DESIR, ANTHONY C v. KNIGHT FRANK (SERVICES) LTD AND OTHERS

HCSA 36/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 36 OF 2013

(ON APPEAL FROM SCTC No 31038 OF 2012)

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J U D G M E N T

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I. INTRODUCTION

1. The claimant Mr Anthony C Desir (“Desir”) was/is a resident of YY Mansion (“Building”), and the unit where he resided was owned by his wife.  The 3^rd defendant is the Incorporated Owners of the Building (“IO”). 

2. The deed of mutual covenant of the Building dated 20 May 1967 (“DMC”) provides as follows:

“13. Each of the parties hereto shall not use the common entrance, hall, staircases, landings or passages of the [Building] for the purpose of drying laundry or hanging or placing or storing anything thereon or therein.

……

20. …… The owners for the time being of the [Building] may at any time at a duly convened meeting of the owners appoint a Management Committee to manage and provide services for the whole of the [Building] and upon a Management Committee being so appointed the Agent aforesaid shall cease to act and the Management Committee shall thereupon have the same powers and duties as are herein conferred upon the Agent.

21. The duties of the agent shall be generally to manage and provide services for the whole of the [Building] to the satisfaction of the Owners of the Agency and in particular but without derogating from the generality of the foregoing to do the followings:

……

(j) To remove any structure or installation signboards fitting or things in or on the [Building] which is illegal or contravene the terms of the [DMC] affecting the same and to demand and receive from the owner by whom such structure or other thing as aforesaid was erected or installed the costs and expenses of such removal.

……

(l) To prevent any person from occupying any of the common parts or spaces of and in the said premises or the [Building].

……”

3. The 1^st defendant Knight Frank (Services) Ltd (the management company, “KF”) issued a circular dated 26 May 2011 to all owners/residents of the Building (which Desir had received) for “removal of personal belongings at common lobbies/stairways and carparking areas” (“26/5/11 Circular”):

“With reference to our previous circulars dated 18 March and 1 April 2011, respectively, …… we regret to advise you that some owners/residents have continued to ignore our requests and have continued to place their personal belongings in the common areas and carpark of the development.

Since the grace period for owners/residents to take back/dispose of their private belongings has lapsed for over one month, we will treat them as abandoned articles and they will be disposed of by the current cleaning contractor, Cheung Kee on 2 June 2011 (Thursday).

Please note that this circular also serves as the last and final warning for you to dispose of your private belongings such as …… bicycles …… tyres ……. and other belongings from the common areas of the development before 2 June 2011.

Last but not least, our on-site management staff has already been instructed to remove any items left in the common areas without further notice in the future.”

4. On 31 May 2011, there was a meeting of the management committee of the IO (“Committee”) (“31/5/11 Meeting”). There were issues over delay in the preparation, finalisation and circulation of the minutes of the 31/5/11 Meeting (“31/5/11 Meeting Minutes”), but there was no dispute over paragraph 8(a) of the 31/5/11 Meeting Minutes that recorded as follows:[1]

“Any Other Business:

(a) Bicycle Rack

Committee Member Eddie Lee brought up the idea that provision of a bicycle rack would be a useful addition to the facilities of the estate.  This suggestion met with general approbation, and Mr Lee indicated that he would investigate the cost and feasibility and report back to the [Committee].  Questions were raised about the placement of the rack, and whether it would be a free service or a rental arrangement.  Once costings and transport had been investigated, it was decided to address these matters at a later time.”

5. In a series of emails on 2 and 3 June 2011 among inter alia Ms Helena Lee (then chairperson of the Committee, “Madam Lee”), Mr Eddie Lee (a Committee member, “Lee”), Mr Peter Cooper (“Cooper”), the 2^nd defendant Mr John Chan (associate director of the KF, “Chan”) and Desir, proposals were made for the procurement of bicycle racks, and there were discussions on whether use of the bicycle bays would be a free service.  Cooper sent email to inter alia Chan for his advice on suitable locations for designated bicycle parking areas (“Designated Areas”) bearing in mind ease of access and proximity of legitimate parking spaces.  He suggested “spaces below block C (inside) should be considered”.  Desir replied he had seen “there is space under block B, BlocK A, and Block C, but not sure of Block D”.  Lee queried whether they “should hold the bicycles now kept in common area since [they] are considering to instal rack? specially those look not like an abandoned article?” Madam Lee replied that “[she] understand [Chan] has instructed the site staff to assemble all bicycles in one area ie at the back of Block A while waiting to sort out the bicycle racks”.  Cooper then suggested that they “elect a practical installation location before [they] purchase”.  He queried whether an indoor location such as “empty unit under Blk 1/C” would keep the bicycles from corroding, and noted “there is a good space directly under Blk 1/a but when [his] carpark buddy parks this is all but blocked.  Bicycle induced scratches on cars will waste [the Committee’s] time so let’s keep that in mind …...” Desir suggested that the empty unit under “Blk 1/C” should be reserved for something more valuable such as children’s playroom.

6. In a series of emails on 7 June 2011 among inter alia Madam Lee, Desir, Lee, Cooper and others, there were discussions on the procurement of bicycle racks and possible locations for the Designated Areas.  Desir suggested three areas, ie (a) under Block B opposite to the entrance to Block C commons room (“Location A”), (b) under Block A at the back entrance behind the service lift entrance (“Location B”), and (c) under Block A near the external stand pipe faucet (“Location C”).  Cooper said there was carpark marking for Location A, and he queried whether there was enough space at Location B when cars were parked.  He could not find Location C.  Lee said he and Desir had looked at various areas and noted at least two places for 3m bicycle racks, but he had some reservations that moving bicycles might scratch the cars when the carparks were fully parked.  Cooper said he required recommendations as to where the bicycle racks were proposed to be located before he could give his vote.  Madam Lee also asked where the Designated Areas would be located “before [they] move forward as [they] might risk having car owners about causing damage to their cars”.

7. On 29 June 2011, Madam Lee sent email to Desir, Lee, Chan and others to say she had discussed the proposal for bicycle rack locations with Cooper, “and [they] also consulted [their] management agent, and [Chan] seems to have concerns about the logistics of implementation”. She asked Chan for his views. 

8. On 6 July 2011, Chan replied that as regards installation of bicycle racks, it would be wise to have a formal resolution passed at an owners’ meeting rather than to have the matter handled by the Committee.  He gave the following reasons and asked for the views of the Committee:

“1. Since such facility only caters for a number of owners/residents who have bicycles and the quantities of rack are limited (not every unit can have allocated for one bicycle space), it maybe challenged by other owners who do not have bicycles; (Not all owners/residents get the same benefit)

2. The place (common area) to be designated for such purpose should be compromised among owners for the sake of fairness/unnecessary disputes among blocks’ owners;

3. We should set some regulations (like amount of licence fee, application procedures, first come first serve basis or by tendering, etc) and all these should be tabled for free discussion and passing resolution before implementation;

4. In view of current critical and sensitive situation, we have reservation to put forward this task (not an urgent matter) and it is better to have this be passed at a formal owners’ meeting (to be arranged later) rather than decided by the [Committee].”

9. Desir was the owner of four bicycles and bicycle parts (collectively, “Bicycles”), which he parked at the location marked in blue on the floor plan (“Original Location”) ever since January/February 2010.[2] At the Hearing, he claimed the Original Location was at Location C.  There is no dispute the Original Location is a common area of the Building.  However, Desir claimed it was also a Designated Area.[3]

10. KF issued to Desir a seven-day Advisory/Final Notice dated 1 November 2011 (“1^st Final Notice”) as follows:

“For the sake of fire safety and to avoid violation of local fire ordinances, we would like to solicit your kind cooperation by removing *personal belongings / unwanted articles / furniture placed outside your premises such as *lift lobby / front / rear staircase / common passages / car parking areas accordingly.

We would like to remind you of the captioned concern and would be greatly appreciated that you could help keep clear of the above-mentioned common areas as required.

We shall remove such article(s) from the common areas after 7 days from the date of this notice. Unclaimed article(s) will be discarded by the management without further notice.

……”

11. KF issued a further warning notice which stated as follows (and Desir said this was placed in his mailbox together with the 1^st Final Notice, and the two documents were also posted on the Bicycles):[4]

“Warning: Putting personal belongings at car park is STRICTLY PROHIBITED. Anything left unattended in the said area shall be removed within 7 days from the date of this notice, otherwise the management office shall take action to clear up the area without further notice.”

