CHAN LAI CHUN MARIA v. STEADYPROFIT LTD

LDBM 17/2024

[2025] HKLdT 24

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 17 OF 2024

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J U D G M E N T

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THE APPLICATION

1.  The applicant with her husband and son are majority owners (“Majority Owners”) of the land and building known as “LA VILLA (龍濤花園)” situated at No. 142 Waterloo Road, (“Building”) erected on New Kowloon Inland Lot No. 4069 (“Premises”). The respondent is the remaining owner.

2.  The applicant seeks a declaration that, on the proper construction of the Deed of Mutual Covenants dated 4 February 1987 (Memorial No: 3288524) (“DMC”), the Majority Owners are entitled to change the name of the Building without the unanimous consent of all its owners (“Owners”), namely without the consent of the respondent.

3.  The question is whether the name of the building known as “LA VILLA (龍濤花園)” can be changed by the majority of owners passing a resolution pursuant to clause 9 of, and the Fifth Schedule to, the DMC, without the unanimous consent of all the Owners.

4.  Although witness statements had been filed neither party called any witness at the trial. There are no material disputes of fact. The parties agreed that the application proceed and be determined on the basis of a Statement of Agreed Facts dated 18 November 2024 (“Agreed Facts”) and a bundle of agreed documents. The issues turn on the construction of the DMC and determinations of law.

5.  The applicant is represented by Ms Queenie Lau SC and Mr Cedric Yeung. The respondent is represented by Mr Ian Chau.

THE FACTS

6.  The Agreed Facts include the following.

7.  The applicant was at all material times and still is the registered owner of 87 equal undivided 323^rd parts or shares of and in the Premises and of and in the Building together with the sole and exclusive right and privilege to hold, use, occupy and enjoy the following:

(a)  Unit D with 3 split levels and portion of the roof;

(b)  Car Park Nos. 1, 2 and 3;

(c)  Covered Space Nos. 7 and 10; and

(d)  Open Space Nos. 8 and 12 on the Ground.

Neither the applicant nor any other persons has ever resided in Unit D.

8.  The respondent was at all material times and still is the registered owner of 77 equal undivided 323^rd parts or shares of and in the Premises and of and in the Building together with the sole and exclusive right and privilege to hold, use, occupy and enjoy the following:

(a)  Unit A with 3 split levels and portion of the roof; and

(b)  Car Park Nos. 4.

The respondent’s directors are now in their mid-70s.

9.  Mr. Ma King Ho, the applicant’s husband (“husband”), was at all material times and still is the registered owner of 78 equal undivided 323^rd parts or shares of and in the Premises and of and in the Building together with the sole and exclusive right and privilege to hold, use, occupy and enjoy the following:

(a)  Unit C with 3 split levels and portion of the roof;

(b)  Car Park No. 6; and

(c)  Open Space No. 13 on the Ground Floor.

Neither he nor any other persons has ever resided in Unit C. According to Centaline Property’s website and rental recommendation list, Unit C is currently available for rent.

10.  Mr. Ma Wai Ning Anson, the applicant’s son (“son”), was at all material times and still is the registered owner of 81 equal undivided 323^rd parts or shares of and in the Premises and of and in the Building together with the sole and exclusive right and privilege to hold, use, occupy and enjoy the following:

(a)  Unit B with 3 split levels and portion of the roof;

(b)  Covered Space No.; and

(c)  Open Space Nos. 9, 11, 14 and 16 on the Ground Floor.

11.  By a Tenancy Agreement dated 14 December 2019 and registered in the Land Registry by memorial no. 19122701080113, the son let Unit B, Open Space Nos. 9, 11 and 14 on the Ground Floor to Mr. Tang Chi Kan for a term of 3 years from 10 January 2020 to 9 January 2023. No one save the aforesaid tenant has ever resided in Unit B.

12.  The applicant, the husband and the son collectively hold and held 246 equal undivided 323^rd, or approximately 76.2%, parts or shares of and in the Premises and of and in the Building.

The DMC

13.  The vendor T-N Cheong Enterprises Ltd, and the First Owners Lau Chi Kan Michael and Chan Yuen Ning Janice, entered into the DMC.

14.  The DMC contains, inter alia, the following express provisions:

(1)  Recital (1) defines “the said premises” thus:

“WHEREAS:- (1) Immediately prior to the assignment … of ALL That piece or parcel of land registered in the Land Office as NEW KOWLOON INLAND LOT NO. 4096 (which land and all erections or buildings thereon is hereinafter called ‘the said premises’)…”.

(2)  Recital (2) provides:

“There is now erected on the said premises a building containing several units and car parks known at the date hereof as “LA VILLA (龍濤花園)” at No. 142 Waterloo Road Kowloon (hereinafter called ‘the said building’)”.

(3)  Recital (3) specifies the manner in which “The said premises and the said building have been notionally divided into 323^rd equal undivided 323^rd parts or shares which have been allocated to each and every unit and Car Parks[,] Open Spaces and Covered Spaces on the Ground Floor of the said premises...”.

(4)  Recital (5) provides that the Vendor and First Owner entered into the DMC “for the purposes of making provision for the management and of defining and regulating the rights interest and obligations of themselves and all subsequent owners in respect of the said premises”.

(5)  Clause 12(b) of the DMC defines the word “owner” to include “each person in whom for the time being the legal estate in any undivided share in the said premises is vested”.

(6)  Clause 9 of the DMC provides that: “From time to time there shall be meetings of the owners to discuss and decide matters concerning the said premises and in regard to such meeting the provisions set out in the Fifth Schedule hereto shall apply”.

(7)  The Fifth Schedule to the DMC contains, inter alia, the following provisions:

(a)  “A Meeting may be validly convened by those owners of the said premises who in the aggregate have vested in them for the time being not less than 3/4^th of the undivided shares in the said premises”: paragraph 1.

(b)  “No business shall be transacted at any meeting unless a quorum is present when the meeting proceeds to business and owners present in person or by proxy who in the aggregate have vested in them not less than 3/4^th of the shares in the said premises shall be a quorum”: paragraph 3.

(c)  “Every owner shall have one vote for each share in the said premises vested in him …”: paragraph 6.

(d)  “Any resolution on any matter concerning the said premises passed by a majority of the owners present in person or by proxy and voting at a duly convened meeting shall be binding on all the owners provided as follows:-

(i)  The notice convening the meeting shall have specified the intention to propose a resolution concerning such matter.

(ii)  Any resolution purported to be passed at such meeting concerning any other matters shall not be invalid.

(iii)  No resolution shall be valid if it is contrary to the provisions of this Deed”: paragraph 10.

(e)  “A resolution in writing signed by owners who in the aggregate have vested in them for the time being more than one half of the shares in the said premises shall be as valid and effectual as if it had been passed at a duly convened meeting of the owners”: paragraph 11.

15.  Clause 9 and the above provisions of the Fifth Schedule are referred to as the “Meeting Provisions” herein.

Re-naming the Building

16.  In around November 2023, the Majority Owners first informed the respondent of their wish to re-name the Building. On 7 December 2023, the applicant’s solicitors, Messrs. Iu, Lai & Li (“ILL”) letter to the respondent’s solicitors, Messrs. Wong, Hui & Co. (“WHC”) dated 7 December 2023 with a Counsel’s Opinion dated 6 December 2023 (“the Counsel Opinion”) stated that the Majority Owner was entitled to change the name of the Building without the respondent's consent.

17.  At a meeting of the Management Committee of the Building held on 8 December 2023 and attended by the respective representatives of the Majority Owners and the respondent, the respondent expressed reservations as to the Majority Owners’ proposal to re-name the Building.

18.  By a letter dated 15 December 2023 from ILL to WHC, ILL requested WHC to promptly provide comments on the views expressed in the Counsel Opinion. By letter dated 22 December 2023, WHC stated the respondent’s stance that unanimous consent of all the Owners is required for changing the name of the Building.

19.  The parties are in dispute as to whether a majority of the Owners are entitled to change the name of the Building by passing a resolution in accordance with the Meeting Provisions, or whether unanimous consent of all the Owners is required.

