Fan Tony v. The Incorporated Owners of Kung Lok Building

HCMP1861/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.1861 OF 2004

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BETWEEN

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Before : Deputy High Court Judge Muttrie in Court

Date of Hearing : 9-10 February 2006

Date of Judgment : 17 February 2006

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J U D G M E N T

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1.The defendant is the owners’ incorporation of a residential building, and the plaintiff is the registered owner of a flat, roof and car parking space therein.  The car parking space is No.76 on the ground floor, and I will call it the Property.  The plaintiff’s case is that the car parking space designated as no.76 by the defendant does not correspond with the Property, which is actually an area occupied, or mainly occupied by the defendant’s guard house.  The plaintiff therefore applies for a declaration that the defendant is not entitled to possession of the Property, an order for its possession, an order for removal of all objects erected on it and its reinstatement to its original position and condition, and an injunction to restrain the defendant from interfering with the plaintiff’s possession, use and enjoyment of the Property. 

2.The building concerned is No.44 Kung Lok Road, Kwun Tong (“the Building”).  The plaintiff is the registered owner of Flat E on the 12^th floor, plus the roof E above it and the Property, which is car parking space No.76 on the ground floor, by an Assignment dated 9 May 2003 and registered in the Land Registry by Memorial No.8936968.  In fact these properties were originally bought in the name of the plaintiff and his wife in 1996, assigned to one Dawson E & E Parts Ltd, a company of which the plaintiff is a shareholder and director in 1999, and then assigned to the plaintiff in his sole name.  The plaintiff has lived in the flat since 1996.  

3.The Assignment identifies the properties assigned by reference to the Assignment registered in the Land Registry by Memorial No.5126113 which is the first assignment of the same flat, roof and car parking space, and the plans annexed thereto, including one of the ground floor and the car parks on it (“the Assignment Plan”).  This plan shows the Property, no.76, as the first car parking space on the left side, inside the gateway of the Building.  Beyond it, on the same side and going away from the gate, are spaces nos.75 and 74 then a small width of common area and a staircase, and beyond the staircase spaces nos.73-67.  This plan is the same as that annexed to the Deed of Mutual Covenant of the Building (“the DMC Plan”), which is dated 18 November 1975. 

4.There is also before me, as part of a report by the plaintiff’s expert surveyor, Mr Chan Wing Tat, an Approval Plan which was approved by the Building Authority on 28 January 1974, which is to a different scale, but which shows the same car parking spaces, inside the gate on the left side, as nos.27, 26 and 25, corresponding to nos.76, 75 and 74 on the other two plans.  I will call these “old spaces” 76, 75 and 74.

5.The surveyor, Mr Chan, surveyed the Property in January 2005, and he correlated the Assignment Plan and the Approval Plan, so as to produce an Identification Plan.  This shows, just inside the gate and adjacent to the wall, a guard room measuring 3.02 by 2.44 metres, occupying part of the narrow common area between the wall and the boundary of old space 76 and most of the width of old space 76.  Beyond this, on the left side and going away from the gate, are existing spaces designated by numbers painted on the surface as nos.76, 75 and 74.  According to the Identification Plan, the existing space no.76 occupies almost exactly the width of old space 75, but is shorter from front to back, followed by spaces designated as 75 and 74, the latter abutting against the staircase. 

6.Mr Chan says, if I may paraphrase his findings, that the original position of the Property, i.e. old space 76 has been occupied by the guard room; the now existing space no.76 does not correspond to the position shown on the Assignment Plan and the Approval plan of the old space 76 and has been displaced towards the north-east by about 2.6 metres; and the surveyed area of the existing space no.76 is smaller than the areas shown on those two plans, by about 2.6 square metres and 2.4 square metres respectively. 

7.Mr Chan also produces photographs of the car parking spaces and the guard room, along with the car-port roof above them.  On the Identification Plan, one of the roof support posts lies just in front of the front corner of new space 76.  It is not clear whether or not it is within the old space 76.  Next to it, apparently on part of the old space 76, lies the box of the drop bar for controlling the entry of vehicles through the gate of the Building.  

8.An order was made for the deponents to the various affidavits to be called as witnesses.  I have heard evidence from the plaintiff himself, and three witnesses for the defendant, who are themselves owners of flats within the Building.  None of them has been there from 1975, when the Building was first occupied, but one of them, Mr Choy Wing Kwan, has lived there since 1984 and another, Mr Ng Kwok Shui, has lived there since 1985.  The other witness, Mr Ho Kin Ming Joseph, was the Chairman of the defendant in 2004 and gives evidence based, in part, on what he was told by another flat owner, Mr Lo Lik Kwong, who has lived there since 1975. 

9.There is no real dispute about the history of the Building.  As appears from the evidence of the defendant’s witnesses, the building was first occupied in 1975.  The flats were rented out at first, but later on they were sold.  By the time the defendant was incorporated in 1985, the car-port roof was in existence, having been put up by the developer.  It is an illegal structure but, according to the Buildings Department, not of a type accorded priority for enforcement action.  There was a guardhouse in about the same position as the present guardhouse.  According to Mr Ho, it was of about the same width but not as deep. 

