The Incorporated Owners of Fortune Gardens v. Chan, Grant and Another

LDBM 67/2016

[2018] HKLdT 53

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 67 OF 2016

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Before: His Honour Judge S. LO, Presiding Officer, Lands Tribunal

Date of Hearing: 23-25 May 2018 and 31 May 2018

Date of Judgment: 11 July 2018

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JUDGMENT

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Background

1.The applicant (“Applicant”) is the Incorporated Owners of Fortune Gardens (“Building”).  The Building is comprised of two blocks of flats (ie Block A and Block B), both of which are 31 stories high. Each floor consists of units 1, 2 and 3. The common area of the rooftop of each Block (where the elevator shaft, pump room and entrances to the rooftop are located) are surrounded by the private rooftop areas belonging to the individual owners.

2.Hong Yip Service Company Limited (“Hong Yip”) is the management company employed by the Applicant to manage the Building.

3.The 2 respondents (“Respondents”) have since September 2004 been the joint registered owners of Unit 2, 31^st Floor, Block B of the Building (“Rs’ Flat”) and the roof directly above Rs’ Flat (“Rs’ Roof”) as respectively shown on the 31^st Floor Plan[1] and Roof Plan[2] annexed to the Assignment dated 12 May 1988, according to which  they have exclusive possession of Rs’ Flat and Rs’ Roof.  Rs’ Flat is about 69.01 sq. m. and a bit larger in area than Rs’ Roof which is about 54.02 sq. m. pursuant to the said plans.

4.The 1^st respondent (“R1”) is the husband of the 2^nd respondent (“R2”).  They began to reside there in September 2005.

5.The rights and obligations of the owners of the Building (including the Respondents) are governed by a deed of mutual covenants dated 8 April 1988 (“DMC”).

6.During September to October 2012, the Respondents engaged contractors to carry out the following works:

i)  erection of the stair hood[3] on Rs’ Roof (“Stair Hood”);

ii)  construction of an internal staircase[4] in Rs’ Flat leading to Rs’ Roof by drilling a hole in the ceiling of Rs’ Flat (“Internal Staircase”); and

iii)  removal of a portion of the concrete roof slab (“Concrete Roof Slab”) including a portion of the waterproof membrane (“Waterproof Membrane”) as between the ceiling of Rs’ Flat and the floor of Rs’ Roof. 

(collectively referred to as “Works”)

7.On 13 November 2012, Hong Yip issued a demand letter asking the Respondents to demolish the Internal Staircase and the Stair Hood and to reinstate the Waterproof Membrane.

8.As the Internal Staircase and the Stair Hood have not been removed, the Applicant commenced the proceedings in the Lands Tribunal on 31 March 2016.

Applicant’s case

9.In the Notice of Application filed 31 March 2016, the Applicant seeks an injunction against the Respondents to remove the Stair Hood and reinstate the Concrete Roof Slab and the Waterproof Membrane of Rs’ Roof on the ground that the Respondents are in breach of the clauses 4, 14, 17 and 26 in Section IV of the DMC.

10.Clause 4 in Section IV of the DMC (“Clause 4”) states:

“No owner shall make any structural alterations to any part of the Building owned by him which may damage or affect or interfere with the use and enjoyment of any other part or parts of the Building whether in separate or common occupation nor will any Owner use, cut, injure, damage, alter, or interfere with any part or parts of the Common Areas of the Land and the Building or any equipment or apparatus on in or upon the Land or the Building not being equipment or apparatus for the exclusive use and benefit of any such Owners.”

11.Clause 14 in Section IV of the DMC (“Clause 14”) states:

“No Owner shall have the right to enter into, alter, repair, connect to or in any other way interfere with or affect the working of the lifts, machine rooms, public lighting, transformer rooms, pump rooms, pumps, apparatus, services and the other common facilities of the Building without the previous written consent of the Manager.”

12.Clause 17 in Section IV of the DMC (“Clause 17”) states:

“No Owner shall do or permit to be done any act or thing which may or will alter the external appearance of the Building without the prior consent in writing of the Manager.”

13.Clause 26 in Section IV of the DMC (“Clause 26”) states:

“No Owners except the Owners having the exclusive right to occupy any Roof or part of a Roof shall have the right to use the Roof or part thereof except only for escape in the event of fire or emergency. No Owner shall erect or place or cause or permit to be erected or placed any advertising sign or illegal structure on any of the Roofs or any part thereof and the Manager shall have the right to remove anything erected or placed on any Roof in contravention of this provision at the costs and expenses of the Owners.”

14.The Applicant alleged that both of the Concrete Roof Slab and the Waterproof Membrane are the common parts and / or common facilities of the Building and that the Respondents did not obtain any prior written consent of Hong Yip and / or the Applicant concerning the Works.

15.Ms Chan for the Applicant conceded in her closing submission that the Applicant’s claim under Clause 26 was no longer pursued and that Clauses 4, 14 and 17 are within its power to acquiesce but submitted that the defence of acquiescence and / or proprietary estoppel has not been made out by the Respondents.

