DANDENONG ESTATE COMPANY LIMTED v. YU KAI TO AND OTHERS

----------------------

Headnote

----------------------

Acquiescence. As a defence amounting to waiver and raising a species of estoppel (see 'Chitty on Contracts', 25th ed. (1983) Vol. I, p. 1056, para. 1912).

                 Claim for mandatory order compelling removal of structure erected in breach of Deed of Mutual Covenant.

                 Toleration of other structures erected in such breach.

                Whether such toleration gives rise to defence of acquiescence depends on whether breach complained of is wider than earlier comparatively small breach(es): Hong Kong Land Co. Ltd v. Cheung Chiu-moon [1976] HKLR 214 at p. 217.

                Question to be answered by comparing and contrasting the structure(s) complained of with the structure(s) tolerated: ibid.; and Cheung Yuet & Another v. The Incorporated Owners of Oriental Gardens [1979] HKLR 536.

                [Applying such principle and following such approach, defence of acquiescence fails on facts of present case].

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

----------------------

----------------------

JUDGMENT

----------------------

1. This case concerns structures which have been affixed to the external walls of an industrial building in the New Territores. The building is Annking Industrial Building in Wang Chau Industrial Estate in Yuen Long.

2. The plaintiff company is the Manager of the building. The Defendants are four individuals who are the co-owners of Factory Flat A on the ground floor of the building, at which factory flat they carry on a business under the style of Sze Hing Loong Metal Co.

3. The Deed of Mutual Covenant in respect of the building, which deed is dated October 18, 1983, requires (by clause 7(a)) the appointment of a manager, and provides (by clause 7(b)) that the Plaintiff shall be the first one. The Plaintiff's appointment as Manager was effected by a Management Agreement, which is also dated October 18, 1983. The Plaintiff's duties include a duty to take such proceedings as it deems fit to remedy any breach of the Deed of Mutual Covenant which comes to its notice. Clause 2(p) of the Management Agreement so provides.

4. It is common ground on the pleadings that the Defendants - to whom the factory flat was assigned under an assignment dated April 17, 1984 - purchased it subject to the Deed of Mutual Covenant and the Management Agreement, and have undertaken to be bound by and to observe and perform the covenants, provisions and restrictions set out in the Second Schedule to the Deed of Mutual Covenant.

5. In or about August last year, the Defendants erected a structure which is affixed to the external wall immediately above the entrance to their factory flat. This structure takes the form of a large box-like metal canopy and two substantial metal bars, which one can properly describe as girders. The canopy consists of three sides and a roof. Two sides are adjacent to the external wall. They project outwards therefrom some 10 feet or so. The third side is parallel to the wall. It runs - between the outer ends of the other two sides - along the entire frontage of the factory flat, which comes to about 20 feet. All three sides are made of metal sheets, and have been painted so as to constitute signboards. The roof is made of corrugated metal. The two girders are affixed to the wall, project outwards therefrom some 10 feet or so, and are confined within the sides of the canopy. I will assume that, as the Defendants' Counsel suggested, they support the canopy, and also serve to carry containers running along them. The Plaintiff seeks - and the Defendant resists - an injunction ordering the Defendant to remove this structure.

6. The Plaintiff pleaded that the erection of this structure constituted breaches of clauses 6 and 12 of the Second Schedule to the Deed of Mutual Covenant. In their Defence, the Defendants denied breach of either clause.

7. However, in their final speeches, Counsel for the Plaintiff conceded that there was no breach of clause 6, while Counsel for the Defendants conceded that there was a breach of clause 12. Clause 12 is a covenant 'NOT TO ADD to, subtract from, repair, redecorate, improve or relegate the facade or exterior walls or alter the appearance of the exterior of the Building or any part thereof ...' with a proviso that' ... it shall not apply to any person to whom the external walls may have been expressly granted. '

8. Acquiescence is what the Defendants seek to rely on. The Defence also speaks of waiver and estoppel. In fact those concepts are included in the concept of acquiescence which, as is stated in 'Chitty of Contracts', 25th ed. (1983) Vol. I p. 1056, para. 1912, ’… amounts to the waiver of [the plaintiff's] rights and raises a species of estoppel preventing him from subsequently enforcing them. '

9. What is urged on behalf of the Defendants is that by tolerating the erection and maintenance, over a number of years, of numerous canopies, signboards and other structures erected by other owners, tenants or occupiers of the building, the Plaintiff has precluded itself from complaining against the structure which they, the Defendants, have erected and maintain.

10. As to the other structures, and as to the Defendants' structure, I have the photographs which each party placed before me, and the testimony of the only witness who was called. This was the Plaintiff's witness, one of its employees, Mr So Chun Ho. He impressed me as honest and sensible.

11. The other structures consist, in the main, of: box-like canopies housing roller shutters; awnings made of corrugated metal; awnings made of fabric; signboards, including one which projects at right angles from the external wall rather than lie flat against it; and a large metal water cooler. There was no evidence that the erection of any of the other structures received prior approval. Mr Tse, for the Defendants, submits that I should proceed that none of them had. I agree; and I will proceed on that basis.

12. Mr Tse, relies on all these other structures. But he places the greatest reliance on the sign projecting at right angles and the water cooler. He rightly recognises that the canopies, the awnings and the other signboards are really rather modest affairs when compared to his clients' structure.

13. Mr Mayne, for the Plaintiff, says that the water cooler and the sign-board at right angles to the wall are also significantly less objectionable than the Defendant's structure. He points, as is the fact, that the signboard although long, is a very light structure compared with the Defendants' structure. And he also points out, again rightly, that the water cooler is situated in a space between the building here in question and another building next to it - forming something in the nature of a service lane and/or light well between the two buildings. Finally, he points out, still rightly, that none of the other structures relied on by the Defendants have any feature like the two girders - which can, and do, carry containers along them, across the pavement.

