DARREN ROBERT BARTON v. DISCOVERY BAY SERVICES MANAGEMENT LTD

LDBM 23/2018

[2018] HKLdT 93

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 23 OF 2018

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J U D G M E N T

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1.  The applicant seeks various declaratory and injunctive relief in his Amended Notice of Application as follows:

1)   A declaration that the direction by the applicant made at the meeting of all owners of high-rise buildings, Parkridge Village and No. 1 to No. 7 (Odd Nos.) Parkland Drive, Discovery Bay, held on 11 January 2018 for a poll vote to be held between 18 January 2018 and 8 February 2018 for the election of Village Owners’ Committee of Parkridge Village (“the Directed Poll Vote”) pursuant to Clauses 10, 11 and 17 of the Sub-Deed of Mutual Covenant of Parkridge Village is valid;

2)   A declaration that the Management Notice dated 17 January 2018 from the Respondent to all owners of Parkridge Village that the Directed Poll Vote had no effect and that the respondent would in due course convene an owners’ meeting of Parkridge Village for the election of the Village Owners’ Committee of Parkridge Village (“the VOC”) is invalid;

3)   A declaration that the notice dated 27 April 2018 from the respondent to the Parkridge Owners for an owners’ meeting to be convened on 24 May 2018 for the formation of the VOC (“the Proposed Meeting”) is invalid;

4)   An injunction to restrain the respondent, whether by itself or through its servant(s), agent(s), or otherwise any other person(s) acting on its behalf or on its instructions, from acts which prevent the carrying out of the Directed Poll Vote, notwithstanding the dates of the poll vote have passed, and the Directed Poll Vote shall take place at the time and manner as the applicant shall direct;

5)   An injunction to restrain the respondent, whether by itself or through its servant(s), agent(s), or otherwise any other person(s) acting on its behalf or on its instructions, from calling for, carrying out, holding and/or conducting the Proposed Meeting and/or any other meetings, contrary to the effect of the Directed Poll Vote; and

6)   An injunction to restrain the respondent, whether by itself or through its servant(s), agent(s), or otherwise any other person(s) acting on its behalf or on its instructions, from passing any resolution for the formation of the VOC whether at the Proposed Meeting or at any other meeting(s) contrary to the effect of the Directed Poll Vote.

BACKGROUND

2.  The applicant is and was at all material times the chairman of the VOC.

3.  An owners’ meeting of Parkridge Village was held on 11 January 2018 (“the January Meeting”). The purpose of the January Meeting was to discuss, inter alia, the election of the VOC office bearers.

4.  It is not disputed by the respondent that during the election of the VOC members, at least one owner requested a poll vote be conducted.

5.  Upon the request for a poll vote, the applicant directed the poll vote for the election of the chairman, and subsequently other positions in the VOC, to take place between 9:00 a.m. on 18 January 2018 and 5:00 p.m. on 8 February 2018. The applicant further directed the poll vote to be conducted by way of ballot box voting in which the voting box would be placed at the local management office.

6.  On 12 January 2018, the applicant gave detailed directions to the respondent on how to carry out the poll voting.

7.  The respondent did not reply to the applicant until 17 January 2018. In its reply, the respondent indicated, amongst other things, they were of the view the Directed Poll Vote is invalid. On the same day, the respondent issued a notice (“the 17 January Notice”) to all owners of Parkridge Village stating that according to the legal advice sought, the Directed Poll Vote is invalid and that there would not be a poll vote conducted as directed by the applicant.

8.  On 27 April 2018, the respondent issued a notice to convene a meeting on 24 May 2018 for the purposes of electing the VOC (“the 27 April Notice”).

