Growth Bright Ltd. v. The Incorporated Owners of Grandview Building

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 61 of 2000

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J U D G M E N T

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(1) Background:

1. The Applicant Growth Bright Limited is the registered owner of the Ground Floor entrance and all the shops on the first to third floor of the Grandview Building (hereinafter called the Building) situated at Nos 46-69 Fa Yuen Street and Nos 8 and 8A Nelson Street, Mongkok, Kowloon. The Respondent is the Incorporated Owners of Grandview Building. At present, there are altogether 3 lifts installed in the Building. Two lifts-i.e. lift A and another lift are located side by side with one another and are housed in a lift shaft which runs all the way from the ground floor to the 22nd floor of the building. As there are no openings on the lift shaft at the first, second and third floor for these two lifts, the two lifts are now only serving the upper ground floor and those floors from the fourth floor upward. The third lift---lift B on the other hand is housed in a lift shaft else where in the building. As its lift shaft only runs from the ground floor to the third floor, lift B is only serving the commercial premises situated on those floors. By way of the present proceeding, the Applicant was seeking to obtain a declaration which enable it to break open the lift shaft of lift A and install doors at the first floor, second floor and third floor. The Respondent resisted and alleged that the Applicant had no such right under the Deed of Mutual Covenants of the building.

(2) Facts not in dispute:

2. There was no dispute between the parties that in the final version of the building plans for the building, on floors 1 to 3, the lift shaft wall on the side where openings and doors were made for the fourth floor and upwards were made of two layers of building materials. The inner layer was a brick wall of 3 inches thick while the outer layer was a concrete wall of 4 inches thick. Lift A and the lift next to it shared the same lift lobby at the upper ground floor. The residents of the domestic units on 4th floor or above would normally use a staircase to gain access to this lobby from Fa Yuen Street. On the other hand, visitors to the commercial premises would have to go to the ground floor entrance at Nelson Street to gain access to lift B or the staircase serving the ground floor to the third floor. There was a common back stair case serving all the floors in the building. However, there was a door installed for this staircase at street level and the design of the door was such that people could only open the door from inside the staircase and not the other way round. Also at the entrances at the 1st to 3rd floor to this common back staircase, doors fitted with alarm devices were installed so that people going into this staircase from those floors would trigger off the alarm.

3. There is also no dispute that both the water tank for the sprinkler system and the machine room for lift B serving exclusively the commercial floors were located on the 4th floor. Also on this floor was the plump house serving the whole building. The commercial floors also depended on two water tanks on the rooftop of the building respectively for the supply of fresh water and flushing water. There was also a transformer room located at the bottom of the commercial floors staircase for the supply of electricity to the whole building.

4. Also not in dispute was the fact that the Applicant desired to carry out some alteration and addition works at the commercial units and had submitted plans to the Building Department and Fire Services Department for their approval. Approvals were obtained from these departments respectively on 25th July and 16th May in 1996. The works to be carried out according to the plans included the breaking open of the lift shaft of lift A at the first, second and the third floors to install lift doors. In this way, lift A could be used as a fireman's life for all the floors in the building in case of emergency. The Applicant then proceeded to negotiate with the respondent who for fear of possible nuisance disagreed to have such alteration to be carried out on the lift.

5. There were some disagreements between the two experts called by the parties on whether there were one or two layers of walls at the place where proposed opening would be made. However, Mr. TSANG Yiu-sang the expert for the applicant agreed that there should in fact be two walls there after he was shown the relevant building plans. As for the requirement of fireman's lift, it is not in dispute that the requirement in Regulation 41B(3)(a) of the Building (Planning) Regulation under the Buildings Ordinance Cap. 123 only requires each alternate floor of a building to be served with at least one fireman's lift. Mr. TSANG in his evidence said that the Building Department in practice would insist on a standard over and above the basic requirements of the law when approving plans. Mr. CHIH Ming-yuen the respondent's expert on the other hand disagreed that there was such a practice.

