THE INCORPORATED OWNERS OF KAM MAN FUNG FACTORY BUILDING v. CHEWY INTERNATIONAL FOODS LTD

LDBM 67/2018

[2019] HKLdT 69

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 67 OF 2018

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J U D G M E N T

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Introduction

1.  Kam Man Fung Factory Building (“the Building”) is an industrial building situated in Chai Wan, Hong Kong and on a slope going upwards Hong Man Street.

2.  The applicant is the incorporated owner of the Building.

3.  The respondent is the owner of the following properties (total 120/1,000^th parts of undivided shares) situated in the Building:-

(1)  Car Parking Spaces Nos 1 to 4 on the Ground Floor (since January 1979), ie 8/1,000^th parts of undivided shares;

(2)  Lower Ground Floor (since January 1979), ie 110/1,000^th parts of undivided shares;

(3)  Car Parking Space No 3 on the Car Park Floor (since July 1996), ie 2/1,000^th parts of undivided shares

(collectively “the Properties”).

4.  The configuration of the Building is as follows:

(1)  The Carpark Floor (“CP/F”) is the lowest floor of the Building, which can be accessed from Kut Shing Street, followed by the Lower Ground Floor (“LG/F”) and the Ground Floor (“G/F”).

(2)  There are 3 lifts in the Building with access to the floors in the following manner:

(i)  Lift No. 1 – accessible from the CP/F in between and up to 10^th Floor;

(ii)  Lift No. 2 – accessible to the CP/F and the G/F, and from 11^th to 21^st Floors. In other words, it is not accessible to the LG/F; and

(iii)  Lift No. 3 – accessible to all floors, that is, from the CP/F to the 21^st Floor. It is a fire service lift.

(3)  The LG/F has separate access to and at the street level on Hong Man Street.

5.  For ease of reference, below is a table showing the Properties vis-à-vis the configuration of the Building and the service coverage of the lifts:-

Floors	The Properties	Lift No. 1	Lift No. 2	Lift No. 3
11/F – 21/F			✓	✓
1/F – 10/F		✓		✓
G/F	Car Parking Spaces Nos 1 to 4	✓	✓	✓
LG/F	Whole Floor	✓		✓
CP/F	Car Parking Space No 3	✓	✓	✓

6.  On 24 October 2016, the applicant held an owners’ general meeting (“General Meeting”) and passed resolutions, inter alia, for replacing Lifts No. 1 and 2[1]. On 5 December 2016, the management committee of the applicant (“MC”) held a committee meeting (“December MC Meeting”) and passed the resolutions, inter alia, that the total replacement costs would be $1,900,000.  As the owner of the 21^st Floor agreed to pay an extra $250,000, all owners of the Building would share the remaining $1,650,000 according to their undivided shares[2]. On 9 June 2017, the MC held another committee meeting (“June MC Meeting”), in which Messrs Huen & Partners was appointed to calculate each owner’s contribution to the replacement costs and a contribution was sought from the respondent.

7.  On 23 June 2017, Messrs Huen & Partners acting for the applicant informed the owners by letter that the total contribution sum was $1,655,500 (inclusive of $5,500 legal fee), and the sum would be shared by the owners in proportion to their undivided shares.

8.  On 16 March 2018, the applicant commenced the proceedings in the Tribunal against the respondent.  According to the Amended Notice of Application, the amount claimed against the respondent is $198,660 (ie $1,655,500 X 120/1000) with respect to its ownership of the LG/F, as well as the Car Parking Spaces No. 1 to 4 on the G/F and the Car Parking Space No. 3 on the CP/F.

9.  The main issues of the present case are the respondent’s liability to pay the contributions to the replacement costs of Lift No. 1 and Lift No. 2 (but not Lift No. 3) of the Building, and the quantum of such contributions if liability is established.

Relevant clauses in the DMC

10.  The Deed of Mutual Covenant (“DMC”) was dated 2 March 1978.

11.  The most relevant clause in the DMC is Clause 12: “The costs and expenses of repairing and maintaining the lifts, shall be borne and paid by the owners for the time being of the Units on the First to Twenty-first Floors (inclusive) of the said Building in proportion to the Units owned by them respectively. (Provided that the owner of the units on the Ground floor and Lower Ground floor shall not bear any expenses for the maintenance of the lifts in the said Building)” (emphasis added)

12.  The other clauses which are also relevant are set out as follows:

(1)  Recital (3): “For the purpose of the sale of the Units of the said Building, the said premises and the said Building have been notionally divided into 1,000 equal undivided 1,000th parts or shares as set out in the 3rd Column of the first Schedule hereto.”

