THE INCORPORATED OWNERS OF WAH CHUN INDUSTRIAL CENTRE FOR AND ON BEHALF OF ITSELF AND ALL OWNERS OF WAH CHUN INDUSTRIAL CENTRE, NO. 54 TAI CHUNG ROAD, TSUEN WAN, NEW TERRITORIES, EXCEPT THE DEFENDANT v. COCA INVESTMENT COMPANY LTD

HCA 2064/2023

[2024] HKCFI 3240

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2064 OF 2023

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BETWEEN

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REASONS FOR DECISION (Leave Application) AND
DECISION (Variation Application)

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1.   Introduction

1.1  By a decision handed down on 20 June 2024 (“Decision”), I acceded to the Plaintiff’s[1] Injunction Summons in part, allowed the Plaintiff’s Amendment Summons, and made an order on the Defendant’s Transfer Summons to transfer the present proceedings to the District Court (“Transfer Order”). In respect of the Amendment Summons, I made a costs order nisi that the costs be paid by the Plaintiff to the Defendant to be summarily assessed (“Nisi Order”).

1.2  The Plaintiff now seeks leave to appeal against the Transfer Order (“Leave Application”) and a variation of the Nisi Order (“Variation Application”). In respect of the latter, the Plaintiff seeks an order that the Nisi Order should be varied to “costs of and occasioned by the amendment to the Defendant whilst the costs of the hearing before court to be to the Plaintiff”.

1.3  I have considered the written submissions lodged by Ms Carol Wong for the Plaintiff and Mr Justin Ismail[2] for the Defendant.

1.4  On 4 November 2024, I dismissed the Leave Application and indicated to the parties that I would provide my reasons on 12 November 2024. I was informed by the parties that there would be a hearing before Registrar S Kwang on 8 November 2024 and my decision on the Leave Application would assist the parties and the learned Registrar on the conduct of that hearing. I now provide my reasons, in addition to my decision on the Variation Application.

2.  The Leave Application

(i) Introduction

2.1  It is perhaps unsurprising that the Plaintiff has decided to pursue the Leave Application. As set out at Decision §§5.6-5.8, I commented that (1) disputes between co-owners of a building often generate very entrenched positions and (2) the positions adopted by the parties did not appear to me to be entirely reasonable. I also noted at Decision §5.8 that the Plaintiff was adamant that these proceedings should remain in the Court of First Instance.

2.2  At Decision Section 3, I set out the procedural history leading to the issuance of the Transfer Summons. It was pointed out that:

(1) Despite the Plaintiff having obtained the Interim-Interim Injunction in December 2023, no Statement of Claim had been filed before the hearing on 7 March 2024;

(2) At the hearing on 7 March 2024, it became apparent that there might be an issue (which was not raised by the parties or spotted by the court before that hearing) as to whether the present action fell within the jurisdiction of the District Court and that was relevant to the position then taken by the Defendant, which was for an order for speedy trial;

(3) I therefore directed the Plaintiff to file a Statement of Claim on or before 14 March 2024, the purpose of which was to assess whether the Plaintiff’s claim fell within the District Court;

(4) Instead of filing a Statement of Claim, on 14 March 2024, the Plaintiff took out the Amendment Summons to amend the Writ and also sought an extension of time of file the draft Statement of Claim (“Draft SOC”) annexed to the Amendment Summons; and

(5) No doubt having had sight of and considered the Draft SOC, the Defendant took out the Transfer Summons on 18 March 2024.

(ii) The proposed appeal

2.3  I set out my reasons for making the Transfer Order at Decision Section 6. In the proposed appeal, Ms Wong does not challenge my conclusion at §6.7 that the present case is not of such importance or complexity that it should remain in the Court of First Instance.

2.4  As set out at Decision Section 6, the only basis relied on by Ms Wong to resist a transfer to the District Court was that the Plaintiff’s claim for mesne profits was over HK$ 3 million. The table set out at Decision §6.2 was taken from Ms Wong’s Skeleton Submissions dated 18 March 2024 §14.

2.5  I had set out the approach adopted at Decision §§6.3 and 6.4. As I understand Ms Wong, it is not said that I had erred in my understanding on the proper approach to be adopted, namely a plaintiff should be entitled to frame his case in the manner that he wishes and his case on quantum ought to be viewed at its highest when determining the proper jurisdiction where the case should be brought. However, the foregoing was subject to the qualification of absence of abuse and the court had on previous occasions carried out an evaluation of the quantification advanced by a plaintiff, bearing in mind the requirement to err on the generous side.

2.6  As set out in Ms Wong’s Written Submissions dated 25 July 2024 lodged for the Leave Application, the proposed appeal is directed at Decision §6.4, namely I had erred in:

(1) Failing to take into account the absence of valuation or other evidence (“Ground 1”);

(2) Failing to take into account the continuing and on-going occupation of the Defendant of the CPs which are not subject to the interlocutory injunction (“Ground 2”); and

(3) Whilst holding that the Plaintiff’s claim for mistaken payment fell within the jurisdiction limit of section 37 of the DCO, failing to recognize the existence of another independent cause of action, namely a contractual claim (“Ground 3”).

