THE INCORPORATED OWNERS OF KIN WING COMMERCIAL BUILDING v. WORLD TREASURE PROPERTIES LTD

LDBM 107/2016

[2024] HKLdT 24

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 107 OF 2016

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J U D G M E N T

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A.  Introduction

1.  The applicant was at all material times and is owners’ corporation (IO) of Kin Wing Commercial Building situated at Nos.24-50 Kin Wing Street, Tuen Mun (the Building).

2.  The respondent was at all material times since 2004 and is registered owner of Units 703, 704, 904, 905 and Carpark Nos.5, 13, 14, 24, 25 and 26 of the Building.

3.  In this application, IO sues the respondent for unpaid balance of its share of costs of certain works of the Building purportedly carried out pursuant to order issued by Building Authority (BA), together with collection charge and interest. Ms Becky Wong of counsel (Ms Wong) appeared for IO at trial.

4.  The respondent defended IO’s claim on the main ground that part of the said works were carried out on private properties (i.e. canopy at 1/F level and external walls of certain floors) whose costs should be paid by their private owners and also that canopy works are outside scope of order issued to IO by BA. It counterclaimed against IO for declarations, inter alia, that it is not liable to contribute to costs of works over the said properties. Mr Victor Chiu of counsel (Mr Chiu) appeared for the respondent at trial.

B.  Witnesses called at trial

5.  The background facts I found in section C have largely been proven by undisputed documentary evidence, undisputed factual evidence given by parties’ witnesses, admissions made by the respondent and its witness, and, lastly, common and undisputed factual observations and expert opinions given by parties’ experts.

6.  IO called周美德 (Chow)[1], chairlady of its management committee (MC), as its sole factual witness whereas the respondent only called its director 何權佳 (Ho) to testify.

7.  Ir. Fan Siu Kay (Fan) was called as IO’s expert witness to give evidence on, and Mr Ben T. C. Chan (Chan) testified as respondent’s expert witness on, the following 3 issues: -

(1)  Whether 1/F Canopy (see [10] below) can be categorized or form part of the external walls, loading bearing walls, foundations, columns, beams and other structural supports of the buildings (Issue 1);

(2)  Whether demolition of 1/F Canopy with the associated structures therein connected to the building is related to and/or incidental to and/or facilitated the repair and maintenance of the building and/or in compliance with the 2014 Order (see [33] below) (Issue 2);

(3)  Whether works carried out to the external walls under Items 4.1 to 4.6 (see [50] below) are for compliance with the 2014 Order and/or for repair and maintenance of the building (Issue 3).

C.  Backgrounds facts

C1.  The Building & 1/F Canopy

8.  The Building is a 10-storey industrial building (with 26 car parking spaces at its basement) built at a corner site bounded by Kin Wing Street on one side and Kin On Street on the other side. Its occupation permit was issued on 2 February 1982.

9.  As is shown in Schedule of deed of mutual covenant of the Building (the DMC) and approved plans of the Building, the G/F to 4/F of the Building were built as shopping arcade, bank and restaurant while its 5/F to 10/F were built as offices.

10.  A canopy made of reinforced concrete was built at 1/F level of the Building by way of a cantilevered slab structure projecting over pedestrian pavements along Kin Wing Street and Kin On Street (1/F Canopy), providing shelter from rain and sun to pedestrians as well as some of the shop fronts at G/F. The extent of its projection from the walls of the Building was 1.6m[2]. Its construction was approved by the Building Department (BD) and approved plans of the same had been retrieved from BD by parties’ experts. It was finally removed by IO’s contractor latest by January 2016[3].

C2.  First Assignment & the DMC

11.  By an assignment dated 28 August 1982 (First Assignment), Isoba Limited (First Owner) assigned to Royal Hong Kong Jockey Club (HKJC) 979 equal undivided 8,578 shares of Tuen Mun Town Lot No.148 (the Land) and the Building thereon together with 1) the exclusive right to hold use occupy and enjoy Shops Nos.3, 4, 5, 6, 7 and 8 on G/F[4] and the external wall of such shops and 2) all that portion of Shopping Arcade on G/F[5] (collectively JC Premises)[6].

12.  On the same date, the DMC was executed by the First Owner, HKJC and a management company, and it was later registered at the Lands Registry.

13.  Under the DMC, “common parts” means:

“(a) the whole of the Land and the Building (including the external walls) except such parts as are specified in the First Column of the Schedule hereto; and

(b) unless so specified those parts specified in the First Schedule to the Multi-Storey Buildings (Owners Incorporation) Ordinance (Predecessor Ordinance) (i.e. the predecessor of current Buildings Management Ordinance (BMO))[7] (bold and italics supplied)”.

14.  By the DMC, the Land and the Building were notionally divided into 8,578 equal undivided shares, which shares are, among others, allocated in First & Second Columns of its Schedule as follows:

Units	Number of shares allocated
Car parking space No.5 on the basement	6
Car parking space No.13 on the basement	6
Car parking space No.14 on the basement	6
Car parking space No.24 on the basement	6
Car parking space No.25 on the basement	6
Car parking space No.26 on the basement	6
Shop No.1 on G/F and external wall of such shop	140
Shop No.2 on G/F and external wall of such shop	310
Shops Nos.3, 4, 5, 6, 7 and 8 on G/F and all that portion of Shopping Arcade on G/F as shown coloured indigo on G/F plan annexed hereto and external walls of such shops (i.e. JC Premises)	979
Shop No.9 on G/F and external wall of such shop	85
Shop No.10 on G/F and external wall of such shop	88
Unit A on G/F as shown on G/F plan[8] annexed hereto coloured pink and external wall of such unit	240
Unit A on 1/F and the canopy adjoining such unit (i.e. 1/F Canopy) and Unit A on 2/F as shown on 1/F plan and 2/F plan[9] annexed hereto and coloured pink and external walls of such units	2350
The Restaurant Entrance on G/F, and external wall of such restaurant entrance, the restaurant premises on 3/F, the restaurant premises on 4/F and the flat roof adjoining thereto	1650
Office No.8 on 5/F[10]	46
Office No.3 on 7/F	50
Office No.4 on 7/F	50
Office No.4 on 9/F	50
Office No.5 on 9/F	50
Office No.8 on 10/F[11]	46

15.  Hence, the respondent was at all material times since 2004 been holder of 236 equal undivided shares of the Land and the Building.

16.  Two other matters should be noted from the Schedule of the DMC, namely: -

(1)  1/F Canopy adjoining Unit A on 1/F is specified in First Column of Schedule of the DMC and assigned with 2,350 undivided shares with Unit A on 1/F and Unit A on 2/F (Unit A on 1/F coloured pink on 1/F Plan annexed to the DMC covers almost the entirety of 1/F, except one small lift area and 2 small corridor areas).

(2)  1) external walls of all 10 shops, of Unit A and of Restaurant Entrance all on G/F; 2) external wall of Unit A on 1/F; and 3) external wall of Unit A on 2/F are all specified in First Column of Schedule of the DMC and assigned with undivided shares (collectively Assigned External Walls) while external walls of the rest of G/F[12], and from 3/F to 10/F of the Building (collectively Other External Walls) are nowhere found in the said Schedule or assigned with undivided shares.

17.  By clause 1 of the DMC, the First Owner shall have the exclusive right and privilege to hold use occupy to the exclusion of HKJC of “All Those units[13] set out in the First Column of the Schedule hereto” save and except JC Premises assigned to HKJC. By clause 2 thereof, HKJC shall have the exclusive right and privilege to hold use occupy JC Premises to the exclusion of the First Owner.

18.  Since its purchase of JC Premises, HKJC has been operating at the same an off-course betting centre. Other shops including bank also came to be opened for business at G/F of the Building over time.

C3.  Ownership of the 3 Units A

19.  By an assignment dated 15 September 1982, First Owner assigned 2,590[14] equal undivided 8,578 shares of and in the Land and the Building together with the exclusive right to hold use occupy and enjoy 1) Unit A on G/F, 2) Unit A on 1/F, 3) 1/F Canopy, and 4) Unit A on 2/F (collectively the 3 Units A)[15] and the external walls of the 3 Units A[16] to their 1^st purchaser.

20.  In 2004, Chu Chung Shing Investment Company Limited (CCS) came to be registered as the owner of the 3 Units A (and their external walls) and 1/F Canopy.

C4.  Complaints over external walls before 2012

21.  On 22 September 2009, BD issued letter to IO advising of receipt of complaint and their inspection result of concrete loosening at 7/F external wall of the Building facing Kin Wing Street and suggesting IO arranging early repair in the interest of occupiers and the public.

22.  After IO had received aforesaid letter from BD, a meeting of MC was held on 29 October 2009, during which it was agreed to put up newspaper advertisement to tender for the engagement of a surveyor to assess the matter.

23.  Judging from venue and contents of MC meetings held over the years in minutes, and photos of the Building taken over the years, produced at trial, restaurants (of different names) have been operating at the 3 Units A since at least October 2009.

24.  On 14 September 2010, management office of the Building informed MC an incident of mosaic titles falling off external walls at 10/F of the Building the day before and urged IO to conduct external wall repair as soon as possible.

C5.  Winfield Incident

25.  On 9 June 2011, a cantilevered reinforced concrete canopy at 1/F level of Winfield Industrial Building situated at No.3 Kin Kwan Street, Tuen Mun, to the opposite of (and within sight of) the Building[17] collapsed onto pavement and injured a passer-by (Winfield Incident). The design and construction of 1/F Canopy of the Building was similar to that of the collapsed canopy in Winfield Incident[18].

26.  On 10 January 2012, surveyor explained to members of MC that ceiling waterproofing membranes, load-bearing and structural parts of the Building should belong to, and their repair responsibility should lie with, all owners.

C6.  BD’s pre-action letter to IO in 2012

27.  On 26 March 2012, BD issued letter to IO advising IO of defects/damage at exterior and common parts of the Building and its intention to issue order pursuant to Buildings Ordinance[19] (BO) requiring removal of all loosened/damaged rendering and mosaic tiles at external walls of the Building.

28.  On 26 April 2012, MC held meeting to discuss result of tender and also decided to instruct lawyer to obtain land search result of 1/F Canopy to ascertain its ownership. On 14 June 2012, MC held another meeting to discuss proposed 3 different methods (or options) of repairing external walls of the Building.

C7.  The 2012 Order

29.  On 23 July 2012, pursuant to s.26A(1) of BO, BA issued and served an order on “the owner of Unit A & Canopy on 1/F & Unit A on 2/F and the External Walls, of [the Building]” requiring the said owner (i.e. CCS) to appoint an Authorized Person (AP) to “investigate and report on the integrity and stability” of 1/F Canopy[20] and to “submit proposals for remedial works” if, inter alia, its “drainage system” “is defective, inadequate or blocked” by 23 January 2013 (the 2012 Order).

30.  On 13 September 2012, a meeting of MC was held. Tenders of external repair (with 3 options) were opened. Lawyer 廖成利 (Liu) was welcomed to serve as voluntary legal adviser to IO for one year. By then, MC had knew from CCS of the 2012 Order and another order about steel frame demolition[21] and knew that 1/F Canopy was registered in name of CCS from land search obtained. Representative from CCS i.e. 葉蔭初 attending the meeting had replied MC, I accept from Chow, that only the latter about steel frame demolition would be complied with[22]. Had CCS indicated to MC that it would comply fully with the 2012 Order over 1/F Canopy, I find it unlikely for IO to have resolved in the end to take it up itself. In this respect, I accept from Chow that all minutes of meetings of IO were prepared by staff of management office and they were not drafted in minute details.

