CHUNG KWOK HUNG v. CAYLEY PROPERTY MANAGEMENT LTD

LDBM 72 OF 2004

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 72 OF 2004

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J U D G M E N T

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1. By these proceedings the Applicant seeks to recover from the Respondent, the manager of the building of which he is the owner of a flat, a deposit given by him and required of him some years ago as security before he commenced some decoration work of his flat. The Respondent contends that the conditions of return for the deposit have not yet been complied with. Alternatively, the Respondent argued that the deposit was not paid to or retained by it and that therefore it had no duty to return the deposit to the Applicant. The Respondent also counter-claims for a mandatory injunction compelling the Applicant to rectify certain breaches of the deed of mutual covenants (the DMC).

2. The Respondent alleged that there are three breaches. Firstly the tip of the flue of the gas heater protruded out of an aperture of the external wall. This protrusion is allegedly in breach of Clause 17 of section IV of the DMC. Clause 17 provides that:

" No external signs, signboards, notices, advertisements, flags, banners, poles, cages, or other projections or structures whatsoever extending outside the exterior of any unit shall be erected, installed or otherwise affixed or projected from any building of any estate or any part thereof."

The dimension of the protrusion of the tip of the flue is not clear. From the photographs produced, it can be seen that the protrusion is small. The Applicant's argument is that the flue was installed by a qualified engineer as part of the water heating system. The installation is in compliance with the safety requirements. He cited the house rules in support. That is quite irrelevant. The house rules in question govern only the safety standard of the appliance but do not excuse the breach of other clauses of the DMC. An owner has to comply with both the provisions of the said house rules and clause 17 of the DMC.

3. Mr. Parry, counsel for the Applicant, who came to represent the Applicant in the middle of the trial, presented a simple argument in respect of this breach and the other two breaches. He urged me to adopt a common sense approach. In effect he argued that the breaches were of minor nature so that injunctions should not be granted. Though the triviality of the breach is one factor to be taken into account but by itself it is seldom sufficient for the court to exercise its discretion not to grant the injunction.

4. Both parties seem to have assumed that the protrusion of the flue is the kind of protrusion encompassed by Clause 17. However there is no express concession or admission on the part of the Applicant, either by himself or by his counsel, that such protrusion as the tip of flue in the instant case is covered by Clause 17. No argument is raised at the trial or in the pleading that the protrusion does fall or does not fall into ambit of Clause 17. However it is a fundamental point. In such a case, especially the practice and procedure of the Tribunal is meant to be informal and not technical, I am bound by the Court of Appeal decision of 陳偉連，梁麗貞V 香港房屋委員會 (CACV925/2001) to consider this fundamental point. (see also Pun Kwok Kei V The Incorporated Owners of Merit Industrial Centre and Another LDBM 25 of 2003, following the Court of Appeal decision)

5. In my judgment, Clause 17 should not be interpreted literally to cover every type of protrusions. Ejusdem generis rule should apply. The specific examples mentioned in the clause fall within the class of objects which are not part of the building facilities provided for by the original structure and design of the building. The correct interpretation of Clause 17 is that any protrusion consistent with the use of the original design of the building is not prohibited. To take a hypothetical example, if for the purposes hanging out laundry to dry there were bamboo pole receptacles installed on the external walls in the original design of the building, the normal use of these receptacles would involve the protrusion of bamboo poles. Such protrusions by the bamboo poles would not be prohibited. It would be absurd that Clause 17 would have intended to prohibit the normal use of these facilities installed for the residents. The aperture in the external wall is a feature of the original design of the building and is reserved for the purpose of housing a flue of the heater. I accept the evidence of the Applicant, in fact it is only common sense, that if the tip does not protrude out of the external wall, harmful exhaust fumes might find the way back into the flat, especially when the wind is blowing in the correct direction. Furthermore I find that the protrusion in the instant case is no more than necessary for the proper and safe functioning of the heater. The aperture in the external wall is a building feature for housing a flue. To prohibit any sort of protrusion of the flue from it is to restrict the full and efficient use of the aperture. The protrusion as depicted in the photographs is not the kind of protrusion prohibited by Clause 17. There has been no breach of this clause by the Applicant.

6. If I am wrong in holding that there has been no breach, I would not grant the injunction. There are two reasons. Firstly the protrusion is so small that it takes some effort to notice it. It would not affect the aesthetic appearance of the exterior of the building. Secondly the Respondent as a building manager has suffered or permitted such breach for quite some time or has failed to notice it at all. It did not complain about it until the Applicant asked for the return of the deposit. My conclusion is that the Respondent is not bona fide in seeking this injunction.

