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HCMP 603/2012
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MISCELLANEOUS PROCEEDINGS NO. 603 OF 2012
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BETWEEN
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PARTY FOR CIVIC RIGHTS AND LIVELIHOOD OF THE PEOPLE OF HONG KONG LIMITED |
Plaintiff |
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and
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CHINA-TECH SURVEYORS LIMITED |
1st Defendant |
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(Discontinued) |
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INCORPORATED OWNERS OF 87 WONG NAI CHUNG ROAD |
2nd Defendant |
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Before: The Honourable Deputy High Court Judge Seagroatt in Chambers
Date of Hearing and Decision: 16 October 2012
Date of Handing-down of Written Judgment: 24 October 2012
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J U D G M E N T
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1. The plaintiff has commenced this action by Originating Summons issued on 30 March 2012. It has discontinued its action against the 1st defendant but seeks to pursue its claim against the 2nd defendant, the Incorporated Owners of a building in which the plaintiff is one of the tenants. It claims a declaration that “beams and pillars within private units (and in particular within the unit of which it is the tenant on the 3rd Floor) in the building at 87 Wong Nai Chung Road, Happy Valley are common parts and shall be repaired by the 2nd defendant.”
2. The unit of which the plaintiff is now the tenant is owned by a Mr Siu See Kong (“Mr Siu”) who is a director of the plaintiff company and granted the tenancy to the plaintiff about six weeks before the action was commenced by him. Prior to that the plaintiff company had been a licensee of Mr Siu who still lives at the premises. The plaintiff has not pursued its action expeditiously.
3. On 19 July the 2nd defendant issued a summons to stay the proceedings and for the dispute to be submitted to arbitration in accordance with Clause 14 of the Deed of Mutual Covenant governing the building.
4. On 4 October 2012 the 2nd defendant made an application to amend the summons to add a ‘strike-out’ provision under Order 18, rule 19 or the inherent jurisdiction of the Court, on the ground, principally, that the Originating Summons disclosed no reasonable cause of action. Although I could see the merit of this particular approach I declined to allow the 2nd defendant to amend his summons. In my view the alternative provisions sought by the 2nd defendant were “back-to-front” and in any event the proposed amendment came late in the day.
5. The proper issue before me was therefore is the nature of the issue or dispute one that falls within the ambit of the arbitration clause, and if it is, is the plaintiff bound by it?
6. Under Clause 4(b) of the Deed of Mutual Covenant each party was to pay his due proportion for “the keeping in good and tenantable repair of the building … walls, supports, beams …”.
7. Clause 5 provides “The proportion which each of the parties hereto shall be liable to pay or contribute pursuant to the last preceding clause hereof (viz. Clause 4) shall be in proportion to the share or shares for the time being vested in him.
8. There is a further provision at Clause 7 which says “The expenses for keeping the interior of any floor and all … glass in the windows and doors thereof in good and tenantable repair shall be borne by the owner of that particular floor.”
9. Do the beams and pillars within the private units come within the ambit of common parts?
10. It is now necessary to consider the wording of Clause 14 which reads:
“All disputes and questions which shall hereafter arise between the parties hereto touching these presents or the construction or adjudication thereof or whether these presents are still subsisting or not or touching any account or calculation to be made hereunder or as to any act or deed or omission by any of the parties hereto or as to any other matter in any way relating to these presents or the rights duties or liabilities of any person hereunder shall be referred to a Single arbitrator … otherwise to two arbitrators …”.
11. The wording allows of no other interpretation or construction but that the nature of this dispute identified within the Deed of Mutual Covenant is to be (“shall be”) referred to arbitration. That should be the end of the matter.
12. However the plaintiff argues, in effect, that it is not bound by the Deed of Mutual Covenant and therefore not subject to the Arbitration clause.
13. The Deed of Mutual Covenant binds incorporated owners, owners and tenants. I have never heard it argued otherwise. An owner or tenant cannot have the benefits of such an agreement without the burdens or obligations. A person who is not an original party to the Deed of Mutual Covenant and/or the Arbitration Clause, but who seeks to enforce Clause 4(b) cannot simply “cherry-pick” but is bound by all the provisions of the Deed of Mutual Covenant.
14. I have read the written submissions of Mr Sui on behalf of the plaintiff and he has added oral submissions. Despite his submissions the position set out by section 41(9) of the Conveyancing and Property Ordinance (Cap 219) is clear enough. It covers all covenants and the plaintiff as lessee is bound whether it has notice or not. See Jumbo King Ltd v Far Pacific Properties Ltd [1992] 2 HKCFAR − Lord Hoffman NPJ at page 295 (G‑H). The owner of the land, is the grantor of the lease and has notice in any event. I am bound to conclude that the granting of the lease to a former licensee (of which he is the director) was a device to “muddy the waters” if possible.
15. These proceedings will be stayed pending submission to arbitration in accordance with Clause 14 of the Deed of the Mutual Covenant. I reject the alternative application of the 2nd defendant. It is in any event a course open to the 2nd defendant within arbitration proceedings.
16. There will be an order that the plaintiff pay the 2nd defendant’s costs of and occasioned by this application.
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(Conrad Seagroatt)
Deputy High Court Judge |
Mr Sui See Chun, instructed by Robert C K Tsui & Co., for the plaintiff
Mr Patrick Siu, instructed by S K Lam, Alfred Chan & Co., for the 2nd defendant
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