TONG LAU FUNG v. THE INCORPORATED OWNERS OF YUE SUN MANSIONS

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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Reasons for Decision

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1. Today is the second day of a 2 days’ trial.  Ms Lam for the applicant raised the argument that since the allegation by the respondent that the use of the premises by the applicant is in breach of the Occupation Permit (“OP”) as well as the Deed of Mutual Covenant (“DMC”) (collectively referred to as “the Breach”) had not been pleaded in the Notice of Opposition (“NOO”) hence irrelevant, this Tribunal should not be required to deal with these issues at trial.

2. I have made a ruling against the applicant on this argument at the hearing indicating that the reason will be handed down in due course.  This is the reason.

Undisputed Facts

3. The applicant is the tenant and occupier of Shop C on G/F and the whole of 1/F of Yue Sun Mansion (“the Premises”) and is minded to use the Premises for the business of operating a residential care home for the elderly. 

4. The respondent is the incorporated owners of Yue Sun Mansion (“IO”).

5. On 12 February 2015, the applicant filed the Notice of Application (“NOA”) in this case alleging that the IO had unreasonably interfered with the use and enjoyment by the applicant of the lift inside Yue Sun Mansion (“the Building”) in breach of section 34I(1)(b) of the Building Management Ordinance (“BMO”).

6. On 5 March 2015, the respondent filed the NOO (page 9-17 Bundle 1).  The only relevant part about the Breach can be found in §5 of the NOO which stated that :

“The respondent avers that the Occupation Permit (Permit No.K374/64) of the Building stipulates that the user of the ground floor and the 1^st floor of the Building was designated as shops and offices respectively.”

7. It is also not in dispute that there is nothing in the NOO which referred to a breach of the DMC. 

8. At the hearing on 11 March 2015, leave was granted for both parties to file and serve witness statements and for the case to be set down for trial with 2 days reserved.

9. In the 2 witness statements filed by Madam Tse, the chairlady of the IO dated 10 March 2015 and 8 April 2015 respectively, the allegation of the Breach, ie the use as a home for the elderly is not a non-domestic use is raised (§5 at page 34, §15 at page 36 and §§17-25 at page 50-51 Bundle 1).

10. Throughout the proceedings, Clause 10(c) of the DMC is never mentioned in any document filed by the respondent until the written opening submissions of Mr Leung for the respondent filed on 4 June 2015.

Applicant’s Contention

11. It is the submission of Ms Lam that the whole case turns on whether the respondent had been in breach of section 34I(1)(b) of the BMO and whether the applicant’s use of the Premises is in breach of the OP or Clause 10(c) of the DMC is irrelevant.  In any event, the Breach had never been pleaded by the IO in the NOO and in breach of the pleading rules which required the particulars of the breach to be specifically pleaded.

12. When Ms Lam’s attention is being drawn to Practice Direction No. 4 issued by the President of the Lands Tribunal on 1 July 1986 (“PD No. 4”), Ms Lam submitted that the pleadings is not a matter of practice but a matter of principle that the applicant should be entitled to know what case they have to deal with and the respondent should be confined to the case it had pleaded.  Even though the pleadings in Lands Tribunal are not as strict as in ordinary civil litigations, but fairness should also be applicable to the applicant.

13. Ms Lam submitted that this court should not deal with the 2 issues about the breach concerning the use of the Premises.

Respondent’s Reply

14. The applicant had never taken any pleadings point nor had they applied for the irrelevant part in the witness statements of the IO to be expunged when she had ample opportunity to do so.  Hence the application today is a belated application which is misconceived.  In any event, the allegation of the breach of the OP is mentioned in the NOO and both breach of OP and DMC are mentioned in the witness statements of Madam Tse.  And relying on section 10(5) of the Lands Tribunal Ordinance (“LTO”) and the PD No. 4, Mr Leung opposed to this application and contended that the issues of  the Breach are the defence of the IO which should be dealt with by this court.

Discussion

15. Section 10(5) of the LTO reads as follows :

“(5)(a) The proceedings of the Tribunal shall be conducted with as much informality as is consistent with attaining justice and, for this purpose, the President may give directions as to the manner and form in which proceedings shall be conducted.