9.  On 14 May 2018 the applicant took out a summons asking for various relief including 2 injunctions and a declaration as follows:

1)   A declaration that the notice dated 27 April 2018 from the Respondent to all owners of high-rise buildings, Parkridge Village and No. 1 to No. 7 (Odd Nos.) Parkland Drive, Discovery Bay for an owners’ meeting be convened on 24 May 2018 for formation of Village Owners’ Committee of Parkridge Village is invalid;  

2)   An injunction to restrain the Respondent, whether by itself or through its servant(s), agent(s) or otherwise any other person(s) acting on its behalf or on its instructions, from calling for, carrying out, holding and/or conducting the Proposed Meeting;

3)   An injunction to restrain the Respondent, whether by itself or through its servant(s), agent(s), or otherwise any other person(s) acting on its behalf or on its instructions, from passing any resolution for the formation of Village Owners’ Committee of Parkridge Village, whether at the Proposed Meeting or at any other meeting(s), pending determination of the validity of the poll vote for the election of Village Owners’ Committee of Parkridge Village as directed by the applicant at the meeting of Parkridge Owners on 11 January 2018 in these proceedings.

10.  On 18 May 2018, Deputy District Judge Eric Tam granted the applicant 2 interim injunctions in the terms as set out at paragraphs 9(2) and (3) hereinabove, and adjourned the hearing of the summons to a date to be fixed with costs reserved.

11.  The summons dated 14 May 2018 was subsequently fixed to be heard on 17 September 2018. The said summons sought orders from the court which were identical to the relief sought in paragraphs 1(a), (e) and (f) of the Amended Notice of Application (see paragraphs 1(1), (5) and (6) hereinabove). Since the determination of the said summons had the effect of finally disposing of the issues raised in the Amended Notice of Application, and the case was not yet ready for trial, I gave directions and set the case down for an urgent trial. Furthermore, I ordered the summons dated 14 May 2018 be heard together with substantive application.

12.  The respondent does not dispute the following facts:

1)   There was sufficient quorum at the meeting of 11 January 2018 (“the January Meeting”);

2)   The nominations of candidates for the VOC made at the January Meeting were validly made; and

3)   At least 1 person at the January Meeting demanded the election of the VOC members be conducted by way of a poll vote.

ISSUES IN DISPUTE

13.  Counsel have agreed the issues of this case to be as follows:

1)   Whether the Directed Poll Vote for the election of Chairman, Vice-Chairman, and Committee Members of the VOC was validly made;

2)   Whether the January Meeting of the Parkridge Owners was closed or concluded on 11 January 2018;

3)   Whether the nominations of the VOC members continued to be valid for voting thereon for the purposes of the Directed Poll Vote; and

4)   Whether the management notice dated 17 January 2018 setting aside the Directed Poll Vote and the notice dated 27 April 2018 to convene the Proposed Meeting are valid.

WHETHER THE DIRECTED POLL VOTE FOR THE ELECTION OF THE VOC WAS VALIDLY MADE

14.  Counsel for both parties have argued extensively on the meaning of Clauses 10 and 17 of the Sub-Deed of Mutual Covenant of Parkridge Village (“the Sub-DMC”). I do not propose to repeat their arguments in full.

15.  In summary, the applicant argued Clause 10 of the Sub-DMC effectively gives him an absolute discretion in determining the time and manner in which the poll vote should take place. The respondent argued that on a proper reading of the Sub-DMC as a whole, the voting of VOC members should take place in a physical meeting. Hence the applicant had no authority to direct a poll vote to take place outside the January Meeting.

16.  I set out the relevant clauses of Section VIII (A) of the Sub-DMC below:

1)   Clause 2:

“At least once in every calendar year thereafter, the Owners of the Village shall meet for the purpose of electing such officers and members as aforesaid and transacting any other business of which due notice is given in the notice convening the Meeting.”

2)   Clause 3:

“The Owners of the Village may further meet from time to time as occasion may require to discuss and decide matters concerning the Village and they shall meet whenever required by the Manager.”

3)   Clause 4:

“The Meeting of the Owners of the Village shall be convened by the Manager by at least 7 days’ notice in writing specifying the time and place of the Meeting and the subjects to be discussed.”

4)   Clause 10:

“All resolutions put to the vote of the Meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by at least one Owner (or by the representative of the Manager or Registered Owner) entitled to be present and present in person at the Meeting. A poll, if demanded, shall be taken at such time and in such manner as the Chairman shall direct.”