2.7  In relation to Ground 3, it is said that I fell into error by conflating the claim for mistaken payment with the contractual claim.

(iii) The applicable principles

2.8  There is no dispute between counsel on the applicable principles:

(1) The applicant for leave to appeal must satisfy the court that (a) the proposed appeal has a reasonable prospect of success or (b) there is some other reason in the interests of justice why the appeal should be heard. Ms Wong does not rely on the latter ground; and

(2) As the Transfer Order is a case management decision, the Plaintiff faces a very high hurdle and must show that (a) I had gone clearly wrong and the Transfer Order would clearly involve injustice or an inability for the trial court to carry out its task, (b) I had erred in principle or (c) the Transfer Order is irrational having regard to the issues that have to be resolved: Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 §31.

(iv) Analysis

2.9  I am unable to accept that Ground 1 has a reasonable prospect of success:

(1) As acknowledged by Ms Wong at the hearing on 20 March 2024[3], I had at the hearing on 7 March 2024 sought clarification from her as to whether it was necessary for the Plaintiff to file evidence in order to satisfy the court that the claim would exceed HK$ 3 million. The position then taken by Ms Wong was that, based on the authorities, the answer was in the negative;

(2) In my view, it is not reasonably arguable that I had erred in not taking into account the absence of valuation evidence or other evidence which the Plaintiff had indicated was not required; and

(3) Further, and only for the sake of completeness, Ms Wong suggests that the present case is in the pleading stage and the Plaintiff has no obligation to prove its case with evidence at this stage. I am unable to accept that this is a correct submission. Were Ms Wong correct, any consideration of transfer can only be taken after a party has, in her words, “[completed] the discovery and witness statement”. In any event, there is no suggestion that any such valuation evidence or other evidence would have the effect of materially changing the figures advanced in Ms Wong’s own table which was reproduced at Decision §6.2.

2.10  Grounds 2 and 3 may conveniently be dealt with together, as both are concerned with the issue of quantification of the Plaintiff’s claim:

(1) At Decision §§2.5-2.9, I had set out the relevant factual background. It has not been suggested that those factual findings are incorrect. In particular, I pointed out that (a) the CPs were leased by the Defendant to the Plaintiff from 2006 to 31 March 2017, and (b) since the expiry of the tenancy agreement, the Plaintiff had various degrees of access to some of the CPs;

(2) The Plaintiff’s monetary claim is pleaded at Draft SOC §58. Draft SOC §58 (a) pleads a claim for mistaken payment of rent and Draft SOC §58(b) pleads a claim for damages for the Defendant’s wrongful occupation of the CPs;

(3) At Decision §6.5, I set out my views that the Plaintiff’s claim for mistaken payment was caught by jurisdictional limit set out at section 37 of the DCO (against which there is no appeal) and accepted Mr Suen’s submission that Ms Wong’s quantification did not take into account the fact that the Plaintiff had various degrees of access to the CPs for divers periods (and as a corollary the Defendant was not in occupation of those CPs);

(4) Returning to Ms Wong’s table reproduced at Decision §6.2, I had accepted Mr Suen’s submission that the Defendant was not in occupation during the currency of the tenancy agreements for the periods between December 2011 to March 2017 and the proper basis for the Plaintiff’s claim during that period would be a claim for mistaken payment. That would already result in a deduction of HK$702,000 and HK$545,000 (ie HK$1,247,000)[4] from Ms Wong’s quantification of HK$3,170,600 (plus ongoing). I therefore formed the view that the foregoing, plus further deductions for the various degrees of access to the CPs for divers period, would render the Plaintiff’s claim for mesne profits within the jurisdiction of the District Court;

(5) In relation to the period after the termination of the tenancy agreements, the varying degree of access would entail a further deduction of approximately $800,000 (argued at the hearing on 20 March 2024 and reproduced at Mr Ismail’s Written Submissions dated 8 August 2024). I do not understand Ms Wong to have disputed with the quantification, but she says that the Defendant’s wrongful assertion of right over the CPs, despite not being in occupation, would entitle the Plaintiff to claim mesne profits (Ms Wong’s Reply Submissions dated 12 August 2024 §4);

(6) No authority has been cited by Ms Wong as to why (1) the Plaintiff is entitled to claim mesne profits during currency of the tenancy agreements when the Defendant was not in occupation of the CPs and (2) the Plaintiff is entitled to claim a sum equivalent to a complete deprivation of access after the expiry of the tenancy agreement when, as found by me, the Plaintiff had access to some of the CPs;

(7) In relation to the first point of the preceding subparagraph, it is the Plaintiff’s own pleaded case at Draft SOC §58(b) that the claim is based on wrongful occupation. In relation to the latter point, according to Ms Wong’s table reproduced at Decision §6.2, it was acknowledged that, if by the injunction the Plaintiff were granted access to some of the CPs, no mesne profit would be claimed for those CPs (yet the Defendant is plainly still asserting the rights over the CPs);

(8) For the above reasons, I do not regard Grounds 2 and 3 have a reasonable prospect of success.

