THE INCORPORATED OWNERS OF SUMMIT COURT v. FULL SURPLUS INVESTMENT LTD AND ANOTHER

HCA 2280/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2280 OF 2001

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Before: Hon Chung J in Court

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J U D G M E N T

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I.  Introduction

1.  The plaintiff is the incorporated owners of Summit Court, a residential development consisting of a 2-storey car park, a basement level designated for children playground and 4 residential buildings (Blocks A to D).  The plaintiff commenced this action on 24 May 2001 alleging that the defendants:

(a)	acted in breach of the deed of covenant of Summit Court (“the DMC”) by interfering with the common parts and facilities of Summit Court;
(b)	trespassed the common parts and facilities of Summit Court and caused nuisance and annoyance to other owners thereof.

The plaintiff seeks various relief including declaratory orders, injunction orders and damages against the defendants.

2.  The defendants, on the other hand, counterclaim for their exclusive right to occupy and enjoy a portion of the main roof which is delineated in a coloured lease plan of the D1 roof and the coloured plan attached to the assignment of the D1 roof (called “the storeroom” for convenience).  The counterclaim will be dealt with below.

II.  Background Facts

3.  Many of the background facts leading to this action are undisputed.

(A)  Summit Court

4.  The Summit Court development was completed in 1966.  Each of Blocks A to D has been divided into 2 sub-blocks; for example, Block D has been divided into Blocks D1 and D2.  The main roof of each of the said blocks has been divided in similar manner.  The portion of the main roof above Flat D1, 20^th Floor (“Flat D1/20”) is referred to herein as the D1 roof.

5.  Before 1994, there were only 4 water meters (one for each of the said blocks).  Water charges were borne equally by all of the units of Summit Court.  Since 1996, separate water meters were installed for each of those units with funds contributed by the co-owners.  Renovation work related to the communal water supply system was carried out from 1994 to 1996.  In addition to the installation of separate water meters, separate water pipes for the use of the individual units were also installed.

6.  The water tanks, pipes, mains and pumps supplying water to the individual units of the residential blocks (“the communal water supply system”) are situated at the main roof of Summit Court.  Taking Block D1 as an example, the communal water supply system for the units of that block (“the Block D1 water supply system”) is partly located at the D1 roof.  Further, some parts of the Block D1 water supply system (namely, part of the water pipes (and the water meters)) pass through and/or are affixed (arguably) to the D1 roof.

7.  As will be set out below in more details, the 2nd defendant (“Mdm Chan”) and one Ng Chan Sze Mui Simone (“Simone Chan”) have at various stages been related to some of the units in (and portions of) Summit Court, in particular, Flat D1/20 and the D1 roof.  Mdm Chan and Simone Chan are sisters.  By an assignment dated 22 March 2000, they assigned their interest in the D1 roof to the 1^st defendant (“Full Surplus”).  However, no distinction is made between Mdm Chan and Full Surplus in the pleadings or closing submissions.  This is understandable in view of the matters set out in para. 14 below.

(B)  Mdm Chan’s Relationship with Summit Court and Full Surplus

8.  Mdm Chan is an architect.  In the past, she, Simone Chan and their family used to live in Flat D2, 16^th Floor (“Flat D2/16”).

9.  When the communal water supply system was introduced in 1994, Mdm Chan signed documents relating to the installation work on behalf of the then owner of Flat D2/16 and a Mono-Graphic Engineering Co. Ltd. (“Mono-Graphic”), the then owner of Flat D1/20 and the D1 roof.

10.  In December 1996, Flat D2/16 was assigned to Mdm Chan and Simone Chan.  In August, 1997, Mono-Graphic conveyed Flat D1/20 to a third party and the D1 roof to one Ip Hoi Kwai.

11.  Ip asked to have water and electricity supply made available to the D1 roof but the request was turned down by the plaintiff.

12.  Mdm Chan became the plaintiff’s chairman from 1998 to 1999.  She and Simone Chan purchased the D1 roof in January 1999 (while she was still the chairman).  After she became one of the owners of the D1 roof, she attempted to have water and electricity supplied to that place.  The plaintiff objected to this and dismantled the connection.  The matter ended up in the Small Claims Tribunal when the plaintiff tried to recover the costs incurred for doing so.

13.  In March 1999, Mdm Chan and Simone Chan conveyed Flat D2/16 to Simone Chan and Ng Kung Fu.

14.  As stated above, the D1 roof was conveyed to Full Surplus in March 2000.  Company search showed that:

(a)	Mdm Chan and Simone Chan were directors of Full Surplus;
(b)	they were replaced by Sino Japan Investments Ltd. (“Sino Japan”) and a Lee Ting Kwan.  But Mdm Chan was re-appointed as director again later;
(c)	Mdm Chan and Sino Japan were the only two shareholders of Full Surplus;
(d)	Sino Japan is a BVI company.

(C)  Parts of the Block D1 Water Supply System within the D1 Roof

15.  A schedule setting out the respective location of the various parts of the Block D1 water supply system can be found at Annexure “TSH-8” to the witness statement of Ting Sie Huong, one of the plaintiff’s witnesses.  Photographs showing their locations can be found at Annexure “TSH-7”.

16.  There are three main functional parts to the Block D1 water supply system: fresh water supply, fire service water supply and sea water supply (for flushing).

17.  In relation to the fresh water supply part, the water tank lies outside the D1 roof but the feed water mains leading from the water tank to the individual units of Block D1 (each with a water meter) pass through the D1 roof.  Further, the said mains were attached to the inside of the parapet wall of the D1 roof.

18.  The fire service water supply part and sea water supply part are installed in a manner similar to the fresh water supply part.

III.  Pre-litigation Dispute between the Parties

19.  By a letter dated 23 February 2000 to the plaintiff, Full Surplus claimed that parts of the Block D1 water supply system had been installed on the D1 roof without its consent and it reserved the right to require them to be removed.  Further, the plaintiff was informed prior arrangement had to be made before it could enter the D1 roof for any purpose including meter reading and maintenance.

20.  In a letter dated 6 March 2000 to Mdm Chan and Simone Chan, the plaintiff refuted the claim and stated that:

(a)	it had the right to place common facilities on the main roof and to inspect and maintain the same;
(b)	the predecessors-in-title of the D1 roof had not objected to the installation of the Block D1 water supply system;
(C)	Mdm Chan and Simone Chan should not hinder the plaintiff’s agents or servants from entering the D1 roof for the purpose of inspecting and maintaining the common facilities and reading the water meters.

21.  The plaintiff alleges that Mdm Chan wrongfully disconnected the water supply to Flat D1, 7^th Floor and Flat D1, 19^th Floor on about:

(1)	10 March 2001;
(2)	12 March 2001;
(3)	14 March 2001;
(4)	20 May 2001.

Further, the plaintiff alleges that in a letter dated 13 March 2001 to the plaintiff, Full Surplus threatened to turn off the water mains on the D1 roof and disconnect water supply to 1 unit of Block D1.

IV.  Main Issues

22.  The main issues which need to be resolved in order to determine this action are:

(a)	is the Block D1 water supply system part of the common facilities or is it owned by the respective owners of the units to which each water meter is related?
(b)	in any event, does the plaintiff have a right to access the part of the Block D1 water supply system which falls within the boundaries of the D1 roof?

These issues will be elaborated below.

(A)  Block D1 Water Supply System is Part of the Common Facilities

23.  The plaintiff so contends while the defendants deny that the Block D1 water supply system is part of the common facilities.  They contend that the part of the Block D1 water supply system which is situated within the D1 roof is owned (and should therefore be maintained) by the respective owners of the units to which those meters relate.  In relation to this defence, the defendants rely on the following:

(1)	the plans of Summit Court showed that there was no water tank or water meter on the D1 roof (para. 4(c) and 14(a) and (c), re-re-amended defence);
(2)	no access was provided by, nor was it necessary for access to be made through, the D1 roof in order to reach any of the water tanks of the communal water supply system (para. 4(e) and 14(a), re-re-amended defence);
(3)	reg. 28(2), Waterworks Regulations (Cap. 102);
(4)	the minutes of meeting of the plaintiff’s management committee dated 20 August 1997 and 13 April 2000;
(5)	the provisions in the DMC relating to the communal water supply system only refer to “water tank”.  There is no reference to “water pipes” or “water meters”.

(B)  Right of Access to the Block D1 Water Supply System

24.  The plaintiff argues that it has such a right by virtue of consent or permission from the predecessors-in-title of the D1 roof.