5)   Clause 11:

“On a show of hands, every Owner entitled to be present and present either in person or by a duly authorised representative at the Meeting shall have one vote. In case of a poll, every Owner of an Undivided Share including the Registered Owner and the Manager shall have one vote either personally or through his duly authorised representative for every Undivided Share held by him.”

6)   Clause 14:

“All resolutions passed at a Meeting duly convened and held shall be binding on all Owners insofar as the Village is concerned but such resolutions shall not be binding on the Manager or conflict with the provisions of this Sub-Deed, the Principal Deed or the City Rules or any decision of the City Owners’ Committee.”

7)   Clause 17:

“The Chairman, the Vice-Chairman and any other offices of the Village Owners’ Committee shall be elected in the following manner. The candidates for election shall be proposed and seconded by any Owners present in person or by duly authorised representative at the Meeting. As soon as all candidates have been proposed and seconded and provided that such candidates consent to be elected their names will be put before the Meeting who will vote thereon.”

17.  Ms Tam, for the respondent, argued Clause 17 of the Sub-DMC imports an element of immediacy and relies on the words “as soon as” used in the sentence, “As soon as all candidates have been proposed and seconded and provided that such candidates consent to be elected their names will be put before the Meeting who will vote thereon.” She further argued “their names will be put before the Meeting who will vote thereon”requires the voting of the VOC members to be conducted at the physical meeting. Ms Tam relied on McMillian v Le Roi Mining Company Limited [1906] 1 Ch 331for the proposition that the applicant has no power to enlarge the voting power.

18.  Having considered submissions of counsel, I am of the view that on a proper reading of the Sub-DMC, the clause governing the manner of voting is Clause 10 of the Sub-DMC and not Clause 17 of the Sub-DMC.

19.  Clause 17 of the Sub-DMC only requires two things to be done at the physical meeting: the proposing and seconding of the candidates, and the names of the candidates be put before the physical meeting for voting. Once the candidates’ names are put to the vote at the physical meeting, Clause 10 of the Sub-DMC takes over and dictates the manner in which the voting is to be held, that is, either by show of hands or by poll. Clause 17 of the Sub-DMC does not mandate the election of the members be concluded there and then at the physical meeting.

20.  I agree with the applicant that Clause 10 of the Sub-DMC contains no qualifications or restrictions on how the chairman should direct the time and manner of any poll vote demanded. The clear and express wording of Clause 10 of the Sub-DMC is that a poll vote “shall be taken at such time and in such manner as the Chairman shall direct.” The use of the word “shall” mandates that the poll be taken in the manner as directed by the chairman. To read any qualifications into Clause 10 of the Sub-DMC would be artificial and against the clear and unambiguous wording of clause itself.

21.  The respondent raised concerns over the multiple problems caused by a poll vote being conducted outside a meeting, for example, the lack of any proper notice provisions regulating the poll vote and possible invalid votes in cases where a candidate is nominated for more than one position in the VOC. Ms Tam submitted if the poll vote takes place outside the physical meeting, the owners will have no recourse for any grievances they may have. Hence on a proper reading of the Sub-DMC, taking into consideration of the problems raised by a poll vote conducted outside a physical meeting, the Sub-DMC did not intend for a poll vote to be conducted outside the physical meeting. Ms Tam cited and relied on a number of cases[1] for the proposition that the physical meeting is necessary and important for determining resolutions.

22.  In so far as the respondent’s witnesses gave their opinion on the difficulties and problems caused by a poll vote being conducted outside the physical meeting, I find the evidence to be unhelpful in determining the true interpretation of the Sub-DMC.

23.  The Directed Poll Vote is not a meeting in itself and does not require another meeting to be held. The Directed Poll Vote is merely the voting procedure, which is the last stage of the election process of the VOC members. The owners had their chance to debate about the election of the VOC members at the January Meeting. Furthermore, there is no dispute the January Meeting was validly convened and that proper notice requirements were complied with. All matters relating to the need to debate and the requirements of proper notice have already been complied with. Hence the hypothetical difficulties in respect of requirements of notice of the poll vote outside a physical meeting are not relevant.

