WONG BIK LIN v. THE INCORPORATED OWNERS OF CHEVALIER GARDEN AND ANOTHER

DCCJ 893/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 893 OF 2012

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JUDGMENT

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The Parties and the Issues

1.  The Plaintiff is a registered owner of a residential flat and a car parking space at a residential Estate known as “Chevalier Garden” situated at 2 Hang Shun Street, Shatin, New Territories (“the Estate”).  The 1^st Defendant is the Owners Incorporation of the Estate (“the Owners Incorporation”) and the 2^nd Defendant is the Manager of the Estate (“the Manager”) appointed under the Deed of Mutual Covenant of the Estate dated 15 September 1987 (“the DMC”).

2.  The Plaintiff brings the present action against the Owners Incorporation and the Manager on the following grounds:

(1)  without proper authority and approval of the owners of the Estate, including the Plaintiff,  the Owners Incorporation unlawfully financed the Manager to bring litigation against another owner of the Estate for enforcement of the DMC in a District Court action No DCCJ 3373 of 2008 (“DCCJ 3373/08”);

(2)  the Owners Incorporation and the Manager failed to enforce the DMC and the relevant regulations by not taking necessary action in restraining the owners and/or users of  Car parking Spaces Nos 19 and 20 in Parking Area No 20 of the Estate (“CPS No 19” and “CPS No 20”) from parking goods vehicles or lorries at car parking spaces which are designated for private motor vehicles or cars only;

(3)  without proper authority and approval of the owners of the Estate, including the Plaintiff,   the Owners Incorporation and the Manager allowed some owners of the Estate to remove certain flower bed or planter at the common part of the Estate behind CPS Nos 19 and 20 for erection of a metal fence and gate for access to the adjoining Government land;

(4)  the Owners Incorporation and the Manager failed to enforce the DMC by not taking necessary action in preventing vehicles from parking outside the designated boundaries of CPS Nos 19 and 20; and

(5)  the Owners Incorporation and the Manager failed to enforce the DMC by not taking necessary action in restraining some persons from, without proper authority and approval, building some concrete structures and metal covers for the purposes of loading and unloading and from loading and unloading goods on the same.

3.  For remedies, the Plaintiff asks for :-

(a)  the Owners Incorporation and the Manager to account for the money spent or incurred for financing the payment of the alleged unauthorized litigation;

(b)  the Owners Incorporation and the Manager to take the necessary action in restraining the relevant persons, including owners and users of CPS No2. 19 and 20, from such alleged unauthorized acts; and

(c)  damages to be paid by the Owners Incorporation and the Manager.

4.  At the trial, the Plaintiff’s Counsel, Mr Kwan, formerly abandons the claim against the Owners Incorporation for unlawfully financing the Manager to bring litigation against another owner of the Estate for enforcement of the DMC without proper authority and approval. As such, this will no longer be an issue of this case.

5.  The remaining issues to be decided by this Court therefore are:-

(a)  Whether or not the use of CPS Nos 19 and 20 is authorized ?  If not, whether or not the Manager and the Owners Incorporation should take the necessary action ?

(b)  Whether or not the removal of flower bed or planter and the installation of the metal fence and gate behind CPS Nos 19 and 20 were authorized ?  If not, whether the Owners Incorporation and the Manager should take the necessary action ?

(c)  Whether or not any vehicles parked outside the designated boundary of CPS Nos 19 and 20 ?  If so, whether or not the Owners Incorporation and the Manager should take the necessary action ?

(d)  Whether or not building concrete structures and metal covers on the adjacent Government land and loading and unloading goods on the same are authorized ?  If not, whether or not the Owners Incorporation and the Manager should take necessary action ?

Background

6.  There is a history of litigations between different parties in relation to the Estate before leading up to the present action.

7.  In around 2002 to 2005, the Manager as an agent of the Owners Incorporation granted a renewable 1-year licence to a Mr. Yau Fung Shun (“Yau”) for certain common parts of the Estate.

8.  In March 2006, it had come to the attention of the Owners Incorporation and the Manager that Yau had used or caused certain common parts of the Estate and the nearby area to be used as a loading and unloading area. The Manager therefore terminated the licence.  However, Yau continued to use the same common parts and the area nearby as his loading, unloading and parking area.

9.  The Owners Incorporation then took legal action against Yau and obtained an interlocutory injunction in a High Court action, No HCA 1947 of 2006 (“HCA 1947/06”), to restrain him  from:-

(1)  using or causing the common parts of the Estate or any part thereof to be used as a parking area of any vehicle;

(2)  using or causing the common parts of the Estate or any apart thereof to be used by vehicles as loading area by any vehicle; and

(3)  causing or permitting to cause any nuisance or annoyance to the owners and/or occupants of the Estate by obstructing the common parts of the Estate or any part thereof until the trial of the action.

