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Hong Kong Ping Jeng Lau Co Ltd v. The Incorporated Owners of United Centre

Case No.CACV 189/1989
Court
Court of Appeal
Date12 Apr 1990
Judge—
Case Document
100%

CACV000189/1989

IN THE COURT OF APPEAL 1989, No. 189
(Civil)

BETWEEN

HONG KONG PING JENG LAU CO., LTD.

Plaintiff
(Appellant)

AND
THE INCORPORATED OWNERS OF UNITED CENTRE Defendant
(Respondent)

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Coram: Sir Derek Cons, V. P., Macdougall, J. A., & Duffy, J.

Date of hearing: 12 April 1990

Date of delivery of judgment: 12 April 1990

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JUDGMENT

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Sir Derek Cons, V.P.:

1. This appeal is contained within a very small compass. The unique question which we have to decide concerns the construction of part of one clause in a Deed of Mutual Covenant. It is in these words:

"17.     The owner or owners for the time being of each undivided share in the said premises and the said building shall at all times during the subsistence of this Deed be bound by and observe. and perform the covenants and conditions hereinafter contained, namely:-

.....

            (g) Not to use the units of the said building otherwise than for the following purposes except with the consent of he First Owner so long as the First Owner shall retain any share in the said Building:-

.....

(ii) 1st Floor to 6th Floor both inclusive - commercial units excluding restaurant, bars, coffee shops, discotheques and banks"

2. The setting for the discussion is the United Centre in Queensway. Originally it was owned by the Lipak Investment Company Limited ("Lipak"), which is the "First Owner" referred to in the quotation. Lipak has not been made party to these proceedings and will not be bound by any decision given. It has ceased to have any possessory interest in the building, having sold its last shares to the Defendant on the 8th August, 1988.

3. The Plaintiff is the owner of the 4th, 5th and 6th floors. It wishes to sell or let them to a third party for use as a bank. To ensure that it may lawfully do so it applied for the following relief below:-

"1. That it may be determined whether, on the true construction of clause 17 (g) (ii) of the Deed of Mutual Covenants dated 28th April 1981 made between Lipak Investment Company Limited as the First Owner of United Centre, Queensway, Hong Kong and Michigan Realty Limited as the Second Owner, the Plaintiff, being the owner for the time being of the 4th to 6th floors of the said United Centre, is entitled, at any time after 16.11.87 when Lipak Investment Company Limited no longer retains any share in the said United Centre, to use its said property or any part thereof for commercial purposes including the use as restaurants, bars, coffee shops, discotheques and banks despite the consent of Lipak Investment Company Limited not having been obtained.

2. That it may be declared accordingly."

4. Made Defendant to the summons was The Incorporated Owners of United Centre, a body incorporated under the Multi-storey Buildings (Owners Incorporation) Ordinance, Cap. 344. By a Respondent's Notice the Defendant has suggested that it should not have been so joined. But it is not disputed that the Incorporated Owners own shares purchased from the First Owner and for my part I am satisfied that that is sufficient to render them a possible and proper defendant.

5. I note in passing that Section 18(1) (c) of the Ordinance provides that such a corporation "shall do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant (if any) for the control, management and the administration of the building". This may also be sufficient to warrant joining the Incorporated Owners as defendant, but I am content to rely upon their ownership of undivided shares.

6. It was further raised in the Respondents' Notice that the Plaintiff should have joined all the other owners and Lipak. Counsel suggests that it is futile to make a declaration, - a discretionary remedy -, without all those parties being present. As I understand the position none of those owners, or Lipak, will be bound as a matter of course by these proceedings. But in my view it does not necessarily follow that it is futile for the Court to make known its construction of the provision. And that construction will at least be binding as between the Plaintiff and the Defendant.

7. There are two possible interpretations. The first is that the restrictions remain in force so long as the First Owner retains shares in the building, and the First Owner has for the same time a power of dispensation. The alternative is that the restrictions remain in force so long as the building itself remains in existence, with the power of dispensation to the First Owner restricted to such time as the First Owner has any shares therein. The judge below thought the latter construction to be the correct one.

8. The question is not one which is susceptible of much or elaborate argument, although counsel for the Plaintiff has pointed out the dangers inherent in the alternative interpretation where consent may have been given before the First Owner relinquished all his interest. Apart from that it is principally a question of first impression. For my part I cannot read the provision other than in the sense of the first alternative. That seems to me the only and the natural meaning of the language in which it is phrased. I can see no reason either linguistic or indeed commercial why it should be read otherwise.

9. I would therefore allow the appeal answer the. question in the summons in the affirmative subject to a variation of the date therein to the 8th August, 1988, so declare, and, if necessary, dismiss the Respondents' Notice or Cross Appeal.

Macdougall, J. A.:

10. I agree.

Duffy, J.:

11. I agree.

(Sir Derek Cons) (N. Macdougall) (J.M. Duffy)
Vice President Justice of Appeal Judge of the High Court

Representation:

John Swaine, Q.C. & Michael Bunting (M/s. Baker & McKenzie)

for the Plaintiff/Appellant

Patrick Fung (M/s. Woo & Woo) for the Defendant/Respondent