Lam Yin Man Formerly Known As Lam Chiu Chi v. The Incorporated Owners of Kwun Tong Industrial Centre

DCCJ3714/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3714 OF 2014

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JUDGMENT

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Issues

1.This case concerns the occupation and usage of a car parking space and the area adjacent to it.  The plaintiff, Madam Lam Yin Man, is and was the owner[1] of the car parking space 82 (the “CPS 82”) of the Kwun Tong Industrial Centre (the “Building”); while the defendant is and was the incorporated owners of the Building (the “IO”).  Originally, both parties claim and counterclaim, inter alia, various declarations and injunctive reliefs against each other.  As most of their disputes are now resolved, particularly on the strength of the consent summons dated 19 August 2016 (the “Consent Summons”), the remaining issues are:

a. Madam Lam claims, inter alia, that–

i. An injunction order restraining the IO from designating the common area adjacent to CPS 82[2] (the “Common Area”) as car parking space(s) or for any purpose other than part of the common area which each owner of the Building has the full right and liberty to go, pass and repass over and along;

ii. Damages and interest.

b. IO counterclaims, inter alia, that –

i.  An injunction order restraining Madam Lam from interfering with or hindering IO’s exclusive possession and use of the Common Area;

ii.  Vacant possession of the Common Area to be delivered by Madam Lam to IO;

iii.  Mesne profit at the rate of HK$5,000[3] per month from 24 October 2013 until possession is delivered up by Madam Lam;

iv.  Damages and interest.

Madam Lam’s Claims

3.Madam Lam claims an injunction order, inter alia, restraining IO from designating the Common Area as car parking space(s) or for any purpose other than common part.

4.Pursuant to the Consent Summons, IO agrees the Common Area is a common area of the Building. 

5.Pursuant to the Building Management Ordinance, Cap.344 (the “BMO”), s.2:

“ ‘common parts’ means –

(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”

6.Pursuant to the Deed of Mutual Covenant registered in the Land Registry by memorial no. UB1690730 dated 27 February 1979 (the “DMC”) [CI/275 – 332][4]:

“ ‘Car Parking Spaces’ shall mean all of the car parking spaces in the Building in accordance with the Car Parking lay-out Plan approved by the Director of Public Works.

‘Common Areas’ shall mean and include:-

(i) The entrances, staircases, landings and passages which are not included in any part of the Building exclusively owned by the First Owner or Second Owner hereinafter specified.

(ii) Loading and unloading spaces and common Roadways.

(iii) The Common lifts and the motor room thereof.

‘Common Facilities’

(a) Such of the sewers, drains, water courses, pipes, gutters, wells (if any) wires and cables and other service facilities whether ducted or otherwise which are or at any time may be in, under or over or passing through the Land or the Building, through which water, sewage, gas, electricity and any other services are supplied to the Building or any part or parts thereof.

(b) Transformer rooms, main distribution frame rooms (for telephones) pump houses, switch rooms, mechanical rooms, mechanical ventilation rooms and store rooms for use and benefit of the Building.

(c) Lighting for common area.

(d) Any other facilities installed for the use and benefit of the Building and not for the use and benefit of a particular unit.”

7.Further, pursuant to s.34I of the BMO:

“Common parts

(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.

(2) Any person who contravenes subsection (1) shall be deemed to be in breach of an obligation imposed on him by the deed of mutual covenant in respect of the building.”

(with emphasis added)

8.It shows clearly that the BMO provides a statutory framework for the conversion of the Common Area by IO, if necessary. Alternatively, Madam Lam’s interest is also protected by such statutory framework.

9.At trial, Madam Lam gave evidence that since she purchased CPS 82, both her son and herself have been keeping on occupying, enjoying and using it together with the Common Area for loading and unloading goods and there is no evidence to show her exclusive right and possession of it has been affected or she has suffered any loss or damages.

10.Madam Lam’s claim for the injunctive relief is therefore groundless and accordingly, I dismiss such claim.For the same reason, I dismiss her claim for damages and interest.

IO’s counterclaim

11.IO seeks for an injunction restraining Madam Lam, whether by her servants agents or otherwise howsoever, from interfering with or hindering IO’s exclusive possession and use of the Common Area.

12.Pursuant to the Consent Summons, IO agrees that the Common Area is a common area of the Building, which means IO does not have exclusive possession and use of it. 

13.Pursuant to Section II of the DMC:

“A. Rights

… the Owner of each said undivided share shall have the benefit of the following easements rights and privileges:

Full right and liberty for the Owner for the time being his servants, agents and licensees (in common with all other persons having the like right) to go, pass and repass over and along and use the Common Areas and Common Facilities of the Block of which the Unit owned by him form a part for all purposes connected with the proper use and enjoyment of the Unit and/or car parking space owned by him.”

(with emphasis added)

14.Accordingly, I dismiss this counterclaim.

15.The rest of the counterclaims can be dealt with in one go, that IO asks Madam Lam to deliver vacant possession of the Common Area; to pay mesne profit, damages and interest.  Hence, the burden of proof rests on IO.

16.There is no evidence Madam Lam has ever converted the Common Area for her own use or excluded other co-owners to use it; nor has she fenced it off or concealed it.

17.IO produces a number of photos with remarks [CIII/ 845 – 857] to show the situation of the Common Area, that on and off, lorries or private vehicles park at the Common Area.  Madam Lam admits both her son and herself have occupied the Common Area.  She says that she parks her vehicle at CPS 82 and the Common Area continuously (“長期泊自己的車”); and her son uses the Common Area for loading and unloading goods.  She also admits that the lorries, with the words “e-print”, belong to her son (the “e-print Lorries”). 

18.On the other hand, IO produces no entrance record or logbook to show the ins-and-outs of the car park. It also fails to produce any vehicle search to identify the drivers or owners who park their lorries or vehicles at the Common Area.

19.At most, IO shows that lorries or vehicles park at the Common Area, but there is no evidence to show the identities of their owners, except that of the e-print Lorries.  Likewise, IO cannot show the time, duration and frequency of such occupation.  I can only draw conclusion from the photos and the remarks that the Common Area is occupied from time to time. 

20.Madam Lam admits she has continuously parked her vehicle at CPS 82 and the Common Area; but she also mentions that she occupies the Common Area like any other co-owners.  She estimates around 85% of other co-owners also park at the Common Area when no other parking spaces are available.  The e-print Lorries use the Common Area for loading and unloading goods; then they go away and no longer occupy the Common Area.

21.Madam Lam cannot tell the time, duration and frequency that her son occupies the Common Area.

22.IO calls 2 witnesses, Mr Qui Ruihua (邱瑞華, DW1) and Mr Zhu Zhiping (朱竹平, DW2) to give evidence.  They mention that: the car park also opens to public for hourly parking.  There is a gate at the entrance, if an outsider wants to park, he can use an Octopus Card to pay to IO and operate the gate; for an owner of a car parking space or his tenant, IO issues a parking certificate to him and he can operate the gate via a remote control.  IO will not charge parking fee from the owner or his tenant.

23.According to Mr Zhu, IO allows outsiders to park at the Common Area when all the parking spaces are fully occupied.

24.Mr Zhu’s evidence shows IO allows the public to park at the Common Area, which makes no difference when Madam Lamand/or her son park at the Common Area when it is available.

25.Madam Lam admits when she purchased CPS 82, she found the area adjacent to it was a common area (i.e. the Common Area) and no parking space was designated to it. The entire area that included CPS 82 and the Common Area was wide enough to park three lorries side by side. She paid double of the market price to purchase CPS 82 and obtained 3 parking certificates from IO [CIII/ 808].  She admits she parks her car at CPS 82 and the Common Area continuously and her son uses the Common Area for loading and unloading goods.

26.Putting all the fact together, I find both her son and herself occupy the Common Area frequently; however, there is still no evidence shows she converts it for her ownuse or excludes other co-owners.

27.Madam Lam has the rights to use the Common Area as any other co-owners.  Pursuant to Section II of the DMC, she and her servants, agents and licensees have full rights to go, pass and trespass over and along and use the Common Area for all purposes connected with the proper use and enjoyment of CPS 82[5].

28.IO relies on Incorporated Owners of Percival House v Fusion Advertising Solution Ltd [2012] 5 HKC to argue that it is entitled to mesne profits:

“8. Having considered the submissions of both parties carefully, I am of the view that the applicant is entitled to mesne profits as claimed. Lord Nicholls’ judgment in Attorney General v Blake & Anor, supra, has in fact succinctly set out the common law principle as follows:-

‘So I turn to established, basic principles. I shall first set the scene by noting how the court approaches the question of financial recompense for interference with rights of property. As with breaches of contract, so with tort, the general principle regarding assessment of damages is that they are compensatory for loss or injury. The general rule is that, in the oft quoted words of Lord Blackburn, the measure of damages is to be, as far as possible, that amount of money which will put the injured party in the same position he would have been in had he not sustained the wrong: Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39. Damages are measured by the plaintiff's loss, not the defendant’s gain. But the common law, pragmatic as ever, has long recognized that there are many commonplace situations where a strict application of this principle would not do justice between the parties. Then compensation for the wrong done to the plaintiff is measured by a different yardstick. A trespasser who enters another's land may cause the landowner no financial loss. In such a case damages are measured by the benefit received by the trespasser, namely, by his use of the land. The same principle is applied where the wrong consists of use of another’s land for depositing waste, or by using a path across the land or using passages in an underground mine. In this type of case the damages recoverable will be, in short, the price a reasonable person would pay for the right of user: see Whitwam v. Westminster Brymbo Coal Co [1892] 2 Ch. 538, and the ‘wayleave’ cases such as Martin v Porter (1839) 5 M. and W. 351 and Jegon v Vivian (1871) L.R. 6 Ch 742. A more recent example was the non-removal of a floating dock, in Penarth Dock Engineering Co Ltd v Pounds [1963] 1 Lloyd’s Rep. 359.

…

This principle is established and not controversial. More difficult is the alignment of this measure of damages within the basic compensatory measure. Recently there has been a move towards applying the label of restitution to awards of this character: see, for instance, Ministry of Defence v. Ashman [1993] 2 E.G.L.R. 102, 105, and Ministry of Defence v. Thompson [1993] 2 E.G.L.R. 107. However that may be, these awards cannot be regarded as conforming to the strictly compensatory measure of damage for the injured person’s loss unless loss is given a strained and artificial meaning. The reality is that the injured person’s rights were invaded but, in financial terms, he suffered no loss. Nevertheless the common law has found a means to award him a sensibly calculated amount of money. Such awards are probably best regarded as an exception to the general rule.’

9. The above judgment shows clearly that the respondent, as trespasser to the applicant's property, is liable to pay damages to the applicant measured by the benefit received by the respondent, ie by its use of the external wall of the Building, even though the applicant suffered no financial loss.  The measure of damages in this type of cases is not compensatory but based on the price a reasonable person would pay for the right of user.  As mesne profits do represent the price a reasonable person would pay for the use of a property, it is the right damages that the applicant is entitled to recover from the respondent (see also Clerk & Lindsell on Torts (20th Ed), paras 19-73, HSBC Private Trustee (Hong Kong) Ltd v Au Yeung Chung [2008] HKCU 1810, HCA 1662 of 2001 and Incorporated Owners of Tai Tat Building v Leung Koon [2004] HKCU 540, HCA 1931 of 2002).”

29.The above judgment applies when the respondent/ defendant, acts as a trespasser the applicant/plaintiff’s property and has done wrong to the applicant/plaintiff. 

30.In our case, Madam Lam is and was a co-owner, pursuant to the DMC [CI/298], she has the right to use CPS 82 and the Common Area.  Further, IO fails to proveshe is a trespasser or she has violated the DMC.

31.Furthermore, even if IO provesMadam Lam has breached the DMC, it still fails to substantiate the award of the mesne profits.

32.Mesne profits is a damages for wrongful occupancy[6]. Pursuant to McGregor on Damages, 19^th Ed., §37-043:

“Where the defendant wrongfully deprives the claimant of his land, the claimant will generally wish to recover not the value of the land but the land itself. The principal action is therefore an action for the recovery of the land, historically better known as the action of ejectment. Damages will thus generally be limited to loss arising from the period of wrongful occupation by the defendant. Such damages are recoverable in the action for mesne profits, in origin an action of trespass. This action was formerly brought after judgment in ejectment but it may now be joined with the action for the recovery of the land itself. If, however, the court declines to order recovery of the land, the claimant will be entitled to its value as well as to mesne profits.”

33.The car park opens to public for hourly parking and lorries and vehicles come and go every day. Madam Lam and her son only occupy the Common Area when they park their lorries or vehicles there.Once their lorries and vehicles are driven away, the Common Area is no longer occupied and is available for other co-owners and the public.  There is no evidence that Madam Lam has converted the Common Area for her own use.  According to Mr Zhu, IO allows the public to park at the Common Area with an hourly charge; further, IO cannot produce any evidence on the time, duration and frequency forMadam Lam and her son to occupy the Common Area.

34.In this regard, I am not persuaded that mesne profit should be awarded. 

35.I have also considered if normal damages should be awarded.However, after considering McGregor on Damages, 19^th Ed., §12-011 that:

“Indeed in the usual case in which the claimant has effectively lost, as opposed to the occasional case in which he is seeking to establish a right, the awarding of normal damages may be seen as a pointless exercise, given the courts’ powers and practice on costs. This was certainly the view of Jacob J. who, in declining to make an award of nominal damages in a copyright action heard in 1990, Hyde Park Residence Ltd v Yelland, said:

‘It seems to me that the whole question of nominal damages is at the end of this century far too legalistic.  A plaintiff who recovers only nominal damages has effectively lost and in reality the defendant has established a complete defence.’”

36.I decide that no normal damages should be awarded.

Conclusion

37.For the abovementioned reasons, I dismiss both the claim and the counterclaim.  I also grant a costs order nisi that there be no order as to costs of this action, with certificate to counsel.  If there is no application to vary the same within 14 days from the date hereof, the costs order nisi shall become absolute.

38.I thank for the assistance of both counsel.

Mr Anthony Cheung, instructed by K.M. Cheung & Co., for the plaintiff

Mr Jackson Poon, instructed by Huen & Partners, for the defendant

Appendix 1