Read the full judgment text of CACV 000180/1998 on BabelCite. This Court of Appeal judgment was delivered on 12 February 1999 before Mortimer, V.P., Godfrey & Rogers, JJ.A..
Civil law – conveyancing – multi-storey building – Deed of Mutual Covenant – Sub-Deed of Covenant – undivided shares – exclusive use – utility rooms – flat roofs – common areas – unauthorised structures (cocklofts) – rescission of contract – Building Ordinance – disclosure of defects – Sale and Purchase Agreement clauses 10, 18(e) and 19 – contract for sale of undivided shares in land together with exclusive use of commercial units in Hankow Centre (formerly J. Hotung House), Kowloon – three utility rooms and flat roofs on 10th floor and main roof had no corresponding undivided shares allocated – cocklofts were unauthorised structures – purchaser called off contract before requisition answered – whether exclusive right of use could be validly assigned without corresponding undivided shares allocated to the specific parts – whether utility rooms were common areas under the DMC and Sub-Deed of Covenant – whether vendors could rely on clause 18(e) of the Sale and Purchase Agreement to defeat purchaser's objection to unauthorised cocklofts – Court of Appeal allowed the appeal – undivided shares point: the right of exclusive use could be assigned as an incident to ownership of undivided shares in the land, with the developer entitled to assign the exclusive use of the yellow-coloured spaces (utility rooms and flat roofs) under Clause 4(ii) of the Sub-Deed of Covenant, following Lai Wing-ho v. Chan Siu-fong – common areas point: the utility rooms were never designated as common areas and were properly construed as ancillary to the offices and within the developer's exclusive use, and the objection was also raised out of time – cocklofts point: by majority, the vendors could rely on clause 18(e) to preclude objections to unauthorised structures, and in any event the objection was raised out of time under clause 10 of the agreement – purchaser's repudiation wrongful – recorder's order in favour of purchaser set aside – further argument directed on consequential orders (including costs)
Legal issues: Undivided shares point · Common areas point · Cocklofts point
Outcome: Appeal allowed; the purchaser had wrongfully repudiated the contract; the recorder's order in favour of the purchaser was set aside.
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