THE INCORPORATED OWNERS OF GOA BUILDING v. WUI TAT CO LTD

CACV 349/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 349 OF 2002

(ON APPEAL FROM LDBM NO. 34 OF 2002)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1. This is an appeal from a decision of Deputy Judge Wong sitting as the Lands Tribunal given on 16 July 2002. In that decision the deputy judge ordered that the respondent should pay the applicant the sum of $313,025 being the maintenance costs for the external walls of Goa Building, Shek Tong Tsui, and $602 as costs. At the conclusion of the hearing this court allowed the appeal and made an order that the matter be remitted to the Lands Tribunal for a decision in accordance with our judgment. Reasons were to be given later. An order was made that there should be no order as to costs.

Background

2. The sum, claimed by the applicant and ordered by the Lands Tribunal to be paid, was in respect of the total anticipated costs for maintenance of the external walls of the building. The respondent was the original developer of the building. The respondent still owns the mezzanine floor and three shops on the ground floor of the building. The applicant made the claim in respect of the whole of the external wall of the building. The claim was made upon the basis that section 34H of the Building Management Ordinance, Cap. 344 ("the Ordinance") put upon the respondent the obligation to maintain the external wall in good repair. Section 34H reads as follows:

"(1) Where a person who owns any part of a building, has the right to the exclusive possession of any part of a building or has the exclusive right to the use, occupation or enjoyment of that part, as the case may be, but the deed of mutual covenant in respect of the building does not impose an obligation on that person to maintain the part in good repair and condition, that person shall maintain that part in good repair and condition.

(2) The obligation in subsection (1) shall be deemed to be an obligation owed to all owners of the building under the deed of mutual covenant."

3. A claim could thus be made against the respondent if it were shown that it had the right to the exclusive possession of any part of the building or had the exclusive right to the use, occupation or enjoyment of that part. Any such right would inevitably stem from the deed of mutual covenant. In this respect reference has to be made to clause 1.01 thereof I shall set out in full.

"The Vendor shall for the residue of the term of years set out in the said Schedule have the sole and exclusive right and privilege (A) to the use occupation and enjoyment of all the said units of the said Building and the appurtenances thereto and the entire rents and profits thereof save and except the said Flat 'A' on the First Floor and Portion 'A' of the Flat Roof on the first floor level of the said Building and the appurtenances thereto and the entire rents and profits thereof and (B) Subject to any necessary approval of the Government Authority or Department to erect, construct, install, affix, fit up, paint and maintain any signs, signboards, advertisements, placards, posters or any other structures whatsoever of such size and design whether illuminated or otherwise and at to or on such position or positions of the external walls of the said Building and of any part of the said Building in common use as the Vendor shall in its absolute discretion think expedient or desirable and to remove replace or repair the same and to enter upon any unit at all reasonable times with or without workmen for the purpose of so doing and (C) Subject to any necessary approval of the Government Authority or Department to erect, construct, install, affix or fit up one or more flu pipes or smoke stacks or chimneys at to or on such part or parts of the open yard or years and of the external walls of the said Building as the Vendor shall in its absolute discretion think fit and to remove replace or repair the same and to enter upon any unit at all reasonable times with or without workmen for the purpose of so doing." (emphasis added)

4. It is important to note that although the respondent (i.e. the Vendor) was given rights in respect of various matters such as the erection of signs and signboards and flu pipes, it was not given either the exclusive possession of the external walls or the exclusive right to the use, occupation or enjoyment thereof. Indeed, such rights as clause 1.01 gave the respondent extended not only to the external walls but also to any part of the building that was in common use.

5. Clause 3.02 of the deed of mutual covenant imposed three different types of obligation upon the respondent in respect of the exercise of those rights. In the first place, the respondent was required to comply with all the various laws and regulations which might be involved. In the second place, the respondent was required to be solely responsible for the repair and maintenance of any relevant item which might be so placed and also of "the part of the Building in common use and the portion or portions of the external walls and the portion or portions of the open yard or yards of the said Building at which and/or to which and/or upon which" any such item would have been placed. In the third place, the respondent was required to keep the other owners indemnified for any loss or damage which might be occasioned by the exercise of the rights granted under clause 1.01. Whilst I have endeavoured to summarise the effect of clause 3.02, for completeness I set it out.

