Chow Sai Ping and Another v. Chan Yam King

CACV 42/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 42 OF 2012

(ON APPEAL FROM DCCJ NO. 3416 OF 2010)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Yuen JA:

1.I agree with the Reasons for Judgment of Barma JA.

Hon Barma JA:

2.This is an appeal against the order of Deputy District Judge Grace Chan (“the Judge”) dated 30 November 2011, brought by leave granted by the Judge on 17 February 2012.  By her order, the Judge:-

(1)  Declared that the disputed area shown coloured pink on the floor plan marked as Annexure II attached to the Statement of Claim in the proceedings before her is part of the property owned by the 1^st Plaintiff and tenanted by the 2^nd Plaintiff, known as No. 25 of the 5^th Floor of East Asia Mansion, Nos. 23, 23A, 25, 27, 29 and 29A, Hennessy Road, Hong Kong (“the Building”);

(2)  Granted an injunction compelling the Defendant to pull down, within 28 days, a metal gate installed at the doorway to the property owned by the Defendant, known as No. 23 of the 5^th Floor of the Building;

(3)  Declared that the Defendant and her successors in title were entitled to have a right of way over the disputed area; and

(4)  Made a costs order nisi that the Defendant should pay the 1^st and 2^nd Plaintiffs the costs of the action, to be taxed if not agreed, with a certificate for counsel.

3.At the conclusion of the hearing, we allowed the appeal, set aside the orders made by the Judge and ordered that the costs here and below be paid by the Plaintiffs to the Defendant, to be taxed on the party and party basis if not agreed, with certificate for counsel in the District Court.  These are our reasons for doing so.

4.The relevant factual background can be summarised as follows:-

(1)  The building is a multi-storey building at 23-29A Hennessy Road Hong Kong.  It was constructed in the early 1960s.  The upper floors of the building consist of residential units, with six units on each floor, numbered as Nos. 23, 23A, 25, 27, 29 and 29A respectively.  A floor plan in respect of the 5^th Floor of the Building is appended hereto as Appendix 1 (notwithstanding that the plan is titled “4th Floor Plan”, it is common ground that it is in fact a plan of the 5^th Floor – the 5th Floor was originally designated as the 4^th Floor, but was subsequently redesignated as the 5^th Floor, as explained below).  Appendix 1 has been coloured and marked up as follows, to better illustrate the matters in dispute:-

(a)  No. 23 (the Defendant’s premises) is highlighted coloured yellow;

(b)  No. 25 (the 1^st Plaintiff’s premises, but not including the disputed area) is highlighted coloured green;

(c)  The disputed area (which the 1^st Plaintiff says is part of his premises of which he has exclusive possession) is highlighted coloured pink;

(d)  The metal gate outside the entrance to No. 23 that is the subject of the injunction is shown by a heavy red line;

(e)  The entrance to No. 23 is shown by a heavy black line;

(f)  The entrance to No. 25 is shown by a heavy dark blue line; and

(g)  The location of a metal gate which had previously been in existence, but which was removed by the Defendant in about early 2010, is shown by a heavy broken dark blue line.

(2)  The arrangement of the units on each floor, as appears from Appendix 1, is that the units numbered 23, 25, 27 and 29 are at the front of the building, with No. 23 on the left, and No. 29 on the right, when looking at the floor plans.  No. 23A is at the back of the building, on the left, and No. 29 A is at the back of the building, on the right.  The lifts serving the building are to be found between Nos. 23A and 29A.  There is a corridor in an inverted angular U-shape, with the horizontal part of the corridor immediately in front of the lifts, and vertical arms protruding downwards into the space between Nos. 23 and 25, and Nos. 27 and 29, respectively.  The entrances to Nos. 25 and 27 are at the bottom of the vertical arms leading up to those units, while the entrances to Nos. 23 and 29 are on the sides of the vertical arms that run past them.  The entrances to Nos. 23A and 29A are on the horizontal part of the corridor, on either side of the lifts.

