SMARTFUL INTERNATIONAL LTD v. THE INCORPORATED OWNERS OF WAH MING CENTRE BLOCK C

LDBM 152/2006

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. 152 of 2006

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JUDGMENT

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Background

1. The Respondent is the owners’ corporation of the building known as Wah Ming Centre Block C, Nos. 394-400 Des Voeux Road West, Hong Kong (“the Building”).  The Applicant is the owner of the premises known as Portion (being Shop A) on the Ground Floor, the 1^st Floor and the 2^nd Floor of the Building (“the Premises”).

2. The Building is a multi-story composite building.  According to the Occupation Permit dated 10 July 1986, which substituted the one dated 4 February 1986 by amending the lot number, the Ground Floor to the 2^nd Floor are for “Shops and ancillary accommodation for non-domestic use”, and from the 3^rd Floor to the 23^rd Floor there are “4 flats per floor for domestic use”.  There are 2 lifts (including a fireman’s lift) installed in the Building for common use.

3. When the Applicant purchased the Premises on 21 December 2005, the Applicant noticed that the control circuits of the 2 lifts had been altered so that the lifts could not stop at the 1^st Floor.  Upon request of the Applicant, the Respondent resumed the lift service to the 1^st Floor in about March 2006.

4. By a Tenancy Agreement dated 13 April 2006 and made between the Applicant and its associated company, Cheer Hall Development Limited (“the Tenant”), the Premises were let to the Tenant for the purpose of running a Residential Care Home for the Elderly (“RCHE”).  Since about 18 April 2006, the Tenant has used the Premises to run the business of a RCHE under the style or firm name of “Tung Fong Home For the Aged”).

5. However, in about May/June 2006, the Respondent altered the circuitry of the lifts again so that the lifts could no longer stop at the 1^st and 2^nd Floors of the Building.  Despite repeated requests and demands by the Applicant, the Respondent refused to restore the service of the lifts to the 1^st and 2^nd Floors.

6. Thus, by this application, the Applicant claims for an order that the Respondent do forthwith adjust or cause to be adjusted the circuitry of the lifts in the Building so as to enable the Applicant, the Tenant and all persons claiming through or under it including its successors-in-title to gain access to and egress from the 1^st Floor and the 2^nd Floor therein.  The Applicant also seeks for an injunction to restrain the Respondent from altering the circuitry of the lifts or in any way tampering with the lifts so that they by-pass either of the 1^st and 2^nd Floors in the Building, together with damages, interests and costs.

Grounds for the claim

7. The Applicant relies on 3 grounds to make the present application.  The 1^st ground is based on Clause 5(b) of the Deed of Mutual Covenant of the Building (“the DMC”), which provides that:-

“Subject as hereinbefore mentioned and to the rules and regulations as may be imposed by the Manager for the time being of the said building every owner for the time being of any undivided shares in the said land and building in common with the others of them and all others having the like right shall have the right to use for all purposes connected with the proper use and enjoyment of the unit owned by him lifts, staircases, passages and landings for common use.”

(underlines added)

8. The Applicant contends that as an owner it has the right to use the lifts, which are for common use, for the purposes of accessing the 1^st and 2^nd Floors of the Building.

9. The 2^nd ground relied on by the Applicant is that the Respondent is in breach of section 34I(1)(b) of the Building Management Ordinance (“the BMO”).  Section 34I stipulates as follows:-

“(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.

(2) Any person who contravenes subsection (1) shall be deemed to be in breach of an obligation imposed on him by the deed of mutual covenant in respect of the building.”

(underlines added)

10. The Applicant contends that in causing the lifts to skip access to the 1^st and 2^nd Floors, the Respondent has unreasonably interfered with the use and enjoyment of the lifts by the Tenant and has subjected all the persons lawfully claiming through or under the Applicant to a life threatening danger in case of fire.  The Respondent is also deemed to be in breach of the DMC.