31.  On 8 August 2013, general meeting (GM) of IO was held, during which it was resolved to cancel contract with consultant and invite tenders again for repair works of the external walls of the Building. On 5 September 2013, IO held its MC meeting and resolved to invite tender of the aforesaid repair works and engagement of independent surveyor to monitor contractor.

32.  On instructions from Sunfield Engineering Consultants Ltd. (Sunfield), which, I believe, was engaged by CCS, Geotechnics & Concrete Engineering (HK) Ltd. carried out structural investigation works at 1/F Canopy and completed its report dated 27 September 2013 (the 2013 Structural Report).

C8.  The 2014 Order

33.  On 31 March 2014, pursuant to s.26 of BO, BA issued and served an order on IO declaring the Building being dangerous and requiring IO to commence by 29 June 2014 (and to complete by 29 September 2014) the following works to its “common areas and exterior”: (a) “remove loose cracked and otherwise defective concrete from [its] reinforced concrete structure, clean existing exposed steel bars of loose rust and foreign matter, provide and securely fix in place additional steel bars as necessary and reinstate”; and (b) “remove all loose and defective external rendering and internal plastering (bold and italics supplied)” (the 2014 Order).

34.  On 16 April 2014, pursuant to the 2012 Order, Sunfield completed its unsigned survey report on 1/F Canopy (the 2014 Canopy Survey Report).

35.  The next day i.e. 17 April 2014, a meeting of MC was held, whereby it was resolved to engage works and legal consultants on external wall repair works. After the 2014 Canopy Survey Report was submitted to MC by CCS, it was agreed that all owners should be responsible if there was structural problem with 1/F Canopy[23] and MC required engineer appointed by CCS to supply for IO’s reference (and also for analysis by consultant to be engaged by IO) further details of 3 remedial options of 1) partial demolition of 1/F Canopy; 2) its total demolition; 3) extra support to it by steel bars.

36.  Though there was no written record in MC meeting minutes produced of MC receiving legal advice from Liu that structural parts of 1/F Canopy belong to IO such that IO is responsible for the same[24] and though Chow changed her evidence of MC/her receiving such advice from Liu “in meeting” to “over the phone” and to “meeting him on the street”, I accept Chow’s evidence of MC having received, and discussed, such advice from Liu prior to GM of IO on 24 October 2014 for the following reasons:

(1)  I find it inherently probable for MC to have asked Liu for the same when he has already been appointed as IO’s voluntary legal adviser on record.

(2)  Chow’s manner of receipt of the same is, I think, immaterial. Given the lapse of time (and her old age) when she testified in 2023, it is not surprising that she wavered on such detail. But she was adamant of having received such advice and not shaken after lengthy and repeated cross-examination by Mr Chiu.

(3)  Chow did, I note, say in paragraph 22 of her supplemental witness statement made in 2022 of having received the above advice from Liu, though she did not mention the manner of receipt or its timing.

(4)  Most importantly, Ho materially corroborated Chow on this point by giving evidence of Chow replying him at GM held on 24 October 2014 that MC had oral advice from Liu when he asked her if MC had legal advice on 1/F Canopy.

37.  On 29 May 2014, another meeting of MC was held. Representatives from CCS and from Sunfield explained to members of MC contents of the 2014 Canopy Survey Report (including concept of factor of safety (FS) more or less than 1, and that 3 test areas of 1/F Canopy were found to have FS of less than 1 but with no immediate danger) and suggested 3 work proposals costing from $1.12M to $1.46M. They are: 1) partial demolition of 1/F Canopy with span reduced to 0.8m; 2) its total demolition; and 3) extra support to it by steel bars. Some members of MC suggested however, due to the 2012 Order being directed against CCS, that the said proposals be discussed by MC only after legal advisers to be engaged by IO explained, or sorted out, the liability issue for the said works. As such, opinions given by CCS and Sunfield are for IO’s reference only.

38.  On 10 July 2014, GM of IO was held whereby it was resolved to engage Cheung Wing Architects & Engineers Ltd (the Architect) as IO’s consultant on external walls repair works of the Building.

39.  On 31 July 2014, at another MC meeting, IO signed its consultant contract with the Architect and resolved that the Architect would arrange survey of the Building and report to IO later.

40.  On the Architect’s instructions, Global Tests Ltd (Global Tests) surveyed the external walls of the Building on 15 August 2014, prepared an infra-red survey report dated 18 August 2014 (Infra-red Report) and discovered 181 suspected external wall defects: 1) 147 locations of external wall finishes suspected to be delaminated; and 2) 34 locations at external wall suspected to be suffering from water seepage. The total defective area is 152 m² (or 3.2% of all total external walls of 4,800 m²).

41.  On 28 August 2014, another MC meeting was held. Report from the Architect was received. Items or details of repair works of the Building were approved, with newspaper advertisement of tender to be put up by the Architect.

42.  On 29 August 2014, CCS executed an assignment of the 3 Units A (and their external walls) and 1/F Canopy in favour of China All Enterprises Limited (China All).

43.  On 18 September 2014, MC held another meeting and resolved to invite tenders by way of 3 options (all 3 of them involved removing the 1/F Canopy) after having considered analysis prepared by the Architect. Among other differences of the said 3 tender options, item 4 thereof involved external wall repairs using different materials at different pricing for the said 3 options.

44.  On 8 & 17 October 2014, MC held meetings to discuss tender analysis prepared by the Architect, discounts given by tenderers on all 3 tender options, and to discuss methods, and order, of demolishing canopy as advised by tenderers.

C9.  2014 GM resolutions to carry out the Works

45.  By resolutions passed at GM of IO held on 24 October 2014, it was resolved to appoint Wing Shing Engineering & Builder Limited (the Contractor) as IO’s contractor to carry out 2^nd tender option of repair works of the Building (the Works), inclusive of demolition of 1/F Canopy, with 11 more optional items of works chosen. The Works, Ho agreed under cross-examination, is the first major renovation of the Building after it was built.

46.  IO held another MC meeting on 6 November 2014 whereby it was resolved to collect from owners their contributions to renovation works by way of 4 installments, the latest one by 30 June 2015. It was also agreed by MC to allow individual owners to use scaffolding erected by IO for external wall repair works to replace their own aluminum windows (in the end, CCS had used such scaffolding to replace windows of 1/ F and 2/F with walls at its own costs, according to Chow’s evidence I accept).

C10.  Costs of relevant items of the Works

47.  On the same day, IO executed contract with the Contractor to carry out the Works by way of 2^nd tender option at a discounted total sum of $19.9M (its original price being $20,054,400) (the Contract).

48.  Looking at the Contract, the Works consist of a total of 13 items. Item 12 thereof in sum of $3.6M is in dispute. It is for removal of 1/F Canopy (the subject matter of Issues 1 & 2 for experts’ opinion) with particulars as follows:

Item 12.1	Remove original concrete canopy. Follow BD guidelines to remove canopy overhanging Kin Wing Street and Kin On Street. Covered pedestrian walkways and anti-falling platform be put up beforehand for shops and pedestrian safety. All procedures and equipment to follow BD standards.	$3.2M
Item 12.2	Repair external wall concrete after completion.	$200,000
Item 12.3	Submit drawing and plans, and complete application procedure.	$200,000

49.  Items 3.1 to 3.8 of the Works are headed “repair of reinforced concrete and rendering of common external wall of the Building”. These were, Ho agreed, carried out to structural parts of the external walls of the Building[25]. Two pertinent items for our present purpose are:

		Quantities	Unit Price	Amount
Item 3.2	局部打鑿loosened rendering	150 m²	$1,000	$150,000
Item 3.3	局部打鑿loosened concrete structure	300 m²	$1,250	$375,000

50.  Item 4 of the Works in the Contract in total sum of $6.405M (under 2^nd tender option)[26] is also in dispute. It is the subject matter of Issue 3 for experts’ opinion. Like items 3.1 to 3.8, they are also works on external walls of the Building but those in item 4 are other works on all external walls totaling 4,800 m² [27] with particulars as follows:

Item 4.1	demolish external wall finishes	4,800 m²
Item 4.2	rendering	4,800 m²
Item 4.3	install 2” x 4” external wall tiles	4,800 m²
Item 4.4	install tiles with horizontal expansion joints for external wall tiles	1 job
Item 4.5	clean external wall tiles	4,800 m²
Item 4.6	paint all pipes/drain pipes	1 job

C11.  Dispute over respondent’s share of contribution

51.  On 13 November 2014, 3 & 4 December 2014, respondent’s solicitors thrice wrote to Chow to complain about costs of the Works over 1/F Canopy and 1/F & 2/F external walls in the Contract. The respondent later wrote to Chow to the same effect, saying that it would only pay 1^st and 2^nd installments totaling $273,747.02, which it did by 7 May 2015.

52.  In about December 2014[28] or shortly afterwards, the Works began.

53.  On 23 October 2015, respondent’s solicitors wrote to IO’s solicitors to repeat earlier stance at [51] above. IO’s solicitors replied on 12 November 2015 to demand the respondent to pay outstanding 3^rd and 4^th installments in total sum of $273,747.02.

C12.  Completion of the Works by January 2016

54.  By 29 January 2016, the Works had been practically completed[29]. On 6 April 2016, BA wrote to IO to confirm that works relating to the 2014 Order had all been completed after inspection by its consultant on 2 January 2016.

55.  On 25 May 2016, IO took out this application, seeking to recover $273,747.02 from the respondent.

56.  On 28 July 2016, the respondent filed its Form 7 in opposition.

57.  On 3 August 2016, respondent’s solicitors tendered on behalf of the respondent to IO’s solicitors their cheque in sum of $129,764.57 ($127,776.17 thereof being balance of respondent’s share of the Works by deducting $273,747.02 from $401,523.19 and $1,988.40 being interest on the said balance of $127,776.17 at 8% p.a. from 25 May 2016 to 3 August 2016) and IO had accepted the same.

C13.  2018 GM resolution to build a new canopy

58.  On 18 September 2018, IO resolved at GM to re-build canopy at 1/F level and to appoint the Contractor for the said rebuilding works at the costs of $1.4M. A new external structural steel canopy with aluminum cladding projecting over the street is now seen at 1/F level of the Building, including on 24 September 2022 when parties’ experts made their joint site inspection.

D.  Parties’ contentions

D1.  IO’s contentions

59.  IO says that, on proper construction of the DMC and application of BMO,:

(1)  owner of 1/F Canopy is only entitled to exclusive use of the surfaces and inner space of 1/F Canopy;

(2)  owners of Assigned External Walls are also only entitled to exclusive use of the surfaces of the external wall adjoining their respective units and the air space inside their units;

(3)  the concrete slab, structure and/or structural parts (collectively structural parts) of 1/F Canopy and of Assigned External Walls are common parts of the Building; and

(4)  all external walls of the Building, including Assigned External Walls, are loading bearing walls, foundations, columns, beams and other structural supports of the Building.

