XTRNX The Incorporated Owners of Beauty Court v. Hon Ping Kay and Another

English - Translation

HEADNOTE

Building Management - Section 21 and Third Schedule of the Building Management Ordinance, Cap. 344 - maintenance or improvement - validity of resolution of the owners' corporation -

The respondents were joint owners of a flat in a multi-story residential building. They objected to paying contributions for a renovation project which had been carried out. Some items were still usable, serviceable and repairable but were replaced during the project. At the meeting no formal resolution was passed to require owners to contribute to the funds of the project. Instead reliance was made on views stated on the questionnaires returned by the owners to the management office. Further that no such resolution was put on the agenda in the notice of meeting. The points of defences were in effect put forward. Firstly, some items of work were done for the sole benefit of some individual owners. Secondly, many items of work were of decorative or improvement nature especially when they were serviceable and repairable and should not have been replaced. Lastly there was no valid resolution.

Held :

(1) On the evidence, no items of work which have been paid for by the Applicant were for the benefit of individual owners.

(2) To determine whether the project is outside the scope of power of the Applicant, the proper test is not to break it down into small items of work and to criticise them one by one. Various factors had to be taken into account. The ultimate test is one of reasonableness of the decision to undertake the project.

(3) There was no provision in law that facilities can only be replaced when they had become unserviceable or unusable.

(4) On the evidence and on the application of proper test, the project undertaken was a kind of maintenance work and not of improvement.

(5) The questionnaires returned by owners did not constitute ballot papers for the resolution at the meeting and therefore there was no resolution of the owners' corporation requiring contributions.

(6) Further the resolution, if valid, was not put on agenda in the notice of meeting and therefore was not valid.

(7) There was no discretion to dispense with specific provisions in Third Schedule for the procedures of the meeting.

(8) If there were such discretion, it should not be exercised in favour of the Applicant as the Respondents were deprived of the opportunity of convincing the other owners to vote otherwise.

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION No. 2 of 1998

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JUDGMENT

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The Applicant is the Incorporated Owners of a multi-storey building. The 1st and the 2nd Respondent, being husband and wife, are the owners of one of the flats in the building, i.e. the present owners of Block B, 3rd Floor, Beauty Court, Man Fuk Road, Kowloon (the suit premises) and they jointly own 1/37 of the shares of the building. The Applicant claims against the Respondents in accordance with the Building Management Ordinance, Cap. 344 for the payment due for the repair, improvement and decoration work in the sum of $50,000.

2. The Applicant stated that certain matters had been decided on in the General Meeting of Owners held on 7th Oct, 93, one of which was about the repair, improvement and decoration work for the building. The Applicant had notified the Respondents in writing requiring them to pay the fees for the project payable by them in four installments as follows :

	Date of written notice	Project fees
First installment	8th Oct., 1993	$20,000
Second installment	26th Feb., 1994	$20,000
Third installment	15th Nov., 1994	$20,000
Fourth installment	1st Sept., 1995	$10,000
	Total :	$70,000

The Respondents paid the first installment of $20,000 on around 1st June, 1994 but refused to pay the remaining three installments totalling $50,000.

Issues and Findings

3. The Respondents set out the grounds for not paying the rest of the amount. They are of the view that (1) part of the work was private work and the Applicant was not entitled to incur public expenses in this aspect; (2) some of the work violated the Buildings Ordinance; (3) some of the work was not proved by facts or scientific methods at all to be essential; (4) the Deed of Mutual Convenant only gives the Incorporated Owners the power to repair and the work for improvement, beautification and decoration have gone beyond these premises; (5) the resolution in respect of the project was not passed through legitimate procedures or there was no such resolution at all. All these were retorted by the Applicant's counsel point by point. The argument of the parties and our findings are as follows :

(1) Private Work

a. Flooring on the rooftop -

The Respondents are of the view that according to article 5 of the Deed of Mutual Convenant, the expenses should be borne by the owners of the top floor (Block A and Block B of 18th floor). However, Counsel for the Applicant pointed out that this article only stated that only the contracting party who has the right to the exclusive use and enjoyment of the rooftop shall be solely responsible for the repair fees, and the rooftop had been left unused all along. Moreover, according to the record of the Land Registry and the first Assignment, the owners of the top floor do not have the right to the exclusive use and possession of the rooftop.

Having considered the articles of the Deed of Mutual Convenant and the relevant evidence and documents, we find that the owners of the top floor (Block A and Block B of 18th floor) do not exclusively have the right to the use and possession of the rooftop. The owners of the top floor, therefore, should not be solely responsible for the fees for the repair work done on the rooftop.

b. Balcony of Block A of 1st floor

The Respondents stated that the owner of block A 1st floor should be responsible for re-constructing the balcony. Lam Tung Hoi, the Applicant's witness, stated in his witness statement that the part of the balcony outside block A 1st floor formed a part of the common structure of the building. As the balcony had turned bad seriously, it would be dangerous for those passing under it, so reconstructing was urgently needed. Besides, the Applicant only had to pay $17,800, that is, half of the fees. The remaining half was borne by the owner of Block A 1st floor. Counsel for the Applicant averred that the balcony had been in such a poor state that it posed a threat to the safety of the public and that the Applicant had to risk bearing the criminal and civil liabilities incurred. The act of the Applicant was therefore reasonable.

