Wong Kwok Chiang and Others v. Longo Construction Ltd. and Another

HCA005147/1984

1984, No. 5147

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Coram: Hon. Jones, J. in Chambers

Dates of Hearing: 11th July 1986 and 14th July 1986

Date of Judgment: 14th July 1986

Date of Handing Down: 23rd July 1986

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JUDGMENT

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1. This is an application by the plaintiffs under 0.18 r.19 of the Rules of the Supreme Court and under the inherent jurisdiction to strike out paragraph 14 of the defence on the grounds that it discloses no reasonable defence or that it is embarrassing or vexatious or otherwise an abuse of the process of the court. The plaintiffs also seek an order for judgment to be entered on admissions under 0.27 r.3 R.S.C. for a declaration and for damages to be assessed.

Facts

2. The plaintiffs are the registered owners, as tenants in common, of the land and a three storey building erected thereon in 1952 situate at 73D, Waterloo Road, Kowloon. The 2nd defendant is the registered owner of the adjoining site, 73C Waterloo Road. A similar building was erected on this site in 1952, but it was demolished in 1983 for the purposes of redevelopment. Until it was demolished the building on 73C was adjacent to the building on 73D and shared a common foundation at the boundary line. The buildings were entitled to support from each other.

3. On the 16th May 1952 a deed of grant was entered into by the predecessor in title of the 2nd defendant in favour of the predecessor in title of the plaintiffs which was registered in the Land Office that gave to the grantee the full right to use a septic tank that was erected by the grantor under the surface of the ground floor of 730 Waterloo Road. The grant also provided a right to lay a pipe-line connecting the septic tank with the flushing system of 73D Waterloo Road. The grantee and his assigns acquired the right to enjoy the easement and the premises for a period of 75 years from the 25th June 1922 with a right of renewal for a further period of 75 years after the expiry of that term. The grant was made in consideration of a payment of $5,000 by the grantee to the grantor. The pipe-line was subsequently laid by the grantee which connected the septic tank with the flushing system of 73D. By the deed, the grantor covenanted to keep and maintain the septic tank and connecting pipes in good repair and condition and not to do anything to impede the use and free running of sewage, water and soil along the connecting pipe from the flushing system. It is common ground that the covenants run with the land so that the plaintiffs are now entitled to their benefit.

4. No problems arose until 1983 when the building on 73C was demolished. Since that time, the 2nd defendant has through the 1st defendant, a construction company, been redeveloping the site for the erection of a 24 storey commercial and residential complex. As a result of the work that has been carried out, the plaintiffs allege that physical damage has been caused to their property which has become more serious as the redevelopment progressed. Substantial damages are claimed by the plaintiffs in this action for the damage they allege that they have suffered, but I am not concerned with this part of the plaintiffs' claim. The issue before me relates to a complaint that the defendants have diverted the flushing system to another drainage system without the consent of the plaintiffs and have destroyed the septic tank.

5. It is not in dispute that the septic tank and part of the connecting pipes were destroyed by the defendants without the plaintiffs' knowledge or consent in June 1983. Correspondence took place between the architects of the parties in August and September 1983 when the plaintiffs objected to the defendants' proposals to divert the system which culminated in a letter from the defendants' architects dated the 30th November 1983 stating that the work would be carried out despite the objections raised. The objections that were made by the plaintiffs to the proposed new drainage system were considered by the defendants' architect Mr. Lee to be frivolous, vexatious and mala fide and were calculated to cause unnecessary difficulty and delay to the defendants. In his affirmation of the 11th August 1984 Mr. Lee refers to the new drainage system as being far superior and efficient than the septic tank which was obsolete and had fallen into disuse for a substantial length of time.

Proceedings

6. The plaintiffs issued a writ on the 28th July 1984 claiming, inter alia, injunctive and declaratory relief, damages and a declaration that the plaintiffs are entitled to an easement for the use of the septic tank and the drainage pipe connected to the flushing system of 73D. A statement of claim was filed on the 16th February 1985 and the defence was filed on the 29th March 1985. Various amendments were made to the statement of claim on the 18th June 1986 pursuant to an order made by consent on the 9th June 1986. The amendments included a prayer for the reinstatement of the septic tank and the connecting pipe. Although a claim for reinstatement was included in the indorsement of the writ, it was not included in the original Statement of Claim. No amendments have been made to the defence.

