WING HONG INVESTMENT CO LTD v. FUNG SOK HAN AND OTHERS

HCA 2075/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2075 OF 2009

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J U D G M E N T

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1.  This is a dispute between the plaintiff being the owner of seven of eight units on the ground floor of Imperial Court and the incorporated owners on, among other issues, what are the common areas on the ground floor of the building. 

The background and the parties

2.  The plaintiff was the owner and developer of sections B, C and the Remaining Portion of Kowloon Inland Lot 2076 (“the three Sections”). It developed a building on each of the three Sections.  There are 14-storeys including the ground floor for each of the three buildings.    

3.  The building standing on section B is called Blocks A and B.  There are 26 units in this building with 2 units on each of the 1st to 13th floors.  The ground floor is also divided into units A and B.  Section B and this building are divided into 28 shares with each share carrying the right to the sole and exclusive occupation of one of the 28 units (including the two ground floor units A and B).

4.  The building standing on section C is called Blocks C and D.  There are also 28 units in this building including the ground floor units C and D.  Section C and this building are likewise divided into 28 shares and the right to the sole and exclusive occupation of the units including the ground floor units is distributed in the same manner as for section B and Blocks A and B. 

5.  The building standing on the Remaining Portion (“the RP”) is called Blocks E, F, G and H.  It has 52 units on the 1st to 13 floors and four units on the ground floor.  The RP and this building are divided into 56 shares.  The distribution of the sole and exclusive right of occupation of the units including the ground floor units is in the same manner as for the other 2 buildings. 

6.  The three buildings are linked together by common internal corridors on each floor and served by the same lifts.  They appear and function as one building called “Imperial Court”.  The plaintiff still owns seven of the eight ground floor units and four units on the floors above.

7.  However, from the way the occupation permits were issued, it seems that Imperial Court was built in two phases.  Phase one covered sections B and C with the occupation permit issued on 15 October 1959 and phase two covered the RP with occupation permit issued on 25 June 1960.

8.  The 2nd defendant is the incorporated owners of Blocks A and B standing on section B with the 1^st defendant as its chairwoman. The 3rd defendant is the incorporated owners of Blocks C and D standing on section C.  The 4th defendant is the incorporated owners of Blocks E, F, G and H standing on the RP.

The disputed areas

9.  The main dispute is on whether two open yards, a meter room and a transformer room, which are all on the ground floor, are common areas or whether the plaintiff is entitled to the exclusive right to occupy and use them.  The transformer room in question, the two open yards and the meter room on the ground floor are marked “A”, “B”, “C” and “meter room” respectively in the plan annexed hereto (“the Plan”). 

10.  There is also a filled up space which was an accommodation area at the north-west corner of the RP.  That accommodation area was underneath a slope.  The right to the occupation of this accommodation area is also in dispute. The surface of this area is marked “D” in the annexed plan.  This area has however been filled up sometime in or before June 2011 pursuant to a building order issued by the Building Authority.

11.  Furthermore, there are one large and one small staircase shop areas marked “E” on the Plan.  These two areas are part of the common areas but the plaintiff is claiming a possessory title for their exclusive occupation.

The terms of the first assignments and the DMCs

12.  A number of the disputes between the parties including the argument of whether the plaintiff has any exclusive right to occupy the areas marked “A”, “B” and “C” on the Plan turn on the construction of the terms of the first assignments and DMCs.  I set out the relevant terms of these two documents below.

13.  The first assignments are all in the same terms save the particulars of the section and flat concerned.  The relevant terms of the assignment for unit 3A as recorded in the memorial registered in the Land Registry are as follows (C 134-135):

“INDENTURE OF ASSIGNMENT made between the undermentioned Vendor … and the undermentioned Purchaser … WHEREBY AFTER RECITING Crown Lease dated the 25th day of June 1922 …AND AFTER RECITING that All That one equal undivided twenty-eighth part or share (inter alia) of and in all that portion thereinafter more particularly described of the said premises was then vested … in the Vendor who had agreed with the Purchaser for the sale thereof to the Purchaser for the price of $.... IT WAS WITNESSED that in consideration of $... to the Vendor paid by the Purchaser … the Vendor thereby assigned unto the Purchaser ALL THAT one equal undivided twenty eighth part or share of and in ALL THAT portion or the said piece or parcel of ground which said portion with its abuttals and dimensions was more particularly delineated and described on the Plan No. 1 thereto and hereto annexed and thereon coloured Pink, Pink hatched Pink, and Yellow intended to be and was registered in the Land Office as SECTION B OF KOWLOON INLAND LOT NO. 2076 And of and in the messuages erections and buildings thereon known at the date hereof as Blocks A and B of No. 79, Waterloo Road TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy the THIRD FLOOR OF BLOCK A of the said No. 79, Waterloo Road which was shown on the said Plan No. 1 thereon coloured Pink hatched Pink AND TOGETHER with such rights and rights of way as … set out in the FIRST SCHEDULE thereto and hereto And all other rights of way (if any) and all other rights privileges easements and appurtenances thereto belonging or appertaining AND all the estate right title interest properly claim and demand of the Vendor in and to the said premises thereby assigned and every part thereof AND EXCEPTING AND RESERVING unto the Vendor and/or the owner or owners for the time being of the other twenty-seven equal undivided twenty-eighth parts or shares of and in the said premises registered as aforesaid as Section B … the sole and exclusive right and privilege to hold use occupy and enjoy the other floors of the said messuages erections and buildings … AND SUBJECT to such rights and rights of way as were more particularly described and set out in the SECOND SCHEDULE thereto and hereto.

…

FURTHER COVENANT by the Purchaser to bear and pay 1/108th share of the total costs and expenses for the replacement, maintenance and upkeep of and repairs to all the Wells mentioned in the First and Second Schedules thereto and hereto and 1/104th share of the total costs and expenses for the maintenance and upkeep of and repairs to all the staircases, landings, corridors, passageways, yards and roofs mentioned in the First and Second Schedules thereto and hereto.

THE FIRST SCHEDULE ABOVE REFERRED TO

1. A full free and uninterrupted right of way for the Purchaser and other the owners and occupiers for the time being of the said premises thereby assigned … (in common with others having the like right thereto) … to go pass and repass over through upon and along-

(a) …

(b) The staircases, landings, corridors, passageways and open yards erected upon such portions of the neighbouring premises registered … in the Land Office as Section C and The Remaining Portion of Kowloon Inland Lot No. 2076 (therein and hereinafter referred to as ‘the said neighbouring premises’) as shown and coloured Green on the Plans No. l and No. 2 thereto and hereto annexed, and

(c) The roofs of the said neighbouring premises.

2. A full and free right and liberty for the Purchaser and other the owners and occupiers for the time being of the said premises thereby assigned … (in common with others having the like right thereto)-

(a) To use the Wells as shown and marked ‘Common Well’ on the said Plan No. 2 together with the electric pumps, pipe-lines and conduits appurtenant thereto for the purpose of the flushing system installed at the said premises thereby assigned.

(b) To use the lifts as shown on the said Plans 1 and 2 and thereon coloured Purple for the purpose of going up and down to and from the said premises thereby assigned … and

(c) To enter upon the said neighbouring premises and to construct repair and maintain under the surface of the said neighbouring premises sewers and drains to connect with the main or public sewer for the passage or conveyance of sewage water and soil from the said premises thereby assigned and to construct repair and maintain pipes for the passage or conveyance of water gas or electricity above or below the surface of the said neighbouring premises as might be requisite and necessary.

THE SECOND SCHEDULE ABOVE REFERRED TO

1. A full free and uninterrupted right of way for the owners and occupiers for the time being of the said neighbouring premises … (in common with others having the like right thereto) from time to time and at all times thereafter to go pass and repass over through upon and along –

(a) The staircases, landings, corridors, passageways and open yards erected upon such portions of the said premises thereby assigned as shown and coloured Yellow on the Plans No. l and No. 2, and

(b) The roofs of the said premises thereby assigned.

2. A full and free right and liberty for the owners and occupiers for the time being of the said neighbouring premises … (in common with others having the like right thereto)-

(a) To enter upon the said premises thereby assigned and to construct repair and maintain under the surface of the said premises thereby assigned sewers and drains to connect with the main or public sewer for the passage or conveyance of sewage water and soil from the said neighbouring premises and to construct repair and maintain pipes for the passage or conveyance of water gas or electricity above or below the surface of the said premises thereby assigned as might be requisite and necessary.

To use the said Well …”

14.  Regarding the three DMCs, their material terms are the same.  The material terms of the DMC for section B and the building thereon are as follows (C 91-102):

“WHEREAS the premises more particularly described and set out in the Second Schedule hereto (hereinafter referred to as ‘the said premises’) are held from the Crown for … the term of years with right of renewal (if any) … as set out in the Second Schedule hereto by the parties hereto in such shares or proportions as set out in the Second Schedule hereto.

AND WHEREAS there is now constructed upon the said premises a fourteen storeyed building known as Blocks A and B of No. 79 Waterloo Road … (hereinafter referred to as “the said building”)

AND WHEREAS the parties hereto have agreed to enter into these presents in order to define their respective rights and interests of and in the said premises and the said building in manner hereinafter appearing.

NOW THIS INDENTURE WITNESSETH that the parties hereto … DOTH hereby covenant with the other party or parties of them as follows:-

1. Each of the parties hereto shall for the residue of the said term of years … for which the said premises are held from the Crown have the sole and exclusive ownership and the full right and privilege to the use occupation and enjoyment of the whole of that floor of the said building which is more particularly described and set out in the Second Column of the First Schedule hereto opposite to the name of such party set out in the First Column of the First Schedule hereto with the appurtenances thereto and the entire rents and profits of such floor.

2. Each of the parties hereto … shall in common with his co-owners of the whole of the said premises … have access to and be entitled to use the entrance-hall staircases and landings the common passages and the roof of and in the said building for all purposes connected with the proper use and enjoyment of the floor in the said building of which he is entitled to the exclusive use occupation and enjoyment and for the purpose of ingress to and egress from such floor.

3. Each of the parties hereto shall pay his due proportion of:-

…

(b) The cost of keeping in good and tenantable repair and condition the foundation, the side walks, main walls, supports, beams, gutters, fences, chimneys, and all external parts of the said building and all drains, well, electric pumps, pipes, conduits and all plumbing apparatus (if any) intended for the general service of the said building … and the common entrance-hall, staircases, landings and passages and the roof thereof.

(c) The cost of rebuilding or reinstatement of the said building or any part thereof in case of destruction or damage or condemnation by the Building or other competent Authority.

…

6. The expenses of keeping in good and tenantable repair and condition the interior of each floor and all the fixtures and fittings therein or appertaining thereto and all the windows and doors thereof shall be borne by the owner entitled to the exclusive use occupation and enjoyment of such floor.

7. Each of the parties hereto may at his own expense make any non-structural improvement inside the floor of which he is entitled to the exclusive use, occupation and enjoyment, such as mantels, lights, fixtures, wooden-work, panelling, doors or decorations provided such improvement can be removed without any structural alteration or causing any damage to the said building and the party making the same shall have the right to remove the same at any time at his own expense.

8. Each of the parties hereto shall not make any structural alteration to the said building or to the floor of which he is entitled to the exclusive use, occupation and enjoyment and shall not make any alteration to any installation or fixture so as to affect or likely to affect the supply of water, electricity or gas and shall not cut or damage any of the main walls or beams or floors of the said building.

…

10. Each of the parties hereto shall not use or cause or suffer or permit to be used the floor of which he is entitled to the exclusive use, occupation and enjoyment or any part thereof for any illegal, unlawful or immoral purpose and shall not do or cause or suffer or permit to be done anything therein or thereupon which may create unnecessary noise or which may be or become a nuisance, annoyance or inconvenience to the occupiers of the other parts of the said building or of the premises in the neighbourhood.

…

19. Notwithstanding anything hereinbefore contained it is hereby agreed that for the purpose of more effectually maintaining the said building in a proper manner, each of the parties hereto, other than the party or parties to whom the ground floors of the said building are allotted, shall pay to the said Wing Hong Investment Company, Limited or its authorised agent or other organization duly appointed by the majority of owners of the said building, the sum of Ten Dollars per calendar month for each flat as his contribution towards the costs and expenses of maintaining the electric pumps for supplying water (but excluding electricity charges and the costs and expenses of repairing and replacing the said pumps or any spare parts thereto), clearing and disposing of garbage and rubbish, cleansing the common staircases, corridors, passageways and roofs of the said building and employing a watchman or watchmen for the said building, and each of the parties to whom the Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth and Thirteenth Floors of Blocks A and B of the said building are allotted, shall pay for each flat in addition to the said sum of Ten Dollars, a further sum of Ten Dollars per Calendar month as his contribution towards the costs and expenses of cleansing the lifts and of employing an attendant or attendants for the said lifts (but excluding electricity charges and the costs and expenses to be paid to the lift company for inspecting and maintaining the said lifts in good working order and of repairing the replacing the said lifts or any spare parts thereof).

THE FIRST SCHEDULE ABOVE REFERRED TO

THE SECOND SCHEDULE ABOVE REFERRED TO

ALL THAT piece or parcel of ground situate lying and being at Kowloon in the Colony of Hong Kong and registered in the Land Office as SECTION B OF KOWLOON INLAND LOT NO. 2076 is now vested in the parties hereto as tenants in common in the following shares or share, that is to say, as to nineteen equal undivided twenty eighth parts or shares thereof in the First Owner, as to one equal undivided twenty eighth part or share thereof in the Second Owner, … for the residue now to come and unexpired of the term of 75 years …”

Rights of way

15.  In the 1st assignments of the three Sections, the first purchaser is given in the First Schedule a right of way over the staircases, landings, corridors, passageways and open yards of the two neighbouring sections.  The right of way is coloured green on the assignment plans.

16.  Each first assignment is also subject to a right of way in the Second Schedule in favour of the co-owners of the two neighbouring sections over the staircases, landings, corridors, passageways and open yards of the section subject of the first assignment.  The right of way is coloured yellow on the assignment plans.

17.  The areas coloured green and yellow on the assignment plans are all coloured yellow on the Plan annexed hereto.

18.  I note that there is no express right of way or quasi-right of way for the first purchaser along the yellow areas in the section which he partly purchased and own.

19.  The first assignments of the three Sections were made before the DMCs.  In the case of the RP, the first assignment was made on 15 July 1960 (C 153) whilst the DMC was made on 9 September 1960 (C 114).  If the right of way over the yellow areas in the RP was only available to the neighbouring owners but not the first assignee of a share of it, then the first assignee would not have been able to access his flat through theentrance-hall staircases and landings and corridors in the RP until the DMC was made.  That is illogical.  The first purchaser was entitled to access his property as soon as the 1st assignment was executed (see §27 of The Incorporated Owners of Hong Kong Mansion, Causeway Bay v Bothlink Ltd. (CACV 184/2012) (11 February 2014).

20.  If the assignment plans of the three first-assignments of the three Sections are considered together, it can be seen that the rights of way provided in all the yellow and green areas in the three Sections are intended for the use of all the co-owners of the three Sections (excluding the plaintiff who owned the right to exclusive occupation of these areas subject to the rights of way).  Though there is no express grant by the plaintiff of a quasi-right of way to the owners over the yellow areas of the section they partly own, there is the clear intention that they should enjoy a right over these areas similar to that enjoyed by the co-owners of the neighbouring sections.  This right is implied party because of the necessity of access to their units (see Wheeldon v Burrows (1879) 12 Ch D 31).  With this implied quasi-right of way over the yellow areas for the co-owners of their own section, all co-owners of the three Sections will have similar rights and quasi-rights of way over the yellow or green areas on the three Sections.

21.  The schedules of the first assignments also provide for the co-owners the right to use the wells in the three Sections and the electric pumps installed thereat for the individual flushing system in their units, to use the lifts for going up and down and to construct, repair and maintain sewers, drains for conveyance of sewage water and pipes for passage of water and gas above or underneath the three Sections.

The DMCs and areas for common access and use

22.  Clause 2 of the DMC provides for the co-owners of the three Sections a right of access to their units through the areas referred to or defined in that clause.  These areas are the entrance-hall, staircases and landings, the common passages and the roof of and in the three buildings.  A co-owner can use them for all purposes connected with the proper use and enjoyment of his unit and for the purpose of ingress to and egress from the unit.

23.  These areas overlap with some areas subject to the rights of way.  But the rights of way are stipulated in the first assignments which were executed earlier.  The rights of way are also more extensive than the areas provided in clause 2 of the DMCs.  The rights of way also cover areas on the sides and at the back of Imperial Court which do not fit into the definition in clause 2.  The areas on the ground floor subject to the rights of way are coloured yellow on the Plan.  The areas referred to in clause 2 of the DMCs are parts of the areas covered by the rights of way.  They are further hatched in black on the Plan to distinguish them from the yellow areas that are only subject to the rights of way.

24.  I note the defendants’ argument that clause 2 of the DMCs does not define common areas and common areas should be defined by some other means.  I will deal with this argument below.

The plaintiff’s case

25.  The plaintiff referred to the areas defined in clause 2 of the DMCs for common access and use as common areas.  For these areas on the ground floor, they are coloured yellow and hatched black on the Plan.  They are limited to the entrance hall, staircases and landings and common passages. 

26.  The plaintiff claimed in §2A of the re-re-amended statement of claim (“statement of claim”) and re-amended plan no. 4 annexed thereto that it had the exclusive right to use, occupy and enjoy all the ground floor areas (coloured pink on the Plan) save and except (i) the common areas (all areas coloured yellow and hatched black on the Plan), (ii) the areas subject to the rights of way (coloured yellow on the Plan), (iii) an area from and including the retaining wall at the north to the edge of the rights of way at the north but not extending into the areas subject to the rights of way (an extended area also coloured pink on the Plan) and (iv) the Block A ground floor unit (the exclusive right to occupy the same had been sold by the plaintiff).  The areas claimed by the plaintiff include the areas marked “A”, “B”, “C” and “meter room” on the Plan.