(2)  Clause 7: “(b) The Manager will during its appointment have the following powers and authorities:

…

(2)  Without prior reference to the owners of the said Building to carry out all such works, renovations or replacements … as it may think necessary or desirable for the proper management, maintenance, operation, cleaning, repairing and servicing of the said Building.

…

(7)  To repair renew maintain service clean and paint the said Building or any of the common areas and common facilities thereof and for such purpose to engage and to enter into contracts with any person firm or corporation.”

(3)  Clause 10: “The owner of each Unit in the said premises and the said Building shall on demand pay to the Manager in respect of each Unit the due proportion hereinafter mentioned of the expenses (apportioned where necessary) for or in connection with the maintenance, operation, cleaning, repairing, services and apparatus of the said Building … such expenses shall include but not be limited to:-

…

(f)  the cost of keeping in good and tenantable repair and condition the foundations, the side walks, main walls, supports, beams, gutters, fences, chimneys and all external walls or part of the said Building and all the drains, well, water tanks, switch room, transformer room, machine room, meter rooms, pump houses, electric pumps, pipes, conduits and all plumbing, fire fighting and other apparatus (if any) intended for the general service of the said Building … and the common entrance-hall, loading and unloading area, staircases, landings and the passages and the convenience thereof.”

(4)  Clause 11: “The Owners of the Units of the said Building shall pay to the Manager each month on account of their respective shares of the monthly maintenance costs and expenses for their respective Units the sum as set out in the Fifth Schedule hereto (hereinafter referred to as “the said management fee”) and if the total contributions payable to the Manager by the owners of the said Building as aforesaid shall be insufficient to cover all or any of the said costs charges and expenses then the owners shall make further contributions towards such expenses in the shares as above …”

(5)  Clause 15(b)(1): “No resolution shall be valid to the extent that it is inconsistent with or purports to vary any of the provisions of this Deed.”

Respondent’s case

13.  Mr Mak for the respondent argued that it is not liable to contribute to the replacement costs of Lifts No. 1 and 2 mainly based on:

(1)  First, as a matter of proper interpretation of the DMC, the respondent as the owner of 4 car parking spaces on the G/F, the LG/F and 1 car parking space on the CP/F would essentially obtain no benefits from Lifts No. 1 and 2.

(2)  Second, in accordance with the proper interpretation of Clause 12 of the DMC, the respondent is exempted from any liability.

(3)  Third, pursuant to Clause 15(b)(1) of the DMC, the resolutions passed at the General Meeting, the December MC Meeting and the June MC Meeting are invalid because of inconsistency with the DMC.

14.  In the alternative, the respondent is not liable to contribute to the replacement costs in relation to Lift No. 2, which provides no access to the LG/F.  If the Tribunal is not with the respondent on the liability issue, the calculation of the respondent’s contribution should be based on management shares in accordance with Clause 11 and the Fifth Schedule of the DMC.

Legal Principles on interpretation of DMC

15.  As stated by Chan PJ in Grande Properties Management Ltd v Sun Wah Ornament Manufactory Ltd[3], the provisions of the deed of mutual covenant and the Building Management Ordinance (“BMO”) were usually aimed at facilitating the management of the building by reducing conflicts among co-owners on the one hand and preventing abuse by the manager and the majority owner on the other, and that most disputes were resolved by a purposive construction and common sense application of the relevant provisions of the deed and the BMO.

16.  Further, the legal principles governing the interpretation of a DMC have been summarized in Add-Field Investment Ltd & Ors v The Incorporated Owners of Mei Sun Building Tai Po[4] (unrep, HCA 507/2011, 12 December 2013).  I do not think necessary to repeat here.  In short, the general principles on the interpretation and construction of a contract would be similarly applicable and the DMC shall be construed as it was at the time of execution along with other contemporaneous documents, such as the Conditions of Grant and the approved building plans etc.

Summary of evidence

17.  The evidence given by the parties in their respective witness statements or orally at the trial was not seriously challenged by the other side. 

