Memoran Co Ltd v. The Incorporated Owners of Mei Hing Mansion
Read the full judgment text of HCCT 18/2020 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 23 December 2021 before Deputy High Court Judge Winnie Tsui.
Construction management — Common parts definition under Deed of Mutual Covenant and Building Management Ordinance — Order 14 summary judgment and interlocutory mandatory injunction — Whether prior order finally disposed of action — Whether res judicata prevents further Order 14 applications — Application of American Cyanamid principles for mandatory injunctions. The plaintiff commenced proceedings seeking declarations that the structural concrete slab with reinforcement between levels 3 and 4 of Mei Hing Mansion constitutes common parts requiring the defendant’s repair responsibility. The Recorder granted declarations but declined mandatory injunctions in the previous summons. The defendant appealed. The plaintiff sought summary judgment or interlocutory injunction pending appeal. The court found that the previous order did not wholly dispose of the action as factual disputes on damage extent and cause remain undecided. The plaintiff was estopped from making the same Order 14 application again. Summary judgment was refused due to the defendant's arguable factual defence. The court granted the interlocutory mandatory injunction due to safety risks from damaged concrete and lack of adequate remedies, balancing the risk of injustice in favor of immediate repair. Undertakings were given by the plaintiff to mitigate defendant's concerns. Costs were awarded to the plaintiff with discount reflecting failed Order 14 application.
Legal issues: Whether the previous order wholly disposed of the present action · Whether the plaintiff is estopped from pursuing the present Order 14 application · Whether summary judgment should be granted on the present Order 14 application · Whether an interlocutory mandatory injunction should be granted
Outcome: The plaintiff’s Order 14 application is dismissed; an interlocutory mandatory injunction is granted with conditions.
Cited by 4 cases · Cites 5 cases
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HCCT 18/2020 [2022] HKCFI 50 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTRUCTION AND ARBITRATION PROCEEDINGS NO 18 OF 2020 _________________
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_________________ Before: Deputy High Court Judge Winnie Tsui in Chambers Date of Hearing: 23 December 2021 Date of Decision: 23 December 2021 _______________ DECISION _______________ INTRODUCTION 1.Before me this morning is the plaintiff’s summons filed on 30 June 2021 seeking (a) final judgment for mandatory injunctive relief pursuant to Order 14 or, alternatively, (b) interlocutory injunction of the same scope pursuant to Order 29. In its written submissions, the plaintiff asks for a direction that in the event that the order in (a) or (b) is granted, that order be stayed pending the determination of the appeal in CACV 48/2021, which will be heard in May next year. PROCEDURAL BACKGROUND 2.Briefly, the relevant procedural background is as follows. 3.The plaintiff commenced the present action in May 2020. 4.It took out a summons on 30 November 2020 pursuant to Order 14 and Order 14A. It seeks the following reliefs:
5.I shall refer to this summons as “the previous summons”. The summons which is the subject matter of today’s hearing will be referred to as “the present summons”. 6.The previous summons came before Mr Recorder Houghton, SC on 8 January 2021. That was a 9:30 hearing. The recorder made an order in terms of paras 1 and 2 of that summons. As regards para 3, he granted the following declarations instead of the mandatory injunctions sought by the plaintiff. The content of the declarations is however in substance the same as the injunctions. Para 3 reads:
7.I shall refer to this order as “the previous order”. 8.By notice of appeal lodged on 5 February 2021, the defendant appeals against the previous order. That is the appeal in CACV 48/2021. RULING 9.Having considered counsel’s submissions, I am satisfied that, in principle, the interlocutory mandatory injunction should be granted without any stay as initially suggested by the plaintiff but subject to additional undertakings offered by the plaintiff in the course of the oral submissions. 10.In the interest of time, I do not propose to spell out and address counsel’s arguments one by one. Instead I shall go straight to address the questions which I consider to be material for determining the present summons. 11.I set out these questions below.
