Chan Kwok Hing and Another v. The Incorporated Owners of Che Wah Industrial Building

DCCJ 3781/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3781 OF 2008

____________

BETWEEN

____________

Coram: His Hon Judge Leung in chambers (open to public)

Date of hearing: 7 July 2009

Date of decision: 2 October 2009

D E C I S I O N

1.This is the dispute between the Chan’s, the Plaintiffs, and the IO, the Defendant, in respect of the right to possess certain parts of the Ground Floor of the industrial building in question at Kin Hong Street, Kwai Chung, New Territories.  The Chan’s applies for summary judgment of their claim and for the counterclaim of the IO be struck out pursuant to O.14 and O.18, r.19 of the Rules of the District Court respectively.

2.The industrial building consists of 26 storeys and the roof.  The Ground Floor of the building houses car parking spaces for 15 lorries (“L-Parking Spaces”) and 14 private cars and small vans (“S-Parking Spaces”), all numbered accordingly.  There are various partitions on the Ground Floor including one First Aid Room (“the First Aid Room”).  The dispute relates to the First Aid Room and 5 S-Parking Spaces, namely, S-2, S-3, S-4, S-5 and S-6.

3.On the same day in 1978, the developer and the 1^st owner executed the 1^st Assignment and the deed of mutual covenants in respect of the building (“the DMC”) whereby a flat on the 13^th Floor was assigned to the 1^st owner.

4.In 2001, the developer sold and assigned away the First Aid Room and S-Parking Spaces S-2, S-3, S-4, S-5 and S-6 for the first time.  These properties subsequently changed hands in 2004 and 2006.  By an Assignment dated 30 July 2008, the Chan’s became the registered owners of the First Aid Room and the 5 S-Parking Spaces in question.

The claim

5.The First Aid Room was and still is occupied by the IO.  The Chan’s now seeks an order for possession of the First Aid Room, injunction and damages against the IO.

6.In respect of the First Aid Room, the IO’s pleaded case is as follows:

(1) The developer had not reserved the title, property, interest or right to the First Aid Room in the 1^st Assignment or the DMC and could not have been able to convey the same to its successors in title and eventually the Chan’s.  The First Aid Room was intended and designated as a common part.

(2) Since 1978, the First Aid Room has been occupied, used and maintained by the IO which the developer and the predecessors in title of the Chan’s have agreed, consented or acquiesced.  It was and still is in the lawful possession of the IO, the management committee and/or the manager of the building pursuant to the DMC and/or the Building Management Ordinance, Cap.344  (“the Ordinance”).

(3) Alternatively, if the Chan’s are entitled to possession of the First Aid Room, they have not suffered any loss and damage as a result of being out of possession of the same.

The counterclaim

7.The IO admits that the Chan’s are the registered owners and entitled to possession of the 5 S-Parking Spaces in question.  But its pleaded case is as follows:

(1) According to the New Grants and the approved car park layout plan, the area in front of the Ground Floor lift lobby inclusive of the S-Parking Spaces in question is designated as parking spaces for loading and unloading of lorries and is a common part.

(2) The S-Parking Spaces in question were intended and designated by the developer, the Chan’s predecessors in title and the IO and/or its predecessor as parking space for loading and unloading of lorries for common use of the building in compliance with the New Grants.

(3) The IO has a right of way over the area inclusive of the S-Parking Spaces out of necessity.

(4) Since 1978, the area inclusive of the S-Parking Spaces in question has been in the lawful possession of the IO, the management committee and the manager of the building with the consent and acquiescence of the developer and predecessors in title of the Chan’s.

(5) In about July 2008, the Chan’s wrongfully obstructed the way by causing or permitting 3 vehicles to be parked at the S-Parking Spaces in question and thus causing the owners loss and damage.

8.The IO therefore claims a declaration that title and right of the Chan’s in the S-Parking Spaces in question are subject to an easement, right or privilege of the IO and the owners of the building.  It also claims injunction and damages against the Chan’s.

The applications

9.By summons dated 10 March 2009, the Chan’s applies for summary judgment on their claim and for the IO’s counterclaim to be struck out.

