NG YUI TONG v. TAIKOO SHING (MANAGEMENT) LTD

LDBM 1/2023

[2024] HKLdT 35

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 1 OF 2023

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J U D G M E N T

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INTRODUCTION

1.  This is another dispute concerning the management powers of the Respondent as the estate manager of the Taikoo Shing Estate (“Estate”) between the Applicant and the Respondent.

2.  The main issue (“Main Issue”) for determination in this case is whether it is within the management powers of the Respondent, as estate manager, to improve and upgrade some security appliances for Stage III of the Estate (“Stage III”).

3.  The answer to this question essentially depends on the true construction of the deed of mutual covenant for Stage III (“DMC III”), which has been the subject matter of several judicial decisions that I will elaborate further below.

BACKGROUND

4.  The Estate is known as the largest private residential development in the Hong Kong Island. It covers an area of some 53 acres and is home to over 12,000 families living in 61 residential towers. There are also shops, schools and car parks in the Estate. The design and the structure of the Estate points to the fact that the Estate is targeted to be a large-scale urban private residential development that provides convenient and comfortable lifestyle to its owners and residents in the urban area.

5.  The Estate was developed in 12 Stages, with Stage I being completed in 1976. Each Stage of the Estate consists of a number of tower blocks, and has its own deed of mutual covenant and management agreement. All the deeds of mutual covenant of the 12 stages are in similar form and with similar terms.

6.  Stage III, comprising 8 residential towers, each with around 27 floors, was completed in about 1978. The ground floor is shops, car park and school. The first floor is the podium and garden. The DMC III was registered with the Land Registry on 9 January 1978, in that the Respondent is referred to as the “Management Company”. The DMC III is in similar terms to the other deeds of mutual covenant that cover all 11 other Stages of the Estate.

7.  The Applicant became the registered owner of a residential flat of Flat H, 10^th Floor, Fu Shan Mansion in Stage III in 1997. He was a member of the Representative Committee (“RC”) of Stage III between 2006 and 2017, and a member of the Management Liaison Council (“MLC”) (RC and MLC, to be elaborated further below) between 2009 and 2014. In 2021, he was re-nominated as a member of the RC for the period between 1 January 2022 and 31 December 2024.

8.  The Respondent is the estate manager of the whole Estate, and has been acting as such since 1976.

THE LITIGATIONS

9.  The scope of the management powers of the Respondent under the DMC III has been the subject matter of the dispute in the consolidated actions LDBM 191/2018, LDBM 196/2018 and LDBM 116/2019 (“Consolidated Actions”), which were commenced by the Applicant against the Respondent [1] .

10.  The judgment of the Consolidated Actions was handed down by the Learned Deputy District Judge Michelle Soong on 5 March 2021[2] (“LT Judgment”). All the Applicant’s claims in the Consolidated Actions were dismissed.

11.  Dissatisfied with the LT Judgment, the Applicant applied for leave to appeal against it. He was granted leave to appeal against the decision under action LDBM 116/2019, whereas his applications under the other two actions were dismissed.

12.  On 15 March 2023, the Court of Appeal dismissed the Applicant’s appeal against the LT Judgment under action LDBM 116/2019 (the "CA Judgment") [3]. Subsequently, the Applicant’s application for leave to appeal to the Court of Final Appeal was dismissed by the Court of Appeal.[4]

13.  On 3 January 2023, the Applicant commenced the present proceedings by filing the Notice of Applications, which was subsequently amended and further re-amended on 25 July 2023 (“NOA”).

APPLICANT’S CASE

14.  The Applicant’s case in the NOA can be summarized as follows.

15.  In the NOA, the bone of the Applicant’s case is his complaint that the installation and operation of some new security appliances undertaken by the Respondent (“Appliances Works”) do not come within its power as the estate manager of Stage III under DMC III.