10.  Yau defended the action. He arguedthat the right of access from the main road outside the Estate to the point of entry to the gardening business situated at Tai Shui Hang Village was necessary for him and his agents to enter into the Estate to load and unload the plants.He claimed that this had been taking place for more than 10 years.

11.  On 22 December 2006, Yau successfully varied the interlocutory injunction in HCA 1947/06 against him and was allowed by the Court to load andunload goods at an area which is a common part of the Estate from 9am to 5pm on every Tuesday, Thursday and Friday.

12.  Meeting of the Owners Incorporation was convened on 16 January 2010 to discuss and decide whether or not to continue with HCA 1947/06.  At the meeting, upon advice of the Owners Incorporation’s lawyer,the owners resolved that the Owners Incorporation should not continue with HCA 1947/06 andshould settle the case with Yau.

13.  A settlement was then reached between the parties and the relevant terms, inter alia, are (“the Settlement Terms”):-

(1)  subject to the provisions of the DMC and the management rules of the Estate as may be from time to time in force and applicable to the users and occupiers of the car parks of the Estate, Yau including his agent, servants, customers, and suppliers may use CPS No 20 of the Estate for parking of vehicle(s), loading and unloading for plants, goods and chattels for the purpose of transporting the same for his gardening business (the “Activities”) provided that if, for any reason otherwise than those beyond the control of Yau including his agent, servants, customers and suppliers, CPS  No 20 becomes inaccessible, the Manager shall, upon Yau’s request to the management office, arrange for an alternative position for the Activities temporarily in a position close to the footpath of Car Park Zone 18 to 20 to be mutually agreed by Yau and the Manager;

(2)  Yau shall not use certain common partsof the Estate as designated by the Manager which was colored pink in a plan for (i) parking vehicle(s) and/or (ii) loading and/or unloading plants, goods and chattels;

(3)  Yau shall at his own costs install agate behind CPS No 20 and Yau including his agent, servants, customers and suppliers may have access between the Estate and his business premises though the gate for the purpose of transportation of plant, goods and chattels for the gardening business.  Yau shall be responsible for the safety and maintenance of the gate and shall arrange for the insurance for the carrying out of the installation work and provide the Manager with a copy of the relevant policy before the commencement of the work;

(4)  For the purpose of allowing Yau, his agent, servants customers and suppliers to have necessary access to the CPS No 20 or alternative position as aforesaid to carry out the Activities, the Manager shall allow Yau’s vehicles and that of his agents, servants, customers and suppliers to use the road of the Estate from the main gate of the Estate to CPS No 20 or alternative position as aforesaid;

14.  The Settlement Terms are contained in a Schedule of a Tomlin Order dated 16 April 2010 (parties refer it as the Consent Order in their submissions) (“the Tomlin Order”) which was endorsed by the Owners Incorporation and Yau through their respective solicitors.

15.  In fact, in around 2007 to 2008 when HCA 1947/06 was still ongoing, the Manager received another complaint from owners of the Estate.Upon the complaint, the Manager then discovered that a Mr. Chu Yip Sing (“Chu”) allowed his brother to park a truck atCar Park Space No 6 in Parking Area 10 of the Estate(“CPS No 6”). Chu’s acts obstructed the use of the Car Park Space No 7 (“CPS No 7”) and caused annoyance and nuisance to other owners.The Owners Incorporation thereforedecided to authorize the Manager to commence legal action against Chu. Consequently, DCCJ 3373/08 was commenced in 2008. Chu contested the case and, at the end, judgment was granted in favour of the Manager on 15 March 2011. Chu was ordered to remove the truck from CPS No 6 and to be restrained from parking any vehicle other than private motor vehicle or car at CPS No 6.

16.  Chu, in fact, is the Plaintiff’s son. The Plaintiff is of the view that the Owners Incorporation and the Manager were unfair in dealing with the matter because there were other owners of the Estate who were in breach of the DMC but no action was ever taken. The Plaintiff therefore commenced the present proceedings on 16 March 2012 to compel the Owners Incorporation and the Manager to act.

The Car Parking Spaces Nos 19 and 20

17.  First of all, I shall deal with the issue in relation to the use of the CPS Nos 19 and 20.

18.  On the evidence before me, in particular, the photographs shown before me at the trial in the documents bundle, there is no doubt vehicles with registration nos. “LG 679” and “NL 2801” respectively are not private motor vehicles or cars but goods vehicles or lorries and they have been parked at CPS Nos 19 and 20 respectively at all material times. In fact, insofar as CPS No 20 is concerned, the Owners Incorporation and the Manager fairly admitted it.

