HONG YIP SERVICE CO LTD v. MAURETANIA CO LTD

HCSA 73/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 73 OF 2007

(On appeal from Small Claims Tribunal Claim No. SCTC 33422/2007)

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J U D G M E N T

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Introduction

1.  This is the Defendant’s appeal against the award of Madam Adjudicator Grace Chan made on 2 October 2007 granting judgment in favour of the Claimant’s claim for air-conditioning fee and dismissing the Defendant’s application for review on 16 November 2007.  The Defendant is the owner of units 2303-5 and 2514 of Hong Kong Plaza in Des Voeux Road West (“Building”).  The Claimant is the management company of the Building pursuant to the terms of the Deed of Mutual Covenant.

2.  The parties had a long history of dispute over air-conditioning fee for providing air-conditioning services to the Defendant’s units in the Building.  Under clauses D7 and D8(a) of Section VI of the Deed of Mutual Covenant, owners of units in the Building shall pay air-conditioning fee according to the floor area of their units, provided that if a unit has been left vacant and unoccupied for over 25 days in any month, only air-conditioning fee at half rate is payable for that particular month.  Clause D7 provides as follows:

“The Owners of any part of the Building shall be personally liable ... to make the above payment to the Manager irrespective of whether his premises are vacant, let or occupied.  Provided one half of monthly contribution for the air-conditioning expenses shall be payable by the Owners for their unit(s) which is/are leaving vacant and unoccupied over 25 days for that particular month.  For the purpose of this Clause any dispute as to the premises which is vacant or unoccupied the decision of the Manager in this regard shall be final and conclusive.”

Three actions had been instituted by the Claimant against the Defendant in the Small Claims Tribunal since 2003 prior to the present claim.

3.  In SCTC 23046/2003, the Claimant obtained judgment against the Defendant for air-conditioning fee in respect of units 2303-5 for December 2002 to January 2003.  The units were fully furnished and with many personal items kept inside for the use of the Defendant’s two directors when they attended the units.  The Defendant’s directors only attended the units a few times in the month for miscellaneous purposes.  The defence turned on the construction of the phrase “vacant and unoccupied” in clause D7 of Section VI of the Deed of Mutual Covenant and whether the Defendant was only liable to pay the air-conditioning fee at half rate in the circumstances.  The Defendant’s argument that under such circumstances the units were vacant and unoccupied was rejected by the Small Claims Tribunal.  The Defendant’s application for leave to appeal was refused by the Hon Mr Justice Andrew Cheung in HCSA 75/2003 on 20 February 2004.

4.  In SCTC 78091/2003, the Claimant claimed air-conditioning fee in respect of unit 2514 for the period from April to August 2003.  The claim was discontinued, according to the Adjudicator, upon partial settlement.

5.  In SCTC 99499/2003, the Claimant had approved the Defendant’s applications for air-conditioning fee reduction in respect of unit 2514 for the period from August to October 2003 and claimed air-conditioning fee at full rate for July 2003 and at half rate for the period from August to October 2003.  The Defendant was represented by its director, Dr Chan.  That claim was also heard by Madam Adjudicator Grace Chan.  Dr Chan criticised the decision of Andrew Cheung J in HCSA 75/2003 and requested the Adjudicator to rectify that decision.  He argued that the Defendant had left the key to the unit with the Claimant who was therefore able to inspect the unit at will to ascertain if it was vacant and unoccupied and to charge air-conditioning fee at half rate voluntarily.  The Defendant also counterclaimed for electricity charges incurred during that period alleging that the charges were incurred because the Claimant’s staff had failed to switch off the power supply after visiting the unit; damage caused to a window inside the unit and loss of rental income due to the Claimant’s refusal to repair the broken window.  The Defendant also sought an order that the Claimant shall install a separate air-conditioning consumption meter for unit 2514 and that clause D7 of Section VI of the Deed of Mutual Covenant be amended.  The Defendant’s defence and counterclaim were dismissed by Madam Adjudicator Grace Chan.  She held that the Claimant was entitled to require the Defendant to submit application for reduction of air-conditioning fee in advance to enable the Claimant to consider whether to grant the concession; that the broken window was not part of the external wall of the Building for which the Claimant was responsible for its repairs and maintenance; and that there was no evidence that the electricity charges were incurred by the Claimant’s staff.  The Defendant did not appeal against the decision of the Adjudicator.