27.  The plaintiff accepts that parts of these areas that it has the right to exclusive occupation are subject to (i) the use by the other co-owners of the well, electric pumps, pipelines and conduits appurtenant thereto for the flushing systems, (ii) the use of the lifts for going up and down and (iii) the access for repair and maintenance of the sewers, drains and pipes.  The plaintiff says that it has been facilitating the other co-owners in exercising these rights.

28.  The plaintiff has since the completion of the construction of Imperial Court in 1959 and 1960 installed on the ground floor:

(a) a metal gate at the eastern entrance (the “Eastern Outer Gate”);

(b) a metal gate at the boundary between the east open yard, which is subject to a right of way, and the north-east roofed-over area (the “Eastern Inner Gate”);

(c) a metal gate at the boundary of the central open yard (open yard “B”) and the north-east roofed-over area (the “Central Inner Gate”);

(d) a toilet right behind the Central Inner Gate within the north-east roofed-over area (the “1st Toilet”) which is referred to as the “Washroom” in the statement of claim;

(e) three walls surrounding the 1st Toilet (the “three walls”) (the fourth wall is the existing structural or retaining wall on the northern side);

(f) a toilet bowl, a wash basin, electricity cables and fluorescent lights within the 1st Toilet; and

(g) a metal air-conditioning condenser stand located at the north open yard area (the “Air-Conditioning Stand”).  The defendants pleaded in §9(a)(ix) of the re-re-re-re-amended defence and counterclaim (“the defence and counterclaim”) that the “Air-Conditioning Stand” was installed on the retaining wall facing open yard “B” of Block F above the pump room.  That is within the air space of the open yard “B”.

In addition, the 2nd to 4th defendants had in 2000 to 2001 erected a gate at the western entrance (“Western Alley Gate” or “Left Lane Gate” as referred to by DW1 in her third witness statement).

29.  The plaintiff pleaded that save the Western Alley Gate, it is the owner and entitled to possession of all these installations.

30.  Though the occupation permits of Imperial Court state that the ground floor areas are for use as car parks, the plaintiff had partitioned these areas into shop spaces and had let them out to tenants for decades.

31.  On the basis of the plaintiff’s claim of right of exclusive occupation of the ground floor areas and its ownership of the said installations, it made a number of claims for damages against the defendants for alleged infringements of its rights. 

32.  The plaintiff pleaded that the 2nd to 4th defendants had in about mid-June 1994 wrongfully erected a meter room on the ground floor thereby encroaching upon and deprived the plaintiff’s right of exclusive occupation of the area thereby enclosed.  This area is the “meter room” marked on the Plan.

33.  The plaintiff pleaded that on 10 August 2009, the 1st and/or 2nd defendant wrongfully engaged workers to take down and cart away the Eastern Outer Gate (“the 1st raid”).  They then installed a new gate at the same position shortly afterwards.  They also erected three metal bollards that were locked to the ground and placed about 10 potted plants behind the bollards.  The plaintiff also complained that the 1st and/or 2nd defendant only gave it the key to the new gate after it had applied to the court for it on about 16 October 2009.  However, the lock on the new gate was changed sometime before October 2012 and the new key was not given to the plaintiff.  The plaintiff thus could not open the new gate until 20 April 2013 when the old lock was restored.

34.  The plaintiff also pleaded that the 1st and/or 2nd defendant had in the evening of 24 September 2009 wrongfully engaged workers to demolish and take away the Eastern and Central Inner Gates.  They further wrongfully instructed the workers to destroy the three walls, the toilet bowl, the wash basin, the electricity cables and fluorescent lights in the 1st Toilet thereby destroying the 1st Toilet (“the 2nd raid”).

35.  Furthermore, the plaintiff complained that on 5 October 2009 the 2nd defendant under the order of the 1st defendant wrongfully instructed Efficient Property Management Ltd. (“Efficient Management”), the management company of Imperial Court to demolish and take away the Air-conditioning Stand (“the 3rd raid”).

36.  The plaintiff has also made a claim in relation to electricity front switches and cables.  The plaintiff had eight electricity meters connected by cables to eight front switches.  The front switches were in turn connected by cables to electricity distribution boxes.  The plaintiff in order to reinstate the ground floor had terminated the tenancies at the shop spaces and disconnected the electricity cables temporarily from seven of the electricity distribution boxes. The cables connecting these seven front switches to 7 distribution boxes were also disconnected at the distribution boxes and the lose cable ends wrapped up with electrical tapes for safety reasons and for reconnection to the distribution boxes upon completion of the reinstatement works.

37.  The 2nd to 4th defendants had prior to 4 December 2012 wrongfully caused the removal and disposal of the seven front switches and the cables from these switches to the seven distribution boxes and the seven electricity meters (“the further raid”).

38.  The plaintiff also pleaded that the 1st and/or 2nd defendant did the acts on 10 August, 25 September and 5 October 2009 and the 2nd to 4th defendants removed and disposed of the front switches and cables all maliciously and out of spite for the plaintiff and with the intention of causing substantial nuisance and inconvenience to the plaintiff and/or injuring its business and business relations with its tenants.

39.  The plaintiff therefore claims a declaration that it is entitled to the exclusive occupation of the ground floor areas as coloured pink on the Plan which do not include (i) the common areas, (ii) the areas subject to the rights of way, (iii) an area from and including the retaining wall at the north to the edge of the right of way at the north but not extending into the areas subject to the rights of way and (iv) the Block A ground floor unit.  It also claims damages and aggravated damages against the 1st and 2nd defendants, damages against the 2nd to 4th defendants, an order for reinstatement of the seven front switches and cables at both ends of the switches and various injunctive and other reliefs.  However, Mr Edward Chan, leading counsel for the plaintiff, abandoned any claim for damages for unlawful interference with the plaintiff’s tenancies.

40.  In addition, the plaintiff also seeks a declaration that it has obtained a possessory title to the staircase shop areas marked “E” on the Plan.  However, Mr Chan for the plaintiff accepts in his opening that any title of the plaintiff to these areas is subject to the covenant in the relevant DMC that common areas are to be used by all owners for the right of access to their units. This prayer for possessory title is more for resisting the claim for damages by the co-owners for ouster from the staircase shop areas in question than for exclusive enjoyment of the areas.

The defendants’ case

41.  The defendants claim that the plaintiff is only entitled to exclusive possession of the areas on the ground floor that lie within the building lines (roofed-over areas) save and except the common areas and ground floor unit A.  They say that all areas of the three Sections that lie outside the building lines (non-roofed-over areas) include two open yards marked “B” and “C” on the Plan are common areas.  They also dispute with the plaintiff on what are the common areas that lie within the roofed-over areas.  They say that the transformer room marked “A” and meter room are also common areas.  They say that the plaintiff is not entitled to exclusive possession of the common areas. They also dispute the plaintiff’s claim of possessory title to the staircase shop areas marked “E” on the Plan.

42.  There is also the area marked “D” at the north-west corner of the Plan.  It was an accommodation area underneath a slope lying within the RP but outside the retaining wall of Imperial Court.  It was wrongfully made by the plaintiff by excavating the earth from underneath the slope.  It was an unauthorised accommodation area.  It has been filled up in or before June 2011 per expert advice for the purpose of complying with a building order.  I do not think either the plaintiff or the defendants were entitled to occupy this unauthorised accommodation area whether exclusively or in common with one another.  It should not have been made an accommodation area and nobody was entitled to occupy it.

43.  The defendants further pleaded that it can be gathered from the assignments of the units in the three Sections that there are the following common parts in the ground floor areas:

transformer room, yard passageways, corridors, staircases, landings, lobby, lifts, common wells, electric pumps, pipe-lines and conduits appurtenant to flushing system, sewers and pipes (collectively “the said common parts”) (§4(h)(vi) of the defence and counterclaim).

44.  The defendants also pleaded that on the proper construction of the following documents; namely the first assignments, the DMCs, a building plan approved on 7 May 1960 and the occupation permits together with the definition of common parts in the Building Management Ordinance, Cap 344; the ground floor areas are subject to the rights of way and contain the said common parts (§4(i) of the defence and counterclaim). 

45.  They further pleaded that the plaintiff has dedicated or designated the rights of way and common parts and cannot claim any right of exclusive occupation over them (§4(j) of the defence and counterclaim). 

46.  Furthermore, they say that the common parts, if not expressly provided in the DMC, are implied as a matter of necessity (§4(k) of the defence and counterclaim). 

47.  They further rely on the payments by the co-owners of the costs and expenses pursuant to the first assignment and the DMCs for the upkeep and maintenance of the rights of way and common parts and claim that the plaintiff is estopped from claiming exclusive occupation of these areas (§4(l) of the defence and counterclaim).

48.  They then pleaded that in respect of the common parts that may be inside any area where the plaintiff enjoys the right to its exclusive occupation, they have a right of access to such common parts for their inspection, repair, maintenance or renewal upon reasonable notice to the plaintiff (§4(l) of the defence and counterclaim).  The plaintiff accepts that they do have such right of access to the common facilities for the purposes of repair and maintenance, but dispute that the areas where the common facilities are installed are also common areas simply because the facilities are there.

49.  On this point, I note the defendants’ stance as spelt out in §35 of the written opening by Mr Yim and Mr John Chan, counsel for the defendants that “[i]t has never been the defendants’ case that the presence of a common facility on the ground floor makes that part of the ground floor surrounding that common facility a common part”.

50.  Regarding the transformer room, the defendants pleaded that it housed electrical facilities that served the whole Imperial Court and is intended for common use and thus a common part.  Alternatively, they pleaded that the plaintiff had voluntarily abandoned the exclusive possession of the same and rendered the same for the common use of all co-owners (§4(eb) of the defence and counterclaim). 

51.  They also pleaded that the plaintiff had in about March 2009 partitioned off a substantial part of the transformer room and let it to a decoration company.  They counterclaimed that the conversion of the transformer room had breached the DMC and affected or likely to affect the electricity and water supply to Imperial Court (§§9(a) (xii), 33 and 31(b) (iii) of the defence and counterclaim).  (The evidence shows that the transformer room had been reinstated in or before January 2010 (C567)).

52.  Regarding the plaintiff’s complaint of the construction of the meter room, the defendants’ case is that back in October 1993 the plaintiff had agreed to the construction of the same as part of a program for the overall renovation of Imperial Court.  Furthermore, the construction of the meter room was carried out in the open at a place adjacent to the transformer room and the plaintiff had raised no objection then (§13 of the defence and counterclaim).

53.  The defendants then pleaded that after the 1970s, the plaintiff had converted the car parks on the ground floor into shops, godowns or stores for letting to tenants for profit.  They counterclaimed that such conversion was contrary to the DMCs and the Buildings Ordinance and Regulations as the conversion involved structural alterations.  They rely on a number of building orders issued by the Buildings Department.  They further pleaded that the conversion constituted unlawful use of the ground floor and in breach of the Buildings Ordinance and Regulations. The infringement of the prescribed user of the ground floor areas also caused nuisance, annoyance or inconvenience to the occupiers of the Imperial Court (§§9(a)(i) and 32 of the defence and counterclaim). 

54.  The issues relating to the conversion of the car parks, save the question of costs, have become academic as the plaintiff has removed the alterations and obtained approval pursuant to the Buildings Ordinance to effect alterations and to change the user of the ground floor units. 

55.  The defendants also pleaded that the plaintiff had, without approval given pursuant to the Buildings Ordinance, constructed the Eastern Outer, Eastern Inner, Central Inner and Western Outer Gates (§9(a)(ii) to (vii) and 32 of the defence and counterclaim).  They pleaded that the shops, godowns and gates infringed their rights of way and their access to and use and enjoyment of the common parts and that the gates trespassed the ground floor common areas of Blocks A, B and D.

56.  In addition, they also pleaded that the plaintiff had installed two toilets on the ground floor and connected their flushing pipes to the communal flushing system thereby increasing the use of the pumps for operating the communal flushing system.  They counterclaimed that the plaintiff had trespassed the communal flushing system of Imperial Court.

57.  They also complained that the plaintiff had affixed the Air-Conditioning Stand to the wall of area “B” above a pump room.  They pleaded that this area is part of the common areas and the plaintiff had affixed the Air-Conditioning Stand there without the consent of the 4th defendant, the incorporated owners (“IO”) of Blocks E, F, G and H, which has the right to manage area “B”.  They also pleaded that the stand was rusty, in disrepair, could fall at any time and constituted a private nuisance.  The 2nd to 4th defendants and the manager of the Imperial Court removed it to nullify or abate the nuisance.

58.  Regarding the removal of the Eastern Outer Gate, the defendants pleaded that they had been advised by the police and the Buildings Department on 17 May 2009 that this gate and the Western Outer Gate were dangerous. However, the plaintiff failed to repair or remove the 2 gates.  The defendants in order to nullify the nuisance, to exercise their rights of way and to protect the security of Imperial Court, had removed the Eastern Outer Gate on 10 August 2009 in the presence of one Mr Tsang, a representative of the plaintiff.  The defendants then at their own expenses installed a new gate thereat on 24 August 2009. 

59.  The defendants denied of having changed the lock to the new gate after having given the key to the plaintiff on about 16 October 2009.  They also installed 3 metal bollards behind the new gate to prevent the plaintiff’s tenants from parking their vehicles on the area covered by the right of way.

60.  Regarding the removal of the Eastern Inner Gate and Central Inner Gate in the evening of 24 September 2009, the defendants pleaded that they were removed by a person unknown. 

61.  Regarding the damage to the 1st Toilet, they pleaded that the same was done by workers engaged and instructed by the plaintiff.

62.  They counterclaimed the plaintiff for having trespassed the large part of the transformer room marked “A” and areas “B”, “C”, “D” and “E” on the Plan.  They seek damages for trespass or account of profit for letting of such areas.  They also counterclaimed the plaintiff for allowing its tenants to affix sign boards on the vertical wall right above the entrance to the shops.  They say that such vertical wall is part of the common areas of Imperial Court.

63.  Regarding the removal of the seven front switches and the cables attached to them leading to the electricity meters and the electricity distribution boxes at both ends, they pleaded that they understood that the switches and cables were the properly of the 2nd to 4th defendants. 

64.  The defendants further pleaded that their solicitors had by a letter of 18 September 2012 asked the plaintiff to remove all and any installations from the ground floor of the buildings.  This was for the purpose of a renovation and removal of defects.  However, the plaintiff’s electrician only unhooked the cables from the energy meters to the front switches and then wrapped round the cable ends with electrical tape without telling the chairman of the 4th defendant, who was present that the plaintiff intended to re-hook the cables to the meters.  These switches and cables were then removed by a contractor of 2nd to 4th defendants in the course of a periodic inspection sometime before 4 December 2012 for the purpose of complying with a code of practice for compliance with the Electricity (Wiring) Regulation published by the Electrical and Mechanical Services Department in 2009.

65.  Regarding the staircase shop areas, the defendants pleaded that even if the plaintiff had acquired a title to the same, the plaintiff had abandoned it in late 2006.  They also allege that the plaintiff had collected rent from the staircase shop at areas “E” as manager of the buildings and hence as agent and trustee of all co-owners and liable to account the same to them all.

The plaintiff’s reply

66.  The plaintiff refuted the charges of the defendants in the re-amended reply and defence to counterclaim.  It refuted the defendants’ claim that its right to exclusive occupation of the ground floor was limited to the roofed-over areas.

67.  It admitted that there were common facilities within the areas it exclusively enjoyed and occupied and that it had provided access thereto to the manager of the buildings for the purposes of inspection, maintenance and repair of the facilities.  However, the presence of such facilities did not thereby make such areas common areas.  This is in line with the defendants’ stance as expressed in §35 of the opening submissions of their counsel as referred to above.

68.  The plaintiff pleaded that the meter room did not exist in any of the approved building plans and did not exist at the time when the DMCs were made, but was created by the 2^nd to 4^th defendants without the plaintiff’s permission or approval of the Building Authority.

69.  In relation to the payments by the co-owners of costs and expenses for upkeep and maintenance of the common parts, it denied that the incurring of such expenses would result in any proprietary estoppel against it.

70.  It also maintained that the transformer room was subject to its right of exclusive occupation and the meter room was built without its permission.  But it had in early 2010 handed over the key to the transformer room to China Light and Power Co. Ltd. (“CLP”) (C567).

71.  In relation to the conversion of the car parks into shops, it denied that the alterations it made were structural in nature.  It also denied that the occupation permits had the effect of prescribing the user of the ground floor to car parks or that there is any provision in the Buildings Ordinance which prohibits change of user.  Furthermore, it pleaded that even if there was any infringement of the occupation permits, the Buildings Ordinance and its regulations, that was only a matter for the Building Authority to enforce and not for the incorporated owners to deal with.

72.  It also denied that the four gates on the ground floor constituted trespass against the other co-owners or that the Air-Conditioning Stand was erected on a common part.  Further, even if they were unauthorized building works, that was only a matter for the Building Authority and not for the incorporated owners.

73.  It maintained that the 1st Toilet was removed by the 1st and/or 2nd defendant and/or the manager of Imperial Court.  For the remaining toilet, it was used by its tenant and the staff of the manager Efficient Management. The 2nd to 4th defendants hence had impliedly approved the presence of this toilet and the use of flushing water and electricity pump therefor.  It also asserted its right as a co-owner to use the flushing system.

74.  Regarding the sign boards of its tenants, it denied that they were affixed on the common parts or alternatively that they constituted trespass.

75.  Regarding the seven front switches and cables connected thereto which had been removed by the 2nd to 4th defendants, it denied that they were the property of the 2nd to 4th defendants.

Analyses and decision on the status of areas “B” and “C”

76.  The defendants say that areas “B” and “C”, being non-roofed over areas on the ground floor, are not part of the ground floor and not within any of the units A to H on the ground floor.  They say that areas “B” and “C” are common areas.

77.  Area “B” situates partly within section C and partly within the RP whilst area “C” is wholly within the RP.

78.  The first assignments of the three Sections were executed prior to their corresponding DMCs.  In the case of the RP, the time lapse between the execution of the two documents was over a month.  It is thus important to consider what had been assigned by the plaintiff in the first assignments of the Sections. 

