THE INCORPORATED OWNERS OF KENNEDY TOWN BUILDING v. MUKSCH ROLAND AND ANOTHER

LDBM 292/2010

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 292 OF 2010

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BETWEEN

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JUDGMENT

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Introduction

1.  This is a dispute between the owners’ corporation and 2 ex-owners of a flat of the building.

Background

2.  The Applicant was and is the Incorporated Owners of Kennedy Town Building.

3.  The 1^st and 2^nd Respondents were and are husband and wife.  On 26 August 2008, they acquired the property known as Flat B, 25/F and Main Roof B (“Flat B” and “Roof B” individually, “the Premises” collectively) of Kennedy Town Building, No. 27 Praya Kennedy Town, Hong Kong (“the Building”).

4.  The Respondents were owners of the Premises at the time when Applicant commenced the present proceedings on 4 November 2010.  However, they completed their sale 11 days later, i.e. on 15 November 2010.  Parties nonetheless proceeded with their case until trial, after failure of mediation to resolve the dispute.

5.  To understand the dispute between the parties, one needs to know how one can go to Roof B from Flat B.  Roof B is the corresponding roof top of Flat B, but there is no private staircase connecting them.  Instead, two public staircases are available for access to Roof B.  They are connected to a corridor called aisle (“the Aisle”). One can get through the Aisle and the fire doors at the two ends of the former to Roof B. It is indeed the only way for the Respondents to get access to Roof B.

6.  As we will see, at the end of the trial, the Applicant only asked for the sum of $28,000 to re-instate the Aisle to its original position.

7.  Parties appeared before me on 13 July 2011 and 31 August 2011 for the trial of the proceedings. Mr. V. Chan of Counsel acted for the Applicant, and the Respondents were represented by Mr. Hanusch of Messrs. Deacons.

8.  By the Amended Grounds and particulars dated 6 December 2010, the Applicant claimed:

“(1) An order that the 1^st and the 2^nd Respondents do forthwith demolish and remove all the said unauthorized and/or illegal structure and household appliances and furniture from the aisle on the roof and remove the rubber adhesive on external wall from Flat B of 20^th Floor to 24^th Floor of the Property and reinstate the Property to its original state; and

(2) An injunction to restrain the 1^st and 2^nd Respondents whether by himself or by his servants tenants licencees and agents whatsoever from constructing erecting or installing any unauthorized and/or illegal structures on the roof of the Property.

(3) Damage to be assessed;

 (4)      ….”

9.  As the matter developed on 13 July 2011, Mr. Chan confirmed that the Applicant would not proceed with the injunctive relief sought.  Further, he submitted a quotation dated 30 June 2011 in relation to the damages to be assessed.

“天台公共走廊還原工程報價單

….”

(Quotation issued by
Widely Construction &
Engineering Limited
dated 30 June 2011)

10.  Further, on top of the above quotation, the Applicant also sought to produce 20 pages of document (p.148a to t of the Trial Bundle). They consisted of various photos showing the condition of the Aisle and some floor plans of the Building.

11.  Mr. Hanusch objected to the production of the new documents, but, at the same time, he also asked leave from this Tribunal to adduce 4 pages of transcript of tape recording.  At the resumed hearing, he further produced 22 pages of correspondence among the parties, including the latest correspondence between the legal advisers.  Mr. Chan did not agree to admit these documents.

12.  To save time and costs, at the trial, I allowed all these new documents to be admitted on a de bene esse basis. Now, after the closing of the cases of both parties, I confirm such decision.

(a) Late discovery shall not be tolerated, especially after the Civil Justice Reform from 2 April 2009.

(b) It has however to be distinguished with discovery of new documents as the matter progresses. After all, discovery is a continuing obligation.

(c) Further, the bottom line is that the discovery, albeit late, will put the Court in a better position to judge the disputes and the same will also not prejudice any of the parties.  The latter is particularly true in the present case when there is about 1.5 months between the 2 trial dates.  Parties were given sufficient time to deal with the matter, if they wanted to do so.

(d) At the end of the day, certainly, no one has challenged the authenticity of the new documents.

The Witnesses

13.  Three witnesses appeared at the trial.  The Applicant called Mr. Lam Shui Hang (“Mr. Lam”), the officer-in-charge of the Management Company at the Building.  Both Respondents also stepped into the witness box.

14.  Although there were some minor conflicts of evidence between the two sides of witnesses, I do not consider that any of them was not telling me the truth.  Most of the incidents in the present case are documented.  Their differences are probably caused by different perceptions and opinions upon the same facts.  I certainly do not rule out the possibility of misunderstanding between them.  The 1^st Respondent does not read write and speak Chinese.  The 2^nd Respondent is in the same position, save that she can write her own name in Chinese as well as some simple Chinese letters.  And I note that some of the correspondences issued by the Management Company were written in Chinese only.

15.  Having said that, on balance, unless otherwise stated, I will accept the case of the Respondents when it is different from that presented by Mr. Lam.  The Respondents have direct knowledge over the development of the matter.  They purchased the Premises.  They caused the renovation to be done though their contractor.  They used the Aisle.  Their case has been consistent throughout the whole proceedings.

