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Developer loses landmark repair case

A developer yesterday lost a landmark court battle to force the owners and managers of a North Point office block to pay a $5 million repair bill.

The judgment by the Court of First Instance is likely to have an impact on disputes between flat owners and developers.

In a written judgment, Deputy Judge Anthony To Kwai-fung said the repairs were not the responsibility of the management company.

The developer, Uniland Investment Enterprises, a subsidiary of Sun Hung Kai Properties, was ordered to shoulder legal costs for the dispute, which involved the outer wall and roof of Sea View Estate, Watson Road.

Deputy Judge To said the Building Management Ordinance meant Uniland, which was the owner, occupier or user of the wall and roof, had an obligation to maintain it.

This was despite the fact the building's deed of mutual covenant said it was the responsibility of the owners and management.

The dispute over maintenance erupted in November 1996 when the Buildings Department ordered the owners to repair the external and common areas of the 30-year-old building.

Repairs were not done on the outer wall because of a disagreement among the owners, including the plaintiff which acquired a share of the outer wall and roof in 1994.

A second repair order was issued directly to Uniland in April last year but no work was done until concrete fell from the outer wall and damaged a car in November.

Uniland carried out repairs at an estimated cost of more than $5 million, but claimed for damages against Guardian Property Management and the estate's incorporated owners.

Edward Chan King-sang SC, for Uniland, said the ordinance was concerned with the responsibility for maintenance and repair, not expenses which were governed by the deed of mutual covenant.

Denis Chang Khen-lee SC, for the owners, argued that the obligation to pay in discharge of one's duty went with that duty.

Deputy Judge To said: 'To divorce from the obligation to maintain the inherent obligation to pay for the costs of discharging that obligation would be straining common sense beyond its limits and render the obligation meaningless.' He said it would not be difficult for developers to introduce unfair terms in deeds of mutual covenant.

The developer has 14 days to appeal.

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