16.Apart from the respective witness statements filed, Ms WC Wong, Ms YK Wong and Mr Billy Tsui gave oral evidence at the trial on behalf of the Applicant.  Ms WC Wong was the customer service supervisor of Hong Yip assigned to station at the Building from September 2006 to April 2012 as supervisor. Afterwards, a Mr Pang Chi Sing was assigned to station at the Building as supervisor to replace Ms WC Wong for a short period of time.  Then, Ms YK Wong was assigned to the Building as supervisor to replace Mr Pang from June 2012 to September 2013.  Mr Billy Tsui is the chairman of the Applicant since 2010.  

Respondents’ case

17.The Respondents contended that the Works do not amount to a breach of Clauses 4, 14 or 17.   Besides, since the purchase of Rs’ Flat in 2004, the staff of Hong Yip and / or the representatives of the Applicant, namely Ms WC Wong, Ms YK Wong and Mr Billy Tsui have consistently and specifically represented to the Respondents by word and conduct that the waterproof membrane situated in Rs’ Roof belongs exclusively to the Respondents (“Representation”). The Respondents have always maintained and repaired their private areas on Rs’ Roof and the waterproof membrane therein specifically in 2007, 2009 and 2012, while the Applicant was only willing to repair and maintain the common parts of the rooftop of the Building, excluding Rs’ Roof.

18.Relying on the Representation, the Works were carried out from September to October 2012. Before the commencement of the Works, the Respondents submitted a proposal of the Works to the Buildings Department, which issued an approval of the Works on 28 June 2012 based on an approved plan[5]. The Respondents proceeded to implement the proposal and incurred construction costs for about $250,000 (exclusive of the costs for repairing the waterproof membrane situated in Rs’ Roof).  They also alleged that during its construction, the Applicant had full knowledge of the Works.

19.Alternatively, the Respondents contended that even if there was a breach, :-

i)  it was due to the Respondents’ reliance on the Representation made by Ms WC Wong, Ms YK Wong and Mr Billy Tsui, thus the Applicant is barred from enforcing its claimed rights by way of acquiescence and / or proprietary estoppel; and

ii)  the Lands Tribunal does have jurisdiction to order the Applicant to pay the compensation to give effect to the equity of proprietary estoppel.

20.Further in the alternative, even if the Applicant has not acquiesced the breaches in question and are not estopped from enforcing its claimed rights again the Respondents, it would be unjust in all circumstances to grant the injunction as sought by the Applicant and the Lands Tribunal can consider damages in place of an injunction.  Even if an injunction is granted, it should be on terms of reimbursement of reinstatement costs.

21.R1 and R2 respectively filed their own witness statements and also gave oral evidence at the trial.

Any breach of Clause 4?

22.To start with, I shall consider whether the Works amount to a breach of Clause 4 first and then Clause 14 and Clause 17 one by one. 

23.Ms Lam for the Respondents had not specifically contested that the Works did not amount to structural alterations to Rs’ Flat and / or Rs’ Roof for the purpose of Clause 4.   The fact that the Respondents submitted a proposal of the Works to the Buildings Department for approval, I consider that they had regarded the Works as structural alterations to Rs’ Flat and / or Rs’ Roof; otherwise, there is no need to make such an application.

24.Ms Lam submitted, which I accept, that Clause 4 consists of two parts, the first part of which prohibits damage or affect or interference of the use and enjoyment of any parts of the Building while the second part prohibits owners to use, cut, injure, damage, alter, or interfere with any part or parts of the Common Areas as defined by the DMC.

25.For the first part, I am of the view that if any of the Works damage, affect or interfere the use and enjoyment of any parts of the Building, which is private part or parts of the Building owned by another owner, such works are in breach of Clause 4.

26.For the second part, if any of the Works cut, injure, damage, alter, or interfere with any part or parts of the Common Areas, such works are also in breach of Clause 4.

27.Ms Chan for the Applicant confirmed at the hearing for closing submission that the Applicant relies on the second part of Clause 4 only since the Concrete Roof Slab and / or the Waterproof Membrane is/are a common part or parts of the Building.   Indeed, there is no evidence before me that any of the Works damage, affect or interfere the use and enjoyment of any private part or parts of another owner of the Building.

28.As to the issue of whether the Concrete Roof Slab and / or the Waterproof Membrane is/are a common part or parts of the Building, Ms Chan for the Applicant cited 3 cases, namely Incorporated Owners of Hong Leong Industrial Complex v HL Resources Ltd [6], The Incorporated Owners of Gordon Terrace v Shen Yang Lien & Anor[7] and Wing Ming Garment Factory Ltd v Incorporated Owners of Wing Ming Industrial Centre [8], the court or Tribunal in which all found that the waterproof membrane in question is a common part of the building.

29.Ms Lam for the Respondents argued that the Applicant did not adduce any expert evidence at trial to support this issue and each case must be determined on its own facts.  She submitted, which I agree, that the crucial findings in all the 3 cases cited by Ms Chan for the Applicant are that the waterproof membrane in question is a continuous layer covering the whole exposed area of the entire roof.

30.On one hand, I must agree that each case shall be determined on its own facts.  On the other hand, it does not automatically follow that the court can only make the necessary finding for this particular issue unless expert evidence is adduced as submitted by Ms Lam for the Respondents.  In other words, I am of the view that the court can still make a finding of fact as to whether the Waterproof Membrane is a continuous layer covering the whole exposed area of the entire roof of the Building even without expert evidence. It all depends on the evidence adduced by the parties.