(3) The Applicant's Argument:

6. Mr. Chong Counsel for the Applicant had put forward a very straight forward argument. He relied most heavily on Clause 3(a) of the Deed of Mutual Covenant (the DMC) and contented that it conferred on the Applicant the right to use lift A. Then, by virtue of clause 3(e), the Applicant was entitled to make the necessary openings and to install doors in order to make this lift to serve also the commercial floors. Clause 3(a) was worded in these terms:-

"3. Each owner shall hold his part of the said building and the said premises subject to and with the benefit of the following rights privileges and obligations namely:-

(a) Full right and liberty to go pass and repass over along the entrances, staircases, landings and passages in the said Building and the footpaths within the said premises and to use the lifts for all purposes connected with the proper use and enjoyment of his part of the said Building."

7. Mr. Chong said that the word "lifts" in its plural form instead of "lift" in singular was employed in the clause because the drafter of the clause deliberately wanted to vest in every owner of the building a right to use all the lifts therein. The same also applied to staircases. As for clause 4 (b) of the DMC on which the Respondent relied, the clause went like this:-

"4. Each owner shall be bound by and shall observe and perform the following covenants provisions and restrictions:-

(f) b. The Costs of operating servicing repairing and renewing the lifts serving the units on the 4th to top floors (inclusive) of the said building (hereinafter referred to as "the main lifts") shall be borne and paid by the owners of units on the 4th to top floors (inclusive)of the said building in proportion to the respective shares in the said land attributable to such units for the being owned by them. PROVIDED ALWAYS that the owners of the Restaurant, Ground Floor and External Wall shall be exempt from and shall not be liable to contribute towards such costs charges and expenses.

8. Mr. Chong said this clause did not posed any problem at all. It was because upon the completion of the proposed alteration works, lift A would ceased to be the "lift serving the units on the 4th to top floors". The whole clause would ceased to be applicable to lift A and the Applicant would then be liable for making contributions to meet the expenses of lift A.

9. On the approach as to how this tribunal should interpret the DMC, Mr. Chong urged upon me not to examine the circumstances surrounding the execution of the same. The reason being that clause 3(a) of the DMC was unambiguous by itself nor did it create any problem by having the same read together with other clauses of the DMC. According to Mr. Chong, the tribunal could only be allowed to look into the circumstances surrounding and prior to the execution of the DMC for assistance when there was ambiguity created by the clause under interpretation or there were inconsistencies between that clause and other clauses in the same instrument.

10. However, as a fall back argument, Mr. Chong submitted that even the tribunal was to look at the "factual matrix" surrounding the execution of the DMC, the tribunal should still come to the conclusion that the Applicant was entitled to use lift A in the manner as previously described. It was because there were already many common facilities which all the owners of the Building shared amongst themselves. These facilities included a common staircases which ran from the ground floor to the top floor, two water tanks on the top floors, a plump house on the 4th floor and a transformer room on the ground floor. Mr. Chong also relied on the fact that brick walls were used by the designer of the building on the lift shafts to support the inference that the designer had right from the start provided for the eventuality of having openings to be made on the first to the third floor at a later stage. Taking all these facts into account, Mr. Chong submitted that the correct interpretation of clause 3(a) of the DMC must be the one as he had contended on the Applicant's behalf.

11. Finally, Mr. Chong disagreed with the Respondent in its contention that by making lift A to serve also the 3 commercial floors would necessarily cause nuisance to the owners of the domestic floors. It was because visitors to or operators of shops in the commercial floors could already gain access to the domestic floors through the common staircases. Furthermore, the Applicant's rights under clause 3(a) of the DMC should not be affected by the possibility of nuisance caused by some third parties unrelated to the Applicant.

(4) The Respondent's Argument:

12. Mr. Yeung for the Respondent disagreed with Mr. Chong in that the tribunal would be allowed to look at the "factual matrix" surrounding the execution of the DMC only when there were ambiguities in the clause under construction or when such clause was inconsistent with other provisions in the same document. Mr. Yeung submitted that the more modern view was that the tribunal could always rely on the "factual matrix" when it came to interpret a particular clause in a document. This more modern view of the law on construction was clearly illustrated by Lord Hoffmann's judgment in Jumbo Kong Ltd v Faithful Properties Ltd & others (1999) 3 HKLRD 757 at 773

"The construction of a document is not a game with words. It is an attempt to discover what a reasonable person would have understood the parties to mean. And this involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve."

