Worldcap Investment Ltd v. Bosswell Estates Ltd

CACV000108/1988

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Coram: Hon. Fuad, V.-P., & Hunter, J.A.

Date of hearing: 20 October 1988

Date of judgment: 20 October 1988

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J U D G M E N T

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Hunter, J.A. :

1. This appeal is brought from a refusal by Nazareth J on 30th August 1987, to grant the plaintiff the summary judgment it was seeking, namely a mandatory order and damages. Two points basically are taken by the appellant. First, it is said that summary judgment at least for damages to be assessed should have been entered by the judge, and secondly, that the judge was wrong in the order he made as to costs. I deal with the substantial point first.

2. This is an appeal against a refusal of an order for summary judgment. The right of appeal in those circumstances was very recently introduced in Hong Kong by the repeal of section 14 (3) (b) the Supreme Court Ordinance. In this respect, Hong Kong followed the United Kingdom lead where this amendment was made in 1981. In these circumstances I think this court should heed the advice given by the Court of Appeal in England particularly in the case of Lloyd's Bank Limited v Ellis-Fewster [1983] 1 WLR 559. This was a similar appeal from a judge who on the facts had found that there were triable issues. Sir John Donaldson M.R. said this :

"This was essentially a matter for the judge's discretion. He thought that there was a triable issue. In a case where the triability of the issue depends upon evidence as opposed to law, I would think it a very surprising situation if the Court of Appeal was prepared to disturb the judge's view. If one judge thinks there is a triable issue, it would be surprising if two or three judges think that there is not. It is quite different if you are dealing with a triable issue which arises as a matter of law. When it arises as a matter of evidence and fact, it is most unlikely that the Court of Appeal would interfere with the discretion of the judge below".

3. I believe that we should listen to that advice and follow it. Where the issue raised in the court below is the existence of triable issues on evidence and fact, and the judge reaches a certain conclusion, that as Lord Donaldson said is a matter for the judge's discretion, and is subject to the usual restrictions on an appellate court invited to interfere with the exercise of discretion. That is this case. The position is quite different where on an order 14 application a court is faced with no issue of fact at all, but an issue of pure law for example the construction of the particular terms of the written document before it. That situation came before the court in European Asian Bank AG v Punjab & Sind Bank (No 2) [1983] 1 WLR 642. A similar situation was again considered by a Court of Appeal in England in Israel Discount Bank of New York v Hadjipateras [1984] 1 WLR 137. In that case Stephenson LJ, first of a11, cited with approval the passage that I read from Donaldson M.R. and, likewise he gave approval to the passages to which we were referred in the judgment of Robert Goff LJ in the Bank case. There is no conflict between them at all. One arises on pure law where the Court of Appeal on a re-hearing, if the point is clear and simple and it has all the facts before it, can decide for itself then and there. That is not this case.

4. That emerges from a brief look at the facts. The defendants in the matter are the developers of a new Building called the "Ka Fu Building" which is 19-27 Bonham Road. The first of the material documents in the case is an agreement of 17th February 1987 entered into between Grand Star Company Limited and the defendant, where by Grand Star Company agreed to buy certain specified undivided shares in land, which were intended to give the right to exclusive occupation of a flat B on the 24th floor and a roof area described as "roof B". That was a complex agreement which contains a number of reservations by the vendors. It also contains a covenant by the vendors, to complete the building in accordance with prescribed plans. The plaintiff is not a party to that agreement. Later some agreement was reached between the plaintiff company and Grand Star. The result was that the assignment when it was made, and it was made on 7th December, was on the direction of Grand Star made direct by the defendant to the plaintiff. That assignment was also a complex document containing some long, involved and convoluted terms. The assignment was made subject to a Deed of Mutual Covenant, which is recited in the assignment and had been entered into earlier that month. The next date we know is that on 15th January the plaintiff let the property.

5. The complaint that the plaintiff is making in this action is expressed in these words in paragraphs 4(a) and 5 of the statement of Claim :

4. (a) The Defendant has wrongfully in breach of the Agreement and the Assignment installed permanently a number of water meters (hereinafter called "the said meters" together with their connecting pipes along the inside surface of a wall on the east side of the said Roof B of the said premises (hereinafter called "the Roof"), and the Plaintiff's property.

5. The installation of the said meters is thereby also constituting a trespass of the Roof".

There is then a plea of interference with enjoyment and the document goes on :

"7. Furthermore, the presence of the said meters had caused the trespass of the roof by the staff of the Water Supplies Department when they read the said meters"

The relief claimed is :

"(1) An order that the Defendant do forthwith remove and re-locate the said meters together with all their connecting pipes or any other appurtenances away from the said premises;

(2) Damages;".

6. The order 14 summons sought identical relief in identical terms.

7. It seems to me that one only has to read those paragraphs to see that there are considerable ambiguities in this Statement of Claim. The allegation is that the defendant "has wrongfully ...". There is no allegation of fact as to when this installation took place. But it is conceded that the installation in fact took place before 7th December and before this plaintiff became the owner of the premises. In which case, speaking for myself, I have the greatest difficulty in understanding what paragraph 5 means, and the reference to " trespass of the roof". Early in his argument I understood Mr Chan to be saying that he could not pursue that claim and that basically his present claim was that raised by paragraph 7, the potential interference from visitors. In other words he was complaining, not so much of the presence of meters, but the traffic they induced. Later he resiled from that and advanced an argument on continuing trespass. This simply indicates some of the problems which arise on the factual situation which I have sketched in.