The hearing of SCTC 33422/2007

6.  On 16 June 2007, the Claimant instituted the present claim against the Defendant to claim air-conditioning fee in respect of unit 2514 for the period from November 2003 to March 2004 in the amount of $4,210 (i.e. $842 x 5), interest in the amount of $2,652.30 and collection charge in the amount of $219.80, totalling $7,082.10.

7.   The Defendant filed a defence consisting of four pages repeating its defences in SCTC 99499/2003 and the desirability of installing separate air-conditioning consumption meter for each unit.  He criticised the interpretation of the phrase “vacant and unoccupied” by Andrew Cheung J in HCSA 75/2003 and asked the Small Claims Tribunal to rectify that decision. 

8.  The hearing on 2 October 2007 commenced with Dr Chan giving evidence on behalf of the Defendant.  After Dr Chan was affirmed, the Adjudicator ascertained from the Claimant’s representative, Miss Poon, that the Claimant’s case for claiming full air-conditioning fee was that the Defendant had failed to apply for reduction in advance for the period except for the month of February 2004, but in respect of that month, the Defendant refused to permit the Claimant to inspect the unit.  The Adjudicator asked Dr Chan whether he had made applications for reduction in advance.  Dr Chan answered that he could not remember as it was a long time ago but he was sure that Miss Poon was telling lies.  Then after asking some further questions, the Adjudicator entered judgment against the Defendant for the air-conditioning fee and interest as claimed.  She held that this claim was concerned with the same parties, the same unit in the Building and subject to the same Deed of Mutual Covenant as those in SCTC 23046/2003 and SCTC 99499/2003.  She was of the opinion that the same issues, i.e. the construction of the phrase “vacant and unoccupied” in clause D7 of Section VI of the Deed of Mutual Covenant; requiring the Claimant to install a separate air-conditioning consumption meter in the unit; the Claimant’s liability for the repairs of the broken window and the consequential loss of rental income from the unit; that the Defendant was obliged to make advanced application for reduction of air-conditioning fee and the defence that the Claimant had possession of the key to the unit to enable the Claimant to verify if the unit was vacant and unoccupied was insufficient had been litigated in those earlier claims.  Hence, she held that under the principle of issue estoppels, it was not open to the Defendant to re-litigate those issues in this claim. 

9.  The Defendant applied for review of the award.  The review was heard on the afternoons of 14 and 16 November 2007.  At the hearing of the review, apart from repeating his earlier arguments, Dr Chan raised the following points:

(1)  that the Adjudicator should summons witnesses from the Claimant;

(2)  that the Adjudicator should summons a government engineer to prove that the glass windows form part of the external wall of the Building;

(3)  that the Adjudicator was discriminative in favour of women witnesses and ignored false evidence given by Miss Angel Luk of the Claimant in SCTC 99499/2003;

(4)  that the Adjudicator should have permitted Dr Chan to use English in the conduct of the proceedings;

(5)  that if the Adjudicator failed “to rectify all the damages, there will be a certainty that drastic measure must be taken to re-organize the entire legal system and Hong Kong”; and

(6)  that the Claimant failed to serve all documents on the Defendant.

10.  Dr Chan spent almost the entire afternoon between 3:36 pm and 5:14 pm on 14 November 2007 debating with the Adjudicator about the language issue.  He accused the Adjudicator of being so hostile towards the former British rule as to refuse to permit him to conduct the proceedings in English.  Then Dr Chan requested to call four witnesses from the Claimant, namely Mr Hui Chuen, Miss Angel Luk, Miss Wong Pui Ying and an unidentified receptionist.  But that request evaporated when he renewed his argument on the language issue.  Though not a necessary issue for this appeal, I must express my view that the accusation was wholly groundless.  There is nothing in the transcript of the record of proceedings which shows that the Adjudicator was hostile towards the former British rule.  Language of the court is a matter of discretion for the trial Adjudicator.  In this claim where all the parties are Chinese speaking, for expediency reason, the Adjudicator’s choice of language was absolutely un-reproachable.  After all, Dr Chan is a native Chinese speaker and was provided with the services of a court interpreter.

11.  The review hearing was resumed on 16 November 2007.  Dr Chan gave a written submission and reiterated his argument that the Claimant had possession of the key to unit 2514 which would enable it to inspect the unit at will and should voluntarily charge the Defendant air-conditioning fee at half rate.

