SPM LTD v. APPEAL TRIBUNAL (BUILDINGS ORDINANCE)

HCAL 1574/2021

[2022] HKCFI 1105

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 1574 OF 2021

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J U D G M E N T

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A.  Introduction

1.  The question arising in this case is whether the external walls (“External Walls”)  of the 5/F to 30/F of The Sun’s Group Centre in Gloucester Road (“Building”)  are “common parts” of the Building.

2.  The question arises because a building order dated 29 June 2018 (“Building Order”)  issued by the Building Authority requires the owners of the Building as a collective whole to carry out remedial works to the External Walls.  The direction to “All Owners” to carry out the works was given on the basis that the External Walls constitute a common part of the Building.

3.  No issue is taken as to the necessity or requirement for carrying out the ordered remedial works.  The issue taken is, in practical terms, as to who should do them and pay for them.  That is because the Applicant (“SPM”), which is the manager of the Building under the Deed of Mutual Covenant (“DMC”)  argues that the DMC has allocated the exclusive right to use and possess the External Walls to its registered owner, currently Wideland International Ltd (“Wideland”), so that only Wideland is liable to carry out the repairs.

4.  The Building Order was challenged by SPM’s appeal to the Appeal Tribunal (Buildings Ordinance)  (“Tribunal”).  By its written Determination dated 19 August 2021, the Tribunal dismissed SPM’s appeal.  The Tribunal held that the External Walls formed part of the common parts of the Building, meaning the obligation to repair would fall on all owners of the Building, and not just Wideland.

5.  Because an error of law made by the Tribunal is amenable to judicial review, SPM has applied by Form 86 dated 15 November 2021 for leave to apply for judicial review, to seek (1) an order to quash the Determination, (2) a declaration that the External Walls do not form part of the common parts of the Building, and (3) consequential relief.

6.  On 18 November 2021, I directed that there should be a ‘rolled-up’ hearing of (1) the application for leave to apply for judicial review and (2) the substantive application for judicial review.  I also gave certain procedural directions to bring the matter towards the hearing.

7.  The ‘rolled-up’ hearing took place on 13 April 2022.  SPM was represented by Mr Martin Ho of Counsel, and the Building Authority was represented by Ms Jess Chan, Senior Government Counsel.  Both of them had filed succinct skeleton submissions in advance of the hearing.  As usual in such proceedings, the Tribunal has not appeared.

8.  At the end of the hearing, I reserved my decision.  This is my Judgment.

B.  Factual Background

9.  The question for resolution in these proceedings is a question of law, focused on the proper construction of the DMC. Therefore, much of the factual background merely sets the scene.  It is common ground between Mr Ho and Ms Chan that there is no need to consider any pre-contractual documents or negotiations in aid of the proper construction of the DMC.  I agree.

10.  The Building is a 29-story commercial building constructed in 1996 (though there are no floors numbered 14 or 24).  The developer and first owner was Fair Capital Properties Ltd (“Fair Capital”). The Building’s former name was Oriental Centre, but it has since been changed to The Sun’s Group Centre.

11.  SPM was previously named Pearl Property Management Ltd.  At all material times, SPM has been the appointed manager of the Building under the DMC.  SPM is appointed the lawful attorney for and on behalf of all owners of the Building, to do all such acts and things as may be necessary or requisite for the management of the Building.

12.  Under the DMC, the Building is notionally divided into 234,435 equal undivided shares (each a “Share”).  The Shares have been allocated in the manner as set out in Part 1 of the First Schedule to the DMC, as follows:

Floor	Unit / Car Parking Space	Undivided Shares
G/F	Shop 1	4,600
	Shop 2	2,100
	Car Parking Space Nos. 1 and 2
	(140 Shares each)	280
1/F	Car Parking Space Nos. 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 17, 18, 19 & 20 (140 Shares each)	2,240
2/F	Car Parking Space Nos. 21, 22, 23, 25, 26, 27, 28, 29, 30, 31, 32, 33, 35, 36, 37 & 38 (140 Shares each)	2,240
3/F	Car Parking Space Nos. 39, 40, 41, 42, 43, 45, 46, 47, 48, 49, 50, 51, 52, 53, 55, 56 & 57 (140 Shares each)	2,380
4/F	Car Parking Space Nos. 60, 61, 62, 63, 65, 66, 67 (140 Shares each)	980
Flat Roof on the 4/F		1,400
5/F – 13/F	(8,922 Shares on each floor)	80,298
15/F – 23/F	(8,922 Shares on each floor)	80,298
25/F – 30/F	(8,922 Shares on each floor)	53,532
External Walls		1
Roof and Upper Roof		4,085
Common Areas		1
TOTAL SHARES:		234,435