10.Insofar as the claim by the Chan’s is concerned, the court shall consider if the defence raises issues which ought to be tried or if for any other reason the claim ought to proceed to trial.

11.Insofar as the IO’s counterclam is concerned, the court shall consider if it is clearly and obviously unsustainable before it is liable to be struck out.

12.At one point, there seemed to be an issue as to the admissibility of evidence for the purpose of the striking out application.  Since what the Chan’s argue is not confined to the lack of a reasonable cause of action under O.18, r.19(1)(a), but also the alternative grounds under O.18, r.19(1)(b) to (c) that the counterclaim is scandalous, frivolous or vexatious or otherwise an abuse of process of the court, I see no real point in taking such an issue.

The First Aid Room

13.Pursuant to paragraph 2 of the recital of the DMC, the building was notionally divided into 690 shares allocated to each of the units and portions in the following manner:

14.By the 1^st Assignment, the developer assigned 6 of those 690 shares to the      1^st owner together with the sole and exclusive right and privilege to hold use and occupy and enjoy all that Factory Flat B on the 13^th Floor but:

“EXCEPT AND RESERVING unto the Vendor (i.e., the developer) and the owner or owners for the time being of the other undivided shares in the said lands and the said Building …… the right to the exclusive use occupation and enjoyment of all factory flats, roofs, flat roofs, car parking spaces and the exterior walls of and in the said lands and the said Building other than the said premises hereby specifically assigned and save only such part thereof as are designated and intended to be used for the common use and enjoyment of the owners and occupiers for the time being of the said lands.” (emphasis added)

15.Clause 1(a) of the DMC provides that:

“The Vendor (i.e., the developer) shall at all times hereafter subject to and with the benefit of the said New Grants have the full and exclusive right and privileges to hold use occupy and enjoy to the exclusion of the First Owner All Those units car parks and the spaces underneath the staircases of the said building (save and except only All That Factory Flat ‘B’ on the Thirteenth Floor ……) together with the appurtenances thereto and the entire rents and profits thereof.” (emphasis added)

16.Therefore according to the 1^st Assignment, the developer reserved the exclusive rights over “all factory flats, roofs, flat roofs, car parking spaces and exterior wall” subject to 2 exceptions, namely, first, the factory flat specifically assigned and secondly, those parts of such “factory flats, roofs, flat roofs, car parking spaces and exterior wall” that were designated and intended to be used as common parts.

Had the developer reserved the exclusive right over the First Aid Room or is the First Aid Room a common part?

17.Mr Lai argued on behalf of the IO that the First Aid Room was not expressly specified in the exception and reservation by the developer; and it must be intended by the developer to be a common part.  Mr Lai relied on Leung Chiu Lam Paul & Anor v Poon Loi Cheung Desmond & Anor, CACV 84/1998 (15/9/1998) where Godfrey JA said (at p.6):

“…… If a vendor wishes to reserve something in this own favour, he has to do so expressly and clearly, otherwise his grant will be construed against him and he will not be held entitled to claim any such reservation.”

18.Mr Leung for the Chan’s submitted that the correctness of Godfrey JA’s approach is now much doubted in the light of the Court of Final Appeal decision in Jumbo King v Faithful Properties (1999) 2 HKCFAR 279.

19.In Jumbo King, the utility rooms and the flat roofs in question had not been specifically mentioned in the reservation by the developer.  Nor had they been allocated any undivided shares.  A key question to be determined was whether in the circumstances, those areas became common parts and the developer could not have validly assigned any right of exclusive occupation over those areas.

20.Godfrey JA, who also heard the appeal in Jumbo King, was observed to have adopted a different or less strict approach to the developer’s reservation clause than what his Lordship adopted in the earlier judgment in Leung Chiu Lam Paul.  The difference in approach was highlighted by Ribeiro J, as he then was, in Incorporated Owners of the Lorna Villa v Chan Yan Wah [1999] 4 HKC 524 – a case involving ground floor open spaces – (at 525D):

“As to reservations of exclusive use over defined areas, there was an apparent change of approach by Godfrey JA in his judgment in Jumbo King v Faithful Properties, compared with his earlier judgment in Leung Chiu Lam Paul.  Instead of placing on the developer the burden of showing an express and clear reservation of the right in the original DMC, his Lordship appeared to have held that the developer had retained the right to exclusive use because he had not expressly designated the utility rooms, etc to be part of the common areas.  This would appear to involve a reversal of the burden laid down in the Leung case.”