24.  In so far as there are concerns raised over the possible invalidity of votes casted to a candidate who is nominated for more than one position in the VOC, this is for the chairman to consider when he decides how to direct a poll vote. Generally speaking, each poll vote directed for each individual resolution is independent and should be carried out separately. However, the applicant has directed the poll vote of each VOC position to be carried out simultaneously and there was no objection from the owners at the January Meeting.

25.  As stated in Shackleton on the Law and Practice of Meetings (14^th Ed) at paragraph 14-12:

“If a group of associated resolutions is to be voted on, and a poll is demanded, it is proper for each resolution to be submitted to a vote separately. In one such case, the resolutions having been passed on a show of hands were submitted to a poll vote en bloc; it was ruled that the resolutions were not properly carried. In a later case, however, where this procedure was adopted and no objection was registered at the time, the earlier precedent was not followed and the resolutions were confirmed as having been carried. It appears, therefore, that in such circumstances a group of resolutions may be taken en bloc for voting on a poll, but only if the meeting so agrees.”

26.  It is not for this tribunal to remedy the inadequacies of the drafting of the Sub-DMC. Where the wording of the Sub-DMC is clear and there is no unambiguity, the tribunal must enforce the clause as stipulated.

27.  In absence of any objections voiced at the meeting on the simultaneous voting of the VOC office bearers by way of the Directed Poll Vote, there is no reason why the voting of the VOC office bearers and members cannot take place in the manner as agreed at the January Meeting.

28.  By reason of having found the Directed Poll Vote to be in accordance with the Sub-DMC and in view of the wording of Clause 10 of the Sub-DMC, I do not accept the applicant has enlarged the power of voting by directing the poll vote to take place outside the physical meeting of 11 January 2018.  

29.  Counsel argued extensively on whether the January Meeting was “closed” or whether it remained “opened” for the purposes of the Directed Poll Vote.

30.  I am of the view the arguments relating to whether the January Meeting was “closed” are irrelevant for the purposes of deciding whether the Directed Poll Vote was validly made. Once the names of the candidates have been put to vote, Clause 10 of the Sub-DMC governs how the vote is to be conducted. Since there is nothing in the clause that limits the manner and time in which the poll vote should take place, the question of whether the meeting is closed or not is irrelevant to whether the poll vote was validly directed.

31.  For the reasons set out above, I find the Directed Poll Vote was validly made.

WHETHER THE JANUARY MEETING OF THE PARKRIDGE OWNERS WAS CLOSED OR CONCLUDED ON 11 JANUARY 2018 AND WHETHER THE NOMINATIONS OF THE VOC FOR ELECTION CONTINUED TO BE VALID FOR VOTING THEREON FOR THE PURPOSES OF THE DIRECTED POLL VOTE

32.  For reasons as I have set out hereinabove, the proposing and seconding of candidates is governed by Clause 17 of the Sub-DMC. I have also set out reasons why I am of the view Clause 17 of the Sub-DMC does not require the election of the VOC members to be concluded at the physical meeting.

33.  The respondent argued since the applicant declared the January Meeting “closed”, the January Meeting was concluded and it was not open to the applicant to now argue the January Meeting is still open for the purposes of electing the VOC members. Since the Clause 17 of the Sub-DMC requires the proposing and seconding of the candidates and the voting of the candidates be done at the same meeting, the nominations are no longer valid after the meeting was concluded on 11 January 2018.

34.  I do not find the applicant’s use of the word “closed” to be determinative of the issue. The question of whether the meeting was closed is a question of law and of fact. Although there is no dispute the applicant declared the meeting “closed”, there is no doubt that the common understanding amongst the owners at the January Meeting was the agenda of election of VOC members had not been concluded and would not be concluded until the completion of the poll vote process. So long as it was clear to all parties that the election of the VOC members has not been concluded, the January meeting cannot be said to be concluded or “closed” for that purpose.

35.  In the case of The Queen v The Wimbledon Local Board (1882) 8 QBD 459 at 465, Cotton L.J. states:

“A poll is not a new meeting, but it is a mode of ascertaining the sense of the meeting which is continued for that purpose . . .”