60.  The Works, including those of external walls and demolition of 1/F Canopy, said IO, were within its powers and duties under s.18(1) and (2) of BMO in that they were to comply with the 2014 Order and to fulfill IO’s duties in accordance with clauses 12(c), (d) and (dd) of the DMC.

61.  Further or alternatively, the Works, including demolition of 1/F Canopy, were for the common interest of the Building. The inclusion of 1/F Canopy demolition was, IO argued, necessarily incidental to or in the interests of the management of the Building and/or for the common interest of all owners of the Building as a whole as it obviates present and future risk that 1/F Canopy might pose to members of the public and/or owners of the Building and avoid possible civil and/or criminal liability on the part of IO.

62.  The total costs of the Works should be paid by all owners of the Buildings in proportion to their respective undivided shares as per the Schedule of the DMC and the respondent is thus liable to pay the sum of $547,494.04 i.e. $19,900,000 x 236/8,578. Having previously paid IO the sums of $273,747.02 and $127,776.17, the respondent remains liable to pay IO the balance of $145,970.85 (i.e. $547,494.04 - $273,747.02 - $127,776.17).

D2.  Respondent’s contentions

63.  The respondent says that, on proper construction of the DMC and proper application of BMO, owner of 1/F Canopy and owners of Assigned External Walls (from G/F to 2/F) are respectively entitled to exclusive use, occupation and enjoyment of the said canopy and their respective external wall(s) to its/their entirety. Their structural parts are not common parts of the Building. In addition, the respondent says that only external walls from 3/F to 10/F of the Building are common parts.

64.  The respondent also says that only owner of 1/F Canopy was obliged to comply with the 2012 Order but that MC had wrongly opined that IO should carry out remedial works to 1/F Canopy in compliance with the 2012 Order. The Works were thus not to comply with the 2014 Order only. They included renovation to Assigned External Walls and demolition of 1/F Canopy, which are not common parts, thus falling outside IO’s duties under clauses 12(c), (d) and (dd) of the DMC and s.18(1) & (2) of BMO.

65.  Further or alternatively, if owners of 1/F Canopy and of Assigned External Walls are, the respondent argued, entitled to exclusive use of their surfaces only, they should maintain such surfaces under clause 20(m) of the DMC and s.34H of BMO. If they so failed leading to damage and/or dilapidated state of the concrete slab and structure thereof, the said owners should be liable for the costs of the Works relating to 1/F Canopy and the Assigned External Walls.

66.  The costs of the Works relating to the Assigned External Walls should, the respondent argued, first be borne and paid for by their respective owners having exclusive right to their use and enjoyment under the Schedule of the DMC. Thus, China All should, pursuant to s.34H of BMO, be responsible for maintenance of the external walls of the 3 Units A. The remaining costs of the Works over external walls should then be borne by all owners in proportion to their respective undivided shares under the DMC. As there are in total 11 floors in the Building, all owners should only be responsible for 8/11 of the costs of the Works over external walls.

67.  The respondent should, it was argued, not be responsible for the costs of maintenance of 1/F Canopy (in sum of $3,572,283.39[30]) nor 3/11 of the decoration costs of the Works over external walls (in sum of $6,355,687.53[31]). Its due share of contribution to the Works should only be $401,523.19 i.e. [$19.9M - $3,572,283.39 - $6,355,687.53 x 3/11] x 236/8578.

68.  Having paid $273,747.02 before this application was taken out on 25 May 2016 and tendered $129,764.57 by way of cheque sent to IO’s solicitors on 3 August 2016, the respondent says that it had fully paid IO its due share of contribution to the Works plus interest from 25 May 2016 to 3 August 2016.

69.  The respondent counterclaims declaration that:

(1)  it is not liable to pay for the costs of maintenance of 1/F Canopy in the Works and the costs of the Works for maintaining the Assigned External Walls;

(2)  the obligation to maintain the Assigned External Walls should lie with their respective owners; and

(3)  the obligation to maintain 1/F Canopy should lie with the owner of Unit A on 1/F and Unit A on 2/F.

D3.  IO’s reply contentions

70.  If, which is denied, the 1/F Canopy and the Assigned External Walls are not common parts of the Building, such of the Works carried out by IO over them were, IO averred, necessarily incidental to or in the interests of the management of the Building and/or for the common interest of all its owners.

(1)  Removal of 1/F Canopy is a reasonable means of removing the risk it may pose. If the 2014 Order did not include 1/F Canopy, its demolition with its associated structures connected to the Building is related to and/or incidental to and/or facilitated the repair and maintenance of the Building and/or compliance with the 2014 Order. IO’s decision and/or resolution of demolishing 1/F Canopy was to avoid risk of its collapse like that happened in Winfield Incident.

(2)  Works over Assigned External Walls are to comply with the 2014 Order and IO’s duties under clause 12(c), (d) & (dd) of the DMC and s.18(1) & (2) of BMO, minimize and/or obviate risk of IO’s civil and criminal liability caused by dilapidation of the external walls and/or enhance and/or ensure uniformity of the aesthetic aspect and/or external appearance of the Building.

71.  IO puts the respondent to proof of its factual contention in [65] above.

72.  Items 4.1 to 4.6 of the Works are not, IO averred, decoration works but are for compliance with the 2014 Order and/or repair and maintenance works of the Building. If they are decoration works as alleged, IO may carry out improvement or decoration works to common parts under s.18(2)(fa) of BMO.

73.  Finally, IO said that the DMC and/or BMO does not contain any clauses which support the apportionment of 3/11 as contended by the respondent.

E.  Other relevant DMC provisions

74.  Recital 5 of the DMC provides that the First Owner and HKJC have agreed with the management company for the latter to undertake management of the Building and the Land on the terms and conditions of the DMC and

“for the purpose of making provision for such management and in the case of the First Owner and the Second Owner for the purposes of defining and regulating their rights interests and obligations of themselves and all subsequent owners in respect of the said Land and the Building in manner hereinafter contained. (bold supplied)”

75.  In the DMC, “owner” means: -

“a person who for the time being appears from the records of the Land Office to be the owner of an undivided share in the said Land and his executors administrators successors in title and assigns… (bold supplied)”.

The word “owner” when used in relation to any unit in the Building shall unless the context otherwise requires mean

“the person in whom the undivided share allocated to such unit exclusively is for the time being vested, his executors administrators successors in title and assigns… (bold supplied).”

76.  In the DMC, “the unit” means “each of the parts of the Building set out in the First Column of the Schedule hereto”.

77.  Clause 3(b) of the DMC reads:

“Each owner of the canopy adjoining his unit shall not erect or suffer or permit to be erected any structure, advertising sign, installation, signboard or any other thing on his canopy (bold, underline and italics added)”.

78.  Clause 6 of the DMC reads:

“Subject to the provision of this Deed each owner shall hold his share in the said Land and the Building and the unit of which he has the exclusive right privilege to hold use occupy and enjoy subject to and with the benefit of the easements rights privileges obligations covenants terms and conditions as set out in this Deed (bold supplied).”

79.  Clause 7 of the DMC reads:

“Each owner shall hold his share in the said Land the Building and the unit of which he has the exclusive right privilege to hold use occupy and enjoy subject to and with the benefit of the following rights privileges and obligations: -

(a) Full right and liberty to go pass and repass over and along the common entrances, staircases, landings and passages in the Building and the roads and footpaths within the said Land and other common areas.

(b) …

(c) The right to subjacent and lateral support and to shelter and protection from the other portions of the Building.

(d) The right for the owner … of any part of the Building … at all reasonable times in the day time on prior reasonable written notice (except in case of emergency) to enter into and upon the other parts of the Building and the common parts thereof for the purposes of carrying out any work necessary for the maintenance and repair of the Building or any part thereof causing as little disturbance as possible and making good any damage caused thereby.

(e) Full right and privilege for the Manager and the Management Committee under [Predecessor Ordinance] their employees or agents … to enter into and upon any unit for the purpose of rebuilding, repairing, renewing, maintaining, cleansing, painting or decorating the Building or any part thereof…. (bold supplied)”.

80.  Clause 9 of the DMC reads:

“Every owner shall have the full right and liberty without reference to the owner of any other undivided share in the said Land and the Building or any person otherwise interested in any other undivided share in any way whatsoever and without the necessity of making such other owner or any such other person a party to the transaction to sell, assign, mortgage or otherwise dispose of or deal with his share or interest in the said Land and the Building together with the full and exclusive right and privilege to hold use occupy and enjoy the unit held therewith subject to and with the benefit of these presents…. (bold and italics supplied)”.

81.  Clause 12 of the DMC reads:

“The duties and power of the Manager shall be generally to use its best endeavours so far as practicable to undertake the management, operations, servicing, maintenance and repair of the Building and the said Land its equipment, apparatus and services (all of which activities are hereinafter included under the word “management”) and in particular but without derogating from the generality of the foregoing to do the following: -…

(c) To keep the common parts clean and in good sanitary state and condition.

(d) To repair and keep in good repair and condition all the common parts and as and when necessary to replace any part or parts thereof as shall have been damaged or destroyed.

…

(dd) To do all such other things which are reasonably incidental to or in the interests of the management of the Building and the said Land. (bold and italics added)”

82.  Clause 16(d) of the DMC reads:

“All owners shall be liable for and pay to the Manager all other costs fees and expenses for the maintenance upkeep and repair of the common parts and the exercise of the Manager’s power and the performance of the Manager’s duties and to pay all other outgoings which are payable in respect of the said Land and the Building as a whole in the due proportion and in the manner as hereinafter mentioned (bold and italics added).”

83.  Clause 16(g) of the DMC reads:

“If any owner of any unit shall fail to pay any amount payable hereunder within 7 days of the date on which the demand for payment is served on him he shall further pay to the Manager: (i) Interest calculated at the rate of $1.20 for each $100.00 or part thereof of the amount unpaid for each period of 30 days or part thereof for which it remains unpaid; and (ii) A collection charge of $150.00 or such lesser sum as the Manager may agree, to cover the cost (other than legal costs of proceedings as hereinafter mentioned) of the extra costs occasioned by the default (bold supplied).”

84.  Clause 16(h) of the DMC reads:

“All amounts which may be or become due and payable by any owner of any unit in the Building to the Manager together with interest thereon as aforesaid and the said collection charge and all other expenses incurred in or in connection with recovering or attempting to recover the same shall be recoverable by civil action at the suit of the Manager…. (bold supplied)”

85.  Clauses 20(a), (h), (l), (m) & (r) of the DMC read as follows:-

“Each party hereto hereby covenants with the others as follows: -

(a) Not to make in his unit any structural alterations which may damage any other unit or the common parts or cause any inconvenience to the other occupiers and not to cut or injure the cement concrete flooring columns beams or girders of the Building and not to do anything whereby the structural strength thereof may be affected.

(h) Not to erect or cause to be erected so as to extend outside any of the common exterior walls any awnings, sunshades, racks for flower pots or for drying clothes and not to cut maim or injure any part of the common exterior walls.

(l) Not to attach or put up or hang or permit or suffer to be attached or put up or hung any radio or television aerial wire on or from the exterior of the Building except in such parts thereof as the Manager shall reasonably approve or direct in writing.