21.Having said that, Ribeiro J found that adopting either approach would produce the same conclusion in Lorna Villa.  The reason was that not only were the ground floor open spaces in Lorna Villa not expressly reserved by the developer, but the DMC in that case also actually designated the open yards, which his Lordship found to include the ground floor open spaces in question, as common parts.

22.The final court’s judgment in Jumbo King came after the Lorna Villa case.  Lord Hoffman (at 296C) raised doubt about whether the contra proferentum principle for construing reservations explained by Godfrey JA in Leung Chiu Lam Paul applies to construing a deed of mutual covenants.  In any event, his Lordship considered the principle to be a last resort to resolve an ambiguity and has no application where the parties’ intentions are clear.

23.Litton PJ, as he then was, said (at 290A-291B) and Lord Hoffman NPJ agreed (at 295F) that although there had been no specific mention of the utility rooms and roof spaces in the DMC in Jumbo King, the developer had retained the right of exclusive possession over the rest of the property as a legal incident of his retaining the undivided shares not assigned to the first purchaser.

24.Lord Hoffman added (at 296D):

“…… It is an attempt to discover what a reasonable person would have understood the parties to mean.  This involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve……Of course in serious utterances such as legal documents, in which people may be supposed to have chosen their words with care, one does not readily accept that they have used the wrong words.  If the ordinary meaning of the words makes sense in relation to the rest of the document and the factual background, then the court will give effect to that language, even though the consequences may appear hard for one side or the other……But the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean.  Therefore, if in spite of linguistic problems the meaning is clear, it is that meaning which must prevail.”

25.I agree with Mr Leung that one must now read Leung Chiu Lam Paul in the light of the final court’s judgment in Jumbo King.  In my view, the following are clear:

(1) That no mention is made or no undivided share is allocated in respect of the specific part of the building is not per se determinative of whether the exclusive right over such part is reserved by the developer

(2) This is a matter of construction of the 1^st Assignment and the DMC.  These two contemporaneously executed documents should be construed together: see Jumbo King (at 295G-H; 297F-G).

26.In the present case, the developer reserved the right to exclusive use of all the factory flats, roofs, flat roofs, car parking spaces and exterior walls, with the exception of (1) the flat specifically assigned to the 1^st purchaser and (2) any portion of these reserved parts that were designated and intended to be common parts.

27.The DMC in the present case did not expressly designate any area of the building as common parts.

28.Though the First Aid Room was not mentioned in the reservation in the 1^st Assignment, the developer and the 1^st owner by executing the DMC at the same time agreed with each other to include the First Aid Room under S-Parking Spaces S3-S5 in respect of which undivided shares were allocated.

29.In fact, the First Aid Room is not the only example.  In the 1^st Assignment, no mention was made of the Penthouse and the Machine Room.  Yet the developer and the 1^st owner agreed by the DMC that they be specifically included under the roof in respect of which undivided shares were allocated.

30.However, Mr Lai argued that the First Aid Room was not supposed to carry any share.  He pointed out that 1 share was allocated to each of S-2 and S-6 whereas 3 shares were allocated not only to each of S-3, S-4 and S-5 but also the First Aid Room and the space underneath the staircases of the whole building.  He queried who would be entitled to use the First Aid Room if S-3, S-4 and S-5 were sold to 3 different purchasers separately.  He submitted that the inclusion of the First Aid Room (and probably the space underneath the staircases of the building) under S-3, S-4 and S-5 was erroneous for being contrary to logical and common sense.

31.I do not agree.  First, there are in fact other rooms on the Ground Floor of the building which, like the First Aid Room, were not mentioned in the reservation clause.  For instance, from the approved car park layout plan, one can see a switch room, a transformer room and a fire control room.  This means the First Aid Room (like the Penthouse and the Machine Room) was singled out for the allocation of undivided shares in the DMC.  One should therefore be slow in disregarding the intention behind that and categorising that as illogical or erroneous.

