THE INCORPORATED OWNERS OF HUNG WAI BUILDING v. SUNNY ELEGANT LTD AND OTHERS

CAMP 351/2022, [2023] HKCA 930

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 351 OF 2022

(ON AN INTENDED APPEAL FROM LDBM NO. 76 OF 2019)

________________________

________________________

________________________

J U D G M E N T

________________________

Hon Chu VP (giving the Judgment of the Court):

A. Introduction

1.  This is a renewed application of the 1^st to 4^th respondents (collectively “the respondents”)  for leave to appeal against the order of Deputy District Judge S H Lee (“the Judge”)  sitting as the Presiding Officer of the Lands Tribunal given on 6 July 2022. 

2.  By his order, the Judge refused to give leave for the respondents to adduce expert evidence on issues stated in paragraph 1(2), (4)  and (5)  of their summons dated 15 June 2022, and directed that a single joint expert (“SJE”)  be appointed to give expert evidence on a reformulated version of the issue set out in paragraph 1(1)  of the summons.

3.  The applicant opposes the application.

4.  Having considered the papers and the written submissions, we are of the view that it is appropriate to determine this application without a hearing on the basis of written submissions only, pursuant to Order 59, rule 2A(5)(a)  of the Rules of the High Court, Cap. 4A. 

B.  Background  

5.  The applicant is the incorporated owners of Hung Wai Building situated at Nos. 3-5 Fa Yuen Street, Mongkok, Kowloon (“the Building”), which comprises a commercial podium with shops on the Ground Floor (“G/F”)  and office units on the 1^st Floor (“1/F”), and two residential blocks with units on the 2^nd to 24^th Floors.

6.  The 1^st respondent is the owner of one shop on the G/F and 19 office units on the 1/F.  The 2^nd respondent is the principal tenant, and the 3^rd and 4^th respondents are the sub-tenants/licensees and occupiers of the shop and the office units, where a Chinese restaurant (“the Chinese Restaurant”)  and a café (“the Café”)  are being operated.

7.  The main dispute between the parties in the Lands Tribunal concerns whether the external walls and the following areas on the G/F and 1/F are common parts. For present purposes, we need only focus on the areas on the G/F and the 1/F (“Disputed Areas”):

(1)  an entrance space on G/F (“Entrance Space”), two staircases and one stair landing leading to the 1/F (“Staircases and Stair Landing”)[1]; and

(2)  a corridor (“Corridor”), two male toilets and two female toilets on the 1/F (“Toilets”)[2].

8.  The applicant’s claim, insofar as the Disputed Areas are concerned, is that the Disputed Areas are common areas and that the respondents have interfered with the enjoyment and use of other co-owners and occupiers of the Building causing nuisance or hazard to people lawfully in the Building, in breach of sections 34I(1)  and (2)  of the Building Management Ordinance (“BMO”)[3] and Clauses 4 and 13 in Section IV of the deed of mutual covenants (“DMC”)[4].  Specifically, the applicant says that the respondents have: (1)  converted the Corridor to become part of the Chinese Restaurant and the Café, and erected an iron roller shutter door and two glass doors at the entrances of the Chinese Restaurant and the Café; (2)  obstructed the means of fire escape and the access to the main switch room on the 1/F (電制房)[5]; and (3)  enclosed the space of the two lift lobbies on the 1/F. ^[6]

9.  The respondents dispute the claim on the basis, inter alia, that the 1^st respondent has exclusive right to occupy the Disputed Areas under the DMC by reason of his being the owner of the 19 office units on the 1/F.  They also deny there have been breaches of the DMC or that section 34I of the BMO applies.  They counterclaim for a declaration that the applicant is precluded or estopped from contending that the Disputed Areas are common parts.

10.  The respondents’ application to adduce expert evidence is directed at the applicant’s complaint about the obstruction of access to the main switch room.  The thrust of the applicant’s case on this is that:

(1)  The main switch room houses the electrical appliances and cables essential to the power supply for all the units in the Building.

