The Incorporated Owners of Mong Kok Commercial Centre v. Wisdom Profit Ltd

cacv 342/2005

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 342 of 2005

(on appeal from LDBM NO. 4 of 2005)

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BETWEEN

Before: Hon Rogers VP, Cheung and Tang JJA in Court

Date of Hearing: 12 July 2006

Date of Judgment: 12 July 2006

Date of Handing Down Reasons for Judgment: 19 July 2006

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.This was an appeal from a judgment of HH Judge Yung, the Presiding Officer of the Lands Tribunal, given on 30 September 2005.  The judge, quite rightly, pointed out that the application was framed in a somewhat obscure manner.  Nevertheless he accepted the oral submissions that it was an application for two declarations.  The judge acceded to one declaration, namely that the room known as the air-conditioning plant room situated above the roof referred in the Deed of Mutual Covenant (“the DMC”) to as the roof above the 22^nd floor formed part of the common parts of the building.  The judge refused the other declaration.  On this appeal the respondent appealed against the making of the single declaration made by the judge.  At the conclusion of the hearing of this appeal, the appeal was dismissed with reasons to be given in writing.

Background

2.These proceedings concern a building known as Mong Kok Commercial Centre (“the building”).  The building was constructed in the early 1970s.  The lower part of the building was to be taken up by shops and restaurants and the remaining part of the building was to be taken up by offices.  The DMC was dated 28 December 1973.  It was registered on 13 February 1974.  The dispute in this case centres on a room that is located physically at the very top of the building.  It has been referred to as the air-conditioning plant room.  It is shown in the photographs and it can be seen that there is an open space beneath the room.  The room itself is supported on concrete pillars with an open, albeit covered, space between it and (what may be described in terms which avoid using the word “roof”) the horizontal surface of the upper part of the ceiling block of the 22^nd floor.

3.The second and third recital clauses of the DMC were as follows:

“(2) The First Owner has constructed on the said premises a new 22 storey building for non-domestic use (hereinafter referred to as “the said building”) comprising shops (hereinafter called “shops”) on the ground floor, Restaurant Premises on the first, second, third and fourth floors (hereinafter called “restaurant premises”) office units on each floor from 5^th to 12^th floors and 14^th to 22^nd floors inclusive (hereinafter called “Office Units”) and a roof above the 22^nd floor which said building is known as “Mong Kok Commercial Centre”).

(3) For the purposes of sale the said premises and building have been notionally divided into 1,400 equal undivided shares which have been allocated to the shops, restaurant premises, office units the external walls and the roof (excluding those portions for common use) (hereinafter called “the said roof”) of the said building as set out in the Schedule hereto.”

4.It is pertinent to note that the Schedule sets out the various share allocations and in respect of the First Floor and the Fourth Floor there is a notation “(including Flat-Roof thereof)”.  In respect of the Roof above the 22^nd floor the notation reads “(excluding those portions for common use)”.

5.Turning to the body of the DMC, clause 1 recites that the First Owner, who was the developer, should have the “….full and exclusive right and privilege to hold use occupy and enjoy to the exclusion of the Second Owner All Those shops, office units, flat roofs the said roof and the external walls of and in the said building (save and except only …..” the area assigned to the Second Owner.  Reliance was then placed on clause 3(b) which read as follows:

“The First Owner or its successors or assigns shall have the right to use the said roof above the 22^nd floor of the said building in such manner and for such purpose as it shall think fit with power to carry out and construct any works or structure on the said roof which may be approved by the Building Authority or any other competent authority subject only to the right of the owners for the time being of the undivided shares in the said premises and building to have such access thereto as shall be reasonably necessary for the purpose of escape in the case of fire and of maintaining repairing renewing or servicing the said building or any of its services, equipment or apparatus and the First Owner or its successors or assigns shall be responsible for the maintenance of the said roof of the said building.”

6.Clause 4 of the DMC is in standard form giving the owners of the undivided shares their rights in respect of the unit assigned subject to the terms of the DMC.  Clause 5(a) is also important in that it read:

“Subject as hereinbefore mentioned, every owner for the time being of any undivided shares in the said premises and building in common with the others of them and all others having the like right shall have the right to use for all purposes connected with the proper use and enjoyment of the unit owned by him the entrance lobbies, staircases, passages, landings, transformer room, switch room, machine rooms, pump and pump houses water tanks lavatories and other facilities (if any) for common use.”

7.In coming to the conclusion that the air-conditioning plant room was part of the common parts of the building the judge was disposed to consider that it was one of the machine rooms.  He went on to say however that even if that were not correct:

“There cannot be any dispute that the air-condition plant room was at that time and had been in common use.  My finding is that the air-condition plant room is thereby excluded even if it is not one of the machine rooms provided in the Deed of Mutual Covenant.”

8.The judge made that finding on the basis of the evidence which included not only the plan which was approved by the Building Authority when the building was constructed, which showed the room as the “Air-Condition Plant Room”, but also the evidence of Mr Tang Hon who had been a cleaning worker at the building since 1978.

9.Mr Coleman SC, who appeared on behalf of the respondent, did not pursue the point originally raised that the judge should not have made a declaration because that would affect the rights of the parties.  Once it is appreciated that a declaration is within the powers of the Lands Tribunal, the suggestion that in making a declaration the Tribunal would be going beyond the powers given to it under the 10^th Schedule of the Building Management Ordinance Cap. 344, because it would be going beyond the jurisdiction vested under section 45, fell away.  A declaration does not alter or vary any contractual or proprietary right, it simply declares its existence.

10.The other point which was raised on the appeal was as to whether the air-conditioning plant room constituted part of the roof of the 22^nd floor.  Mr Coleman disavowed any reliance upon the subsequent assignments of the roof and the matter was argued simply on the construction of the DMC.  I would add that, similarly, the subsequent history of the use and abandonment of use of the air-conditioning plant room for other purposes would also be irrelevant. 

11.I, for my part, consider that the air-conditioning plant room would come within the definition of machine rooms, but even if it did not it was clearly one of the areas which were designated for common use and indeed in terms of paragraph 3(b) was an area where one of the co-owners would reasonably require access for the purpose of repairing renewing or servicing any of the services equipment or apparatus of the building.

12.Clearly the “Air-Condition Plant Room” referred to in the plans was a location designated for air-conditioning plant.  On the face of the matter that would be for the benefit of all the owners, not merely the owner of a roof.  Indeed, the owner of the roof, if it were not also the owner of an internal part of the building, would seemingly have no need or use for air-conditioning plant.  In those circumstances, even if the air-conditioning plant room were otherwise part of roof of the 22^nd floor, it would be excluded by the terms of recital clause (3) from coming within the meaning of “the said roof” and, hence, would not come within the parts of the building allocated to the First Owner under clause 1 of the DMC.  Likewise, under clause 3, all the owners would have the right to the use of it and it would not be part of the “said roof above the 22^nd floor” in respect of which the First Owner was to have the use.

13.In my view, therefore, the judge was correct to give the declaration sought.

Hon Cheung JA:

14.I agree.

Hon Tang JA:

15.I agree.

Mr John Kerr & Ms Janine Cheung, instructed by Messrs Lee & Chow, for the Applicant/Respondent

Mr Russell Coleman SC & Ms Teresa Wu, instructed by Messrs Tai, Tang & Chong, for the Respondent/Appellant