Hing Sheung Fung Investment Co Ltd and Another v. The Incorporated Owners of Man Kee Mansion
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HCA 59/2006 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 59 OF 2006 ______________________ BETWEEN
______________________ Before : Hon Saunders J in Court Dates of Hearing : 28-31 January 2008 Date of Judgment : 4 February 2008 ______________________ J U D G M E N T ______________________ The problem : 1.Where there is a mixed use building, comprising both commercial and residential uses, sharing a common entrance way, the residents must accept that the general public, wishing to use the commercial facilities, cannot be excluded from the building, or from the lifts giving access to commercial premises above the ground floor. The tenants of the commercial premises are entitled to have their customers, or their potential customers, freely enter into the building without restriction. 2.With such right of public entry there may easily arise a conflict of interest between the commercial users of the building, and the residents of the building. The commercial users will wish to see no restriction at all on members of the public entering the building to use the commercial facilities. The residents, quite understandably, do not wish to have their quiet enjoyment of their residential premises interrupted by the general public. 3.This litigation arises in circumstances where the commercial users of a building and the residential users have not been able to resolve that conflict of interest. Man Kee Mansion : 4.Man Kee Mansion in Kowloon is a mixed purpose building, both commercial and residential, 26 floors high. It comprises a podium of six floors, on top of which there are two residential towers, each comprising 20 floors. Man Kee Mansion was built in about 1966. 5.It is located on Waterloo Road, Kowloon, adjacent to an area known as Waterloo Road Hill. The building has frontages to both Waterloo Road on one side, and also, on the other side, to Man Fuk Road. That road gives access to Waterloo Road Hill, where there are some 25 substantial residential complexes. 6.Over the years it has become the practice of residents of Waterloo Road Hill to use Man Kee Mansion as a shortcut to Waterloo Road. They do this by entering Man Kee Mansion from Man Fuk Road, where they then use the lifts in Man Kee Mansion, primarily those on the fourth floor, to gain access to Waterloo Road. 7.Inevitably this places a heavy burden on the lifts of Man Kee Mansion and introduces to the building many people who have no intention of using the commercial premises, or no right to use the residential premises. 8.Not surprisingly, and for perfectly reasonable reasons, the Incorporated Owners have endeavoured to stop those “outsiders” from using the building. In so doing the plaintiffs, (whom I shall collectively call Hoover Restaurant), consider that their customers, from Waterloo Road Hill, have been unlawfully prevented from gaining convenient access to the restaurant. 9.In these proceedings Hoover Restaurant seeks an injunction to prevent the Incorporated Owners from restricting access to Man Kee Mansions in such a way as to prevent customers of Hoover Restaurant gaining access to the building from Man Fuk Road. The layout of Man Kee Mansion : 10.The ground floor, first second and third floors, comprise commercial premises. On the ground floor and the first floor is the Hoover Restaurant. The premises are owned by the 1st plaintiff, and operated by the 2nd plaintiff. On the third floor is an elderly persons residence and a number of villas, or short-stay hotels. 11.The fourth and fifth floors are dedicated to car parking. 12.These first five floors of Man Kee Mansions are exclusively for non-domestic purposes. 13.On the sixth floor, the top of the podium, there is both car parking and residential apartments. The sixth floor consequently comprises both non-domestic, and domestic use. 14.The two residential towers, each 21 floors from the sixth floor to the 26th floor, are exclusively for domestic use. Access to Man Kee Mansion : 15.Physical access may be gained to Man Kee Mansion from both Waterloo Road and Man Fuk Road. The access from Waterloo Road is solely pedestrian access. For practical purposes, both pedestrian and vehicular access may be gained to Man Kee Mansion and from Man Fuk Road. 16.Access to the sixth floor podium is by way of a simple, straightforward access way from Man Fuk Road, crossing the adjacent footpath. Access to the car parks on the fifth floor is gained, again by way of a simple, straightforward access way from Man Fuk Road crossing the adjacent footpath. This is possible because Man Fuk Road rises as it goes past Man Kee Mansion, thereby enabling access at two different levels. 