Harriman Management Services Ltd v. Lam Chi Keung
Read the full judgment text of LDBM 363/2014 on BabelCite. This Lands Tribunal judgment was delivered on 20 August 2021.
1. This is the applicant’s application for a mandatory injunction to remove an internal staircase together with some other erections in the respondent’s property.
Cites 21 cases
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LDBM 363/2014 [2021] HKLdT 52 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BUILDING MANAGEMENT APPLICATION NO. 363 OF 2014 _________________
_________________ Before: Deputy District Judge Michelle Soong, Presiding Officer of the Lands Tribunal, in Court Dates of Trial: 5, 8, 9 and 25 March 2021 Date of Judgment: 20 August 2021 _________________ J U D G M E N T __________________ INTRODUCTION 1.This is the applicant’s application for a mandatory injunction to remove an internal staircase together with some other erections in the respondent’s property. 2.The applicant is the manager of Bellagio, No.33 Castle Peak Road, Sham Tseng, Tsuen Wan, New Territories, Hong Kong (“the Estate”). The respondent and his wife became the respective registered owner of Units C and D on the 71st Floor (together with the respective roofs above) of Tower 8 of the Estate in January 2003. 3.The applicant is represented by Ms Becky Wong and the respondent is represented by Mr Lau Ka Kin. THE APPLICANT’S CASE 4.The applicant alleges that on some unknown dates, the respondent had caused to be erected an internal staircase connecting Unit D (“the Unit”) and the roof above it (“the Roof”) (“the Internal Staircase”) and installed some ancillary structures on the Roof as follows:-
5.The applicant contends that the said alteration and erections were done without obtaining their prior approval and are in breach of Clause 11 in Section C and the Third Schedule of the Deed of Mutual Covenant[1] (“DMC”) as well as certain provisions of the Building Management Ordinance, Cap.344 (“BMO”). THE RESPONDENT’S CASE 6.The respondent contends that the alterations and erections were done by the respondent in reliance on some representations and assurances made by a Mr Wong Kwong Yiu (“Mr KY Wong”) in 2002, before and at the time the respondent decided to purchase the property. Mr KY Wong was the senior management of the applicant and of Wheelock and Company Limited (會德豐) (“Wheelock”)[2] which wholly owns the applicant. The representations are:-
7.Mr KY Wong procured a letter of consent (“the Consent”) be given to the respondent at the sales office which letter bears the following contents:
8.Induced by the 1st and 2nd Representations and the Consent, the respondent contracted to purchase 71D and the roof above and his wife contracted to purchase 71C (an adjourning unit) and the roof above. The respondent also incurred substantial expenditure in erecting the Internal Staircase. 9.The respondent contends that given the role of Mr KY Wong in the Wheelock group and the applicant, the applicant being the wholly owned subsidiary of Wheelock shall not unreasonably withhold giving consent for the erection of the Internal Staircase. 10.As a matter of construction of the DMC, the respondent did not convert any common areas or common parts to his own use hence there is no breach of the DMC because all erections were within the boundary of the respondent’s property. In any event, in year 2006, the applicant had already known about and consented to the relevant building works which were completed in August 2007. 11.It is contended that even if the applicant can prove breaches of the DMC, the application should be refused by reason of estoppel and/or acquiescence as no complaint was raised by the applicant until 2013 and no legal action was taken until December 2014. 12.In all the circumstances of the case, a mandatory injunction would be unjust. ISSUES 13.The parties have agreed on the following issues to be tried :-
EVIDENCE 14.The applicant has filed the witness statement of 雲國樑 and 梁偉強. Prior to the trial, the applicant has not informed the respondent or the tribunal that Mr Wan would not testify in court. It was until the first day trial the applicant through their counsel indicated that Mr Wan had resigned in April 2020, nearly a year before the trial, and would not testify. The only remaining witness tendered by the applicant is Mr Leung who made two short statements for the proceedings. The applicant does not call Mr KY Wong, who is still an executive director of Wheelock at the time of trial to give evidence. The parties elect not to adduce expert evidence. 梁偉強 15.Mr Leung is a member of the management (管理層) of the applicant. To his knowledge, the applicant is a wholly-owned subsidiary of Wheelock. He believes that all developments managed by the applicant were sold by Wheelock. 16.Mr Leung knows that Mr KY Wong is an executive director of the parent company of the applicant. On the evidence available he accepts that Mr KY Wong did say that an owner of top-floor units can build an internal staircase to connect with the roof above. When being asked under what circumstances an owner can build such an internal staircase, Mr Leung said the question is a “high level (高層次)” one and he is not in a position to answer. 17.Mr Leung also accepts that the applicant should know that Mr KY Wong had declared to the public that top-floor owners can build an internal staircase. He said the applicant could have verified the factual allegations with Mr KY Wong if so wish but he has no idea whether the applicant has ever verified with Mr KY Wong. 18.It was pointed out to Mr Leung that Mr Tsui Yiu Cheung Paul (徐耀祥) has been a director of the applicant since at least year 2000. Mr. Tsui is also an Executive Director and Chief Financial Officer of Wheelock. Mr Leung accepts that the applicant could have checked with Mr Tsui as to what happened in 2002 but he has no idea whether the applicant has ever done that. 19.Mr Leung also testifies on the procedures relating to renovation works in the Estate. According to him, an owner shall complete an application form to specify his proposed works and provide the plans to the applicant for approval. The owner shall also pay a decoration deposit which will be returned to the owner after completion of the renovation works if appropriate. The Respondent 20.The respondent is the only witness to testify on his side. 21.It is his evidence that In September 2002, he and his wife read the Sing Tao Daily report wherein Mr KY Wong declared that “頂層單位可自製室內樓梯連接天台” [6]. Centaline provided the marketing materials to the respondent for reference. His understanding back then was that the Estate was developed and managed by the Wheelock group. 22.In or about 7 October 2002, the respondent and his wife visited the Estate which was still a construction site at that time. They brought along with them the newspaper clipping and were personally received by Mr KY Wong as the representative of the Wheelock group and the top management of Wheelock. 23.Having taken the couple to 71D and the roof above, Mr KY Wong verbally represented that (1) owner of top-floor units can build rooftop garden (e.g. jacuzzi); (2) they can build an internal staircase leading to the roof above 71D; and (3) a written confirmation could be provided to the couple. Mr KY Wong even pointed to the specific location where they could build a staircase which is exactly the position where the Internal Staircase now exists. The respondent couple were persuaded by Mr KY Wong to come to a transaction. 24.When the couple returned to the sales office, a Centaline staff gave them the Consent which was prepared in English but both the respondent and his wife cannot read English. 