(2)  The applicant cannot access the main switch room to effect repair work or inspect the electrical appliances and cables in the event of an emergency because it does not have the keys to or means of accessing the room after close of business.

(3)  Even during business hours, the applicant has to seek the permission of the respondent(s)  to carry out repair or inspection as it is necessary to go past the Café and its kitchen to gain access to the main switch room. 

11.  Pausing here, it is relevant to observe that the main switch room is not part of the Disputed Areas.  The applicant’s complaint is simply that failure to maintain the electrical appliances and cables in a proper state of repair and condition, due to the inability, difficulty or delay in accessing the main switch room, can affect the power supply of the Building and may cause explosion or fire hazard, thereby jeopardizing the safety of the owners and occupiers of the Building[7].

12.  The respondents do not accept that the main switch room houses electrical appliances and cables or is intended to be used to provide for the electricity supply for all the units in the Building.  Their case is that[8]:

(1)  The main switch room only contains electricity meters for the purpose of electricity usage billings.

(2)  Only persons specified under the Electricity Ordinance, Cap. 403 may inspect the main switch room.

(3)  The applicant is not entitled to access the main switch room irrespective of whether it is a common area of the Building.

 C.  The application to adduce expert evidence

13.  By their summons dated 15 June 2022, the respondents applied to adduce expert evidence on five issues.  The third issue, which relates to whether inspection to the main switch room can only be carried out by qualified technicians, was not pursued at the hearing before the Judge.  The remaining four issues are:

(1)  As a matter of design, whether the main switch room is a power supply area intended to be used for the supply of electricity to the Building.  (“Issue 1”)

(2)  As a matter of design, whether the 1^st respondent, as the owner of all the units on the 1/F, is obliged to provide access to the main switch room to the applicant.  (“Issue 2”)

(3)  Whether, subject to access by qualified technicians thereto, in the absence of access by the applicant to the main switch room, the general safety of the owners and occupiers of the Building (other than those of the 1/F units)  may be jeopardized.  (“Issue 4”)

(4)  As a matter of design, whether the Staircase and Stair Landing connecting the Entrance Space at Shop No. 8 and the Corridor and the Toilets are intended to be used for the Building as a whole or the 19 offices on the 1/F.  (“Issue 5”)

13.  The respondents sought to appoint two experts, namely Mr Luk Wai Man, a registered professional engineer, to give expert opinion on Issues 1, 2 and 4; and Mr Lau Pak Wo John, an Authorized Person and building surveyor, to give expert opinion on Issue 5.

D.  The Judge’s decisions

14.  By his Order dated 6 July 2022, the Judge dismissed the application in relation to Issues 2, 4 and 5 but granted leave to the parties to instruct a SJE to give expert opinion on Issue 1 which he reformulated as follows (“Reformulated Issue 1”):

“For all electrical facilities installed inside 1/F electrical room, from 2017 to present, identify each of them by equivalent name, and explain the function of each of them (whether in terms of electricity supply, measurement of electricity consumed, or otherwise)”.

15.  The respondents’ application for leave to appeal was dismissed by the Judge on 1 September 2022 ([2022] HKLdT 42). 

16.  The respondents’grounds for the leave application and the Judge’s reasons for refusing the application may be summarised as follows:

(1)  Issue 5

(1.1)  The respondents argued that this issue went beyond a construction of documents and could not be decided by just looking at the building and/or assignment plans to identify the entrances, exits and corridors.  It was said that the expert would be able to give evidence on the building practice prevailing at the time the building plans were submitted to the Building Department, and assist the court in understanding the design of the Building from a designer’s perspective. 