Grounds of appeal

12.  The Defendant applied for leave to appeal against the award of the Adjudicator and her refusal to review her decision on 28 November 2007.  Dr Chan filed a 25-page statement of appeal containing submission and documentary exhibits setting out the basis of the appeal.  The statement essentially repeated his arguments before the Adjudicator and Dr Chan’s argument why a separate air-conditioning consumption meter should be installed in unit 2514.  Much of the contents of the statement of appeal were irrelevant. 

13.  It appeared that the Adjudicator’s reason for dismissing the defence was not whether unit 2514 was vacant and unoccupied, but that the Defendant had failed to apply for reduction of air-conditioning fee in advance.  It is only if the Defendant had complied with that pre-condition that it would become necessary for the Adjudicator to consider if the unit was vacant and unoccupied.  Thus, Dr Chan’s strong criticism of the decision in HCSA 75/2003 is a non-starter.  Based on the written Reasons for Decision of the Adjudicator, Dr Chan’s statement of appeal and his oral submission made at the hearing for leave to appeal on 10 March 2008, it appeared that the Defendant had the following two causes of complaint:

(1)  the Adjudicator erred in law in applying the principle of issue estoppel without first establishing the facts on which the principle may apply; and

(2)  the Adjudicator erred in law in not dealing with the Defendant’s counterclaim. 

I gave directions for the Defendant to serve on the Claimant his perfected grounds of appeal based on the above two grounds within fourteen days and ordered a pre-appeal review to be held.

14.  The Defendant filed its perfected grounds of appeal on 25 March 2008.  Not unexpectedly, the Defendant did not confine itself within the limits I have set out in the above paragraph.  Its perfected grounds of appeal are utterly confusing and disorderly in thoughts.  Firstly, the Defendant seeks to review of all the three claims in the Small Claims Tribunal referred to paragraphs 3 to 5 above, SCTC 33422/2007 and its application for leave to appeal before Andrew Cheung J in HCSA 75/2003.  Essentially, Dr Chan seeks for a re-definition of the phrase “vacant and unoccupied” in the Deed of Mutual Covenant, which is equivalent to an appeal against Andrew Cheung J’s decision in HCSA 75/2003.  Secondly, it seeks to have the phrase deleted from the Deed of Mutual Covenant.  Thirdly, it counterclaims for trespass to unit 2514 at night-time which resulted in increase in electricity consumption during the material time, malicious damage to the window and loss in rental income.  Fourthly, it seeks an order requiring the Claimant to install an energy flow meter coupled with an octopus system for charging purpose.

15.  At the pre-appeal review, I explained to the Claimant’s solicitors that the appeal is confined to the two grounds that I have set out in paragraph 13(1) and (2), and that they may ignore the irrelevant matters raised in the Defendant’s perfected grounds of appeal.  I also gave direction to the parties to serve separate appeal bundles.  The appeal was subsequently set down for hearing on 20 October 2008.

Requirement of a similar factual basis on which the principle of issue estoppel may apply

16.  It is well established legal principle that whenever a question has in substance been decided, or has in substance formed the ratio of, or been fundamental to, the decision in an earlier action between the same parties, each party is estopped from litigating the same question hereafter: per Lord Romer in New Brunswick Rail Co v British and French Trust Corp [1939] AC 1 at 43.  But this is very different from saying that a party may not thereafter litigate, not the same questions, but a question that is merely substantially similar to the one that has been already decided. 

17.  The requirements of issue estoppels are (i) that the same question has been decided; (ii) that the judicial decision which is said to create the estoppels was final; and (iii) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised: per Lord Guest in Carl Zeiss Stiftung v Rayner & Keeler [1967] 1 AC 853.  There is no dispute that the second and third requirements are met in SCTC 33422/2007.  The remaining issue is whether the questions in that claim were the same questions which the Adjudicator thought had been decided in the earlier claims.

18.  A question may be a question of fact or a question of mixed law and fact.  It is only where the factual basis is the same that one begins to consider the question of issue estoppel.  Sometimes, the factual basis is so tied up with the question that it becomes inconspicuous and one ignores its existence.  Construction of contract provides a good example.  A contract must be construed against its factual background.  The factual background is one of the factual basis for the construction of a certain phrase in the contract.  If the same phrase is used in another contract between the same parties but against a different factual background, the same phrase may have different meaning in the two different contracts.  If the factual backgrounds are different, the principle of issue does not apply.  Similarly, whether a defence is available depends on the factual circumstances of the case.  A decision in an earlier action that a defence may or may not be raised does not raise an estoppel in a later action unless the factual circumstances are the same. 