25.In the course of cross-examination, the respondent says that Centaline staff mentioned that the consent of the government and the property manager shall be obtained when an internal staircase was to be built. Ms Wong suggested to the respondent that by this answer, it would mean that when the respondent contracted to purchase the Unit he actually did not know for sure whether he would get the approval from the government and the property manager. The respondent answers that he “信九倉、信黃光耀 (trust Wharf, trust Wong Kwong Yiu)” and that Mr KY Wong was “大公司高層 (top management of a large company)”. He also adds that his unit was more expensive than other units and he “got something black and white”. 26.In around 2005 or 2006, the respondent engaged an architectural firm, David S. K. Au & Associates Limited, to undertake the renovation project. Before carrying out the renovation works, the respondent through his contractor, Madam Choi, submitted to the applicant an application form together with the building plans of the staircase as approved by the Building Authority. He paid the renovation deposit as well. ISSUE 1: COMMON AREAS? BREACHES? Common Areas / Facilities, Common Parts? 27.This present concern is whether the following areas or facilities are “common areas or facilities” within the meaning of the DMC and “common parts” within the meaning of the BMO:-
28.The respondent contends that they are not common areas or facilities for a number of reasons. First, according to the assignment dated 22 January 2003 under which the property was assigned to the respondent (“the Assignment”), what was assigned to him was “the sole and exclusive right to hold use occupy and enjoy ALL THAT UNIT [D] on the [SEVENTY FIRST] FLOOR together with the main roof above”[7]. The areas and facilities set out in paragraph 27 above are all within the boundary of the property which the respondent enjoys exclusive ownership, use and possession. 29.Secondly, the definition clause in Section B of the DMC defines the following terms in such a way that confirms the respondent’s exclusive right to use and enjoy the roof:
30.Thirdly, under Part II of the First Schedule[11] to the DMC, Flats A, B, C, D, E, F, G & H on 71/F are flats with roofs above, 77 undivided shares were assigned to 71D together with the roof above whereas only 71 undivided shares were assigned to Flat D of the lower floors which do not comes with roofs. It means that the Roof carries undivided shares by itself. 31.In relation to section 2 of the BMO about “common parts” (contents see below), the respondent submits that it turns on the interpretation of the DMC and the Assignment to see whether the parts have been specified or designated for the respondent’s exclusive use and enjoyment:
32.It is submitted that in this interpretation exercise, the background and context are important. The DMC and the Assignment shall be viewed in light of the 1st Representation and the 2nd Representation and the Consent which stated that the vendor of the Estate had no objection to the erection of an internal staircase subject only to the approval of the Government and the manager[12]. 33.Applying the principle laid down by the Court of Appeal in The Incorporated Owners of Westlands Garden v Oey Chiou Ling and Another[13], the respondent submits that it would be an unattractive proposition to have common areas/common parts between 71D and the roof above, which are exclusively occupied by the same owner as one unit. 34.On the other hand, the applicant considers that the above areas and facilities all are “common areas and facilities” under the DMC and are “common parts” under the BMO because they fall within their respective definitions. 35.The applicant further submits that there is no instrument designating the floor slab between the Unit and the Roof for his exclusive use. The Incorporated Owners of Fortune Gardens v Cha, Grant and Another[14] (where the respondent installed an internal staircase leading from their unit to the roof above and the tribunal found the floor slab a common part) is cited. 36.Aside from the above arguments which are generally applicable to all the five items in paragraph 27, the parties also make some arguments that are specific thereto. Their specific arguments are summarized at Appendix II to this judgment. 37.I am not persuaded by the respondent’s arguments. 38.Nowhere in the Assignment designated the parapet wall for the exclusive use and enjoyment of the respondent. The parapet wall is clearly defined as a common part in paragraph 4 of Schedule 1 of the BMO which stipulates that:-
39.Concerning the wall with an opening which was sealed up by the respondent at Location B, it was a wall to set apart the area which is exclusively owned by the respondent (i.e. the Roof) and the common area on the other side of the wall. Again, nowhere in the Assignment specified or designated that piece of wall for the exclusive use and enjoyment of the respondent, not by way of textual description nor by coloring of plan with any degree of clarity. I find that this wall is a common part. 40.As for the floor slab, while I appreciate that in light of Westland Garden, it would generally be an unattractive proposition to suggest that the floor slab between an upper unit and a lower unit which are exclusively owned by the same owner as one unit shall be a common part, such a proposition may not be unpleasing if, in actuality, there are some sort of facilities embedded in the floor slab for the common use of the owners as a whole. 41.Here in this case, within the floor slab is the water-resistant membrane for Tower 8. It is trite that water-resistant membrane on the roof is for the protection of the whole building and shall be a common part thereof. In 梁有勝v 馮源禧及另四人[15], Deputy Judge Wong (as he then was) held that the water proofing layer is a common part as it is not for individual owner but for the benefit of the building as a whole. The same conclusion was reached in Kung Shing Investment Ltd v The Sumbeam Manufacturing Co. Ltd [16], and The Incorporated Owners of Fortune Gardens. It goes without saying that the act of knocking the floor slab or a part thereof would take away the mass of concrete which was supposed to be there to carry the water-resistant membrane, a common part, of the building. 42.As for the segment of the surface channel at Section C, there is no clear evidence from either party as to whether the channel exclusively served the respondent’s unit or serve the building as a whole. But common sense suggests that the surface channel by its design and position should serve the basic or common function of diverting water to other drain(s) and hence preventing accumulation of water on the roof. On balance, I tend to believe that it falls within the definition of “Residential Common Areas and Facilities” as it is the drain, pipe or sewer intended for the common use and benefit of the residential development. 43.To conclude, I find that the parapet wall, the opening of the wall at Location B, the water-resistant membrane and the segment of the surface channel at Location C all are the common areas and facilities and the common parts of the Estate/building. For the reason given in the last sentence in paragraph 41 above, I do not consider it necessary to deal with the floor slab in isolation as if it is separated and detached from the water-resistant membrane because that obviously is not the case. Breaches? 44.In gist, the applicant contends that the respondent has breached, inter alia, (1) Clause 11(a) in Section C of the DMC; (2) the Third Schedule to the DMC; and (3) section 34I of the BMO. The relevant provisions are set out below with emphasis added.