16.  The Appliances Works are the installation and operation of the:-

1.  smart card devices (智能咭) in place of the combination-padlock (數字鎖), which were installed on the ground floor and the first floor, to open the doors at the entrances for entry into the tower blocks of Stage III, since 2004 (“Smartcard Access Devices”);

2.  tags (感應器) to record the security guard patrols (by the security guards connecting their mobile phones to the tags) in place of handwritten visiting logbooks (簽字簿), on each floor of the tower blocks of Stage III, since 2017 (“Electronic Patrol Devices”);

3.  a surveillance camera (攝影機) together with digital monitor (數碼閉路電視監視器), wires., etc., in place of analog monitor (類比監視器) and video machine (錄影機), on the ground floor of Stage III, since April 2022 (“Surveillance Camera Devices”); and

4.  sensors for door opening (門框感應器) in place of "open-button devices” (按制式的開門按鈕), at the entrance on the ground floor of Stage III, since June 2022 (“Contactless Devices”).

(The appliances being installed, collectively as the “Replacement Appliances”)

(The appliances being replaced, collectively as the “Original Appliances”)

17.  The Applicant’s repeated objections to the carrying out of the Appliances Works to the Respondent met with no success. He therefore commenced the present proceedings.

18.  The Applicant contends that:-

(1)  the Appliances Works are not necessary, requisite for or reasonably incidental to the management of the land and the buildings, hence, in breach of Clause 7(a) of the DMC III;

(2)  the Appliances Works do not serve the common interest or benefit of all the owners of the Stage III, thus, the Respondent does not have lawful authority to undertake such works;

(3)  On such basis, the Respondent’s entering into the contracts for the procurement of the supplies, goods or services relating to the Appliances Works and the expenses incurred therefrom are out of the scope of its management power, notwithstanding that such acts and the expenses were supported, resolved and approved by the MLC, RC and the Owners’ meetings;

(4)  hence, the expenses on the Appliances Works did not fall within the scope of the annual budget as prescribed under Clause 8(a) of the DMC III, thus, such expenses should be repaid by the Respondent;

(5)  hence, the Respondent is not entitled to withdraw, use or seek reimbursement of monies or expenditure incurred in the Appliances Works out of the management fund of the Estate;

(6)  hence, the Respondent is also liable to return its unjustifiable gain and profit by receiving remuneration and management supervision fee at 5% of all expenses and expenditures attributable to undertaking the Appliances Works under Clause 8(a)A(iv) of the DMC III (“Charges”);

(7)  hence, the Respondent is, in breach of section 34I of the Building Management Ordinance (“BMO”) in that it has wrongfully converted the common parts for its own use by installing the Appliances Works and interfered the enjoyment of the owners, liable to pay damages;

(8)  hence, the Respondent is estopped from denying that they have no authority to undertake the Appliances Works because that was the legal opinions given by its legal advisors in the past;

(9)  hence, the Respondent is dishonest, willful negligent and is liable to criminal liability.

19.  On such basis, the Applicant asks for, other than costs, the following reliefs: -

(1)  a declaration that the Appliances Works were not necessary, requisite for or reasonably incidental to the management of Stage III and the Respondent is not entitled to fund the Appliances Works with the management fund of Stage III;

(2)  an order for removal of the Replacement Appliances and reinstatement of the Original Appliances;

(3)  damages for breach of section 34I of BMO;

(4)  an order for the Respondent to return the expenses caused by the Appliances Works to the owners of Stage III, the Applicant and the management fund; and

(5)  injunction.

20.  It is noteworthy that despite paragraphs 16 to 17 of the NOA make reference to section 34I of BMO and relate a tortious claim of conversion, the Applicant confirmed that he abandoned all tortious claims in this action during the further call-over hearing on 27 September 2023.

RESPONDENT’S CASE

21.  The fact that the Respondent has undertaken the Appliances Works and that it received the Charges are not disputed by the Respondent. It is the Respondent’s position that the Appliances Works are for the benefits of the owners and residents of the Stage III, and are necessary, requisite for, incidental to and/ or in connection with the management of the Estate, falling within the ambit of what it is empowered to do under the DMC III. Any expenses connected with the Appliances Works are legitimate expenses associated with the management of Stage III and accordingly fall to be paid out of the management fund under the DMC III.

DISCUSSION

22.  Given the facts that the Respondent undertook the Appliances Works and that the Applicant objected to such works are admitted, the question for determination in this application is essentially a legal one, which involves no real solid dispute of facts. The evidence given by the only two witnesses, the Applicant and Mr Lau Chung Ming (“Mr Lau”), the Head of Residential Management employed by the Respondent, for the Respondent, was brief.

