The Incorporated Owners of Foo Hoo Centre v. Hong Kong Alliance in Support of Patriotic Democratic Movements of China
Read the full judgment text of HCMP 1037/2014 on BabelCite. This High Court CFI judgment was delivered on 16 February 2015.
1. The plaintiff is the owners’ corporation of Foo Hoo Centre situate at 3 & 3A Austin Avenue, Kowloon Hong Kong (“the Building”), whereas the defendant is the registered owner of the 5 th Floor of the Building (“the Property”).
Cites 10 cases
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HCMP 1037/2014 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 1037 OF 2014 _________________________
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______________ D E C I S I O N ______________ Background 1.The plaintiff is the owners’ corporation of Foo Hoo Centre situate at 3 & 3A Austin Avenue, Kowloon Hong Kong (“the Building”), whereas the defendant is the registered owner of the 5th Floor of the Building (“the Property”). 2.Clause 5.13 of the Deed of Mutual Covenant and Management Agreement of the Building dated 11 January 1991 (“the DMC”) provides that: -
3.The occupation permit of the Building (“the OP”) granted on 11 December 1990 expressly stipulates that the 4th to 17th floors (inclusive) shall be used as: -
4.It is undisputed and indeed it is clear from the defendant’s own evidence that the defendant uses the Property or at least a substantial part of it as a museum called “The June 4th Museum”. The defendant expressly describes the operation as “a living museum” and “a contemporary history museum for the purpose of civic education”. The Property is used as a showroom or exhibition centre for displaying items kept by the defendant over the years relating to the June 4th Massacre. The intention was to use the Property as a permanent showroom with displays to commemorate the 4th June incident, and to educate the younger generation (especially local students and young visitors from Mainland China) who may not have much knowledge about what happened in the 4th June Massacre but are interested to know more about it”. 5.It is admitted by the defendant that the bulk of the Property comprises a “storeroom/showroom for exhibition where the public can have access”. The defendant charges members of the public an admission fee for entry to the Property, and the museum is open to the public from 10 am to 6 pm on weekdays (save for Tuesday when it is closed) and from 10 am to 7 pm on weekends and public holidays. The floor plan and photographs produced by the defendant reveal that different areas of the Property have been designated for different purposes, eg selling tickets, photo-taking, cinematographic display, exhibition, displaying reading materials, selling souvenirs, etc. The defendant also conducts workshops and guided tours for visitors and uses the Property to sell books and souvenirs to the public. 6.The plaintiff contends that the defendant’s intended use of the Property contravenes the DMC and the OP, but the defendant disagrees. Thus, on 28 April 2014, the plaintiff issued an Originating Summons supported by an affirmation made by its chairman Chau Kwok Chiu on 25 April 2014 (“Chau’s 1st affirmation”) seeking against the defendant inter alia:
7.On 11 July 2014, the defendant filed an affirmation of Lee Cheuk Yan (“Lee’s affirmation”) opposing the Originating Summons, and on 19 September 2014 the plaintiff filed in reply an affirmation of Chau Kwok Chiu (“Chau’s 2nd affirmation”). 8.The present application before me is the defendant’s application by way of Summons dated 7 October 2014 for an order pursuant to Order 28, rule 8 of the Rules of the High Court (Cap 4A) that these proceedings be continued as if the cause and matter had been begun by writ and consequential directions for pleadings to be filed by the parties, as well as an order that the parties do within 28 days after close of pleadings take out summons for directions regarding expert evidence. 9.The defendant’s application is disputed by the plaintiff and was heard by me on 29 January 2015. Here is my decision. Applicable legal principles 10.Order 28, rule 8(1) of the Rules of the High Court (Cap 4A) provides that:
11.The parties have no dispute that the main reason for an originating summons proceedings to be continued as if begun by writ is that there can be shown on the available evidence genuine or substantial issues of fact (see para 28/8/2 of Hong Kong Civil Procedure 2015, Vol 1; Shum Wah Ming v The Estate of Chen King Ngo (deceased) & another [1996] HKLY 1151; and Securities and Futures Commission v Tiger Asia Management LLC [2011] HKEC 842). 12.However, the defendant also relies on the following cases to support its application:-