Clause 11(a) of Section C of DMC 45.The respondent submits that Clause 11(a) in Section C of the DMC is inapplicable because first, the respondent’s exclusive right over the Roof is described as “main roof” in the Assignment and, in line with the Assignment, the DMC also consistently use the term “main roof above”. However, the restrictive covenants in Clause 11(a) make no mention of “main roof” but only refer to “flat roof/roof”. In short, the respondent contents that the “flat roof/roof” in Clause 11(a) actually does not refer to his roof. 46.Secondly, in the floor plans annexed to the DMC, roofs are classified into four types namely, “Doom Roof”, “Upper Roof”, “Roof” and “Main Roof” which lends support to the first contention. 47.Thirdly, if the parties to the DMC intended that the owners of the top-floor units cannot erect any structure or place any chattel on the roof assigned to them, the parties could and should have referred to “main roof” in Clause 11(a) instead of using the term “flat roof/roof”. 48.I am not persuaded by these arguments of the respondent. 49.The definition section of the DMC (i.e. Section B) contains no definition for the roofs in the Estate nor any classification of roofs. The respondent’s suggestion that the DMC consistently use the term “main roof above” is not true. As I observe, this term is only “consistently used” in Schedule 1 to the DMC which schedule deals with allotment of undivided shares only. In the main body of the DMC and other schedules thereto, the term “main roof” has not been consistently used. 50.One can observe that actually throughout the DMC, different terms are being used to refer to the roofs, here are some examples:-
51.Although Schedule 1 refers to the roof above the top-floor units as “Main Roof”, one must not confuse the real function of Schedule 1 in the DMC which, as pointed out above, concerns allotment of undivided shares. It obviously is not the definition section meant for ascribing any specific meaning to any term for general adoption in the rest of the deed. This probably is the reason why the term “main roof” only appears in Schedule 1 but not elsewhere of the deed. 52.As regards the floor plans annexed to the DMC, the respondent submits that roofs are classified into four types namely, “Doom Roof”, “Upper Roof”, “Roof” and “Main Roof” in those plans. My quick answer to this, again, is that one must not muddle up the real purpose of those plans in the deed which are “for the purpose of identification”[25] in order to show the location of the residential common areas and facilities by indigo colour. The plans are not for comprehensive classification or definition of all types of roofs within the Estate for general adoption. That probably explains why the terms “Doom Roof” and “Main Roof” as appear in the plans are not used in the main body of the DMC, and reciprocally certain terms used in the main body of the deed such as “flat roof” and “pitch roof” are not featured in the plans. Analogical to this is the case 黎偉雄 v 信和物業管理有限公司 [26] where Lam VP does not observe on the facts and evidence of that case that a plan should have the legal effect of conclusively determining whether a specific part of the estate is a common area. 53.It is clear that the DMC refers to the roofs in the Estate in a variety of ways. In the absence of any definition or comprehensive classification of roofs in the DMC, and having considered the context in which those terms are used in the relevant provisions, I opine that the references to the roof(s) in Clause 11(a) in Section C as well as the Third Schedule, be they labelled as “any roof”, “roof”, “roofs”, “roofs or flat roofs” or “flat roof/roof”, are made in their generic sense rather than specific sense. 54.Substance matters more than form. If it is clear that the term used in the DMC provision, be it “main roof”, “flat roof/roof” or other terms, actually refers to the roof in question, it is counter-intuitive for the respondent to suggest that the provision shall be inapplicable simply because the term used therein cannot perfectly match with the term used in one schedule to the DMC. 55.Say for instance, Clause 9(b) in Section C[27] prohibits owners from dealing with their interests in the “flat roof or roof” separately from the unit with such “flat roof or roof” is held. If the respondent’s argument stands, it would mean the top-floor unit owners are not subject to this covenant and could freely dispose of their interests in the roof separately from the unit. That obviously cannot be right. 56.On that note, I will turn to the case 黎偉雄 v 信和物業管理有限公司 [28] which the respondent cites to support his contention that Clause 11(a) in Section C is not engaged. In that case, Lam VP said at paragraph 26 of his judgment that the DMC must be construed in the context of the document as a whole and in light of the factual and legal background to its execution and having regard to the practical objects which it was intended to achieve. Lam VP stressed that “the commonly contemplated use of an area [is] a relevant pointer in the construction process”[29]. The respondent submits that the commonly contemplated uses of the main roof are (1) internal staircase and (2) private rooftop garden wherein one can build, for example, jacuzzi[30]. 57.I am not impressed by this argument either. Whilst it is possible that the common intended use of the Roof shared by Mr KY Wong and the respondent at the material times could be for the erection of internal staircase or other facilities, such common contemplation was between Mr KY Wong and the respondent but neither of them was the party who executed the DMC. The DMC by its nature is not a private contract just between two parties but is a deed to govern the rights and obligations of all owners of the Estate vis-à-vis themselves and with other executing parties as a whole. As other owners are not privy to the conversations or the common contemplation between Mr KY Wong and the respondent, I do not think that what were said between them should go that far to alter the objective meaning of the DMC such that the rights, obligations and liabilities of all owners shall be affected. 58.The respondent further submits that if Clause 11(a) is applicable to the Roof, Mr KY Wong’s representations would be most misleading because the ambit of Clause 11(a) is extremely wide which essentially disallows the owner to place even a plant pot (chattel) on the roof. In response to this point, all I need to say is that any unfairness that may be caused by any untrue representations, if proved, could possibly be remedied by applicable equitable principles. To adopt an awkward construction of the DMC with a view to remedying an unfair situation may not be justified. Third Schedule of DMC 59.Concerning the Third Schedule, the respondent submits that it is also not engaged. The Third Schedule stipulates that:
60.There are three provisos in the Third Schedule:- (1) “unless otherwise provided in this Deed”; (2) “Subject to the rights reserved to … the Registered Owners in Part II of the Second Schedule to this Deed”; and (3) “without the previous written consent of the Manager”. 61.The respondent first submits that the applicant fails to prove “without the previous written consent of the Manager”. As I do not find that a written consent to erect an internal staircase had been given by the applicant to the respondent as a matter of fact-finding (see discussion under Issue 2 below), this argument would not succeed. 62.It is submitted, secondly, that the Third Schedule is subject to other provisions of the DMC (“otherwise provided in this Deed”) as follows, and as a matter of construction the “use and enjoyment” etc. of the Unit and the Roof shall include the erection of the Internal Staircase because that has been the “commonly contemplated use”.
