Over and Above Ltd. v. The Incorporated Owners of Nin Fung Building, Homantin
Read the full judgment text of HCA 1691/1999 on BabelCite. This High Court CFI judgment was delivered on 25 May 2001.
1. This is a claim by the owner of premises situated on floors 1 and 2 in a high rise building against the incorporated owners of the building calling upon them to modify the circuitry of one of its two lifts and thus restore access by lift to and from floors 1 and 2 of the building.
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HCA001691/1999 HCA1691/1999 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 1691 OF 1999 ____________
____________ Coram: Deputy High Court Judge Gill in Court Dates of Hearing: 15 to 17 May 2001 Date of Judgment: 25 May 2001 _______________ J U D G M E N T _______________ 1. This is a claim by the owner of premises situated on floors 1 and 2 in a high rise building against the incorporated owners of the building calling upon them to modify the circuitry of one of its two lifts and thus restore access by lift to and from floors 1 and 2 of the building. The History 2. The building in question is Nin Fung Building, 63B, 65, 65A and 65B, Waterloo Road, Ho Man Tin. It was built in 1973. It has 19 floors. The ground, first and second floors are zoned commercial. The remaining floors are zoned residential and comprise 34 flats. Access to the residential flats is by one or other of two lifts and a staircase running up the front of the building from a lobby which is situated at about the middle of the Waterloo Road frontage. 3. At all material times the ground floor has comprised shops with direct street access. The second and third floors comprise a restaurant, with access by means of an internal staircase running from an entrance foyer situated on the ground floor at the right hand end of the building's frontage, separated from the lift lobby by the frontages of two shops. 4. In common with all high rise multi-ownership buildings the rights and duties of the owners of the various units are governed by the terms and conditions of the deed of mutual covenant (DMC) by which each becomes bound having taken title. Administration of the DMC and in particular management of the common areas and communal services of the building has been vested by the owners in an incorporated body called the Incorporated Owners of Nin Fung Building, Ho Man Tin (the defendant) which delegates that power to an elected committee headed by a chairman and two vice-chairmen. Presently and at all material times the chairman is and has been a resident owner called John Ng (Mr Ng). Included in their duties are the fixing and collection of monthly levies from the owners to meet the cost of communal services, known as the management charge. 5. The two lifts are side by side. When one faces their entrances the one on the left serves the odd-numbered floors between 3 and 19 inclusive. Access to any other floor is physically impossible because there is no entry through the lift shaft. The one on the right is designated the fireman's lift, so-called because in an emergency it can be manned and controlled by fire brigade officers. It is capable of serving the first floor and thereafter the even-numbered floors between 2 and 18 inclusive. However, prior to these proceedings, perhaps from when the building was built, its control circuit has been modified so that it cannot be stopped at the first and second floors and, with the buttons in the lift lobbies on these floors dismantled, cannot be called to these floors either. Only when manned by the fire brigade has it been possible to stop the lift on the first and second floors. In practical terms, this has meant that access to and egress from the restaurant has been limited to the use of the internal staircase from the entrance foyer or, exceptionally, by means of the staircase running up the building adjacent to the lift shaft. 6. Over and Above Limited (the plaintiff) is an incorporated company in Hong Kong whose chairman of directors and alter ego is Albert Tsang (Mr Tsang). In January 1994 it purchased the first and second floors and about half of the ground floor of the Nin Fung Building. The half of the ground floor it bought comprises two shops and the restaurant's entrance foyer situated on the right hand side of the building from Waterloo Road. At the time the restaurant was tenanted to a company called Senefeld Investment Limited (Senefeld) which ran it under the name of Golden Court Seafood Restaurant; the plaintiff bought subject to that tenancy. 7. By May 1998 Senefeld was unable to meet the rental and the parties negotiated a termination of the tenancy. For five months the premises were vacant. Then in September 1998 the plaintiff entered into a new tenancy with a company called Golden Sense Development Limited which since then and to date has been running the restaurant under the name of Bauhinia Seafood Restaurant. 8. In or about October 1998 management of the restaurant complained to the plaintiff that because the fireman's lift circuitry prevented that lift from serving the first and second floors there was resultant hardship; in particular, no means for elderly or disabled customers to gain access to the restaurant apart from being carried up the stairs. Informal discussions with the chairman of the management committee of the defendant did not bear fruit, and the plaintiff instructed its solicitors to write the following letter on 4 November 1998:-
