Hong Yip Service Co. Ltd. v. Candela Co. Ltd.
Read the full judgment text of HCA 6706/1994 on BabelCite. This High Court CFI judgment was delivered on 10 January 1997.
1. This is an action by the Plaintiff, the manager of a residential development known as South Bay Garden, 33 South Bay Close ("the Estate") against the Defendant, the registered owner of Flat 2 on the 9th Floor of Block B ("the Flat") of the Estate for a mandatory injunction for the removal of condensers installed on the exterior wall of the Flat.
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HCA006706/1994 1994, No.A6706 IN THE SUPREME COURT OF HONG KONG HIGH COURT _______________
_______________ Coram: Hon Mrs Justice Le Pichon in Court Dates of hearing: 18, 19 and 20 December 1996 Date of handing down judgment: 10 January 1997 _______________ J U D G M E N T _______________ 1. This is an action by the Plaintiff, the manager of a residential development known as South Bay Garden, 33 South Bay Close ("the Estate") against the Defendant, the registered owner of Flat 2 on the 9th Floor of Block B ("the Flat") of the Estate for a mandatory injunction for the removal of condensers installed on the exterior wall of the Flat. 2. The Estate consists of three blocks, each block being 10 storeys in height and contain 20 units. Block A ("the Building") and Block B are identical in design and layout whereas Block C has a slightly different design and layout. Each of the units is L-shaped. The main part of the Flat is rectangular. The front portion of this rectangle, comprising the master bedroom, a second bedroom and the living area commanded a sea-view; the rear portion of the rectangle comprising two bathrooms, a third bedroom and the dining area faced the hill at the rear of the Building. The kitchen and maid's room are situated at the back and at right angles to the main part of the Flat i.e. the rectangle. Together they form an "L". The third bedroom referred to above which faces the hill at the rear has a bay window ("the rear bay window") and is visible from both the kitchen and the maid's room. 3. The Plaintiff is and has been the manager of the development since inception and, as such, was party to the Deed of Mutual Covenant ("the DMC") dated October 24, 1985. Para.(4) of Section I of the DMC provided that the Owners shall at all times be bound by and shall observe and perform the covenants, provisions and restrictions contained in the DMC and in the Third Schedule thereto and that the benefit and burden be annexed to every part of the Lot and the Estate and the Undivided Share held therewith. 4. The Third Schedule contained covenants, provisions and restrictions to be observed and performed by the Owners. For present purposes, the relevant provisions are the following :
5. The Defendant acquired the Flat in mid 1993. In September 1993, split type air-conditioners were installed in the Flat. The installations which are the subject of complaint are the two condensers to these air-conditioners ("the Condensers") : they were installed outside the exterior wall underneath the rear bay window of the Flat. The Condensers are supported by a frame, part of which rests on the rear bay window of the flat immediately below. It is common ground no written consent was obtained from the Plaintiff within para.17 of the Third Schedule. 6. On October 8, 1993, the Plaintiff demanded that the Condensers be removed on the ground that they were in contravention of the provisions of the DMC. Further letters demanding their removal were sent by the Plaintiff on November 1, 1993, December 1 and 14, 1993 and April 22, 1994. The Defendant's continual refusal to remove the Condensers led to the commencement of the present proceedings on July 11, 1994. 7. Prima facie, the Condensers are in breach of the DMC, in particular, of para.27 of the Third Schedule. The Plaintiff, as manager, is empowered under Section II, para.(B)(1)(u) "to enforce the due observance and performance by the Owners ... of the terms and conditions of [the DMC] ... and to take action in respect of any breach thereof ...". 8. Under s.18(1)(c) of the Multi-storey Buildings (Owners Incorporation) Ordinance, Cap.344, incorporated owners are required under statutory duty to enforce the DMC. This approach was endorsed by the Court of Appeal in The Incorporated Owners of the Hoi Luen Industrial Centre & Anor. v. Ohashi Chemical Industries (Hong Kong) Ltd. (1995) 2 HKC 11 at 13 F-D :
Indeed, the Owners Committee of the Estate had convened a meeting in January 1994 to reaffirm compliance with the restrictive covenant concerning the installation of air-conditioners and requested the Plaintiff to take enforcement action. The Facts 9. The defence is one of waiver and/or acquiescence and/or estoppel founded on the following conduct or acts on the part of the Plaintiff :
