The Incorporated Owners of Ying Kong Mansion and Another v. Fedelity Ltd and Another

HCA2491/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2491 OF 2009

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BETWEEN

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(BY ORIGINAL ACTION)

AND BETWEEN

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(BY COUNTERCLAIM)

Before : Hon Suffiad J in Chambers

Date of Hearing : 19 July 2010

Date of Judgment : 3 September 2010

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JUDGMENT

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1.There are two applications by summons, one taken out by the 1^st plaintiff and the other by the 1^st defendant respectively.

2.The 1^st plaintiff, by its Amended Inter Partes summons, seeks summary judgment against the 1^st and 2^nd defendant for:

(a)     a declaration that the 1^st and 2^nd defendants were and are not entitled to erect the Unauthorized Structures and New Unauthrorized Structures (being a signboard and two compressor or condenser units and related accessories erected at or attached to the external wall outside the Mezzanine floor above Shop 6 of Ying Kong Mansion, Nos. 2-6 Yee Wo Street, Causeway Bay, Hong Kong as described in paragraphs 14, 15 and 17C to 17G of the Re-Re-Amended Statement of Claim and which are depicted in the pictures marked as Exhibit A and Exhibit B attached to the summons);

(b)     an order that the 1^st and 2^nd defendants do forthwith dismantle and remove all the said New Unauthorized Structures from the said part of the external wall and reinstate the same to its original condition; and

(c)      an order that the 1^st and 2^nd defendants do pay the 1^st plaintiff the damages suffered by the 1^st plaintiff arising from the breach of DMC, section 34I of the Building Management Ordinance, and/or act of trespass by the 1^st and 2^nd defendants in respect of the Unauthorized Structures and New Unauthorized Structures to be assessed.

3.The 1^st defendant, by its summons, seek summary judgment on the counterclaim pursuant to Order 14 and Order 14A against the 1^st plaintiff for:

(a)     a declaration that the resolution allegedly passed by the owners on 15 April 2005 to regulate the affixing of signs by individual owners on the external wall of the building and the “Advertising/Shop Sign Guidelines and Regulations” is null and void and have no effect whatsoever;

(b)     an order that the 1^st plaintiff do proceed to require and if necessary, take all legal proceedings for the removal by owners including the 2^nd plaintiff of all the advertising signs from the external wall and surfaces of the Mezzanine, 1^st, 2^nd, and 3^rd floor of the Building;

(c)      an order that the 1^st plaintiff should pursue, including but not limited to take necessary legal proceedings against all owners who have used or allowed the use of part of the external walls and surfaces of the Building for the display of commercial advertisements for an account of the profits received from such use or allowance;

The defendants also seek to strike out the claim of the 2^nd plaintiff under paragraphs 15, 16, 17, 17A and 18 of the Re-Re-Amended Statement of Claim pursuant to Order 18 rule 19 of RHC and for the claim to be dismissed.

Background

4.This dispute between the parties relate to Ying Kong Mansion, a building situated at Nos. 2-6 Yee Wo Street, Causeway Bay, Hong Kong (“the Building”).  The front side of the Building faces Yee Wo Street, while the back of the Building is at Jardine’s Bazaar.

5.The 1^st plaintiff is the Incorporated Owners of the Building registered under the Building Management Ordinance (“BMO”).

6.The 2^nd plaintiff is and was at all material times the registered owner of the entire Mezzanine floor of the Building.

7.The 1^st defendant is the registered owner of Shop 6 on the ground floor (“Shop 6”) of the Building and became the registered owner thereof on 29^th September 2005.

8.The 2^nd defendant became the tenant of Shop 6 some time in May 2004 being at that time the tenant of the predecessor-in-title of the 1^st defendant.  The 2^nd defendant carried on business thereat under the trade name of “The Groom Shoes Repair and Polish”.  The 2^nd defendant ceased to be the tenant of Shop 6 some time in January 2010.