19.  I now turn to the question of permissible use of CPS Nos 19 and 20. The law in relation to the control of use of the car parking spaces of the Estate is not in great dispute. Parties agree that I could make reference to the judgment of HH Judge Leung in DCCJ 3373/08, namely Latangan Company Ltd v Chu Yip Sing, unreported, DCCJ 3373 of 2008, 15 March 2011. The case was in fact the case about the Plaintiff’s son, Chu and his car parking space, CPS No 6.

20.  As mentioned above as background, the Manager was the plaintiff and it successfully applied for an injunction against the car parking space belonging to Chu for removing a truck from the car parking space and for restraining him to park any vehicle other than “private motor vehicles”.

21.  Each case, of course, turns on its own facts but since some of the relevant facts of that case are the same as the present one, particularly the legal documents involved, such as the DMC, the terms of the Government Lease (which the Learned Judge described them as the “the Conditions”) and the approved car park layout plan of the Estate, I will therefore make reference to the legal analysis of the learned Judge of these documents, in particular the following paragraphs of his judgment :-

“10.  Clause 31(a) of the Special Conditions of the New Grant (“the Conditions”) specifies the various types of parking spaces to be provided in the Estate.  Among them, car parking spaces designated for the residential flats shall not be used for any purpose other than for the parking of private motor vehicles belonging to the residents.  The clause also specifies the provision of private motor vehicle parking spaces for visitors and parking spaces for goods vehicles in the Estate.  The area and minimum headroom of the parking spaces for goods vehicles are also specified.

11.  Clause 31(b) of the Conditions stipulates that the various types of car parking spaces shall be designated in accordance with the approved car park layout plan.  The spaces indicated in such plan shall not be used for any purpose other than for the purposes set out in clause 31(a) above.  In the approved car park layout plan in the present case, the relatively larger spaces for parking goods vehicles are identified by the letter “L”, signifying that they are for parking lorries.

12.  In my view, the fair reading of the New Grant is that the parking spaces for private motor vehicles are distinguished from those for the goods vehicles.  In the absence of prior written consent of the Director of Lands, the approved layout of the various types of car parking spaces and their use must be maintained.

13.  CPS No.6 is designated as a private motor vehicle parking space and not for parking goods vehicle in the approved car park layout plan.  I reject the contention of Chu that private motor vehicles in this context mean any vehicles so that his car parking space, or effectively any private motor vehicle parking spaces, could be used for parking trucks.

14.  Compliance with the Conditions may be a matter between the Government and the owner.  This also becomes a matter between each owner and the other owners by virtue of the DMC.”

22.  The learned Judge was of the view that the following provisions in the DMC are relevant, and I agree that the same also applies to the present case:-

“Unit” shall mean a portion or portions of the Estate intended for the exclusive use and occupation and enjoyment by an Owner and “his Unit” in relation to an Owner means the Unit or Units in respect of which that Owner has the exclusive right and privilege to hold use occupy and enjoy.

“Conditions” shall mean …… Conditions of Sale deposited and registered in the District Land Office, Shatin as New Grant No. 11915 (as varied and modified by a Modification Letter dated the 16^th day of July 1987 ……

Clause 5

Every Owner and the occupiers for the time being of any Unit shall at all times be bound by and shall observe and perform the covenants provisions and restrictions contained herein and the Fourth Schedule hereto.

4^th Schedule

Covenants, provisions and restrictions referred to in Clause 5 of this Deed:-

Clause  6(a)                

Not to do or permit or suffer to be done any act or thing in contravention of the Conditions or the Occupation Permit.

Clause 22(a)(ii)

The Estate or any part thereof shall only be used for the purpose for which they are designed, constructed and intended to be used in accordance with the Conditions and the Occupation Permit issued therefore and ……”

23.  After referring to the relevant provisions, the learned Judge went on to find that at paragraph 26 of his judgment :-

“The parking of the 1^st Truck and then the 2^nd Truck at CPS No.6, which is not designated for parking goods vehicles, contravenes the Conditions. This amounted to prima facie breach of clause 6(a) of the 4^th Schedule (and clause 22(a)(ii)) of the DMC.”