19.  Thus, if a certain question in an earlier action, for example, one of construction of a particular document has been in substance decided, each party to the action is subsequently estopped from litigating the same question of construction of that particular document even in respect of a subsequent transaction giving rise to a new cause of action.  But the conclusion to be drawn by the application of the construction to different factual circumstances in the subsequent action is a different question.  In the case of a defence, if the factual circumstances are such that a new question arises, albeit one which is substantially similar to the earlier question, a party is not estopped from litigating on the rights and liabilities based on the new factual circumstances, though the action involves the same parties, the same document and the same defence.  In SCTC 33422/2007, the parties’ rights and liabilities to air-conditioning fee for the period from November 2003 to March 2004 were new transactions. Certainly, the Claimant may litigate by making a new claim and the Defendant may defend by arguing that it was only liable to pay at half rate under clause D7 of Section VI of the Deed of Mutual Covenant.  Whether this is the same question which a party may not litigate or whether because of the new factual circumstances this is merely a substantially similar one to the one that has already been decided and hence a party may litigate depends on whether the factual basis of the two cases are the same.  This in essence forms the basis of the Defendant’s first ground of appeal.

20.  The Adjudicator took the view that the issues raised in the defence in SCTC 33422/2007 had been litigated in SCTC 99499/2003.  In SCTC 99499/2003, she had held, firstly, that clause 7D of Section VI of the Deed of Mutual Covenant authorised the Claimant to collect air-conditioning fee and to grant reduction if a unit was vacant and unoccupied for more than 25 days in a particular month subject to certain conditions.  One of the conditions is that an owner must make advanced application for reduction to enable the Claimant to verify if the unit was indeed vacant and unoccupied during the particular month.  Secondly, she had also held that the Defendant’s defence that the Claimant’s possession of a key to unit 2514 for the purpose of renting it out as agent for the Defendant which could enable the Claimant to verify if the unit was indeed vacant and unoccupied is insufficient to discharge the Defendant’s obligation to make advanced applications.  Thirdly, she had further held that the glass window was not part of the external wall of the Building which the Claimant was obliged to maintain and repair.  The Adjudicator then dismissed the Defendant’s defence on the basis that the issues raised by the defence were the same first two questions which she had decided in SCTC 99499/2003.  She also considered it unnecessary to deal with the Defendant’s un-pleaded counterclaim on the basis that the issue raised was the same third question which she had decided in SCTC 99499/2003.

21.  In respect of the first question, i.e. the requirement to apply for air-conditioning fee reduction in advance, there is no argument by the Defendant that it need not apply in advance to qualify for the reduction.  Indeed, the Defendant has accepted in SCTC 99499/2003 that an application in advance is a pre-condition to fee reduction.  It is also its case at the review hearing that the Defendant had made advanced applications.  The issue raised in this appeal is, therefore, whether the remaining two questions are the same questions or are merely substantially similar ones to the ones that have already been decided.  The Defendant will succeed in this appeal if it is able to prove either of these questions is not the same question.  The answers to these questions are whether the factual basis of SCTC 33422/2007 is same as those of the earlier claims.

22.  In respect of the second question, i.e. whether possession of the key to the unit is insufficient to discharge the Defendant’s obligation to make advanced applications for reduction, it appears that the Defendant was seeking to re-argue on this question before the Adjudicator as well as before me on this appeal.  But if the Defendant’s case is carefully analysed and properly understood, it is arguing on a different question due to change in the factual circumstances.  In SCTC 99499/2003, the Defendant’s case was that it had not applied for fee reduction in advance but was simply relying on the Claimant’s possession of the key to unit 2514 as being sufficient to enable the Claimant to verify for itself whether the unit was vacant and unoccupied and to reduce the air-conditioning fee voluntarily.  In SCTC 33422/2007, the Defendant said that it had made applications in advance.  The Claimant said that the Defendant had not except for the month of February 2004, but as the Claimant was unable to gain access to the unit, the Defendant’s application was refused.  In my view, the questions raised by the defence are wholly different questions.  If the Adjudicator had found that the Defendant had made advanced applications, the further questions would have been whether unit 2514 was vacant and unoccupied during the material period, if it was, whether the Claimant was entitled to refuse the application by relying on the conclusive provision in clause 7D of Section VI of the Deed of Mutual Covenant.  On the other hand, if the Adjudicator had found that the Defendant had not made advanced applications, then the further question would have been the same as the one before the Adjudicator in SCTC 99499/2003.  But of course, the Adjudicator could not make that quantum leap without first deciding whether the Defendant had made advanced applications.  There is therefore no factual basis on which the principle of issue estoppel may apply.