79.  The first assignment of section B assigned unit A on the 3rd floor to the first purchaser.  The parcels of the assignment are as follows (C 134):

“ALL THAT one equal undivided twenty eighth part or share of and in ALL THAT portion … which … was more particularly delineated and described on the Plan No. 1 … and thereon coloured Pink, Pink hatched Pink, and Yellow … registered in the Land Office as SECTION B OF KOWLOON INLAND LOT NO. 2076 And of and in the messuages erections and buildings thereon known at the date hereof as Blocks A and B of No. 79, Waterloo Road TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy the THIRD FLOOR OF BLOCK A of the said No. 79, Waterloo Road which was shown on the said Plan No. 1 thereon coloured Pink hatched Pink AND TOGETHERwith such rights and rights of way as … set out in the FIRST SCHEDULE thereto and hereto.” (emphasis supplied)

80.  The reservation and exception are as follows (C 134):

“AND EXCEPTING AND RESERVING unto the Vendor and/or the owner or owners for the time being of the other twenty-seven equal undivided twenty-eighth parts or shares of and in the said premises registered as aforesaid as Section B … the sole and exclusive right and privilege to hold use occupy and enjoy the other floors of the said messuages erections and buildings.” (emphasis supplied)

81.  The word messuage means “a dwelling house with its outbuildings and the adjacent land assigned to its use” (Shorter Oxford English Dictionary (6th ed) or “property comprising a dwelling house with all curtilages, outbuildings and land used for the purposes required by the household such as gardens, orchards, ornamental and vegetable gardens” (Hong Kong English-Chinese Legal Dictionary).

82.  There is standing on section B only one building which forms part of Imperial Court.  The expression “the said messuages erections and buildings” must mean everything on section B and the building thereon.

83.  This assignment thus assigned the exclusive right to use and occupy unit A on the 3rd floor to the purchaser together with the rights of way over parts of section B and the building thereon and coloured yellow on the two assignment plans annexed thereto and over parts of section C and the RP and the buildings thereon and coloured green on the plans.  The purchaser can also make use of the wells and lifts in the Sections and connects pipes and drains therein.

84.  The assignment excepted and reserved unto the plaintiff the exclusive right to use and occupy all the rest of section B and the building thereon save that parts of its areas coloured yellow on the plans are subject to a right of way in favour of the purchaser.  What has been excepted and reserved unto the plaintiff must include the exclusive right to occupy the whole of section B regardless of whether it is within or outside the building lines but subject to the right of way coloured yellow.  The first assignment therefore left nothing undisposed of.

85.  Since areas “B” and “C” on the Plan are not within the parcels and not coloured yellow or green on the assignment plans, they must be subject to the plaintiff’s right of exclusive use and occupation.

86.  Regarding the DMCs, clause 2 stipulated the areas used by all co-owners to access, use and enjoy their units.  Clause 2 provides:

“2. Each of the parties hereto … shall in common with his co-owners of the whole of the said premises … have access to and be entitled to use the entrance-hall staircases and landings the common passages and the roof of and in the said building for all purposes connected with the proper use and enjoyment of the floor in the said building of which he is entitled to the exclusive use occupation and enjoyment and for the purposes of ingress to and egress from such floor.” (emphasis supplied)

87.  The areas referred to in clause 2 cannot include areas “B” and “C” on the Plan.  These two areas are bounded by a retaining wall at the north and enclosed on all other sides by areas subject to the plaintiff’s exclusive occupation.  To the other co-owners, areas “B” and “C” are landlocked. They cannot have access to these areas save and except to exercise the right of access to maintain and repair the common facilities therein, if any.

88.  Mr Yim made extensive submissions on this issue which spanned to over 40 pages out of the 152 pages of the defendants’ closing submissions (“Ds’ Closing”).  He relied on Incorporated Owners of the Lorna Villa v Chan Yan Wah & Anor [1999] 4 HKC 524.  But the first assignments in that case did not dispose of everything in the lot and the building thereon.  Ribeiro J (as he then was) said at 528B to G as follows:

“C. RIGHTS TO EXCLUSIVE POSSESSION OF THE DISPUTED AREAS

The first issue which I have to determine is whether the defendants ever validly acquired the right to exclusive possession of the disputed areas.

(i) The first assignment

The developer of the Lot was a Mr Peter Leung. On 1 December 1973, he executed an assignment of the first unit as vendor (with Mai Lok Enterprises Ltd acting as confirmor) to one Hui Ming as purchaser.

By this first assignment, Peter Leung conveyed to Hui Ming 11/528th parts or shares of and in Kowloon Inland Lot No 9850, with exclusive possession of Flat A on the 9^th Floor and Car Parking Space No 20, as shown coloured pink on the accompanying plan.  The exceptions and reservations clause provided as follows”

Excepting and Reserving unto the Vendor and the other owner or owners for the time being of other undivided parts or shares of and in the said premises hereby assigned the exclusive right to hold use occupy and enjoy the remaining flats and car parking spaces of the said Building and the roof thereof …

Peter Leung therefore reserved to himself and other owners exclusive possession of three areas, namely, the flats other than that being assigned to Hui Ming, the other car parking spaces and the building’s roof.  The clause says nothing about reserving or excepting any part of the open spaces on the ground floor of the Lot.”

89.  Hence, the first assignment did not deal with the “open spaces”.  Furthermore, the “open spaces”, which the learned Judge construed to mean “open yards” and “yard”, have been designated as common parts in the DMC. The learned Judge further said at 528G to 529G as follows:

“The parties also executed the deed of mutual covenant on the same date. By cl 1, the parties effected a mutual grant in the following terms:

…

The DMC goes on to provide, by cl 3(b), that:

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 …

Full right and liberty to use the open yards grounds and swimming pool of the said premises (except any part thereof allotted to any owner) for the purpose of recreation only.

…

By cl 4(p)(i), the DMC provides that:

The common parts services and facilities referred to in this deed shall include the following:-

(i) the lavatories entrances yards staircases landings and passages which are not included in any part of the building exclusively owned by one owner or several co-owners as specified in the First Schedule hereto.” (emphasis added)

90.  The facts of Lorna Villa are thus different from those of the present case and that case cannot serve as a reference for the present case.

91.  The defendants’ approach on construction is also different from that of the plaintiff.  Mr Yim started off with the construction of some words in the first assignments and DMCs instead of considering the parcels and the reservations and exceptions in the first assignments.

92.  He submitted that the “ground floor” of the “building” bear the ordinary meaning of the area bounded by the building lines as in the case of any upper “floor” of the “building”.  If this meaning is applied to the word “floor” in the DMC, then areas “B” and “C” are non-roofed over areas that lie beyond the building lines.  They have not been reserved by the plaintiff in the first assignment and the DMC.  They are therefore not subject to the exclusive occupation of the plaintiff.  They are therefore common areas and all owners had the right of access to them (§§28 to 30 of Ds’ Closing).

93.  However, I do not think the meaning of the word “floor” as used in the DMCs is a reference to an area enclosed by the building lines.

94.  I have mentioned above that there is one building standing on each of the three Sections.  The occupation permits also show that Imperial Court was built in two phases.  The three buildings or two phases are linked together and occupied by the residents as a single development called Imperial Court because they are linked up by common internal corridors and share the same lifts, staircases and other common facilities.  However, for conveyance purpose, the first assignments of the three Sections treat the building standing on section B as consisting of two blocks A and B, the building standing on section C as consisting of two blocks C and D and the building standing on the RP as consisting of flour blocks E, F, G and H. 

95.  This was followed in the DMCs.  For example, the 2nd recital of the DMC for the RP says “AND WHEREAS there is now constructed upon the said premises (defined in the DMC as the RP) a fourteen storeyed building consisting of four blocks known as Blocks E, F, G and H of No 79, Waterloo Road, Kowloon (hereinafter referred to as “the said building”)” (C 114). 

96.  Clause 1 of the DMC then provided:

“1. Each of the parties hereto shall for the residue of the said term of years … for which the said premises are held from the Crown have the sole and exclusive ownership and the full right and privilege to the use occupation and enjoyment of the whole of that floor of the said building which is more particularly described and set out in the Second Column … opposite to the name of such party set out in the First Column of the First Schedule hereto with the appurtenances thereto and the entire rents and profits of such floor.” (emphasis supplied)

97.  The First Schedule of the DMC then referred to the unit designated for the exclusive occupation of an owner by reference to the particular floor of a certain block.  An example is as follows: “Second Floor of Block E” opposite to the name of one “Lee Chung Mo Yan” (“Mrs Lee”) (C 122).

98.  However, Mrs Lee did not have the exclusive right to occupy the whole of the second floor of Imperial Court or of phase two of the development on the RP.  She only had the exclusive right to occupy one of the eight units on the second floor of Imperial Court or one of the four units on the 2nd floor of the phase two development on the RP.

99.  The size of her unit is not defined by the building lines of Imperial Court or of phase two of the development on the RP, but by the walls enclosing her unit.

100.  The “Second Floor” used in the first schedule indicates the floor level and not the area of that floor as bounded by the building lines. The area on the 2nd floor of Imperial Court that is bounded by the building lines includes eight units or flats of Blocks A to H on the Second Floor and the common areas and common facilities like the staircases, lifts, corridors and so on.  The area on the 2nd floor of the phase two development on the RP as bounded by the building lines includes four units of Blocks E to H and the common areas and common facilities therein. 

101.  Hence, “Second Floor of Block E” in the First Schedule of the DMC for the RP is for identification purpose and not for demarcating the area or extent of the unit subject to Mrs Lee’s exclusive occupation.

102.  I now turn to the description of the plaintiff’s units in the first schedules of the DMCs.   The First Schedule of the DMC for section B referred to the units that the plaintiff had the exclusive right to occupy as:

“The Ground, First … Floors of Block A … and The Ground, Second … Floors of Block B …” (C 98)

103.  The First Schedule of the DMC for section C referred to the plaintiff’s units as:

“The Ground, Second … Floors of Block C and the Ground, First … Floors of Block D” (C 110).

104.  The First Schedule of the DMC for the RP referred to the plaintiff’s units as:

“First Floor of Block E, Third Floor of Block E … and the Whole of the Ground Floor of the said Building” (C 124)

105.  Considering the three First Schedules together, it is obvious that “the Whole of the Ground Floor of the said Building” in the First Schedule of the DMC for the RP means “The Ground Floor of Block E, … and the Ground Floor of Block H”.

106.  These references in the First Schedules of the DMCs are clearly for identification of the units.  Hence, Mr Yim’s submission at §28.1 of Ds’ Closing that “ground floor” of the “building” bear the ordinary meaning of the area bounded by the building lines as for every other “floor” of the “building” is misconceived.  It is also wrong to just look at the First Schedules of the DMCs to determine the extent of the exclusive right of occupation of the individual owners.

107.  Mr Yim also referred to some clauses in the DMCs where the word “floor” is being used.  For example, he referred to clause 6 which required the owners to bear the expenses to keep “the interior of each floor” in good and tenantable repair.  Taking this “floor” to mean the whole floor of the building on the section, he submitted that this expression refers to the interior of the three dimensional building lines (§39.3 of Ds’ Closing).  However, the “floor” used here is a reference to a unit or flat the exclusive occupation of which is owned by an owner.  It does not refer to the whole floor of the building.  It does not even include the common area like the common corridor, staircases and landing areas.  Hence, this submission is wrong. 

108.  Mr Yim made a similar submission on the words “inside the floor” in clause 7 (§39.4 of Ds’ Closing).  This submission is similarly flawed as the one above.

109.  Mr Yim also referred to clause 9 which deals with the event of destruction of any “floor or floors” of the building and submitted that there is nothing to be destroyed on the ground floor level beyond the building lines.  Hence, he further submitted that the “floor or floors” used in this clause must be a reference to the area within the building lines (§39.5 of Ds’ Closing). This submission is again flawed as the word “floor” is used in the DMCs for identification of a unit or flat subject to the exclusive right of occupation by an owner. 

110.  Mr Edward Chan for the plaintiff also pointed out that if the demarcation of the ground floor should be by reference to the building lines, then it is necessary to look at the approved building plan and expert evidence is required to understand the plan.

111.  Mr Yim responded by submitting that since the common facilities like electric pumps, pipes, conduits and plumbing apparatus are not indicated on the assignment plans and the DMCs have no plan annexed thereto, it may be necessary to refer to the approved building plans to resolve a dispute on whether certain facilities are common or for the exclusive use of an owner.  Hence, it may be necessary to seek expert advice in any event.  I am a bit perplexed by this submission.  I doubt if it is wise to look at the approved plan rather than the facility or installation itself to determine if it is a common facility or a facility for the benefit of an individual owner. 

112.  Mr Yim also referred to The Incorporated Owners of Hong Kong Mansion, Causeway Bay v Bothlink Ltd, HCMP 1814/2010 (30 July 2012). This case was taken on appeal in CACV 184/2012.  Both the CFI and the Court of appeal referred to the approved plan in that case to resolve a dispute on common area.  But the approved plan was just used to show that there were subsequent unauthorized building works on certain areas to make them habitable accommodation.  I do not think that case has any relevance to the present case.

113.  If it were necessary to look at the approved plan in the present case, the plan approved on 7 May 1960 (re-amended plan no. 4 annexed to the statement of claim) has a parking space marked within area “B”.  This militates against the defendants’ proposition that area “B” is a common area as the parking space should be for the plaintiff’s exclusive use.

114.  On the facts of this case, I do not think it necessary to look at the approved plan to determine which of the areas are subject to the exclusive occupation of individual owners and which are common areas.

115.  Mr Yim’s next argument is that neither area “B” nor “C” is listed in the First Schedules of the DMCs for the plaintiff’s exclusive occupation (§63 of Ds’ Closing).  But this point is made on the assumption that areas “B” and “C” are not parts of the ground floor areas that the plaintiff has the exclusive right to occupy.  It is an argument made on the assumption that the plaintiff’s exclusive areas are only within the building lines.  On this assumption, shares of the section may be allocated to these two areas.  However, if the two areas are indeed parts of the areas subject to the plaintiff’s exclusive occupation, then they should not be given any share of the section or be separately listed in the First Schedule of the DMCs.  Hence, this submission is made on the assumption that the defendants have succeeded on the issue and is misconceived.

116.  Mr Yim also referred to the absence of colouring to a yard on the ground floor assignment plans annexed to the first assignments. The yard is on section C opposite to a staircase and the staircase is adjacent to the meter room on the Plan.  He submitted that on the plaintiff’s case, this uncoloured yard should be subject to the plaintiff’s exclusive occupation and without any right of way thereon.  But he further submitted that the plaintiff was being inconsistent in not claiming this yard for its exclusive occupation (§29 of Ds’ Opening and §69.7 of Ds’ Closing).

117.  I, however, note from the assignments produced to the court that this yard is coloured on some plans but not on some others.  I agree with Mr Chan that so long as it is coloured green or yellow on one assignment plan, it is subject to a right of way.

118.  The following table shows the colouring status of this yard in the plans of the 13 assignments that have been produced in evidence.

119.  Since there are seven assignments with plans including the first four showing the yard with colouring, the colouring would not have been applied in error.  Hence this yard is subject to a right of way.  But it is not part of the common areas referred to in clause 2 of the DMC as clause 2 makes no mention of any yard.

120.  Mr Yim also argued that the schedules to the first assignments have referred to “open yards” and these yards must be areas “B” and “C”.  However, I agree with Mr Chan that the open yards are (i) the yard above-mentioned which is opposite to a staircase in section C and (ii) another yard on the RP and enclosed by area “E” on the Plan.  These two yards are coloured for rights of way and referred to as such in the first assignments.  Areas “B” and “C” are not coloured and are not the open yards referred to in the said schedules. 

121.  On the plaintiff’s argument that areas “B” and “C” are landlocked at the north by the retaining wall and on the other sides by areas subject to the plaintiff’s exclusive occupation, Mr Yim submitted that the provision of common access in clause 2 of the DMC would include right of access for all co-owners to areas “B” and “C” (§76.5 of Ds’ Closing).  This submission is to create a common access to “B” and “C” on the assumption that they are common areas.  It also twisted the meaning of clause 2 on what are common areas.  This submission cannot assist the consideration of whether “B” and “C” are common areas.

122.  Mr Yim then relied on the principle of non-derogation from grant (§§85 to 91 of Ds’ Closing).  But it is difficult to see how this principle can turn areas “B” and “C” into common areas if the two areas have been reserved and excepted unto the plaintiff’s exclusive occupation by the first assignments.

123.  If Mr Yim is trying to argue that the principle of non-derogation from grant would compel the plaintiff to provide access to areas “B” and C, otherwise the plaintiff would be derogating from its grant of these two areas as common areas, then he is assuming again that the two areas are already common areas.  This argument therefore fails again.

124.  Mr Yim also downplayed the importance of access to “B” and “C” by arguing that if there are also parts of the three Sections which are outside the building lines and of which the plaintiff is not claiming exclusive possession, then areas “B” and “C” are common areas and clause 2 of the DMC would apply to them (§82 of Ds’ Closing).

125.  This argument is to designate common areas without reference to clause 2 of the DMCs and then to make use of clause 2 to create an access to such areas.  This is illogical reasoning.  It also twists the definition in clause 2 by ignoring that the common areas it defined is for access to the individual units or flats, not for access to common areas as may be arbitrarily designated. This is an artificial ground for the creation of an access way for all co-owners (other than the plaintiff) to areas “B” and “C” over areas within the building lines that are subject to the plaintiff’s exclusive occupation.  This argument is again flawed.

126.  Mr Yim then argued that the ground floor was designed for use as a carport.  Hence, it must have been contemplated that there would be access thereto by people not strictly entitled to its exclusive occupation (§§78 to 81 of Ds’ Closing).  But he has not explained how such people could have lawfully gained access to the plaintiff’s car parks without the licence or permission of the plaintiff.  This submission is again misconceived.

The correct approach for ascertaining the common areas and decision for areas “B” and “C”

127.  I am of the view that the correct approach in the present case for ascertaining the areas subject to exclusive right of occupation vis-à-vis common areas is to consider the parcels and the reservations and exceptions in the first assignments first.  The next step is to consider the DMCs and see what changes they might have caused to the rights as assigned, reserved and excepted in the first assignments. 

