CHAN KWOK HING AND ANOTHER v. THE INCORPORATED OWNERS OF CHE WAH INDUSTRIAL BUILDING

CACV 49/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 49 OF 2010

(ON APPEAL FROM DCCJ NO. 3781 OF 2008)

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BETWEEN

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J U D G M E N T

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Hon Rogers VP:

1.  This was an appeal from a decision of HH Judge Leung given on 2 October 2009. The matter before the judge was an application for summary judgment by the plaintiffs in respect of their claim for an order for possession of the first aid room of Che Wah Industrial Building (“the building”). The defendant, for its part had raised a counterclaim seeking a declaration that the plaintiffs’ title, property, interest and/or right to various car parking spaces within the building were subject to the easements, rights and/or privileges of the defendant and the owners of the building. Part of the relief sought by the defendant was an injunction to restrain the plaintiffs from parking their cars in what the defendant had referred to as the designated area.

2.  The judge held in favour of the plaintiffs in respect of both matters.  He ordered delivery of vacant possession of the first aid room to the plaintiffs and he ordered that the defendant’s counterclaim be struck out.

3.  On this appeal no issue was taken in respect of the first aid rooms.  At the conclusion of the hearing of this appeal, judgment was reserved which we now give.

Background

4.  The building is an industrial building with apparently at least 26 floors.  On many of those floors there are a number of units.  The building was the subject of 2 New Grants in 1971.  The material part of the special conditions relevant to these proceedings relates to the car parking spaces.  Under special conditions 13 one space for parking, loading and unloading of vehicles had to be provided for each 10,000 ft.² of gross floor area of the building.  There is no dispute in this case that this required that 29 such spaces should be provided.  Special condition 13(d) provided that one half of the spaces provided for parking, loading and unloading, should be for parking private cars and light vans and one half for parking, loading and unloading of lorries.  Clause 13(e) required that one third of the space provided for lorries should be for simultaneous loading and unloading.  The spaces which were to be provided were respectively 16’ x 8’ in respect of private cars and light vans and 25’ x 8’ in respect of lorries, with specified space for the required turning circles of the vehicles.

5.  Clause 13(c) provided:

“The space provided for loading and unloading shall abut a goods handling platform or area which must be provided and so laid out that goods loaded/unleaded from/to such platform or area may be transported within the lot to all parts of the building both vertically and horizontally. ….”

6.  Special condition 14 required that a lay-out plan indicating the parking, loading and unloading spaces required to be provided, approved by the Building Authority, or a copy of such plans certified by the authorised architect, had to be registered by the grantee by memorial in the District Land Office.

7.  It was agreed between the parties that there was no loading or unloading platform in the building but there was such an area, although there was no agreement as to precisely what that area was.  Sheet 1 of 8 of the plans of the building (“the plan”) was exhibited in evidence.  The plan, certified by the authorised architect, showed a total of 15 lorry spaces and 14 private car or van spaces.  The lorry spaces are marked L and the private car or van spaces are marked S.  The plan shows that there are four lifts to the building as well as 2 go-downs, one on the opposite side of the building from the lifts and the other to the side of the lifts.  Whereas there is, seemingly, enough room for two vehicles, whether they be private cars or vans or lorries, between the pillars shown on the plan, it appears from the plan that more spaces for private cars or vans are provided close to the lifts with five such spaces marked in what might be described as a fan shaped layout.  The arrangement of 5 private car or van spaces, marked S2, S3, S4, S5 and S6 (“the parking spaces”) with the 2 adjacent lorry spaces enables space for 7 vehicles to be provided in what would otherwise be space for 6 vehicles.

8.  There is no dispute between the parties that when the building was first built and the various flats were sold, the vendor retained for its own use the car park spaces and the spaces underneath staircases of the building.  Likewise, there is no dispute that in July 2008 the plaintiffs took assignment of the parking spaces.  Whereas, in the past, some accommodation had been reached by the various owners and tenants of the building with the plaintiffs’ predecessors in title, that accommodation has now, seemingly, come to an end.

