CHAU MEI LEE ERAGRANCE v. NG YEE TIM AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

-----------------

-----------------

JUDGMENT

-----------------

Background leading to issue of the writ on 29. 1. 1994

1. Kowloon Inland Lot No. 9205 ["the said Lot"] is held from the Crown under a Crown Grant dated 28. 4. 1904 which provides by its Special Condition 4 that the Lot "shall not be used for industrial purposes".

2. In about 1969, a 12 storeyed building known as Wing Lee Mansion was erected on the said Lot. As presently stands, there are 3 units on each of the Ground Floor and 1st to 11th Floors of that Mansion. The Deed of Mutual Covenant of this Mansion dated 8.4.1969 provides by Clause 2 that each of the parties thereto shall be entitled to use "the common passages of and in the said building...". Clause 3 provides that each of the parties shall pay a proportion of the Crown rent, caretakers' and workmen's fees and other expenses in relation to the building. Clause 4 provides that the extent of contribution by each owner "shall be in proportion to his share of and in the said premises". Clause 17 provides that the owners of the flats on the 3rd to 11th floors shall not use the same "for any purpose other than private residential purpose" whilst the owners of the ground, first and second floors "shall use the same for non-domestic purposes". Chatham Property Limited was appointed by Clause 21 to manage the building for 3 years.

3. On the application of a management committee, The Incorporated Owners of Wing Lee Mansion ["The Incorporated Owners"] was registered as a corporation under the Multi-Storey Buildings (Owners Incorporation) Ordinance on 14.10.1985. Chan Ying Kit and Chu Lok Hing were the respective Chairman and Secretary of that management committee. On 31.10.1986, Ling Chee Sing and Tao Yuk Lin were appointed Chairman and Secretary of the Incorporated Owners. They were replaced by Leung Siu Keung as Chairman and the 1st Defendant ["Mr. Ng"] as Secretary on 1.3.1990. Leung Siu Keung resigned as Chairman in June 1993 apparently as a result of a disagreement with Mr. Ng.

4. As from October 1988, with the exception of 1 unit who paid $510, Management fees were levied on the rest of the owners of Wing Lee Mansion at the rate of $300 per unit. It would appear that this is contrary to Clause 4 of the Deed of Mutual Covenant. By a notice dated 15.9.1993 signed by Mr. Ng as Treasurer and Mr. Chan Ying Kit as Secretary of the Incorporated Owners, owners of Wing Lee Mansion were notified of a proposed increase of $50 per unit. Outlined in this notice was the income from and the expenditure incurred in respect of the Mansion together with an intimation of the cash held in the bank account of the Incorporated Owners.

5. Mr. Ng is a repairer. On 9.7.1966, he registered a business in the name of Man Sang Refrigeration Company ["Man Sang Refrigeration"]. According to that Business Registration, Man Sang Refrigeration first commenced business in July. 1966 at 152A-3, Austin Road, Ground Floor. Various amendments were made on this registration as to Man Sang's place of business including a reference to "1/F, 25 Austin Avenue, Kowloon Flat C". It is unclear from the registration when the various amendments were effected. The dates spanned between 1973 to 1988.

6. By an assignment dated 8.8.1985, Mr. Ng purchased Flat C on 1/F of Wing Lee Mansion together with 1/40 part of the said Lot. By a further assignment dated 5.7.1991, Mr. Ng acquired Flat C on 2/F of Wing Lee Mansion also with 1/40 part of the said Lot.

7. On 23.5.1986 Mr. Ng registered another business in the name of Man Sang Company ["Man Sang"] for the making of "mannequin & coat hanger". Man Sang carried on its business at Shek Kip Mei and then on G/F of 148A Austin Road. According to the up-date made on 20.5.1988, this business was moved to "1/F, C, 25, Austin Ave., Kowloon".

8. The Plaintiff ["Ms. Chau"] and her father Mr. Chau came onto the scene on 20.7.1993 when Ms. Chau acquired Flat A, 5/F of Wing Lee Mansion together with 1/40 part of the said Lot. By a notice dated 30.8.1993 addressed to Leung Siu Keung and copied to Chan Ying Kit as the Secretary of the Incorporated Owners, Ms. Chau notified them of her appointment of Mr. Chau to represent her including participation in the management of Wing Lee Mansion. By a letter dated 3.9.1993, Mr. Chau invoked Section 8(5) and Rule 1 (1)(b) and (2) in the Third Schedule of the Building Mangagement Ordinance (Cap. 344) and called upon Leung Siu Keung and Chan Ying Kit to hold a general meeting of the Incorporated Owners within 14 days.