31.In Wing Ming Garment Factory Ltd’s case, although expert opinions from both parties were adduced which mainly focused on the cause of water seepage, Godfrey Lam J said in para. 87 of his Judgment as follows:

“It appears from the building plans that the waterproofing membrane within the Upper Roof floor is a continuous layer.”

32.Similarly, in The Incorporated Owners of Gordon Terrace’s case, HH Judge J Ko concluded in para. 129 of his Judgment as follows:

“…..According to the building plans, the waterproofing layer should be a continuous layer covering the entire surface of the roof. It is impracticable to carve up the waterproofing layer and require different entities to maintain and repair different parts….”

33.In the present case, apart from citing the above 3 cases, Ms Chan for the Applicant referred me to para. 13 of the witness statement of Ms YK Wong and the architect flat roof plan[9] provided by the Buildings Department, in which the surface of the entire roof of the Building (which is not limited to Rs’ Roof but also includes the roof of Block A) is described as: “One course of Canton tiles on Jiffy Seal# 140 Sheet Membrane with cement screeding laid to fall”.   According to the Membrane Application[10], Jiffy Seal 140/60 is ideal for use as waterproofing under tile, paver, shower pans and counter tops.  Ms Chan submitted that, which I accept, the waterproofing layer covered the entire surface of the entire roof of the Building.

34.On the other hand, Ms Lam for the Respondents submitted that it was common practice for the owners of the private roofs including the Respondents themselves to repair the waterproof membrane of the private roofs whereas Hong Yip would only fix the waterproof membrane of the common area of the rooftop. Hence, the waterproof membrane of the common area and private portions of the roofs has through the years always been torn up, replaced and / or repaired in a piecemeal fashion.  With respect, I disagree.  Since there is no evidence that the entire membrane is replaced, I still consider that the Waterproof Membrane is a continuous layer.

35.In the circumstances, I find on the balance of probabilities that the Waterproof Membrane is a continuous layer covering the whole exposed area of the entire roof of the Building.  I do not think that I need the assistance of expert evidence in order to determine this issue.

36.Based on my finding that the Waterproof Membrane is a continuous layer covering the whole exposed area of the entire roof of the Building, I reject the submission of Ms Lam for the Respondents that the 3 cases cited above can be distinguished albeit there must be some facts in these cases which are not the same as the present case, but I consider that they are immaterial.

37.I am further of the view that the comments made by Godfrey Lam J in Wing Ming Garment Factory Ltd is not only correct but also applicable in the present case, who said in paras. 95 and 97 of his Judgment as follows:

“95.…water is a fluid that percolates through cracks and pores, and once there is a breach in the waterproofing membrane, it is not only the spot directly below the breach that will be affected. I am unable to accept the contention that the waterproofing membrane should be notionally carved up and the part that is located directly above the Workshop should be regarded as being there for the exclusive use and benefit of the Workshop. Rather, the membrane protects all areas on the 11/F which includes common facilities such as lift machine rooms and staircases….

……

97…….Even assuming that the waterproofing membrane in the Upper Roof floor is meant for the protection only of the floor below, it is used in connection with the enjoyment of another flat of the building, namely the Roof Floor level. It follows that it is a common part.”

38.The learned judge also held that the waterproof membrane in question was also caught by para.10 and para.11 of Schedule 1 of the Building Management Ordinance (“BMO”), which provides:

“10. ….and installations intended for the use and benefit of all of the owners generally….

11.Fixtures situated in a flat which are used in connection with the enjoyment of any other flat or other portion of the building.”

39.The learned judge further said in para.100 of his Judgment as follows:

“100. Alternatively, if the waterproofing membrane is situated in the floor slab and the floor slab is to be regarded as a common part, then equally the membrane is a common part. It is one continuous layer serving the whole of the floor below, including common areas on that floor.”.

40.I cannot see how the learned judge’s reasoning is not applicable in the present case.

41.Based on the above reasons, I conclude that the Waterproof Membrane is a common part of the Building.   In my view, the Waterproof Membrane cannot exist alone in the Building without the Concrete Roof Slab which is the “cement screeding laid to fall” as described in the architect flat roof plan.  I further conclude that the Concrete Roof Slab is also a common part of the Building. 

42.Accordingly, I find that the Works, in particular the removal of a portion of the Concrete Roof Slab including a portion of the Waterproof Membrane as between the ceiling of Rs’ Flat and the floor of Rs’ Roof, are in breach of Clause 4.

Any breach of Clause 14?

43.In order to determine this issue, I have to define what “the other common facilities” is for the purpose of Clause 14.   Parties’ counsel agreed that the definition of “Common Facilities” in the DMC does not specifically cover the Waterproof Membrane and the Concrete Roof Slab.

44.However, I observe that the phrases “for the use and benefit of the Building” and “for the use and benefit of each Block” appear respectively in paras. (b) and (d) under the definition of “Common Facilities” in the DMC which states as follows:

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

(c) …

(d) Communal television antennae for the use and benefit of each Block.”

