Lam Suk Yee and Another v. The Incorporated Owners of Kam Kin Mansion

HCA 748/2011

[2018] HKCFI 2760

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 748 OF 2011

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JUDGMENT

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INTRODUCTION

Introduction

1.This is an action by the plaintiffs, who are co-owners of Kam Kin Mansion (the “Building”), against the Incorporated Owners of the Building (the “IO”) seeking an order that the IO do carry out certain remedial works to stop water leakage from the common parts of the Buildinginto that part of the Building identified as the “covered playground” to which they had exclusive possession and damages; and the IO’s counterclaim against the plaintiffs for an injunction restraining them from using their covered playground for domestic purpose or purpose other than the approved non-domestic use and to demolish certain structures erected on the covered playground. 

2.Kam Kin Mansion is a multi-storey building erected in 1973.  It consists of 27 storeys containing 150 domestic units above the ground level on Caine Road, two shops and a storeroom on the ground level, and four lower ground levels with access to and from Shing Wong Street.  The first three of these lower ground levels, identified as “LG1”, “LG2” and “LG3” are used as carparks and the lowest one is identified as “Playground Floor” in the occupation permit.  The Playground Floor consists of the covered playground, a transformer room and a switch room for non-domesticuse.  The covered playground is located immediately below the driveway ofLG3.  It was allotted 10 shares with right to exclusive possession under the deed of mutual covenant (“DMC”).  In course of time, the covered playground was converted into three tenement units (the “units”) by one of its previous owners.  On 11 December 2007, the plaintiffs became the current owners of the units.

3.The IO is the body corporate of the owners of the Building incorporated under section 8 of the Building Management Ordinance (“BMO”).  It employed Internal Property Management Limited as manager of the Building (the “Manager”).

The background

4.The plaintiffs alleged that they had complained to the Manager about water leakage in the units as early as December 2007 before the completion of their purchase of the covered playground.  That is denied by the IO, but it is at least common ground that in about July 2008, the first named plaintiff’s husband (“Tong”) made an oral complaint of water leakageinto the three units to the Manager.  In contemplation of the repairs to be carried out, the leases in respect of the three units were not renewed upon their expiry. 

5.The first repair works were carried out between 2 December 2009 and 20 January 2010 (the “First Repairs”).  The works were not effective.  Further repairs were carried out between November and 13 December 2010(the “Second Repairs”).  In the meantime, dissatisfied with the slow progressof their complaint, the plaintiffs caused the Food and Environmental Hygiene Department (“FEHD”) to conduct investigation on the water leakage by itself and two specialist contractors before the First Repairs commenced.  Such investigation served no purpose other than to confirm the obvious leakage which was not in dispute.

6.On 28 April 2011, the plaintiffs issued the writ and statement of claim in this action.  On 15 June 2011, the IO filed its defence.

7.Then, between 23 June 2011 and 25 May 2012, there were on-going correspondence between the IO and the Buildings Department complaining about the units and seeking enforcement action against them as illegal structures.  The position of the IO changed from trying to satisfy the plaintiffs’ complaint to seeking the removal of the units and reinstatement of the covered playground as a covered playground.  As a result of the IO’s complaint, the Building Authority issued a Superseding Notice dated 25 September 2017 under section 24C(1) of the Buildings Ordinance requiring the plaintiffs to remove the unauthorized building works making up the three units for contravention of regulations 21 and 23 of the Building (Planning) Regulations (the “Superseding Notice”).  As the plaintiffsdid not remove the unauthorized building works, the Superseding Notice was registered in the Land Registry against the Building on 15 December 2017.

The parties’ case

8.The plaintiffs’ claim is founded on negligence and private nuisance.  In respect of the cause of action in negligence, the issues are the IO’s duty of care, standard of care, breach and damages.  The plaintiffs claim damages for the costs in reinstating the three units and loss of rental income.  There is no dispute that the IO is under a duty to maintain the driveway on LG3 which was where water leaked or seeped into the ceiling of the units.  The dispute is whether the IO was in breach of its duty.  This in turn depends on the standard of care owed by the IO.  The IO’s case is that the standard is not an absolute one but that which is commensurate with the design, construction and purpose for which the covered playground was intended to be used under the approved building plan.  The IO asserts that it has discharge its duty to that standard.  The issues, broadly speaking, are what is that standard of care and whether on the facts the IO has discharged that standard of care.  Depending on my finding on the above issues, the issue of damages is a factual one to be resolved on the evidence of the parties’ quantum experts.

9.As for the cause of action in nuisance, the issue is whether the use of the driveway on LG3 for which the IO has a duty to regulate is causing a substantial and unreasonable interference with the plaintiffs’ enjoyment of their covered playground.

10.The IO’s counterclaim is founded on the plaintiffs’ breach of clauses 9, 19, 22(i) and (iii) of the DMC in using the covered playground for domestic purpose; breach of section 14 of the Buildings Ordinance and provisions of the regulations made under the Buildings Ordinance (the “Regulations”); and breach of the occupation permit.  Apart from denying the various breaches, the plaintiffs’ defence is that the IO has no locus standi to enforce compliance of the provisions of the Buildings Ordinance and Regulations.  The broad issues are: what is the true construction of the relevant provisions of the DMC; whether the works done in converting the cover playground into the three units amounted to breaches of provisions of the Buildings Ordinance and Regulations; whether the covered playground is being used for any illegal or unlawful purpose; and whether the IO has locus standi in enforcing the DMC and compliance of the provisions of the Buildings Ordinance and Regulations.  The IO seeks an injunction restraining the plaintiffs from continuing the breaches; a mandatory order requiring the plaintiffs to remove the units and to restore the covered playground to its original state and condition; and to restrain the plaintiffs from attempting to lease the covered playground for use for domestic purpose other than the approved non-domestic use as a covered playground. 

11.As most of the issues in the IO’s counterclaim are common issues with the plaintiffs’ claim, it makes better sense to deal with the counterclaim first. 

Credibility of witnesses

12.The plaintiffs called one factual witness.  The IO called two factual witnesses.  There are one building surveyor expert and one quantumexpert on each side.  In addition, there is a joint expert on the cause of water leakage and a joint valuation expert on rental value of the units.

13.Tong is the husband of one of the plaintiffs.  He was a graduate in civil engineering from the former Hong Kong Technical College.  He handled the purchase of the covered playground and attended to the rental and management of the three units.  Much of his evidence is not in dispute.  The disputed evidence revolved around whether there were two or just one repairs, whether he had refused access to the repair workers in August and November 2009 and some miscellaneous complaints about discriminatory treatment such as removal of the plaintiffs’ letter boxes from the lobby of the Building when the Building underwent renovation.  Having considered the totality of the evidence, for reasons as stated in the judgment I consider there is an element of exaggeration in his evidence.  I prefer the evidence of the factual witnesses of the IO.  Their evidence is largely documented.

14.Ho Sin Wai has been a resident of the Building since 1990.  He was a committee member of the IO from 1997 to 2001.  He has been the vice chairman of the IO since 2011.  His evidence is not in dispute.

15.Cheng Bing Cheong (“Cheng”) was first employed by the Manager in December 2000.  He was promoted to assistant property asset manager in June 2005 and then to the current position of property asset manager on 1 January 2017.  Most of his evidence is not in dispute.  As for the evidence in dispute, I prefer his to Tong’s.  Part of that evidence is hearsay, but part is documented.  He testified that according to the records Tong first complained about water leakage on 4 July 2008 to a colleague who had now deceased.  He produced contemporaneous correspondence supporting his evidence that Tong refused access to the units for repairs.  I find him an honest and credible witness.

16.James Law is the plaintiffs’ building surveyor expert.  His expert report contained primary facts not in dispute and his expert conclusion which is in dispute.  His conclusion, for example that “nothing in the building works to be carried out are in contravention of any regulations”, is just his bald assertion to support the plaintiffs’ case.  It is totally lacking in chapters and verse.  In the face of the much stronger report from his opponent quoting the Building (Planning) Regulations, he had to concede in their joint report that some of the works were unauthorized building works, and he tried to tune down his opinion by saying that they were classified as non-priority unauthorized building works according to the internal policy of the BuildingsDepartment.  When cross-examined on domestic and non-domestic user andplot ratio, he unreservedly revealed his hire gun approach by giving opinionsupporting the plaintiffs’ case which, with the greatest respect, was manifestly absurd. He contravened the fundamental common law requirements of an expert in that his report was not seen to be the independent product of an expert; did not provide independent assistance to the court by way of objective unbiased opinion in relation to matters within his expertise: see Tristram Hodgkinson & Mark James:  Expert Evidence: Law and Practice[1].  He was demonstrably biased and lacked impartiality.  His evidence about the cause of water leakage is superficial.  I do not accept his evidence.

17.Samson Wong is the IO’s building surveyor expert.  His report is detailed.  He quoted the primary facts and referred to the factual circumstances and site conditions.  He quoted chapters and verse.  He gave reasons for his conclusion.  I am satisfied that he was impartial and trying his best to assist the court with his expertise.  I accept his evidence.

18.Gabriel Lam and Cheung Sheung-tung are respectively the plaintiffs’ and IO’s quantum experts.  They have differences, but their differences are within the realm of reasonable disagreement.  I shall make my assessment on quantum based on such of their evidence as I consider more appropriate.

19.Jack Chan is the parties’ joint valuation expert.  I accept his opinion.

THE COUNTERCLAIM

The background

20.The parties’ rights and obligations as against each other in respect of the use and occupation of the covered playground and therefore the three units is governed by the DMC and the approved user of the covered playground under the building plans and the occupation permit.  Under the DMC, the Building including the land on which it stands is divided into 1,720 equal undivided shares; of which 10 shares were allotted to the covered playground.  The owner for the time being of those shares are entitled to exclusive use occupation and enjoyment of the covered playground subject to and with the benefits as set out in the DMC. 

21.Under the occupation permit, the Building Authority permitted the occupation of the Playground Floor, including the covered playground (which was subsequently converted to the three units by the plaintiffs’ predecessor-in-title), a transformer room and a switch room for non-domestic use; two shops with a store room and lavatories on the ground floor for non-domestic use; the roof including a machine room and store room for non-domestic use; and 150 flats for domestic use.  The thrust of the IO’s counterclaim is that the three units which were converted from the covered playground has the effect of converting the user of the covered playground from non-domestic to domestic and is therefore in breach of the user restriction under occupation permit and various provisions of the Buildings Ordinance and Regulations and in breach of the DMC.

The three units

22.The Playground Level is located below LG3.  Its northern long side faces a scavenger lane with a parapet wall of about 1.1 metre high.  Its southern side is the slope against which and on which the Building stands.  The western end is a staircase leading up to LG3.  The eastern end is the exit to Shing Wong Street. The boundary of the covered playground is about two-third the width between the northern and southern side, leaving a narrow common passage or right of way between the western staircase and eastern exit.  In its original design, the Playground Level was completely open to the north above the parapet wall, and there was no partition between the covered playground and the common passage.

23.The three units were constructed by erecting a partition on the boundary dividing the covered playground from the common passage.  The vertical space between the parapet wall and the underside of the driveway of LG3 is covered by sliding windows and a few small walls.  The covered playground is internally sub-divided into the three self-contained units.  Unit A is at the eastern end of the covered playground.  Unit C is at the western end with Unit B at the middle between those two units.  Each unit has individual door exit to the common passage.   The covered playground or the three units occupy a total area of 2,380 square feet.

24.Unit A has an open layout with a partitioned kitchen and partitioned bathroom.  The walls and floors are tiled.  There are one split type and one window mounted air conditioners.  The kitchen is fitted with a sink with cabinet, a table top with a two head cooker with LPG cylinder and an exhaust fan opening to the common passage.  The bathroom is fitted with a water closet, basin with cabinet, a bath tub and an exhaust fan opening to the common passage.

25.Unit B is internally divided into three rooms.  There are three window-mounted air conditioners.  The walls and floors are tiled.  The main room includes an open kitchen fitted with a range hood and four head electrical stove, a sink, a counter top and an exhaust fan opening to the common passage outside.  There are two mattresses placed in the main room.  The bathroom is located in the middle room where there is a timber frame bunk bed. It is fitted with a water closet, a basin with cabinet, a bath tub and an exhaust fan opening to the common passage.

26.Unit C is internally divided into two rooms and a storeroom.  There are two window-mounted air conditioners and two exhaust fans opening to the scavenger lane.  The walls and floors are tiled.  The main room includes an open kitchen fitted with a range hood and four head electrical stove, a sink and cabinet, a counter top and an exhaust fan opening to the common passage.  There is a toilet and a washing machine.  The bathroom is located in the inner room.  It is fitted with a water closet, a basin with cabinet, a bath tub, a shower and an exhaust fan opening to the common passage.

The test of domestic or non-domestic user

27.The Buildings Ordinance and the occupation permit only distinguish between domestic or non-domestic user.  The principles of construction of documents apply equally to construction of statutes.  The general rule is that construction is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of making of the document: Investor’s Compensation Scheme Ltd v West Bromwich Building Society[2].  The following definitions under section 2 of the Buildings Ordinance are relevant:

“ domestic (住用), when used in relation to a part of a composite building, means a part that is constructed or intended for habitation;

domestic building (住用建築物) means a building constructed or intended to be used for habitation and the expression domestic purposes (住用用途) shall be construed accordingly;

habitation (居住) in relation to the use of a building, or part of a building, includes use of it for hotel, guest-house, boarding-‌house, hostel, dormitory or similar accommodation;

non-domestic (非住用), when used in relation to a part of a composite building, means a part that is constructed or intended for use otherwise than for habitation;”

28.What is determinative of the user of a building or part of a composite building is whether the building or that part of the building was constructed or intended for habitation or otherwise.  The word “habitation” carries with it the sense of living in a place as a home or dwelling where onespends the night.  The meaning is extended by the above definition to include places used temporarily as a home such as guest-house, boarding-house, hostel, dormitory or similar accommodation.  Thus, a domestic building means a building which is constructed or intended to be used as a place for people to live in as a home whether for long term or temporarily.  Likewise, the word ‘non-domestic’ when used in relation to a part of a composite building, means part of that building which is constructed or intended for use otherwise than for habitation.  

