永樂大廈業主立案法團 v. 林穎欣經營珠珠找換店
Read the full judgment text of LDBM 48/2019 on BabelCite. This Lands Tribunal judgment was delivered on 28 April 2023.
1. The Applicant is the incorporated owners of an 11-storeyed building called Wing Lock House ( the Building ) erected on a rectangular lot in Tsimshatsui [1] ( the Lot ). The Building is at the southwestern side of Lock Road at its junction with Peking Road. The dates of its occupation permit and registered deed of mutual covenant ( the DMC ) are 17 November 1962 and 28 February 1963 respectively.
Cited by 1 case · Cites 8 cases
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LDBM 48/2019 [2023] HKLdT 31 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BUILDING MANAGEMENT APPLICATION NO.48 OF 2019 __________________
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_____________________ J U D G M E N T _____________________ 1.The Applicant is the incorporated owners of an 11-storeyed building called Wing Lock House (the Building) erected on a rectangular lot in Tsimshatsui[1] (the Lot). The Building is at the southwestern side of Lock Road at its junction with Peking Road. The dates of its occupation permit and registered deed of mutual covenant (the DMC) are 17 November 1962 and 28 February 1963 respectively. 2.According to the DMC, the Building comprises of “8 shops on G/F and 39 flats on its upper floors and known as Nos.14, 14A, 16 and 16A Peking Road and Nos.1, 1A, 3 and 3A Lock Road”. Vertical circulation within the Building is by way of two lifts and two staircases. On its approved G/F building plan (the G/F Plan), its front entrance (and also front staircase) opens to Lock Road while its rear entrance (and also its rear staircase) opens to a scavenging lane (the Rear Staircase and the Rear Lane), which runs in a north-south direction with Peking Road at its southern end. 3.The Respondent at one time operated on G/F of the Building a shop (the Shop) running a currency exchange business (the Business) occupying, she admitted, a rectangular space adjacent to the Rear Staircase facing the Rear Lane totaling 110 square feet in area[2] (and described by her expert, Mr Kenneth C.Y. Cheung (Mr CY Cheung), as the Property in his report[3]), consisting of 2 portions with different headroom i.e.
4.The Property was one of two “storerooms” that was created out of approved alterations and additions works that were carried out at G/F of the Building from about 1964 to 1966 (the A&A Works). The Applicant alleged (but the Respondent disputed) that the Respondent had also occupied the second storeroom so created i.e. another rectangular space to the north of the Property (the Disputed Storeroom), making up a total occupied area of 200 square feet. This 200-square-feet area was described in Notice of Application in Chinese (NOA) as “the said Space (該地方)”. Applicant’s current solicitors, Messrs. Chung & Kwan (C&K), had marked the said Space in pink on a G/F plan of the Building annexed to NOA (the Pink Area)[4] 5.In its NOA dated 12 March 2019, the Applicant alleged that:
The Applicant therefore sought injunctions and damages against the Respondent. 6.On 28 March 2019, the Respondent in person filed a Notice of Opposition in Chinese (NOO). On 17 July 2020, her elder sister and authorized representative, Ms Lam Wing Yin (Ms Lam), appeared before the Lands Tribunal and gave an undertaking that the Respondent shall not “thereafter occupy, possess, use or enter the said portion of passageway next to the Rear Staircase i.e. the Pink Area in the plan annexed to NOA” (the Undertaking). 7.Because of the Undertaking, the Applicant withdrew all its claims of injunction against the Respondent. Hence, the sole subject matter of this trial is Applicant’s remaining claim of damages. The Applicant sought damages against the Respondent for the period from 12 July 2018 to 2 March 2021. 8.On 11 February 2021, the Respondent’s current solicitors filed on her behalf Amended Notice of Opposition (ANOO), taking issue about the Pink Area being common parts, the DMC having binding effect on her or that the DMC and/or BMO having been breached.
