The Incorporated Owners of Hung Wai Building v. Sunny Elegant Ltd and Others
Read the full judgment text of LDBM 76/2019 on BabelCite. This Lands Tribunal judgment was delivered on 13 August 2024.
1. This Decision deals with 2 summonses filed by the 4 respondents ( 4 Rs ) arising from my Judgment handed down on 6 June 2024 after trial of this application and counterclaim ( the Judgment ) [1] . The same expressions and abbreviations in the Judgment are adopted in this Decision.
Cited by 2 cases · Cites 3 cases
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LDBM 76/2019 [2024] HKLdT 67 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BUILDING MANAGEMENT APPLICATION NO.76 OF 2019 ___________________ BETWEEN
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_____________________ D E C I S I O N _____________________ 1.This Decision deals with 2 summonses filed by the 4 respondents (4 Rs) arising from my Judgment handed down on 6 June 2024 after trial of this application and counterclaim (the Judgment)[1]. The same expressions and abbreviations in the Judgment are adopted in this Decision. 2.The first summons filed on 3 July 2024 is an application for leave to appeal to the Court of Appeal (the Leave Application). The proposed grounds of appeal are set out in 7th Affirmation of Wong Kam Mun filed on the even date (7th Affirmation). 3.The second summons filed also on 3 July 2024 is an application for stay of execution of the Judgment pending appeal (the Stay Application). It was supported by 6th Affirmation of Wong Kam Mun filed on the even date (6th Affirmation). 4.Ms Vivian Li of counsel (Ms Li) appeared on behalf of 4 Rs on both summonses before this Tribunal. 5.Ms Becky Wong of counsel (Ms Wong) appearing for IO opposed both summonses. In the event the Stay Applicatin is allowed, Ms Wong asked that suitable conditions be imposed by this Tribunal. Discussion Overview of the Judgment 6.The 5 parties to this application litigated over two groups of areas of the Building set out in section C1 of the Judgment: -
7.As I found in the Judgment, at all material times, R3 and R4 (tenants of R2) carries on their respective businesses of the Chinese Restaurant and the Cafe at 1/F of the Building by occupying not only the Shop and the Offices (owned by R1, which rented them to R2) but also the Disputed Areas to the exclusion of other owners, and by making use of 43 air-conditioners and 2 chimneys installed at 1/F level of the External Wall facing West without prior written consent of IO. 8.Five main issues set out in section C2 of the Judgment are resolved by this Tribunal after trial all in favour of IO. 9.Issue 1 touches upon both the Disputed Areas and the the External Wall facing West. But, for our present purpose, it suffices to note the former only i.e. whether the Disputed Areas are “common parts” of the Building, or exclusive use areas, at the making of the DMC, as all grounds of appeal of 4 Rs focus on this Tribunal’s ruling of the Disputed Areas being “common parts” of the Building. As Ms Li confirmed before me, there is no application for leave to appeal against my ruling and judgment on the External Wall facing West. 10.This Tribunal set out all relevant BMO provisions in section E of the Judgment, cited relevant legal principles to resolve Issue 1 in sections F1 and F2 of the Judgment, found the pertinent background facts, mainly the design and layout of the Building, in particular its G/F, 1/F and 2/F levels, at section F3 (and also paragraphs 1 and 2 at Section A) of the Judgment, and set out pertinent provisions of the DMC in section F4 of the Judgment. 11.Among other BMO provisions in section E of the Judgment, this Tribunal quoted s.2 definition of “common parts” and relevant paragraphs of Schedule 1 of BMO at paragraphs 40 and 41 of the Judgment, and the approach on them by the courts at paragraphs 47 and 48 of the Judgment. 12.Among other design and layout of the Building shown in approved building plans[2] and found at section F3 of the Judgment, this Tribuanl found that : -
13.Among other DMC provisions set out in section F4 of the Judgment, this Tribunal had noted: -
14.At section F5 of the Judgment, this Tribunal reached its conclusion on Issue 1 that the Disputed Areas are “common parts” of the Building at the making of the DMC and gave its reasons at paragraph 86 running from pages 26 to 32 of the Judgment. 15.At sections G5 and G6 of the Judgment, this Tribunal also examined how the Shop and the Offices had devolved from the Developer upon R1 in 2004 through intermediate purchasers including Joyday in 1993. 16.At sections G2 and G3 of the Judgment, this Tribunal also examined post-DMC leasing of the Shop and the Offices together with the Disputed Areas from 1986 to 1994, and from 2004 to 2017. Physical barriers in the Corridor or in 1/F level separating the Offices among themselves and separating them from other 1/F facilities were removed during these post-DMC leasing. 17.At sections M & N of the Judgment, this Tribunal dismissed all 4 Rs’ counterclaims and granted in favour of IO: -
