DYNAMIC OCEAN LTD v. SAVILLS PROPERTY MANAGEMENT LTD AND ANOTHER

LDBM 37/2006

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. 37 of 2006

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JUDGMENT

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Background 

1. The 1^st Respondent is the manager of the building known as Realty Garden, 41 Conduit Road, Mid-Levels, Hong Kong (“the Building”).  The Building has 5 blocks of flats known as Venice Court, Rome Court, Vienna Court, London Court and Paris Court.  The 5 blocks of flats share a common car park complex situate underneath them.  The first-named 2^nd Respondent is the owners’ corporation of Venice Court, Rome Court and Vienna Court (“IO1”), whereas the second-named 2^nd Respondent is the owners’ corporation of London Court and Paris Court (“IO2”).  The Applicant is the owner of Flat C, 1^st Floor of Venice Court of the Building (“the Flat”).

2. The Applicant’s application is in relation to a metal plate (“the Plate”) installed underneath the Flat on the driveway of the upper level car park for the purpose of covering an expansion joint of the Building.  The Applicant contends that the Plate was defective and caused substantial amount of noise and vibration to be transmitted to the Flat whenever vehicles ran across it.  However, after the present application was filed, the Plate was removed on 22March 2006.  Thus, it was no longer necessary for the Applicant to pursue with any injunctive relief, but to claim for damages and costs.

3. The Applicant confirms at the trial that the claim for damages is not based on the cause of action of nuisance at common law, but breach of duty on the part of the 1^st and 2^nd Respondents in enforcing the Deed of Mutual Covenants in respect of the common parts of the Building.  The Applicant also confirms that there are no special damages claimed but only general damages in the sum of about $30,000.00 to $50,000.00 for the nuisance suffered by Miss Kwan Long Yee Corrina (“Miss Kwan”), who is a director of the Applicant and resides at the Flat.

4. The Respondents deny their liabilities and raise various defences which shall be dealt with by me as below.

Liability of IO2

5. The Respondents contend that the claim against IO2 should be dismissed in any event as the Plate was not situate at the common part of London Court and Paris Court.  There is no dispute that the Building in fact consists of 2 buildings on 2 separate lots, namely, London and Paris Courts are situate at Remaining Portion of Section A of IL No. 2479 and the Extension, whereas Venice, Rome and Vienna Courts are situate at Section B of IL No. 2479 and the Extension.  There are two similar Deeds of Mutual Covenants governing these two buildings (i.e. DMC1 for IO1 and DMC2 for IO2).

6. In this regard, based on the plans and assignments produced, I accept the Respondents’ submission that we are in fact dealing with a “Common Area” of a building on one lot, plus an easement which only goes through a building on another lot, and another “Common Area” of an adjacent building with a corresponding easement.  There has been no merger of titles, so the easements remain: see  Pwllbach Collery Co. v. Woodman [1915] A.C. 634.

7. In both of the DMCs, the driveway in question is neither assigned to the First Purchaser, nor has it been reserved for the exclusive use of the First Owner.  Therefore, by default of designation, the part of driveway situated on each lot forms part of the Common Area under each individual DMC.  It follows that the Plate which covers the expansion joint of the driveway between Rome Court and Venice Court forms part of the Common Area under DMC1 only.

8. The Applicant argues that by the management agreement dated 1 April 2004, IO1 and IO2 jointly appointed the 1^st Respondent to be the manager for the Building and that IO1 and IO2 jointly undertook the statutory duties to maintain the common areas and facilities of the Building as a whole.  However, the management agreement would not confer any title to anyone.  The joint effort to manage the car park as a whole would not make any change in title to the common parts of the two separate lots.

9. Thus, I agree with the Respondents that the Plate forms part of the Common Area under DMC1 only.  In other words, the Plate cannot be regarded as part of the Common Area under 2 separate DMCs.  The Applicant is only a party to DMC1, not DMC2, and hence has no right of action under DMC2.  The Applicant cannot rely on section 18 of the Building Management Ordinance (“the BMO”) in respect of IO2 because it is simply not a party to DMC2.  As held in Lily Tse Lai Yin and others v. The Incorporated Owners of Albert House HCPI 828B/1997, the BMO “never intended by the legislature to give protection to the public generally … although it may well give a right of action for parties to a deed of mutual covenant in respect of any particular building to enforce the obligation provided by the Ordinance as against parties to the same deed or the incorporated owners”

10. Thus, it is my finding that the Applicant cannot rely on DMC2 nor section 18 of the BMO to lay any claim against IO2.  The claim against IO2 must therefore be dismissed.