29.There are arguments between counsel whether the words ‘constructed or intended’ imply a subjective or objective test on the part of the owner or user of the building.  Mr Chong, counsel for the plaintiffs, suggests the test is subjective.  If the owner intends to use and actually uses the building for non-domestic purposes, the building is a non-domestic building.  Mr Cheung, counsel for the IO, argues that the test is objective.  What one needs to do is to look at the physical elements of the building, such as the layout and ask objectively what is the building constructed or intended for.

30.In my view, the words ‘domestic’ or ‘non-domestic’ is a description attached to the building.  These words refer to the character or status of the building.  Though the words ‘constructed or intended’ suggests the test is a subjective one, a building is a dead object which is incapable of forming any intention.  The intention must be that of the architect who designed and constructed the building.  It is the subjective intention of the architect that counts.  Though subjective, the avowed subjective intention has to be proved by objective facts, such as the design, layout, construction, fittings etc.  For that purpose, one looks at the objective facts to ascertain the architect’s subjective intention.

31.The user of a building is determined by the building plans submitted by the architect and approved by the Building Authority and, whenit is completed, by the occupation permit issued.  That status would not change regardless of the intention of the current owner and user of the building, unless there is a subsequent change in the construction of the building and a change in intention of the new owner and his architect who brought about the change in construction.  With respect to Mr Chong, counsel is wandering about in a maze by asking what is the subjective intention of the user.  That is the basic premise of the plaintiffs’ building surveyor expert’s ridiculous opinion that by removing the bed or the toilet bowl or merely blocking it or by leaving the premises vacant, domestic premises are turned into non-domestic premises.  A show flat in a property developer’s office or a sanitary fitment showroom are non-domestic premises as they are usually located in commercial buildings and are not intended for habitation.  But a show flat in a tower of completed residential units must be domestic premises.  

32.Applying the above principles, I would approach this issue as follows.  The covered playground was approved for non-domestic use. That was the status of the covered playground until it was converted into the three units by one of the plaintiffs’ predecessors-in-title.   It is not known who that person was.  There is no evidence of his intention as to what were the units converted or intended for.  The best this court could do is to look at the objective facts to ascertain his subjective intention. 

The user of the three units

33.The plaintiffs’ case is that the three units were for non-domestic use.  Tong’s evidence is that the plaintiffs acquired the units subject to existing tenancy.  Unit A was let for use as a chiropractor office.  Unit B was let for use by a fashion designer as his workshop.  Unit C was let to a bank accountant for use as an office.  He said that all these users were non-domestic and in any event the tenancies were not renewed upon expiry in September 2007 and in April and October 2008, pending the repair works to be executed by the IO.  He further asserted that the units were acquired for letting for non-domestic use as such letting would yield higher rental income.  Mr Chong also relied on Cheng’s evidence that during his patrolling rounds in the Building in 2002 he saw people going in and out of the units which looked like offices with desks and chairs; and that he saw no bed and did not believe anyone was living in the units.   With respect, Mr Chong has fallen into the mistake of mixing up the character or status of the building with the actual use of to which the building was put at a particular time.  Given the test I set out above, the issue is what are the units converted or intended for.  The actual use to which the units is put is irrelevant.

34.Besides, Cheng’s evidence is about his observation in 2002 which was almost ten years before the present dispute.  It has little bearing to the situation when this action was commenced.  As for Tong’s evidence, I think it is flatly contradicted by the tenancy agreements of all the three units.  Under these agreements, the tenancies were expressly stated to be for domestic purposes.  Clauses 5 and 7 of all these tenancy agreements stated:

“ 5. The Tenant agrees to use the said premises hereby agreed to be let for residence of himself/herself or his/her immediate family’s members. He/she shall not use the premises as office, …”

“ 7. The Tenant shall confine his/her laundries within the Drying Area provided for.…. The Tenant shall not affix, put up or display any signboard, sign decoration, flower stand, iron stand, neon light, advertising board or any other fixtures outside the balcony or on any door, wall, pier or window or public places i.e. walls, entrances, corridors, stairways, lifts, etc. except with the written approval of the Landlord.”

Clause 21 of these tenancy agreements set out a list of domestic appliances, fixtures and fittings provided by the landlord which had to be returned upon expiry of the tenancy.  Depending on the unit, these appliances included air conditions, refrigerators, washing machine, dryer, electrical stove with oven, water heater.  Obviously, the actual user of these units in 2008 was domestic. Though the actual user is not determinative of what the building was constructed or intended for, it is some evidence which reflects that purpose.

35.Mr Chong argues that there is no evidence to show that the plaintiffs had used or intended to use the units for domestic purpose.  The thrust of his argument is that the units have been left vacant since the tenancies expired in 2007 and 2008.  As I have said, counsel was lost in a maze asking what the owner’s intention was when the appropriate question is what was the building constructed or intended for.  The status of domestic or non-domestic user is attached to the building and not to the mind of its current owner.  It is the character of the building.  That the units were kept vacant does not change its character.

36.Applying the approach I set out in paragraph 32, I have no difficulties at all in drawing the inference that whoever converted the covered playground into the three units as they now stand did so with the intention that they were to be used for domestic purposes as residence.  The evidence on which such inference may be drawn is overwhelming.  All the three units are fitted with full kitchen and equipped with cooking facilities.  While pantry facilities are not uncommon in office accommodation, full kitchen facilities of the kind in these units suggest that the units are to be used as a home or residence.  Another striking feature is the provision of full bathroom.  Toilets and lavatories are standards in commercial buildings, but full bath facilities are not.  Some luxurious offices may be fitted with bath facilities, but these units do not fall within that category.  Not only that, Unit B is fitted with a bath and a shower and equipped with a washing machine.   The equipment reflects that the units were intended to be used as a home or dwelling for spending the night.  Most telling of all are the timber frame bunk beds and mattresses in Unit B and Unit C.  In my view, these three units simply strike the eye as residence more than as office or other non-domestic accommodation.  They were constructed or converted or intended to be used for habitation by the plaintiffs’ predecessor-in-title who caused the conversion. 

37.James Law opined that the user of the units is non-domestic as the units had been left vacant for a long time and that some appliances were probably not functional, though he had not actually tested them.  He said that the unit with toilet bowls and bath tubs were no different from a sanitary ware showroom and did not necessarily suggest that the units were used for domestic purposes.  Apart from ignoring the test that user is attached to the buildingand not to the mind of the owner, his opinion that a building is domestic whenit is occupied and non-domestic when it is vacant is absurd and demonstrateshis biased and hire gun approach in advocating in the interest of his clients instructing him.    

38.Mr Chong argues that when the plaintiffs took over the units, they were already leased out for a non-domestic purpose and that part of clause 1 of each of the tenancy agreement stated that the units were for non- dwelling purposes.  As shown in paragraph 34, this is contrary to clause 5 of the tenancy agreement which stated that the units were leased as a residence for the tenants and their families.  Furthermore, as mentioned above, user is attached to the building.  It is determined by the purpose for which the units were converted or intended to be used.  The actual use is not relevant.  Even assuming what Mr Chong submitted is factually correct, that does not have the effect of changing the user of the units from domestic to non-domestic. 

39.Mr Chong further argues that when the plaintiffs took over the units, they had already been converted and as such the plaintiffs could not bein breach of the DMC or the occupation permit.  With respect, this argument leads to nowhere.  I cannot see how such argument can change the fact that the units were converted or intended by the plaintiffs’ predecessor-in-title for domestic use.  The status or character of the units was domestic when the plaintiffs acquired them.

40.In conclusion, I find that the covered playground was converted into the three units for domestic use.

Whether the user restriction under the occupation permit may be deviated

41.Mr Chong argues, quoting Cheermark Investment Ltd v Director of Lands[3], that the user stipulated under the occupation permit can be deviated from as long as such deviation is permitted by the government lease.  Cheermark was a case of compensation under the Land Resumption Ordinance.  The issue in that case was whether compensation for the resumption of the ground floor unit of a multi-storey building used as a shopshould be valued as a shop according to the actual user or as residential premises according to the occupation permit.  The relevant part of the government lease restrained the lessee from using the land for certain offensive trade or business or for purposes other than for reclamation building dwelling houses workshops, factories or godowns or similar purposes.   The Lands Tribunal held:

“ 29. When the Government Lease was read in the context of the definition of ‘dwelling house’ in the 1903 Ordinance, we are of the opinion that it supports the applicant’s assertion that when the Building was primarily or partly used as residential, that was the 1^st, 2^nd, 3^rd and 4^th Floors, the Building was still a building for residential purpose. Hence, the use of the Ground Floor as shop for commercial use did not amount to a breach.

…

33. Further we are of the view that ‘or similar purposes’ can be widely construed for the phrase to make sense in the User Clause. The reason being that definition for ‘dwelling houses’ under the 1903 and 1950 Ordinance was wide at the time of the Government Lease and the issue of the Occupation Permit. Basically, when a building was partly occupied or used for domestic purpose, it would satisfy the designated or designed use for domestic purpose. In other words, part of the building can be used for any other use subject of course to other statutory prohibitions. …

…

48.   …We however accept the applicant’s case that although ‘shop’ was not expressly written in the Government Lease it was allowed by the user of ‘dwelling houses’ when the Government Lease was read in light of the 1903 Ordinance.  We are of the opinion that shop is a permitted use.”  

(My emphasis added)

42.Cheermark was a case on construction of a government lease.  What it decided was that on the true construction of the subject lease a user clause restricting the user of the land to dwelling houses would, when construed against the then background in 1903, permit the land to be used asa shop.  It then followed the well-established authority of Mexx Consolidated (Far East) Ltd v Attorney General & Another[4] and held that where the user covenant of the government lease restricted the use of the premises to industrial and godown purpose, the user covenant was complied with if the primary user of the premises was industrial.  On that basis, the Lands Tribunal held that the use of the ground floor as a shop was not in breach of the government lease as the primary user of the premises was nevertheless domestic.  Though the occupation permit was mentioned, there was absolutely no discussion about breach or otherwise of the user stipulated in the occupation permit.  The focus of the discussion in Cheermark was on whether on the true construction of the government lease the use of the premises as a shop was a non-permitted use and therefore breach of the government lease; and not, as Mr Chong put it the other way round, that despite the use was not permitted under the occupation permit there was no breach of the occupation permit if such use was permitted by the government lease.  Cheermark did not support the proposition advanced by Mr Chong.  Counsel was misconstruing and misapplying the authority.

43.Next, Mr Chong referred to Central Profit Investments Ltd v Shuga Investments Ltd [5].  The occupation permit of the building in that case permitted the use of a playground, store and meter room on the basement for non-domestic use. The playground was later converted into shop units.  Mr Chong submits that it was part and parcel of the decision in that case that converting the playground to shop units conformed with the occupation permit limiting it to non-domestic use.  I am quite unable to agree with that submission.  That was another land resumption case.  There was absolutely no discussion about breach or otherwise of the user provision under the occupation permit.   The Lands Tribunal just mentioned the conversion and proceeded with valuation on the basis that the conversion did not result in a breach of the government lease.  Even if the Lands Tribunal had decided that the conversion was not in breach of the occupation permit, it would be a non-issue.  This is because both the use as a playground and as shops were non-domestic which was what the occupation permit allowed.  This is a far cry from the present case of switching from non-domestic user to domestic user.

44.Mr Chong’s argument that the user restriction under the occupation permit may be freely deviated from so long as it does not contravene the government lease is based on his misunderstanding and distorted application of the authorities.  According to his proposition of the law, the occupation permit is not worth the paper on which it is printed and the Building Authority is defunct.  It is absurd. 

Unauthorized building structures — the external and internal partitions

45.An important part of the IO’s counterclaim is that the units are unauthorized building structures which ought to be removed.  The thrust of the plaintiffs’ defence is that they are not because they are exempted works under the Buildings Ordinance in respect of which no authorization is required before the works may be executed.  James Law opined that these works could be considered as exempted works under section 41(3) as they do not involve the structure of the Building.  Though these partitions must at some points be attached or affixed to the structure of the Building, I do not consider that they involve the structure of the Building.  However, these partitions should not be viewed in isolation.  The way they are erected and the effect they have on the Building has to be viewed collectively.  It is Samson Wong’s expert opinion that these structures have the effect of converting the covered playground for non-domestic use into three units for domestic use which affects the plot ratio of the Building.  That results in various other breaches of the Buildings Ordinance and Regulations, which are not permitted by section 41(3D). Thus, even if the works do not involve the structure of the building, if they contravene any provisions of the Regulations, they are not exempted works and may not be carried out without authorization.

46.Mr Chong argues that section 41(3D) was introduced in 2008 and was not in force at the time the structures were erected.  I set out hereunder the current section 41(3) and (3D) which came into force in 2008 and section 41(3) under the 1985 edition of the Laws of Hong Kong which were amended in 1959 and 1982 which were in force at the time of the conversion:  

The current version:

“ (3)   Building works (other than drainage works, ground investigation in the scheduled areas, site formation works or minor works) in any building are exempt from sections 4, 9, 9AA, 14(1) and 21 if the works do not involve the structure of the building.

(3D)   Nothing in subsections (3), (3B) and (3C) permits any building works or drainage works to be carried out in contravention of any regulations.”

The 1985 version:

“ (3)   Building works other than drainage works, ground investigation in the scheduled areas or site formation works not involving the structure of any building may be carried out in any building without application to or approval from the Building Authority:

Provided that nothing in this subsection shall permit any building works to be carried out in contravention of any regulation.”