12. On 8 November 2011, the IO via KF removed the Bicycles from the Original Location and stored them at a locked storeroom at Block C of the Building (“Storeroom”).  On the same day, Desir wrote to Chan to complain inter alia that the 1^st Final Notice was only delivered to his mailbox on 7 November 2011 even though it was dated 1 November 2011, that he had not received any other notice prior to the 1^st Final Notice, and that he was unaware he had any personal belongings placed “in violation of local fire ordinance” or any ordinance whatsoever.  He further advised he had left the Bicycles “in an area where they are out of harm’s way”, and warned KF not to touch the Bicycles otherwise he would claim against them.  He added as follows:

“7. Finally, I am happy to consider the matter of relocating [the Bicycles] but only at a time when a senior person from your company is on hand to witness this. It is necessary for a credible 3^rd party witness to be present to verify actions taken, because of the established pattern of lies, misinformation and falsified records as produced by the current [Committee] (here shown, and in the past), and because of the personal vendettas orchestrated by the current [Committee] Chairman against previous [Committee] members or supporters.

8. Please let me know when you or a senior representative of your company would like to arrange a visit to address this last matter. (Your site staff are not able to address this point because they admit to being intimidated by “certain [Committee] members” and have suggested that they “… do not want to get caught in the middle and get fired”).

13. On 9 November 2011, Desir sent email to Chan noting KF’s site staff had removed the Bicycles from the Original Location and had placed them in the Storeroom.  He confirmed for the record that this was not at his request.  “If any senior person from [KF] would like a visit, [Desir is] still willing to address the solution in the manner which [he] originally proposed yesterday.”

14. On the same day, Chan replied by email to say the removal of the Bicycles to the Storeroom was “only a temporary arrangement that [they] give a last chance to defaulting owners/residents to get back their things within one more week time.  ([They] will treat all owners/residents the same unless getting a clear instruction from the [Committee] that [they] have to remove all stuffs immediately.) Please note that [Desir] and/or other residents do not take things back to [their] own places by 14 November, 2011 (Monday), [KF] will treat these as unwanted/unclaimed articles and they will be surely disposed from [KF] without further prior notice.”

15. On the same day, Desir replied by email reiterating he would only address this in the presence of a senior person from KF present as witness, and he would not remove the Bicycles from the Storeroom before 14 November 2011 (or any time thereafter) unless his conditions were met.  He made clear the Bicycles did not breach any statutory ordinance and were not abandoned.

16. By a series of emails on 9 and 10 November 2011, Chan proposed to meet Desir to address this matter.  On 14 November 2011, Desir sent an email to Chan to confirm that “[he has] arranged to remove [the Bicycles] to a suitable location” and he required a senior party from KF to be present as witness so that “there is no further conflict with Icy Lui [then chairperson of the Committee, “Lui”] who has apparently initiated these actions as part of her personal vendetta”.  He added that:

“I confirm again that I have indicated all along that I am happy to comply with this silly request despite the fact that it is not lawful so that we can use this opportunity to highlight the absurd conduct of the current [Committee], and your own acquiescence and unreasonable conduct accordingly. Note that I still require you answer the questions raised—for the record—in my original email on this matter? Since you have set today as your deadline for me to move the items from the storage room where they were transferred by your staff I would appreciate your attending to my request soonest. ……”

17. By a series of emails between Chan and Desir on the same day, arrangements were made for them to meet on 17 November 2011. On 14 November 2011, Desir wrote to the District Land Office to ask for use of one of the five carparking spaces (ie carparks nos 10, 11, I/O1, I/O2 and I/O3) located at the lower carport level of the Building (“Govt Carparks”).

18. On 17 November 2011, Desir met Chan and walked around the Building, but did not go to the Storeroom.  Desir physically showed Chan the Original Location, the area where he intended to move the Bicycles, and other locations where other bicycles were parked.[5] When Desir showed Chan he wanted to move the Bicycles to a Govt Carpark, Chan said he did not know whether it was government-owned, so it was proposed to wait for the government to let them know.[6]

19. On the same day, Desir sent email to thank Chan for the meeting that morning, and to confirm the following:

“1. [The Bicycles] were legally stored and should never have been removed by your staff! I am prepared to address this in court if and when necessary as I can easily produce evidence to support my position.

2. The above notwithstanding; I have made alternate arrangements to park [the Bicycles] in the government owned spaces and will address the arrangements with the rightful owners directly. The government is the rightful owner/s.

3. The matter does not involve you or the IO and no one other than the government has a right my use of the its space. I have shown you copies of my correspondence with the government related to this.

4. If the IO has a different view, the IO must demonstrate proof of ownership before it can legally address the above.

5. [The Bicycles] should be immediately returned to [the Original Location] – undamaged – and I will immediately arrange to place them in the government owners space.

6. If you do not immediately return my property, it is the case that you have confiscated it illegally and you are therefore responsible for loss and/or damages which I reserve the right to recover.

7. If there is any damage to my property I will let you know and expect compensation back from yourselves.

8. Please confirm that the bicycles are returned and I will immediately follow up as indicated.”

20. On the same day, Chan replied by email that Desir was free to get back the Bicycles from the Storeroom and he could approach KF’s on-site staff for such purpose.  Chan clarified that the “IO spaces that [Desir has] mentioned with parties concerned unless we receive solid evidence/ proof from [Desir] and/or the government authorities.  Meanwhile, please do not put any personal belongings at the common areas of the building, otherwise, [KF] will dispose of them all without further prior notice”.

21. On 7 December 2011, the District Lands Officer/Hong Kong West and South replied to Desir that (a) carparking spaces nos 10 and 11 were vested in the government as bona vacantia upon dissolution of the previous corporate registered owner in 2002 and his enquiry had been referred to the Estate Management Section of the Lands Department for reply, and (b) no relevant information could be retrieved from the Land Registry and file record in respect of carparking spaces nos I/O1, I/O2 and I/O3 and the matter was still pending investigation.

22. On 11 January 2012, Desir sent email to Chan annexing copy letter from the District Land Office which he said was proof that the IO did not own the car parking spaces which he intended to make use of to park the Bicycles, “and which [KF] have prevented [his] use of by stealing [his] property”.  He reiterated that KF had no legal authority to confiscate the Bicycles, and he further demanded for payment of the value of the Bicycles.

23. On the same day, Chan replied by email to say Desir was free to get all his belongings from the Storeroom at any time but he had failed to do so.  Chan strongly demanded Desir to take back the Bicycles immediately.  He further reminded that under the DMC Desir and other owners/residents were not allowed to place any personal belongings at the common areas of the Building, and “[KF] will dispose of them all without giving prior notice when [Desir] and/or other owners/residents breach the same covenant in future.  This email is also served as [their] last reminder and warning to [Desir]”.

24. On the same day, Desir replied by email to say he had made arrangements to park the Bicycles in government-owned space and therefore the DMC was not relevant.  He claimed he had shown KF evidence that the government owned the Govt Carparks, but even if the Bicycles were parked in the common areas of the Building, they did not violate any provision of the DMC.  Since Lui was a person with questionable intentions and caused nuisance to him by calling the police, Desir had no intention of entering the Storeroom lest he be accused later of theft or damage.  Desir stated “[he] did not put [his] property there that was [KF’s] doing and it is [KF’s] responsibility to restore it to when [he] left it.  …… When [his] property is returned to place [he] left it [he] will address it as is suitable.”

25. On 9 March 2012, Chan sent a further Final Notice (“2^nd Final Notice”) to Desir by email.  He stated KF was under instructions from the Committee to inform Desir that “since [Desir has] been disclaiming to take back [the Bicycles] from the [Storeroom] more than three months, [KF] will treat them as abandoned/unclaimed articles and will dispose of the same after 15 March 2012.  This email will serve as a final notice and please take back [the Bicycles] from the [Storeroom] by 15 March 2012 (Thursday) before 5:00 pm”.

26. On the same day, Desir replied by email to warn that “if [KF] do not return [his] property to the place when [he] left it [he] will take legal action against [KF]”.  For the record, he reiterated that:

“1. I have no intention whatsoever of entering [the Storeroom] because I did not put any item/s there—that was your doing not mine and you must remedy this.

2. You were never authorized to touch my property and you should never have done so without consulting me first.

3. Further, given that [Lui] has falsely accused me of “criminal activity” and “stealing”, I cannot be expected to put myself in a position where she can now claim that I removed or stole items from [the Storeroom] should she now invent another story that something is missing and I must now be responsible.

4. I am suspicious that the above may be a legal trap set by the chairperson in collusion with yourself and my belief is not unfounded because ……

5. If you are acting in good faith then you have no legitimate reason to continue to refuse to return my property to the place where I left it so that I could have addressed this matter as I have been asking—you clearly must have a hidden agenda if you refuse to return my property as I have requested you to do all along.

6. Finally, I confirm that I am now able to show that your supposed “enforcement of rules” in matters related is in fact a personal attack orchestrated by those instructing you, where you have clearly failed to take action in other cases where the commons areas rules are ignored, but you have nonetheless taken an aggressive and malicious position towards me.”