(3)  On 15 December 1965, the developer of the Building, East Asia Investment and Mortgage Company Limited (“the Developer”) entered into an agreement (“the Agreement”) for the sale and purchase of Nos. 23 and 25 on what was described as the 4^th Floor (but subsequently became known as the 5^th Floor) to one Yee Shang Chi.  The property that was the subject of the Agreement was described as being coloured pink on an annexed floor plan. It is clear from the annexed floor plan that the disputed area (which was not coloured pink) did not form part of the property that was to be sold pursuant to the Agreement.

(4)  On 2 March 1966, the Developer and one Wong Chun Fan (described as the “Second Owner”), who had acquired No. 29A on the 5^th Floor, entered into a Deed of Mutual Covenant in respect of the Building (“the DMC”).  Clause 1 of the DMC provided for the Developer and the Second Owner to have exclusive possession and use of those parts of the Building set out against their respective names in the First Schedule to the DMC.  Clause 4(m) provided that the common parts of the Building should include, inter alia, the “lavatories entrances yards staircases landings and passages which are not included in any part of the building exclusively owned by one owner or several co-owners as specified in the First Schedule hereto and as shown on the plans annexed hereto”.  Notwithstanding the reference to a plan annexed to it, no plan was in fact annexed to the DMC.  However, included amongst the parts of the Building allotted to the Developer under the First Schedule was the “FIFTH FLOORS of Nos. 23 and 25 (formerly known as FOURTH FLOORS described in an Agreement Memorial No. 514851)”. The agreement there mentioned was the Agreement mentioned in paragraph 4(3) above.

(5)  By an assignment dated 2 August 1966 (“the Assignment”), the Developer assigned Nos. 23 and 25 on the 5^th Floor to Yee Shang Chi.  The floor plan annexed to the Assignment showed the property apparently assigned to consist of Nos. 23 and 25 together with the disputed area.

(6)  Thereafter, Nos. 23 and 25 were sold separately, by various transactions resulting in the 1^st Plaintiff and the Defendant becoming the owners of Nos. 25 and 23 respectively.  It appears that the assignments in relation to these subsequent sales did not contain any floor plans, but simply referred back to the floor plan annexed to the Assignment.

5.Against this background, the 1^st Plaintiff contended that he was the owner of the disputed area, as it had been assigned to his predecessor in title, and that the Defendant was therefore not entitled to erect the gate outside No. 23, which encroached upon that area.  The Defendant contended that the disputed area did not belong to the Plaintiff, but was properly to be regarded as part of the common parts of the Building.  The 2^nd Plaintiff, the tenant of the 1^st Plaintiff, was content to be represented by the 1^st Plaintiff.

6.At the trial, it was common ground that the first issue for determination was whether the disputed area was part of the 1^st Plaintiff’s premises or whether it was part of the common area of the Building (this also appears from the parties’ respective lists of issues – see paragraph 1 of the Plaintiffs’ List of Issues and paragraphs 1 and 2 of the Defendant’s List of Issues).

7.It was also clear from paragraphs 32 and 37 of the judgment below that the argument being advanced by the Defendant was that this issue should be determined by reference to the DMC, that regard should be had to the building plan (which predated the DMC, and was in fact annexed to the Agreement), and that no regard should be had to the plan annexed to the Assignment, on the basis that it post-dated the DMC and thus could not assist in determining what were the common parts of the Building and what were not (i.e. that the position as to common parts was crystallised at the time that the DMC was executed).  The Judge was also aware that the building plan was annexed to the Agreement and regarded it as part of the title documents in respect of Nos. 23 and 25 on the 5^th Floor (see paragraph 40 of the judgment).

8.Notwithstanding this, the Judge concluded that the plan annexed to the Assignment should take precedence over that annexed to the Agreement, on the basis that it was contained in a deed, whereas the plan annexed to the Agreement was not, and found that the disputed area was part of the 1^st Plaintiff’s premises.