24.  I entirely agree with the Learned Judge’s analysis. I find that the 2 parking spaces in question in the present case, namely CPS Nos. 19 and 20 are similarly designated for private motor vehicles or cars only and not for truck, lorry or any goods vehicles. And in my judgment, the use of the 2 parking spaces in question, similarly, contravenes the Government Lease and is in breach of clauses 6(a) and 22(a)(ii) of the 4^th Schedule of the DMC.

25.  I also agree with the learned Judge that the Owners Incorporation and the Manager have an obligation to deal with these breaches (paragraph 43 of  Latangan Company Ltd v Chu Yip Sing, unreported, DCCJ 3373 of 2008, 15 March 2011):-

“In any event, the existence of other similar breach does not mean that the Incorporated Owners or the Manager was selective in the enforcement or they are targeting a particular owner. In the worst case, the owners are entitled to compel the Incorporated Owners and the Manager to act accordingly.”

26.  The next question is whether I should exercise my discretion to grant the injunction. 

27.  Mr Kwan, for the Plaintiff, relies on See Wah Fan and Incorporated Owners of Ki Tat Garden (Phase I), [2003] 3 HKLRD 1. He submits that owners incorporations generally have a statutory duty to enforce the obligations contained in a deed of mutual covenants. And if these owners incorporations fail to carry out their duties, the owners are entitled to apply for an injunction to compel the same to do so. I agree with Mr Kwan on this point.

28.  Mr Kwan further relies on the authority of The Incorporated Owners of Hoi Luen Industrial Centre & Anor v Ohashi Chemical Industries (Hong Kong) Ltd, [1995] 2 HKC 11 to argue that enforcement of deed of mutual covenants is a duty, and not a right of, owners incorporations generally. He therefore submits that the issue of discretion of granting injunction simply “does not come into place”. I disagree and, in my view, this is not what the authority is about. The issue of the authority turned on the tolerance of breaches of other owners by the owners incorporation in that case and the Court of Appeal decided that “tolerance of breaches” would not become “acquiescence”. It was held that the owners incorporation simply was not bound by its previous tolerance of similar breaches.  For the present case, in my judgment, in granting injunction, the Court is always given the authority and power to consider the entire circumstances to see whether it is just and equitable to do so.  As a matter of basic principle, this is an equitable remedy after all. I agree with Miss Lee, Counsel for the Owners Incorporation and the Manager, that, despite my findings above, the Court still has discretion not to grant the injunction. This discretion, no doubt, must be exercised judicially.

29.  Miss Lee submits that granting the injunction would be unjust and inequitable.

30.  Firstly, she argues that there is 3^rd parties’ interest affected by the injunction, namely Yau, his son, Mr Yau Shing Cheong, and perhaps the registered owners of CPS Nos 19 and 20 as well.  In my view, Yau, his son and the registered owners of CPS Nos 19 and 20 will definitely be affected by the injunction but, on the evidence before me, if there is an obvious breach of the Government Lease, as well as, the DMC, I do not see how granting the injunction would unjustly and inequitably affect these 3^rd parties.  They should have not conducted themselves in such a way inconsistent with the Government Lease and the DMC in the first place. 

31.  Secondly, she submits that there was a delay of 4 years for the Plaintiff to take out the present action after the settlement was reached between the Owners Incorporation and Yau in HCA 1947/06.  Miss Lee accepts that delay per se does not prevent the Court to grant the injunction but the delay must render unjust for granting the injunction. In my view, I do not consider that there is a material delay which causes unjust to anyone concerned.  The compliant of unauthorized use of the CPS Nos 19 and 20 involves a breach of Government Lease and there is no evidence to suggest that the Government is legally not entitled to enforce the breach because of delay. Furthermore, I cannot see how Yau’s, his son’s and the registered owners’ interest could be unjustly and inequitably affected by the injunctive relief as they are only asked to comply with the Government Lease in such a way similar to all other owners of the Estate. Complying Government Lease is a fundamental obligation of all the Government Lease holders, including all the owners of Estate.  In my judgment, there is simply no evidence before me showing that anyone affected by the injunction would be unfairly prejudiced because of delay.

32.  Thirdly, the Owners Incorporation and the Manager further argue that if an injunction is granted, it may affect the compromise or the settlement between the Owners Incorporation and Yau in HCM 1947/06.

33.  Miss Lee, for the Owners Incorporation and the Manager,  submits that the settlement as manifested in the Tomlin Order expressly, or impliedly, allows goods vehicles to be parked at CPS No 20.  She argues that if the injunction is granted, the Owners Incorporation may have to reopen the litigation HCA 1947/06 with Yau in the High Court.  On plain reading of the Settlement Terms, I am unable to see how this submission could hold water. First and foremost, the opening statement of the Settlement Terms is;-

“Subject to the provisions of the DMC and the management rules of Chevalier Garden as may be from time to time in force and applicable to users and occupiers of the car parks of Chevalier Garden, ……”.