THE APPLICANT’S CASE

20.  The applicant’s case is that:

(a)  Under the DMC, Owners may pass resolutions on “any matter concerning the said premises” by majority consent and such resolutions are binding on all Owners.

(b)  In the recent Court of First Instance decision in Falcome Co Ltd v Zhejiang Development Co Ltd [2024] HKCFI 2992, handed down on 7 November 2024, it was held that words to the same effect as “any matter concerning the said premises” are “wide enough to include owners deciding the name of the Building” (§§47, 58), and the contention that owners’ unanimous consent was needed to change the building name was roundly rejected.

(c)  This case is on all fours with Falcome, so the same conclusion ought to follow, namely that the Majority Owners are entitled to re-name the Building without the respondent’s consent.

The current owners

21.  The applicant, her husband and son together hold approximately 76.2% shares in the land and Building. While the respondent holds 23.9%. Current ownership is tabulated below:

	Owner	Property	Number of undivided shares owned	Percentage of total undivided shares of La Villa owned
1.	Mr. Ma Wai Ning Anson (son)	Unit B and Open Space Nos. 9, 11, 14 & 16 and Covered Space No. 15 on G/F of La Villa	81	25.1%
2.	Mr. Ma King Ho (husband)	Unit C and Car Park No. 6 and Open Space No. 13 on G/F of La Villa	78	24.1%
3.	Ms. Chan Lai Chun Maria (applicant)	Unit D and Car Park Space Nos. 1, 2 & 3 and Covered Space Nos. 7 & 10 and Open Space Nos. 8 & 12 on G/F of La Villa	87	26.9%
4.	Steadyprofit Ltd (respondent)	Unit A and Car Park Space Nos. 4 and 5	77	23.9%
Total:			323	100%

DMC provisions the applicant relies upon

22.  By Recital (5) to the DMC the vendor and the First Owners agreed to enter into the DMC “for the purposes of making provision for the management and of defining and regulating the rights interest and obligations of themselves and all subsequent owners in respect of the said premises”. In Recital (1) to the DMC the “said premises” refer to the Lot and “all erections or buildings thereon”.

23.  Clause 9 of the DMC provides that: “From time to time there shall be meetings of the owners to discuss and decide matters concerning the said premises and in regard to such meeting the provisions set out in the Fifth Schedule hereto shall apply”.

24.  The Fifth Schedule Meeting Provisions relied upon are that:-

(a)  A Meeting may be validly convened by owners who have not less than 3/4^th of the undivided shares in the premises (§1).

(b)  No business shall be transacted at any meeting unless a quorum is present and owners who have not less than 3/4^th of the shares in the premises shall be a quorum (§3).

(c)  Every owner shall have one vote for each share in the premises vested in him (§6).

(d)  Any resolution on any matter concerning the premises passed by a majority of the owners present in person or by proxy and voting at a duly convened meeting shall be binding on all the owners provided as follows:-

(i)  The notice convening the meeting shall have specified the intention to propose a resolution concerning such matter.

(ii)  Any resolution purported to be passed at such meeting concerning any other matters shall not be invalid.

(iii)  No resolution shall be valid if it is contrary to the provisions of this Deed (§10).

Events leading to the present proceedings

25.  After the Majority Owners informed the respondent of their wish to re-name the Building they provided the Counsel Opinion on 7 December 2023 that opined “there was a good chance that [the Majority Owners] could change the name of the Building without [the Respondent’s] consent…” (§3). On 22 December 2023 the respondent’s solicitor replied asserting that unanimous consent of all the Owners is required for changing the name of the Building. Accordingly, the parties are in dispute as to whether Majority Owners are entitled to change the name in accordance with the Meeting Provisions, or whether unanimous consent is required.

26.  By a Notice of Application dated 7 February 2024 (“NOA”), the applicant commenced the present proceedings to resolve that dispute.

Applicant’s pleaded case

27.  The applicant’s case is summarised as follows:

(a)  By virtue of section 41(3) of the Conveyancing and Property Ordinance (Cap. 219) (“CPO”), the Meeting Provisions are enforceable by and against the current Owners, namely the Majority Owners and the respondent (NOA §§2.14(a)-(d));

(b)  On the proper construction of the DMC, changing the name of the Building constitutes a “matter concerning the said premises” as referred to in clause 9 of the DMC and §10 of the Fifth Schedule to the DMC (NOA §2.14(e));

(c)  Accordingly, a majority of the Owners are entitled to re-name the Building by passing a resolution in accordance with the Meeting Provisions, and it could be changed without the unanimous consent of all the Owners (NOA §2.14(f)).

(d)  The applicant therefore seeks declaratory relief (NOA §1.1).

THE RESPONDENT’S CASE

28.  The respondent’s position is that the majority of owners have no power to impose a change of name on the minority by the majority of owners passing a resolution pursuant to clause 9 of, and the Fifth Schedule to, the DMC, without the unanimous consent of all the Owners. Further, the declaration sought by the applicant should not be granted, as the matter is hypothetical lacking a concrete factual basis. There is no actual resolution or proposal for any particular new name.

Respondent’s pleaded case

29.  The respondent’s case, is summarised in order to define the issues, as follows:

(a)  By reason of Recitals (1) to (3) and (5) to the DMC and §10 of the Fifth Schedule to the DMC, each co-owner is entitled to his property being described by reference to the name of the Building under the DMC, namely “LA VILLA (龍濤花園)”. To change this name is contrary to the provisions of the DMC and therefore impermissible (Notice of Opposition dated 23 February 2023 (“NOO”) §§3-4).

(b)  The meaning of “matters concerning the said premises” under clause 9 of the DMC and §10 of the Fifth Schedule to the DMC is confined to the two purposes stated in Recital (5), namely (1) to make provisions for the management in respect of the Premises; and (2) to regulate the rights interests and obligations of the co-owners and all subsequent owners in respect of the Premises. Changing the name of the Building does not fall within either recital purpose (NOO §§5-6).

(c)  The respondent disputes that any contentions in NOA §2.14(a)-(f) support the applicant’s claim that the Majority Owners are entitled to change the name of the Building without the respondent’s consent (NOO §9).

ISSUES

30.  Ms Lau SC set out three issues, and Mr Chau raised a fourth issue, which fall to be determined:

(1)  First, whether each co-owner is entitled to his property being described by reference to the name of the Building under the DMC, namely “LA VILLA (龍濤花園)” (“Name Entitlement Issue”)?

(2)  Secondly, whether the Meeting Provisions are enforceable by and against the current Owners of the Building (namely the Majority Owners and the respondent) (“Enforceability Issue”)?

(3)  Thirdly, if so, whether on the proper construction of the Meeting Provisions, changing the name of the Building constitutes a “matter concerning the said premises” as referred to in clause 9 of the DMC and §10 of the Fifth Schedule to the DMC (“Construction Issue”)?

(4)  Fourthly, whether declaratory relief should be refused because the issues are hypothetical and/or not based on facts (“Declaratory Relief Issue”)?

LEGAL PRINCIPLES

Construction of DMC

31.  A deed of mutual covenant is construed in the same manner as any other contract. The court’s approach is to discover what a reasonable person would have understood the parties to have meant, having regard not merely to the individual words used, but to the agreement as a whole, the factual and legal background against which the deed was concluded, and the practical objects which the deed was intended to achieve: Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279, 296D-I (Lord Hoffmann NPJ).

32.  The factual background includes the characteristics of the building, and whether an interpretation of the DMC makes practical sense: Jumbo King v Faithful Properties Ltd at 296-297J-B.

33.  The legal background against which the contract was made may influence the interpretation of the contract. Such background includes both the common law and relevant statutes: Lewison The Interpretation of Contracts (8^th edn; 2024), §§4.32-4.42.

34.  The starting point is the ordinary and natural meaning of the words of the deed: Eminent Investments (Asia Pacific) Ltd v DIO Corp (2020) 23 HKCFAR 487, §43 per Ribeiro PJ and Lord Collins of Mapesbury NPJ.

