The Incorporated Owners of Shatin 33 v. Lee Wong Tim and Another
Read the full judgment text of LDBM 107/2017 on BabelCite. This Lands Tribunal judgment was delivered on 3 December 2018.
1. The applicant is the incorporated owners of Shatin 33, whereas the respondents are the owners of both Flats 1B and 2B of Block 2 (Phenix Heights) of Shatin 33 (collectively “the House”).
Cited by 1 case · Cites 7 cases
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LDBM 107/2017 [2018] HKLdT 91 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BUILDING MANAGEMENT APPLICATION NO 107 OF 2017 _______________
_______________ Before: His Honour Judge S. Lo, Presiding Officer of the Lands Tribunal Dates of Hearing: 29 October 2018 and 1 November 2018 Date of Judgment: 3 December 2018 _______________ JUDGMENT _______________ Background 1.The applicant is the incorporated owners of Shatin 33, whereas the respondents are the owners of both Flats 1B and 2B of Block 2 (Phenix Heights) of Shatin 33 (collectively “the House”). 2.Under the deed of mutual covenants of Shatin 33 (“DMC”), “S.T. 33 Management Limited” is appointed as the manager of Shatin 33 (“Manager”), and is empowered to manage the housing estate and enforce the provisions under the DMC. 3.Clause 38 of Section IV Part B of the DMC (“Clause 38”) sets out the Manager’s power and duty concerning dog-keeping as follows:
4.On 8 June 2011, the applicant passed a management committee’s resolution (“June 2011 Resolution”) in respect of dog-keeping by the individual owners as follows:
5.Eventually, in around April 2012, the “Dogs Control and Registration System”[1] (“the System”) was implemented, which required the then dog owners to register their dogs by 1 May 2012. The System comprises the following components:-
6.Dog owners would need to sign a letter of undertaking and to register their dogs under the System. The respondents then signed and returned the required form (with undertaking) on or about 2 May 2012[2] in respect of two dogs, named Pumkin and Token. Pumkin passed away in February 2016, and Token still remains in the House. 7.On 15 May 2012, the applicant passed another management committee’s resolution (“May 2012 Resolution”) in respect of dog-keeping as follows:
8.On 25 January 2016, the applicant resolved in meeting to abolish the System with immediate effect. Then the residents were notified in writing of the applicant’s decision as well as enforcement actions pursuant to Clause 38 were to follow, if they did not remove their dogs within 3 months. On 18 February 2016, notice to the residents were also put up. 9.On 13 October 2016, another Building Management Application (LDBM 350 of 2015) was heard at the Lands Tribunal. It was an application by a dog owner at Shatin 33 against the applicant, for a declaration that the DMC did not prohibit dog-keeping. On 24 November 2016, judgment of LDBM 350 of 2015 was handed down, in which it was held that Clause 38 prohibits dog-keeping at Shatin 33 and that despite the existence of the System, the applicant never waived its rights to enforce Clause 38. 10.On 20 January 2017 and 10 May 2017, letters were issued to the respondents to demand the removal of their dog(s) within 14 days of the letter, failing which legal action would be taken without further notice. Despite repeated requests and demands by the Manager, the respondents failed to remove their dog(s). The applicant hence commenced the present action on 9 June 2017 seeking a mandatory injunction against the respondents to remove their dogs out from Shatin 33 permanently. To this day, the respondents are still keeping dog(s) in the House. Applicant’s case 11.Ms Chan for the applicant relied on Hollywood Shopping Centre Owners Committee Limited v The Incorporated Owners of Wing Wah Building Mongkok Kowloon HCA 1582/2007 (16 August 2010) (at paras. 63 to 66)[3] and submitted that although Clause 38 was drafted in a way to “impose a duty” on the Manager, in effect, it acts as a general prohibition against “dog-keeping” in any part of Shatin 33 with only one exception - i.e., where the dog is being kept by the Manager for the security of Shatin 33. In short, the applicant could not permit the respondents to do something the DMC forbids. If the Tribunal takes the same view, the defence of waiver, acquiescence, estoppel or even laches would not avail the respondents. 12.Accordingly, the System must be invalid as the applicant has no power to allow the respondents to keep dogs pursuant to Clause 38. Alternatively, the System only amounted to a bare licence and even if valid, it is revocable with reasonable notice. 13.Since the implementation of the System, the Manager still received complaints against dog-keeping and apparently, the situation was not getting any better as originally intended. As a result, it was resolved by the applicant to abolish the System. 14.In any event, there was no waiver, acquiescence or estoppel because (i) there was no clear and unambiguous representation as contended by the respondents, and/or (ii) there was no detrimental reliance. Respondents’ case 15.Mr Siu for the respondents submitted that the System cannot possibly constitute a bare license. He accepted that the legal principles as set out in paras. 