(m) To keep his unit in good repair and condition and to maintain the same in a manner so as to avoid any loss, damage, nuisance or annoyance to any owners or occupiers of any other units in the Building or any part of the neighbouring premises

(r) No air-conditioners shall be installed through any windows or any other part of the external wall other than at such place specially provided therefor provided that such owner shall take all precautions to avoid condensation dripping on the units below (bold and italics supplied)”.

F.  Relevant BMO & related provisions

86.  Under s.2 of BMO, “common parts” mean: -

“(a) the whole of a building, except such parts as have been specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner; and

(b) unless so specified or designated, those parts specified in Schedule 1 (bold and italics supplied).”

87.  Para 1 of Schedule 1 of BMO reads: “External walls and load bearing walls, foundations, columns, beams and other structural supports (bold and italics supplied)”. The word “canopy” is nowhere found in the said Schedule 1.

88.  Definition of “common parts” in s.2 of, and First Schedule of, Predecessor Ordinance reads substantially the same like those in [86] and [87] above.

89.  S.14(1) of BMO reads:

“Subject to this Ordinance, at a meeting of a corporation any resolution may be passed with respect to the control, management and administration of the common parts or the renovation, improvement or decoration of those parts and any such resolution shall be binding on the management committee and all the owners (bold and italics added).”

90.  S.18(1) of BMO reads:

“The corporation shall —

(a) maintain the common parts and the property of the corporation in a state of good and serviceable repair and clean condition;

(b) carry out such work as may be ordered or required in respect of the common parts by any public officer or public body in exercise of the powers conferred by any Ordinance;

(c) do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant (if any) for the control, management and administration of the building (bold and italics added).”

91.  S.18(2) of BMO reads:

“A corporation may, in its discretion—…

(fa) carry out any renovation, improvement or decoration work, as the case may be, to the common parts[32];

(g) act on behalf of the owners in respect of any other matter in which the owners have a common interest (bold and italics added).”

92.  S.18(2A) of BMO reads:

“Without prejudice to the generality of subsections (1) and (2), the corporation in the performance of its duties and the exercise of its powers under this section shall have regard to and be guided by Codes of Practice issued from time to time under section 44(1)”.

93.  S.34H of BMO reads:

“(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 (bold and italics supplied).”

94.  Code of Practice on Building Management and Maintenance issued pursuant to s.44(1) of BMO and taking effect as from 1 August 2007 (COP 2007)[33] has the following paragraph 1.2:

“The purpose of this Code of Practice is to publicize standards and practices of management and safety in relation to the common parts of a building that are to be observed and followed by an owners’ corporation (OC)…”.

95.  Paragraph 4.2 headed “Structural elements” of COP 2007 has the following paragraph 4.2.1:

“If there is cracking, spalling, bulging or deformation of structural elements (columns, beams, floor slabs, structural walls and cantilevered balconies/canopies) or exposing of reinforcement bars, the OC shall appoint an Authorized Person and/or Registered Structural Engineer registered under [BO] to check the condition and, if necessary, submit remedial proposals to [BA], for consideration”.

96.  Paragraph 4.3 headed “External walls” of COP 2007 has the following paragraphs 4.3.1 and 4.3.3:

“Minor cracking, damage, spalling or bulging of cement rendering, concrete surface, wall tiles or other finishes and delaminated mosaic titles shall be repaired, including the removal of the defective and loose parts.”

“Any dampness or water staining marks shall be traced for eliminating the source of dampness. The affected wall finishes shall be repaired, including the making good or replacement of the damaged wall finishes”.

97.  And paragraph 4.4 headed “Canopies and balconies” of COP 2007 has the following paragraphs 4.4.1:

“Canopies and balconies shall not be overloaded and misused. They shall be free of all attachments and shall not be used for stockpiling. They shall be kept in dry condition and properly drained”.

G.  Discussion

G1.  Item 12 of the Works to remove 1/F Canopy

98.  Ms Wong submitted that it was within power and duties of IO under s.18(1)(a) to (c) and s.18(2)(g) of BMO to remove 1/F Canopy under item 12 of the Works. And IO did it in line with the 2014 Order and clauses 12(c), (d) & (dd) of the DMC. Mr Chiu took the contrary position on each of these points.

G1.1   Structural parts of 1/F Canopy common parts or not?

99.  IO has, one thinks, to first prove that 1/F Canopy was “common parts” of the Building before it becomes duty-bound under s.18(1)(a) of BMO to “maintain” it “in a state of good and serviceable repair and clean condition”.

100.  Opinion on Issue 1 as it was framed was, I believe, therefore sought from the 2 experts to assist this Tribunal on the above point. However, given that parties’ dispute only focuses on whether structural parts of 1/F Canopy are “common parts”, I wonder if Issue 1 was framed too wide than it is required to resolve this narrow dispute.

101.  As it turned out, Fan and Chan gave wide-ranging opinions on, inter alia, structural design of 1/F Canopy on approved plans, whether practice note and concrete code etc. were applicable to 1/F Canopy at the time the Building was built, whether 1/F Canopy was cast (or built) monolithically, and the degree of corrosion, if any, of its reinforced steel bars between 2012 and 2015.

102.  It appears to me that the narrow question the 2 experts could assist this Tribunal is simply whether structural parts of 1/F Canopy are “... other structural supports” of the Building within para 1 of Schedule 1 of BMO (or Predecessor Ordinance) or not.

103.  As a matter of law, whether structural parts of 1/F Canopy are “common parts” of the Building as alleged by IO depends on proper construction of the DMC and application of s.2 and para 1 of Schedule 1 of BMO (or Predecessor Ordinance).

104.  The DMC should be read as a whole in light of the factual and legal context of its making and the practical objects which it was intended to achieve. Both textual analysis and contextualism are useful tools in this construction exercise. To arrive at a proper construction, the court has to conduct a unitary exercise in each case going through an iterative process: Donora Company Limited v IO of Tsuen Kam Centre [2024] HKCFA 3 (Donora)[34], para 55.

105.  The correct approach is to read the DMC together with the First Assignment in discerning parties’ common intention. Applying s.2 of BMO (or Predecessor Ordinance), the question is when these documents are read together whether they manifest a common intention to specify or designate the relevant part as being for the exclusive use, occupation or enjoyment of an owner. These documents should be construed together contextually and purposively in a coherent fashion: Donora, para 39.

106.  In applying the statutory definition, the court must examine all relevant provisions instead of narrowly confining itself to one single provision. One should not simply ask if there is any clause in a registered instrument which stipulated that the exclusive use, occupation and enjoyment of a particular part be given to an owner. One must pay regards to the overall context of the transaction and the other relevant provisions in the instruments effecting the same transaction. The specification or designation in an instrument referred to in the statutory definition refers to the relevant and effective specification or designation in the transaction: Donora, para 40, 51 & 52.      

107.  Schedule 1 of BMO (or Predecessor Ordinance) serves as a non-exhaustive pointer to what might commonly be regarded as common parts and if a part has been specified in that schedule a stronger indication is required before the court can come to the conclusion that it is not common part: Donora, para 56.

108.  Going through the aforesaid iterative process in our case in the manner below, reading the DMC and the First Assignment together, I do not think that they manifest a common intention to specify or designate the structural parts of 1/F Canopy as being for the exclusive use, occupation or enjoyment of an owner like owner of Unit A of 1/F and Unit A of 2/F.

(1)  Under the First Assignment, First Owner had not, one notes, assigned 1/F Canopy to HKJC for the latter’s exclusive use, occupation or enjoyment.

(2)  Instead, the same 2 parties executed on the same day the DMC with the aim of defining and regulating their rights interests and obligations of themselves and all subsequent owners in respect of the Land and the Building as stated in Recital 5 of the DMC.

(3)  I agree with Mr Chiu’s submission that inclusion of the “unqualified” words of “1/F Canopy” into First Column of Schedule of DMC as per definition of “common parts” provided in the DMC and allocation in Second Column of the same Schedule of “2,350” shares to the said canopy, Unit A on 1/F, Unit B on 1/F and external walls of such units, coupled with clause 1 of the DMC, is indicative (or one pointer) of 1/F Canopy being an exclusive use area in its entirety.

(4)  As was also pointed out by Mr Chiu, “canopy” is not found within Schedule 1 of BMO (or Predecessor Ordinance). That suggests that canopy is not commonly regarded as “common parts” and is another pointer in his favour.

(5)  Mr Chiu has further sought support for his submissions from Court of Final Appeal (CFA) judgment in Nation Group Development Ltd v New Pacific Properties Ltd (2000) 3 HKCFAR 427, which was a vendor-purchaser summons taken out on an aborted sale of two G/F shops, the whole of 1/F and its canopy and flat roof. The deed of mutual covenant in Nathan Group, supra, had allocated undivided share to the said canopy, which was not put down as “common parts” and its description was also unqualified i.e. not confined to any particular surface: 434E-I, per Ribeiro PJ.

(6)  However, what divided the vendor and purchaser in Nathan Group, supra, was whether the vendor had exclusive use of the soffit or underside of the said canopy as substantial unauthorized building works was attached to such surface. The vendor argued that the soffit had not been given to it by its predecessor by the use of 2-dimensional plan while the purchaser argued that the vendor had been assigned the entire canopy and sold the entire canopy to it. The exclusive use of canopy of the vendor, argued the purchaser, is not limited to its top surface. CFA finally accepted purchaser’s submissions. CFA had thus, I think, not disposed of any argument about structural parts of the said canopy being “common parts” in the final appeal before it.

(7)  Moreover, as cautioned by CFA in Donora, one must read the entirety of the DMC (and not single provision) together with the First Assignment as a coherent whole. And, as shall be seen, we have expert evidence in this case that structural parts of 1/F Canopy could usefully serve other owners of the Building as potential “common parts”: compare 434H per Ribeiro PJ.

(8)  Prima facie, considering the location of 1/F Canopy within the Building, its separation from G/F shops, from 3/F to 10/F units and offices makes 1/F Canopy, one thinks, more difficult to be used or enjoyed by these owners (and their occupants) than by owner (and occupants) of Unit A on 1/F and Unit A on 2/F i.e. the holder of the said 2,350 shares allocated to 1/F Canopy.

(9)  But, were Mr Chiu’s contentions right, treating entirety of 1/F Canopy as the “unit” of owner of 1/F Canopy under, say clauses 6 and 9 of the DMC, it is, I think, difficult to envisage of any use (let alone exclusive use), occupation or enjoyment that such owner could make out of the structural parts within such “unit”.

(10)  Clause 3(b) of the DMC further prohibits one possible use of 1/F Canopy by prohibiting erection on it[35] (its owner could still, say, paint on its external surfaces). The said clause, however, does not say anything about the exclusive use of the structural parts of 1/F Canopy on any particular owner, which is the subject matter in issue between Mr Chiu and Ms Wong.

(11)  In contrast, owners of all G/F shops, including that of Unit A on G/F allocated separately with 240 shares, are more likely to enjoy or benefit from overhead protection afforded by 1/F Canopy (if not by its structural parts) from sun and rain than the owners of Unit A on 1/F and of Unit A on 2/F. In fact, any occupant and patron who require access to and from any shop, unit or office within the Building would benefit in the said manners.