7. The plaintiffs aver that the defendants are in breach of their express covenant to keep the septic tank in good repair and that by the diversion of the system, they have lost their rights under the deed of grant. The allegation made with regard` to the septic tank is set out in paragraph 22 of the amended Statement of Claim which reads :-

"22.         The Plaintiffs further aver that the diversion of the said system is wrongful and was done without obtaining any prior agreement from the Plaintiffs or their predecessor-in-title or any of them. Unless ordered by this Honourable Court, the Defendants and each of them refused to reinstate the said septic tank and the said connecting pipe. In the premises, the Plaintiffs aver that, even if, (which is denied), that it is proved that the said system has in fact been diverted to the new system which is more superior and efficient than the said septic tank, the Plaintiffs have lost their rights as provided in the Deed of Grant and in particular, the right to use the said septic tank until 24th June 2072 and the right to compel the Defendants and their successors in title, to keep the new system in good repair and order and refrain from doing anything to impede the use as provided in the said Deed of Grant. Further or alternatively, the Plaintiffs aver that they have suffered loss and damage which is the costs necessary to reinstate the said septic tank and the said connecting pipe. Still further or alternatively, if which is denied, the Plaintiffs are not entitled to the order for reinstatement as aforesaid, the Plaintiffs seek the court for an order that the Defendants do grant to the Plaintiffs the same right and enjoyment of the new system (if it is proved to be an efficient system) as previously provided in the said Deed of Grant. "

Paragraph 14 of the defence reads :-

""14.         Further or alternatively, the Defendants contend that it is an implied term of the said Deed of Grant Memorial No. 211155 that the 2nd Defendant is at liberty to remove the said septic tank and replace the same by a drainage system no less efficient than the said septic tank on condition that the use of such alternative system should be freely available for serving the Plaintiffs' premises on terms no less favourable to the Plaintiffs than those contained in the said Deed. The 2nd Defendant is ready able and willing to abide by the conditions of such an implied term and to execute a formal grant in favour of the Plaintiffs on such term's as the Plaintiffs may reasonably require. Save as aforesaid, no admission is made to Paragraph 22 of the Statement of Claim. "

Should Parragraph 14 be struck out

8. Mr. Mok who appeared for the defendants submitted that paragraph 14 should not be struck out on the grounds firstly that the plaintiffs have by their conduct, acquiesced in the abandonment of their right to relief and are therefore estopped from applying for discretionary relief and secondly that it is an implied term of the Deed of Grant that the 2nd defendant is at liberty to remove the septic tank and replace it with a system no less efficient than the old drainage system.

Abandonment

9. Mr. Mok asserted that as the plaintiffs did not repeat their claim for reinstatement in the statement of claim, the defendants believed that such claim had been abandoned. This issue can be disposed of right away for the plaintiffs' amended Statement of Claim relates back to the original Statement of Claim and with the amendment, it is clear that the plaintiffs have not abandoned their right.

Implied Term

10. By contending that there is an implied term in the Deed of Grant, the defendants in effect are saying that they are entitled unilaterally to break their covenants and install a new system without the knowledge or consent of the plaintiffs. This argument was wholly misconceived for the terms expressed in the Deed of Grant are clear and unambiguous. I therefore reject the defendants' submission that there is an implied term in the deed.

Conclusion

11. Paragraph 14 of the defence does not disclose a reasonable defence with the result that it will be struck out.

Should mandatory relief be granted

12. Mandatory relief is of course discretionary. Mr. Mok submitted that the plaintiffs should not be entitled to mandatory relief firstly by reason of delay and secondly having regard to the cost and delay that would be caused to the redevelopment. In respect of delay, the defendants assert that no steps were taken by the plaintiffs to obtain interlocutory relief. A summons was in fact taken out by the plaintiffs for interlocutory relief at the commencement of this action which related to other issues, but not for reinstatement of the septic tank. By virtue of the delay alleged, the defendants contend that the plaintiffs' conduct is unconscionable.