In my view, the overriding principle in reading the Settlement Terms is that the DMC must prevail and the construction of the Settlement Terms must be consistent with the DMC. To be consistent with DMC, this must include complying with the Government Lease of the Estate as well. Given my findings above, CPS No 20 is designated for private motor vehicle or car only and not for goods vehicle or lorry. I am unable to see how the argument to construe the Settlement Terms otherwise, namely allowing CPS No 20 for parking goods vehicle or lorry, could make any sense at all.

34.  I must, however, clarify that giving “access” and allowing “loading and unloading” within the Estate is one thing, allowing “parking of goods vehicles or lorries” at car parking spaces in breach of the Government Lease as well as the DMC is another. Furthermore, I do not see how the enforcement of the DMC by controlling the use of CPS Nos. 19 and 20 in accordance with the permissible use under the DMC and Government Lease would affect the operation of the Settlement Terms at all. If, however, the parties concerned are of the view that the present arrangement would cause inconvenience to their respective operations, parties concerned are at liberty to enter into a better agreement for loading and unloading but the overriding principle remains the same, namely it must be consistent with the DMC and the Government Lease. The Owners Incorporation and the Manager knew it well and that was the reason why they put that as the opening statement in the Settlement Terms.

35.  There are also some miscellaneous arguments which I intend to deal with them altogether. The Owners Incorporation and the Manager submit that the Plaintiff had suffered no loss. There is also suggestion that the Plaintiff is merely seeking to vindicate her rights but did not suffer any real or substantial hardship or inconvenience. It is also suggested that the Plaintiff could have other alternatives, such as by convening a general meeting of the Owners Incorporation to resolve the matter. The Owners Incorporation and the Manager also submit that after many complaints were made to various Government departments, there were in fact no follow-up actions at all. All in all, they submit that this Court should not exercise the discretion in her favour. In my judgment, as the compliant is about breach of Government Lease by owners of the Estate, it is obvious that there would be serious consequences on the owners of the Estate, even if there might not be any immediate loss or inconvenience suffered.  The fact that the Government departments take no immediate action is not material. On the evidence before me, I am unable to see the present action is a vindication by the Plaintiff. It seems to me that the Plaintiff is simply asking for a fair and reasonable policy in enforcement of the DMC. And the suggestion to convene a general meeting of owners may not be practical at all as there is no evidence before me to suggest that other owners might have any interest in doing so. I am not convinced by any of the above arguments of the Owners Incorporation and the Manager at all. 

36.  I also do not see that the Owners Incorporation and the Manager would have any difficulty in taking action to enforce the DMC. The Manager, in fact, was authorized to take similar action before to prevent unauthorized use of car parking spaces of the Estate in DCCJ 3373/08.

37.  By reason of the above, I am not persuaded that granting the injunction against the Owners Incorporation and the Manager is unjust and inequitable. I find for the Plaintiff and will grant an appropriate remedy for the Plaintiff similar to the remedy obtained in  See Wah Fan and Incorporated Owners of Ki Tat Garden (Phase I), [2003] 3 HKLRD 1.  I therefore order that, unless the Owners Incorporation and the Manager are stratified that the use of CPS Nos 19 and 20 are no longer in breach of the DMC and the Government Lease, in particular the approved car park layout plan, they do take such actions, including legal actions, against the registered owners and/ or occupiers of CPS Nos 19 and 20 or any other relevant parties, as are necessary for:-

(a)  removing any goods vehicles or lorries from CPS Nos 19 and 20; and

(b)  restraining, prohibiting and/or preventing them from parking any vehicles, other than private motor vehicles or cars, which will constitute breach of the DMC or the Government Lease.

The Installation of Metal Gate and Fence

38.  The Plaintiff submits that the flower bed or planter behind CPS Nos 19 and 20 is a common part of the Estate. It is therefore unlawfully that it was removed and replaced by a metal gate and fence.  The Plaintiff argues that the installation of the metal gate and fence is a conversion of the common part of the Estate for personal use in breach sections 16 and 34I of the Building Management Ordinance, Cap. 344 (“BMO”), namely :-

Section 16

“When the owners of a building have been incorporated under section 8, the rights, powers, privileges and duties of the owners in relation to the common parts of the building shall be exercised and performed by, and the liabilities of the owners in relation to the common parts of the building shall, subject to the provisions of this Ordinance, be enforceable against, the corporation to the exclusion of the owners, and accordingly-

(a) any notice, order or other document which relates to any of the common parts of the building may be served upon the corporation at its registered office; and

(b) any proceedings in the tribunal in respect of any of the common parts of the building may be brought and pursued by or against the corporation.”