17.Access to the fourth floor car parks uses the same access point as the access to the fifth floor car parks. Instead of going straight ahead into the fifth floor, there is a driveway, accessed by turning right immediately upon entering from the road, descending down a gradient to the level of the fourth floor, then turning left into the car parking area. I will call this driveway “the passageway”, the expression used by the parties throughout. 18.Upon entering the fourth floor form the passageway, access is gained to the car parks by passing through an entrance way to the fourth floor car parking area, which has as its ceiling the floor of the fifth floor car park. 19.The dispute between the parties centres around the steps taken by the Incorporated Owners to restrict the use of the passageway to vehicles, and to totally prohibit pedestrian access by way of the passageway. The layout of the lifts operated Man Kee Mansion : 20.There are seven lifts serving Man Kee Mansion. 21.Lift 1 serves the ground floor and the sixth floor only. It does not stop on the intermediate floors, and, for practical purposes, enables a person to travel from Waterloo Road, entering at the ground floor, exiting on the sixth floor, and going from there by way of the car park to Man Fuk Road, and vice versa. 22.Lifts 2 & 3 serve the ground floor, the first, second, third and fourth floors. These lifts enable access from Waterloo Road to all three commercial floors, and the lowest of the car parking floors, the fourth floor. It is convenient here to note that at the present time a little more than half of the car parks on the fourth floor are owned by the 1st plaintiff, some of which are available for the use of patrons of Hoover Restaurant. The remaining car parks on this floor are owned by the company operating the elderly persons accommodation. 23.Lifts 4 & 5 begin service at the fifth floor, and give access above the fifth floor, to residents of flats A-D, and their visitors, to the residential portions of the tower block containing those flats. 24.Lifts 6 & 7 also begin service at the fifth floor, and give access above the fifth floor, to residents of flats E-H, and their visitors, to the residential portions of the tower block containing those flats. Residential access from Waterloo Road : 25.The consequence of the layout of the lifts is that a resident who wishes to go to his flat from Waterloo Road will enter at the ground floor access, take lift 1 to the sixth floor, and then transfer to the appropriate lift, depending upon which of the two towers he wishes to enter, to go to his floor. 26.There is no vehicular access from Waterloo Road. Residential access from Man Fuk Road : 27.For practical purposes, if a resident of either of the two tower blocks wishes to enter his flat from Man Fuk Road, he will go onto the podium at the sixth floor level, using the vehicle access entrance way, thereby gaining access to the appropriate lift, at the sixth floor level, to go to his flat. 28.Residents who own a car gain access in the same way if their car park is on the sixth floor level. If their car park is on the fifth floor level access is gained in the same way, but at that level, with entry to the residential lifts, 4, 5, 6 & 7, being available from that floor. 29.So far in this judgement I have referred to pedestrian access “for practical purposes”. I have done so to distinguish between what is practically possible, and what is legally permitted. General public access : 30.The problem of the general public access arose when the public living on Waterloo Road Hill, and school students at two schools in that vicinity, found that by walking down the passageway, descending from the fifth floor entrance at Man Fuk Road to the fourth floor, entry could be gained to lifts 2 & 3 to give quick and easy access to Waterloo Road. 31.If they do not use this quick and easy access they must go all the way down Man Fuk Road to Pui Chung Road, and then on to Waterloo Road. Alternatively they may go up Man Fuk Road to Man Fuk Road Garden, and descend down the hillside to Waterloo Road by way of a set of steps. 32.The set of steps, while convenient to most to descend during fine weather, is obviously not nearly so convenient to the elderly or the disabled who wish to ascend from Waterloo Road to Man Fuk Road, or in either direction during bad weather. It is to these people, and during bad weather, that the shortcut through Man Kee Mansions became very attractive. 33.This use by outsiders has placed a heavy burden on the use of the lifts. The extent to which that is so may be seen from the fact that the evidence is that during a period during which public access from Man Fuk Road was stopped the electricity consumption for the commercial floors of the building was reduced by 40%. It is said that this substantial reduction resulted from the reduced use of the lifts. The Deed of Mutual Covenant : 34.The general public have no right of entry to Man Fuk Mansions, unless they are customers of the Hoover Restaurant or have legitimate commercial business in any other of the commercial premises on the third floor. 35.The following provisions of the DMC, made on 24 August 1966, are relevant.
