LUNG PO KWAN AND ANOTHER v. TANG KAM SHEUNG AND ANOTHER

CACV 164/2010 and CACV 190/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS. 164 AND 190 OF 2010

(ON APPEAL FROM LANDS TRIBUNAL BUILDING

MANAGEMENT APPLICATION NOS. 243 AND 309 OF 2005)

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LDBM 243/2005

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 243 OF 2005

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Hon Tang Acting CJHC:

1.  I have had the advantage of reading Le Pichon JA’s judgment in draft, I am in complete agreement and there is nothing I can usefully add.

Hon Le Pichon JA:

2.  This is an appeal from a judgment dated 27 April 2010 of His Honour Judge M Wong, presiding officer of the Lands Tribunal (“the presiding officer”).  There were two applications before the presiding officer which were ordered to be tried together.  They concerned a dispute between the owners of car parks 25 and 27 in a development known as YY Mansion, situated in Pokfulam.  The Incorporated Owners of YY Mansion (“the incorporated owners”) was a party to both applications.  At the conclusion of the hearing judgment was reserved which we now give.

The background facts

3.  The first matter (“LDBM 243/2005”) was an application by Lung Po Kwan and Lee Karen Yuk Lun (“Mr Lung and Ms Lee” or collectively “the applicants”) the owners of car park 27 for (1) an injunction to restrain Tang Kam Sheung (“Ms Tang”) the owner of car park 25 from parking a vehicle at car park 25 in such a manner as to obstruct the passageway to and from car park 27; (2) damages against Ms Tang for obstructing the applicants’ right to quiet enjoyment of car park 27; (3) an order that the incorporated owners take such action as necessary to prevent Ms Tang from parking at car park 25 in such a manner as to obstruct access to and from car park 27; and (4) damages for the incorporated owners’ failure to prevent Ms Tang from obstructing access to and from car park 27.

4.  The second matter (“LDBM 309/2005”) was an application by Ms Tang seeking relief against the incorporated owners for trespassing on car park 25.  The relief sought included a mandatory injunction to remove a wall which, as built, cut across the rear portion of car park 25.

5.  The development consists of 4 twelve-storey residential blocks comprising 96 flats and 132 car parks.  The car parks were situated on 3 levels, namely, the upper, middle and lower carports.  Because of the topography of the site, access to the various levels of carports was via a circular ramp which provided a driveway leading down from the residential blocks.

6.  The land on which the development stands used to be owned by Chung Ch’en College (“the vendor”).  In March 1963, the vendor entered into a sale and purchase agreement with Tsang Kai who did not develop the land himself but who, in June 1964, entered into a sub-sale agreement with Yue Yan Investment Company Limited (“the developer”).  The development was carried out by the developer at its own expense.

7.  The development proceeded and the occupation permit was granted on 26 January 1967.  Title remained with the vendor until an assignment dated 20 May 1967 (“the 1^st assignment”) whereby the development was assigned to the developer save and except a number of flats and car parks identified in the assignment which the vendor retained.  The properties retained did not include car parks 25 and 27.

8.  On the same day, the vendor and the developer also entered into a Deed of Mutual Covenant (“the DMC”) for the development.  A layout plan for the car park (“the approved plan”) was attached to the DMC showing, inter alia, the location of car parks 25 and 27 in the lower carport.

9.  As shown on the approved plan, car park 25 is situated at right angles to the rear boundary of the car park, which is depicted as a straight line running from the northeast to the southwest.  The relevant part of a copy of the approved plan is attached to this judgment.  Behind the rear boundary was an exposed slope.  Near the rear boundary are two of several circular columns that support the ramp that leads down to the lower carport.  The column situated nearest the north-eastern corner of the rear boundary (“the first column”) is further away from the rear boundary than the column situated to its southwest (“the second column”).  Car park 25 is situated between those columns.

10.  Prior to the major refurbishment of the development in 1995, the boundaries of the car parks were not marked in accordance with the approved plan.  The work undertaken in 1995 included the re-alignment of the boundaries of the car park so that they correspond to the boundaries shown on the approved plan.