Relevant rules on leave to appeal 18.Under s.11(2) of Lands Tribunal Ordinance (LTO)[4], any party to proceedings before the Tribunal may appeal to the Court of Appeal against a judgment of the Tribunal on the ground that such judgment is erroneous in point of law. 19.S.11AA(1) of the LTO requires leave to be granted by the Tribunal or the Court of Appeal before an appeal under s.11(2) can be made. S.11AA(5)(a) of LTO provides that leave to appeal may be granted in respect of a particular issue arising out of the judgment. S.11AA(6) of LTO further provides that leave to appeal shall not be granted unless the Tribunal is satisfied that:
Relevant rules & principles on stay of execution 20.Under O.59 r.13(1)(a) of Rules of High Court[5], except so far as the court below or the Court of Appeal or a single judge may otherwise direct — (a) an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below. 21.Ms Li in her skeleton submissions cited a number of authorities. With respect, the landmark local authority for stay of execution pending appeal is the judgment of Ma J (as he then was) in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84. 22.Indeed, recently, in Chow Kin Hang Ali v Secretary for Justice (Food and Environmental Hygiene Department) [2023] 5 HKLRD 783, cited by Ms Wong, Chow JA, giving the judgment of the Court of Appeal, had also summed up the principles of Star Play, supra, at [14] as follows: -
23.Therefore, in disposing of the Stay Application below, I find it sufficient and most appropriate to apply the principles of Star Play, supra, summed up by Chow JA above. The other authorities cited by Ms Li are, I think, less relevant or less authoritative. Some of them are, I note, not cases of stay pending appeal. Merits of the Leave Application 24.With respects, the 4 Rs are, I think, merely repeating in the Leave Application their failed submissions made at trial. They never identify any error of law in the Judgment. 25.At paragraphs 6(1) and 15(2) of the 7th Affirmation, it was complained that this Tribunal had erred in law in concluding that the Disputed Areas are “common parts” by failing to have construed the DMC as a whole. 26.Considering section F4 of the Judgment, pararaphs 44 and 48 of the Judgment, and the first few words of paragraph 86 of the Judgment i.e. “Reading the DMC as a coherent whole .... (italics supplied)”, this above complaint has, I think, no substance. 27.At paragraph 6(2) of the 7th Affirmation, it was complained that this Tribunal had erred in law in concluding that the Disputed Areas are “common parts” by failing to have addressed the issue as to whom they are common to. 28.With respect, in the context of the DMC in this case, the self-evident answer to aforesaid is all the co-owners of the Building. The above complaint above was, I think, made without having in mind basic concept of co-ownership of multi-storey buildings, which were explained at paragraph 46 of the Judgment. 29.As Ms Wong pointed out in her skeleton submission, there is, as was held at paragraph 86(6)(i), (ii), (iv) and (v) of the Judgment, no categorization of different kinds of “Common Areas” (or of different kinds of owners) in the DMC. There is only one set of provisions for all owners in the DMC. 30.This Tribunal did not, it should be stresssed, reach its conclusion of Disputed Areas on Issue 1 solely relying on Schedule 1 of BMO or DMC definition of “Common Areas” as 4 Rs might have suggested at paragraph 7 or 9 of the 7th Affirmation. 31.Schedule 1 of BMO and DMC definition of “Common Areas” are, I must say, only two out of many pointers that this Tribunal has considered in the Judgment in undertaking the iterative process of construing the DMC (in such process, the factual and legal background to its execution, its practical objects, its text and context have all been considered: see paragraph 44 of the Judgment). 32.Any complaint by 4 Rs in the 7th Affirmation to that effect at [30] is, I think, misconceived (contrary to paragraph 8(2) of 7th Affirmation, the words “entrance lobbies” are not found in paragraph 8 of Schedule 1 of BMO but in the definition of “Common Areas” of the DMC). 33.In the aforesaid iterative process, due to BMO definition of “common parts”, as was made clear by this Tribunal at paragraph 86 of the Judgment, the crux is whether any of the Disputed Areas has/have been specified or designated in the DMC as being for the exclusive use of the Developer (the inquiry is not whether the Offices are, as was claimed at paragraph 10(2) of 7th Affirmation, exclusively owned and possessed by their respective owners, or intended for shared use among co-owners of the residential blocks). 