The Incorporated Owners of Tsui Chuk Garden v. Edentown Ltd and Others
Read the full judgment text of LDBM 87/2004 on BabelCite. This Lands Tribunal judgment was delivered on 17 June 2004.
1. The Applicant is the incorporated owners of the estate known as Tsui Chuk Garden located at New Kowloon Inland Lot No. 6023, Chuk Yuen West, Kowloon, Hong Kong ("the Estate"). All owners of the Estate are bound by the terms of the Deed of Mutual Covenant ("DMC") of the Estate dated 6th October 1989 and registered at the Land Registry by Memorial No. 4212970. Quartey Properties Limited ("the Manager") was and is the manager appointed for the management of the Estate under the provisions of the
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LDBM000087/2004 LDBM 87 of 2004 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BUILDING MANAGEMENT APPLICATION NO. 87 OF 2004
Coram: Member W K LO Date of hearing: 17 June 2004 Date of judgment: 17 June 2004 Date of review hearing: 4 August 2004 Date of decision of review: 30 August 2004 __________________________ DECISION OF REVIEW __________________________ Background 1.The Applicant is the incorporated owners of the estate known as Tsui Chuk Garden located at New Kowloon Inland Lot No. 6023, Chuk Yuen West, Kowloon, Hong Kong ("the Estate"). All owners of the Estate are bound by the terms of the Deed of Mutual Covenant ("DMC") of the Estate dated 6th October 1989 and registered at the Land Registry by Memorial No. 4212970. Quartey Properties Limited ("the Manager") was and is the manager appointed for the management of the Estate under the provisions of the DMC. 2.The Applicant pleaded that the 1st Respondent was and is at all material times the "owner" of Shop 302, 303A and 304 in the Estate ("the 3 shops") within the meaning of Clause 1(a) of the Deed of Mutual Covenant governing the use and management of the Estate. Also, the Applicant pleaded that at all material times, the 2nd, 3rd and 4th Respondents were and are the respective occupiers of the 3 shops. In or about September 2002, the 1st Respondent informed the Manager that the former had appointed a company called Tsui Chuk Commercial Complex Management Limited (1st Respondent's Agent") as its agent to manage, inter alia, the 3 shops. 3.The Applicant filed on 29 March 2004 an application ("the Application") in the Lands Tribunal ("the Tribunal") claiming against all the 4 Respondents and seeking (a) an injunction restraining all the Respondents (i.e. 1st, 2nd, 3rd and 4th Respondents) and each of them whether by themselves or agents or otherwise howsoever "from placing continuing to place or permitting or suffering to be placed or continue to place any boxes, goods, articles or any matter at the Common Areas outside the said Shops 302, 303A and 304"; or (ii) in any way obstructing the Common Areas outside the said Shops 302, 303A and 304 or the emergency exit; (iii) in any way causing nuisance at the Common Areas outside the said Shops 302, 303A and 304, or (iv) committing and/or continuing the said Breaches; (b) damages; (c) interests; (d) further and/or other reliefs; and (e) costs. 4.There was no notice of opposition from any of the Respondents. On 17 June 2004, the application was fixed for hearing ("the original hearing"). 5.The Applicant called for the evidence of Mr. Wong Kwong Tim, the Property Manager of the Manager of the Estate. He gave evidence as to the alleged occupation of the said common areas of the Estate by the 2nd, 3rd and 4th Respondents and the steps he and his colleagues had taken prior to the Application and the date of original hearing. Mr. Wong told the Tribunal that since October/November 2003, the 2nd, 3rd and 4th Respondents have continued the alleged breaches of the DMC. After repeated verbal and written warnings, the breaches remained unabated. Sometimes, the said breaches ceased but since about 13 February 2004, the same breaches relapsed and have continued since then. Mr. Wong added that the 1st Respondent have since about October or November 2003 permitted or suffered to be left at the said common areas outside the 3 shops the alleged articles for business. Mr. Wong also said that since October 2003, he had made numerous oral and written complaints of the breaches to Mr. Siu Ka Kei, the manager of the 1st Respondent's Agent but the 1st Respondent still failed to effect the removal of the goods and articles from the said open areas of the Estate. 6.The 1st Respondent was represented by a manager, Mr. Ng, Siu Keung who did not give any evidence or make any oral submission. However, he produced a letter (marked as Exhibit R1) as the written submission from the 1st Respondent. 7.Towards the end of the original hearing, the Applicant abandoned her claims for damages, interests as well as further and/or other reliefs in the application. 8.Under the DMC, no part of the staircases, landings, arcades, lift lobbies, passages or other common areas shall be obstructed or incumbered or used for any business or private purposes. Furthermore, no owner or occupier shall leave or cause, permit or suffer to be left any furniture, boxes, goods, articles or refuse in any part of the common areas or cause any obstruction whatsoever thereto. And, under the DMC, the Manager have full power and authority to do all things necessary for the proper management of the Estate, in particular:-