9.The Applicant disagreed in her Re-Amended Reply with the assertions made by the Respondent in ANOO and averred, among others, that Mdm Poon does not own the Space and that the Respondent had occupied the Pink Area until the Applicant recovered its possession on 2 March 2021. 10.At trial, Ms Becky Wong of counsel (Ms Wong) represented the Applicant while Mr Lawrence Cheung of counsel (Mr Cheung) appeared for the Respondent. Agreed Issues in dispute 11.It was agreed that the following six issues require the determination of this Tribunal. They have been reformulated by this Tribunal to become as follows: -
Assessment of witnesses 12.Apart from calling Mr CY Cheung as her expert at trial, the Respondent called Ms Lam as her factual witness. The Applicant called at trial Ms Tong Fung Ming (Ms Tong), the secretary of its management committee (MC), as its factual witness and Mr Keith L.H. Siu (Mr Siu) as its expert witness. 13.I do not find Ms Lam credible or reliable. She was not, I think, entirely truthful at trial. Material parts of her evidence are, I think, inherently implausible and contradicted by words and/or actions of her own and of others, or contradicted by documents produced. Though the Respondent had produced many documents into evidence, as shall be explained below, they are of limited assistance to the evidence of Ms Lam or the Respondent’s case. 14.Regarding Ms Tong’s evidence, some were, I note, given for the first time in the box and not stated in her three witness statements. That said, her evidence in general is, I think, supported by its inherent probabilities and the contemporaneous documents produced by the Applicant. Unless otherwise stated, I find her credible and reliable and accept her evidence referred below. 15.In case of any conflict between the evidence of Ms Lam and that of Ms Tong, unless otherwise stated, I prefer those of the latter on my general assessment of these two witnesses above and specific reason(s), if any, I give below. 16.Regarding Mr CY Cheung and Mr Siu (the 2 Experts), there are common factual (including observation) evidence given by them, and unopposed factual (including observation) observation given by one of them, that I will accept and act upon below. 17.Mr Cheung in his submissions attacked the impartiality of Mr Siu on the ground that Mr Siu had altered his opinion in the box regarding the location of “the spaces underneath the staircases leading from G/F to 1/F of [the Building]” referred to in the DMC. He submitted that Mr Siu was deliberately lying in the first place[7]. 18.I disagree. What in fact happened, I think, was that it had unfortunately escaped Mr Siu’s attention in his writing his report that the Rear Staircase leading from G/F to 1/F had 2 flights (instead of 1 flight) of stairs such that he mistook the location of the space above mentioned at the Rear Staircase[8]. 19.In our daily life, people do, I am afraid, overlook things from time to time. Mr Cheung himself, I observed, had also overlooked cross-examining Mr Siu about the “landing” in between 1/F and G/F of the Rear Staircase by reference to photos taken by Mr Siu[9] to uncover the said mistake above. Mr Cheung did not do so by follow-up questions until after this Tribunal had questioned Mr Siu on those photos for clarifications. 20.The 2 Experts are, I believe, both impartial. Both had, I think, given their independent valuation opinion and “common parts” opinion. Nonetheless, the former is more an art than science and no two experts will likely agree on every point. The latter is, as shall be explained below, a matter of construing the DMC. On these two areas in conflict, I will therefore focus below more on merits and demerits of their individual opinions and reasons. Background facts 21.Having considered all the evidence adduced at trial, I find the following further background facts proven. They are either common ground or have been proven from indisputable or unopposed evidence and/or documents. Moreover, some of them have come from admissions given by Ms Lam, Ms Tong and/or the 2 Expert(s), as the case may be (to which I shall give full weight). The DMC dated 28 February 1963 22.The DMC was executed in 1963 by a total of 26 parties[10] and it has the followings salient provisions (and features): -
The G/F Plan dated 22 October 1962 23.The following physical layout of the G/F of the Building in the G/F Plan (which predated the DMC) should, I think, be noted.
A&A Works carried out from 1964 to 1966 24.In July 1964, April 1966 and November 1966, 3 sets of plans of A&A Works[16] were in turn submitted and approved by the Building Authority (BA). These works had, I think, been completed subsequently with the following results:
Subsequent Events 25.All 8 G/F shops with their respective addresses stated in the DMC had subsequently been sold with assignment plans[18] marking their respective boundaries. For our present purpose, three things are of interest.
26.The boundary or the length of the said Exterior Wall was also marked in subsequent assignment plan[20] as limited to that of western side of No.14 Peking Road and no more i.e. it stopped at that side of the Rear Entrance closer to Peking Road. 27.In November 1965 i.e. before the last approved plan of the A&A Works, the First Owner had assigned 1/48 share together with exclusive use of the whole Roof of the Building and the said Staircase Spaces to one Tan A Moy[21] subject to and with the benefit of the DMC. The boundaries of the said Staircase Spaces were, however, not marked thereto. 28.Mr CY Cheung[22] had found another subsequent assignment plan[23] that purported to mark the boundaries of the said Staircase Spaces. They are found at two locations: 1) one below the front staircase leading from G/F to 1/F, and 2) the other below the Rear Staircase leading from G/F to 1/F (see [80(4)] below for its exact area)[24]. 29.In 1971, the Applicant was incorporated pursuant to the predecessor of BMO. 30.On 28 November 2006, a lease of the said Exterior Wall for 2 years from 1 January 2007 to 31 December 2008[25] was entered into by Mr Fung Shing Cheung[26] (Mr Fung), the husband of Mdm Poon, as tenant thereof. 31.In or after February 2015, the Applicant was served by BA with an order No.C/TF/000318/15/K dated 12 February 2015[27] requiring it to demolish a projecting structure attached to the shopfront of the Shop and of the Disputed Storeroom facing the Rear Lane (BA Order and the Projection). 32.On 18 November 2016, the Respondent applied for business registration (BR) of the Business, which was said to have commenced on 16 October 2016. Five days later, the business address was updated to “shop at side of the rear staircase G/F Wing Lock House 14 Peking Road Tsimshatsui”. 