Purposive approach to interpretation of DMC

35.  In Grande Properties Management v Sun Wah Ornament Manufactory Ltd (2006) 9 HKCFAR 462 at §2, Chan PJ held:

“The rights and obligations of the owners and the manager of a multi‑storey building are usually defined and governed by a deed of mutual covenant in respect of the building. This deed is a contract which runs so as to bind all owners and their assignees and the manager. Some of these rights and obligations are modified by the Building Management Ordinance, Cap 344 (“the Ordinance”). The provisions of the deed and the Ordinance [i.e. the Building Management Ordinance] are usually aimed at facilitating the management of the building by reducing conflicts among co-owners on the one hand and preventing abuse by the manager and the majority owner on the other. It is fair to say that most disputes are resolved by a purposive construction and common sense application of the relevant provisions of the deed and the Ordinance.”

36.  The reasonableness of the result of any particular interpretation is a relevant consideration in choosing between rival interpretations: Lewison, §7.161 et seq.

Recitals

37.  The function of recitals is to narrate the history leading up to the making of the agreement or to express in general terms the intention with which the agreement was made. Recitals may be taken into account as an aid to interpretation. The recitals to a document may perform a different function to the operative part of the document, but nevertheless they are part of the document itself, or at least part of the context in which the contract was made. Since the circumstances surrounding the making of a contract may be relied on as an aid to interpretation, it follows that the recitals may be similarly relied on. Accordingly, a recital may set out the background and purpose of an agreement. In order for a recital to be an aid to interpretation it must be capable of being read consistently with the operative parts of the contract: Lewison §10.37.

38.  Where the operative part of a contract is unclear, the recitals may be used to control, cut down or qualify the operative part. Demonstration of a true ambiguity is not required before resort may be had to the recitals. Recitals may be used to control the operative part where the language of the operative parts is not absolutely clear. A contract must be interpreted as a whole and in the light of the background knowledge available to both parties when made. Lewison opines therefore that recitals may govern or qualify the operative part even where the contract is not ambiguous in the true sense, provided there is some doubt about the true meaning, when read as a whole: Lewison §§10.48-10.51.

39.  In the case of inconsistency between the recitals and the operative part of the contract where both are clear the operative part prevails and is to be preferred: Lewison §10.54. The court will be cautious in spelling a covenant out of a recital, because that is not the part of the deed in which covenants are usually expressed: Lewison §10.61.

The Falcome decision

40.  The specific issue of whether owners of a multi-storey building are entitled to change its name by majority consent was analysed by DHCJ Yuen in Falcome. The applicant submits that the present facts are on all fours with Falcome and the same analysis must therefore follow.

41.  In Falcome, the plaintiff and the 2^nd defendant were owners of different units of the Building. Section VII B of its DMC is concerned with “meetings of the Owners to discuss and decide matters concerning the Land and the Building”; clause 10 provided that “a resolution shall be validly passed if passed with a simple majority of the vote by the Owners”; and clause 13 provided that “all resolutions passed at a meeting duly convened and held shall be binding on all owners” (§24). These provisions are materially identical to clause 9 of the DMC and §10 of the Fifth Schedule to the DMC here, according to the applicant, which the respondent disputes.

42.  In Falcome the 2^nd defendant contended that (1) it had the right to name the Building by virtue of a covenant in the DMC, referred to as a “Naming Right Clause”; and (2) in any event, there was a valid change of name pursuant to an owners’ resolution: §2.

43.  On the other hand, the plaintiff contended that (1) the Naming Right Clause was unenforceable as it did not comply with section 41(2) CPO; and (2) the name of the building could not be changed without the consent of all current co-owners, which is the contention the present respondent is advancing here: §3.

44.  On whether the Naming Right Clause was enforceable, the 2^nd defendant accepted that the CFI was bound by the Court of Appeal decisions in Lamaya Ltd v Supreme Honour Development Ltd [1991] 1 HKC 198 and Pak Fah Yeow Investment (Hong Kong) Co Ltd v Proper Invest Group Ltd [2009] 3 HKC 285 to find that it was unenforceable: §§33-34.

45.  On whether unanimous consent of the current owners was required to change the building name, DHCJ Yuen held that the answer was “no”. DHCJ Yuen’s analysis may be summarised as follows:

(a)  In the Court of Appeal decision in Pak Fah Yeow (CA), Rogers VP upheld DHCJ Au’s decision that a clause which related to the mode of conduct of an owners’ meeting was enforceable even if the subject matter of the resolution was the naming of the building (§17).

(b)  Rogers VP then went on to observe that “[i]n my view, quite irrespective of the provisions of clause 13, it would be necessary for all the owners of the building to agree to the change of name” (§18). The plaintiff in Falcome sought to rely on this remark to contend that unanimous consent was required to change the building name (§37).

(c)  However, DHCJ Yuen held, (1) Rogers VP’s statement in Pak Fah Yeow (CA) §18 “would appear to be obiter”, and he “did not explain why, if the DMC did not contain clause 13, a majority vote passing a resolution to change the name of the building would not bind all owners” (§§41-42); (2) “the ratio of both DHCJ Au and the Court of Appeal … was that when deciding the name of the building, the current co-owners were bound by the provisions of the DMC governing the conduct of meetings” (§43); and (3) “[a]pplying that ratio to our case, where there is no provision in the DMC requiring unanimous consent like clause 13, the current co-owners would be bound by the provisions of the DMC in Section VII B” (§43).

(d)  Importantly, it was held that (1) it would have been in the common interest of co-owners to give the building a name if it did not originally have one (§45) and also to change its name (§46); (2) “if all current co-owners acting together can decide to change the name of the Building, there is no reason why that decision cannot be made by a majority who reached that decision in accordance with procedures agreed in the DMC” (§47); and (3) in this light, the words “matters concerning the Land and the Building” in the DMC, when construed “literally and purposively”, “are wide enough to include owners deciding the name of the Building (§§47, 58).

(e)  DHCJ Yuen also rejected the plaintiff’s contention that a decision to name the building was a matter outside the proper purpose of the DMC. It is clear from the ratio of Pak Fah Yeow (CA) that “the name of the building was a matter which was properly governed by the DMC” (§48).

(1)  Name Entitlement Issue

Respondent’s case

46.  The respondent’s position, as owner of Unit A, is that the family who own Units B, C and D of the Building and wish to rename “LA VILLA (龍濤花園)” do not have the power to do so.

47.  The DMC expressly provides for the name of the Building to be “LA VILLA (龍濤花園)”.

48.  The applicant, her husband and son in November 2023 first informed the respondent of their wish to re-name the Building. However:

(1)  The applicant has not put forward any other purpose or utility for the change of name.

(2)  There has not been any purported resolution passed for a new name.

(3)  Neither has the applicant even suggested any particular name for the tribunal’s consideration.

49.  The applicant now seeks a declaration that the majority of owners are entitled to change the name of the Building by passing, in a meeting of the owners, a resolution in accordance with clause 9 of, and the Fifth Schedule to, the DMC. An owner would have one vote for each share held: paragraph 6 of the Fifth Schedule to the DMC. The applicant, her husband and her son would have a majority to pass a resolution thereunder.

Purposive considerations and potential for Majority Owner abuse

50.  The respondent relies on the following purposive considerations for construction Issues 1 and 3 and as facts relevant to discretion under Issue 4. The DMC provided for a total 323 equal and undivided shares, with 73, 75, 73, and 75 shares being allocated to Unit A, B, C, and D respectively. 1-2 shares each were allocated to various car parking, open, and covered spaces.

51.  The respondent submits that if clause 9 of the DMC were to empower the majority to change the name of the building, that would be ripe for potential abuse by a bare majority:

(1)  The allocation of shares meant that only 2 units out of 4 might form a majority, who could on any whim, change the Building’s name.

(2)  If one family were to own 2 such units forming a majority, they would constitute a persistent voting bloc.

(3)  There are no express limits on what the majority could select as the name of the Building. The name selected could be of personal significance to the majority only, such as naming the Building after the applicant’s family name, and be of complete indifference or even distaste of the minority.

(4)  A longstanding name may be changed any number of times.