13.The defendant submits that it is obvious from the above principles that the order asked for by the defendant would only help to have effective resolution of the disputes between the parties and would not prejudice the plaintiff in any way. However, if the plaintiff ought to have anticipated that there would be substantial disputes as to the facts which would render the originating summons procedure adopted inappropriate, the court would penalize him as to costs upon making an order under Order 28, rule 8 (see para 28/8/2 of Hong Kong Civil Procedure 2015, Vol I; Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35; Woo Chiu Lin v Leung Chi Ying (unrep, HCMP 4493/1999, 23 November 2000)). The defendant’s defence 14.The defendant contends that, as can be seen from the Originating Summons and the affirmations of the parties, there are genuine and substantial issues of fact, and that expert evidence is needed to resolve the issues between the parties. The defendant summarises its defence (in the absence of pleadings) as follows: -
15.The defendant submits that as the plaintiff has not made or threatened to make any application to strike out any part of the defendant’s defence, the live issues in the case as framed by the aforesaid defence include, inter alia, the following: -
16.The defendant contends that the defence involves technical matters relating to the different regimes of land use, regulations and practice and definitions of terms relating to land use. In the premises, the defendant has already engaged experts in the areas of land surveying (Mr Clarence K Y Chan, Registered Professional Surveyor) and town planning (Mr Ng Wing Fai Stanley, Registered Professional Town Planner) to give preliminary expert opinions to assist the court. They have prepared a draft joint expert report exhibited at “LCY-7” of Lee’s affirmation to assist the court to understand the areas where the defendant seeks to introduce expert evidence. Expert directions will need to be obtained from the court in relation to the formal production of the expert report. 17.The defendant disagrees with the plaintiff’s contention that the construction of clauses in the DMC (which is a multiparty contract) and the OP is purely a question of law to be decided by the court. The defendant submits that from its defence, there is clearly a need for expert evidence in the areas of surveying and town planning to assist the court in the determination of the issues in the case and the court should not deprived of useful evidence in relation to the issues in the case. In particular, the first question to be answered: whether the use of the Property by the defendant falls within the permitted use under the OP of “offices and ancillary accommodation” – must be examined from the perspective of the land law in relation to surveying, town planning and building regulations. 18.In order to answer this question, the nature of the business of the defendant is important – in turn, the complexity, the scale and the objective and business of the operator (ie, the defendant), and the intensification of use (including number of visitors, whether there are nuisance complaints, and management measures in place) must be examined. It follows that factual evidence on the nature of the defendant’s business, the number of visitors to the Property every day, whether there have been complaints and whether measure have been put into place by the management to control the intensification of use of the property must all be taken into consideration. 19.The defendant also contends that expert evidence is necessary to assist the court in determining the objective and purpose for stating the “permitted use” of a certain property on an occupation permit, and whether the only reason for stating the permitted use of the Property on the OP concerns purely the compliance of building regulations prescribed in the Buildings Ordinance in relation to the physical design and construction of the Property. Expert evidence is further needed to assist the court to determinate whether use of land in deviation of the original “permitted use” in an occupation permit would lead to any action by the Building Authority. Issues of facts on the plaintiff’s own case 20.The defendant further contends that there are issues of facts on the plaintiff’s own case. In Chau’s 1st affirmation, he sets out the alleged factual basis for the plaintiff’s claim as follows: -
21.Thus, the defendant contends that the plaintiff’s own case requires evidence on the nature of the defendant’s business as well as the number of visitors and capacity of the Building facilities (including elevators) to support such loading safely. Indeed, the plaintiff has reserved the right to file expert evidence to support its case. 22.The defendant further contends that from Chau’s 2nd affirmation, it is even more evident that the court would need to hear factual evidence to resolve the factual disputes between the parties as follows: -
23.In Chau’s 2nd affirmation, he further gives evidence to rebut the defendant’s case that the use of the Property could not possibly affect the rights and interests of the co-owners of the Building or the plaintiff. He states that:-