11. The 3^rd ground is that by skipping access to the 2^nd Floor, the Respondent has failed to have regard to the safety regulations under the Code of Practice on Building Management and Maintenance (“the CPBMM”) issued by the Secretary for Home Affairs pursuant to section 44(1)(b) of the BMO.  Section 18(1)(c) of the BMO states that the corporation shall “do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant (if any) for the control, management and administration of the building.”  Section 18(2A) of the BMO further states that “Without prejudice to the generality of subsections (1) and (2), the corporation in the performance of its duties and the exercise of its powers under this section shall have regard to and be guided by Codes of Practice issued from time to time under section 44(1).”

12. The Applicant contends that from these sections, it is implied that the Respondent has the obligation to cause the lifts to gain access to all floors for the proper management of the Building and the Respondent shall have regard to the Code of Practice.  Paragraph 4 of the General Notes to Paragraph 5 of the CPBMM stipulates that for technical standards relating to means of access for firefighting and rescue, the Code of Practice for Means of Access for Firefighting and Rescue 1995 (“the CPMAFR”) and its subsequent revisions shall be referred to.  The CPMAFR was revised in December 2004 and paragraph 10.1 thereof provides that in the case of a single fireman’s lift, it shall serve at least alternate floors.  Since the Building has only 1 fireman’s lift and it serves the Ground Floor, it must also serve the 2^nd Floor as the alternate floor.  Thus, by preventing the fireman’s lift to stop at the 2^nd Floor, the Respondent is in breach of section 18(2A).

The Respondent’s defence

13. First of all, the Respondent contends that the Codes of Practice are not law and are not legally binding on the Respondent.

14. Secondly, according to Clause 14(d) of the DMC, the Respondent is not to use the Premises “for any purpose other than commercial purposes in accordance with the terms of the Occupation Permit”.  As the Occupation Permit only permits the Premises to be used for “Shops and ancillary accommodation for non-domestic use” and the RCHE is of domestic use, the Respondent is in breach of Clause 14(d).

15. Thirdly, the Respondent alleges that the people in wheelchairs going in and out of the Premises by using the lifts have caused inconvenience to the other owners.  The Respondent contends that the Applicant is in breach of Clause 14(f) of the DMC, which stipulates that the owner is not to “permit anything … which may be or become a nuisance or cause damage or inconvenience to the occupiers of any neighbouring premises or to use the said building … for any purpose which is in contravention of … the Occupation Permit”.  The Respondent further relies on Clause 14(k) of the DMC, which stipulates that the owner is not “to do anything in those parts of the said building intended for common use which may be a nuisance or cause any annoyance to the occupiers of the said building or any of them”.

16. By reason of the Applicant’s breaches of the DMC, the Respondent contends that it has the power to forbid the Applicant and the Tenant the use of the lifts under Clauses 7(d)(23) and (24) of the DMC.  Clause 7(d)(23) stipulates that the Manager shall have the power to “disconnect the electricity and/or water supply and other services to the unit of any owner who … fails to observe or perform any of the terms and conditions herein contained … and to forbid such defaulting owner, his tenants and licensees the use of the lifts … until such default is rectified”.  Clause 7(d)(24) stipulates that the Manager shall have the power to “do all such other things as are reasonably incidental to the management of the said land and building”.  The Respondent also relies on Clause 7(e) of the DMC to contend that all acts and decisions of the Manager in accordance with the provisions of the DMC shall be binding on all the owners.

17. The Respondent denies that there would be hazard to the persons in the Premises in case of fire as there are staircases leading from the Premises to the exit and the occupiers of the Premises need not rely on the lifts to escape in case of fire.

18. In the Notice of Opposition, the Respondent raised the defence that the Applicant has no locus standi to bring the present proceedings on behalf of the Tenant, but the Respondent has abandoned this line of defence at the trial.

Is the Applicant in breach of the DMC?

19. In view of the Respondent’s defence, I have to determine whether the Applicant is in breach of the DMC first before deciding on the justification of the Respondent’s action in stopping the service of the lifts to the 1^st and 2^nd Floors.