33.On 13 June 2017, former solicitors of the Applicant gave a letter to the Respondent demanding her to remove the Projection in line with BD Order by 15 June 2017. 34.On 2 February 2018, C&K sent a demand letter by post to the Respondent demanding her to remove the Projection (and reinstate the external wall of the Building) within 3 weeks, claiming the same to be unauthorized erection to its “common parts” i.e. its external wall[28]. 35.On 12 July 2018, C&K sent another demand letter by post to the Respondent (12/7/18 Letter) who admittedly received it[29] and advised Ms Lam of the same. By 12/7/18 Letter, C&K complained instead of the Shop being unauthorized erection to “common parts” of the Building i.e. its external wall and demanded removal of the Shop (and reinstatement of the said external wall) within 21 days. 36.In September 2018, the Applicant was served by BA with notices requiring it to instruct qualified persons to make prescribed mandatory inspection (and, if necessary, to make repairs) of the windows and common parts of the Building[30] (BA Notices). 37.On 12 March 2019, C&K filed NOA to commence this application against the Respondent. On 28 March 2019, the Respondent filed NOO in person. 38.Between 19 and 24 June 2019, C&K sent to Mdm Poon by ordinary and registered post several letters at Respondent’s business address (or the said Space) but they were all returned undelivered to C&K with the remark of “no such person”. 39.On 25 June 2019, photo was taken by the Applicant of the Pink Area, which had been built upon and enclosed[31]. More detailed description of its structures and objects found therein will be made below by reference to close-up photos taken later. For present purpose, it should be noted that suitcases were seen being placed both outside the Shop and the Disputed Storeroom. 40.On 4 July 2019, C&K sent a letter to the Respondent demanding address or contact particulars of Mdm Poon. Ms Lam in the box confirmed receipt of this letter. However, the Respondent never replied. 41.On 17 September 2019, Prestige Construction & Engineering Co. Ltd. (Prestige) reported to the Applicant with photos[32] on, inter alia, whereabouts of manholes still found (and also missing manholes[33]) at G/F of the Building, including at the Property and at the Disputed Storeroom (whose photo showed suitcases placed inside[34]). 42.On 10 October 2019, Prestige had reinstated one manhole cover[35] situated, but formerly covered by flooring[36], inside the Disputed Storeroom (whose photo showed presence of water meters inside it[37]). 43.On 24 October 2019, Mr Siu visited and inspected the Pink Area and the Rear Staircase, and took photos[38].
44.On 18 December 2019, several close-up photos were taken by the Applicant of the Shop and the Disputed Storeroom at the Pink Area[43]. The followings should be noted.
45.On 17 July 2020, Ms Lam gave the Undertaking on behalf of the Respondent. 46.On 4 August 2020, the Respondent reported to BR Office that the Business had ceased on that day. On the same day, she notified the Custom & Excise Department (C&E) of the cessation of the Business[44]. 47.In late October 2020, as captured by two photos produced by the Respondent[45], some workers were instructed by someone to demolish, and they did demolish, the Stall at the said Exterior Wall. 48.On 2 November 2020, as shown by a photo taken, and produced, by the Applicant[46], the Business was no longer being carried out at the Shop, whose roller shutter had been pulled down. But miscellaneous items including the Ventilator were still placed in front of it. The Disputed Storeroom was still surrounded by hoardings. Food by way of 2 dishes was still being placed on the ground for, one believes, the 2 cats raised by Ms Lam to feed themselves. In the background, the Stall (which had by then been demolished) was also surrounded by wooden hoardings. 49.On 10 February 2021, Mr CY Cheung visited the Building, inspected the Pink Area and took photos[47]. The Stall was still surrounded by wooden hoardings. The roller shutter of the Shop remained pulled down. The Disputed Storeroom was surrounded by hoardings. The next day i.e. 11 February 2021, Respondent’s solicitors filed ANOO on behalf of the Respondent. 50.On 20 and 23 February 2021, the Applicant instructed its contractor to attend the Pink Area to demolish the structures erected thereon. On both occasions, Ms Lam’s father (Mr Lam) turned up and called the police. For this reason, demolition works had to be suspended on both occasions. 51.On 2 March 2021, the Applicant’s contractor accompanied by staff of Building Department (BD) attended the Pink Area again to attempt demolishing the structures erected thereon. Mr Lam and Ms Lam both turned up this time. Mr Lam once again called the police. After Applicant’s contractor and BD staff had explained the matter to police, the demolition works was allowed to proceed on that day. 52.Applicant’s contractor managed to complete on that day demolition of most structures erected at the Pink Area and the Projection[48]. Many photos were taken by the Applicant and produced as evidence[49]. It should be noted that; -
53.On 4 March 2021, Amended Reply was filed on behalf of the Applicant. On 17 May 2022, Re-Amended Reply was filed on behalf of the Applicant. 54.Further photos taken on about 29 July 2022 capturing, among others, the Pink Area and the Rear Entrance were produced at trial by the Respondent[50]. The Shop and the Disputed Storeroom[51] remained enclosed, with each of their original openings replaced by a pair of wooden planks. The Open Yard shown in G/F Plan had not yet been restored. But objects and structures were no longer placed in front of them. Hence, occupants of the Building exiting from the Rear Entrance would no longer be obstructed by, say, structures, objects or suitcases formerly found therein. Liability Issue (1) –Disputed Storeroom occupied by Respondent or not? Issue (5) – when did Respondent comply with the Undertaking? 55.These two issues above can, I think, be considered together. Mr Cheung in his submissions sought to place much emphasis on the mass of documents produced by the Respondent, including BR and business records, tenancy agreements, photos etc.[52]. In substance, by reference to these documents, he submitted that it was likely that