25.  Alternatively, the plaintiff relies on proprietary estoppel to found such a right by virtue of the following:

(a)	the predecessors-in-title of the D1 roof have by conduct encouraged the plaintiff’s installation, inspection, maintenance and repair and improvement of the Block D1 water supply system since about 1996 (to 2000);
(b)	the plaintiff has acted in reliance upon the aforesaid encouragement and incurred expenses to install, inspect, repair and maintain and improve the Block D1 water supply system;
(c)	in particular, Mdm Chan, who was one of the co-owners of the D1 roof prior to the assignment dated 22 March 2000, was the plaintiff’s chairman from 1998 to 1999.  This shows that both she and Full Surplus must have had knowledge of the aforesaid.

26.  In relation to whether the plaintiff has a right of access to the Block D1 water supply system (whether by reason of a right of way (an easement) or proprietary estoppel) over the D1 roof, the defendants contend that:

(1)	160 water meters were installed from 1994 to early 1996 (para. 15(a), re-re-amended defence);
(2)	of the said water meters, 20 were installed at the D1 roof;
(3)	the then occupier of the D1 roof was induced to permit those 20 water meters to be installed thereat by the plaintiff’s servant or agent who represented that the place where those water meters were installed was part of the common area to which the plaintiff had right of access (para. 15(c), re-re-amended defence);
(4)	the permission of the then occupier of the D1 roof was given in such mistaken belief (which was induced by the said representation) (para. 16(a), re-re-amended defence);
(5)	the defendants have discovered that in truth and fact that place was not part of the common area (para. 17, re-re-amended defence).

27.  Further, the defendants argue any right of way can only be created an easement.  However, such a right cannot be sustained as a matter of law because an easement cannot be created over one’s own land; there must be a dominant tenement and servient tenement.

28.  The defendants also state in their pleading they have in their letters dated 23 February and 28 February 2000 informed the plaintiff the said 20 water meters were not installed on common area.  Unless the plaintiff can show that the easement is permanent in nature, those letters have revoked any permission or licence which might earlier have been given to the plaintiff.

29.  In relation to the cause of action based on proprietary estoppel, the defendants further contend that there is no evidence of any assurance held out by the predecessors-in-title of the D1 roof, let alone evidence of any reliance by the plaintiff on such assurance.  In fact, there is no evidence that the predecessors-in-title knew that the D1 roof was not part of the common area, or that they knew the Block D1 water supply system would be installed thereat.

30.  In any event, any assurance or encouragement will fall within s. 6, Conveyancing and Property Ordinance (Cap. 219) and hence would not be actionable for want of documentary evidence.

31.  Reliance is also placed by the defence on the testimony of Mdm Ha Fung (also known as Mrs. Ip) to the effect that:

(a)	in 1992, the plaintiff resolved to investigate into which part(s) of the main roof belonged to the common area;
(b)	as a result, the plaintiff knew (or should know) the main roof, especially the part where the water meters were installed, was private property;
(C)	the plaintiff thought that the inward surface of the parapet wall at the main roof was part of the common area.

V.  Witnesses’ Testimony

32.  The following witnesses testified at trial:

(1)	Ting Sie Huong, a practising solicitor and a member of the plaintiff’s management committee holding various posts at different times between December 1987 and December 1995 (plaintiff’s witness);
(2)	Mdm Ng Yun Fei, a staff employed by the plaintiff from January 1990 to July 2002.  She is also known in Summit Court as Mrs. Lui (plaintiff’s witness);
(3)	Mdm Ha Fung, who used to live in Summit Court and was a member of the plaintiff’s management committee.  She was also known as Mrs. Ip (plaintiff’s witness);
(4)	Mdm Cheung Heung Fung Theresa, an occupier of the D1 roof since December 1990 (defence witness);
(5)	the defendant (defence witness).

33.  I find the testimony of the plaintiff’s witnesses to be truthful and reliable.  Insofar as there is any conflict between their testimony and that of the defence witnesses, I reject the testimony of the defence witnesses.

34.  The relevant findings of fact are set out under the heading “Findings of Fact” below.  For present purposes, I will summarise some of the matters mentioned in the testimony which I find to be truthful and reliable.

35.  There were illegal structures on the main roof since the 1970’s.  They have been used for residential purposes although the occupation permit specified that the main roof was to be used for:

“2 drying shelters per block for non-domestic use”.

However, the part of the main roof where the Block D1 water supply system was installed has been unoccupied as at the time of trial.

36.  Before 2000, the plaintiff effectively has had unrestricted access to the communal water supply system for the purpose of inspecting, repairing and maintaining the same.  General maintenance and repair work has been undertaken by the plaintiff.

37.  None of the plaintiff’s servants or agents ever discussed with anyone as regards whether the D1 roof was common part.  Hence, the plaintiff did not misrepresent to the then occupier of the D1 roof that the place where the water pipes and water meters of the Block D1 water supply system was installed was common area.  The plaintiff has not misrepresented to the said occupier it had the right to place the water pipes and water meters on the D1 roof.

38.  I accept Mdm Chan’s testimony that she was a student studying architecture around 1966.

39.  Finally, it was Mdm Chan who:

(a)	signed the documents relating to the installation of the communal water supply system on behalf of the then respective owners of Flat D2/16, Flat D1/20 and the D1 roof;
(b)	disconnected the water supply on the occasions set out in para. 21 above.

VI.  Findings of Fact

40.  The findings of fact will be set out under separate sub-headings below in relation to the issues raised by the parties herein.

(A)  Is the Block D1 Water Supply System Common Facility?

41.  Before considering this aspect of the dispute, two matters should be noted.  One, it is highly likely none of the owners of Summit Court addressed their mind to this issue when they made changes to the communal water supply system.  Two, there is a hint in the parties’ arguments that the identity of the owner of the Block D1 water supply system may be relevant.

42.  In relation to the last-mentioned matter, I do not find it helpful to consider the question of ownership for the following reason.  As a matter of law, most (if not all) of the multi-storey buildings in Hong Kong are co-owned.  It is proper to infer that Summit Court is co-owned in a similar manner.  It is undisputed the communal water supply system (to which the Block D1 water supply system forms part) is affixed to Summit Court as a fixture.  It is therefore part of Summit Court and is accordingly also co-owned.

43.  The reason why it is important to determine whether the Block D1 water supply system is part of the common facilities is because of some of the provisions of the Building Management Ordinance (Cap. 344).  In this connection, the following provisions are relevant.

44.  S. 2, Cap. 344 defines “common parts” of a multi-storey building to mean:

“the whole of a building, except such parts as have been specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner”

and

“unless so specified or designated, those parts specified in the First Schedule”.

45.  In the factual context of this action, the relevant parts of the First Schedule, Cap. 344 are:

“1. External walls and load bearing walls, foundations, columns, beams and other structural supports”;

“4. Parapet walls, fences and boundary walls”;

“6. Water tanks, reservoirs, pumps, … , water-courses, … ducts, downpipes, … ”.

46.  S. 16, Cap. 344 provides:

“When the owners of a building have been incorporated … , the rights, powers, privileges and duties of the owners in relation to the common parts of the building shall be exercised and performed by … the corporation to the exclusion of the owners … ”.

47.  The duties and powers of an incorporated owners are set out in s. 18(1) and (2), Cap. 344.  The material parts provide:

“(1)   The corporation shall -
	(a)	maintain the common parts and the property of the corporation in a state of good and serviceable repair and clean condition;
	…
	(c)	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 administration of the building … ”.

and

“(2)   A corporation may, in its discretion -
	…
	(fa)	carry out any renovation, improvement or decoration work, as the case may be, to the common parts”.

48.  This issue is ultimately one involving a question of mixed law and fact and, accordingly, turns on the relevant circumstances of each case.

49.  Reference has been made by both parties to the decision in So John v. Lau Hon Man [1993] 2 HKC 356.  That decision concerns a burst water pipe embedded in a concrete slab separating the units of the parties therein (one unit is directly above the other).  The learned judge found that, although the concrete slab was a common part, the water pipe, which was to feed exclusively the unit above, was part of the unit above.  That finding was upheld by the court of appeal.

50.  The plaintiff herein contend that the decision in John So supports its proposition that the Block D1 water supply system, which is to serve all the units of Block D1, is a common part.  On the other hand, the defendants argue that the decision in John So supports their case because each individual feed water mains (together with the water meter) is for the exclusive use of one unit of Block D1.  Hence, according to the reasoning in the John So decision, such water mains are part of the units which enjoys such exclusive use.  The purpose of s. 16, Cap. 344 is only to exclude the individual co-owners’ powers and duties as regards common facilities.