10. I now turn to the evidence.
11. The Defendant's case is that oral permission was granted on July 12, 1993 by Flora Chan, then an employee of the Plaintiff, to Wendy Ma ("Miss Ma"), an interior designer employed by Design Positive Architects Planners Ltd. ("Design Positive"). The only direct evidence of this alleged oral permission is the statement of Miss Ma admitted under the hearsay rules as Miss Ma is beyond the seas. In her statement, Miss Ma said that Design Positive was engaged by the Defendant in June 1993 to carry out decoration work to the Flat including the installation of split type air-conditioners. In the early part of July 1993, she went with Miss Amy Sadick, a director of the Defendant, to the Flat for a general inspection and to find out the name of the management company. After the visit, she telephoned the Plaintiff to seek its permission to erect the Condensers on the exterior of the Building. Miss Ma stated that she was informed by the person answering the call that Flora Chan was the person in charge of the Building but that Miss Chan was not available at the time. Miss Ma further stated that in the afternoon of July 12, 1993, between 2:30 p.m. and 4 p.m., Miss Chan returned her call and informed her that installation of split type air-conditioners was permitted provided that the external unit was placed at the rear of the Building. 12. The Defendant relied on Miss Ma's hearsay statement to establish the alleged oral permission. Whilst Miss Ma's statement is admissible in evidence, the weight to be attached to it is another matter, particularly when no evidence has been adduced from the other party involved, namely Flora Chan. It is pertinent to note that no subpoena was issued by the Defendant to compel Miss Chan to give evidence; unlike the case of Miss Ma, it is not suggested that Miss Chan is not currently in Hong Kong or is otherwise unavailable. 13. Miss Sadick gave evidence to the effect that when she visited the Flat for the first time with Miss Ma on July 1, 1993, and indicated an intention of installing split type air-conditioners, Miss Ma warned her that she should ask the management company before installing such air-conditioners and as a result she delegated this matter to Miss Ma. In her evidence-in-chief, she said that Miss Ma called her in July saying that "the Building allowed split air-conditioners to be installed". Flora Chan was mentioned and Miss Sadick understood that Miss Ma had obtained permission for the installations. It was after that assurance that she asked Miss Ma to get quotations and subsequently signed a contract with Vital Engineering Co. Ltd. When she was cross-examined about this conversation, she could not give a precise date for it except that it was in early July and that Miss Ma's conversation with Flora Chan took place one or two days prior to Miss Sadick's conversation with Miss Ma. 14. Miss Sadick's evidence regarding the alleged oral permission is difficult to reconcile with letters she had written : on December 12, 1993 and May 2, 1994 she wrote to the Plaintiff asserting that such express oral approval was granted to Miss Ma on July 1, 1993. Miss Sadick could not give any satisfactory explanation as to why she had so unequivocally asserted in those letters that oral permission was granted on July 1 when according to her oral evidence, that was the day she first inspected the premises together with Miss Ma and before Design Positive was engaged to do the work and plainly the alleged oral permission could not have been granted on July 1. But even if I were to overlook this discrepancy, Miss Sadick's evidence adds nothing to what Miss Ma has to say about the alleged oral permission and certainly cannot cure the intrinsic deficiencies of Miss Ma's evidence which are considered below. 15. As to Miss Ma's statement, what it said about the alleged oral permission was not only extremely brief, it was very general and unspecific. It is unclear whether what was set out in para.5 of her statement is her own conclusion from what Miss Chan might have said about other air-conditioners : Miss Ma certainly did not purport "to recite" the words actually said by Miss Chan. As will appear below, the installation of Condensers other than within the air-conditioning hoods was not a widespread or prevalent practice in the Estate in that there were no more (and probably less) than six instances of this in July 1993. I find it inherently unbelievable that the discussion could have been in such general and unspecific terms, particularly if Miss Ma had emphasised the importance of obtaining prior consent to Miss Sadick. One would have expected the number and size of condensers as well as the exact location for the proposed installations to have been specifically discussed : they were not. 16. In assessing the weight to be attributed to Miss Ma's statement, letters which she subsequently wrote regarding the installation of the Condensers are relevant :
In my judgment, these letters detract from, rather than support, the existence of the alleged oral permission. 17. In the present case, there was no viva voce evidence by Miss Ma and/or Miss Chan about which they or she (as the case may be) could have been cross-examined. In the absence of such cross-examination to test the veracity and reliability of the evidence presented, I am not satisfied that any oral permission as alleged in Miss Ma's statement was granted.