DISCUSSION Question 1 12.In his written submissions, Mr Tim Wong, counsel for the defendant, takes the stance that the action has been wholly disposed of. In the course of his oral submissions this morning, Mr Wong confirms that he no longer maintains that position and submits that only partial final judgment was entered by the recorder. 13.Notwithstanding the defendant’s change of stance, I shall still address Question 1 briefly as the scope of the adjudication of the recorder is still potentially relevant to the other questions. 14.The answer to Question 1 turns on a proper construction of the previous order. 15.Generally speaking, the construction exercise is an objective one. The express wording of the order should be construed against the proper context. The context comprises the background against which the order is made. The task is to deduce the objective intention of the court, as revealed from the order when it is looked at against the background. 16.On the face of the sealed order, it does appear to be a final order which has disposed of the entire action. I say this because:
17.Drawing on point (d), the immediate conclusion would seem to be that the action had been disposed of as otherwise the recorder would not have made an order on the costs of the action itself. 18.However, as just mentioned, an order is not to be construed by merely looking at the express wording in isolation. Here, the context and background against which the previous order was made is important. They can be found in the transcript of the hearing and also in the written decision handed down by the recorder subsequent to the hearing: see [2021] HKCFI 154. 19.I reproduce the relevant parts of the written reasons below:
20.Further, at para 27, the recorder wrote, “The costs of the summons are to be to the plaintiff.” There was no mention of the costs of the action. 21.I also reproduce the relevant parts of the transcript below:
22.In my view, it is plain from the above extracts that the recorder was of the clear view that there were factual issues that could not be determined in a summary way at an interlocutory stage. These factual issues concerned the extent of the damage to the structural concrete slab and the cause of such damage. He referred to these factual issues as “the water seepage aspects of this case”. 23.It is clear that he expressly refrained from making any determination or expressing any view on these factual issues. To put it bluntly, he did not want to touch on these factual topics at all at the hearing. In effect, he acknowledged that they would have to be resolved at some stage in the future. 24.It follows that these factual disputes remain to be live issues in this action. 25.I would therefore answer Question 1 in the negative. The previous order did not wholly dispose of the present action. 26.I should add that I am also of the view that para 4 of the sealed copy of the previous order contains a manifest error in that it should not cover the costs of the action. This must also be a logical conclusion flowing from Mr Wong’s concession that the action has not been wholly disposed of by the order. Question 2 27.It is clear from the transcript that the recorder did not want to grant the injunction at the hearing. It was out of his own initiative that he proceeded to grant the declarations instead. The relevant exchange with counsel is as follows. (The injunction was sought in para 3 of the previous summons.)
28.It is plain from this extract and also the previous extracts at para 21 above that the recorder had formally ruled on the plaintiff’s application contained in para 3 of the previous summons. Para 3 asked for injunctions. The recorder said he was unsure about it because the ambit of the work required was not clear. He proceeded to make an order on para 3 by instead granting the declarations. All the time, he was having in mind the injunctions. He did not feel it right to grant them. He did not in fact grant them. In my view, he had dealt with them substantively. I would therefore conclude that the Order 14 application made in the previous summons had been fully dealt with. 29.I do not accept the submissions of Mr Bernard Man, SC, appearing with Mr Danny Tang for the plaintiff today, to the effect that there was no adjudication by the recorder on the injunction application. 30.It follows that the plaintiff is now estopped per res judicatum from making yet another Order 14 application seeking essentially the same relief. I answer Question 2 in the affirmative. For that reason, the Order 14 application would be dismissed. Question 3 31.In light of my answer to Question 2, Question 3 does not arise. But I will just deal with it briefly in case I am wrong on Question 2. 32.The special feature regarding the present Order 14 application is that the plaintiff has (initially) tied its execution to the outcome of the appeal. 33.It is recognised that if the appeal is allowed and the declarations set aside, the summary judgment obtained here (if granted) cannot stand. Hence the plaintiff is content to wait for the outcome of the appeal and in the meantime have the summary judgment stayed. The reason why it is making the application now rather than after the appeal is that it does not want to suffer any further delay after (and in the event) the appeal is decided in its favour. It will straightaway have in place a mandatory injunction against the defendant so that the water seepage problem which has affected its premises for the past five years can be fixed at the earliest opportunity. 34.I am of the view that summary judgment should not be granted. 35.The defendant has raised the defence that the damage to the structural concrete slab was in fact caused by the plaintiff when it drilled holes into the slab when installing false ceilings in the premises in the past. This is a factual allegation that cannot be resolved summarily. If made out, it seems that the defendant has an arguable case that it should not be held responsible for repairing the damage. That is the provisional view expressed by the Court of Appeal when it determined a related application in this action recently: see [2021] HKCA 1146 at para 19. 