(12)  Importantly, Chan agreed under cross-examination with Ms Wong (i.e. with Fan) that the structural parts of 1/F Canopy are connected (secured or anchored) with the internal slabs, beams, column and foundation within the envelope, or parent structure, of the Building to form together the structural support of the Building[36]. I accept such consensus opinion evidence.

(13)  The formulation of para 1 of Schedule 1 of BMO (or Predecessor Ordinance) has been held to be read inclusively and in such a way to encompass matters of a similar nature and function: Memoran Company Limited v IO of Mei Hing Mansion [2023] HKCA 841 (Mei Hing) para 20 & 56.

(14)  As a matter of construction, an owner usually acquires no right to use the structural parts of the “slab” or “floor” purchased: see para 57 of Mei Hing, per Au JA[37], and judgment of Godfrey JA (as he then was) in Nation Group Development Ltd v New Pacific Properties Ltd, unreported, CACV 160/1999, 20 January 2000[38] (this part of judgment was not disturbed when the case reached CFA[39]).

(15)  Hence, I would, if it is necessary to do so, hold structural parts of 1/F Canopy within “other structural supports” of the Building as per para 1 of Schedule 1 of BMO (or Predecessor Ordinance) on the narrow issue I posed at [102] above. That points to structural parts of 1/F Canopy being “common parts” of the Building though its other parts such as its external surfaces may not be.

(16)  If Ms Wong is right, all owners of the Building would be liable to maintain, and under clause 16(d) of the DMC to pay for maintenance and repair, of the structural parts of 1/F Canopy (there is no provision in the DMC dealing specifically with repair costs of 1/F Canopy or its structural parts) while these parts could be used by all owners as structural support of the Building.

(17)  To the contrary, were Mr Chiu’s right, owner of 1/F Canopy i.e. owners of Unit A on 1/F and of Unit A on 2/F would be burdened with the duty under clause 20(m) of the DMC to repair and maintain the structural parts of 1/F Canopy as part of the said “unit” with no use occupation or enjoyment of such structural parts.

(18)  Manager (and IO) could, if Ms Wong is right, have right of access to external surfaces of 1/F Canopy owned by its owner to repair and maintain its structural parts (or “common parts” of the Building) inside pursuant to clause 7(e) of the DMC.

(19)  Finally, absolute prohibition 1) against “structural alteration” within one’s unit which may damage the “common parts”, 2) against making injury to structural parts of the Building like “concrete flooring”, “columns”, “beams”, and 3) against doing anything whereby “structural strength” of the Building may be affected at clause 20(a) of the DMC is, one thinks, more consistent with structural parts of 1/F Canopy being “common parts” to be protected from all owners (including owner of its external surfaces) in the interest of all owners of the Building. If owner of 1/F Canopy owns the same to its entirety as alleged by the respondent, it should likely, one thinks, be free in the DMC to do whatever it likes about the said structural parts it owns.

109.  After going through the above iterative process in the manner above, I would therefore prefer, and find for, IO’s contentions to those of the respondent on this point. Reading the First Assignment and the DMC as a coherent whole, I conclude that any reasonable person would have understood the parties to them to mean that the structural parts of 1/F Canopy are to remain as “common parts” for the benefit of all owners of the Building.

G1.2  S.18(1)(a) of BMO?

110.  Though I accept IO’s contentions that structural parts within 1/F Canopy are “common parts” of the Building, I do not accept IO’s further contention that it had exercised its power under s.18(1)(a) of BMO to “maintain” the said “common parts” “in a state of good and serviceable repair and clean condition” when what it had done was to remove the whole 1/F Canopy (more than its structural parts I found to be “common parts”) without replacement. IO’s case on this section therefore, I think, fails.

G1.3  In compliance with the 2014 Order or not?

111.  IO has, one thinks, also to prove that it was ordered or required to remove the structural parts of the 1/F Canopy (i.e. “common parts” of the Building as I found above) by BA under the 2014 Order made under BO before it became duty-bound under s.18(1)(b) of BMO to carry out such works.

112.  Looking at the details of investigations required by para (a)(i)-(viii) & (b)(i)&(ii) of the 2012 Order and the detailed works required by para (a) & (b) of the 2014 Order, the focus of the two orders is, I think, apparently different:

(1)  the former mainly on degree of corrosion of reinforcement steel bars inside 1/F Canopy at its root with parent structure of the Building caused by, say, inadequate drainage or ineffective waterproofing and its effect on stability of the canopy (though para (a)(vii) also required report on “location and extent of concrete spalling”); and

(2)  the latter on removing “loose cracked” concrete from reinforced concrete structure, cleaning “exposed” steel bars “of loose rust and foreign matter, removing “loose” and defective “external” rendering and internal plastering.

113.  Against the above observation, I prefer the reasons given by Chan at para 62(1) & (2) of his expert report and at para 8.4.2 of the joint expert report, and find that the 2014 Order was likely intended by BA to require IO to complete such works at para (a) & (b) thereof to “exterior and common areas” of the Building other than 1/F Canopy which then was subject matter of the 2012 Order still valid against its “owner”[40] i.e. CCS and unperformed.

114.  Had BA had 1/F Canopy in mind again when it issued the 2014 Order against IO such that it overlapped in part with (or touched upon again the subject matter of) the 2012 Order, BA should likely, one thinks, have made it clear to IO (and CCS) in the 2014 Order or otherwise the inter-relationship between the two orders.

115.  If it be necessary, I reject Chow’s evidence in her supplemental witness statement that the demolition of 1/F Canopy by IO was in compliance with the 2014 Order for the following reasons.

(1)  Under Mr Chiu’s repeated cross-examination, Chow once answered him that it can be said that the said removal was in compliance with the 2012 Order. I give full weight to such admission.

(2)  I agree with Mr Chiu[41] that approach of CCS (recipient of the 2012 Order) to MC with the 2014 Canopy Survey Report, MC’s discussions of them and 3 suggested remedial options over 1/F Canopy (2 of them involving demolition of 1/F Canopy) reinforce the aforesaid admission of Chow: see [30], [35] & [37] above.

(3)  Even when Chow was re-examined on the same point, she never saw fit to assert positively that it was done in compliance with the 2014 Order but gave the explanation of avoiding a repetition of Winfield Incident.

If it be necessary, I therefore find it likely that IO had removed 1/F Canopy in purported compliance with the 2012 Order.

116.  Were I wrong with my conclusions and/or findings above, had the 2014 Order also covered 1/F Canopy as IO had suggested, the complete removal of 1/F Canopy as item 12 of the Works definitely went beyond, I think, what was ordered or required in para (a) of the 2014 Order as suggested by Fan.

(1)  Removal of entire 1/F Canopy is, I think, certainly more than removing “loose cracked and otherwise defective concrete from the reinforced concrete structure of” the Building at para (a) of the 2014 Order as suggested by Fan.

(2)  Fan in fact agreed with Mr Chiu that there is no evidence of “concrete spalling” of 1/F Canopy at the material times. Notwithstanding the aforesaid reporting requirement in the 2012 Order, the 2014 Canopy Survey Report simply said nothing at all about “concrete spalling”.

(3)  Hence, more likely than not, IO had, I think, by its contractor also removed concrete of 1/F Canopy that had not become loose, crack or otherwise turned defective.

117.  In this respect, I disagree with Ms Wong’s submission at para 12 of her closing submission. Authority or power for IO to do more than what was ordered or required by the 2014 Order should, I think, be sought elsewhere, if any, than from s.18(1)(b) of BMO itself or else the section would be easily abused or misused.

118.  Hence, IO’s case here fails on the facts I find.

G1.4   S.18(1)(b) of BMO?

119.  On my findings in sections G1.1 & G.13, I do not find it within IO’s duty as per s.18(1)(b) of the BMO to undertake removal of the entire 1/F Canopy. The IO was not ordered by the 2012 Order to do so. Neither was such entire removal works in respect of the “common parts” of the Building as I have found.

G1.5   S.18(1)(c) of BMO & clause 12(c) & (d) of DMC?

120.  On Issue 2, Fan opined that removal of 1/F Canopy was related to and/or incidental to and/or facilitated the repair and maintenance of the Building.

121.  Ms Wong also submitted that demolition of 1/F Canopy involving removal of reinforcement steel bars cast inside parent structure of the Building so as to eradicate and/or prevent risk of corrosion of its parent structure is definitely incidental to and/or facilitates the repair and maintenance works of the Building[42].

122.  Ms Wong referred this Tribunal to s.18(1)(c) of BMO & clauses 12(c) & (d) of the DMC quoted above, which, except for s.18(1)(c) of BMO, all relate to “common parts” of the Building. Nevertheless, one way or another, clause 12(c), 12(d) and 16(d) of the DMC relied upon by IO do use such express words like “keep clean and in good sanitary state and condition”, “keep in good repair and condition”, “replace” damaged or destroyed part(s), “maintenance”, “upkeep” and “repair” to restrict or confine their scope of operation.

123.  In IO of Beauty Court v Hon Ping Kay & Another, unreported, LDBM 2/1998, 11 December, 1998 (Beauty Court), the following had been said by the Lands Tribunal[43] in a dispute about “repair works”:

“In order to decide if a project is within the scope of power of the corporation, one has to consider various aspects. One cannot break the project into small parts and criticize them one by one. The urgency of the various repair work, the costs incurred, the beneficial result and other relevant factors have to be taken into consideration and the ultimate criterion is to see whether the decision is a reasonable one. As to what it is meant by repair work in the Deed of Mutual Covenant and in s.18(1) of [BMO], it is difficult to define….It is our understanding that there is no provision in law which says that facilities can only be replaced when they are unserviceable and cannot be used anymore. We are of the view that under reasonable circumstances, earlier replacement of some facilities is in conformity with the provisions”.

124.  At para 13 & 14 of 和富大廈(荃灣)業主立案法團 v浩鴻發展有限公司 & Another, unreported, LDBM 15/2011, 10 January 2012 (和富大廈), HH Judge M. Wong had also distinguished “repair” and “improvement” as follows:

“… whether or not work amounts to repairs, improvement or maintenance is a matter of fact and degree…. The test for ‘improvement’ is an objective one. If the work provides something new for the benefit of the occupier, it is properly speaking an improvement. On the other hand, if it only replaces something already there, which has dilapidated or worn out, albeit that it is a replacement by its modern equivalent, it constitutes “repairs” and not “improvement”… the following matters are relevant matters in determining whether a piece of work constitutes “improvement” or “repairs”: (a) Whether prior to the work, the relevant parts were well-maintained and serviced and in good condition, or there were defects there; (b) Whether the relevant parts were in need of replacement; and (c) The wordings in the relevant written records (italics supplied)”

125.  For reasons below, I am afraid that complete demolition of 1/F Canopy by way of item 12 of the Works can in no way be regarded as “repair”, “maintenance” or “improvement” of the Building or to “its common parts”.

(1)  The evidence at trial does not, I think, disclose “serious” defects of 1/F Canopy that “definitely” called for its “immediate” and “complete” demolition.

(i)  While 1/F Canopy had been built, and subject to the elements, for decades by 2010’s without major repair, reading the results of the concrete samples in the 2014 Canopy Survey Report, Fan agreed with Mr Chiu that there was no evidence of serious corrosion as Chan opined.