(v) Overarching observations

2.11  In the Leave Application, Ms Wong contends that the Transfer Order involves an injustice and an inability for the trial court to carry out its task. I find that submission difficult to follow.

2.12  Even disregarding the deductions to be made for the period subsequent to the expiry of the tenancy agreements, the quantification of the Plaintiff’s claim as at March 2024 is [HK$3,170,600[5] – HK$1,247,000 =] HK$1,923,600. Since the Interim-Interim Injunction, the Plaintiff has had access to 2 of the 4 CPs. According to Ms Wong’s table, the monthly claim is therefore [HK$22,900 / 2 =] HK$11,450. It would therefore take [(HK$3,000,000 – HK$1,923,600) / HK$11,450/month =] 94 months from March 2024 for the ongoing claim to take the Plaintiff’s claim beyond the jurisdictional limit of HK$3,000,000. The period would even be longer were the access to the CPs after the expiry of the tenancy agreement taken into account.

2.13  The Transfer Order does not deprive the Plaintiff of any of the matters suggested by Ms Wong. The Plaintiff is perfectly entitled to prepare its case after the present action is transferred to the District Court and it cannot be suggested any procedural tools to assist the preparation of the Plaintiff’s case are not available in the District Court. When thought justified, the Plaintiff is perfectly entitled to apply to transfer to the proceedings to back to the Court of First Instance pursuant to section 42 of the DCO.

2.14  I am unable to accept that it is reasonably arguable that a correct exercise of the case management discretion is to allow the present proceedings to remain in the Court of First Instance when it is far from clear at this stage that the Plaintiff’s claim does not fall within the jurisdiction of the District Court. One has to bear in mind that section 43(1) of the DCO that a transfer order may be made if it appears to the Court of First Instance that a claim is likely to be within the jurisdiction of the District Court.

2.15  In my view, the proposed appeal does not meet the very high hurdle that has to be met by the Plaintiff.

2.16  It is for the above reasons I dismissed the Leave Application. I also make a costs order nisi that the Plaintiff is to pay to the Defendant the costs of the Leave Application to be summarily assessed. The Defendant is to lodge and serve its Statement of Costs within 3 days hereof and the Plaintiff its Statement of Objection within 3 days thereafter. I will thereafter conduct the summary assessment on the papers.

3. Variation Application

3.1  On any view, the costs at stake cannot be said to be substantial. The Amendment Summons only took up very little time at the hearing although it has to be said that the Defendant did object to part of the amendments which I had stated ought to be litigated on another occasion (Decision §4.7).

3.2  However, as set out at Decision §4.5, the objection raised by the Defendant was that some of the claims set out at draft Statement of Claim were time-barred. I think Ms Wong acknowledges (in part) the correctness of that opposition, as Ms Wong’s table reproduced at Decision §6.2 does not advance part of the claims in Draft SOC which were pleaded to have accrued in 1991. I accept Mr Ismail’s submissions that that objection was relevant to my deliberation in the Transfer Summons.

3.3  I take into account (1) the Amendment Summons was only an application to amend the Writ, (2) the Defendant had at the time of the Amendment Summons not yet filed a defence, (3) the Amendment Summons included an application for an extension of time which was an application for indulgence, (4) the Defendant’s objection made against the Draft SOC was probably not justified as no leave was required (Decision §4.7) but (5) the objection was relevant to the arguments ventilated in the Transfer Summons, I will vary the Nisi Order to “no order as to costs is made on the Amendment Summons”.

3.4  I note that the Defendant had sought to dispose of the Variation Application by consent by varying the Nisi Order to “costs in the cause”.

3.5  In the exercise of my discretion, I make an order nisi that there be no order as to costs on the Variation Application.

Ms Carol Wong, instructed by Li & Partners, for the Plaintiff

Mr Justin Ismail, instructed by Deacons, for the Defendant

HCA 2064/2023

[2024] HKCFI 1617

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2064 OF 2023

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D E C I S I O N

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1.  Introduction

1.1  This is my decision on the following applications:

(1)  The Plaintiffs’ application by their summons dated 22 December 2023 for interlocutory injunction (“Injunction Summons”);

(2)  The Plaintiffs’ application by their summons dated 14 March 2024 for leave to amend the generally-indorsed writ dated 20 December 2024 (“Writ”) and for an extension of time to file and serve a Statement of Claim (“Amendment Summons”);

(3)  The Defendant’s application by their summons dated 18 March 2024 for this action to be transferred to either the District Court or the Lands Tribunal (“Transfer Summons”).

1.2  At the hearings on 7 and 20 March 2024, the Plaintiffs were represented by Ms Carol Wong and the Defendant by Mr Jenkin Suen SC (leading Mr Justin Ismail).