Section 34I

“(1) No person may-

(a) convert any part of the common parts of a building to his own use unless such conversion is approved by a resolution of the owners' committee (if any);

(b) use or permit to be used the common parts of a building in such a manner as-

(i) unreasonably to interfere with the use and enjoyment of those parts by any owner or occupier of the building; or

(ii) to cause a nuisance or hazard to any person lawfully in the building.

(2)  Any person who contravenes subsection (1) shall be deemed to be in breach of an obligation imposed on him by the deed of mutual covenant in respect of the building.”

39.  On the evidence before me, I find that the removal of the flower bed or planter behind CPS Nos 19 and 20 and the installation of the metal gate and fence for access to Yau’s gardening business is a conversion of the common part for Yau’s use. However, the proper question to ask is: Was the conversion authorized ?

40.  Relying on Clause (3) of the Settlement Terms, the Owners Incorporation and the Manager argue that Yau was expressly permitted by the Owners Incorporation to erect the metal gate and through which to have access to his gardening business situated at Tai Shui Hang Village adjacent to the Estate. This arrangement was approved by the general meeting of the owners of the Estate on 30 January 2010.

41.  The Plaintiff accepts that a general meeting of owners was held on 30 January 2010.  But at the meeting, owners of the Estate only approved and resolved that the Owners Incorporation and the Manager could proceed to settle the High Court action, HCA 1947/06, with Yau without approving the actual Settlement Terms in details.  The Plaintiff criticizes that the Owners Incorporation and the Manager should not have entered into such settlement with Yau as it had no authority to do so. The Plaintiff, therefore, argues that the Settlement Terms are not valid and the Tomlin Order (or the Consent Order as referred in the Plaintiff’s case) is therefore void.

In my judgment, in plain reading of section 34I of BMO, the Owners Incorporation and the Manager may convert common parts of the Estate for use of some other persons, if “such conversion is approved by a resolution of the owners' committee”.In the present case, there is a management committee of the Owners Incorporation, (“the MC”) and pursuant to section 34K of the BMO the function of the owners committee is performed by the MC, namely:-

Section 34K

“Where a management committee in respect of a building is or has been appointed under section 3, 3A, 4 or 40C, the members of the management committee for the time being shall be deemed, for the purposes of the deed of mutual covenant in respect of that building, to be the owners' committee and shall-

(a) to the exclusion of any other persons have all the functions, powers and duties of the owners' committee under the deed of mutual covenant; and

(b) in relation to those functions, powers and duties be subject to Schedule 2, even if that Schedule is inconsistent with the deed of mutual covenant.”.

42.  Pursuant to these provisions, it is therefore irrelevant whether the general meeting of the owners approved the Settlement Terms or not. The proper question is whether the MC has resolved to approve the conversion ?

43.  On the evidence before me, I am shown the minutes of 2 MC meetings on 26 February 2010 and 16 April 2010 respectively.   These meetings were held after the general meetings of owners on 30 January 2010 approved the resolution to settle the High Court Action, HCA 1947/06.

44.  According to the minutes of the 26 February 2010 MC meeting,  in particular paragraph 3.1.1 (in Chinese),

“管理處鄧先生滙報，簡松年律師行就HCA 1947/2006訴訟個案，已按照管委會要求草擬協議書予管委會審閱，並經由我方律師交予對方律師審閱後回覆再作進一步行動。”(emphasis added),

I have no doubt that the MC must have discussed the Settlement Terms in details, instructed lawyers to draft them and finally approved them. This is also consistent with the minutes of the 16 April 2010 MC meeting (which was the date of the Tomlin Order), in particular paragraph 3.6 (b) (in Chinese), that

“有關法律訴訟案件HCA 1947/2006，法團已將雙方和解同意書透過簡松年律師行遞交予法庭，此外由簡松年律師行處理事項法律訴訟案件之費用約港幣150,000元，而根據和解同意書內容，法團需支付港幣120,000元予訟方（天滙園藝）”.

45.  The evidence clearly shows that the MC had approved the Settlement Terms in details including authorizing the conversion in question. But was there a formal resolution passed ? Pursuant to section 34D of BMO, a resolution must be “passed by a majority of the votes of the members of the owners' committee present at a meeting” but no record of such voting is found in the minutes of the MC meetings.