(ii)  In fact, the 2014 Canopy Survey Report was, Fan pointed out, incomplete in material survey results when it was compared against the 2012 Order. For example, concrete samples were not collected at the root of 1/F Canopy[44] as was required. Nothing was mentioned about drainage of 1/F Canopy as was required.

(iii)  Though Fan found no surface channel but only 2 small drainage outlets on 1/F Canopy on its approved plans, he agreed he could find no evidence of “water ponding” on 1/F Canopy at trial.

(iv)  There is also, Fan admitted, no evidence of “structural cracks” of 1/F Canopy at trial. Also, there was no evidence of any rectification works being done, after demolition of 1/F Canopy, to reinforcement steel bars at parent structure of the Building previously connected with structural slabs of 1/F Canopy (and Fan’s claim of parent structure of the Building being adversely affected lack evidence in support).

(v)  Though Sunfield advised MC of 1/F Canopy having FS less than 1, it did not go as far to say it had “immediate danger” and to suggest there was only one single option of “complete and immediate demolition”.

(vi)  Indeed, BA had issued no order expressly requiring complete demolition of 1/F Canopy.

(2)  Looking at the Contract, item 12 is one independent and separate item on its own at a substantial price tag of $3.6M. On its face, it has no connection with other work items. And there is no evidence at trial that it was a “compulsory” item of works.

(3)  After item 12 of the Works was performed, CCS (and IO) was left with no canopy at 1/F level of the Building as shelter or protection of G/F shops and pedestrians. In terms of facilities of the Building, there was no “improvement” after the exercise.

(4)  Item 12 of the Works was not described in the Contract as “repair” or “maintenance”.

(5)  Accordingly, I cannot accept Fan’s claim or opinion that complete removal of 1/F Canopy “related to” or “facilitated” “repair” and “maintenance” of the Building. As such, I do not find clause 12(c) and 12(d) of the DMC applicable to this case.

126.  For s.18(1)(c) of BMO, Ms Wong had also not pinpointed any alleged DMC obligation (or clause) for control, management and administration of the Building that IO could enforce by instructing contractor to remove 1/F Canopy.

127.  In so far Ms Wong falls back to submit that “prevention is better than cure”[45] i.e. it is reasonable for IO to remove risk of collapse of 1/F Canopy before it happens, such submission is, I think, outside the express wordings of the DMC clauses and BMO section considered in this section and thus not open to IO to run.

128.  For the above reasons, Ms Wong’s case in this section does not succeed either.

G1.6   S.18(2)(g) of BMO & clause 12(dd) of the DMC?

129.  I go on to consider Ms Wong’s last submission on the 2 most general powers of IO in s.18(2)(g) of BMO and clause 12(dd) of the DMC. Relying on them, Ms Wong submitted that removal of 1/F Canopy was for the common interests of all owners of the Building and that such removal was necessarily incidental to or in the interests of the management of the Building.

130.  At para 13 of IO of Swiss Towers v Chow Yum Wah, unreported, CACV 122/2006, 20 October 2006 (Swiss Towers), Cheung JA, giving the judgment of Court of Appeal, after referring to the long title of BMO and s.14(1) of BMO, had explained s.18(2)(g) of BMO as follows:

“All this points to the fact that a corporation is set up for the specific purpose of managing the buildings. The words ‘any other matter in which the owners have a common interest’ in section 18(2)(g) must be read in that light. They must be referable to the management and maintenance of the buildings and matters relating to such purposes (italics supplied)”.

131.  In support of her submissions, Ms Wong relied on Beauty Court, supra, where the applicant corporation reached an agreement with 1/F flat owner to share the costs of reconstructing a balcony. Having found part of the balcony outside the said 1/F flat forming part of external part of the building for which all owners should share its repair costs under the deed of mutual covenants, the Lands Tribunal accepted that the damaged balcony endangered the safety of others and needed to be reconstructed urgently and that it was reasonable for the applicant to reach the said agreement with the 1/F flat owner. Without referring to s.18(2)(g) of BMO, the Tribunal found this work item “within the power and obligation given” to applicant “under the law” and the said expenses recoverable from the respondent owner[46].

132.  At trial, Chow gave evidence that, after Winfield Incident, IO was greatly concerned about its potential legal liability in the event of collapse of 1/F Canopy. It was against such background (and also, I think, CCS’s reluctance to comply with the 2012 Order in [30] above) that MC decided on IO taking up the 2^nd remedial proposal of total demolition suggested by Sunfield in [37] above. This proposal can, said Chow, completely eradicate all potential danger of collapse of 1/F Canopy, or risk of IO being sued, once and for all. MC thus had discussions with CCS, which also gave its consent for the canopy to be removed[47]. The decision to remove 1/F Canopy was therefore, said Chow, made in the interest of all owners of the Building as a whole.

133.  Having regard to all evidence adduced at trial, I accept the above evidence of Chow on the following grounds: -

(1)  Save challenging whether or not CCS had agreed to comply with the 2012 Order (which challenge failed at [30] above), Mr Chiu did not challenge the rest of Chow’s evidence above.

(2)  Sunfield did explain to MC that, though 1/F Canopy did not pose immediate danger, its FS was less than 1 according to the contents of the 2014 Canopy Survey Report.

(3)  While Fan ad Chan differed on whether there was a construction requirement of monolithic casting of cantilevered canopies[48] in about 1982, their otherwise consensus are that, in terms of safety, proper building guidelines and requirements had yet to be put in place in about 1982 to ensure their suitable design and construction. Put it other way, the design and construction of 1/F Canopy had by 2010’s become outdated and it no longer complied with then safety standards.

(4)  On the case law, there are, to the laymen, plenty instances before 2014 of IO being sued for, and as a result of, collapsed canopy for one reason or another[49].

(5)  Under cross-examination, Ho also agreed with IO having reasonable concern of its having potential legal liability after happening of Winfield Incident and Chan also agreed that complete demolition of 1/F Canopy can solve the problem once and for all.

(6)  The respondent had through its solicitors admitted to IO in correspondence that the 1/F Canopy was unsafe and posed safety risk, and that demolition of the same, if approved by BA, was one of the reasonable means of removing the risk[50].

(7)  Ho also agreed under cross-examination of 1/F Canopy being unsafe by having FS below 1 and that it exposed IO to risk of being sued in the event of its collapse.

134.  Applying Swiss Tower and following Beauty Court, handling or solving of outdated design and construction problems of 1/F Canopy and its safety risk of collapse, and the consequential risk of potential legal liability (by coming to an agreement with CCS to remove 1/F Canopy) is, I think, a matter in which all owners of the Building “have a common interest” as per s.18(2)(g) of BMO and also reasonably incidental to and/or in the interests of the management of the Building as per clause 12(dd) of the DMC. It is a common problem of the management of the Building faced by all its owners.

135.  Hence, I accept IO’s contentions that it was within its power or discretion under s.18(2)(g) of BMO and clause 12(dd) of the DMC to resolve on instructing contractor at GM to remove 1/F Canopy in the Works.

136.  In the event I am wrong on my ruling in section G1.1 and Mr Chiu were right that the entirety of 1/F Canopy was within exclusive use occupation and enjoyment of CCS (and of China All after 29 August 2014), for same reasons given by me in this section, I would have remained of the same view that it was within power or discretion of IO under s.18(2)(g) of BMO and clause 12(dd) of the DMC to resolve at GM to remove 1/F Canopy if so far it may be necessary.

137.  In coming to the above ruling, I reject Mr Chiu’s contrary submissions based on s.34H of BMO.

138.  In gist, public fund of IO should, Mr Chiu argued, be spent on “common parts” for which IO had duty to maintain and not on private properties. Were it otherwise, there could well be misuse of public fund on private properties to the windfall of individual private owner(s). As CCS (and, after 29 August 2014, China All) was, under s.34H of BMO, responsible to maintain and repair 1/F Canopy, such costs should not be paid by all owners (or paid upfront by all owners and recovered from individual private owners afterwards) but by CCS (or China All). To apply s.18(1) & (2) of BMO (and clause 12 of the DMC) in the way suggested by IO would, Mr Chiu submitted, be contrary to the mandatory and overriding[51] provision of s.34H of BMO, unreasonable, absurd, nonsensical and contrary to the law.

139.  My reasons to disagree with Mr Chiu are as follow:

(1)  Unlike other sub-sections of s.18(1) & (2) of BMO and unlike other sub-clauses in clause 12 of the DMC, IO’s power under s.18(2)(g) of BMO and clause 12(dd) of the DMC are plainly, on their own terms, not confined to “common parts” of the Building.

(2)  The dispute or issue in this application before me only deals with the existence or otherwise of such “power” or “discretion” on the part of IO and not the “exercise” of such power in the circumstances of this case or other future cases.

(3)  The “exercise” or otherwise of such power or discretion is for IO (or all owners in GM in this case) to decide for itself. The owners may decide by taking the view that “prevention is better than cure” as suggested by Ms Wong (i.e. a proactive or preventive approach) or by taking other views such as “wait and see” (i.e. a more passive approach) or one of “owners pay” advocated by Mr Chiu for the respondent.

(4)  The IO should, one thinks, be trusted that it is capable to get informed and to decide for itself how best to expend its public fund, including whether or not to spend on private properties and/or to seek reimbursement from individual owner afterwards.

(5)  Given the narrow issue that I need to resolve in this case, this Tribunal should, I think, not concern itself in this Judgment with the wisdom or otherwise of IO in its internal decision-making leading to GM resolution on 24 October 2014 once it is decided that it is within power or discretion for IO to decide for itself.

(6)  S.34H of BMO was, I think, apparently introduced into BMO to fill such gap or omission in deeds of mutual covenant that make no provision for duty on somebody to maintain certain areas. Where such deeds do not impose such obligation on anyone, BMO implies one such obligation onto particular person(s) into the deeds.

(7)  S.34H of BMO therefore serves a distinct purpose different from that of s.18(1) & (2) of BMO (which set out powers and duties of a corporation) or of clause 12 of the DMC (which set out duties and power of the Manager). The former and the latter deal with, I think, two different subject matters.

(8)  In any event, clause 20(m) of the DMC has already provided for each owner “to keep his unit in good repair and condition and to maintain the same (bold supplied)” in a proper manner. “Unit” could include 1/F Canopy. Hence, there is, I think, no room or need to apply s.34H of BMO to the DMC.

(9)  Moreover, s.34H of BMO never on its terms, I think, says that the person(s) who owed the implied obligation to maintain particular area(s) is/are the only person(s) responsible for such maintenance and the only person(s) liable to pay for such maintenance. To be clear, S.34H of BMO does not have the words of “only”, “solely” or “pay”.

(10)  Therefore, s.34H of BMO does not, I think, prevent (or is no obstacle preventing) IO from exercising its power or discretion under BMO and/or the DMC to undertake removal of 1/F Canopy (if there is such power and/or discretion under other sections in BMO and/or the DMC and IO has so decided for itself).

(11)  Hence, there is, I think, absolutely no inconsistency between s.34H of BMO on one hand and s.18(2)(g) of BMO[52] and clause 12(dd) of the DMC on the other hand as alleged by Mr Chiu.