9. The initial response was a holding one, from solicitors instructed by the defendant :- Hong Lee v Co.
11. But when the plaintiff received a substantive reply it was from the defendant, above the signature Yuen Tui (Mr Yuen) one of the vice-chairmen, the translation of which is as follows:-
12. The plaintiff not being satisfied with this response issued its writ in January 1999. The Pleadings 13. The plaintiff's pleaded case is that by virtue of the DMC it has in common with all other owners of upper floor premises in Nin Fung Building the right for itself and its tenant and all others to whom that right has been lawfully passed to gain access to its premises on the first and second floors by means of the lift, which access has been wrongfully withheld. The claim is that the fireman's lift be reinstated to provide access and that the defendant be restrained from further tampering with its function. It also pleaded damages and further relief, but this has not been pursued. 14. The defendant's pleaded case is that in the history of the building the fireman's lift has never served the first and second floors, save when operated by the fire brigade. The plaintiff and its predecessors in title have all along been aware of this and the management charge levied has been adjusted downwards accordingly. Furthermore the lifts and lift lobbies are not designed to accommodate the huge number of patrons of the restaurant without causing a nuisance or obstruction or resulting in unlawful use which the defendant by the DMC is empowered and under a duty to prevent. In addition the plaintiff having taken no steps since becoming an owner in January 1994 until the issue of the writ five years later had acquiesced in the matters it now complains of, such that the defendant acted to its prejudice. The Issues 1. Does the plaintiff and do those lawfully claiming through it by virtue of the DMC or otherwise have the right to use one or other of the lifts serving the Nin Fung Building? 2. If so, is the plaintiff a party to and bound by an agreement that it will not use the lifts? 3. If not, would the reinstatement of the lift constitute a nuisance, which the defendant is under a duty to prevent? 4. If not, is the plaintiff barred from its claim by virtue of the doctrine of laches? The Interlocutory Summons 15. By summons of February 1999 the plaintiff sought an interlocutory injunction in terms of its pleaded case. The upshot was that by order of 16 June 1999, by consent, the defendant pending trial or further order was ordered to reinstate the fireman's lift within 21 days for use by such invalid and old age customers of the plaintiff's tenant vouched for and accompanied by an employee of the tenant. That order has been implemented and remains in force. 16. I now turn to the evidence for the purpose of resolving the issues. The Evidence 17. First it is appropriate to reproduce pertinent clauses of the DMC. These are clauses 2, 5(b), 6, 10(f), 11(k) and (m) and 12B(b) and (c). In the context, 'Parties' refers to the owners for the time being of the units and 'the building' to the Nin Fung Building. The defendant has become the lawful successor of Yau Cheong Company Limited. The 'Agent' refers to the defendant.