13. Mr. Yeung then focus his submission on the condition of the Building in 1978 when the last edition of the building plans were finalized and when the DMC was executed. Mr. Yeung said there was a clear design intention that the domestic premises and the commercial premises were to be separated from one another. Hence, the two different sets of premises had their own lift or lifts. They had separated lift lobbies located at different levels in the building and had separated accesses from different streets. The designer's intention, submitted by Mr. Yeung, was clearly that the owners and visitors of the domestic premises were to be separated from those of the commercial premises. As a result, this was reflected in the DMC in clause 4(f)b so that the maintenance cost of the lifts serving the domestic floors were to be bore by the domestic floors owners. According to Mr. Yeung, the Applicant, being the owner of the commercial floors, could not have a right under clause 3(a) to convert the domestic lifts for its use while being exempted from making contribution to its running and maintenance under clause 4(f)b at the same time.

14. Mr. Yeung further submitted that if the Applicant was to carry out the proposed lift shaft alteration work in respect of lift A, the Applicant would be causing nuisance to the domestic owner and would be committing a breach of clause 10 (a) and (c) of the DMC.

15. Although the Respondent appeared to have included a counter claim in its Notice of Opposition, Mr. Yeung had indicated to the Tribunal that he was not pursuing this counter claim any more.

(5) The Rights of the Applicant under clause 3(a) of the DMC:

16. In the present application, the Applicant was seeking, inter alia, a declaration on its right to use only the lift A in the Building. It was also the applicant's case that should it be allowed to use lift A and made openings and doors on the lift shaft at the commercial floors, the applicant would only be using lift A as a fireman's lift in cases of emergency. However, should Mr. Chong's contentions on the interpretation of clause 3(a) were to be up held, the applicant's right to use the upper floor lifts would not be so restricted. In other words, the applicant would be entitled to do the same to the lift installed side by side to lift A and was not obliged to use the lifts as fireman's lift only. The question I have to consider and answer is: Does clause 3(a) of the DMC give the Applicant, the owner of the commercial floors this right?

17. In my judgment, the interpretation of clause 3(a) as suggested by Mr. Chong does lead to absurdity. How can the commercial floor owners be able to claim equal rights as those enjoyed by owners of the domestic floors in using the 2 high rising lifts under clause 3(a) while the commercial floor owners are to be exempted from making contribution in the operation and maintenance of the 2 lifts by virtue of clause 4(f)b. Mr. Chong's interpretation of 4(f)b as outlined in the foregoing in that once the lifts were to extend their service to the commercial floors, clause 4(f)b would cease to apply could not resolve the problem. It is because the owners of the street shops on the ground floors, who have also been exempted under clause 4(f)b from paying contributions for the high rising lifts, would be losing the exemptions if Mr. Chong's interpretation is to be upheld. Yet, the extended service effected on the lifts would not be benefiting the street shops owners at all in practical terms. Under such circumstances, should the street shop owners be required to pay their shares of contributions to the high rising lifts?

(6) The Factual Matrix:

18. As a result of such ambiguity, even on Mr. Chong's contention, I am entitled to look at the physical conditions of the Building in 1978. It was common ground that the building plans of the building were approved by the Building Department between 22nd August, 1975 and 9th June, 1978. The dates on which Occupation Permit of the Building was issued and the execution of the DMC were respectively 23rd August, 1978 and 23rd December, 1978. It is quite clear that when the draftsman of DMC was drawing up the instrument, the Building had been built and its building plans were all finalized. It could not be disputed that on the final version of the building plans as well as the physical lay out of the building itself had provided for different accesses for the lift lobbies for the domestic premises and the commercial floors. As such, I find there was a clear intention on the part of the building designer that he wished to separate the users and visitors to the commercial floors from those to the domestic premises. I have considered the fact that there was a common staircase that runs from the top floor to the ground floor. However, this staircase was equipped with an outgoing alone door at the ground floor level. This door served as clear evidence that this staircase was meant to be used as an emergency escape route and not as a day-to-day passage way for the users of the Building. The ingress and egress for users of the domestic floors on a day-to-day basis were obviously the staircase connecting the Fa Yuen Street entrance with the domestic lift lobby on the upper ground floor level of the Building. The Fa Yuen Street entrance was completely separated from the Nelson Street entrance leading to the staircase and lift for the 3 commercial floors. Likewise, in my judgment, the designer's intention of separating the users of the domestic and commercial floors could not be negated by the existence of common utility rooms or by the fact that some facilities which serve the commercial floors exclusively were located on the domestic floors of the Building. These facilities were mainly automatic devices which normally ran by themselves. They only required occasional maintenance. The opportunity of the commercial floors owners having to send along workmen to carry out on site maintenance on these facilities must have been rare.

