Bristle Ltd v. Wong Tsui Ching Venisa and Another

CACV 246/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 246 OF 2013

(ON APPEAL FROM HCA 854 OF 2012)

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J U D G M E N T

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Hon Barma JA (giving the Judgment of the Court):

1.This was an appeal brought with the leave of this court by the plaintiff, Bristle Limited, against the decision of Chung J dated 16 May 2013 by which the judge dismissed the plaintiff’s application for an interlocutory injunction to restrain the defendants from placing a security guard’s booth (or guardhouse) in front of what is now the main gate providing access to the plaintiff’s house in a development known as “The Baroque” in Kau To Shan, Shatin.

2.There were also before the court applications by both the plaintiff and the defendants to adduce further evidence for the purposes of this appeal.  We indicated that we would deal with these applications in our judgment.  At the end of the hearing we reserved judgment, which we now give.  The delay in handing down this judgment is regretted.

3.The Baroque is a small residential development of four houses.  The plaintiff is, and has at all material times been, the owner of House 1, while the 1^st defendant, Ms Wong Tsui Ching, Venisa (together with her husband) is the present owner of House 4, having acquired it in about 2007 from its former owners, Professor and Mrs Kao.  She also acts as the chairman of the 2^nd defendant, which is described as the Incorporated Owners of The Baroque.  The validity of the 2^nd defendant’s incorporation (which took place in about 2010) is disputed by the plaintiff, and is the subject of separate proceedings between the parties in which the plaintiff seeks declarations that the 2^nd defendant was not validly incorporated, alleging that the meeting of owners at which it was resolved to set up the 2^nd defendant was not properly convened, and thus was not competent to pass any effective resolutions.

4.As one enters The Baroque, the houses are to the left of the common driveway.  House 1 is the first house, followed by Houses 2, 3 and 4.  The houses have been described by the parties as semi-detached, although from the plans it appears that they are, with the exceptions of Houses 1 and 4, attached on both sides.  Houses 1 and 4 have no adjoining house to their left and right respectively (as one looks at the front of the house), and instead have larger gardens, which run along the side of the house as well as at the back.  Houses 2 and 3 have smaller gardens at the back of the house only.  Each of the houses has its own garage.  As originally built, on passing through the main entrance to the development, there was a wall to the left, separating the common driveway from the garden of House 1.  In front of the wall, just after the entrance to the development, there was a planter and a rubbish collection point at the left, and a common toilet on the right.

5.The private garden space to the left of House 1 is quite large, and the plaintiff (through its director Mr Mok) wished to use it to provide space to park additional cars.  Accordingly, in February 2001, the plaintiff wrote to the owners of Houses 2 to 4 to inform them of the changes that the plaintiff proposed to enable this to be done. These involved the removal of the flower bed, relocation of the rubbish collection point, replacement of the wall between the driveway and the garden of House 1 with a large metal gate that could open to allow cars into the area occupied by the garden to the left of House 1, and alteration of the footpath in front of the wall by lowering it to the same level as the driveway, so as to enable vehicles to enter the grounds of House 1. 

6.The plaintiff then convened an owners’ meeting of the owners of houses in The Baroque to consider and vote upon this proposal.  In the event, only the plaintiff and the then owners of House 4 (Professor Kao and his wife) attended the meeting, at which it was resolved to approve the plaintiff’s proposal.  The plaintiff then undertook the works as proposed.  Initially, there were some complaints from the owner of House 2, but after some correspondence between lawyers, the complaints do not seem to have been persisted in.

7.Thereafter, between the latter part of 2001 and about 2010, the plaintiff used the new gate in order for vehicles to enter the grounds of House 1.  However, it seems that the relationship between the plaintiff and his neighbours was not always harmonious, and that disputes and differences arose from time to time.