20. I think Clause 14(d) of the DMC has made it very clear that the Premises can only be used for “commercial purposes in accordance with the terms of the Occupation Permit”.  It is not just for “commercial use” but it must be “in accordance with the terms of the Occupation Permit”.  The Occupation Permit only permits the Premises to be used for “shops and ancillary accommodation for non-domestic use”.  In other words, if the Applicant or the Tenant is not using the Premises as “Shops or ancillary accommodation for non-domestic use”, the Applicant is in breach of Clause 14(d) of the DMC.

21. The Applicant, relying on the Technical Circular No. 691 of the Lands Administration Office (Exhibit “A4”), argues that the operation of a RCHE is a for a “commercial purpose but with a residential element”.  I do not think that this argument would bring the Applicant anywhere, as it is clear from Clause 14(d) that the use must be in accordance with the Occupation Permit.  If Clause 14(d) referred to “commercial purposes” only and nothing else, then the Applicant’s argument in this respect might be arguable, but clearly it is not the case here.

22. The Applicant then relies on the New Oxford Dictionary of English to construe a “shop” to mean “a building or a part of a building where goods or services are sold”.  The Applicant submits that the court should look at this plain and natural meaning and construe that a RCHE is a shop.  The Applicant also argues that the phrase “non-domestic use” in the Occupation Permit refers to “Ancillary accommodation” only, but not “Shops”.  I do not agree with the Applicant’s interpretation in this manner.  A “shop”, where goods and services are sold, must be of commercial nature and cannot be described as for domestic use.  Thus, whether the phrase “non-domestic use” is used to describe “Shops” or not, a shop must still not be for domestic use.  The New Oxford Dictionary of English does not give further definition of what types of services that can be provided in a shop, but in the context of occupation permits and the Building Ordinance, I think it would be too wide to include all kinds of services under the umbrella of “Shops”.  When a building or part of a building provides habitation, and depending on what other services are provided with it, I think it should be more plain and natural to refer it as a hotel, a guest-house, a boarding-house, a hostel or a dormitory.  If the Applicant’s interpretation were correct, it would mean that all hotels, guest-houses, boarding-houses, hostels and dormitories are “shops”.  I think it is just plainly wrong to have such a loose definition in the context of an Occupation Permit.

23. Moreover, under section 2 of the Building Ordinance, there is a clear distinction between “domestic” and “non-domestic”.  “Domestic”, when used in relation to a part of a composite building, means a part that is constructed or intended for habitation.  “Non-domestic”, when used in relation to a part of a composite building, means a part that is constructed or intended for use otherwise than for habitation.  So they are mutually exclusive.  “Habitation”, in relation to the use of a building or part of a building, is also defined in section 2 to include use of it for hotel, guest-house, boarding-house, hostel, dormitory or similar accommodation.  Clearly, the use of a building or part of it for hotel, guest-house, boarding-house, hostel, dormitory or similar accommodation is “domestic” and cannot be “non-domestic” by the definitions in section 2.  The wordings used in the Occupation Permit should be interpreted in this manner, as it is issued under the same Ordinance.

24. In Aberdeen Shopping Plaza Ltd. v. The Incorporated Owners of Aberdeen Ka Ning Mansion, HCA 9319 of 2000, Suffiad J. held that the Old Age Home in question was a boarding house albeit restricted to elderly persons.  Likewise, I am also of the view that a RCHE is a “boarding-house”.  As a boarding-house, it will fall within the definition of “domestic” in section 2 of the Building Ordinance as aforesaid.  Thus, the use of the Premises for a RCHE is “domestic”, and it clearly contravenes the restrictions imposed in the Occupation Permit.  It follows that the Applicant is breach of Clause 14(d) of the DMC. 

25. The Applicant is also in breach of Clause 14(f) of the DMC, as it contains the prohibition to use the Building for any purpose that is in contravention of the Occupation Permit too.

26. However, I do not find that the Applicant has breached any provisions in the DMC by causing nuisance or inconvenience to occupiers of neighbouring premises.  The Respondent only adduced evidence in relation to a few incidents of nuisance or inconvenience, some of which are just hearsay evidence.  I do not find that the delays caused to the other occupiers in the use of the lifts are serious enough to constitute nuisance or inconvenience.  The incidents mentioned by the Respondent’s witnesses could just be isolated incidents.  Thus, there is no breach of the DMC on the part of the Applicant in this aspect.

