Breach of covenant? Can failure to enforce against others amount to acquiescence?

In Hoi Luen Industrial Centre (IO) v Ohashi ([1995] 2 HKLR 448, HC) D was the owner of a unit in an industrial building and was bound by the terms of the Deed of Mutual Covenant for the building. He erected a water cooling tower on the external wall of the building even though the incorporated owners had informed him that they regarded this as being a breach of the terms of the Deed of Mutual Covenant. There had been many such breaches and the management committee had delivered a notice to all owners in the building warning of the dangers of the unauthorised cooling towers and of their intention to take action to deal with this problem. The incorporated owners then began proceedings against D seeking a mandatory injunction.

D argued that the failure to take action in respect of earlier breaches amounted to acquiescence. This failed. Acquiescence was akin to estoppel. Here, the incorporated owners had made it clear to D even before he erected the tower that they objected to it and were prepared to take legal action in the event of breach. Nor was a mandatory injunction inappropriate: it was reasonable (given limited financial resources) for the incorporated owners to make an example of just some owners in breach and to choose those whose breach post-dated their notice of intention to bring proceedings.


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