128.  I have already considered above the parcels and the reservations and exceptions of the first assignments and the plans annexed thereto. I have come to the view that the first assignments had assigned to the assignees (i) the exclusive right to occupy their particular units together with (ii) rights of way coloured yellow and green and (iii) rights of access to maintain and repair the drains and pipes.  Save and except these units and areas, the plaintiff had the right to the exclusive occupation of all other areas of the three Sections and the buildings thereon.  The yellow and green right of way areas in the assignment plans were also subject to the plaintiff’s exclusive right to occupy. The areas for the plaintiff’s exclusive occupation are also subject to the co-owners’ right of access to repair and maintain the pipes and drains wherever they are installed. But these areas are not common areas. 

129.  The allocation of areas for the exclusive occupation of the plaintiff and the other co-owners was not changed materially by the DMCs. I hold that clause 2 of the DMCs, which designated the access ways to the units above, have turned these areas into common areas as these areas are by the definition in that clause subject to the common use of all owners.  Before the DMCs were made, the plaintiff owned the exclusive right to occupy these areas subject to the rights of way of the other co-owners.  The DMCs have turned them into common areas. 

130.  There is therefore no doubt as to (i) which are the areas subject to the plaintiff’s exclusive occupation with or without rights of way over them, (ii) which are the areas subject to the exclusive occupation of the other co-owners and (iii) which are common areas.

131.  I would also say that in case of doubt on the designation of common areas in the assignments and DMCs, the availability of access to them can be an important consideration.  In the present case, I have no doubt that areas “B” and “C” are subject to the plaintiff’s exclusive occupation and not common areas. But had I been in doubt, the fact that these two areas are landlocked to the other co-owners would have driven me to the conclusion that they are not common areas.

132.  I also agree with Mr Chan that the facts of this case is similar to those in Jumbo King Ltd v Faithful Properties Ltd & Ors (1999) 2 HKCFAR 279.  In the present case, Imperial Court is divided into a residential portion above and a private carport on the ground level.  In Jumbo King, the development was divided into a residential portion above and a commercial portion underneath.  The dispute was on whether two flat roofs and a utility room were common areas available to the first purchaser or they were subject to the exclusive occupation of the developer.

133.  The reasoning of Litton PJ at 288C to E is instructive:

“There was no specific mention of spaces on those floors such as ‘utility’, ‘storage’, ‘air-handling plant room’, ‘meter’ etc. It is the appellant’s case that this made the property rights vested in the developer in respect of those floors uncertain: that he cannot be deemed to have retained the right of exclusive possession over the spaces marked ‘utility’. That submission succeeded at trial. I would reject that submission. The allocation of space within the commercial portion was of no conceivable interest to Mr Cheng Ah Loong. The deed of assignment and the DMC, both dated 1 May 1968, read together were clear: Mr Cheng Ah Loong had exclusive possession of Flat A5 on the sixth floor and portion number 11 on the main roof. He had easements over portions of the domestic part of J Hotung House for the purpose of passage. Full stop. The developer retained the right of exclusive possession over the rest as a legal incident of his 719/20th share of the land and building.”

134.  However, the plaintiff does not even need to rely on this reasoning as areas “B” and “C” in this case should not be treated as separate and distinct from the rest of the ground floor area like the utility room in Jumbo King.  Areas “B” and “C” are just parts of section C and the RP.  The building lines have never been brought in by the conveyance documents to carve out the two areas from the rest of the carport or section C and the RP.  The argument in reliance on the building lines is an artificial one.

135.  Mr Yim also seeks to rely on Billion Zone Co Ltd v The Incorporated Owners of May Moon House, HCA 15296/1998 and HCA 19488/1998. Mr Chan has however pointed out that the orientation and layout of May Moon House is quite different from the present building.  I would also refer to §50 of the judgment of Deputy High Court Judge J Poon (as he then was) to illustrate the factual difference between the two cases:

“50. I first note the change in the description of the subject matter of assignment. In the 1959 Assignment, it was the exclusive right to use and occupation of ‘the whole of Ground Floor’ of the Building. In the 1962 Assignment, it was ‘the whole Ground Floor (Garage)’ of the Building. As a matter of natural and ordinary language, the word ‘garage’ means a building or shed for housing one or more motor vehicles when not in use. It connotes a covered car parking area as opposed to mere car parking spaces in the open. And it is plain that not the entire Ground Floor of the Building was at the material time used for car parking purposes. It follows that the parties must have intended ‘the whole Ground Floor (Garage) of the Building’ to mean the area of the Building which was used for car parking purpose, and not the entire Ground Floor.”

136.  Furthermore, the non-roofed over areas on the ground level of May Moon House are accessible to all co-owners of the lot and the building thereon.  There is no problem of accessibility.

137.  In view of my analyses and reasoning above, I hold that areas “B” and “C” marked on the Plan are not parts of the common areas of Imperial Court.  They are subject to the plaintiff’s right of exclusive occupation and I so declare. 

138.  The defendants claim in  §§1(ab), 1(b), 1A(b) and 1A(c) of the prayer for relief of the counterclaim a declaration that some areas including areas “B” and “C” are common areas and not subject to the plaintiff’s exclusive occupation.  In the light of my findings above, I dismiss these claims in so far as they relate to areas “B”: and “C”.  I also dismiss §2 of the prayer in so far as it claims damages from the plaintiff for trespass to areas “B” and “C”. 

The three pieces of land within and adjacent to the boundaries of the three Sections at the east, north and west and the area from and including the retaining wall at the north to the edge of the right of way at the north (but not including the right of way)  

139.  The plaintiff also treats as common areas the three pieces of land within and adjacent to the boundaries of the three Sections at the east, north and west.  They include the green and yellow areas in the first assignment plans.  In the first assignments, the plaintiff has the exclusive right to occupy these areas, but the green and yellow areas are subject to the rights of way of other co-owners stipulated in the schedules of the first assignments.  They are coloured yellow on the Plan but without any black hatching.  The plaintiff’s position in this action is that it does not have exclusive right to occupy them.

140.  The plaintiff’s stance is that all the areas subject to the rights of way provided in the first assignments and the area from and including the retaining wall at the north to the edge of the right of way at the north (but not including the right of way) are also common areas.  This area from and including the retaining wall to the edge of the right of way is a slope.  It is also coloured pink on the Plan.

141.  Mr Yim disagreed that these yellow areas on the three sides and the pink area from and including the retaining wall to the edge of the right of way are common areas.  He doubted the plaintiff’s intention in not claiming exclusive possession of these areas.  He thought that the plaintiff was trying to offload the costs of maintenance and repair of these areas onto the incorporated owners (§22 of the defendants’ closing submissions).  But his stance differed from that of the defendants who claim that all these areas are common areas. 

142.  Mr Yim’s view may or may not be correct in relation to the pink area between the retaining wall and the rights of way, but it is mistaken in relation to the yellow rights of way areas.  The maintenance and repair costs of the yellow areas subject to the rights of way have been dealt with in the first assignments.  The plaintiff is immune from such costs. Even if these costs should not have been covered by the first assignments, the plaintiff as the servient owner need not shoulder the costs for repairing the way for the dominant owners (Gale on Easements (19^th ed) §1-93 to 1-105).  If these yellow areas are turned into common areas, the plaintiff will have to contribute a portion of such costs in the capacity of one of the co-owners.

143.  I however agree with Mr Yim that I cannot treat these yellow and pink areas as common areas.  I have already held above that save and except the units that the assignees had the right to their exclusive occupation, the plaintiff had the right to the exclusive occupation of all other parts of the three Sections and the buildings thereon.  Hence, the plaintiff had the right to the exclusive occupation of these yellow and pink areas subject to the rights of way.  These yellow and pink areas are also not for purposes connected with the proper use and enjoyment of the units or for ingress to and egress from them as stipulated in clause 2 of the DMCs.  Hence, they have not been converted into common areas by the DMCs.  If the plaintiff is willing to dedicate these areas as common areas, there are ways and means in conveyance for this to be achieved.  But I cannot declare them common areas as a matter of law if they do not fit into the description in clause 2 of the DMCs. 

144.  I therefore find that the plaintiff has the exclusive right to occupy these yellow and pink areas but the yellow areas are subject to the rights of way granted in the first assignments.

145.  Despite Mr Yim’s views that these yellow and pink areas are not common areas, the defendants have claimed in §1A of the prayer for relief of the counterclaim for a declaration that the plaintiff does not have the sole and exclusive right to possess these yellow and pink areas and areas marked “B”, “C” and ‘D”.  I have already dismissed the defendants’ claims in relation to areas “B” and “C”.  I now dismiss prayer §1A in relation to these yellow and pink areas.

The Defendants’ claim for damages for the plaintiff’s trespass to area “D”

146.  The defendants’ claim in §31 of the counterclaim for damages for the plaintiff’s occupation of area “D” marked on the Plan.  The claim is for the period from 9 May 2007 to 30 June 2011.  This accommodation area was created by excavating the earth from underneath a part the slope coloured pink.  That part of the slope lies between the retaining wall and the right of way at the north.  The plaintiff had let out this accommodation area “D” for profit.  This area had been sealed up in or before June 2011 pursuant to a building order.

147.  The defendants claim that this accommodation area was a common area because it lied outside the building lines of Imperial Court.  I have decided this argument on common area against the defendants.  I have decided that the exclusive right to occupy the slope belongs to the plaintiff and it is not even subject to any right of way for the other co-owners.  Nobody addressed me on the right of occupation of this “underground” accommodation area from the perspective that it lied underneath the surface of the RP.  I will thus proceed on the basis that the owner who has the exclusive right to occupy the surface would have the same right to occupy the area underneath it. Hence, this area was subject to the plaintiff’s exclusive right of occupation. The defendants had no right to have access to or occupy it.  Hence, the defendants have no claim for damages by reason of the plaintiff’s exclusive occupation of it through letting it to tenants.

148.  In any case, PW2, Tsang Kee Ping, a technical officer of the plaintiff testified that this accommodation area had been left vacant since about April 2003 (§7 of B130).  His evidence was not challenged. Hence, for the period of claim by the defendants which is from 9 May 2007 to 30 June 2011, the plaintiff was not in occupation of this accommodation area.  This claim therefore fails on this ground as well.  Regarding the plaintiff’s occupation of this area in and before April 2003, any claim in respect of that would be time barred.

149.  I therefore dismiss the defendants’ claim in §§1(ab) and 1A in the prayer for relief of the counterclaim for a declaration that area “D” is a common area.  I also dismiss the claim for damages in §2 of the prayer for relief of the counterclaim insofar as it relates to area “D”. 

Decision on the status of Area A (the transformer room)

150.  The transformer room is within the roofed-over area on the ground floor.  On the defendants’ case, it should be subject to the plaintiff’s exclusive occupation.  It is also not coloured.  There is therefore no right of way over it.  It is also not within the definition in clause 2 of the DMCs. 

151.  However, Mr Yim submitted that the transformer room has been marked in the approved plan and the first assignment plans.  There is a right of way provided to it.  Under the DMCs, all co-owners have the obligation to contribute to the outgoings and expenses for its maintenance and repair.  Hence, Mr Yim submitted that it must be a common area (§§25-29 and 46-47 of Ds’ Opening and §§96-99 of Ds’ Closing).

152.  However, the  defendants also say that it is not their case that the presence of a common facility at a location on the ground floor would make that location surrounding the facility a common area (§35 of Ds’ Opening).

153.  Mr Chan on the other hand submitted that the transformer room is clearly part of the ground floor that has been expressly reserved for the plaintiff’s exclusive occupation.  The rights of way in the schedules of the first assignments also do not cover this room as it is not coloured. 

154.  Mr Chan also submitted that there is no legal basis for the defendants’ pleaded case that the plaintiff had abandoned the exclusive possession of the transformer room.

155.  I agree with Mr Chan.  I also say that the transformer room is a conspicuous location.  If it were the intention of the parties or of the plaintiff to make it a common area, it would have been so designated either in the first assignments or the DMCs.  It would not have been omitted by mistake or oversight.  Hence, I hold that this room is a common area.  There is also no legal basis to say that the plaintiff had abandoned its exclusive possession.

156.  Nevertheless, there is no longer any transformer kept in this room.  An upgrading of electricity supply in about 1994 necessitated the use of a bigger transformer for Imperial Court.  This room was not big enough to house the upgraded transformer which was then moved to and housed in a neighbouring building.  There are now in the room two electric cables running through it for the supply of electricity to Imperial Court.  

157.  In the light of my finding that the transformer room is not a common area, I dismiss the defendants’ claim in §§1(ab) and (b) of the prayer for relief of the counterclaim for common areas in so far as they relate to the transformer room.  I also dismiss §§2, 3 and 8(b) of the prayer for damages in so far as they relate to this room.

158.  Though the plaintiff claims the right to the exclusive possession of the transformer room, it accepts that the other co-owners of Imperial Court have an implied right of way to access this room for inspection, maintenance, and repair of the electric cables.  The plaintiff has also handed over the keys of the room to CLP on 1st February 2010 and ceased to be in occupation of the same since then (C567).

The plaintiff’s misuse of the transformer room

159.  The plaintiff had misused the transformer room blatantly since sometime before February 2009 by partitioning the bulk of it for letting.  It was contrary to the Buildings Ordinance and the Electricity Ordinance.  The 1st defendant lodged a complaint on this with the Buildings Department, the Electrical and Mechanical Services Department (“EMSD”) and CLP.  The departments and CLP had issued numerous complaint letters requiring restoration of this room.  A building order was also issued by the Buildings Department dated 29 July 2009 (C545) requiring restoration.  Eventually, the plaintiff ceased its flagrant infringements and restored the transformer room before 1st February, 2010 (C567).

160.  The plaintiff has taken the point that the IOs can only sue in respect of common areas.  However, the transfer room houses two cables for supplying electricity to Imperial Court.  These are common facilities.  I hold that the 2nd to 4th defendants have the locus to sue the plaintiff for having altered the transformer room which could affect the repair and maintenance to the cables. 

161.  Since the plaintiff has rectified its breaches of the Buildings Ordinance and the Electricity Ordinance in relation to the user of the transformer room and delivered possession of this room to CLP on 1st February, 2010, it is no longer necessary to grant any injunctive relief against the plaintiff in respect of the user of this room.  I would therefore grant no injunctive relief pursuant to paragraphs 5 and 8(a) of the prayer for relief of the counterclaim.  But the question of costs is still alive.

Decision on the status of the Meter Room

162.  Regarding the meter room, it is at the location on the approved plan where the meters were positioned.  The defendants submitted that it should therefore be a common area.  But I do not think the positioning of the meters in the approved plan is a sufficient basis for treating the meter room as a common area. 

163.  Furthermore, even if the plaintiff had acquiesced in the building of the meter room on the ground floor, that would also not be enough to turn it into a common area.

164.  I hold that the meter room is subject to the plaintiff’s right of exclusive occupation subject to access being given to the IO’s and their manager to inspect, repair and renew the equipment therein.

The Defendants’ claim for damages for the plaintiff’s trespass to area “E”

165.  There are two areas marked “E”.  They are inside the entrance area leading to the staircase to Blocks E, F, G and H on the RP. The whole entrance area including these two areas is marked green or yellow in the first assignment plans.  The entrance area is also within the definition of entrance hall, staircases, landings and common passageways in clause 2 of the DMCs.  Hence, initially the plaintiff had the exclusive right to occupy the entrance area subject to the rights of way of all the other co-owners of the three sections.  But insofar as the co-owners of the RP are concerned, this area was later turned into a common area by the DMC of the RP.  The rights of way for the co-owners of sections B and C are however unaffected by this change.

166.  The defendants pleaded that the plaintiff had trespassed these two areas by letting them to a Kwan Ngai Sang Store from 26 November 2003 at the latest to 30 August 2006 or thereabouts (§31(b)(i) of the counterclaim).  They seek an order for damages for trespass to be paid by the plaintiff.

167.  The defendants alternatively claimed that the plaintiff had collected the rent from the store as agent and trustee of the other co-owners of Imperial Court since 1960 or thereabouts and should account the same to the IOs ((§31C of the counterclaim).  I think this claim should only be made by the co-owners of the RP and not by the co-owners of sections B and C. The co-owners of sections B and C only own incorporeal interests of rights of way over them.

168.  The defendants’ further claim that the plaintiff has not acquired any possessory title over the two areas and the title of the other co-owners of the RP to them had not been extinguished.  Alternatively, the defendants seek a declaration that even if the plaintiff should have obtained a possessory title to the two areas, the two areas are still subject to the terms and conditions of the DMCs. 

169.  The plaintiff in defence to these claims pleaded that it has acquired a possessory title to these two areas.  But it accepts that the two areas are still subject to the terms and conditions of the DMCs (which should be restricted to the DMC of the RP).

170.  The plaintiff pleaded that it had without the consent of the IOs or the other co-owners been in continuous possession of the two areas for no less than 20 years by letting it to Kwan Ngai Sang Store from around 1971 to 1997 and then to Kwan’s sister-in-law, Madam Ng to run a store in the same name from 1997 to about 30 June 2006.  The plaintiff further denied that it did so as the agent or trustee of the other co-owners.  The plaintiff thus pleaded that it had obtained a possessory title to these areas prior to the commencement of this action.  It is therefore not liable to pay any damages to the IOs for the trespass over these areas.

171.  The 1st defendant gave some hearsay evidence in her 3rd witness statement that she had heard from the above-named Madam Ng that Kwan Ngai Sang had operated his store at these two areas since 1960.  When Kwan emigrated in 1985, Madam Ng took over the store and operated it until the end of July 2006.  Kwan and subsequently Ng had paid rent to the plaintiff for their tenancy over the two areas and the plaintiff had given them rent receipts.  But they had never paid any rent or management fees to the IOs (§34, B150).  This evidence was unchallenged.

172.  PW2 also said in his supplemental witness statement that when he joined the plaintiff in 1971, Kwan Ngai Sang Store was already there as a tenant of the plaintiff.  At that time, most of the flats in Imperial Court were let to members of the British Forces in Hong Kong.  There were then not many shops or stores on Waterloo Road.  Kwan’s shop supplied the needs of the residents by selling them beers, soft drinks, fruits, cigarettes and other groceries (§§4 to 6, B130).  This evidence was also unchallenged.