DEED OF MUTUAL COVENANT

23.  The dispute between the two parties focuses on the Main Issue. The answer to it rests heavily on the true construction of the DMC III. The provisions of the DMC III referred by the parties in the present application are also referred to in the CA Judgment. Those provisions were considered and determined in the CA Judgment. The provisions which are relevant to the present case can be summarized as follows:-

(1)  In the DMC III, the Respondent is referred to as the “Management Company”.

(2)  Recital (5) to the DMC III states that the parties to the DMC III agreed with the Respondent for the latter to –

“undertake the management, operation, servicing, maintenance, repair, renovation, replacement, security, and insurance of the said Land and the buildings thereon and their equipment services and apparatus (all or any of which activities are hereinafter included under the word ‘management’) and the parties hereto have agreed to enter into this Deed for the purposes of making provisions for such management and of defining and regulating the rights interests and obligations of themselves and all subsequent owners in respect of the said Land and the buildings thereon.”

(3)  Clause 6A(i) provides that the management of Stage III shall be undertaken by the Respondent from the date of issue of the first occupation permit until terminated by the Respondent.

(4)  Clause 6A(iii) states that it is intended that the Respondent, in addition to managing “the said Land and the buildings thereon” (including Stage III), will be the manager of the entire Estate.

(5)  Clause 6B provides for the establishment of RC for Stage III comprising 18 members appointed by secret ballot at a meeting of the owners (with 2 representatives from each tower block and 2 representatives from the owners of the shops in Stage III), with the function of, inter alia, representing the owners in all dealings with the Respondent through the MLC.

(6)  Clause 6C provides for the establishment of the MLC for all completed buildings in the Estate. The MLC is required to hold meetings not less than 8 times a year[5], and each RC (of the 12 Stages) shall elect from their number not more than 3 persons to serve on the MLC. In addition, a representative of the Respondent shall be a member of the MLC and ex officio it’s Chairman. The functions of the MLC include, inter alia, liaising with the Respondent in respect of all matters dealing with the management of the Estate as a whole; and reviewing the annual budget prepared by the Respondent.

(7)  Clause 7 sets out the powers and functions of the Respondent. Clause 7(a) states generally that the Respondent shall be responsible for and shall have full and unrestricted authority to

“do all such acts and things as may be necessary or requisite for or in connection with the said Land and any of the buildings thereon and the management thereof including …”

(8)  Clause 7(a) then sets out, in 28 sub-paragraphs, a list of specific powers (without prejudice to the generality of the foregoing) of the Respondent covering a wide range of matters pertaining to the management of Stage III such as management and control of car parking spaces, insurance, lighting, repairs and maintenance of common parts, common areas and common facilities, refuse collection, security, keeping of accounts, etc.

(9)  Clause 7(a)(11) states that the Respondent shall have power to –

“keep the lifts and security and all other equipment plant and installations in the said buildings in good repair and condition and to replace any parts that may require replacement and in this connection the Management Company shall be at liberty to carry out its obligations by independent contractors employed by them.”

(10)  Clause 7(a)(24) states that the Respondent shall have power to –

“do all such other things as are reasonably incidental to the management of the said Land and the said buildings”.

(11)  Clause 7(b) provides that all acts and decisions of the Respondent arrived at in accordance with the provisions of the DMC III shall be binding in all respects on all the owners for the time being of undivided shares in Stage III.

(12)  Clause 8(a) provides that for the purpose of fixing the contributions payable by the owners, an annual budget showing the estimated expenditure for the ensuing year shall be prepared by the Respondent for review by the MLC. Such budget shall be divided into four parts. The first part covers expenditure for the benefit of all owners as essential or required for the proper management, cleansing, security and maintenance of common areas and facilities common to the Estate as a whole; the second part covers expenditure referable to the shops, schools, school playgrounds and offices in the buildings; the third part covers expenditure referable to the flats or roofs of the buildings; and the fourth part covers expenditure referable to the car parking spaces.

(13)  Clauses 8(a) A(iv) provides the remuneration of the Respondent which remuneration shall be the cost to the Respondent of providing its services with the addition of a management supervision fee of 5% of all expenditure to be borne by the Owners.