11.  The rear wall consists of a number of screen walls linking the south-eastern corner of the rear boundary with its north-western corner but via the first and second columns, resulting in a ‘retaining’ wall with a pronounced angle at the first column (“the rear wall”).  It was discovered in the course of the refurbishment that it was not built on the rear boundary.  Rather, the rear wall can be described as representing two sides of a triangle with the rear boundary line forming the third and longest side of the triangle.  The three points of the triangle are thus the south-eastern and north-western corners of the rear boundary and the first column.  The rear wall was built right up to the side wall of the access ramp, forming a single structure with it.  The triangular area is situated directly beneath part of the access ramp which is supported by columns and is the hatched area shown on the plan attached to this judgment (“the plan”).

12.  Architects instructed respectively by Mr Lung and the incorporated owners have provided reports and advanced various theories as to when the rear wall could have been built.  In §4 of his judgment, the presiding officer found that there was “no evidence as to who built the [rear wall] or when exactly it was built”.  What is clear and beyond dispute is that the rear wall is not shown on the approved plan and has been in existence at least since about 1968.  The presiding officer considered that, based on the available evidence, “it is more likely than not that the [rear wall] was built by the developer”: see §26 of the judgment.  

13.  As appears from the attached plan, the rear wall cuts across car park 25 such that approximately 30% of car park 25 is behind the rear wall and thus unusable.  For convenience, that part of car park 25 that is located behind the rear wall will be referred to as “the blocked-off portion”.  When the boundaries of the car parks were realigned in 1995, all that was left of car park 25 was the remaining 70%, the length of which is insufficient to accommodate the vehicle used by Ms Tang which is a van some 16 feet long.

14.  Car park 27 is situated to the right of, and at right angles to, car park 25 when one is looking towards the rear wall.  There is a passageway that is 3.3 m wide between one of the pillars supporting one of the residential blocks and the corner of car park 25 that is closest in proximity to car park 27 (“the passageway”).  This passageway is the only access to and from car park 27.

15.  The van is usually parked by Ms Tang partly on what remains of car park 25 and partly on the passageway which forms part of the common parts of the development.  When the van is parked in this manner, car park 27 is inaccessible.

16.  The refurbishment in 1995 gave rise to the dispute between the owners of car parks 25 and 27 and the incorporated owners.  Various attempts have been made to resolve the dispute amicably but without success.

This appeal

17.  The presiding officer ordered the incorporated owners to remove that part of the rear wall that is situated within the boundary of car park 25 within nine months of the date of the order and otherwise dismissed the applicants’ claims against Ms Tang for an injunction and damages.  He also dismissed their claims against the incorporated owners for an order compelling them to take such action as necessary to prevent the passageway from being obstructed and for damages on the basis the mandatory injunction would resolve the applicants’ complaints.

18.  In CACV 164 (being the appeal from LDBM 243/2005), the applicants appeal from the dismissal of their claims to an injunction to restrain Ms Tang from obstructing their access to and from car park 27.

19.  In CACV 190 (being the appeal from LDBM 309/2005), the incorporated owners appeal the mandatory injunction requiring removal of such part of the rear wall that is situated within the boundary of car park 25.

20.  The single most important issue to be determined and the key to the dispute is whether (1) the rear wall and (2) the blocked-off portion were ‘common parts’ at the date of the first assignment.

21.  I have already alluded to the presiding officer’s view that it was more likely than not that the rear wall was built by the developer.  At trial, that appeared to be the position of Ms Tang as well as the incorporated owners.  It is also a view that accords with common sense.  If it was built by the developer, as explained below, it stands to reason that it was part of the development as built, in which case it must have been in existence at the date of the first assignment.

22.  The first assignment took place in May 1967.  If (contrary to my view) the rear wall was not in existence then, given that it is common ground that it was in existence in 1968, it would mean that it had to have been built within a few months of the date of the first assignment.  That is a highly improbable scenario.  Given the size and nature of the development and the significance of the ramp containing the driveway to the various levels of car ports in the development, one would not expect major building works such as the erection of the rear wall having to be undertaken so soon after the completion of a brand-new development.  If, as is undisputed, the rear wall was in existence in 1968, the only rational conclusion which is consonant with common sense is that it was a feature of the original development and that, accordingly, it was in existence at the time of the 1^st assignment.