There were other subsections introduced in between the two versions whichcaused a change in drafting.  In essence, section 41(3D) of the current versionhas the same effect as the proviso under section 41(3) of the 1985 version.  Inmy view, except for the treatment of drainage works and ground investigation work in the schedule area, the combined effect of section 41(3) and (3D) under the current version is same as that under section 31(3) of the 1985 version.  There is no evidence as to what are “the scheduled areas”.  It probably refers to the mid-level.  As the IO bears the burden of proof, I assume in favour of the plaintiffs that section 41(3) and (3D) do not operate to the detriment of the plaintiffs.  Hence, in this judgment, I shall not engage in any discussion about breaches of regulations relating to drainage works.

47.Samson Wong pointed out the following breaches: change in plot ratio; regulations 21, 30, 36, 41(1) of the Building (Planning) Regulations; and regulation 90 of Building (Construction) Regulations.  These breaches will be considered in turn below.

48.The external partition dividing the covered playground from the common passage together with the small walls and windows on the parapet wall and all the fittings and fixtures in the covered playground have the effect of converting the user of the covered playground from non-domestic to domestic.  It is common ground that the area of the covered playground was exempted when calculating the non-domestic part of the Building.  That is a very substantial area of 2,380 square feet.  With the conversion of the user, the area has to be included in calculating the plot ratio of the domestic part of the Building.  James Law disagreed.  He opined that since the units were left vacant for a long period of time, the plot ratio would not be exceeded.  For reasons as explained in paragraph 37, I reject that opinion.

49.However, both experts agreed that if the user of the units were changed to domestic user as result of the conversion, the plot ratio of the domestic part of the Building would exceed the permitted plot ratio under regulation 21 of the Building (Planning) Regulations.  This would result in a breach of regulations 21 and 23 of the Building (Planning) Regulations. 

50.This breach and the change of user are beyond dispute.  In response to the IO’s complaint, the Buildings Department inspected the covered playground and confirmed via a letter dated 12 April 2012 that the partitions constituting the three units were unauthorized building works but the Building Authority would not be taking immediate enforcement action because the matter was considered to be of low priority.  Though no immediate enforcement action was taken, the breach was confirmed by the Building Authority.  The breach was further confirmed by the Building Authority in a later Superseding Notice dated 15 December 2017 in which the Building Authority gave notice to the plaintiffs of breaches of regulations 21 and 23 of the Building (Planning) Regulations caused by the partition and metal gate of the covered playground and required their removal.

51.Mr Chong referred to a letter dated 23 June 2011 from the Lands Department informing the IO that no enforcement action under the government lease can be contemplated in respect of the unauthorized building works.  He submits, without quoting any authority, that the Director of Lands was the appropriate authority responsible for dealing with matters related to plot ratio.  Presumably, he was relying on the Building Authority’s letter dated 12 April 2012 declining to take immediate enforcement action and Director of Lands’ above letter confirming no lease enforcement action will be taken.  If that was the basis of his argument, his argument is badly misconceived.  Enforcement of the government lease and enforcement of breaches of the Buildings Ordinance and Regulations are different matters.  Under section 2 of the Buildings Ordinance, all the powers and duties under the Ordinance are vested in the Building Authority. Plot ration and site coverage are matters provided for in the Buildings Ordinance.  The Building Authority must be the appropriate authority to deal with such matters.  In fact, in the letter dated 12 April 2012 the Building Authority categorically expressed that the units were unauthorized building works but the Building Authority did not intend to take immediate enforcement action as a matter of its internal priority.  That is a clear assertion by the Building Authority of its authority in enforcement of the Buildings Ordinance and Regulations.  Furthermore, in the letter dated 12 June 2011, the District Lands Office also informed the IO that the enforcement responsibility against unauthorized building works was within the jurisdiction of the Buildings Department.  Mr Chong’s arguments are blatant attempts to mislead the court.

52.As for the internal partitions, ie those separating the units fromone another, I am not satisfied that they involved the structure of the Building.  By themselves in isolation and not in combination with any fitting resulting in breaches of the Regulations, they are not involved in any contravention of the Buildings Ordinance or Regulations.  If the external partition and the walls and windows above the parapet wall are removed, they would not have the effect of converting the user of the covered playground or affecting the plot ratio of the Building.  In that scenario they may be regarded as exempted works and not unauthorized building works. 

Unauthorized building works — the windows on the parapet wall

53.Mr Cheung referred to the sliding windows and some structures, presumably built of bricks, resting on the parapet wall on the northern side of the covered playground as the external wall.  He submits that this external wall is an extension of the parapet wall and amounted to unauthorized building works.  On the basis of James Law’s opinion, Mr Chong argues thatthe windows and brick structures do not involve the structure of the Building and are therefore exempted works and not unauthorized building works.  

54.Mr Cheung referred me to Incorporated Owners of Elite Gardenv Profit More Co Ltd [6] in which Le Pichon JA held that the phrase “structural alteration” in a deed of mutual covenant should be given its natural and ordinary meaning and not to be read as requiring some special or technical meaning.  She construed the phrase to mean alteration of form or structure of the building and form has to do with appearance or visual aspect.  She therefore concluded that opening of windows on the external wall was a structural alteration because it pertained to the framework or structure of the building and affected its visual aspect.  On the same basis, Mr Cheung argues, a fortiori, that the extension of the parapet wall by installation of window frames should be regarded as structural alterations for they have substantially changed the appearance of the parapet wall.

55.With respect, I do not think the approach in construction in Elite Garden relevant.  That was a case of construction of the term “structural alteration” in a deed of mutual covenant not about the term “works do not involve the structure of the building” in section 41(3) of the Buildings Ordinance.  The terms used in the deed of mutual covenant must of course be given its ordinary and natural meaning.  According to Oxford Concise Dictionary, “structure” means “arrangement of and relations between the parts of something complex; a building or other object constructed from several parts”.  “Structural” in the context of the deed of mutual covenant means relating to or forming part of a structure.   The arrangement of and relations between parts of the building creates a visual impact.  It was in this light that the visual aspect of the alteration assumed significance in construing the phrase “structural alteration” in Elite Garden. 

56.However, the issue in this case is the construction of the phrase “the works do not involve the structure of the building” in section 41(3), which is a technical term in a piece of technical legislation.  It must be given its technical meaning.  There are well-established authorities on the meaning of this phrase.  In Mariner International Hotels Ltd v Atlas Ltd [7], theCourt of Final Appeal held that “building works added to a building involvesits structure if they serve a structural function or are capable for some reason of affecting the integrity of the structure”.  In my view, this construction must be followed in construing section 41(3) of the Buildings Ordinance.

57.The structure of the Building consists of beams and pillars.  These windows and structures are resting on the parapet wall.  Though they must at some points be anchored to some structures which eventually are attached to the structure of the Building, I agree with James Law that they do not served any structural function or are capable of affecting the integrity of the structure of the Building.  They do not involve the structure of the Building. However, they have the same effect as the external partition in converting the user of the covered playground and in increasing the domestic plot ratio resulting in a contravention of regulations 21 and 23 of the Building (Planning) Regulations.  They are not exempted works but unauthorized building works.

58.Furthermore, under the BMO, ‘parapet walls’ is defined as common parts of a building.  The parapet wall in the covered playground is never specified or designated in the DMC or any instrument registered in theLand Registry as being for the exclusive use, occupation or enjoyment of the owner of the shares relating to the covered playground.  It must therefore be common part of the Building.  The IO must be entitled to require the plaintiffs to remove the windows and structures now resting on and trespassing the parapet wall without the IO’s consent.

Unauthorized building works — Unit A: kitchen without window

59.A corner of Unit A was partitioned off as a kitchen and fitted with basin, stove, and range hood.  There is no window which opens to the open air but an exhaust fan opening to the common passage. Initially, James Law opined that the corner was not a kitchen as he personally doubted anyone would use it for cooking purpose.  He was substituting his biased personal opinion for the opinion of the plaintiffs’ predecessor-in-title who caused the conversion and was turning a blind eye to the obvious objective evidence.  However, he eventually had to concede it was a kitchen. Regulation 30 of the Building (Planning) Regulations required that kitchens shall be provided with natural lighting and ventilation by means of windows of certain specified requirements.  With such concession, contravention of regulation 30 is proved. 

Unauthorized building works — kitchens without fire resistant partition

60.Though the kitchen of Unit A was partitioned, Samson Wong opined that the material could not provide adequate resistance to fire.  The kitchens of Unit B and Unit C are open kitchens with no partitions other than the external partition which in Samson Wong’s opinion is not fire resistant.  Regulation 90 of the Building (Construction) Regulations requires that kitchens shall be provided with adequate fire resistant material to prevent the spread of fire and smoke.  James Law accepted that the kitchens are required to be fitted with fire resistant walls.  Accordingly, contravention of regulation 90 is proved.

Unauthorized building works — toilets without windows

61.There is no dispute that the four toilets in the three units are partitioned but without window opening directly to the open air.  Regulation 36 of the Building (Planning) Regulations requires that toilets shall be fitted with windows that open directly to the open air.   However, James Law opined that there was no need to comply with this regulation because the sanitary fittings were not used and that they were just like sanitary fittings in display in a sanitary ware showroom.  He further opined that even if these works were contraventions, they are classified as low priority unauthorized building works.  Thus, according to his opinion, when the toilet was not used, it was just like a show piece in a show room.  Hence, the partitions were exempted works and the unit was non-domestic. On that logic, when someone turns the toilet bowl handle and flushes the toilet, there is a contravention of the regulation, the unit becomes domestic and everything becomes unauthorized works.  The user of the unit changes on each turn of the toilet bowl handle.  I have not heard any expert opinion which is more bizarre.  In my view, the absurdity is not because he failed to have regard to the purpose for which the sanitary fittings were installed in the units, but because he chose to adopt a hire gun approach to advance the interest of his client instructing him.  I have no faith in his opinion.  These works are clear breaches of regulation 36.  Whether they are low priority unauthorized building works is irrelevant.

Unauthorized building works — exhaust fans facing the common passage

62.There is no dispute that there is one exhaust fan drawing exhaust air from the kitchen of Unit A and four exhaust fans drawing exhaust air from the toilets or bathrooms of the three units to the common passage.  Samson Wong opined that their existence imposes fire risk to the public andconstitutes breach of regulation 90 of the Building (Construction) Regulation.   The regulation requires that a building shall be constructed so as to provide resistance to the spread of fire.  Except for parts of the external partition dividing the kitchens of the units from the common passage, I am not convinced how the exhaust fans constituted fire hazards and involved contravention of regulation 90. 

Unauthorized building works — metal gate at the entrance of Unit C

63.There is a metal gate in the common corridor which opens to a recess opening to a staircase well leading to LG3 and the entrance of Unit C.   A second metal gate is installed at the entrance to Unit C which swings open to the recess.  Samson Wong opined that this second metal gate is an unauthorized structure because it obstructs the means of escape in case of fire and constitutes a contravention of regulation 41A of the Building (Planning) Regulation.  At the hearing, there was some confusion as to where the metal gate was installed and some dispute as to whether the recess is part of the covered playground.  The plan attached to the DMC or assignment of the covered playground was not produced.  However, looking at the plan in the bundle of documents[8], it is obvious that the recess opens to the staircase well and the entrance to Unit C is behind the recess.  The recess must be part of the common area and could not have been part of the covered playground to which the plaintiffs have exclusive possession.  The second metal gate which swings open to the recess would substantially obstruct the recess as a means of fire escape. 

The IO’s locus standi in enforcing breaches of the Buildings Ordinance and Regulations

64.The IO’s cause of action in the counterclaim is founded on breaches of clauses 9, 19 and 22 of the DMC and provisions of the BuildingsOrdinance and Regulations.  In its closing submission, Mr Cheung did not advance any argument based on clauses 9 and 19 of the DMC.  These clauses provide as follows:

“ 9.   Each of the parties hereto shall not at any time detrimentally alter any part of the structure of the said Building … so as not to cause any injury or damage thereto.

19.   Each owner may at his own expense make any non-structural improvement inside the units or unit of the said Building of which he is entitled to exclusive use occupation and enjoyment, … that such improvement can be removed without any alteration and without causing any damage to the said Building and the party making the same shall have the right to remove the same at any time at his own expense.”

65.As analysed above, the building works involved in converting the covered playground into the three units were non-structural in that they did not involve the structure of the Building, but they are unauthorized building works in that they contravened various provisions of the Building (Planning) Regulations and Building (Construction) Regulations.  Thus, those buildings works could not and did not detrimentally alter any part of the structure of the Building as to amount to a breach of clause 9.  For the same reason, putting aside the question of breaches of the Building (Planning) Regulations and Building (Construction) Regulations, the plaintiffs’ predecessor-in-title was at liberty to execute those works under clause 19.  It seems that the IO has abandoned its case based on breaches of clauses 9 and 19.

66.What remains is breach of clause 22.  The focal point of the IO’s argument is on clause 22(i).  The IO relies on the change of user of the covered playground as the illegal unlawful purpose which the plaintiffs suffered or permitted the units to be used.  Clause 22(i) provides as follows:

“ 22   Neither the parties hereto nor any of the owners of the said pieces of land shall at any time:-

(i)   Use or cause or suffer or permit to be used the unit or units of the said Building of which they are entitled to the exclusive use occupation and enjoyment … for any illegal unlawful or immoral purpose;

67.Mr Chong quoted the case of Wing Hong Investment Co Ltd v Fung Sok Han [9] as authority for the proposition that it is not an offence to adopt a user of premises which is different from that stated in the occupation permit and that a change of user is not illegal.  The deed of mutual covenant in that case contained a similar provision as clause 22(i). The court found that section 25 of the Buildings Ordinance was relevant to change of user.  Section 25(1) permits an owner to give notice to the Building Authority of his intended change of user and the Building Authority has one month to confirm or refuse the change.  Louis Chan J found that there was no provision under the Buildings Ordinance making it a criminal offence to adopt a change in user but it was an offence under section 40(2) not to serve a notice of the intended change.  He therefore held that change of user was not illegal and not in breach of the deed of mutual covenant.  He said:

“   232.   The two grounds of attack are illegal use and nuisance.  For illegal use, the defendants say that the user of the ground floor as shops and godowns was contrary to the user of carport as stated in the occupation permits and hence illegal.