45.Comparing with the similar wordings in para. 10 and para. 11 of Schedule 1 of the BMO as mentioned above, I take the view that in determining whether a facility in the Building is a common facility for the purpose of Clause 14, it must be “for the use and benefit of the Building”.   In CAMP26/2018[11], the Court of Appeal in refusing to grant leave to appeal said as follows:

“11. At [10] of the Judgment, the Judge rightly acknowledged that the definition of common facilities/parts should not be confined to its location, whether it is located in the common area or privately owned and designated area, but the facilities/parts should be for the use and benefit of all the owners of the Building. The Judge went on to find at [11] of the Judgment that :

“ 11.  以此為準則，安放在該地舖內的花灑系統及消防喉轆，祇是供該單位使用，該單位亦無公用部份，所以這些裝置不屬於公用設施。”

12. On that basis, the Judge considered at [12] of the Judgment that even though the Fire Services Equipment could decrease the risk of fire of the Shop Premises and might be of indirect benefit of the whole Building, it could not be considered as for the use and benefit of all the owners of the Building directly and therefore, would be regarded as common parts of the Building.”

46.Based on the above reasons, I further find that both of the Waterproof Membrane and the Concrete Roof Slab fall within the meaning of “the other common facilities” for the purpose of Clause 14 since they are serving the important function to protect the Building from water seepage which is for the use and benefit of the Building.

47.Next question is whether the previous written consent from Hong Yip had been given according to Clause 14.

48.Ms Lam argued that the Respondents had sought the written consent by submitting the renovation application form to Hong Yip on 27 April 2012[12] (“Form”) and that the Form had served as written consent from Hong Yip.

49.With respect, I disagree.  In my view, the Form is no more than an application to be submitted by the individual owner for intended renovation works to be carried out in his flat.  Besides, the Form was only signed by the Respondents and their contractors but was never signed by Hong Yip.  I also note that there is a column in the third page of the Form[13], in which it stated “Agree/ Disagree” under “Engineering Department” and a space on the right hand side of the Form to be signed by the Engineering Supervisor /Engineer with date to be filled in.  There is no evidence before me that the Engineering Supervisor /Engineer of Hong Yip or the Applicant had either completed the relevant column “Agree/ Disagree” or signed on the relevant space on the Form and then returned to the Respondents.  I cannot accept that the Form unsigned by Hong Yip or the Applicant can be regarded as the previous written consent to the Works as required by Clause 14.

50.Furthermore, there is an item 4 ie “其它裝置”, that means other installation, on the Form, in which the Respondents could have well specified the Works but they failed to do so.  In my view, as the intended renovation works as mentioned in the Form did not mention the Works, Hong Yip was unable to give the previous written consent to the Works as required by Clause 14.

51.Indeed, according to the Notice of Opposition filed by the Respondents, they were only arguing that oral instead of written consent to the Works had been given by Ms WC Wong, Ms YK Wong and / or Mr Billy Tsui on behalf of Hong Yip or the Applicant at the material time.  They did not allege that they treated the Form as the previous written consent of Hong Yip to the Works.   I find that no previous written consent had been given by Hong Yip or the Applicant under Clause 14.  The evidence of Ms WC Wong, Ms YK Wong and / or Mr Billy Tsui will be dealt with in the latter part of this judgment.

52.In the circumstances, the Respondents are in breach of Clause 14.

Any breach of Clause 17?

53.The first question is whether the external appearance of the Building has been altered by the Works, in particular the Stair Hood.

54.In Taikoo Shing (Management) Ltd v. Trillion (HK) Ltd[14], it was held that both the roof structure and the balcony enclosure alter the exterior appearance of the building and that as a matter of literal interpretation of the relevant paragraph in the DMC, anything that alters the exterior appearance of the building, whatever aesthetic enhancement such thing might bring to the building, is prohibited.

55.In Metro City Management Limited v Tsui Fee Hung Vincent and Lam Wai Fun[15], Recorder Edward Chan, SC in deciding whether canopies erected on a flat roof immediately adjacent to the first floor of one of the residential blocks had altered the external appearance of all 11 towers said in para. 40 of his Judgment:

“40. It is question of fact whether the canopies should be considered as having altered the external appearance of the 11 towers as a whole. In this regard, each case must be considered in the light of its own facts and the wordings of the relevant covenant, and I do not find the decision reached in other cases like the Taikoo Shing case or the Hong Yip Service Company Ltd case to be useful.”

56.In the present case, some photographs of the Stair Hood and its surroundings were exhibited[16]. The dimensions of the Stair Hood is 364 cm (length) X 216 cm (height) X 107 cm (width)[17], which is not a small structure.

57.Based on the photographs, I accept that the Stair Hood cannot be seen from the ground floor street level.  However, the Building is surrounded by other taller buildings from which the Stair Hood can easily been seen and thus affects external appearance of the Building visually.  Further, the Stair Hood would be visible from the buildings facing its back.  I therefore conclude that viewed as a whole, the external appearance of the Building has been altered by the Stair Hood.

58.Regarding the issue of written consent of Hong Yip, I reject the submissions of Ms Lam for the Respondents based on the reasons as aforesaid, which will not be repeated here.  In the circumstances, the Respondents are in breach of Clause 17.

