Cainford Ltd v. The Incorporated Owners of Ka Wing Building

CACV 74/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 74 OF 2009

(ON APPEAL FROM LDBM NO. 276 OF 2008)

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Before: Hon Tang VP, Yeung JA and Yuen JA in Court

Date of Hearing: 29 October 2009

Date of Judgment: 29 October 2009

Date of Reasons for Judgment: 6 November 2009

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REASONS FOR JUDGMENT

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Hon Tang VP (giving the reasons for judgment of the Court):

1.Cainford Limited (“the applicant”) is the manager of a commercial plaza known as In’s Point (“the Plaza”).  The Plaza is converted from the commercial parts of three “mixed commercial and residential” buildings namely Wing Kiu Building, Ka Wing Building and Cheung Hing Building.  The Wing Kiu Building, Ka Wing Building and Cheung Hing Building are separate buildings each presumably governed by its own deed of mutual covenants (“the DMC”).  The DMC governing Ka Wing Building is dated 16 January 1974.  The DMC shows that the Ka Wing Building comprises shops or non-domestic accommodation on the ground to the 3^rd floor inclusive and 17 domestic flats on the 4^th to the 21^st floor inclusive.

2.The owners of the Plaza have entered into a sub-deed of mutual covenant dated 16 December 1998 (“the sub-DMC”).  From the sub-DMC, it appears that the Plaza comprises two shops namely, 1B and 9 on the ground floor of the Ka Wing Building, as well as the whole of the 1^st floor, 2^nd floor and the 3^rd floor of the Ka Wing Building.  It also comprises different shops on the ground floor as well as the whole of the 1^st, 2^nd and 3^rd floor of the Wing Kiu Building.  So far as the Cheung Hing Building is concerned, the Plaza comprises all of its 2^nd and 3^rd floor. 

3.The respondent is the incorporated owners of Ka Wing Building. 

4.By an amended notice of application dated 29 January 2009, the applicant claimed, inter alia, that the incorporated owners had connected a sewage pipe serving the residential units of Ka Wing Building to the sewage pipe serving the Plaza, and that that was done in breach of para. 4 of Schedule 2 of the DMC.

5.Judge Wong held that as the applicant is not an owner of any interest in the Ka Wing Building nor a party to the DMC, it had no right to enforce the DMC.  He dismissed its claim.

6.On appeal, the applicant relies on clauses 15(d)(12) and 16(h) of the sub-DMC.  Clause 15(d)(12) authorises the applicant as manager:

“(12) To enforce the due observance and performance by the owners of the terms and conditions of the Government Leases the Principal Deeds and this Sub-Deed and to take action in respect of any breach thereof including the commencement conduct and defence of legal proceedings and the registration and enforcement of charges as hereinafter mentioned.”

7.Clause 16(h) provides:

“(h)    The Manager shall further have power to commence proceedings for the purpose of enforcing the observance and performance by any owner of any unit or part of the Plaza and any person occupying any unit or part of the Plaza through under or with the consent of any such owner of the covenants conditions and provisions of this Sub-Deed and of recovering damages for the breach, non-observance or non-performance thereof. All damages recovered in any such proceedings shall be held as part of the management funds of the Plaza and be applied accordingly.”

8.Ms Kate Poon, counsel for the applicant, submitted that clause 15(d)(12) of the DMC gave authority to the applicant as manager:

“(12) To enforce the due observance and performance by the owners of the terms and conditions of (the DMC), and to take action in respect of any breach thereof including the commencement, conduct and defence of legal proceedings.” [Emphasis added]

9.She submitted “the owners” referred to the owners of Ka Wing Building.  The reference to the owners in clause 15(d)(12) is a reference to the owners of interests in the Plaza and not to other owners in Ka Wing Building.

10.As for clause 16(h), the language makes it clear that the reference to any owner is a reference to:

“(h)    … any owner of any unit or part of the Plaza”

and its occupier.

11.No other submission was made to us.

12.For the above reasons, we had dismissed the appeal with costs.

Ms Kate Poon, instructed by Messrs Au, Thong & Tsang, for the Applicant

Mr Ernest Koo, instructed by Messrs David Y Y Fung & Co., for the Respondent