Claim for damages

11. The Respondents contend that the Applicant is not a person, but a company.  The company did not itself suffer any personal damage or inconvenience.  The Applicant only alleges that Miss Kwan suffered damages for nuisance and Miss Kwan should therefore bring an application herself in the District Court.  The Applicant on the other hand contends that it can bring an action for damages on behalf of Miss Kwan similar to a personal injury case, where for example, a plaintiff can claim damages in relation to expenses incurred by his mother.

12. I do not agree with the Applicant that the law in relation to nuisance or breach of DMC has developed into such a stage that damages suffered by a person can be claimed by another person like personal injury cases.  However, a company can suffer nuisance: Realty Harvest Ltd. & others v. Gold Margin Development Ltd. & another HCA11197 of 1998 and Great Source Enterprise Ltd. v. Lam Ka On Allan & another LDBM 193/2002.  The Applicant also seeks to rely on these 2 cases to claim damages suffered by Miss Kwan.

13. These 2 cases are not the same as the situation here and would not help the Applicant.  In the Realty Harvest’scase, the damages claimed were related to the costs of installing additional false ceiling and the loss of use of part of the plaintiff’s premises.  These losses were incurred by the plaintiff company, not individual employees, even though the noise and vibration were heard and felt by the employees.  In the Great Source’s case, the Applicant did not in fact pursue with the claim for damages.

14. In the present case, the Applicant did not suffer any damages itself.  It was Miss Kwan who suffered the nuisance of not being able to sleep or work.  The Applicant can occupy the Flat through Miss Kwan and if the Applicant has suffered any loss like paying Miss Kwan to rent another flat, then of course the Applicant can claim such loss.  It is, however, a different thing all together for the Applicant to claim general damages on behalf of Miss Kwan.  In my view, the Applicant cannot claim such losses not incurred by itself but by a third party, even though Miss Kwan is a director of the Applicant and the Applicant occupies the Flat through Miss Kwan.

15. In the circumstances, I find that the Applicant’s claim for damages fails.

Costs

16. As to costs, the Applicant has to establish that the original claim for injunctive relief is a valid claim against the 1^st Respondent as well as IO1.  In this regard, I have no doubt that had the Plate not been removed, the Applicant would be entitled to an junction to comply the 1^st Respondent and IO1 to make good the Plate and its installation, and to stop the nuisance caused to the Flat.

17. The Applicant relies on Clauses 7(5), 7(13) and 7(23) of DMC1 (which should in fact be Clauses 7(c)(5), 7(c)(13) and 7(c)(23) respectively) to make the claim.  Clause 7(c)(5) stipulates that the Managers shall have the duty “to repair and keep in good repair and condition the main structure, main roofs and fabric of the said buildings their equipment, apparatus, services and common areas and when necessary to replace any part or parts thereof which require replacement.”  Clause 7(c)(13) stipulates that the Managers shall have the duty “to remove any structure or installation, signboards, sunshade brackets, fittings or things in or on the said buildings which are illegal or contravene the terms herein contained”.  Clause 7(c)(23) stipulates that the Managers shall have the duty “to do all such other things as are reasonably incidental to the management of the said premises and buildings.”

18. It is clear to me that the 1^st Respondent and IO1, as they could both be regarded as the managers of the relevant part of the Building, would be caught by the aforesaid clauses if the Plate was defective and caused excessive noise.  The Respondents do not challenge the applicability of these clauses as such, but contend that the noise was not significant.  I think the evidence adduced by the Applicant, particularly Dr. Lo’s evidence, has clearly established that the Plate was defective and improperly installed.  Much noise was generated when vehicles drove past it.  The other metal plates did not generate such noise.  Thus, the source of the excessive noise came from the Plate.

19. I accept Miss Kwan’s evidence that the noise was excessive and caused nuisance to her.  I do not accept the Respondents’ claim that Miss Kwan was exaggerating her evidence.  She was not the only person who had complained about the noise.  A Mr. Lo of Block 5 also made the same complaint, as well as Miss Villapa Haydee of Flat 1D, Block 4.  The 1^st Respondent’s staff also recorded severe nuisance noise caused by vehicles running on loosened metal plate.  Such evidence clearly shows that Miss Kwan was not over sensitive about the noise.  The Applicant’s expert on acoustic, Dr. Chong, further supports the Applicant’s case that the noise was excessive.  He found that 6 out of 8 events under investigation were higher than the acceptable noise level of 45 dB(A).  At such level, it would affect normal sleep in the night-time.