23.  On that basis, the rear wall plainly was part of the common parts of the development.  At trial, that was accepted by Ms Tang as well as the incorporated owners.  While the DMC did not contain any definition as such of common parts or common areas, there are references to “the common parts”: see, for example, clause 21.  Clause 4 conferred on the owner of each flat the right in common with all other co-owners “to have access to and be entitled to use the eastern and western approach road and driveways”.  Clause 5 imposed an obligation on the owner of each flat to pay his due proportion of the costs charges and expenses for and in connection with, inter alia,

“(h) The cost of laying out, improving, maintaining and repairing all the retaining walls including the retaining wall along the Northern boundary of the said premises, the approach roads …and all other structures and equipment thereon.

…”

24.  When Mr Lai (the architect retained by the incorporated owners) gave evidence below, he apparently opined that the rear wall was a “retaining wall”, that is to say, a permanent structure that holds up an unstable structure behind it.  We do not have the transcript but according to the §19 of the written submissions of Mr Poon, counsel for Ms Tang, Mr Lai’s evidence was that a retaining wall has one weep hole every 3 metres.  As the rear wall only has two weep holes that were 8 metres apart and there were no weep holes in between the two columns, it was submitted that the rear wall could not have been a retaining wall but merely a screen wall.  In my view, whether or not the term “retaining wall” as used in the DMC is to be understood in a strict technical sense which is debateable, the rear wall clearly is a “structure” for the purposes of clause 5(h).

25.  If the rear wall was part of the common parts as at the date of the first assignment, the question which then arises is whether the blocked-off portion, representing approximately 30% of the size of the car park also would have become part of the common parts.  Given the facts of this case, the only rational and sensible conclusion is that it must have been intended by the developer and the vendor that the blocked-off portion, like the rear wall, should constitute common parts of the development. Its correctness could be tested by asking whether the developer could have sued the vendor in respect of the blocked-off portion.  The answer must be “no”, particularly as the developer itself was responsible for building the rear wall in the first place, thereby creating the blocked-off portion.  It cannot possibly have any legitimate complaint regarding the blocked-off portion. Its successors-in-title can be in no better position.

26.  Therefore, it must follow that when the developer sold, inter alia, car park 25 to Esther Kong by an assignment dated 11 July 1967, it had no title to the blocked-off portion.  The purchaser (Ms Kong) could have refused to complete because of the defect in title but she did not do so.  It is now too late.  Similarly, her successors-in-title can be in no better position.

27.  On this analysis, it is clear that there was no basis for granting the mandatory injunction to compel the incorporated owners to take down such part of the rear wall as is within the boundary of car park 25.  That injunction must be set aside.

28.  Mr Chong who appeared for the incorporated owners had put forward an alternative construction of the first assignment and the DMC, the effect of which was that the blocked-off portion was reserved to the developer.  Since it is my view that the only sensible and rational construction of the first assignment and the DMC is that both the rear wall and what lies behind it (including the blocked-off portion) constituted ‘common parts’ of the development, it is unnecessary to consider this alternative argument.  Accordingly, it is unnecessary to decide whether or not the incorporated owners should be granted to amend the notice of appeal to allow the alternative argument (which is a new point not taken below) to be argued.

29.  I appreciate that Ms Tang acquired the property back in 1986.  It was certainly open to her then (had she been so advised) not to complete the purchase because of the defect in title vis-a-vis her immediate predecessor-in-title.  But that did not happen.  Having accepted title, there is no alternative to her accepting that she has no title to the blocked-off portion of car park 25.  It may be that she has a legitimate complaint against the solicitors who acted for her in the purchase of the property in 1986 but it is a matter which does not arise on this appeal and as to which she will have to take such action as she sees fit.

30.  As against Ms Tang whose car when parked on car park 25 rendered car park 27 inaccessible, prima facie, the applicants must be entitled to an injunction to restrain Ms Tang from obstructing the passageway.  The fact that Ms Tang owns car park 25 and was merely exercising her right of ownership cannot be a valid defence when the user is not confined to user within the physical boundaries of car park 25.  Ownership of car park 25 is irrelevant.  As the owners of car park 27, the applicants have a valid cause of action against anyone (whether a third party or another owner of a flat in the development) who interferes with their exclusive right and privilege to use and occupy car park 27.