233.   Section 25 of the Buildings Ordinance is relevant to change of user.  It provides:

‘ (1)   One month's notice in the specified form shall be given to the Building Authority of any intended material change in the use of a building by the person intending to carry out or authorizing the carrying out of such change.

(2)   Where in the opinion of the Building Authority any building is not suitable by reason of its construction for its present or intended use, he may by order in writing served on the owner or occupier —

(a)   within 1 month of the receipt of a notice under subsection (1) prohibit such intended use; or

(b)   require the owner or occupier to discontinue such present use of the building within 1 month from the service of the order:

Provided that the Building Authority may permit by notice in writing such building works as he deems necessary for the purpose of rendering the building suitable for its present or intended use.

(3)   The use of a building shall be deemed to be materially changed—

(a)   where the carrying out of building works for the erection of a building intended for such use would have contravened the provisions of this Ordinance; or

(b)   where the Building Authority could have refused to give approval to plans of such building works under section 16(1) (g).”

234.   The provision in section 25(1) requires the person intending a material change of user to serve on the Building Authority a notice of intended change.  It is not a crime to adopt a material change in the user of the premises, but it is an offence under section 40(2) of the Ordinance not to serve a notice under section 25(1). 

235.   If the changed or intended new user is not acceptable to the Building Authority, it can always serve an order under section 25(2) to prohibit the intended user or require the changed user to be discontinued.  But there is no provision saying that it is an offence to adopt a user of premises which is materially different from that stated in the occupation permit.

236.   If the legislature should have intended to make it an offence for a material change of user without approval from the Building Authority, it would have legislated for it in section 40.  Section 40 contains dozens of offences for infringements of the provisions in the Ordinance. 

237.   For the above reasons, I hold that the change of user from carport to shops and godowns on the ground floor was not illegal and did not contravene clause 10 of the DMCs.”

68.Mr Cheung submits that Louis Chan J adopted too narrow a construction for the word ‘illegality’ by focusing solely on the question of criminal liability and that the parties had not argued and the learned judge had not considered the issue of unlawfulness of the conversion.

69.Clause 22(i) of the DMC specifically adopted the phrase “illegal unlawful or immoral purposes”.   It is well established principle that construction of document is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract: Investor’s Compensation Scheme Ltd v West Bromwich Building Society [10].  In serious utterances such as legal documents drafted by lawyers, in which the draftsmen may be supposed to have chosen their words with care, one does not readily accept that they have used the wrong words.  The DMC was obviously drafted by lawyers.  In making their choice of words, the draftsmen must be presumed to know that these words carry different meanings and the intention was that the clause shall have effect in relation to all these meanings.  

70.In Prestcold (Central) Ltd v Minister of Labour[11], Lord Diplock held that there was a presumption that:

“ the habit of a legal draftsman is to eschew synonyms.  He uses the same words throughout the document to express the same thing or concept and consequently if he uses different words the presumption is that he means a different thing or concept … a legal draftsman aims at uniformity in the structure of his draft.”

This presumption is widely recognised in common law jurisdictions and was cited in Lewison’s The Interpretation of Contracts[12].  The words “illegal” and “unlawful” are not two words scattered in different places in the DMC as to suggest that they are interchangeable and being carelessly adopted by the draftsman.  As submitted by Mr Cheung, they are consecutive descriptions of prohibited purposes, located adjacent to one another.  I accept that the draftsman could not have intended to give the word “unlawful” the same meaning as “illegal” or vice versa.  They are intended to convey two different concepts, although “unlawfulness” may overlap and cover “illegality”.

71.The words “legal” and “lawful” or “illegal” and “unlawful” are words which are often used loosely and interchangeably by laymen and sometimes even by lawyers.  The following passage from Revenue and Customs Commissioners v Total Network SL[13]demonstrates their use in real life:

“ The man in the street, if asked what an unlawful act was, would probably answer ‘a crime’.  He might give as an example theft, obtaining money by false pretences, or assault occasioning actual bodily harm.  He might or might not know that each of these was also a civil wrong (or tort) but it is unlike that civil liability would be in the forefront of his mind.  The reaction of a lawyer would be more informed but it would not, I suggest, be essentially different.  In its ordinary legal meaning ‘unlawful’ certainly covers crimes and torts (especially intentional torts). Beyond that its scope may sometimes extend to breach of contract, breach of fiduciary duty, and perhaps even matters which merely make a contract unenforceable, but the word’s appropriateness becomes increasingly datable and dependent on the legal context.”   

72.The words “illegal” and “unlawful” are defined in the Stroud’s Judicial Dictionary as follows:

“ ILLEGAL.  ‘Illegal’ has, in a statute, a meaning very near to, but not the same as, void, and where a thing is only ‘illegal’ quoad A, it is inoperative as against him and yet may be binding on B (per Alderson B., Job v lamb,11 Ex. 542).  On the other hand, a thing, e.g. a wager, might be “null and void” (Gaming Act 1845 (c.109) s. 18) in the sense of being irrecoverable, without being ‘illegal’ in the sense of being punishable or forbidden (per Lush J., Haigh v Sheffield, L.R. 10 Q.B. 102, cited by Smith L.J., Bridger v Savage, 15 Q.B.D. 363, cited GAMING CONTRACT).  So, a bill or note given for a bet on a horse-race was void and irrecoverable except in the hands of a holder in due course), because by Gaming Act 1835 (c.41) s.1 it was to be deemed to have been taken for an illegal consideration (Woolf v Hamilton [1898] 2 Q.B. 337.

UNLAWFUL.  A thing may be unlawful in two senses, (1) as unenforceable by law, (2) as punishable by law; e.g. an agreement for sexual immorality would furnish no right of action between the parties, but is not punishable (per Bramwell B., Cowan v Milbourn, L.R. 2 Ex. 236).”  

73.In the 10^th edition of Black’s Law dictionary published in 2014, “illegal” and “unlawful” are regarded as synonyms.  But they do have a subtle distinction.  “Lawful” or “unlawful” contemplates the substance or content of the law.  “Legal” or “illegal” alludes to the form of the law.  Thus, an act prohibited by contract, if performed, is unlawful; whereas a contract prohibited by statute, for example sale of dangerous drugs without licence, is illegal.  Contracts which are not illegal in the sense that they contravene criminal law or are otherwise contrary to statute may be unlawful in the sense that they are unenforceable under common law.  This distinction appears simple, but in actual usage, there are overlaps.  “Unlawfulness” is a word of wider import which includes “illegality, immorality and concepts contrary to public policy”.

74.Mr Cheung has helpfully referred me to the 4^th edition of Black’s Law dictionary in which this distinction was noted.  That edition was published in 1968 which was the latest edition at the time the DMC was executed.  The definition in the 4^th edition may be more insightful in construing the DMC in issue.  In that edition, “unlawful” was defined as:

“ That which is contrary to law or unauthorized by law.  State v Chenault, 20 N.M. 181, 147 p. 283, 285.  That which is not lawful.  State v. Bulot, 175 La. 21, 142 So. 787, 788.  The acting contrary to, or in defiance of the law; disobeying or disregarding the law.  While necessarily not implying the element of criminality, it is broad enough to include it.  Sturgeon v Crosby Mortuary, 140 Neb. 82, 299 N.W. 378, 383.  “Unlawful” and “illegal” are frequently used as synonymous terms, but, in the proper sense of the word, “unlawful” as applied to promises, agreements, considerations, and the like, denotes that they are ineffectual in law because they involve acts which, although not illegal, i.e., positively forbidden, are disapproved of by the law, and are therefore not recognized as the ground of legal rights, either because they are immoral or because they are against public policy …”

Under this definition, “unlawful” appears to be wider than “illegal” in that it encompasses not only criminality, but also defiance of legal provisions with morality and public policy dimension. 

75.This distinction can be seen in Alexander v Rayson [14].  There, the court expressed concern over “an agreement which in itself is not unlawful was made by one or both parties with the intention of using the subject matter “for an unlawful purpose, that is to say a purpose that is illegal, immoral or contrary to public policy”.  Thus, unlawfulness is a word of wider import.  It covers not only illegality, but also immorality and concepts contrary to public policy.

76.This distinction can be found in many other area of the law, for example, adverse possession.  As quoted by Mr Cheung, the learned authors in Ruoff & Roper: Registered Conveyance[15]acknowledged that “an act of adverse possession in relation to common land may be unlawful and thus a civil wrong but will not normally give rise to criminal illegality”.  This in fact was the line taken by Louis Chan J in Wing Hong Investment Co Ltd.

77.Mr Chong also referred me to an earlier decision in Luk Kwan Hung v Victory Mark Investment Ltd[16] which has the same effect.  In that case, Sakhrani J held that the construction of beams lower than that required by regulation 24(1) of the Building (Planning) Regulations was not an offence under the Buildings Ordinance and did not render the beams an illegal or unauthorized structure.   Thus, a breach of the regulations is unlawful in the sense that it is not lawful or not in accordance with the law, but is not necessarily illegal.

78.I would not attempt to define the impossible. While the words “illegal” and “unlawful” are sometimes or often used interchangeably, they do have different and overlapping meanings.  The word “illegal” is often used in relation to prohibition under criminal law or statute, while the word “unlawful” has a wider import and encompasses criminality and defiance of the law generally, whether enacted by statute or evolved under common law and whether criminal or civil in nature.   As always, the meaning of these words depends on the context.

79.I accept Mr Cheung’s submission that the phrase “illegal unlawful or immoral purpose” in clause 22(i) of the DMC carries different meanings.  Returning to Louis Chan J’s dicta quoted in above passages in Wing Hong Investment Co Ltd, it is self-evident that the parties’ arguments as well as the learned judge’s decision on the issue of conversion of the car ports to shops were focussed on its illegality and not unlawfulness.  Having read that very long judgment, I can find there was a reason for not dealing with the issue of unlawfulness and a reason for distinguishing that case from the instant one.

80.The building in Wing Hong Investment Co Ltd was an older one.  The occupation permits were issued in 1959 and 1960.  In respect of the premises in question, the user stated in the relevant occupation permit was as car port.  From the judgment, it is not clear whether the user was just “car port” simpliciter or like the present one “covered playground … for domestic use”.  The current version of the Buildings Ordinance is essentially similar to the 1985 edition in which the principal categories of user were domestic and non-domestic.  I assume the version in force in 1959 and 1960 was also similar to the 1985 version, being originated from 1956 version.  I therefore have strong grounds to assume that the user of the occupation permit of the subject building in Wing Hong Investment Co Ltd was “car port for non-domestic use” and not just “car port” simpliciter.  Thus the change in user was just a change from car port use to shop use within the category of non-domestic user.  This is a far cry from the instant case where the change is from non-domestic to domestic user, ie from one category to another.

81.Then, as noted by the learned judge, the change in user in Wing Hong Investment Co Ltd had become academic, save for costs, as the plaintiff had removed the alterations and obtained approval pursuant to the Buildings Ordinance to effect the alterations and to change the user of the ground floor units.  As at the time of trial, the unlawful alterations had been removed and the user had been regularised.  The unlawfulness had been rectified.  There could be no breach of the deed of mutual covenant based on the unlawfulness limb.  Hence, it would serve no purpose to pursue the unlawfulness limb.   That case was about construction of the term “illegal purpose” and not “illegal and/or unlawful purpose”.

82.On my construction of the words “illegal” and “unlawful”, I concur with the approach of Louis Chan J in determining whether breach of the user stipulation in the occupation permit is illegal and agree with his conclusion on the facts of that case.  As a matter of basic legal principle, an act is not illegal or unlawful unless made illegal or unlawful by law.  While the Buildings Ordinance laid down what may be done and what may not, there is no provision which makes the change of user criminal.  What is made criminal under section 40 is the failure to give notice of such intended change or to comply with an order of the Building Authority.  If a change is effected without giving notice to the Building Authority, it is unlawful but not illegal.  If the Building Authority has issued a notice to the owner requiring rectification and is not complied with, the non-compliance becomes illegal.  The issue of unlawfulness had not been explored in Wing Hong Investment Co Ltd.  The conclusion inthat case must be confined to the facts of that case and cannot be taken as a statement of over sweeping principle that any breach of the occupation permit is neither illegal nor unlawful.

83.Returning to the instant case, there is a change of user.  It is a principal change as it involved change from non-domestic to domestic category and not a minor change within the same category.  It also involved unauthorized building works.  The change probably has no prospect of receiving approval from the Building Authority as it involved exceeding the permitted plot ratio and unauthorized building works.  No steps have been taken to seek approval for the change.  Following the reasoning in Wing Hong Investment Co Ltd,the change is not illegal.  However, it is unlawful.  The covered playground is being used for an unlawful purpose.  The unlawfulness is confirmed by the Superseding Notice issued by the Building Authority stating that the unauthorized building works in the covered playground contravened regulations 23 and 36 of the Building (Planning) Regulations, ie site coverage and plot ratio, and toilet without window.  This Superseding Notice has been registered against the Building in the Land Registry.

84.Mr Chong argues that there is no evidence to support the IO’s allegation of use of the units in contravention of clause 22(i).  In essence, he said that the IO’s case was rested on the tenancy agreements in respect of the three units; that the tenancy agreements were not entered into by the plaintiffs but by their predecessor-in-title; that the tenancies had expired and the units are being left vacant and not used.  I have dealt with this argument in paragraphs 33 to 40 in the context of user of the covered playground.  Though the tenancies had expired and the units are not being occupied now, the issue is not whether the units are being used for an unlawful purpose but whether the covered playground is being used for an unlawful purpose.  The answer is an emphatic “yes”.  The covered playground was used for erecting the units and the plaintiffs suffered or permitted their continued existence on the covered playground.  Despite that the units are not being occupied, their very existence on the covered playground is indisputable evidence of the covered playground being used for an unlawful purpose.

