WONG CHING YEE v. POON CHUNG YUEN AND ANOTHER

[English Translation – 英譯本]
LDMR 32/1999

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

(MISCELLANEOUS REFERENCES APPLICATION
 NO. 32 OF 1999)

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JUDGMENT

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1. The Applicant is the owner of a residential unit in Block H of Fanling Centre, New Territories. She made the application herein on behalf of and representing not less than 5% of the owners of Fanling Centre.  The 2^nd Respondent is the Incorporated Owners of Fanling Centre (“the Incorporation”), and the 1^st Respondent is the Chairman of the Incorporation.

2. On 17 December 1999, the Applicant made the following application in the Lands Tribunal:

To remove all of the existing members of the management committee of the Incorporated Owners of Fanling Centre and to re-elect new members for the same.  By consent, the Plaintiff and the Defendants ask for an order in terms of the Consent Summons enclosed.

3. On the same day, I granted an order in terms of the Consent Summons.

4. The only issue in dispute between the parties is in relation to costs.  The two Respondents suggested that each party was to bear its own costs, whereas the Applicant maintained that the two Respondents were to bear all her costs in the hearings of the matter in the High Court and that Lands Tribunal.  As the issue was unresolved, a hearing on that issue took place before me.

The High Court hearing

5. On 30 November 1999, the Applicant commenced proceedings in the High Court claiming the following:

1. The Plaintiff applies to the court for an injunction requiring the Defendants to convene, within 15 days, an owners’ general meeting of Fanling Centre for the purpose of considering and approving the following matters:

a) re-electing members for the management committee of the Incorporated Owners;

b) dissolving the existing management committee of the Incorporated Owners.

2. Damages for the Plaintiff;

3. Interest;

4. Costs;

5. Other claims.

6. The Applicant issued a summons in the High Court on the same day, seeking the following orders from the court:

“1. The Defendants within 15 days convene a meeting of the Incorporated Owners of Fanling Centre to consider and vote on the following resolutions:-

(a) To remove the existing members of the management committee of the Incorporated Owners of Fanling Centre and to re-elect new members for the same;

(b) Alternatively to dissolve the existing management committee of the Incorporated Owners of Fanling Centre.

2. Costs of and incidental to this application and order be to the Plaintiff.”

7. On 13 December, having heard submissions from both parties, Yeung J adjourned the hearing for part-heard.  On 17 December 1999, Deputy Judge Li, who took over the hearing of the case, heard submissions from both parties and made the following orders:

“1.     The Action be stayed and not be proceeded without leave of the High Court.

2.      The Plaintiff do have leave to start a fresh application at the Lands Tribunal.

3.      The documents filed into Court be released to all parties.

4.      All costs of High Court be reserved for consideration by the Lands Tribunal.”

8. On the same day, the Applicant made the present application in the Lands Tribunal.

9. The legal proceedings in the High Court were commenced in purported reliance of Paragraph 1(2) of Schedule 3 to the Building Management Ordinance, and naturally, this also formed the basis of the Applicant’s present application in the Lands Tribunal.  The said Paragraph 1(2) provides as follows:

“The chairman of the management committee shall convene a general meeting of the corporation at the request of not less than 5% of the owners for the purposes specified by such owners within 14 days of receiving such request.  (underlining added)”

10. The first issue for my decision is whether the Applicant has requested the 1^st Respondent to convene an owners’ general meeting.  The Applicant claimed that not less than 5% of the owners of Fanling Centre had made requests, on 11 November and 30 November 1999 respectively, that an owners’ general meeting be convened.

The second request for an owners’ general meeting

11. On the evidence of Mr Kwong Kam Tim Christopher, a clerk in the employ of Messrs. Liu, Chan & Lam, solicitors for the Applicant, he served an affirmation of the Applicant together with the exhibits thereto on the 1^st Respondent on 30 November 1999.  The gist of his affirmation is as follows:

“1.     I did on Tuesday the 30^th day of November 1999 at about 8:39 p.m. serve a photocopy of an Inter-Partes Summons dated 30^th November 1999 returnable on 3^rd December 1999 at 10:00 a.m. at the High Court, a photocopy of the Affirmation of Wong Ching Yee filed on 30^th November 1999 together with exhibits marked “WCY-1” to “WCY-12” therein referred to and a Sealed Copy of a Writ of Summons in this action which appeared to me to have been regularly issued out of and under the seal of the High Court against the abovenamed 1^st Defendant POON CHUNG YUEN and 2^nd Defendant THE INCORPORATED OWNERS OF FANING CENTRE at the suit of the abovenamed Plaintiff WONG CHING YEE (suing on behalf of herself and on behalf of and representing not less than 5% of the owners of Fanling Centre) and which said Sealed Copy of a Writ of Summons was dated the 30^th day of November 1999, on the said 1^st Defendant personally with a sealed copy of the said Writ of Summons written in both English and Chinese languages and endorsed with an explanatory note in Chinese language pursuant to the Practice Direction together with 3 prescribed forms of Acknowledgment of service and a copy of the Directions for Acknowledgment of service at Podium, Block H, Fanling Centre, New Territories.”