13.  The 1 Share allocated to the External Walls has had three registered legal owners as shown on instruments registered with the Land Registry.  The relevant address is shown on the Land Register as:

EXTERNAL WALLS

THE SUN’S GROUP CENTRE

NO. 200 GLOUCESTER ROAD

HONG KONG

14.  The first registered legal owner of the External Walls was Fair Capital.  The second was Proper Investor Group Limited (“Proper Invest”).  The third was and remains Wideland.  The transfers of legal ownership came about as follows.

15.  By an assignment dated 30 March 2004, Fair Capital assigned to Proper Invest 5,486 Shares in the Building together with “the exclusive right and privilege to hold use occupy and enjoy”:

FIRST ALL THOSE the external walls of the Building including but not limited to the full and exclusive right to use, occupy and enjoy the external walls of the Ground (save and except the shopfronts of Shop 1 and 2), 1^st, 2^nd, 3^rd and 4^th Floors of the Building and the pillars on the Ground Floor, for advertising purposes and to display, install, erect, affix or permit to be displayed, installed, erected or affixed thereon and thereto such advertising signs, Q-boards or other structures whatsoever (whether illuminated or not)  subject to the approval of the relevant Government authorities concerned and with the right to remove, repair, maintain, service or replace the same provided that the same shall not unreasonably interrupt the enjoyment of any unit of the Building as mentioned in Clause 2(ii)  of Section D of the Deed of Mutual Covenant, SECONDLY ALL THOSE the Roof and Upper Roof of the Building including but not limited to the full and exclusive right to use, occupy and enjoy the Roof (including the external walls thereof)  and Upper Roof (including the external walls thereof)  together with all the erections structures and additions thereon including but not limited to the Crown Lighting Pole of the Building and the right to erect or display advertising signs or structures whatsoever (whether illuminated or not)  thereon and to grant rights in relation thereto as mentioned in Clause 2(iii)  of Section D of the Deed of Mutual Covenant AND THIRDLY ALL THAT the Flat Roof on the 4^th Floor of the Building.

16.  In other words, what was assigned by Fair Capital to Proper Invest was the exclusive right to the use and possession of the External Walls (1 Share), the Roof and Upper Roof (4,085 Shares), and the Flat Roof on the 4/F of the Building (1,400 Shares).

17.  By further assignment dated 30 November 2010, Proper Invest assigned to Wideland 5,626 Shares in the Building, together with “the sole and exclusive right and privilege to hold use occupy and enjoy” Car Parking Space No. 28 (140 Shares)  as well as the External Walls, the Roof and Upper Roof, and the Flat Roof on the 4/F of the Building.

18.  On 26 May 2016, the Buildings Department issued a letter to the owner of the 5/F to 30/F External Walls, indicating the intention to issue a building order requiring the owner to carry out certain remedial works.  However, on 18 July 2017, a building order was issued to “The Owner of the Common Area [of the Building]” requiring it to carry out the remedial works.

19.  After solicitors for SPM invited the Building Authority to reconsider the position, in light of the fact that Wideland was the registered legal owner of the External Walls, that building order was withdrawn on 14 June 2018. Then, on 29 June 2018, the Building Order was issued against “All Owners of [the Building]”.

20.  On 16 July 2018, SPM filed its appeal with the Tribunal.  The Tribunal held a ‘preliminary hearing’ on 7 June 2021 to determine the legal question as to whether the 5/F to 30/F External Walls form part of the common parts of the Building, which would be determinative and dispositive of the appeal.

21.  The Tribunal’s Determination dated 19 August 2021 found that the 5/F to 30/F External Walls are part of the common parts of the Building.  As that question is a question of law argued afresh in these proceedings, it is not necessary to set out the Tribunal’s reasoning.  In any event, Ms Chan essentially repeats her argument as found favour with the Tribunal.

C.  The Starting Point

22.  It is common ground between Mr Ho and Ms Chan that the starting point of the consideration is section 2 of the Building Management Ordinance Cap 344 (“BMO”).  That section provides an exhaustive definition of “common parts” as follows:

“common parts (公用部分)” means –

(a)  the whole of the building, except such parts as have been specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner; and

(b)  unless so specified or designated, those parts specified in Schedule 1.