9.The Building is governed by a Deed of Mutual Covenant dated 12 July 1983 (“the DMC”) and registered in the Land Registry.

10.On 15 April 2005 an Extraordinary General Meeting (“E.G.M.”) of the owners of the Building was held and, inter alia, a resolution was passed by the owners of the Building whereby the ‘Billboard/Signboard Standardization Regulations’ (“the Regulations”) were passed and adopted by the owners of the Building to regulate the use of the external walls of the Building for the purpose of billboard/signboard.  (N.B. The Regulations were called “Advertising/Shop Sign Guidelines and Regulations” in the defendant’s summons due to a difference in translation in the minutes but nothing of significance turns on the difference in title.)

11.In March 2006, construction works were carried out by the 1^st plaintiff in the Building to construct condenser racks on that side of the Building facing Jardine’s Bazaar.

12.On 31 December 2007, the Manager of the Building by letter to the defendants referred to the condenser units and the signboard and complained about the non-compliance with the Regulations.

13.On 2 January 2008, solicitors acting for the 2^nd plaintiff issued a demand letter to the defendants demanding the removal of the two condenser units and the signboard which is said to encroach upon the external wall of the Mezzanine floor.

14.The present proceedings were issued on 14 March 2008 in the District Court (being DCCJ 1116 of 2008) by the present 2^nd plaintiff alone.

15.Upon the subsequent complaint by the defendants that the 2^nd plaintiff had no right to bring such a claim claiming for the reliefs sought, but that such rights rested only with the Incorporated Owners of the Building, the 1^st plaintiff was joined in as a plaintiff and the proceedings were transferred to the High Court.

The plaintiffs’ case

16.The plaintiffs’ case relies on clause 8 and clause 11 of the DMC.

17.Clause 8 of the DMC provides as follows:

“None of the parties hereto shall affix or exhibit or paint on any part of the external walls, the common entrance hall, staircases, landings, lifts, corridors, passages or any other common areas of and in the said building any sign, notice or advertisement whatsoever without the prior approval of the manager of the said building acting on the instructions and by the direction of the Owners.”

18.Clause 11 of the DMC provides as follow:

“None of the parties hereto shall use the common staircases landings passages or the other common parts of and in the said building for the purpose of drying laundry or hanging or placing or storing any dustbins, garbage cans, furniture, machinery, goods or chattels or other things thereon or therein or in any way cause obstruction thereto.”

19.The 1^st plaintiff’s case also relies on paragraphs 4 and 11 of the Regulations which provide as follows:

“4. If owners of particular floors sell their units or the tenants move out, the written approval concerning the hanging of billboards/signboards shall be cancelled and voided and the billboards/signboards concerned shall be immediately removed. If new owners or tenants of particular floors want to hang other billboards/signboards, (they) shall apply to the Management Company afresh.

. . .

11. If owners or tenants of particular floors want to hang or show any billboard/signboard outside their floors, the size and location (of the same) shall be approved pursuant to the following principles:

Height: From the platform of the said floor to the bottom of the platform of the floor upstairs.

Width: Subject to the smallest inerior width of the said floor.

Depth: Subject to the guidelines of the Buildings Department.

Material: Refer to photocopies of the Buildings Department.”

20.It is the plaintiffs’ pleaded case that some time in November 2007 the 1^st and 2^nd defendants had unlawfully and without the consent or approval of the Manager erected an advertising/shop sign and two condenser units outside the external wall of Shop 6 and which also encroached upon part of the external wall of that part of the Mezzanine floor immediately above Shop 6.

21.The plaintiffs say that this is in breach of clause 8 and clause 11 of the DMC and the Regulations as well as a breach of section 34I of the BMO since the external wall on which the shop sign and the condenser units were erected forms part of the common area of the Building.