(5)  Whenever the name is changed, the minority would be compelled to bear their pro rata share of expenses for the removal of the existing plaque engraved with the Building name and the installation of a plaque bearing the new name. Paragraph 7(iv) of the Fourth Schedule to the DMC provides that the cost of, inter alia, renewing, painting or decorating the said building shall be borne and paid by the owners.

(6)  Additionally, the minority owner would be compelled to suffer the inconvenience of having to give notices of change of address with a new building name to various parties.

(7)  There would be broader complications. For instance, the bus stop outside the Building is named after the building name. Either that would also need to be changed, or the bus stop sign would be inaccurate and misleading.

52.  Particularly with only 4 Units in the Building, it cannot have been the intention of the DMC that 2 or 3 owners could have almost complete freedom to impose their whims on the remaining 1 or 2 owners. The DMC should prevent abuse by the majority owner on the other: Grande Properties Management at §2.

53.  On the other hand, in the context of the Building/Premises, there is no disadvantage in requiring unanimous consent of all co-owners for the name to be changed. “LA VILLA (龍濤花園)” is a neutral name for a residential building, and the inability of owners of 2 or 3 out of 4 Units to change the name would not cause unfairness or prejudice.

54.  The only reason for renaming, on the facts before the tribunal, is the applicant’s, her husband’s and son’s “wish”. The family majority, the owners of Unit B, C, and D, argue they have a right to impose any personal and subjective preference on the respondent, the owner of Unit A.

55.  These purposive considerations are clearly against the applicant’s case (Issues 1 and 3), and so is the textual analysis of the DMC.

Textual analysis - DMC expressly stipulates name

56.  Recital (2) of the DMC expressly stipulates that the building containing several units and car parks erected on the Premises was known as the date of the DMC to be “LA VILLA (龍濤花園)” at No. 142 Waterloo Road Kowloon, and specifically defined this to be “the said building”.

57.  Unlike “[T]he said premises” which is defined separately at Recital (1), to be: “[t]hat piece or parcel of land registered in the Land Office as NEW KOWLOON INLAND LOT NO. 4069 (which land and all erections or buildings thereon is hereinafter called ‘the said premises’)”.

58.  Therefore two distinct definitions are drawn by the DMC:

(1)  The Building, specifically being that erected at the time of the DMC, and identified by its name, “LA VILLA (龍濤花園)”.

(2)  The Premises, which refer to the Lot, land and, generally, erections or buildings thereon.

59.  Moreover, having expressly stipulated the name of the Building, the DMC does not mention any name change right or mechanism.

60.  This is in stark contrast to the facts of Falcome (§9) where the DMC contained a “Naming Right Clause”, granting a right to the First Owner, who entered the DMC, its successors and assigns the exclusive right to give whatever name for the Building and to “change the name of the Building … at any time or times and from time to time”. The DMC in Falcome envisaged that the building’s name would be readily changed at any time. The Falcome judgment did not mention if the DMC contained a stipulation as to the name of the building, like Recital (2) of the DMC here.

61.  Mr Chau acknowledges that previous Court of Appeal decisions have held that a “Naming Right Clause” is not an interest in land and was therefore unenforceable against co-owners who are not privy to the DMC: Falcome at §33. However, the clause would be binding on the parties to the DMC, and he says would be relevant context in interpreting other provisions of the DMC. Mr Chau emphasises that here the DMC is silent and did not even contemplate a change of name. Therefore, renaming the Building is entirely outside the Meeting Provisions.

Co-owner’s right

62.  Recital (3) of the DMC provides that the Premises and the Building have been divided into shares, and such shares have been allocated to units and car parking spaces. The respondent’s case is that Recital (3), along with Recitals (1) and (2), have the consequence that every co-owner has a right to have their property - to which they have the exclusive use, occupation, and enjoyment - described with the name “LA VILLA (龍濤花園)” as part of the name of their property.

63.  Pak Fah Yeow (CA) at §14 cites Union Insurance Society of Canton, Ltd v The Hongkong Land Co Ltd (unrep., HCA 386/1977, 5 December 1977) for the proposition that changing the name of a building may be a breach of the covenant of quiet enjoyment. While the covenant of quiet enjoyment in Union Insurance Society was owed to a tenant, it illustrates that restrictions on the change of name can be an incidence of property rights.

64.  Mr Chau’s construction is that the intention and effect of Recitals (1) to (3) was that a co-owner would not suffer the name of his property to be changed without his consent.

65.  That was also the conclusion reached by the Court of Appeal on the facts of Pak Fah Yeow at §18, with Rogers VP stating (Le Pichon JA and Hartmann JA concurring at §§20-21): “it would be necessary for all the owners of the building to agree to the change of name”.

Applicant’s case - Name Entitlement Issue

66.  The applicant’s position is that there is no basis for the respondent’s contention essentially, that each co-owner is entitled to the Building being named “LA VILLA (龍濤花園)” because it is described as such in the Recitals to the DMC. The applicant’s reply is as follows.

67.  Recital (2) to the DMC provides that “There is now erected on the said premises a building containing several units and car parks known at the date hereof as ‘LA VILLA (龍濤花園)’ at No.142 Waterloo Road Kowloon (hereinafter called ‘the said building’)”.

68.  Plainly read, this only describes the name of the Building as “LA VILLA (龍濤花園)” as of the date of the DMC, as opposed to more generally or indefinitely. It cannot possibly give rise to a contractual entitlement to their property being forever described by this name.

69.  Indeed, the very fact that Recital (2) to the DMC includes the words “There is now erected on … at the date hereof” indicates that the name of the building was not intended to be permanent, for there would otherwise have been no need to specify that the Building was known as “LA VILLA (龍濤花園)” only as of the date of the DMC. I have to agree. Including the words “known at the date hereof” objectively construed necessarily implies that it may not be so known at some other date. Owners, and readers of the DMC from time to time, know that the DMC is in respect of the land and buildings New Kowloon Inland Lot No. 4069, even if the building is then known by some other name.

70.  The court will be cautious in spelling a covenant out of a recital, because that is not the part of the deed in which covenants are usually expressed: Lewison §10.61. The Recital (2) reference to the name is merely descriptive of the existing state of affairs at the time of execution of the DMC. The Recitals properly construed do not provide for the Building to be forever so named. Recital (2) does not give rise to a prohibition or prevent change of name. The respondent has not identified the basis of a right to maintain the name.

71.  The applicant continues, even if the DMC conferred a contractual right that the Building shall forever be described by reference to the name “LA VILLA (龍濤花園)”, the respondent is not entitled to enforce this right because (1) it is not privy to the DMC; and (2) a covenant conferring naming rights in respect of a building does not run with the land: Lamaya 203H-204B per Cons JA; Incorporated Owners of Nine Queen’s Road Central v Minkind Development Ltd [2004] 1 HKC 270, §§23, 33-34 per Barnett J; Pak Fah Yeow (CA) §§10-13 per Rogers VP.

72.  The applicant objects to any argument that there may be a breach of a covenant of quiet enjoyment. First, the respondent has not pleaded that renaming is a breach of such a covenant. Secondly, Ms Lau SC does not accept that there is any covenant of quiet enjoyment as between co-owners of a property held as tenants in common. A covenant of quiet enjoyment may be an express or implied term of a lease. There is no legal basis, and no legal authority has been cited, to imply such a covenant into a DMC. Union Insurance Soceity was a landlord and tenant case. There was no analysis in Pak Fa Yeow (CA) as to how a landlord and tenant covenant was to be implied into the co-ownership relationship. The respondent’s proposition that it is an illustration of how the law recognises a legitimate interest in not renaming is unsupported. If a resolution is binding according to the terms of the DMC it could not be in breach of a right to quiet enjoyment. Mr Chau replied that it is analogous, not a direct comparison and he would not take the analogy too far. It may be disposed of on the basis that it is not pleaded. Further, the argument is without merit. There is no basis in fact or law to imply a covenant of quiet enjoyment here.

73.  I answer the Name Entitlement Issue in the negative. Each co-owner is not entitled to have his property described by reference to the name of the Building under the DMC, namely “LA VILLA (龍濤花園)”.