23.  Schedule 1 includes Item 1 “external walls”.

24.  Therefore, as is also common ground, unless an instrument registered in the Land Registry has “specified” or “designated” the External Walls as being for the exclusive use, occupation or enjoyment of an owner, the External Walls should be regarded as common parts of the Building under section 2 of the BMO.

25.  The relevant instrument to be considered and construed in this case is the DMC.

26.  The proper approach to the question of construction is well-established, and does not require lengthy reference to authorities.

27.  It is an objective exercise by which the court seeks to find the intention of the parties, by identifying the meaning of the relevant words in their documentary, factual and commercial context in light of (a) their natural meaning, (b) the overall purpose of the document, (c) other relevant provisions of the document, (d) facts assumed or known to the parties at the time of the execution of the document, and (e) common sense.

28.  If there are rival interpretations, it is necessary to decide what seems to be the natural meaning of the relevant words, and then consider whether there is anything in the document or the surrounding circumstances when it was made which calls that interpretation into question. But that is not to suggest any rigid order of consideration, because the construction exercise is an iterative and unitary process.

29.  As regards deeds of mutual covenant, like the DMC in this case, the legal purposes of them are also well-established: see, for example, Kong Wai Hsien v Tai Wai Glamour Garden [2019] 5 HKLRD 672 at §30.  Co-owners in a multi-storey building are tenants in common of the land where the building is situated.  Each of them is prima facie entitled to exercise rights of possession over every part of the building in common with the other co-owners.  However, this ‘unity of possession’ is modified by a deed of mutual covenant, under which – as a matter of contract among the co-owners – individual co-owners are given the right to exclusive use occupation and enjoyment of certain parts of the building (ordinarily, the individual units in that building).  Common parts or common areas are merely convenient labels to describe any part or area of the building in respect of which no individual owner has been given the right to such exclusive use occupation and enjoyment.

30.  I would also add that though the construction exercise involves the application of common sense, and/or commercial sense, that does not give rise to abstract discussions.  For example, in this case, there is no benefit in considering whether external walls of buildings should or should not in general be thought of as common parts of the building.  Any individual exercise of construction or interpretation will turn on the particular document or documents being construed or interpreted in the individual case.

31.  As already stated, in this case the relevant document is the DMC.  Unless the DMC includes an express or implied term conferring the right to exclusive use occupation and enjoyment of the External Walls to any particular owner, the External Walls are part of the common parts of the building, by operation of section 2 of the BMO.

D.  The DMC

32.  The DMC is broken down into sections.  The sections relevant for present purposes are as follows: Section A ‘Parties and Recitals’; Section B ‘Definitions’; Section C ‘Use of Common Areas’; and Section D ‘Rights of Owners’.  As with Mr Ho and Ms Chan, I shall refer to the clauses in those sections as, for example, clause D1(ii).

33.  In Section A, the purpose of the allocation of the Shares and the purpose of the Deed as a whole are identified.  The purposes of the DMC include that of defining and regulating the rights, interests and obligations of the parties and all subsequent owners in respect of the Land and Development.

34.  Section B has the following material definitions, in the alphabetical order in which they appear amongst all other definitions:

“Building Common Areas”	Any parts of the Land the Building other than the Commercial Common Areas and Garage Common Areas, the exclusive use, occupation and enjoyment of which has not been assigned to any Owner including but not limited to the management office and any other space on or in the Land and the Development used for office or other accommodation of watchman or caretakers or other staff employed on or in or for the Land and the Development
“Building Common Services and Facilities”	Lighting and sprinkler systems of the Building Common Areas, mechanical ventilation, water pipers, drains, wires, ducts, cables, fire services equipments, communal television antennae for use and benefit of the Building (if any), air-conditioning ducts leading to the Shop(s)  and Office(s)  and Car Parking Space(s)  of the Building (where applicable)  and other facilities installed for the use and benefit of the Building and not for the use and benefit of a particular Shop or a particular Office or a particular Car Parking Space or a particular Floor.
“Commercial Common Areas”	shall include:- (i)  the lanes, footpaths and pedestrian accesses, loading and unloading areas, entrances, lobbies, staircases, landings, corridors and passages, manholes, channels and tunnels, refuse collection points, machine rooms, pump rooms, transformer and switch rooms, plant and equipment rooms, store rooms, lift pits and voids, lavatories, canopies, skylights and planters and flower beds on or in the Commercial Tower; (ii)  such other parts in the Commercial Tower the exclusive use, occupation and enjoyment of which has not been assigned to any Owner. The Commercial Common Areas shall specifically exclude any of the foregoing, or any part thereof, the exclusive use, occupation and enjoyment of which has been assigned to any Owner.
“Commercial Common Services and Facilities”	shall include:- sewers, gutters, drains, watercourses, wells, pipers and ducts, pumps, tanks and sanitary fittings, wires, cables, electrical installations, fittings, equipment and apparatus; satellite dishes, antennae, communal television and radio aerials and associated equipment (if any)  fire protection and fire fighting systems, equipment and apparatus; security systems, equipment and apparatus, refuse disposal equipment, lifts and lift machinery; air-conditioners, condensers, chillers and fans, emergency generators, chimney flues and any other installations, systems, plant, equipment, apparatus, fittings, services and facilities used or installed in or for the use and benefit of the units in the Commercial Tower as part of the amenities thereof and not for the sole benefit of any Owner or group of Owners.
“Commercial Tower”	the two Units on the Ground Floor designated as Shop 1 and Shop 2 in Part 1 of the First Schedule hereto, the 5th to 30th Floors of the Building, the Roof and the Upper Roof.
“Common Areas”	shall include the Building Common Areas, Commercial Common Areas and Garage Common Areas
“Common Services and Facilities”	include Building Common Services and Facilities, Commercial Common Services and Facilities and Garage Common Services and Facilities
“Garage Common Areas”	the entrance together with the driveway leading to the 1st Floor, 2nd Floor, 3rd Floor, 4th Floor and those areas in or on the Garage not specifically designated for the parking of motor vehicles.
“Garage Common Services and Facilities”	shall include:- sewers, gutters, drains, watercourses, wells, pipers and ducts, pumps, tanks and sanitary fittings, wires, cables, electrical installations, fittings, equipment and apparatus; satellite dishes, antennae, communal television and radio aerials and associated equipment (if any)  fire protection and fire fighting systems, equipment and apparatus; security systems, equipment and apparatus, refuse disposal equipment (if any), lifts and lift machinery, air-conditioners (if any), condensers (if any), chillers and fans (if any), emergency generators, chimney flues and any other installations, systems, (if any), plant, equipment, apparatus, fittings, services and facilities used or installed in or for the use and benefit of the Car Parking Spaces in the Garage as part of the amenities thereof and not for the sole benefit of any Owner or group of Owners.
“Owner” or “Owners”	the First Owner, the Second Owner and any person who may hereafter become the registered owner or mortgagee or chargee of any Shares in the Land and the Development including joint tenants or tenants in common and its or his or their executors, successors and assigns and references to the Owner or Owners for the time being where undivided shares in the Land and the Development entitle him or them to the exclusive right to use occupy and enjoy that part of the Building (collectively the “Owners” and individually the “Owner”).
“Unit”	part of the Development including the Shop, Office, Car Parking Space, Roof and Upper Roof to which the full and exclusive right and privilege to hold use occupy and enjoy has been or is intended to be assigned to an Owner and “his Unit” in relation to an Owner means the Unit or Units in respect of which the Owner has the full and exclusive right and privilege to hold use occupy and enjoy.

35.  Section C provides that each of the six component elements of the Common Areas shall be deemed to be the common areas and facilities for the benefit of the owners in the various parts of the building

which may, subject to the provisions of Clause 2 of Section D hereof, be used by each Owner … in common with all other Owners and occupiers of [the relevant component part] or any part thereof.

36.  Section D deals materially with ‘Rights of Owners’ as follows:

Rights attaching to each Share

1.  Each Share shall during the residue of the term and any renewal thereof to the covenants and terms contained in the Crown Lease and in this Deed be held by the person or persons from time to time entitled thereto together with:- (i)  the full and exclusive right and privilege to hold, use and occupy the Unit designated opposite to it in the First Schedule hereto; and (ii)  if and for so long as an Owner of a Shop and/or an Office and/or a Car Parking Space and/or the Roof and/or Upper Roof shall punctually make payment of the Management Charges at the time and in the manner herein provided, the benefit, insofar as applicable, of the easements, rights and privileges set out in Part A of the Second Schedule but subject to the exceptions and reservations set out in Part B of the Second Schedule.