(14)  Clause 8(b) provides that such budget shall be reviewed by the MLC, and in the light of such review the Respondent may, but is not obliged to, alter the same.

(15)  Clause 8(c) further provides that the Respondent shall fix the amount to be contributed to the annual budget by each owner in accordance with various principles.

CONSTRUCTION OF THE DMC

24.  The answer to the question of whether it is within the Respondent’s management power under the DMC III to undertake the Appliances Works and to include the relevant expenses in its budgets depends on the true construction of the aforesaid clauses, which are also the clauses that have been considered and determined by the Court of Appeal in the CA Judgment. I respectfully adopted and summarized the relevant main points of the decision as follows.

25.  The true construction of the DMC III should take into account its background facts, context and purpose as well as the language used. When considering the question of the limit or scope of the management powers or functions that is given to an estate manager, the factual context in which the question arises is significant.

26.  The acts or things that may properly be regarded as falling within the "management" of an estate depend, amongst other matters, on the type of estate in question as well as the facilities available. Many functions or activities in a large residential estate, including holding activities, security, etc, which undoubtedly would be regarded as falling within the umbrella of "management", may simply not be relevant in the context of a single-staircase low-rise building.

27.  The purpose of the DMC III is set out in Recital (5). It is clear the DMC III serves two main purposes: (i) making provisions for the management of the estate, and (ii) defining and regulating the rights, interests and obligations amongst the owners of the estate.

28.  In respect of the first purpose, Clause 6A(i) of the DMC III vests the general power of management of the whole Estate primarily in the Respondent, in consultation and with support from the MLC, which is a body substantially composed of the owners’ representatives elected by the owners, to represent the owners and to exercise budgetary control under Clauses 6B and 6C. The MLC has 6 sub-committees, which specialize and focus on different aspects of the affairs of the estate (including the “Security Sub-committee” which is of particular relevance to the present case).

29.  The purpose of Clause 7(a) is to set out the powers and functions given to the Respondent to manage the estate. It is the clear intention of the DMC III to give the Respondent wide powers of management by granting to it "full and unrestricted authority" to do the acts and things referred to in Clause 7(a) including 7(a)(1)-(28).

30.  The powers given are not limited only to the management of the estate in the strict sense of “necessary or requisite for”, but extend to acts and things "in connection with", or "reasonably incidental" to, the management of the estate. The word "management" is not a word of precision and is not defined exhaustively in Recital (5) to the DMC III. The meaning of the word permits a degree of elasticity around its edge depending on the context in which it is used.

31.  I accept the submission of Mr Hunsworth, solicitor for the Respondent, that although a distinction may be made in the sense that the CA Judgment primarily concerned recreational or social activities and the present proceedings concern technological security upgrades and improvements, the determination in the CA Judgment unquestionably addresses substantially the present issues as to the construction of the DMC III, in particular, the ambit of the management power of the Respondent. The construction of the scope of the Respondent’s management power has a direct impact on the present argument on the Respondent’s power of using technological updates to improve the security system in the Stage III.

32.  I respectfully agree with the findings of the CA Judgment. The true construction of the DMC III should take into account its context and purpose, as well as the language used in the document. The context in the present case concerns the management of a large private residential estate housing tens of thousands of residents in Quarry Bay, one of the prominent urban areas in Hong Kong.

33.  As the Court of Appeal observed, even though the DMC III concerns only Stage III of the Estate, the Respondent is expressly intended to be the manager of the entire Estate (with each Stage having a similar deed of mutual covenant). Thus, the MLC referred to in Clause 6C of the DMC III, being the main bridge of communication between the residents and the Respondent in respect of matters concerning the management of the Estate, is a representative body of residents of not just Stage III, but all 12 Stages of the Estate. Hence, when one considers the question of what powers or functions of management have been entrusted with the Respondent under the DMC III, one should not be focusing on the management of only 8 residential towers in Stage III, but should consider what powers and functions of management are intended to be given to the manager of the entire Estate.