Control of public access : 36.The Incorporated Owners Management Committee, (IOMC), has, over the years, taken a number of steps to prevent general public access to the building for use as a shortcut between Waterloo Road and Man Fuk Road. 37.In order to prevent persons entering without authority to the sixth floor, a gate has been erected that can only be opened by the use of an access code number, that number giving access both to a small doorway for pedestrians and the opening of the whole gate for motor vehicles. No specific evidence was led as to the access to the lift lobby on the fifth floor, and I anticipate that again it is by way of a door controlled by an access code number. 38.In order to prevent general public access from the bottom of the passageway descending from the fifth floor to the fourth floor, a substantial sliding gate has been erected across the entrance way to the car park area. This is controlled from time to time by a security guard who at various times has had instructions to prevent access of persons who cannot establish that they are going to either Hoover Restaurant or other commercial premises on the third floor. 39.It will immediately be obvious that establishing that intention will be difficult. Equally a system that requires the announcement of that intention is plainly open to abuse. A person may assert to the security guard that he is going to be restaurant, but with no intention at all to do so, thereby achieving access to the shortcut. 40.On 21 September 2004, the IOMC decided to close the main gate of the ground floor lobby. At the same time an iron gate in the passageway was closed. A month later at a meeting of the IOMC, Hoover Restaurant and another merchant on the third floor complained that these measures were affecting their business and requested the reopening of the gates. 41.A number of proposals were considered over a period of time in order to resolve the problem. These included VIP cards for regular patrons of Hoover Restaurant, pre-issued a visitor cards, and requiring people wishing to enter the building to purchase a $20 coupon that could be redeemed in the commercial facilities in the building. None of these were found to be satisfactory. 42.For a period, Hoover Restaurant operated a shuttle bus up and down the passageway for its customers, but even that was not acceptable to the IOMC and continued only after the intervention of solicitors. The visitor card proposal, although apparently attractive, did not work primarily because the IOMC would only issue to Hoover Restaurant 30 visitor cards. That is plainly an insufficient number for a restaurant that occupies two floors of the building and has over 1,000 seats. 43.With the IOMC and Hoover Restaurant being unable to reach a satisfactory compromise these proceedings were commenced with Hoover Restaurant seeking an injunction restraining the IOMC from obstructing, restricting or otherwise hindering pedestrian access of the passageway by the 1st and 2nd plaintiffs, their licensees, staff, agents customers and visitors from 6 a.m. to midnight daily. 44.In addition, the 2nd plaintiff seeks damages for the loss of business it claimed to have suffered during the period that the passageway was blocked. The interpretation of the DMC : 45.It is correctly agreed by the parties that the entrance halls, the lifts and lift lobbies, the staircases and passages, the passages between car parks on the car parking floors, the entrance ways to the car parks and the passageway are all common property. It follows, and it is accepted by the IOMC, that in the absence of any provision to the contrary in the DMC, all of those parts of the building may be used by all of the tenants and their lawful visitors. In the case of the commercial premises this must include those members of the general public who enter the building wishing to use, (in the widest sense of the term), the commercial premises. 46.In these circumstances the crucial provision requiring interpretation in the DMC is clause 18. The proper approach to the construction of a DMC is set out in Grande Properties Management Ltd v Sun Wah Ornament Manufactory Ltd (2006) 9 HKCFAR 462 at 466 in the following terms:
47.Mr Wong SC, for the IOMC, argues that the effect of clause 18 of the DMC is that the driveways leading from the car parks on the fifth and sixth floors of the building may only be used by motor vehicles, to the total exclusion of pedestrians. Consequently he says, although the passageway is common property, by virtue of clause 18 pedestrians may be lawfully excluded from the passageway. This interpretation will have the effect of preventing pedestrian access to the lifts on the fourth floor, thereby achieving the objective of the IOMC of preventing members of the public from using this route is a shortcut between Waterloo Road and Man Fuk Road. 48.Mr Wong acknowledges that the interpretation will also have the effect of preventing lawful visitors to the Hoover Restaurant from Waterloo Road Hill from gaining access to the restaurant by this route. That the route was used for this purpose for many years provides no answer to Hoover Restaurant to this conclusion. On this interpretation Hoover Restaurant are not deprived of any rights under the DMC, instead the limitations of the rights they have are appropriately defined. 49.Mr Wong was obliged to acknowledge that this interpretation must also mean that the driveways leading from the car parks to the fifth and sixth floors, to Man Fuk Road, may not be used by pedestrians at all. Thus, residents of the two residential towers would not be permitted to descend to the sixth floor podium and exit the building on to Man Fuk Road. Neither could they enter the building by that route. Further, a resident of Waterloo Road Hill, who has purchased a car park on either the fifth or sixth floors of Man Kee Mansion could not enter or leave the car park on foot from Man Fuk Road. Instead, they must go down to Waterloo Road, into the building and take a lift up to the appropriate floor. 50.Ms Li SC, for Hoover Restaurant, argues that the purpose of clause 18 of the DMC is not to control pedestrian use of the driveways, but to control the location of loading and unloading of vehicles. She points first to the latter part of the clause containing specific provisions in relation to the loading and unloading vehicles, and argues that the term “exclusively” relates to the words “for the purpose of entering and leaving such car parks”, thereby demonstrating that the driveways leading to the car parks on the fifth and sixth floors may not be used for loading and unloading. 51.I accept Ms Li’s interpretation of clause 18. I do so for three reasons. 52.First, the clause omits to refer at all to the passageway leading from the fifth floor driveway to the fourth floor carpark. If it was the intention that the purpose of the clause was to exclude pedestrians from the driveways, then there is no reason at all to limit the operation of the clause to the two driveways leading from the car parks on the fifth and sixth floors. The absence of the passageway leading to the fourth floor carpark militates against an interpretation of the clause is requiring the expression “exclusively” to relate to the use of the driveways by motor vehicles. 53.The absence of reference to the passageway supports the proposition that the purpose of clause 18 is to control the location of vehicles loading and unloading goods to the building. In this respect it must be remembered that this is a multi-purpose building, with commercial uses. The only vehicular access to the commercial parts of the building from which commercial vehicles could bring goods to be unloaded or collect goods to be loaded, is by way of Man Fuk Road. 54.Second, as Mr Wong acknowledges, it is a necessary consequence of his interpretation that no pedestrian may use the driveway leading from the sixth floor podium level to Man Fuk Road. There is simply no purpose to such an interpretation. To contend that residents of the building wishing to go to Man Fuk Road must go down to Waterloo Road and then either climb the steps to Man Fuk Road Garden, or walk all the way along Waterloo Road, then go into Pui Ching Road, and climb the hill to that part of Man Fuk Road at the rear of Man Kee Mansion, borders on the farcical. It is a proposition that is simply impracticable and would be unworkable, and probably, unenforceable. The IOMC itself has recognised the potential need for residents to enter and leave the building on the sixth floor by way of the podium and onto or from Man Fuk Road, by installing a doorway in the secure gate, giving pedestrian access to the car parking area on the podium. 55.Third, again as Mr Wong had to acknowledge, it is a necessary consequence of his interpretation of a person parking a car on the fifth or sixth floor can only access that car from Waterloo Road, and may not leave or enter the car park directly from Man Fuk Road. Such a proposition is equally farcical and impracticable and probably unenforceable. 