FAIRVIEW PARK PROPERTY MANAGEMENT LTD v. WONG SHU HO

Property law - breach of negative covenant

                Where the Plaintiff alleged and proved breach of an express negative covenant and the Deputy District Judge gave no reasons for refusing all the reliefs claimed, the Court of Appeal would grant the declaration, and the mandatory and prohibitory injunctions that had been sought by the action.

IN THE COURT OF APPEAL

BETWEEN

___________

JUDGMENT

___________

Fuad, J.A.:

1. This is an appeal against the decision of Deputy Judge Polson given on the 23rd August this year, sitting in the Fanling District Court. The Deputy Judge, on that day, dismissed the Plaintiff's claim for a declaration, in junctions and damages in respect of the user of a flat in Fairview Park Yuen Long registered in the name of the Defendant, Madam Wong Shu Ho.

2. The Statement of Claim avers that the Plaintiff, Fairview Park Property Management Ltd. ("Fairview") is the Manager appointed under a clause (with power to briny; these proceedings) in a Deed of Mutual Covenant by which Madam Wong became effectively bound when she bought her flat; and that under its terms she was prohibited, inter alia, from making any alterations or additions to the exterior of her home without the prior approval in writing of the named Development Company and, more specifically, from placing, installing, erecting or affixing any sunshades, canopies or awnings except with the prior written approval of Fairview. Other terms by which Madam Wong was said to be bound are also averred in the Statement of Claim, but I do not consider it necessary to go into them.

3. The Statement of Claim goes on, by paragraph 7, to aver that Madam Wong had "erected and/or affixed a sunshade, canopy or awning at the property" without prior consent or approval. It refers to two letters from Fairview (one dated the 30th December 1982 and the other dated the 23rd May 1983) asking Madam Wong to remove the canopy and to a letter before action sent by Fairview's Solicitors dated the 14th November 1983. All these were ignored. The following relief was claimed:

4. The writ, accompanied by the Statement of Claim, was issued on the 12th March 1984 and served two days later. Madam Wong did not file a Defence. She did not appear, nor was she represented, when the matter came on for trial on the 13th August 1984. She appeared before us in person today.

5. Fairview could not, of course, have applied for judgment in default of defence because their claims were not embraced by r. 22(1) of the District Court Civil Procedure (General) Rules, and so at the hearing they proceeded to prove their case. They first established service of the writ. Next, one of Fairview's estate officers produced a photo he had taken showing the "unauthorised structure". The following exchange between the witness and the Court is then recorded:

"Court:

 

 

Court: Does it obstruct anyone else?

 

6. Fairview’s Managing Director then gave evidence. He produced his authority to represent the Plaintiff and also produced the relevant Deed of Covenant and Estate Rules. He said he knew Madam Wong's flat and produced a copy of her title. He looked at the photo taken by his estate officer and said that the canopy had not been authorised by his company. The record continues:

"Court:    What is your objection to it?

 

 

Court:    What is your company's objection?

 

7. The Managing Director told the Court that he had asked Madam Wong to "rectify the breach" and produced the two letters sent by Fairview, and the Solicitors' letter before action, adding that at the date of the hearing the canopy was still in position. The Deputy Judge asked the witness three more questions. I read out these and the answers given to them:

"Court:  Would you have granted permission if flat owner had applied?

 

 

Court:   Why not?

 

Court: Is any other flat owner affected by this?

 

8. Fairview then closed their case and the record of proceedings concludes thus:

9. I will now read out the grounds upon which Fairview appeal to this Court, omitting paragraph 3. I omit the paragraph because it contains material not comprised in the certified record and which is not otherwise properly substantiated before us. And Mr. Payne, who appeared before us for Fairview, no longer relies on that paragraph. With that omission, the grounds of appeal are in the following terms:

10. I have to assume that the "Order" recorded by the judge is his complete judgment - it was certainly in writing and he did not avail himself of any opportunity to write more than the proviso to section 60(1) of the District Court Ordinance might have afforded. We have thus been deprived of the benefit of having before us the reasons why the Deputy Judge rejected all the reliefs claimed by Fairview. Perhaps the questions asked of the witnesses by the judge, themselves, reveal that he did not think much of their case, but one can readily understand Fairview's sense of grievance at the apparently cavalier way in that their claim was treated.

11. In the absence of evidence to the contrary, Fairview amply proved that Madam Wong had been in breach of her obligations.

12. The grant or refusal of a declaration is, of course, in the discretion of the Court but it is a discretion that must be exercised judicially, and I am sorry to have to say that there is no indication that the judge's approach to any of the issues in this case was judicial. I cannot conceive circumstances in which, on the undisputed facts before the Court, a refusal to grant the declaration sought (to establish Fiarview's rights) would have been justified. I am, therefore, forced to the conclusion that the judge exercised his discretion wrongly in arriving at his decision.