9. By a notice dated 17.9.1993 signed by the Secretary, a general meeting of the Incorporated Owners was called for 29.9.1993. Items on the agenda for that meeting included election of officers, increase in management fees and control and management of the common parts. At the meeting held on 29.9.1993, only 3 owners attended personally. Mr. Chau was also present as proxy for Ms. Chau. The 3 owners and Ms. Chau have amongst them 5/40 part of the said Lot. After Chan Ying Kit's refusal to take up the post of Chairman, Mr. Ng proposed Mr. Chau be nominated Chairman on behalf of presumably Ms. Chau. 3 votes were cast in favour of this appointment. The meeting further resolved that pending the employment of a caretaker cum secretary, Mr. Ng should act as secretary. Chan Ying Kit and Liu Chung Yin were also appointed onto the management committee. The meeting unanimously resolved that management of the common parts should be strengthened and no one be allowed to occupy the same "wrongfully". A circular sent to the owners on 1.10.1993 however made it clear that it was Ms. Chau who had been appointed Chairman. In a separate letter from Ms. Chau she acknowledged her appointment as Chairman but expressed the wish to delegate this office to Mr. Chau. She invited objections be sent to Mr. Ng within 14 days.

10. By a notice dated 24.10.1993 signed by Mr. Ng, a meeting of the management committee was called for 1.11.1993. The notice indicated that a solicitor Mr. Ip would attend as legal advisor of the Mansion. The minutes of that management committee meeting revealed strong challenge being made by Mr. Ng on the status of Mr. Chau. Questions were raised on the propriety in delegating the Chairmanship to a representative who is not an owner of Wing Lee Mansion. The possibility of fresh election of Chairmanship was canvassed. It was an unhappy meeting. Mr Ng left before its conclusion. By a letter of the same date, the Chaus sought guidance from the Yau Tsim District Office as to their status.

11. On 7.11.1993 a letter was sent in the name of Ms. Chau as Chairman to Mr. Ng. The letter adverted to the provisions in Cap. 344 concerning proper maintenance of accounts by the Incorporated Owners. Mr. Ng was called upon to appoint an auditor within 7 days for preparation of accounts for the past 6 years. Mr. Ng's attention was also drawn to the requirement of the chairman and secretary's signature in applying the common seal of the Incorporated Owners.

12. This letter was followed by another letter dated 8.11.1993 sent by Ms. Chau in her personal capacity to Mr. Ng. She invoked Rule 3 in the 6th Schedule of Cap. 344 and called upon Mr. Ng to supply her income and expenditure account and other accounting documents of the corporation. Legal proceedings were threatened on non-compliance. The letter was chopped with a chop of Ms. Chau. She notified the co-owners of Wing Lee Mansion that day of her adoption of this new chop ["the said Personal Chop"].

13. Mr. Ng maintained his challenge against Ms. Chau's delegation of the Chairmanship. He was informed by a letter dated 9.11.1993 chopped with the said Personal Chop that Ms. Chau would continue to discharge her duties personally pending clarifications from the Legal Department.

14. On 2.12.1993, Solicitors acting for Ms. Chau demanded from Mr. Ng "as the treasurer of the Management Committee" to provide copies of the books of account including the income and expenditure account and the balance sheet for the last 6 years. There was no response to this letter. Instead the owners were notified on 9.12.1993 of the appointment of a new management committee. Ng Chi Kong was appointed Chairman of that new committee. Mr. Ng, Chan Ying Kit, Liu Chung Yin and Leung Lai Kwan were the other members appointed onto that management committee. These appointments were allegedly made pursuant to a notice dated 9.11.1993. By a letter dated 25.12.1993 chopped with the said Personal Chop, Ms. Chau lodged her protest with the Land Registrar against these new appointments. She also wrote on the same day as Chairman to Mr. Ng as Treasurer threatening proceedings. The Land Registry replied on 10.1.1994 that they had no jurisdiction to inquire into the validity of the appointments. The present proceedings were issued on 29.1.1994.