56.On the other hand, is sensible to control the loading and unloading of vehicles, all of which must enter or leave the building by way of the two run-ins, on the fifth and sixth floors. The effect of clause 18 is to ensure that those run-ins will not be blocked by loading or unloading vehicles, but instead kept clear for vehicles to pass and re-pass. 57.For these reasons I conclude that the purpose of clause 18 of the DMC is to control the location of vehicles loading and unloading, and that the word “exclusively” in that clause relates to the purpose for which vehicles may use the two driveways leading to the car parks on the fifth and sixth floors. The effect of the clause is to limit the use of those two driveways exclusively to the purpose of entering and leaving the car parks. Vehicles may not remain stationary on those driveways for loading or unloading. The Building Management Ordinance : 58.There are two provisions of the Building Management Ordinance which are relevant to these proceedings. They are first, s 34C and second, s 34I. These provide, as far as relevant, as follows:
59.Part of the justification relied upon by the IOMC for the closure of the passageway to pedestrian traffic was an assertion that the introduction of pedestrians to the passageway created a danger. This basis of justification raised two matters. 60.First it was asserted that the presence of pedestrians in the passageway created a risk of accident between a pedestrian and motor vehicle. The evidence of Ms Poon, a member of the IOMC, was that in her recollection, which extended back to the 1980’s, there had never been an accident involving a pedestrian and motor vehicle in the passageway. No evidence was put to the court of any such accident. 61.Undoubtedly there is a risk of such an accident, but in my view it is no greater than the risk of any accident arising between a pedestrian and motor vehicle manoeuvring in a car park. It is a perfectly acceptable risk and one that is unavoidable. It does not constitute a “hazard”, in the sense that that word is used in s 34I(1)(b)(ii) of the Building Management Ordinance. 62.The extent of the risk may be seen by a comparison of the width of the passageway and the width of the driveway from the sixth floor entrance, to the secure gateway giving access to vehicles to the sixth floor parking area. In that gateway there is a pedestrian door. It is plain that the IOMC are perfectly content that pedestrians and vehicles could safely share that driveway. 63.The width of that driveway in front of the secure gateway is 12 feet 6 inches. The width of the passageway where it enters the covered area shortly before turning on to the fourth floor carpark area is wider, at 13 feet. If it is safe for pedestrians and vehicles to share the sixth floor driveway it must be equally safe for pedestrians and vehicles to share the passageway. The absence of accidents over the many years during which the passageway has been used by pedestrians demonstrates that it may be safely used by pedestrians. 64.The second area in which this justification was raised was in respect of insurance. In her evidence Ms Poon said:
65.The cross-examination established that this assertion was far from the truth. Ms Poon was able to refer to only one telephone conversation,, not made by her, instigated by the IOMC, to the insurance company. No letters were produced from the insurance company containing any warning. No evidence was given of any steps taken by the insurance company in relation to the insurance. No evidence was called from the insurance company. There was nothing to support Ms Poon’s assertion. 66.In the whole of the circumstances I am satisfied that it is not open to the IOMC to rely upon s 34I(1)(b)(ii) in order to justify closing the passageway to pedestrians. Conclusion : 67.For these reasons I conclude that the steps taken by the IOMC to close the passageway to pedestrians is in breach of the DMC in that it unlawfully interferes with the rights of lawful visitors to Hoover Restaurant to use the common areas of Man Kee Mansion. 68.It follows that the 1st and 2nd plaintiff's are entitled to an injunction restraining the defendant whether by itself its servants or agents or otherwise howsoever from obstructing, and restricting or otherwise hindering pedestrian access of the passageway by the 1st and 2nd plaintiffs, their licensees, start agents, customers and visitors from 6 a.m. to midnight daily. 69.The IOMC is entitled to prevent members of the public who have no lawful business in Man Kee Mansion from using the passageway. They must do so however in a manner which does not unreasonably interfere with the rights of customers of Hoover Restaurant to pass freely and without hindrance through the common areas of Man Kee Mansion to Hoover Restaurant. 