56.Mr Cheung asked me to accept Ms Lam’s evidence to the above effect and her evidence that it was Mdm Poon who put suitcases back into the Disputed Storeroom after the Respondent had complied with the Undertaking latest by 31 July 2020 by terminating the Tenancy earlier and ceasing the Business. 57.Mr Lam, Mr Cheung further submitted, had worked for Mr Fung at the Stall and the Property before on Ms Lam’s evidence and was therefore asked by Mdm Poon to take care of her goods or belongings at the Disputed Storeroom. That explains why Mr Lam tuned up on 20 and 23 February 2021, and on 2 March, 2021. 58.I cannot, and do not, accept the above submissions of Mr Cheung (and I reject the above evidence of Ms Lam). 59.It is true that Ms Tong under cross-examination agreed that Mr Fung or the Couple owned the Stall. The Respondent also managed to produce BR and other business records of one sole proprietorship by name of “Peninsular Company” with address of “14 Peking Road Side Door Tsimshatsui”[53]. However, they are not, I notice, updated enough to prove that the Couple or Mdm Poon had continued to own or run the Stall at all material times after, say, 2017. 60.Had the Couple or Mdm Poon were/was still around the Stall after 2017 as alleged, one thinks it unlikely that C&K had failed to reach them/her by writing several letters to Mdm Poon in vain in June 2019 at [38] above and by writing in vain to the Respondent in July 2019 at [40] above. Were they/she reachable after 2017, the Applicant would have, one thinks, already sued them/her as additional respondent(s) to this application. I therefore prefer, and accept, Ms Tong’s evidence that the Mr Lam and/or Mrs Lam were/was found instead running the Stall and its business at all material times. 61.In any event, I do not think the Respondent had adduced sufficient evidence to prove that “Peninsular Co” had carried on a business selling suitcases.
62.Had suitcases spreading all the way northwards from Peking Road to outside the Disputed Storeroom all belonged to the Couple or Mdm Poon as alleged by Ms Lam in the box, one finds it unlikely that the Respondent would have allowed them/her to place them also outside the Shop to cause obstruction to the Business. After all, as from January 2019, the Respondent paid as much as $28,000 per month for the Tenancy over the Property. 63.Admittedly, many documents produced by the Respondent give address of “14 Peking Road”, “Rear Lane”, “Rear Staircase”, “G/F shop” or their combinations. They include telephone bill and BR record of the Business, tenancy agreements the Respondent and Ms Lam had entered with Mr Fung and Mdm Poon respectively, and rental receipts issued by Mdm Poon to the Respondent. However, they give, I think, no clear indication or delineation of the ground surface (or particular area of the Building) that the Respondent had occupied and made use of at the material times. 64.Had the Couple occupied or used the Disputed Storeroom in name of “Peninsular Co.” or otherwise in early 2000’s while Ms Lam was in her secondary school as alleged, one finds it surprising that the Respondent had not specifically pointed out in NOO their occupation and use of the Disputed Storeroom. The Pink Area marked in the plan annexed to NOA written in Chinese plainly included the Disputed Storeroom. 65.For similar reasons above, one also finds it surprising that:
66.Under cross-examination, Ms Lam was also unable to explain why there was no mention of occupation and use of the Disputed Storeroom by the Couple or Mdm Poon in her witness statement and supplemental witness statements. 67.To the contrary, Ms Lam had admitted in the box of opening the Iron Gate to allow Applicant’s workers to go inside the Shop to search for manholes. In addition, Mr Cheung had put to Ms Tong that the Respondent had allegedly cooperated fully with every access request to water meters found inside. These 2 pieces of evidence suggest in my view that the Respondent had effective control over the Disputed Storeroom at the material times (and photos at [41] and footnote [34] above had captured that suitcases had already been stored inside the Disputed Storeroom before Ms Lam gave the Undertaking to Lands Tribunal). 68.The suggestion that it was Mdm Poon who had put her belongings (or suitcases) back into the Disputed Storeroom after Ms Lam gave the Undertaking came, I notice, from Ms Lam alone. She said in her supplemental witness she heard that from Mdm Poon herself but she said differently in the box that she heard that from Mr Lam who heard from Mdm Poon. I disbelieve this bare assertion of Ms Lam. In any event, neither Mr Lam nor Mdm Poon was called as witness. I give no weight to such hearsay. 69.Admittedly, the Respondent had reported to BR office and C&E about cessation of the Business as from 4 August 2020. But she had, I think, never returned vacant possession of the Property even to her alleged landlord (i.e. Mdm Poon) by 31 July 2020 in line with the terms[54]of their termination letter dated 31 May 2020 (let alone, I think, returned vacant possession of the Property to the Applicant). 70.By 2 March 2021, many tools-of-trade and other items of the Shop (or the Business) like the Counter, note-counting machine and the Fridge were still yet to be removed by the Respondent, who had simply pulled down the roller shutter to close the Shop. Considering these facts found by me, the Respondent had plainly, I think, not complied with the clear terms of the Undertaking, which prohibited her from continued possession, occupation or use of the Pink Area as from the date of the Undertaking. 71.The fact that Mr Lam turned up on 20 and 23 February 2021, and 2 March 2021, called police[55] and oversaw the demolition from afternoon till evening on 2 March 2021 strongly suggested to me that he was most concerned with, and possibly even connected with, the goods (including suitcases) that were left behind. In contrast, their alleged “owner” as claimed by Ms Lam i.e. Mdm Poon was nowhere to be seen. 72.Inference can and should, I think, be drawn on the totality of trial evidence that the Respondent owned and/or possessed the large number of suitcases left behind and recovered from the Disputed Storeroom on 2 March 2021 and that the Respondent had occupied and made use of the Disputed Storeroom to store them until that date. Among others, it makes, one thinks, good commercial sense for a moneychanger to sell not only foreign currencies to customers but also suitcases for their travel purpose. 73.Relying on previous version of Amended Reply[56] which Ms Tong had signed and verified on 4 March 2021 (i.e. two days after Ms Tong attended the Pink Area on 2 March 2021 and witnessed the events above), Mr Cheung sought to discredit Ms Tong and used them to corroborate Respondent’s case on Issue (5). 74.I do not think Mr Cheung succeeded on that.