Legal principles on defences of acquiescence and proprietary estoppel

59.In The Incorporated Owners of Freder Centre v Gringo Ltd [18], the Court of Appeal reaffirmed that in order to succeed in a defence of acquiescence, two conditions must be shown:

“…firstly, there was on the part of the plaintiff, an assent or lying by in relation to the acts of another person; secondly, in view of the assent or lying by and consequent acts it is unjust in all the circumstances to grant the relief in question: see Spry, Equitable Remedies, (9th edition), p.56” (at para. 26)

60.Ms Lam for the Respondents submitted that there are different forms of acquiescence and the Respondents’ case is primarily concerned with:-

i)  Estoppel by acquiescence, which is more appropriately termed as “proprietary estoppel”; and

ii)  Acquiescence based on the “assent” or “lying by” in relation to the Works.

61.Ms Lam further submitted that the two forms should be separately considered since proprietary estoppel depends on three elements, namely (i) representation; (ii) reliance; and (iii) unconscionable disadvantages.

62.However, in Taylors Fashion Ltd v Liverpool Victoria Trustees Co Ltd[19], a case cited by Ms Lam, Oliver J said[20] as follows:

“Furthermore the more recent cases indicate, in my judgment, that the application of the Ramsden v Dyson, L.R. 1 H.L. 129 principle - whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial - requires a very much broader approach which is directed rather at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behavior.” (emphasis added)

63.It seems to me that unconscionability is the most important element which the court has to consider.  As Ms Chan for the Applicant in her closing submission has raised no objection for the Tribunal to deal with these two defences separately, I will deal with them separately below.

64.It is also undisputed by the Applicant that the defences of acquiescence and / or proprietary estoppel raised by the Respondents are available for Clauses 4, 14 and 17 which are within the Applicant’s power to acquiesce. Besides, the legality of the Works is no longer in issue due to the approval granted by the Buildings Department.

Main factual disputes

65.There are a lot of factual disputes between the parties which will no doubt affect the question whether the defences of acquiescence and proprietary estoppel are satisfied or not.  I therefore need to assess the credibility of the evidence of the Applicant’s witnesses, namely Ms WC Wong, Ms YK Wong and Mr Billy Tsui as well as that of the Respondents and then make the necessary finding of facts first.

66.The main factual disputes are as follows:

i)  whether the Respondents had in about March 2012 informed Ms WC Wong of the idea of installing an internal staircase leading from Rs’ Flat to Rs’ Roof (“Issue 1”);

ii)  whether Mr Billy Tsui and Ms YK Wong had seen the Works in their visit to the rooftop of Block B on 20 September 2012.  If no, when the Applicant first noticed the Works (“Issue 2”);

iii)  whether Ms WC Wong, Ms YK Wong and / or Mr Billy Tsui has/have represented to the Respondents by word and conduct that the waterproof membrane situated in Rs’ Roof belongs exclusively to the Respondents.  If yes, when did the Applicant/Hong Yip make the Representation? (“Issue 3”);

iv)  whether the Respondents relied on the Representation to carry out the Works (“Issue 4”).

Issue 1

67.The Respondents said that before informing Ms WC Wong of the idea of installing an internal staircase leading from Rs’ Flat to Rs’ Roof, they had a meeting with a Mr Ricky Law of a structural engineering consultancy company (“Mr Law”) on 1 March 2012 concerning the said idea.  The Respondents also alleged that Ms WC Wong told them that as long as the works were done on their own private property and that approval was obtained from the Government, they would require no further consent from Hong Yip.  R2 further asked Ms WC Wong if anything in writing to be put on record was needed.  Ms WC Wong replied that they would not require any further permission.

68.Ms WC Wong denied the Respondents’ allegations in her witness statement filed with the Tribunal.  She did agree in her witness statement that one day in the lobby of Block B, R2 informed her of the idea of making a staircase and asked her if the Government’s approval was necessary.  Ms WC Wong advised R2 to consult from the professionals and reminded R2 to submit the renovation application form with the details of the intended works and plan for the approval of the Engineer Department of Hong Yip.

69.In my view, installing an internal staircase leading from Rs’ Flat to Rs’ Roof is a very expensive, complicated and substantial construction works which requires drilling a big hole in the ceiling of Rs’ Flat.  That is why the Respondents were sensible enough to seek professional advice from a structural engineering consultancy company before the commencement of the Works. The Respondents also produced the correspondence with this structural engineering consultancy company proving an appointment of the meeting on 1 March 2012.  If that is the case, I consider that there is no reason why the Respondents would choose not writing to Hong Yip to make an appointment for a similar meeting. However, the Respondents said that they suddenly went to see Ms WC Wong at the management office without making any prior appointment.  They simply informed her of the Works and sought permission from her orally.  I doubt very much on the credibility of their evidence in this regard.

70.Further, in light of the fact that Mr Law had alerted the Respondents to inquire with the management office about the Works and that R2 was a practising solicitor in Hong Kong, though she claimed to be a corporate solicitor at the material times, I consider it wholly unreasonable for her not to read the DMC herself.   If R2 bother to read the DMC, she could have found that prior written consent is necessary for the Works and that oral permission from a supervisor of Hong Yip may not be sufficient as required by the DMC.