63.I believe the discussions in paragraphs 56 and 57 above could dispose of this argument and shall not repeat. 64.The respondent submits, thirdly, that the Third Schedule is “Subject to the rights reserved to … the Registered Owner [i.e. the vendor of the Estate in the DMC] in Part II of the Second Schedule to this Deed”. Part II of the Second Schedule, paragraph 3(d) of the DMC provides that the vendor of the Estate shall have the right to alter, amend, vary or add to the building plans relating to any parts of the Development[33]. By the 1st Representation, the 2nd Representation and the Consent, the vendor shall be taken to have agreed to amend the building plans[34] so as to allow the respondent to erect an staircase and had conferred the right to alter the building plans to the respondent. The amendments to the building plans were completed by the 2007 building plan[35] submitted by the respondent and approved by the authority concerned. Therefore, there was no breach of the DMC. 65.Self-explanatorily, nowhere in the contents of the 1st Representation, the 2nd Representation or the Consent ever mentions that the vendor agreed to “amend the building plans” and conferred or delegated such right to the respondent. In my view, this argument of the respondent has stretched way too far the meaning of the representations and the Consent and must be rejected. Section 34I BMO 66.About section 34I of the BMO, the respondent submits that the applicant’s contentions about common areas/common parts are unsubstantiated as they ignore the admissions and evidence of the applicant’s own factual witness that: (1) all pleaded works are within the respondent’s property; (2) Location A, Location B and Location C are all within the respondent’s property; and (3) the pleaded works have not occupied or damaged the common areas/parts with the only exception being the metallic door at Location A. 67.I believe my discussions about what constitute common areas and facilities and common parts could dispose of this argument and shall not repeat. 68.To conclude, I find that Clause 11(a) in Section C of the DMC; (2) the Third Schedule to the DMC; and (3) section 34I of the BMO are all engaged and applicable. 69.Apart from the above general arguments, both parties have also made specific arguments in relation to each and every item of erections, installations or alteration as follows:-
70.The specific arguments are summarized in the table at Appendix III for easy reference. 71.Without diving into the details of the applicant’s specific analysis in Appendix III, I shall make findings in favour of the applicant for Items (1), (3), (4), (5), (7), (11) and (12). 72.In making such findings of breach for these seven items, I am not endorsing all particulars of breaches as alleged by the applicant, suffice it to say that the fulfillment of even one particular of breach for each item shall be sufficient to support the finding. 73.I find that the DMC provisions are contravened in the following fashion. For Item (1), the fixing or anchoring of wooden fencing to the parapet wall damaged the wall’s fabrics. For Item (3), the erection of a metallic door at Location A which has subsequently been removed leaving the frame remains mounting on the wall constitutes erection of structures or chattels on the roof (which is forbidden) and interference with the fabrics of the common parts of the building. For Item (4), the sealing up of an opening on a wall at Location B amounts to interference with the common parts. For Item (5), the erection of a concrete structure with windows at Location C equates to erection of structure on the roof (which is forbidden). For Item (7), removing the water-resistant membrane was damage or interference to the common parts of the building. For Item (11), the water basin at Location F amounts to erection of chattel or structure on the roof (which is forbidden). For Item (12), the blocking of a segment of the surface channel is an interference with the common parts of the building. 74.It is not necessary for me to make any finding in relation to Items (8) and (10) as they have been rectified by the respondent and since the applicant is not seeking any damages. 75.Item (6), which is the floor slab, shall not be dealt with in isolation for the same reason as explained in paragraph 41 above. 76.Concerning Item (2), considering that the subject tiles are laying on the floor and that particular floor is situated on the roof above the 71st floor of the Tower 8 which location is not so conspicuous or readily observable from an external position, I do not consider that the mere changing of the surface tiles having a colour that is different from that of the original flooring would affect the existing design or external appearance of the building, façade or elevations. 77.Item (9) is the raised flooring of 150 mm thick made of mass concrete inside the concrete structure. Without expert evidence, I am unable to form a view whether they are structural alteration which will affect the structural integrity of the development or which may exceed the loading constraints of the structures in the development or any building. I therefore make no finding of breach. ISSUE 2: REPRESENTATIONS, CONSENT & RELIANCE 78.The fact that Mr KY Wong, as top management of the Wheelock group:- (1) made the 1st Representation in September 2002; (2) made the 2nd Representation in October 2002; and (3) gave the Consent to the respondent on the same day are supported by the Sing Tao Daily report, by the respondent’s witness evidence and documentary evidence which are not seriously challenged by the applicant. 79.The applicant has chosen not to call Mr KY Wong – an serving executive director of Wheelock – to give evidence to rebut the respondent’s case. There is not even a suggestion that the applicant has ever verified with Mr KY Wong on the truthfulness of the various factual allegations by the respondent. 80.When a party without proper explanation fails to call a witness whom the party might reasonably be expected to call, the court may draw an adverse inference against the party that the evidence of the witness may not help the party’s case. In Telings International Hong Kong Ltd v John Ho and Others[36], Le Pichon JA in paragraph 79 of the judgment quoted the well-established maxim, omnia praesumunter contra spoliatore (sometimes referred to as the principle in Armory v Delamirie) as follows:-