173.  Regarding the defendants’ claim that the plaintiff had collected rent from Kwan and then Ng as agent or trustee of the co-owners of the RP, there is no evidence that any co-owner or the Incorporated Owners (“the IO”) of the RP had authorized the plaintiff to let out the “E” areas to Kwan, Ng or anyone else on behalf of the co-owners or the IO.  The DMC of the RP also does not contain any provision authorizing the plaintiff to do so.  The rent receipts were issued by the plaintiff in its own right.  The plaintiff also claimed to be the owner of this staircase shop in Requisition for Particulars of Tenements filed with the Commissioner of Rating and Valuation (C1114-1127).  It thus paid rates for the shop in its own right.  There is no evidence that the plaintiff had let out the “E” areas as agent or trustee of the co-owners or IO of the RP.  There is in fact ample evidence showing that the IOs had been trying hard to get rid of the store from the “E” areas since the 1910s (C 1211) but they could not prevail over the plaintiff’s will until July 2006.

174.  The plaintiff in letting out these two common areas for its own benefit was obviously committing a wrongful act of trespass.  Its trespass was glaring and outrageous.  It did not desist from the wrongful act despite repeated demands by the Buildings Department and the manager of Imperial Court since September 1997 and the issuance of a building order on 6 January 1999.  The occupation by the store only ceased sometime in July 2006 after a lot of work having been done by the IOs and the manager Efficient (C 11198 – 1214).

175.  On the basis of the evidence referred to above, I hold that the plaintiff did not occupy and let out the “E” areas or collected the rent thereof as agent or trustee of the other co-owners of the RP.  The plaintiff and the IOs were in fact fighting against each other over the plaintiff’s occupation of these areas.  The plaintiff is therefore not liable to account any rent collected from Kwan or Ng to the co-owners or IO(s) as their agent of trustee.  I therefore dismiss §1E of the prayer for relief of the counterclaim.

176.  However, the plaintiff’s trespass of the two areas could as a matter of law extinguish the title of the other co-owners to these areas and acquire for it a possessory title to them (Wong King Lim v The Incorporated Owners of Peony House, CACV 3/2012 at §§17 to 19).

177.  Regarding the plaintiff’s claim of having acquired a possessory title to the two areas, the defendants say that there is no evidence that the plaintiff, in occupying the two areas by letting them to Kwan and then Ng, had the necessary animus possidendi.

178.  There is the unchallenged evidence of PW2 that Kwan and subsequently Ng were operating a fruit store in these two areas to sell beers, soft drinks, fruits, cigarettes and other groceries.  They must have kept refrigerators, shelves, containers and boxes thereat for their business. They would thus have assumed exclusive occupation of the two areas against the whole world.  I therefore hold that the plaintiff had, by letting the two areas to Kwan and then Ng for such operation, had the necessary animus possidendi in occupying these two areas.

179.  I therefore find on the basis of the unchallenged evidence of the 1st defendant that the plaintiff had in about 1980 extinguished the title of all co-owners of the RP to these two areas and had acquired a possessory title thereof.  In any event, even if I should accept Mr Yim’s submission and not rely on the hearsay evidence of the 1st defendant, there is still the unchallenged evidence of PW2.  On the basis of Tsang’s evidence, the plaintiff should have acquired the possessory title to these two areas sometime in 1991 and I so find.  I therefore dismiss §1C of the prayer for relief of the counterclaim which seeks a declaration that the plaintiff has not acquired a possessory title to the “E” areas and that these areas are still common areas.

180.  The defendants have also pleaded abandonment of the two areas by the plaintiff since July 2006.  However, the mere cessation of exclusive occupation by the plaintiff could not have deprived the plaintiff of its ownership and title of the two areas.  There is no merit in this plea.

181.  Furthermore, once the plaintiff has acquired a possessory title to the “E” areas, it ceased to be liable to pay any damages to the other co-owners or the IO of the RP (Mount Carmel Investments Ltd v Peter Thurlow Ltd & Anor [1988] 1 WLR 1078 at 1088C to 1089C).  I therefore dismiss §2 of the prayer for relief of the counterclaim insofar as it seeks from the plaintiff damages for trespass to the “E” areas.

182.  Regarding §1D of the prayer for relief of the counterclaim which seeks a declaration that if the plaintiff should have acquired a possessory title to the “E” areas, then these areas are still subject to the terms and conditions of the DMCs, the plaintiff still has to let the other co-owners of the RP to have access to and use of these areas for all purposes connected with the proper use and enjoyment of their units.  This proposition has always been accepted by the plaintiff and no declaration needs to be made under this paragraph. 

183.  I would also note that the rights of way enjoyed by the co-owners of sections B and C over these two areas have not been affected by the plaintiff’s acquisition of a possessory title over them (see Peony House).  But there is no claim by any of these co-owners for damages for substantial interference with their right of way over these areas.

Surface drainage, surface channels or covered channels

184.  The defendants pleaded in §8 of the defence that there were surface drainage, surface channels or covered channels which were demolished and/or damaged by the plaintiff.  They were marked on plan 12 annexed to the defence.  The 1st defendant said in her 3rd witness statement that these surface drainage and/or surface and covered channels on the ground floor were damaged or demolished by the plaintiff or its tenants.  Water therefore could not flow freely and overflew from the channels.

185.  The defendants seek an order in §1B of the prayer for relief of the counterclaim for the plaintiff to restore these drainage and channels and to provide the IOs with reasonable access for inspection, repair and renewal.  They further ask for an injunction restraining the plaintiff from demolishing and/or damaging these drainage and channels. 

186.  The 1st defendant also produced a letter dated 5 April 2013 from the Buildings Department.  The letter was written in response to verbal and written reports made by the 1st defendant to the department on the drains and channels of Imperial Court.  The letter referred to an inspection conducted by the department which did not show anything unacceptable.  The letter also said that the department would conduct further investigation into the underground drains and manholes to ensure that nothing would be in disorder or unhygienic.  In a nut-shell, the department had, pursuant to the 1st defendant’s verbal and written complaints, conducted an inspection of the drains and channels on the ground floor of Imperial Court, but did not find any problem.

187.  All the drains and channels as indicated in the plan (C1143-1144) used by the 1st defendant in her evidence are within areas subject to the plaintiff’s exclusive occupation and not on common areas.  Two of them are on the eastern and western edges which are subject to rights of way.

188.  Since these surface drains and channels are on areas subject to the plaintiff’s exclusive occupation and not on common areas, they are for the plaintiff to deal with.  The defendants have no locus to seek any order requiring the plaintiff to repair them.  I therefore dismiss §1B of the prayer for relief in the counterclaim.

The defendants’ claims against the structural alterations made by the plaintiff for converting the carport to shops and godowns

189.  The defendants claim that the plaintiff had converted the ground floor carport and transformer room into shops and godowns contrary to clause 8 of the DMCs.

190.  Clause 8 provides:

“8. Each of the parties hereto shall not make any structural alteration to the said building or to the floor of which he is entitled to the exclusive use, occupation and enjoyment and shall not make any alteration to any installation or fixture so as to affect or likely to affect the supply of water, electricity or gas and shall not cut or damage any of the main walls or beams or floors of the said building.” (emphasis supplied)

191.  The defendants made two complaints under clause 8.  They are against (i) the structural alterations and (ii) alterations to installations or fixtures that affected or likely to affect the supply of water and electricity. 

192.  They pleaded in §9(a)(i) of the defence that the plaintiff had since a date unknown and probably after the 1970s carried out various actions wrongfully and in breach of the DMCs.  These actions infringed the rights of way, a vehicular passageway enjoyed by the co-owners of Imperial Court, the common areas and the IOs’ rights of access to the common parts.  The actions under complaint were the conversion of the carport on the ground floor and other areas into shops, godowns or stores for letting for profit.  Such conversions are said to involve structural alterations to these areas.  Such conversions are also said to be for unlawful use of these areas contrary to the Buildings Ordinance and its regulations. 

193.  The defendants also relied on a plan exhibited by PW2 showing the partitions in sketch form and two letters from the Buildings Department and dated 14 April and 11 November 2009.  The defendants further pleaded in §32 of the counterclaim that these conversions were contrary to clause 8 of the DMCs as they involved structural alterations.

194.  The defendants then referred to a number of letters issued by the Buildings Department, EMSD and CLP as particulars and evidence that the conversions were in breach of the Buildings Ordinance and the Electricity Ordinance.  Many of these letters referred to the plaintiff’s misuse of the transformer room which I have already dealt with above.  These letters however do not suggest that there was any structural alteration in the transformer room before it was restored and handed over to CLP on 1 February 2010.

195.  Regarding the plaintiff’s partition of the carport into shops, the letters show that the 1st defendant had made her first complaint to the Lands Department sometime before 27 March 2009.  The Lands Department then referred the complaint to the Buildings Department.  The 1st defendant also repeated her complaint to the Buildings Department on 2, 6 and 8 April 2009.  The Buildings Department then replied to the 1st defendant on 14 April 2009 (C550).  This reply is one of the two letters pleaded in §9(a)(i) of the defence.  The reply advised the 1st defendant that the department after investigation had found that there were some car parks that had walls erected so that they could be used as shops.  But the department did not discover that the building had structural danger.  The letter further advised the 1st defendant that the unauthorized building works did not belong to those that needed priority of enforcement, but the department would advise the owner to voluntarily remove such works.

196.  The next letter from the Buildings Department to the 1st defendant was issued on 20 October 2009 (C561) on her complaint on the partition walls, the metal gates and wire fence on the ground floor.  The letter advised the 1st defendant that the so-called illegal building works were not newly built.  The department also did not discover that the relevant unauthorized building works had structural danger.  Thus the department would not accord these works the priority of enforcement.

197.  The third letter from the Buildings Department to the 1st defendant was issued on 11 November 2009 (C565).  This is the 2nd letter pleaded in §9(a)(i) of the defence.  It referred to the 1st defendant’s complaint since April 2009 on the unauthorized building works in and the change of user of the carport.  It advised the 1st defendant that they did not have structural danger, had no effect on the structure of the building and did not obstruct the fire escape.  They also did not attract priority of enforcement.

198.  The forth letter was issued on 16 March 2010 (C568) in response to the 1st defendant’s enquiry on 8 February 2010 about the building orders and unauthorized building works in Imperial Court.  An inspection had taken place on 25 February 2010.  On the unauthorized building works in the carport complained by the 1st defendant, the department again said that they did not have structural danger, did not affect the structure of the building and did not obstruct the fire escape.  Hence, they would not be given priority of enforcement.

199.  The fifth letter was issued on 21 October 2010 (C574) in response to the 1st defendant’s letter of enquiry dated 14 October 2010 on the follow up by the department of her complaints against unauthorized building works in Imperial Court.  In relation to the conversion of the carport into shops, the letter said that the department had from April 2009 to February 2010 carried out inspections on many occasions.  The department found that the partition walls as added were exempt building works.  The change of user did not pose structural danger and did not affect the structure of the building or obstruct the fire escape.  The department therefore would not take any further action.

200.  The 1st defendant was apparently not satisfied with the last reply.  She complained on 18 November 2010 directly to the Chief Executive.  The Director of Planning replied to her complaint on 15 December 2010 (C788).  The director said that the Buildings Department, after receiving her complaint of conversion of the carport into shops and godowns, had inspected the premises many times.  The inspections revealed that the additional building works were mainly partition wall that belonged to exempt works.  These walls and the converted shops and godowns did not have structure danger, and did not affect the structure of the building or obstruct the fire escape.  The Buildings Department would therefore take no further action.

201.  I note that the 1st defendant has since 26 November 2009 at the latest been legally represented.  Her defence was filed on that date.  The Buildings Department had advised her by a letter dated 11 November 2009 that the plaintiff’s building works that she complained of had no effect on the structure of the building and did not obstruct the fire escape.  She should by then have been advised that these building works did not affect the structure of the building and did not infringe clause 8 of the DMCs.  But she still persisted in her complaint in March, October and November 2010 and her conduct resulted in the expenditure of a lot more public resources.  Her attitude of persistence has contributed substantially to the worsening of the animosity between the parties and the escalation of the dispute between the parties which resulted in this expensive litigation that has to be funded by all owners of Imperial Court.

202.  The defendants’ expert Ms Cordelier Chan made a different point against the plaintiff’s conversion of the carport.  She said that the plaintiff had not served any notice of change of user on the Building Authority under section 25(1) of the Buildings Ordinance. 

203.  Ms Chan referred to the partition walls as unauthorized building works.  She also said that these works were confirmed by the Building Authority as unauthorized building.  She relied on the letters issued by the Buildings Department including the one dated 16 March 2009 referred to above.  But this letter clearly said that the partition walls did not have structural danger and did not affect the structure of the building.  I cannot tell why Ms Chan as an expert would have concluded from this letter that the Buildings Department had regarded these walls as unauthorized building works. 

204.  Furthermore, Ms Chan’s report is dated 28 December 2011.  I am surprised by her failure to refer to the letters dated 21 December 2010 from the Buildings Department and dated 15 December 2010 from the Director of Planning respectively.  Both letters said that the partition walls were exempt building works. 

205.  I also say that the mere failure of the plaintiff to serve a notice of change of user under section 25(1) of the Buildings Ordinance would not necessarily make the partition walls unauthorized the building works.  Ms Chan seemed to have suggested otherwise, but she has not explained why.

206.  Since Ms Chan has not supplied any valid reason to support her assertion that the partition walls were unauthorized building works and her opinion is contrary to the view of the Buildings Department as shown in the letters above-mentioned, I reject her opinion on this issue.

207.  On the basis of the letters issued by the Buildings Department as referred to above, I hold that the building works that converted the carport into shops and godowns were exempt works and not unauthorized building works within the meaning of the Buildings Ordinance.

208.  Mr Yim further argued that the conversion of the carport into shops produced a structural alteration to the form of Imperial Court in its visual aspect contrary to clause 8 of the DMCs.

209.  He submitted that the words “structure alteration” should be given their ordinary meanings.  He relied on the case of Incorporated Owners of Elite Garden v Profit More Co Ltd [2002] 2 HKLRD 518 where the Court of Appeal held that it was a structural alteration to open windows on an exterior wall because the windows altered the form of the building in its visual aspect. 

210.  However, as pointed out by Mr Chan, the partition walls inside the ground floor were not integral parts of Imperial Court.  They did not affect the visual aspect of Imperial Court.  Mr Chan also relied on Incorporated Owners of Westlands Garden v Oey Chiou Ling [2011] 2 HKLRD 421 at §46 where the Court of Appeal said that an internal partition wall could not be said to be an integral part of a building.  I agree with Mr Chan. 

211.  Mr Yim in §60.9 of Ds’ Closing also referred to two boundary walls with one adjacent to the Western Alley Gate.  These walls have not been pleaded in the defence and counterclaim.  In any case, I am not told how they have altered the visual or structural aspect of Imperial Court.

212.  In the light of the above analyses, I hold that the partition walls that converted the carport into shops and godowns as inspected by the Buildings Department in 2009 did not amount to structural alteration as prohibited by clause 8 of the DMCs.  I dismiss the defendants’ claim in §4 of the prayer for relief of the counterclaim for an injunction requiring the plaintiff to restore the ground floor to a carport.

The defendants’ claims against the plaintiff’s alteration to installations or fixtures that affected or likely to affect the supply of water and electricity

213.  The defendants pleaded in §9(a)(i) of the defence and §33 of the counterclaim that the plaintiff’s conversion of the ground floor carport and the transformer room into shops and godowns had breached clause 8 of the DMC as the alterations had affected or likely to affect the supply of water and electricity to Imperial Court.  They pleaded further or in the alternative in §§9(a)(x) and 34 that the plaintiff had trespassed the communal flushing system by connecting flush pipes from the two toilets to the system.  The two toilets were built by the plaintiff on the ground floor.

214.  Regarding the transformer room, I endorse the view of EMSD in its letter dated 3 June 2009 where the department opined that the partition of part of this room had made it difficult and created danger for the carrying out of the operation to supply electricity by the cable and main switch provided by CLP (C555).  I agree with Mr Yim that such alteration by partition of the transformer room had affected or was likely to affect the supply of electricity.

215.  The defendants seek under §5 of the prayer for relief of the counterclaim an order of restoration of the ground floor alterations including the partition in the transformer room and an injunction restraining repetition.  In the light of the fact that the plaintiff had restored the transformer room and handed its keys to CLP on 1 February 2010 (C567), there is no need to make any order under §5 of the prayer for relief in relation to the transformer room.  But the question of costs remains.

216.  Regarding the rest of the ground floor, Mr Yim submitted that the defendants only needed to prove “alteration” in order to succeed in the claim that the alterations had affected or was likely to affect the supply of water and electricity.  He further referred to the defendants’ evidence that the meters and cables installed by the plaintiff in the metre room were not in line with the circuit diagrams produced in court. 

217.  I do not agree that the mere fact that there was “alteration” in the electrical installations would mean that the supply of electricity would be affected or likely to be affected.  Whether the supply would be affected depends on the nature and effect of the alterations.  It is a dispute that needs expert evidence for resolution.

218.  There are however documents before the court that can show whether the plaintiff’s alterations had affected the electricity supply.

219.  Ever since the upgrading of electricity supply to Imperial Court sometime in 1994, there had been a supply of electricity at 300A to the ground floor premises (supplemental witness statement of DW2, Ho Pak Kwong at §§4 to 12 at B104-106).

220.  DW2, the chairperson of the 4th defendant also produced an inspection report dated 19 September 1997 made by a registered electrical contractor Mr Lau (C698-760).  The report stated the result of the inspection by Mr Lau of the electrical installations of Imperial Court.  Mr Lau was satisfied that the main switch and fuse box(es) for the supply of 300A electricity to the ground floor shops were in proper functional order.

221.  Mr Lau also filed a Periodic Test Certificate under the Electricity (Wiring) Regulations with the Director of EMSD on 25 September 1997 certifying that the electricity riser cable and public electrical installations in Imperial Court were in compliance with the Electricity Ordinance (C701-704).