The proceedings as originally constituted on 29.1.1994

15. Mr. Ng and the Incorporated Owners were joined as the 1st and 2nd Defendants. The claim was lodged by Ms. Chau "on her own behalf and on behalf of the Incorporated Owners." 2 principal complaints were advanced. The first relates to her demands in the letters dated 7th and 8th November, 1993 [Para. 10 of S/C] and 2nd December 1993 [Para. 11 of S/C]. I shall refer to these as "the Account Claim". The second relates to the appointment of Ng Chi Kong as Chairman. I shall refer to this as "the Appointment Claim". The Statement of Claim gives little clue as to which of these 2 claims was being advanced on behalf of the Incorporated Owners and the basis whereby such claim was so advanced.

Dealings between the parties since institution of proceedings

16. By a notice dated 3.2.1994 issued in the name of the Incorporated Owners the owners of Wing Lee Mansion were informed of the circumstances leading to the appointment of Ms. Chau as Chairman, her delegation of that office to Mr. Chau on ground of her unavailability and inexperience and the appointment of Ng Chi Kong to replace her. The owners were further informed of the legal proceedings instituted by Ms. Chau and the termination of the auto-pay arrangements for payment of electricity and lift services. A general meeting was called and Ms. Chau was invited to attend that meeting personally. The notice drew attention to the fact that Ms.

Chau had by that stage let out her own premises

17. The formal notice dated 21.2.1994 for the general meeting scheduled on 14.3.1994 was signed by owners of 10 units in Wing Lee Mansion. The agenda for the general meeting included regularisation of membership of the management committee; consideration of Ng Chi Kong's appointment on 9.12.1993 as Chairman of the management committee; ratification of past accounts alleged to have been posted monthly on the notice board of Wing Lee Mansion and future management of the Mansion. Owners were informed that former monthly accounts were available on payment of 50 cents per page.

18. The Chaus took 3 steps to counter this First, by an unsigned notice dated 22.2.1994 issued in the name of the Chairman of the management committee, a meeting of that committee was called for 3.3.1994. Mr. Ng, Chan Ying Kit and Liu Chung Yin were invited to attend as current members of that committee. Item 4 of the agenda called for censure of Mr. Ng in his capacity' as temporary Secretary and Treasurer in disclosing to the public administration and financial documents of the Incorporated Owners. Secondly, by a notice dated 25.2.1994 chopped with the said Personal Chop, 2 additional items were inserted into the agenda of the general meeting scheduled on 14.3.1994. The first item related to an open yard ["the said Yard"] that abuts Flat C, 1/F of Mr. Ng. Ms. Chau informed the owners that the said Yard was being utilised improperly for commercial purpose and she was in the course of engaging legal advisers at her own expense to recover the said Yard for the common good. The second item called for the immediate dismissal of Mr. Ng as Secretary and Treasurer. Thirdly, the support of Full Plan Development Limited (owner of 8/40 share of the said Lot) was canvassed. Full Plan Development Limited ["Full Plan"] was asked not to ratify the accounts of the previous years and to defer consideration of the status of various officers of the management committee pending adjudication by the Court of the Appointment Claim.

19. The management committee meeting of 3.3.1994 was aborted for want of quorum.

20. On 10.3.1994, solicitors for Ms. Chau demanded Mr. Ng to vacate the said Yard within 7 days. Mr. Ng was told that in the event of non-compliance, Ms. Chau would "institute a derivative action against you.". This was followed by a letter dated 14.3.1994 addressed to the Incorporated Owners calling for action "within the next 3 days".

21. By a notice dated 21.3.1994, the Land Registrar was informed that with effect from 14.3.1994. Full Plan and Wong Shu Kei were the respective Chairman and Vice-Chairman of the Incorporated Owners. Leung Siu Keung and Mr. Ng were the Secretary and Treasurer. The Chaus' pleas for deferment of this item at the general meeting of 14.3.1994 apparently fell on deaf years. Ms. Chau's title as Chairman of the management committee was therefore removed although she was appointed a member of the new management committee.

22. The new management committee met on 29.3.1994. The minutes recorded the presence of Ms. Chau as member and Mr. Chau as an observer. New measures were adopted in relation to the chops and the bank mandate of the Incorporated Owners. The issue of alleged wrongful use of the said Yard was raised. Mr. Ng explained to the committee members that he had been using the said Yard from when he first moved into Wing Lee Mansion. It was resolved that since the said Yard "involved problem of property right, the Chairman would look for a solicitor to handle the case".