81.In my view, the applicant’s failure to call Mr KY Wong, a crucial witness, to give evidence justifies the application of the said evidential maxim. In any event, even if no adverse inference is to be drawn against the applicant and the respondent’s evidence is to be assessed on its own, I still find the respondent a credible witness. 82.I accept the respondent’s evidence about the making of the 1st and 2nd Representations by Mr KY Wong and the giving of the Consent to be true subject to a caveat that, the representations and assurances shall be confined to the erection of an internal staircase rather than the construction of a private garden with jacuzzi because the respondent’s evidence about the latter falls to vagueness, is not featured in the contents of the Consent and does not appear to be the subject matter of assurance. 83.I also accept and find as a matter of fact that the respondent did, in reliance of Mr KY Wong’s representations, purchase Unit D on the 71st Floor of the building together with the roof above with valuable consideration and incur expenses in the erection of the Internal Staircase. ISSUE 4: WHETHER APPLICANT CONSENTED, IF NOT WHETHER CONSENT COULD BE UNREASONABLY WITHHELD? Applicant Consented? 84.The applicant submits that if the applicant did not have prior knowledge of the erection works of the staircase, they could not have given consent. It is the respondent’s case that he did not make any application to the applicant himself but entrusted the task to a contractor and the consent given by the applicant was a written one. However, no written document evidencing the consent has been produced. Contradictorily, in the respondent’s Answer to Request of Further and Better Particulars, the answer given by the respondent was that due to the lapse of time, the contractor “is unable to state whether the Applicant gave its consent orally or in writing”. The applicant opines that if the written consent really exists, there is no reason why the respondent does not retain it as evidence. 85.On the other hand, the respondent submits that the burden of proving no consent rests on the applicant. The applicant’s case of no consent is inherently improbable and is contradicted by undisputed or indisputable evidence. First, contemporaneous documentary evidence shows that since 2005 the respondent expended substantial time, effort and money to obtain approval from the Building Authority and there was no reason why he would not apply for the applicant’s consent. Secondly, the respondent’s evidence about the submission of application form for renovation works and the carrying out of such works is consistent with a permission having been given by the applicant in light of the applicant’s evidence about their internal policy and practice on renovation works. Thirdly, the applicant cannot explain why they made full refund of renovation deposit to the respondent upon completion of the renovation works if the works had caused damage to the common areas as they now allege. 86.I shall point out that aside from the erection of the Internal Staircase, the respondent was also undertaking some other renovation works to his property at that period of time. It does not appear to be in dispute that the respondent should have submitted an application form for the “conventional” renovation works and the applicant should have granted approval therefor. What is really in dispute is whether in or relating to that application, the respondent also obtained approval for the “unconventional” part of the renovation (i.e. the erection of a staircase) as well. 87.Where a given allegation, whether affirmative or negative, forms an essential part of a party’s case, the proof of such allegation generally rests on him[37]. Whilst noting that the lack of consent to erect the Internal Staircase forms an essential part of the applicant’s case, I also note that the consent required under the DMC is a written one. As the applicant’s case is exactly that no such written consent has ever been in existence, it falls to be circular to require the applicant to produce documentary proof to prove the non-existence of the document in question. 88.On the respondent’s part, he himself was not the one who applied for the consent because he delegated the task to his contractor, Madam Choi. Madam Choi has not prepared witness statement in these proceedings nor has she been called to testify at trial. In short, there is no direct evidence to positively show that the requisite consent to erect a staircase was successfully obtained by the respondent from the applicant. 89.About circumstantial evidence, in my view the fact that the security guard(s) of Tower 8 allowed the respondent’s workers to go in and out of the building, that they might have noticed the erection of the staircase during patrol or that the management office returned the security deposit to the respondent is neither here nor there. All these could be attributable to the wrongful belief on the part of the frontline officers that the works being carried out were within the scope of what had been approved under the application form, or attributable to their insensitivity toward potential contraventions of the DMC by performing their duties in a robotic and unenthusiastic manner. 90.The respondent argues that it is inherently improbable for the respondent not to seek approval from the applicant when he already took all the troubles to apply for approval from the Buildings Authority. But be that as it may, it is not helpful to decipher the subjective psychology or behavior on the part of the respondent because the real concern here is more about the “giving” part of the consent by the applicant rather than the “seeking” part of the consent by the respondent. 91.I can see a spectrum of possibilities from the circumstances before me. At one end of the spectrum is that the respondent did not apply for approval to erect the staircase at all. On the other end of the spectrum is that the respondent did apply for a consent and the applicant did give one in writing. The odds in between the two polarities are that the respondent’s application about the staircase accidentally escaped the applicant’s attention and the consent given by the applicant was meant for the conventional renovation works only but not the staircase. And that could be a result of an unclear and obscured application on the respondent’s part, or a result of a properly-made application having unfortunately landed on some reckless hands on the applicant’s side. In my view, the circumstantial evidence is not indicative of the likely scenario in reality among the plethora of possibilities. 92.To conclude on the status of evidence, there is no documentary evidence at all about the existence of a written consent nor is there any witness evidence from anyone who was actually involved in the process of obtaining or giving approval. I tend to think that if a written consent really came into existence in about 2006 or 2007, there is no reason why the respondent did not safe keep this piece of important document as he did for the letter of consent given by Mr KY Wong in 2002. On balance, I am unable to make a positive finding that a written consent for the erection of the Internal Staircase was given by the applicant at the material time. Consent Unreasonably Withheld? 