32.Secondly, an undivided share may ‘carry’ a right to exclusive possession of a defined space, not the other way round: see Jumbo King (at 290E per Litton, NPJ).  Lord Hoffman in the same case explained (at 298G) how the developer is entitled to assign the right to occupy together with any undivided shares:

“…… In my opinion, if an owner in common of some undivided share in a building has the right, under a covenant with him as such owner, to occupy a specific part of the building, there is no conceptual objection to his assigning the right to occupy together with any undivided share.  This the vendor (i.e., the developer), who was entitled to occupy the roof spaces, utility rooms and so forth under covenants made with him as owner of 719 out of 720 shares (in the case of the first DMC) and as owner of 474,601 out of 482,000 shares (in the case of the sub-DMC) to which occupation of the commercial portion was attributable, was entitled to assign those rights of occupation to Target together with 204,587 of those shares, notwithstanding that they had not previously been ‘attached’ to any particular number of his undivided shares.” (emphasis added)

33.Mr Leung pointed out, and I agree, that nothing would have stopped the developer, if it had been so minded, to subdivide and to assign those shares to subsequent purchasers unless this was clearly prohibited by the DMC.  He suggested that for instance, the developer could have chosen to assign 1 share to purchaser X together with exclusive possession of S-3 and S-4, and 2 shares to purchaser Y together with exclusive possession of S-5 and the First Aid Room.

34.The developer and the predecessors in title of the Chan’s did exactly that.  While the 5 S-Parking Spaces in question together with the First Aid Room and the space underneath the staircases of the whole building apparently ‘carry’ 5 shares according to the DMC, what the developer actually assigned was 4 shares together with the exclusive possession of these 5 S-Parking Spaces and the First Aid Room in 2001.

35.For the avoidance of doubt, I refer to the 2001 Assignment above as a factual example of what is discussed in the preceding paragraphs, rather than as evidence to construe the intention of the parties at the time of executing the 1^st Assignment and the DMC.  Such evidence would have been inadmissible.

36.Mr Lai also argued that the First Aid Room is physically separate from the S-Parking Spaces in question.  Their natures and purposes are said to be different from and unrelated to each other.

37.In my view, there is nothing inherently erroneous about that.  In Jumbo King, the developer had reserved “the offices on the second floor”.  The final court found that that must be understood to mean the whole floor including also the corridors, lobbies, lavatories, machine rooms, lift shafts, staircases, utility rooms, etc. and the reference to “offices” merely described its general use.  This was what the parties intended the words to mean, though the court accepted that this was not the normal meaning of the words: see Jumbo King (at 297H per Hoffman NPJ).

38.Mr Lai submitted that his construction was supported by the actual condition and use of the First Aid Room by the IO over a long period of time as well as the conduct of the IO, the developer and its successors in title.  As mentioned above, such evidence is inadmissible for construing the intention of the parties at the time when the 1^st Assignment and the DMC were executed.

39.Even if considering and even accepting such evidence, I do not see how that supports the IO’s position in respect of how the room should be used.  The photographs and the affirmation filed on behalf of the IO suggest that the First Aid Room was and is used as an office, a place for the IO to meet, storage of tools and even the caretaker to take his rest.  There is no first aid facility or installation save and except an ordinary family-styled first aid box on the wall.

40.Mr Lai argued that that it does not make common or commercial sense for the developer to reserve to itself the First Aid Room unless the developer would provide first aid from the room.

41.I do not agree.  How the room was described does not imply a user requirement or restriction binding on whoever is entitled to exclusive possession of the room.  No such requirement of a first aid room or restriction of such user can be found in the New Grants.  Nor is there any evidence of such requirement or restriction in other documents such as the DMC.

42.In my view, whatever reasons or intention there might have been for the developer’s reservation of exclusive rights over these specific parts of the building, whether the reservation was valid and effective is after all a question of construction of the documents.  In Jumbo King, it did not seem to bother the court whether the developer by reserving the lavatories intended to assume the responsibility of providing sanitary services.  As mentioned above, it does not appear that the IO, while claiming the right to possession of the room, was or is actually using the room as a first aid room either.