8. Secondly paragraph 4 pleads a breach of the agreement. I am bemused as to how that is put. The plaintiff is not to the agreement. No term of the agreement is pleaded, which is said to have been broken. No facts are pleaded which identify an obvious breach of this agreement. In particular this court does not start to know whether these pipes have been installed in the places indicated on the plans referred to it in the purchase agreement or not. That seems to me to be one of the important facts which has hereafter to be ascertained. Then there is the plea of the breach of the assignment, and said to be leading to a "trespass". Whether that is the right way of putting this matter it is something which I have considerable reservations.

9. When the matter came before Nazareth J, the defendants exhibited a draft defence which they said gave rise to triable issues. They have since in fact filed a defence. The defence raises a number of points. First of all, it disputes any trespass on the basis that what happened took place before the plaintiff became owner. That point is an obvious problem where the formulation of the plaintiff's claim needs to be reconsidered. Secondly, it is said that on the true construction of the documents and the assignment that the plaintiffs possession of these premises is subject to valid reservations of easements in respect of the location of pipes and meters and likewise an easement in respect of the right of persons to attend to these pipes and meters, for the purpose of looking at them and so on. The water pipes concerned do not simply supply the plaintiff's flat. They supply I think another 20 floors in the building. Reliance is placed upon phrases like "common facilities" in the assignment and in the Deed of Mutual Covenant. These were also allegations of implied right, means of knowledge estoppel and so on.

10. I am not going to read any of the passages in any of the documents, because it seems to me self-evident, that this is not a case where this court is in any circumstances under order 14 going to arrive at what it conceives to be the true construction of an interlocking group of documents starting with the contract, going through construction plans to a Deed of Mutual Covenant and ending up with an assignment. Those documents have all to be looked at together against the background of the facts existing on the site at the time they were entered into, and particularly the state of these pipes and meters on 7th December 1987. There are a whole series of facts that ought to be ascertained before the court can satisfactorily come to any conclusion on the true construction and effect of the various clauses in those documents. This seems to me to be a hopeless case as far as Order 14 is concerned, and that stood out on the face of the documents from the outset. I do not dispute that the terms of Order 14 rule 1 are now so wide, that this is a case which is within its ambit. But one only has to look at the nature of the problem in a case like this to see it cries out for a trial, and full elucidation of the facts, before you can decide on the meaning of the documents.

11. It is even clearer when you consider the relief. The relief claimed is a mandatory order in the terms I have read, for the removal of meters and pipes which supply the water to a big block of flats. It is plainly a significant matter. Before the court could consider granting a mandatory order in those terms it would have to consider the whole of the impact of such an order, and if it came to the conclusion that the plaintiff was right on its contentions on the true construction of the assignment, whether it was proper to grant such relief in the exercise of the court's discretion. It would have to consider the impact not only upon the defendant but on the all other flats in the building, the cost of the removal, the consequence of the removal, and weigh those against the seriousness of the location of the small group of meters to this plaintiff.

12. From the photographs that have been produced to us at this hearing the pipes themselves have been laid along what appears to be parapet wall. Whether it is described as the main wall of the building or the wall of this roof is going to one of the matters upon which issue is going to be joined on construction of the documents hereafter. To those pipes have been fixed stop cocks, and beyond each stop cock there is a meter. The meters are plainly intended to measure the supply of water passing through the pipes and then on down to the various occupants the flat underneath. One of those flats is the plaintiff's flat. The plaintiff can hardly object to the water authority and/or the manager coming in and reading the meter for his flat. What he objects to at the same time is a reading of the meters for the whole building.

13. The court hereafter is going to have to consider the seriousness of that, before it could contemplate granting or refusing a mandatory order, and before it can consider how damages on either possibility have to be assessed. There was a suggestion by Mr Chan that he could separate out these two issues; abandon the mandatory order for the purposes of Order 14; and persuade this court to grant interim judgment for damages to be assessed. In the circumstances of this case that is a hopeless contention because the two points are quite inseparable. Both have to be dealt by the same tribunal. In these circumstances, and without in any way coming to any conclusions, tentative or otherwise, as to the meaning of any of the clauses in this complicated documentation, it is in my view plain and obvious that there are triable issues in this case and this was never a case where Order 14 proceedings stood any chance of success.

14. It is against those conclusions that I turn to the second part of the judge's judgment, where, with respect to him, I think a little confusingly he did two things. He dismissed the summons with costs and granted unconditional leave to defend. To the purist that is not right. If a summons is dismissed the court need say nothing more. If it grants unconditional leave to defend that is different because it is not dismissing a summons it is making an order upon it. In those circumstances it may or may not be proper to go on and give directions. But that is really semantic criticism. As I read the judgment the judge came to the same conclusion I have reached, that this was not a case which justified Order 14 proceedings and that this claim advanced under Order 14 was bound to fail. In those circumstances in my judgment a judge should have no hesitation not simply to grant unconditional leave to defend, but to dismiss the summons with costs.

15. In my view this appeal fails and should be dismissed.

Fuad, V.-P. :

16. I agree that the appeal should be dismissed and with all that my Lord had said. The application that was made before the judge was a misuse of the Order 14 procedure.

Representation:

Chan Chi Hung (M/s Chan & Wan) for Appellant/Plaintiff

Horace Wong (M/s Ko & Co) for Respondent/Defendant