9.  The defendant raised various grounds upon which it was said that the various tenants and owners of flats within the building should be permitted to use the parking spaces.  The judge dismissed all those grounds.

This appeal

10.  On this appeal, Mr Shum, who appeared on behalf of the defendant, argued one main point, namely that it was arguable that the parking spaces were common areas of the building.  If that were the case the plaintiffs would not have the exclusive possession of the parking spaces, which would then be available for use by other tenants and owners of the building.  Put simply, the crux of the argument was that the Deed of Mutual Covenant (“DMC”) had to be read in the light of the New Grants.  It was argued that if that were done the parking spaces, which were the closest spaces to the lifts, could only be used for loading and unloading lorries.

11.  In my view, starting from a practical point of view, the argument fails.  The plan has the legend “Parking Space for Loading & Unloading of Lorries” in the space on the far side of the parking spaces from the lifts, between the parking spaces and the first row of columns.  There is a line associated with that.  Once it is understood there is no loading platform but there is a loading area, it can be readily understood that the loading area extends between the row of columns and the lifts.  In that area there are five spaces for lorries, namely, L3, L4, L5, L6 and L7. Although these are not the closest spaces to the lifts, if the loading and unloading area is as designated on the plan, then, those lorry spaces do, abut the goods handling area.  Furthermore, when it is understood that the goods handling area, has to cater for horizontal movement of goods as well as the vertical movement of goods and that some of the goods may be required to be moved to one or other of the godowns, it appears to me that the special conditions are, indeed, satisfied.

12.  Criticism was made of the judge’s reference to the case of Carado Company Ltd v The Incorporated Owners of Carado Garden LDBM 54 of 1996, 19 November 1996.  In the judgment in that case, HH Judge Cruden, sitting as the Presiding Officer of the Lands Tribunal had said:

“25. The common area argument was initially developed from Special Condition (23)(c) of the New Grant. However, the Respondent’s pleaded Notice of Opposition and submissions, both misinterpreted that provision. Special Condition (23) is not concerned with ownership, or the distinction between individually owned units and common areas. It simply imposes on the Grantee developer, minimum requirements for parking.

26. So far as good vehicles are concerned, Special Condition (23)(b) is silent on whether those spaces were to be individually owned or form part of the common area. The Grantee had the option either to have notionally divided and sold such spaces to individual owners, or to have included them within the defined common areas. …”

13.  I consider that the judge below was correct in adopting the same approach to special conditions 13 and 14.  Those conditions are concerned with the provision of parking and loading and unloading spaces.  The special conditions do not regulate the ownership either of the building as a whole or of the parking spaces.  Nor do they provide that spaces for loading and unloading should be in common ownership. They require that one-third of the spaces provided for lorries should be used for simultaneous loading and unloading.  One takes into account the fact that the special conditions refer to the spaces provided for private cars and vans are for use for parking and, in contrast, the spaces provided for lorries are for use for parking, loading and unloading.  One then takes into account that the special conditions mandate that one-third of the spaces provided for lorries should abut the goods handling area and that there is nothing in the special conditions about who should own those spaces.  The special conditions only provide that the relevant spaces, which can only be those provided for lorries, because they are for loading and unloading, should be used for a particular purpose, namely simultaneous loading and unloading.  When consideration is given to the plan, it can be seen that it is spaces L3, L4, L5, L6 and L7 that should be used for that purpose, irrespective of who owns them.

14.  In those circumstances, it avails the defendant nothing to aver the DMC mandates adherence to the Conditions of Grant.  They are complied with, even if the plaintiffs retain the spaces S2, S3, S4, S5 and S6, that are provided for cars, for their own use.

15.  I would, therefore, dismiss this appeal and make an order nisi in favour of the plaintiffs.

Hon Le Pichon JA:

16.  I agree with the judgment of Rogers VP.

Hon Kwan JA:

17.  I agree with the judgment of the Vice-President.