31.  The presiding officer took the view that as the obstruction was on the passageway which is part of the common parts, the applications had no locus to sue Ms Tang and that the only person who had the right to do so was the incorporated owners by virtue of section 16 of the Buildings Management Ordinance (“the Ordinance”).  With respect, a wrong may give rise to different causes of action vested in different parties.  While undoubtedly the incorporated owners are entitled to take action to restrain such obstruction of the common parts, that does not preclude the owners of car park 27 whose exclusive ownership rights have been interfered with from proceeding against Ms Tang in respect of that interference.  Accordingly, the applicants are entitled to the injunction that they seek.

32.  There remains the question of whether the applicants are entitled to recover damages in the sum of $54,000 from Ms Tang.  The applicants claim loss of rental income of $500 per month for the period from 15 August 2004 to 14 August 2008 and $1500 per month for the period from 15 August 2008 to 14 August 2010.  As judgment was given on 27 April 2010, the applicants’ claim is calculated on the basis of $500 for 48 months and $1500 for 20 months, aggregating $54,000.

33.  In §32 of his judgment, the presiding officer stated:

“I do not agree that they have suffered the damages claimed by them. There was another car parking space offered to Mr Lung and Ms Lee, which can substitute CP27 temporarily. Although it is not a permanent solution, it can still eliminate all the alleged loss claimed by Mr Lung and Ms Lee. I do not find that this alternative car parking space is in any way inferior to CP27. Thus, it is unreasonable for Mr Lung and Ms Lee not to mitigate their losses by taking up this offer.”

34.  The applicants have exhibited tenancy agreements for the relevant period.  Each contains a provision to the following effect save for the amount of rental which increased to $1500 for the period from 15 August 2008:

“As the right of access to the assigned car parking space provided by the landlord is currently obstructed by another vehicle unlawfully, another temporary parking space is arranged located along the road. The landlord is dealing with the management office to resolve the issue so as to allow unobstructed access to the assigned car parking space. In this connection, before the assigned car parking space is provided to the tenant, the rental fee is HK$17,000.00, which inclusive rates, management fee and temporary car parking space rental fee.

Once the assigned car parking space is available for the tenant, the monthly rental charge will be resumed to HK$17,500.00.”

35.  That the applicants did suffer damage from not being able to use their car park is obvious.  To be allowed to use a car park as a temporary arrangement, as it were, on sufferance, clearly is different and less satisfactory than being able to exercise an unqualified proprietary right to use one’s own property.  The presiding officer appears to have overlooked the fact that he had recognized that distinction in §23 of his judgment when he stated:

“It is not right for Mr Lung and Ms Lee or their tenants to park their cars at another place permanently. They have the right to use CP 27.”

The applicants were in no position to assure their tenant of the use of a car park which the reduction in rental reflected.

36.  Further, the presiding officer was also in error when he said that the applicants were at fault for not taking up the temporary offer when in fact they had.  I agree with Mr Shum who appeared for the applicants that whether the temporary arrangement is superior or inferior is not the issue.  Rather, it is the interference with the applicants’ right to enjoy and use their car park that is the issue.  I have no doubt that the applicants are entitled to the damages that they seek.

Conclusion

37.  I would allow the appeals of the applicants and the incorporated owners and set aside the order below.

38.  For CACV 164 of 2010, I would also order that

(1) there be an injunction that Ms Tang whether by herself, her servants, agents, tenants, licensees any of them or otherwise howsoever be restrained from parking a vehicle at CP 25 in such a manner that obstructs the passageway to and from CP 27;

(2) damages in the sum of $54,000 be paid by Ms Tang to the applicants for obstructing the exclusive right to peaceful and quiet enjoyment of CP 27;

(3) there be an order nisi that Ms Tang do pay the first and second applicants their costs below and of this appeal with certificate for two counsel, to be taxed if not agreed.

39.  For CACV 190 of 2010, I would order that:

(1) the mandatory injunction made against the incorporated owners be set aside;

(2) there be an order nisi that Ms Tang to pay the incorporated owners their costs below and of this appeal, to be taxed if not agreed.

Hon Saunders J:

40.  I agree.

Hon Tang Acting CJHC:

41.  Accordingly, there will be an order in terms of §§37-39 above.