The finding of facts

16.  I find the following facts on balance of probabilities.

(a) On 26 August 2008, the Respondents purchased the Premises.

(b) The Respondents started renovation at the Premises.  They also asked their contractor to do some simple renovation at the Aisle, including painting the walls blue, installing electricity, water supply, a sink and a shelf.  They however did not do anything to the ceiling and the floor at the Aisle.  During the renovation of the Aisle, the windows at the 2 fire doors were blocked by newspaper and as such, the Applicant and the Management Company did not know the extent of work therein.

(c) The previous owner of the Premises kept the 2 fire doors padlocked.  However, the Management Company also had keys to the padlocks.

(d) After the purchase of the Premises, the Respondents changed the padlocks.  They did not give keys to the Applicant or the Management Company.  However, upon request, they agreed to lend to the Applicant or the Management Company the keys so that they would have access to Roof B.

(e) In March/April 2009, the putting of stuffs and installation of padlocks (擺放雜物及加上門鎖) caused concern of the Applicant on the safety issue.  The matter was raised with the Respondents and later, reported to the Fire Services Department (“the FSD”).

(f) The Respondents liaised with the FSD and in about September 2009, they agreed to install “push-bar” device at the two fire doors.  The FSD thereafter accepted the arrangement and closed the case.

(g) The Applicant however did not satisfy with the push-bar device.  In October 2009, it further wrote to the Respondents informing that the Aisle were common parts of the Building.  The fixtures fittings furniture and appliances installed or put therein were asked to be removed.  The Applicant also enclosed floor plans to prove that the ownership of the Aisle belonged to it, instead of the Respondents.

(h) As a matter of fact, the Aisle was and is common parts of the Building.  The Respondents then turned to Messrs Deacons for assistance.  The Applicant also asked Messrs Sam Fu & Co. for help. The legal advisers thereafter engaged in some extensive correspondence.

(i) On 27 October 2010, Messrs Sam Fu & Co. wrote to Messrs Deacons asking for confirmation from the latter if they had instructions to accept service of proceedings for the Respondents.

(j) Messrs Deacons replied the next day.  They said, inter alia, that the Respondents had informed the Applicant in October of their intended sale of the Premises.  The completion would take place on 15 November 2010.  The Respondent would not claim any rights in the Aisle.

(k) The Respondents left the Premise on 9 November 2010.  The next day, they arranged to remove all the fittings at the Aisle, but the painting of blue walls, the electricity and water facilities as well as the shelf were still there.

Answers to the Issues

17.  I now turn to the issues as identified by the parties, although they do not necessarily help to decide the claim of $28,000 by the Applicant.

18.  Mr. Chan identified 4 issues to be tried.

“1. Whether the renovation (including the fixtures/utilities installed) in the Aisle (“Renovation”) and the exclusive occupation of the Aisle (“Exclusive Possession”) by the Respondents at the material time did constitute a breach of the Building Management Ordinance (Cap. 344) and/or the Deed of Mutual Covenants dated 8 March 1991?

2. Whether the Respondents could rely on a defence of estoppel to the extent that the Respondents would be allowed to carry out the Renovation and to have the Exclusive Possession at the material time?

3. Alternatively, whether the Respondents could rely on a defence of acquiescence to the Renovation and the Exclusive Possession by the Respondents in the premises?

4. Whether the Renovation has damaged the Aisle one way or another?”

19.  I would answer the issues in the followings.

(1) Yes.

(2) It is an academic question, as the Respondents have sold the Premises.  They do not claim any right in the Aisle.  Anyway, in case that I have to deal with it, the answer would be negative.  The Aisle was enclosed during the renovation by the Respondents.  The Applicant started to complain as early as in March/April 2009.  As a matter of fact, I do not consider the basis of estoppel can be established.  Further, I also agree with Mr. Chan that the circumstances of the case do not satisfy the definition of promissory estoppel as stated in Halsbury’s Laws of Hong Kong, paragraph 170.120 at p.366.

“…. When one party has, by his words or conduct, made to the other a clear and unequivocal promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards to allowed to revert to their previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced…..”

(3) As in (2) above, it is also an academic question.  I take a similar view as aforesaid because of the stance taken by the Applicant at the material time.  Further, as a matter of law, the Applicant cannot acquiesce to something which is violating the Deed of Mutual Covenant or the Building Management Ordinance (Cap. 344) because it is the one who shall enforce the same.  (The Incorporated Owners of Hoi Luen Industrial Centre v. Ohashi Chemical Industries Hong Kong) Ltd. [1995] 2 HKC).  Such obligation on the part of the Applicant is particularly important herein because the Aisle is one of the ways leading to two fire exits of the Building.

(4) With respect, issue no. 4 could have been framed in better way if the word “damaged” was not used.  The employment of such word led to the argument between the parties that the renovation by the Respondents did not “damage” the Aisle.  Instead, they were “improvement”.  In my view, we do not need to decide if the renovation is damage or improvement.  It altered the state of the Aisle and the Applicant asked for “reinstatement” only.  Anyway, again, if it has to be answered, the renovation would amount to a “damage” to the Aisle because screws and nails were applied to fix the tubes and shelf on the walls therein.