 (b)  Directions by the President under paragraph (a) may be given in such manner as he thinks fit and need not be published in the Gazette.”

16. PD No. 4 is a direction issued by the President of the Lands Tribunal under section 10 of LTO and §§5 and 6 of it provided that :

“5. Presiding Officers should not regard Notices as in the nature of pleadings by which parties are bound, but as an indication of the issues which are likely to be raised.

6.   The remedy, if the documents filed by a party are so incomplete or misleading as to prejudice the other party, is to adjourn, not to dismiss the claim.”

17. From the wordings of §5 of PD No. 4, it can be seen that the normal rules applicable to pleadings in ordinary civil litigation where parties are bound by their pleadings is not applicable in the proceedings at this Tribunal.  To the contrary, PD No. 4 required the Tribunal not to regard the NOA and the NOO “as in the nature of pleadings by which parties are bound”.  The spirit of §5 of PD No. 4 is stated in the last sentence, ie the Notices should only be taken “as an indication of the issues which are likely to be raised” (my emphasis).

18. It is not in dispute that the allegation of a breach of the OP has been raised in the NOO.  This should be sufficient to alert the applicant that breach of the OP is a point raised by the IO in defence and likely to be an issue at trial.  Even if the specific words of the Breach did not appear in the pleadings, the applicant is all along well aware of the fact that the IO is alleging an illegal use of the Premises by the applicant.

19. And even though the allegation of the breach of the DMC is not mentioned in the NOO, I found such allegation is not alleging something new if one were to read the wordings of the relevant clause of the DMC.  The IO is alleging a breach of Clause 10(c) of the DMC which reads :

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

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(c) Not to use or permit or suffer to be used its self-contained portion office or shop for any nuisance, obnoxious, immoral or illegal purpose and …” (page 207 Bundle 2).

20. The IO is alleging that the use by the applicant of the Premises as a residential care home for the elderly is not in line with the use requirement in the OP, ie for non-domestic purpose, hence an illegal purpose.  Clause 10(c) is also a provision governing the use of the Premises.  Even though Clause 10(c) has not been pleaded in the NOO, with the allegation of a breach of the OP mentioned in the NOO which is an allegation of same nature as in Clause 10(c) of the DMC, I do not agree with the applicant that by the mere failure to name the breach and the relevant clause in the DMC, this would deny the applicant the opportunity to understand the defence she is facing.

21. And even if the IO had failed to plead the allegations or named the relevant clause is material, adopting the spirit of §6 of PD No. 4, this Tribunal should not dismiss this line of defence but should allow an adjournment to cure the defect. 

22. The fact that these allegations are raised either in the NOO or the witness statements is beyond argument.  The applicant had waited long till the second day of the trial to raise this argument that these 2 issues should not be dealt with by this Tribunal.  Had the applicant taken a prompt reaction by seeking to strike out this line of defence from the NOO or asked for the parts of the witness statements be expunged, the IO would have the opportunity to seek for an amendment of the NOO and I see no reason not to allow an amendment.  Now that the applicant only raised this at the second day of the trial and asked this court not to deal with the Breach, should this be allowed, the court is depriving the respondent the opportunity to amend its pleadings and to have its defence to be considered by the court.  Balancing the interests of both parties, the prejudice likely to be caused to the respondent outweighs the prejudice likely to be caused to the applicant.  

23. And as far as relevancy is concerned, I found Ms Lam had failed to convince me otherwise.  The application in this case involved a finding as to whether the IO had been in breach of section 34I(1)(b) of BMO.  The IO should be entitled to raise the defence that they had not acted unreasonably.  It is the defence of the IO, inter alia, that since the Premises had been used for an illegal purpose in breach of the OP and the DMC, it would not be unreasonable for the IO not to accede to the applicant’s request of connecting the lift service to the Premises.

24. Under such circumstances, I fail to see how can the issues of the Breach be irrelevant in the consideration of the applicant’s allegation of a breach of section 34I(1)(b) of BMO.

25. Having considered all the above, I found the issues of breach of OP and breach of DMC raised by the respondent should be dealt with in this case.