The Incorporated Owners of Tak Cheong Building (Battery Street) v. Tong Wai Tak and Another

(English Translation-英譯本)

LDBM 104/1999

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 104 OF 1999

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BETWEEN

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Coram:  Deputy Judge Lee and Member W. K. Lo

Dates of Hearing: 13-14 September, 4-5 November, 6 December 1999

Date of Delivery of Ruling: 8 February 2000

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RULING

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1. Pursuant to the relevant Deed of Mutual Covenant (the “DMC”), the Applicant herein, acting in the capacity of the owner of the external wall of Tak Cheong Building (the “Building”), seeks an injunction order restraining the 1^st and 2^nd Respondents from erecting any signboard on the external wall of Flat D on the 3^rd Floor of the Building (“Flat 3D”). The Applicant also applies for a mandatory injunction requiring the 1^st and 2^nd Respondents to dismantle the signboards erected on the said external wall.

2. The 1^st Respondent is the owner of Flat 3D. The 2^nd Respondent is a company under the 1^st Respondent’s control and was responsible for erecting the signboards in question. The 1^st Respondent is one of the directors of the 2^nd Respondent and attended the hearing as the 2^nd Respondent’s representative. The 1^st and 2^nd Respondents will hereinafter be referred to as the Respondents.

3. In 1998, an action commenced between the parties in relation to the matter (LDBM No. 6 of 1998). Subsequently, the Court of Appeal ruled (in CACV No. 147 of 1998) that the Applicant was not the owner of the said external wall; that the title to the external wall was held by Hang Yick (transliteration) Property Management Company Limited (Hang Yick), the former manager of the Building; and that the external wall was not related to any “matter in which the owners had a common interest” and therefore the Applicant had no right of action.

4. On 20 November 1998, Hang Yick assigned the title of the external wall to the Applicant in consideration of one dollar. The land registration memorial number of the relevant instrument is 7638285.

5. The DMC was registered on 24 August 1977 and its memorial number is 1433388.

6. The Applicant is making the present application as holder of title to the external wall and pursuant to the DMC.

7. The Respondents do not deny having erected signboards on the external wall of the Building.

8. The Respondents are of the view that the same matter has already been determined by the Court of Appeal, which ruled against the Applicant, and the Applicant cannot commence another action with the same cause. The Respondents also challenge the capacity of the Applicant as owner of the external wall. They argue that the relevant deed of assignment did not bear the chop of previous corporate owner, and this rendered Hang Yick’s title defective. As a result, Hang Yick could not validly assign the title to the external wall to the Applicant.

The Respondents made the following allegations:

·        the chairman of the Applicant commenced the present action out of his personal interest;

·        the Advertisement By-laws allow the signboards to exist;

·        in contravention of the Building Management Ordinance (Cap.344), the Applicant failed to convene an owners’ general meeting to pass the resolution required to commence the present action;

·        the signboards are situated on Government land;

·        the windows and doorway of Flat 3D are part of the premises;

·        the signboards were erected with the acquiescence of the previous owner;

·        information on the Applicant’s title has not been registered at the Land Registry. The Applicant should produce the requisite sealed documents, otherwise it has no right to commence an action against the Respondents;     

·        the Applicant has acted in breach of section 20A(2) and (3) of the Building Management Ordinance.

9. Subsequently, relying on grounds similar to those set out above, the Respondents applied to dismiss the present application, amend the defence and file a counterclaim.

10.  Most of the amendments sought to be made were already contained in the original notice of objection. The rest of the amendments sought related to evidence. In the end, only “res judicata” was allowed to be added as a ground of objection.

11. As regards the various grounds put forward by the Respondents for dismissing the application, the Applicant responded and submitted as follows:

12. Although the Applicant commenced the action LDBM No. 6 of 1998, there had been a change in the circumstances, in that the Applicant became the owner of the external wall on 20 November 1998. For this reason, the Applicant was not required to obtain leave from the Court of Appeal to make a new application.

13.  On 17 December 1998, the Applicant did convene an owners’ general meeting, at which it was resolved that the present application be made.