18.  The applicant called two factual witnesses at trial, namely Mr 鄭世章and Mr 趙芝力.

19.  Mr 鄭世章was a security guard of the Building employed by the applicant. He adopted his witness statement as part of his evidence-in-chief at the trial.  In his oral evidence-in-chief, Mr 鄭世章 further explained the layout of his hand-written record concerning the usage of Lift No. 1 stopping at LG/F between 11 May 2018 and 2 November 2018 (both dates inclusive), and explained his methodology in conducting the observations.

20.  Under cross-examination, Mr 鄭世章 said that his normal working hours were from 9am to 6pm, with a flexible lunch break. He accepted that he would take washroom breaks from time to time. As to the observations, he accepted that he had conducted the same through the closed-circuit television system installed inside Lift No. 1, and viewed it from a coloured monitor. He said that he could recognise the people using Lift No. 1 at LG/F from his observations were people working for Livington Enterprises Ltd (“Livington”), a company in the trade of bedding products, or people working for the respondent, but mostly were people from Livington. He also said from his understanding, Livington and the respondent shared a common boss.

21.  Mr 趙芝力was the chairperson of the MC who adopted his three witness statements as part of his evidence-in-chief at the trial.

22.  On the other hand, the respondent called one factual witness, Mr Lam Wai Sing, a director of the respondent. He adopted his two witness statements as part of his evidence-in-chief at the trial.  Under cross-examination, Mr Lam Wai Sing accepted that:-

(1)  After the replacement works had been carried out, the lifts functioned better than the old ones. For instance, he needed not to manually open the doors of Lifts No. 1 or 2 when using them. Although a lift attendant was in the past employed to operate the doors of Lifts No. 1 and 2 prior to the replacement works, he had to operate the doors by himself from time to time.

(2)  Apart from using Lift No. 1 fairly regularly, he had personally used Lift No. 2 when he needed travelling to the upper floors of the Building, for instance, when heading up to 20/F for the owners’ meetings of the Building. He could not confirm, however, whether his colleagues had used Lift No. 2 or not.

(3)  The stairway connecting LG/F to G/F as shown in the photographs[5] had a sharp turning at one end. The said stairway was mostly for movement of people rather than transportation of goods.

(4)  Whilst the respondent is at all material times the owner of LG/F, the respondent had allowed Livington to use the premises on LG/F. He also confirmed that Livington and the respondent shared a common boss. Further, the goods stored inside Car Parking Space No 3 on CP/F as shown in the photograph[6] belonged to Livington with the permission of the respondent.

(5)  The vehicular entrance of the Building on G/F would lead to Hong Man Street whilst the one on CP/F would lead Kut Shing Street. Comparing the two streets, Hong Man Street was the wider one whereas Kut Shing Street was a narrower side street. It was easier for lorries to enter Hong Man Street than Kut Shing Street, as Kut Shing Street was narrower and often congested.

Maintenance or Replacement of Lifts No. 1 and 2? 

23.  Mr Mak for the respondent submitted that the Tribunal is not concerned with complete replacement of Lifts No. 1 and 2 with a new model.  However, judging from the minutes of the General Meeting and other MC Meetings[7], they kept using the Chinese words “電梯更換” , “更換工程” or simply “更換” in many different places.  Looking at the contract itself[8], the Chinese words “更換” also appear in many different paragraphs therein.  The total costs incurred for such works is $1,900,000 which is a very huge amount of money and non-recurrent or capital in nature.  In the circumstances, I am of the view that although Lifts No. 1 and 2 were not replaced with a new model, the substantial works carried out by the contractors pursuant to the resolution passed by the General Meeting and the relevant contract are not maintenance works but renovation or replacement works of the lifts.

Interpretation of Clause 12

24.  Mr Mak for the respondent submitted that any conduct subsequent to the execution of the DMC are irrelevant to its interpretation.  He relied on the House of Lords case, James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 which held[9] that:

“… it is not legitimate to use as an aid in the construction of the contract anything which the parties said or did after it was made.”

25.  I agree with this submission and consider that the evidence of 鄭世章 and 趙芝力 can only serve the purpose of background information but is irrelevant to the determination of the objective intention of the drafters at the time of executing the DMC.

26.  Mr Mak for the respondent further submitted that Clause 12 of the DMC shows the drafters’ intention to exempt the respondent, as the owners of the LG/F, and car parking spaces on G/F and CP/F, from the liability to the lifts and that the proviso in the second sentence, namely “Provided that the owner of the units on the Ground floor and Lower Ground floor shall not bear any expenses for the maintenance of the lifts in the said Building” does not add liability to the owners of the G/F, LG/F and CP/F.