13. Mr. Wan Koon-ying, a director of the 2nd defendant, in his affirmation of the 8th July 1986 states that the plaintiffs failure to apply for an injunction led to the excavation work being carried out which was followed by connecting and construction of caisson cap works. As a result the spaces between the former septic tank and connecting pipes were filled in with concrete. Mr. Wan contends that the plaintiffs should have been aware that the excavation would result in the complete removal of the septic tank. Mr. Lee in his affirmation of the 11th August 1984 said that permission for the first stage of the caisson work was granted by the Building Authority on the 20th September 1983. Yet Mr. Wan states that if the reinstatement of the septic tank had been insisted upon before the excavation of the site had been completed, when it is probable that the plaintiffs were unaware of the true position, the cost of reinstatement would not have exceeded $20,000, whilst only marginal delay would have been caused to the redevelopment of the site. However, having regard to the present stage of the development, the 2nd defendant says that he has been informed by the 1st defendant that the cost would now be in the region of $500,000 and that if the septic tank is to be reinstated, construction of the superstructure will have to stop which would result in a delay of 8 months. Payments by way of interest could result in the actual cost exceeding $1,000,000 according to the defendants. However, the evidence on these matters was extremely vague.

14. In support of his submission, Mr. Mok cited Wrotham Park Estates Company Limited v. Parkside Homes Ltd. & Ors. (1974) 1 W.L.R. 798 where the principles for granting a mandatory injunction were considered by Brightman J. In that case a writ was issued by the plaintiffs on the 14th Feburery 1972 seeking an injunction to restrain building on land which was subject to a restrictive covenant. A mandatory injunction was sought for the demolition of the buildings erected on the land in breach of the covenant, but no application was made for an interlocutory injunction. Meanwhile, the building works continued. and the purchasers who with the mortgagees of some of them were added as defendants, had moved into the new houses by April and May 1973. In the course of his judgment, Brightman J. had this to say on pp. 809, 810 and 811: -

"Undoubtedly it is a highly material factor that Parkside, aided and abetted by those who entered into contracts with it, continued building operations in the face of the clear and early protest by the plaintiffs and the issue of proceedings. In such circumstances, a defendant proceeds at his own peril, and in such or similar circumstances the court made mandatory orders to demolish bay windows in Lord Manners v. Johnson (1875) 1 Ch.D.673; to remove buildings that obstructed easements of way and of light in Krehl v. Burrell (1879) 11 Ch.D.146, and Achilli v. Tovell (1927) 2 Ch. 243, and to demolish an advertisement hoarding in Stevens v. Willing & Co. (1929) W.N. 53 : see also as to the attitude of the court, Smith v. Day (1880) 13 Ch.D. 651. But even where the defendant has continued in the face of protest or writ, there is no rule that the plaintiff will be granted a. mandatory injunction if he succeeds at the trial. Such relief was refused in Isenberg v. East India House Estate Co. Ltd. (1863) 3 De G.J. & Sm. 263 though the defendant had accelerated building operations between the date of the plaintiffs warning and the filing of the bill and in Kilbey v. Haviland (1871) 24 L. T. 353 and Sharp v. Harrison (1922) 1 Ch. 502 where the defendant continued to build in defiance of a warning that proceedings would be taken.

In the Isenberg case, 3 De G. J. & Sm. 263 Lord Westbury L.C. said, at p. 271:

'Every one of this class of cases must depend upon its own peculiar circumstances. The common law remedy for a grievance of this description is an action for damages: an action liable to be resorted to as long as the cause of damage continues. Upon that ground, and by reason also of the damage in many cases not admitting of being estimated in money, this court has assumed jurisdiction. The jurisdiction of this court, so far as it partakes of the nature of a preventive remedy, that is, prohibition of further damage or an intended damage, is a jurisdiction that may be exercised without difficulty, and rests upon the clearest principles. But there has been superadded to that the power of the court to grant what has been denominated a mandatory injunction, that is, an order compelling a defendant to restore things to the condition in which they were at the time when the plaintiff's complaint was made. The exercise of that power is one that must be attended with the greatest possible caution. I think, without intending to lay down any rule, that it is confined to cases where the injury done to the plaintiff cannot be estimated and sufficiently compensated by a pecuniary sum. Where it admits of being so estimated, and where the evil sustained by the plaintiff may be abundantly compensated in money, there appears to me to be no necessity to superadd the exercise of that extraordinary power by this court. '