75.On Issue (1), I therefore find that the Respondent had at all material times occupied the Pink Area (i.e. both the Property and the Disputed Storeroom). 76.And, on Issue (5), I find that the Respondent had only complied with the Undertaking by 2 March 2021. Issue (2) – the Pink Area “common parts” or not? 77.This is a question of construing the DMC. 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 that it was intended to achieve. The overriding objective in construction is to give effect to what a reasonable person would have understood the parties to meann. Instead of focusing on the ordinary and natural meanings of a few words in a clause, very often the broader context provides surer guide. Such construction is a unitary exercise involving an iterative process[57]. 78.The 2 Experts differ on this issue as follows: -
79.On proper construction of the DMC (and proper application of BMO), the Disputed Storeroom and the Front Portion are, I think, “common parts” under the DMC. My reasons are as follows.
80.Regarding the Rear Portion i.e. the said triangular Staircase Space underneath the Rear Staircase leading from G/F to 1/F, a reasonable person reading the DMC as a whole would, I think, have understood the parties to mean that it is to be privately owned by its owner(s) for the time being. I give the following reasons for the said construction.
81.Accordingly, on Issue (2), I hold that the Pink Area less the Rear Portion (or, the Front Portion and the Disputed Storeroom) is “common parts” under the DMC. It total area is, I think, only 160 square feet i.e. 200 square feet (of the Pink Area) less 40 square feet (of the Rear Portion). Issue 3 – Breach of DMC and/or s.34I of BMO or not? 82.Ms Wong, I think, in effect accepted in her submissions that the Applicant has no locus to sue the Respondent in respect of the Rear Portion in the event I do not find it “common parts”. In view of my conclusion on Issue (2) above, I so rule and focus below on the Front Portion and the Disputed Storeroom i.e. the Pink Area less the Rear Portion. 83.I first agree with the following submissions of Ms Wong. They are, I think, supported by the terms of the legislation and the related case law.
84.At the same time, I agree with Mr Cheung that the specific “negative” covenants of the DMC relied upon at paragraph 3 of NOA are all inapplicable in the circumstances against the Respondent. Clauses 2, 8, 9 and 11 of the DMC apply if and only if the Respondent is “entitled to exclusive use, occupation and enjoyment of any floor or portion thereof”, which was not so in our case. 85.For the above reason, I do not find the Respondent in breach of the provisions of the DMC the Applicant relied upon. 86.I therefore move to Applicant’s remaining complaint under s.34I(1) of BMO. By that section, no person may (a) convert any part of the common parts to his own use unless such conversion is approved by a resolution of the owners’ committee (if any)[69]; (b) use or permit to be used the common parts in such a manner as (ii) to cause a nuisance or hazard to any person lawfully in the building. 87.Considering background facts and such additional facts I have find proven on Issues (1) and (5) above, I am satisfied that the Applicant had, at all material times until 2 March 2021, “converted” the “common parts” of the Building (i.e. the Pink Area less the Rear Portion as I find on Issue (2) above) “to her own use” (whether it was for the Business or otherwise) without any authority of the Applicant by way of resolution made by its MC. 88.Subject to equitable defence below, I therefore find the Respondent in breach of s.34I(1)(a) of BMO in respect of the Pink Area less the Rear Portion. 89.Moving to Applicant’s complaints under s.34I(1)(b)(ii) of BMO, I refer to paragraph 8 of NOA and particulars thereof (alleged hygiene problem of the Shop caused by cat-raising of Ms Lam and alleged late removal of the Projection are, I note, not found therein and therefore will not be considered in this judgment). 90.In terms of evidence on this complaint, I prefer that of Ms Tong to that of Ms Lam. I accept and find that Prestige, its contractors and workers had to apply to the Respondent for access to the Disputed Storeroom and the Property. They had, however, been rejected, delayed and obstructed by the Respondent in their efforts in searching for, maintaining and repairing manholes and underground sewers (and also taking measurement of, maintaining and repairing, water meters) found inside. Old manhole cover found inside had covering made of flooring and new cover needed to be reinstated. 91.On the aforesaid findings, background facts proven above and additional findings per Issues (1) and (5), I am satisfied that the Applicant had also, at all material times until 2 March 2021, “encroached” and “obstructed” the “common parts” (i.e. the Pink Area less the Rear Portion) in such a way to cause “nuisance” to persons lawfully in the Building. 