THE INCORPORATED OWNERS OF MILLION FORTUNE INDUSTRIAL CENTRE v. JIKAN DEVELOPMENT LTD. AND ANOTHER

CACV 122/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 122 OF 2000

(ON APPEAL FROM HCA 14915/1998)

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J U D G M E N T

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Hon Godfrey VP :

Introduction

1. This is an appeal from Waung J, who on 24 March 2000 upheld an order of the master dismissing the application of the 1st defendant, Jikan Development Limited, to strike out the name of the plaintiff, the Incorporated Owners of Million Fortune Industrial Centre, from the action and to have the action dismissed.

Background

2. The plaintiff brought this action against (1) the 1st defendant, as an individual owner of a number of undivided shares in Million Fortune Industrial Centre; and (2) against the 2nd defendant as manager of the building of that name. The subject matter of the proceedings is not relevant for present purposes. We are concerned only with whether the 1st defendant is right in asserting as it does that the plaintiff has not authorised the action or that, even if it has, the plaintiff cannot prove that fact.

Facts

3. The relevant facts are as follows.

4. At a meeting held on 10 February 1998, the management committee of the plaintiff is said by the plaintiff to have met and to have authorised this action. We have been shown what purports to be a minute to that effect, unsigned, but bearing the plaintiff's chop. (I should add that on 23 July 1998, it is said that there was a meeting of owners also authorising this action. Again, we have been shown what purports to be a minute of that meeting, this time signed by the Chairman as well as bearing the plaintiff's chop.)

The legislation

5. Against these facts, reference must be made to the provisions of section 6, and the Second Schedule, to the Building Management Ordinance, Cap. 344. Section 6 of the Ordinance reads as follows :-

"6. Composition and procedure of management committee

The Second Schedule shall have effect with respect to the composition and procedure of a management committee."

6. The Second Schedule contains, among other provisions, clause 10, which provides, by sub-paragraph (1) for the person who is to preside over the meeting; by sub-paragraph (2) that things authorised to be done by the management committee may be decided by a resolution passed at the meeting; by sub-paragraph (3) that each member present shall have one vote; and by sub-paragraphs (4), (4A) and (4B) as follows :-

"(4) The secretary shall keep minutes of the proceedings at every meeting of a management committee.

(4A) The minutes referred to in subparagraph (4) shall be certified by the person presiding over the meeting as containing a true record of the proceedings of the meeting of the management committee to which they relate.

(4B) The minutes certified in accordance with subparagraph (4A) shall, within 28 days of the date of the meeting of the management committee to which they relate, be displayed by the secretary in a prominent place in the building."

The problem

7. The minutes of the management committee to which I have referred have not been certified in accordance with sub-paragraph (4A) or displayed in accordance with sub-paragraph (4B).

The 1st defendant's case

8. The 1st defendant says that the only way open to the plaintiff of proving what resolutions have been passed at the meeting of the management committee is by the production of such minutes as have been so certified and displayed. Absent such minutes, proved to have been duly certified, and proved to have been displayed by the secretary in a prominent place in the building, no evidence of any alleged resolution of the management committee can be received by the court.

Conclusion

9. I am quite unable to accept this contention. I fully accept, as was submitted by Mr Edward Chan, SC (with the support of a citation from So Chun Man Paul & others v. The Incorporated Owners of Chee On Building (unreported), CACV No. 302 of 1999) that the aim of the Ordinance is to protect the interest of owners of a building and to guard the owners against any abuse of office by the management committee. But, even accepting this, I understand that, unless displaced by clear words, the rule of evidence is that although minutes of meetings are sufficient (and usually the best) evidence of the proceedings to which they relate, they are not exclusive evidence of such proceedings. The provisions of clause 10 are, no doubt, mandatory. They do require the secretary to keep the appropriate minutes. They do require that the minutes are to be certified by the person presiding over the meeting and they do require that the minutes so certified are to be displayed by the secretary in a prominent place in the building. But it does not follow that a resolution which can be proved aliunde (as the Latin scholars say) to have been duly passed must be ignored by the court simply because the person presiding over the meeting, or the secretary, may have failed in one or other of these duties.

10. In the present case, there really is no room for any doubt but the resolutions which appear to have been passed by the meeting of the management committee and which bear the chop of the plaintiff were resolutions duly passed. That being so, there can be no doubt that these proceedings were duly authorised. It is unnecessary to examine the question whether the meeting of 23 July 1998 (the meeting of the owners to which I have referred) was or was not sufficient to authorise these proceedings. As Mr Edward Chan, SC very properly accepts, if the court accepts that there is sufficient evidence of the passing of those resolutions by the management committee, no point on the meeting of the owners on 23 July 1998 will be of any assistance to the 1st defendant.

Result

11. For these reasons, I would uphold the decision of the judge and dismiss this appeal.

Hon Rogers JA :

12. I agree.

13. I only wish to add this, that I read the provisions of paragraph 10 of the Second Schedule of the Ordinance as mandatory requirements which are designed to ensure that the owners are kept informed as to the transactions of the management committee. The failure of the chairman of the management committee, or indeed, the secretary, to comply with those provisions does not, in my view, render the resolutions which have been passed invalid or unprovable but it does open up parties perhaps to the sanction of applications for their removal and, perhaps, for the appointment of an administrator.

14. In those circumstances, I too would dismiss this appeal.

Hon Godfrey VP :

15. The appeal will accordingly be dismissed, with costs.