51.  The litigation in John So was one between two co-owners of the same multi-storey building.  The issue arose therein because the co-owner of the unit above (the defendant therein) argued he should not be held responsible for the burst water pipe by reason that the pipe was inside a concrete slab which was indisputably a common part.

52.  On the other hand, this action is a dispute between the incorporated owners (the plaintiff) and two of the co-owners of the building (the defendants).  The resolution of the dispute herein depends ultimately on who should be responsible for maintaining the Block D1 water supply system (rather than the “ownership” of that item).

53.  It is usual for an incorporated owners of a multi-storey building to be given powers and duties to take care of certain parts of that building (usually the common parts).  The most common method through which this is done is either by way of a contractual document such as a deed of mutual covenant or by way of powers conferred by Cap. 344 (see para. 44 to 47 above).  Irrespective of the method adopted, the incorporated owners exercises those powers (or performs those duties) in essence as an agent of the co-owners of that building.  

54.  I find from the evidence before me that the plaintiff has been given general authority by the co-owners to inspect and maintain the Block D1 water supply system as a matter of routine.  Consequently, by virtue of the meaning given to “common parts” by Cap. 344 (see para. 44 to 45 above), I find that the Block D1 water supply system to be part of the common area.  For present purposes, it is unnecessary to find out whether the plaintiff could later recover the costs for doing so from the co-owner(s) concerned, nor is it of importance to consider third party liability relating to the Block D1 water supply system.

55.  For this reason, reg. 28(2), Cap. 102 which provides:

“Where a meter is damaged and … is not the result of fair wear and tear, or where a meter is interfered with, the consumer responsible for the custody of the meter shall, without prejudice to any penalty provided for the offence, be liable to pay …”

cannot advance the defendants’ argument: see para. 23(3) above.

56.  The defendants argue that there are passages in the minutes of meeting of the plaintiff’s management committee which show that the plaintiff has not been generally authorised to maintain or repair the Block D1 water supply system: see para. 23(4) above.  Para. 4(9), minutes of meeting dated 20 August 1997 records:

“D１ １９樓業主投訴天台之水錶位置現時建有一間廁所，她曽有一次因屋內水喉損壞漏水而想上天台關水喉 … ”.

Para. 5(11), minutes of meeting dated 13 April 2000 records:

“D２ ８樓王太投訴該户水錶總制不能關緊，要求管理處更換，由於錶後所有設施均屬業[主]負責 … 委員會懇請該單位業主盡[快]安排換制，以策安全”.

The defendants argue that the first minutes of meeting show that the plaintiff itself regarded the water pipes and water meters to be the properties of the individual co-owners’.  The second minutes of meeting (so they argue) show that it was the individual co-owners’ responsibility to control the water supply to their own units.

57.  I disagree with the defendants’ above arguments.  The first minutes of meeting need to be read in its proper context.  The thrust of the discussion concerned whose responsibility it was to pay for a defective water meter.  The second minutes of meeting was mainly about a toilet having been built on the main roof.  The water pipe referred to therein was clearly inside the co-owner’s own unit.  In any event, isolated incidents relating to one or two individual co-owners are not proper evidence to support a finding that the plaintiff has not been authorised to maintain and repair the Block D1 water supply system on a routine basis.

58.  The lack of express reference in the DMC to “water pipes” or “water meters” is to be expected: see para. 23(5) above.  The DMC must have been drafted much earlier than 1996 (when the communal water supply system was not in existence yet).  The same observation applies to the plans of Summit Court: see para. 23(1) above.

59.  It is actually surprising the defendants should decide to persist in this line of defence in view of what Mdm Chan said in her witness statement dated 21 June 2003.  At para. 36 she said:

“As a matter of fact, I had agreed to allow the Plaintiff to enter [the D1 roof] as per the provision of clause 10(k) of the DMC and as per [s. 40] of [Cap. 344]”.

Clause 10(k) of the DMC provides:

“The Agent and all person authorised by it shall at any time have the right of access to the water tanks … on the main roof … for the purpose of repairing, maintaining and replacing the said water tanks … and shall have the right to pass and repass over the said main roof for such purpose” (emphasis supplied).

S. 40(1)(a), Cap. 344 provides:

“A member of a management committee and any other person authorized in that behalf by the management committee may, on reasonable notice to the owner or occupier thereof, enter a flat at any reasonable time for the purpose of -
(a)	inspecting, repairing, maintaining or renewing -
	(i)	any common parts in the flat; or
	(ii)	any other property in the flat the condition of which does or may affect adversely the common parts or other owners”
(emphasis supplied).

(S. 40(1), Cap. 344 will be further discussed under the heading “S.40(1), Cap. 344”).

60.  Both clause 10(k) and s. 40(1)(a) are effectively concerned with the common parts of a building (in relation to clause 10(k), it relates to the “said water tanks” of Summit Court).  Hence, Mdm Chan must have conceded that the part of the Block D1 water supply system which is located within the D1 roof is part of the common facilities.

61.  I also notice that the concession is, however, put slightly differently at para. 50 of her witness statement:

“… I concede that the 20 water meters are common facilities … ”.

62.  Further to the witness statement, when Mdm Chan was the plaintiff’s chairman, she wrote a letter dated 15 January 1998 to the Director of Water Supply.  She said the following about the Block D1 water supply system:

“… The roof area is not for domestic use … In fact certain common facilities, including communal pipes for the whole Block D, have always been situated on the said premises and maintained by [the plaintiff] … ”.

In the same capacity, Mdm Chan made similar remarks in a letter dated 20 February 1998 to Ip.

63.  When she testified, Mdm Chan attempted to disown the statements she made in the said letters.  She claimed that she was merely stating the plaintiff’s view and not her own.  In view of what she said in her witness statement, I reject this part of her testimony as well.

64.  By virtue of the matters set out above, I am satisfied that, as between the plaintiff and the defendants, the Block D1 water supply system is part of the common facilities and hence part of the common parts of Summit Court.

(B)  The Plaintiff’s Right of Access

65.  In view of the conclusion reached in relation to the sub-heading “(A) Is the Block D1 Water Supply System Common Facility?” (and subject to the discussion regarding s. 40, Cap. 344), it is strictly unnecessary to deal with this aspect.  I shall do so for completeness.

66.  I pause here to note it is undisputed that part of the Block D1 water supply system is located within the D1 roof and the registered owner of the D1 roof is now Full Surplus.

67.  The plaintiff’s case is that it has the right of access to the said part of the Block D1 water supply system:

(a)	by way of quasi-easement;
(b)	proprietary estoppel.

68.  In relation to sub-para. (a) above, the plaintiff relies on the decisions in:

(1)	Chiu Shu-choi v. Merrilong Dyeing Works Ltd. [1990] 1 HKLR 385, 388G-391F;
(2)	Jumbo King Ltd. v. Faithful Properties Ltd. [1999] 2 HKCFALR 279, 297B-F.

69.  Chiu Shu-choi was a litigation between two co-owners of an industrial building.  The defendant owned the unit below and the plaintiff the one above, both units being formerly held by the same owner.  Dispute arose when the plaintiff was put in a position where it could not access the unit it owned by lift and staircase.  Both the trial court and the court of appeal considered it appropriate to grant a declaration to the effect the plaintiff could have a right of way over the unit below to enable the plaintiff to access its own unit.

70.  Jumbo King Ltd. was a litigation between a vendor and purchaser of undivided shares in the commercial portion of a multi-storey building.  The gist of the dispute there was whether the failure of the developer to expressly allot the utility rooms and flat roofs any undivided shares would prevent the assignment by the vendor of the right to the exclusive use of the property being sold.  The part of the court of final appeal’s judgment relied upon by the plaintiff concerned the proper construction of clauses in the deed of mutual covenant.

71.  The purpose for which the plaintiff referred to the above decisions is in short to support its argument that a right of way by way of a quasi-easement can be created over one’s own land.

72.  The difficulty with this argument is, however, both decisions were in truth decisions based on the construction of clauses in the respective deeds of mutual covenant in question.  This is clearly the case in Chiu Shu-choi in view of the following observations in the judgment:

“We have so far freely used the general language of ownership and purchase and sale with respect to the two floors. … It does not however accurately reflect the situation.  The plaintiff and the defendant company do not have ownership of the eighth and the ninth floors as such; they have each an equal undivided tenth part or share … It is well established that an owner cannot have an easement over his own land, so that any rights which the plaintiff may now have … must be put upon some other basis.  The most likely choice is contract … ” (p. 389F-I);

“The plaintiff has an express right to use that lift, given to him by that part of the Third Schedule [of the deed of mutual covenant] …  The argument of the defendant company would deprive it of all meaning whatsoever … For these reasons we have come to the conclusion that on a true construction of the Deed of Mutual Covenants there is to be implied a right of passage … ” (p. 391C-F).