Desir therefore demanded KF to return the Bicycles to the Original Location and to compensate him, and urged for resolution of this matter on or before 15 March 2012.

27. On/about 19 March 2012, the IO disposed of the Bicycles.  The value of the Bicycles was $25,699 (“Value Sum”). 

28. The crux of the dispute between Desir and the IO was whether or not the IO’s removal and/or disposal of the Bicycles were wrongful (“Issue”).  Desir claimed but the IO denied such acts were wrongful.

II.  PROCEEDINGS

29. On 20 August 2012, Desir commenced SCTC31038/2012 at the Small Claims Tribunal (“Tribunal”) to claim against KF and Chan for the value of the Bicycles.  On/about 28 September and 8 November 2012, leave was granted for Desir to withdraw his claims against KF and Chan.  On 11 October 2012, leave was granted for Desir to add the IO as the 3^rd defendant.  The IO is now the sole remaining defendant.

30. Desir himself gave evidence and called Lee as his witness.  The IO’s representative Madam Chow Man Yuk (“Chow”) gave evidence, but the IO did not call any other witness. 

31. On 30 May 2013, the learned adjudicator (“Adjudicator”) dismissed Desir’s claim against the IO with no order as to costs (“Decision”). The Adjudicator reduced his reasons for the Decision into writing (“Decision Reasons”).

32. On 31 May 2013, Desir applied for review of the Decision.  In his Application for Review,

(a)  Desir asked the Tribunal to re-examine the issue of whether there were Designated Areas.  Desir’s case was that the Designated Areas were effected after the 31/5/11 Meeting, and he adduced further written emails pertaining to such issue.

(b)  Desir argued that the Adjudicator’s finding that returning the Bicycles to the Original Location, which was a common area, would have violated the DMC was inconsistent and could not be supported because it overlooked the fact that after removing the Bicycles the IO stored them at the Storeroom which was also a common area. 

(c)  Desir suggested that the Decision was highly technical, and justice would be better served by transferring the case to the Lands Tribunal which had more extensive experience in dealing with building management and DMC-related matters. 

33. On 28 August 2013, the Adjudicator dismissed the application for review with no order as to costs (“Review Decision”).  The Adjudicator reduced his reasons for the Review Decision into writing (“Review Decision Reasons”). 

34. On 23 October 2013, Desir lodged his Application for Leave to Appeal against the Decision and Review Decision.  At the hearing on 4 December 2013, I granted leave for Desir to file his Amended Application for Leave to Appeal.  On 14 January 2014, Desir filed the Amended Application for Leave to Appeal.  At the hearing on 17 February 2014, I granted leave for Desir to appeal against the Decision and Review Decision on the following grounds:

(a)  in respect of the Decision, the Adjudicator erred in law (i) by relying on clauses 13 and 21(j) and (l) of the DMC in deciding whether or not the IO had the right to remove the Bicycles (“1^st Ground”), (ii) in deciding that the issue of whether or not the IO had the right to dispose of the Bicycles was a question of whether the IO had taken reasonable steps and/or had given sufficient time before such disposal (“2^nd Ground”), and (iii) even if (ii) is a proper question, in concluding the IO had taken reasonable steps and given sufficient time (“3^rd Ground”);

(b)  in respect of the Review Decision, the Adjudicator erred in law by refusing to (i) make findings of fact on the Designated Areas by referring to or drawing inferences from the emails adduced at the review hearing (“4^th Ground”), (ii) consider whether the case should be transferred to the Lands Tribunal on the basis that the Tribunal could not exercise such power after the trial proper or at the review stage (“5^th Ground”), and (iii) consider whether the IO also stored the Bicycles at a common area on the basis that such issue had not been raised/ argued at trial and therefore could not be considered at the review stage (“6^th Ground”).

35. On 31 March 2014, Desir filed Notice of Originating Motion to appeal against the Decision and Review Decision on the aforesaid grounds of appeal (“Appeal”). On 15 April 2014, the IO’s solicitors filed Notice to Act.  When the Appeal first came before me on 29 September 2014, the parties were not ready and there was disagreement over preparation of the hearing bundle.  I granted directions for the preparation and lodgment of the hearing bundle and written submissions.  The substantive hearing of the Appeal came before me on 10 October 2014 (“Hearing”).

III.  DECISION REASONS

36. To resolve the Issue, the Adjudicator raised the following five questions:

(a)  whether the Bicycles were parked at a Designated Area;

(b)  whether the DMC empowered the IO to remove the Bicycles;

(c)  what steps did the IO take before they removed the Bicycles;

(d)  whether Desir acted reasonably throughout;

(e)  whether the IO had powers to dispose of the Bicycles.

37. On question (a), the Decision Reasons noted the Original Location was a common area of the Building, but Desir claimed it was also a Designated Area.  Lee adopted his witness statement (which stated the 31/5/11 Meeting specially discussed the issue of bicycle parking at the common areas of the Building and “approved the plan for owners to park their bicycles in designated areas.  The item is minuted as item 8-(a) in the [31/5/11 Meeting Minutes]”).  Lee testified that at the material time bicycles were randomly parked at the common areas of the Building.  When asked as to whether the Original Location was a Designated Area, Lee hesitated briefly before saying “I think so, one of those areas”.  When asked as to whether KF was made aware of the designated areas for bicycle parking, he said “[they] had attended the [31/5/11 Meeting].  I think yes”.  The Adjudicator found Lee had failed to satisfactorily explain why he claimed the Committee had “approved the plan for owners to park their bicycles in designated areas” at the 31/5/11 Meeting when the 31/5/11 Meeting Minutes had no such record.  Lee also did not give evidence from “where his power to designate bicycle parking within the common areas of the [Building] came about”.

38. The Adjudicator accepted the 31/5/11 Meeting Minutes were a full and complete record (and he found Desir must have acknowledged this), so if (as Lee suggested) the Designated Areas had been so designated as at the 31/5/11 Meeting leaving only the provision of bicycle rack facilities outstanding, the 31/5/11 Meeting Minutes would not have mentioned that “[questions] were raised about the placement of the rack” because such rack would have been placed at the Designated Areas.  Hence, paragraph 8(a) of the 31/5/11 Meeting Minutes contradicted Lee’s evidence that the Original Location had been designated as a Designated Area.  The Adjudicator concluded that no common area of the Building had been designated for bicycle parking on 31 May 2011, and in fact the Original Location was a common area not designated for bicycle parking.

39. On question (b), since the Bicycles were parked at a common area of the Building and there were no Designated Areas, the Adjudicator was satisfied the IO was empowered under the DMC to remove anything placed therein or thereon, and it followed the removal of the Bicycles by KF/IO in accordance with the DMC was lawful.

40. On question (c), Desir received the 26/5/11 Circular although he was unsure whether he received the two earlier circulars referred therein.  He only received the 1^st Final Notice on 7 November 2011, and replied to it on the following day.  Desir and Chan also exchanged other emails with the last ones being the 2^nd Final Notice and Desir’s reply thereto on 9 March 2012.  Desir confirmed he would not let other emails, reminders and notices following the 26/5/11 Circular go unattended, and he also referred to some email exchanges that showed he had been cooperative and attending to the matter all along by keeping close contact/liaison with Chan.

41. After he received the 1^st Final Notice, Desir last saw the Bicycles at the Original Location in the morning on 8 November 2011, which notice was also posted on the Bicycles.  When he returned home from work on 8 November 2011, the Bicycles had been removed and he found out from the caretaker they were stored at the Storeroom.  He emailed Chan on 8 November 2011 to indicate his willingness to relocate the Bicycles if a senior person from KF would witness such removal.

42. On 17 December 2011, Chan met Desir who then emailed Chan to reconfirm his willingness to remove the Bicycles on condition they were first returned to the Original Location.  Desir explained that why he would not get the Bicycles from the Storeroom himself and/or why some senior person from KF had to witness his collection of the Bicycles was because he had been vendetted and targeted by Lui, including being accused of theft with investigation by the police, and he did not wish to be further victimised and criticised.  He queried why the Bicycles were stored at the Storeroom and not at some other open space within the Building, and he feared it was a trap by Lui or the then Committee to frame him if he took steps to collect the Bicycles himself.

43. The Adjudicator held he was in no position to comment on the veracity or otherwise of the various minutes of meeting, but having heard Desir’s testimony/submissions, he considered “there is reason to believe [Desir] was highly upset and aggrieved by the management of the estate, not to say about those accusations and statements made openly against him by [Lui] in the Minutes of Meeting he referred [the Adjudicator] to.  The only relevance of such accusations and adverse comments against [Desir] to the present claim, in [the Adjudicator’s] decision however, is to explain why he did not pick up the Bicycles from the secured storage before the expiry date stipulated and no more than that”.