23.  On the evidence, Dr Chan gave sworn evidence that the Defendant had made advanced applications.  His evidence was somewhat equivocal at the hearing, but was more positive at the review.  On the other hand, the Claimant did not give evidence.  The witness statements given by the Claimant’s witnesses did not deal with this aspect of Dr Chan’s evidence.  The assertion by the Claimant’s representative, Miss Poon, at the hearing was not evidence nor was it given under oath or affirmation.  There was no basis to support her assertion that the Defendant had not made advanced applications.  The Adjudicator made no finding one way or the other.  She simply felt it unnecessary because she thought the principle of issue estoppel applied.  It is not open to me to make any finding of fact.  Unfortunately, the matter must therefore be remitted back to the Adjudicator for further consideration of the various questions I mentioned above.

Whether the Adjudicator had dealt with the un-pleaded counterclaim

24.  When granting leave to appeal, I was led into the misunderstanding that the window was damaged under different circumstances as those in SCTC 99499/2003.  The Defendant’s un-pleaded counterclaim as I now understand it is that it was intending to counterclaim for the same damage to the window arising under the same factual circumstances as its counterclaim in SCTC 99499/2003.  The question raised by the un-pleaded counterclaim is whether the glass window formed part of the external wall of the Building for which the Claimant was responsible for its maintenance and repairs.  This is the third question which the Adjudicator decided in SCTC 99499/2003.  The issue had been raised, argued and determined in SCTC 99499/2003 by the same parties.  The Defendant did not appeal against that decision of the Adjudicator.  I have to agree with the Adjudicator that the principle of issue estoppels would apply to this un-pleaded counterclaim.  It was futile for the Adjudicator to deal with it.  This ground of appeal must be dismissed.

Meaning of “vacant and unoccupied”

25.  Though misconceived, the main theme of the Defendant’s appeal is to attack on Andrew Cheung J’s judgment in HCSA 75/2003.  Dr Chan argues that his Lordship’s construction of the phrase “vacant and unoccupied” in the Deed of Mutual Covenant was incorrect.  I have already held that the question of construction of that phrase does not arise in this appeal.  This phrase has not really been fully argued before me.  I do not intend to give any definition for this phrase.  But in view of the directions I am going to give in relation to this appeal, I think it is appropriate for me to make a few observations about HCSA 75/2003, which appears to have been misunderstood.

26.  Andrew Cheung J has not actually pronounced any judicial definition for that phrase.  His Lordship has repeatedly said that he was not attempting to make any definition.  He only confirmed a finding of fact by the Small Claims Tribunal of the case before him.  It must be recalled that the Defendant’s case in SCTC 23046/2003 and HCSA 75/2003 is that units 2303-5 were fully furnished with many personal items kept in the units, though the owner attended the units only several days a month for miscellaneous purposes.  His Lordship’s judgment must be read and understood against those facts.  His Lordship was unable to derive any assistance from Stroud’s Judicial Dictionary (5^th ed) for the meanings of the words “vacant”, “occupied”, “in occupation of” and “unoccupied”.  Then he said at paragraphs 8, 9 and 12:

 “8.       I need not attempt any exhaustive definition of “vacant and unoccupied” here.  Suffice to say that on the facts of the present case, I have no doubt that “vacant and unoccupied” does not bear the meaning suggested by the Defendant.  In my judgment, on the facts, the units were clearly “occupied” by the Defendant during the whole of the two months in question even though only occasionally did Dr Chan and his wife attend the units.

9.      In my view, on the facts, occupation does not mean physical attendance/presence during all or most of the time, and there can be occupation throughout without physical attendance/presence during all or most of the time.  Indeed I do not think a temporary physical absence of the owners or occupiers of days, or even months, would make any difference at all in the present context.  Here, I am concerned with fully furnished premises in which various items and articles are kept for use by the owner whenever he attends the premises - which the owner does, albeit only infrequently, for his own purposes.  I am not concerned with cases like where an owner has vacated the premises, but has simply left a broken and abandoned piece of furniture or two in his premises, or only returns to the premises from time to time to check, for instance, what they are in good condition or have not been trespassed upon by others, or, again for example, to take potential tenants to view the premises.