9.With respect, this was not correct.  The designation of parts of the Building as common parts, to which all owners of units in the Building had rights of access (and thus not in the exclusive possession of any owner), was effected by the DMC.  It is evident from the First Schedule to the DMC that the Developer’s reservation of rights of exclusive possession in respect of Nos. 23 and 25 on the Fifth Floor did not extend to the disputed area.  This is because the First Schedule stated that Nos. 23 and 25 on the Fifth Floor (of which exclusive possession was reserved to the Developer) were as described in the Agreement, from which it was clear that the disputed area was not part of those units, or either of them.  The disputed area was thus a common area of the Building, over which all owners of shares in the Building had rights of access, and the fact that the Developer had purported subsequently to assign the disputed area to the 1^st Plaintiff’s predecessor in title can make no difference, for the Developer could not thereby convey something which he did not own (see Incorporated Owners of the Lorna Villa v Chan Yan Wah & Anor [1999] 4 HKC 524, at pages 528 to 533).

10.In a commendably frank submission, Mr Paul Wong, who appeared for the Plaintiff (as he had below), accepted that this was the case.  He submitted, however, that the contention that the disputed area formed part of the common area of the Building because of the reference in the First Schedule of the DMC to the Agreement, thereby incorporating by reference the plan annexed to the Agreement, was a new point, which the Defendant should not be permitted to take on appeal.  Alternatively, he submitted, if the point was one which was allowed to be taken, even though it was a new point, the matter should be remitted for a new trial, to afford his client an opportunity to seek to obtain and put in evidence that the plan annexed to the Agreement was mistaken, and that the true intention of the Developer was all along to sell to Yee Shang Chi the disputed area along with Nos. 23 and 25 on the 5^th Floor.

11.I cannot agree with either of these submissions.

12.In my view, the point raised before us was not a new point.  This is for the following reasons:-

(1)  As I have noted, it is clear from the judgment below (and the transcripts of the parties’ submissions at the trial) that the question of whether or not the disputed area formed part of the common area of the Building was squarely before the court, and it was just as clearly the argument advanced on behalf of the Defendant that the disputed area formed part of the common area in the light of the DMC and the antecedent floor plan.

(2)  Further, the fact that the antecedent floor plan correctly recorded the extent of the property conveyed to the predecessor in title of the 1^st Plaintiff and the Defendant was pleaded in paragraphs 9 to 12 of the Defendant’s Amended Defence to which was annexed the plan attached to the Agreement, and the fact that it was at all material times part of the common area was pleaded in paragraph 16 of the same document.

13.The most that could be said is that the Judge unfortunately failed to fully grasp the significance of the point that was being made by counsel for the Defendant in the court below (who was not Mr Sham, who appeared for the Defendant before us).

14.Further, even if (contrary to my view) the point should be regarded as a new one, I do not think that Mr Wong’s suggestion that the Plaintiffs would be prejudiced by allowing it to be taken on appeal, so that the matter should, at best, be dealt with by remitting it for a new trial, is valid.  Mr Wong suggested that to allow the point to be taken on appeal would be unfair to the Plaintiffs, as they would not have the opportunity to investigate the correctness of the floor plan annexed to the Agreement with a view to advancing an argument that that plan was inaccurate and did not reflect the intention of the Developer (or the purchaser) in relation to the extent of the property sold under the Agreement.  However, the Defendant’s case that the floor plan delineating the extent of the property in respect of which the Developer had reserved exclusive possession was clearly raised in paragraphs 9 to 12 of the Amended Defence, and the Plaintiffs thus had ample opportunity to investigate the accuracy of that plan and to adduce evidence in relation to it (if they were able to obtain any).

15.I was therefore satisfied that the point advanced on appeal was neither a new one, nor one the taking of which would be unfair to the Plaintiffs.  It followed, having regard to Mr Wong’s concession recorded in paragraph 10 above, that the appeal should be allowed with costs.

Hon Poon J:

16.I agree.

Mr Paul Wong, instructed by Hon & Co., for the Respondents/Plaintiffs

Mr Walker Sham, instructed by Li, Chow & Co, for the Appellant/Defendant