9.At the end of the original hearing, I gave an oral judgment. I was satisfied that the 2nd, 3rd and 4th Respondents (whether by themselves, their directors, partners, servants, agents or otherwise) had been placing, continuing to place, or permitting or suffering to be placed the said boxes, goods, articles or the matter in the common areas outside the 3 shops in the Estate as alleged in the Application. The breaches complained of relapsed and remained unabated at the time of the filing of the Application. The factual evidence adduced by the Applicant's witness was overwhelming. As for the 1st Respondent, I was certain to find that her role was not the same as those of the 2nd, 3rd and 4th Respondents. However, given the evidence, I was satisfied that the 1st Respondent had been permitting or suffering to be placed the alleged unauthorized occupation of the common areas of the Estate. For these reasons, I granted the mandatory and prohibitory injunction against all the 4 Respondents, and a costs order nisi that all the 4 Respondents do pay costs of the Application to the Applicant, to be taxed on the District Court Scale, if not agreed, with Certificate for Counsel, such order to be made absolute after the expiry of 21 days from the date of judgment unless applications are made otherwise. Review application by the 1st Respondent 10.On 15 July 2004, the 1st Respondent filed a review application on the following 3 grounds: "(1) The Applicant has not adduced any or any sufficient evidence in support of its allegations that the 1st Respondent was in breach of the provisions of the Deed of Mutual Covenant; (2) The Application has not adduced any or any sufficient evidence in support of its application for an injunction order against the 1st Respondent; and (3) there has not been a fair trial of the Application." 11.On 15 July 2004, I decided to review the orders granted in the original hearing. The review was fixed for hearing ("the review hearing") on 4 August 2004 during which the 2nd and 3rd Respondents were also represented, and the 4th Respondent was again absent. Mr. William Lee for the 2nd & 3rd Respondents explained that since his client had been served with the notice of the review hearing, he had been instructed to be present in the proceedings. However, Mr. Lee added that as his clients would not wish to participate in the review proceedings, no order as to costs relating to the review should be ordered against them. He further wished to seek the Tribunal's direction on the issue of costs to be borne by the Respondents. In this regard, I told Mr. Lee that he should take an appropriate application for the matter in question as the review hearing could not entertain his oral application on such matter. After taking instruction from his clients, he stated that the 2nd & 3rd Respondents would be filing an application on costs. Also, Mr. Kwan for the Applicant gave notice that if the Tribunal would accept the 1st Respondent's review application at the end of the review hearing, the Applicant would be making an application on costs that the 2nd & 3rd Respondents would be required to indemnify the Applicant. 12.During the review hearing in the afternoon of 4 August 2004, the Applicant before starting her submission made an oral application that leave be granted to the Applicant to amend the notice of the original Application by inserting before the names of the 2nd and 3rd Respondents the actual names of the tenants of 302 and 303A respectively (i.e. So, Lai Kuen and Ho, Chak Ming respectively). The Applicant explained that they had been able to ascertain from the concerned parties (who were represented in the review hearing) the actual names of the said tenants. There being no objection from both the 1st Respondent, as well as the 2nd & 3rd Respondents, I granted the leave as sought by the Applicant. 13.During the review hearing, the 1st Respondent and the Applicant gave their submissions respectively. But neither party chose to adduce any new evidence. Was the 1st Respondent in breach of the Deed of Mutual Covenant of the Estate? 