23. This did not satisfy the Chaus. On the following day their solicitors informed Mr. Ng of their intention to amend the writ and the statement of claim to include a claim in relation to Mr. Ng's alleged wrongful occupation of the said Yard. The Statement of Claim in this action was duly amended on 13.5.1994 to include a claim in respect of the said Yard ["the Trespass Claim"].

24. Mr. Ng tendered his resignation on 21.6.1994. By a notice dated 21.7.1994, the Secretary of the Incorporated Owners canvassed the views of the owners as to the accounts tendered by Mr. Ng for the period between 1988 to 1994. It was pointed out that should the majority agree to accept those accounts, the Incorporated Owners would press no further.

25. On 30.7.1994 Solicitors acting for the Incorporated Owners took up the Trespass Claim with Mr. Ng. In reply, Mr. Ng's solicitors asserted that he had been in occupation of the said Yard for "over 20 years" and has thereby acquired title to that area. This claim was repeated by Mr. Ng in his letter to the co-owners dated 26.11.1994.

26. Profits and Loss Accounts and Balance Sheets in respect of Wing Lee Mansion for the years 1988 to 1992 were prepared with the assistance of Mr. Ng. Those accounts were tabled at meetings of the owners of Wing Lee Mansion held on 29.11.1994 and 17.5.1995. On the basis of information furnished by Mr. Ng, the Incorporated Owners also prepared schedules of management fees collected for the years 1988 to April 1994. The Incorporated Owners met on 17.5.1995. It was resolved that the Incorporated Owners would take no action against anyone in relation to liability pertaining to its accounts for the period between 1.1.1988 to 3.5.1993.

27. By an order made by Master Jennings in these proceedings on 7.6.1995, Mr. Ng was ordered to deliver to the Incorporated Owners "all books, vouchers, receipts and other documents of the Incorporated Owners for the years 1988 to July 1994. The Incorporated Owners were to serve on Ms. Chau audited accounts for the year 1988 to April 1994 within 30 days.

28. The accounts of the Incorporated Owners were audited by Messrs. K. W. Lau & Co., a firm of certified public accountants. Their report of 12.7.1995 made 2 qualifications: the first relates to the Incorporated Owners' potential liability for costs in respect of these proceedings and the second relates to possible error in the basis adopted to collect management fees during this period. Apart from these 2 qualifications, those accountants thought that the financial statements for the period in question gave "a true and fair view". Those statements were approved by the management committee of the Incorporated Owners.

The Pleadings between the parties when the case was first opened before me

29. In relation to the Appointment Claim, Mr. Ng maintains that the meeting of 29.9.1993 appointing Ms. Chau as chairman was irregular and invalid. Ng Chi Kong was appointed on 9.12.1993 as Chairman in view of the purported delegation by Ms. Chau. In any event any irregularity was remedied by the election of Full Plan on 14.3.1994. The Incorporated Owners expressed no interest in this issue which they characterised as "personal disputes" between Ms. Chau and Mr. Ng. They further pointed out that under Cap. 344, membership on the management committee is confined to an owner as defined by that Ordinance.

30. In relation to the Account Claim, Mr. Ng asserts that by virtue of the irregularity of Ms. Chau's appointment, she had no locus standi to represent the management committee in making the demand. Furthermore, by the notice of 21.2.1994, owners were informed of the availability of copies of past accounts. Mr. Ng denies that no proper books of accounts have been kept. He says that Ms. Chau's request should have been directed to the Incorporated Owners. He further relies on approval of the accounts from 1986 to 1994 at a meeting of the management committee on 21.6.1994. The Incorporated Owners did not put forward a positive case on this claim.

31. In relation to the Trespass Claim, Mr. Ng says he had exclusive use since 1974. He relies on his adverse possessory title and says that Ms. Chau's claim is statute barred. The Incorporated Owners says this claim was maintained by Ms. Chau without their consent or authority and the current management committee "has already instructed solicitors to take action to persue (sic) the claim against the trespasser(s) of the said [Yard]".

This was the state of the pleadings since September, 1994. When the case was first opened before me, Mr. Mak informed me that the issues for my determination are the Account Claim and the Trespass Claim. The Appointment claim was hardly touched upon.

Alliance between Ms. Chau and the Incorporated Owners

32. Ms. Chau's claims were considered by the Incorporated Owners at a meeting held on 19.4.1995. Solicitors for the Incorporated Owners advised the owners present that his perusal of the documents discovered in these proceedings indicates that Mr. Ng did not derive any personal benefit from his handling of the accounts. The owners present resolved that subject to Ms. Chau accepting various proposals for costs, the Incorporated Owners should join Ms. Chau in suing Mr. Ng. In the context of the minutes of that meeting, it seems that this is referrable to the Trespass Claim.