34.And the DMC must be construed at the time of its making and not according to post-DMC circumstances: see paragraph 53 of the Judgment. 35.At the time of the DMC, the Offices and the Shop were 20 separate and individual tenements at law with each of them having their own undivided share and also individual tenement physically separated from one another by partitions and floor: see paragraph 86(5)(i) of the Judgment. 36.Post-DMC deliberate destruction of the above physical barriers and post-DMC combined sale of the Offices and the Shop to one single purchaser is, with respects, irrelevant to our construction exercise: see paragraph 86(5)(ii) of the Judgment. Post-DMC unified ownership of the Shop and the Offices stressed by 4 Rs at paragraph 10(3) of 7th Affirmatin is, I think, also irrelevant. 37.In addition, once held to be “common parts” at the making of the DMC, post-DMC wrongful leasing of the Disputed Areas as if they were private properties does not change their “common parts” status either: paragraph 100 of the Judgment. 38.In so far it was repeatedly complained by 4 Rs that this Tribunal has, in construing the DMC, failed to consider, or failed to consider properly, the intended use, design and/or configuration of the “office entrance hall”, all 13 shops on G/F (including the Shop), all the Offices on 1/F, of the residential units of Block 1 and of Block 2 from 2/F upwards, and of the Building, this oft-repeated ground at paragraphs 8(2), 10(1), (4), 12(1), (2), (3), 15(1), 16, 19(2), 20(1) of the 7th Affirmation is, I think, unsustainable when one reads section F3 of the Judgment and paragraph 86(5) and (6) of the Judgment. 39.Those design matters (or pointers) stressed by 4 Rs in the aforesaid various paragraphs of the 7th Affirmation have all been considered in the Judgment. Overview of the design and layout of the Building at [12] above serves as a good illustration. 40.Contrary to 4 Rs’ suggestion at paragraphs 14 and 15 of the 7th Affirmation, this Tribunal did consider Part A of Section II of the DMC regarding easement and rights enjoyed by every “owner of each undivided share”. 41.In so far clause a) in the said Part A gives “owner of each undivided share” (with no distinction between commercial and residential owners) the same “benefit of easement rights and privilege of a) full right and liberty to go pass and repass over and along and use the Common Areas (with no different Common Areas, or different routes, for different owners) and Common Facilities of the said Building for all purposes connected with proper use and enjoyment thereof”, the said clause points, as I held at paragraphs 86(5) and (6)(ii), (iv) and (v) of the Judgment, against 4 Rs’ contentions of residential owners having no interference with commercial owners. 42.So does the stopping of the 2 passenger lifts at 1/F of the Building and the construction of the 2 pairs of criss-crossing staircases, one for Block 1 and one for Block 2. They also point, I think, against 4 R’s contentions of residential owners having no exchange or interaction with commercial owners. I refer to paragraphs 58, 59, 62, 63, 68, 69, 86(5)(iii), (iv) and (v) of the Judgment. 43.Had the drafters of the DMC intended residential owners to have no use of the Corridor, the Toilets, the Staircases, the Stair Landing and the Entrance Space, the said 2 passenger lifts would not, one thinks, have been designed to stop at 1/F to allow them to go to 1/F by the said lifts (the converse is also true i.e. commerical owners could also make use of the said lifts to go up and down). Such complaints made at paragraphs 10(1) and 12(3) of the 7th Affirmation cannot, I think, be supported. 44.In particular, this Tribunal maintains its observation at paragraph 86(10) of the Judgment (and the 4 Rs had not explained why it was wrong). The Offices could still be used by its different owners (and occupants) for office purpose by sharing the Disputed Areas, among themselves (and, one should add, by sharing them with the residential owners as well). The contrary suggestion by 4 Rs at paragraph 20(1) of the 7th Affiramtion is, I think, incorrect. Not having their internal toilets, each of the Offices would have, one think, more internal office or working spaces. 45.Equally, had the “office entrance hall” been intended to lead one to the Offices at 1/F and nowhere else, the said 2 passenger lifts of the Building would not have been designed to stop at 1/F to allow one to go upstairs to Block 1 or Block 2 by taking the lifts at 1/F lift lobbies. Such observations raised by 4 Rs at paragraphs 8(3) and (4) of 7th Affirmation are, I am afraid, incomplete. 