiling height through the void above the car park space reserved in the D.M.C. to the plaintiff for the building of the cockloft.

3. The work of installing the pipe was completed during the first half of August 1993 in spite of the plaintiff's protests, which were general before the work and specific immediately afterwards.

4. On 12th August the plaintiff complained of trespass but the defendants did not accept that the pipe was on the plaintiff's property. On 24th August the plaintiff requested the removal of the pipe. By 30th September a writ had been issued and there was an application for numerous injunctions - some mandatory and some not, but their intended effect is not in dispute. It is to enjoin the defendants to remove the pipe and restore the water supply underground where it had been in the first place.

5. If it is relevant, there is no dispute that the pipe was originally placed at ceiling height because it was much more convenient, less expensive and perhaps provided a more efficient supply than repairing the pipe originally embedded in the floor. The second defendant clearly had no knowledge of the plaintiff's rights above the parking spaces.

6. The application came before Barnett J. on 26th January 1994. In a careful and clear judgment he dismissed the application. The plaintiff now appeals contending that the judge's exercise of discretion was flawed and that he was plainly wrong.

7. Mr Charles Ching, Q.C., for the plaintiff/appellant, contends that the defendants are guilty of trespass, although he did not argue this point fully. He recognises the difficulty that as all the owners including the plaintiff are tenants in common, the plaintiff could not maintain an action in trespass save in very limited circumstances. He contends that there was an ouster in respect of the air space taken up by the pipe. In my view, which of course must be preliminary, this is simply not arguable.

8. On much firmer ground Mr Ching submits that the defendants are in breach of their contractual duties under the D.M.C. which gives the plaintiff an exclusive right to occupy the space invaded. He contends that the defendants have no defence to this breach - a matter which he says was not fully considered by the judge below. In Hong Kong, he further adds, rights to exclusive occupation usually depend upon the D.M.C. and local circumstances require that these rights should be jealously guarded and firmly enforced where necessary. He also says that the defendants' action was blatantly wrongful and amounted to stealing a march on the plaintiff against its protests. Also, that this wrong is not reparable in damages, which in the event will be difficult to assess. He submits that even though this is an interlocutory application for a mandatory order, the order should be made. He relies in particular upon Doherty v Allman (1878)3 App.Cas.709 on Hampstead & Suburban Properties Ltd v Diomedous [1969]1 Ch 248; and the decision of this Court-of which I was a member - in Incorporated Owners of South Seas Centre, Mody Road v Great Treasure Development Limited Civil Appeal No.8 of 1994.

9. On the other hand Mr Kotewall, Q.C., for the defendants, supports the judge's conclusions, saying that he considered all the matters that he ought to have taken into account, that the exercise of his discretion is not flawed and should not be interfered with by this Court, applying the principles which are too familiar to be repeated. He continues that even if, contrary to his contention, there is no defence to a breach of the D.M.C., there are still grounds for refusing the injunction. In other words, that he has a defence to the application in spite of the plaintiff's proposal made below and here, that the bringing into effect of any injunction should be delayed pending the re-establishment of the original below-ground pipe so that the services to the building would not be interrupted.

10. As I have already said, the effect of the orders asked for is mandatory and requires the removal of the pipe. If the orders are made it will be necessary to specify the detail of the work required and its timing so that those essential services are preserved. This would not, in my judgment, cause any difficulty.

11. The principles to be applied are not in doubt. They were considered by this Court in Incorporated Owners of South Seas Centre, Mody Road v Great Treasure Development Limited. There are certain passages in Hampstead & Suburban Properties Ltd v Diomedous which are in point. I do not rehearse the passages in Doherty v Allman which are now too well-known. But Megarry J. said at p.259 of the Hampstead case:

"Where there is a plain and uncontested breach of a clear covenant not to do a particular thing, and the covenantor promptly begins to do what he has promised not to do, then in the absence of special circumstances it seems to me that the sooner he is compelled to keep his promise the better ... I see no reason for allowing a covenantor who stands in clear breach of an express prohibition to have a holiday from the enforcement of his obligations until the trial."