14.The 1st Respondent's main contention was that the Applicant was wrong in alleging that the 1st Respondent was in breach of the DMC of the Estate. The Tribunal erred in accepting the Applicant's allegation. Mr. Lam for the 1st Respondent contended that although the Applicant had not pleaded a precise and unambiguous case against the 1st Respondent, the Applicant's case was made clearer and known to the 1st Respondent after hearing the evidence adduced by the Applicant's witness. Also, after reviewing the final submission made by the Applicant's counsel, Mr. Lam submitted that "the only possible case that the Applicant might have alleged against R1 is ... namely the various items for business were permitted or suffered to be left by R1 on the common area outside the 3 shops and it was R1 who permitted or suffered to be caused the obstruction and nuisance." Then, Mr. Lam went on at lengths to submit why, based on the requirements as set out by the established legal authorities in both U.K. and Hong Kong, the Applicant failed to prove to the Tribunal the said allegation. 15.On the other hand, the Applicant submitted very clearly in the review hearing that the 1st Respondent was in breach of the DMC not because the 1st Respondent was the party that had actually been placing those alleged items for business on the common areas outside the 3 shops. However, the Applicant said that before the original hearing, they did not know the exact relationship between the 1st Respondent and the occupiers (i.e. the 2nd, 3rd and 4th Respondents). And they had not been assisted by the 1st Respondent at all in trying to find out the identity of the occupiers. Therefore, the Applicant suspected then that the occupiers might be the agents of the 1st Respondent. Furthermore, even if it was confirmed to the Applicant later that the occupiers were the 1st Respondent's tenants but not agents, the 1st Respondent still committed the breach by permitting or suffering to permit the said obstruction and nuisance. 16.Since the evidence is clear that it was the tenants/occupiers (i.e. the 2nd, 3rd and 4th Respondents) but not the owner (i.e. the 1st Respondent) that actually placed the said items for business on the common areas outside the 3 shops and hence causing the said obstruction and nuisance, I find the most important issue in this review is whether the 1st Respondent had been permitting or suffering to be placed the alleged items for business on the common areas outside the 3 shops in the Estate. However, it was unfortunate that at the time of the original hearing, the 1st Respondent was not then represented and the Applicant did not elaborate this important issue at that time. The meaning of "permit of suffer" 17.In Berton v. Alliance Economic Investment Company Limited [1922] 1 K.B. 742, Atkin L.J. treated the words "permit" and "suffer" as having the same meaning and said,
18.Moreover, the expression 'permit' connotes a measure of control and the word 'suffer' covers allowing something to be done which the covenantor has a complete power to prevent. 19.The test laid down by Atkin L. J. was applied by Leong CJHC, Wong and Woo JJA of the Court of Appeal in Hong Kong in Realty Harvest Ltd. And Others v. Gold Margin Development Ltd. And Another [2001] 1 HKC 234. In this case, it was held that it was not sufficient to show that the premises had been used in a way which would constitute a breach of the covenant, it must further be shown that the user was by the defendant or his agent. And, the onus was on the plaintiff to establish a permission or sufferance which was within the meaning of the covenant not to permit or suffer an act to be done. The covenantor's obligation did not include an obligation at all costs to take steps to prevent the act. 20.In Kwan Shung King v Housing Appeal Tribunal [2000] 2 HKLRD, Yeung J (as he then was) said it was held in Berton case that,
21.Counsel for the 1st Respondent submitted that in applying the test laid down by Atkin L.J. in Berton case to the present case, there was no evidence to suggest that the 1st Respondent had given leave to the other three Respondents and even the Applicant conceded this fact. Secondly and most importantly, although the Applicant submitted that the 1st Respondent had the power and the duty to take steps to prevent the other 3 Respondents (i.e. the 2nd, 3rd and 4th Respondents) from placing those items for business on the common areas outside the 3 shops but the 1st Respondent had failed to do so, the 1st Respondent did not in fact have the control over the conduct of the other 3 Respondents and did not have any power to prevent the breaches of the DMC to take place. 