34.  As the Court of Appeal has found from the language of the DMC III, Clause 7(a) gives the Respondent “full and unrestricted authority” to do all such acts and things, not only “necessary” or “requisite for”, but also “in connection with” the land and the buildings thereon and the management thereof, in addition, Clause 7(a)(24) further gives the Respondent general powers to do all such things as are “reasonably incidental to” the management of the land and the buildings thereon.

35.  Obviously, it is the clear intention of the DMC III to give the Respondent wide powers of management by granting to it “full and unrestricted authority” to do the acts and things referred to in Clauses 7(a) and 7(a)(1)-(28). The powers are not limited only to acts or things that are “necessary” or “requisite for” the management of the estate, but extend to those “in connection with”, or “reasonably incidental” to, the management of the estate.

36.  Contrary to the Applicant’s interpretation that Recital (5) has an effect of limiting the Respondent’s power and even qualifying its scope under Clause 7(a), the Court of Appeal took the view that the word “management” is expressly provided with a wide meaning by Recital (5) to cover many aspects as “the management, operation, servicing, maintenance, repair, renovation, replacement, security, and insurance of” the said Land and the buildings thereon and their equipment services and apparatus.

37.  Further, the word is found not defined exhaustively in Recital (5), because the definition appearing in that recital is an inclusive one that includes all or any of which activities as mentioned above. Furthermore, the definition is a somewhat circular one, because it defines the word “management” to include “management” as well as other forms of activities.

38.  Thus analyzed, the Applicant’s narrow construction of the Respondent’s management power are limited only to acts or things that are “necessary” or “requisite for” the management of the estate is bound to fail.

THE APPLIANCES WORKS

39.  Putting the language used in the DMC III into context, in view of the development of the large scale Estate since 1976, of the massive flow of peoples living, using and going in and out of the Stage III since its completion in 1978, of the aspiration of the developer to provide a comfortable and convenient integrated urban environment for living and leisure to the owners, residents and users of the Estate, it is illogical that the drafter of the DMC III and the parties to it would have intended the Applicant’s narrow construction to give the Respondent just restricted powers limited to do only things that are barely “necessary” or “requisite for” the management of the Stage III so as just to meet the very basic management needs of the owners and residents.

40.  Such narrow construction plainly does not sit well with the development background and the special feature of the Estate (including Stage III). It could not achieve the peculiar lifestyle and property management style as intended by parties to the DMC III. To manage the Stage III in a barely “necessary” or “requisite” approach would deprive the owners and residents of enjoying some non-costly technologically advanced security products which could provide the users with safer, more convenient, efficient and effective security systems.

41.  The nature, function, purpose and benefits of the Replacement Appliances were elaborated by the Respondent and its witness, which are well supported by documents and the photographs depicting the locations, sizes and uses of the Replacement Appliances. They are used for access control, identification, duty-reporting, privacy-protection, data-processing and record-keeping purposes. It is clear to me that the Replacement Appliances are functional other than just cosmetic.

42.  It is beyond dispute that the Replacement Appliances would contribute to enhance the efficiency and effectiveness of the security system for the Stage III. They promote convenience and better security system to the owners and residents due to their user-friendly design, their capacity to deliver fast and convenient transactions for security purpose. They are easily operated and even without touching or pressing the appliances. The standard of hygiene could be improved accordingly. I am convinced that they are generally considered modern forms of security appliances and has wide application in many estates nowadays.

43.  Viewed in this light, I form the view that the Appliances Works are not strictly “necessary or requisite for” the management of the Stage III in the strict sense that without them, the management of the estate can still continue, and the Original Appliances could still be used for security purpose. That said, the Replacement Appliances are technologically advanced security appliances, which have been widely used for enhancing security and efficiency in the modern society nowadays. The use of them in the common areas inside the buildings of the Stage III on a daily basis would significantly enhance the efficiency and effectiveness of the security system as well as increase the convenience, data-protection[6], and standard of hygiene[7] to the owners and users of the Stage III.

44.  Common sense dictates that reasonable making use of non-costly up-to-date technology to enhance security and provide convenience is beneficial to the owners and users of the buildings and estate, which actually is the essence of good and proper management of a large estate in the modern society nowadays.

45.  In my view, the purpose of providing the Stage III with a safe and convenient residential environment to the owners and the residents is specifically indicated in Recital 5 and Clause 7(a). The word “management” therein specifically covers the “management”, “security”, “servicing” and “replacement” of the Land and the building thereon together with “their equipment, services and apparatus”.