When we considered those passages among others in Incorporated Owners of South Seas Centre we went on to say that even in those circumstances the general discretionary considerations always must be taken into account when the court has to decide whether or not to grant an interlocutory injunction. A fortiori when a mandatory interlocutory injunction is asked for. The general purpose of an interlocutory injunction is well-known - it is to preserve the rights of the parties until the trial of the issues. The court will always require considerable persuasion to make a mandatory injunction which decides the very issue between the parties in the proceedings - which is the position here. However, if persuaded that the general discretionary considerations make it appropriate, then such an order should be made without hesitation.

12. In the course of the argument, I have wavered. But such wavering is perhaps more attributed to Mr Ching's advocacy than to my judgment - for I do not think the result of this appeal should ever have been in doubt.

13. To my mind the plaintiff cannot succeed in trespass. My preliminary view however is that there is no defence to a breach of the D.M.C. save perhaps that the defendants may have an arguable immunity from the award of damages. Of course, this Court can only form preliminary views on the relevant issues - but on the many other issues between these parties - even a preliminary view cannot be formed, and Essman has now been joined in the proceedings as third parties by the 1st defendant.

14. Even though there is a clear breach of the D.M.C. I cannot say, for my part, that the defendants deliberately stole a march on the plaintiff, nor am I able to say - in spite of the breach - that it is certain or near certain that an injunction will be granted at trial - this may depend upon many other factors. This amounts to me saying that I cannot say with "a high degree of assurance" that such an injunction will be granted at trial.

15. At the time of the application before Barnett J. the cockloft had not been built. There was indeed some question before him whether it was possible to build it with the pipe in place. It has now been built but evidence of the likely effect of the pipe on the occupation or upon any rental obtained of the cockloft since completion is absent. The judge visited the scene. He thought that the encroachment to the pipe was "little more the technical" and it would have "minimal impact upon the storage space available." We in this Court cannot ignore those conclusions he reached having been to the area where the cockloft now is. Nor can it be said that this application is urgently needed to protect the plaintiff nor that any irremediable damage will ensue. Further I cannot take the view that any damages awarded will be unusually difficult to assess. That will depend upon the evidence at trial.

16. Although the emphasis of presentation has clearly changed before us on appeal, the judge's reasoning remains valid. For my part, I cannot fault it. The injunctions sought are neither urgent nor necessary. Nor does the balance of justice or convenience lead me to think that the judge's decision was in any way flawed. The plaintiff may well have been wronged. If so, this will be righted at trial. The plaintiff's interests require that the case should be brought to trial as soon as possible. Those advising the plaintiff should bend their efforts to that end. It seems to me that this appeal is an unnecessary distraction of time, effort and money which would have been better spent, preparing and bringing this action to trial and final conclusion. Unfortunately many interlocutory appeals before this Court fall into that category.

17. For my part, I would dismiss this appeal.

Sears, J.:

I have great doubts as to whether the defendants have any defence to the plaintiff's claim for breach of the deed of mutual covenant. They erected the length of pipe over the plaintiff's air space which the deed recognised may be built upon. Their decision to erect the pipe appears to have deliberately ignored the legal rights of the plaintiff. Should then a court grant a mandatory injunction prior to the trial, ordering the defendants to take down this length of pipe which effectively means that this continuance of the main water supply pipe necessary for the fire service installation in this industrial building? The judge thought not.

18. For the reasons given by my Lord, I agree that this Court should not interfere with the judge's discretion in refusing such an injunction. I also agree that this appeal should be dismissed.

Rogers, J.:

19. I agree with the judgment which has been given by Mortimer J.A. and I agree that this appeal should be dismissed.

Mortimer, J.A.:

20. In the event this appeal is dismissed with costs.