222.  There were also inspections by the staff of EMSD on 15 May 2009 (C553) and 26 August 2010 (C572-573).  The 2nd inspection was about six months after the transformer room had been restored and handed over to CLP.  The staff of EMSD did not find any problem with the electrical installation of or electricity supply to Imperial Court on the 2nd occasion. In fact the staff of EMSD also did not say anything about electricity supply to Imperial Court after the 1st inspection.

223.  DW2 said that one of the shops “Chan’s Bean Curd” had power outage in May/June 2011.  If that was the only problem, then it was not a case that the supply of electricity to Imperial Court had been affected. It was just a problem of electricity consumption of Chan’s Bean Curd.  DW2, a chartered electrical engineer also agreed in oral evidence that it was just a case of Chan’s Bean Curd using excessive electricity.  Chan’s Bean Curd should investigate its own electrical wiring and installation and electricity consumption.

224.  On the strength of the documentary evidence, I find that the defendants have failed to prove that the plaintiff’s alterations on the ground floor for converting the carport into shops and godowns did not affect and was not likely to affect the supply of electricity to Imperial Court.  In fact the plaintiff had converted the carport into shops for decades and there was never any issue that such conversion had affected the electricity supply to Imperial Court.

225.  Regarding the flushing system, the defendants’ expert Ms Chan agreed that there should be expert evidence from an electrical and mechanical engineer to show whether the supply of flush water to the two ground floor toilets from the system had affected Imperial Court.  But she said it was for the plaintiff to engage the engineer.  This is of course wrong as he who asserts has the burden of proof.

226.  Furthermore, there is also no evidence that the flushing system has been affected by the supply of flush water to the two toilets. 

227.  In any event, one of the two ground floor toilets is used by the staff of the manager Efficient.  The IOs cannot complain about flush water being supplied to this toilet.

228.  There are 104 toilets upstairs.  There is only one toilet exclusively used by the plaintiff and its tenants on the ground floor. The effect of the supply of water to one more toilet on the supply to the other 105 toilets, if any, must be minimal. 

229.  There is some suggestion that the flush water supply is reduced during the dry season.  But such reduction is not caused by the additional 106th toilet.  This additional toilet cannot worsen the shortage appreciably.

230.  On the basis of the above findings, I dismiss §§5 and 6 of the prayer for relief in the counterclaim which relate to the effect of the plaintiff’s alterations to installations on the supply of electricity and water.

The defendants’ claim that the user of the carport as shops and godowns was contrary to clause 10 of the DMCs and s. 25 of the Buildings Ordinance

231.  The defendants’ next grounds of claim against the conversion of the carport into shops and godowns are based on clause 10 of the DMCs.  Clause 10 provides:

“Each of the parties hereto shall not use or cause or suffer or permit to be used the floor of which he is entitled to the exclusive use, occupation and enjoyment or any part thereof for any illegal, unlawful or immoral purpose and shall not do or cause or suffer or permit to be done anything therein or thereupon which may create unnecessary noise or which may be or become a nuisance, annoyance or inconvenience to the occupiers of the other parts of the said building or of the premises in the neighbourhood.” (emphasis supplied)

232.  The two grounds of attack are illegal use and nuisance.  For illegal use, the defendants say that the user of the ground floor as shops and godowns was contrary to the user of carport as stated in the occupation permits and hence illegal.

233.  Section 25 of the Buildings Ordinance is relevant to change of user.  It provides:

“(1) One month's notice in the specified form shall be given to the Building Authority of any intended material change in the use of a building by the person intending to carry out or authorizing the carrying out of such change.

(2) Where in the opinion of the Building Authority any building is not suitable by reason of its construction for its present or intended use, he may by order in writing served on the owner or occupier —

(a) within 1 month of the receipt of a notice under subsection (1) prohibit such intended use; or

(b) require the owner or occupier to discontinue such present use of the building within 1 month from the service of the order:

Provided that the Building Authority may permit by notice in writing such building works as he deems necessary for the purpose of rendering the building suitable for its present or intended use.

(3) The use of a building shall be deemed to be materially changed—

(a) where the carrying out of building works for the erection of a building intended for such use would have contravened the provisions of this Ordinance; or

(b) where the Building Authority could have refused to give approval to plans of such building works under section 16(1) (g).”

234.  The provision in section 25(1) requires the person intending a material change of user to serve on the Building Authority a notice of intended change.  It is not a crime to adopt a material change in the user of the premises, but it is an offence under section 40(2) of the Ordinance not to serve a notice under section 25(1). 

235.  If the changed or intended new user is not acceptable to the Building Authority, it can always serve an order under section 25(2) to prohibit the intended user or require the changed user to be discontinued.  But there is no provision saying that it is an offence to adopt a user of premises which is materially different from that stated in the occupation permit.

236.  If the legislature should have intended to make it an offence for a material change of user without approval from the Building Authority, it would have legislated for it in section 40.  Section 40 contains dozens of offences for infringements of the provisions in the Ordinance. 

237.  For the above reasons, I hold that the change of user from carport to shops and godowns on the ground floor was not illegal and did not contravene clause 10 of the DMCs.

238.  I also note that by reason of the complaints of the 1st defendant, the Buildings Department had inspected the ground floor on repeated occasions since April 2009 with emphasis on the alterations therein for use as shops and godowns.  But the department has not seen it necessary to issue any notice under section 25((2) of the ordinance against the plaintiff to prohibit or require the discontinuance of any user.

The defendants’ claim that the user of the carport as shops and godowns was contrary to clause 10 of the DMCs on ground of nuisance, annoyance and inconvenience

239.  The next claim based on clause 10 is nuisance, annoyance and inconvenience to the other occupiers of Imperial Court.  The defendants produced three letters of complaint from the residents and some photos to support this claim.  The three letters are all dated 26 February 2010.  They are all about the dust and noise generated by the operation of a building materials supplier, Ho Wing Construction Materials Company.

240.  However, all tenancies including the tenancy of Ho Wing have been terminated by 30 September 2012.  The ground floor units of the plaintiff have been vacant since then.  There is therefore no basis to grant any injunction to prohibit any activity which may create the alleged nuisance, annoyance or inconvenience.

241.  Furthermore, apart from the three complaint letters dated 26 February 2010 and the 1st defendant’s assertion in her witness statement, there is no other evidence like complaint letter from the IOs or Efficient to the plaintiff.  The photos themselves do not prove anything.  If there was indeed such nuisance, Efficient should have relayed the same to the plaintiff for action.  I therefore find that the defendants have failed to prove this claim of nuisance, annoyance or inconvenience.  In the premises, I also dismiss §7 of the prayer for relief of the counterclaim. 

The defendants’ claim of trespass by signboards to the common areas

242.  The defendants pleaded in §31B of the counterclaim that the plaintiff had allowed its tenants to affix signboards on certain common areas facing Waterloo Road.

243.  Despite the length of the Ds’ Closing, Mr Yim did not submit at any length on this claim.

244.  The area where the signboards were affixed was the external face of the extended floor slab between the ground and first floors.  The external wall of the first floor recessed for a small distance from the edge of the slab.  The external face of the slab is the eaves of the ground floor and not part of the first floor.  The defendants claim that the eaves is part of the common areas.  But it is not within the description of common areas in clause 2 of the DMCs.  From the first assignments and the First Schedules of the DMCs, the right to exclusive occupation of the external wall seems to belong to the owner who owns the right to occupy the unit it encloses.  This is so despite clause 3(b) of the DMCs which requires all owners to pay a share of the costs for maintaining the common areas, common facilities and the external parts of the building.  Since all units in Imperial Court have external walls, such provision is not unreasonable but practical.

245.  Hence, the first floor owner may claim the exclusive right of occupation to the external wall of that floor or even the upper surface of the slab between the ground and first floors, but he cannot claim the eaves of the ground floor.

246.  For the above reasons, I hold that the signboards did not trespass on the common areas of the Imperial Court.  I dismiss §2 of the prayer for relief of the counterclaim insofar as it refers to the signboards. 

Areas on the ground floor of Imperial Court subject to the plaintiff’s exclusive occupation.

247.  On the basis of my findings above, I declare under §1B of the prayer for relief of the statement of claim that the plaintiff is and was at all material times entitled to the sole and exclusive use, occupation and enjoyment of the areas coloured pink and yellow (without hatching) including the areas marked “A”, “B” and “C” on the Plan.  The yellow (without hatching) areas are subject to rights of way of the other co-owners. The areas subject to the plaintiff’s exclusive right to occupy are also subject to the rights of the IOs and the management company appointed by them to access the common facilities for the purpose of repair and maintenance.

248.  By reason of this declaration, I do not think I should grant any declaration under §4A of the prayer of the statement of claim to enjoin the 1st and 2nd defendants from interfering with the plaintiff’s use of the yellow (without hatching areas) as that paragraph is prayed on the assumption that such areas are common areas.

The plaintiff’s claim for damages for trespass by and demolition of the meter room

249.  The meter room was built in about mid-June 1994 as part of the project to upgrade the electricity supply to Imperial Court.  It was required by CLP as part of the project to upgrade the electricity supply (C867).  The plaintiff had agreed to the upgrading project (C871).  It must have been aware of the need to build this room in its exclusive area.  The construction of the room was also done in the open and the plaintiff must have been aware of it too.  I doubt if the room was built contrary to the plaintiff’s wish.  I also note that most of the meters housed and protected in the room belonged to the plaintiff.  For the above reasons, I would not order the 2nd to 4th defendants to demolish this room under §1C of the prayer for relief in the statement of claim. 

250.  Since this room is subject to the plaintiff’s exclusive use, occupation and enjoyment, the plaintiff is at liberty to demolish this room if it so wishes subject to not affecting the electricity supply to Imperial Court as prohibited by clause 8 of the DMCs. 

251.  For the same reasons, I would not order any damages to be paid by the 2nd to 4th defendants under §1E of the prayer of the statement of claim for the alleged trespass to the meter room.

The plaintiff’s claim for the areas marked “E” on the Plan

252.  Regarding the two areas marked “E”, I have already held that the plaintiff has by adverse possession defeated the title of the other co-owners of the RP to them and has obtained a possessory title over them.  I therefore declare to the same effect under §1H of the prayer of the statement of claim.  I further declare that these two areas are and were at all material times still subject to the terms and conditions of the DMC for the RP and the rights of way granted in the first assignments of sections B and C in favour of the co-owners of these two sections.

The plaintiff’s claim on the Western Alley Gate

253.  The plaintiff’s claim under §1I of the prayer of the statement of claim referred to this gate though it is addressed to the Western Outer Gate.  The position has been clarified at the hearing.  The Western Alley Gate guards the entrance to the right of way at the west of the RP.

254.  There is no dispute that this gate was built by the 2nd to 4th defendants in about 2000 to 2001.  It can be opened from the inside without key.  But a key is needed to open it from the outside.  No key has been given to the plaintiff and the plaintiff has not asked for any.  There is no evidence of any complaint by the plaintiff in relation to the existence of this gate until the commencement of this action. 

255.  Since the plaintiff is claiming under §1I of the prayer for an order of removal of this gate or the provision of a key to it, I would order the 2nd to 4th defendants to provide a key to this gate to the plaintiff forthwith but would not order for its demolition.  But I give the parties a liberty to apply in case anything that may arise subsequently on the plaintiff’s right to a full and uninterrupted access to the yellow area behind this gate. 

256.  I also make it clear that the plaintiff can demand the 2nd to 4th defendants to remove this gate since it lies on an area subject to the plaintiff’s exclusive right of occupation.  The rights of way owned by the other co-owners over this area do not entitled them to install a gate to control access to the area.  The same applies to the Eastern Outer Gate referred to below. 

The plaintiff’s claim relating to the new gate built by the defendants and the bollards behind it

257.  This gate was built by the defendants after the removal of the Eastern Outer Gate on 10 August 2009.  The plaintiff is not insisting on its removal and is contented with the provision of a key to it.  A key has been provided.  The bollards and potted plants behind it have also been removed.  I do not think it necessary to make any order under §§ 5, 5A and 5B of the prayer of the statement of claim which relate to these items.  But I give the parties a liberty to apply in case anything that may arise subsequently on the plaintiff’s right to a full and uninterrupted access to the yellow area behind this gate.  I repeat here what I have said for the Western Alley Gate on the plaintiff’s right to demand the removal of this gate as it lies on an area subject to the plaintiff’s exclusive right of occupation.  Regarding the removal of the Easter Outer Gate on 10 August 2009 and the incident of change of lock to the new gate prior to October 2012, I will deal with them below.

The 1st raid on 10 August 2009 and the removal of the Eastern Outer Gate

258.  The 1st defendant gave evidence that in the afternoon on Sunday 17 May 2009, she noticed that the metal frames of the Eastern and Western Outer Gates were heavily rusted and porous especially the parts supporting the weight of the gates.  The bottom and bottom left of the Eastern Outer Gate was so porous that it was close to breaking apart.  She heard from the news that somewhere in the territory a metal gate had fallen and killed a woman.  She feared that these gates would fall.  She dialled “999” to the police for help.  The police came, but they could not contact the plaintiff’s representative, PW2.  The police then contacted the Buildings Department.

259.  According to the records of the police, the officers of the Buildings Department made a preliminary inspection of the gates and found that the Eastern Outer Gate had potential danger.  The police therefore affixed this gate with plastic tapes to avoid accident.  The police also advised the residents through the manager not to use this gate.  The Buildings Department succeeded in contacting the plaintiff on the next day. The plaintiff then repaired the gate on the next day.  The officers of the Buildings Department examined the gate again.  They were of the view that there was no risk of the gate collapsing and it could be used by the residents (C601).

260.  The 1st defendant in her witness statement only referred to her reporting the matter to the police and the fact that the Buildings Department officers had inspected the gate(s) in the evening of 15 May 2009, but she did not mention that the plaintiff had repaired the Eastern Outer Gate on the next day to the satisfaction of the Buildings Department.

261.  The 1st defendant then referred in her witness statement to the morning of 10 August 2009.  She said the Eastern Outer Gate had the bottom part broken and was later patched up with tin plates.  She then said that she in the capacity of the chairperson of the 2nd defendant (and certain unidentified person) had instructed the manager Efficient to remove this gate.  She further asserted that PW2 was there when the gate was removed as if PW2 had acquiesced in or approved of the taking down and carting away of the gate. 

262.  She tried to justify the removal of this gate by referring to a letter of the Buildings Department dated 22 May 2009 which asked the plaintiff to remove all the gates on the ground floor.  But the department asked the plaintiff to remove the gates not because they were dangerous, but on the ground that they were unauthorized building works.

263.  The evidence of PW2 on this incident was very much different from that of the 1st defendant.  He said he was told by a tenant of the plaintiff in the morning of 10 August 2009 at about 9 am that the Eastern Outer Gate had been taken down.  He immediately went to the scene.  He found that the gate had already been taken down.  The 1st defendant, a resident Li and a representative of Efficient were there.  He then had an argument with the 1st defendant’s group on why they demolished the gate.  The 1st defendant admitted that she had instructed workers to take down the gate in the night before.  The 1st defendant further claimed that that was the right thing to do as the ground floor was common area that belonged to the plaintiff and the IOs.

264.  PW2 argued that the gate belonged to the plaintiff and that the 1st defendant’s group had never sought permission from or given notice to the plaintiff prior to its demolition.  PW2 further said that the plaintiff would not have allowed the gate to be taken down even if the 1st defendant should have asked for permission to do so.  At that time, the resident Li said that if the Eastern and Central Inner Gates were illegal, they would arrange for them to be taken down as well.

265.  PW2 then told the 1st defendant not to remove the gate as he would have to discuss with the plaintiff on what to do with it. According to the oral evidence of the 1st defendant, he also said at the scene that he would reinstall it.  However, the 1st defendant ignored his demand and instructed the workers to cart the gate away.

266.  The record of the police shows that this dispute necessitated the intervention of the police, but the parties refused to settle it.

267.  After the Eastern Outer Gate was taken down and carted away, the IOs installed a new gate in its place on 24 August 2009.  They further positioned and locked up three mental bollards behind it on the ground.  The police was also called to intervene in this matter. 

268.  The defendants also refused to provide a key to the plaintiff to this new gate despite repeated requests including a written request dated 7 September 2009.  It was only when the plaintiff applied to this court on 16 October 2009 that the defendants agreed to provide a key to the plaintiff and to remove the three bollards.

269.  The 1st defendant at the trial tried to justify the taking down the gate by asserting that it was in a dilapidated and dangerous state.  Mr Yim further submitted that it was a nuisance that should be removed.  But the 1st defendant, in answering my question, strenuously denied that she procured the removal of the gate and its replacement by the new gate because of the ugly look of the old gate.

270.  I reject the 1st defendant’s explanation for removing the Eastern Outer Gate.  If the gate was indeed in a dilapidated and dangerous stage, she only needed to repeat what she had done on 17 May 2009 to get rid of the danger.  That was to seek help from the police.  The police would then request the Buildings Department to inspect the gate.  If there should be the potential of danger in the gate, the Buildings Department would make sure that the plaintiff would repair it to the satisfaction of the department.

271.  In any event, I cannot see why the 1st defendant should have insisted on incurring expenses to take down and cart the old gate away.  She knew that it belonged to the plaintiff.   The lack of storage space is a lame excuse.  If the plaintiff wanted to keep it, it could be placed against the wall of the building, the back of the open area or anywhere else for a while pending its disposal by the plaintiff. 

272.  I am of the view that the real reason for the defendants to cart away the old but usable gate and to install a new gate at the expense of the IOs was to prevent the plaintiff from reinstalling the old gate.  The purpose of taking down the old gate was to allow the IOs to replace it with a new gate.  The IOs could then assume absolute control of the use of the new gate and hence absolute control of the access to the area behind the gate to the exclusion of the plaintiff.  That was the reason for the defendants’ refusal to provide a key to the new gate to the plaintiff despite repeated requests.  All these were done when the defendants did not even know the legal position on the Eastern and Western Outer Gates.  The IOs at that time were waiting for legal advice on the same (C245 and 246).  Eventually, the plaintiff obtained the key to the new gate and the removal of the bollards behind it by coming to this court for relief.