(1.2)  The Judge found this ground unarguable[9]. First, the building practice and the exact assistance that the expert could render to the court were not identified.  Second, the design of the Building is manifested by the way it was built and evidenced by the building plans.  Third, it was not suggested that the building and assignment plans contain technical words or terms of art that the court would have difficulty understanding.  Fourth, the layout of the entrances and exits is the only aspect of the design of the Building to be considered under this issue, and this is readily recognizable and identifiable on the building plans and the related assignment plans.

(2)  Issues 2 and 4

(2.1)  On Issue 2, the respondents argued that it was wrong to regard the issue of access to the main switch room as a matter of construction of the DMC and application of the BMO, and to hold that expert evidence was not required in determining whether the main switch room is a common part.

(2.2)  As to Issue 4, the respondents argued that the Judge was wrong to hold that the issue did not address the real complaint, which is that the restriction of access has affected the applicant’s ability to maintain the common facilities inside the main switch room, and that the SJE could assist the court to establish on the facts whether the general safety of the Building might be jeopardized or there was a safety hazard to the persons lawfully inside the Building. 

(2.3)  The respondents submitted that the expert could assist in the determination of (a)  the issue of access to the main switch room by looking at and comparing other switch rooms in the Building and “all other relevant technical factors”, and (b)  the issue of building safety by looking at the electricity supply plans from a professional technician’s point of view.  It was also said that without the assistance of an electrical engineering expert, the court would have to speculate on the reason for the location of the main switch room, its service and the design concept as compared to similar switch rooms located on each floor of the Building.

(2.4)  The Judge rejected the respondents’ arguments. First, on Issue 2 ^[10], there was no explanation of the need to consider and compare the other switch rooms, no indication of what were the “other relevant technical factors” that the expert might consider, and how they would assist the Tribunal to decide whether the main switch room is a common part when it is trite that construction of the DMC is a matter for the court.  Second, on Issue 4 ^[11], the reasons for considering the location and service of the main switch room, comparing the main switch room with other switch rooms, and the so-called design concept of the Building from the perspective of an electrical engineer are unclear and unexplained.  The need to have expert assistance to look at the electricity supply plans was also not established.  Third, the proposed expert evidence would confuse the real issues to be resolved by the Tribunal and delay the resolution of the parties’ dispute, leading to unnecessary costs and waste the Court’s time.[12]

(3)  Appointment of SJE

(3.1)  The respondents argued that the appointment of a SJE was inappropriate given that the issues are highly contentious, and the Judge should have directed the parties to adduce expert evidence separately.

(3.2)  The Judge rejected the argument, holding that Reformulated Issue 1 was straightforward and simple[13] and the appointment of SJE would save the time and expenses of the parties as well as avoid delay to the case[14]. 

E.  The respondents’ intended grounds of appeal

17.  The respondents’ grounds for this renewed application largely resemble those argued in the leave application before the Judge.  They may be sumamrised as follows:

(1)  On Issue 5[15], the Judge erred in law in holding there is no need for expert evidence as the court can decide the issue by looking at the entrances, exits and corridor shown on the building and assignment plans.  (“Ground 1”)

(2)  On Issues 2 and 4 [16], the Judge erred in law in holding that (a)  the issue of access to the main switch room is purely a matter of construction of the DMC and BMO; (b)  one of the disputes is whether the main switch room is a common part to which the applicant is entitled to have access; and (c)  the issue of whether it is a common part is a matter of construction of the DMC and does not require expert evidence. (“Ground 2”)

(3)  On the appointment of SJE[17], the Judge erred in the exercise of his discretion in that the expert evidence on Issues 1, 2, 4 and 5 will be highly contentious and it is central to the parties’rights over the Disputed Areas.  (“Ground 3”)

F.  Our reasons for decision

F.1  Relevant legal principles

18.  Section 11(2)  of the Lands Tribunal Ordinance, Cap. 17 provides that a party may appeal to the Court of Appeal against a judgment or order or decision of the Lands Tribunal on the ground that it is erroneous in point of law.  Section 11AA(1)  further provides that no appeal may be made unless leave to appeal has been granted.  Under section 11AA(6), leave to appeal shall not be granted unless the court is satisfied that (a)  the appeal has a reasonable prospect of success, or (b)  there is some other reason in the interests of justice why the appeal should be heard.