...

12.    ... (... - as I said, I need not attempt an exhaustive definition of “vacant and unoccupied” here.  My instant focus of discussion is on the objective intention of the parties and the avoidance of reaching a construction of the Deed that would give rise to an absurd, irrational, unduly unfair or unreasonable result.)”

27.  From the above dicta, it is clear that Andrew Cheung J refrained from giving a judicial definition of “vacant and unoccupied”.  At the highest, his Lordship has said that occupation does not mean physical attendance or presence during all or most of the material time.  In other words, there can be occupation throughout without physical attendance or presence.  His Lordship only gave his opinion on what “occupation” need not required.  His Lordship never said what could in law amount to “non-occupation”.  Whether premises are vacant and unoccupied is a question of fact.  His Lordship held that on the facts of the case then before him, i.e. fully furnished premises in which various items and articles were kept for use by the owner whenever he attended the premises, albeit only infrequently for his own purpose, the premises were not vacant and unoccupied.  His Lordship then contrasted that with the case where an owner has vacated the premises leaving a broken and abandoned piece of furniture or two or only returns from time to time to check if they are in good condition or have not been trespassed upon by others or to show the premises to potential tenants or, I should add, potential purchasers.  In between the two scenarios, there can be all sorts of possible situations.  I agree with that view.  However, his Lordship’s judgment in HCSA 75/2003 seems to have been misunderstood, at least by the Defendant, as meaning that to be “vacant and unoccupied” within the meaning of clause D7 of Section VI of the Deed of Mutual Covenant the premises must be cleared of all goods and chattel as well as unoccupied by any person.  I have not the slightest doubt that was not what his Lordship meant.  I certainly would not hold that view.

28.  Construction of a document or a contract is to ascertain the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.  It is not the same as interpretation of a certain word or a particular phrase in the document.  The document must be construed as a whole bearing in mind the purpose of the document and the surrounding factual matrix: see Investor’s Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 897 at 912 to 913 per Lord Hofmann and Jumbo King Ltd v Faithful Properties Ltd & Ors [1999] 4 HKC 707 at 726 to 727.  The document in question is a deed of mutual covenant binding on all owners of units in a commercial building.  It is not a lease or sale and purchase agreement of units in such a building.  Also, the Building is a commercial building and not a warehouse.  Thus, the concept of vacant possession applicable to property transaction is largely irrelevant.  It is only to be expected that when reading the Deed of Mutual Covenant, the reasonable man would be more relaxed about the meaning of that phrase than he otherwise would when reading a lease or a sale and purchase agreement.

29.  Lastly, I must also emphasize that the finding in HCSA 75/2003 that units 2303-5 were not vacant and unoccupied is a finding of fact.  It would be dangerous to assume that the principle of issue estoppel applies to unit 2514 merely became the same parties, the same Deed of Mutual Covenant and the same Building are involved.  Units 2303-5 were owner-occupied units which were fully furnished whereas unit 2514 was, according to the Defendant, a unit which had been vacated by its former tenant.  The extent to which unit 2514 was occupied must be ascertained before one is to apply the principle of issue estoppel.

Conclusion

30.  Having found that there was no factual basis on which the principle of issue estoppel may apply, the award of the Adjudicator given on 2 October 2007 must be set aside.  The claim is remitted back to the Adjudicator with a direction that she shall investigate in respect of each month during the material time:

(1)  whether the Defendant had made advanced applications for air-conditioning fee reduction for that particular month;

(2)  if the answer to (1) is in the affirmative, whether unit 2514 was vacant and unoccupied during that particular month; and

(3)  if the answer to (2) is in the affirmative, whether the Claimant was entitled to refuse the application by relying on the conclusive provision in clause 7D of Section VI of the Deed of Mutual Covenant.

The Adjudicator shall enter judgment in favour of the Claimant for air-conditioning fee at half rate for that particular month, only if the answer to questions (1) and (2) in respect of that particular month is in the affirmative and the answer to question (3) is in the negative.  Otherwise, she shall enter judgment in favour of the Claimant for air-conditioning fee at full rate for that particular month.  The Adjudicator may on her discretion award such interest and costs as she will consider appropriate.

31.  In respect of this appeal, there shall be a costs order nisi that each party shall bear its own costs.