46.  Thus analyzed, the Appliances Works are clearly works that are "in connection with", or "reasonably incidental" to, the management of the Stage III which fall squarely in the scope of the "management" power of the Respondent under Clause 7(a) including Clauses 7(a)(11) and 7(a)(24) of the DMC III.

47.  The Applicant seeks to rely on the case of The Incorporated Owners of Bayview Mansion v Chan Cheung Kit Mui Margaret (HCSA32/1994 unreported 23 June 1995) ("Bayview") in support of his contention. Such argument plainly ignores the fact that the terms in the deed of mutual covenant in Bayview and those of the DMC III are at variance. It also neglects the background and the type of the building in Bayview are different from those of the Stage III. The rationale in drawing a distinction between different types and backgrounds of the buildings as elaborated in the CA Judgment is material. I fail to see how the Bayview can lend any support to the Applicant in the present case.

48.  Likewise, the Applicant’s reliance on the other cases as Grace International Ltd v The Incorporated Owners of Fontana Gardens & Ors [1996] 4 HKC 635 is also misplaced. Suffice it to say that each case turns on its own facts and the construction of the peculiar terms of the Deed of Mutual Covenant concerned.

49.  The present case is readily distinguishable from Bayview. Unlike Bayview, which consisted of one tower block only, the Estate consists of 12 stages and Stage III itself consists of 8 tower blocks. The construction of the two deeds of mutual covenant differs according to their different context, background facts and language used.

50.  Further, Bayview concerned the “renovation” works of the building, which was considered as partly truly of a cosmetic nature and partly to improve the amenities of the building, whereas in the present case, the Appliances Works are functional instead of cosmetic.

51.  Furthermore, the costs of the work in Bayview was substantial to the extent of HK$1.5 million in 1992. In the present case, the costs involved are relatively modest. For example, the budget of the Smartcard Access Devices was HK$190,000 with each flat sharing a range of HK$96 to HK$156 for purchasing the system. The total cost of the Electronic Patrol Devices was just HK$3,000 per month. The Contactless Devices was HK$1,700 per tower block. The whole project of the Surveillance Camera Devices was awarded to the lowest tender at HK$456,000.

52.  Given my finding that the Appliances Works are within the management power of the Respondent under the DMC III, the Applicant’s argument that the Respondent has wrongfully converted the common parts for its own use by installing the Replacement Appliances or interfered the residents’ enjoyment under section 34I BMO is doomed to fail. The Applicant gave no solid evidence or conducted serious cross-examination to challenge the Respondent’s case that the Appliances Works were duly supported, resolved and approved by the MLC, RC and/ or the Owner’s Meeting. In fact, according to the photos, the space occupied by the Replacement Appliances are indeed very limited.

53.  Looking at all the relevant matters in the round, I form the view that it was within the management powers or functions of the Respondent to undertake the Appliances Works, in that they were acts or things done “in connection with”, or “reasonably incidental to”, the management of the Stage III and the Estate under Clauses 7(a), including 7(a)(11) and 7(a)(24) of the DMC III. Such works were intended for the interests and the benefits of the owners and users of the buildings of the Stage III.

54.  Premised on the Applicant’s claim as set out in the NOA, it is

strictly not necessary for this Court to make a finding on the reasonableness of the decisions to undertake the Appliances Works, which falls within the power and function of the Respondent in consultation with the MLC, RC, the security Sub-committee and/ or owners. At any rate, there is plainly no basis, still less of any solid evidence, to suggest that the Respondent has not acted reasonably in undertaking the Appliance Works as required under the DMC.

55.  Lastly, I need to reiterate the rationale, in the same approach as emphasized in the CA Judgment and the LT Judgment, that this Tribunal is not laying down a general rule that the Respondent may undertake whatever upgrading or improvement security works that it wishes. The question of reasonableness remains a relevant consideration.

56.  Given the Applicant’s claim is premised on the Main Issue, such issue has been resolved for the reasons set out above. In light of my findings that the Appliances Works are within the Respondent’s powers under the DMC III, the Applicant’s complaints of the Respondent’s breach of Clause 8(a) and its obligations under the DMC III fall away. For completeness sake, I will briefly deal with his other complaints as follows.