14. Two cases were cited to me, and both Counsel addressed me on them. The first is the decision of Mr Justice Cons in Hong Kong Land Co. Ltd v. Cheung Chiu-moon [1976] HKLR 214. The second is a decision of the Court of Appeal (Huggins, JA and Leonard and Cons, JJ) in Cheung Yuet & Another v. The Incorporated Owners of Oriental Gardens [1979] HKLR 536.

15. In both these cases, the defendants defended injunction proceedings for the demolition of structures erected and maintained in breach of covenant, by relying on acquiescence arising out of the plaintiffs' toleration of other structures so erected and maintained. This defence failed on the facts in The Hong Kong Land Case, but met with partial success on the facts in The Oriental Gardens Case.

16. In the former, the defendant shop owner had, in breach of covenant, erected an iron canopy above the whole length of his two adjoining shops on the ground floor. The plaintiff manager sought an injunction for the removal of this canopy. The defendant resisted the application on the ground that the plaintiff's acquiescence in breaches by other shop owners precluded it from the relief sought. The other breaches - committed by the defendant himself earlier on as well as by other shop owners - consisted of the erection of light, temporary canvas sunblinds. Mr Justice Cons held that the defence failed on the facts and granted the injunction. As to the principle, he said (at p. 217) :-

'It is well established that acquiescence may preclude the grant of relief. It is equally well established that acquiescence in a small breach may not bar relief against a wider breach. '

17. Applying this principle to the facts, he continued :-

'The question then in the present instance is whether a distinction can be drawn between the sunblinds of the other owners and the defendant's iron canopy. I think it can. There is a difference between a structure like that put up by the defendant and a light, retractable sunblind. It is not easy to define that difference strictly in words, but it will not usually be difficult to observe the difference in practice. The plaintiff is entitled to draw the line it seeks. '

18. I turn now to the other case to which I was referred, The Oriental Gardens Case. There were two defendants there. Each had, in breach of covenant, erected extensions, beyond the building line, at the front and at the back of her flat. The first instance, they were ordered to remove all the extensions. But on appeal, the injunction was varied so as to require removal of the extensions at the back of the flats only. This variation was made on the basis of acquiescence. The extensions at the front of the flats were of their sitting rooms.

At p. 539, Mr Justice Huggins said :-

 

'The fact remains that many of the other owners, including more than a dozen whose flats are in this very facade, had previously extended those flats by the addition of a room. The only difference is that those extensions are on the outer sides of the staircases and most do not project substantially beyond the line of the staircases. However, as breaches of covenant they are not less grave than the breaches committed by the Defendants and could reasonably be considered by the Defendants as a representation that the addition of a room of equivalent size would be tolerated. That does not mean to say that we are concerned solely, or even primarily, with measurements: we have to consider the whole nature of the breaches committed by the Defendants and by the other owners.

        It has been argued that the Defendants did not in the court below rely upon the additions on the outer sides of the staircases as relevant to the issue of acquiescence, but I think it is clear that they did. Exhibit D19, for example, would otherwise have been inadmissible in evidence.

        In the event the effective case for the Plaintiff is no more than that a projecting enclosure on the inner side of the staircases is more objectionable than a projecting enclosure of similar size on the outer side of the staircases because it is more apparent and spoils the aesthetic appearance of the facade. In this connection one must be careful not to attach undue weight to photographs of a small section of the facade, e.g. photographs 6 and 7 of Exhibit P13. We are all agreed that aesthetically these additions are far less obtrusive than the photographs would suggest and, indeed, are more in keeping with the general appearance of the facade than some of the balconies which project equally far. They are also considerably less obtrusive than some of the balconies in the facades of the other buildings in Oriental Gardens. '

19. Mr Justice Leonard said (at p. 540) that it was '... not open to the respondents to complain unless they can show that these extensions differ substantially from the multitudinous extensions permitted to other owners.' And, turning to the facts, he said (at p.541) that there '... was not substantial difference between these and those which the respondents sought to have removed and no difference other than that the latter protruded beyond the staircase and were therefore a shade more noticeable. '

20. Mr. Justice Cons said (at p. 541) that '... the appellants' extensions [were] no more obtrusive than many other extensions or balconies in the block ...' and the '... the appellants [had] gone no further than many others...'

21. Thus comparing them with some of the extensions which were being tolerated: Mr Justice Leonard considered the extensions complained of only 'a shade more noticeable'; Mr Justice Cons considered them' no more obtrusive'; and Mr Justice Huggins actually considered them 'more in keeping with the general facade' in question, and 'considerably less obtrusive' than some of the extensions to other blocks in the same development.

22. This is a far cry from the facts as I find them in the present case. I have already set out the differences, pointed out by Mr Mayne, between the Defendants' structure and the ones being tolerated. In light of these differences, I am satisfied that there is a substantial difference between the Defendants' structure and the ones being tolerated. This difference is, in my judgment, such that acquiescence in the erection of the latter does not, in all the circumstances, amount to acquiescence in the erection of the former.

23. It is perhaps appropriate to observe that none of the Defendants went into the witness-box to say that any toleration of the activities of others on the part of the Plaintiff induced them to do as they did, or led them to believe that what they did would also be tolerated.

24. I grant the injunction sought and I will now hear Counsel as to the time which I should set for compliance, costs and any other ancillary matters which may arise.

[Mr Tse asks for, and Mr Mayne agrees, to one month's stay. Mr Mayne does not seek damages. Mr Mayne asks for costs to be taxed if not agreed. Mr. Tse agrees. Order: order for removal with a stay of exection until Jan. 15, 1989. Costs to the Plaintiff to be taxed if not agreed. Liberty to apply to both parties].