On 22 September 2011, the Court of Appeal handed down a judgment in the case Tam Sze Man and Wise Step International Limited v. The Incorporated Owners of Shan Tsui Court (CACV 30/2011), which concerned the removal of the partition wall between two adjoining flats. The partition wall was not a structural or load-bearing wall. The Court held that the partition wall does not form part of the common area of the building and thus its removal did not constitute a structural alteration.
The owners of two adjoining flats in a multi-storey building removed the partition wall between the two flats to create one larger unit. The incorporated owners of the building ("IO") objected on the grounds that (i) the partition wall is a common area of the building belonging to all owners and (ii) such removal constitutes a structural alteration in breach of the DMC.
Q1: Whether the Partition Wall is a Common Area?
The Court of Appeal followed the decision of an earlier Court of Appeal decision in Incorporated Owners of Westlands Garden v Oey Chiou Ling  2 HKLRD 421 on 21 February 2011 and held that, on the proper construction of the Building Management Ordinance ("BMO") and title documents, each of the flats was assigned together with its partition wall adjoining the adjacent flat, and the partition wall is to be exclusively used by the owners of the relevant flats. The Court's reasoning is summarised as follows:
First, partition walls do not fall within the definition of "common parts" in the BMO. While "boundary walls" are specified as "common parts" in the BMO, partition walls are different from boundary walls because the Court considered that "boundary wall" (in Chinese ??? in the BMO) refers to a wall at the boundary of a site or development, while "partition wall" refers to the internal partition wall in-between two adjoining units.
Secondly, the partition wall is specified or designated for exclusive use occupation or enjoyment of the owners of the two adjoining units because (a) the DMC does not specify the partition wall as a common area and (b) the pink coloured portions on the plans attached to the respective first assignments of the two units which identify the area of the units do include the partition walls.
Thirdly, the partition wall is bounded by the owners of the two adjoining units where other owners of the building have no right to enter and in any event there would be no purpose for other owners to make use of the partition wall. The Court therefore held that to construe the partition wall as a common area could give rise to anomalies and absurdities (e.g. IO would have the right to enter the relevant units to conduct repairs or works at any time; driving a nail into a partition wall would be damaging a common part and would require consent of the IO; the owners may even resolve to take down any partition wall and thus affect the interest of the owners of individual units).
Q2: Whether there is any structural alteration in breach of the DMC?
Since the partition wall is not a common area and is not a structural or load-bearing wall, the Court agreed that an internal partition wall is no different from an internal partition wall making a bedroom and therefore held that removal of the internal partition wall did not constitute a structural alteration.
With the Court of Appeal's decision in this case and in the Westlands Garden case, it can be expected that there will be more cases in future where adjoining units owned by the same or associated owners will remove the internal partition wall to create one larger unit, so that the value of such larger unit may be enhanced.
However, the Court's decision is based partly on the fact that (i) the partition wall is not a load-bearing wall, (ii) the DMC does not specify that partition walls are common areas and (iii) the relevant plans attached to the first assignments of both adjoining units include the partition wall as the property of the units.
It remains to be seen whether the Court may make a different ruling if (a) the DMC in a particular development expressly specifies that internal partition walls fall within the definition of common areas and/or (b) the colouring of the relevant units in a development does not include the partition wall. Further, if the partition wall is a load-bearing wall, then it would fall within the definition of "common parts" in Schedule 1 to the BMO. Accordingly, as a word of caution, owners who wish to remove adjoining partition walls should first (i) check whether the partition wall in question is a load-bearing wall, and (ii) review the terms of the DMC and the relevant assignments, to ensure that they are entitled to carry out the works.
For inquiries related to this Legal Update, please contact Alan Yip or your usual contacts with our firm.