22.The plaintiffs further plead that such breaches by the defendants also violate and interfere with the 2^nd plaintiff’s rights since some part of the external wall of the Mezzanine floor (the Mezzanine floor being owned by the 2^nd plaintiff) has been affected by the shop sign and the two condenser units erected by the defendants.

23.It was also pleaded by the plaintiffs that after the 2^nd defendant ceased to be a tenant of Shop 6, the former signboard and the two condenser units (collectively “the Unauthorized Structures”) had been removed, but that some time on or about 11 February 2010 a new signboard and two new condenser units (collectively “the New Unauthorized Structures”) were newly erected in the same part of the external wall as the Unauthorized Structures.  It is the plaintiffs’ case that the New Unauthorized Structures were erected by the 1^st defendant and the new tenant of Shop 6, alternatively by the new tenant with the knowledge or consent of the 1^st defendant.  The new signboard has the name of “TAN’S” written on it and although that new signboard was of the same size as the previous one, the two new condenser units were even larger than the former ones.

24.The plaintiffs say that the New Unauthorized Structures, like the Unauthorized Structures, were erected by the defendants without the consent or the approval of the Manager of the Building.

25.As for damages, it is the plaintiffs’ case that damage has been caused because the tenants of the Mezzanine floor could not use that part of the external wall of the Mezzanine floor which has been encroached upon by the defendants’ signboard and the two condenser units thereby resulting in loss to the 2^nd plaintiff.

The defence case

26.The defence of the defendants is contained in the Amended Defence and Counterclaim filed herein on 14 August 2009.

27.Basically, the defences relied upon by the defendants can be summarized as follows:

(a)     the Regulations relied upon by the plaintiffs are void, and have no effect and are not binding upon the defendants;

(b)     the 1^st plaintiff and the Manager are effectively controlled by George Chong Lap Fu, the principal director of the 2^nd plaintiff, together with his companies, relatives and associates, who together hold the majority interests in the Building resulting in the passing of the Regulations which amounted to promotion of the self interests of these persons but to the detriment of the other owners in general and which is oppressive to the minority owners;

(c)      it is not feasible for the two compressor units to be relocated to any other part of the Building, a matter well known to the 1^st plaintiff since that had been canvassed at the E.G.M. held on 15 April 2005.  It is inequitable to accede to the claim of the plaintiffs, alternatively hardship will be caused to the defendants; and

(d)     there has been acquiescence by the 1^st plaintiff as well as the Manager of the Building with respect to the shopsign and the two condenser units now complained of.

28.In respect of the defences pleaded the argument of the defendants run as follows.

29.The external walls of the Building are common parts of the Building both under the DMC as well as under the BMO.

30.There are no provisions in the DMC or any other instruments registered in the Land Registry which would confer upon any particular owner the exclusive use, occupation or enjoyment of any of the external walls of the Building.  Since the external walls are common parts of the Building, every owner of the Building is entitled to use and enjoy such common parts as long as the DMC are complied with.

31.Clause 8 of the DMC is designed and intended to permit the Manager to allow for shop signs displaying the name of the owner or occupier of a shop to be put up at places designated for such signs.  However, it does not allow an owner to use the common parts of the Building including the external walls for general commercial advertisement or for hire or profit.

32.The resolution passed at the E.G.M. held on 15 April 2005 and which resulted in the Regulations are void and has no effect since the effect of the Regulations are to alter the terms of the DMC such that the external walls are no longer common parts of the Building when the DMC has not been modified or amended by any other deed executed by all the owners of the Building.

33.The Manager has no power (even under the DMC) to make rules such as the Regulations which conflict with the DMC.

34.The Regulations violate the terms of the DMC in that it allows a particular owner to have exclusive use and enjoyment of the external wall outside his unit or property and in that sense also violate the provisions of the BMO.

35.The defence also pleads that the Regulations are not binding on the defendants since they were not party to the resolutions which brought about the Regulations.  Further the 1^st defendant became the owner of Shop 6 in September 2005 and had no knowledge of the Regulations.