46.  I therefore find that the formality of passing a resolution for approving the conversion in question is missing. Should therefore this Court grant the injunctive relief ? In my view, this Court must look beyond the irregularity of formality but to see whether or not, in substance, an approval for the conversion was granted by the MC. In exercise of my discretion, this Court must look at the entire circumstances of the case.

47.  As mentioned above, the MC was given authority by the general meeting of the Owners Incorporation on 30 January 2010 to settle the litigation with Yau. Yau had always been arguing in the High Court action, HCA 1947/06, that he had the right of access from the main road outside the Estate to the point of entry to the gardening business situated at Tai Shui Hang Village. He argued that it was necessary for him and his agents to enter into the Estate to load and unload the plants.He claimed that this had been taking place for more than 10 years. After considering Yau’s position, the MC who was given the authority to settle, obviously, considered in favour of giving a reasonable alternative access to Yau through the Estate. Clause (3) of the Settlement Terms was therefore a reasonable comprise between the Owners Incorporation and Yau.

48.  By reason of the above, I accept Miss Lee’s submissions that although a formal resolution was not passed by the MC to approve the conversion in question, I am of the view that the MC could have passed one retrospectively to complete the formality. In fact, the MC is bound by the Settlement Terms to do so. I therefore do not see that it is just and equitable to compel the Owners Incorporation and the Manager to restore the flower bed or planter at the common part of the Estate behind CPS Nos 19 and 20.  I therefore exercise my discretion to refuse the application for an injunction in relation to the alleged unauthorized conversion of the flower bed or planter.

49.  The Plaintiff further argues that the Tomlin Order (or the Consent Order as referred in the Plaintiff’s case) and the Settlement Terms are void. Given my analysis above, I do not see any merits of this argument at all.

Parking outside the designated boundary

50.  The Plaintiff relies on her own observation and the photographs in the document bundle to show that there were vehicles parking outside the designated boundaries of CPS Nos 19 and 20 with the vehicles projecting upon the adjoining Government land.

51.  I have carefully studied the photographs but I am unable to find any evidence showing that the vehicles were parked outside the designated boundaries of CPS Nos 19 and 20.

52.  The Settlement Terms, in fact, allow loading and unloading being carried out at CPS No 20 and if, for the reason of loading and unloading, there is any vehicle which stopped outside the boundary of CPS 20, in my view, it is not totally unreasonable at all. The operation of loading and unloading naturally and inevitably involves temporary occupation of areas around CPS No 20. It is against common sense to restrict the loading and unloading activities within the boundary of the car parking space. Furthermore, loading and unloading are expressly permitted under the Settlement Terms.  On balance of probabilities, I do not find sufficient evidence to show that any vehicles were parked outside the boundaries of CPS Nos 19 and/or 20.

53.  On the whole, I find that the Plaintiff’s claim fails on this ground too.

The Alleged Unauthorized Activities and Occupation of Government Land

54.  The Plaintiff argues that the Owners Incorporation and the Manager unlawfully facilitate and encourage Yau and his agent to build certain concrete structures and metal covers on the Government land adjacent to the Estate and to carry out loading and unloading of goods on the same.

55.  Mr Kwan, for the Plaintiff, relies on the General Conditions 1(b) of the Government Lease to say that Yau or his agent was in breach of the Government Lease and the Owners Incorporation and the Manager has a duty to enforce the same under the DMC.

56.  On the plain reading of the General Conditions 1(b) of the Government Lease, I find it difficult to follow the Plaintiff’s argument. The said condition reads as follows: -

“In the event that the Purchaser is found to have encroached upon and to be occupying Crown land the Director may at his absolute discretion either require the Purchaser to demolish any building or part of any building standing on such Crown land, to reinstate such Crown land to his satisfaction and deliver vacant possession of the same to the Government or pay to the Government such sum as the Director in his absolute discretion shall determine as the premium in respect of such Crown land. A certificate under the hand of the Director shall be conclusive as to the extent of any such encroachment and as to the amount of the premium payable in respect thereof. If the Purchaser fails to demolish any building as required by the Director as above, it shall be lawful for the Director to demolish such building and the Purchaser shall pay on demand to the Government the amount certified by the Director as the cost of such demolition. In the event that the Director exercises his discretion to require the payment of premium as aforesaid upon the payment of such premium the area of Crown land encroached upon shall be deemed in all respects to be part of the lot and shall be included in the Crown Lease when issued.”.

57.  General Conditions 1(b) of the Government Lease sets out a mechanism between the Government and the Government Lease holders of how to deal with any encroachment of the Government land. This is not a restrictive covenant but an agreement between them for the Government’s rights and remedies in the event of encroachment. Unlike the enforcement of the restrictive covenants of the Government Lease, the Owners Incorporation and the Manager have no place in enforcement of such conditions like this one.