(12)  Indeed, Mr Chiu could produce no authority to support his objection based on s.34H of BMO. In so far he relied on references to s.34H of BMO in the judgments of Lands Tribunal and of the Court of Appeal in Donora to support his objection, I would point out there is no dispute in that case about power or authority of IO to use public fund to pay for works on alleged private properties. Donora therefore, I think, lends no support to his objection here.

140.  Hence, IO has, I conclude, managed to prove its case on s.18(2)(g) of BMO and clause 12(dd) of the DMC regarding item 12 of the Works while all its rest fails.

G2.  Items 4.1 to 4.6 of the Works over all external walls

141.  Ms Wong submitted that it was within power and duties of IO under s.18(1)(a)-(c) and s.18(2)(fa) & (g) of BMO to carry out items 4.1 to 4.6 of the Works. It was done by IO in line with the 2014 Order and clauses 12(c), (d) & (dd) of the DMC. Again, Mr Chiu took the contrary position on each of these points.

G2.1  Structural parts of Assigned External Walls common parts or not?

142.  Again, IO has to first to overcome the “common parts” or “private/exclusive area” hurdle in order to apply s.18(1)(a) of BMO.

143.  Ms Wong conceded that Assigned External Walls do not form common parts of the Building but that their exclusive use area must, she argued, be confined to the space of their adjoining units surrounded by these external walls, the ceiling and floor slab. These exclusive use areas do not, she submitted, extend to the structural parts of Assigned External Walls[53]. As such, for Assigned External Walls, the parties’ dispute also lies with their structural parts alone.

144.  For Other External Walls, the respondent effectively submitted that they are common parts of the Building (see [63] above) and the IO does not contend otherwise. And both parties are contended for their costs of the Works to be shared by all owners of the Building in proportion with their respective undivided shares (see [66] & [67] above). I would therefore proceed with the rest of the Judgment on such common ground of the parties.

145.  For parties’ difference over structural parts of Assigned External Walls, going through the same iterative process as suggested by Donora, by looking at First Assignment and the DMC as a coherent whole in the manner below, I do not think that their parties had manifested a common intention to specify or designate the structural parts of the Assigned External Walls as being for exclusive use of their respective individual owners.

(1)  By First Assignment, First Owner had assigned exclusive use of “external walls” of 6 G/F shops of JC Premises to HKJC. That suggests them being exclusive use area in their entirety as Mr Chiu had contended for the respondent.

(2)  In the DMC executed on even date (which was intended to define and regulate the inter-relationship between First Owner, HKJC and subsequent owners), para (a) of its definition of “common parts” prima facie include “external walls” as common parts unless they are specified in First Column of its Schedule.

(3)  But Assigned External Walls (including those of 6 G/F shops of JC Premises) were, Mr Chiu was at pains to point out, specified in First Column of the Schedule of the DMC and allocated with undivided shares. By operation of clauses 1 & 2 of the DMC, First Owner and HKJC would have, one would have thought, exclusive use of Assigned External Walls of their respective shops, units and entrance. Coupled with the fact that the words of “external wall” used in the Schedule of the DMC were unqualified, it is a pointer to Assigned External Walls in their entirety being exclusive use areas.

(4)  Moving to Schedule 1 of BMO (or Predecessor Ordinance), “external walls” is included in paragraph 1 thereof, indicative of them being common parts. At the same time, the said paragraph 1 has also the words of “other structural supports” at its end.

(5)  External walls by its nature perform 3 structural or architectural functions to the benefit of all owners of a building. They serve the functions of (i) holding and supporting the building; (ii) preventing damage to the building’s interior; and (iii) enabling co-owners of the building to have peaceful enjoyment of their respective units. These uses are their primary uses and all the owners of the building enjoy the benefit of such uses: para 66 of Donara. As such, structural parts of Assigned External Walls should, one thinks, perform same above structural and architectural functions with structural parts of Other External Walls as an entire external framework of the Building.

(6)  In view of structural function of external walls above, structural parts of Assigned External Walls must, I think, fall within the words “External walls… other structural supports” within para 1 of First Schedule of Predecessor Ordinance (or BMO). One begs to consider the remaining provisions of the DMC (together with First Assignment) as required by Donora to see if sufficiently strong indication to the contrary could be found.

(7)  There is, I believe, no dispute about whether or not structural parts of external walls are exclusive use area or common parts in Donara and I do not think Mr Chiu could derive any support to respondent’s contention in our case of entirety of Assigned External Walls being exclusive use area from Donara.

(8)  At the time of the making of the DMC, Assigned External Walls themselves were, as Ms Wong stressed, owned by different owners and not owned by a single owner. Were those different owners of Assigned External Walls intended by the parties to the DMC also to have exclusive use of their different structural parts as suggested by the respondent or only to have exclusive use of their surfaces and inner spaces as suggested by IO?

(9)  Again, it is difficult to envisage what use, let alone exclusive use, these different owners of Assigned External Walls could have made out of their different structural parts if they were within their respective “units” under, say, clauses 6 & 9 of the DMC. At the same time, they would be burdened with the duty to maintain these different structural parts under clause 20(m) of the DMC if these structural parts form part of their respective “units”.

(10)  Treating the structural parts of Assigned External Walls as “common parts” as suggested by IO would, however, place the duty to maintain and repair them on all owners of the Building under clause 12(c) & (d) of the DMC and would require all owners to pay for their maintenance and repair under clause 16(d) of the DMC.

(11)  Unlike certain other parts and facilities of the Building whose repair costs have been placed by the DMC solely on, or on, particular owners[54], including one sub-clause on Unit A owners of 1/F, there is no provision in the DMC that particular owners shall pay or solely pay costs of repair of the Assigned External Walls[55] or their structural parts. This, I think, points against their structural parts being private property of individual owners.

(12)  For clauses 20(h), (l) & (r) of the DMC, which touch upon “common exterior walls”, “exterior of the [Building]” and “external wall” respectively, they are all, I think, covenants agreed upon parties of the DMC over the “exercise” or “manner” of exercise of certain particular activity/activities on these parts. They do not, I think, purport to specify or designate these parts (or their structural components) within exclusive use occupation and enjoyment of any particular owner. Indeed, approval of manager to use such parts of the “exterior” of the Building for such use prohibited by clause 20(l) of the DMC could have suggested the other direction.

(13)  Finally, absolute prohibition 1) against “structural alteration” within one’s unit which may damage “the common parts”, 2) against causing injury to structural parts of the Building like “concrete flooring”, “columns”, “beams”, and 3) against doing anything whereby “structural strength” of the Building may be affected at clause 20(a) of the DMC, and absolute prohibition against causing injury to any part of the “common exterior wall” at clause 20(h) of the DMC is, one thinks, more consistent with structural parts of Assigned External Walls being “common parts” to be protected from their owners in the interest of all owners of the Building.

146.  After going through the above iterative process, IO’s contention is, I think, the right one on this point. Notwithstanding specification of, and allocation of shares to, Assigned External Walls in First Column of the Schedule of the DMC, their structural parts remain, I think, “common parts” of the Building. That accords, I think, with what a reasonable person rather than a pedantic lawyer would have understood the parties of the DMC to mean.

G2.2  S.18(1)(a) of BMO?

147.  But items 4.1 to 4.6 of the Works were all carried out on the surfaces of all external walls of the Building. Looking at [50] above, items 4.1, 4.3, 4.4 and 4.5 involved demolishing external wall finishes, installing and cleaning external wall tiles, and installing tiles with expansion joints for external wall tiles. Item 4.2 concerned rendering. Item 4.6 was painting of pipes/drain pipes.

148.  Hence, putting aside items 4.1 to 4.6 of the Works carried out at Other External Walls, these items carried out at Assigned External Walls were not carried out at structural parts of Assigned External Walls. In other words, these items were not carried at “common parts” of the Building (as I have found in section G2.1) as required by s.18(1)(a) of BMO.

149.  IO was thus, I think, under no duty under s.18(1)(a) of BMO to carry out items 4.1 to 4.6 of the Works at Assigned External Walls, whatever the position might well be regarding same works at Other External Walls. IO therefore fails on this point.

G2.3  In line with the 2014 Order or not?

150.  Under Issue 3, Fan opined that all items 4.1 to 4.6 of the Works were not for the compliance of the 2014 Order. The said order was, he opined, solely related to the removal of dangerous elements. There was, he pointed out, no additional requirement in the said order to reinstate external wall tiles finishes.

151.  To the contrary, Chan’s views on Issue 3 are that only items 4.4 and 4.6 of the Works were not in compliance with the 2014 Order. On the results of Infra-red Report found at [40] above and limited to those damaged locations at Other External Walls, Chan opined in his expert report, and in joint expert statement, that only a total of 152 m² of works in items 4.1, 4.2, 4.3 & 4.5 of the Works were in compliance with the 2014 Order[56].

152.  For reasons explained in the next section, I do not find it necessary to resolve the above differences between the 2 experts. In either case, IO cannot succeed either.

G2.4  S.18(1)(b) of BMO?

153.  As neither of the 2 experts opined in favour of IO that all items 4.1 to 4.6 of the Works were carried out in compliance of the 2014 Order, there is, I am afraid, no available favourable expert evidence that IO could rely upon to prove that it was ordered or required by order of BA to carry out all items 4.1 to 4.6 of the Works such that it became duty-bound under s.18(1)(b) of BMO to do so. Again, IO has, I think, to seek elsewhere for the necessary power or authority, if any, to carry out all items 4.1 to 4.6 of the Works.

154.  On the evidence before me, s.18(1)(b) of BMO (and the 2014 Order) therefore, I think, does not empower IO to carry out all items 4.1 to 4.6 of the Works on all external walls of the Building.

G2.5  S.18(1)(c) of BMO & clauses 12(c) & (d) of the DMC?

155.  For same reason of lack of alleged DMC obligation to enforce given in [126] above, I do not think s.18(1)(c) of BMO avails IO to carry out items 4.1 to 4.6 of the Works at all external walls of the Building.

156.  Regarding clauses 12(c) & (d) of the DMC both involving “common parts” of the Building, IO suffers, I think, from same fatal problem of items 4.1 to 4.6 of the Works carried out at Assigned External Walls being surface works and not being structural works as explained by me in section G2.2.

157.  The provision and clauses in this section cannot, I think, support IO’s case either.

G2.6  S.18(2)(fa) of BMO?

158.  This power or discretion of IO under s.18(2)(fa) of BMO covers 3 different kinds of works: i) renovation; ii) improvement and iii) decoration work.

159.  Under Issue 3, Fan opined that all items 4.1 to 4.6 of the Works were for the repair and maintenance of the Building.

160.  In comparison, Chan took the views in his expert report, and in the joint expert statement, that:-

(1)  100% of item 4.6 of the Works

(2)  a total of 152 m² of works for items 4.1, 4.2, 4.3 and 4.5 of the Works (based on the results of the Infra-red Report and limited to those damaged locations at Other External Walls)[57]; and

(3)  0% of item 4.4 of the Works

were for the repair and maintenance of the Building.

161.  In spite of the above contrary expert opinion of Chan, on the authority of Beauty Court and 和富大廈, Ms Wong has, I think, by way of submissions below, put forward forceful arguments that all such works in items 4.1 to 4.5 of the Works could be regarded as either renovation, improvement, or decoration works of the Building under s.18(2)(fa) of BMO[58].