73.  When the court of final appeal said in Jumbo King Ltd.:

“… So each [co-owner] held such part [of the building] subject to allowing the other certain rights over it.  One could call these rights quasi-easements because one cannot have a real easement over one’s own property.  But for practical purposes they were easements … ” (per Lord Hoffmann, p. 297C-D),

what the court really meant must have been this.  On final analysis, the right is legally contractual in nature, but that right is little different from an easement from a practical point of view: see also the court of final appeal’s observations at pp. 287B-289H, 295F-G, 296A-D, 296J-297B and 297F-299B.

74.  There is no legally binding contract between the plaintiff on the one part and the defendants on the other.  The only document which may constitute an agreement between them is the DMC.  Indeed, the plaintiff relies on clauses 10(k)(i) and (o) thereof and contend that such a right can be implied from those provisions.  I pause here to observe that they expressly refer to “water tanks”, “lift motor room” and “well pump and pipes [for flushing purposes]” only.

75.  For a written contract, it is trite law contractual intention is to be ascertained by construing the contractual document as at the date when it was entered into (and, if necessary, to construe it in the light of the relevant surrounding circumstances). However, the communal water supply system (and therefore the Block D1 water supply system) did not exist when the DMC was drafted and entered into by the first owners.

76.  In view of the above, I do not accept the plaintiff’s argument that it has a right of access by way of a quasi-easement.  In view of this conclusion, there is no need to deal with the defendants’ argument relating to s. 6, Cap. 219 in relation to this aspect: see para. 30 above.

77.  I should perhaps observe that, if I were to find that the plaintiff had been able to establish such a right, the right is proprietary in nature in the sense that it cannot be terminated simply by the defendants giving notice of revocation (as they contend in this action): see para. 28 above.

78.  The plaintiff also relies on proprietary estoppel to found a right of access: see para. 67(b) above.

79.  As stated above (at para. 9), at the time when the communal water supply system (and therefore the Block D1 water supply system) was installed, Mono-Graphic was the registered owner of both Flat D1/20 and the D1 roof.  Mdm Chan signed the documents for applying for separate water meters as Mono-Graphic’s director.  I infer from this she must have given consent for the installation of the Block D1 water supply system on behalf of Mono-Graphic in view of:

(a)	the extensiveness of the installation work relating to the communal water supply system;
(b)	Mdm Chan’s background as an architect;
(c)	her assertive personality as demonstrated by her demeanour when she testified.

80.  In relation to her knowledge of the installation work relating to the communal water supply system, Mdm Chan carefully only stated the following in her witness statement:

(a)	“As an architect, I knew that the Water Authority would not approve the proposal if they were installed in a private area.  In other words, I believe that the Plaintiff did not reveal the fact to the Water Authority that the new meters were located in a private area … ” (italics added) (para. 29);
(b)	“I understand that the then occupier of [the D1 roof] was mis-represented by the representative of the Plaintiff that the area within [the D1 roof] where the said 20 water meters no situated was a common area of Summit Court … ” (italics added) (para. 30).

81.  Mdm Chan never said that she (or Mono-Graphic) was unaware:

(a)	the D1 roof in fact was part of the property registered under Mono-Graphic’s name;
(b)	the Block D1 water supply system was to be partly installed on the D1 roof.

82.  Even if Mdm Chan had not given the consent to the plaintiff to commence work on the Block D1 water supply system, she has at least stood by silently when the plaintiff did so.  I find that this amounts to passive encouragement on Mono-Graphic’s part: see Snell’s Equity (2000) 13^th Ed., para. 39-16.

83.  The defendants allege that the plaintiff’s agent has misrepresented the facts to the then occupier of the D1 roof.  I already rejected this: see para. 37 above.  Even if the allegation was true, there is no suggestion or proper basis for concluding the misrepresentation was known to, or acted upon by, the then owner of the D1 roof.  It is therefore immaterial.

84.  The defendants also argue that the plaintiff never believed the D1 roof was a common part.  Reliance is placed on para. (5)9 of an undated minutes of meeting of the plaintiff (held in January 1992) which recorded that the plaintiff resolved to retrieve plans of the main roof so as to ascertain where the common area was.  However, as stated in the minutes, that was done in relation to illegal structure(s) erected on the main roof affecting the common facilities there.  It is unclear where the illegal structure(s) was/were but it appears the common facilities on the main roof at the time were the water tanks and the lift room only.  I do not find this document to be helpful to the defence case.

85.  The defendants also argue that, in order for silence to be properly regarded as encouragement or representation, there must be a duty on the representor’s part to inform the representee: West Country Cleaners (Falmouth) Ltd. v. Saly [1966] 1 WLR 1485, 1489 (citing Greenwood v. Martins Bank Ltd. [1933] AC 51, 57).

86.  West Country was a case about whether a landlord has waived the tenant’s breach of tenancy terms by not complaining earlier.  It was held he has not.  Greenwood was a case about a husband who, knowing his wife has forged his cheques, failed to inform the bank of the forgery.  It was held he was under a duty to do so.

87.  The plaintiff relies on (among other cases) Bestkey Development Ltd. v. Incorporated Owners of Fine Mansion & Anor. [1999] 3 HKC 275.  That decision concerned a space which should be part of the plaintiff’s property.  It has been permitted by its predecessor-in-title (through inaction) to be used as the management office for a long time.  It was held the plaintiff was estopped from asserting its title.

88.  In this action, the work in relation to the communal water supply system (and the Block D1 water supply system) must have been extensive.  Information about it must have been widely known to the co-owners.  Mdm Chan is a practising architect with an assertive character.  She has signed documents on behalf of the then owners of Flat D2/16 and Flat D1/20 (which included the D1 roof) to apply for separate water meters for those units.  The plaintiff could properly regard that as an indication of consent to the installation work.  From 1996 to at least 2000, the plaintiff has been permitted practically unrestricted access to the Block D1 water supply system for the purpose of inspection and maintenance and repair.

89.  In these circumstances, I do not regard the facts of this action to bear any resemblance to those in West Country.  I rather agree with the plaintiff that the facts herein are more similar to those in Bestkey Development.  I also agree with the plaintiff that, insofar as it may be necessary to do so, reliance can properly be placed on the observations in Snell, para. 39-16.

90.  In addition, by signing the documents to apply for separate water meters and by using the Block water supply system since its installation in 1996, the defendants have obtained the benefit of being able to enjoy water supply exclusive to their respective units (and to pay for water only used by them).  In the circumstances set out above, it is proper to infer that the above benefit is conditional upon their consent to the way in which the Block D1 water supply system was installed.  Insofar as it may be necessary to rely on the rule that “where it is a condition of enjoying the benefit that a burden is assumed, the assignee cannot enjoy the benefit without discharging the burden”: Snell, para. 5-26 (citing Halsall v. Brizell [1957] Ch 169 as interpreted in Rhone v. Stephens [1994] 2 AC 310, 322), I find that this rule is applicable to the facts of this action.

91.  Proprietary estoppel can result from encouragement by conduct.  Where it so arises, s. 6, Cap. 219 has no application.  Hence, that provision cannot assist the defendants either: see para. 30 above.

92.  Accordingly, I find that the plaintiff has satisfied me as regards the part of its case relating to proprietary estoppel.

VII.  S. 40(1)(a), Cap. 344

93.  This provision reads:

“A member of a management committee and any other person authorized in that behalf by the management committee may, on reasonable notice to the owner or occupier thereof, enter a flat at any reasonable time for the purpose of -
(a)	inspecting, repairing, maintaining or renewing-
	(i)	any common parts in the flat; or
	(ii)	any other property in the flat the condition of which does or may affect adversely the common parts or other owners”
(emphasis supplied).

94.  The defendants contend that, even if the Block D1 water supply system is common facility (which I have found to be the case), the plaintiff still has to abide by the above provision.

95.  At the court’s invitation, the parties submitted their respective written submissions specifically on this aspect.

96.  I accept the plaintiff’s case that inspection and maintenance and repair work on the Block D1 water supply system was undertaken practically unchecked until about 2000.  Similar work on the pre-1994 communal water supply system has similarly been unchecked.  The part of the Block D1 water supply system which pass through the D1 roof is an area not actually occupied by the defendants (or anyone else).  In these circumstances, I accept the plaintiff’s primary contention that no notice is required.

