Bridam Ltd and Another v. Sa Sa Cosmetic Company Ltd and Another

HCA 1050/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1050 OF 2013

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D E C I S I O N

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1.The 1^st plaintiff has let certain premises to the 1^st defendant. Under the tenancy, the 1^st plaintiff gave the 1^st defendant the right to use the signage that overhangs Canton Road. It is a big signage and the putting up of which requires approval from the Building Authority. It is attached to the wall of the building by bolts and nuts. The 1^st plaintiff is a co-owner of the building and the wall comprises part of it, but the right to use the surface of the wall has been reserved in the DMC to some other co-owners who might have been the developers.

2.However, the plaintiffs say that they have acquired a possessory title to the wall to the extent that they can put up the signage there regardless of the other co-owners’ rights in the DMC.  Alternatively, they say that they have a licence to put the signage up there.

3.By two tenancies with the first one commencing from May 2007 and the second one expiring on 15 May 2013, the 1^st plaintiff let its premises to the 1^st defendant with authority to use the signage.

4.The 1^st defendant says that it has delivered up vacant possession of the premises and the signage to the 1^st plaintiff on 15 May 2013 upon expiry of the second tenancy.  The 1^st plaintiff has also let these premises and the right to use the signage to another tenant.  This other tenant was also a tenant of the plaintiffs’ some other premises.  The tenancy of the other premises has expired.  The other premises have also been let to new tenants of the plaintiffs at higher rents and this other tenant would be moving from the other premises into the premises in question.

5.After 15 May 2013, this other tenant took possession of the premises in question and replaced the 1^st defendant’s advertisement on the signage with its own.  However, lo and behold, this tenant’s new advertisement was removed on about 21 or 22 May and the 1^st defendant’s advertisement was reinstated by the 2^nd defendant onto the signage. The plaintiff thus applied for an injunction to remove the 1^st defendant’s advertisement from the signage and to recover possession of the signage. 

6.The 1^st defendant says that it has delivered possession of the signage to the plaintiff on 15 May 2013 and hence has committed no breach of the tenancy agreement which has now expired.  It further says that its advertisement is now put up on the signage because the 2^nd defendant says that it has the right to use the signage and has entered into an agreement with the 1^st defendant to put up the 1^st defendant’s advertisement there.  Hence the 1^st defendant is not claiming any right of its own to put up its advertisement on the signage, but is relying wholly on the 2^nd defendant’s alleged right. 

7.The 2^nd defendant, however, is not claiming any right either; it simply says that neither of the plaintiffs has any right to the signage. The 2^nd defendant says that the right belongs to those co-owners who have the right to use the external wall under the DMC.  The 2^nd defendant has in fact notified those co-owners about these proceedings. 

8.The 2^nd defendant also relies on the Court of Appeal’s decision in Sunbroad Holdings Limited v Unknown Occupiers and Others [2012] 2 HKLRD 599 and [2012] 2 HKC 179 to say that there cannot be a possessory title on an external wall which is a vertical plane.  But in that case, there was only a claim to a possessory title to the external wall and with no claim of any easement.  There was also no case of bolts and nuts having been driven into the wall.  That case is different from the present one. 

9.The 2^nd defendant also argued that the plaintiffs have not obtained any order of possessory title from the court on the wall to which the signage is attached; however possessory title is not conferred but declared by the court to have been acquired by the occupier.

10.Under the DMC, the plaintiffs are not the owner of the right to use the wall to which the signage is attached.  The plaintiffs, however, have been in possession (of the part of the wall to which the signage is attached), through the 1^st defendant, from May 2007 until 15 May 2013 and it might have been in possession before that through other tenant or tenants.  From 15 May 2013 onwards, the 1st plaintiff continued to be in possession (including the signage) through its new tenant.  That remained so until the 2^nd defendant took possession of the signage on about 21 or 22 May by reinstating the 1^st defendant’s advertisement on it.

11.The plaintiffs certainly have some rights to the signage which may or may not be subject to those rights of the other co-owners who have the rights to the surface of the wall reserved unto them by the DMC, but the 2^nd defendant has trespassed on the plaintiffs’ rights and should be restrained.  The 2^nd defendant has no claim of any right to the use or possession of the signage.

12.Even if the plaintiffs have not acquired a possessory title to the part of the wall to which the signage is attached, the plaintiffs may well have an easement or some other right over it by virtue of its possession of it since no later than May 2007 when the first tenancy it entered into with the 1^st defendant commenced. 

13.Even if the plaintiffs should have no possible title or easement and are liable to be evicted by the other co-owners who have the rights to use the surface of the wall under the DMC, which question I am not deciding here, I still see no basis why the 2^nd defendant can lawfully take up possession of the signage in place of the plaintiffs.  If such is to be permitted, there will be chaos in the community.

14.The 2^nd defendant tried to argue that the signage was built by it or by the 1^st defendant, but there is no such evidence.  In any case, the signage is a fixture and belongs to the landlord.

15.Since the interests of the registered owners have been used by the 2^nd defendant to oppose this application, I should make it clear that this decision does not affect the rights and interests of those owners who are given the rights to the surface of the wall by the DMC.  Those owners are also not present in these proceedings.

16.The defendants have also argued on the lack of urgency, but then if the signage is not recovered by the plaintiffs, the new tenant may not want to move in as its name cannot be advertised on the signage.  That would affect the vacating by this new tenant of the premises that it is still occupying but were let to it under an expired tenancy.  The knock-on effect is that the remaining of the new tenant in those premises may affect the moving into those premises by some other new tenants who have agreed to take up those premises at higher rents.  The loss of the higher rental from these other new tenants may well be too remote to be recoverable from the 1^st or 2^nd defendants. I therefore think that there is some urgency in this application so as to avoid such potentially irrecoverable loss.

17.Furthermore, there is not a shred of merit in the defendants’ cases.  To adjourn the matter will require more costs to be incurred but for no useful purpose.

18.I therefore allow the application.  I now consider the terms of the order that I should make.

(Submissions on terms of the order)

19.On the basis of undertaking (a) as amended and undertakings (b) and (c), I make an order in terms of paragraphs 1, 2 and 3 of the order.

(Submissions on costs)

20.The plaintiffs will have 90 per cent of their costs from the defendants. 

21.On certificate for counsel, I would order two certificates for counsel for the obvious reason that we are talking about rental of $6 million a month and if anything should go wrong, the loss would be very substantial.  I think that is the justification plus the question that the legal picture is not really as clear as one may like to have it and I have already demonstrated in my decision that there is some complexity.  The 10 per cent deduction of costs, of course, would apply to the certificates for counsel too.

Mr Edward Chan, SC, and Mr Andrew Mak, instructed by Tang, Lai & Leung, for the 1^st and 2^nd plaintiffs

Mr Benny Lo, instructed by Iu, Lai & Li, for the 1^st defendant

Mr Kenneth Chan and Mr Billy Ma, instructed by Woo, Kwan, Lee & Lo, for the 2^nd defendant