10.At that time, and up to 2003, the three car parking spaces now existing were delineated on the surface, but with this difference; they were numbered consecutively, going away from the gate, as nos.74, 75 and 76.  When the plaintiff moved in, in 1996, he used no.76, i.e. the space adjacent to the stairway.

11.In 1997 the defendant decided, pursuant to resolutions of the owners, to carry out renovation works.  The old guardhouse was then replaced with the one now existing, at a cost of $30,100 plus $9,300 for air-conditioning.  The drop bar gate is said to have been installed at this time. 

12.In 2003, Mr Liu Chi Nang, who was the registered owner of car park space no.74, complained to the defendant that, according to the car park layout plan of the Lands Department, the owner of car park space no.76, i.e. the plaintiff, was parking in space no.74.  The defendant wrote to the plaintiff to the effect that it would correct the car park numbering, which it did; and that is why the existing spaces are now numbered consecutively 76, 75 and 74, going away from the gate.  The plaintiff then noted that no guardhouse was shown on the car park layout plan registered at the Land Registry, and raised various other points about difficulty in parking in the new space no.76.  He said that he would apply to the Buildings Department for provision of the size and exact location of the car parking spaces, which he did, and on 24 June 2004 his solicitors wrote to the defendant complaining that the car park spaces had been shifted, and that the defendants trespassed on his property, and further that the erection of the guardhouse was a breach of the DMC.  He called on the defendant to reinstate the Property.  The parties could not agree, and the plaintiff took out the Originating Summons herein on 29 July 2004.

13.There are no pleadings, but the plaintiff’s case is pretty clear.  He relies on trespass and breach of the conditions of the DMC.  The defendant’s case, as it appears from the affidavit of Mr Ho, is that the defendant accepted the car parking spaces as they had been laid out by the developer; the plaintiff should have known the position, but never raised any objection when the resolution was made to replace the guardhouse; and the defendant had spent a substantial amount of money on that replacement.  From the submissions made by Mr Chum, counsel for the defendant, it appears that the defendant denies trespass and breach of conditions of the DMC, and also argues that the plaintiff acquiesced in the defendant’s occupation of the Property.

The extent of the Property

14.There is nothing to contradict the evidence of the plaintiff’s expert witness, Mr Chan,  as to the position and boundaries of the Property.  It was argued that his evidence could not be relied on because of possible errors in the correlation exercise between the different plans.  Mr Chan accepts that there could be minor errors of a few centimetres, but this is within the limits required by good surveying practice.  I accept that this would be the maximum error, and subject to that I accept his evidence as to the position and boundaries of the Property.

15.I also accept that, as appears on the Identification Plan, the defendant’s guardhouse takes up most of the width of the Property.  From the scale, it is obvious that only about half a metre of the width of the guardhouse lies on the common areas. 

Trespass and breach of the DMC

16.Trespass consists of the unjustifiable intrusion by one person on to the land in possession of another.  By the terms of the DMC, in particular Clauses 1–4, and the assignment in his favour, the plaintiff has the sole and exclusive right to hold, use, occupy and enjoy, i.e. possess the Property.  The defendant’s guardhouse and drop bar box intrude on to the Property; as I have indicated, they take up most of its area.  The plaintiff holds the Property as a tenant in common; it represents one 1,750^th share of the total of the Lot on which the Building is situated.  As between co-owners, there must be ouster of possession to establish trespass.  Clearly the encroachment is such as to oust the plaintiff from possession. 

17.It is argued that no inconvenience was caused to the plaintiff, because he never parked his car on the Property.  In the first place this is irrelevant; in the second, he could not park on the property, because of the trespass.  It is also argued that there should be no problem in selling, because of the transactions because there had been transactions already, but this too is irrelevant, and in any event those transactions were not at arms length. 

18.It is also argued, if I have understood the argument properly, that an involuntary encroachment caused by negligence would not amount to trespass, and that the defendant, by simply taking over the space occupied by the guardhouse put up by the developer acted negligently or involuntarily.  Mr Chum relies on Braithwaite v. South Durham Steel Co. Ltd & Anor[1958] 1 WLR 986.  That case concerned the liability of an occupier to a person who had momentarily encroached on the occupier’s railway sleepers, and been struck by a van moving on the railway line.  It does not assist. 

19.This is not a case of involuntary encroachment over a small area of land.  Even if the defendants did not realise that they were encroaching on the plaintiff’s property, and I think that, as the owners’ incorporation, they should have known which parts of the building were common areas and which were exclusive to a particular owner, the plaintiff ultimately brought it to their attention, and once he did that, there could be no involuntariness in the defendants’ leaving the guardhouse in position. 

20.As to breach of the DMC, the same applies.  The plaintiff has the exclusive right to occupy the Property; if another owner, or the defendant which acts in the name of all the owners, occupies it, there is a breach of the conditions of the DMC.  I have no doubt that an owner’s incorporation is bound by the conditions of the DMC.  For this Mr Wong, counsel for the plaintiff, relies on Wing Ming Garment Factory Ltd v. The Incorporated Owners of Wing Ming Industrial Centre, CACV 22 of 1994. 