85.Mr Chong argues that the units have not been used and are not being used for domestic purpose and no illegality or unlawfulness arise.  This argument is premised on his misunderstanding of the meaning of the permitted user of the covered playground.  User, as I have said, is attached to the building or a specified part of the building.  It is the status or the character of the building.  It has nothing to do with the actual use to which the building or that part of it is put.  User depends on the purpose for which the premises are constructed or intended to be used.  It is not as amoeboid as James Law put it that premises constructed for domestic use would become non-domestic by leaving them vacant or by disconnecting the sanitary fixtures to the drains and by not using the cooking facilities.  The covered playground was clearly converted for domestic user.  Not until it is reverted to the original condition or substantially re-converted to evidence that it has been re-converted or intended for non-domestic use, they contravene the regulations on plot ratio and site coverage.  Their existence remains unlawful as evidenced by the various breaches of provisions under the Buildings Ordinance and Regulations as confirmed by the Superseding Notice.

86.Mr Chong argues that plot ratio is only a design and construction requirement which may be changed even after completion of the building and that the contents of the occupation permit could also be changed upon application.  Theoretically, this is correct.  But on the fact, there was no application to change the user in the occupation permit and according to experts the permitted domestic plot ratio had been exceeded as result of the conversion of the covered playground to domestic user.  There is no room for any such application to be approved. 

87.Mr Chong submits that using part of a building for domestic purpose exceeding the plot ratio as shown in the design plan does not constitute contravention as there was no statutory prohibition against the use of certain parts of a building for a purpose exceeding the plot ratio.  Therefore, there is no illegality and/or unlawfulness.  With respect that submission is premised on his failure to understand what caused the plot ratio to be exceeded.  It is the unauthorized building works in erecting the external partitions, the windows on the parapet wall, the kitchen and bathrooms etc. in contravention of the various regulations under the Building Ordinance.  There are contraventions, though not illegal.  His submission is premised on his refusal to acknowledge that “unlawfulness” is a wider concept than “illegality”.  These contraventions render the use of the units unlawful.  The unlawfulness was confirmed by the Building Authority’s Superseding Notice.  The plaintiffs’ permitting or suffering these units to remain on the covered playground constituted unlawful use of the covered playground.  It is a clear breach of clause 22(i) of the DMC.

88.Lastly, Mr Chong argues that the unlawfulness involved are contraventions of the regulations under the Buildings Ordinance for which the Building Authority is the sole law enforcement authority.  Hence, the IO has no authority to enforce compliance with the regulations.  With respect, the IO is not enforcing compliance with the regulations.  The covenants in the DMC run with the land of which the plaintiffs are the current owners.  They are binding on the plaintiffs.  If they are in breach of the DMC, the IO has the right to enforce the DMC, though an indirect consequence of which is enforcement of the regulations.  The IO has the right to sue for any breach of contract to which it is a party.  It is nonsense to argue that the IO has no right to sue for breaches of the DMC simply because it amounted to an indirect enforcement of provisions under the Buildings Ordinance and Regulations.

The remedies sought

89.The IO seeks, inter alia, the following injunctive reliefs:

(i)   an injunction restraining the plaintiffs from continuing and/or allowing the unauthorized building works to be in contravention of the DMC, the Buildings Ordinance and/or Regulations and occupation permit;

(ii)   a mandatory order directing the plaintiffs to forthwith demolish the unauthorized building works and to restore the covered playground to its original state and condition as in the latest approved building plans and occupation permit; and

(iii)   an injunction to restrain the plaintiffs from attempting to lease and/or allowing the covered playground to be used for domestic purpose or purpose other than the approved non-domestic use as a playground.

90.As the plaintiffs are in breach of the DMC, the IO is entitled to such injunctive relief as would prevent continued breaches.  Furthermore, though not so pleaded, the units are causing a nuisance to the other co-owners of the Building.  They are obstructing the flow of air in the common passage and its access to natural light.  The exhaust fans are also discharging foul or obnoxious air into the common passage causing discomforts to the users of the common passage.  All unauthorized building structures constituting breaches of the Building (Planning) Regulations and Building (Construction) Regulations must be removed.  But, in my view, the injunctive relief sought by the IO is wider than necessary and has insufficient regard to the plaintiffs’ right to exclusive use of the covered playground.  What the IO is entitled is to seek removal of such of the unauthorized structures which are in contravention of the above regulations. The most obvious ones are the windows and walls on the parapet wall and the external partition.  The plaintiffs are entitled to allow the other structures and fittings to remain, if they wish, insofar as they are not involved in any contraventions of the Regulations.  Once this is complied with, there is no need for any injunction in terms of paragraph 89(i).  As the plaintiffs are entitled to apply to the Building Authority for change of user as a playground in accordance with section 52 of the Buildings Ordinance, to restrain them from using or leasing the covered playground in the terms of paragraph 89(iii) would be an unreasonable restraint on the plaintiffs’ right to enjoy their property to the extent the law allows.   Accordingly, I just make an order that the plaintiffs shall remove all unauthorized building structures in the covered playground which constitute breaches of the Building (Planning) Regulations and Building (Construction) Regulations.

91.As no evidence on damage has been adduced, I award the IO nominal damages in the sum of $10,000.  I also award costs of the counterclaim to the IO.

THE PLAINTIFFS’ CLAIM

Background

92.The plaintiffs became the registered owners of the covered playground on 11 December 2007.  It is the plaintiffs’ case that prior to completion of their purchase of the covered playground and as early as December 2007 Tong had complained to the Manager of water leakage in the three units.  The IO’s case is that it first received complaint from Tong in July 2008.

93.The plaintiffs emphasised that eight IO meetings were held between 29 July 2008 and 17 April 2009 but the complaint was not discussed.  But steps had actually been taken by the Manager in inspecting the units, seeking advice from its consultant Peter HT Cheung, of China-Tech which was the IO’s consultant in the then progressing renovation project of the Building, and obtaining quotation for repair works.  On 28 October 2008, the Manager received a quotation from Pacific Ocean (Construction) Co (“Pacific Ocean”) for re-laying the waterproof membrane on the driveway of LG3.  In my view, the absence of any mention of the complaint at the IO meetings is not evidence of negligence.  At the matter then stood, it was a routine matter within the management functions of the Manager.  It is only when the seriousness of the complaint and the cost in remedial works involved have escalated to a certain level that the complaint should be brought to the attention of the IO.  In my view, at that stage it had not.

94.Between May and June 2009, the Manager received further oral advice from its consultant, conducted further inspections at the units and invited quotations for repairs from Diploma Construction & Engineering Company Limited (“Diploma”), Pacific Ocean, Hang Fai Engineering (HK) Limited, Express Plumbing Engineering Co for repairing the surface of the driveway and grouting.  The works did not involve relaying the waterproof membrane. Diploma’s quotation was the lowest among the bidders.

95.The water leakage complaint was first discussed at the IO meeting on 12 June 2009.  At the IO meeting on 28 July 2009, the IO resolved to engage Diploma for the repair works.  On 30 July 2009, the Manager issued a purchase order to Diploma to carry out the repair works on LG3 and the covered playground.  For reasons which are in dispute, the works did not commence until November 2008.  On my finding below, the plaintiffs were responsible for the delay[17].

96.In the meantime, dissatisfied with the slow progress of their complaint, the plaintiffs sought help from Food & Environmental Hygiene Department (“FEHD”) on 12 August 2009.  

97.On 24 August 2009, FEHD conducted an investigation. It confirmed water leakage, but was unable to identify the source.  On 8 and 12 October 2009 Brightspect Limited (“Brightspect”) commissioned by FEHD and the Buildings Department conducted an investigation in LG3 and the units. Remarkably, at about the same time (but the exact time is unknown), FEHD instructed yet a second specialist contractor, Wong Kam Kau Engineering Consultant Company Limited (“WKK”) to carry out investigation at LG3 and the units.  WKK opined that the suspected cause of leakage was damage in the floor slab of LG3.  Including FEHD’s own investigation, altogether three investigations were made.  However, all these investigations were made before the First Repairs.  They confirmed the water leakage which is not in dispute but gave no clue as to the effectiveness of the repairs which is in dispute.

98.The First Repairs were executed by Diploma between 2 December 2009 and 20 January 2010.  A water test was carried out by Diploma on 22 January 2010 (the “first water test”).  About a month later, Tong complained to the Manager about water leakage.  During an inspection of the units, the Manager’s representative saw some water stain and damage to paintwork.  The complaint was also noted in the IO meetings on 2 March and 16 April 2010.  The above statement of facts is based on Cheng’s evidence which is at a slight variance with the IO’s pleading and Tong’s evidence.  Tong denied that this first water test had been carried out and asserted that water leakage was discovered about two weeks after the completion of the First Repairs. According to the further and better particulars provided by the IO, this water test was carried out in early February 2010.  In my view, Tong probably was not aware of the first test having been carried out and the IO was mistaken about the date when it was carried out.

99.Presumably as result of Tong’s complaint, Diploma conducted a second water spraying test at LG3 on 23 April 2010.  On 26 April 2010, a joint inspection by representatives of the Manager and the consultant, Diploma and Tong was carried out in the units.  Water marks were observed.  Diploma undertook to touch up the damaged paintwork in the units. 

100.According to the Manager, sometime between then and May 2010, Tong orally intimated that the plaintiffs would not allow the Manager to touch up the damaged paintwork at the ceiling or to execute further repair works and that the plaintiffs would take legal action against the IO and claim damages.  This is denied by the plaintiffs.  I shall deal with this dispute separately.

101.In June 2010, the IO’s consultant identified other water leakage locations at the light well and toilet in LG3 which required follow up works by Diploma.  This was reported at the IO meeting on 3 June 2010, including the undertaking by Diploma to do touch up works in the units after the repairs.  Quotations were invited from Diploma and other contractors.

102.On 26 July 2010, the plaintiffs’ solicitors issued a letter to the IO demanding immediate remedial action within 14 days to stop the water leakage. 

103.Quotations were received from the contractors in August 2010.  At an IO meeting on 17 August 2010, the IO resolved to engage Pacific Ocean for the repair works at LG3.  A purchase order was issued to Pacific Ocean on 30 August 2010.   

104.The Second Repair Works were carried out in the light well and toilet between November and 13 December 2010.  No works were carried out inside the units.   The parties are in dispute as to whether the plaintiffs refused to allow the contractor access to the units for the purpose of executing the repairs works.

105.On 28 April 2011, the plaintiffs issued the writ and statement of claim in this action.  The IO filed its defence on 15 June 2011.

Delay in carrying out remedial works

106.The plaintiffs alleged that they had complained to the Manager about water leakage as early as December 2007, but no remedial works were carried out until 2 December 2009.  Cheng’s evidence is that according to the record of the Manager, Tong first complained of water leakage on 4 July 2008.  I accept Cheng’s evidence which is based on contemporaneous records kept by the Manager.  The Manager responded promptly by inspecting the units, obtaining a quotation from Pacific Ocean and arranging an inspection by the consultant.  On 28 October 2008, Pacific Ocean submitted a quotation for very extensive two stage works involving removing the surface concrete of the floor slab of LG3 and relaying the waterproof membrane with epoxy mixture at the price of $218,000. Up to that stage, I do not think there was any unreasonable or undue delay. 

107.However, there was no follow up for the next six months between October 2008 and 17 April 2009.  There was a total lack of explanation for the inaction.  What transpired during that period was that the issue of the legality or lawfulness of the units was raised as evidence by a letter dated 12 November 2008 from A&D Surveyors Ltd which certified that the units were not unauthorized building works.  Probably the IO withheld action pending a determination on the legality or lawfulness of the units.

108.Progress resumed in April/May 2009 by the Manager and contractors making further inspections and inviting quotations for an alternative method of repairing the surface of LG3 and grouting.  On 30 July 2009, a purchase order to execute the works at the price of $138,000 was issued to Diploma.  Had this alternative method been considered in parallel, at least these two months could have been saved.   

109.On 12 August 2009, being frustrated with the progress, the plaintiffs sought help from FEHD. 

110.According to the IO, round about that period of time, an assistant property asset manager, Willy Poon (“Poon”), made a number of telephone calls to Tong in August 2009 to discuss about access to the units.  But it was only until 21 August 2009 that Tong consented to allow Diploma to execute works inside the units.  On the same day, the Manager confirmed by letter that the works would commence on 26 August 2009 and would take 20 days.  This is not disputed by the plaintiffs.

111.It so happened that on 24 August 2009, FEHD conducted a coloured water test and other investigations on LG3 and the units. FEHD confirmed there was water leakage but was unable to identify the cause of the leakage.  On the same day, the Manager issued a letter to the plaintiffs informing them that the repair works would commence on 26 August 2009.  But the letter was mis-addressed.  Be that as it may, there is no dispute that Tong had been informed on 24 August that the works would commence on 26 August 2009.

112.Then, according to the IO, following the investigation by FEHD on 24 August 2009, Tong suddenly informed the Manager on the following day that he was unable to arrange access.  The work arrangement was thus cancelled.  This incident was noted in the Manager’s letter to the plaintiffs dated 24 September 2009 in which the above assertions of the IO were repeated.  It was not until 6 November 2009 that Tong agreed to give access to Diploma to commence works on 19 November 2009.  The agreement was confirmed by the Manager’s letter dated 16 November 2009.  The plaintiffs deposited the keys to the units with the Manager for the purpose of accessing the units.  The repair works were carried out from 2 December 2009 to 20 January 2010.