2.  Background

2.1  The 1^st Plaintiff is the Incorporated Owners of Wah Chun Industrial Centre (“Building”) and the 2^nd Plaintiff the registered owner of Unit 2 on 7^th Floor of the Building.

2.2  The Defendant is a wholly-owned subsidiary of Chinachem Properties Holding Company Limited and was the developer of the Building. It is, and was at all material times, the registered owner of car park nos 3, 4, 5, and 6 on the Ground Floor (respectively “CP3”, “CP4”, “CP5” and “CP6” and collectively “CPs”). The CPs are the subject matters of the present dispute between the parties.

2.3  The Building is a 23-storey industrial building. The Ground Floor is essentially a carpark and the vehicular access to the Building. For ease of understanding, the Ground Floor Plan of the Building is annexed hereto as Attachment 1 (“G/F Plan”). It may be seen from the G/F Plan that access to the upper floors (apart from stairs) is provided by 3 cargo lifts and 1 passenger lift. Right in front of the 3 cargo lifts is an elevated Loading and Unloading Platform.

2.4  CP4, CP5 and CP6 are located right in front and across the entire width of an elevated Loading and Unloading Platform (about 3 feet from the ground) and CP3 in front of an opening for occupants or visitors of the Building to pass through and access the elevated Loading and Unloading Platform via a short flight of stairs. Although not shown on the G/F Plan, it is common ground that there is a drainage manhole within the area of CP3.

2.5  The occupation permit of the Building was issued on 18 October 1988 and the Building is subject to a Deed of Mutual Covenant dated 25 October 1988.

2.6  Since at least 2006 up to 31 March 2017, the CPs were leased by Defendant to the 1^st Plaintiff, and the 1^st Plaintiff, in turn, would receive income by charging users a parking fee for the use of the CPs for loading and unloading goods.

2.7  In early 2017, the Defendant approached the 1^st Plaintiff in respect of the renewal of the tenancy of the CPs (at an increased rent) which was then due to expire on 31 March 2017. On the 1^st Plaintiff’s part, there were at least two considerations at that time. As shown in the minutes of an annual general meeting of the owners held on 7 April 2017: (1) counsel had been instructed to advise the 1^st Plaintiff on whether the CPs were in fact common parts of the Building despite the Defendant being the registered owner; and (2) the income generated from the CPs was insufficient to cover the associated expenses, which included the rental payments paid to the Defendant and the costs of hiring an attendant for the CPs. At the meeting, by an overwhelming majority of those in attendance, a resolution was passed against the renewal of the tenancy of the CPs.

2.8  Ever since the expiry of the tenancy agreement with the 1^st Plaintiff, the Defendant has not rented any of the CPs to others. Instead:

(1)  In the latter part of 2017, the Defendant installed metal poles at the CPs in September 2017 which prevented access to the Loading and Unloading Platform, but they were subsequently removed as a result of a complaint made by the property manager to the Defendant in November 2017;

(2)  Throughout 2018, the CPs were left empty most of the time and there was therefore clear access to the Loading and Unloading Platform;

(3)  Since March 2019, the Defendant started to use the CPs more frequently by parking 2 to 3 vehicles at the CPs. Access to the Loading and Unloading Platform therefore became limited;

(4)  In late November 2019, the Defendant put up fences at the front of CP4, CP5 and CP6 and placed vehicles and objects on all the CPs, and as a result, there was very limited access to the Loading and Unloading Platform;

(5)  From 2020 to around October 2023, the Defendant moved away the vehicle parked at CP4 but continued to occupy CP3, CP5 and CP6 and therefore there was limited access to the Loading and Unloading Platform;

(6)  On or around 14 November 2023, the Defendant parked a vehicle at CP4.

2.9  The elevated Loading and Unloading Platform was plainly designed to allow the back of a lorry to reach the edge of the platform to enable loading or unloading goods directly onto or from the lorry. As a result of the matters stated in the preceding paragraph, during the period between 1 April 2017 and mid-November 2023, there were varying degrees of vehicular access to the Loading and Unloading Platform. Between 13 November and 29 December 2023 (and for divers periods earlier in late 2017 and November 2019/early 2020), the vehicular access to the Loading and Unloading Platform was entirely blocked and access to the manhole at the CP3 area was restricted.

3.  The hearings on 29 December 2023 and 7 March 2024

3.1  By the Injunction Summons, the Plaintiffs seek an interlocutory injunction in the following terms:

(1)  An order restraining the Defendant from interfering with or disturbing the Plaintiffs’ use and enjoyment of the CPs and/or the right of way over the CPs to access the Loading and Unloading Platform (“Right of Way”);

(2)  An order enjoining the Defendant do forthwith remove the fences, vehicle or objects on the CPs which interfere with or disturb the Plaintiffs’ use and enjoyment of the CPs and/or the Right of Way.