44. The Adjudicator was satisfied on the evidence that the IO or Committee had given sufficient time and notice to Desir on the question of the Bicycles parked in the common area in breach of the DMC which the IO/KF was bound to enforce.  Even assuming Desir received the 1^st Final Notice on 7 November 2011 as he claimed, the Bicycles removed on 8 November 2011 were not disposed of until four months later on 19 March 2012, ie after the 2^nd Final Notice with a deadline of 15 March 2012 was given to Desir.  The Adjudicator found reasonable steps had been taken with sufficient time given to Desir before disposal of the Bicycles.

45. On question (d), the Adjudicator was satisfied from the documents/evidence that Desir had attended to the matter promptly after he received the 26/5/11 Circular, and that he tried to explore ways of resolving the issue of bicycle parking in areas other than common areas of the Building, eg the Govt Carparks.  However, the crux of the matter was Desir’s misconception that the Original Location was a Designated Area, but there was no evidence that any Designated Area had been effected by the IO or had been provided for under the DMC.  Even though Desir produced evidence that other bicycles/vehicles were parked at other common areas, that motor tyres belonging to Lui were left lying around, and that the IO/KF did not attend to laundry hanging in the staircases (to support the suggestion that he was the only one targeted by Lui), the Adjudicator held “ten wrongs would not make a right” and these management issues, which “would not confer any privilege or right on any owner to breach the DMC” and which would have to be resolved in another forum.  The Adjudicator further held that whether Desir was being targeted or personally vendetted by any person (which matters would have to be resolved elsewhere) “should be kept separate from any findings in accordance with the law and evidence which this Court is bound to consider and decide on the issue of [Desir’s] present claim”. 

46. The Adjudicator found Desir was unable to justify why in his email reply to the 2^nd Final Notice he requested/required the Bicycles to be returned to the Original Location except to say he would immediately, and indeed had made a firm decision, to take them away and park at other non-common areas within the Building, say, the nearby Govt Carparks shown on the floor plan. The Adjudicator held the IO/KF would not return the Bicycles to the Original Location (ie a common area of the Building) because it would be tantamount to their breaching the DMC or assisting such breach by Desir, and it mattered not that Desir “would then remove his Bicycles away within seconds.  It really is a matter of ensuring that no single moment in time the terms of the DMC are to be contravened.  Therefore, [the Adjudicator] find the [IO or KF] not accepting [Desir’s] request to them to put the Bicycles back to the original place justified”.

47. But at the same time, the Adjudicator also accepted Desir’s explanation that he had serious concern about picking up the Bicycles himself at the Storeroom.  As to why Desir did not ask for the Bicycles to be returned to his unit, the Adjudicator accepted Desir’s explanation that it was purely a matter of convenience for him to move the Bicycles from the Original Location to the Govt Carparks rather than to move them to his unit and then bring them down to the ground floor again.  The Adjudicator accepted Desir acted reasonably throughout, but his grievances over being targeted and personally vendetted coupled with his genuine concern of being further criticised “made the steps he took not being sensible enough to avoid the loss of the Bicycles”. The Adjudicator believed “a request for return of the Bicycles to his unit would be more sensible and attractive to [KF] than returning the Bicycles to the [Original Location] when there was no evidence to show it was [a Designated Area]”.

48. On question (e), the Adjudicator held that since all reasonable steps had been taken and sufficient time had been given to Desir, the IO/KF “could have done no more other than disposing the Bicycles”.  He found the removal of the Bicycles on 8 November 2011 and their disposal on 19 March 2012 justified.  On such basis, the Adjudicator dismissed Desir’s claim against the IO.

IV.  REVIEW DECISION REASONS

49. In the Review Decision Reasons, the Adjudicator first dealt with the further documents adduced by Desir which consisted of inter alia the series of emails referred to in paragraphs 5-6 above (“Further Documents”).  Upon review of the Further Documents, it appeared to the Adjudicator that Desir was asking him to make different findings/ inferences of fact based on the Further Documents, ie the Designated Areas had been effected leaving only the purchase of the bicycle racks outstanding.  However, the Adjudicator held the Tribunal would not make findings of fact on the issue of the Designated Areas by referring to or drawing inferences from the contents of the emails already produced at trial and/or in the Further Documents. 

50. As regards Desir’s request to have the case transferred to the Lands Tribunal, the Adjudicator held that the Tribunal would not be in any position to deal with matters which fall within the exclusive jurisdiction of the Lands Tribunal over management disputes or the provisions of the Buildings Management Ordinance Cap 344 (“BMO”).  In any event, the jurisdiction of the Tribunal to transfer cases to another forum would not be exercised after trial proper or at the review stage.

51. At the review hearing, Desir submitted that Lui, members of the Committee, KF and/or Chan only pretended to (but actually did not) observe the terms of the DMC, and this went to the ulterior motive/intent of the IO/KF in removing the Bicycles, which was relevant to the assessment of evidence in making findings of fact.  The Adjudicator rejected such submissions on the basis that Desir’s claim was for the value of the Bicycles disposed by the IO, and any observance or non-observance of the DMC, any dispute over the DMC, any mismanagement or sub-standard management by the IO/KF might have to be resolved in another forum.

52. As regards Desir’s complaint that the Storeroom where the Bicycles were stored after confiscation was also a common area of which the IO could not have exclusive use, the Adjudicator held this issue had not been raised/argued at trial and therefore could not be considered at the review stage.

53. For the aforesaid reasons, the Adjudicator upheld the Decision and dismissed the application for review.

V.  LEGAL PRINCIPLES

54. Section 7 of the Small Claim Tribunal Ordinance Cap 338 (“Ordinance”) provides that the Tribunal may at any stage of the proceedings in the Tribunal, either on its own motion or upon the application of any party, transfer the proceedings to inter alia the Lands Tribunal whereupon the practice and procedure of inter alia the Lands Tribunal shall apply.

55. Section 27A(1) of the Ordinance provides that “…… an adjudicator may, within 14 days from the date of an award or order given or made by him, review the award or order and on such review may re‑open and re-hear the claim wholly or in part and may call or hear fresh evidence and may confirm, vary or reverse his previous award or order”.

56. Section 29 of the Ordinance provides as follows:

“(1) On an appeal for which it has granted leave under section 28, the Court of First Instance may –

(a) allow the appeal;

(b) dismiss the appeal; or

(c) remit the matter to the tribunal with such directions as it thinks fit, which may include a direction to the tribunal for a new hearing.

(2) On an appeal for which it has granted leave under section 28, the Court of First Instance may –

(a) draw any inference of fact; and

(b) make such order as to costs and expenses as it thinks fit,

but may not –

(i) reverse or vary any determination made by the tribunal on questions of fact; or

(ii) receive further evidence.

……”

57. It is trite that findings of fact by the Tribunal are generally immune from challenge as they involve no error of law unless such is perverse or irrational or where there is no evidence to support the decision or where the decision was made by reference to irrelevant factor or without regard to relevant factors.[7]

58. In Potential Optical Media Ltd v Upplan Holdings Ltd,[8] To J in dealing with appeal on point of law against the Tribunal’s findings of fact said:

“Bokhary PJ specified three points which the appellate court must bear in mind when dealing with this kind of appeal. First, the appellate court must bear in mind what scope the circumstances of the case provide for reasonable minds to differ as to the conclusion to be drawn from the primary facts. If the lower court’s conclusion is reasonable, i.e. within the scope for reasonable minds to differ, then even if the appellate court does not agree with that conclusion, it cannot substitute its own conclusion for that of the lower court. However, if the appellate court regards the contrary conclusion as the true and only reasonable one, in other words, the lower court’s conclusion is not within the scope for reasonable minds to differ, the appellate court is obliged to substitute the contrary conclusion for the lower court’s conclusion. In my view, the said legal principles are also applicable to appeals from the [Tribunal].”

59. But even if the Tribunal has erred on a point of law, it falls on the appellate court to consider whether it has some material bearing or impact on the outcome of the case, otherwise there is little point in considering any possible retrial.[9]

VI.  4^TH GROUND

60. I agree with Desir that the Adjudicator erred in law in refusing to refer to the contents of the emails produced at trial and at the review hearing in making findings/inferences of fact on the question of whether Desir had parked the Bicycles at a Designated Area.

61. As the Adjudicator himself acknowledged in the Decision Reasons, the first question he had to deal with was whether the Bicycles were originally parked at a Designated Area.  This is primarily a question of fact.  As seen in paragraphs 37-38 above, the Adjudicator came to his conclusion that no common area of the Building was made a Designated Area on the basis of his assessment of the veracity of Lee’s testimony as against his own interpretation of the 31/5/11 Meeting Minutes that there was no Designated Area as at 31 May 2011 (which, he said, contradicted Lee’s evidence that the Committee “approved the plan for owners to park their bicycles in designated areas” at the 31/5/11 Meeting).

