Construction of DMC charging clause

Incorporated Owners of Kingley Industrial Building v Wan Fai Ping ([2011] HKEC 652, CA) concerned the construction of a Deed of Mutual Covenant. W owned a factory on the 25th floor of an industrial building and a unit on the roof above it. The charging clause imposed a liability to contribute to the cost of renovations on the owners of units on the 25th floor but did not expressly require the owner of the roof unit to make such a contribution. The second schedule to the DMC (specifying the shares allotted to each part of the building) described the roof units as being part of the 25th floor. The sixth schedule (specifying the charges to be paid) dealt with the roof as being separate from the 25th floor. The Lands Tribunal had decided that the DMC did not require the owners of roof units to contribute to the cost of renovations. On appeal, however, it was decided that the owners of roof units did have to contribute to the cost of renovations. Tang ACJHC referred to the approach to construction of Lord Hoffman NPJ in Jumbo King: what would a reasonable person have understood the words to mean? It was clear that the owners of roof units were intended to contribute: they were described as part of the 25th floor in schedule 2. They were also referred to in schedule 6 and the saleable areas of the roof spaces were specified there; there was no reason for this if the parties had not intended the owners of the roof units to be liable to contribute.

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