58.  For the same reason, even if there is any unauthorized activities or occupation of the Government land, if no action is being taken by the Government, namely the Government is not claiming any remedies, I find it difficult to see how, the Owners Incorporation and the Manager could take any action under the DMC at all.

59.  Furthermore, the Settlement Terms did not expressly authorize, Yau and his agent to build certain concrete structures and metal covers on the Government land for the purpose of loading and unloading. I am therefore unable to see how this could encourage or facilitate the same.

60.  Given my analysis above, it is, in fact, unnecessary for me to find whether or not Yau or his agent built the concrete structures and metal covers on the Government land and whether or not any unauthorized loading and unloading of goods are being carried on the same. But I would like to make an observation on the evidence before me that it is unclear who actually built the concrete structures and metal covers and I have great doubt as to what the Owners Incorporation and the Manager could do.  In any event, they have no jurisdiction under the DMC to take any action and I do not think that granting any injunction is just and equitable at all. I therefore also find that the Plaintiff’s claim fails on this ground as well.

Conclusion and Orders

61.  There are, in fact, some pleadings points raised by the parties in their final submissions. I do not intend to deal with them one by one specifically. I agree the pleadings were not drafted satisfactorily and could be much improved but parties, in fact, know exactly what issues they have to deal with and are given sufficient opportunities to deal with them. In my view, there are no unfair arguments raised during the trial.

62.  Furthermore, regarding the only successful issue raised by the Plaintiff in relation to the unauthorized use of CPS Nos. 19 and 20, no evidence has been adduced for the claim of damages, I therefore do not intend to deal with it.

63.  I therefore order that :-

(1)  the Plaintiff’s claim against the Owners Incorporation and the Manager to account for the total money spent or incurred by them for financing the payment of legal costs in the District Court action No DCCJ 3373 of 2008 be withdrawn;

(2)  the Owners Incorporation and the Manager do take such actions, including legal actions, against the registered owners and/ or occupiers of CPS Nos 19 and 20 or any other relevant parties, as are necessary for:-

(a)  removing any goods vehicles or lorries from CPS Nos 19 and 20; and

(b)  restraining, prohibiting and/or preventing them from parking any vehicle, other than private motor vehicle or car, which will constitute breach of the DMC or the Government Lease.

(3)  The Plaintiff’s claim for an injunction against the Owners Incorporation and the Managerfor taking such legal action to enforce the DMC to remove the metal fence and gate for access to the adjoining Government land and to restore the flower bed or planter at the common part of the Estate behind CPS Nos 19 and 20 be dismissed;

(4)  The Plaintiff’s claim for an injunction to restrain the Owners Incorporation and the Manager from allowing the unauthorized loading or unloading of goods at the Government land be dismissed;

(5)  Plaintiff’s claim against the Owners Incorporation and the Manager for taking such legal action to enforce the DMC in restraining persons from occupying the adjacent Government land and to remove the concrete structures and metal covers be dismissed.

Costs

64.  For costs, the majority of the Plaintiff’s claims in fact fail except one which I have acceptedthat the Owners Incorporation and the Manager ought to have enforced the DMC by restraining the unauthorized use of CPS Nos 19 and 20.

65.  Therefore, I do not see that, despite there is a partial success of the Plaintiff, the Owners Incorporation and the Manager should bear all the costs of the Plaintiff’s action, particularly the claim to account for the legal costs in DCCJ 3373/08 is a distinct, separate and isolated issue in itself and the Plaintiff only abandoned the same at the trial.

66.  For the successful issue of the Plaintiff’s claims, namely the unauthorized use of car parking spaces and the unsuccessful issues, including the alleged unauthorized loading and unloading, the alleged unauthorized removal of flower bed or planter and the alleged unauthorized occupation of Government land, there are, in fact, a mixture of common, distinct, separate and isolated issues.

67.  By reason of the above, I consider that the Plaintiff should bear 10% costs of the action of the Owners Incorporation and the Manager for the abandoned issue. On the other hand, the Owners Incorporation and the Manager should bear only 40% of the costs of the action of the Plaintiff reflecting the failure of some distinct, separate and isolated claims which the Plaintiff should not have brought against the Owners Incorporation and the Manager in the first place. Allowing a set-off, I therefore grant an order nisi that the Owners Incorporation and the Manager do pay 30% (namely 40% - 10% = 30%) costs of the entire action to the Plaintiff with certificate for Counsel and this order nisi shall become absolute, unless an application to vary the same is made within 14 days.