19.  On the admission of expert evidence, the Final Report on Civil Justice Reform identified three conditions for admission of expert evidence (at §596), namely (1)  the subject matter of the opinion must fall within an area in which expert evidence may properly be given; (2)  the witness must be qualified as an expert to give the evidence of the type in question; and (3)  the expert’s evidence must be relevant to the issues being litigated.

20.  With regard to conditions (1)  and (3), the court’s approach post-CJR is that evidence meeting condition (1)  may still be excluded if the court considers that calling it will not be helpful to the court in resolving any issue in the case justly; and expert evidence will not be helpful where the issue to be decided was one on which the court is able to come to a fully informed decision without hearing expert evidence: see Shenzhen Futaihong Precision Industry Co Ltd v BYD Co Ltd [2018] HKCA 408 at [3] to [13], applying Barings plc v Coopers & Lybrand [2001] PNLR 22 at [45]. 

21.  Ultimately, it is a case management decision premised on the court’s assessment of whether expert directions should be given and if so, on what terms.  Like other case management decisions, the Court of Appeal will be circumspect in interfering with such decisions and will not do so unless the decision is not made in accordance with established principles or is otherwise plainly wrong.  It is a very high threshold: Lee Tak Yee v Chen Park Kuen [2001] 1 HKLRD 401, at 403C-G.

F.2  An overview

22.  Before turning to the three grounds relied on by the respondents, it is pertinent to bear in mind that: (1)  the Judge’s decision is a case management decision and what is engaged is the Judge’s discretion; and (2)  appeals from the Lands Tribunal must be on points of law.  It follows that leave to appeal should not be given unless it is reasonably arguable that the Judge had committed error(s)  of law in exercising his discretion to refuse the admission of expert evidence and/or to direct the appointment of a SJE.

F.3  Ground 1: Issue 5

23.  Under Ground 1, the respondents argue that Issue 5 (i.e. whether the Staircase, Stair Landing, Corridor and Toilets were intended for the use of the whole of the Building or just the 19 offices on the 1/F)  goes beyond a mere consideration of the building and assignment plans; nor is it simply a question of accessibility within the Building.  It is said that what matters is the design intention of the Building which underpins the clauses in the DMC, and the court ought to take into account the prevailing building practice when the plans were submitted to the Buildings Department for without such evidence, the Tribunal will not be able to make any informed decision and is driven to rely on the bare assertions of the parties[18].

24.  We are unable to see how the proposed expert evidence is of assistance to the Tribunal.  

25.  First, the burden is on the respondents to show that the subject matter of the expert opinion falls within an area in which expert evidence may properly be given and the proposed expert evidence is relevant to the issues being litigated.  The court cannot be expected to speculate on the nature and relevance of the proposed expert evidence.  In this case, however, the respondents have not explained the precise nature, the relevance or use of expert opinion on the prevailing building practice, and how it may add to the existing building plans or inform the understanding of them.  Merely contending that the Tribunal will be assisted by viewing the issue from a professional point of view and from the perspectives of building practice or building design[19] is both vague and unhelpful. 

26.  Second, the Judge had observed that it is not the respondents’ case that the building plans contain technical words or terms of art that the court would find it difficult to apprehend, and that the single aspect of the design of the Building to be resolved under Issue 5 is the layout of the entrances and exits, which is readily ascertainable from the building plans and assignment plans[20].  These views of the Judge are not really challenged by the respondent.  In fact the Amended Notice of Opposition also avers that it is apparent from the design of the Building that the Entrance Space is common only to the office units[21].  In our view, the Judge is justified in concluding that the court is in a position to consider the design of the Building as manifested by the way it was built, having regard to the building plans and the relevant assignment plans[22].