27.  Mr Mak for the respondent contended that the units and the carparking spaces on the G/F have direct access to Hong Man Street since it is at the street level. As a result, access to the lifts is unnecessary for any G/F’s owners for using their own units or carparking spaces. Therefore, at the time of its execution, the drafters of the DMC would not have intended to confer any benefit of the lifts to any G/F’s owners.  In relation to the LG/F, while it was not on the street level itself, owner of the LG/F can get access to Hong Man Street, without the use of a lift.   At approximately 15 meters from the Building’s main entrance, there is a separate and independent entrance with a flight of stairs leading directly to the LG/F. With that entrance, the LG/F’s users can get access from and to Hong Man Street without using any lifts. With such a design, the drafters of the DMC would have intended the lifts to confer little to no benefits on the LG/F’s owner.  With regard to the CP/F, it is also at the street level, with direct access to Kut Shing Street. Therefore, any cars can use the entrance at Kut Shing Street to enter into the CP/F for transportation of good, storage, and loading and unloading without using the lifts. Given this direct access, the drafters of the DMC would have intended for the owners of the car parking spaces on the CP/F to benefit a little or nothing at all from the lifts, which are unnecessary to their enjoyment of their properties.

28.  On the other hand, Mr Wong for the applicant cited 南生大廈業主立案法團訴葉小燕及另一人[10], in which a building underwent renovation works including the lift, and the incorporated owners of the building, as applicant, issued a claim for the share which should be borne by the roof owner, as the respondent,  in accordance with the undivided shares of each owner.  Judge Lam (as Lam VP then was) observed that the interpretation of DMC was key to the case, and he drew a distinction between recurrent expenses and non-recurrent expenses in considering a proviso which exempted the roof owner from contribution to “maintenance fees”. The learned judge said:-

“2． 南生大廈於1977年中進行大規模的維修工程，而該維修所涉的工程，… 包括工程項目如下：

雨水排污系統，…，升降機門工程，…，天台升降機門維修，…，地下升降機大堂維修，…，拆換升降機大堂天花。

…

10． 本案之重心，是對大廈公契內有關之條文之詮釋。大廈公契第 4(c) 條之條文如下。

‘Each owner shall be bound by and shall observe and perform the following covenants, provisions and restrictions,

(c) The following costs charges and expenses namely:-

(i) Electricity, water for flushing purpose and other similar charges …

(ii) Remuneration for caretakers, watchmen, cleaners, attendants and the like.

(iii) The cost of refuse disposal.

(iv) The cost of repairing, renewing, maintaining, cleansing, painting or decorating the said building or any part or parts thereof and all water pumps, tanks pipes, sewers, drains, watercourse, cable, wires or services therein and all the apparatus equipment and conveniences thereof.

(v) The cost of operating and servicing the water pumps.

(vi) Insurance premium shall be borne and paid by the owners …

Provided that so long the owner of the main roof owns other units of the building it is not required to pay maintenance fees.’

11． 本案關鍵的條款，是第 4(c) 條之但書 (即proviso) ：

‘Provided that so long as the owner of the main roof owns other units of the building it is not required to pay maintenance fees.’

 …

25.  本席認為有關公契條文之解釋，應參照其前文後理。在本案中，公契第 4(c) 條的但書之描述，是確實與第 4(d) 條之描述有明顯之分別，如果第 4(c) 條內有關 ‘maintenance fees’ 的豁免，原意是包含一切維修之費用，本席認為應可參照第 4(d) 條之做法，簡單地描述為不需支付一切該等費用，即 ‘is not required the pay the said costs, charges and expenses’.

26.  本席認為 ‘maintenance fees’ 這個字句，本身的範圍是有含糊的地方，它可以是廣義的，即包括一切維修費用，也可以是狹義的，即局限於一些日常保養之經常性費用。本席認為如果公契的原意是要採納與本席上述提及在普通法之下攤分方式 (即按業主之業權份數攤分) 不相符之方法，公契是需要採用清楚明確的字句。

27.  本席同意申請人之論據，即第 4(c)(iv) 條及第 4(d) 條內之字句，對 ‘maintain’ 一字之意義，是給予一個狹義之意思，所以採用了 ‘repairing、renewing、maintaining、cleansing、painting or decorating’  之句式，這一點亦反映在第3(f)條之條文內。因此本席認為，在第 4(c) 條的但書中，‘maintenance fees’  應給予一個狹義之理解。