97.  If however it was necessary to determine what “reasonable notice” and “reasonable time” should mean in the context of this action, I will exercise my discretion as follows as regards “reasonable notice”:

(a)	wall-in area:
	(1)	non-emergency work: (a) 7 days’ notice by posting a notice at a conspicuous location on the D1 roof and on a notice board at (or, where it has not already been put up, to be put up at) a conspicuous location near the management office (“written notice”) and (b) by telephoning the registered owner of the D1 roof (“oral notice”) (whichever is the earlier);
	(2)	emergency work: no notice is required;
(b)	outside wall-in area:
	(1)	non-emergency work estimated by the plaintiff to last for more than 7 days: 7 day’s written notice and oral notice (whichever is the earlier);
	(2)	non-emergency work estimated by the plaintiff to last for more than an hour but less than 7 days: 3 days’ written notice and oral notice (whichever is the earlier);
	(3)	non-emergency work (including preventive maintenance inspection) estimated by the plaintiff to last for 1 hour or less: no notice;
	(4)	emergency work: no notice.

The above is conditional upon the owner of the D1 roof providing the plaintiff with a telephone number for contact.  The owner of the D1 roof must give not less than 7 day’s written notice to the plaintiff if there is any change to the said telephone number.

98.  In relation to “reasonable time”, any work or manner of work which can be carried out at a time not in contravention of any laws prevailing at the time is regarded as work carried out at a “reasonable time”.

VIII.  Relief

99.  I will make an order in terms of para. (1) to (5), prayer for relief.

100.  The defendants argue that the nature and extent of the plaintiff’s right of way is uncertain and relief should be refused on that ground.  I disagree with that argument.

101.  In relation to the injunction orders sought, the defendants submit that there is no risk they will interfere with the Block D1 water supply system.  I also disagree with that submission.

102.  I do not find that the plaintiff has proven it has suffered any real loss.  There will therefore be an award for a nominal sum of HK$100 by way of damages.

IX.  Counterclaim

103.  As stated above, the subject-matter of the counterclaim is the storeroom.

104.  The plaintiff’s stance is that, as long as the defendants are able to satisfy the court that the storeroom has been conveyed to them, the plaintiff will not oppose the counterclaim.

105.  The defendants rely principally on the coloured plan attached to the assignment of the D1 roof dated 5 October 1967 as evidence that the storeroom formed part of the property conveyed.  The property conveyed was described in the assignment as follows:

“… The Vendor DID thereby assign unto the Purchase … ALL THAT one equal undivided 163rd part or share of and in ALL THAT the said piece or parcel of ground … INLAND LOT NO. 7736 …and buildings thereon known at the date thereof as SUMMIT COURT … the Vendor DID thereby assign unto the Purchaser ALL THAT the right to the exclusive use occupation and enjoyment of ALL THAT FLAT D-1 on the TWENTIETH FLOOR and PORTION D-1 of the MAIN ROOF and the ROOF thereof of the said SUMMIT COURT … which flat was shown and coloured Pink on the Floor Plan hereto … ”.

106.  Hence, the coloured part of the attached plan was intended merely to show the flat, that is, Flat D1/20.

107.  For this reason, I agree with the plaintiff that there is insufficient evidence to prove that the storeroom was conveyed to the defendants.

108.  The above conclusion is supported by the surrounding circumstances including:

(a)	the space described by the defence witness, Mdm Theresa Cheung, to be the storeroom appears to have a different location: see her testimony and exhibit “D2”;
(b)	the storeroom was dirty and there were old machine parts and metal louvres inside.  These indicate that the storeroom has never been occupied by anyone before.

109.   By virtue of the above matters, I will dismiss the counterclaim.

X.  Costs Order Nisi

110.  There is no apparent reason to depart from the usual rule that costs should follow the event.  There will accordingly be a costs order nisi pursuant to Ord 42 r 5B(6) that the costs of this action be paid by the defendants to the plaintiff to be taxed if not agreed.

HCA 2280/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2280 OF 2001

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D E C I S I O N

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1. The 1st and 2nd defendants issued a summons on 30 January 2002 to strike out this action on the ground that the action falls within the exclusive jurisdiction of the Lands Tribunal. At the hearing of the application, I inquired with Mr. Brian Wong, who appeared on behalf on the defendants, which provision or provisions in the Rules of the High Court he intended to rely on to bring this application, as a number of provisions were stated in the summons, including Order 33 rule 3. Mr. Wong informed me that he wished to ask the court to decide as a preliminary issue in the action, under Order 33 rule 3, whether the action should be struck out on the ground that it falls within the exclusive jurisdiction of the Lands Tribunal. There being no objection from Mr. C.Y. Li, who appeared for the plaintiff, and as I was satisfied it would be appropriate for the issue on jurisdiction to be decided as a preliminary issue, I allowed the application to proceed on that basis.

2. The background matters of this litigation, insofar as they are relevant to the preliminary issue, may be set out as follows.

Background matters

3. The incorporated owners of Summit Court in Tin Hau Temple Road, Hong Kong ("the building") sued as the plaintiff in this action in relation to the alleged common parts and facilities of the building. 20 water meters for the individual units of Block D1 were installed by the plaintiff at Portion D1 of the Main Roof as well as separate pipes for the supply of water. The 1st defendant, Full Surplus Investment Limited, became the registered owner of Portion D1 of the Main Roof of the building by an assignment dated 22 March 2000 made by the 2nd defendant Madam Chan Wing Mui Cordelia, and her sister Mrs. Simone Ng as assignors. The 2nd defendant and her sister had resigned as the directors of the 1st defendant within one month of the assignment. The plaintiff's case is that notwithstanding the assignment and the resignation, the 2nd defendant still owns and controls the 1st defendant. It is alleged that since March 2001, the 1st and 2nd defendants have wrongfully interfered with the water supply system to units of Block D1 of the building by disconnecting the water supply to certain units or have threatened to interfere with the water supply system.

4. It is the plaintiff's contention that the aforesaid water supply system are the common parts or facilities of the building by reason of the provisions of the Deed of Mutual Covenant dated 17 August 1966 ("the DMC") and the Building Management Ordinance, Cap. 344. Hence, the plaintiff should have the right of way over the Main Roof including Portion D1 for inspection, installation, repair and maintenance of the water supply system. It is further alleged that the defendants have acted in breach of the DMC and/or Cap. 344 by interfering with the common parts and facilities, trespassed on the common parts and facilities, and caused nuisance and annoyance to the owners of units in the building.

5. The plaintiff seeks declarations against the defendants that the water supply system are the common parts or facilities and that it has a right of way over Portion D1 for the purpose of discharging its duties in relation to the water supply system; injunctions to restrain the defendants from disconnecting or interfering with the water supply system and from obstructing or interfering with the plaintiff's access to the water supply system; and damages for breach of the DMC, Cap. 344 and/or trespass.

6. The defendants' case is that the area in Portion D1 of the Main Roof to which the water meters were installed is not a common area of the building and that the 1st defendant is entitled to revoke the consent or licence given to the plaintiff to install the meters as the consent of the predecessor of the 1st defendant was obtained by misrepresentation of the plaintiff that the area to which the meters were to be installed was a common area. The defendants counterclaim, inter alia, for a declaration that the 1st defendant does have exclusive possession of Portion D1 on the Main Roof.

7. It is not in dispute that the claims of the plaintiff and the aforesaid counterclaim bring the proceedings within the 10th Schedule of Cap. 344 so that these proceedings would come under the jurisdiction of the Lands Tribunal, by virtue of section 45(1) of Cap. 344 and section 8(5) of the Lands Tribunal Ordinance, Cap. 17. The question for determination is whether these proceedings would come within the exclusive jurisdiction of the Lands Tribunal or whether the High Court would have concurrent jurisdiction.

8. For completeness sake, I should mention that the plaintiff obtained an interlocutory injunction in the High Court on 23 May 2001 to restrain the defendants from turning off the water mains at Portion D1 on the Main Roof or otherwise interfering with the water supply system. The writ herein was issued in the High Court on 24 May 2001. On 1 June 2001, the interlocutory injunction was discharged upon the defendants' undertaking not to turn off or in any way interfere with the water supply system and to allow the plaintiff access to inspect and maintain the system. After the close of pleadings, on 29 November 2001 a Master made an order on the summons for directions for further and better particulars to be served by the defendants, for discovery and inspection of documents and exchange of witness statements. It was not until 25 January 2002 that the defendants sought leave to amend their Defence to raise for the first time that the High Court would have no jurisdiction to hear this action. After the defendants issued a summons to strike out this action for want of jurisdiction, the plaintiff took out a summons on 26 March 2002 to file and serve its Amended Reply out of time as it had not done so within the time ordered by the Master when the defendants were given leave to amend the Defence. That summons is also before me.