Consequence of the breach

27. The Applicant submits that even if there was a breach of Clause 14(d) of the DMC, the Respondent is not entitled to disconnect lift service to the 1^st and 2^nd Floors of the Building by virtue of section 34I(1) of the BMO, as it would amount to the deprivation of the use of the lifts which are common parts of the Building, and also deprivation of the use lifts by other owners, occupiers and persons lawfully in the Building.  The Applicant argues that Clause 7(d) of the DMC only impliedly permits the Manager to remove services exclusively enjoyed by the relevant units and does not empower the Manager to remove services enjoyed by other owners.

28. I do not accept the Applicant’s submission in this regard.  Clause 7(d)(23) of the DMC expressly empowers the Manager to forbid the Applicant, the Tenant as well as licensees to use the lifts until the default is rectified.  It is not an implied power and it does not matter that the lifts are common parts of the Building when there is such an express to forbid the use.  Section 34I(1)(b)(i) of the BMO is concerned with unreasonable interference, but in our case the Respondent’s action cannot be regarded as unreasonable interference.  The Respondent is merely exercising its right under the DMC to ensure that the Applicant would rectify its unlawful use of the Premises.

29. There is also no breach of section 34I(1)(b)(ii) of the BMO, as I do not agree that the Respondent has caused a nuisance or harzard to any person lawfully in the Building by stopping the service of the lifts to the 1^st and 2^nd Floors.  It is common sense that in case of fire, the occupants of the Premises should not be using the lifts in any event.  There are staircases leading from the Premises to the exit.  So the occupants should use the staircases instead.  As to the fireman’s access to the lifts, the evidence shows that at such critical times a device pre-installed to the lifts would enable the fireman to have access to every floor using the designated fireman’s lift.  There is no breach of the CPBMM or the CPMAFR.  In any event, the Codes of Practice are not law, and the Respondent is not bound by such Codes.  Thus, there is no breach of section 18(2A) of the BMO.

30. I therefore find that the Respondent is entitled to rely on Clauses 7(d)(23), 7(d)(24) and 7(e) to stop the service of the lifts to the 1^st and 2^nd Floors as the Applicant has failed to comply with the Occupation Permit.

Change of Permitted Use

31. The Applicant has obtained a licence to operate a RCHE at the Premises, but it does not mean that the Applicant can ignore the restriction in the Occupation Permit.  The Applicant is still required to obtain a change of the permitted use in the Occupation Permit.  However, the Applicant has only obtained a letter of “no in-principle objection” from the Building Department, which is not the same as a formal approval for the change of use.  In fact, the letter dated 11 April 2007 from the Building Department (Exhibit “R5”) makes it clear that the Applicant has not obtained the formal approval, but is still required to appoint an Authorized Person and submit the proposed Alterations & Additions plans.

32. The Applicant also tries to draw a distinction between “material change of use” and “change of permitted use”, but I do not find that there is any significant issue arising out of such a distinction, even assuming there is one.  In fact the experts of both parties also used these two terms loosely and interchangeably.  I do not see how the distinction could help the Applicant to advance its case further.

Is the Applicant entitled to the reliefs?

33. As the Applicant has no right to contravene the restriction in the Occupation Permit, the use of the Premises as a RCHE is not a proper use and enjoyment of the Premises.  Thus, the Respondent has not infringed the Applicant’s right under Clause 5(b) of the DMC.  As stated above, I do not find that the Respondent is in breach of section 34I(1)(b) or section 18(2A) of the BMO.  Thus, none of the 3 grounds relied on by the Applicant are established.  The Applicant has therefore no right to obtain the reliefs sought.

Conclusion

34. By reasons aforesaid, I order that:-

(1) The Applicant’s application herein be dismissed.

(2) Costs order nisi: Save where there has been previous costs order, the Applicant do pay the Respondent costs of the proceedings herein including counsel’s certificate to be taxed on District Court Scale if not agreed.  If there is no application for costs within the next 14 days, the costs order nisi shall become absolute.