7. The second breach complained of relates to the wall inside the balcony of the flat of the Applicant. It is alleged that the original mosaic tiles have been changed and thereby changing the external appearance of the building. There is no evidence as to what the original mosaic tiles were like. The only evidence is a photograph showing the state of the similar walls in three flats including the flat of the Applicant. All three walls differ in colour from each other. The Respondent called its own staff member to give evidence. She could not have known and did not know what the original tiles were like. It appears to be the contention of the Respondent that original tiles should be the same as the external wall. This is not a valid assumption. The Respondent could have easily called some of the residents who know what the original tiles were like to give evidence. I have drawn to the Respondent's attention this gap in evidence. However nothing was done to close the gap. The Respondent has failed to prove this essential fact, i.e. change of original tiles, and must therefore fail in its claim for injunction in this regard.

8. Furthermore that particular wall in question is well inside the balcony of the Applicant's flat. As such it does not form any part of the exterior of the building or a part of external appearance at all. Therefore the Respondent would have also failed to prove its claim even if it had succeeded in proving the change of mosaic tiles.

9. The third complaint is the affixing the support brackets of the two air conditioners on the external walls. There are designated areas to install air conditioners. It is not in dispute that these two air conditioners are not installed in these designated areas. The Applicant contends that it is within his own right as an owner to enjoy his flat. Surely it is so. However the enjoyment of his flat is subject to the provisions of the DMC. By installing the said air conditioners in such a way in non-designated places, the Applicant is in breach of Clause 17 and Clause 18. The fact that other owners are also in breach and their breaches contribute to the change of appearance is no defence. From the photographs the installation of these air conditioners makes the external appearance of the building quite unsightly. It is justifiable for the Respondent to take action to rectify the situation. It is not unfair to the Applicant that he be chosen to be the first one to sue. Injunction should be granted compelling the Applicant to remove the supporting frames.

10. As to the claim for the return of deposit, the Respondent raises the defence that the deposit has been handed over to the incorporated owners. This defence is of no merit. The deposit was exacted of the Applicant by the Respondent under the House Rules. By the same rules, it is provided clearly it is the Respondent's duty to return the deposit on the completion of project, after making any deductions if any. In any event, should the Respondent be required to return the deposit, there is no practical problem in seeking re-imbursement of the deposit from the incorporated owners.

11. The other defence is that the Applicant has been in breach of the DMC and therefore the condition for the return of the deposit has not been fulfilled. In view of my ruling I have made, the Respondent can only rely on the breach relating to the supporting frames for the air conditioners. In this regard I accept the evidence of the Applicant that the drawings and sketches for the decoration work were provided to the Respondent when applying for the work permit to commence the work. I find the Respondent clearly knew or is taken to have known the erection of the supporting frames. They raised no objection at the time or at any other time until the Applicant demanded the return of the deposit. It should be noted it is clearly provided by the House Rules that releasing the deposit does not relieve the owner from liability of any breach of the DMC. Taking this into account, the purpose of requiring a deposit is clear. It merely enables the Respondent to deduct from it expenses it has incurred to rectify the nuisance, or other breaches of the DMC committed by the contractors, or such expenses to be incurred. To withhold the deposit or part of it, the Respondent must account for the expenses incurred or to be incurred when an owner demands for its return. It is never the intention of the House Rules that the Respondent can keep the deposit indefinitely as if it is a pledge for the good behaviour of the owner or a license fee for the continuous breach. When the Applicant demanded for the return of the deposit, no account was made to him what portion of deposit would be set off or deducted. The Respondent generally has two choices on demand for the return of the deposit. The first one is to rectify the breaches itself, e.g. removing debris left behind by the contractors, and makes deductions of the expenses from the deposit. The other choice is to return the deposit if it does not choose to rectify the breaches itself. The Respondent has not rectified the breach itself and as I understand it, could not have done it itself. For these reasons, the Respondent is not entitled to retain any part of the deposit.

12. I here now order the return of the $20,000 deposit to the Applicant with interest thereon at judgment rate from 18 December 2003 and grant an injunction sought in relation to the supporting frames in question. The proper costs order should be that: costs to the Applicant in the main claim and costs to the Respondent in the counter-claim with certificate for counsel, and, both sets of costs be taxed on High Court Scale if not agreed. A costs order nisi in these terms is now made.