36.As for the second limb of the defence, that is by and large connected with the first limb in that it is the defence case that George Chong Lap Fu is both the principal director of the 2^nd plaintiff as well as the chairman of the 1^st plaintiff.  George Chong Lap Fu therefore effectively controls (together with his other companies, family relatives and associates) not only the 1^st plaintiff, but also the Manager of the Building being Ying Kong Company Limited.

37.It is because of such control that George Chong Lap Fu was able to get the resolution passed at the E.G.M. held on 15 April 2005 whereby the Regulations came into existence.  The purpose, according to the defendants, of the Regulations and this litigation was to enable George Chong Lap Fu to rent out the external wall outside the Mezzanine floor of the Building to CSL Ltd., for rental and which would profit only the 2^nd plaintiff since the rental collected would be pocketed by the 2^nd plaintiff alone.

38.It is the case of the defendant that this is to the detriment and oppressive to the minority owners of the Building.

39.As for the third limb of the defence, that of acquiescence, the defence case is that as early as 2004, when the 2^nd defendant became the tenant of Shop 6, there was erected a shop sign over the entrance of Shop 6 with the word “Groom” denoting the business of the 2^nd defendant. At the same time there were also two condenser units erected on the external wall over that shop sign.  The shop sign and both condenser units were erected with the knowledge of the 1^st plaintiff as well as the Manager of the Building and acquiesced to by them.  There was no complaint by either the 1^st plaintiff or the Manager regarding the shop sign or the condenser units.

40.It is also the defence case that at the E.G.M. held on 15 April 2005 it was discussed and resolved by the owners of the Building that the shop sign and the two condenser units be permitted to remain on the external wall above Shop 6 facing Yee Wo Street due to the fact that it was infeasible to relocate the condenser units of Shop 6 anywhere else, while the condenser units for other shops in the Building were to be installed or mounted on the rear side of the Building facing Jardine’s Bazaar.

41.Even after the renovation works in respect of Shop 6 had been completed at the end of 2007, that shop sign and the two condenser units remained at the same place, and that the shop sign and the two condenser units do not obstruct the windows of the toilet on the Mezzanine floor of the Building.

42.All along there had been no complaint as to the shop sign and the two condenser units erected on that part of the external wall above Shop 6.  This dispute arose which led to this litigation only when the 2^nd plaintiff complained in about November 2007 because the 2^nd plaintiff desired to rent out for income that part of the external wall to CSL Ltd, which rental income would go the 2^nd plaintiff alone.

The evidence

43.The plaintiffs have filed three affirmations, two of them being affirmations of Chiu Yiu Wing and one from Fung Kwok Ki.

44.The defendants have filed two affirmations of Chong Mei Shan.

45.I do not propose to repeat the allegations contained in these affirmations which have already been stated above under the headings “The plaintiffs’ case” and “The defence case”, but only to state here the evidence which can support such allegations.

46.There is evidence from the defendant that the Building was originally wholly owned by the Chong (or Chung) family, but by a Deed of Partition and Assignment dated 12 July 1983, the units in the Building were partitioned and divided up between the members of the Chong family or their respective companies.  The Manager of the Building, Ying Kong Company Ltd.  is also a family company, founded and controlled by the Chong family.

47.The defendants believes that George Chong Lap Fu holds over 40% interests in the Building and being also the chairman of the 1^st plaintiff, he has enough influence over the other owners who are family members to enable him to have a majority control over all concerned in the Building.

48.It is with such influence that George Chong Lap Fu, who chaired the E.G.M. held on 15 April 2005 was able to get the resolutions passed and the adoption of the Regulations.

49.It was alleged by the plaintiff that construction works in respect of Shop 6 took place at the end of November 2005 and by 8 December 2005 it was discovered that the two condenser units had been installed and attached to the external wall of the Mezzanine floor (paragraph 22 of Affirmation of Chiu Yiu Wing refers).