14. The Respondents did not have evidence to prove that the signboards were erected on Government land.

15. The Respondents did not have evidence to prove that the previous owner acquiesced to the erection of the signboards. Furthermore, even if the previous owner so acquiesced, the Respondents were merely granted a licence to use the external wall and were neither tenants nor landlords. Upon assignment of the title to the external wall, the new owner could revoke the above licence.

16. The Respondents submitted that the signboards could help reduce both the noises emitted by the traffic on the flyover and the disturbance from the lights of vehicles’ headlamps. Nevertheless, this was not a valid ground of objection as far as this case was concerned.

17.  Regarding the allegations against the chairman of the Applicant and his friends, they were neither valid grounds of objection nor reasons for dismissing the present application.

18.  The Respondents also argued that the external wall was a common area. As a matter of fact, however, a share had been allotted to the external wall, and hence this argument could not stand.

19. According to section 45(3) under Part VIII of the Building Management Ordinance, the jurisdiction of the Lands Tribunal in relation to building management shall not be construed to include the power to make any order which, if made, would “have the effect of rendering void, negativing or substantially varying in whole or in part any contractual or proprietory right enjoyed by any owner or occupier or otherwise referred to in the terms and provisions of an instrument which is registered in the Land Registry including a deed of mutual covenant (if any).” Accordingly, the Lands Tribunal did not have jurisdiction to deny the Applicant’s title to the external wall by reason of the challenge raised by the Respondents regarding the absence of a chop in the relevant deed of assignment.

20.  Furthermore, in CACV No. 147 of 1998, the Court of Appeal accepted the fact that Hang Yick was the owner of the external wall and the Respondents did not dispute that. The Respondents in that case acknowledged that Hang Yick was the owner of the external wall.

21. The Respondents alleged that they had not received any notice of the owners’ general meeting on 17 December 1998. In response to this, the Applicant relied on section 37 of the Building Management Ordinance, which provides that “[a] resolution passed at any meeting convened under this Ordinance shall not be invalid by reason only of the omission to give notice of the meeting to any person entitled to such notice.” The resolution passed was, therefore, still valid.

22. In any event, the Applicant had deposited the notice of the meeting in the Respondents’ letter box in accordance with paragraph 2(1A)(c) of the Third Schedule to the Building Management Ordinance.

23.  We accepted the Applicant’s arguments as set out above and dismissed the Respondents’ application to dismiss the present case. The case proceeded to trial accordingly.

The first witness of the Applicant

24. The first witness of the Applicant, Madam Fok Sheung Ning (transliteration), is the chairperson of the Applicant. She has been in this capacity since 11 May 1998.

25. The witness agreed that the Applicant had been involved in litigation with the Respondents because of the signboards on the external wall. In the end, the Applicant lost as it was not the owner of the external wall (CACV No. 147 of 1998). Subsequently, the Applicant acquired the title to the external wall from its previous owner, i.e. the former management company Hang Yick (the land registration memorial number of the relevant instrument being 7638285). The Applicant convened an owners’ general meeting on 17 December 1998 to determine whether or not the present application was to be made. The witness instructed the manager to draft the notice and agenda of the meeting and display them inside the notice box. Fourteen days before the meeting, the management staff, acting on the instruction of the witness, put the said notice and agenda into the letter box of each of the units of the Building in the presence of the witness. The witness received the notice 14 days prior to the meeting.

26. On the day preceding the meeting, the management staff posted the notice again near the control panel of the lifts in the lobby of the Building in order to remind all the owners of the meeting.

27. The owners’ meeting resolved to proceed with litigation in respect of the signboards on the external wall of Flat 3D.

28. The witness did not consider it necessary to convene a special meeting for the purpose of resolving to acquire the title to the external wall in consideration of one dollar. Since 1997, the owners’ meeting had already confirmed that the signboards in question were to be removed. All the owners knew that the Applicant lost in CACV No. 147 of 1998 because it did not have the title to the external wall, and that acquiring such title was a prerequisite for proceeding with the action. By passing the said resolution, the owners’ meeting agreed that all acts which would facilitate the proceeding of the litigation were to be taken. When the relevant item on the agenda was discussed, the acquisition of the title to the external wall formed part of the discussion.

