The Incorporated Owners of Golden Castle Mansion v. Eastern Global Property Management Ltd

LDBM 351 OF 2004

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT Application No. 351 of 2004

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Between

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Before: H. H. Judge Yung, Presiding Officer of the Lands Tribunal

Date of Hearing: 9 - 13 January 2006

Date of Judgment:  23 February 2006

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J U D G M E N T

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1.The building in question has a car park portion. The car park is quite separate from the other portions. The Respondent has been managing the car park portion for quite some time.  Recently the Applicant has challenged the right of the Respondent to manage the car park portion. The key to resolving the dispute is the title to the disputed areas in the car park portion.  Most of the disputed areas are the driveways for access to car parking spaces. The main contention of the Respondent is that it has the privilege and right to their exclusive use, possession, and enjoyment.  The Applicant disagrees claiming that the disputed areas are common parts within the meaning of the deed of mutual covenant (“the DMC”) and the Building Management Ordinance (“the BMO”).

2.To properly interpret the title documents, the Respondent urged me to look at the history of the transactions and to take into account the fact that the Respondent had managed the car park portion all these years.    Cases were cited in support.  I have no quarrel with the general principles enunciated in these cases. These cases are binding upon me in any event. These cases do not help the Respondent.

3.The wording of the title documents is clear and intrinsic evidence should not be admitted to rebut the clearing meaning of the title deeds. The Respondent obtained its title from Kam Koon Investment Company Limited (“Kam Koon”), and Kam Koon its from the developer, Tai Shun Engineering Company Limited (“Tai Shun”). 

4.For Kam Koon there are two title documents.  The first document is the DMC to which both Kam Koon and Tai Shun are signing parties.  According to the clear provisions of the DMC, one share of the land is assigned to each of the car parking spaces.  Kam Koon is also described as owner of all these car parking spaces. No part of the disputed areas has been assigned any share. As usual, an owner is described as the party entitled to the exclusive use, occupation and enjoyment of the premises it owns.  Nothing is the DMC suggests that Kam Koon is entitled to the exclusive use, possession and enjoyment of the disputed areas.

5.The second title document for Kam Koon is the assignment.    In this document the subject-matter for the conveyance is clearly described as parking spaces.  Parking spaces on each floor are given numbers and their positions on each floor are marked out in the corresponding floor plan forming part of the assignment.  Part of their narrative descriptions is “ as shown coloured pink and marked Ground Floor Plan,---etc.” The parking spaces are indeed coloured pink. Unfortunately the disputed areas are also coloured pink and this fact forms the basis of the Respondent’s case.

6.The parking spaces are numbered and marked out and coloured pink.  The subject-matter of the assignment is clearly spelt out by the wording and the floor plans. The fact that other parts of the floor plans are also coloured pink does not change the clear intention of the parties as clearly shown in the assignment.  The Respondent contends in effect that every thing coloured pink should have been assigned. A lot of words would have been read into the assignment by implication if the contention of the Respondent is right.  In my judgment there is justification for such interpretation.

7.Similarly the assignment from Kam Koon to the Respondent clearly does not support the contention that the disputed areas form part of the subject-matter.  Furthermore counsel for the Applicant has rightly pointed out that Kam Koon at the time of assigning the car parking spaces to the Respondent would have lost its right (if it had it at all at one stage) to the exclusive use, occupation and enjoyment of the disputed areas.  By the time the Respondent purchased the car parking spaces, Kam Koon had sold some of the parking spaces without reserving the said purported right of exclusive use of the disputed areas.

8.The Respondent having no title to the exclusive use of the disputed areas, it would be trite law that the areas would become common parts of the building within the meaning of the DMC and the Ordinance. A declaration to that effect would be sufficient to settle the on-going dispute between the Applicant and the Respondent. It is superfluous to make a declaration that the Applicant has the duty and power in respect of their management.   

9.As to the injunction in respect of the disputed areas, the kindred defences of laches, acquiesces, and estoppel and the defence of limitation have no application in the instant case. (see  The Incorporated Owners of Man Hong Apartments V Kwong Yuk Ching & ors  [2001] 3 HKC 116 CA). When exercising the discretion the injunction, the history of the management of the building should be taken into account. It is impractical for the Respondent to remove the structure in the disputed areas, now that it has been ruled that they form the common parts of the building.   I do not think it proper to make an injunction in respect of those structures.  Nor do I think it fair to ask the Respondent to pay for the necessary costs of removing the structures by way of damages or otherwise.  The structures have served a useful purpose for the management of the building. If the Applicant should decide to make changes to those structures, it should bear the costs. Therefore I would not grant the injunction nor would I order the Respondent to pay damages in respect of those structures installed in the disputed areas.

10.As to the disputed areas, I would make an injunction restraining the Respondent from converting to its own use, as car parks or otherwise.  The Applicant asked the Respondent to account for the profits in respect of the car parking spaces carved out the disputed areas. The Respondent has never managed the car park portion in the name of the Applicant.  The Applicant has allowed and permitted the separate management of the car park portion for a long time.  This arrangement has conferred actual benefit on the management of the whole building.  Before the dispute, the Respondent had incurred expenses on maintaining the common parts within the car park portion and which expenses should have been borne by the Applicant.  Profits from those car parks were pooled together with the management fees it obtained from the owners of car parking spaces.  I do not think it proper and fair to ask the Respondent to account for the profits it has made in all circumstances of the case.   

11.The Applicant is also seeking a declaration in effect that what the Respondent demanded of the car parking spaces should be paid to the Applicant.  I do not know if the Applicant is serious in pursuing this remedy.  If the Applicant is serious, the declaration should have been termed clearly in the pleadings.  As it is so termed, it cannot serve any useful purpose. Owners of other car parking spaces are not parties to these proceedings.  The Applicant might claim it represents their interest.  This might be the case vis-à-vis the Respondent.   The terms asked for might affect the interest between the Applicant and the owners of car parking spaces. In any event what forms the basis for the Respondent’s claim against the other owners of car parking spaces is the management agreements they entered into with the Respondent. Whether or not and to what extent these agreements are binding is a matter between them. It is none of the business of the Applicant.  For instance if all the owners on the top floor covenanted with one another to employ additional security guards to patrol their floor, I cannot see how an owners incorporation can intervene simply because it has the right to manage the building.  The Applicant should determine the amount the owners of car parking spaces should contribute towards the building management and made a demand. It is its duty. It does not require and does not have to wait for a declaration from this Tribunal to do the same.  Whether the Respondent can exact some other charges from the car parking spaces owners is not the business of the Applicant in so far the Applicant does not purport to claim the charges in the name of or on behalf of the Applicant.

12.In the premises, I would make a declaration that the disputed areas are common parts of the building and that the Respondent does not have the title to their exclusive use, occupation, and enjoyment. I would also grant an injunction restraining the Respondent from converting to its own use the disputed areas, as car parking space or otherwise.  All other reliefs and remedies asked for by the parties would be refused. There be an order nisi for costs in favour of the Applicant with Certificate for Counsel on High Court Scale to be taxed if not agreed. The order nisi for costs be made absolute in 6 weeks.

The Applicant: represented by Mr. M. Chai instructed by M/S Peter Lau & Co.

The Respondent: represented by Mr. V. Luk instructed by M/S Massie & Clement