33. No concrete action was taken until the matter was brought up again at a meeting of the owners held on 29.1.1996. By a majority, the owners resolved to acknowledge "retrospectively that [Ms. Chau] may represent the Incorporated Owners ... to continue these proceedings".

34. On 4th March, 1995 a proposed consent order was placed before me by Solicitors for Ms. Chau and Solicitors for the Incorporated Owners. I was asked to make an order under O. 42 r. 5A for the Incorporated Owners to withdraw its Defence. I refused whereupon Counsel appeared for the Incorporated Owners on the first day of trial (5th March, 1996). I drew Counsel's attention to O. 21 r. 2(2) whereupon Counsel for the Incorporated Owners withdrew its defence and departed.

35. In the course of Mr. Ng's evidence on 7th March, 1996, Mr. Mak (Counsel for Ms. Chau) applied to re-amend the Statement of Claim. The proposed amendments entail joining the Incorporated Owners as the 2nd Plaintiff. A draft re-amended Statement of Claim was tendered in support of this application. Mr. Ng who appeared throughout without legal representation strongly opposed. I was initially attracted by Mr. Mak's argument that the action is a derivative action and the Incorporated Owners is merely adopting Ms. Chau's claim. I reluctantly granted leave but subsequently indicated to Mr. Mak that I would like to re-consider my ruling and deal with the same as part of this Judgment. Whilst I must apologise to Mr. Mak for my indecision, the additional time allows me to see his application in better perspective.

36. Whilst the impact of the proposed amendments on the Trespass Claim is not extensive, they are far reaching in relation to the Account Claim and the Appointment Claim. I have already pointed out above the lack of averment in the original statement of claim to support Ms. Chau's pursuit of these claims on a derivative basis. If those claims are not derivative claims, the amendments would permit the Incorporated Owners to allege for the first time wrongdoing against Mr. Ng. The illogicality of the proposed amendments can be illustrated by paragraph 2 of the new proposed prayer wherein the Incorporated Owners would be claiming against itself a declaration that it failed to comply with various provisions of Cap. 344. Whilst it is tempting to confine leave to the Trespass Claim, I am of the view that overall these amendments in furtherance of the alliance came too late. I therefore exercise my discretion to disallow them.

Oral Evidence in support of Ms. Chau's case

37. Ms. Chau is a young hair stylist. Despite being named as the Plaintiff in this case, I doubt if she is truly interested in this suit. Her personal knowledge of what transpired is limited as she delegated most of the matters to Mr. Chau. All the references to Ms. Chau in this Judgment should be understood in this context.

38. Mr. Chau is a very careful and meticulous witness. His citation of the relevant provisions in the applicable Ordinances would have done any Junior Counsel proud. His finesse contrasts sharply with the crude antics of Mr. Ng. I have no doubt that he is the force behind the present suit. The Chairmanship of the management committee was his as opposed to Ms. Chau's goal. Upon being dislodged from that position, these proceedings were instituted and thereafter pursued in a personal vendetta against Mr. Ng. He transformed the relative calm and tranquillity of Wing Lee Mansion into an unsavoury legal maze.