43.In my view, the unambiguous inclusion of the First Aid Room in the 3 S-Parking Spaces for the purpose of allocating undivided shares under the DMC reflects the intention of the developer and the 1^st owner that “car parking spaces” included the First Aid Room.

44.The developer did reserve the sole and exclusive right and privilege to hold use occupy and enjoy the First Aid Room.  By successive assignments mentioned above and finally in 2008, the Chan’s became registered owner of the First Aid Room together with such sole and exclusive right.

Agreement, consent or acquiescence to the IO’s use of the First Aid Room?

45.Essentially, it was argued that the IO has used the First Aid Room in the past years without interruption by the predecessors in title of the Chan’s.  However, it is unclear, whether from the pleading or the affidavit, how the consent or acquiescence by the predecessors in title to the IO’s use of the room binds the Chan’s with the effect of displacing the exclusive right of the Chan’s.  Effectively, the IO is claiming proprietary right over the room which the Chan’s allegedly took subject to.

46.In the affirmations, reference was made to the fact that the IO did not charge or collect fee for the management of the First Aid Room.  The IO suggested that since the First Aid Room and the S-Parking Spaces in question were used and managed for the benefit of all owners, the IO would not charge the owners fees for their management.  The IO also suggested that the Chan’s had never offered to the IO as to how much they were willing to pay after becoming the owners of these properties.

47.I find such stance of the IO extraordinary.  It is always the duty of the manager of the building to collect management fees from the owners and in such amount determined in accordance with the Ordinance and the DMC.  All owners of the car parking spaces are subject to such burden in accordance with Part B of the 4^th Schedule of the DMC.

48.During the hearing, Mr Lai also described this as some kind of implied right of the IO to use the First Aid Room but this is not really its pleaded case.

Damages and mesne profits

49.The IO’s position is that the First Aid Room could not have been used for any purpose other than the provision of first aid facilities.  Therefore the Chan’s could not have suffered any loss and damage as a result of being deprived of its exclusive possession.

50.For the reasons explained above, I do not agree that the description of this room imposes a user restriction on the room.  In my view, this should be left to assessment of damages or mesne profits, if any.

51.But I agree with Mr Lai that if an order for possession is made against the IO, there should be no need for the injunction sought.

Conclusion

52.In my judgment, the contentions of the IO do not constitute a valid defence.

Car Parking Spaces

53.The developer had reserved the exclusive right to use the car parking spaces by the 1^st Assignment.  The same had subsequently been assigned together with the First Aid Room to the successors in title and finally the Chan’s.

Were the S-Parking Spaces in question designated as parking spaces for loading and unloading of lorries for the benefit of all the owners?

54.Mr Lai referred to the Special Conditions of the 2 New Grants.  Special Conditions 13 and 14 provided that certain amount of space in the building must be provided for the parking, loading and unloading of vehicles.  A layout plan indicating such designated space must be approved by the Building Authority.  In the certified amended car park layout plan of the Ground Floor, the area where the car parking spaces were situated was invariably designated as “PARKING SPACE FOR LOADING AND UNLOADING OF LORRIES”.

55.Special Condition 13(b) stipulated that the space designated for such use cannot be used for other purpose.  Mr Lai submitted that therefore the area including the S-Parking Spaces in question were intended and designated as parking spaces for loading and unloading lorries for the common use of the building.  Effectively, the Chan’s could not claim exclusive right over these spaces.  For the following reasons, I do not agree.

56.First, in Carado Company Ltd v Incorporated Owners of Carado Garden (1996) LDBM 54/1996 cited by Mr Leung, the learned presiding Judge, as he then was, had to decide whether several goods vehicle car parks formed part of the common areas.  He had the following observation about the nature of the Special Conditions of the New Grant:

“…… Special Condition (23) is not concerned with ownership, or distinction between individually owned units and common areas.  It simply imposes on the Grantee developer, minimum requirements for parking.