9. I turn to consider the question of jurisdiction. The relevant provisions in Cap. 344 and 17 do not contain any express provision that the Lands Tribunal is to have exclusive jurisdiction over the proceedings specified in the 10th Schedule to Cap. 344. What is in issue is whether, by necessary implication, the Lands Tribunal is to have such exclusive jurisdiction. There are a number of conflicting decisions in the Court of First Instance and the District Court on this issue, none of which are binding on me. In a recent decision of the Court of Appeal in The Incorporated Owners of Finance Building v. Bright Hill Management Consultants Company Limited, CACV No. 386 of 2000, 29 November 2001, Cheung J.A. noted six conflicting decisions of the Court of First Instance on the question of exclusive jurisdiction of the Lands Tribunal and stated that this conflict must await adjudication in an appropriate case in future (pages 6 and 7 of the judgment).

The conflicting decisions

10. It would be convenient to set out first what are the conflicting decisions, which have been cited to me exhaustively by Mr. Wong. In chronological order of the date of decision, they are as follows:

(1) Winbase Industrial Ltd. & Ors. v. Mightyton Property Management Ltd. & Anr., HCA No. 10232 of 1994, 25 October 1994, Mayo J.;

(2) Ngan Chor Ying & Anr. v. Year Trend Development Ltd. & Anr. [1995] 1 HKC 605, 13 January 1995, Findlay J.;

(3) Mass Transit Railway Corporation v. Lam Kai Fai & Ors., HCA No. 1796 of 1994, 21 July 1995, Yam J.;

(4) Incorporated Owners of Yuen Sun Mansion v. Luk Ngai Ling Irene & Anr. [1999] 1 HKC 410, 17 November 1998, Suffiad J.;

(5) Broadway-Nassau Investments Ltd. v. Lo Yiu Ho & Ors. [1999] HKCU 110, 18 January 1999, Recorder E. Chan, SC;

(6) Colliers Jardine Management Ltd. v. Chow Yuk Lan, HCA No. 16082 of 1998, 21 April 1999, Dep. J. Z.E. Li;

(7) The Incorporated Owners of Carado Garden v. Glory Home Development Ltd., HCA No. 13957 of 1996, 11 February 2000, Dep. J. Z.E. Li;

(8) The Incorporated Owners of Pokfulam Gardens & Anr. v. Metrogain Development Ltd., HCA No. 4075 of 1998, 9 March 2000, Burrell J.;

(9) Incorporated Owners of Million Fortune Industrial Centre v. Jikan Development Ltd. & Anr., HCA No. 14915 of 1998, 24 March 2000, Waung J; and

(10) Wong Hing Cheong & Anr. v. Wah E Investment Ltd. & Anr., DCCJ No. 13999 of 2000, 19 April 2001, Z.E. Li D.J.

11. In addition, Mr. Wong informed me that he knew of two other decisions in the District Court of Z.E. Li D.J. in which the view was taken that the Lands Tribunal would have exclusive jurisdiction. He also referred me to the decision of the Court of Appeal in Incorporated Owners of Man Hong Apartments v. Kwong Yuk Ching & Ors. [2001] 3 HKC 116 in which Mayo VP mentioned without comment at 118G that the District Court had dismissed proceedings originally commenced there as it was held by the court that it did not have jurisdiction and proceedings were later commenced in the Lands Tribunal.

12. In summary, the decisions in (1), (3), (6), (7) and (10) held that the Lands Tribunal would have exclusive jurisdiction in proceedings within the 10th Schedule of Cap. 344. The decisions in (2), (4), (5), (8) and (9) were to the contrary.

The statutory provisions

13. I start with the provisions of Cap. 344 and Cap. 17. I set out the relevant provisions for ease of reference.

Building Management Ordinance, Cap. 344

14. The long title of this Ordinance reads: "To facilitate the incorporation of owners of flats in buildings or groups of buildings, to provide for the management of buildings or groups of buildings and for matters incidental thereto or connected therewith." Part VIII is headed "Jurisdiction vested in Lands Tribunal". Section 45 is the only provision in this part and it is as follows:

"45. Jurisdiction of tribunal in relation to building management

(1) The tribunal [defined in section 2 to mean the Lands Tribunal] shall have jurisdiction to hear and determine any proceedings specified in the Tenth Schedule.

(2) No person other than a person to whom this section applies shall be competent to commence any proceedings referred to in subsection (1).

(3) Subject to the provisions of this Ordinance, nothing in this section or the Tenth Schedule shall be construed to vest in the tribunal any jurisdiction other than civil jurisdiction or any jurisdiction to make any order which would, if made, have the effect of rendering void, negativing or substantially varying in whole or in part any contractual or proprietory right enjoyed by any owner or occupier or otherwise referred to in the terms and provisions of an instrument which is registered in the Land Registry including a deed of mutual covenant (if any).

(4) This section applies to the following persons, namely -

(a) an owner;

(aa) the Authority [i.e. the Secretary for Home Affairs];

(b) a person referred to in section 3(1)(a) or (b) [i.e. a person managing the building in accordance with the DMC or a person authorized to convene a meeting of owners by the DMC];

(c) a management committee;

(d) a corporation;

(e) a manager within the meaning of Part VIA;

(f) an owners' committee within the meaning of that Part;

(g) a registered mortgagee;

(h) an administrator;

(i) with leave of the tribunal, the tenants' representative; or

(j) with leave of the tribunal, any other person specified in an instrument which is registered in the Land Registry including a deed of mutual covenant (if any).

(5) In this section and the Tenth Schedule, 'proprietory right' includes any such right express or implied whether specified in an easement, licence, permission or otherwise."

15. The 10th Schedule is headed "Hearing and determination of specified proceedings by tribunal" and it provides as follows:

"1. Proceedings relating to the interpretation and enforcement of the provisions of this Ordinance.

2. Proceedings relating to the interpretation and enforcement of the terms and provisions of a deed of mutual covenant, including such terms or provisions impliedly incorporated into a deed of mutual covenant under Part VIA.

3. Proceedings relating to the use, occupation, enjoyment, possession or ownership of the common parts or any other part of a building in which the owners have a common interest.

4. Proceedings relating to the calculation or apportionment of -

(a) any sums payable or purported to be payable under a deed of mutual covenant (if any);

(b) the funds and contributions referred to in section 20 and 21;

(c) any management expenses or charges (howsoever named);

(d) any other outgoings, payments, debts or liabilities due or liable under this Ordinance or in accordance with the terms and provisions of an instrument which is registered in the Land Registry including a deed of mutual covenant (if any).

5. Proceedings relating to any question of law concerning the powers and duties of -

(a) a corporation;

(b) a management committee, and of the chairman, secretary and treasurer thereof;

(c) a manager within the meaning of section 34D(1);

(d) an owners' committee within the meaning of that section;

(e) the tenants' representative,

including such powers and duties (if any) of a financial, pecuniary or fiduciary nature.

6. Proceedings relating to any question of law concerning ownership, occupation or possession of the whole or any part of the building, including ownership of an undivided share in a building or in land on which there is a building.

7. Without prejudice to paragraph 6 and subject to section 45(3), proceedings relating to any question of law concerning the extent and applicability or otherwise of any contractual or proprietary right enjoyed by owners and occupiers or otherwise referred to in the terms and provisions of an instrument which is registered in the Land Registry including a deed of mutual covenant (if any).

8. Proceedings relating to any question of law concerning any breach or alleged breach of any covenant, term or condition specified in an instrument which is registered in the Land Registry including a deed of mutual covenant (if any).

9. Proceedings relating to the enforcement of any contractual or proprietory right referred to in paragraph 7 or any covenant, term or condition referred to in paragraph 8, as the case may be, whether by way of specific performance, injunction, declaration, damages or otherwise."