46.The same also applies to the 2 pairs of criss-crossing staircases, which allow one to move from the commerical podium to the 2 residential blocks and vice versa. 47.Therefore, this Tribunal disagrees with Ms Li’s submissions that the 2 pairs of criss-crossing staircases and the 2 passenger lifts are specifically designed for the 2 residential blocks. 48.With respects, contrary to grounds of 4 Rs in the 7th Affirmation, the ending words of “for all purposes connected with proper use and enjoyment thereof” of the said easement and right at clause a) in Part A of Section II of the DMC shed, I think, no light on Issue 1. These words are to be applied to (or considered in) particular factual circumstances only after certain disputed areas are first determined to be “Common Areas” (as opposed to exclusive use areas) i.e. after Issue 1 is first resovled in IO’s favour. 49.Moreover, no dispute of improper use or enjoyment of the Disputed Areas (as “common parts”) by the residential owners (assuming they have first been decided as “common parts” in IO’s favour) arose in this case. No counterclaim of “improper use or enjoyment” of such “common parts” by residential owners or otherwise was raised by the 4 Rs in this case. Such breach of the DMC and BMO alleged by IO against 4 Rs in Issue 3 is their conversion of the Disputed Areas (as “common parts”) to the exclusion of other owners. 50.I repeat paragraph 86(6)(vi) to (ix) of the Judgment. All such complaints of failure to rule on the above words raised by 4 Rs at paragraphs 14 and 15 of the 7th Affirmation are, I think, completely misconceived. Submissions relying on these ending words of “for all purposes connected with proper use and enjoyment thereof” for the wrong purpose of determining where the “common parts” are served only, I think, to cause confusion at trial as they are directed to a different issue not before this Tribunal in this case. 51.Moving to 4 Rs’ ground of appeal relying on the words “appurtenances thereto” regarding “exclusive use” areas of the Developer at clause 1(a) in Section 1 of the DMC (and Part One of Second Schedule), the fatal flaw, I think, of this repeated failed submission is that the definition of “Common Areas” at clause 5 of Section VIII of the DMC is unequivocally clear and specific. 52.For example, the clear and specific words of “the male and female toilets on the 1st Floor” are employed in the said clause 5 of Section VIII to make clear the drafters’ intention of making the Toilets “Common Areas” of the Building to be enjoyed by all owners. One completely fails to see why the DMC definition of “Common Areas” should be qualified (and how it could be qualified) such that the Developer could have expanded their ownership of the Offices to annex the Toilets as part of their “exclusive use” areas or as part of the Offices they owned. Were it to be done as suggested by the 4 Rs, one is doing, I think, violence to the plain and clear language of the DMC. 53.Had the Toilets been intended by the makers of the DMC to be “owned” or “exclusively enjoyed” by the Developer, the quoted words above (i.e.“the male and female toilets on the 1st Floor”) could easily have been removed by the solicitor firm concerned from the said clause 5 of Section VIII with exclusive right to use the Toilets reserved expressly to the Developer in Part One of Second Schedule of the DMC (like the external walls) without the need to use the words “appurtenances thereto” at all. Alternatively, undivided share can easily be given to the Toilets and, in turn, allocated to the Developer. I repeat paragraphs 86(4)(i) to (v) and 87(5) of the Judgment. 54.For post-DMC assignments of the Offices and the Shop ultimately to R1 in 2004, I refer to section G6 of the Judgment, where the 1993 Assignment and 2004 Assignment are, I think, clearly shown to be exclusive of the Disputed Areas (the 2 assignments could also be easily drafted otherwise). Furthermore, the 2004 Assignment was also subject to the DMC: paragraph 117 of the Judgment. Complaints made by 4 Rs at paragraphs 17, 19 and 20 of the 7th Affirmation are, I think, unmeritorious. The words “appurtenances thereto” simply could not, as they asserted, be read to expand the ownership of the Offices to include the Disputed Areas when the plain language of the assignments do not so support either. 55.Accordingly, this Tribunal’s conclusion on Issue 1 after completing its iterative process of construing the DMC as a whole cannot, I think, be faulted. Each of the Disputed Areas has not been specified or designated in the DMC as being for the exclusive use of the Developer and they fall within Schedule 1 of BMO and/or DMC definition of “Common Areas”. 