18. On September 9, 1993, workers arrived to erect scaffolding at the Defendant's Flat. Liu Poa Wha the caretaker of the estate said that he stopped them and was told that they had come to carry out decoration work to the Flat. Mr Liu was adamant that there was no mention at that juncture of installation of air-conditioners. He told the workers that they had to apply for approval before carrying out any work since those were the Plaintiff's regulations. 19. Mr Liu was certain that the incident occurred on September 9 since he had made a written record of it. He telephoned the Plaintiff and tried to speak to the supervisor and/or the manager but neither was available. When Mr Liu made this call, the contractors remained outside. He said he tried to stop the workers from proceeding when he failed to get hold of any one at the management office but they ignored him and simply went ahead. Mr Liu said that he did not know that the purpose of putting up the scaffolding was for the installation of the Condensers. He said that he never conveyed any approval for that work nor did he give any advice to the contractors to the effect that the installations could only be carried out at the rear of the Building. 20. Mr Ho Yin Tak is a sole proprietor of Decoration and Furniture Works, the main contractor engaged by Design Positive to carry out decoration work to the Flat. Counsel for the Defendant explained that those instructing him only managed to contact Mr Ho on the eve of the trial. I found this a little surprising as Mr Ho is still the sole proprietor and continued to carry on the same business. Be that as it may, at the commencement of the hearing, the Defendant applied for leave to call Mr Ho to give evidence and for his signed statement of December 17, 1996 to be his witness statement. The Plaintiff opposed the application. As Mr Ho's evidence is clearly relevant, it would not serve the ends of justice to shut out relevant evidence provided that in so doing the Plaintiff would not be unfairly prejudiced. Any prejudice that the Plaintiff might conceivably suffer could be addressed by a suitable adjournment if required. On that basis, Mr Ho was allowed to give evidence on behalf of the Defendant. 21. Mr Ho's evidence was that he started decoration work in the Flat in about mid-July. In September 1993, he erected scaffolding at the Flat to enable the air-conditioning sub-contractor, Vital Engineering, to install the frame to support the Condensers as well as the Condensers themselves. Mr Ho accepted that the scaffolding in question was erected on September 9. Mr Ho said he was stopped at the barrier by a caretaker. He said he told the caretaker that they were carrying out decoration work at the Flat and were putting up scaffolding to install air-conditioners but was not told by Mr Liu that prior permission was required. Mr Ho used the telephone in the guard's booth to call Design Positive but there was no evidence as to the outcome of that conversation. The caretaker said that he would have to speak to his superiors. He made a call. After that call, Mr Ho said they were allowed to go in although the caretaker did ask where the scaffolding was going to be erected and told Mr Ho that no scaffolding would be allowed at the front of the Building but only at the rear. There is thus a conflict of evidence as to what occurred on September 9. 22. The evidence of Mr Liu is to be preferred for the following reasons. Mr Ho did not appear to be a reliable witness. His oral evidence regarding the permission that was granted by the caretaker differed materially from the account given in his statement which was only made the day before the commencement of the trial. His statement was very specific : namely that after calling the management office, Mr Ho was told by Mr Liu that he "could install air-conditioners of the split type, provided it was installed at the rear of the Building and it should be installed so as not to affect the external appearance of the Building." His oral evidence fell far short of that : it went no further than informing Mr Liu that the scaffolding was for the installation of air-conditioners. There was never any mention of "split type" air-conditioners. Given that his statement was made a day or two before he gave oral evidence, I find that discrepancy remarkable. Further, the notion that on September 9, the caretaker could have directed or authorised Mr Ho where the scaffolding was to be erected thereby indirectly controlling the positioning of the Condensers is patently absurd. Where the Condensers were to be installed and therefore where the scaffolding was to be erected was a matter that must have been determined by Design Positive and/or Vital Engineering well before September 9. Extra electrical cable to supply additional power required for split type air-conditioners was installed as early as mid-August. Mr Ho and his team were simply implementing the decision of Design Positive and/or Vital Engineering. 23. On Mr Ho's own evidence, since carrying out that work in September 1993, he had been engaged in more than 50 projects. He accepted that there was nothing out of the ordinary in the project that would cause him to recall with great clarity events and conversations that occurred over three years ago. Mr Ho also accepted that he was the main contractor and that any delay in completion might have resulted in a dispute with Design Positive. There was therefore every reason to believe that Mr Ho was very keen to get on with the job on September 9. 24. Mr Liu's evidence, on the other hand, is consistent with his witness statement which was made at the beginning of 1996. It is also consistent with the evidence of Miss Li regarding procedures she had put in place for the obtaining of approvals for work.