21.Further, by section 18(1)(c) of the Building Management Ordinance, Cap.344, an owners’ corporation is required to :

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(c)

do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant (if any) for the control, management and administration of the building.”

22.In The Incorporated Owners of Hoi Luen Industrial Centre v. Ohashi Chemical Industries (Hong Kong) Ltd[1995] 2 HKC 11 it was held that, because of this duty of enforcement, an owners’ corporation could not acquiesce to the breach of a condition of a deed of mutual covenant.  It follows that, a fortiori, the incorporation must be under a duty not to breach any of the conditions itself.  

Acquiescence

23.For acquiescence, there must be an assent or lying by in relation to the acts of another person, and in view of that and consequent acts, it must be unjust in all the circumstances to grant the specific relief that is in question.  See Spry on Equitable Remedies, 2001 Edition, page 440. 

24.There could be no assent or lying by without knowledge.  Spry refers to a statement by Lord Wensleydale in Archbold v. Scully, (1861) HLC 360 which includes the words “knowingly permits”.  Now it is true that, on the plan attached to the Assignment in favour of the plaintiff, the Property is shown as the parking space nearest to the gate.  When the plaintiff first moved in, the parking space he got was the third from the gate.  This suggests that he should have known that he was not occupying the Property, and the defendant was, because the old guardhouse was then on it. 

25.In fact the plaintiff says that he did not know about the wrong numbering until 2003, and when he moved in, there was no guardhouse on the Property.  I think there must have been one, but obviously it was not on the space then numbered as no.74, and until a survey was done the plaintiff would not know the extent or boundaries of the Property which was rightfully his. 

26.Even if the plaintiff did know that the defendant was occupying his property, and consented to the occupation, that would at best have given the defendant the right of a bare licensee.  A bare license is terminable at will; once the plaintiff asked the defendant to leave the Property, the defendant would have no right to stay.

27.I do not consider, therefore, that the plaintiff ever assented to the defendant’s occupation.  If he did, he withdrew that assent when he called on the defendant to give up possession to him. 

28.Even if there was assent, the defendant would still have to show that it would be unjust to grant the injunctive relief sought.  I do not see how it could be unjust.  The plaintiff owns the Property and is entitled to possess it, and indeed to sell it if that is what he wants to do.  There is no evidence to suggest that it would be impossible for the defendant to put its guardhouse and its drop bar somewhere else.  The drop bar could no doubt go on the common areas next to the gate.  If the roof support encroaches on the property, it would no doubt not take much to move it to the common areas.  There are 8 flats on each floor, from the 1^st to the 12^th floors, i.e. 96 flats, and 104 parking spaces; it may be that some parking spaces remain as part of the common areas, for visitor parking.  But even if the defendant had to buy out the plaintiff or another car parking space owner, there is no evidence to suggest that that would be unjust to the defendant or the owners which it represents, and who would ultimately have to contribute pro rata to the price. 

Discretion

29.The plaintiff seeks a mandatory injunction which is an equitable remedy granted at the discretion of the court.  Apart from acquiescence the defendant has not put forward any other reason why the discretion should not be exercised in the plaintiff’s favour.  Where there is a continuing breach of an obligation undertaken in a deed of mutual covenant, the discretion will be exercised unless there are good reasons not to : see JLW Management Services Ltd v. Chater Dragon Development Ltd, [1995] 2 HKC 591.  It is not suggested here that damages would be an adequate remedy, and where there is a continuing breach, they would not be so regarded save in exceptional circumstances; see Incorporated Owners of South Seas Centre, Mody Road, v. Great Treasure Development Ltd [1994] 1 HKC 197.  The simple fact is that the plaintiff cannot sell the Property with the defendant in occupation, so there is massive inconvenience to him, and nothing to suggest injustice to the defendant if the injunction is ordered. 

Result

30.There will be judgment in favour of the plaintiff as prayed for in the Originating Summons. 

Costs

31.The plaintiff seeks indemnity costs.  There must be some special or unusual feature to justify an order for indemnity costs : see Sung Foo Kee Ltd v. Pak Lik Co[1996] 3 HKC 570. 

32.Here, the defendant never had any defence at all, on the fact that it was occupying the plaintiff’s car parking space, and to try to attack the accuracy of the expert’s evidence, without any contrary expert evidence, was a waste of time.  Nor, frankly, was there ever any ground for the discretion to grant a mandatory injunction not to be exercised in the plaintiff’s favour.  In my view the defendant acted unreasonably in maintaining its defence and should pay the costs on the indemnity basis. 

33.I indicated that I would make the costs order nisi, and therefore I so order.  However, I have already heard some argument on costs, so I think it is proper now to indicate that I will not be disposed to vary the order unless I hear some very compelling argument indeed. 

Mr Ivan Wong, instructed by Messrs Fung, Wong, Ng & Lam, for the Plaintiff

Mr David Cham instructed by Messrs B. Mak & Co., for the Defendant