(2)  Enforceability Issue

The applicant’s case

74.  None of the current Owners are parties to the DMC. Accordingly, whether they are bound by the covenants therein turn on the operation of section 41(3) CPO, which provides as follows:-

“Notwithstanding any rule of law or equity but subject to subsection (5), a covenant shall run with the land and, in addition to being enforceable between the parties, shall be enforceable against the occupiers of the land and the covenantor and his successors in title and persons deriving title under or through him or them by the covenantee and his successors in title and persons deriving title under or through him or them.”

75.  This provision applies to covenants which satisfy each of the three limbs of section 41(2) CPO, namely covenants (1) which relate to the land of the covenantor; (2) the burden of which is expressed or intended to run with the land of the covenantor; and (3) which are expressed and intended to benefit the land of the covenantee and his successors in title or persons deriving title to that land under or through him or them.

76.  The applicant submits that it is clear that the Meeting Provisions satisfy each of the three limbs of section 41(2) CPO, to the effect that the current Owners are bound by the Meeting Provisions by virtue of section 41(3) CPO, for the following reason.

Limb (i) – “covenants which relate to the land of the covenantor”

77.  The test is whether the covenant “touched and concerned the land”, in that it affects the nature, quality, mode of user or value of the land: Lamaya, 203A-F per Cons JA; P & A Investments (A Firm) v Combined English Stores Group Plc [1989] 1 AC 633, 642 per Lord Oliver.

78.  A covenant giving the right to name a building does not satisfy this test. However, a procedural provision governing the conduct of passing resolutions in an owners’ meeting is binding on and enforceable against non-parties to the deed of mutual covenants, even though the resolutions in question may concern the renaming of the building: Pak Fah Yeow Investment (Hong Kong) Co Ltd v Proper Invest Group [2008] 5 HKC 474, §65 (DHCJ Au (as she then was) upheld on appeal at §17).

79.  The material facts of Pak Fah Yeow are:-

(a)  The defendant sought to change the name of the building by invoking its express naming right under clause 3 of Section D of the deed of mutual covenants (referred to as “clause 3”). At first instance, the plaintiff contended, inter alia, that (1) clause 3 was not enforceable by the defendant after a change of parties to the DMC as it did not touch upon the land (§§27-29 Pak Fah Yeow (CFI)); and (2) on this basis, clause 13 of Section J of the deed (requiring unanimous consent and referred to as “clause 13”) should apply to the effect that the name of the building shall not be changed without the owners’ unanimous consent (§30 Pak Fah Yeow (CFI)).

(b)  Both contentions were accepted by DHCJ Au. The judge accepted that clause 3 was no longer binding on subsequent purchasers, including the plaintiff and the other new owners after the date of the DMC (§58 Pak Fah Yeow (CFI)). Importantly for present purposes, the judge also rejected the defendant’s argument that clause 13 was unenforceable as it amounted to a naming right provision, and held in Pak Fah Yeow (CFI) at §65:-

“On a proper reading of Clause 13, it is simply a provision prescribing the kind of resolutions that requires a unanimous consent at the owners’ meetings. It is a procedural provision governing the conduct of passing resolutions in an owners’ meeting. The mere fact that such resolutions concern the change of name of the building does not make it a provision conferring any naming right to any person. This construction is consistent with (a) the marginal descriptions provided to this clause, and (b) the fact that the clause is included under s J of the DMC, entitling ‘Meetings of the Owners’”.

(c)  The Court of Appeal upheld DHCJ Au’s decision in relation to both clauses 3 (§13 Pak Fah Yeow (CA)) and clause 13 (§17 Pak Fah Yeow (CA)).

80.  Ms Lau SC submits that in the present case, it is plain that the Meeting Provisions (like clause 13 in Pak Fah Yeow) “relate to the land of the covenantor” as they are procedural provisions governing the conduct of passing resolutions in an Owners’ Meeting. This is so even if the subject matter of the resolution concerns the re-naming of the Building, as held in Pak Fah Yeow; §65 CFI decision and §17 CA decision.

Limb (ii) – “the burden of which is expressed or intended to run with the land of the covenantor”

81.  Pursuant to section 40(1) CPO, “[a] covenant relating to any land of a covenantor or capable of being bound by him, shall be deemed, unless the contrary intention is expressed, to be made by the covenantor on behalf of himself, his successors in title and persons deriving title under or through him or them”.

82.  In the present case, the Meeting Provisions are intended to run with the land, in that:-

(a)  First, Recital (5) provides that “[t]he Vendor and the First Owner have agreed to enter into this Deed for the purposes of making provision for the management and of defining and regulating the rights interests and obligations of themselves and all subsequent owners in respect of the said premises”.

(b)  Secondly, the word “Owner” is defined under clause 12(b) of the DMC to include “each person in whom for the time being the legal estate in any undivided share in the said premises is vested”.

(c)  Thirdly and in any event, there is nothing in the DMC which indicates that the Meeting Provisions are not intended to run with the land, in which case section 40(1) CPO applies to presume the contrary.

Limb (iii) – “which is expressed and intended to benefit the land of the covenantee and his successors in title or persons deriving title to that land under or through him/ them”

83.  There are three elements of this third limb, namely (1) the covenant must be expressed to benefit the land of the covenantee and his successors-in-title; (2) the covenant must be intended to benefit the land of the covenantee and his successors-in-tile; and (3) the covenantee must have land that could be so benefitted: Lee Hysan Estate Co Ltd v Sky Heart Ltd [1997] 1 HKC 313, 338G-H per Le Pichon J (as she then was).

84.  On element (1):-

(a)  A covenant may be “expressed to benefit” the land by virtue of express annexation of the covenants to the land: Lee Hysan, 338I-339C; Hong Kong Land Law (2^nd edn; 2001), §16.4.3.

(b)  Annexation is achieved in a deed of mutual covenants by inserting words to the effect that the parties entered into the deed “for the purposes of … defining and regulating the rights interests and obligations of themselves and all subsequent owners” and by defining the parties to the deed in terms such as “shall where the context so admits include its successors and assigns”: Hong Kong Conveyancing Law and Practice (2023, Vol 1, Div III), [1105]-[1150], p.509.

(c)  Alternatively, the covenant may be “expressed to benefit the land” by virtue of implied or deemed annexation under section 39(1) CPO, which provides that “[a] covenant relating to any land of the covenantee shall be deemed, unless the contrary intention is expressed, to be made with the covenantee and his successors in title and persons deriving title under or through him or them”: Incorporated Owners of Mirador Mansion v Tecowin Development Ltd [1999] 4 HKC 113, 120E-121C; Hong Kong Conveyancing Law and Practice, [1152], p.510.

(d)  In the present case, (1) the Meeting Provisions are expressed to benefit the land under Recital (5) to the DMC as well as clause 12(b) of the DMC; and (2) section 39(1) CPO applies as there is nothing in the DMC which shows the contrary.

85.  On element (2), the requisite intention may be inferred from express wordings of annexation: Lamaya, 204G-I per Cons JA. The Meeting Provisions are intended to benefit the land in light of the clear provisions under Recital (5) to the DMC and clause 12(b) of the DMC.

86.  Lastly, element (3) is plainly satisfied as the applicant owns 26.9% undivided shares in the Premises and therefore retain interests therein.

Conclusion on the Enforceability Issue

87.  In light of the foregoing, the applicant submits that there is no question that the Meeting Provisions are enforceable by and against the current Owners. The respondent does not dispute enforceability of the Meeting Provisions. I accept the above analysis and find that the Meeting Provisions are enforceable by and against the current owners.

(3)  Construction Issue

Applicant’s case - proper construction of the Meeting Provisions

88.  Ms Lau SC submits that it is beyond doubt that re-naming the Building is a matter “concerning the said premises” within clause 9 of the DMC and therefore governed by §10 of the Fifth Schedule to the DMC and the other Meeting Provisions.

89.  First, as a matter of plain language, the name of a building is a matter which “concerns” the building. This was the precise ruling in Falcome (§47), where it was held that changing the name of a building was within the literal meaning of the words “matters concerning the Land and the Building”.