36.  The same principle is upheld in later cases: see Shaw v Tati Concessions Ltd [1913] 1 Ch 292; Jackson and others v Hamlyn and others [1953] 1 Ch 577; Holmes and anor v Keyes and others [1959] 1 Ch 199.

37.  Having considered the authorities cited by counsel, I am of the view that in so far as the election of VOC members are concerned, the January Meeting has not been concluded and the January Meeting remains “open” in so far as the election of the VOC members are concerned. In absence of any dispute on sufficiency of quorum at the January Meeting and on the validity of nominations of the candidates at the January Meeting, the nominations must continue to remain valid for the purposes of the Directed Poll Vote.  I therefore find the nominations continue to be valid for the purposes of the Directed Poll Vote.

WHETHER THE MANAGEMENT NOTICE DATED 17 JANUARY 2018 SETTING ASIDE THE DIRECTED POLL VOTE AND THE NOTICE DATED 27 APRIL 2018 TO CONVENE THE PROPOSED MEETING ARE VALID

38.  With due respect, the issue as framed by counsel is slightly incorrect. The notice dated 17 January 2018 (“the January Notice”) does not “set aside” the Directed Poll Vote per se. More properly, the January Notice sets out a summary of the legal opinion from the respondent’s solicitors and announced the respondent will not conduct the poll vote in the manner as directed by the applicant.

39.  I note Clauses 3 and 4 of Section VIII(A) of the Sub-DMC clearly confer on the respondent the power to convene meeting of the owners so long as a notice in writing of not less than 7 days is given to all owners. Hence technically speaking, the 27 April Notice convening a meeting for the purposes of electing the office bearers of the VOC cannot be said to be invalid per se because the respondent has the authority to issue a notice to convene an owners’ meeting. However, whether it is proper to discuss and possibly elect the VOC members at the Proposed Meeting is a different question.

40.  For reasons given above, I am of the view the Directed Poll Vote was directed in accordance with the Sub-DMC and hence valid. I also find that since the agenda of election of VOC member has not been concluded, the January Meeting continues to be “open” in so far as that agenda is concerned.

41.  In such circumstances, the respondent should not have refused to carry out the poll vote in the time and manner as directed by the applicant. Furthermore, in so far as the 27 April Notice seeks to override the Directed Poll Vote, any resolution that may have been passed on the election of VOC members at the Proposed Meeting may be liable to be set aside or overturned.

RELIEF SOUGHT

42.  For reasons set out hereinabove, I am prepared to grant the declaration sought at paragraph 1(1) hereinabove.

43.  As for the declarations regarding the 17 January and 27 April Notice as set out at paragraphs 1(2) and (3) hereinabove, for reasons I have stated, I do not find the notices to be invalid per se. I therefore refuse to grant the relevant declaratory relief.  

44.  As for the injunctions seeking to prohibit the convening of the Proposed Meeting and election of new VOC members (see paragraphs 1(5) and (6) hereinabove), I am not minded to grant the said injunctions. In respect of the injunctions set out at paragraphs 1(5) and (6), the date of the Proposed Meeting has lapsed. The injunctions sought are now academic and would be of no effect.  

45.  In respect of the injunction sought at paragraph 1(4) hereinabove, there are 2 injunctions sought in the same paragraph.

46.  The first is a prohibitory injunction seeking to prohibit the respondent and its agents from acting in a manner so as to prevent the carrying out of the Directed Poll Vote. However, the Directed Poll Vote can no longer be carried out in any event and the relief, if granted, is nugatory by reason of the lapse of time.

47.  The second injunction sought in paragraph 1(4) is a mandatory injunction asking the tribunal to direct the Directed Poll Vote to take place “at the time and manner as the applicant shall direct.”

48.  It is trite law that an injunction should be expressed in language that is clear, certain and unambiguous: see Lai Hoi Ping and another v Persons Occupying portions of Nathan Road near to and between Argyle Street and Dundas Street to prevent or obstruct normal vehicular traffic from passing and repassing the occupied areas and others, (unrep), HCMP 3090/2014, 27 November 2014, at paragraph 13. Where the terms of an injunction are too vague to be enforceable, the court will not grant the injunction sought: see paragraph 29/1/33 of the Hong Kong Civil Procedure 2019, Vol 1.  