63 to 66 of the judgment of Mr Recorder Yuen SC in Hollywood Shopping Centre’s case stand as good laws. 16.However, all the owners could tolerate a breach of mutual covenants through the incorporated owners, if neither the incorporated owners nor the owners have done anything about the breach. 17.The respondents relied on the defences of waiver, acquiescence, estoppel and even if they cannot be established, the Tribunal shall not exercise the discretion to grant the mandatory injunction to remove Token who is a “home-dog” of 8 years old with poor health condition. Insofar as Clause 38 is concerned, whether the applicant is capable of giving acquiescence and/or granting waiver? 18.To start with, it is necessary for the Tribunal to determine the above question because if the breach of Clause 38 is beyond the power of the applicant to acquiesce, the defence of waiver, acquiescence, estoppel will not be available to the Rs. 19.In Hollywood Shopping Centre’s case, Mr Recorder Yuen SC who seems to draw the analogy from the doctrine of “ultra vires” in the company law said as follows:
20.Mr Siu reminded me that the doctrine of “ultra vires” has been abolished by section 115 of the Companies Ordinance (Cap. 622) in about 2014, which gives companies the capacity of a natural person. Section 116(5) thereof further provides that an act by a company is not invalid only because the company does the act in contravention of its articles of association. As Mr Siu has conceded that the legal principles in the judgment of Mr Recorder Yuen SC in Hollywood Shopping Centre’s case are good laws, I do not think that it is necessary for me to consider the effect of such abolishment by the legislature in the context of the company law. 21.Turning to the interpretation of Clause 38, Mr Siu relied on a recent judgment in Lucky Hing Shing Estate Company Limited v The Incorporated Owners of Genius Court HCA 2048/2015 (unreported, 7 April 2016), DHCJ Marlene Ng has considered the above principles at para. 46 in her judgment. Her Ladyship then proceeded to say at para. 47 as follows:-
22.Mr Siu submitted that the test of whether the incorporated owners can acquiesce to a breach of mutual covenants does not depend on whether the covenant is qualified or unqualified. 23.In my view, Lucky Hing Shing Estate’s case can be distinguished as it concerned an application for summary judgment and was decided on the basis that it has a triable issue. The rationale of this case is that the learned judge did not agree the narrow approach for the construction of the covenants which contain or do not contain the words “prior written consent”. In other words, whether the covenant is qualified or unqualified is not the test for deciding whether the incorporated owners can acquiesce to a breach of mutual covenants. 24.In Wing Ming Garment Factory Ltd v Wing Ming Industrial Centre (IO) [2014] 4 HKLRD 52, G Lam J ruled that the incorporated owners could give consent to the alteration to the external wall, so it had power to acquiesce to the breach but further said in para. 140 of the judgment:-
25.In my view, the learned judge simply made the alternative ruling that based on his interpretation of the overriding clause IV.4 in the subject deed, he came to the same conclusion that the incorporated owners could acquiesce the breach of a particular clause in respect of the unauthorized use of the common parts. 26.In the present case, unlike the breach concerning the unauthorised use of the common parts, I am of the view that Clause 38 contains a prohibition which the Manager would have no power to grant to the owners the right to keep dogs in contravention of this clause since it is the duty of the Manager under such clause to ensure no dog to be kept except for security of Shatin 33 only. If the Manager has no such power, I fail to see how the applicant can be said to have such power. It is ultra vires for both of the applicant and the Manager to implement the System at the very beginning. If Clause 38 has to be amended, the only way to do so is to obtain the unanimous consent of all the owners of Shatin 33, instead of simple majority. 27.In fact, the topic to amend the DMC concerning dog-keeping has been discussed in the May 2012 Resolution. However, no consensus among the committee members was reached and no resolution was passed. Even according to the oral evidence given by Mr Lee for the respondents, he agreed that some owners accepted dog-keeping but some not. Mr Siu for the respondents tried to argue that all the owners of Shatin 33 (as opposed to the majority of the owners) via the applicant had given the consent to allow the dog-keeping. With respect, I cannot agree. 28.In the circumstances, it is not necessary to consider the respondents’ defences of waiver, acquiescence and estoppel which are bound to fail. Whether the defences of waiver, acquiescence and estoppel are established 29.In case I am wrong in the above, it is then necessary to consider the respondents’ defences of waiver, acquiescence and estoppel. 