71.Besides, even if Ms WC Wong really said that it was unnecessary to write down what she had told the Respondents, I fail to see any difficulty on the part of the Respondents simply to send an email or letter to Hong Yip recording the conversation with Ms WC Wong and confirming their understandings, especially when they later knew that new supervisors, Mr Pang replaced Ms WC Wong and Ms YK Wong replaced Mr Pang subsequently.  In short, I find the evidence given by the Respondents in this regard is unbelievable.  Having further observed carefully the demeanour of the witnesses in giving their evidence at the trial, I do not accept on the balance of probability that the Respondents had in about March 2012 informed Ms WC Wong of the idea of installing an internal staircase leading from Rs’ Flat to Rs’ Roof.

Issue 2

72.Both Mr Billy Tsui and Ms YK Wong denied that they saw or could see the Works in their visit to the rooftop of Block B on 20 September 2012 because the metal boards surrounded the entire area of Rs’ Roof. Ms YK Wong gave oral testimony at the trial that the height of the metal boards was about 180cm or about an arm’s length taller than her.

73.On the other hand, R1 produced 2 photos[21] in his witness statement, which was alleged to be taken on 21 September 2012 showing that the metal boards only surrounded the Stair Hood but not the entire area of R’s Roof.  Apart from the bare allegation made by R1, I consider that there is no evidence to prove that these 2 photos were really taken on 21 September 2012 ie just one day after the inspection by Mr Billy Tsui and Ms YK Wong.  There is no reason given by R1 as to why he or someone had to take some photos at Rs’ Roof on that day suddenly.  During re-examination, R1 testified that when he met Mr Billy Tsui on Rs’ Roof on 10 October 2012, Mr Billy Tsui pointed to the structure surrounded by the metal boards and asked R1 what it was, to which R1 replied “it is an internal staircase.”  In my view, R1 is contradicting himself that Mr Billy Tsui should have be well aware of the Works long time ago according to R1’s evidence.  I therefore reject R1’s evidence in this regard and accept the evidence of Mr Billy Tsui and Ms YK Wong that they did not and could not see the Works in their visit to the rooftop of Block B on 20 September 2012.

74.As I have rejected most of the Respondents’ evidence, I find that the evidence given by Ms YK Wong and Mr Billy Tsui is more credible and that the Applicant only first noticed the Works during their inspection on 7 November 2012.

Issue 3

75.The Respondents alleged that they incurred $38,000 and $19,500 for Rs’ Roof tiles to be torn up and replaced for waterproofing in 2007 and 2009 respectively.  In July 2012, more serious water seepage occurred in the living room, dining room, window sills and window frames of Rs’ Flat. 

76.For the repair costs incurred by the Respondents in 2007 and 2009, I consider that there is no or insufficient evidence to show that Hong Yip has any knowledge about the repair works for water seepage carried out by the Respondents.  No documentary evidence or contemporaneous records were produced by the Respondents.  The fact that the security guards of the Building allowed the Respondents’ contractors to enter the Building is, in my view, not enough to prove such knowledge on the part of Hong Yip.  In any event, the Respondents agreed that the alleged waterproof repair was carried out at the same time with the other works like removal of some structures on Rs’ Roof.  The security guards may know that some works were carried out at Rs’ Flat but not necessarily the repair works for water seepage.

77.R1 had also alleged under cross examination that it was the standard practice of all top floor owners to repair the waterproofing of their private roof area.  However, he never mentioned the same in his witness statement.  He also failed to call any of these owners to give evidence nor produce any documentary evidence or contemporaneous records, such as the fee notes paid by the owners for the waterproofing works, proving his allegation.  No doubt, the burden of proof is on the Respondents.  I therefore reject R1’s evidence in this regard. 

78.For the water seepage in July 2012, it is not in dispute that the Respondents’ complaint was recorded in the log book of Hong Yip on 3 July 2012 and 21 August 2012 respectively.  R1 further said that during the inspection of Rs’ Flat on 3 July 2012, Ms YK Wong expressly told him that Hong Yip would only fix the waterproof membrane of the common areas of the rooftop of the Building and that the waterproof membrane situated in Rs’ Roof should be responsible by the Respondents.  Ms YK Wong denied.  I consider that it is just a bare assertion made by R1 without any documentary proof.  R1 failed to discharge the burden of proof.  Accordingly, I accept Ms YK Wong’s evidence and reject R1’s evidence in this regard.

79.However, as documented by the subsequent email correspondences between Ms YK Wong, R1 and Billy Tsui including the quotations made by the various contractors[22] as well as the Applicant’s minutes relating to the respective meetings held on 20 December 2012 and 24 September 2013[23], it had been mentioned many times that waterproofing works in respect of the common area of the roof of Block B.  I am of the view that if the Applicant would be responsible for the waterproofing repair works for the entire rooftop of Block B including the waterproofing works in Rs’ Roof, it is totally redundant to mention repeatedly the phrase or similar phrase “the common area of the roof of Block B” in the said correspondences, quotations and Applicant’s minutes.  In the circumstances, I accept that Hong Yip and the Applicant did represent to the Respondents that the Applicant would only be responsible for the waterproofing repair works for the common areas of the rooftop of the Building whereas the Respondents should be responsible for the waterproofing works in Rs’ Roof.  By making such representation, Hong Yip and the Applicant have indeed represented to the Respondents by conduct, though not expressly by word, that the waterproof membrane situated in Rs’ Roof belongs exclusively to the Respondents; otherwise, the Respondents should not have the liability to repair the same. 