50.However, the defendants have drawn my attention to a photograph attached as Exhibit “A” to a Statement of Claim in DCCJ 2128 of 2005 which is a claim brought by the Incorporated Owners against Hong Kong Tramways Ltd.  The Statement of Claim therein was dated 9 May 2005. The photograph in Exhibit “A”, although somewhat vague, was sufficiently clear to show two condenser units above the shop sign with the word “Groom”.  Although there is no direct evidence as to the date when that photograph was taken, the defendants submit that it is a reasonable inference to make that the photograph must have been taken prior to the date of the Statement of Claim in order for it to have been exhibited thereto.  What is therefore shown, if that inference is drawn, is that the two condenser units had been erected on that part of the external wall of the Building by May 2005, and probably long before that, contrary to the contention of the plaintiff that the two condenser units were installed in November or December 2005.

51.My attention was also drawn by the defendants to the minutes of the E.G.M. held on 15 April 2005 in which was recorded:

“Mr. Leong of [Waking Builders Ltd.] answered that they planned to re-install all water meters of street shops separately and lay all the supports of air conditioners in the direction of Jardine’s Crescent and replace the old and broken ones with stainless steel supports. What owners of particular floors are to pay for the expenses of the work are all covered in Item 4. Specially, drawings for the supports of billboards and air conditioners should be submitted. The expenses should be paid off before 25 April. Owing to the conditions of the location, only the air conditioner of Shop 6 on the ground floor could be installed in the direction of Yee Wo Street.”

52.Further on in the same minutes were recorded:

“Chairman Mr. Chung Lap Fu asked owners to vote on Item 5 of the agenda and suggested all existing billboards/signboards be ratified to remain as they were because it was impossible to demolish all signboards of street shops.

Owners unanimously resolved to approve proposal to standardize the billboards/signboards and ratify all existing billboards/signboards.”

53.The defendants have also drawn my attention to the minutes of a meeting of the Owners Management Committee on 26 September 2005 (which was also chaired by George Chong) in which it was minuted as follows:

“(3) Matters regarding advertising signs/signboards

(a) Ratifying and approving the advertising signs/Signboard Standardization Regulations approved in the Extraordinary Owners’ Meeting of 15 April 2005;

(b) Ratifying and approving all existing advertising signs/signboards of the whole building as lawful advertising signs/signboards;

(c) Allowing owners to erect advertising signs/signboards on the external walls which would thereby convert a common part of a building for personal use provided that approval for erecting advertising signs/signboards be obtained from the management company pursuant to the advertising signs/Signboard Standardization Regulations;

(d) Allowing the rental proceeds from the advertising signs/signboards on the external wall be received by the following persons:-

1/. For the existing advertising signs/signboards, be received by the owner who arranged the erection of such signs/signboards;

2/.   For new applications for hanging of advertising signs/signboards, be received by those owners whose applications have been approved by the management company pursuant to the advertising signs/Signboard Standardization Regulations;”

54.There is also evidence from the defendants that the 2^nd defendant was informed by its contractor that it was not feasible for the condenser units of Shop 6 to be installed on the Jardine’s Bazaar side of the Building since the location of Shop 6 is very different from other shops in the Building.

55.From the building plans produced, it can be seen that Shop 6 is a corner shop on the eastern end of the Building separated from the other shops of the Building by the main entrance and lift lobby of the Building.  Moreover, the rear end of Shop 6 does not extend to Jardine’s Bazaar because of the presence of a yard and a transformer room which is used only by the Hong Kong Electric Company Limited as its Yee Wo Street Substation.  There is therefore no direct access from Jardine’s Bazaar to Shop 6.

56.The deponent, upon enquiring with the Hong Kong Electric Company Limited, was told by an authorized person that they will not permit the concrete wall of its transformer room to be drilled through since it was built with special design to protect the equipment, installation and transformers inside.  Therefore it will not be possible for the trunking linking up the condenser units to go through the transformer room.