19. I have also considered the made of the lift shaft walls which the applicant proposed to break open. It was clear on the relevant building plans that there were in fact two walls; namely a concrete wall and a brick wall respectively 4 inches and 3 inches thick. There was also clear evidence given by the Respondent's expert Mr. Chih that the 4 inches thick concrete wall alone would be sufficient to meet the fire resistance factor required for the lift shaft wall of a fireman's lift (i.e lift A) and that the brick wall was constructed as a filling there. This clear went contrary to Mr. Chong's contention that the brick wall was constructed to facilitate easy reopening in future. Mr. Chong's contention could not be right for if the building designer was to make provision for reopening on the lift shaft in future, the better course would of cause be skipping the brick wall altogether. For this reason, I find that the made of the wall on the lift shaft did not advance Mr. Chong's contention at all.

(7) The Proper Construction of Clause 4(f)b and Clause 3(a) of the DMC:

20. Having looked into the physical circumstances of the Building when the DMC was executed, I am of the view that the phrase "the lifts serving the units on the 4th to top floors (inclusive)" in clause 4(f)b was descriptive and not definitive in nature. In other words, this phrase only referred to the two lifts by way of the floors they were serving and not defining the basis on which why the owners of the units on the 4th floor to the top floor should pay their contribution. In my judgment, any reasonable man having looked at the circumstances of the building would agree that the design of the two lifts mentioned in clause 4(f)b were meant to serve the domestic floors only. This was the reason why the draftsman of the DMC used the wordings "PROVIDED ALWAYS" to provide for the exemption to be enjoyed by all owners of the commercial premises in the Building.

21. As for the construction of clause 3(a), not doubt the word "lifts" instead of "lift" was used. Prima facie, the word "lifts" did give the owners of the commercial floors a right to use the domestic lifts as well as the commercial lift. However, the rights to use the lifts were subject to the phrase "for all purposes connected with the proper use and enjoyment of his part of the said Building" As the domestic lifts did not stop at the commercial floors, the chances for the commercial floors owners or their visitors to use the domestic lifts in order to facilitate their proper use and enjoyment of the commercial floors must be rare in deed. Yet, as there were common facilities serving the whole building as well as facilities which served exclusively the commercial floors situated on the top floor and the 4th floor, the commercial floor owners might be required to carry out on site inspections over these facilities or they might send along technicians to effect maintenance work over the same. In the circumstances and to that extent, they also had the right and liberty to use the domestic lifts as authorized under clause 3(a) of the DMC. Having this right to use the domestic lift in the manner as aforesaid was one thing but saying that such right would enable the applicant to break open the lift shaft walls on the commercial floors and have doors installed to make those domestic lifts serving the commercial floors as well was quite another. Having considered the surrounding circumstances of the building in 1978, I am of the view that the latter act would clearly defeat the designer's intention of separating the users of the domestic premises from those of the commercial premises. Such act would also fundamentally alter the use of the domestic lifts as designated in the DMC. For this reason, I rule that clause 3(a) of the DMC did not give Applicant the right he had contended for.

(8) The Applicability of Clause 3(e):

22. Mr. Chong had also put forward a supplemental argument saying that should I find in favour of the Applicant on the kind of right he contented for under clause 3(a), the Applicant could rely on clause 3(e) to carry out the necessary work to break open the lift shaft wall and to install the lift doors on the commercial floors. Several authorities were cited to me in support of this supplemental argument. As I have already ruled that clause 3 did not give Applicant the right he had contended for, I do not think it is necessary for me to deal with this supplemental argument of Mr. Chong. However, should I be asked to rule on this sub-clause as well, I am inclined to hold that breaking open of the lift shaft wall and having doors installed thereat would fall outside the ambit of the phrase "any work necessary for the maintenance and repair of the said Building" employed in that sub-clause.

(9) Order:

23. As a result of the aforesaid analysis, I dismiss the application of the Applicant with cost to the Respondent. As this case dose involve contested construction of an instrument, I order that counsel certificate be granted as well.