20. Although Dr. Chong’s finding did not match with the finding of the Respondents’ acoustic expert, Professor Tang, who found that the noise level was much lower than the acceptable level, I find that Dr. Chong’s finding is much more credible than Professor Tang’s.  Professor Tang’s way of measuring the noise level was by reference to a 30-minute equivalent sound pressure level, rather than individual events.  I accept Dr. Chong’s evidence that Professor Tang’s way of measurement is simply not suitable for the noise in question.  I therefore totally reject Professor Tang’s evidence, and accept Dr. Chong’s evidence on the level of the noise caused by the Plate.

21. Thus, Miss Kwan’s complaint about the noise was not a subjective one.  It was shared by other residents in the Building as well as supported by scientific measurements.  I am satisfied that the evidence has clearly established that a reasonable man in the situation of Miss Kwan would find the noise a nuisance too.

22. I am also satisfied that the 1^st Respondent and IO1 have not done what is reasonably required from them in rectifying the noise problem.  It is not disputed that the 1^st Respondent had tried various methods to reduce the noise, but I agree with the Applicant that they were all ineffective measures.  In fact, since the first recorded complaint of the Applicant on 20 July 2005, the Respondents have failed to consult the architect in charge of the building work at the Building.  It was only until after the Applicant had issued the first solicitor’s letter dated 15 December 2005, the architect was then consulted.  The Respondents could have consulted the architect much earlier.  I do not accept that the Applicant should contact the architect instead of the Respondents.  According to Dr. Lo, the defects were obvious to a qualified person in the field.  So the Architect or the contractor should be able to realize the defects and rectify the same much earlier and at much lower cost.  I find that it is the fault of the Respondents in failing to inform the architect or the contractor about the problem earlier.

23. The Architect when consulted at first held the view that the Plate or its installation was in good condition, but it was proven to be wrong.  The architect then tried to ask the contractor to rectify it.  The Respondents have tried to argue that they were not vicariously liable for the failure of the architect or the contractor, but later on accept that a party to a contract cannot delegate liabilities in performance of the contract to a third party: para. 19-180 of Chitty on Contract.  Nevertheless, in their supplemental written submissions, the Respondents then seek to rely on the exemption clause in Clause 7(e) of DMC1 to avoid liability.  I agree with the Applicant that it is too late for the Respondents to rely on such an exemption clause as it was never pleaded nor dealt with at the hearings.  I will not allow such an issue to be relied upon at such a late stage.

24. In the circumstances, I find that the 1^st Respondent and IO1 were in breach of Clauses 7(c)(5), 7(c)(13) and 7(c)(23) of DMC1.  Hence the Applicant would be entitled to the injunctive relief sought had the Plate not been removed.

25. The Respondents further argue that Miss Kwan had taken unreasonable steps in bringing the proceedings against the Respondents.  I totally reject the Respondents’ submissions in this regard.  I find nothing wrong for the Applicant to institute the proceedings after having waited for over half a year and the noise problem was still unresolved.  The response of the Respondents towards the Applicant’s complaints were negative and did not suggest to the Applicant that the problem is going to be resolved.  I find that the Applicant was reasonable in the institution of the present proceedings.

26. Thus, I have no doubt that the Applicant is entitled to costs of the proceedings.  However, as the Applicant fails in its claim for damages, I am of the view that the Applicant should only be entitled to half of its costs.  The Applicant should also pay costs to IO2.  The scale of the costs should be on District Court Scale as the amount of claim and the relief sought should be within the District Court’s jurisdiction.

Conclusion

27. In the premises, I order as follows:-

(1) The Applicant’s claims against IO2 be dismissed;

(2) The Applicant’s claim for damages be dismissed;

(3) Costs order nisi: The 1^st Respondent and IO1 do pay the Applicant half of its costs of the proceedings with certificate for counsel, to be taxed on District Court Scale if not agreed;

(4) Costs order nisi:  The Applicant do pay IO2 its costs of the proceedings with certificate for counsel, to be taxed on District Court Scale if not agreed;

(5) The above costs orders nisi shall become absolute if there is no further application on costs within 14 days from today.