So far as good vehicles are concerned, Special Condition (23)(b) is silent on whether those spaces were to be individually owned or form part of the common area.  The Grantee had the option either to have notionally divided and sold such spaces to individual owners, or to have included them within the defined common areas.  The DMC clearly shows by Recital (4) and the provisions of the First Schedule, that the Grantee preferred the first alternative of individual ownership.” (emphasis added)

57.I consider what the learned Presiding Judge said to be applicable in the circumstances of the present case and I echo the same.

58.Secondly, the fact that S-Parking Spaces in question were within the area designated in the certified car park layout plan as “parking space for loading and unloading of lorries” does not alter their nature being Small Van Car Parks as specified in the New Grants.  Special Condition 13(d) stipulated that of the space provided for parking, loading and unloading, one half shall be used for “parking of private cars and light vans” and one half for the “parking, loading and unloading of lorries”.  Special Condition 13(e) went on to split the space provided for lorries into two third being for “parking” and one third being for simultaneous “loading and unloading”.

59.The fact is that the S-Parking Spaces were arranged amongst the L-Parking Spaces in the certified layout.  This explains why the area was invariably described in the plan as “PARKING SPACE FOR LOADING AND UNLOADING LORRIES”.  Clearly this does not alter the specifications in the New Grants and the S-Parking Space still may not be used for loading and unloading, not to mention that of lorries.  Even the L-Parking Spaces within the area were not all supposed to be used for loading and unloading.

60.Clearly the IO is aware of the different use of the car parking spaces.  In its car park rules, the IO limited the number of lorries that could be loaded and unloaded at the same time.  According to the minutes of the IO’ committee meeting on 9 October 2008, the IO resolved that in accordance with the DMC, only one private car or small van might be parked in each S-Parking Space and no owner might make use of the S-Parking Spaces as if they were L-Parking Spaces for lorries.

61.The IO’s present claim of right to use the S-Parking Spaces for loading and unloading of lorries simply contradicts the Special Conditions of the New Grants.

Right of way out of necessity?

62.It is suggested that if the S-Parking Spaces could not be used by other owners, this would lead to an extremely inconvenient and chaotic situation.  The suggestion is that the vehicles parked in the S-Parking Spaces will render the manoeuvring of lorries in the area extremely difficult.  This will also block the access for human being between the freight lifts and the area.

63.Regarding contention of like nature, the learned Presiding Judge in Carado had this to say (at paars.34-36):

“If the sole or primary purpose of these parks was for loading or unloading, the Tribunal accepts it may have been better achieved and controlled by the respondent through the exercise of its management powers.  There is therefore some force in Counsel for Respondent’s submission, that there could well be major management and other disadvantages, in having such spaces exclusively controlled, at the whim of a particular individual owner.

However, if the preferred alternative was to have the spaces controlled by the Respondent or its manager, that could very simply have been achieved by appropriate provisions in the DMC.  First, the notionally divided shares for individual ownership, should not have included Goods Vehicle Car Parks and references to their shares in the Second Schedule, should have been omitted.  Secondly, the definition of common areas should have been widened expressly to include the Goods Vehicle Car Parks.  The DMC provisions are in fact expressly to the contrary.

Whatever the reasonableness or practical advantages of the scheme advanced by the Respondent, it faces the difficulty that far from being supported, it is contrary to the provisions of the New Grant and the DMC.  I am satisfied that those two documents clearly established the Applicant is not only the owner but is also entitled to enjoy the exclusive use and occupation of the six Good Vehicle Car Parks.” (emphasis added)

64.Again, I echo the learned Presiding Judge’s observation and reject the IO’s suggestion as a matter of law.

65.As a matter of fact, the IO’s case is also bound to fail.  Special Condition 13 of the New Grant specified the turning circles, dimension of the area occupied and the minimum headroom of “private cars and light vans” as well as “lorries”.  As Mr Leung submitted, each of the New Grants was endorsed with a note by the Secretary for New Territories that the conditions of grant have been complied with.  The present layout of the car parking spaces was approved by the Building Authority pursuant to Special Condition 14 of the New Grants.  All these evidence that the present layout of the car parking spaces complied with these conditions.  The grantee was supposed to maintain the layout as approved and not to alter it except with the prior written consent of the Director of Public Works.  I am surprised by the IO’s suggestion that manoeuvring lorries or access of human being under the approved layout is somehow impossible or chaotic if vehicles are properly parked in the S-Parking Spaces in question.

66.Even assuming that the approved car park layout somehow could not accommodate the owners’ actual needs, what the IO may consider doing would be to resolve to apply for written consent from the Director of Public Works for the alteration of the approved layout and perhaps amendment of the DMC.  What the owners may not do is to deprive the owners of the S-Parking Spaces of their exclusive right and to claim the right to use these spaces in contradiction with the Special Conditions of the New Grants.

67.The starting point is that these are spaces for parking of vehicles as the New Grants permit.  Unlike a situation where an owner can use his land subject to an easement or right of way of others, the assertion of a right of way in the manner suggested by the IO virtually requires the Chan’s to somehow not to use the parking spaces.  This cannot be right.

Agreement or consent or acquiescence to the use of the S-Parking Spaces?

68.Again the IO claims the right to use the S-Parking Spaces in question for years without interruption as a result of alleged acquiescence or consent by the predecessors in title of the Chan’s.

69.This is factually incorrect.  The usage of the S-Parking Spaces in question has over the years been a matter of contention.  The documents concerning such dispute were produced for this hearing.

70.According to the documents and the affirmation of the current Chairman of the IO, the dispute between the developer and the IO over the S-Parking Spaces in question started in as early as 1980.  The dispute seemed to be resolved after the developer consented or acquiesced the IO to use and to manage the spaces for loading and unloading of lorries.

71.However, in 2006, the dispute between the predecessor in title of the Chan’s and the IO even entailed police intervention.  In its notice of general meeting dated 6 December 2006, the IO acknowledged that the dispute as to rights over the S-Parking Spaces had not been resolved for the past 3 decades.  The solicitors for the predecessor in title of the Chan’s and the solicitors for the IO also engaged in seriously worded correspondence in this regard.  Apparently, the IO also sought to argue on the basis of adverse possession.

72.In January 2007, the IO resolved to offer to purchase the S-Parking Spaces in question.  Obviously that did not materialise.  During the period between March and July 2007, one of the Chan’s (the 1^st named Plaintiff) became tenant of the S-Parking Spaces.  He sublet the same to various owners of the building.

73.In January 2008, S-Parking Space S-3 was sublet to the IO with effect from February 2008.  In July 2008, the Chan’s acquired the S-Parking Spaces in question and took over the tenancy.  The Chan’s commenced the present action in August and the tenancy ended in September 2008.

74.In October 2008, the Chan’s caused metal rims to be fixed on the ground of the S-Parking Spaces in question.  This caused the IO to hold a meeting on 9 October 2008.  Interestingly, according to the minutes of that meeting, the cause of complaint was not that the S-Parking Spaces were common parts but that some of these rims exceeded the designated parking space and encroached upon adjacent common parts.  The IO also reiterated that the rims might only be fixed within the designated parking space.

75.Even assuming that the S-Parking Spaces in question had been available for the owners to use in the past decades, the above evidence shows no unequivocal conduct on the part of the predecessors in title of the Chan’s or the Chan’s to accept the IO’s use as of right.

76.As to the fact that the IO had not charged or collected any management fees in respect of the S-Parking Spaces in question, I repeat what was said in the discussion about the First Aid Room.

Conclusion

77.In my judgment, the counterclaim in respect of the IO’s right over the S-Parking Spaces in question is bound to fail.

Order

78.I make the following order:

(1) Order for possession of the First Aid Room in favour of the Chan’s;

(2) Judgment in favour of the Chan’s for mesne profits or damages for the IO’s occupation of the First Aid Room from 30 July 2008 until delivery of vacant possession of the same by the IO to be assessed;

(3) Counterclaim of the IO be struck out;

(4) Costs of this action and the costs of and occasioned by this application, including any costs reserved, be to the Chan’s to be taxed, if not agreed, with certificate for counsel.

Mr Wilson LEUNG instructed by Messrs Lam & Lai for the Plaintiff

Mr Alex S W LAI instructed by Messrs Lau & Chan for the Defendant

Appeal by the defendant to Court of Appeal dismissed. Please refer to CACV49/2010 dated 26 November 2010