19. Each side called one witness; Mr Tsang as its chairman of directors was called by the plaintiff and Mr Ng as chairman of its management committee was called by the defendant. 20. Mr Tsang said that notwithstanding that the plaintiff had always been prompt in meeting all levies charged to it under clauses 5(b), 6 and 12B(b) and (c) and otherwise complied with the DMC at all material times the plaintiff and its tenant have been deprived of their lawful right under clause 2 of the DMC to gain access to and from the first and second floors by use of the fireman's lift. He said there was no agreement whereby in consideration of the plaintiff not using the lift it was charged only half the management charge it would otherwise have to pay. He was taken to a letter written by the plaintiff to the defendant, whose translation I now reproduce :-
21. He said this was written to recover the cost of cleaning out a blocked gutter. When it was written he had no idea the plaintiff was being charged a concessionary rate in respect to the management charge. Neither he nor the plaintiff had been informed of this; he had never queried the management committee's assessments and paid on the invoices when the premises were vacant and passed the same on to the tenant when not. Reference to non-use of the lift was not to recognise an agreement but to state a fact. 22. In cross-examination it was put to him that at the time the plaintiff bought he knew full well that it was not permitted to use the lift; he disagreed. 23. He agreed that the defendant employs watchmen who work in shifts manning the lobby leading to the lifts on the ground floor, whose duties include monitoring the use of the lifts, with instructions to take down the names of those who come in, not being inhabitants or regular visitors. It was put to him that use of the lifts by customers of the restaurant would present a security risk and put an extra burden on the watchmen. He disagreed. He said he had no knowledge of and could not comment on any difficulties arising from the conditional use of the fireman's lift in compliance with the order of June 1999. 24. Taken to the management charge he repeated what had been said in examination in chief; namely, that he did not query the amount, ensured it was paid on time, did not know about any reduction or concessionary rate and in particular that it was reduced to half to compensate for the non-use of the lifts. 25. Then I heard from Mr Ng. He said he is a retired businessman. He has been an owner and occupier of one of the flats in Nin Fung Building since 1989, was that year elected on to the management committee of the defendant and in 1990 became its chairman, an office he has held ever since. Mr Yuen has been his vice-chairman since 1997. 26. He said the restaurant is about 6,000 square feet in size. He eats there from time to time. It is generally busy with a large turnover of customers. He has noticed that sometimes customers have to queue at peak times. He anticipates substantial nuisance might result if staff and customers of the restaurant are given unfettered right to use the fireman's lift, particularly if it were used between floors to carry food, fuel, ingredients, trolleys, workers and so on. The lifts are designed and permitted to carry a maximum of seven people. A large flow of customers would obstruct the use of the lifts by inhabitants of the building and compromise their safety. And the lobby is small and simply not designed to accommodate masses of people. 27. It is his understanding that since 1973 the owner of the restaurant's premises for the time being has only had to pay half the management charge that might otherwise be levied but for the lifts not serving these floors. But he has not seen an agreement nor does he have any record of one nor can he point to any minute dealing with this. 28. He said clause 11 (k) of the DMC empowered the defendant to prevent obstruction of any common part of the building. Unrestricted use of the lift particularly at busy times would inevitably result in there being obstruction. 29. He confirmed that from before the time he took over as chairman the watchman on duty has been and is required to ask for and note down the names of all strangers who use the lifts. Those who refuse to comply are turned away. 30. He said access to the lifts since the interlocutory order of June 1999 though restricted has posed problems; for instance, if a customer is wheelchair bound that takes up most of the space, causing delays for others. On the issue of security he said he had been informed by a watchman of problems encountered; many of the restaurant's patrons declined to give their names. Security is now a risk; there was a burglary in one of the flats in March this year. 31. In cross-examination he agreed that the entrance to the Bauhinia Restaurant is marked by a signboard, there is a receptionist stationed there and any able-bodied customers were more likely to use that entrance rather than via the lift lobby which is some distance away and has no sign promoting the restaurant. He also agreed that the system of allocating the amount of management charges each owner has to pay was inherited from the past. He and his committee adopted that method having no direct knowledge of how or why they were calculated in that way. 32. He agreed that in its letter to the plaintiff of 16 November 1998 the defendant made no reference to any agreement, though it was part of its pleaded case. 33. That was the evidence, based on which I now come to findings of fact. Findings of Fact 34. The parties in the absence of any contrary agreement are bound by the terms of the DMC, in particular clause 2. No one has been able to point to an agreement. Mr Ng said his committee inherited