12. Exhibit “WCY-1” consists of a document containing the signatures of not less than 5% of the owners of Fanling Centre which founded the Applicant’s request for an owners’ general meeting, and also the Land Registry records of their ownership.  When Kwong Kam Tim Christopher served “WCY-1” on the 1^st Respondent, he was merely acting on behalf of Messrs. Liu, Chan & Lam in delivering to the 1^st Respondent the legal documents pertaining to the High Court action. At that time, Messrs. Liu, Chan & Lam was not making, on behalf of those owners, a request to the 1^st Respondent for an owners’ general meeting; the firm was merely lodging a Statement of Claim on behalf of the owners and then, through Kwong Kam Tim Christopher, serving the relevant legal documents on the 1^st Respondent.

13. The documents that comprise Exhibit “WCY-1” clearly show the owners’ intention in signing the document.  The relevant parts of the document are set out below:

“As the incorporation had, on 4 November 1999, received a request, made by not less than 5% of our owners in accordance with Schedule 3 to the Building Management Ordinance, to convene an owners’ general meeting for the purpose of the following matters:

(a)     to dissolve the existing management committee of the incorporated owners;

(b)     to re-elect members for the management committee.

But up to now, the incorporation has not complied with the legislation by convening the general meeting, but instead, has done many unnecessary acts of obstructing and blackening the convenor, etc.

We have sought legal advice and the lawyer considers it necessary to apply to the court to convene an owners’ general meeting for the purpose of resolving the above matters.

We therefore respectfully ask all supporters to put their signatures below and on the enclosure to instruct Messrs. Liu, Chan & Lam to apply to the court to convene an owners’ general meeting, to negotiate with the incorporation and to attend to all relevant matters.”

“We hereby instruct Messrs. Liu, Chan & Lam to apply to the court to convene an owners’ general meeting, to negotiate with the incorporation and to attend to all relevant matters, and the agenda of the meeting is:

(a)     to dissolve the existing management committee of the incorporated owners;

(b)     to re-elect members for the management committee.”

14. The sentences “We therefore respectfully ask all supporters to put their signatures below and on the enclosure to instruct Messrs. Liu, Chan & Lam to apply to the court to convene an owners’ general meeting” and “We hereby instruct Messrs. Liu, Chan & Lam to apply to the court to convene an owners’ general meeting” clearly show that the aforesaid owners instructed the law firm for the specific purpose of “applying to the court to convene an owners’ general meeting”; and if their application was allowed, the court would order (and not request) the 1^st Respondent to convene an owners’ general meeting.  Therefore, the purpose of signing on the document under Exhibit “WCY-1” was not to request the 1^st Respondent to convene an owners’ general meeting.  Had this been the owners’ request, it would not have been necessary for them to seek the court’s intervention by commencing legal proceedings.

15. Applying for a court order to compel the chairman of an owners' incorporation to convene an owners’ general meeting is completely different from requesting the chairman to convene such meeting.  Once the court allows the application and makes an order against the chairman, he is bound to comply with the order, failing which he will incur legal liability and may be punished for contempt of court.  On the other hand, the chairman will not be punished for not complying with the owners’ request, which is not tantamount to non-compliance with a court order.  Therefore, the application by the owners for a court order compelling the 1^st Respondent to convene an owners’ general meeting did not amount to a request by the owners to the 1^st Respondent for such meeting.

16. As is clear from the Applicant’s closing submissions and her affirmations, the basis of her application was the “request” (“2^nd Request”) of 30 November.  Mr Wong, Counsel for the Applicant, stated in paragraph 3(2)(a) of his Closing Submissions that “It is as obvious as daylight that the writ was based on the 2^nd Request and cannot be based on a previous request (‘the 1^st Request’).”  Mr Wong went on to say, at paragraphs 8 and 9:

8.      This position is made clear as early as 14^th December 1999 when Madam Wong filed her second Affirmation.  At paragraph 3, it is stated:-

‘I have now carefully read through each and every paragraph of the Affirmation and the contents of which have been explained to me by my solicitors.  To my surprise, I cannot find a single piece of document and/or evidence in the Affirmation to rebut the validity of WCY-1 [the 2^nd Request].  What the 1^st Defendant attempts to do is to confuse the matter by (1) discussing the background of the Plaintiff’s present application which would have to be solved in any event the merits of which would be very briefly discussed herein below; (2) by questioning the validity of the former statutory request issued by the Plaintiff pursuant to clause 1(2) of the Third Schedule of the Building Management Ordinance, Cap. 344.  The significance of the former statutory request is limited to the fact that and it will be shown below how unreasonable the Defendants have been unlawfully refusing and avoiding the inevitable.’