80.Ms Chan for the Applicant rightly drew my attention that all these correspondences, quotations and Applicant’s minutes were made starting from late October 2012.  Accordingly, I find on the balance of probability that the Applicant only made the Representation in late October 2012 but not earlier.

Issue 4

81.This issue concerns reliance.   Ms Lam for the Respondents submitted that once it has been shown that the Representation had influenced the judgment of a “reasonable man” (in this case the Respondents), reliance by the Respondents is presumed.  The burden shifts to the Applicant to establish that the Respondents did not rely on the promise of entitlement which was given.  Ms Lam cited Greasly v Cooke[24] and Wayling v Jones[25].

82.On the other hand, Ms Chan for the Applicant submitted that the law on reliance and inducement has been succinctly summarized by the learned authors of Spencer Bower: Reliance-Based Estoppel, 5^th Ed. at para. 5.7 as follows:

“…an automatic but rebuttable presumption, placing the onus on B to prove that A was not induced by the representation or breach of duty if it was material. However, the language of some authorities suggests, to the contrary, that where, although the representation or breach of duty was material to the relevant conduct of A, a reasonable man in the position of A might as easily have acted as he did for reasons wholly independent of the representation or breach of duty, the burden of establishing reliance remains on A. It is submitted that the resolution of the difference in these approaches lies in the court taking a practical view as to whether the representation or breach of duty, in the particular context, is such that the court would expect it to induce the relevant conduct, and if it is not, requiring proof of reliance.”

83.Ms Chan further submitted that the learned authors cited Taylors Fashion Ltd v Liverpool Victoria Trustees Co. Ltd.[26] in which the proprietary estoppel raiser failed to establish that he would not have spent what he did on a property had he not believed that he had a larger interest in it than he actually had, Oliver J held that:

“But what is there to indicate that the work was undertaken “on the faith of” that belief rather than merely “in” that belief?...But what Mr Taylor was unable to say was that they would not have done the work if they had not thought that option was available, much less that the Defendants were or must have been aware that they would not have done it.”

84.In my view, no matter who has the burden of proof of reliance, the Respondents had not been influenced by nor relied on the Representation in order to carry out the Works based on the following reasons:

i)  as I find that the Applicant only made the Representation in late October 2012 but not earlier and the Works had already started in early September 2012, I fail to see how the Representation would have any impact on the decision made by the Respondents to commence the Works;

ii)  in R1’s witness statement, he said that ever since 2009, he and R2 began seeking other ways to better utilize Rs’ Roof as they enjoyed spending time there and in March 2012, they consulted Mr Law for the Works.  Simply based on his own evidence, I am able to conclude that the decision made by the Respondents to carry out the Works had nothing to do with the Representation;

iii)  In view of the high education level of the Respondents, especially R2 was a solicitor at the material time, they could easily seek legal advice from other lawyers who are familiar with the building management before commencing the Works.

Whether the defences of acquiescence and proprietary estoppel established

85.Based on my findings of facts above, since there is no reliance on the part of the Respondents, I conclude that the defence of proprietary estoppel cannot be established.  Furthermore, even if the Respondents may somehow have mistaken as to the ownership of the waterproof membrane situated in Rs’ Roof, I do not consider any unconscionability on the part of the Applicant who had never encouraged the Respondents to spend money to carry out the Works.  The Works were commenced simply because they wanted to better utilize Rs’ Roof. Taking the Respondents’ case to the highest, it may say that in reliance of the Representation, the Respondents carried out the repair works for water seepage.

86.As to the defence of acquiescence, I am of the view that it is necessary to separately deal with the Applicant’s applications for injunction against the Respondents to (i) remove the Stair Hood and (ii) reinstate the Concrete Roof Slab and the Waterproof Membrane since it is not in dispute that structures had been erected on five out of six of all the private roof areas at the Building. In Incorporated Owners of Freder Centre[27], the Court of Appeal said that the trial judge was wrong to have disregarded as irrelevant the objective fact that all, except one, owners or occupiers in the building had for many years committed similar breaches, yet the applicant had never taken any enforcement action or proceedings against them. It was held that this was directly relevant and germane as to whether there is assent or lying by on part of the applicant, and whether it is unjust to grant to injunctive relief against the respondents in the said case.

87.From the photos produced[28], I observed that these structures erected on the rooftop looked similar to the Stair Hood and that some seems bigger, wider, and higher than the Stair Hood. It was also admitted by Ms WC Wong that one structure existed since 2005, one existed since 2006, and some structures have existed throughout her employment with Hong Yip.  Ms YK Wong and Mr Billy Tsui also agreed that all these structures have existed for some years.  Although Mr Billy Tsui had said in his testimony that these structures could be easily removed, I doubt very much on his opinion in this regard which was made without basis.