92.Accordingly, subject to equitable defence below, I also find the Respondent in breach of s.34I(1)(b)(ii) of BMO in respect of the Pink Area less the Rear Portion. 93.For the sake of completeness, unless further proof is forthcoming, be it oral evidence or further document, I am not satisfied that the filled up Rear Staircase window (or, the Front Portion and the Disputed Storeroom) had anything to do with alleged delay, if any, in complying with the BA Notices. 94.On Issue (3), the Respondent have therefore, I find, been in breach of s.34I(1)(a) and s.34I(1)(b)(ii) of BMO in respect of the Pink Area less the Rear Portion at all material times until 2 March 2021. Issue 4 – Equitable defence made out or not? 95.I refer to paragraph 12 of ANOO for the particulars of the 3 equitable defences of estoppel, waiver and laches that the Respondent relied upon to deny the Applicant the relief of damages it seeks against the Respondent for breach of s.34I of BMO I found above. 96.One should observe from the said paragraph 12 of ANOO that the Respondent did not rely on proprietary estoppel nor lay claim to any alleged proprietary interest over the Pink Area. Neither was allegation made by the Respondent against Applicant’s predecessor-in-title one way or another. 97.I accept Mr Cheung’s submissions that the following principles of promissory estoppel apply, namely: -
98.As for acquiescence in our context: -
99.As for knowledge required to establish acquiescence, it is sufficient that at the relevant time the party concerned knew of the facts or matters that gave rise to his right to equitable relief, even although he may not have fully understood, as a question of law, the rights that he possessed. It is ordinarily sufficient that the plaintiff has been put on suspicion, that is, that he is aware of sufficient matters to raise in his mind a doubt whether an infringement of his rights has taken place[72]. 100.For waiver to apply, the following elements are required to be met i.e.
101.For the equitable bar of laches, I also accept Mr Cheung’s reference to the following principles, namely:
102.Applying the above principles, for the following reasons, I do not think that the Respondent had made out the above three equitable defence she relied upon.
103.For the above reasons, the Respondent has, I think, failed to make out all her alleged equitable defence on Issue (4). Quantum Issue 6 – Award, Duration & Amount of Damages 104.Agreeing with the applicable principles set out at [8] of IO of Percival House v Fusion Advertising Solution Ltd[78], I reject paragraphs 56 to 58 of Mr Cheung’s closing submission. 105.Admittedly, on my finding that the Pink Area less the Rear Portion being “passageway” of the Building and “common parts” under the DMC for communal use, this 160-square-feet “common parts” area is, I would agree with Mr Cheung, not intended for “commercial” use (like being rented out) by “individual” owner. Nonetheless, the Respondent is, I would hold, still liable at law to pay the Applicant mesne profits for breach of s.34I of BMO in respect of the same.
106.For duration of payment, I would hold that the Respondent is liable to pay the Applicant mesne profits from 12 March 2019 to 2 March 2021. As C&K still demanded the Respondent in 12/7/18 Letter to remove the Shop as being unauthorized erection over the external wall as “common parts”, I accept Mr Cheung’s submission that mesne profits should start to accrue from the commencement of this application on 12 March 2019 and not earlier. Such payment ends when the Respondent at last complied with the Undertaking on 2 March 2021. 107.In terms of quantum, the 2 Experts both adopted direct comparison method to arrive at market rent, exclusive of management fees, government rents and rates, on “existing use value basis” of the Pink Area, the Property, the Front Portion or the Rear Portion (as the case may be) for the valuation period from 16 October 2016 to October 2019.
108.Regarding differences of the 2 Experts in terms of adopted comparable, my determination and reasons are as follows.
109.Hence, disregarding comparable Nos.2 and 4 of Mr Siu as being not in line with the market as the 2 Expert agreed, I adopt below comparable Nos.1, 3, 5 and 7 of Mr Siu[83] to arrive at average monthly unit rate per square feet for calculating the amount of monthly mesne profits payable by the Respondent for her past occupation of the said 160-square-feet “common parts” area from 12 March 2019 to 2 March 2021. 110.Regarding the 2 Experts’ differences in terms of adjustments for various factors, my determination and reasons are as follows.