56.I therefore conclude from all draft grounds of appeal that the intended appeal focusing only on the Disputed Areas carry no reasonable prospect of success on appeal. Neither did Ms Li submit that leave should be given in the interest of justice. 57.For the sake of completeness, [58] and [59] of judgment of Yuen JA regarding “saleable area” in Metro City Managment Limited v Tsui Fee Hung Vincent & Lam Wai Fun, CACV 328/2005, 6 June 2006, cited by Ms Li at paragrpah 13 of her skeleton has, I agree with Ms Wong, no bearing to our case. Disposition of the Leave Application 58.I therefore dismiss the Leave Application with costs to the IO to be taxed at District Court scale if not agreed. And I certify engagment of Ms Wong by IO for attending the hearing of the Leave Application. Merits of the Stay Application 59.Ms Li confirmed before this Tribunal that 4 Rs sought stay of execution of the Judgment pending determination of the substantive appeal by the Court of Appeal. 60.I have carefully considered all her submissions and all the contents of the 6th Affirmation. 61.First, as there is no intended appeal against my ruling, and judgment, on the External Wall facing West, the 4 Rs have not, I am afraid, been able to advance any “good reason” to justify any stay of the Mandatory and Prohibitory Injunctions granted by this Tribunal in the Judgment over the External Wall facing West. 62.Notwithstanding Ms Li also advanced the Stay Application against such relief granted in the Judgment over the External Wall facing West, the default position after trial should, I think, remain i.e. IO, as the successful party in the Judgment, should be entitled to its fruit of the Judgment over the External Wall facing West. 63.Next, Ms Li confirmed before me that the Stay Application does not cover the Damages granted in the Judgment and I therefore say no more about it. 64.Moving on to the most contentious part of the Stay Application i.e the Declaration and the Mandatory and Prohibitory Injunctions granted in the Judgment over the Disputed Areas, given that this Tribunal had concluded in last section that 4 Rs had not raised “arguable” grounds of appeal on the Disputed Areas, no stay shall, I think, be granted on them either, however allegedly exceptional the circumstances might otherwise be to justify a stay on them as claimed in the 6th Affirmation, on the principle at [22(3)] above. 65.In any event, considering the nature of the Declaration granted on the Disputed Areas, I do not agree with Ms Li’s submission that the intended appeal over the Disputed Areas would be rendered nugatory in the event 4 Rs prevail after appeal if stay is declined on the said declaration. Nothing is required to be done by 4 Rs as a result of the said declaration. 66.As for Mandatory and Prohibitory Injunctions granted in the Judgment over the Disputed Areas, I cannot agree either with the view expressed at 6th Affirmation that any money or costs expended by 4 Rs in complying with the former (whose figure I was not informed at all in 6th Affirmation) could not be recovered from IO in the event their appeal succeeds. If the assests of IO (and I have no information on that either) are insufficient, the owners of the Building could, I think, be enforced against with leave of the Tribunal. 67.Having said that, there is, I agree with Ms Li, much to be said that, due to the nature of the aforsaid injunctions over the Disputed Areas, the intended appeal over them would be rendered nugatory in the event 4 Rs prevail after appeal had they completed all restoration works over the Disputed Areas before the intended appeal could be heard or determined by the Court of Appeal. 68.But, for reasons given below, if stay of execution on the Mandatory and Prohibitory Injunctions on the Disputed Areas is to be granted at all, I would have agreed with Ms Wong’s submissions that any such stay should be made conditional in order to protect IO’s competing interest on the matter as the successful party after trial.
69.As I have decided against granting of any stay in favour of 4 Rs at all, I do not go further into details of such conditions to be imposed on a stay of execution of the Mandatory and Prohibitory Injunctions on the Disputed Areas. Disposition of the Stay Application 70.I therefore also dismiss the Stay Application with costs to the IO to be taxed at District Court scale if not agreed. And I certify engagment of Ms Wong by IO for attending the hearing of the Stay Application. Miscellaneous 71.Solicitors for 4 Rs do draft, file and serve all orders of both applications on IO. 72.Finally, I thank Ms Li and Ms Wong for their written submissions.
Ms Becky Wong, instructed by Lam & Partners, for the Applicant Ms Vivian Li, instructed by Christine F L Ip & Young, for the 1st, 2nd, 3rd and 4th Respondents |
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