24.The defendant contends that the allegation of nuisance clearly requires factual evidence from the parties. The plaintiff’s case that the physical layout and design of the Building was never intended to accommodate and memorial hall open to the public requires expert evidence. There are clearly factual disputes on the volume of visitors to the Property and the effect it has on the occupants of the Building (as the records of visitors put forth by the parties differ greatly from each other). 25.Moreover, the plaintiff has, in Chau’s 2nd affirmation, raised further and new allegations against the defendant which were not stated in the Originating Summons or Chau’s 1st affirmation in support of the application, namely,
26.The defendant contends that the plaintiff should not be allowed to introduce new issues in a piecemeal fashion by merely mentioning them in supporting affirmations. The defendant is entitled to know from a clear pleading what the plaintiff’s entire case is. As stated in the Court of Final Appeal judgment in the recent case of Sinoearn International Ltd v Hyundai-CCECC Joint Venture (2013) 16 HKCFAR 632 at para 30: -
27.Thus, the defendant submits that there is a need for pleadings to clearly state and define the case of the parties. In particular, the plaintiff needs to clearly set out all the provisions and material facts relied on by it in its pleadings so that the defendant and the court would know what are the provisions and relevant factual matters relied on and the defendant would be able to fairly and properly prepare and present its defence. No factual dispute in this case 28.However, having considered the submissions of both parties carefully, I agree with the plaintiff that, on its true analysis, this case turns on no dispute of fact. The only issue in dispute is one of law – whether the defendant’s use of the Property described above is in breach of the DMC and/or the OP. 29.The defendant’s suggestions that there are factual disputes on matters such as the nature of the defendant’s business, the number of visitors to the Property, whether the defendant has caused any nuisance, whether any complaints were made with regard to the defendant’s use of the Property and whether the defendant has implemented adequate crowd control measures etc are all not relevant to the court’s interpretation of the DMC and/or the OP and cannot be relied on to convert the present proceedings to a writ action or distract the court from determining the sole issue in this case. 30.The plaintiff’s case is that the defendant’s use of the Property is in breach of the DMC and/or the OP because, on a true and proper interpretation of the DMC and the OP, such use is not permitted. This is simply a question of law to be decided by the court in interpreting the DMC and the OP, bearing in mind all the relevant circumstances. As held by Deputy District Judge Anthony Chow in Yeung Ching Lau v Incorporated Owners of Century Industrial Centre & others (unreported, DCCJ 381/2006, judgment delivered on 24 July 2006), the interpretation of the DMC is a question of law and does not involve any “conflict of evidence”. Also in Ever Famous Limited v Donny International Limited (unreported, HCA 1507/1998, judgment delivered on 11 December 2006), Recorder Kwok, SC, held that proper interpretation of the DMC is a matter solely for the court. 31.The issue in this case is similar to that raised in The Incorporated Owners of Tuen Mun Hung Cheung Industrial Centre (Phase 1) v United Hong Kong Ltd (unreported, HCMP 2991/1998, judgment delivered on 22 November 1999), in which the plaintiff proceeded by way of an originating summons, raising as an issue whether there was a breach of the deed of mutual covenant by the defendant of a unit in an industrial building. Cheung J (as he then was) held that the defendant was in breach of the DMC and granted a permanent injunction restraining such defendant from removing the external wall of the relevant building in breach of the terms of the DMC. Thus, there can be no question that the issue in the present case can be properly determined by way of an originating summons. 32.The defendant tries to suggest that the aforesaid 3 cases are distinguishable from the present case. However, I do not think that the defendant can really suggest that interpretation of the DMC and the OP is not a question of law for the court to decide. 33.Even if the defendant wishes to rely on all the aforesaid factual matters to substantiate its defence, such factual matters are not going to be disputed by the plaintiff. Despite what were stated in Chau’s 1st affirmation and Chau’s 2nd affirmation, the plaintiff has already made it very clear that assuming all these factual matters are relevant, the plaintiff will accept the defendant’s case on all these factual matters and will not challenge the same. Thus, there are no genuine or substantial issues of fact as contended by the defendant and there is no need for any of the witnesses to be examined or cross-examined at the trial. Expert evidence and pleadings 34.The defendant relies on Memorial Park Hong Kong Ltd v Secretary for Justice, supra, to suggest that expert evidence and hence pleadings are required in the present case. However, I agree with the plaintiff that Memorial Park Hong Kong Ltd is completely distinguishable from the present case in that the plaintiff there sought to rely on custom, “background knowledge” and a “matrix of facts”, which are not present here. 35.The sole issue in the present case is whether there is a breach of the DMC and/or the OP. This is a question for the court to determine upon making a proper construction of the terms of the DMC and the OP, and is not a matter which calls for determination by expert opinion. In Tuen Mun Hung Cheung Industrial Centre, supra, Cheung J (as he then was) rejected the defendant’s argument that the opinion of an architect must first be obtained before the court could construe the terms of the DMC, and said this:-