113.While admitting that he was informed that the repair works would commence on 26 August 2009, Tong said that he did not know why the works were not commenced on that day.  He said that the units were vacant by October 2009 and he had deposited the keys of the units with the Manager.  He said that there was no conceivable reason why the plaintiffs would not allow access to the units for the purpose of executing works to their benefit.  On the face, that is a very strong argument.

114.However, in the face of the contemporaneous documentary evidence, I have no reason not to believe the IO’s evidence.  I can only conclude that for some inexplicable reasons or undisclosed reasons, the plaintiffs refused access.  These reasons include, possibly, that the units were not in fact vacant and Tong was not telling the whole truth; or that the plaintiffs were stalling for time pending the outcome of FEHD’s investigation; or they wished to preserve evidence of the damage for the purpose of an intended action.  In fact, as the evidence unfold, Tong adopted a litigious and confrontational attitude and indulged in the belief that it would be in the plaintiffs’ interest to preserve the evidence of water leakage for the purpose of supporting their claim for damages.  Tong might entertain the belief that the plaintiffs have a good case as they must have known that the FEHD’s investigation revealed water leakage.  I do not have to speculate what those reasons were.  Suffice it is to say, I formed an unfavourable view of Tong’s credibility and do not accept his evidence.  I accept the IO’s evidence that Tong withdrew consent for access to the units.    While there is no dispute that Tong had deposited the keys of the units with the Manager, he was probably mistaken as to when he had deposited the keys or he deliberately lied.  I find that he only deposited the keys with the Manager in November 2009 and not October 2009.  In conclusion, I find that the plaintiffs were responsible for the four months’ delay between August and November 2009.

115.The First Repairs were completed on 22 January 2010.  The repairs were apparently ineffective as Tong complained about leakage on 2 March and 16 April 2010.  A water test was conducted on 23 April 2010 during which leakage was found in the units.  On 26 April 2010, at a meeting among the representatives of the consultant, the manager and Diploma and Tong, the consultant’s representative advised further repair works to be carried out near the toilet and light well at LG3.  Diploma undertook to touch up the damaged paintwork in Unit B. 

116.However, according to Cheng, in about May 2010, Tong informed another assistant property asset manager, Chan Hing Leung (“Chan”), that the plaintiffs would not permit the IO to enter the units for executing further repairs because they would be commencing legal action against the IO and seeking damages. Repeated requests for access to the units for repairs were refused by the plaintiffs.   Though Chan was not called to testify, Cheng’s evidence is supported by contemporaneous documentary evidence from the Manager, the consultant and Diploma.

117.By a letter to the IO dated 2 June 2010, the consultant informed the IO that Diploma had undertaken to make good the damaged paintwork in Unit B.  Diploma’s internal record showed that on 15 May 2010 Diploma had requested Chan by telephone to arrange for access to the unit for doing touch up works but Chan replied that the owners of the unit refused access as they were contemplating legal action against the IO.  The record also showed further follow up requests were made on 18 May and 28 June 2010.  The authenticity of these documents are not disputed.  Diploma is an independent and disinterested party.  There is no reason not to give weight to its records.  The touch up work was to be executed at no costs to the IO as it was accepted by Diploma to be part of its outstanding obligation under the First Works.  The touch up work would also ease the plaintiffs’ grievance.  Diploma’s record showed that it had repeatedly chased Chan for the access arrangement. There was no reason why Chan would not have liaised with the plaintiffs to arrange for access for doing the touch up works.  I consider Tong’s denial were just bare assertions.

118.On about 4 August 2010, the IO received a letter from the plaintiffs’ then solicitors, Messrs Oliver C.M. Chan & Co (“Chan & Co”), demanding repairs to be carried out within 14 days, failing which the plaintiffs will seek an injunction from the court and claim damages. At around the same time, the Manager had invited quotations in July 2010 for the Second Repairs.  On 17 August 2010, the IO approved awarding the contract for the Second Repairs to Pacific Ocean.

119.Tong denied there was any offer to execute any works within the units after the First Repairs.  The plaintiffs’ frustration could be well understood.  It is inexplicable why Tong would have refused to allow access to execute works for the benefit of the units.  According to Cheng, the reason given by Tong was that the plaintiffs were going to sue the IO and wished to preserve the evidence for their damages claim.  Indeed, after this litigation commenced, the plaintiffs adopted a more confrontational and uncooperative stance by refusing to allow the IO’s presence when the parties’ joint expert inspected the units.  Life is not logic but experience.  A person may behave unreasonably in frustration.  He may act under a misconception or may be ill-advised and over-confident in his position.  I accept Cheng’s evidence which is supported by contemporaneous documentary evidence from different sources.  I find that the plaintiffs  refused access to the units for carrying out touch up works.

120.The plaintiffs first lodged their complaint on 4 July 2008.  The Second Repairs were completed on 13 December 2010.  The repairs took 17 months.  Mr Cheung argues that water leakage in old buildings is a notoriously difficult problem and that the FEHD took a year and failed to identify the source of the leakage.  I do not regard that as an indication of what is a reasonable time for an incorporated owner which was under a contractual duty to carry out repairs.  I accept that water leakage is a notoriously difficult problem.  The source and path of the leakage is difficult and sometimes impossible to identify.  The floor slab is made of concrete which is a mass of porous material containing numerous pores through which water travels with miraculous ease by capillary action.  That is why concreting includes a vibrating process to remove air bubbles and holes so as to make the concrete more compact.  The denser is the mass, the less permeable it is to water.  But, as the slab ages, concrete is lost, being carried away by water leakage. The source of leakage and the point of leakage may be tens of feet apart. Water tests may narrow down the area of leakage, but may not always identify the path of leakage.  As in the present case, it did not yield positive results. I would not consider the failure to stop the leakage by the First Repairs necessarily evidence of negligence or breach of duty.  I consider the IO is responsible for its failure to make the primary decision of whether to use epoxy method or grouting method which occasioned at least two months’ delay. It is also responsible for the inexplicable six months’ delay presumably in investigating the legality or lawfulness of the units.  The other delays were caused by the plaintiffs’ uncooperative attitude in refusing access for Diploma to carry out repair works.  Given the usual difficulties associated with water leakage, had the IO proceeded with works regularly, I think the repairs could have been completed within nine months.  There was a total delay of eight months.

Duty of care

121.The IO accepts that the driveway in LG3 immediately above the covered playground forms part of the common area of the Building and that it is under a duty of care to maintain the driveway.  The duty of care is imposed under section 18(1) of the BMO.  The section provides:

“ (1)   The corporation shall –

(a)   maintain the common parts and the property of the corporation in a state of good and serviceable repair and clean condition;

(b)   …

(c)   do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant (if any) for the control, management and administration of the building.”

122.Despite the use of the imperative word ‘shall’ in the section, the duty is not a strict or an absolute one.  The section only imposes a mandatory and statutory duty upon the IO to maintain the driveway in “a state of good and serviceable repair”.  The nature of the management’s duty has been considered in a number of cases over the years and is conveniently encapsulated in the Court of Appeal’s decision in Lo Yuk Chu v Hang Yick Properties Management Ltd[18] and Lau Chun Wing Rod v The Incorporated Owners of Po On Building[19] cited by Mr Chong.  Both of these cases were concerned with construction of section 18(1) and similar provisions in the deed of mutual covenant.  In Lo Yuk Chu,Power Acting CJ rejected the argument that the manager was under an absolute duty to maintain the common part and held that the overall duty imposed on the incorporated owners of a building by the deed of mutual covenant is one of proper management, which entails doing all that is reasonably required of a manager in the circumstances.  In Lau Chun Wing Rod, Rogers VP held that section 18(1) does not provide an insurance to the extent that if some part of the building becomes in disrepair the incorporated owners automatically and necessarily become liable.  Liability may arise if there is fault or if, having been made aware of a defect which requires remedy, the incorporated owners fail to take appropriate steps. 

Standard of care

123.The real dispute between the parties is about the standard of care required to discharge that duty of proper management.  The plaintiffs’ argument is that there is only one standard applicable to the entire Building, ie it is same for the covered playground as it is for the residential units.  Relying on Lo Yuk Chuand Lau Chun Wing Road, Mr Chong submits that it is the duty of the IO to carry out proper management of the Building which denotes that the same must be reasonably required of a manager in the circumstances of the case and this would necessarily include taking proper actions if there was any indication of malfunction and to act expeditiously. Hence, he argues that it is difficult to see how the IO as owner of the driveway in LG3 and as the IO could escape liability for the water leakage which persisted for 11 years since 2007. 

124.Mr Chong’s argument is premised on the proposition that the IO owed the plaintiffs the same duty of care and standard of care as that owed to owners of the residential units.  With respect, there is no basis for that proposition.  The IO’s duty of care and standard of care are governed by the DMC.  The developer as the first owners and the first two buyers entered into the DMC on the terms as set out in the DMC.  Those terms are benefits and burdens which run with the land.  They are binding on the subsequent owners and the IO which represents them.  The rights and obligations of the parties to the DMC must be those as expressed in the DMC and those which may reasonably be inferred or implied by reason of the then factual circumstances.  In the absence of express provision on the standard of care applicable to the covered playground, it is open to the court to imply such standard which is reasonable in the circumstances.  In Caparo Industries Plc v Dickman and Others[20], the House of Lords held that the duty of care to be created must be fair, just and reasonable.  The underlying principle is to avoid putting a defendant to an indeterminate amount and indeterminate class of liability.  The same principle is applicable in implying the standard of care.  Any duty of care and standard of care to be implied on the IO in favour of a particular owner or group of owners must also be fair, just and reasonable.  To require the IO to comply with a higher standard of care which was not anticipated by the parties to the DMC at the time it was entered into would be manifestly unfair, unjust and unreasonable.  This would be all the more so if the IO is to be put under a heightened standard in favour of one of the owners who converted his unit into a more delicate user not anticipated in the DMC, especially if such user is unlawful.  Were it otherwise, the IO’s duty and liability would be precarious, indeterminate and even unlimited.  Ultimately, standard of care is translated into costs.  it would be manifestly unjust to the IO and to its members if the IO is to be put to additional costs to discharge a heightened standard in favour of one of its members which was not anticipated at the time of making of the DMC and which would otherwise be unnecessary had that member not been in breach of the DMC.  Accordingly, I hold as a matter of law that the standard of care required of the IO is such standard as was prevailing at the time of entry into the DMC. 

125.The IO’s argument is that proper management entails, as was held in Lo Yuk Chu, doing all that is reasonably required of a manager in the circumstances.  As I have said, the standard of care depends on what the DMC and the circumstances required.  A duty of care is not imposed in vacuo.  The duty must be fair, just and reasonable in the circumstances. The standard required to discharge that duty must all depend on all the circumstances.  Invariably more cost is required to discharge a higher standard of care.  A balance has to be struck between what the circumstances reasonably requires.  The standard to be discharged in an intensive care unit of a hospital must be higher than that required in an open ward.  Even where life and limb are in issue, it does not justify incurring excessive cost in making an open ward as safe as an intensive care unit just to cater for a risk which is extremely unlikely to occur in an open ward.  It is all a matter of balancing.  Likewise, the standard to be discharged in relation to a domestic unit must be higher than that in relation to a semi open space.  Lo Yuk Chu, Lau Chun Wingand all the authorities relied on by the plaintiffs on water leakage are about leakage from the roof into the residential unit below.  These authorities are clearly distinguishable on this basis from the present situation where the leakage occurred from a semi-open driveway into the premises below which were converted from what was originally planned and constructed as a semi-open covered playground.  This is a unique feature in this case. 

126.The standard of care required to discharge the duty of care must be that which is appropriate to the design, construction and the intended user of the covered playground and LG3.  The Building was planned and constructed according to the approved building plans.  Samson Wong retrieved the approved plans from the Buildings Department.  He noted from the plans that the three lower ground floors, including LG3, were originally designed as carparks with cement screed finish.  The floors are semi-open, being surrounded on three sides by walls and the slope against which and on which the Building was built.  The northern side is open with a parapet wall of 1.1 meters high and a surface channel running alongside the parapet wall.  The surface channel was constructed to divert rain water into drainage outlets for discharging the water to the drainage pipes.  The three floors were designed and constructed as covered carpark open to the open air and were designed to be vulnerable to weather condition.  The Playground Floor was situated under LG3. It was designed, constructed and intended for use as a playground floor and approved for non-domestic use, ie not for human habitation.  It was similarly designed and constructed to be open to the open air and vulnerable to weather condition.  Given the design and intended use of LG3, the possible causes for accumulation of water on the floor slab of LG3 which caused the leakage are: rain water from the opening above the parapet wall, water carried by wheels of cars driving onto the driveway and the carpark, water left behind by car owners when washing their cars and water left behind by cleaners after washing the driveway.  This is the nature of risk which the Manager has to guard against.

127.According to Samson Wong’s expert opinion, as is common to buildings of a similar age and design, LG3 being a covered car park was not designed and constructed with heavy waterproofing material to prevent water penetration to the floor below, which was designed and constructed as a semi-open covered playground for non-domestic use.  Samson Wong also pledged his expertise as a building surveyor for decades, that he had not observed any heavy duty waterproofing design being adopted for a covered carpark, in particular when the floor below was an open area like the Playground Floor.  His opinion is based on the approved building plans which was not challenged by James Law. I accept his evidence.  