22.I agree with the above analysis. The 1st Respondent did not have the power, as the landlord of the said 3 shops, to prevent the other 3 Respondents from placing the alleged items for business on the common areas outside the 3 shops. The test is simple. If the other 3 Respondents asked for the 1st Respondent's permission to occupy the common areas outside the 3 shops, could the 1st Respondent give such permission to do so? The answer must be "no" as the 1st Respondent simply did not have the ownership, care, management or control of the common areas outside the 3 shops but only the Applicant did. Therefore, if the 1st Respondent could not have allowed the other 3 Respondents to place the alleged items for business on the common areas outside the 3 shops, how could she prevent them from placing the same on the said common areas? The 1st Respondent could not go, seize and remove those items after knowing that the other 3 Respondents had done the wrongful acts. She could not even institute legal proceedings against the other 3 Respondents, like what the Applicant has done in the present case. 23.After reviewing the evidence of the Applicant's witness as well as the documents in the review bundle (page 110 - 115), I note that in January 2004, the 1st Respondent's Agent wrote to the 2nd, 3rd and 4th Respondents immediately after receiving the written warning letter from the Manager of the Applicant. In those letters, the 1st Respondent's Agent conveyed the warnings of the Manager of the Applicant and reiterated both the demands of the Applicant and the 1st Respondent that the 2nd, 3rd and 4th Respondents must cease the unauthorized occupation of the common areas outside the 3 shops; otherwise, they would be asked to bear the costs of the civil litigation that might arise. So, it appears that the 1st Respondent did give unequivocal warning to the 2nd, 3rd and 4th Respondents. I accept that the 1st Respondent under the circumstances have taken reasonable steps "to secure that the premises should be used according to the terms of the lease and not otherwise." 24.The Respondent submitted that the above said warning letter issued by the 1st Respondent's Agent was inadequate in that it did not contain any threat and that there was no further warnings after the letter dated 2 February 2004 from the Applicant's solicitor. I do not agree with this submission. I suppose the threat to be given by the 1st Respondent referred to the termination of the tenancies of the 3 shops. However, I think it would be unreasonable to expect the 1st Respondent to threaten to terminate or to actually terminate the tenancies of the 3 shops for actions of the other 3 respondents in respect of common areas outside the 3 shops. As to why no further warning letter was given, it appears that may be the 1st Respondent was misled that there would be a compromise solution between the other 3 Respondents and the Applicant. 25.To summarize, I agree with the 1st Respondent that there was no evidence in the original hearing that the 1st Respondent committed the breach of unauthorized occupation of the common areas of the Estate outside the 3 shops by "permitting or suffering to be placed". In addition, I have already found that there was no evidence of actual breaches committed by the 1st Respondent or any agent of the 1st Respondent. Hence, summing up, there was no evidence that the 1st Respondent breached the DMC of the Estate. Should an injunction order be granted against the 1st Respondent? 26.The 1st Respondent submitted that even if the Tribunal found that the 1st Respondent had permitted or suffered to be placed the alleged items for business on the common areas outside the 3 shops, the Applicant should not be entitled the injunction order in the form as it was granted. The mandatory injunction of the Tribunal imposed upon the 1st Respondent an obligation that she would not be able to discharge without committing another civil or even criminal wrong. As to the prohibitory injunction order, the 1st Respondent submitted that firstly, it was misconceived and unjust that the Applicant was granted part of the order which had never be applied for by the Applicant in the first place and secondly, the order was imprecise and unambiguous so that it would be impossible for the 1st Respondent to comply with. 27.The Applicant submitted that if the Tribunal accepted that if the persons placing the alleged items for business in the common areas of the Estate outside the 3 shops were not the 1st Respondent's agents or servants, then the mandatory injunction in paragraph 1 of the Orders granted by the Tribunal on 17 June 2004 should not be directed against the 1st Respondent. On the other hand, it was still proper for the Tribunal to grant a prohibitory injunction against the 1st Respondent. 28.However, I have already decided above that upon review, I concur with the 1st Respondent that there was no evidence that the 1st Respondent had permitted or suffered to be placed the alleged items for business on the common areas outside the 3 shops. So, there was really no need to consider the 1st Respondent's second ground any further. Simply put, if the 1st Respondent was not found in breach of the DMC, it was obvious that no injunction order, whether prohibitive or mandatory, should be granted against it. Was there a fair trial? 