3.2  The first hearing of the Injunctions Summons took place on 29 December 2023. At that hearing, I gave directions to bring the Injunctions Summons to a substantive hearing on 7 March 2024. I also granted an interim-interim injunction pending the substantive determination of the Injunction Summons, the effect of which was to “reopen” CP4 and CP5 and allow unrestricted access to that part of CP3 where the drainage manhole is located[1] (“Interim-Interim Injunction”).

3.3  At the hearing on 7 March 2024, the position taken by the Defendant was that there should be a speedy trial of the action. The Defendant was prepared to offer in the meantime to keep two of the CPs (either (1) CP3 and CP4 or (2) CP4 and CP5) “open”.

3.4  As part of the consideration for a speedy trial canvassed at that hearing, it became apparent that there might be an issue (which was not raised by the parties or spotted by the court before the hearing) as to whether the present action falls within the jurisdiction of the District Court. The substantive hearing of the Injunction Summons was therefore adjourned to 20 March 2024 and the Plaintiffs were directed to file and serve their Statement of Claim (which by then they had not done so) on or before 14 March 2024, the purpose of which was to assess whether the Plaintiffs’ claim falls within the jurisdiction of the District Court.

3.5  On 14 March 2024, the Plaintiffs, instead of filing a Statement of Claim, issued the Amendment Summons. The Defendant thereafter issued the Transfer Summons on 18 March 2024.

4.  The Amendment Summons

4.1  I first deal with the Amendment Summons. The Amendment Summons seeks:

(1)  Leave to amend the Writ by (a) altering the capacity in which the 1^st Plaintiff sues, namely from only suing in its own right to suing also for and on behalf of all the owners of the Building except the Defendant, (b) removal of the 2^nd Defendant (which is one of the owners of the Building), (c) adding a number of declaratory relief and (d) amending the claim for damages from “Damages including but not limited to wrongful interference with the Plaintiffs’ use and enjoyment of the Carparks and/or Right of Way, derogation of grant and the rents paid by the 1^st Plaintiff to the Defendant over the years” to “Damages as pleaded in paragraph 58 of the Statement of Claim”;

(2)  An extension of time to file and serve a Statement of Claim, a draft of which was annexed to the Amendment Summons.

4.2  RHC Order 20, rule 1 provides as follows:

“[(1)] Subject to paragraph (3), the plaintiff may, without the leave of the Court, amend the writ once at any time before the pleadings in the action begun by the writ are deemed to be closed.

…

[(3)] This rule shall not apply in relation to an amendment which consists of –

(a) the addition, omission or substitution of a party to the action or an alteration of the capacity in which a party to the action sues or is sued, or

(b) the addition or substitution of a new cause of action, or

(c) (without prejudice to rule 3(1)) an amendment of the statement of claim (if any) indorsed on the writ,

unless the amendment is made before service of the writ on any party to the action.”

4.3  The Defendant does not object to the Amendment Summons, save one aspect. Mr Suen contends that the reference made in the proposed amended Writ to draft Statement of Claim §58 should not be allowed (§4(1) above).

4.4  Draft Statement of Claim §58 pleads as follows:

“[a] Mistaken payment of rents as pleaded in paragraph 19 above (to be assessed subject to discovery);

[b] Damages for the Defendant’s wrongful occupation of the Carparks…”

4.5  Mr Suen’s objection is on the basis that the claims set out at draft Statement of Claim §58 (or parts thereof) are time-barred.

4.6  In the present case, pleadings have not been deemed to be closed. As pointed out by Ms Wong, Mr Suen’s objection has overlooked the fact that no leave is required to amend the claim for damages as the proposed amendment in the Writ is not said by the Defendant to involve any addition or substitution of a new cause of action. Even if there was, the Defendant did not object on that basis.

4.7  In relation to the draft Statement of Claim, the Amendment Summons only seeks an extension of time from the deadline imposed by my order made on 7 March 2024. RHC Order 20 rule 1(3)(c) does not apply as the draft Statement of Claim was not indorsed on the Writ. The Amendment Summons is therefore not an application to amend the Statement of Claim as none had been filed. In so far as Mr Suen raised any arguments on the merits of the matters pleaded in the Statement of Claim (in particular whether some or all of the claims advanced at draft Statement of Claim §58 is time-barred), it seems to me that the proper occasion for such issues to be ventilated is in the context of a strike-out application (if pursued).

4.8  For the above reasons, I accede to paragraphs 1 to 3 of the Amendment Summons. I also make a costs order nisi that the costs of the Amendment Summons be paid by the 1^st Plaintiff to the Defendant[2].

5.  The Injunction Summons

5.1  As a result of the Transfer Summons, Mr Suen no longer maintained his stance at the hearing on 27 March 2024 that there should be a speedy trial of the action. Notwithstanding the Transfer Summons, both parties were content for the court to determine the Injunction Summons even if, at the end of the day, the court is to transfer the present case elsewhere.

5.2  The issues raised by the Plaintiffs in this action, as summarized by Mr Suen, are as follows:

(1)  Whether the CPs are common parts of the Building;

(2)  Whether the co-owners have the Right of Way;

(3)  Whether the Defendant has derogated from grant;

(4)  Whether the Defendant is estopped from denying the co-owners’ access to the Loading and Unloading Platform;

(5)  Whether the Defendant is in breach of the Deed of Mutual Covenant and the Building Management Ordinance Cap 344 in placing fences at the CPs.

5.3  At the hearing, Mr Suen fairly accepted that there are serious issues to be tried on the Plaintiffs’ claims. As submitted by Mr Suen, the question for determination is whether and to what extent the balance of convenience lies in favour of the grant of an interlocutory injunction.

5.4  As stated above, the Defendant has offered to keep open 2 CPs pending trial, namely either (1) CP3 and CP4 or (2) CP4 and CP5. In my view, I think CP 3 merits separate consideration due to its location (not being in front of the Loading and Unloading Bay) and characteristics (the existence of a drainage manhole and providing “human” as opposed to vehicular access to the Loading and Unloading Area).

5.5  It seems to me therefore what has factually transpired after the granting of the Interim-Interim Injunction is a useful starting point to consider issues relating to balance of convenience.

5.6  Disputes between co-owners of a building often generate very entrenched positions. At the time of the issuance of the Injunction Summons, vehicular access to all the CPs and therefore the Loading and Unloading Area was denied.

5.7  The position taken by the Defendant at the hearing on 29 December 2023 was that there was space and passageway to “accommodate a trolley/cart or pallet truck to assist the transport of goods onto” the Loading and Unloading Platform. From the photographs then adduced, the Defendant, for example, seemed to have deliberately parked the cars not in the middle but towards the sides of CP3 and CP4 to leave a gap. I do not see how that can be said to be a satisfactory arrangement, not least because it plainly exposed workers to safety considerations attendant to the lifting of heavy goods, and the associated risks would self-evidently be lowered had lorries been able to access the Loading and Unloading Platform directly.

5.8  On the other hand, I have some difficulties in understanding why the 1^st Plaintiff could not attempt to deal with the situation on a more practical basis. Whilst litigating the underlying disputes, more practical arrangements could have been offered, such as making payments for the use of the CPs under protest or into an escrow account. Instead, the Plaintiffs decided to litigate the interim arrangement of the CPs by mounting an expensive application. Bearing in mind that the rent of the CPs last paid was only in the neighbourhood of HK$23,000 per month, I do not see why a more reasonable and cost-effective proposal was not considered or offered in the light of the legal fees involved. For example, an olive branch was extended by the Defendant prior to the hearing on 29 December 2023 by offering to lease CP5 to the 1^st Plaintiff at a nominal rent of HK$ 1 per month until the determination of the action. Whilst I understand that the 1^st Plaintiff might have wanted the reopening of more CPs, but on the evidence before me, no counter proposal was made. In addition, for reasons set out below, the 1^st Plaintiff also takes a steadfast position that these proceedings should remain in the Court of First Instance.

5.9  Be that as it may, I have to decide the Injunction Summons on the material before me.

5.10  The competing considerations are as follows.

5.11  On the Defendant’s part:

(1)  The Defendant has produced a video footage for the period between 11 to 18 January 2024 (6 weekdays)[3] to demonstrate the usage of CP4 and CP5 and compiled a table summarizing the durations during which CP4 and/or CP5 were occupied (“Table”). As demonstrated by the Table, there were only sporadic timeslots during which both CP4 and CP5 were occupied following the grant of the Interim-Interim Injunction;

(2)  Mr Suen submits that CP4 and CP5 are already sufficient and this is evidenced by the fact that, for an extended period between 2020 and November 2023 (which included a substantial period after all COVID-19 restrictions had been lifted), the Plaintiffs only had access to CP4 and no injunction was sought;

(3)  As regards CP3, since the granting of the Interim-Interim Injunction, no notice has been received from the Plaintiffs and/or the property manager that any repair works had to be carried out at the drainage manhole. In any event, the property manager is empowered under the Deed of Mutual Covenant to access CP3 for the purpose of maintaining the drainage manhole upon giving notice to the Defendant. In so far as it is suggested by the Plaintiffs that the door accessing the switch room is within the area of CP3, that is factually incorrect;

(4)  The Defendant, as the registered owner of the CPs, has a proprietary right and the Defendant has reached out to estate agents concerning the sale of the CPs;

(5)  The 1^st Plaintiff is running at a deficit (in the sum of around HK$325,000 for the year 2023). There is a real question whether the 1^st Plaintiff is able to offer a credible undertaking as to damages.

5.12  On the Plaintiffs’ part:

(1)  The Plaintiffs contend what is shown by the Table demonstrates there are, in Ms Wong’s words, “indeed a lot of times” when both CP4 and CP5 are occupied;

(2)  When CP4 and CP5 were both occupied, the waiting lorries would have to make loops around the Building;

(3)  Smaller goods vehicles still need access to the Loading and Unloading Platform, it being the only access to the cargo lifts;

(4)  The Defendant has no meaningful use of any of the CPs. The Defendant does not own any units in the Building and the cars placed at, for example, CP6 is a “dead” car;

(5)  Even if CP4 to CP6 are reopened, it may still fall short of the minimum requirement of the Hong Kong Planning Standards and Guidelines (“Guidelines”);

(6)  CP3 is required to remain at least partially open as provided by the Interim-Interim Order as access to the switch room and the drainage manhole is required;

(7)  Although the 1^st Plaintiff is running at a deficit, the 1^st Plaintiff is in the position to raise funds to meet its undertaking, given the Defendant’s damages (should the injunction be wrongly granted) are not substantial. The rental payment last paid in early 2017 was HK$22,900 per month, which could realistically be raised amongst owners occupying 23 floors of the Building.

5.13  In my view, the balance of convenience lies in favour of continuing the Interim-Interim Order until trial, for the following reasons.

5.14  I do not regard the position taken by the Defendant to be a very attractive one. The suggestion that it has reached out to estate agent(s) to sell the CPs is a bare assertion. No email or engagement letter has been adduced into evidence. The fencing-off of the CPs and placing a dead car thereat, when plainly CP4 to CP6 are designed for vehicular assess to the Loading and Unloading Area, seem to me to be difficult to justify. The suggestion that an injunction order would strike a blow to the Chinachem group’s reputation, standing and credit is also a very far-fetched proposition.

5.15  On the other hand, P’s position that all the CPs should immediately be “reopened” cannot be justified on the present evidence. Since the granting of the Interim-Interim Injunction, even on Ms Wong’s analysis, CP4 and CP5 appear to have provided adequate access to the Loading and Unloading Area. Whilst there were sporadic periods during which both CP4 and CP5 were occupied, it seems to me that such durations would not be considered abnormal. It cannot be said that, in the normal course, industrial buildings should be expected to offer unfettered or guaranteed access to a loading and unloading bay. In my view, it is not uncommon that delivery workers may on occasions have to wait around until a loading bay is cleared. From the Table, it does not appear to me that during those occasions when both CP4 and CP5 were occupied, the consequent waiting time (until one of them was cleared) can be considered to be unreasonable. I note that it is the Plaintiffs’ evidence that reopening of CP6 is sought to be justified only on the basis that there should be spare availability of the loading and unloading area.

5.16  The above also leads to the point that I do not agree with Ms Wong’s reading of the Guidelines. The part of the Guidelines which Ms Wong refers to is as follows:

“Loading and Unloading requirements:

1 goods vehicle bay per 700-900m² GFA, 50% of which should be for parking of goods vehicles.

1 container vehicle loading/unloading bay with turning circle of 11.6m outer radius should be provided for a site with dimensions not less than 45m x 40m” (emphasis added)

5.17  The Gross Floor Area (“GFA”) of the Building is around 25,000m². Ms Wong reasons that the available carparking spaces for loading and unloading should therefore be 25,000 x 900 x 50% = 13.89 car parking spaces. But the Guideline plainly distinguishes between (1) goods vehicle bay for parking of goods vehicles and (2) container vehicle loading/unloading bay. According to the Guideline, only 1 container vehicle loading/unloading bay is required, regardless of the GFA of a building.

5.18  In terms of CP3, I accept that, after the granting of the Interim-Interim Injunction, it cannot be said on the evidence that the drainage manhole required frequent access. However, the drainage manhole is right in front of the opening providing “human” access to the Loading and Unloading Bay. Were the Interim-Interim Injunction lifted in respect of CP3, the Defendant is entitled to park a car in such a way to block that opening. I do not regard it as satisfactory to force workers or users to jump up to or down from the Loading and Unloading Platform (which is about 3 ft in height). In the foregoing regard, the competing evidence as to whether CP3 provided access to the switch room is not my main concern when compared with the access to the Loading and Unloading Platform.

5.19  I acknowledge the evidence shows that the 1^st Plaintiff is running at a deficit. However, the Building has 23 floors and I do not regard it likely that, should the 1^st Plaintiff be called upon its undertaking, it will not be able to raise funds to meet it, given the likely extent of the Defendant’s loss until trial, which is around HK$25,000 (or adjusted upwards given inflation) per month. I think I can take judicial notice that the 1^st Plaintiff would have passed a resolution to meet legal expenses incurred or to be incurred in these proceedings.

6.  The Transfer Summons

6.1  Ms Wong accepts that the Plaintiffs’ claims as formulated in the draft Statement of Claim fall within the jurisdictional limits prescribed by section 35 (annual rent or rateable value of the CPs being below HK$320,000) and section 37 (proceedings involving land for relief against mistake where the 1^st Plaintiff’s claim for mistaken payment is below HK$7,000,000) of the District Court Ordinance Cap 336 (“DCO”).