16. The proceedings I am presently concerned with would come under the jurisdiction of the Lands Tribunal by virtue of any of the paragraphs in 1, 2, 3, 6, 7, 8 and 9 of the 10th Schedule. I should mention that section 2 and the 1st Schedule provide for a definition of "common parts"; section 16 provides that the rights, powers, privileges and duties of the owners in relation to the common parts of the building shall be exercised and performed by, and the liabilities of the owners in relation thereto, shall be enforceable against, the corporation to the exclusion of the owners; section 34I provides that no person may convert any part of the common parts to his own use unless such conversion is approved by a resolution of the owners' committee and no person may use the common parts in a manner as unreasonably to interfere with the use and enjoyment of the common parts by any other owner or occupier or to cause a nuisance or hazard to any person lawfully in the building.

Lands Tribunal Ordinance, Cap. 17

17. The relevant provisions may be set out as follows:

"8. Jurisdiction of the Tribunal

(5) The Tribunal shall have such other jurisdiction as may be vested in it under any Ordinance including any Ordinance specified in the Schedule [Cap. 344 is one of the ordinances specified in the Schedule].

(9) In the exercise of its jurisdiction, the Tribunal shall have the same jurisdiction to grant remedies and reliefs, equitable or legal, as the Court of First Instance."

"8A. Transfer of proceedings to the Court of First Instance or the District Court

(1) The Tribunal may transfer to the Court of First Instance or the District Court any proceedings instituted before the Tribunal which are within the jurisdiction of the Court of First Instance or the District Court, but which -

(a) are not within the jurisdiction of the Tribunal; or

(b) the Tribunal considers should in the interests of justice be so transferred."

"11. Decisions of Tribunal final

(1) Subject to subsection (2) and section 11A, the decision of the Tribunal in determining -

(a) the amount of compensation payable by the Government in the case of any claim submitted to it under section 8(1) or (2); or

(b) any appeal submitted to it under section 8(4),

shall be the final determination thereof.

(2) Subject to the provisions of any Ordinance relating to appeals from the Tribunal, any party to proceedings before the Tribunal may appeal to the Court of Appeal against a determination or order of the Tribunal on the ground that such determination or order is erroneous in point of law."

"11A. Review of decision

(1) The Tribunal may, within 1 month from the date of any decision by it, decide to review that decision and, on such grounds as it may think sufficient, may set aside, reverse, vary or confirm it."

"12. Costs

(1) Subject to the provisions of the Ordinance giving the Tribunal jurisdiction in any matter, the Tribunal may award costs to and against any party to any proceedings and may order that those costs be taxed on the basis of any one of the Scales of Costs set out in the First Schedule to the District Court Civil Procedure (Costs) Rules (Cap. 336 sub. leg.) and the Schedules to Order 62 of the Rules of the High Court (Cap. 4 sub. leg.)."

Presumption regarding jurisdiction

18. In construing the statutory provisions, I take as the primary starting point the presumption against ousting established jurisdictions, because that would be the effect of holding that exclusive jurisdiction in all of the proceedings specified in the 10th Schedule of Cap. 344 should be vested in the Lands Tribunal. I reject Mr. Wong's submission there is no ouster of jurisdiction of the High Court, I cannot regard this as merely a division of labour of the courts and the more efficient allocation of resources, as contended by Mr. Wong.

19. The presumption and the rationale for it are stated in Maxwell on the Interpretation of Statutes, 12th ed., page 153 as follows:

"A strong leaning exists against a statute so as to oust or restrict the jurisdiction of the superior courts... 'the well-known rule that a statute should not be construed as taking away the jurisdiction of the courts in the absence of clear and unambiguous language to that effect' (Commissioners of Customs and Excise v. Cure & Deeley, Ltd. [1962] 1 Q.B. 340 per Sachs J. at 357) now rests on a reluctance to disturb the established state of the law or to deny to the subject access to the seat of justice."

20. This presumption was adopted as the starting point by Findlay J. in Ngan Chor Ying, supra. at 607G to H and 608H; apparently by Burrell J. in Incorporated Owners of Pokfulam Gardens, supra. at page 3 of the judgment; and by Waung J. in Incorporated Owners of Million Fortune Industrial Centre, supra. at page 2 of the judgment. In my reading of the decisions that went the other way, none of the judges had stated that the presumption was inapplicable. It would appear to be the case that notwithstanding the presumption against the ouster of jurisdiction of a superior court, the court was satisfied in those decisions that there was clear legislative intent that exclusive jurisdiction should be vested in the Lands Tribunal (see for instance, Winbase Industrial Ltd., supra. at pages 6 and 7).

21. I turn to examine those matters that could be regarded as clear indication of such a legislative intent. It would be appropriate to begin with Winbase Industrial Ltd., the first decision on this issue after the statutory provisions came into effect on 1 June 1994.

The decision of Winbase Industrial Ltd.

22. In coming to the view that the proceedings specified in the 10th Schedule should be vested exclusively in the Lands Tribunal, the reasoning of Mayo J. (as he then was) was twofold. Firstly, he rejected the submission of the plaintiffs that the range of proceedings referred to in the 10th Schedule was so wide that it must be the case that the jurisdiction of the Lands Tribunal should be concurrent with the High Court. I will deal with this ground in the subsequent part of my decision. Secondly, he held that the fact that Cap. 344 does not contain an express exclusive jurisdiction provision, unlike for instance the Labour Tribunal Ordinance, Cap. 25, was not significant and in this connection he would adopt the reasoning of Trainor J. in Kong Hoa (Hong Kong) Ltd. v. Lau Hung Kwan [1976] HKLR 62.

23. When one looks at the reasoning of Trainor J., he would appear to have regarded two matters as significant in interpreting the legislative intent. The first matter was section 68(6) of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7, which provides that the District Court shall have the jurisdiction conferred upon it by Part II of Cap. 7, notwithstanding anything in the District Court Ordinance, Cap. 336. Of greater importance would appear to be the second matter, being section 68(7) of Cap. 7, which, at that time provided as follows: "Any determination or order of the Court [District Court] under this Part [Part II] shall be final and no appeal shall lie therefrom". Trainor J. held that as the legislature had declared in section 68(7) that a decision of the District Court in proceedings of this kind should be final and no appeal would lie from it, then the legislative intent became clear and there was meant to be a court of first and final jurisdiction. He reasoned that if the Supreme Court were to have concurrent jurisdiction, this would result in an anomaly, namely, the existence of one court with first and final jurisdiction in cases within Part II, and another court with a right to appeal up to the Privy Council (at pages 65 to 66).

24. I should mention that section 68(7) of Cap. 7 has since been amended and it was amended by the time Winbase Industrial Ltd. was decided. The section as amended reads as follows: "Subject to section 68A, any determination or order, other than a conviction, of the court [District Court] or the Tribunal [Lands Tribunal] under this Part shall be final." Section 68A provides for an appeal to the Court of Appeal on the ground that the determination or order is erroneous in point of law, similar to section 11 of Cap. 17 that I have set out earlier.

25. In the case of the Mass Transit Railway Corporation, supra. at page 4, Yam J. stated that it was the reasoning of both Trainor J. and Mayo J. that if the High Court had concurrent jurisdiction, this would result in "the existence of one court with right of appeal restricted to erroneous point of law and another with a general right of appeal." This does not appear to be the reasoning of Trainor J. as he was concerned with section 68(7) of Cap. 7 before it was amended. And in adopting the reasoning of Trainor J., Mayo J. made no mention of the fact that the statutory provisions do not provide for a court with first and final jurisdiction in the Lands Tribunal in respect of proceedings within the 10th Schedule of Cap. 344 but rather provide for a restricted right of appeal to the Court of Appeal on an erroneous point of law.

26. In my respectful opinion, the reasoning of Trainor J. as adopted in Winbase Industrial Ltd. that there was clear legislative intent in ousting the jurisdiction of the High Court loses its force when the Lands Tribunal is not established as a court of first and final jurisdiction in those kinds of proceedings. For my part, I see no difficulty with providing for different rights of appeal to the Court of Appeal from different tribunals. After all, this is what happens if proceedings commenced in the Lands Tribunal are transferred to the Court of First Instance or the District Court in the interests of justice pursuant to section 8A(1)(b) of Cap. 17. In this instance, there would be a general right of appeal to the Court of Appeal. Besides, the Lands Tribunal has power to review its decision under section 11A of Cap. 17, and neither the High Court nor the District Court has power to review its decision.

27. For the above reason, I would respectfully differ from the opinion in Winbase Industrial Ltd. In my view, the provision of a restricted right of appeal from the Lands Tribunal is insufficiently clear for the jurisdiction of the High Court to be ousted.