111.In summary, I agree with all adjustments made by Mr Siu to his comparable Nos.1, 3, 5 and 7, whose adjusted monthly unit rate per square feet as at 16 October 2016 is $133.6, $98.5, $161.5 and $102.4 respectively. Their average adjusted monthly unit rate is therefore $124 per square feet. 112.Making time adjustment on a yearly basis for the 2 years of 2017[84] and 2018[85] by reference to same rental index for private retail property agreed by the 2 Experts[86], as at 12 March 2019, I arrive at, and adopt, an average monthly unit rate of $130.5 per square feet, and a monthly sum of $20,880 for the subject 160-square-feet “common parts” area (i.e. $130.5 x 160 square feet). 113.Applying the above monthly sum of $20,880 until 2 March 2021, say, a total of 23.67 months, the total mesne profits payable by the Respondent amount to $494,230 (i.e. $20,880 x 23.67 months). 114.On Issue (6), for her breach of s.34I of BMO in respect of the Pink Area less the Rear Portion, the Respondent is, I think, liable to pay the Applicant mesne profits totaling $494,230 for the period from 12 March 2019 to 2 March 2021. Disposition 115.On my factual findings and legal conclusions above, I order the Respondent to pay the Applicant damages in the total sum of $494,230. Costs order nisi 116.Costs normally follow the event after trial. I make an order nisi that the costs of this application, including all reserved costs and the costs of this trial together with certificate of counsel, be paid by the Respondent to the Applicant to be taxed on District Court scale if not agreed. 117.The above order nisi shall become absolute if none applies to vary it within 14 days of this judgment. 118.Finally, I thank both Ms Wong and Mr Cheung for their submissions.
Ms Becky Wong, instructed by Chung & Kwan, for the Applicant Mr Lawrence Cheung, instructed by Vitus Lawyers, for the Respondent [1] Kowloon Inland Lot No.8058 [2] See Further & Better Particulars given by Respondent’s solicitors on para 3(e) of Amended Notice of Opposition by way of letter to Applicant’s solicitors dated 29 March 2021 found at p.24 of Trial Bundle (T/B). It is marked in yellow in a plan prepared by Mr CY Cheung at p.363 of T/B. [3] It was called “Area B” in the Joint Expert Statement at p.428 of T/B. [4] p.9 of T/B. The shape of the Pink Area is like an English letter “L”. The part admittedly occupied by the Respondent is the horizontal line at the bottom of this letter “L” while the vertical remainder is the Disputed Storeroom. [5] Cap.344 [6] Whose current term expires on 31 December 2021. [7] Paragraphs 4 to 6 of Respondent’s closing submissions. [8] Paragraph 33 of Mr Siu’s report in this respect (at p.282 of T/B) is, for this reason, inaccurate. [9] P.301 of T/B, see also Exh.A5 drawn by Mr Siu. [10] Called the “First Owner” to “26th Owner” therein. Some owners consisted of more than one person. [11] Oen Yin Choy 溫仁才 [12] i) and ii) add up all G/F shops without frontage of Lock Road. [13] In proportion to his share of and in the Lot: see clause 4 [14] Its northeast corner has 2 shops. One is big. One is small. [15] I disagree with Mr Cheung’s reading of the DMC and of the G/F Plan in this regard. I do not think the said Exterior Wall extends all the way to the other (northern) end of the Building. It was described in the DMC as “the exterior wall of G/F of No.14 Peking Road facing scavenging lane (bold supplied)”. It means, I think, the enclosing wall of the said shop only. [16] P.296-298, 366-368 of T/B [17] See paragraph 22 of Mr Siu’s report at p.279 of T/B. See also photos of the altered Rear Staircase with its altered landing (and the Rear Portion enclosed in walls) at p.301 & 378 of T/B. [18] Save that of February 1965 for assignment of shop at G/F, 14 Peking Road, the dates of the other 7 G/F shop assignments are unknown. [19] Found at p.309-316, 403-410 of T/B. They are put together in a plan found at p.4 of Mr CY Cheung’s report at p.363 of T/B. [20] Marked in red at p.411 of T/B and also marked in green in plan at p.363 of T/B. [21] 陳亞妹 [22] According to Mr CY Cheung, the existing owners of the said Staircase Spaces are Chen Chin Wan and Kao Mei Cung after an assignment in July 2009. [23] P.412 of T/B. It also resembled the layout of the G/F Plan. [24] Section 2.1 “Property (10)” at p.5-6 of Mr CY Cheung’s report at p.364-365 of T/B. [25] Found at Schedule 8 at p.464 (read with Schedule 4 at p.462) of T/B regarding comparable No.6 of Mr Siu. [26] 馮誠彰 [27] Issued pursuant to s.24 of the Buildings Ordinance, Cap.123. It was registered at the Lands Registry, see land search at p.306 of T/B. [28] Relying on clause 9 of the DMC prohibiting structural alteration and s.34I of BMO. [29] Paragraph 3(c) of ANOO. [30] Pursuant to s.30B(3) and 30C(3) of Buildings Ordinance, Cap.123. [31] P.177 of T/B [32] p.173-175 of T/B [33] S3-UTL and S2-UTL [34] S2-UTL with photo at bottom of p.173 of T/B showing suitcases inside the Disputed Storeroom [35] F7-UTL. On 19 December 2019, Prestige billed the Applicant $9,000 for the said reinstatement work. [36] 飾面 [37] F7-UTL with photo at top of p.173 of T/B showing water meters inside the Disputed Storeroom. See also photos of water meters inside the Disputed Storeroom taken on 19 March 2018 found at p.182-184 of T/B [38] P.300-302 of T/B [39] On this point, see another photo of the Shop produced by the Respondent at p.259 of T/B for this end of the Stall. The Disputed Storeroom also captured can apparently be locked and dark objects like suitcases in plastic bags were stored inside. The peculiar feature about this photo is that suitcases placed outside the Shop on other photo dates had all been, I think, deliberately removed on this occasion of photo taking. A useful comparison is another photo of the Shop produced by the Respondent at p.260 of T/B where suitcases were found being placed outside the Shop (and with two cats inside the Counter). [40] She was not identified by evidence. [41] P.302 of T/B [42] P.235 of T/B [43] P.178-181, 185 & 186 of T/B [44] Pursuant to Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap.615. [45] P.272-273 of T/B [46] P.197 of T/B [47] P.377 of T/B [48] I prefer Ms Tong’s evidence on this point to that of Ms Lam. [49] P.198-210, 473-475 of T/B. [50] P.476-482 of T/B [51] whose interior should, one thinks, have been emptied. [52] Paragraphs 11, 51 and 52 of Respondent’s closing submissions. [53] One invoice from Uni Hardware Ltd dated 14 June 2007 at p.257 of T/B does show the Chinese name of Mr Fung i.e. 馮誠彰 as proprietor of Peninsular Company. [54] 搬清該處內的一切物件 [55] I prefer, and accept, Ms Tong’s evidence that Mr Lam did obstruct demolition on all occasions above. [56] It reads: “the Applicant avers that the Respondent operated a currency exchange shop at the said Space until 31 July 2020 (italics supplied)”. [57] 黎偉雄 v信和物業管理有限公司 [2020] HKCA 448 [2] & [26] [58] P.6-7 of Mr Siu’s report at p.281-282 of T/B [59] P.3-10 of Mr CY Cheung’s report at p.362-369 of T/B. [60] Cogi Enterprises Ltd & Others v The IO of Malahon Apartments, unreported, HCA 816/2004, 5 May 2010 at [82]. [61] Jikan Development Ltd & Another v IO of Million Fortune Industrial Centre (2003) 6 HKCFAR 446, 457C-E. [62] Their boundary is marked by Mr CY Cheung in blue on a plan found at p.363 of T/B. [63] Mr Cheung is suggested to read, or re-read, those authorities cited at [11] to [13] of Incorporated Owners of No 27A Chatham Road, Kowloon v Lee Kai Kong [2001–2003] HKCLRT 273 [64] See also華都大廈(高士威道)業主立案法團 v譚建華所經營裕華皮鞋 [2021] HKDC 1475 [20] – [25] [65] Cap.219 [66] The Respondent never raised adverse possession in NOO or ANOO. [67] Incorporated Owners of No 27A Chatham Road, Kowloon v Lee Kai Kong [2001–2003] HKCLRT 273 [18] to [21] [68] Paragraphs 38 and 68 of Respondent’s closing submissions [69] After the Applicant was incorporated, the owners’ committee would be replaced by MC of the Applicant: see s.34K of BMO. [70] Luo Xing Juan Angela v The Estate of Hui Shui See, Willy, Deceased (2009) 12 HKCFAR 1, [55], applied at [53] of The IO of Shiu Fung Mansion v Wong Yuk Ming & Another, unreported, LDBM 341/2014, 30 December 2016 [71] Freder Centre (IO) v Gringo Ltd [2016] 2 HKLRD 190, 197-198, [24]-[26] , applied at [62] of The IO of Shiu Fung Mansion, supra. [72] Grand Power International Ltd v Chan Sing Hoi Enterprises Ltd [2018] HKLdT 86 [93]. [73] Grand Power International Ltd [2018] HKLdT 86 [94] [74] [86] and [87] of The IO of Shiu Fung Mansion, supra. [75] The words “their predecessor” and “laundry shop” were found in paragraph 12(a) of ANOO. But such predecessor was nowhere found in witness statement of Ms Lam. And the business records of “Peninsular Co.” produced by her (which dated back to 1995 only) showed no “laundry” business. [76] The Applicant complained instead to the Respondent about the Projection before these proceedings. [77] See paragraphs 5 and 11 of Ms Lam’s witness statement [78] Unreported, LDBM 59/2011, 17 July 2012 [79] Its term is 2 years from 1 January 2019 to 31 December 2021 and its monthly rental is $28,000 per month, exclusive of management fees, government rents and rates. [80] In view of my findings on Issues (1) and (5), like Mr Siu, I would also treat the monthly rental of $28,000 payable by the Respondent on the 2019 Tenancy to cover the entire Pink Area of 200 square feet in total area. [81] No.1A Lock Road, G/F of the Building. [82] Shop No.49 on G/F, Mirador Mansion. [83] found at Appendix 1a of the Joint Expert Statement of the 2 Experts at p.437 of T/B. [84] 2.8% [85] 2.4% [86] See Appendix 1c of Joint Expert Statement at p.441 of T/B | ||||||||||||||||||||||||
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