28.  本席對公契之解釋，當然不會單憑條文本身之合理性而作出一些結論。但本席認為，在本案中，本席給予 ‘maintenance fees’ 這一字句的詮釋是合理的。因為天台對日常保養的需求較少，所以大廈公契內有關之但書對天台業主作出豁免是合理的，但對於整座大廈之維修，天台的業主也是有具體的得益，所以不給予豁免也是合理的。

29.  在本案的維修工程當中，很明顯地是不包括在一般日常保養的範疇內，所以本席裁定第 4(c) 條的但書並不適用，正確的分攤方式是應以九十五份計算。因此，本席判決申請人勝訴。”

29.  In my view, the proviso in Clause 12 shall be similarly interpreted in narrow sense rather than in wide sense.  It only provides an exemption to the “repairing and maintaining” costs of the lifts to the owners of G/F and LG/F, which are recurrent in nature.  The Tribunal has no difficulty to understand the reason behind as the owners of G/F and LG/F (including their authorised persons) will barely or seldom use the lifts.  However, the Tribunal does not consider that the proviso in Clause 12 further provides an exemption to the costs of “renovations or replacements” of the lifts to the owners of G/F and LG/F, which are non-recurrent or capital in nature. This must be a deliberate choice instead of an oversight of the DMC’s drafter who is a firm of solicitors[11].

30.  According to Clauses 7 (b)(2) and (b)(7), the Manager of the Building has the express and wide power to carry out the “renovations or replacements” works and engage the contractors for such purposes.  It clearly shows that the drafter has considered the necessity of “renovations or replacements” in respect of the Building including the lifts in the future and intentionally chosen not to grant exemption to the owner of G/F and LG/F for the costs of the “renovations or replacements” of the lifts when drafting the proviso in Clause 12; otherwise, it should expressly include all the necessary words to such effects in the proviso.

31.  Reading the DMC as a whole, looking at the surrounding circumstances of the Building and applying a purposive construction and common sense, I form the view that Clause 12 of the DMC dose not exempt the respondent, as the owners of the LG/F, and car parking spaces on G/F and CP/F, from the liability to the replacement costs of the lifts.

Whether the respondent shall be liable to contribute to the replacement costs of Lift No.2 as an owner of LG/F

32.  It is not in dispute that Lift No. 2 has access to the CP/F and the G/F, and from 11^th to 21^st Floors only but is not accessible to the LG/F.

33.  Mr Mak for the respondent made the alternative argument that since Lift No. 2 confers no benefit at all on the LG/F, simply by its physically absence, the respondent, as an LG/F owner, is not liable to contribute to its replacement costs.  Mr Mak cited Thorogood Estates Ltd v Robinson Heights (IO) [2013] 1 HKLRD 1077, in which the Court of Appeal was dealing with a clause in the DMC providing for apportionment between the Garage owner and the flat owners in two parts: first, the estimated management expenses (EME) “which are attributable solely to or solely for the benefit of the Garage” and second, EME of the units other than the Garage.  The Court of Appeal held that:

“38.  Thus, viewing the DMC as a whole, and the practical object which it was intended to achieve, in my judgment a reasonable person having all the background knowledge would have understood cl.D5(a) and D5(b) to provide for a mutually exclusive apportionment of the estimated Management Expenses.  The practical effect of cls.D5(a), D5(b) and 6 is that flat Owners who do not benefit from the use and enjoyment of the Garage would not be required to contribute to the Management Expenses attributable solely to or solely for the benefit of the Garage including the Garage Common Areas, and the Garage Owner who does not benefit from the use and enjoyment of the flats in the Towers would not be required to contribute to the Management Expenses attributable solely to or solely for the benefit of the flats in the Towers including the Towers’ Common Areas and Facilities.” (emphasis added)

34.  In my view, this case does not support Mr Mak’s proposition of “no benefit no pay” principle since the Court of Appeal was interpreting a particular clause in the DMC containing the express words, namely the estimated management expenses “which are attributable solely to or solely for the benefit of the Garage”.  I consider that the Garage owner in this case was held not liable, not because of the alleged “no benefit no pay” principle, but because of the interpretation of this particular clause. Thorogood Estates Ltd’s case is distinguished.