93.The applicant submits that it is not that the respondent had made an application for erecting a staircase but the applicant had refused to give consent. The applicant’s case is that no application for consent was made by the respondent whereas the respondent’s case is that the manager had already given the consent. As in the parties’ respective case, there does not exist a scenario where the manager refuses to consent, the question of whether the manager could refuse to give consent does not arise. More importantly, if the tribunal finds that the portion of floor slab and waterproof membrane removed are common parts and/or facilities of the building, consent must come from the owners’ committee. The applicant, being the manager, would have no power to consent. 94.The respondent submits that the applicant cannot unreasonably withhold consent otherwise the representations of Mr KY Wong and the Consent would become meaningless, the Court of Appeal decision in Lee Yin Hong v Serenade Cove (IO)[38] is cited. 95.I agree with the applicant that the question of whether the applicant could unreasonably withhold consent is plainly academic and hypothetical. I shall refrain from making a ruling on this issue. ISSUES 3, 5 & 6: APPLICANT BE BOUND BY REPRESENTATIONS? WHETHER INJUNCTION SHALL BE GRANTED? ACQUIESCENCE & ESTOPPEL? 96.Issues 3, 5 and 6 will be discussed together as they are intimately related. Applicant Bound? Injunction? 97.The applicant submits that any representation and/or consent given by Mr KY Wong is not binding on the applicant as a matter of fact and law. While the applicant is a subsidiary of Wheelock, the two companies are separate entities and Wheelock is not the applicant’s alter ego. The case Goodwell Property Management Limited v Garg Lalit Kumar and Another[39] is cited. The company chop affixed on the letter of consent is that of “Harriman Realty”, not that of the applicant. Furthermore, if the consent was intended to be binding on the applicant, the letter of consent would not state that the manager’s consent has to be sought. 98.I agree with the respondent that Goodwell does not assist the applicant because the facts of the present case are very different from those in Goodwell. Mr KY Wong is and was the top management of Wheelock, the parent company of the applicant. He is not an unnamed “salesman of the Developer” as is the representor in Goodwell. In that case, there was no suggestion that the manager was wholly owned by the developer nor was there suggestion that the manager and the developer were even related companies. 99.Notably, the marketing materials of the Estate stated that the Estate is developed and managed by the Wheelock group. Mr KY Wong’s representations patently concern what alterations could be done to the Unit and the Roof after assignment of the property which falls squarely within the purview of property management. It is cunning for the applicant to suggest that Mr KY Wong only represented one Wheelock entity but not the other entity of the group which was designated to take up the property management role for the group. 100.Ms Wong for the applicant points out that according to the respondent’s evidence under cross-examination, Centaline staff did tell him that consent from the government departments and the manager would be required as stated in the letter of consent. Ms Wong then put to the respondent that on that basis, it was incorrect for him to say in his witness statement that an internal staircase could definitely be built. Ms Wong recaps that the respondent only said “he was confident” in reply. 101.In response to this, Mr Ho, counsel for the respondent, points out that the respondent did not just say he was confident. The respondent actually answered that he “信九倉、信黃光耀 (trust Wharf, trust Wong Kwong Yiu)” and said that Mr KY Wong was “大公司高層 (top management of a large company)”. 102.To analyse, I shall slightly rewind back to the encounter between Mr KY Wong and the respondent in early October 2002. On that occasion, Mr KY Wong personally received the respondent couple in the capacity as the senior management of the Wheelock group. Mr KY Wong took the couple to the 71st Floor of Tower 8 and enthusiastically introduced the top-floor unit which was to be sold together with the roof above. He spoke highly of the roof as being south facing with an “unbeatable sea view (無敵海景)”. He depicted the vision of having a private roof-top garden with a jaccuzi as a way of enjoying life. The respondent couple specifically asked Mr KY Wong about the erection of an internal staircase as mentioned in the newspapers. He assured that the couple was entitled to do that, pointed to the location where it could be built and volunteered to provide some document for their retention. 103.There is no suggestion that Mr KY Wong, in the course utilizing the internal staircase as a selling point to promote the property, also mentioned to the respondent that the future manager of the estate would consider itself not bound by his assurance and would take enforcement action against the staircase any time. I verily believe that had the respondent been told of such a possibility the occurrence of which would completely cancel out the very appealing aspect of the transaction as assured, he would unlikely have entered into the contract. 104.It is in fact also the respondent’s evidence that before the transactions, they had already been residing in some combined units in Lido Garden (麗都花園) just that their properties did not come with roofs[40]. There was no point for them to purchase unit C and unit D of the Estate had they not come with directly accessible roofs which give them some open-air freshness with convenience and privacy. 105.I gather from the respondent’s evidence that his mind was completely blown and he virtually set his heart on an internal staircase having heard Mr KY Wong’s powerful representations. The respondent and his wife instantly decided to cut the deal there and then. It was after the respondent left the 71st Floor and returned to the sales office then some staff there from Centaline gave him a consent letter about the internal staircase. 106.In my view, it is not fair for the applicant to heavily consume the letter of consent to build the argument that no assurance about the erection of an internal staircase was made by Mr KY Wong because the letter mentions about the obtaining of consent from the manager and the government. I come to this view base on a number of reasons. 107.First, the assurances were made by Mr KY Wong in the capacity as a senior management of the Wheelock group right at the site, at the location where the internal staircase was said could be built. This certainly would create a much stronger impact on the respondent than a document handed by any staff of an estate agency afterwards in the sales office. 108.Secondly, I have reservation on how hard one could really rely on the letter of consent[41] one way or another as it seems to create more confusions than whatever it seeks to confirm or clarify. The contents of the letter of consent are appended below in their entire and original text for analysis purpose :-