49.  The mandatory injunction sought in its current drafted form is not enforceable because the time for the Directed Poll Vote has lapsed. The tribunal cannot mandate the respondent to carry out the Directed Poll Vote (which by definition was to take place from 18 January 2018 to 8 February 2018) on another date. If a poll vote on the election of the VOC members is to take place, the applicant must give new directions on the poll vote, at the very least on the time of the poll vote, which will be different from the Directed Poll Vote.  

50.  I have considered whether it would be appropriate for this tribunal to amend the terms of the injunction sought. I had considered paragraph 13 of Lai Hoi Ping and another where the Court of Appeal stated: “It follows that if there were uncertainties in the injunction as originally drafted, the court must have the power to amend it in order to clearly set out what should be done in compliance with it.” However, I am of view I would have to substantially amend the terms of the injunction to render it enforceable. For example, I would have to amend the wording so as to redefine what the poll vote should mean including the new date of the poll vote to take place, and the manner and procedure of the poll vote to take place. Such amendments will go beyond clarifying the uncertainties in the order drafted.  Furthermore, in absence of any evidence from the applicant regarding how he intends to carry out the poll vote now that the time for his Directed Poll Vote has lapsed, I am not satisfied the mandatory injunction as pleaded should be granted.

51.  I therefore refuse to grant the relief set out at paragraphs 1(b) to (f) of the Amended Notice of Application.

52.  In respect of the inter-partes summons dated 14 May 2018, for reasons given above of which I shall not repeat, I refuse the relief sought in paragraph 1 of the summons.

53.  Since I have now determined the validity of the Directed Poll Vote, the relief sought at paragraph 3 of the summons falls away.

54.  As for the injunction sought at paragraph 2 of the summons dated 14 May 2018, for the same reasons as I have given above relating to paragraph 1(5) hereinabove, I refuse the injunction sought.

COSTS OF THE SUMMONS DATED 14 MAY 2018

55.  The respondent strongly opposed the applicant’s application for costs of the summons dated 14 May 2018. In short, the respondent has made complaints on delay, failure to prove damages are an inadequate remedy and that the balance of convenience lies in favour of the applicant. References to the hearing of 18 May 2018 were also made.

56.  Having considered the submissions of counsel, though I have refused to grant the relief sought, I am of the view that the costs of the summons should be awarded to the applicant.

57.  Firstly, the applicant was successful in obtaining the interim injunctions as set out in paragraphs 2 and 3 of the said summons.

58.  Secondly, it was important for the applicant to preserve status quo and not to allow the respondent to proceed with the election of the VOC members until the determination of the applicant’s application. If the election of the VOC members was allowed to proceed at the Proposed Meeting, the questions to be tried at the trial would be rendered a moot point. Hence I am of the view the applications made in the summons dated 14 May 2018 were justified.

59.  I therefore allow the applicant’s costs on the summons dated 14 May 2018.

SUMMARY

60.  For reasons set out above, I allow paragraph 1(a) of the applicant’s Amended Notice of Application but dismiss the application for the relief at paragraphs 1(b) to (f) in the Amended Notice of Application. As for the applicant’s summons dated 14 May 2018, I dismiss paragraphs 1, 2 and 3. I also set aside the interim injunctions granted by Deputy District Judge Eric Tam on 18 May 2018.

61.  Though I have refused most of the relief sought, the relief is refused mainly because the time for conducting the Directed Poll Vote has lapsed. The issues tried are largely determined in the applicant’s favour. I therefore consider the applicant to be successful in his claim and I order that costs should follow the event. I make a costs order nisi that the respondent shall pay the applicant’s costs of this action and of the summons dated 14 May 2018 (including the costs reserved on 18 May 2018) to be taxed if not agreed on the District Court scale, with certificate for Counsel. Unless any party applies to vary the costs order within 14 days hereof, the costs order shall become an order absolute.