25. As pleaded, the defence (at para.6(j)) alleged that Miss Catina Li Wai Fong ("Miss Li") the area manager of the Estate waived the breach in that on September 11, she had a conversation with Miss Sadick allegedly indicating that she (Miss Li) was aware that the Condensers were being installed without raising any objection. Miss Li denies that such a conversation took place. 26. On September 11, 1993, Mr Liu noticed workers doing work at the scaffolding erected outside the window of the Flat. The work caused debris to fall onto two cars parked below. The owners of the cars lodged complaints and Mr Liu reported the incident to the management office. He said that he informed the car owners that the damage resulted from work being carried out at the Flat. He maintained that he had no idea of the precise nature of the work being carried out at the Flat. 27. Mr Liu's evidence is corroborated by that of Miss Li who said that she was informed of the complaints from car owners regarding damage to their cars from debris falling from the Flat on September 11. Miss Li went to the Building that day as the owners of the damaged vehicles wanted compensation. Miss Li's evidence was that although she was at the Estate, she did not go up to the Flat nor did she know about the Condensers. She did not see Miss Sadick but made a call to Design Positive. She found out from Miss Ma that the scaffolding was for the purpose of installing air-conditioners. The management procedures that Miss Li had put in place required that applications for approval for work be made in writing. There was a standard form which an applicant had to complete. These were invariably endorsed in writing by Miss Li before any response would be given to the applicant. In urgent cases, the response might be made orally after the endorsement either by Miss Chan or the building manager. As no application had been submitted and no prior permission had been obtained, she told the decorators that the work could not be carried out until permission had been obtained for the specific items of work. She was not told that condensers would be installed and there was no mention of any split type air-conditioners. According to Miss Li, the first time she became aware of the Condensers was when she was informed by the management office after they had been installed some time in mid-September. 28. Miss Sadick's evidence was that the damage to the vehicles occurred on September 10. That morning she was at the Flat together with Wendy Ma and the sub-contractor Mr Ho. She became aware of the damage to the two vehicles because of complaints received from the caretaker. In her evidence-in-chief, Miss Sadick was asked about "a call from Miss Li about the cars" and whether there was any mention of the precise nature of the work that was being carried out. To that question, Miss Sadick replied that she (Miss Sadick) "definitely talked about air-conditioners". When cross-examined about this conversation, Miss Sadick said that Miss Li had called to inform her of the incident of the falling debris and said that the workers caused the stones to fall when they were installing the air-conditioners but Miss Li did not raise any objection - to the installations themselves. 29. Miss Sadick's evidence was that the Condensers were installed a day or two after the scaffolding had been erected. So the frame if not also the Condensers should have been installed by September 11. 30. As appears below, this conflict of evidence need not be resolved. But if it were necessary to choose between the evidence of Miss Li and Miss Sadick, I would have little hesitation in preferring Miss Li's evidence. She struck me as an honest and reliable witness : her evidence was consistent and her answers direct and spontaneous. Miss Sadick's lacked consistency and less spontaneous.
