嚴順意v圖置有限公司（Macro Land Limited） HKCU 626
"Clean Hands" Needed for Removal Orders
This recent Lands Tribunal case involved an application for the removal of a business sign ("Sign") and an exhaust system ("Exhaust System"), both of which were fixed to the external wall of a building, which had three floors, with one unit on each floor ("Building"). The ground floor unit was for commercial use, and the first and second floor units were residential.
The Applicant was the owner of the first floor residential unit ("First Floor Unit"). The Respondent was the owner of the ground floor commercial unit ("Ground Floor Unit"). The Applicant applied for the removal of the Sign and Exhaust System from the external walls on the basis that the Respondent was in breach of the Building's Deed of Mutual Covenant ("DMC").
The Applicant purchased the First Floor Unit in March 2011 by a sale and purchase agreement which incorporated an express term that the external wall of the First Floor Unit was being rented out to the tenant of the Ground Floor Unit for the purpose of hanging the Sign. The Applicant continued to rent the external wall of the First Floor Unit to the tenant of the Ground Floor Unit up until June 2014.
During June 2014, the Ground Floor Unit was rented out to a new tenant, IGL. IGL was in the food industry business. It was at this time when the Exhaust System was installed and fixed onto the external wall of the Ground Floor Unit.
Despite the Tribunal deciding that the fixing of the Sign and Exhaust System to the external walls was in breach of the DMC, the Tribunal determined that the Applicant was 'estopped' (prevented) from obtaining an order requiring the removal of the Sign (the applicant succeeded in obtaining an order for the removal of the Exhaust System).
The Tribunal explained that the Applicant was made aware of the existence of the Sign when he purchased the First Floor Unit. The Applicant received rent for the Sign fixed to the external wall of the First Floor Unit between March 2011 and June 2014. The Tribunal found that it would be unjust to allow the Applicant, having first made a monetary gain from the rent of the external wall, to then seek a removal order based on a breach of the DMC.
When seeking equitable relief from a Tribunal or Court such as declarations or injunctions (e.g. a removal order), applicants must recognise that failing to come with "clean hands" may give rise to a valid defence. Applicants should be 'estopped' (prevented) from obtaining equitable relief if they have knowledge of, derived benefit from, or encouraged the performance of the unlawful act.
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