128.In my view, in the circumstances of this case, the standard of care is discharged if the driveway is maintained in such a way that the covered playground below may be used and enjoyed for the intended use as a covered playground.  On the basis of Samson Wong’s evidence, given the design, construction and intended user of LG3 and the Playground Floor, some minor leakage or seepage is expected or permitted, so long as it does not affect the proper enjoyment of the covered playground as a playground and that the risk of leakage which I mentioned above is adequately guarded against.  Thus, if the leakage or seepage only resulted in dampness on the underside of the floor slab of LG3, ie the ceiling of the covered playground, on occasions of heavy rainstorm or typhoon which would be evaporated or carried away by the ventilation or flow of air under the original design of the Building such that the enjoyment of the covered playground as a playground is not affected or would not be affected, the duty of proper maintenance is discharged.  The IO is not required to discharge the higher standard required to enable the covered playground to be used for domestic purpose.  There is no duty on the IO to ensure that the driveway on LG3 is maintained in such a condition as to enable the covered playground below to be fit for human habitation.  To maintain that higher standard, the IO would have to be put to tremendous expenses in upgrading the floor slab with heavy duty waterproofing material and/or installing rain curtains in the open space above the parapet wall and engage staff in operating them.  I am unable to read into clause 18 an absolute duty on the part of the IO of ensuring no leakage of water from the driveway in LG3 into the covered playground below.

129.Even though it is the plaintiffs’ case that the units were not intended to be used or were not actually used for habitation, the construction of the units was such that they create the same effect on the units as if they were actually used for domestic purpose.   This cannot be a reason to cast on the IO an obligation to discharge its duty of care to a much higher standard at a much greater cost.

FEHD’s investigation: September 2009

130.In its letter dated 21 September 2009, FEHD informed Tong that the department had conducted a coloured water test on the drainage pipes in the Building on 24 August 2009 but was unable to find out the cause of leakage.  Apart from the fact that this investigation was of a very limited scope, it was conducted before the First Repairs.  There were no details about the investigation.  No reliance could be placed on this letter.

The WKK investigation: January 2010

131.FEHD also commissioned WKK to conduct investigation of the leakage.  In two separate letters dated 21 January 2010, the same officer informed Tong that both Brighspect and WKK suspected that the leakage was caused by damage to the floor slab on the driveway of LG3.  No report from WKK was produced.  It is not known when WKK conducted the investigation.  The investigation could not have been carried out after the date of the letter, ie 21 January 2010.  It must have been completed before the completion of the First Repairs on 20 January 2010, not to mention the final Second Repairs in December 2010.  For the same reason, the WKK investigation only confirmed the leakage but not whether the First Repairs were effective.  It has no probative value.

Brighspect report: October 2009

132.Brighspect was the expert commissioned by the FEHD to investigate the water leakage problem in the covered playground.  The inspection and water tests were conducted on 8 and 12 October 2009.  The report was dated 8 January 2010.  As I have noted, as the investigations were conducted well before commencement of the First Repairs, the usefulness of this report is very much limited.  It merely confirms the fact of leakage and water infiltration from the floor slab of LG3 which were not in dispute.  It ruled out leakage from drainage pipe as unlikely. 

133.Apart from the above observation which limited the usefulness of the report, the report itself is a mess of confusion.  It contains handwritten alterations which do not make sense.  In Section D at page 11 of the report, the date on which the test was conducted was originally type-written as “2/7/2009” which was before Brighspect was commissioned.  It was then deleted and substituted by a handwritten date of “24/8/2009”.  That date predated the date of receipt of the works order as recorded on page 7 of the report and the dates of inspection as noted on paragraph 1.3 on page 5 of the report.  That date was then overwritten by yet another date of “24/10/2009”. This date was 12 days after the last date of inspection as noted on page 5 of the report.  As if the confusion was not enough, a further date with a cross was handwritten next and below it, “X 20/1/2010”.  That was 16 days after the date of the report as shown in page 6 of the report.  The maker of the report was not called to clarify these ridiculous inconsistencies.  What reliance can this court place on a report apparently prepared with such an irresponsible attitude?

134.Annex I of the report reported the result of a coloured water test.  The floor of the driveway of LG3 was flooded with colour dye water to a depth of 10 mm for 1.5 hours.  Seepage of colour dye water was observed in the units below.  The writer then concluded there was infiltration from the floor slab.  That was a perfectly reasonable conclusion.  But, as I have said, water seepage was not in dispute even in the absence of this report. Though the plaintiffs sang and danced on the Brighspect report, that report served no purpose than confirming what was not in dispute before the repairs commenced.  It is no evidence that the First Repairs and the Second Repairs completed in December 2010 were not effective or sufficient in discharging the IO’s duty of care.

Joint expert report (the “IREC report”): June 2015

135.Nigel Ko of Infrared Engineering & Consultants Ltd (“IREC”) was appointed as the parties’ single joint expert to prepare an infrared thermographic survey report on the sources and paths of water leakage to the ceiling of the units.  The test was conducted on 30 June 2015.  That was four and half years after the completion of the Second Repairs. That limits the usefulness of this report as evidence of inadequacy of the repair works and as evidence of IO’s breach of duty, which, of course, was not the purpose of the report.

136.A water spraying test was conducted on the driveway in LG3 immediately above the covered playground.  There was no rain 48 hours prior to the test.  The test was conducted in the presence of the parties’ expert, James Law and Samson Wong.  Water was sprayed using a garden hose at a pressure of 25 pounds per square inch on the driveway continuously for one minute for “2 metre long the perimeter of the test area and wall and floor joint length” (whatever that means) and with the floor being maintained completely wet for one hour.  That pressure was equivalent to the pressure of the tyre of a small passenger vehicle.  Moisture content and infrared thermographic measurements of the ceiling were taken one hour and five hours after the water spray.  Nigel Ko noted water dripping on the ceiling of Unit B.  He confirmed that there was leakage on the floor slab of the driveway but was unable to identify a significant leakage path.  He found significant “moisture/water trapping” content in the ceiling, blistering, spalling and peeled-off paintwork on the ceiling.  There is no evidence what “moisture/water trapping” means, but he observed no leakage other than the dripping.  His conclusion at paragraph 6 of the report is as follows:

“ In accordance with the water dripping, seepage and cooler thermal anomalies found on the ceiling of Covered Playground immediately after water spraying test, the source of water leakage is likely from the Test Area on the LG3.  However, no significant leakage path was shown up in the thermographic survey.”

137.James Law repeated the observations and findings in the IREC report.  He high-lighted the finding of ponding on the driveway in LG3 which corresponded to the area of seepage or dripping in the units.  He amplified the damage which would be caused by the leakage in course of time. In short, he simply adopted the IREC report.  I can derive little assistance from his opinion on how to interpret the IREC report for the purpose of determining adequacy of the First and Second Repairs and the IO’s breach of duty.

138.Samson Wong took a more analytical approach.  He did not challenge the finding of the IREC report, but sought to explain the phenomena observed in the report and postulate what the situation would be had the covered playground remained as a semi-open covered playground.  Having reached the conclusion that as a matter of law the standard of care depends on the lawful user of the premises and the nature of risk which the IO has to guard against, I consider it permissible for Samson Wong to adopt such approach in interpreting the IREC report.

139.Samson Wong drew my attention to the fact that the water spraying test was conducted with a water pressure of 25 psi.  He opined that the impact caused by the spraying test was much more rigorous than that caused by normal use, including regular cleaning, water brought onto the driveway by private cars and the effect of rainstorm and typhoon to the driveway which was vulnerable to weather condition.  

140.A water pressure of 25 psi is a great pressure. It is equivalent to the tire pressure of a small passenger car.  It is an unusually high pressure to be applied to the floor surface under normal weather condition, particularly in a semi-open carpark.  The water spraying test was intended to bring about a quick result which might otherwise take a much longer time to develop under normal usage situation.  There is no evidence what sort of situation would be simulated by a one-minute direct hit and one-hour flooding.  There is no evidence what the pressure of a heavy rainstorm is. From what one may feel from a garden water hose used to generate the pressure for the test and what one experiences in a heavy rainstorm, it would not be a wrong guess to say that the water pressure from a rainstorm or typhoon is considerably lower than 25 psi.  The severity of the impact caused by rainstorm or typhoon to the driveway in LG3 would be significantly less by reason of the design of the carparks and the fact that the carparks are essentially covered above.  Rainwater could only come in through the opening above the parapet wall at an angle which would be significantly less in terms of volume and force than a direct hit on a roof or an external wall.  The finding of dripping during the test is no evidence that there will be dripping under normal heavy rainstorm and typhoon situations.

141.In this regard, it should be noted that the Brighspect report showed that there was only water seepage but no dripping during the coloured water test performed in 2009.  The coloured water test engaged flooding the floor to a level of 10 mm for 1.5 hours.  That test was less invasive and would more or less simulate the situation created by a heavy rainstorm. Accordingly, I would not jump to the conclusion that the dripping is conclusive evidence of breach of duty. 

142.The evidence of dripping is not to be ignored.  Nigel Ko was unable to identify the leakage path by his thermographic technique, I think it would not be wrong to assume if water dripping is immediately observed during the test, there was some latent defect in the floor slab of LG3.  But that is not conclusive evidence of breach of duty of care in properly maintaining the driveway.  If the dripping is found in the domestic premises below, one may confidently conclude there was a breach of duty to maintain.  But the premises in question is a semi-open playground.  The question of whether the duty of care to maintain has been discharged remains an open question.  That question can only be answered by considering what was the standard of care required in the circumstances, including the design, construction and intended use of LG3 and the covered playground, the risk which the Manager has to guard against in the circumstances and the actual use to which the covered playground was put.  The plaintiffs bear the burden of proof.  These issues will be explored below.

Appropriateness of the repair works : breach of duty of care

143.Mr Chong attacked the repairs works on two fronts.  First, he argues that the epoxy method instead of grouting should have been used.  In reply Mr Cheung argues that the IO acted on the consultant’s advice in deciding to use the grouting method and that there was no expert evidence from the plaintiffs that epoxy method should be preferred.  Mr Chong argues that as the consultant was not called to testify, the court should draw adverse inference against the IO’s defence that all reasonable steps have been taken in deciding the appropriate remedial works.  Despite that the consultant was not called to testify, there was evidence from Samson Wong about the pros and cons of the two methods.  In essence, his opinion is that because of the vibration caused by the motor cars, there is a higher risk of cracks on the waterproof membrane and therefore higher risk of water leakage.  The other factors were costs and inconvenience.  The entire carpark had to be closed for a significant period for removing the concrete surface and resurfacing.  As against those consideration, the grouting method was simpler, cheaper and would cause less inconvenience.  There was indeed no expert evidence from the plaintiffs to contradict Samson Wong’s opinion.  If both methods may be effective and neither one is demonstrably better than the other, the choice was a management function for the IO.  Given my finding that the standard of care was not onerous, the IO’s choice could not be criticised.

144.The second front is in fact the critical issue. Were the repairs effective?  Before proceeding to answer this question, it must be remembered that the burden of proof is on the plaintiffs, that the standard of care required of the IO is to guard against the risk of leakage caused by normal use of the driveway to the covered playground in connection with its permitted or lawful user, and the actual use to which the covered playground was put.  The only evidence relied on by the plaintiffs is dripping of water and seepage in the IREC report in 2015 and the seepage in the Brighspect report, the WKK investigation and the FEHD investigations in 2010.

145.All that the Brighspect report, the WKK investigation and the FEHD investigation proved was leakage before the First Repairs and Second Repairs were carried out.  The effectiveness of those repairs was not tested.  The issues are whether the leakage is evidence of IO’s breach of duty to maintain the driveway on LG3 and whether the IO was in breach of its duty to carry out prompt repairs.  I have already found in favour of the plaintiffs in respect of the second issue.  The remaining issue is whether the leakage is evidence of IO’s breach of duty to maintain the driveway.

146.On the first issue, as I have found given the design, construction and intended use of LG3 and the covered playground, some seepage is expected.  The IO would have discharged its duty of care if such seepage does not affect the enjoyment of the covered playground as a covered playground.  In other words, provided there is no water dripping and the dampness of the seepage is cleared away by evaporation or the ventilation such that it does not affect the enjoyment of the covered playground as a covered playground, there is no breach of duty. 

147.While leakage and damage to the paintwork on the ceiling of the units is not disputed, Samson Wong has a theory to explain the phenomena which vindicates the IO.  He said that the covered playground was converted into three enclosed and self-contained units.  The covered playground was thus effectively converted into an air-tight chamber.  This is particularly so when the units were kept vacant with windows and doors closed because there was no ventilation.  Any moisture or water which seeped through the floor slab and which would otherwise have been evaporated and carried away by the open air would accumulate and cause damage.  Had the units been actually occupied, the windows would have been opened or air conditioners would have been turned on, the moisture would have been removed and would not have accumulated and caused damage.  I agree with his opinion which accords with common sense.  I should add a further common sense observation.  The emulsion paint and tiles on the ceiling and walls would prevent or obstruct the water moisture in the concrete slab from escaping into the open air.  The moisture would accumulate and cause more damage to the concrete and paintwork.  That probably explains why the underside of flyovers had naked cement finish.

148.It is not known what the situation would be had the covered playground remained as a semi-open covered playground.  The plaintiffs’ expert has not postulated what that situation would be.  Common sense suggests that it would be all the easier for the moisture to escape.  Under the approved plan, the Playground Floor was fully open on the long northern side, which is three or four times the length of the eastern and western sides.  There is an exit at the east end which opens to Shing Wong Street and a staircase at the west end leading to LG3 above.  There would be good ventilation.  I accept Samson Wong’s opinion but would not go that far as to say that the leakage has totally stopped.  Even though there was seepage of water through the floor slab of LG3, probably it would not affect the enjoyment of the covered playground as a covered playground.  The burden of proof is on the plaintiffs to show that their lawful enjoyment of the covered playground as a covered playground was adversely affected.  The situation now created by the plaintiffs is that of an air-tight chamber.  There is no evidence what the situation would be had the playground not been converted to the units which remained unoccupied for four and half years.  The plaintiffs have failed to prove the IO was in breach of duty even before the First Repairs were carried out.   But prudence would require preventive maintenance to be carried out to minimise the loss of concrete in the floor slab of LG3 caused by the leakage.  But there is no evidence that failure to carry out such preventive maintenance affected enjoyment of the covered playground as a covered playground. 