31. As is not uncommon, air-conditioning hoods for the installation of air-conditioners were incorporated into the design of the Building. Air-conditioners installed in the apertures provided for them are not very visible, encased as they were by the air-conditioning hoods. The effect of these hoods is that they give the Building a certain uniformity in external appearance in that the outer edges of the air-conditioners do not protrude beyond the outer edges of the hoods. Although these air-conditioning hoods were designed for window units rather than split type air-conditioners, the hoods could accommodate condensers of certain types of split air-conditioners. An example of this appears from the photograph of the external wall of the third floor of Flat 1 of the Building. It is apparent from the floor plan of the Building that the air-conditioning hood for the dinning area of each of the flats is recessed so that the outer edge of the hood is in line with the external wall of the Building and does not protrude from it. The same is true of Block B, the layout of which is the same as that of Block A. No such recess exists in Block C. 32. As at July 1993, a total of six out of the sixty units in the Estate had split type air-conditioners installed. Four of these were in the Building, namely Flat 1 on the 1st, 3rd and 7th floors and Flat 2 on the 2nd floor of the Building. One was in Block B, namely, Flat 1 on the 2nd floor, and the remaining one was in Block C, namely, Flat 2 on the 8th floor. In all cases, apart from the one in Block C, the condenser was installed in the recessed area, on top of the air-conditioning hood of the floor below. As noted above, Block C does not have a recessed area and the Condensers were installed on top of the rear bay window of the Flat immediately below. 33. I should mention in passing that three other flats had air-conditioning units installed otherwise than in the apertures provided. They were window units rather than split type air-conditioners and were installed through the windows of the flats concerned. None of these flats was in the Building : one was in Block B(Flat 2, 7th Floor) and the two were in Block C (Flats 1 and 2, 10th Floor). 34. The dates when the six units installed split type conditioners were not in evidence. According to Miss Li, the Area Manager in charge of the Estate from 1988 until May 1996, when she assumed responsibility for the Estate in 1988, split type air-conditioners had been installed in some cases. However apart from the one in Block C on the 8th floor, it is unclear which (if any) of the five others had been installed. 35. Of the so-called similar breaches, namely, the installation of condensers other than within the air-conditioning hoods provided, five out of the six cases were not truly "similar". In these cases, the condensers were installed in the recesses of Blocks C and B, on top of the air-conditioning hood of the floor below. The existence of the recess meant that these condensers were less visible than they otherwise might have been and were certainly less conspicuous. Only one case (Block C, 8th Floor) could be said to be substantially on all fours with the present case. Even then, the breach in the present case is the more egregious. There was no attempt to align the Condensers with the line formed by the rear bay window as was the case in Block C. Here, one of the Condensers protruded beyond the edge of the rear bay window. 36. The evidence shows that in recent months another unit has installed split type air-conditioners. The condenser in that case is in the recessed area, on top of the air-conditioning hood of the floor below as in all instances other than the one on the 8th Floor of Block C. Is there a valid defence? 37. On the facts as I have found, the Defendant has failed to establish that the installation was pursuant to consent granted by the Defendant in July 1993 through Flora Chan or in September when the scaffolding was erected, through Mr Liu the caretaker, assuming for present purposes in the Defendant's favour that Mr Liu was clothed with the necessary authority. 38. Even if I were to accept Mr Ho's evidence as to what occurred on September 9, he never mentioned that air-conditioning would be of this split type or that the work involved the installation of separate Condensers on the outer wall : all the caretaker is alleged to have said was that no scaffolding could be put up at the front but only at the rear of the Building. This is not the same as saying that Condensers could be installed on the external wall provided that it was at the rear. Therefore Mr Ho's evidence fall short of establishing any clear and unequivocal promise that is essential to a plea of promissory estoppel. Further, it also falls short of establishing that the party waiving his rights knew of the breach. 39. As to the September 11 incident, whilst there is a direct conflict of evidence as to whether or not a conversation took place between Miss Li and Miss Sadick on September 11, irrespective of that conflict, the defence of estoppel must fail since the Defendant has failed to prove detriment. The reason is that by September 11, the Defendant had already incurred the expenditure in question : the quotation from Vital Engineering which was responsible for installing the frame as well as the Condensers is dated August 25, 1993. The price quoted did not include the cost of scaffolding which was to be provided by third parties. It follows that the quotation must have been accepted by the time the scaffolding was erected. So the only reasonable inference is that by September 11, the Defendant had already incurred liability under that contract. Certainly the cost of erecting scaffolding and the additional electric cable had already been incurred. 