13. So, too, the grant or refusal of an injunction is generally a discretionary jurisdiction but Mr. Payne drew our attention to part of the speech of Lord Cairns, L.C. in Doterty v. Allman^(l). Although the words of the Lord Chancellor of the day were obiter, I have no doubt, with respect, that the passage I am about to read, beginning at page 719, correctly states the law:

"Now, my Lords, let us look at it in that point of view. I said that there is here no negative covenant - not to turn these buildings to any other use. My Lords, if there had been a negative covenant, apprehend, according to well-settled practice, a Court of Equity would have had no discretion to exercise. If parties, for valuable consideration, with, their eyes open, contract that a particular thing 'shall not be done, all that a Court of Equity has to do is to say, by way of injunction, that which the parties have already said by way of covenant, that the thing shall not be done; and in such case the injunction does nothing more than give the sanction of the process of the Court to that which already is the contract between the parties. It is not then a question of the balance of convenience or inconvenience, or of the amount of damage or of injury - it is the specific performance, by the Court, of that negative bargain which the parties have made, with their eyes open, between themselves."

Had the question of exercising a discretion been in issue, it is as well o recall the words of Lord Blackburn in that case, where he said, at page 728 "......it is no doubt a discretionary jurisdiction but..... the discretion is not one to be exercised according to the fancy of whoever is to exercise the jurisdiction of equity, but is a discretion to be exercised according to the rules which have been established by a long series of decisions, and which are now settled to be the proper guide to judges......". One gets the impression (his decision cannot otherwise be explained) that the judge felt that Fairview had suffered very small or nominal damage and were acting oppressively. But I cannot see any reason why, in all the circumstances, they should not have been allowed to insist on their rights.

14. My Lord Kempster, J.A. has reminded me of a case where considerations not far different from those the judge here should have borne in mind (if he were exercising a discretion) were canvassed. In Elliston v. Reacher⁽²⁾, Parker, J. had this to say, at page 395:

"     The only other point raised by counsel for the defendants is the question whether I ought under the circumstances to grant an injunction, or to award damages in lieu of an injunction, under the powers first conferred do the Court by Lord Cairns' Act, 21 & 22 Vict. c. 27. The defendants contend that the plaintiffs have not proved any substantial damage, and that in default of proof of such damage no injunction ought to be granted. I do not think this is a correct proposition of law. As was said by Farwell, J. in Osborne v. Bradley [1903] 2 Ch. 446, the rule enunciated by Lord Cairns in Doherty v. Allman (1878) 3 App.Cas.719, prima facie applies to all restrictive covenants, and though it may well be that if the plaintiffs' right be equitable only, as in the present case, the Court will more readily award damages instead of an injunction, it is in my opinion clear from the case of Richards v. Revitt (1877-78) 7 Ch.D.224 that the absence of proof of substantial damages is not by itself sufficient to warrant that course being adopted. Of course in exercising its discretion the Court is bound to consider all the circumstances of the case, and I see no reason in the present case why the  plaintiff Elliston should not be entitled to maintain the residential character of this estate by preventing any house thereon being used for the purposes prohibited by the building scheme. If an injunction be refused in the present case, I doubt whether he could hereafter prevent the user of any house on the estate for any of such purposes, and he might have to submit to manufactories or shops opened all along Brownlow Street or. Hamilton Terrace."

In this context it is interesting to note that Madam Wong herself told us that she had put up her canopy because so many other owners of flats on the estate had done the same.

15. In my judgment, no Court reasonably directing itself would have refused the declaration and the mandatory and prohibitory injunctions sought in the action.

16. I do not think that this is a case that needs to be sent back for re-trial. All the facts (which are undisputed) are before us and we are in as good a position as was the District Court to exercise any discretion in so far as it is necessary so to do. I would therefore allow the appeal.

Kempster, J.A.:

17. I agree with all that has fallen from my Lord Fuad, J.A. and have nothing to add in relation to the appeal which I, too, would allow. Madam Wong, who remarked to us on the fierceness of the sun's rays, may be assured, however, that she will not be precluded from enjoying such shade as is afforded by a personal parasol. Should she require greater protection in the enjoyment of her garden, she should seek the written licence of the Plaintiff.

Cons, J.A.:

18. I agree entirely with what has been said by both my Lords and I, too, would allow the appeal.

(1)    (1878) 3 App.Cas. 709

(2)    [1908] 2 Ch. 374