29.Mr. Kwan, counsel for the 1st Respondent submitted that there was not a fair trial because the Applicant, who was the only party being represented by lawyers in the original hearing, had failed to provide the necessary assistance to the Tribunal, including "the setting out of the facts in full and properly referring the Tribunal to the law that applied to the present situation." This is a serious allegation. Therefore, although the outcome of the review does not depend on the success or otherwise of this ground, I find that it is appropriate to consider the rationale behind the 1st Respondent's arguments for this ground. 30.Firstly, it was submitted by the 1st Respondent that although the Applicant had known of the actual names of the tenants of the 3 shops in question, i.e. Shop No. 302, No. 303A and No. 304, the Applicant did not inform the Tribunal of this important fact in the original hearing. 31.I agree that during the original hearing, I was also not clear why the Applicant had not put down the actual names of the tenants of the 3 shops in the names of the 1st, 2nd and 3rd Respondents in the Application. However, this could not be a ground of unfair trial. If the Applicant could not enforce the orders later on because of the ambiguity of the original Application which led to the ambiguity of the orders, the Applicant would simply has to blame herself. 32.Secondly, it was also submitted by the 1st Respondent that the Applicant failed to concede that the 1st Respondent did not have the care, control or management of the common area outside the shops, and they ought to have but had also failed to submit to the Tribunal that this would be an important matter that would affect the granting of the injunction order or not. 33.I do not think that the Applicant had paid sufficient attention to this point when applying for the injunction. In the original hearing, the Applicant was mainly concerned with the argument that the 1st Respondent, whilst not actually placing the alleged items for business on the common areas outside the 3 shops, they would still commit the breach by "permitting or suffering to be placed". The Applicant had not addressed to the Tribunal on the matter of the care, control or management of the common area outside the 3 shops. However, I do not think that any omission by the Applicant in the submission would amount to the allegation that there was not a fair trial. 34.Thirdly, it was further submitted by the 1st Respondent that after the representative of the 1st Respondent had submitted a letter to the Tribunal in the original hearing, the Applicant's counsel ought to have but failed to submit to the Tribunal that it ought to have considered the contents of the said letter and, if necessary, to have asked the 1st Respondent to adduce evidence in those regards before making a decision on the matter. 35.On the other hand, Mr. Kwan, counsel for the Applicant submitted that the Applicant had made no opposition to the Applicant's application. This included: (i) the Applicant did not file any Notice of Opposition despite of being given leave by the Tribunal on 18 May 2004 to file out of time; (ii) the 1st Respondent informed that the Applicant's counsel that it did not object to the Application; (iii) the representative of the 1st Respondent stated that he had no defence to make at all in the original hearing and (iii) in the letter submitted to the Tribunal on 4 August 2004, the 1st Respondent expressly stated that it did not defend the Applicant's application. 36.Mr. Kwan also summarized the instances when the Tribunal had in the original hearing at pains explained to the representative of the 1st Respondent the position, including indicated to him that the 1st Respondent could still make an application to adduce evidence. 37.After considering the submissions, I did not agree with the 1st Respondent that there was no fair trial in the original application. I agree that 1st Respondent had no obligation to assist the Applicant in the latter's application against the occupiers (i.e. the 2nd, 3rd and 4th Respondents). 38.The said letter submitted by the representative of the 1st Representative in the original hearing was written in Chinese. Since the 1st Representative stated in the review hearing that their position was abundantly made known to the Applicant and the Tribunal from the contents of this piece of document, I find it necessary to quote the document and make certain remarks at this point. 39.The last 2 paragraphs of the letter was most important, and I quote,