36.The defendant’s suggestion that expert opinion in the areas of land surveying and town planning is required to determine whether the Building Authority could make any legitimate complaint or take any enforcement action and whether this would affect the interests and rights of the plaintiff and the other co-owners is a red herring. The question of whether or not the terms of the DMC and the OP have been breached does not depend on the presence of any complaint or enforcement action by the Building Authority. Instead, the plaintiff has a clear legal duty to ensure compliance with the DMC and take action to enforce the same. As held by Cheung J (as he then was) in Tuen Mun Hung Cheung Industrial Centre, supra:-
37.Even assuming expert evidence is necessary in the present case as contended by the defendant, I am of the view that this application is pre-mature as the defendant has not yet even applied for leave to adduce expert evidence. Without such an application for leave to adduce expert evidence and the determination thereof, one simply does not know what expert evidence or what extent of it would be allowed by the court. It is also not clear whether such expert evidence so allowed or any part thereof will be disputed by the plaintiff. It may well be the case that the plaintiff would not dispute any of such expert evidence so allowed and hence there is no dispute that requires the Originating Summons to be turned into a writ. In applying for the Originating Summons to be turned into a writ before expert directions are sought, the defendant is in fact putting the cart before the horse. 38.It does not make sense to me that the defendant would require pleadings to properly plead the expert evidence. It is the defendant’s own case that it requires expert evidence. So the defendant should know what expert evidence is required even without pleadings. In any event, even for an Origination Summons, the court can ask the parties to frame the issues in dispute, and hence one does not really require pleadings to know what the issues are concerning the expert evidence. In fact, as far as I can see from the information before me, there is only one issue in this case, namely whether the undisputed use of the Property by the defendant is a breach of the DMC and/or the OP. I do not see any real need for pleadings as the issue is just a simple one. 39.It is incorrect for the defendant to suggest that converting the present proceedings into a writ action would not prejudice the plaintiff. On the contrary, the order sought by the plaintiff would prolong the proceedings and waste the parties’ costs and time. 40.As to the defendant’s contention that the plaintiff has made new allegations falling outside the scope of the Originating Summons, namely by alleging the defendant’s breaches of the Place of Public Entertainment Ordinance and of the Code of Practice for Fire Safety in Buildings 2011, and hence it is necessary to have pleadings to avoid the plaintiff making piecemeal allegations, the plaintiff is in fact confined by what are stated in Chau’s 1st affirmation and Chau’s 2nd affirmation. Unless the plaintiff obtains leave to file further affirmations, its case has already been defined by the affirmations. Thus, there is no question of the plaintiff making further new allegations as it likes when the proceedings remain one of Originating Summons. In fact, even if the Originating Summons is to be turned into a writ, these affirmations can be ordered to be treated as the plaintiff’s pleadings. There is no need to have new pleadings filed. If the issues are not clear from the affirmations filed by the parties, it is also possible to frame the issues for the court to decide instead of turning it into a writ action. Conclusion 41.For all the above reasons, I find that there is no genuine or substantial issue of fact that requires the present proceedings to be turned into a writ action. The sole issue in dispute is whether the defendant’s use of the Property is in breach of the DMC and/or the OP. The lack of pleadings in the present case will not cause any difficulties for the court to determine this question of law. 42.Accordingly, there is no reason to prolong the proceedings by converting it into a writ action, and the defendant’s application must be dismissed. 43.I therefore order as follows:-
Mr Daniel Fung SC and Ms Ebony Ling, instructed by Tung, Ng, Tse & Heung, for the plaintiff Ms May Chung, instructed by Ho Tse Wai, Philip Li & Partners, for the defendant |
Cases cited in this judgment
Further hearings and rulings under HCMP 1037/2014