8.In about 2010, the owners of Houses 2, 3 and 4 decided to form an owners’ corporation in relation to The Baroque, resulting in the incorporation of the 2^nd defendant.  The validity of the 2^nd defendant’s incorporation is, as we have noted, disputed by the plaintiff, and is the subject of separate proceedings (HCA 1094/2011).  Thereafter, it was proposed by the defendants that security at The Baroque should be improved by the installation of security cameras and a guard booth.  The intended location of the guard booth was in front of and at the right hand end of the gate leading into the garden of House 1.  The plaintiff said that this would interfere with its access to House 1 through the gate, and accordingly commenced these proceedings to obtain an injunction to prevent the guard booth being placed in the location proposed. After the commencement of the proceedings, the plaintiff applied for an interim injunction – this was the application before the judge.

9.The judge dismissed the application, holding that the plaintiff had failed to make out a serious question to be tried as to the claim for an injunction.  Although he did not, therefore, need to come to a view as to whether or not the balance of convenience favoured the granting of the injunction sought, the judge indicated that had he concluded that there was a serious question to be tried, the balance of convenience would have favoured the granting of an injunction. Before us, the argument focused on the question of “serious question to be tried”, rather than “balance of convenience”.

10.The judge was not satisfied that the plaintiff had demonstrated that there was a serious question to be tried as to the plaintiff’s entitlement to use the gate it had installed in 2001 as a means of vehicular access for House 1 because, in his view, this involved an breach of clause 9(c) of the Deed of Mutual Covenant (“DMC”) in respect of The Baroque.  That clause provided that each party to the DMC covenanted “not to use or permit or suffer any part of the Development of which he is the owner to be used for any purpose whatsoever other than for the purpose for which it was designed”, and such a breach could not be ratified or approved by a meeting of the owners because of the provisions of clause 12(j)(iii) of the DMC.  Clause 12(j)(iii) provided that no resolution shall be valid if it is contrary to the provisions of the DMC.  The judge considered that the effect of the changes that were made following the meeting of owners was to turn the garden at the side of House 1 into a passageway and car parking area, contrary to clause 9(c).

11.The judge also appears to have considered that the changes involved a change in the use of the common areas near the wall that had originally existed at the end of the garden of House 1, as a result of the loss of the planter and rubbish collection point, and the changing of the sidewalk into a vehicular access point for House 1, and that these matters also involved an infringement of clause 9(c) of the DMC, which equally could not be ratified because of clause 12(j)(iii).

12.The judge went on to hold that no question of acquiescence on the part of the other owners of houses in The Baroque could arise so as to assist the plaintiff, as incorporated owners had, as one of their principal functions, the enforcement of the DMC relating to the property in question, so that they could not, as a matter of law, consent to or acquiesce in a breach of the DMC.  He also appears to have considered that there was no acquiescence in fact, as the owners of House 2 had complained about the alterations when they were in progress during 2001.

13.At the hearing of the appeal, both sides sought to adduce additional evidence.  The plaintiff sought to put in evidence correspondence with the Buildings Authority which it said demonstrated that the guard booth was an illegal structure.  The defendants sought to put in evidence of statements from Professor Kao to the effect that he had not in fact agreed to the changes that were made in 2001.  Having considered this material, we are of the view that it would not be appropriate to permit it to be adduced for the purposes of the appeal.  So far as the plaintiff’s additional evidence is concerned, while it might be said that it could not reasonably have been obtained before the application below, it does not seem to us that it is such as would be likely to have a real impact on the outcome, as it is not clear what material the plaintiff had placed before the Buildings Authority in order to obtain from it a view that the portable guard booth in this case was an illegal structure.  As for the defendants’ proposed additional evidence, there is no good explanation of why the material sought to be put forward could not have been obtained earlier.  In any event, Professor Kao has since disagreed with what is being put forward by the defendants and the material therefore is of little assistance, at best demonstrating that there might be some basis for disputing whether or not the 2001 meeting had approved the plaintiff’s proposals.  However, it cannot conclusively show that it had not, and is therefore not something which could be said to be likely to have a significant impact on the outcome of the proceedings.  Accordingly, we shall dismiss both of these applications.

14.Turning, therefore, to the key issue – whether the judge was justified in concluding at this stage that the plaintiff could not show that there was a serious issue to be tried, we have come to the conclusion that he was not justified in doing so at this stage. 