9.      Hence, in strict analysis, the validity of the 1^st Request is irrelevant.  It is precisely because of the unreasonable behaviour of the Defendants in respect of the 1^st Request, that the Plaintiff issued a new request, i.e. the 2^nd Request with the Writ to base its application.  (underlining added)

17. As Exhibit “WCY-1” relied on by the Applicant did not constitute a request by the owners to the 1^st Respondent for an owners’ general meeting, the Applicant’s conduct failed to meet the requirement of Paragraph 1(2) of Schedule 3.  Nevertheless, I have to proceed to consider whether the 1^st Request made by the owners assisted the Applicant’s application.

The 1^st Request for an owners’ general meeting

18. A list of owners (Exhibit “WCY-7”) was handed to the 1^st Respondent on 11 November 1999.  That list contained signatures of owners of 137 residential units at Fanling Centre.  The following sentence appeared at the top of the list:

“Request the incorporated owners to convene an owners’ general meeting to dissolve the existing management committee and re-elect members for the management committee.”

19. Upon verification, the incorporation found that not all the owners named in the list agreed to make a request for an owners’ general meeting.  It is unnecessary for me to decide on this issue.  For the sake of analyzing the evidence, I assume that all the owners of the 137 residential units had made a request for an owners’ general meeting.  Of these owners, only owners of 78 residential units signed the document that comprises Exhibit “WCY-1”.  In other words, only the owners of 78 out of 137 residential units made the present application to the court.  This is below the 5% requirement under Paragraph 1(2) of Schedule 3 because Fanling Centre consists of 2,202 residential units and 5% of that will be 110 owners.  Exhibit “WCY-1” does contain the signatures of owners of 151 residential units, but apart from the aforesaid owners of 78 units, owners of the remaining 73 units had not signed “WCY-7”.  This means that these owners of the 73 units had not requested the 1^st Respondent to convene an owners’ general meeting, and therefore this figure cannot be included in the numbers of owners who had made such a request.  The owners of the 78 units only form 3.5% of all the owners.  Therefore, as far as the High Court action is concerned, only 3.5% of the owners had requested the 1^st Respondent to convene an owners’ general meeting, and this is below the 5% figure as required by Paragraph 1(2) of Schedule 3.

20. For the above reasons, had the parties not been able to reach a settlement on 17 December 1999 and the case proceeded to hearing, the Applicant’s application would have been doomed to fail.  Hence the Applicant must pay costs of the two Respondents in the present case.

21. Section 12(1) of the Lands Tribunal Ordinance contains the following provision regarding costs orders:

“(1)   Subject to the provisions of the Ordinance giving the Tribunal jurisdiction in any matter, the Tribunal may award costs to and against any party to any proceedings and may order that those costs be taxed on the basis of any one of the Scales of Costs set out in Schedule 1 to the District Court Civil Procedure (Costs) Rules (Cap. 336, sub. leg.) and the Schedule to Order 62 of the Rules of the high Court (Cap. 4, sub. leg.).”

22. Although Section 12(1) does not expressly provide that the term “proceedings” refers to proceedings before the Lands Tribunal, the first sentence of the subsection makes it clear that, in dealing with any matter over which the Tribunal has jurisdiction, the Tribunal may, subject to other relevant provisions to the contrary, make a costs order against a party to the proceedings; in this connection, “proceedings” must mean any “proceedings” for matters over which the Tribunal has jurisdiction.  “Proceedings” in this context cannot possibly refer to “proceedings” before another court (such as the High Court or the District Court), and the Lands Tribunal can only have jurisdiction over proceedings brought before that Tribunal.  “Proceedings” must therefore mean proceedings before the Lands Tribunal.  The High Court action between the parties hereto is separate and distinct from the proceedings between the parties before this Tribunal, and this Tribunal has no power to make any costs order for the High Court action.  Therefore, I cannot and will not make any costs order for the High Court proceedings.

23. The present case does not involve legal questions of great complexity, and therefore costs should not be assessed on the High Court scale.

24. I hereby order the Applicant to pay costs of the two Respondents in the proceedings before the Lands Tribunal (including costs in instructing Counsel), such costs to be fixed on the basis of the scale set out in the District Court Civil Procedure (Costs) Rules and to be taxed if not agreed.