Rights of First Owner

2.  The First Owner and its successors and signs shall during the residue of the term and any renewal thereof subject to the covenants and terms contained in the Crown Lease and in this Deed have:- (i)  The full and exclusive right and privilege to hold, use, occupy and enjoy the Land and the Development Together with the appurtenances thereto save only the said Car Parking Space No.28 on the SECOND FLOOR of the Building and the right as stipulated under Clause 3(ii)  of Section D hereof. (ii)  the full and exclusive right to use occupy and enjoy the external walls of the Ground (save and except the shopfronts of Shop 1 and Shop 2), 1st, 2nd, 3rd and 4th Floors of the Development and the pillars on the Ground Floor, the use, occupation and enjoyment of which has not been assigned to any Owner, for advertising purposes and to display, install, erect, affix or permit to be displayed, installed, erected or affixed thereon and thereto such advertising signs, Q-boards or other structures whatsoever (whether illuminated or not)  subject to the approval of the Government Authorities concerned and with the right to remove, repair, maintain, service or replace the same provided that the same shall not unreasonably interrupt the enjoyment of any Unit of the Development; (iii)  the full and exclusive right to use occupy and enjoy the Roof (including the external walls thereof)  and Upper Roof (including the external walls thereof)  together with all the erections structures and additions thereon including but not limited to the Crown Lighting Pole of the Development and the right to erect or display advertising signs or structures whatsoever (whether illuminated or not)  thereon and to grant rights in relation thereto; (iv)  the right at any time to use and operate any parts or parts of the Land and the Development including the Common Areas (notwithstanding the provisions in Section C)  the exclusive use, occupation and enjoyment of which has not been assigned to any Owner provided that such use and operations shall not contravene the terms and conditions of the Crown Lease and not in any way interfere with the other Owners’ right to hold use occupy and enjoy their respective Units; (v)  the right at any time to alter or amend the allocation of Shares as particularised in the First Schedule hereof Provided that in making such alteration or amendment the interests and rights of the other Owners will not be unduly prejudiced.

37.  Amongst the clauses in Section D, Mr Ho places emphasis on clause D1(i), which he says has the effect of identifying – at least prima facie – that the allocation of a Share to a part of the Building suggests that the owner of that part of the Building would enjoy the full and exclusive right to use and possess it.

38.  Ms Chan places more emphasis on clause D2(ii), because it only expressly refers to the external walls (not capitalised)  of the G/F (except the shopfronts), 1/F-4/F of the Development, namely the external walls of the Garage as identified in Section B, and the focus is on limited and conditional rights relating to advertising.

E.  The Competing Arguments

39.  Mr Ho’s argument as to the proper construction of the DMC runs, in summary, as follows:

(1)  Clause D1(i)  provides that each Share shall be held by the person or persons from time to time entitled thereto together with the full and exclusive right and privilege to hold, use and occupy the Unit designated opposite to it in the First Schedule to the DMC.

(2)  By the First Schedule to the DMC, the External Walls are specifically allocated 1 Share.

(3)  “Unit” is defined as “part of the Development [itself meaning “the Building with the Common Areas…”] Including the Shop, Office, Car Parking Space, Roof and Upper Roof to which the full and exclusive right and privilege to hold use occupy and enjoy has been or is intended to be assigned to and Owner”.

(4)  Those provisions together provide that the holder of the 1 Share attached to the External Walls would enjoy “full and exclusive right and privilege to hold use and occupy” such “Unit”.

(5)  There is no contrary stipulation in the DMC that the exclusive right to use the External Walls was not intended to be assigned to any owner.

(6)  Wideland is the owner of the 1 Share attached to the External Walls.

(7)  Therefore, Wideland should be regarded as the entity enjoying the “full and exclusive right and privilege” to use and possess the External Walls.

(8)  That takes the External Walls out of the definition of “common parts” under section 2 of the BMO.

40.  Mr Ho also places reliance on the fact that a separate 1 Share was allocated to the Common Areas.  First, there is then a clear distinction between the Common Areas and the External Walls.  Secondly, the External Walls might have been included within the definition of Common Areas, but the definition of Common Areas in the DMC includes the specific components relating to the Building Common Areas, Commercial Common Areas and Garage Common Areas.