15.First, Mr Cooney SC, appearing for the plaintiff, rightly pointed out that this was not a point that was taken by the defendants in their defence.  Although clause 9(c) is mentioned in paragraphs 9.2.1 and 9.2.2 of the defence, the breaches alleged do not concern the alleged change of use of the private garden identified by the judge.  This was thus not a matter that was focussed on in the evidence.  It does not necessarily follow that because part of the property belonging to the plaintiff was paved over so that vehicles could pass over or stand on it, that it could no longer be used also as a garden area.  At any rate, it seems to us that this is a matter which could properly be determined only after trial.  We therefore do not think that it was possible to say at this stage that the plaintiff was so clearly in breach of clause 9(c) as to have no prospect of establishing his alleged entitlement arising from the owner’s resolution which it says was passed in 2001.

16.Further, as Mr Cooney SC also pointed out, it is significant that the plaintiff has been using the gate as a means of access to House 1 for some 10 years prior to this dispute arising.  This suggests that, even if there had been some breach of the DMC, it had been acquiesced in by the other owners of houses in The Baroque.  The judge’s concern about the inability of incorporated owners to acquiesce in a breach of the DMC does not seem to us to be well founded, having regard to the fact that the 2^nd defendant (the incorporated owners) did not come into existence until around 2010, long after the alleged breach occurred (leaving aside the issues raised by the plaintiff as to the validity of the incorporation of the 2^nd defendant).  Although an incorporated owners may not, because of its nature, be capable of acquiescing in a breach of the DMC in respect of the property of which it is the incorporated owners, this inability does not apply to the individual owners of parts of the property where there is no owners’ corporation.  This was the position here until about 2010 – for a period of some 9 years after the alterations were carried out.  Although it is true that the owners of House 2 raised complaints at the time when the works were carried out, the correspondence shows that the complaints were responded to by or on behalf of the plaintiff at that time, and that no complaints were thereafter made.  In these circumstances, it does not seem to us that the possibility of acquiescence could be ruled out without being investigated at trial.  Thus, in this respect also, we consider that the judge erred in concluding that there was no serious question to be tried.

17.At the hearing before us, Mrs Dora Chan, for the defendants suggested that there had also been an infringement of sections 34I(1)(a) and (b) of the Buildings Management Ordinance by the plaintiff.  These provisions provide that:

“(1) No person may –

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

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

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

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

18.As we understood the submission, it had two elements.  First, that the actions taken in 2001 in altering the area in question breached both sections 34I(1)(a) and (b) (in that part of the common area was allegedly enclosed within extended boundaries of House 1, and that the elimination of the flower bed, rubbish collection point and pavement unreasonably interfered with the use and enjoyment of those parts of the building or estate); and second, that as there was no owners’ committee of the building at the relevant time, it was not competent for the meeting of owners convened by the plaintiff in 2001 to approve what had been done when it had those effects.

19.We do not think that this submission can assist the defendants.  Whether or not there was in fact any breach or potential breach of the sections relied upon is a question of fact, which cannot be determined in the defendants’ favour at this stage so as to prevent the plaintiff from making out a serious question to be tried as to its entitlement which it seeks to protect by the injunction applied for.  Further, it seems to us a surprising outcome that in the absence of an owners’ committee, the owners would be disabled from doing themselves in general meeting what an owners’ committee (representing them) would be able to do.

20.For the foregoing reasons, we consider that the judge erred in concluding that the plaintiff had failed to demonstrate that there was a serious question to be tried.  We see no reason to disagree with the judge regarding the balance of convenience, and we would therefore allow the appeal and grant the injunction sought.

21.So far as costs are concerned, we would make an order nisi that the costs here and below should be to the plaintiff, including the costs of the applications for leave to appeal to this court.  However, in relation to the applications to admit fresh evidence, we shall make no order as to costs on either summons.  All costs are to be taxed on the party and party basis if not agreed.

Mr Nicholas Cooney SC and Mr Tony Ko, instructed by George YC Mok & Co, for the plaintiff / appellant

Mrs Dora Chan, instructed by Fred Kan & Co, for the defendants/respondents