57.The only other possible route for the trunking to link with the air conditioners of Shop 6 if the condenser units are to be installed on the Jardine’s Bazaar would be for such trunking, pipes and ducts to go through the concrete wall and to be affixed to the ceiling or common part of the lift lobby of the Building, in which case the distance of the trunking, pipes and duct would be over 45 feet, and according to the contractor engaged by the 2^nd defendant, at that distance it would cause the coolant to lose its effect by the time it reached Shop 6.  Such an arrangement would defeat the purpose of air conditioning.

58.The defendants further say that all this relating to the infeasibility of installing the condenser units of Shop 6 on the Jardine’s Bazaar side of the Building was well known to the 1^st plaintiff since this must have been informed to them by the contractor at the E.G.M. held on 15 April 2005.  It further explains why the minutes of that meeting recorded “owing to the conditions of the location, only the air conditioners of Shop 6 could be installed in the direction of Yee Wo Street.”

1^st plaintiff’s application for summary judgment

59.The plaintiff’s application for summary judgment is based on the 1^st and 2^nd defendants having no credible defence to the claim of the 1^st plaintiff.

60.In this respect, the plaintiff relies on the provision in Schedule 1 of the BMO that the external wall is a common part of a building which is accepted by the defendants as pleaded in paragraph 29 of the Defence and Counterclaim.

61.It was submitted by the plaintiff that in so far as the shop signs of Shop 6 are concerned, the situation was regulated by the Regulations, which are in the nature of directions and instructions given to the Manger by all the owners to deal with applications to erect signboards.

62.It was also submitted that after the 1^st defendant became the owner of Shop 6, a new and bigger signboard was erected above Shop 6 in November 2007.  Even if there had been an earlier signboard erected above Shop 6, the Regulations provide that the any previous approval given would automatically expire upon transfer of ownership or moving out of the tenant.  Moreover, clause 8 of the DMC provides that signboard can only be erected with the approval of the Manager.  In the absence of any such approval, the new and bigger sign erected in November 2007 must be a breach of the Regulations as well as the DMC.

63.It was also submitted by the plaintiff that after the 2^nd defendant ceased to be a tenant of Shop 6 and another new signboard was erected above Shop 6 in February 2010, failure by the 1st defendant to obtain approval from the Manager for the new signboard was also a breach of the Regulations and/or the DMC.

64.In so far as the Regulations are concerned, it was submitted that if such Regulations are held to be valid, the defendants will be in breach of both the Regulations and the DMC.  But even if the Regulations were found not to be valid, the defendants are still in breach of the DMC for erecting the signboards without the approval of the Manager.

65.As for the two condenser units, it is the plaintiff’s submission that they were first discovered by the 1^st plaintiff in December 2005 and that no approval had been sought in respect of them.  In November 2007, the two condenser units were moved to new positions (albeit in the same area) after renovations had been carried out to Shop 6.

66.Complaint was made by the Manager and the 2^nd plaintiff in respect of the two condenser units in December 2007 and again in early January 2008.

67.Bigger condenser units were used by the new tenant of Shop 6 in February 2010 and again no approval had been sought from the Manager for the bigger condenser units.

68.It is the plaintiffs’ case that the installation of the two condenser units were in breach of the DMC and that the defendants have converted common parts of the Building for their own use therefore also being in breach of section 34I of the BMO.

69.The right to enforce the DMC vests with the 1^st plaintiff.

Decision on Order 14 application

70.Looking at the evidence which has been placed before me in relation to the defences raised by the defendants, I have no doubt that this matter must go to trial.

71.Firstly, there are conflicting and disputed facts as to when the two condenser units and the signboard were erected.

72.Initially, it was pleaded by the plaintiffs (paragraph 14 of Re-Re-amended Statement of Claim) that the “Unauthorised Structures” (i.e. the shop sign and two condenser units) were erected in November 2007.

