Riseway Properties Ltd v. Star River Imitation Ornaments Ltd

DCCJ 6789/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6789 OF 2004

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BETWEEN

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Coram  :  His Honour Judge Chow

Date of hearing  :  16^th November and 21^st December, 2005

Date of handing down Decision  :  29^th March, 2006

DECISION

1.This is an application by the Plaintiff for the following orders to be made by this court:-

‘1.   the Defendant do, within 14 days from the date of the Order to be made herein, demolish and/or dismantle the following signboards posters and/or boards (collectively called “the Signboards”):

(a)   a signboard bearing the characters “星河人造首飾Star River Imitation Jewelry Wholesale” hanged and/or anchored onto the external wall of the First and Second Floors of Prosperity Court, No. 74 Yen Chow Street (“the Building”) facing Yen Chow Street;

(b)   a signboard bearing the characters “Siam Creative Life Store山林”hanged and/or anchored onto the external wall of the First and Second Floors of the Building facing Yen Chow Street;

(c)   a signboard bearing the characters “Siam Creative Life Store” hanged and/or affixed onto the upper outer wall of the enclaves and staircase of the Ground Floor facing Yen Chow Street; and

(d)   various posters and/or boards bearing the characters “Siam Creative Life Store” pasted and/or affixed onto the interior wall of the staircases leading from Ground Floor to the First Floors of the Building;

2.   if the Defendant shall fail to demolish and/or dismantle the Signboards pursuant to the terms of the Order to be made herein, the Plaintiff be at liberty to demolish and/or dismantle the Signboards;

3.   damages to be assessed;’

2.For easy reference, I shall refer to the signboards under para. 1(a), (b), (c) and posters and/or boards under para. 1(d) as (a) signboard, (b) signboard, (c) signboard and (d) posters and/or boards.

Background

3.The Plaintiff and the Defendant entered into a provisional sale and purchase agreement dated 27.7.2004, under which the Defendant agreed to sell and the Plaintiff agreed to buy at a sum of $7,000,000 the 1^st and 2^nd floors of Prosperity Court, No. 72 Yen Chow Street, Sham Shui Po, Kowloon, together with the reserved entrance and reserved staircases leading from the Ground Floor to the 1^st and 2^nd Floors (“the Property”), with the following covenant:

“Both parties agree that the Purchaser purchases the said premises without ownership of the external wall.  However, the Vendor and its successors-in-title-agree to allow the Purchaser and its successors-in-title and tenants to solely and exclusively enjoy and use free of charge the external wall of the said premises facing Yen Chow Street (including the existing signboard area on the external wall.)”

4.Pursuant to the said provisional sale and purchase agreement, a formal sale and purchase agreement dated 18.8.2004 was entered into between the Plaintiff and the Defendant.  On 23.9.2004, an assignment of the Property was made whereby the Property was assigned to the Plaintiff by the Defendant.  On the same day, a deed of licence was granted whereby the Defendant as licensor granted to the Plaintiff (and its successors in title, assigns and tenants) the sole and exclusive permission licence to use all that portion of the external wall of the Property facing Yen Chow Street, Kowloon (including the location where the existing signboard is installed) free of charge, and a tenancy agreement was made between the Plaintiff as landlord and the Defendant as tenant under which the whole of the 1^st Floor of the Building was leased to the Defendant for a period of 2 years.

The purported defence

5.Regarding the Plaintiff’s application, the defendant raised various defences.  As to (a) signboard, the Defendant did not admit that the signboard was installed, hung or affixed by the Defendant; it stated that it was installed by a previous tenant of the 1^st floor of Prosperity Court named United Asia Finance Limited for displaying its trade name.

6.As to (b) signboard, the Defendant averred that that signboard was not installed, hung or affixed by the Defendant; it stated that it was installed by another previous tenant of the 1^st floor of Prosperity Court named South China Finance Limited for displaying its trade name.

7.Regarding  (c) signboard, the Defendant stated that it is hung on and from the external wall of the upper part of the ground floor, which was not included in the sale of the 1^st and the 2^nd Floors, staircases and enclaves of the Building to the Plaintiff.  Further, the chairman of the Incorporated Owners of the Prosperity Court gave oral permission to the Defendant to install, hang or affix the said signboard on or about 2000.

8.As to (d) posters and/or boards, the Defendant said that the reserved staircases are “Common Areas” under the DMC of the Prosperity Court.  Under the DMC “common areas” include entrance, lobbies, staircases”.  Therefore it seems that it is the Incorporated Owners of the Prosperity Court and not the Plaintiff which has the authority to take action against the Defendant regarding (d) posters and/or boards.

9.In support its application, the Plaintiff relies on paragraph 8 of the Tenancy Agreement, which states:

“…… The Tenant is not allowed to post or hang signboards of any individual or group or any advertisements at any places of the premises without the written consent of the Landlord.”

(Underline provided)

The underlined part of paragraph 8 of Tenancy Agreement shows that this clause applies to the act of the Tenant when the Tenancy Agreement operates.  When the Tenant installs any signboard etc, then he does not comply with this paragraph.  The Tenancy Agreement began to have effect at the time it was signed, namely, on 23.9.2004.  It does not refer to or deal with signboards already posted or hanged up in the past.  Hence, so long as the Tenant does not install any signboard, he is not in breach of this clause.  It appears that this paragraph is not applicable in this case.

10.The Defendant has put up reasonable defences.  There are triable issues in this case.  There should be a trial in this case; hence the Plaintiff’s summons is dismissed.

Costs

11.I make an order nisi for costs, to be made absolute in 14 days’ time, that the Plaintiff do pay costs of this application to the Defendant in any event, to be taxed, if not agreed, with certificate for Counsel.

The Plaintiff  : represented by Mr. Justin Wang, instructed by M/S Charles Yeung Clement Lam Liu & Yip, Solicitors.

The Defendant  : represented by Mr. Anthony P.W. Cheung, instructed by M/S Philip W.I. Li & Co., Solicitors.