the methodology of assessment of management charges from their predecessors but could go no further. Mr Tsang denied any agreement. There is no evidence he or the plaintiff was told of a concessionary rate in return for not using the lift. The best that can be said is that the plaintiff's predecessors and, since January 1994, the plaintiff have not had access to the lift without complaint. But that does not amount to proof of the existence of an agreement. Nor does the plaintiff's letter of March 1998 amount to an admission of one. I cannot be satisfied there was one. 35. There is no conclusive evidence of a nuisance or obstruction or unlawful use. Much of Mr Ng's evidence on the topic are concerns based on what he has been told by others, and amount to fears of what may result from unrestricted use. Reference to a wheelchair without more admissible data does not assist in establishing there is significant obstruction caused by people who are wheelchair bound. There is no direct evidence that security is suffering. There is no link between the order of June 1999 and the burglary. 36. The concern that unrestricted use of the lift will result in a flood of travellers that will overwhelm the resources is not backed by evidence; nor common sense, which suggests that all customers capable of using stairs will gravitate towards and use the main entrance, with only the halt and lame likely to bother with the lift. 37. Whether or not staff of the restaurant will use the lift as a means of travel between floors is a speculation. Arguably clause 2 of the DMC does not permit this. In any event it seems to me that would not be efficient; furthermore it may well offend against the restaurant's licence. 38. I conclude that I can make no findings of fact that there are or will be a nuisance or obstruction or unlawful use caused by the reopening of the fireman's lift. 39. I come to the issue of delay. Although Mr Tsang said otherwise in evidence I am satisfied that from when the plaintiff bought in 1994 he knew or at least ought to have known of the plaintiff's rights under the DMC and that the right to use the lift had been withheld. Though it has not been established that the plaintiff knew of a concessionary rate in the assessment of the management charges it was required to pay, I am satisfied it has in fact all along been charged half of what it would otherwise have had to pay had the lift been fully functional. 40. What flows from these findings of fact follow next. The Outcome 41. Clause 2 of the DMC speaks for itself, entitling the plaintiff and those lawfully claiming through it the use of the lift for access to and egress from floors 2 and 3. There is as I have found no agreement between the defendant and the plaintiff to disturb this contractual right. I have found no agreement binding a predecessor either. But even if there had been it could only now bind the plaintiff as successor in title if the rights given by clause 2 of the DMC had been altered by deed. The point is dealt with by clause 4 of the Conveyancing and Property Ordinance Cap. 219, which states :-
42. And there is no deed. 43. I have made no findings of fact establishing nuisance or obstruction or unlawful use. There is a fear that these might eventuate; but I cannot rely on speculation. If they do the defendant has the power to deal with such contraventions under clauses 10(f) and 11(k) and (m) of the DMC. 44. I come finally to the defence of delay. This topic is covered by the editors of Snell's Equity, twenty-ninth edition, page 655, as follows :-
45. The defence case is that the lapse of five years between the plaintiff purchasing the premises occupied by the restaurant and mounting this claim amounts to a waiver of its right to make the claim. Furthermore it has been prejudiced by the plaintiff's inactivity in that it has for all that time charged only half what it would otherwise have been entitled to in management charges. 46. In my view the plaintiff's position has been one of quiescence and not acquiescence. It was motivated into pursuing its rights only when called upon to do so by its tenant. And this being a claim to enforce a contractual, thus legal right, there has been no suggestion and it cannot be said that the pursuit of its rights has become dishonest or unconscionable. The defendant having charged a concessionary rate in the management charge cannot be said to have been prejudiced by that, for that merely recognises as a matter of logic that an owner prevented from using a facility should not have to contribute to the cost of running it. And the management committee is and has all along been empowered to readjust the rates if circumstances, such as a reinstatement of user, warrants that course. Conclusion 47. There is, as I find, no defence to the plaintiff's claim to enforce its rights under clause 2 of the DMC. 48. The orders now follow. 49. The defendant shall forthwith ensure that the circuitry of the lift designated the fireman's lift in the building known as Nin Fung Building 63B, 65, 65A and 65B Waterloo Road, Ho Man Tin is so adjusted as to enable the plaintiff and all those lawfully claiming through it including its successors in title to gain access to and egress from the first and second floors therein. 50. The defendant shall not thereafter by itself or by its servants or agents adjust or otherwise tamper with the fireman's lift so that it by-passes either of the said first and second floors. 51. The order of the 16 June 1999 is hereby discharged. 52. Costs (nisi at first instance) including those reserved are to the plaintiff, taxed if not agreed.
Representation: Mr A Fung, instructed by Messrs Victor Ng & Co., for the plaintiff Miss A Ma, instructed by Messrs Hong Lee & Co., for the defendant |