41.  In this regard, where there was some debate between Mr Ho and Ms Chan as to the nature of the definition of Common Areas – Ms Chan having described it as “non-exhaustive” – Mr Ho says the definition is “inclusionary”, by which he means that it includes the designated components (which are themselves also separately defined)  but nothing else.

42.  Mr Ho also refers to the cases of: (1) Green & Grace Ltd v Wang Long Industrial Building (IO) [2015] 5 HKLRD 170 at §50, where it was pointed out that had the external walls been a common area of the building in that case, it might be wondered why it was not mentioned in the definition of common areas in the DMC; and (2) Kayway Investment Ltd v Focus Winner Ltd (unreported, HCA 967/2013, 30 April 2015)  at §16, where it was held that because the Exterior Wall in that case had been allocated a share and its owner was given exclusive possession of it under the schedule to the DMC, to turn it into common parts would be inconsistent with the main purpose of the DMC.

43.  Ms Chan’s argument as to the proper construction of the DMC runs, in summary, as follows:

(1)  The allocation of the 1 Share to the External Walls cannot itself create any exclusive right of use, occupation and enjoyment thereof.

(2)  On the proper construction of the DMC as a whole, the term “Unit” does not refer to “External Walls”.

(3)  Nowhere in the DMC is there an express definition of “External Walls”, and the non-exhaustive definition of “Common Areas” covers those parts including “External Walls” which exclusive use, occupation and enjoyment have not been or are not intended to be assigned.

(4)  That is consistent with the statutory definition of “common parts” in section 2 of the BMO.

(5)  If the holder of the 1 Share allotted to the “External Walls” has the full rights to use them to the exclusion of the other co-owners, that does not make sense in the context of the DMC where “Common Areas” is also allotted with 1 Share (or else the holder of that share could be said to have the full exclusive rights to use the Common Areas, which obviously is not right).

(6)  The mere reservation by the developers to areas under shares does not mean that they have exclusive possession over those areas.

(7)  Notwithstanding the use of the words “the full and exclusive right to use” in clause D2(ii), the right is limited and conditional because it only expressly refers to the external walls of G/F and 1/F to 4/F, for advertising purposes, and is subject to other lease covenants and government approvals, and whereby the enjoyment of any Unit shall not be unreasonably interrupted.

(8)  The answer to the question whether the 5/F to 30/F External Walls are common parts by applying the statutory definition in section 2 of the BMO is arrived at by an elimination exercise, to find out whether the same have been designated to have been or intended to be assigned to a co-owner of the Building.

(9)  The elaborate definitions of “Common Areas” and its component elements, each of which is inclusively defined, is intended to avoid any parts of the Building being unintentionally left undefined.  If there are any residual parts left not expressly defined, ambiguity can be removed by the prevailing statutory definition of “common parts”.

44.  Ms Chan also refers to a series of decisions, which she says are supportive of the conclusion that external walls are within the common parts of the building: see Incorporated Owners of Shatin New Town v Yeung Kui [2010] 2 HKC 241 at §§12-19; Incorporated Owners of Goa Building v Wui Tat Co Ltd [2004] 1 HKC 348; and Incorporated Owners of Hong Leong Industrial Complex v HL Resources Ltd [2010] 4 HKC 463.

45.  In particular, Ms Chan says that, in the Shatin New Town case, the Court of Appeal noted that shares had been reserved by the developer for common service facilities and communal areas including the external walls of the residential parts of the development, but the reserved rights described as exclusive rights were nevertheless in practice conditional.

46.  It can also be mentioned in passing that there has been a previous case, though not involving the Building Authority as a party, which considered the External Walls in question in this case, and where it was held by HHJ Chow that the External Walls did not form part of the common parts of the building: see Pointpiper Investment Ltd v The Sun’s Property Management Ltd (unreported, DCCJ 3512/2006, 22 December 2006), in particular at §§14-15.  But, it is common ground that that decision is of no assistance to the current exercise.

F.  Analysis

47.  In my view, the important points of analysis are as follows:

(1)  The First Schedule to the DMC allocated 1 Share to the “External Walls”.

(2)  The further allocation of 1 Share to “Common Areas” tends to show the intentional drawing of a distinction between “External Walls” on one hand and “Common Areas” on the other.

(3)  The DMC also contains a detailed definition of “Common Areas”, including by reference to its constituent elements across the Building, Commercial Tower and Garage areas.