90.  Secondly, the name of a building affects land in various ways and it would be contrary to common sense if this somehow did not constitute a matter “concerning the said premises”:

(a)  The name of a building (as opposed to the name of a street and a number) is a convenient way of referring to a location. Changing the building name would therefore be in the common interest of co-owners, as where the original name is confusingly similar to the name of another building, and consequently correspondence or visitors get sent to the wrong location: Falcome §§45-46.

(b)  Further, as noted by the author of Building Management in Hong Kong, Malcom Merry, (3^rd edn; 2016) at §7.106, “[a]n owner’s shares in the land as well as his right to occupy part of the building surely benefit in value from carrying the right to name the building and the right to name is of more value if it is linked to the right to occupy part of the building than would be if divorced from the right to occupy”.

(c)  In the premises, the name of a building is plainly a matter “concerning the said premises”, because (i) it can have a real effect on the owners’ interests; and (ii) the right to change the building name can also affect the value of their property rights.

91.  Thirdly, the statutory background against which the DMC was executed tends to show that re-naming the Building is a matter “concerning the said premises”:-

(a)  In 1970, before the DMC was executed, the Multi-Storey Buildings (Owners Incorporation) Ordinance (Cap. 344) (“MSBO”) came into effect. It is now the Building Management Ordinance (“BMO”).

(b)  Pursuant to section 10 MSBO, the incorporated owners may change the name of the corporation (1) by a resolution passed by a majority of the votes of the owners, in the case of a direction by the Land Registrar; or (2) in any other case, by a resolution passed by not less than 75%.

(c)  The name of the corporation is usually that of the particular building: Building Management in Hong Kong, §6.23. Owners are free to choose any corporation name, subject to the Land Registrars power to refuse to register a name which in his opinion is undesirable. The corporation name does not change automatically when the building name is altered.

(d)  Against this background, Ms Lau SC suggests that (1) it would be extremely odd if the name of the building could only be changed with unanimous consent, whereas the name of the IO could be changed with a simple or 75% majority; (2) yet that would be the consequence if “matters concerning the said premises” were to be construed to exclude the re-naming of the Building, for there would be no discernible way (under the DMC or otherwise) to bind a dissentient owner. This could not have been intended by the original parties to the DMC.

92.  Fourthly, contrary to the NOO §§5-6, the naming of the Building is plainly a proper subject matter of the DMC: (1) this affects the owners’ interests and the value of their property; (2) provisions in the DMC which control the process by which a building name is changed, such as the Meeting Provisions, must therefore fall within the ambit of “defining and regulating the rights interests and obligations of co-owners and all subsequent owners in respect of the said premises” under Recital (5) to the DMC, so as to constitute a relevant purpose of the DMC; and (3) indeed, the notion that naming a building is a matter outside the proper purpose of a DMC was roundly rejected in Falcome (§48).

93.  The applicant submits therefore on the proper construction of the DMC, the Majority Owners are entitled to change the name of the Building in accordance with the Meeting Provisions, and unanimous consent of the Owners, namely the respondent’s consent is not required.

Respondent’s case - proper construction of the Meeting Provisions

94.  Mr Chau’s construction is as follows. Clause 9 of the DMC provides: “… there shall be meetings of the owners to discuss and decide matters concerning the said premises and in regard to such meeting the provisions set out in the Fifth Schedule hereto shall apply.” He seeks to distinguish the word “premises” in the instant DMC from “Land and Building” in the Falcome DMC. In contrast, to clause 9 the provision as to meetings in Falcome provided that: “[f]rom time to time there shall be meetings of the Owners to discuss and decide matters concerning the Land and the Building”. The Court in Falcome at §47 therefore held that the words included “owners deciding the name of the Building”.

95.  Falcome at §48 observed that the focus in Pak Fah Yeow (CA) on clause 13 in that case was an indication that the name of a building is a matter which was properly governed by the DMC. But in Pak Fah Yeow (CA) (§6) clause 13 specifically provided that, “the name of the Development shall not be changed or removed without the unanimous consent”. Whether a change of name is within the scope of a DMC depends on the construction of the terms of that particular DMC.

96.  The DMC also provides at paragraph 10 of the Fifth Schedule that any resolution on any matter concerning the said premises passed by a majority of the owners voting at a duly convened meeting shall be binding on all the owners provided any resolution purported to be passed concerning any other matters shall not be invalid and, “(iii) No resolution shall be valid if it is contrary to the provisions of this Deed.”

97.  The respondent submits that the provisions in the DMC as to meetings do not empower the majority of co-owners (short of unanimity) to change the name of Building, for the following reasons.

98.  First, there is an express proviso at paragraph 10(a)(iii) of the Fifth Schedule that no resolution can validly be passed if it is contrary to the provisions of the DMC. The effect and intention of Recitals (1)-(3) of the DMC is that the name of the Building would not be changed without unanimous consent of the co-owners, as any change would also change part of the name of each individual co-owner’s property. The tribunal must be cautious in spelling a covenant out of a recital, which is not where covenants are usually expressed. I have determined Issue 1 in the negative.

99.  In the same vein, clause 15 of the DMC states that should there be any conflict between the body of the DMC and those set out in the Schedule thereto, those contained in the body of the DMC shall prevail. In my view there is no conflict. In any event the respondent relies on a recital to override an operative provision in the body of the DMC, namely Recital (2) (with Recitals (1) and (3)) over clause 9, which refers to the Fifth Schedule. Recitals do not prevail over operative provisions which are clear, even if there is inconsistency between the recitals and the operative part. Recital (2) does not qualify the operative part of the DMC. There is no conflict between parts of the DMC. I reject the respondent’s argument based on clause 15 of the DMC.

100.  Second, Recital (2) defines, “the said building”, and specifies its name “LA VILLA (龍濤花園)”. Recital (1), defines “the said premises”. Both clause 9, and paragraph 10 of the Fifth Schedule, to the DMC expressly target matters “concerning the said premises”. The reference is therefore only to the definition in Recital (1). Recital (2), which specifies the name of “the said building” was not targeted by the Meeting Provisions. I cannot accept that the Building is excluded from the “premises” by virtue of Recital (2), juxtaposed with Recital (1), as advanced by the respondent. Recital (1) identifies the Lot and expressly provides “(which land and all erections or buildings thereon is hereinafter called the said premises)”. On a proper construction of Recital (1) and the DMC as a whole, both on a plain reading and a purposive construction, any reference to the “premises” in the DMC includes all buildings on the Lot. The clause 9 and paragraph 10 of the Fifth Schedule references to the said premises are clearly intended to include the Building.

101.  Third, Recital (5) of the DMC states that:

“[t]he Vendor and the First Owner have agreed to enter into this Deed for the purposes of making provision for the management and defining and regulating the rights interest and obligations of themselves and all subsequent owners in respect of the said premises.”

102.  The respondent says the “management” is stated to be “of the said premises” and not directed at the definition of “the said building”, which Recital (2) provides for, along with specifying the name “LA VILLA (龍濤花園)”. This would also suggest that a change of name is not within the scope of the DMC.

103.  Recital (5) recites that the DMC was entered for the purposes of making provision for the management and defining and regulating the rights and interests of owners. In my view naming of the Building is plainly a proper subject matter and within the scope of the DMC. It affects the owners’ interests in the property. The provisions of the DMC which control the process by which a building name is changed, such as the Meeting Provisions, fall within the ambit of “defining and regulating the rights and interests and obligations of co-owners and all subsequent owners of the premises”.

104.  Mr Chau continues that on the facts and the purposive considerations referred to under Issue 1, empowering a thin majority of 2 or 3 out of 4 residential Units to change the name of the Building, where there is no conceivable justification other than the personal preference of the majority, does not amount to “management”. Quite the contrary, the expenses and logistical rearrangements necessitated by a change of name, only for majority personal preference, would constitute mismanagement. Characterising a majority of 2 or 3 out of 4 units as “thin” does not assist the respondent. If half or three quarters of units are attached to a majority of shares that is a majority. Exercise of powers and rights pursuant to the Meeting Provisions of the DMC cannot, without more, be deemed to constitute mismanagement. There are remedies for mismanagement, failing BMO mediation, including specific performance and the ultimate relief, dissolution and replacement of a management committee: section 31 BMO. Further, Recital 5 purposes are not limited to management.