62. The correct approach in assessing witness evidence was laid down by the Court of Appeal in Esquire (Electronics) Ltd v Hong Kong and Shanghai Banking Corp Ltd as follows:[10]

“…… I do not say that an assessment of the character of a witness plays no part in the fact-finding process, but it is a task that may sometimes be elusive even to the best trained eye and ear, and I would venture to suggest that the truth, in so for as one is able to reach it or, as is sometimes the case, to reach a version of it that is more likely to be correct than not, can best be tested by reference to contemporaneous documentation where it exists, or to its absence where one could expect it to have been created, as well as to inherent improbabilities (though bearing in mind that there may be occasions where the truth may run against that particular grain) having regard to all the facts that are known …… It is however to say that in this case the approach adopted to assessment of the facts placed far too much emphasis on character impression and too little upon what was suggested by the documentation and by the inherent improbabilities in their historical context. That documentation, as well as conflicts within the evidence, inherent probabilities, and a study of how matters were originally pleaded and asserted in witness statements – these are the factors which …… were likely to be of particular use in assessing the facts ……” (my emphasis)

63. In applying Esquire (Electronics) Ltd, To J in Hung Fung Enterprises Holdings Limited& anor v The Agricultural Bank of China made the following observations as to the proper approach in analysing the evidence:[11]

“……. I shall approach the evidence with caution and place special weight on documentation. I shall test the credibility of the assertion of any witness by reference to contemporaneous documentation where it exists, or to its absence and lack of explanation where one would expect it to have been created and to inherent improbabilities having regard to all the known facts and incontrovertible evidence. I shall consider the totality of the evidence and the context in which each piece of assertion arose. I also bear in mind the tenor of the parties’ case.” (my emphasis)

64. Although findings of fact are generally immune from challenge on appeal unless they involve error of law in the sense explained in paragraphs 57-58 above, I find the Adjudicator has erred in law in refusing to the consider the emails produced at trial and at the review hearing insofar as they discuss the potential location(s) of the Designated Areas, which necessarily has impact on the understanding of paragraph 8(a) of the 31/5/11 Meeting Minutes.  I bear in mind that under section 27A(1) of the Ordinance, an adjudicator in dealing with a review application may “re-open and re-hear the claim wholly or in part and may call or hear fresh evidence ……” The Adjudicator did not give any reason for refusing to consider the emails in question other than he thought Desir was asking him to make different or new findings of fact.  As seen in paragraphs 5-8 above, it cannot be said that the emails in question are irrelevant to the issue of whether or not there were any Designated Areas.  In light of the wide ambit of section 27A(1) of the Ordinance, it is an error of law to hold that new evidence will not be considered merely because the applicant on a review application wishes the Tribunal to re-open and re-hear certain findings/inferences of fact. 

65. This is particularly significant when it appears the Adjudicator in placing emphasis on whether Designated Areas have been approved or effected as at 31 May 2011 appears to have misunderstood Desir’s case.  Desir’s case at trial is that the Designated Areas were not approved/ designated at the 31/5/11 Meeting, so there is no record of the same in the 31/5/11 Meeting Minutes.[12] Rather, the Committee approved the plan for bicycle parking at the 31/5/11 Meeting, and what was needed was to “designate bicycle racks so that they could make it orderly” “rather than have people leaving bicycles everywhere around the estate”.[13] Desir claimed Lee was responsible for identifying the Designated Areas and procuring the bicycle racks,[14] and after the 31/5/11 Meeting he and Lee went around the Building to mark the Designated Areas,[15] including the Original Location and other areas.[16] However, since the plan for bicycle parking had been approved, Lee was only required to report to the Committee on “costings and transport” of the bicycle racks, which he did, but such matter (not being a major issue) was not recorded in the minutes (and Desir claimed that in fact most of Committee’s work was not recorded in the minutes).[17] In short, Lee made a decision on where the Designated Areas should be, but it was not recorded in the documents.[18]

66. Lee gave similar testimony that paragraph 8(a) of the 31/5/11 Meeting Minutes more or less reflected what happened,[19] ie that his proposal for bicycle parking was approved at the 31/5/13 Meeting,[20] and he was asked to source the bicycle racks and to report to the Committee on cost for final decision on purchase of the racks.[21] Lee gave evidence that he was responsible for locating suitable places for the Designated Areas, and he and probably Cooper and Desir looked around for such suitable places.[22] He could not remember where exactly the Designated Areas were, but they found several which they thought were suitable.  Lee then gave the answers set out in paragraph 37 above that the Adjudicator found to be hesitant.[23] Lee added it was normal procedure for the KF and the Committee to communicate by email.[24]

67. Thus, the whole tenor of Desir’s case even at trial is that the Designated Areas were identified/designated after the 31/5/11 Meeting (which would explain why there was no record of designation/approval of the Designated Areas in the 31/5/11 Meeting Minutes), and the Committee at such meeting merely approved the plan for bicycle parking and required Lee to report back to the Committee on cost and feasibility.  Thus, Desir’s stance at the review hearing set out in paragraph 32(a) above did not reflect any different or new position.  In asking the Adjudicator to revisit this question at the review hearing, Desir was not changing his case but was asking the Adjudicator to consider further evidence.  In my view, the relevant emails are pertinent to the issue of whether there is any genuine contradiction between Lee’s assertion in his witness statement that the Committee “approved the plan for owners to park their bicycles in the designated areas” and the contents of paragraph 8(a) of the 31/5/11 Meeting Minutes that made no mention of approval of any Designated Area but referred to deferral of consideration of inter alia “[questions] raised about the placement of the rack” until after “costings and transport had been investigated”.

68. Be that as it may, the relevant question for determining the Issue is not whether the Original Location was a Designated Area as at 31 May 2011 but whether it was such as at 8 November 2011 when the IO via KF removed the Bicycles from the Original Location.  On proper understanding of Desir’s case as explained above, it must be necessary to consider the relevant emails produced at trial and at the review hearing to ascertain whether any Designated Areas have been so designated after 31 May 2011.  In such circumstances, the Adjudicator erred in law in refusing to do so.

69. Ms Tam, counsel for the IO, submitted that the Adjudicator did consider the emails in the Further Documents, but (as was open to him under section 27A(1) of the Ordinance) he could refuse to refer to them to make findings of fact when they were irrelevant to the primary premise of his decision.  Ms Tam argued that since the Adjudicator decided the question as to whether there were any Designated Areas based on what he described as “logic and common sense” understanding of the 31/5/11 Meeting Minutes, it was unnecessary to making further findings of fact by relying on the emails in the Further Documents.  But such submissions are, in my view, flawed as (a) the 31/5/11 Meeting Minutes do not aid understanding as to whether any Designated Area was approved after the 31/5/11 Meeting and (b) the Adjudicator confirmed he did not even refer to the emails produced at trial to make findings of fact, which must be incorrect in light of the above analysis. 

70. Under section 29(2) of the Ordinance, on an appeal from an order/award by the Tribunal the appellate court may “draw any inference of fact”.  Hence, this court is in a position to consider the relevant emails for the purpose of drawing inferences of fact (if any) on the issue of whether or not any Designated Area has been designated after the approval of the plan for bicycle parking at the 31/5/11 Meeting.  In my view, the tenor of such emails in paragraphs 5-8 above is that both Cooper and Desir did suggest some possible locations for the Designated Areas and there was discussion as to the merits and demerits of these possible choices.  Whilst the emails did record that Lee and Desir walked around the Building and located two possible locations, at that point Madam Lee still queried where the Designated Areas would be located before moving the matter forward.  Indeed, upon Madam Lee consulting KF after discussing with Cooper about the proposal for bicycle rack locations, KF advised it would be wise for a formal resolution to be passed at an owners’ meeting for the installation of bicycle racks, and one of the reasons put forward was that the owners should (at an owners’ meeting to be arranged) compromise among themselves as to which common area should be designated for such purpose.  There was no further email correspondence to show whether KF’s recommendation was adopted, whether/where any bicycle rack was eventually installed, and whether the plan for bicycle parking moved forward at all.  In my view, the only logical and sensible inference of fact to be drawn from such chain of emails is that although proposed locations for the Designated Areas have been canvassed, there is no firm decision on any location for the Designated Areas. 