"The person or persons either solely or between themselves in whom the sole and exclusive right and privilege to erect, construct, install, affix, fit up or maintain any sign, signboard, advertisement, placard, poster, other structure, chimney, flu pipe or smoke stack mentioned in Clause 1.01 hereof or the right to receive the rents and profits thereof is for the time being vested for the residue now to come and unexpired of the term of years as set out in the said Schedule shall at all times observe and comply with all the laws and regulations relating to the erection maintenance and dismantling thereof and shall be solely responsible for the repair, maintenance, upkeep, renewal and removal of any such sign, a signboard, advertisement, placard, poster, other structure, chimney, flu pipe or smoke stack and the part of the said Building in common use and the portion or portions of the external walls and the portion or portions of the open yard or yards of the said Building at which and/or to which and/or upon which such sign, signboard, advertisement, placard, poster, other structure, chimney, flu pipe or smoke stack shall be erected, constructed, installed, affixed, fitted up or maintained and such person or persons shall at all times indemnify and keep indemnified the owners and occupiers for the time being of the said Building against all loss, damage, injury, costs, expenses, actions, claims and demands arising out of or on account of or resulting from the installation, repair, renewal, removal, maintenance and upkeep of such sign, signboard, advertisement, placard, poster, other structure, chimney, flu pipe or smoke stack or any defect therein or any failure to maintain the same in proper repair and condition."

6. In my view, it was clear that the rights accorded to the respondent under clause 1.01 did not comprise all the rights which would amount to the exclusive possession or the exclusive right to the use, occupation or enjoyment of a part of the building. The rights accorded by clause 1.01 were merely part of the rights which might be enjoyed by an owner but were not the full and exclusive rights. As a result, I consider that the conclusion which was arrived at by the deputy judge in paragraph 11 of his judgment that "Clause 1.01 of the DMC confers on the respondent the exclusive right to the use, occupation and enjoyment of the wall" was wrong. Indeed, as was pointed out during the course of argument, it is impossible to ignore the fact that clause 1.01 refers not only to the external walls but also to the parts of the building in common use. To suggest that the common parts of the building were thus either in the exclusive possession of the respondent or that the respondent had the exclusive right to the use, occupation or enjoyment thereof would be self-contradictory and absurd.

7. In those circumstances, the respondent's liability in respect of the maintenance of the external walls would fall to be determined under clause 3.02 of the deed of mutual covenant and not under section 34H of the Ordinance. Insofar as costs have been incurred in respect of maintenance falling within the terms of clause 3.02 then, no doubt, the respondent would be responsible therefor. The respondent would not be responsible for the cost of maintaining the whole of the external walls of the building. Since the deputy judge had made his order in respect of all such costs, it was inevitable that the order made had to be set aside and the matter remitted for consideration as to what costs have been incurred which are attributable to those parts of the external wall to which the respondent has exercised its rights under clause 1.01.

8. In view of the fact that Mr Ng, who appeared on behalf of the respondent, had indicated in his skeleton argument that he did not intend to take the point which this court has considered was fundamental to the consideration of the rights of parties, this court considered that the appropriate order was that there should be no order as to costs.

9. Finally it should be mentioned that Mr Kwok, on behalf of the applicant, sought to argue, a little belatedly in the course of the hearing of this appeal, that the appeal was out of time. Whilst he did not contest the effect of the decision in Chung Fai Engineering Co. v Maxwell Engineering Co. Ltd [2001] 3 HKC 24 that time for filing a notice of appeal did not run during the month of August, he sought to argue that the original notice of appeal was defective in that it failed to identify a question of law as required under section 11 of the Lands Tribunal Ordinance and Order 60A of the Rules of the High Court. In respect of that it is sufficient to say that although the original notice of appeal might have been better phrased, ground 1 of the notice of appeal does raise a matter of law. There is thus no merit in the point.

Hon Le Pichon JA:

10. I agree.

Hon Waung J:

11. I agree.