273.  The reason for the defendants’ desire to exclude the plaintiff’s control of access to the area behind the new gate (which the defendants regarded as common area) can be gleaned from the 1st defendant’s evidence in her witness statement.  She said in §33 of her first witness statement that the Eastern Outer Gate should be closed when passage through it was not required.  But the plaintiff always kept it open for the vehicles and visitors of its tenants to access the shops, godowns and storerooms inside the ground floor through the vehicular passage way near the gate.  The plaintiff had a decoration company tenant and an estate agent tenant.  They parked their vehicles in the area behind the gate and placed their advertisements there facing Waterloo Road.  The 1st defendant took the view that such activities compromised the safety and security of Imperial Court as strangers could go in and out of Imperial Court through the gate.  She also asserted that the parking of the cars of the plaintiff’s tenants or their visitors on the vehicular passageway near the gate prevented emergency parking of fire engine and ambulance.  She said the three bollards were positioned behind the new gate and locked onto the ground to keep the vehicular passage way free for emergency use.  She also repeated this in oral evidence.

274.  It is thus clear that if the Eastern Outer Gate was replaced by a new gate that the plaintiff had no control, the defendants could put an end to what they regarded as undesirable activities of the plaintiff and its tenants.  That explained the conduct of the 1st and other defendants.

275.  In fact, this incident was part of the defendants’ scheme to put an end to the plaintiff’s use of the ground floor as shops and godowns.  I have already referred to above the repeated complaints by the 1st defendant to the Buildings Department against the plaintiff’s alterations of the ground floor for use as shops and godowns.  Even when the Buildings Department said in its letter dated 11 November 2009 that the plaintiff’s alterations did not affect the structure of Imperial Court or obstruct the fire escape route, she was still undeterred (C568).  Despite the repeated answer by the Buildings Department in the further reply dated 21 October 2010 to her further complaint and the repeated advice to her that the department would not take further action on this matter, she still persisted in her complaint (C574).  She even directed her complaint to the Chief Executive’s office though she obtained the same reply.  Her conduct showed that she was quite determined to procure an end to the plaintiff’s use of the ground floor as shops and godowns. 

276.  I do not think the defendants’ desire to put an end to the use of the ground floor as shops and godowns was because their business activities had caused a nuisance to the residents of Imperial Court.  I have already dismissed this claim above.  I think it may well be related to the 1st defendant’s thinking (as confirmed in her oral evidence) that the plaintiff should let the parking spaces on the ground floor to the residents of Imperial Court. 

277.  PW2 shared this thinking too.  PW2 agreed in cross-examination that it was the defendants’ thinking that they should claim back the passageway so that the ground floor could be used as car parks and be rented to the residents of Imperial Court.

The destruction of the Eastern and Central Inner Gates and the 1st Toilet in the late evening of 24 September 2009 (the 2nd raid)

278.  The plaintiff intended to call one Mr So Sun Chuen as its witness.  A subpoena had been served on Mr So, but he failed to appear at the trial.  The plaintiff therefore adduced his witness statement as hearsay evidence.

279.  Mr So was a former tenant of the plaintiff.  He used to hawk chestnuts on a cart.  He rented a storeroom from the plaintiff on the ground floor for storage of his cart and chestnuts.  His storeroom was opposite the open yard “B”.  He used to go to the storeroom at about 10:00 am to retrieve his cart and goods for his business and return them to the storeroom at about 10:00 pm.

280.  It was drizzling in the evening of 23 September 2009.  He therefore stopped working a bit early and returned to the storeroom at about 9:30 pm.  He saw four to five people standing at the open yard “B” in front of the Central Inner Gate and talking loudly.  But he did not pay much attention to what they were talking about.

281.  In the evening of 24 September, he returned to his storeroom at about 10:15 pm.  He saw four to five workers who were in the course of demolishing the Central Inner Gate with electrical tools.  He later saw a man who brought some bottled water for the workers and a woman who came to ask the workers whether they had finished with their work.  A worker replied that they had finished.  The workers then lifted the parts of the demolished gate and carted them away with a truck.

282.  In the morning of 25 September, he told PW2 what he saw in the two previous evenings.

283.  The plaintiff’s 4th witness is a former tenant, Mr Yu Kam Shing.  He used to be a tenant of the plaintiff renting a storeroom on the ground floor.  He used the storeroom as the office for his interior design and decoration business.  His storeroom occupied the area between the Eastern and Central Inner Gates.

284.  In the evening of 24 September 2009, he worked until about 9:00 pm when he left his office, the Eastern and Central Inner Gates and the 1st Toilet were intact and there was nothing unusual about them.

285.  When he returned in the morning at about 11:00 am, he found that the Eastern and Central Inner Gates and the 1st Toilet had all been demolished.  The wash basin and toilet bowl in the 1st Toilet had also been broken.  He saw PW2 and PW3 there together with a policeman.  He then checked his tools and found that he had lost two construction tools.  He immediately reported his loss to the policeman.  He then went to the Kowloon City Police Station and made a statement on his loss.

286.  After this incident, he was concerned about the safety and security of his assets.  He then moved out in February or March 2010.

287.  It was put to him in cross-examination that he moved out because the plaintiff had asked him to do so, but he maintained what he said in his witness statement.

288.  There is a copy of a termination of tenancy made between him and the plaintiff, and dated 24 September 2009 terminating the tenancy on 31 August 2009 (C967).  PW1 clarified in his oral evidence that Yu used to rent the partitioned area in the transformer room from the plaintiff. This document was used to terminate that tenancy after the plaintiff had received a building order dated 23 July 2009 requiring the transformer room to be restored (C559).  Yu then moved from the transformer room to the storeroom.

289.  PW2 said in his witness statement that he learnt from So Sun Chuen in the morning of 25 September that there were four to five persons who demolished the Eastern and Central Inner Gates and the 1st Toilet. He witnessed Mr Yu’s report of loss of two construction tools to the police. Judging from what happened to the Eastern Outer Gate and what resident Li said on 10 August 2009, he believed that it was the 1st and/or 2nd defendant who had caused the demolition of these items.

290.  He had also been told by one Mr Lau Chi Hung, an employee of a tenant of the plaintiff that when Lau returned to the ground floor at 7:30 am on 25 September, the wash basin and toilet bowl in the 1st Toilet had already been broken.

291.  After the removal of the Eastern Outer Gate on 10 August and the removal of the Eastern and Central Inner Gates on 24 September, the plaintiff’s tenants expressed to him their concern about the safety and security of the goods and properties in their premises.

292.  PW2 later learnt from one Mr Wong Fung Kei, a caretaker of Efficient that Mr Wong knew who procured the demolition on 24 September and the expenses involved, but Mr Wong did not reveal such information to him.  He further said in cross-examination that Wong had told him that Wong received the information from a night shift caretaker.

293.  The 1st defendant in §33 of her 3rd witness statement denied knowledge of the demolition of the Eastern and Central Inner Gates and the 1st Toilet.  She also denied that anyone of the committee of the 2nd defendant had caused such demolition.  She further alleged that the Eastern Outer Gate was wide open throughout the day at material time and anyone could have done it.

294.  She also referred to a statement by the said resident Li.  But Li’s statement only referred to the further breaking down and removal of the wash basin and toilet bowl by PW2 and his staff on 25 September before these items were cart away as rubbish.  The statement tells nothing about who had demolished the two gates and the 1st Toilet in the previous evening.

295.  The 1st defendant in oral evidence further asserted that the plaintiff’s tenants had always kept the Eastern Outer Gate open.  She further suggested that people could have come in through the Western Alley Gate to the rights of way area gone up the stairs and come round to the eastern side, gone down the stairs and reached the Eastern Inner Gate.

296.  However, I think it is just fanciful to suggest that there were people who would have taken a route through the rights of way to come in to demolish the gates and then carried them away through such a route.

297.  It is also fanciful to suggest that because the plaintiff’s tenants had left the new gate open, therefore there were people who would have sneaked into the eastern open area and quietly demolished and carted away the two gates like petty thieves quietly stealing a few light objects from the place.  It is unrealistic to suggest that the two gates could have been demolished and carted away in a clandestine manner that did not even alert the night shift caretaker.  Furthermore, to demolish the two metal gates and the toilet and to cart away the gates must have required more than one worker armed with the necessary equipment and a truck to cart away the broken parts.  Hence, some considerable expenditure would have been required for the task.  The task would therefore have been organized and procured by someone having a desire to remove the gates and the toilet.

298.  Furthermore, the plaintiff was not given a key to the new gate until 16 October 2009, but the demolition was done in the late evening of 24 September 2009 before the plaintiff had any control of the new gate.

299.  If this operation had been done by the plaintiff, the caretaker would also have known about it as he would have made the necessary enquiries when the operation was undertaken late in the evening.  If the caretaker had knowledge that it was the plaintiff that did it, he would have relayed the same to the IOs.

300.  In any case, save and except the plaintiff and the defendants, there would not have been any person who would incur the expenditure to undertake this operation.  As between the plaintiff and the defendants, I do not think the plaintiff would have done it and then reported it to the police with a view to frame the defendants.  I cannot see any purpose that the plaintiff could have achieved by so doing.  If they wanted to claim the use of the ground floor area where the gates situated, they could have brought an action without damaging the gates. 

301.  The gates were also old installations and would have any significant worth.  The plaintiff could not have claimed substantial damages from the defendants by framing them.  To do so would also amount to the commission of a criminal act.  Furthermore, to demolish the gates would also weaken the security to the assets and properties of the plaintiff’s tenants and is against the plaintiff’s interest.  I rule out the possibility that the plaintiff had undertaken this operation and then tried to frame it on the defendants.

302.  I also accept the evidence of the plaintiff’s witnesses including the hearsay evidence of So Sun Chuen on this incident.  I accept that So had witnessed the demolition and carting away of the Central Inner Gate as that was consistent with what could be observed in the morning of 25 September.  I also accept the evidence of PW2 on how the aftermath of the demolition was discovered in that morning.  Their evidence is also corroborated by the police record (C602). 

303.  The police record said that the plaintiff had reported on 25 September 2009 that the big gate(s) and toilet at the rear block (the 1st Toilet) had been destroyed.  The record further said that investigation had revealed that the big gate(s) and toilet were obstructing the fire escape, and by notice of the Buildings Department, they were demolished.  Thus, the police took the view that it was a legitimate operation pursuant to a building order and not demolition by unknown people as alleged by the defendants. 

304.  This view of the police should have been based on some information that the police had obtained from either the defendants or Efficient in the course of its investigation.  PW2 or PW3 would not have said anything like this to the police.  PW2 only said at the scene that even if there was a building order, the plaintiff would carry out the demolition by itself.

305.  On the credibility of the 1st defendant, Mr Chan has submitted that she was evasive and unreliable with a strong tendency to tailor her evidence for her purposes.  Mr Chan cited various instances of the 1st defendant’s evidence to support this submission.

306.  The first instance is her changes of evidence as to what was her alleged back passageway.  She referred to plan 6 of the defence but gave three different versions at different times as to the location of the passageway.

307.  The next instance is on when she had become aware that there was no transformer but only two cables in the transformer room.  She denied that she had learnt about it in 1996.  She then agreed that she only learnt it in the morning of 28 May 2013 in the course of the trial. But she probably realized the absurdity of her answer.  She then quickly changed the date to early 2013.  But the transformer room was one of the subject matters in her complaints to the Buildings Department since April 2009.  She knew at that time that the bulk of the room had been partitioned by the plaintiff for letting.  The police record also stated that she had made a complaint to the police on 11 October 2009 that there was a caretaker Mr Tang Kin Sang sleeping in the transformer room (C603).  Hence, she would have known that there was no transformer in the transformer room long before early 2013 and no later than 2009.  But she did not tell the truth in her evidence.

308.  On the decision to remove the Eastern Outer Gate, she at one time tried to shrug off responsibility by saying that she had no part in the decision.  But eventually she admitted her role in it as she was the chairperson of the 2nd defendant.

309.  On this alleged decision of the IOs to remove the Eastern Outer Gate on 10 August 2009, the IOs only made a retrospective resolution on 19 April 2012 to rectify the action.  That was long after the litigation had commenced (C1257-1260).  She disagreed that the rectification by the IOs was because of the litigation.  She maintained that there was a previous resolution of the IOs for the removal, but could not locate any.  She then made a new allegation that the members of the IOs had held a meeting on 10 August 2009 but did not record the resolution.

310.  Regarding the key to the new gate, she was asked why the plaintiff was not given it but she claimed ignorance of the reason without explaining why she could be ignorant.  Such an answer is incredible bearing in mind that she was the chairperson of the 2nd defendant and took an active interest in demolishing the Eastern Outer Gate by presenting herself at the scene of the operation.

311.  Regarding So Sun Chuen’s evidence on the operation in the late evening of 24 September 2009, she wanted to establish a case that she was known to So and the woman So referred to in his witness statement was not her.  She thus suggested that she had visited the pump room (at area “B”) every single day.  She said such was necessary as caretakers of Imperial Court changed very frequently.  However, shortly thereafter she denied of having said this.

312.  The above instances indeed show that the 1st defendant is not a reliable witness.  She has little respect for truth and is prepared to say anything that may advance her case.  I disbelieve her denial of knowledge or absence of role in the demolition of the Central and Eastern Inner Gates and the 1st Toilet. Judging from her leading role in the demolition and removal of the Eastern Outer Gate and her firm view against the plaintiff’s use of the ground floor for shops and godowns, I am of the view that she had also played a leading role in the demolition of the Eastern and Central Inner Gates and the 1st Toilet in the late evening of 24 September 2009.

313.  By reason of my analyses above including my consideration on the credibility of the 1st defendant, I find that the Central and Eastern Inner Gates and the 1st Toilet were demolished on the instruction of the 1st, 2nd, 3rd and 4th defendants in the late evening of 24 September 2009.

Removal of Air-Conditioning Stand on 5 October 2009 (the 3rd raid)

314.  PW2 said in his witness statement that at around 10:00 a.m. on 5 October 2009, he was told by Mr Wong Fung Kei, the caretaker of Efficient that the 1st and/or 2nd defendants had instructed Efficient to enter the ground floor and remove the Air-Conditioning Stand affixed on the retaining wall over the pump room inside Area “B”.  PW2 said the stand was erected there and owned by the plaintiff.  Neither the 1st nor 2nd defendant had complained to the plaintiff about the stand.  They had also not asked for the plaintiff’s consent for its removal.  PW2 admitted that the stand was rusty, but denied that it was in disrepair or dangerous.  When he learnt of the 1st and/or 2nd defendants’ attempt to remove the stand, he reported the matter to the police.  But the police regarded it as a civil dispute and did not interfere.  The stand was then removed by Efficient on the instruction of 1st and/or 2nd defendants.

315.  The 1st defendant did not dispute the plaintiff’s allegations or the evidence of PW2.  She admitted that the Air-Conditioning Stand was removed by Efficient on the instruction of the IOs. She alleged in her witness statement (B72 §36) (but without pleading so) that the Air-Conditioning Stand was installed there by a Dr Ho for support of an air-conditioner.  Dr Ho had practised from one of the plaintiff’s shops on the ground floor.  The 1st defendant further alleged that the stand had become rusty, was in a state of disrepair and could break and fall at anytime.  Seeing that there was a real danger that it might fall, the IOs therefore instructed Efficient to remove it.

316.  However, even if the 1st defendant’s unpleaded case that the stand was affixed there by Dr Ho is accepted, it still does not mean that the defendants had the liberty to remove it without the consent of the plaintiff.  It is settled law that a tenant’s fixture would become the landlord’s property after the termination of the tenancy and departure of the tenant (see Woodfall’s Law of Landlord and Tenant 2015 at §§13.140-13.141, 13.144-13.148 and 13.156-13.157.5).  The removal of the stand at the instance of the defendants was thus a wrongful act.

317.  Since the plaintiff had claimed ownership of the stand and the 1st to 4th defendants had no legal advice on the merit of the plaintiff’s claim, they should not have insisted on removing it contrary to the plaintiff’s claim.  If the stand should have been in the dilapidated state as alleged by the defendants, the defendants should have advised the plaintiff of the same and asked the plaintiff to repair or remove it.  If the plaintiff should refuse to rectify the situation, they could always report the matter to the Buildings Department.  They should not have taken the matter into their own hands.

Removal and disposal of seven front switches and cables on or before 4 December 2012 (the further raid)

318.  There were a number of electricity meters installed in the meter room on the ground floor.  They supplied electricity to units A to H and common facilities.  Eight of the meters supply the electricity needs of the plaintiff.  Seven of them were for supply to the plaintiff’s former tenants on the ground floor and the eighth was for its caretaker’s desk.

319.  There were cables connecting the eight meters to eight front switches and further cables connecting the eight front switches to eight electricity distribution boxes.

320.  When the plaintiff renovated the ground floor, its contractor switched off seven of the front switches and disconnected the cables from the seven electricity supply boxes at the end.  The ends of the disconnected cables were wrapped up with environmental tapes for safety reasons and for the cable to be reconnected to the supply boxes upon completion of the renovation.  However, the plaintiff discovered on 4 December 2012 that the seven front switches and the cables at their both ends had been removed and disposed of without the plaintiff’s consent.

321.  The 2nd to 4th defendants admit that the seven front switches and cables at their two ends had been removed by their contractor, An Wa Engineering Co (“An Wa”).

322.  DW2, the chairperson of the 4th defendant dealt with this matter in his supplementary witness statement (B103).  He referred to the project to upgrade the electricity supply to Imperial Court in 1992 to 1994.  The total costs for the electrical system for supply of 300A electricity to the ground floor shops were at HK$38,000.  But the plaintiff only agreed to bear HK$19,000.  This was accepted by the IOs which waived the balance of HK$19,000. 

323.  DW2 asserted that it was the understanding all along that all switches and cables belonged to the IOs and no individual owner could remove any such switch or cable without the IOs’ consent. 