(4)  The main definition does not include “External Walls” or even to “external walls”.

(5)  The definitions of the constituent elements also do not include “External Walls” or even to “external walls”.

(6)  Rather, they expressly do not include (i.e. they exclude)  those parts of the Building, Commercial Tower and Garage the exclusive use, occupation and enjoyment of which has not been assigned to any Owner.

(7)  The definition of “Owner” is of any person who becomes the registered owner of any Shares, and includes references to the Owner for the time being where undivided shares entitle him to the exclusive right to use occupy and enjoy that part of the Building.

(8)  Under the DMC, it is only clause D1(i)  which confers any exclusive possession of any part of the Building on any Owner, and there is no other clause which does that.

(9)  Clause D1(i)  of the DMC gives to then holder of each Share the full and exclusive right and privilege to hold, use and occupy the Unit designated opposite to it in the First Schedule.

(10)  Whilst the word “Unit” might not ordinarily be understood to be a likely reference to external walls or common parts of the building, both can be said to constitute a “Unit” for the purposes of the DMC.

48.  Previous cases – not least where the relevant DMC expressly defined “common areas” to include “external walls” are of little assistance to any analysis where the DMC in this case makes a clear distinction.

49.  As to Ms Chan’s argument that it does not make sense that the holder of the 1 Share allotted to the “External Walls” has the full rights to use them to the exclusion of the other co-owners, where “Common Areas” is also allotted with 1 Share, it is plain that the Common Areas are by definition not expected to be a Unit to which the holder would have full and exclusive rights.  Nor would the Common Areas be a part of the Building to which the full and exclusive right and privilege to hold use occupy and enjoy has been or is intended to be assigned to an Owner.

50.  As to the point that clause D2(ii)  refers only to G/F and 1/F to 4/F external walls, I think that clause in effect simply provides that no other owner can complain if the owner of the external walls at those locations uses them for advertising purposes in compliance with any necessary Government approvals and so as not interrupt the enjoyment of any Unit.  A similar provision relating to the Roof and Upper Roof is to be found in clause D2(iii). It is also not like the clause found in other cases – e.g. the Hong Leong case – where the manager of the building could allow other co-owners to make use of the external walls, which would show that the developer could not be said to have the exclusive right to use and possess them.

51.  Indeed, what seems to have happened as a matter of fact in this case was that might be regarded as the outer ‘shell’ of the Building, comprising the External Walls, the Roof on the 4/F, the Roof and Upper Roof have all been retained by the developer for its own use, including for advertising and signage.

52.  Further, though it is not strictly relevant to the construction exercise, which is an objective exercise, it can be noted that the exclusive right to possession and use of the External Walls has in fact been assigned from the developer First Capital to Proper Invest and then to Wideland. This is at least consistent with the subjective understanding of those parties, and presumably those legally representing them.

G.  Conclusion

53.  Acknowledging that the starting point is section 2 of the BMO, it is necessary to consider whether there is anything in the relevant instrument – here the DMC – identifying that the External Walls have been designated for the exclusive use, occupation or enjoyment of an owner.

54.  In my view, on the proper construction of the DMC, it does designate the owner of the External Walls as having the exclusive use, occupation or enjoyment of the External Walls.  The combined effect of the allocation of 1 Share to the External Walls, and the operation of clause D1(i)  is to give the exclusive rights to the owner.  That owner is Wideland.

55.  Further, the approach to the definition of Common Areas identifies that it does not include the External Walls.  Put another way, there is no ambiguity which leads back to section 2 of the BMO.  So, once the conclusion is reached that the External Walls do not form part of common parts of the building, it follows that the duty to make repairs falls on Wideland under clause F7(a)  of the DMC.

56.  It is my conclusion that the Tribunal erred as a matter of law, in reaching the incorrect construction of the DMC.

57.  Therefore, I would not only grant leave to apply for judicial review but find grounds for review on the substantive hearing. SPM is entitled to (1) an order of certiorari to bring up and quash the Tribunal’s Determination, and to (2) a declaration that the External Walls, specifically 5/F to 30/F, do not form part of the common parts of the Building.

58.  I see no practical purpose in remitting the matter to the Tribunal for consequential directions and orders.  It is more straightforward simply to quash the Building Order.

59.  I see no reason why the cost should not follow the event.  In the circumstances, I order SPM’s costs to be paid by the Building Authority, to be taxed if not agreed.