In Durell v. Pritchard (1865) 1 Ch.App. 244, where a mandatory injunction was refused, Turner L.J. said that the court would not interfere by way of mandatory injunction except where extreme or, at all events, very serious damage will ensue from withholding an injunction. In Kilbey v. Haviland (1871) 24 L.T. 353, where the defendant had transgressed a building line, Bacon V.-C. found that the covenant breaker had built in defiance of regulations which he was bound to observe, and placed a house where it was certain to be injurious to the adjoining lots. He described the defendant's conduct as inexcusable. Yet it was another question whether he should be compelled to pull the house down. A mandatory injunction was refused .................... Mr. Newsom submitted, and I accept, that it is no answer to a claim for a mandatory injunction that the plaintiffs, having issued proceedings, deliberately held their hand and did not seek the assistance of the court for the purpose of preserving the status quo. On the other hand, it is, in my view, equally true that a plaintiff is not entitled "as of course" to have everything pulled down that was built after the issue of the writ. The erection of the houses, whether one likes it or not, is a fait accompli and the houses are now the homes of people. I accept that this particular fait accompli is reversible and could be undone. But I cannot close my eyes to the fact that the houses now exist. It would, in my opinion, be an unpardonable waste of much needed houses to direct that they now be pulled down and I have never had a moment's doubt during the hearing of this case that such an order ought to be refused ........ ....Without hesitation I decline to grant a mandatory injunction. But the fact that these houses will remain does not spell out a charter entitling others to despoil adjacent areas of land in breach of valid restrictions imposed by the conveyances. A developer who tries that course may be in for a rude awakening. "

15. Mr. Mok also referred me to Bracewell and Another v. Appleby (1975) 1 Ch. 408 in which the principles enunciated in Wrotham Park Estate Co. Ltd. v. Parkside Homes Ltd. were applied. That case concerned a dispute as to whether there was a right of way over a road to some land. It was held that as the plaintiffs had delayed enforcing their legal rights until the defendant had almost completed the building of the house and any enforcement of those rights would render the defendant's house uninhabitable, the plaintiffs would be granted damages in lieu of an injunction.

16. Another case cited by Mr. Mok was Shaw and Another v. Applegate (1977) 1 W.L.R. 970 where it was held that to deprive the possessor of a legal right of that right on the ground of his acquiescence the situation must have become such that it would be dishonest or unconscionable for him to continue to seek to enforce it. The plaintiffs sought an injunction to restrain the defendant from using a building on his land as an amusement arcade, which was in breach of his covenant not to do so. The injunction was refused on the grounds of the plaintiff's failure to apply for interlocutory relief and as he had built up goodwill and had incurred considerable expenditure over a period of six years, with the result that damages would be the appropriate remedy.

17. The cases that were cited relate to breaches of a restrictive covenant and an easement of a right of way whereas in the instant case the plaintiffs' complain of a loss of amenity. There was a deliberate breach of the terms of the Deed of Grant by the defendants despite notice of the plaintiffs' objections. The work was carried out without the knowledge and consent of the plaintiffs and in complete disregard of their rights. Within a reasonable time the plaintiffs instituted Proceedings. There has admittedly been a delay of two years before the hearing of the present summons, but the defendants have always been aware that at some time they will be faced with the responsibility of restoring the status quo. I do not consider that the plaintiffs conduct was in any way unconscionable nor should their right to mandatory relief be refused on the grounds that they did not apply for an interlocutory injunction. It ill behoves the defendants to impugn the conduct of the plaintiffs when their own was inexcusable.

18. Not only have the plaintiffs suffered a loss of amenity, but their future rights under the Deed of Grant have not been safeguarded for the defendants have not presented any proposals for a new grant.

19. I accept Mr. Chang's submission that the plaintiffs are at the mercy of the defendants for they are wholly dependent upon them for the flushing system. For the injury that they have suffered the plaintiffs cannot be sufficiently compensated by a pecuniary sum. The submission by Mr. Mok that the Plaintiffs should await the outcome of the trial and that a mere declaration be granted at this stage is in my judgment quite unjustified. I am satisfied that the plaintiffs are entitled to a mandatory order. I will hear the parties on the terms of the declaration t o be made.

Representation:

Mr. Denis Chang Q.C. and Mr. Sammy Lee (Y.L.Yeung & Co.) for Plaintiffs

Mr. Y.C. Mok (Wong Hui & Co.) for Defendants .