73.In the paragraph 7 of its Reply, the plaintiffs accept that when the 1^st defendant became the registered owner of Shop 6 in September 2005, there was already an ‘advertising sign’ erected above Shop 6, but that there were no condenser (or compressor) units erected on the external wall of the Mezzanine floor.

74.It is also alleged by the plaintiffs that the Unauthorised Structures erected by the defendants in November 2007 were of a much bigger size, in particular the height of the signboard.

75.The defence says that the shop sign and the two condenser units, all of which were on the external wall above Shop 6 were erected when or shortly after the 2^nd defendant became the tenant of Shop 6 as early as 2004.

76.In this respect, I have been shown the photograph which was annexed to the Statement of Claim in DCCJ 2128 of 2005 which can support the defendants’ claim, at least in respect of the two condenser units being shown to be there in May 2005.

77.Secondly, the court will have to deal with complex questions of law relating to the construction of the DMC as well as to the validity or otherwise of the Regulations, namely as to whether they are merely instructions and directions to the Manager as suggested by the plaintiffs or whether the Regulations has the effect of amending or altering the terms of the DMC as suggested by the defendants.

78.In so doing, the court will have to make a finding as to the prevailing factual circumstances pertaining when that resolution was passed at the E.G.M. held on 15 April 2005; a matter which can only be done after trial.

79.Thirdly, the court will have to decide on the facts by hearing evidence concerning the infeasibility of the two condenser units to be installed elsewhere and whether any hardship may thereby result to the defendants in that respect.

80.The above matters per se quite conclusively show that this litigation cannot be decided without a trial.

81.As for the defendants’ application for summary judgment on their counterclaim, in my view, the issues on the counterclaim are only the other side of the same wall in respect to the claim by the plaintiff. In that sense, the counterclaim cannot be decided without a trial either.

82.Accordingly, since the defences to both the main claim and the counterclaim have already been pleaded and the pleadings have closed, both applications for summary judgment by the plaintiffs as well as by the defendants must be dismissed.

Defendants’ striking out application

83.As already indicated, there is also an application by the defendant to strike out the claim of the 2^nd plaintiff on the basis that the external wall is a common part of the Building and that by reason of section 16 of the BMO, the rights, powers, privileges and duties in relation thereto are conferred upon the 1^st plaintiff alone, to the exclusion of all the owners including the 2^nd plaintiff.

84.The short answer to that application of the defendants to strike out the claim of the 2^nd plaintiff must be that in this case, the claim by the 2^nd plaintiff is based on the Regulations which were passed at the E.G.M. held on 15 April 2005.

85.If the Regulations are held to be valid, then it might be possible for the 2^nd plaintiff to have a claim for damages against the defendant for trespass.

86.On the other hand, if the Regulations are held not to be valid, then it may well be that the claim by the 2^nd plaintiff against the defendant will be dismissed.

87.Since the claim by the 2^nd defendant hinges upon the validity of the Regulations, and before that issue is determined, it would be wrong for the 2^nd defendant’s claim to be struck out.

88.Accordingly. the application to strike out the 2^nd plaintiff’s claim is refused.

Costs

89.This is the type of satellite litigation which the courts have always frowned upon.  It assist nobody least of all the litigation of this matter, but only waste time and expenses.

90.While there can be little doubt that bad blood exist between the parties here, the legal advisers should have better advised their respective clients as to whether such applications should have been launched in the first place.

91.Both parties are at fault and the only proper order to make is that each party is to bear their own costs of their respective summons and of the hearing, being a costs order nisi.

Mr Kenneth C.L. Chan and Mr Herbert Leung, instructed by Messrs Fung & Fung, for the 1^st and 2^nd Plaintiffs

Mr Walker Sham, instructed by Messrs Lo & Lo, for the 1^st and 2^nd Defendants