LETTERS OF ADVICE

57.  The Applicant refers to several letters of advice respectively dated 3 January 2009, 12 January 2009, 3 December 2012 and 15 March 2013, which were received by the Respondent from different law firms, to argue that the Respondent should not act contrary to the legal advice given by its legal advisers.

58.  Such argument is devoid of merit. In fact, similar arguments have been raised and rejected in the CA Judgment. Suffice it to say that the present application concerns the true construction of the DMC III and is a question of law. The legal opinions obtained by the Respondent is strictly not relevant, or admissible as an aid to the proper construction of the DMC III.

59.  Besides, those letters of legal advice are purely opinions of those solicitors. They are not governing legal principles. They are not binding on this Tribunal. Nor do they give rise to any estoppel on the Respondent. Further, they in fact relate to quite different matters than the subject of the present action does. They focused on the power on constructing an additional lift, organizing various social and recreational activities, which are in no way specific to the Appliances Works. Given legal advice is fact-sensitive, those letters of advice are strictly irrelevant to the present case.

THE OTHER COMPLAINTS

60.  In light of my finding that the Respondent has actual power to undertake the Appliances Works, the fact that the Applicant had sent several emails to the Respondent to object to the Appliances Works gives no impact on the management powers of the Respondent under the DMC III. The power conferred to the Respondent in relation to the Appliances Works under the DMC III cannot be altered by the requests of a single owner.

61.  I might also add in passing that the Applicant has quoted an extract of section 5(3)(b) of Schedule 7 BMO in the NOA but without pleading any positive case nor giving any particulars. Neither solid evidence nor cross-examination has been adduced or conducted by the Applicant in this area. In the premises, such statutory provision cannot assist the Applicant’s case.

62.  In any event, according to Mr Lau, the Appliances Works and the expenses incurred were duly considered, discussed, and/ or resolved with resolutions by the MLC, RC, the Security Sub-committee and/ or the Owner’s meeting as required in the DMC III. He also stated that in respect of the contract with a value that exceeded the sum of HK$200,000, the Respondent would follow the requirement under section 5(1) of Schedule 7 to BMO and procured such contracts by invitation to tender and in compliance with the Code of Practice referred to in BMO. He also produced a document, which summarized the tender quotations for the installation of the Surveillance Cameras Devices for proof.

63.  In the premises, as the NOA now stands and in the absence of any solid evidence or cross-examination in support, section 5(3)(b) of Schedule 7 BMO (which only applies where the contract with a value exceeding the sum of HK$200,000 is not procured by way of invitation to tender) plainly has no room to play in the present case.

EXEMPTION CLAUSE

64.  Under the section entitled "exemption clause" in the NOA, the

Applicant seems to be making the point that the Respondent was in breach of duty, dishonest, willful negligent and liable to criminal liability in undertaking the Appliances Works and cannot therefore rely on the exemption clause set out in clause 7(c) of the DMC III.

65.  Notwithstanding some case authorities on "dishonesty" are referred by the Applicant, he has not provided any solid particulars to substantiate his complaints, not to mention any concrete evidence in support. In further consideration of my findings on the Main Issue that the Appliances Works were within the Respondent’s powers under the DMC III, all the Applicant’s complaints relating to the Appliances Works in the present case fall away. Thus, his complaints are unjustified. It follows that there is no basis to give rise to the operation of the Control of Exemption Clauses Ordinance, Cap. 71.

CONCLUSION

66.  Having considered the submissions of the parties and all the relevant evidence before me, I form the view that the Applicant has failed to prove his claim. His application is hereby dismissed.

COSTS

67.  Costs follow the event. I make a costs order nisi that the Applicant do pay the Respondent the costs of the whole proceedings, including all costs reserved, to be taxed on District Court scale, if not agreed.

68.  This costs order nisi shall become absolute in the absence of application to vary by way of Form 1 within 14 days from the date hereof.

69.  This judgment is written in English in view of the fact that a considerable amount of the documents in this case are written in English. If required, the Applicant may make an appointment with the clerk to the Tribunal for this judgment to be orally interpreted to him in Punti.