39. Mr. Chau told me that he operates a tourist apartment. After her daughter's purchase he contacted Mr. Ng Mr. Ng told him that Leung Ying Kit, previous chairman of the management committee, had a dispute with him and resigned. Mr. Ng further told him that he took up the most important role because he was the treasurer. Mr. Chau referred to the notice dated 17.9.1993 calling for a general meeting to be held on 29.9.1993. He admitted that he drafted that notice which he distributed to the occupants. He attended the general meeting as Ms. Chau's proxy. Mr. Ng did not raise any objection in relation to his attendance. It was unanimously resolved at that meeting that there should be tighter control of the common part. After the meeting, he raised with Mr. Ng the state of occupation of the Yard. Mr. Ng told him in colourful terms that he should not meddle in other people's affairs. At the meeting of the management committee held on 1.11.1993, he said Mr. Ng left before the end of the meeting because the issue of election of new Chairman was not on the agenda. He asked Mr. Ng twice for the account books but was impolitely refused. He therefore sent to him the letter dated 7.11.1993 copying the same to the Yau Tsim District Office. He wrote the follow up letter on 8.11.1993 in Ms. Chau's personal capacity as Mr. Ng did not accept her chairmanship. Nr. Ng responded by his letter of 9.11.1993 calling for appointment of new chairman. The appointment of Ng Chi Kong came to his notice and he advised Ms. Chau to continue with her job. He acknowledged receiving copy of the notice dated 21.2.1994 indicating availability of accounts but explained that proceedings were ready on foot and the matter was in hands of solicitors. He referred to the schedule of management fees compiled on the basis of information furnished by Mr. Ng. He thought that mistakes had been committed by Mr. Ng in short collecting management fees from owners of ground floor units. He also pointed out that Mr. Ng made no effort to collect the receivables. In the course of his evidence Mr. Chau produced his original copy of the minutes of the meeting of the Incorporated Owners held on 17.5.1995 wherein it was resolved that the Incorporated Owners would not questions accounts for the period between 1.11.1988 to 3.5.1993. Mr. Chau expressed surprise that he did not attend that meeting and pointed out that he would have opposed this resolution. He disagreed with the suggestion that Mr. Ng had started using the Yard since 1974. He relied on the business registration of Mr. Ng indicating a move only in 1988. He admitted that Ms. Chau is not residing at Flat 5A which is rented out.

40. Mr. Shum Tai Chung, a Chartered Architect, produced his survey report dated 25.10.1995. He identified the Yard in question - an area of approximately 691 sq. ft. From the "present aging (sic) and deteriorating condition of the building materials" he estimated that the unauthorised structure on the Yard is approximately 10 years old. He further opined that the rental value of the Yard for 1995 would be HK$30 per sq. ft. on the assumption that the rental value for 1988 was $10.5 per sq. ft. It is not clear whether such opinion is within his realm of expertise. He pointed out that inactivity on the part of the Building Authority should not be treated as their acceptance of the existing structures in the Yard.

Site inspection and Mr. Mak's intimation of intention to amend

41. At the conclusion of evidence for Ms. Chau, Mr. Mak informed me of his intention to amend by adding the Incorporated Owners as co-Plaintiff. He further informed me that he was awaiting written authority from the Incorporated Owners and he was formulating his amendments.

42. I visited Wing Lee Mansion in the presence of the parties. The said Yard is just outside Mr. Ng's flat. It is in close proximity to the entrance leading to the lifts for access upstairs. The said Yard is covered by an iron structure of a rudimentary type. It encircled the Yard so that the Yard effectively formed an integral part of Mr. Ng's flat. On the day of my visit, the said Yard was apparently used as a storage space.

Mr. Ng's evidence

43. He certainly does not possess the same degree of sophistication as Mr. Chau. I can well understand the difficulties of communication between the two. Leaving his crude mannerism aside, I have no doubt whatsoever that he is a man of the utmost honesty. The very spontaneous way in which he gave his answers indicates that he stuck closely to the facts and made no attempt to tamper his evidence in the light of his personal interest.

44. He told me that he is a repairer by occupation. He first rented Flat 1C from Oen Cheong Estate Co. Ltd. ["Oen Cheong"] in 1974. In response to suggestion from the Bench, he produced rent receipts issued by Oen Cheong covering "Flat B - 1/F, 25 Austin Avenue, Kowloon" for the period between 1.3.1976 to 1.3.1979. Although so described, he was in fact occupying what is currently Flat C. The first tenancy was 1.3.1974. He started storing goods "outside" once he rented the premises. He also produced factory inspection records issued by the Labour Department in 1983, 1985 and 1993 in relation to the factory at Flat C, 1/F, Austin Avenue. He was cross examined on a bundle of business registration of Man Sang Refrigeration. Those registrations indicate that in 1966 Man Sang carried on business at 152A-3 Austin Road. The first business registration of Man Sang Refrigeration using Flat C, 1/F Austin Avenue as its address is the one dated May 1988.

45. Mr. Ng explained that prior to registration of the Incorporated Owners, Chan Ying Kit and one Chu were managing the Mansion. They started the practice of collecting management fees at the rate of $200 per unit per month for flats on the Upper Floors and $240 for G/F and Flats A & B on the 1/F. When Ling Chee Sing and Tao Yuk Lin were appointed Chairman and Secretary of the Incorporated Owners on 31.10.1986, he had already erected his canopy in the said Yard and there was no complaint being made against him.

46. When he took over from Chan Ying Kit and Chu, he adopted their practice. Entries were made page by page in an account book passed down by his predecessors. Although the Incorporated Owners maintained an account with the BCC, he kept some petty cash. As he was afraid that he might mix up that money with his personal income, he put the money into an envelop which he kept in his drawer. He refuted strongly the suggestion that he had in any way misappropriated sums of the Incorporated. I discouraged any further cross examination along this line as no such wrongdoing was alleged against Mr. Ng.

47. As treasurer of the Incorporated Owners he accounted to the owners every month by posting a balance sheet on the notice board. A photograph in Bundle A dated 25.12.1993 lends some weight to his claim. He refused to produce these documents to Ms. Chau before November 1993 because she "did not hold a meeting for this purpose and asked me for these". After the appointment of the new management committee on 14.3.1994, he assisted Mr. Yiu of the new committee to compile the accounts of the past year. He was told that the compilation revealed a discrepancy of $4,700. He immediately deposited this sum into the account of the Incorporated Owners.

48. He agreed that no meeting was held for the election of Ng Chi Kong on 28.12.1993. He accepted that is totally improper and explained such impropriety on the basis of his ignorance of the law.

49. He rejected the suggestion that no notice of the meeting of 17.5.1995 was given to the Chaus.

The Appointment Claim

50. As pleaded in paragraph 17 of the Amended Statement of Claim, the provisions in the Multi-Storey Buildings (Owners Incorporation) (Amendment) Ordinance came into effect on 8.5.1993. It made an important amendment to Rule 2(1) in the Third Schedule of what was hitherto the Multi-Storey Buildings (Owners Incorporation) Ordinance and thereafter the Building Management Ordinance. The governing provision in relation to meetings and procedure of the incorporated owners states that:

"Notice of a meeting convened under paragraph I shall be served by the secretary of the management committee upon each owner and upon the tenants' representative (if any) at least 14 days before the date of the meeting".

51. The notice in question was dated 17.9.1993. It called for a meeting on 29.9.1993. Only 12 as opposed to 14 days notice was given. Whilst this has not been relied upon as particulars in support of the averment in paragraph 7(b) of the Defence of Mr. Ng, it does raise doubt as to whether the meeting of 29.9.1993 was properly convened.

52. Mr. Ng accepts that no actual meeting was held for the appointment of Ng Chi Kong. Ng Chi Kong's appointment obviously cannot be sustained.

53. Indeed there was no attempt by Mr. Ng to maintain the Chairmanship of Ng Chi Kong. Whilst the Chaus attempted in February, 1994 to defer consideration of their status by the general meeting scheduled on 14.3.1994, they eventually accepted the appointment of Full Plan as Chairman of the management committee with Ms. Chau's role being confined to that of a member.

54. The Appointment Claim is therefore largely academic. Mr. Mak had very properly advised his client to drop this in his opening.

The Account Claim

55. To designate various parts of Ms. Chau's amended statement of claim as "the Account Claim" may be convenient but carries with it the danger of treating this as an ordinary case where the remedy of account is sought between a fiduciary and his principal. This is not such case.

56. Ms. Chau's claims under this head have to be considered by asking the following questions:

57. The relevant pleadings are to be found in paragraphs 10 - 12, 16 and 17 of the Amended Statement of Claim and paragraphs 1, 2, 4 to 5 of the Prayer.

58. Paragraph 10 of the Amended Statement of Claim pleads the letter of 7th and 8th November, 1993. By the 7th November, 1993 letter, Ms. Chau sought to direct Mr. Ng in her capacity as Chairman to appoint an auditor to prepare accounts for the past 6 years. Ms. Chau gave further directions in relation to her own appointment, Section 29 of the Building Management Ordinance provides:

"Subject to this Ordinance, the powers and duties conferred or imposed by this Ordinance on a corporation shall be exercised and performed on behalf of the corporation by the management committee".

There is no evidence to suggest that a management committee had so resolved. The Chairman alone has no power to dictate. Eve if I be wrong on all these, ensuring compliance is a matter for the Incorporated Owners. By asserting her position as Chairman of the management committee, Ms. Chau must therefore be maintaining that there is an organ on foot to take steps for the Incorporated owners. She has no locus standi to maintain these complaints on a derivative basis bearing in mind regularisation of the management committee on 14.3.1994 and the vote on 17.5.1995.