40. But even if Miss Sadick's version were to be accepted, non-objection for the few days from September 11 to the telephone objection made to Design Positive in mid-September and request for removal could not amount to a waiver by the Plaintiff of its rights so as to disentitle it to equitable relief. 41. The only issue that remains is whether the Plaintiff had waived its right to enforce the DMC through acquiescing in similar breaches. 42. The Defendant relied on Cheung Yuet v. The Incorporated Owners of Oriental Gardens [1979] HKLR 536. In this case, the appellants' application to set aside a mandatory injunction for the demolition of extensions to the building was allowed. The equitable defence of acquiescence was established in the appellants' favour because particular kinds of breaches had been tolerated by the respondent. There was only one flat among the many in the four blocks which make up the Oriental Gardens which had not been extended one way or another by the owners. In that case, as Huggins J.A. noted (at p.538) :
43. Cons, J. concluded (at p.541) that :
44. The other case relied on by the Defendant was Incorporated Owners of Dragon View v. Nalpak Limited [1989] 1 HKC 549, where it was held that :
In that case the breaches were described in the following terms :
See also Kichenchand Chellaram (Hong Kong) Ltd. v. Hang Yuan Management Ltd. (1987) 2 HKC 257 where of the 70 flats in the estate, the owners of no less than 54 of them had committed breaches of the covenant prohibiting the installation of air-conditioning or other units through any external wall except in the aperture provided. But that case is of little assistance in that it dealt with the question whether summary judgment was appropriate. 45. The authorities relied on are all distinguishable on the facts : the scale and prevalence of breaches which mark those cases are notably and fatally absent from the present. 46. In the present case, only one other unit out of a total of 60 had installations that could be said to be substantially similar. This is clearly not sufficient to establish acquiescence on the Plaintiff's part. It is to be noted that in fact the condensers erected on the 8th Floor of Block C have since been removed and the breach remedied. Even if (assuming in the Defendant's favour) the other five instances of condensers being installed other than within the air-conditioning hoods are taken in account, that would still not lead to a different conclusion : in my judgment, six out of sixty units is a far cry from the extent of breaches that occurred in Oriental Gardens and Dragon View. 47. Counsel for the Plaintiff also submitted that a manager of a building has no authority to grant expressly to the Defendant or any other owner of any unit in the Estate the right to act in contravention of the DMC and that which cannot be done expressly cannot be done impliedly, citing The Incorporated Owners of Hoi Luen Industrial Centre v. Ohashi Chemical Industries (Hong Kong) Ltd. [1995] 2 HKC 11 at 13 D. Having reached the conclusion that the Plaintiff has neither waived its rights to enforce the covenants under the DMC nor acquiesced in their breach, this point does not fall for consideration. 48. Accordingly, I reach the conclusion that no valid defence has been established. Should a mandatory injunction be granted? 49. It was contended that as the remedy of an injunction is discretionary, the Plaintiff's conduct was such as to render it inappropriate in any event for the court to exercise its discretion in the Plaintiff's favour. The Defendant submitted that such an injunction ought not to be granted for the following reasons :
50. As explained above, acquiescence and waiver have not been established so as to disentitle the Plaintiff to equitable relief. There is no evidence to support the submission that this Plaintiff is being unfair or unjust to the Defendant by arbitrarily choosing to enforce the covenants against it whilst tolerating breaches by others. Rather, the evidence is to the contrary : the Plaintiff has written to the owners of all units that have breached the DMC requiring compliance with the covenants and the removal of condensers installed other than in the air-conditioning hoods. Some of the owners have already complied with the demand including the owner of flat whose breach was substantially similar. 51. I do not accept the Defendant's submission that the Condensers do not adversely affect the external appearance of the Building if they are installed at the rear bay window : they plainly destroy the uniformity of the Building's external appearance which the covenant was designed to achieve. Evidence of physical damage to the Building is not essential. It is self-evident that if the covenant is not enforced, it would be rendered both meaningless and valueless. 52. In my judgment this is a proper case for the grant, inter alia, of a mandatory injunction. 53. Accordingly, I will grant the injunctions sought. The Condensers are to be dismantled and removed within 60 days of this order. I also make an order nisi that the Plaintiff is entitled to costs.
Representation: Mr Chan Chi Hung, inst'd by M/s Foo & Li, for the Plaintiff Mr Nicholas Pirie, inst'd by M/s Hon & Co., for the Defendant |
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