The apparent width of the 10th Schedule

28. In the cases of Winbase Industrial Ltd. and the Mass Transit Railway Corporation, the court was concerned with the apparent width of the 10th Schedule of Cap. 344 and attempted to narrow its scope in holding that the proceedings in that schedule would fall within the exclusive jurisdiction of the Lands Tribunal. In Winbase Industrial Ltd., it was held that the proceedings in that schedule should be "limited to matters coming within the ambit of the Building Management Ordinance" (page 6). In the latter case, it was held that section 45 and the 10th Schedule have vested "exclusive jurisdiction in the Lands Tribunal in respect of, inter alia, the interpretation and enforcement of a registered instrument and exclusive jurisdiction in the High Court in respect of rectification and validity of a registered instrument" (page 4).

29. For my part, I would have difficulty in narrowing certain paragraphs of the 10th Schedule to "matters within the ambit of the Building Management Ordinance", having regard to the language of the provisions. Section 45(4) provides for proceedings in the 10th Schedule to be commenced, inter alia, by an owner of an undivided share in the land. Paragraph 6 of the schedule provides for proceedings "relating to any question of law concerning ownership, occupation or possession of the whole or any part of the building, including ownership of an undivided share in a building or in land on which there is a building". Likewise, paragraphs 7, 8 and 9 of the schedule are couched in very wide terms.

30. Even if the jurisdiction conferred in the schedule in respect of registered instruments is to be narrowed to the interpretation and enforcement of such instruments as held in the Mass Transit Railway Corporation case, the jurisdiction conferred is still very wide. Besides, this would have no bearing on paragraph 6 of the schedule, which is not in relation to any registered instrument. As stated in Ngan Chor Ying, supra. at 609D, the schedule is very widely drafted and it "includes matters that concern rights and obligations that arise quite independently of [Cap. 344], matters that frequently come before the High Court for determination".

31. This is not a case in which a right or remedy does not exist at common law and is created for the first time in a statute which also lays down a method of pursuing such right in a particular tribunal. If all of the proceedings specified in the 10th Schedule could rightly be regarded as proceedings in respect of rights and remedies created by Cap. 344, one would have no quarrel with the view that exclusive jurisdiction in such proceedings should be vested in the Lands Tribunal, as there would not have been any ouster of jurisdiction of the High Court (see Ngan Chor Ying, supra. at 608F to H). This, however, is not the case.

32. I would respectfully agree with the views of Findlay J. in Ngan Chor Ying that the width of the 10th Schedule points to the conclusion that the Lands Tribunal is not meant to have exclusive jurisdiction of the proceedings in the schedule. Other pointers against conferring exclusive jurisdiction are mentioned in Ngan Chor Ying, supra. at 609F to 610D, I also agree with the views there.

Other indications of legislative intent

33. Mr. Wong submitted for the defendants there are other indications pointing to a legislative intent that the Lands Tribunal should have exclusive jurisdiction. He referred to section 8(9) of Cap. 17, which provides that in the exercise of its jurisdiction, the Lands Tribunal is to have the same jurisdiction to grant remedies and reliefs as the Court of First Instance. This enlargement of powers of the Tribunal should be regarded as a significant indication of exclusive jurisdiction, as appeared from the reasoning of Trainor J. in Kong Hoa (Hong Kong) Ltd., supra. at 66. I am unable to accept this. It does not follow that the jurisdiction of the High Court is to be abrogated merely because the legislature confers on the Lands Tribunal power to grant remedies and reliefs as in the High Court.

34. Next, Mr. Wong referred to the power of the Lands Tribunal to transfer proceedings in appropriate cases to the High Court or the District Court, under section 8A of Cap. 17. He submitted that as there is no parallel provision in the High Court Ordinance, Cap. 4, the High Court would have no power to transfer proceedings to the Lands Tribunal but to dismiss proceedings wrongly brought in the High Court and this is another indication that the Lands Tribunal should have exclusive jurisdiction.

35. In Liu Ying-wah & Ors. v. Great Mace Trading Co. Ltd. & Anr. [1980] HKLR 881, it was argued before Mr. Commissioner Litton, QC (as he then was) that the Registrar of the High Court had no jurisdiction to order an action which was within Part II of Cap. 7 to be transferred to the District Court and that the only order he could have made was to rule that the action be dismissed for want of jurisdiction, relying on Kong Hoa (Hong Kong) Ltd. Whilst the Commissioner held that the High Court would have no jurisdiction to hear the action, he rejected the argument that the order of transfer was not within the jurisdiction of the Registrar. This was because "the High Court is a court of unlimited jurisdiction, to the extent that it has an inherent jurisdiction to regulate its own procedures, and it is a strong thing to say that a statute has had the effect of depriving it of jurisdiction in a particular matter". Although Cap. 7 has made it clear that the High Court has no jurisdiction to hear the case, "it does not thereby follow that it lacks jurisdiction in every other respect" (at 883). He also made reference to the provision then in section 40 of the District Court Ordinance, Cap. 336 (this has been amended and the new provision is in section 43 of Cap. 336), which provided that where an action commenced in the Supreme Court was within the jurisdiction of the District Court, the Supreme Court may order the transfer of such action to the District Court.

36. Mr. Wong has sought to distinguish the above decision on the basis that there is no provision equivalent to section 43 of Cap. 336 or Order 25 rule 3 of the Rules of the High Court, to provide for the transfer of proceedings from the High Court to the Lands Tribunal. I do not accept this as a valid distinguishing factor as it was held by the Commissioner in the earlier part of his judgment that there is inherent jurisdiction in the High Court to make an order of transfer to regulate its own procedures. I reject the submission that the High Court would have no jurisdiction to transfer proceedings to the Lands Tribunal in an appropriate case and the contention that the lack of jurisdiction of the High Court to do so would be a factor indicating exclusive jurisdiction should be vested in the Lands Tribunal.

37. Mr. Wong has also relied on the "alternative approach" of Dep. J. Z.E. Li in paragraphs 16 to 18 of his judgment in Colliers Jardine Management Ltd., supra. in which it was held that assuming the Court of First Instance would have concurrent jurisdiction with the Lands Tribunal, it would be an abuse of process to bring proceedings in the High Court because the legislature has set up the Tribunal as a specialised tribunal to provide for a cheaper mode of litigation and a more efficient tribunal to determine certain kinds of proceedings. The judge held that in this situation, it would be within the inherent jurisdiction of the High Court to stay the proceedings in the High Court for abuse of process. With respect to the judge, I am unable to agree that it would be an abuse of process to bring proceedings in the High Court where such proceedings are within the jurisdiction of the court.

38. Lastly, Mr. Wong referred me to the decision of the Court of Appeal in The Incorporated Owners of Finance Building, supra. at pages 13 to 14 in support of his contention that the judgment of Cheung J.A. has cast doubt on the reasoning in Ngan Chor Ying, supra. at 609F to H that the Lands Tribunal "does not have comprehensive jurisdiction over all persons and to make all lawful orders", in view of section 45(3) of Cap. 344. I am unable to read the judgment of Cheung J.A. in that light. The Court of Appeal was only concerned with whether section 45(3) should be interpreted in a manner to give jurisdiction to the Court of First Instance or the Lands Tribunal to vacate a charge wrongly registered against an owner's property. It was held that an application to vacate a charging order would come within paragraphs 1 and 2 in the 10th Schedule, that the Lands Tribunal was not precluded from granting the relief sought by section 45(3) of Cap. 344, nor was this outside the jurisdiction of the Tribunal by virtue of section 8(9) of Cap. 17 (see also pages 16 and 24 of the judgment). It does not appear on a fair reading that that part of the judgment relied on by Mr. Wong is meant to have a wider implication and Cheung J.A. has indicated at the outset that the Court of Appeal was not concerned with the issue if the Lands Tribunal was to have exclusive jurisdiction.

Conclusion and orders

39. For the above reasons, I have come to the view that there is lack of clear and unambiguous language in the statutory provisions to abrogate the jurisdiction of the High Court and I decide the preliminary issue in favour of the plaintiff. I hold that the Lands Tribunal does not have exclusive jurisdiction in these proceedings. I make an order nisi that the plaintiff is to have the costs of that application in any event, to be taxed if not agreed.

40. On the plaintiff's summons for time to file and serve an Amended Reply and Defence to Counterclaim, I grant leave to the plaintiff to do so within 7 days of the handing down of my decision and make an order nisi that the costs of that application be to the defendants in any event.

Representation:

Mr Li Chau Yuen, instructed by Messrs Johnson Stokes & Master, for the plaintiff.

Mr Brian C W Wong, instructed by Messrs Weir & Associates, for the defendants.