30.The permeable (前言) of the form signed by the respondents on or about 2 May 2012 expressly states that pursuant to Clause 38, dog-keeping at Shatin 33 is strictly prohibited (“根據大廈公契第四章B部第38條，本苑範圍內嚴禁飼養狗隻”) and that the System was only introduced as a temporary measure (暫緩方案). In other words, it is not a permanent measure. It is further expressly stated the applicant and the Manager reserve all the rights to take enforcement actions to execute the terms of the DMC (“法團及管理公司亦保留一切權力處理及執行大廈公契的規定”). In my view, these express terms is binding on the respondents. 31.In June 2011 Resolution and May 2012 Resolution, it was clearly stated that based on humanitarian grounds, the applicant would not immediately take action to remove all the dogs temporarily (“鑑於人道立場，法團暫不即時取締及清除住戶所有狗隻”), with the ultimate goal of “eliminate dog-keeping in Shatin 33” (“通過一系列措施逐步清除現有狗隻”) in accordance with Clause 38. In other words, the applicant also made a representation that it is always possible for the applicant to take action to remove the dogs in the future. 32.It is not in dispute that the dog owners including the respondents who registered their dogs under the System were fully aware of the 2 resolutions. In the circumstances, I share with the learned judge’s decision in LDBM 350/2015 that the applicant has never waived its right to enforce Clause 38 against the relevant owner including the respondents. I also disagree with the submission of Mr Siu that there is a representation embodied in the System that owners who registered their dogs would be allowed to have their dogs staying in Shatin 33 until the end of the dogs’ lives, so long as the dog owners comply with the Codes. Mr Siu cannot simply cherry-pick some paragraphs in June 2011 Resolution which may be in favour of the respondents but ignore the rest of the said resolution. 33.Even if there is such a representation in June 2011 Resolution as alleged, it must be read together with and subject to the express terms of the form signed by the respondents in May 2012, in particular the applicant’s right to take action to remove the dogs in the future. These express terms must be binding on them. Accordingly, I consider that the alleged representation, even exists, have been subsequently superseded by these express terms and that their defences of waiver, acquiescence and estoppel are doomed to fail. 34.It is unnecessary for me to determine the issue of whether the System amounts to a bare licence or a licence coupled with an equity (as per Lord Denning M.R. at paras. 36 to 37 in Inwards & Ors v Baker [1965] 2 QB 29 (13 January 1965)). Whether the Tribunal shall exercise the discretion to grant the mandatory injunction to remove Token 35.Mr Siu for the respondents cited the House of Lords case, Redland Bricks Ltd v Morris & Anor [1970] AC 652 at 665F-G and submitted that:-
36.He further submitted that the respondents have been complying with the Codes. The keeping of Token, a “home dog”, causes no harm or damage to anyone. No grave damage can conceivably be caused to other owners. 37.On the other hand, Ms Chan for the applicant submitted that since dog-keeping has been a problem at Shatin 33 for many years, the applicant and the Manager have been finding ways to deal with the problem. Nonetheless, the System was proved a failure and the applicant, as the incorporated owners, has a paramount duty to ensure strict compliance of the DMC. Further, the respondents have been given ample time to remove Token. 38.Ms Chan further submitted that factors such as “sentimental value” and “emotional ties” with the dog should not be a reason to refuse equitable relief in the present case and relied on景田苑業主立案法團v Pang Wah For & Leung Chin Wan LDBM 312/2013 (6 June 2014) per Deputy Judge T Chan at paras. 14 to 18 of the judgment, in particular:-
39.Since I have already decided that it is beyond the power of the applicant to allow dog-keeping by the individual owners under the DMC, I consider that it is illogic for me to refuse to grant the mandatory injunction. Otherwise, the Tribunal is making an order indirectly compelling the applicant to do something which is ultra vires or beyond its power. Even if I have such discretion, I will still refuse to exercise as I consider that damages must be an insufficient remedy to the applicant and that no substantial hardship is caused to the respondents. In my view, the respondents are financially capable of renting an apartment or house, in which dog-keeping is allowed and they can move in together with Token. I fail to see any good reason as to why they have to insist to reside with Token in the House but not the other suitable place. Conclusion 40.In the circumstances, taking into account of the poor health condition of Token, I make the order that:
41.Lastly, I thank Counsel for their helpful assistance to the Tribunal.
Ms Crystal Chan, instructed by Y K Tam & Co, for the applicant Mr Patrick Siu, instructed by Boase, Cohen & Collins, for the respondents | ||||||||||||||||
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