27.  Third, the proposed expert evidence on prevailing building practice or design concept/intention bears no relevance to the pleaded case of the parties.  The respondents do not dispute that the Disputed Areas do not fall within the boundary of the shop and office units owned by the 1^st respondent[23]. Their case is that notwithstanding this, the 1^st respondent has exclusive right to occupy the Disputed Areas under the DMC, and the respondents are entitled to use and enjoy the Disputed Areas[24]. In short, the respondents are not disputing the boundaries of the Disputed Areas; nor are they disputing the accuracy of the existing building plans or the validity of the clauses in the DMC.  In the circumstances, the necessity of the proposed expert evidence or its relevance to the determination of the dispute in the case is simply not established.

28.  Even though the respondents have pleaded that the Building was designed in such a way that there are separate means of access to and exits from the commercial and residential units of the Building[25], it is the Judge’s considered view that the Tribunal is able to reach an informed decision, without the aid of any expert evidence, as to whether the residential blocks have their own self-contained entrances and exits and whether the residents are entitled to use the entrances and exits of the commercial premises on the G/F and 1/F[26].  The respondents have not shown in what way the Judge’s view is wrong, let alone palpably wrong.  In our view, the Judge is entitled to take the view that expert evidence will not be helpful where the issue to be decided is one which the court is able to come to a fully informed decision[27].

29.  Fourth, the respondents’ submission that without expert assistance the Tribunal’s approach would differ from that of the designer of the Building is misplaced[28]. In the first place, the proposed expert (an Authorized Person and a building surveyor)  is not the designer of the Building. Further, there is no basis to assume that, without expert assistance, the Tribunal would inevitably come to an uninformed decision. More importantly, it is for the respondents to persuade the court of the relevance and necessity of the proposed expert evidence.  The court cannot be left to speculate on whether, and in what ways, it would be hampered in resolving the issues between the parties.

30.  For the above reasons, Ground 1 is not arguable.

F.4  Ground 2: Issues 2 and 4

31.  Under Ground 2, the respondents reiterate that on the issue of  whether the 1^st respondent is obliged to give the applicant access to the main switch room (i.e. Issue 2), the expert can assist the court to compare the main switch room with the switch rooms on the other floors in the Building and “all other technical factors”; and on the issue of whether the non-availability of access would endanger the general safety of the occupants of the Building (i.e. Issue 4), the expert can assist the court to consider the issue from a professional technician’s point of view by looking at the electricity supply plans of the Building[29].  It is also said that, without such assistance, the court will have to speculate on the location choice of the main switch room and its service as compared to other switch rooms in the Building.  The respondents further argued that the applicant will not suffer any real prejudice that cannot be compensated by costs.

32.  We are not persuaded that the respondents have demonstrated that expert evidence on the two issues are both relevant and necessary.

33.  The primary issues to be determined by the Tribunal in this case are whether the Disputed Areas are common parts of the Building and whether there is any breach of the DMC and the BMO.  As pointed out by the applicant[30], the main switch room is not part of the Disputed Areas.  The dispute over the main switch room stems from the applicant’s plea of nuisance that its access to the room was obstructed by the conversion of the Disputed Areas to their own use.  The resolution of the dispute over the main switch room will follow from the determination of the primary issues, and not the other way round.  The questions posed under Issues 2 and 4 are peripheral to the main issues in dispute and the proposed expert evidence is not necessary for the determination of the primary issues.

34.  In addition, it is not made clear why it is necessary to have the expert to consider and to compare the main switch room with other switch rooms in the Building.  There is also no elaboration of the nature, relevance or basis of the proposed expert evidence on the “other relevant technical factors”, the reasons for the location of the main switch room, its capacity and loading difference compared to other switch rooms, and the design concept of the switch room in housing the meters and ducting.  In the absence of solid evidential basis demonstrating the relevance and necessity of the proposed expert evidence, the Judge is entitled to refuse to disallow its admission.