71. Desir placed emphasis on the email correspondence by Lee and Madam Lee (ie Lee queried whether they “should hold the bicycles now kept in common area since we are considering to instal rack? specially those look not like an abandoned article?”, and Madam Lee replied that “[she] understand [Chan] has instructed the site staff to assemble all bicycles in one area ie at the back of Block A while waiting to sort out the bicycle racks”) to suggest that parking the Bicycles “at the back of Block A” was with the permission of KF/IO.  The location “at the back of Block A” corresponds to Location B, but it is Desir’s case that the Original Location was at Location C, ie under Block A near the external stand pipe faucet.[25] I am therefore unable to see how his submissions in this respect can assist.  But even assuming Madam Lee was referring to the Original Location, it is plain from the above discussion that such location was not yet a Designated Area.  Indeed, the email correspondence between Lee and Madam Lee shows that the collection of bicycles was merely a temporary measure pending “to sort out the bicycle racks”.  In my view, it is not a necessary inference or a present ground of appeal (and in any event it was not Desir’s case either at trial or at the review hearing) that KF/IO acquiesced in the placing of bicycles (including the Bicycles) at the Original Location.  His case was simply that the Original Location was a Designated Area (as identified by Lee and not by KF), but such inference cannot be reasonably drawn from the emails.  That being the case, I am not persuaded the Adjudicator’s error of law under the 4^th Ground has any material bearing or impact.

VII.  1^ST GROUND

72. There is no dispute that the Original Location is a common area of the Building (and, as discussed above, not a Designated Area).  Desir argued that clauses 13 and 21(j) and (l) of the DMC did not empower the IO to remove the Bicycles from the Original Location. 

73. In respect of clause 13 of the DMC, Desir argued that the word “placing” was not intended to cover the placing of anything on the common areas on temporary basis because the references in such clause to other uses such as “drying laundry hanging …… or storing anything thereon or therein” were all for a duration of time.  Ms Tam submitted there was no reason to limit the act of “placing” to a non-temporary sense, and in any event “drying laundry hanging …… or storing anything thereon or therein” were not necessarily activities that take up any length of time.

74. In respect of clause 21(j) of the DMC, Desir submitted that the word “things” when read ejusdem generis necessarily referred to objects of permanent nature affixed to the building similar to “structure or installation signboards fitting” and not any and every object.  But Ms Tam said “things” was a general term and there was no reason to limit its meaning in the way proposed by Desir. She submitted if it was so intended, further words would have been added to clause 21(j) of the DMC to such effect.

75. In respect of clause 21(l) of the DMC, Desir argued that leaving the Bicycles at the Original Location was not “occupying” any common area of the Building.  He said he simply placed them there with no intention to occupy.  Ms Tam submitted that “occupation” is a general and wide term and a less formal concept than possession, and the Shorter Oxford English Dictionary defined “occupy” as “to take up, use up, fill (space or time); also in weakened sense, to be in or at (a place or position), thus ordinary meaning of the word “occupy” is to be present in.[26]

76. In Desir’s supplemental written submissions, he conceded that the DMC gave specific power to remove the Bicycles “only in respect of 2 of the 3 Clauses relied on by the Tribunal, but not the first Clause quoted by the Tribunal”.  I assume he still maintained that clause 21(j) of the DMC was inapplicable[27] although in light of his concession which enables the IO to remove the Bicycles from the Original Location under the other two provisions of the DMC, such remaining challenge is immaterial. 

77. However, for completeness, I agree with Desir that although the Bicycles are “things” in the broad sense of the word, the wording of clause 21(j) of the DMC suggests that meaning of the word in that clause is narrower.  In my view, the impugned objects that come within the meaning of “things” in the context of that clause are those “erected or installed” “in or on the [Building]” although they do not necessarily have to be affixed to the land.  Plainly, the Bicycles are not such “things”. 

78. But that said, the Adjudicator was correct in concluding that the Bicycles parked at the Original Location were placed at or occupied such area in the sense of filling up such space.  In any event, Desir admitted the Bicycles had been placed at the Original Location since at least January/February 2010, ie for more than a year prior to their removal by the IO via KF, so it could not be said they were placed at or they occupied the Original Location only temporarily.  Further, the proper construction of the DMC does not turn on Desir’s subjective intent.  Viewed objectively and reasonably, Desir has been using the Original Location (which is common and not private area) as parking area for his Bicycles for a significant period.  That, in my view, is sufficient basis for the IO/KF to exercise the powers under the DMC to remove the Bicycles.  There is no merit to the 1^st Ground.

VIII.  2^ND AND 3^RD GROUNDS

79. Desir argued that in concluding the IO had the right to dispose of the Bicycles the Adjudicator erred in law in deciding this merely raised questions as to where or not the IO (a) had taken reasonable steps and/or (b) given sufficient time before such disposal.  But even if these were the right questions, Desir claimed the Adjudicator erred in law in concluding that the IO had taken reasonable steps and/or had given sufficient time.

80. At the Hearing, Ms Tam accepted that in removing the Bicycles from the Original Location and taking them into their custody by storing them in the Storeroom, the IO via KF became an involuntary bailee of the Bicycles.  She also confirmed that to the knowledge of the IO/KF the Bicycles were not abandoned property but Desir’s property.

81. Desir complained that the Adjudicator failed to recognise the relationship of involuntary bailment between him (as bailor) and the IO (as bailee).  This, he submitted, was borne out by (a) the lack of reference to such relationship at all in the Decision Reasons and/or Review Decision Reasons, and (b) the Adjudicator’s failure to apply the proper test in assessing whether the IO was entitled to dispose of the Bicycles on 19 March 2012. 

82. In light of such complaints, it is perhaps useful that I first turn to the relevant legal principles.  Conversion occurs when property is wrongfully destroyed.  A defendant deals with others’ goods at his peril: unless he can invoke some specific defence he is potentially liable, however reasonable or well-intentioned his action.[28] But if an involuntary bailee performs in good faith an act which, taken in the abstract, would amount to a conversion, he is liable only if the performance of that act was accompanied by a lack of reasonable care.[29] If an involuntary bailee conscientiously performs acts with the object of returning the goods to their owner, such acts would be regarded as reasonable acts.  But what is reasonable will depend on all the circumstances, including the nature of the goods.[30] The burden falls on the involuntary bailee to prove that he has exercised the required standard of care.[31]

83. As regards conversion by destruction, if A is in possession of goods belonging to B and A destroys those goods without B’s permission, A is ordinarily liable to B for conversion.  There is at common law no general right to dispose of goods which a bailor has refused, or is unable, to collect. Thus, ordinarily, an involuntary bailee is not entitled to destroy goods just because they have become a nuisance to the bailee, and the learned authors of Palmer on Bailment describe the difficulties of the involuntary bailee’s position as “a blot on the law”[32] and as giving rise to a situation “in which the common law is incapable of supplying a satisfactory solution”:[33]

“…… As the decision of McCardie J. in Prager v Blatspiel, Stamp and Heacock shows, there must be an actual commercial necessity dictating the disposal before the bailee can evade liability for conversion; in addition, the bailee must have acted prudently and bona fide in the interests of the owner and must have been, for practical purposes, unable to communicate with his bailor prior to the disposal. Although this doctrine may apply where goods are deteriorating or otherwise falling in value (provided the depreciation is sufficiently serious to constitute an emergency) there is little prospect of its acceptance in situations where the disposal or other treatment is for the benefit of the bailee alone.

This can be seen from Sachs v Miklos, where the first defendant (after a lapse of three years, numerous telephone calls and two unanswered letters) finally sold a quantity of furniture which the plaintiff had stored with him many years before, and which was occupying necessary space.  Lord Goddard C.J.  acknowledged that what the first defendant did was perfectly natural in the circumstances and observed that in peacetime, with furniture values constant, his action would probably have involved him in no real liability.  But in the present case, values have risen and the plaintiff found it worthwhile to sue for conversion.  The defendant could not plead agency of necessity because there was no real emergency confronting him; he simply (and quite understandably) wished to be rid of an inconvenience.  This was too mild an ambience for the doctrine to apply.  …… it is clear that the act complained of must be in the interests of the principal for the defence to succeed.  Sachs v Miklos was followed in Munro v Willmott where Lynskey J doubted whether the doctrine could apply to goods stored in premises and held the defendant liable for disposing by ale a car which had lain in his yard for nearly three years and which the owner (despite efforts both on the defendant’s part personally and through the police to contact her) had failed to collect.  Clearly, this is one situation in which the common law is incapable of supplying a satisfactory solution.”

Ms Tam referred to the Canadian decision of Davies v Henry Birks & Sons Ltd[34] which held that “[bailment] by way of work and labour was essentially a contractual phenomenon, and to a great extent the duties of the parties depended upon the general law of contract rather than the specialized rules of bailment”.  But in the present case, there is no question of any contractual relationship between Desir and the IO/KF over the Bicycles.