88.As there is no evidence before me that the Applicant has taken any enforcement action or proceedings against the owners who erected these structures, the Applicant has tolerated the similar breaches by these owners. I come to conclude that there is assent or lying by on part of the Applicant and that it is unjust to grant to injunctive relief against the Respondents for removal of the Stair Hood.

89.However, in respect of the injunction for reinstatement of the Concrete Roof Slab and the Waterproof Membrane, the Respondents produced no evidence that any of these owners have similarly removed a portion of the Concrete Roof Slab including a portion of the Waterproof Membrane of their roofs.  Hence, I do not find that there is any similar breach committed by them in this regard.  The Applicant only first noticed the Works on 7 November 2012 and then Hong Yip issued a letter dated 13 November 2012 demanding the Respondents to reinstate[29]. I conclude that there is no assent or lying by on part of the Applicant.  The defence of acquiescence fails in this respect.

Whether it is unjust and inequitable to grant a mandatory injunction

90.Ms Lam for the Respondents further argued that even if there is a breach of the DMC of which the Applicant have not acquiesced or been estopped from enforcing the clauses in question, it would still be unjust in all circumstances to grant the injunctive relief sought by the Applicant. Alternatively, she submitted that even if an injunction is granted, the Tribunal should have the jurisdiction and power to grant it on terms of reimbursement by the Applicant of the reinstatement costs and / or the cost of the repairs to the water seepage in 2007, 2009 and 2012 incurred by the Respondents.

91.Ms Lam relied on Incorporated Owners of Shan Kwong Towers Phase II v Li Suet Ching[30].  In my view, this case can be distinguished as the judge found acquiescence on the part of the applicant[31] whereas I find the defence of acquiescence fails in respect of the injunction for reinstatement of the Concrete Roof Slab and the Waterproof Membrane in the present case.  Besides, I consider that the Applicant as the Incorporated Owners of the Building has the duty to enforce the terms of the DMC and to ensure the strict compliance with it.  Even though the Works may not be unsafe and have not endangered the other parts of the Building or the other owners, it may encourage the other roof owners to commit a similar breach and damage the Waterproof Membrane in the future if the Tribunal refuses to grant a mandatory injunction against the Respondents.  Without the assistance of expert opinion, I have to acknowledge the general function of the waterproof membrane is to keep the rain or water from entering into the building from the rooftop.  I cannot see why I have to create a precedent in the present case to allow the Respondents to damage the Waterproof Membrane which is a common part and common facility of the Building.

92.Although the Respondents offered to execute a deed of undertaking to indemnify the other owners of the Building for damages suffered if the Works should prejudice them, I do not think that it is acceptable since it may create another dispute or litigation between the Applicant and the Respondents or their successor-in-title, when Rs’ Flat and Rs’ Roof may be sold in the future.

93.Ms Lam also argued that the total cost of construction of the Works plus the quoted price for reinstatement would be $550,000 to $600,000 which are disproportionately large, and amount to hardship upon the Respondents. With respect, I disagree as the Applicant has done nothing to induce the Respondents to commence the Works.  I would rather say if the Respondents could properly seek written prior consent from Hong Yip according to the DMC, this dispute would not happen at all.   

94.I also refuse the Respondents’ request for reimbursement of the repair costs for the water seepage in 2007 and 2009 incurred by them as the Representation was only made by the Applicant in late October 2012.  For the repair costs incurred for the water seepage in 2012, I am unable to and should not determine this issue here since I do not know the exact amount of such costs and I have not given an opportunity to the Applicant to defend this claim formally.  To be fair to the both parties, I shall leave them for argument in case the Respondents commence another litigation afresh in the Tribunal or other court for reimbursement of the repair costs for the water seepage in 2012.

95.Although I agree that the grant of a mandatory injunction is entirely discretionary, I fail to see how it would be unjust in the circumstances to grant the mandatory injunctive relief to reinstate the Concrete Roof Slab and the Waterproof Membrane which were damaged by the Respondents without the consent of the Applicant.

Conclusion

96.To conclude, I only grant the mandatory injunction that the Respondents do reinstate the portions of the Concrete Roof Slab and the Waterproof Membrane which were removed by them to their original states and conditions.

97.Usually costs shall follow event, namely the Respondents shall bear costs of these proceedings.  Indeed, I decide most of the issues in favour of the Applicant.  Nonetheless, I am of the view that I shall take into account of the fact that one out of two reliefs sought by the Applicant succeeds. Besides, the Applicant only made the important concessions in respect of its claim under Clause 26 and its power to acquiesce under Clauses 4, 14 and 17 lately in the closing submission.  I therefore exercise my discretion to make an order nisi that the Respondents shall pay 70% costs of these proceedings including all costs reserved with certificate for Counsel on the District Court scale, to be taxed if not agreed, which shall become absolute unless any of the parties apply to vary the same by summons within 14 days.  

98.Lastly, it remains for me to thank both Counsel for their very helpful assistance to the Tribunal.

Ms Joyce M Y Chan, instructed by Pansy Leung Tang & Chua, for the applicant

Ms Stephanie Lam, instructed by Adrian Yeung & Cheng, for the 1^st  and 2^nd respondents