(1)  The Building has not undergone major renovation in the past.

(2)  On top of the 2014 Order, there had been past complaint and intimation to IO of the external walls of the Building having problem of falling mosaic titles (see [24] and [27] above).

(3)  Global Tests had inserted written remarks at divers different pages of the Infra-red Report to give different sorts of reservations about its test results[59] such that its results of damaged external wall locations may not reflect the complete picture.

(4)  IO should therefore not wait for damage to have occurred or discovered at other locations than those 181 locations identified by Global Tests in the Infra-red Report to decide upon carrying out works on all 4800-square-metre external walls of the Building.

(5)  Item 4 of the Works should not be broken down and each of its items considered in isolation. If not “decoration” or “repairs”, item 4 of the Works, including installation of new external wall tiles and installation of tiles with 5 horizontal expansion joints[60] for external wall tiles, could still be properly regarded as “improvement”.

(6)  The overall aesthetic appearance of the entire exterior of the Building, both Chow and Ho had said, has improved after the Works as a result (I also concur by comparing its photos prior to, and after, the Works before me).

(7)  In order to carry out remedial works at structural parts of the external walls of the Building, its surface external wall tiles must first be demolished or uncovered. After structural repairs are done, such external surfaces should, of course, be restored by new external wall tiles in the ordinary course of events.

162.  On the other hand, Chan questioned the necessity and costs to demolish as many as 4800m² of external wall tiles over all external surfaces of the Building (by way of item 4.1 of the Works) to carry out structural repairs below at only 152m² area he calculated (or, one may add, at only 300m² area for item 3.3 of the Works).

163.  But, again, s.18(2)(fa) of BMO, one notes, applies only to renovation, improvement or decoration work “to the common parts” and not “to the building”.

164.  With respect, experts’ opinion in Issue 3, and Ms Wong’s submissions, regarding items 4.1 to 4.6 of the Works being repair and maintenance of the Building are misplaced.

165.  Even assuming I were to rule in favour of Ms Wong’s argument above, whatever may be the position regarding Other External Walls, such works carried out at the surfaces of Assigned External Walls could not, one thinks, be renovation, improvement or decoration works “to the common parts” as per s.18(2)(fa) of BMO on my ruling in section G2.1. For this reason, I also do not find it necessary to reach a conclusion on Ms Wong’s argument above.

166.  IO’s case on s.18(2)(fa) of BMO also fails.

G2.7  S.18(2)(g) of BMO and clauses 12(dd) of the DMC?

167.  Relying on Chow’s evidence, Ms Wong last submitted that carrying out items 4.1 to 4.6 of the Works on all external walls of the Building is a matter “in which the owners of the Building have a common interest” and/or necessarily incidental to or in the interests of the management of the Building under clause 12(dd) of the DMC.

168.  In the box, Chow further gave evidence (which I accept) that if only parts of the external walls of the Building were repaired or improved, there would be color difference between different parts of the Building, adversely affecting its aesthetic appearance. Moreover, IO had, she said and I accept, opted for repairs to all external walls of the Building (as opposed to damaged parts) to have a complete overhaul of all of them (solving, inter alia, their structural and seepage problems) in order to avoid further mosaic tiles falling off from them causing dangers to passers-by (thus avoiding potential legal liability on the part of IO). As such, the repairs of all external walls of the Building resolved by IO at GM held on 24 October 2014 are, she stressed, in the common interest of all owners of the Building as a whole.

169.  Ms Wong sought support for her submissions from the judgment of HH Judge M. Wong in 陳民華及另十七人 及 元朗屏會街9號同發大廈業主立案法團, unreported, LDBM 165/2011, 27 June 2012, where His Honour held that the incorporated owners had power to install new central air-conditioning water collection pipes[61] under s.18(2)(fa) & (g) of BMO by saying the followings at para 14 & 15 thereof:

“本席認為是次安裝中央集水喉並不是單為住宅業主而設，其目的主要是為了改善大廈外觀而設。若果要各住宅業主獨自安裝冷氣機去水喉，這必定使大廈外牆懸掛多條去水喉，影響大廈外觀。住宅業主亦不可能不接駁冷氣機喉管至地下去解決冷氣機滴水問題。申請人認為住宅業主可以不用中央集水喉而同時可以維持大廈外觀的說法並不合理。

再者，改善大廈外觀並不是單為住宅業主或個別業主的利益，而是有利於所有業主，包括地舖業主。冷氣機中央集水喉其實與大廈其他的中央去水喉無異，都是避免過多的喉管在外牆上，影響外觀。冷氣機集水喉亦不是單為個別業主所設，而是為所有住宅業主所設。即使這並不包括地舖業主，也不能作為個外業主的利益。(Bold supplied)”

170.  In further support of her submissions, Ms Wong also cited judgment of Deputy District Judge Simon Lui in  好順利大厦業主立案法團 對 Wealth Gear Ltd及另一人 [2018] HKLdT 19, where it was said at para 19 as follows:

“在本案中，所牽涉的外牆，雖然是屬於私人擁有，但明顯地大廈外牆是大廈重要的結構，而大廈外牆並非只影響該外牆內所保護的有關單位，大廈外牆是整棟大廈的一個保護外殼，任何其中一部分受損、破壞或受不當影響，不單止會對於該部分所牽涉的單位有所影響，亦會影響整棟大廈的安全。審裁處認為這必定是業主共同權益的事務。(Bold supplied)”

171.  I take note of Mr Chiu’s submissions regarding the above 2 cases[62] where he highlighted their factual differences from this case and thereby sought to distinguish them. In addition, Mr Chiu objected to their application, as he did in opposition to IO’s case of removal of 1/F Canopy, by reference to s.34H of BMO (but on the different premises that CCS, or China All, has exclusive use of Assigned External Walls in its entirety and therefore should, he argued effectively, be solely responsible to pay for their maintenance and repair).

172.  Of course, the facts of the 2 cases in [169] and [170] above are not on all fours with this case. Notwithstanding that, I find their reasoning convincing in our context and still applicable to the evidence of Chow I accept and the different factual circumstances of this case.

173.  In so far Mr Chiu’s objection based on s.34H of BMO is concerned (see [138] above), I repeat reasons given by me at [139] above in reply thereto. Again, I would stress that I am only concerned myself in this judgment (or this dispute) with existence or otherwise of power or discretion of IO under s.18(2)(g) of BMO and/or clause 12(dd) of the DMC to carry out items 4.1 to 4.6 of the Works over all external walls of the Building[63].

174.  Applying Swiss Towers and the reasoning of the above authorities, and on the facts I find, I accept Ms Wong’s submissions and conclude that IO had power or discretion under s.18(2)(g) of BMO and/or clause 12(dd) of the DMC to undertake item 4.1 to 4.6 of the Works for all external walls of the Building. It is a matter in which the owners of the Building have a common interest and/or necessarily incidental to or in the interests of the management of the Building.

175.  Again, were I wrong in my conclusion in section G2.1 and Mr Chiu were right that Assigned External Walls in their entirety belong to their respective different owners, for the reasons given in this section, I would have remained of the same view that it was within IO’s power or discretion under s.18(2)(g) of BMO and/or clause 12(dd) of the DMC to undertake items 4.1 to 4.6 of the Works for all external walls of the Building, including Assigned External Walls.

176.  Hence, IO has, I think, also made out its case only on s.18(2)(g) of BMO and clause 12(dd) of the DMC to carry out items 4.1 to 4.6 of the Works over all external walls of the Building.

G3.  Further & alternative plea of respondent made out or not?

177.  I refer to [65] and [71] above. The respondent had not, I think, proven that owners of 1/F Canopy and of Assigned External Walls had failed to maintain external surfaces of 1/F Canopy and Assigned External Walls respectively causing damage and/or dilapidated state of their structural parts. No factual or expert evidence to the above effect was forthcoming at trial.

178.  Further, the above plea has, I think, no legal foundation either.

(1)  Mr Chiu made no closing submission regarding this further and alternative plea at all.

(2)  In so far he relied on s.34H of BMO, I would repeat my reasons given in [139] above against his reliance of this section for a different purpose than it was introduced or designed for.

(3)  In so far he relied on clause 20(m) of the DMC to support such duty to repair on the owners concerned, it is, I think, no obstacle to IO resolving to undertake items 4.1 to 4.6 and item 12 of the Works pursuant to IO’s power and discretion under s.18(2)(g) of BMO and clause 12(dd) of the DMC as I have concluded above.

G4.  Does respondent owe IO unpaid balance as alleged?

179.  On my findings and rulings in sections G1 & G2 that IO had power or discretion under s.18(2)(g) of BMO and clause 12(dd) of the DMC to resolve to carry out items 4.1 to 4.6 as well as item 12 of the Works, the respondent’s challenge to IO’s apportionment of the costs of the Works, and its consequential liability as an owner of the Building to share, fails.

180.  I therefore reject respondent’s different method of apportionment and calculations at [67] above.

181.  If not bound by GM resolution made on 24 October 2014 pursuant to s.14(1) of BMO, the respondent as an owner of the Building should, I think, be liable to pay to IO all costs and expenses for the exercise of its power and to pay all other outgoings which are payable in respect of the Building as a whole pursuant to clause 16(d) of the DMC,.

182.  Save to dispute sharing all costs of item 12 of the Works and 3/11[64] costs of items 4.1 to 4.6 of the Works, which attempt has failed above, the respondent did not otherwise dispute IO’s apportionment method of all costs of the Works in proportion to the respective undivided shares of the owners of the Building, which method I find to be the appropriate one for IO to adopt in this case.

183.  Hence, the respondent was, I find, at all material times since 3 August 2016 liable to pay IO outstanding balance of its due share of contribution to the costs of the Works in sum of $145,970.85 as per the calculations in [62] above.

G5.  Should the counterclaims be granted?

184.  For the reasons given, and my conclusion, in the last section, it is, I think, inappropriate for me to grant the 3 declarations sought by the respondent in its counterclaim.

G6.  Collection charge & Interest

185.  The respondent made no submission opposing IO’s claim of collection charge of $150 per clause 16(g)(ii) of the DMC and I would allow it as the said clause so provides.

186.  The respondent also made no submission opposing IO’s interest claim. I also find it appropriate to award pre-judgment interest as per clause 16(g)(i) of the DMC to compensate IO for its loss of use of its money over time.

H.  Disposition

187.  Accordingly, I enter judgment in this application as follow:

(1)  The respondent’s counterclaim be dismissed;

(2)  The respondent do pay the applicant the sum of $145,970.85;

(3)  The respondent do pay the applicant interest on the said sum of $145,970.85 at 1.2% for every 30 days from 4 August 2016 until judgment and thereafter at judgment rate until payment in full;

(4)  The respondent do pay the applicant collection charge in sum of $150; and

(5)  Applicant’s solicitors do draft, file and serve this judgment on the respondent.

I.  Costs Order Nisi

188.  Costs normally follow the event. As the applicant has prevailed on both its application and respondent’s counterclaim, I make a costs order nisi that the respondent do pay the applicant the costs of the application and the costs of the counterclaim, including all reserved costs of both and the costs of this trial together with certificate for counsel, to be taxed on District Court scale if not agreed.

189.  Finally, I thank both counsels for their able assistance.