Falcome’s discussion of section 18(2)(g) of the BMO

105.  The respondent refers to section 18(2)(g) BMO which provides that the owner’s corporation (“IO”) may in its discretion “act on behalf of the owners in respect of any other matter in which the owners have a common interest.” The respondent acknowledges that the court in Falcome rejected the argument of the plaintiff (at §51) that the ratio of Incorporated Owners of One Beacon Hill v Match Power Investment Ltd [2012] 6 HKC 200 was that co-owners of a building would only have a “common interest” under section 18(2)(g) BMO in a matter where the matter involves as legal right or interest common to all the co-owners, and the naming right was not a legal right common to all the co-owners, ruling that “common interest” also included management matters (at §§57-58).

106.  Ms Lau SC replies that section 18(2)(g) BMO is simply not relevant. The applicant does not rely on section 18 BMO. The section provides IO powers. The IO has a discretion to act on behalf of and in the common interest of owners. The IO is not a party to these proceedings. The section cannot reasonably be prayed in aid of the respondent’s construction. Section 18 BMO is raised in obiter remarks in Pak Fa Yeow (CA) which Falcome held are incorrect: § 41-43. The respondent accepts that the ruling as to the law in Falcome is binding on the tribunal but reserves the right on appeal (if any) to challenge the ruling in Falcome.

No common interest

107.  In any event, the respondent submits that, in this case, there is no “common interest” between the family, owners of Units B, C, and D, on one hand, and the respondent, owner of Unit A on the other.

108.  I accept that what is a common interest is a question of fact in each case: Building Management in Hong Kong at §6.63. However, the respondent poses the wrong question, focusing on the present subjective interest of the respondent minority owner as opposed to the Majority Owner and todays requirements, not on the proper objective construction of the DMC in context at time of execution.

109.  Mr Chau submits that there is no common interest in changing the name of the Building, “LA VILLA (龍濤花園)”, to another name:

(1)  This is not a case in which there is any common need or utility for the Building to be renamed:

(a)  “LA VILLA” is a neutral name for a residential building which does not require changing.

(b)  The current Chinese name, 龍濤花園 is auspicious. 龍 translates to “dragon”; 濤 to “strong wave” and “花園” to garden. The connotations of the “dragon” character include strength, wisdom, and dignity, and those for the “strong wave” character include courageously moving forward. The bus stop outside the Building is named after this building name, and not the names of other surrounding buildings.

(c)  The purely personal preferences of a family owning 3 out of 4 units should not constitute a “matter in which the owners have a common interest” under section 18(2)(g) BMO. The respondent minority has no interest at all in this.

(d)  Issue 1 concerns are repeated, including the expense and logistical trouble necessitated by a change of name, which on the applicant’s case, can be changed any number of times at the discretion of the family majority.

(e)  Falcome (§§57-58) ruled that “common interest” also included “management matters”. However, the respondent submits that a change of name of the Building would not amount to “management matters”.

110.  The respondent seeks to distinguish Falcome as follows:

(1)  The building in question was a commercial building. There would likely be questions of branding or company names.

(2)  The original name “Kiu Fu Commercial Building” (“橋阜商業大廈”) reflected the name of the developer and first owner, “Kiu Fu Development Company Limited” (“Kiu Fu”) (§1).

(3)  Kiu Fu had been dissolved in 2014, some years before the change of name (§30).

(4)  Being named after the dissolved developer, the name of the commercial building had become defunct and irrelevant, and it would have been in the common interest of all the co-owners to change its name.

(5)  The change of name was to “ZJ300” and “浙江興業大廈” (translated to Zhejiang Prosperous Commercial Building) (§1). The Building was no longer named after a particular and defunct commercial entity, and the English reflected a more modern styling.

111.  In my view whether the building is for commercial or residential purposes the same issues may arise. Naming a building after the developer that is subsequently dissolved is not unique to commercial buildings. That is not a sound basis to distinguish the case.

112.  Mr Chau says this case is a far cry from cases where a court held there was a common interest. Building Management in Hong Kong at §6.63 sets out examples, including proceedings over a right of way, use of a roof as a means of fire escape and access, right of access to water supply, the resolution of a dispute as to whether an area was a common part or for exclusive use, and evicting a trespasser. Of course, Falcome may now be added to the examples where a court has held there was a common interest.

113.  I have considered all the contextual, textual and purposive matters and arguments of both parties. I find as a matter of plain language the name of a building is a matter which concerns the premises. Falcome held that changing the name of a building was within the literal meaning of the words “matters concerning the Land and the Building”. It is clearly also within the literal meaning of the words “matters concerning the premises” where the land “and all erections or buildings thereon” is to be “called the said premises” in the DMC.

114.  I have no doubt that the name of a building is a matter “concerning the said premises” within clause 9 of the DMC, effecting the interests of owners and their property. The naming of the Building is a proper subject matter of the DMC. I have found that the DMC provisions controlling how a building name may be changed and the Meeting Provisions fall squarely within the ambit of “defining and regulating the rights interest and obligations of co-owners and all subsequent owners in respect of the said premises” under Recital (5), so as to constitute a relevant purpose of the DMC. The notion that naming a building is a matter outside the proper purpose of a DMC was roundly rejected in Falcome. I reject such a notion on the facts and construction of the DMC here.

115.  In my view upon a proper construction of the DMC, having regard to contextual and textual considerations, changing the name of the Building is a matter of common interest to all Owners. The DMC must be construed at the date of execution, not by reference to subsequent events. The possibility of liquidation of a developer and that this is a residential, not commercial, building are not distinguishing facts. I infer the bus stop was named after the Building. It does not alter my construction. A fact that may be of more moment is that there are only 4 units and the share division would likely mean there would only be a small number of owners. The factual background includes the characteristics of the Building and premises. The number of units and share division may be taken into account in construing the DMC. The fact that one family, or even one individual, may hold 2 or 3 of the units and majority ownership of shares does not cause the express provisions of the DMC with regards voting and the Meeting Provisions to be unclear or require a strained construction.

116.  The tribunal has no vetting role in choice of a name. The name in the DMC is part of the factual context to be taken into account. The present application does not require the tribunal otherwise assess a name, including whether a name is neutral, auspicious, modern or otherwise.

117.  Ms Lau SC takes exception to any suggestion of abuse. The parties bought their share in the premises in proportions set out in the schedule to the DMC and agreed to the terms of the DMC upon purchase. Paragraph 10 of the Fifth Schedule provides for majority resolutions and this is binding: section 41(3) CPO. Purchasers know and accept being bound by a majority is part of the bargain when they acquire their interest. Exercise of a right or power provided by the DMC does not amount to an abuse. I reject any suggestion of abuse. To the contrary, the applicant has made the present application to clarify the position.

118.  I answer the Construction Issue in the affirmative. I find that upon a proper construction of the Meeting Provisions, changing the name of the Building constitutes a “matter concerning the said premises” as referred to in clause 9 DMC and §10 of the Fifth Schedule to the DMC.

(4)  Declaratory Relief Issue

119.  The tribunal has jurisdiction to grant declaratory relief. Section 8 of the Lands Tribunal Ordinance, Cap.17 conferring jurisdiction, includes section 8(9), that provides:

“In the exercise of its jurisdiction, the Tribunal shall have the same jurisdiction to grant remedies and reliefs, equitable or legal, as the Court of First Instance”.

Respondent’s case - declaration sought lacks concrete factual basis

120.  The respondent submits that the tribunal should refuse to grant the declaratory relief sought in the exercise of its discretion.

Legal principles

121.  The power to make binding declarations of right is a discretionary power. Three requirements before the court’s discretionary jurisdiction to grant declaratory relief can be invoked are (1) the applicant has a real interest in the subject matter of the declaration; (2) the applicant has a real interest in obtaining a declaration against the adverse party; and (3) the adverse party is a proper contradictor: Hong Kong Civil Procedure 2025 (“HKCP 2025”) 15/16/2.