70.It is unfortunate that I have found myself obliged to reach this conclusion, because I accept that the IOMC faces a genuine problem in the use of the building by unauthorised persons as a shortcut from Waterloo Road to Waterloo Road Hill. To an extent this is a problem they must live with because it is inevitable, having regard to the configuration of the building the surrounding land, that people will try to use this shortcut. This situation is compounded by the fact that the residents must accept that the building is a multi-purpose building and consequently, inevitably, members of the public are entitled to freely enter and leave the building in relation to the commercial premises. 71.However, in resolving the problem the obligation is on the IOMC to find a solution which does not unlawfully interfere with the rights of Hoover Restaurant. Damages : 72.In addition to the claim for an injunction the 2nd plaintiff claims damages for loss of profits caused by the closure of the passageway. The damages claimed in this case are unliquidated damages, and not special damages, and accordingly do need not be the subject of a specific figure in the statement of claim. 73.To support the claim, unaudited profit and loss statements for the period from 1 October 2003 to 31 September 2005, from the restaurant were put before the court. No other evidence at all was given relation to damages. 74.Mr Wong submitted that these documents fall far short of establishing a significant drop in business income after the imposition of the ban on the pedestrian use of the passageway in January 2005. He pointed out that the gross income for February 2004, was $2.82 million, whereas in February 2005, one month after the ban was established the income was significantly higher at $3.23 million. Further, in March 2004, the income was $2.3 million, and in March 2005, $2.4 million. 75.That is right, but it may also be seen that the gross and net income for January 2005, and April to September 2005, was reduced from the previous year in the equivalent months. 76.The best point Mr Wong makes in respect of the accounts is that it cannot be said from the business income or net profit figures alone, and that is all that was relied upon by Hoover Restaurant, that those figures establish that the blockage of the passageway was the cause of the variation in either turnover or net profit. Mr Wong further reminds me of the danger in taking these figures at face value, particularly having regard to the fact that in January 2005, the accounts show a dividend of $960,000 being paid. 77.Mr Wong points also to the fact that the accounts produced went only to September 2005, and there was nothing to show what had happened when the ban on the use of the passageway was lifted following the commencement of these proceedings in January 2006. 78.The case for Hoover Restaurant was simply that the accounts showed that the average reduction in net profit for the period October 2004 to September 2005, was $111,064, and consequently that sum should be multiplied by 15.4, the number of months during which the ban on the passageway was imposed. The damages claimed were accordingly $1,710,386. 79.The onus is on the plaintiff to establish its entitlement to damages. The plaintiff must establish both that it has suffered damage or loss, and that the damage or loss was caused by the wrongful conduct of the defendant. 80.Looking at the matter broadly, and having regard to the fact that access may be gained to Hoover Restaurant by residents from Waterloo Road Hill easily, by going down the steps from Waterloo Road Hill Garden, I am not satisfied that the plaintiff has sufficiently established that the reduction in income was caused by the closure of the passageway. I am not satisfied that the bare presentation of the accounts, unaudited and without any further explanation, are sufficient to establish that the mere difference in gross or net income in the comparative months properly reflects any loss that might have been suffered from the closure of the passageway. 81.That said, the 2nd plaintiff has established wrongful conduct on the part of the IOMC and it is entitled to damages, which in all the circumstances I fix at nominal damages in the sum of $100. 82.An injunction will issue on the terms set out in paragraph 68 above. There will be an order nisi that the IOMC must pay the plaintiffs costs of the proceedings to be taxed on the party and party basis.
Ms Gladys Li, SC and Mr Sean Fang, instructed by Messrs Tai Mak & Partners, for the Plaintiffs Mr Horace Wong, SC and Mr Justin Wang, instructed by Messrs Lam, Lee & Lai, for the Defendant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Further hearings and rulings under HCA 59/2006