35.  We also do not agree that the Judge erred in viewing the issues of whether the main switch room and the facilities installed in it are common parts and/or whether the respondents are under an obligation to provide access to the common switch room as matters for the court to determine upon a construction of the DMC[31].

36.  As to Issue 4, we agree with the Judge that the issue has no apparent or direct relevance to the issue joined by the parties on the pleadings[32]. The issue is premised on a complete lack of access to the main switch room whereas the thrust of the applicant’s complaint is its inability to carry out repair or inspection work on the facilities inside the main switch room on an urgent or routine basis.

37.  Further, the respondents have not shown why there was a need to look at the technical plans, especially the electricity supply plans.  In particular, Reformulated Issue 1 already requires the expert to identify and explain the name and function of each of the electrical facilities installed inside the main switch room from 2017 to present.  We do not accept the respondents’ submission[33] that this is insufficient to assist the court to decide whether any restriction to the applicant’s access to the main switch room in the event of an emergency will jeopardize the general safety of the occupants of the Building or pose a safety hazard to the persons lawfully in the Building under the BMO[34].

38.  We agree with the Judge that the proposed expert evidence on Issues 2 and 4 will only lead to proliferation of unhelpful evidence, lengthen the trial and increase the costs of the litigation.  We also do not accept the respondents’submission that this is an appropriate case for this Court to review the Judge’s exercise of discretion or the reliance on the case of Lee Tak Yee v Chen Park Kuen is apt.  On the contrary, the case highlights the very high hurdle that the respondents have to surmount in seeking to challenge the Judge’s case management decision (see 403C-G).

40.  For these reasons, Ground 2 is not arguable. 

F.5  Ground 3: Appointment of SJE

41.  Ground 3 argues that the Tribunal ought to have granted leave for Issues 2, 4 and 5 to be addressed by the parties’ own experts instead of appointing a SJE because these are highly contentious issues that go to the determination of the parties’ rights over the Disputed Areas[35]. The respondents submit that one of the central issues is whether the facilities inside the main switch room are essential or related to the power supply of the Building, and whether they are common facilities to be used and enjoyed by all the owners in the Building[36].

42.  We see no merits in this ground.  First, we have for the reasons set out above rejected the application to adduce expert evidence on Issues 2, 4 and 5.  Second, as noted above, the main switch room does not form part of the Disputed Areas and Issues 2 and 4 are peripheral to the primary issues in the case.  Third, as the Judge correctly pointed out[37], the SJE was appointed to deal with the Reformulated Issue 1.  Whether Issues 2, 4 and 5 are highly contentious and/or are central to the parties’ rights over the Disputed Areas has no bearing on whether the Judge’s decision to appoint a SJE is correct.  Fourth, even if the issues are highly contentious, that by itself would not preclude the appointment of an SJE.

43.  In short, the respondents’ submissions do not reveal any error of law in the Judge’s exercise of discretion and the reasons he gave (at §43 of his decision)  for rejecting the respondents’ arguments.

G.  Disposition

44.  For the above reasons, the respondents’ intended appeal are not reasonably arguable. We are also not satisfied that the circumstances are such that the interests of justice require leave to appeal to be given.  Accordingly, we refuse the application for leave to appeal and dismiss the summons dated 15 September 2022. 

45.  Costs of this application should follow the event. We order the respondents to pay the applicant’s costs of this application, to be summarily assessed.  We further direct (1)  the applicant to file and serve a statement of costs for summary assessment within 14 days from the handing down of this judgment; and (2)  the respondents may file and serve a statement in opposition, if any, within 14 days thereafter.  We will deal with the assessment of costs on paper.

46.  As the present application is totally without merit, we further make an order under O.59 r.2A(8)  of the Rules of the High Court that no party may request the determination to be reconsidered at an oral hearing inter partes.