324.  He further said that the IOs had decided in August 2012 to renovate and repair the defects in Imperial Court.  Their solicitors wrote the plaintiff’s solicitors a letter dated 18 September 2012. On the removal of installations and attachments in the common areas.  The material part of the letter reads:

“We write, …, to give your client notice to remove all and any installations and attachments of your client over, of and in the common areas of the ground floor of … Imperial Court including but not limited to the air-conditioner metal frame outside of Flat 2B of Block B within 14 days from the date of this letter as renovation/repair works of the whole of Imperial Court shall commence shortly. If your client should fail to remove the said installation and attachments, our client shall take such action as appropriate to remove them and all such costs shall be borne by your client absolutely.”

325.  Also in around September 2012, Efficient informed DW2 that an electrician of the plaintiff wanted to carry out works in the meter room.  Since DW2 was keeping a key to the room, he let the electrician into the room.  He saw the electrician unhooking the cables from the meters and wrapping round the loose ends with electrical tape.  He said the electrician did not tell him that the unhooked and wrapped up cables would in due course be hooked back to the meters.  The plaintiff also did not inform the IOs that it intended to re-hook the front switches to the meters.

326.  Subsequently, the IOs received a letter dated 15 October 2012 from EMSD (C890).  The letter advised the IOs that their five-yearly periodic test certificate would expire on 11 July 2013 and the IOs should procure another certificate before the expiry date.

327.  The IOs then engaged An Wa to perform preparatory works for the next periodic test.  One of the terms of An Wa’s engagement was to remove the existing useless wiring in the meter room.  DW2 said this was for complying with §4(d) (1) of the Code of Practice for the Electricity (Wiring) Regulations which required the workplace to be kept clean and tidy (C913).

328.  Then in the morning of 4 December 2012, he was asked by a caretaker of Efficient to speak to a policeman who was investigating a report made by the plaintiff of theft of switches and cables.  He later enquired with An Wa and learnt that An Wa had removed the seven front switches and loose cables in accordance with its contract with the IOs because the cables were unhooked and taped.  He was only able to retrieve one cable from An Wa.

329.  DW2 also produced a letter dated 5 March 2013 from the Kowloon City Police Station Information Officer to him.  The letter recorded that he had told the investigating police officer that he had entrusted others to remove the cables on the ground of safety.  The police did not discover any criminal element in the case and treated it as a dispute.

330.  DW2 is a chartered electrical engineer.  He should know that the seven front switches and cables attached to their two ends were expensive electrical components and materials.  Their acquisition and installation required thousands of dollars if not tens of thousands.

331.  He saw that the plaintiff’s electrician had unhooked the cables from the meters and then wrapped round the loose ends of the cables with electric tape.  Obviously the electrician was not treating the switches and cables as rubbish or useless materials.  He did not abandon them. Otherwise, he would have detached them and taken them away.  The electrician in leaving the switches in situ and the cable ends wrapped up must have meant that he was disconnecting the electricity supply temporarily and was keeping these installations for future use.

332.  DW2 said that the electrician did not tell him that the unhooked and wrapped up cables would in due course be hooked back to the meters.  But he is a chartered electrical engineer.  He knew that these switches and cables were expensive electrical components and materials.  He should have known that the plaintiff’s electrician was not treating them as rubbish or had abandoned them as he was leaving them in situ.  If he had any doubt, he would have enquired with the electrician. 

333.  In any case, if he should have thought that the electrician had abandoned the switches and cables as rubbish, he would have asked the electrician to remove and dispose of them elsewhere rather than leaving such rubbish in the meter room.  To let the electrician leave rubbish in the meter room was contrary to §4(d) (1) of the Code of Practice that he relied on in his witness statement.  But he had not asked he electrician to remove the switches and cables.  That shows that he did not think that the electrician had abandoned these things.

334.  I would also add that the plaintiff has sent Efficient a fax dated 27 October 2011 advising Efficient the names and telephone numbers of five employees of the plaintiff including PW2 and PW3 who could give access to the ground floor (including urgent access in case of emergencies) (C859).  If DW2 should have any doubt on whether the front switches and cables connected thereto were useless or had been abandoned, he could have telephoned PW2, PW3 or other employees of the plaintiff and enquire. But he did not.

335.  I am therefore of the view that DW2 could not make use of the silence of the electrician as an excuse to allow An Wa to misappropriate such expensive electrical components and materials.  The whole scenario showed clearly that the plaintiff’s electrician was not abandoning these as unwanted materials.  The electrician had all the loose ends wrapped up. 

336.  I also refer to DW2’s assertion that it was the understanding that these switches and cables belonged to the IOs and nobody could remove them without the IOs’ consent.  I am however of the view that even if that were the case, it still does not mean that the IOs could remove any of the electrical installations at their whim.  If they should remove any of the installations without good reason or the consent of the party for whom the supply was dedicated, then they should restore the installations and/or pay damages for the wrongful act. 

337.  In fact, there is authority saying that for installations that serve a flat exclusively, then unless otherwise provided, the installations should be regarded as part of the flat (see John So & Anor v Lau Hon Man & Ors, CACV 110/1993).

338.  In the premises, I find that the 2nd, 3rd and 4th defendants had through DW2 deliberately allowed An Wa to misappropriate the plaintiff’s seven front switches and the cables attached thereto.

339.  For the sake of completeness, I also hold that the 2nd, 3rd and 4th defendants cannot reply on the letter dated 18 September 2012 from their solicitors to the plaintiff’s solicitors as referred to above as an excuse for misappropriating the switches and cables.  The letter was not addressed to the switches and cables.  It referred to other installations and attachments in the common area like an air-conditioner metal frame referred to in the letter.  That letter also pre-dated the EMSD letter by nearly a month.  An Wa was engaged on 19 October 2012 pursuant to the EMSD letter and not the letter dated 18 September 2012 from the defendants’ solicitors.

340.  I therefore order under §1F of the prayer for relief of the statement of claim that the 2nd, 3rd and 4th defendants do reinstate the seven front switches and the cables connected thereto.  I further grant an injunction under §1G prohibiting the 2nd, 3rd and 4th defendants by their servants, agents howsoever from interfering with the supply of electricity to the ground floor of Imperial Court and the plaintiff’s use of electricity thereat.

Locking of the New Eastern Outer Gate from about October 2012 to 20 April 2013

341.  PW2 said in his supplemental witness statement that he had tried to use the key provided by the defendants on 16 October 2009 to open the new gate in October 2012 to demolish the unwanted structures on the ground floor.  The key however did not work.  He thus used another access from the driveway to the ground floor.  He could then open the new gate from the inside without a key.  Hence, he could still gain access to the ground floor and open the new gate from the inside.

342.  He forgot to inform PW1, Daniel Lai, the plaintiff’s director of this matter until late February 2013 when PW1 asked him to check whether the new key could work.  I think when he told PW1 in late February 2013 that the key could not open the new gate, he must have told PW1 of how he had access to the ground floor and that the new gate could be opened from the inside without a key.

343.  PW3, Ngai Man Chiu Eddie, a technician of the plaintiff said in his witness statement that PW1 had instructed him on 8 April 2013 to check if the key provided by the defendants could open the new gate.  Since PW3 had other matters to attend to, he asked PW2 to undertake this task for him. PW2 later told him that the key could not open the new gate.  PW2 also confirmed in his supplemental witness statement that the key could not open the gate on that day.  PW2 also said that he had informed PW1 about this.  He further said in cross-examination that he had also told PW3 about this.

344.  PW3 further said in his witness statement that PW1 had told him on 20 April 2013 to try the key again.  He went to the new gate and tried but was unsuccessful.  He then told a Mr Chan, a caretaker of Efficient at the management office that the key did not work.  He asked Chan whether the lock had been changed but Chan had no knowledge of it.  Chan then took another key from a key box and went with PW3 to the new gate to try it. This key could open the new gate.  It was also different from the key used by PW3 which was provided by the defendants.  PW3 asked for Chan’s key to make a duplicate but Chan declined.  Chan then phoned DW2 who said that he would think about the matter and that Efficient would deal with it.  PW3 then left his phone number with Chan and left.  On his way out from the lobby, he met the 1st defendant who was coming out from the lift.  He then reported the incident to PW1 over the phone.

345.  At about 10:30 am, PW1 told PW3 to telephone a Mr Yu of Efficient about the matter.  Mr Yu said that there was no reason why the key could not work.  He promised to check.

346.  Mr Yu called PW3 at about 11:45 am and asked PW3 to try the key again.  PW3 tried it again at about 12:00 noon and it worked. But PW3 noticed that the cylinder of the lock had been changed.  It was older than the one he saw in the morning.  The screws for fastening the lock set had also been loosened.  He thus believed that the old cylinder of the lock had been put back to the lock set whilst he was waiting for Yu’s phone call.

347.  He then told Chan the caretaker that the key could open the gate.  Chan responded by saying that someone had gone in there to fix the matter up.  He then came across the garbage collector Madam Leung who told him that the lock had been changed for over a year.

348.  The defendants’ case on this incident is a denial.  The 1st defendant said in her 3rd witness statement that she met PW3 at the lobby at about 10:00 am on 20 April 2013.  The caretaker Chan then told her that PW3’s key could not open the new gate.  She also received a phone call from DW2 who told her of Chan’s message that PW3 could not open the new gate. She then waited for PW3 and both of them went to check the gate.  They found that there was nothing wrong about the lock.  They asked PW3 through Yu to try PW3’s key again.  That key proved to be workable.

349.  Mr Yim attacked PW2’s credibility on this matter by saying that it was unreasonable for PW2 not to report the allegation to PW1 in October 2012 if the allegation was true.  However, I am not surprised by PW2’s failure to report to PW1 as the problem of the key did not prevent his access to the ground floor.  He just suffered a small inconvenience of having to walk a slightly longer distance to get into the ground floor. 

350.  After the Eastern and Central Inner Gates had been taken down in the evening of 24 September 2009, one could go into the ground floor from the western side and walk over to the eastern side.  Hence, the problem presented by the unworkable key was a relatively trivial one and caused no real damage to the plaintiff.  That perhaps also explains the delay of PW1 in instructing PW3 to test the key on 20 April when PW1 had been told on 8 April that this key could not work.

351.  I also do not think that PW1, PW2 and PW3 would together fabricate such an elaborate story involving caretaker Chan, Yu and garbage collector Madam Leung to frame the defendants.  I note that DW2 has not even filed any witness statement to corroborate the 1st defendant on this matter.

352.  I do not believe in the 1st defendant’s evidence on this matter.  This is just another instance when she is prepared to lie so as to resist a claim by the plaintiff regardless of the merits of the claim.  I accept the evidence of PW1, PW2 and PW3 on this matter.

353.  However, I do not think the defendants had deliberately changed the cylinder of the lock to exclude the plaintiff from the control of the new gate.  If that was their purpose, they would not have restored the old cylinder in a clandestine manner as soon as PW3 complained that his key could not open the gate.  I do not wish to guess into the defendants’ reason for changing the cylinder.  The quick response in restoring the old cylinder suggests that it was probably through oversight that they had changed the cylinder but did not give a new key to the plaintiff.  I do not think this incident would be reflective of an intention on the part of the defendants to deprive the plaintiff of control of the new gate.  Furthermore, I do not think the plaintiff has suffered any real damage in this incident.

354.  In the premises, I would make no order in relation to this incident.

Other injunctive relief claimed by the plaintiff

355.  The plaintiff also claims various injunctions against the 1st to 4th defendants from entering the ground floor save in the exercise of their rights over the common areas and common facilities. 

356.  In the light of the previous conduct of the defendants, I think it is justifiable to grant an injunction to restrain the defendants and all the owners of Imperial Court as represented by them from entering, remaining or using the parts of the ground floor of Imperial Court as coloured pink and yellow (without hatching) on the Plan save for the proper exercise of:

(a) the said rights of way over the areas coloured yellow (without hatching) on the Plan;

(b) the rights to use the wells and the electric pumps, pipelines and conduits appurtenant thereto for the purpose of the flushing system of Imperial Court subject to the payment of the due proportions of the costs and expenses for the maintenance and upkeep of and repairs and replacement to the wells and facilities appurtenant thereto;

(c) the rights of access as might be requisite or necessary for the purposes of repairing and maintaining:

(1) the sewers and drains for the passage or conveyance of sewage water and soil from Imperial Court under the surface of the ground floor of Imperial Court;

(2) the pipes for the passage or conveyance of water gas or electricity above or below the surface of the ground floor of Imperial Court; and

(d) the rights of escape from emergencies or fire.

357.  I do not think this injunction will create any hardship for the defendants or the owners represented by them. 

358.  The plaintiff also claims an injunction to enjoin the defendants from interfering in the contracts between the plaintiff and its tenants or with the plaintiff’s trade.  Since the plaintiff has terminated all the previous tenancies, obtained a change of user from the Building Authority for its ground floor units and refurnished the ground floor units in accordance with the new user, I do not think it necessary or appropriate to grant this injunction now as it is based on the defendants’ conduct aimed at the previous tenants.

The 1st defendant’s reliance on section 29A of Cap 344

359.  The 1st defendant seeks to rely on section 29A of the Building Management Ordinance to avoid personal liability to the plaintiff’s claims.  Section 29A provides:

“(1) No member of a management committee, acting in good faith and in a reasonable manner, shall be personally liable for any act done or default made by or on behalf of the corporation—

(a) in the exercise or purported exercise of the powers conferred by this Ordinance on the corporation; or

(b) in the performance or purported performance of the duties imposed by this Ordinance on the corporation.”

(2) The protection conferred by subsection (1) on a member of a management committee shall not in any way affect the liability of the corporation for that act or default.”

360.  Section 29A is applicable to the 1st defendant if she has acted in good faith and in a reasonable manner.  I do not think she has so acted when she procured the demolition of the Eastern Outer Gate.  At that time, the legal position regarding this gate was still unknown.  Her instruction for the carting away of the demolished Eastern Outer Gate was even worse.  She did it in blatant violation of the owner’s right which was asserted there and then in clear terms by PW2. 

361.  Her instruction to Efficient to remove the Air-Conditioning Stand was also contrary to the plaintiff’s clearly asserted ownership.

362.  Her relentless complaints to the Buildings Department and eventually to the Chief Executive’s Office against the plaintiff’s alterations on the ground floor have also resulted in wastage of public resources.

363.  I think these grounds are already sufficient to show that the 1st defendant has not been acting in good faith or in a reasonable manner in her actions against the plaintiff as referred to herein. I hold that she cannot be protected by section 29A. 

Claims of damages

364.  The plaintiff also seeks nominal damages against the 1st and 2nd defendants for the value of:

(i) the Eastern Outer Gate;

(ii) the Eastern Inner Gate;

(iii) the Central Inner Gate;

(iv) the three walls enclosing the 1st Toilet;

(v) the toilet bowl in the 1st Toilet;

(vi) the wash basin in the 1st Toilet;

(vii) the electricity cables in the 1st Toilet; and

(viii) the fluorescent lights in the 1st Toilet.

365.  I order that the 1st and 2nd defendants do pay HK$80 to the plaintiff as nominal damages for these items.

366.  There are other claims of damages that I have already disposed of above.  The remaining claims are for damages against the 1st and 2nd defendants arising out of the wrongful removal of the eight installations referred to above and the seven front switches and cables connected thereto (§17.4(a) of the plaintiff’s closing).  I do make an order that the 2nd defendant do pay the plaintiff damages arising out of the wrongful removal of the eight installations referred to above and the seven front switches and cables connected thereto to be assessed. 

367.  Regarding the 1st defendant, I order that she do pay the plaintiff damages arising out of the wrongful removal of the eight installations referred to above to be assessed.

Aggravated damages

368.  The plaintiff also claims aggravated damages against the 1st and 2nd defendants.  The plaintiff pleaded in §17 of the statement of claim:

“17. The 1st Defendant and/or the 2nd Defendant did the said acts in the 1st Raid, 2nd Raid, 3rd Raid and the 2nd to 4th Defendants did the said acts in the Further Raid maliciously and out of spite for the Plaintiff and with the intention of causing substantial nuisance and inconvenience to the Plaintiff and/or injuring its own business and its business relationship with the tenants.”

369.  The plaintiff has pleaded in detail in the statement of claim on the 1st raid with the removal of the Eastern Outer Gate contrary to the plaintiff’s demand and the erection of the new gate without a key being given to the plaintiff until the plaintiff sought judicial redress, the 2nd raid with the removal of the Central Eastern and Inner Gates clandestinely, the 3rd raid with removal of the Air-Conditioning Stand despite the plaintiff’s protest and the further raid in the misappropriation of the front switches and cables in blatant disregard of the plaintiff’s ownership rights therein.  These have all been proved.

370.  I find that the conduct of the 1st and 2nd defendants in these raids was intimidatory, unpleasant and malicious (see §37-041 of McGregor on Damages, 19^th edn).  I stress that none of the defendants herein is entitled to trample on other people’s property rights in the name of public good.  The 1st and 2nd defendants have damaged and destroyed the plaintiff’s properties in complete disregard of the plaintiff’s property rights which were clearly asserted by the plaintiff.  

371.  In the premises, I order the 1st and 2nd defendants to pay the plaintiff aggravated damages at HK$3,000 on top of the damages to be assessed.

Interest

372.  I also order that there be interest on the damages at two percent over the best lending rate of the Hong Kong Bank from the date of the writ to the date of assessment.

Costs

373.  On the question of costs, I think the plaintiff has succeeded substantially and in particular on what are the areas that it is entitled to their exclusive occupation, use and enjoyment.  It has proposed to concede to some of these areas as common areas.  That concession is in line with the defendants’ stance, but I have not accepted it as it is not a correct position in law.  The plaintiff has also succeeded in proving the four raids against its properties.  The plaintiff, however, has failed to obtain favourable orders over a few other matters that I have explained above.

374.  Though the plaintiff’s alteration and use of the ground floor as shops and godowns were not in line with the occupation permits, that were not against the law or the DMCs.

375.  The defendants’ main success is on the plaintiff’s flagrant misuse of the transformer room.  But that is just one of the numerous matters raised in this action.

376.  All in all, I think it is fair to make a costs order nisi that the 2^nd. 3rd and 4th defendants do pay the plaintiff 75% of the costs of this action.

377.  In line with the agreement of the parties, I also make a costs order nisi that there be no order as to costs as between the plaintiff and the 1st defendant.