122.  In exercising its discretion the court will consider whether any useful purpose would be served by granting declaratory relief. If the declaration would not serve any practical purpose or utility, this will weigh heavily in the scales against the grant of declaratory relief. A practical purpose means that the declaration should “solve a real difficulty” with which the claimant is faced, but there is no requirement that a claimant must be in a position to demonstrate that he will benefit in a material way as a result of the declaration: HKCP 2025 15/16/2. Courts are not general advice centres: HKCP 2025 15/16/2; applying Charter View Development Ltd v Golden Rich Enterprises Ltd & Anor [2000] 2 HKC 77 at 83A, 85E-F, 86B-C, 87B, 88D, 89C; and S v G [2020] HKCFI 2201 at §46.

123.  The declaration sought should be directed at specific facts. Where it is not the tribunal may in its discretion refuse declaratory relief. If an issue in dispute is not based on concrete facts the issue can be treated as hypothetical. This includes where the applicant is generally entitled to act in a certain way, but the dispute is not attached to specific facts: Zamir & Woolf: The Declaratory Judgment (Sweet & Maxwell, 4^th Ed.) at §§4-59, and 4-71 to 4-72. However, the respondent’s case is not that the applicant is “generally entitled to act in a certain way” but the dispute is not attached to specific fact. The issue and dispute is whether the applicant is entitled to act in a certain way, namely change the Building name by majority not unanimity. Rather than any subsequent issue regarding how that act is then performed.

124.  The reason that the court will not generally decide academic or hypothetical questions is that such a declaration would not be grounded on any factual basis. Relief may be refused where the proceedings only raise hypothetical issues or the issue needs to be considered in light of the evidence at the time of a future occurrence and it would be wrong to seek to prejudge the issue: Zamir & Woolf §4-46 and §4-61. Mr Chau relies on Draper v British Optical Association [1938] 1 All E.R. 115, where the defendant association notified the claimant member, that a meeting would consider the removal of his name from the list of members, on the alleged ground that he violated its code of ethics, and asked whether he wished to attend and be heard. Before the meeting, he commenced proceedings for a declaration that the association was not entitled to attempt to enforce the code on him or to remove him from its register of members. The action was dismissed. Farwell J held that if and when the defendants held a meeting and sought to enforce the code against the member it may be that they will be acting ultra vires. But, until they sought to enforce the code Farwell J did not consider that it was for him to determine the question in the abstract: at 119D-E. Farwell J was not being asked to determine, as between the association and the members what are the rights: at 119H. Ms Lau SC submits that Draper cannot assist the respondent as the declaration sought was in respect of a dispute which may or may not arise. The association had yet to decide if they would enforce, so the matter was academic. Whereas here the dispute has already arisen.

125.  The respondent relies on the facts that (1) there has not been any purported resolution passed for a new name, and (2) the applicant has not suggested any particular name for the tribunal’s consideration. Mr Chau submits that this constitutes a lack of concrete facts, rendering the declaration hypothetical. Relief should be refused for this reason alone:

(1)  The terms of the declaration sought does not limit the family majority to any particular name: NOA at §1.1. The declaration would appear to be a blank cheque for any name they wish.

(2)  Supposing the family majority choose to name the Building after the applicant’s family name, say “Chan’s House” or a name which is inauspicious or “Hell’s Kitchen”, such capricious and unreasonable naming may be a forceful or determinative factor as to whether the renaming was within the scope of the DMC and/or section 18(2)(g) BMO. It would be highly relevant to whether the particular renaming is a matter of management and/or part of the “common interest” of all co-owners. There would also be the question of whether there are implied terms against an unreasonable and/or capricious renaming.

(3)  The carte blanche declaration now sought is imprecise, appearing to permit all possible names. Depending on the name chosen by the family majority, a declaration may not be the end of the parties’ disagreement.

(4)  This case turns on the construction of a particular DMC and whether there is a “common interest” on a specific set of facts. There is no broader public interest to these questions.

126.  Ms Lau SC refers to the solicitors’ correspondence, the Counsel Opinion and the Management Committee meeting on 8 December 2023 evidencing how the dispute crystallised, to show that the applicant has not jumped the gun. The respondent never replied that it wanted to know the name proposed by the Majority Owners and it would then decide. It opposed any change of name. This recent argument is without merit.

127.  The applicant replies that the declaration sought is not hypothetical, theoretical or academic. Indeed, the respondent accepts there is a dispute. The Agreed Statement of Facts includes:

“The parties are in dispute as to whether a majority of the Owners are entitled to change the name of the Building by passing a resolution in accordance with the Meeting Provisions, or whether unanimous consent of all the Owners is required.”

128.  I find that the tribunal’s discretionary jurisdiction to grant declaratory relief may be invoked here as the applicant does have a real interest in the subject matter of the declaration, she has a real interest in obtaining the declaration and the respondent is a proper contradictor.

129.  Granting declaratory relief would serve a useful, practical purpose and solve a real difficulty faced by the applicant. The facts that there has not been any resolution passed for a new name and that the applicant has not suggested any particular name do not constitute a lack of concrete facts rendering the declaration sought hypothetical.

130.  The complaint that the applicant has not suggested any particular name for the tribunal’s consideration is misconceived. The tribunal does not have a vetting role before buildings are named. The respondent’s objections based on any particular name postulate as to the future. I make no determinations on the nature of any name.

131.  The concern that the declaration may give the family a blank cheque to select any name they wish is also misconceived. It is the terms of the DMC, rather than the declaration, that give the majority the right to change the name in accordance with the Meeting Provisions. The declaratory relief sought is a declaration of right upon the proper construction of the DMC.

132.  The respondent also says that the carte blanche declaration is imprecise permitting all possible names and, depending on the name chosen by the family majority, a declaration may not be the end of the parties’ disagreement. Any future disagreement would have to be addressed in the future. Parties are always urged to pursue alternative dispute resolutions and, in building management disputes, mediation.

133.  I do not accept the argument that if the family were to choose a personal or inauspicious name, whether capricious and unreasonable, it would be a forceful or determinative factor as to whether the renaming was within the scope of the DMC and/or section 18(2)(g) BMO. The argument suggests that whether the Meeting Provisions include change of name depends on the particular name chosen. Whether renaming is a matter of management and/or in the “common interest” of all co-owners does not turn on any particular name. The DMC must be construed with regard to the factual and legal context at time of execution.

134.  Ms Lau SC objects to the respondent raising a new point, that there would also be the question of whether there are implied terms against an unreasonable and/or capricious renaming. The point has not been pleaded in the NOO. Ms Lau SC considers that if it were a real point, surely, it would have been raised in Pak Fah Yeow and Falcome.

135.  The respondent does not actually argue that there is an implied term against unreasonable and/or capricious renaming, submitting simply that “there would be a question” of such implied terms. The possibility of implied terms as to the nature of a name or to control the ambit of change of name rather accepts that the name may be changed by the Meeting Provisions, but there may be implied limits or restrictions on the nature of the name. The issue of implied terms is raised obliquely and far too late. I decline to determine whether there are any such implied terms.

136.  In my view the declaration sought is based on concrete facts, is not hypothetical and would serve a useful purpose. For the reasons set out above it is proper in the exercise of discretion to grant the declaration sought by the applicant.

ORDER

137.  I grant a declaration, that upon a proper interpretation of the DMC:

(1)  Owners of the Premises (“Owners”) are entitled to change the name of the Building by a majority of the Owners passing a resolution in accordance with clause 9 of, and the Fifth Schedule to, the DMC; and

(2)  The name of the Building may be changed without the unanimous consent of all the Owners.

COSTS

138.  There is no apparent reason to depart from the principle that costs follow the event. I make a costs order nisi that the respondent do pay the applicant’s costs taxed on the District Court scale with certificate for counsel. Either party may apply to vary the costs order nisi within 14 days, failing which the nisi order shall become absolute.

139.  I thank counsel for their assistance.