84. Desir argued the IO did not act bona fide in disposing of the Bicycles. First, he claimed the IO/KF took no action (and gave no explanation for such inaction) against other bicycles, motorcycles, tyres and other objects placed by other residents/owners at the common areas in the carport, but only removed/destroyed the Bicycles.  He submitted this was because he was targeted, victimised and personally vendetted by Lui/IO, and hence the IO/KF did not act in good faith in disposing of the Bicycles.  Secondly, Desir suggested that the IO in disposing of the Bicycles instead of returning them to the Original Location as he requested or delivering them to his unit as the Adjudicator suggested was not acting in good faith. 

85. Desir claimed the above matters are plainly relevant matters and yet the Tribunal refused to let him subpoena Chan and Lui as his witnesses otherwise he would have elicited evidence from them at trial that the removal of the Bicycles from the Original Location was preceded by Desir’s application to the Lands Tribunal to compel Lui to call a general meeting of the IO at the request of 5% of the owners of the Building, which would have supported his contention that he was targeted and personally vendetted by Lui. In this respect, Desir referred to the transcript of the interlocutory (not trial) hearing on 8 April 2012 (“8/4/12 Transcript”)[35] before the Adjudicator in which (a) Desir submitted that the Chief Adjudicator had previously rejected his application to subpoena witnesses and that he intended to renew such application, and (b) the Adjudicator observed that any renewed application “would not be approved” unless there were further reasons or fresh grounds.[36] I am not persuaded by Desir’s complaint in this regard because he made no further submissions or renewed application to the Adjudicator for issuing subpoena to witnesses in response to (b) above.[37] In any event, even if the Adjudicator’s above observations amount to any formal decision, there is presently no permission to appeal against such interlocutory decision and/or the Chief Adjudicator’s earlier decision declining Desir’s attempt to subpoena witnesses.  The Appeal is confined to challenge against the Decision and the Review Decision.

86. Ms Tam submitted that the Adjudicator was bound to have considered the question of whether the IO acted in good faith when he dealt with the question whether the IO’s actions were empowered by the DMC and whether the IO acted reasonably and gave sufficient time to Desir.  Ms Tam further submitted that the question of good faith was inherently addressed in the Decision Reasons in that the Adjudicator:

(a)  found the IO’s actions were covered by the provisions in the DMC, and went on to consider the IO’s attempts to communicate with Desir via removal notices and emails;

(b)  considered Desir’s concerns that he had been targeted, victimised and personally vendetted, and that he suspected that the IO’s acts were a legal trap;

(c)  upon taking Desir’s evidence to the highest, considered that the IO did not dispose of the Bicycles until four months later and after expiry of the 2^nd Final Notice.

87. Having carefully considered the Decision Reasons, I am not persuaded that the Adjudicator properly addressed the rights/obligations of the IO as an involuntary bailee.  He did not specifically address the issue of whether the IO acted in good faith in disposing of the Bicycles in contra-distinction to the issue of whether they took reasonable care and/or gave sufficient time to Desir.  Even though the Adjudicator referred to Desir’s concerns in paragraph 86(b) above, and the inaction by the IO/KF over other bicycles, motorcycles, tyres and other objects placed by other residents/owners at common areas in the carport as well as other alleged breaches of the DMC, the Adjudicator held that (a) these management issues, which “would not confer any privilege or right on any owner to breach the DMC”, would have to resolved in another forum, (b) whether Desir was being targeted or personally vendetted by any person (which would have to be resolved elsewhere) “should be kept separate from any findings in accordance with the law and evidence which this Court is bound to consider and decide on the issue of [Desir’s] present claim”.  Significantly, the Adjudicator held that “…… [the] only relevance of such accusations and adverse comments against [Desir] to the present claim, in [the Adjudicator’s] decision however, is to explain why he did not pick up the Bicycles from the secured storage before the expiry date stipulated and no more than that” (my emphasis).  Plainly, the Adjudicator did not weigh/assess these matters or take them into account in coming to his decision. 

88. In my view, the Adjudicator erred in law in failing to consider these matters.  Desir fairly acknowledged it might well be open to the Adjudicator to take the view that “ten wrongs would not make a right” in deciding whether or not he was in breach of the DMC in parking the Bicycles at the Original Location, but I agree with him that the IO’s inaction over the “ten wrongs” against a backdrop of alleged personal vendetta and victimisation by Lui/IO against him are pertinent to the question of whether the IO was targeting him and not acting in good faith in disposing of the Bicycles.  I bear in mind that, as Ms Tam acknowledged at the Hearing, there is no provision in the DMC or in the BMO that empowers the IO/KF to dispose of private property of residents/owners removed from the common areas pursuant to the relevant provisions in the DMC.  Thus, prima facie, disposal of the Bicycles (as distinct from their removal from the Original Location) is an act of conversion unless the IO discharges their burden to show they have performed such act in good faith and with reasonable care.

89. Desir claimed there was lack of reasonable care in that the IO, could have returned the Bicycles for his “immediate” collection to (a) the Original Location (as he requested), (b) Desir’s car parking space at the carport of the Building, (c) the Govt Carparks which were not common areas, (d) Desir’s unit at the Building, or (d) “on site in a place of their choosing”, and in face of such options the IO in disposing of the Bicycles could not be said to have taken reasonable care.

90. Desir also questioned the IO’s reason for refusing to return the Bicycles to the Original Location for his “immediate” collection.  He submitted that the real reason was that he was being personally targeted by Lui/IO.  Desir argued that the Adjudicator erred in holding that the IO was justified in refusing to return the Bicycles to the Original Location for his collection because the Original Location was a common area of the Building and that it would be tantamount to the IO breaching the DMC or assisting in such breach by Desir. 

91. On the other hand, Ms Tam submitted that the IO had taken reasonable care by issuing various notices (including the 26/5/11 Circular and the 1^st and 2^nd Final Notices) and by allowing four months to lapse after the removal of the Bicycles before disposing of them.  She reminded this court that the Adjudicator concluded that the steps Desir took was “not being sensible enough to avoid the loss of the Bicycles”.

92. In my view, as a matter of general principle, a bailee is not obliged to take active steps to return the goods to their owner. It has been said that this principle must apply a fortiori to an involuntary bailee.[38] But notwithstanding such general principle, the Adjudicator found differently in the particular circumstances of the present case.  He held that Desir has acted reasonably throughout, and he accepted Desir’s explanation that he has serious and genuine concerns about picking up the Bicycles himself from the Storeroom.  Giving such findings, it is plain the Adjudicator must have accepted that steps would have to be taken to address Desir’s concerns for collection of the Bicycles from the Storeroom or the Bicycles would have to be re-delivered to a place outside the Storeroom for collection by Desir.  This is borne out by the Adjudicator’s belief that it would have been more appropriate for Desir to propose for return of the Bicycles to his unit. 

93. In light of the above, I turn to the two proposals by Desir in response to the requests/demands by the IO/KF to him to collect the Bicycles.  First, Desir offered to pick up and relocate the Bicycles to a suitable location in the presence of a senior person of the KF as witness because of his concerns (against a backdrop of being targeted, victimised and personally vendetted) that by entering the Storeroom on his own he would be walking a legal trap and opening himself to subsequent accusations.  Secondly, Desir requested the IO to return the Bicycles to the Original Location whereupon he would immediately collect and remove them to one of the Govt Carparks.

94. The Adjudicator did not appear to have considered the viability and/or reasonableness of first offer when (a) there was no evidence as to why the IO failed to take up such offer by arranging for a senior staff of KF supervise Desir’s collection of the Bicycles and their removal to a suitable location, especially when Chan as a senior personnel of KF was prepared to and did meet Desir on 17 December 2012 to discuss the matter of the Bicycles, and (b) the Adjudicator found that Desir had genuine concerns about picking up the Bicycles himself from the Storeroom and that Desir had acted reasonably throughout. 

95. As regards the second offer, I find the Adjudicator erred in law in holding that in bringing the Bicycles to the Original Location (ie a common area of the Building) for Desir to collect them “immediately” or “within seconds” amounts to a breach of the DMC.  This is a far different situation from Desir’s parking of the Bicycles at the Original Location since January/February 2010.  The purpose of the exercise as proposed by Desir was merely for the Bicycles to exchange hands and there would not be any placing of the Bicycles in the common areas and/or any occupying of the common areas that contravene the DMC.  To date, there has been no suggestion by the IO that the Govt Carparks (the place where Desir wanted to place the Bicycles after he collected them from KF) were in fact common areas and not government-owned.  In any event, the District Land Office has confirmed that carparks nos 10 and 11 belong to the government.  In my view, the Adjudicator’s narrow reading of the DMC is unjustified.  If his view is correct, a resident/owner will not even be able to, say, move his bags and suitcases down to the carport or ground floor lobby to wait for a pick up car or taxi to arrive to take him (and his luggage) away.  Given the aforesaid analysis, question is immediately raised as to whether there was lack of reasonable care on the part of the IO in disposing of the Bicycles instead of arranging for their return. 