35.  Mr Mak also relied on 好運中心業主立案法團 (Incorporated Owners of Shatin New Town) v 楊渠 (Yeung Kui) [2010] 2 HKC 241 to support the alleged “no benefit no pay” principle.  In this case, the Court of Appeal was again facing with a clause consists of the similar words “expenditure relates solely to or solely for the benefit of any Residential Unit…”[12].  I am of the view that this case is distinguished as the wordings in the clause is substantially different from that in the present case, in particular missing of the important words “solely for the benefit of”.

36.  Clause 12 of the DMC in the present case only mentions “the lifts” but not Lifts No. 1, 2 and 3 as defined in this judgment or any of them.  I fail to see on what legal basis which the Tribunal can interpret this clause to exempt the liability of the owner of LG/F for contribution to the replacement costs of Lift No. 2 only but not Lift No. 1.  In the circumstances, I reject the alleged “no benefit no pay” principle and consider that the respondent shall be liable to contribute to the replacement costs of Lift No.2 as the owner of LG/F.

Whether the resolutions passed at the General Meeting, the December MC Meeting and the June MC Meeting are inconsistent with Clause 12 of the DMC

37.  Mr Mak for the respondent relied on Clause 15(b)(1) of the DMC to submit that the resolutions passed at the General Meeting, the December MC Meeting and the June MC Meeting are invalid due to inconsistency with Clause 12.

38.  Mr Wong for the applicant accepted that the applicant has no power to pass resolutions which contravene provisions in the DMC. Nevertheless, in the present case, he submitted that there is no provision in the DMC which prohibits the applicant from undertaking renovation or replacement works to the common parts of the Building, including the lifts.  Based on my interpretation of Clause 12 above, I accept Mr Wong’s submission as the said resolutions did not contravene Clause 12.

Calculation of contribution

39.  Mr Mak for the respondent argued that in view of the substantial similarities between the DMC in the present case and that in The Incorporated Owners of Galaxy Factory Building v Hui Yerk Chow & Ors (unrep, LDBM116/2004, 9 July 2004) and its similar structure with that in The Incorporated Owners of Hertford Mansion (Un Chau Street) v Wong Shing Kwan (unrep, DCMP2924/2016, 5 June 2017), Clauses 10 and 11 of the DMC should be construed in a way that the calculation of the contribution should be based upon management shares as set out in the Fifth Schedule, instead of the undivided shares.

40.  Mr Wong for the applicant submitted that section 22(2) of the BMO should apply, which provides that contributions by owners should be calculated in proportion to their undivided shares, as the DMC does not provide for the fixing of contributions to non-recurrent expenditure like the lifts replacement work.

41.  I have no doubt to reject Mr Mak’s submission as Clause 10 relates to the management fees and the Fifth Schedule of the DMC relates to the management shares, which are in recurrent nature and have nothing to do with the renovation or replacement costs.  I accept Mr Wong’s submission and consider that the situation of the present case is similar to that of Incorporated Owners of Man Ying Building v Lai Ming Fung LDBM 342/1999; [2001] 3 HKLRD 344, 345B-E. In that case, the DMC was silent as to how contributions were to be made to the contingency fund and Schedule 3 of the DMC was only applicable to calling contributions to and the maintenance of the general fund. That formula was not applicable to the contingency fund as the renovation work was not of a recurrent nature. Accordingly, section 22 of the BMO and the formula contained therein were applied in determining how much an owner should contribute.  In the present case, I consider that section 22 is also applicable.

42.  Lastly about the legal fee of $5,500[13] incurred, I consider that there is no owners’ or MC meeting passed to recover such fee from the owners according to their respective undivided shares.  Hence, this fee is disallowed and the total contribution shall be $1,650,000 instead of $1,655,500.

Conclusion

43.  To conclude, judgment be entered against the respondent for the sum of $198,000 (ie $1,650,000 X 120/1000).

44.  In the prayer of the Notice of Application, the applicant claims interest pursuant to sections 12B and 12C of the Lands Tribunal Ordinance.  As both parties have not made any submission on the issue of interest, I exercise my discretion to order the respondent to pay interest on $198,000 at 8.125% per annum from the date of the commencement of these proceedings (ie 16 March 2018) up to the date hereof and thereafter at judgment rate until full payment.

45.  No reason why costs shall not follow event.   I now make an order nisi that the respondent shall pay costs of these proceedings including all costs reserved, if any, with certificate for Counsel on the District Court scale, to be taxed if not agreed, which shall become absolute unless any of the parties apply to vary the same by summons within 14 days.