Squatter of land subject to a DMC takes subject to DMC covenant not to convert common parts to private use

In Mountain View (IO) v Heart Cuisine [2012] 4 HKLRD 628, CA) S was a former owner of a shop in a building covered by a DMC. There was a service lane next to the shop which was a common part of the building. S sold the shop but retained possession of the service lane. The IO brought proceedings to enforce the covenant not to convert common parts to private use (implied into the DMC by s.34I of the Building Management Ordinance). The practical effect was that S would have to give up possession. The IO succeeded; S’s possessory title was subject to the implied covenant (section 41(3) of the Conveyancing and Property Ordinance and the general law on restrictive covenants as applied to possessory title in Re Nisbet and Potts’ Contract[1906] 1 Ch 386). The Limitation Ordinance did not apply since this was not an action to recover possession but an action to enforce the covenant. The Lands Tribunal’s jurisdiction to deal with matters of this nature was confirmed by the Court of Appeal.