109.On would see that the letter is a very brief one with slightly more than three lines of words in substance, prepared in English. It makes no reference to who the vendor would be or who the future manager of the Estate would be. It does not mention about the Wheelock, the applicant or their interrelationship. To describe it more accurately, it actually does not meaningfully identify any party by any name. 110.Another feature is that when the verbal assurance was given by Mr KY Wong as the representative of Wheelock, the letter states that the consent was given by “the Vendor” which turns out to be not Wheelock but a company called “Salisburgh Company Limited” as subsequently transpired in the assignment and the DMC. However, the letter of consent does not bear the company chop of either the Wheelock or Salisburgh. It bears the chop of “Harriman Realty Company, Limited” which chop was seemingly affixed on that piece of paper out of the blue as one simply cannot relate how Harriman Realty was involved in the matter. In addition to the English words “Harriman Realty Company, Limited”, the chop also contains three Chinese characters “夏利文”. Coincidentally, the Chinese name of the applicant (夏利文), which later became the DMC manager, also contains these three characters. 111.Absent clear evidence as to how exactly the contents of that consent letter were explained to the respondent, I do not think the mere statement that the consent of the manager and the government is required could dispel the tremendous doubts about identities which would confuse even a well-educated person, not to mention the respondent who received limited education and does not know English. 112.In my view, when the senior management of the Wheelock group had strongly assured that an internal staircase could be built, it was reasonable for the respondent to expect the applicant, being the property management arm of the group, would approve the application as a matter of formality so long as the building plans are endorsed by the government. It was also reasonable for the respondent to expect that the respondent would not treat the erection of an internal staircase, being exactly the thing promised, as contravention of the DMC and take enforcement action against it otherwise it would make a complete mockery of what the top management had promised openly to the public and personally to the respondent. That line of thinking resonates with common sense and humanity and also echoes with the respondent’s evidence in general and his specific answer to Ms Wong’s questioning that he “信九倉、信黃光耀 (trust Wharf, trust Wong Kwong Yiu)” and that Mr KY Wong was “大公司高層 (top management of large company)”. 113.It was asserted in Mr Wan’s written statement that when the representations were made in September and October 2002, the DMC was not yet executed, the applicant was therefore not aware of the representations. However, Mr Wan has failed to testify in court. The applicant’s only factual witness concedes that the applicant knew of the representations. In any event, evidence shows that by the time the DMC was drafted in September 2002, it had already been decided that the applicant would in due course be appointed as the manager of the Estate. Such being the case, the applicant’s argument that the DMC was executed two or three months after the representations is nothing but a red herring. In view of the newspapers reporting in September 2002 in Sing Tao Daily and the identical board of directors, there can be little doubt that the applicant knew or should be taken to have known of Mr KY Wong’s representations and his utilization of the internal staircase as a selling point to promote the top-floor units. 114.If, as the applicant now claims, they will never consent to the building of any internal staircase[42], the applicant should have come forward to rebut the Sing Tao Daily report because by those contents Mr KY Wong had seriously misled the potential buyers of the top-floor units. From the perspectives of what is just and fair, I do not think it right for the applicant to disown Mr KY Wong’s representations now. 115.In addition to the above, I also take into account the undisputed fact that the Internal Staircase was built in accordance with building plans approved by the Building Authority[43]. There is no evidence or suggestion that the staircase is in any way unsafe in its current state or is in breach of any law or regulation. There is also no evidence of any detriment or loss to other owners or occupiers of the building caused by staircase thus far[44] (see: The Incorporated Owners of Yee Fung Garden v Basic Tech Limited and Another[45]). The applicant’s only factual witness says that he has never seen any complaint from other owners against the respondent. On the other hand, the respondent, now retired, would need to incur substantial expenses to demolish the staircase and to reinstate the premises (see: The Incorporated Owners of Shan Kwong Towers Phase II v Li Suet Ching[46]). 116.It is trite that equity may intervene to restrain an applicant to exercise its legal rights if to do so would be unjust and inequitable in all the circumstances of the case (see: PC Fortune Co Ltd v Incorporated Owners of Kwong Fu Building[47]). 117.In Wing Ming Garment Factory Ltd, Godfrey Lam J has this to say about equitable relief at paragraph 148 of his judgment:-
118.Having taken into account the entire circumstances of the present case, I find that notwithstanding the breaches as discussed under Issue 1 above, it would be unjust to, at this stage, grant a mandatory injunction to require the respondent to reverse the alterations in relation to the Internal Staircase and the erections or alterations that are part and parcel thereof or connecting thereto. 119.The applicant concerns that not requiring the respondent to reinstate would encourage similar breach of the DMC by other owners. In my view, the applicant is self-righteous to condemn violations of the DMC by the very act which was inspired, encouraged and promoted by their group in the first place. In any case, should future breaches by other owners happen, there is nothing to prevent the applicant from pursuing against the relevant owners through legal actions and whether the applicant would succeed in those proceedings shall turn on the facts of the particular case concerned. Estoppel & Acquiescence 120.Given my ruling on the relief of mandatory injunction, it is not necessary for me to rule on the issues of estoppel and acquiescence which ultimately boil down to the same consideration of what is fair and just. I would only discuss these issues very briefly for completeness’ sake. 121.In Mo Ying v Brillex Development Ltd and Another[48], the essential elements of estoppel by representation are (1) a representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made; (2) an act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made; and (3) detriment to such person as a consequence of the act or omission. 