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

CAMP 22/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 22 OF 2017

(ON AN INTENDED APPEAL FROM DCCJ NO 3714 OF 2014)

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J U D G M E N T

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

INTRODUCTION

1.The plaintiff is the registered owner of car parking space 82 of the Kwun Tong Industrial Centre (“the Building”).  The defendant is the incorporated owners of the Building. Disputes between them concerning the occupation and use of car parking space 82 and the area adjacent to it (once designated as car parking space 92 by the defendant, referred to as “the Area” below) arose, resulting in the proceedings below. 

2.The trial took place before Deputy District Judge Daniel Tang (“the Judge”) from 3 to 5 August 2016, with judgment reserved.  By a consent order dated 25 August 2016, it was ordered and declared that :

(1)  The plaintiff is entitled to exclusive possession and use of car parking space 82; and

(2)  The Area is the common area of the Building.

Other consequential relief was also granted.

3.The remainder of the plaintiff’s claim and the defendant’s counterclaim was left for the Judge’s determination :

(1)  The plaintiff sought an injunction restraining the defendant from designating the 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.

(2)  The defendant counterclaimed for an injunction restraining the plaintiff from interfering with or hindering the defendant’s exclusive possession and use of the Area; delivery of vacant possession of the Area; mense profit from 24 October 2013 until delivery of vacant possession of the Area; damages and interest.

4.By a judgment handed down on 25 May 2017, the Judge dismissed both the remainder of the plaintiff’s claim and that of the defendant’s counterclaim with no order as to costs.

5.The plaintiff applied to the Judge for leave to appeal against his order of dismissing her claim for the injunction and costs order.  By a decision dated 25 August 2017 (with Reasons for Decision handed down on 29 September 2017), the Judge refused the plaintiff’s application.  The plaintiff now renews her application before the Court of Appeal.

6.We have duly considered the parties’ written submissions.  We take the view that the plaintiff’s application can be disposed of on paper without an oral hearing.  We now hand down our judgment.

Discussion

7.Under section 63A of the District Court Ordinance, Cap 336, no leave to appeal shall be given unless the Court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interest of justice why the appeal should be heard.

8.We first consider the judge’s dismissal of the plaintiff’s claim for the injunctive relief concerning the Area.

9.The Judge’s reasoning involved two points.  He first considered relevant clauses in the deed of mutual covenant for the Building and sections 2 and 34I of the Building Management Ordinance, Cap 344 (“BMO”).  He then observed that the BMO provides a statutory framework for the conversion of the Area by the defendant if necessary; and that alternatively, the plaintiff’s interest is also protected by such statutory framework.  He went on to deal with the plaintiff’s evidence very briefly.  After referring to the plaintiff’s evidence that she and her son had been using the Area for loading and unloading goods, the Judge noted that there was no evidence to show her exclusive right and possession of the Area had been affected or had suffered any loss or damage.  He therefore found the plaintiff’s injunctive claim groundless and dismissed it accordingly.

10.Mr Cheung, counsel for the plaintiff, advanced 6 grounds of appeal challenging the Judge’s decision. Essentially, he argued that based on the factual matrix of the case, the Judge ought to have found that the defendant did purport to treat the Area as a car parking space; and that the Judge erred in relying on section 34I of the BMO when the point had not been pleaded or argued in submissions.

11.We need not dwell on the grounds of appeal or Mr Cheung’s submissions on fact.  The evidence clearly shows that all along the defendant had acted under the mistaken belief that the Area was not a common area when designating it as car parking space 92.  Once they realized that they had so mistaken, they conceded that the Area was a common area and consented to declaratory judgment to be entered to that effect.  There is no evidence to suggest that the defendant, having accepted that the Area is a common area and consented to the declaratory relief being made, would then renege on such a position and designate the Area as a car parking space.  The claim for the injunction is wholly unnecessary on the facts of the case.