20.  On the other hand, Mr. Hanusch said that there were 7 issues.

“1. To what extent the respondents renovated common parts of the building (“the Renovation”).

2. Whether the Renovation at the material time constituted a breach of the Building Management Ordinance and/or the Deed of Mutual Covenants dated 8 March 1991.

3. Whether the respondents can rely on a defence of estoppel to the extent the respondents were requested and/or encouraged and/or permitted by the Applicant to carry out some or all of the Renovation at the material time.

4. Alternatively, whether the respondents can rely on a defence of acquiescence to some or all of the Renovation by the applicant.

5. Whether the Renovation caused the applicant any damage.

6. Whether the applicant has failed to mitigated the damage, if any.

7. The amount of damages payable by the respondents, if any.”

21.  Here are my answers to them.

(1) The Aisle was and is common parts of the Building, so all renovation inside done by the Respondents will be taken into account.  They include the painting of the walls, installation of electricity and water facilities as well as the shelf.

(2) Yes.

(3) No.

(4) No.

(5) Yes.

(6) Yes.

(7) $7,000 (See below).

The claim for $28,000

22.  With the above findings and the answers to the issues, I now move to deal with the claim of $28,000 damages by the Applicant.

23.  I will reject the first item of claim in the sum of $14,000.  Under this item, the Applicant is asking for the 2 fire doors together with the door frame to be completely replaced.

(a) Why the fire doors and flame have to be replaced? I do not know.

(b) There is no evidence before me.  Mr. Lam has not explained it in his witness statements or oral testimony.

(c) The new papers adduced by the Applicant include 3 pictures (p.148 l, m and n) showing the dismantling the push-bar devices on 24 November 2010.  However, they did not show the fire doors at Roof B.   Instead, they only demonstrated the other two roofs of the Building, Roof A and Roof C.

(d) Even if I would be accepting evidence from Mr. Chan, i.e. the Respondents did not pass the keys of the push-bar devises at Roof B to the Applicant.  These keys are for the turning off of the sound system of the push-bar device after the same having been triggered.  It therefore forced the Applicant to dismantle the devise which caused damage to the doors and their flames.

(e) The so-called damage is not apparent from the pictures, as I indicated to the parties at the trial. Certainly, one also bears in mind that we are even talking about the pictures of the doors at Roof A and Roof C only, not Roof B.

(f) From the evidence, the push-bar device was suggested by the FSD.  The Respondents accepted it and paid the costs of installation.  I have not seen any complaint from the Applicant or the Management Company for such installation.  I have also not seen any letter of demand issued to the Respondents asking for the said keys or demanding them to dismantle the device.

(g) If an inference has to be drawn, I opine that the Respondents would “surrender” the said keys to the Applicant, if so requested. There is simply no point in keeping the keys when they have sold the Premises.

(h) In the alternative, I am not sure if one had to tear down the device completely.  Was there any substitute key?  Could the FSD help the Applicant or at all?

24.  As to the 2^nd item of $5,000, being costs of removing the water supply, drainage pipe and the electricity outlet, as well as pipes containing the wiring and the shelf, I will order the Respondents to bear them.

(a) As discussed, we should avoid the use of the word “damage”.  It is only the re-instatement of the Aisle in question.

(b) By adopting such concept, it really does not matter whether the “original” walls were dirty, muddy and grey.  It had been painted white and the new blue paint therefore “altered” its original position. It no longer “matches” the door of the roof and surrounding area.  It has to be re-instated.  The same applies to other facilities.  One needs to bear in mind that the Aisle is common parts.  It is a passage to the fire exits.  Facilities should not have been installed to “block’ the same.

(c) I should further add that, even if I were wrong in ruling on the question of estoppel and acquiescence, they would not help the Respondents. In “occupying” the Aisle, the concept of estoppel and acquiescence cannot be stretched to such an extent to allow them to leave the alterations there.  That is to say, even if the Respondents could “use” the Aisle, they have to restore the same in its original position at the end of the day.

(d) Certainly, there is no challenge of quantum on the part of the Respondents.

25.  Finally, in relation to the sum of $9,000, the Applicant asked for costs of placing titles on the floor and painting the whole of the Aisle, including the roof. Since I have accepted the evidence of the Respondents that they did not renovate the floor and the ceiling at all, such costs have to be adjusted.  And, I opine that the sum of $2,000 will be reasonable in the circumstances.

Costs

26.  I do not have the benefit of hearing parties’ argument on the question of costs, but take the view that no order as to costs is appropriate in the present case.

(a) The Applicant won the sum of $7,000 in my judgment.

(b) The Applicant dropped most of its claim on the first day trial.

(c) There should not have been any dispute on the ownership of the Aisle. It belongs to the common parts of the Building.

(d) I have ruled against the argument on estoppel and acquiescence raised by the Respondents.

(e) The costs spent by both parties far exceed the subject matter of the present proceedings.

Summary

27.  To sum up the matter, I made the following orders.

(a) The Respondents shall pay the Applicant damages in the sum of $7,000.

(b) There is an order nisi that there is no order as to costs.