122.The representations or conduct relied upon by the respondent include the 1st Representation, the 2nd Representation and the Consent. The respondent’s acts as a result of the representation/conduct include the purchases of the Unit (i.e. 71D) together with the Roof as well as the erection of the Internal Staircase. The detriment he suffered includes payment of considerable sums to acquire the property[49] and to construct the staircase. 123.On acquiescence, the respondent submits that it depends on two conditions: first, there was, on the part of the applicant, an assent or lying by in relation to the acts of another person; and secondly, in view of that assent or lying by and consequent acts, it is unjust in all the circumstances to grant the specific relief in question[50]. It is further submitted that the relevant works had been completed in 2007 but the applicant did not take action until December 2014. The applicant’s only remaining answer to the acquiescence defence is that they sent a warning letter dated 1 August 2008 but the respondent denied having received the same. 124.In my assessment on a balance of probabilities, the warning letter shows no assent on the applicant’s part and it shall not be given no weight at all simply because the respondent denies having received it or the maker thereof is not called. If I have to make a finding on the questions of estoppel and acquiescence, I would find in favour of the respondent on estoppel but not acquiescence. DISPOSITION 125.To recapitulate, in paragraph 73 above, I find that the following erections have breached the DMC and/or the BMO:-
126.I shall grant the following order:-
127.Items (4), (5), (7) and (12), are not covered by the injunction as a result of my ruling in paragraph 118 that the respondent shall not be required to reverse the alterations in relation to the Internal Staircase and the erections or alterations that are part and parcel thereof or connecting thereto. To elaborate a bit further, Item (7) is an inevitable outcome for an internal staircase to be built. Item (5) is the structure built to shield the opening of the staircase without which the staircase may be exposed to sunlight and rainwater. Item (4) is the sealing up of a hole on a wall which closely relates to or constitutes part of the structure in Item (5). As Item (5) is to remain there, reopening the hole would not serve any real function but only create security risk to the respondent and physical risk of people falling down the hole. For Item (12), it appears that the original route of the channel had to change course or give way due to the positioning of the staircase structure. As the staircase structure is to remain, the altered segment of the surface channel cannot be practically reinstated. At least this is what I observe from the information available without the benefit of expert assistance. 128.On the question of costs, in view of the outcome after trial, I shall make a costs order nisi that there be no order as to costs which shall become absolute in the absence of any application for variation within 14 days from this judgment. 129.Lastly, I thank counsel for their assistance.
Ms Becky B. Y. Wong instructed by Chung & Kwan, for the Applicant, present Mr Lau Ka Kin instructed by Cheung & Yip, for the Respondent, present Appendix I
Appendix II Whether Locations/Areas where Alterations and Erections made are “Common Areas and Facilities” or “Common Parts” (Issue 1)
Appendix III Whether Internal Staircase & Other Alterations/Erections are Breaches (Issue 1)
[1] The DMC dated 27 December 2000 was registered on 15 January 2003 by memorial number 1500204. [2] Paragraphs 3 – 5 of the respondent’s Opening Submissions and paragraph 17 of the applicant’s witness statement introduce the group of companies relating to Wheelock. [3] A/26, para (a)(i) and (ii) [4] A/27, para (a)(iia) [5] A/27-28, para (a)(iii) [6] C/1 [7] B/154 [8] B/52 [9] B/52 [10] B/52 [11] B/103 [12] C/70 [13] [2011] 2 HKLRD 421, CACV 155/2010, Judgment dated 21 February 2011. [14] LDBM 67/2016, Judgment dated 11 July 2018. [15] LDBM 249/2000, unreported, Date of Judgment:16 July 2002 [16] DCCJ 4093/2002, Date of judgment: 28 October 2004 [17] B/56 [18] B/60 [19] B/120 [20] B/51 [21] B/56 [22] B/74-7 [23] B/111 [24] B/120 [25] See B/52, the definition of “Residential Common Areas and Facilities” under Section B of the DMC [26] CACV 222/2019, [2020] HKCA 448, Judgment dated 11 June 2020 at paragraph 17 [27] B/56 [28] supra [29] §§19, 33 [30] could be seen in the 1st Representation, Wheelock’s marketing materials, the 2nd Representation and the Consent [31] B/52 [32] B/52 [33] B/115 [34] “the general building plans and specifications in respect of the Development or in respect of any part or parts of the Development approved by the Building Authority and as amended, modified or substituted from time to time” (emphases added), see B/43 [35] C/151 [36] CACV 10/2010, 22 October 2010 [37] Phipson on Evidence §6-06 [38] [2011] 5 HKLRD 660, CACV 21/2011, Reasons for Judgment dated 28 September 2011 [39] LDBM 242/2011, Judgment dated 12 July 2012 [40] A/135 [41] C/70 [42] A/50 §4(m) [43]Wing Ming Garment Factory Ltd v The Incorporated Owners of Wing Ming Industrial Center [2014] 4 HKLRD 52, HCCT 60/2006, Judgment dated 23 June 2014, at §139(2) [44] If that happens in some future days, that may become the subject matter of some future litigation. [45] CACV 40/2003, 20 April 2005 at §43 [46] [2007] 4 HKLRD 567 at §§17 & 18, LDBM 290/2016, Judgment dated 25 June 2007 [47] [2009] 5 HKLRD 787 at § 67 [48][2014] 3 HKLRD 224 at §144, HCA 111/2011, Judgment dated 5 May 2014 [49] Nearly HK$10 million was paid in 2002/2003 to acquire the combined units which sum is exclusive of tax and incidental expenses and about HK$1 million was spent on erection works in 2006/2007. [50] Wing Ming Garment Factory, supra, at§137 [51] hence not falling within paragraph 1 of Schedule 1 of BMO, para 23 [52] [2011] 5 HKLRD 434 [53] LDBM 67/2016, 11th July 2018 [54] HCA 4327/2003, 13 January 2005; CACV 328/2005, 6 June 2006 [55] The Incorporated Owners of Hong Yuen Court v Dugar Shishir and Dugar Saroj and Anor, LDBM 89/2012, Date of Judgment: 30th June 2015 [56] C/154 [57] B/223 [58] B/224 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment