The Incorporated Owners of Asia Harvest Commercial Centre v. Gearing Development Ltd

LDBM 263/2016

[2020] HKLdT 3

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 263 OF 2016

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D E C I S I O N

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1.This is the Respondent’s application for the following:

1) Leave to appeal against my judgment dated 29^th August 2019 (“the Judgment”); and

2) A stay of proceedings pending the disposal of the appeal or until further order.

2.An interim stay pending the outcome of the respondent’s present application for leave to appeal was granted on 20^th December 2019.

3.The background of this case is summarized at paragraphs 2 to 8 of the Judgment. I shall not repeat the same. I shall adopt the same abbreviations used in the Judgment.

THE LAW

4.Section 11AA(6) of the Lands Tribunal Ordinance (Cap 17) provides:

“(6) Leave to appeal shall not be granted unless the Tribunal, the Court of Appeal or the registrar hearing the application for leave is satisfied that—

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

5.In Ho Yuen Ki Winnie and anor v Ho Hung Sun Stanley and anor, HCMP 1009/2009, (unrep), Le Pichon JA stated at paragraph 16 of the judgment: -

“For leave to be granted, this court must be satisfied that the appeal has ‘reasonable prospects of success’. Merely showing that the appeal is ‘arguable’ and ‘not fanciful’ would not be sufficient. In my view, ‘reasonable prospects’ requires something more and, in that regard, some assistance may be derived from the test applied when setting aside a default judgment.”

6.In KNM v HTF, HCMP 288/2011, (unrep), Fok JA (as he then was) stated at paragraph 9: -

“The relevant test of whether an appeal has a reasonable prospect of success under section 63A is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal. A reasonable prospect of success therefore means an appeal with prospects that are more than ‘fanciful’ but which do not need to be shown to be ‘probable’”.

INTENDED GROUNDS OF APPEAL

7.The respondent’s 2 intended grounds of appeal are summarized as follows:

1) Err in law: failing to consider or apply the principles set out in Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279 in that the tribunal failed to have regard to the factual background in which the DMC was drafted and “the practical objects which it was intended to achieve.”

2) Err in law: failing to consider the following matters when concluding the End-Wall is a common part:

a) There was no recession provided for the End-Wall;

b) There was no specification of the type of cladding to be used on the End-Wall on the elevation plans;

c) The End-Wall is separated by a canopy from the External Walls;

d) The End-Wall is a shop front of a shop on the Ground Floor;

e) The Floor Plans and Block Plans show the End-Wall was assigned together with the shop.

8.Though the respondent has proposed 2 intended grounds of appeal, I am of the view that they are both part of the same argument. In essence, the respondent’s grounds of appeal are a criticism of my finding that the End-Wall is a common part. I shall therefore deal with the 2 intended grounds together.

DISCUSSION

9.I note the intended grounds of appeal are the same arguments put forward by counsel for the respondent during the trial hearing. The respondent has not raised any new arguments.

10.One of the arguments made by counsel for the respondent is the tribunal had not properly considered his submissions on the practical objects of the DMC and on interpreting the DMC in accordance to proper commercial sense.  

11.Having considered the respondent’s submissions in the present application, I am of the view there are no reasonable prospects of success in the intended grounds of appeal.

12.Firstly, in coming to the conclusion the End-Wall is a common part, I was fully aware of and had considered counsel’s arguments on the proper construction of the DMC: see paragraph 14 of the Judgment. I also note the respondent’s expert had also repeated the same argument on the importance of the Shop Front to the Shop in his expert report: see paragraph 3.9 of the respondent’s expert report and paragraph 3.15 of the Combined Investigation Report. Although not explicitly stated in the Judgment, it is clear from the reasoning in the Judgment I did not accept counsel’s argument the “practical objects” or even the “factual background” in which the DMC was drafted indicates the End-Wall was part of the Shop for being the Shop Front. Hence I had considered the respondent’s arguments in coming to my decision but had not accepted the same.

13.Secondly, I understand that the respondent does not dispute I should have considered the title documents in determining whether the End-Wall is a common part. The crux of the compliant is that I had not considered the importance of a shop front (i.e. part of it being the End-Wall) to the Shop and the implications of the elevation plans, the Floor Plans and the Block Plans in my determination.

14.However, I do not find any substance in the submissions of counsel. I have set out my reasons in paragraphs 21 – 22 of the Judgment for finding the End-Wall is a common area as defined in the DMC. I have also set out my reasoning and the relevance of the various plans to the determination of whether the End-Wall is a common part in the Judgment: see paragraphs 11, 12, 14, 18 and 19 of the Judgment.

15.In short, I did not find any of the matters raised by the respondent to support the argument that, upon a proper reading of the title documents including the DMC, the End-Wall must necessarily be considered part of the Shop and therefore belong to the respondent. 

16.I reiterate that the important documents to consider in determining the ownership of the End-Wall must be the sale and purchase agreement of the Shop, the Assignment and the DMC.

17.For reasons I have already set out in the Judgment, I am of the view that these documents clearly show the End-Wall is a common part.

18.By reason of the matters set out hereinabove, I do not find there to be any reasonable prospects of success on the intended grounds of appeal. Furthermore, I do not find there to be some other reason in the interests of justice why the appeal should be heard.

19.I therefore refuse the respondent’s application for leave to appeal against the Judgment and the application for a stay of execution of the Judgment.

20.I make a costs order nisi that the respondent do pay the applicant’s costs of the application for leave to appeal, to be taxed on the District Court Scale if not agreed, with certificate for counsel. Unless any party applies to vary the costs order nisi within 14 days hereof, the costs order shall become an order absolute.

Mr Forest Fong, instructed by Yung, Yu, Yuen & Co, for the applicant

Mr Gary Lam, instructed by J Chan & Lai, for the respondent