59. The letter of 8th November, 1993 was sent by Ms. Chau in her personal capacity to Mr. Ng. She invoked section 3 in the Sixth Schedule of the Building Management Ordinance which provides:

"If ...an owner...requests in writing the corporation to supply him with copies of -

the treasurer shall, on payment of such reasonable copying charge as the management committee may determine, supply such copies to that person."

60. The letter was sent to Mr. Ng as opposed to the Incorporated Owners. Whilst the capacity of Mr. Ng had been variously described, the minutes of the general meeting of 29.9.1993 and the subsequent notice to the owners of 1.10.1993 indicate that Mr. Ng was merely appointed as Secretary and not Treasurer. Her personal complaint, if justified, can only be against the Incorporated Owners.

61. The same applies to her letter dated 2.12.1993. That was written in her personal capacity to Mr. Ng. It called upon him as "the treasurer of the Management Committee" to give her access to the books of account of the Incorporated Owners pursuant to section 27(2) of the Building Management Ordinance which provides:

62. Consequently, if she has any complaint at all, those complaints should be addressed to the Incorporated Owners. It is for the Incorporated Owners, through the management committee as its executive organ, to ensure compliance.

63. What remains then is the "oral requests by the Plaintiff or her representative" pleaded in paragraph 12 of the Amended Statement of Claim. Mr. Ng says he refused to comply with those requests because there was no meeting presumably of the management committee giving the Chairman authority to make those demands. This is reinforced by the attitude that he took once a generally accepted management committee was on foot since 14.3.1994. Every co-operation was extended by Mr. Ng to that new management committee. The books were reviewed by solicitors of the Incorporated Owners who vindicated his honesty. The 2 qualifications by the auditor on 12.7.1995 do not diminish in any way the recommendations of those solicitors. It is therefore not surprising that Mr. Ng's co-owners resolved on 17.5.1995 that no action be taken in relation to the accounts for the period between 1.1.1988 to 3.5.1993. The situation is wholly different from cases where a dishonest majority sought to use his voting strength to suppress a minority. Mr. Ng's book keeping might not be perfect. But the vote of his co-owners signified their appreciation of the gratuitous efforts made by a man, not blessed with a high standard of education, in providing them with adequate services in Wing Lee Mansion. I reject any suggestion that Mr. Ng had deliberately kept the Chaus in the dark concerning the holding of the meeting of 17.5.1995.

64. The minutes of the Incorporated Owners dated 29.1.1996 indicates that their alliance with the Chaus is on the basis that any relief that this court might grant against the Incorporated Owners would not be enforced by the Chaus. This demonstrates the artificiality of the Account Claim. It is no more than an instrument to harass Mr. Ng.

65. For these reasons I dismiss the Account Claim made against Mr. Ng.

The Trespass Claim

66. Mr. Mak puts his case firmly on the tort of trespass. Whilst the defence asserts an adversary possessory title, it also relies on limitation. Section 7(2) of the Limitation Ordinance provides:

67. I accept Mr. Ng's evidence that he first rented what is currently Flat C, 1/F, Austin Avenue from Oen Cheong in about 1974. I further accept his evidence that he said to Oen Cheong that his belongings were bulky and he needed space to store them. Upon being told by Oen Cheong that he should think about a way out himself, he proceeded to occupy the said Yard for storage of his belongings. This state of affairs continued from 1974 to date. It was done openly and with the knowledge of the Authorities. When the Incorporated Owners was first formed in October, 1985, its officers did not take any step to terminate such trespass. There is no evidence to suggest any complaint or dissatisfaction by the co-owners. My visual inspection indicates that illegal structures are prevalent in Wing Lee Mansion. The situation is not unlike that described in the decision in Cheung Yuet v. The Incorporated Owners of Oriental Gardens [1979] HKLR 536. It is now too late for the co-owners or the Incorporated Owners to complain.

68. For these reasons I too dismiss Ms. Chau's Trespass claim against Mr. Ng.

69. I would however observe that Mr. Ng had erected 2 gates on Crown land. Whilst this is not the subject matter in this suit, I doubt if he will get a sympathetic hearing if he takes no step to remove those gates. I trust he will remedy this situation forthwith.

70. I dismiss the 2 live claims of Ms. Chau vis-a-vis Mr. Ng. I make an order nisi for costs in favour of Mr. Ng. He was not represented before me. His costs of the hearing should be modest. I make no order in relation to the academic dispute between Ms. Chau and the Incorporated Owners.