6.2  The only basis relied on by Ms Wong to resist a transfer to the District Court is that the 1^st Plaintiff’s claim for mesne profits (quantified as follows) is over HK$3 million (provisionally based on rents in fact paid by the 1^st Plaintiff and assuming a limitation period of 12 years):

Dec 2011 to Feb2015	HK$18,000 x 39 months = HK$702,000
Mar 2015 to Mar 2016	HK$21,800 x 25 months = HK$545,000
Apr 2017 to Mar 2024	HK$22,900 x 84 months = HK$1,923,600
Mar 2024 until possession	Ongoing if injunction does not cover the CPs
	Total HK$3,170,600 (plus ongoing)

6.3  I accept Ms Wong’s submission that the authorities suggest that a plaintiff should be entitled to frame his case in the manner that he wishes and that his case on quantum ought to be viewed at its highest when determining the proper jurisdiction where the case should be brought: Wong Miu Kwan v FPD Savills Property Management Ltd [2006] 1 HKC 575 §§19-21.

6.4  However, as pointed out by Mr Suen, the foregoing is subject to a qualification of absence of abuse. The court has in the past carried out an evaluation of the quantification advanced by a plaintiff, bearing in mind the requirement to err on the generous side set out in Wong Miu Kwan: Hung Chor Hung John suing as the administrator of the estate of Chow So Hing, the Deceased v Li Kwok Kin & Anor, HCPI 251 of 2009, 10 November 2009 §§16, 50-60 and 69-70.

6.5  Ms Wong’s quantification is on the basis that the 1^st Plaintiff can claim mesne profits for all the CPs in the stated periods and even then it is barely over HK$3 million. However, as pointed out by Mr Suen, during December 2011 to March 2017, the Defendant was not in occupation of the CPs as they had been leased to the 1^st Plaintiff. The proper basis for that period would be a claim for mistaken payment, which if pursued, is caught by the jurisdiction limit under section 37 of the DCO. During the period identified by Ms Wong, the 1^st Plaintiff had various degrees of access to the CPs for divers periods which Ms Wong’s quantification does not take into account. In my view, the 1^st Plaintiff’s claim for mesne profits is likely to be within the jurisdiction of the District Court.

6.6  Section 43 of the DCO provides:

“(1) The Court of First Instance may, either of its own motion or on the application of any party, order the transfer to the Court of all or part of an action or proceeding, other than a counterclaim, which appears to the Court of First Instance likely to be within the jurisdiction of the Court.

(2) An order may be made under this section at any stage of the proceedings of the motion of the Court of First Instance itself or on the application of any party.

(3) The Court of First Instance is required to make an order under this section unless it is of the opinion that, by reason of the importance or complexity of any issue arising in the action or proceeding, or for any other reason, the action or proceeding ought to remain in the Court of First Instance.” (emphasis added)

6.7  I have considered the parties’ submissions on the residual factor on importance or complexity of the issues arising in the present case. I do not accept Ms Wong’s submission that the present case is of such importance or complexity that it should remain in the Court of First Instance. That being the case, I transfer the present action to the District Court pursuant to section 43(3) of the DCO.

6.8  Given my view that the case should be transferred to the District Court, it is unnecessary for me to deal with the Defendant’s fallback position to have the present case transferred to the Lands Tribunal.

7.  Conclusion

7.1  For the above reasons:

(1)  I accede to the Amendment Summons with costs to be paid by the 1^st Plaintiff to the Defendant (§4.8 above) to be summarily assessed[4];

(2)  On the Injunction Summons, I order the Interim-Interim Injunction granted on 29 December 2023 be continued until trial or further order;

(3)  On the Transfer Summons, I make an order that these proceedings be transferred to the District Court.

7.2  As to costs (except those of the Amendment Summons)[5]:

(1)  I order the costs of the Injunction Summons to be costs in the cause;

(2)  I order the costs of the Transfer Summons to be the Defendant’s costs in the cause;

(3)  I reserve the questions as to costs before the transfer to the trial judge who may then consider whether this case should have been commenced in the Court of First Instance in the first place (adopting the approach set out at The Incorporated Owners of Affluence Garden v Guardian Management Services Ltd [2023] 1 HKLRD 910 §20).

7.3  All of the above costs orders are nisi. However, I set out my provisional views.

7.4  I do not agree with Mr Suen’s submission that the hearing on 7 March 2024 were wasted as a result of the Plaintiffs bringing the action in the wrong court. It was not a point raised by the Defendant at the hearings on 29 December 2023 and 7 March 2024, and it was the Defendant’s proposal to have a speedy trial in the High Court.

7.5  It also seems to me that neither party acted entirely reasonably (§§5.6 to 5.8 above) or was entirely successful in the Injunction Summons. The Plaintiffs sought the reopening of all the CPs and the Defendant was prepared to only keep 2 of them open.

Ms Carol WONG instructed by Messrs Li & Partners, for the 1^st - 2^nd Plaintiffs

Mr Jenkin SUEN, SC leading Mr Justin ISMAIL instructed by Messrs Deacons, for the Defendant