36.In the circumstances, the defendant has established an arguable defence and that would defeat the summary judgment application. 37.Mr Man invites me to nonetheless proceed to grant judgment given that there are as of now binding declarations made by the recorder which are to the effect that the defendant is responsible to repair (see para 6above). That is an order presently in force. 38.Based on that, Mr Man says I should have no difficulty in granting judgment which is merely to give effect to the declarations. And because of the way the summary judgment is bundled up with the outcome of the appeal as devised by the plaintiff, if the declarations turn out to have been wrongly made, my summary judgment would also go. Hence there is nothing wrong in granting summary judgment now. On the other hand, according to Mr Man’s submissions, it would be wrong for me to refuse summary judgment as that is in effect a failure to recognise the binding effect of the declarations now in place. 39.There may be some merit in this argument. 40.However, when answering Question 1 just now, I have referred to how the recorder had expressly refrained from dealing with the factual issues arising from “the water seepage aspects of the case”. Nevertheless, he proceeded to make declarations that the defendant is responsible to repair the structural concrete slab: see, in this regard, paras 20 and 21 of the Court of Appeal decision. In the light of these observations, I do not consider that it is right for me to proceed now to make a final determination of the rights and obligations of the parties at this interlocutory stage. These should be left to be dealt with at trial. 41.I would therefore not grant summary judgment if the plaintiff was not debarred from taking out the present Order 14 application. Question 4 42.As noted at the outset, I am satisfied that an interlocutory mandatory injunction should be granted. The short reason is that it is the best course to take to do practical justice in the present circumstances. 43.We are dealing with a mandatory injunction here. I shall apply the approach explained by Deputy High Court Judge To in Sam Hei Tai Hing Foods Company Limited v The Incorporated Owners Of Waford Industrial Building [2020] HKCFI 871 at para 4:
44.There is clearly a serious issue to be tried that the defendant is liable to repair the structural concrete slab. I am indeed further satisfied that there is a high degree of assurance that at the end of the trial of the action, the injunction was rightly granted. Even if that is not the case, it is a clear-cut case where granting the injunction now carries the lower risk of injustice than refusing one. 45.There is evidence before me that there has been an incident of spalled concrete block falling off from the ceiling. There is further evidence that the concrete was peeling off from the ceiling. It is not in dispute that the slab is damaged. If the damaged slab continues to remain in its current state, this creates a risk of physical danger for those who reside and work in the premises, where an elderly nursing home is operating. Damages are clearly not an adequate remedy when such risk materialises. 46.On the other hand, if the defendant is compelled to repair now, the only realistic downside is that the defendant will bear the repair costs in the meantime when he is not responsible to do so. 47.The balance of convenience lies in favour of an injunction being granted now. 48.I have considered whether there is any delay in the present application. Notwithstanding that the action was commenced in May 2020, no application has been made for an interlocutory injunction up to now. 49.But in the meantime, it is not the case that the plaintiff has been sitting on the problem. It has taken out the previous summons hoping that a favourable outcome would compel the defendant to take action. In March this year, the plaintiff in fact suggested that it could engage its own contractors to carry out the repairs and asked the defendant to co-operate and to pay its costs. But even that request has been refused by the defendant (on the basis that the evidence should not be tampered with). 50.In the circumstances, the plaintiff cannot be accused of any delay in applying for the injunctive relief. 51.On the indication that I am inclined to grant an interlocutory mandatory injunction, the plaintiff has offered to provide a number of undertakings which are to address the defendant’s concern about the tampering of evidence. 52.On that basis, parties have discussed the forms of those undertakings. Based on the resulting draft of those undertakings, the interim injunction can take effect immediately and there is no need to impose a temporary stay. This way, the repair works can hopefully start soon. CONCLUSION 53.For the above reasons, I dismiss para 1 of the present summons. As to para 2, I make the following orders: Upon the plaintiff’s undertaking that:
[Submissions on costs] 54.I am going to take a broad and pragmatic view of the matter. 55.It is plain from the history of the case that the plaintiff has been trying to resolve the water seepage problem which has persisted over the past five years in a reasonable and sensible way. As recently as in March this year, it offered to conduct the repair works. But even that was refused. 56.In this hearing, the plaintiff is the practical winner. It should have costs. But a discount should be applied to reflect the failed Order 14 application. 57.I order that the plaintiff do have 70% costs of the present summons, to be taxed if not agreed. 58.I grant certificate for two counsel.
Mr Bernard Man, SC and Mr Danny Tang, instructed by Jones Day, for the plaintiff Mr Tim Wong, instructed by Huen & Partners, for the defendant |
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