12.Mr Cheung submitted that the defendant did not concede to the injunctive relief, saying that they wished to reserve their position in the future and still proceeded to their counterclaim for mense profit.  Such submission does not take the plaintiff’s case any further.

(1)  On the purported reservation of the defendant’s position, Mr Poon, counsel for the defendant, submitted that he had never said that “the defendant wanted to consider whether in the future it could covert the Area”.  He said it must be a misunderstanding on the plaintiff’s part.  We do not have the relevant transcript of the proceedings to verify what was actually said by Mr Poon below.  Even assuming that he did say that the defendant would reserve its position in the future, it is not a ground for granting the injunction now.  It is because reservation of its position as the Incorporated Owners of the Building now is wholly different from designating the Area as a car parking space in the future.

(2)  The defendant’s counterclaim for mense profit for the plaintiff’s use of the Area is based on the fact that it is a common area and the defendant considered the plaintiff had wrongly used it exclusively. In pursuing the counterclaim, the defendant did not insist that the Area is not a common area.

13.What remains is Mr Cheung’s complaint concerning the Judge’s reliance on section 34I of the BMO. In our view, it is a point of law that requires no pleading.  However, if the point had not been argued, the Judge ought to have invited submissions from the parties before deploying it in his judgment.  We can also see some force in Mr Cheung’s complaint.  But in final analysis, even assuming the Judge erred in relying on section 34I, it does not take the plaintiff’s case any further.  For as we have pointed out, her claim for injunction must fail on the facts of the case.

14.We next turn to the costs order. 

15.It is well established that an appellate court will not interfere with a costs order made by the lower court unless it can be shown that it had failed to exercise the discretion on costs, or exercised it upon a false principle, or did not exercise it judicially or the exercise was demonstrably flawed.

16.Mr Cheung argued that the Judge erred in having made no order as to costs as if the plaintiff failed in her claims.  The Judge failed to take into account that fact that even if the plaintiff did not succeed on the claim for injunction, she had obtained judgment on her other claims by way of the consent order, which came about upon the defendant’s concession made close to the end of the trial.  Upon the dismissal of the defendant’s counterclaim, the plaintiff is in fact the successful party in the action.  There is no reason why a costs order should not be made in favour of the plaintiff.  With respect, we disagree.

17.The bulk of the plaintiff’s claims was disposed of by the consent order.  But the consent order is completely silent on costs because it simply contained no provision on costs.  And there is no material before us, such as solicitors’ correspondence, to show that costs relating to the matters covered by the consent order had been reserved or was agreed to be treated as part of the costs of the action to be determined by the Judge in his judgment.  In such circumstances, with the consent order being silent on costs, there has been no provision for the costs of the consent order and of the matters covered by it.  What was left in terms of the costs of the action was the costs of the trial.  In light of the outcome of the trial, it is hardly surprising that the Judge made no order as to the costs of the trial.  Proceeding next to the remaining costs of the action, the Judge was entitled to exercise his discretion in making no order as to the remaining costs of the action when no order had been made for the consent order and no order would be made for the trial.  We can see no basis for us to interfere.

Conclusion

18.For the above reasons, we hold that there is no reasonable prospect of success for the plaintiff’s intended appeal. We can see no reason why in the interest of justice the matter has to be heard by the Court of Appeal either.  We accordingly refuse to grant leave and dismiss the plaintiff’s application.

19.Costs should follow the event.  We order the plaintiff to pay the defendant’s costs.  In their statement of costs dated 22 September 2017, the defendant asked for HK$49,118 for solicitors’ profit costs and HK$50,000 for counsel fees and HK$50 for postage fee, totaling HK$99,168.  In our view, the costs claimed are excessive, especially when the papers and arguments involved in this application are more or less the same as those in the leave application below.  On profit costs, we would only allow HK$20,000.  We allow the same amount for counsel fees.  In total we summarily assess the defendant’s costs at HK$40,000.

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

Mr Anthony PW Cheung, instructed by KM Cheung & Co., for the Plaintiff