149.The plaintiffs also rely on the IREC report.  The condition of the units had deteriorated.  As confirmed by Samson Wong there were water stains, peeled-off paintwork and spalled concrete at the ceiling soffit in the units.  He observed serious rising damp on the floor of Unit A and old mould growing on the walls of the units at skirting level.  That was the condition four and half years after the Second Repairs.  I accept Samson Wong’s opinion that the damage was caused and aggravated by the air-tight chamber effect during for all these four and half years.  Moisture coming from the floor slab of the driveway in LG3 could not escape into the open air.  The moisture would condense and cause more damage to the concrete.

150.Mr Chong argues that even if the plaintiffs had denied access to the units to carry out works, the works covered by the Second Works were at the toilet and light well of LG3 and no works were to executed inside the units.  Be that as it may, those were the areas identified by the consultants as requiring remedial works.  The works had been carried out.  As I have said, the floor slab is a large mass of porous matter.  Water could enter at any weak point and travel inside the pores of the mass and exit at any weak points below.  Having carried out works near the toilet and the light well, no leakage was detected in the common passage.  If those were the only significant damaged surface left after the First Repairs which allowed water to infiltrate into the floor slab, the leakage to the covered playground would be stopped or significantly reduced.  There is no evidence one way or the other for the plaintiffs had kept the units closed to the IO for four and half years for the purpose of preserving the evidence.  No test was carried out immediately or shortly after the Second Repairs.  The plaintiffs might have thought the FEHD investigation, the WKK investigation and the Brighspect report are evidence of IO’s breach of duty.  Unfortunately, as I have stressed time and again, they are evidence of leakage before the repairs which is not in dispute.  As I have explained in paragraph 149, given the rather low standard of care required of the IO and the air-tight chamber effect caused by the conversion of the covered playground into the units, leakage as such is not evidence of breach of duty. The plaintiffs have simply failed to discharge their burden of proving breach of duty.

151.Mr Chong emphasises the fact that none of the works under the Second Repairs were to be carried out inside the units.  That is a non-issue.  To prevent leakage, the works have to be done on the surface of the floor slab in LG3 and not below.  That had been done with completion of the Second Repairs.  The works to be done inside the units were just cosmetic. In any event, Diploma had time and again offered to carry out the touch up works, but Tong refused access.  

152.In conclusion, there is absolutely no evidence from the plaintiff of any leakage after the Second Repairs were completed.  The plaintiffs did not allow the IO access to the units and never conducted by water tests other than the one by IREC four and half years later.  I have ruled out the dripping of water as evidence of breach of duty because the unusually high pressure spray is not the kind of situation which the floor slab was required or designed to withstand and not the risk which the IO has a duty to guard against.  The only remaining evidence is leakage.  As I have found, given the unlawful conversion and the non-permitted use of the covered playground, the plaintiffs have failed to prove the leakage before the First Repairs was the result of the IO’s breach of duty.  A fortiori, after the completion of the Second Repairs, the leakage must have been significantly reduced.  Even though this is only a common sense deduction, the fact remains that there is no evidence what the situation would be had the covered playground not been converted into an air-tight chamber and kept closed for four and half years. The plaintiffs bear the burden of proof and they have totally failed to discharge the burden of proof of the IO’s breach of duty to properly maintain the driveway of LG3.  As the plaintiffs failed to discharge the burden of proof, the IO’s delay in taking action becomes a non-issue.

Nuisance

153.A second cause of action pleaded by the plaintiffs is nuisance.  Mr Chong submits that the continuation of water leakage from the driveway of LG3 into the units constitute nuisance under common law.  The IO as owner and occupier of the driveway is therefore liable irrespective of the statutory duty under the BMO.  He relies on the following dicta of Lord Wright in Sedleigh-Denfield v O’Callaghan[21]:

“ Though the rule has not been laid down by this House, it has I think been rightly established in the Court of Appeal that an occupier is not prima facie responsible for a nuisance created without his knowledge and consent.  If he is to be liable a further condition is necessary, namely, that he had knowledge or means of knowledge, that he knew or should have known of the nuisance in time to correct it and obviate its mischievous effects.  The liability for nuisance is not, at least in modern law, a strict or absolute liability.  If the defendant by himself or those for whom he is responsible has created what constitutes a nuisance and if it causes damage, the difficulty now being considered does not arise.  But he may have taken over the nuisance, ready made as it were, when he acquired the property, or the nuisance may be due to a latent defect or to the act of a trespasser, or stranger.  Then he is not liable unless he continued or adopted the nuisance, or, more accurately, did not without undue delay remedy it when he became aware of it, or with ordinary and reasonable care should have become aware of it. This rule seems to be in accordance with good sense and convenience.  The responsibility which attaches to the occupier because he has possession and control of the property cannot logically be limited to the mere creation of the nuisance.  It should extend to his conduct if, with knowledge, he leaves the nuisance on his land.  The same is true if the nuisance was such that with ordinary care in the management of his property he should have realized the risk of its existence.  The principle was affirmed in Barker v Herbet [1911] 2 KB 633 … if the defendant did not create the nuisance he must, if he is to be held responsible, have continued it, which I think means simply neglected to remedy it when he became or should have become aware of it …”    (Emphasis underlined by Mr Chong)

He further submits that as Mr Cheung has not made any submission on nuisance, the plaintiffs are entitled to judgment.

154.Presumably, Mr Chong quoted the above dicta in support of his argument that despite the IO was not the creator of the nuisance, it is liable in the tort of nuisance because it has knowledge of the nuisance, adopted the nuisance and did nothing to remove it.  The above dicta are only a specific application of the principle of nuisance.  What Mr Chong did not address was the principle of the law of nuisance.  

155.Private nuisance is basically unlawful interference with a person’s use or enjoyment of land, or some right over, or in connection with it.  Generally, the essence of a nuisance is a state of affairs that is either continuous or recurrent, a condition or activity which unduly interferes with the use or enjoyment of land.  As Lord Wright put it in Sedleigh-Denfield v O’Callaghan, the whole of the law of private nuisance represents an attempt to preserve a balance between two conflicting interests, that of one occupier in using his land as he thinks fit, and that of his neighbour in the quiet enjoyment of his land.  His Lordship said[22]:

“ A balance has to be maintained between the right of the occupier to do what he likes with his own, and the right of his neighbour not to be interfered with.  It is impossible to give any precise or universal formula, but it may broadly be said that a useful test is perhaps what is reasonable according to the ordinary usages of mankind living in society, or more correctly in a particular society.  The forms which nuisance may take are protean.”

156.The plaintiffs would have to pass the above test before they may rely on the dicta quoted by Mr Chong.  The test is one of reasonableness.  This brings the parties back to the and the factual background.  The factual background includes the approved plan, the design, construction and intended use of the driveway in LG3 and the covered playground below.  On these facts, nuisance overlaps with negligence.   How the balance is drawn between the IO’s use of the driveway and the plaintiffs’ right to enjoy the covered playground below very much depends on what is the permitted or lawful use of the driveway and the playground.  The driveway was built on LG3 which is a semi-open floor vulnerable to weather condition.  Because of the design, rain water is expected to remain for some time on occasions of rainstorm or typhoon.  Water may also be carried onto the driveway by wheels of the cars.  Water may also be left on the driveway by owners washing their cars and by cleaners cleaning the driveway.  Because the driveway was not built with heavy duty waterproofing material, some water may permeate into the floor slab and be carried away by the ventilation in the Playground Floor below, which was designed, constructed and intended to be used as a semi-open space.  This was the state of affairs which the floor slab of LG3 and the Playground Floor were designed and constructed to meet so that the covered playground could be enjoyed as a covered playground.  That is the balance to be maintained.

157.On the fact, it was the plaintiffs’ predecessor-in-title who upset this balance by converting the covered playground for non-domestic use into the units for domestic use.  That amounted to a non-permitted use of the covered playground.  As Samson Wong testified, the covered playground was converted into an air-tight chamber which has the effect of preventing water to escape from the floor slab in the form of moisture and which caused the damage.  Is the IO required to re-adjust the balance and thereby put under an additional duty to upgrade the waterproofing standard of the floor slab or taking steps to prevent the ingress of rain water during occasions of rain, rainstorm or typhoon, by installing rain curtains and employing staff to close the curtains whenever there is rain? 

158.The answer must be an emphatic ‘no’.   In considering what is reasonable, the law does not take into account abnormal sensitivity in either persons or property.  In Robinson v Kilvert[23], the claimant occupied the upper part of a house and the defendant occupied the lower part.  Then the defendant began to manufacture paper-boxes in the cellar of the house. As the manufacturing process required hot and dry air, the defendant heated up the cellar.  This raised the temperature on the claimant’s floor which dried and diminished the value of brown paper warehoused by the claimant there.  But it did not inconvenience the claimant’s workmen nor would it have injured paper generally.  In dismissing the plaintiff’s claim, Lopes LJ said[24]:

“ A man who carries on an exceptionally delicate trade cannot complain because it is injured by his neighbour doing something lawful on his property, if it is something which would not injure anything but an exceptionally delicate trade.”

In Robinson v Kilvert, both the claimant and the defendant were conducting normal business in the house.  There was no issue of unlawful conversion of the user of the house.  Yet, the Court of Appeal held that abnormal sensitivity is not a matter to be taken into account by the law of nuisance.  A fortiori, in the present case, the abnormal sensitivity is created by the plaintiffs’ unlawful user. 

159.The Privy Council case of Eastern and South African Telegraph Co v Cape Town Tramways Companies Limited[25] is precisely on the point.  In that case, the appellant claimed damages in nuisance for disturbances in the working of their submarine cable and sensitive instrument caused by an escape of electricity stored by the respondents for the due working of their tramway system.  The Privy Council heldthat a man cannot increase the liabilities of his neighbour by applying his own property to special uses, whether for business or pleasure:

“ The true comparison is with things used in the ordinary enjoyment of property, and this instrument differs from such things in its peculiar liability to be affected by even minute currents of electricity. Now, having regard to the assumptions of the appellants' argument, it seems necessary to point out that the appellants, as licensees to lay their cable in the sea and as owners of the premises in Cape Town where the signals are received, cannot claim higher privileges than other owners of land, and cannot create for themselves, by reason of the peculiarity of their trade apparatus, a higher right to limit the operations of their neighbours than belongs to ordinary owners of land who do not trade with telegraphic cables. If the apparatus of such concerns requires special protection against the operations of their neighbours, that must be found in legislation; the remedy at present invoked is an appeal to a common law principle which applies to much more usual and less special conditions. A man cannot increase the liabilities of his neighbour by applying his own property to special uses, whether for business or pleasure.”   (My emphasis high-lighted in italics)

160.Apart from the issue of conversion and unlawful user, the present case is on all fours with Eastern and South African Telegraph Co.  The use of the covered playground as a covered playground is the normal use.  Its conversion into the units is to apply the covered playground to a special use, let alone the issue of the lawfulness of the conversion.  To require the IO to take steps in ensuring that the plaintiffs could enjoy the units for domestic use is to increase the liabilities of the IO which the law of nuisance does not allow.

Conclusion

161.The plaintiffs’ case started on the wrong premises.  They deliberately turned a blind eye to the fact that the covered playground they purchased was designed, constructed and intended for non-domestic use and that the covered carpark in LG3 was not designed and constructed with heavy duty waterproofing material.  That governed the standard of care owed by the IO in the proper management of the Building, or specifically the driveway in LG3.  The design and construction of the floor slab in LG3 was not intended to provide the covered playground below with a waterproofing standard similar to that for domestic units.  That standard was not adequate to enable the units to be enjoyed as domestic units for human habitation.  The standard of care required of the IO in the discharge of its duty of care in the proper management of LG3 and the Playground Floor is to ensure that the driveway in LG3 may be use as a driveway and the covered playground below may be enjoyed as a covered playground.  Given the design and construction of LG3 and the risk and source of water leakage caused by the normal use the driveway, the IO’s duty of care is discharged even if there is some infiltration of water from the floor slab in LG3 to the ceiling of the covered playground, provided that the enjoyment of the covered playground as a covered playground is not affected.  In other words, even if there is some infiltration of water from the floor slab in LG3 causing dampness to the ceiling of the covered playground, provided that the dampness could be carried away by the ventilation of the Playground Floor such that it does not accumulate to such a stage as to cause dripping or discomfort, the IO was not in breach of its duty of care.  The plaintiffs may not increase the standard of care required of the IO by their adopting the use of the covered playground as domestic units or for any user otherwise than the lawful user.   The burden of proving breach of duty rests squarely on the shoulders of the plaintiffs.    

162.The covered playground was converted into the units.  According to the expert opinion of the IO’s building surveyor expert which is accepted by this court, the conversion created an air-tight chamber effect in the units such that any water infiltrated into the ceiling of the covered playground could not escape into the open air.  That caused or aggravated the damage to the ceiling or other structures of the unit.  Though the water leakage is not in dispute, the plaintiffs have failed to prove that had the covered playground not been converted, the leakage will affect the enjoyment of the covered playground as a covered playground.  Accordingly, the plaintiffs’ claim in negligence is dismissed.

163.The plaintiffs’ claim in nuisance was also launched on a similar false premise that they may increase the liability of their neighbour by putting the covered playground to an exceptionally delicate or special use.   Given the design, construction and intended use of LG3 and the covered playground, converting the covered playground into units for domestic use amounted to such exceptionally delicate or special use in the circumstances.  By adopting the conversion, the plaintiffs upset the balance which has to be maintained between themselves as owners of the covered playground and the IO as owners of the driveway.   As such, they are not entitled to damages in nuisance. 

164.In conclusion, the plaintiffs’ claims are dismissed with costs.

Mr K M Chong and Mr Daniel Kuan, instructed by C.H. Chan & Co., for the plaintiffs

Mr Anthony Cheung, instructed by Cheung & Yeung Solicitors, for the defendant