40.In the penultimate paragraph, after stating that the 1st Respondent was confused as to whether there was compromise between the Applicant and the other three Respondents (i.e. the 2nd, 3rd and 4th Respondents), the 1st Respondent admitted that she had to treat the Applicant's Application as a genuine application and the decision by the 2nd, 3rd and 4th Respondents not to oppose the Application to be genuine and voluntary. The 1st Respondent then confirmed that she did not make an opposition to the Application and left it to the Court to decide everything. Since the meaning of this sentence is so clear and unequivocal, I do not understand what further assistance the Applicant could give to the Tribunal by making submission further upon knowing that the 1st Respondent's representative submitted this letter on the date of original hearing. 41.In the ultimate paragraph, it was only about the issue of costs. However, the reasoning on costs in the first two lines of this paragraph is really contrary to the normal rules on costs for civil litigation. It said that simply because all the Respondents did not make opposition, did not waste the Court's time and the fact that occupying the common areas was a long-time fact (yet no evidence at all was adduced by any Respondent as to the facts of their occupation, if any, of the common areas), there should be an order that each party bears its own cost. This argument, I must say, is totally contrary to the normal rules on costs. If this were right, there would not be any case against occupiers and owners for continuing wrongful occupation of common area in any building or estate in Hong Kong. 42.Finally, I do not understand why the 1st Respondent submitted that there was not a fair trial because the counsel for the Applicant had not assisted the Tribunal and the other parties (who were either absent or unrepresented during the original hearing) so that the Tribunal would consider in more details the contents of the letter presented by the 1st Respondent's representative so that the Tribunal would have asked the 1st Respondent to adduce evidence in those regards before making a decision on the matter. On the contrary, as rightly submitted by Mr. Kwan for the Applicant, I have during the original hearing asked a number of times the 1st Respondent's representative whether he would present evidence or any oral submission. But it was clear that that his job was only to bring that piece of paper to the Tribunal on the date of hearing, and he appeared to know nothing else, or at least, he refrained from saying much anything relating to the Application. Was this the fault of the Applicant? I do not think so. With this remark, I complete my analysis of the 1st Respondent's submission on her third ground and conclude that this ground fails. Conclusion 43.In respect of the first ground put up by the counsel for the 1st Respondent, I have already decided above that upon review, I agree with him that the 1st Respondent was not in breach of the DMC of the Estate. Regarding the second ground, since I have already decided upon review that the Applicant had not been able to prove that the 1st Respondent had been permitting or suffering to be placed those items for business (i.e. boxes, goods, articles or any matter) at the common areas outside the 3 subject shops in the Estate, the Applicant was obviously not entitled to be granted either the prohibitory or the mandatory injunction order against the 1st Respondent, whether in the form of the Orders granted on 17 June 2004 or in any other form. So, there is no need to consider the rationale of the 1st Respondent's second ground any further. Similarly, for the same reason, it is unnecessary to consider any further the 1st Respondent's third ground since the 1st Respondent's review will be allowed on the 1st ground alone. However, as summed up above, I do not agree with the counsel for the 1st Respondent that there was no fair trial in the original hearing. 44.For the above reasons, I decide to allow the review and to grant the following Orders. Orders 1. The review application filed by the 1st Respondent on 15 July 2004 be allowed; 2. The Orders dated 17 June 2004 be set aside, and replaced by the Orders Nos. 3 to 6 below. 3. The Application filed by the Applicant on 29 March 2004 against the 1st Respondent be dismissed; 4. The 2nd Respondent, the 3rd Respondent and the 4th Respondents do within 7 days hereof remove all boxes, goods, articles or any other matter at the Common Areas outside Shops 302, 303A and 304, Tsui Chuk Commercial Complex, Tsui Chuk Garden, Chuk Yuen West, Kowloon, Hong Kong; 5. The 2nd Respondent, the 3rd Respondent and the 4th Respondent, and each of them whether by themselves, their directors, partners, servants, agents or otherwise howsoever, be restrained from: -
6. Costs of the original Application filed on 29 March 2004: -
7. Costs of the review filed on 15 July 2004: -
Representation: The Applicant, represented by Mr. Thomas T. H. KWAN, instructed by Messrs. Herbert Tsoi & Partners, Solicitors The 1st Respondent, represented by Mr, Allen LAM, instructed by Messrs. Ng, Lie, Lai & Chan, Solicitors The 2nd & 3rd Respondents, represented by Mr. William LEE of Messsrs. Chan & Co., Solicitors The 4th Respondent, absent |
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