96. Ms Tam submitted that since the appellate court cannot make fresh findings of fact, if I were dissatisfied with the Adjudicator’s approach on law and facts, then I should remit the proceedings to the Tribunal for retrial.  If the Appeal merely turns on the above matters, I may have been tempted to consider such argument.  As it is, there is a more significant consideration, ie (a) assuming Desir’s two proposals were inappropriate and he therefore failed to collect the Bicycles as requested, and putting aside the question of good faith, whether the IO was entitled to dispose of the Bicycles as they did.  In my view, the Adjudicator erred in law in concluding this was a question of whether the IO had taken reasonable steps and/or had given sufficient time to Desir before disposal.  The true question is whether in all the circumstances the IO was entitled to dispose of the Bicycles at all pursuant to the principles that are set out in paragraphs 82-83 above.

97. Here, the Bicycles were stored in the Storeroom. They were not noxious or deteriorating articles such that in disposing of the Bicycles the IO acted as an agent of necessity.  There was no evidence of any commercial necessity or emergency.  Even if I were to put aside Desir’s allegations that the disposal of the Bicycles were the result of being personally targeted by the IO, there is no evidence at all that the Bicycles posed any problem except to take up space at the Storeroom and were at best an inconvenience.  An involuntary bailee’s duty is to act prudently and he can only dispose of the goods if it is in the interests of the owner to do so, and “there is little prospect of its acceptance in situations where the disposal …… is for the benefit of the bailee alone” (my emphasis).  In applying such principle to the facts of the present case (which went much further than a lost owner who failed to respond to attempts to locate him), in which Desir was in constant contact with KF and he persistently demanded the return of the Bicycles, I am not convinced that in applying the legal principles in paragraphs 82-83 above there is any evidence to justify the disposal of the Bicycles notwithstanding the notices given by the IO to Desir and the deferral of the disposal of the Bicycles for four months. 

98. In my view, it is sufficient to allow the Appeal on the 2^nd Ground, and there is no need to consider the 3^rd Ground.  Likewise, there is no need to deal with the 5^th and 6^th Grounds, but I will deal with them briefly for completeness.

IX.  5^TH GROUND

99. Desir suggested that the Adjudicator erred in law in refusing to consider whether the present case should be transferred to the Lands Tribunal on the ground that the Tribunal could not exercise such power after the trial proper or at the review stage.

100. Ms Tam accepted that under section 7 of the Ordinance the Tribunal may at any stage of the proceedings transfer the proceedings to the Lands Tribunal.  The word “may” shows quite clearly that whether or not to transfer proceedings to the Lands Tribunal requires an exercise of discretion by the Tribunal.  As explained by Godfrey JA in Ho Siu Mei v Solution House Ltd,[39] a decision to transfer must be supported by “some good and sufficient reason”.  The learned judge suggested that only where it is necessary in the interests of justice will an order for transfer be justified, eg where the issues are complicated or where the case cannot be decided without expert evidence on both sides, but “such cases will be rare indeed”.  The learned judge reminded that the primary consideration is that the Tribunal was constituted to deal with small clams in a comparatively speedy and inexpensive way.  “It is always possible to exaggerate the complexity of a case in order to achieve justice.  But justice is never perfect; and it is often better that it should be speedily and inexpensively dispensed than that it should be achieved only after years of expensive litigation”.  Such observations carry even more weight after the Civil Justice Reform, and it must not be forgotten that there are avenues of review and appeal against awards/orders of the Tribunal.

101. I am not persuaded by Desir’s submissions that this case requires any special expertise outside the experience of the Tribunal concerning DMC-related and building management matters.  It is not necessary for the trial tribunal to come to any firm decision on the rights/obligations of the involved parties on various management issues raised by Desir; rather the crux of their relevance is in relation to whether the IO acted in good faith in disposing of the Bicycles, and the Tribunal would have been well suited to deal with such matter. In my view, it is well within the discretion of the Adjudicator to consider it is not appropriate to transfer the matter to the Lands Tribunal.

102. Further, as a matter of general principle, the Adjudicator in saying that “even in proper cases” the jurisdiction of the Tribunal to transfer cases to other forum would not be exercised after trial proper or the review stage is not wrong in law.  As L Chan J explained in Victor Chiu also known as Chiu Koon Shou joint and several liquidator of Best Resources Development Limited (in compulsory liquidation) v Charter View Development Limited,[40] notwithstanding section 7 of the Ordinance that permits an application for transfer to be made at any time, “there seems to be a pre-condition that no award should have been made or the award already made should have been set aside before the claim can be transferred.  Otherwise, there would be nothing to be transferred”.  Indeed, after the trial proper and judgment has been granted thereunder, there are no further proceedings except for possible application for review.  Section 7 of the Ordinance provides that upon the transfer of proceedings from the Tribunal to the Lands Tribunal, the practice and procedure of the Lands Tribunal shall apply.  Section 11A(1) of the Lands Tribunal Ordinance Cap 17 provides that “[the Lands Tribunal] may, within 1 month from the date of any decision by it, decide to review that decision and, on such grounds as it may think sufficient, may set aside, reverse, vary or confirm it”. There is no statutory provision that empowers the Lands Tribunal to review a decision by any other court or tribunal including the Tribunal.  Since the present case was already tried before the Adjudicator at the Tribunal, even if the Adjudicator acceded to Desir’s application at the review hearing to transfer the present case to the Lands Tribunal, the Lands Tribunal would not re-try the case or be able to entertain any review application with the consequence that Desir as claimant would have to seek leave to appeal against the Decision.  It would not have served any meaningful purpose to transfer the case to the Lands Tribunal at the review stage.

103. Desir submitted that he had applied the Chief Adjudicator at an interlocutory hearing prior to trial for the transfer of the present case to the Lands Tribunal, but his application was refused.  However, there is no appeal against such decision.  Desir then submitted that he made two further applications to the Adjudicator during closing submissions at the trial to transfer the present case to the Lands Tribunal.[41] However, careful scrutiny of the relevant parts of the Transcript reveals that Desir was merely complaining against what he perceived to be the Adjudicator’s unwillingness to address the management issues, and he did not make any formal application during closing submissions to have the present case transferred to the Lands Tribunal.  Anyway, for the reasons explained in paragraph 101 above and given that by that time all witnesses had finished giving evidence, the Adjudicator did not err in law in not transferring the proceedings to the Lands Tribunal at that stage.  In any event, leave has been granted for Desir to appeal on the 5^th Ground vis-à-vis the Review Decision only and not vis-à-vis the Decision or any earlier interlocutory decision.  There is no merit to the 5^th Ground.

X.  6^TH GROUND

104. Desir argued that the Adjudicator erred in law by refusing to consider whether the Storeroom where the Bicycles were stored being a common area is relevant to the question whether the IO/KF acted in good faith in refusing to return the Bicycles to the Original Location (which was also a common area) for his “immediate” collection.  Desir submitted that the Adjudicator erred in refusing to entertain this argument on the basis that such issue had not been raised or argued at trial and therefore could not be considered at the review stage.

105. In my view, the Adjudicator erred in law in holding that because an issue had not been raised or argued at trial it could not be considered at the review stage.  This flies in the face of section 27A(1) of the Ordinance which provides that the adjudicator “on such review  may re-open and re-hear the claim wholly or in part ……” However, in my view, such error of law would not have any material bearing or impact in the final outcome.  There is no dispute that the Storeroom that was managed by the KF is a common area, but it must be remembered that particular common areas may have designated building management purpose.  Plainly, the management company KF in performing building management services has used the Storeroom for storage purpose.  Other notional examples of common areas used for specific building management purpose include potential children’s playroom and/or potential designated bicycle parking area as canvassed in the evidence.  So although the Storeroom is a common area, it is different from the Original Location which is a common area with no designated purpose.  I see nothing objectionable in the IO/KF storing the Bicycles (which have been rightly removed by the IO via KF from the Original Location) at the Storeroom in their exercise of reasonable care over the Bicycles pending return to or collection by Desir.  It has no material bearing on the very different issue of whether the return of the Bicycles to the Original Location for “immediate” collection (and not for storage) by Desir is warranted as a matter of law/fact and permissible under the DMC.  There is no merit to the 6^th Ground.

XI.  CONCLUSION

106. In all the circumstances, I allow the Appeal and grant judgment in favour of Desir against the IO in the sum of $25,699 and interest thereon at judgment rate from the date of the disposal of the Bicycles (ie 19 March 2012) until payment.  There is no reason why costs should not follow event, and I grant a costs order nisi that the IO shall pay costs of the Appeal (including all costs reserved, if any) to Desir to be taxed if not agreed. 

107. Since Desir is self-represented, I direct the IO (who is legally represented) to submit the relevant draft order within seven days for approval.