The first witness of the Respondents

29. The first witness of the Respondents, Mr Ng Man Kin (transliteration), agreed that he had represented the first witness of the Applicant and other owners to attend owners’ general meetings. He denied having ever told anyone that he was a decoration worker. Not being a member of the management committee, he did not pay attention to the details of the management affairs.

The second witness of the Respondents

30. The second witness of the Respondents was Mr Tsang Chun Tat (transliteration). He was the manager of the consultancy department of Memfus Wong Surveyors Ltd (“Memfus”). Nothing was known about his qualification and experience. He testified that, having received instructions from the 2nd Respondent, Memfus obtained the DMC and lot index plan of the Building from the Land Registry and the Lands Department.

31. In order to ascertain the title to the location on the external wall where the two signboards in question were erected, the witness personally conducted inspections and surveys both from the outside of the Building and from inside Flat 3D.

32. The witness agreed with the Applicant that the signboards were erected on a metal frame which was fixed on the external wall of the Building.

33. Since the instructions of the 2nd Respondent were to “ascertain the title to the location where the two signboards were erected”, the witness did not explore how the metal frame came to be fixed on the external wall of the Building. The witness testified that if a perpendicular line were drawn from the base of the signboards, this line would fall on Government land outside the boundary of the Building. The witness pointed out that the two signboards were some distance away from the external wall. The larger signboard was parallel to and about 3.3 feet from the external wall, whereas the smaller signboard was perpendicular to and about one foot from the external wall. Consequently, the witness was of the view that the signboards were situated above Government land outside the boundary of the Building. The witness did not survey the metal frame.

34. The 1st Respondent admitted that the 2nd Respondent erected the signboards with the consent of the 1st Respondent. The 1st Respondent is one of the directors of the 2nd Respondent.

35. The name and address of the 2nd Respondent appeared on the signboards. The 2nd Respondent is the licensee of the 1st Respondent and should also abide by the DMC.

36. The Respondents repeatedly put forward their grounds of objection, when they sought to dismiss the present application and amend their defence.

37. On the evidence, we accept the following as the facts of this case and rule accordingly:

38. The 1st Respondent is the owner of Flat 3D of the Building and also one of the directors of the 2nd Respondent.

39. With the consent of the 1st Respondent, the 2nd Respondent erected the signboards in question. The 2nd Respondent is the 1st Respondent’s licensee.

40. The signboards are supported by the metal frame and erected outside the window of Flat 3D and on the external wall of the Building.

41. The metal frame is fixed on the external wall of the Building. The DMC of the Building (land registration memorial number 1433388) is binding on the Respondents.

42. The Applicant has been the owner of the external wall of the Building since 20 November 1998. According to clause 1 of the DMC, the Applicant enjoys the exclusive right to use the external wall.

43. The signboards and metal frame are erected in breach of the DMC and interfere with the title of the Applicant.

44. The 1st Respondent is liable for the breach of the DMC and the tortious act committed by the 2nd Respondent.

45. At the time of the hearing, the signboards had not been removed yet.

46. The Applicant has withdrawn the third item of the relief sought in the application.

Ruling

47. The 1st Respondent, who permitted the 2nd Respondent to erect the signboards, is also liable to the Applicant.

48. The 1st Respondent is in breach of clause 1 of the DMC. Only the owner of the external wall enjoys the right to use it.

Both the first and the second items of relief sought are allowed:

49. The 1st Respondent and/or 2nd Respondent are prohibited from erecting the above-mentioned signboards or any signboard on the external wall of Flat 3D, whether by themselves or by their servants or agents or any other person.

50. And it is hereby ordered that the 1st Respondent and/or the 2nd Respondent shall remove the above-mentioned signboards.

51. Costs are to be paid by the Respondents to the Applicant, to be taxed if not agreed.

52. This is an appropriate case for instructing counsel, and we grant Certificate for Counsel accordingly.

Mr Sunny Chan, instructed by Wier & Associates, for the Applicant.

The Respondents in person.

Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. Edmund Cham, Solicitor