We agree that the part of the balcony outside the flat forms part of the external part of the building. Article 1(b) of the Deed of Mutual Convenant states that the fees for the repair work done on the external part of the building shall be shared among the owners according to the number of shares owned by each owner unless the damage is caused by a particular owner or his agent or his tenant. The respondents did not provide obvious and strong evidence to prove that the damage to the external part of the balcony was entirely caused by the owner of Block A 1st floor. Furthermore, the damaged balcony endangered the safety of others and needed to be reconstructed urgently. In the circumstances, it was manifestly reasonable for the Corporation to discuss with the owner of Block A 1st floor about the reconstruction and the sum of $17,800 was the agreement reached after discussion and it was a reasonable agreement. The expenses spent by the Applicant on this item of work is within the power and obligation given to it under the law. The Respondents cannot refuse to bear the fees on the excuse that the spending was improper.

c. New aluminium window of parking space no. 27

The Respondents take the view that the wall and the metal window next to parking space no. 27 were installed by the owner of the parking space himself, so the expenses on replacing the metal window with an aluminium one should not come from the public fund. However, Counsel for the Applicant pointed out that this was merely a mistake on the part of the contractor and the contractor did not charge the Applicant for the work. The Respondents did not prove that the Applicant had paid the contractor for the work. We accept the evidence of the Applicant. We are of the view that the Applicant has not made any payment to the contractor for the work and we find this ground of defence unfounded.

d. Tap water pressurized pump

The Respondents are of the view that the Applicant should not have paid for the installation of the two pumps for the owners of the four flats on 17th and 18th floors. Counsel for the Applicant, however, pointed out that these pumps were installed by the contractor free of charge. Besides, the Respondents did not adduce any evidence to prove that the Applicant had paid for the installation.

We agree the Respondents failed to provide any valid evidence to prove that the Applicant had paid for the work concerned. Moreover, as we understand it in the hearing, owing to the fact that 17th floor and 18th floor are near the water tank on the rooftop, the pressure of the water supply is not strong enough and so the pumps are needed. It would seem that the installation of the water tank on the rooftop and the attempts to ensure the pressure of the water supplied to each household is strong enough are duties of general building management and it is reasonable that the expenses be shared among all the owners. In any event, the Respondents failed to prove that the Applicant did pay for the installation of the pumps and we accept the evidence put forth by the Applicant that the contractor did not ask for the payment for the work. It is not surprising that in such a big project, the contractor did not ask for payment for some of the minor items.

e. Work carried out on private additions

The Respondents claimed that the expenses on the installation of electric lights, the plastering/painting work for private illegal structure/additions were regarded by the Applicant as public expenses. He, however, did not detail the locations of the private illegal structure/additions and the work concerned. In answer to the Respondents' Notice of Opposition, the Applicant pointed out that it had not installed electric lights at the additions of any owner in the building nor was it aware that the contractor had painted some of the private additions. Even if the contractor had done so (which the Applicant denied), the Applicant would be denying having paid the contractor for such work. After consideration, we are of the view that the Respondents do not have sufficient evidence to support their allegation.

f. Illegal connecting of water pipes

The Respondents alleged that the Applicant illegally connected the water pipes for the purpose of making car-washing easy for a minority of owners and the expenses were drawn from public fund. The Applicant stated in its reply that the pipes were installed at the ground floor and at the podium on 1st floor of the building. They were for cleaning the compound on the ground floor and on 1st floor, the public area of the carpark and for watering the plant in the public area. It was only incidental that some car-owners washed their cars with the water from the pipes and the Applicant did not encourage them to do so. In fact, the 1st Respondent had also been seen washing his car with the water from the pipes. The Applicant has now removed the pipes as requested by the Water Supplies Department.

In view of the above circumstances, we accept that the pipes were installed for public use and not, as alleged by the Respondents, for the exclusive use of individual owner. The mistake of the Applicant in this aspect is a minor and forgivable one. The Respondents cannot use it as an excuse for refusing to bear the fees.

g. Levelling of the floor of parking space no. 6

In the course of the hearing, the 1st Respondent pointed out that the Applicant levelled the floor of parking space no. 6 for its owner with public fund. However, he did not mention the amount of the fees. Counsel for the Applicant took the view that the work was of a minor nature and the cost was insignificant.

Having seen the photos produced to court, we found out that the work involved part of the floor of parking space no. 6. According to the quotation among the Applicant's exhibits, there was an item of $10,000 for the work of "checking the floor, wall, ceiling and enclosing wall of the carpark on two floors, removing the broken concrete, replacing it with cement". The parties did not make any calculations as to the fees for the flooring at parking space no. 6.

From the photos produced, we can roughly estimate the fees for the floor-levelling of parking space no. 6 and the place adjacent to it to be around $1,000. Therefore, the fees for the floor-levelling of only parking space no. 6 would be less than $1,000. With a total of 37 shares in the building, each owner would only have to pay no more than $27 which is really an insignificant amount. Had the Applicant left only the flooring of parking space no. 6 undone, the outward appearance of the entire podium would have been affected. This is not a choice of wisdom. The best way should have been to persuade the relevant owner of the parking space to bear the fees for the flooring. The fact that the Applicant has failed to do so does not mean this can be used as an excuse for not paying the amount due.

(2) Prohibited work

The Respondents pointed out in the Notice of Opposition that the Buildings Department had sent a letter to the Applicant on 8th July, 1997 referring to the prohibited work in the building. They are as follows :

a. Making an opening in the beam at the entrance level for equipment to pass through;

b. Altering the exit of the lift lobby on the entrance level leading to the carpark;

c. Blocking off the smoke outlet on the ground floor;

d. Building a glass wall to enclose the front staircase of the building;

e. The watertank built on the rooftop;

f. The cover on rooftop at the top end of the staircase.

In his final submission, Counsel for the Applicant submitted that the Respondents should pay their share of the fees for the work mentioned above. He said the Respondents did not raise any objection in the consultation period nor did they apply for an injunction to stop the work mentioned above. He also averred that there was nothing wrong with the above item (a), and the minor work in items (b) and (c) were free of charge. In respect of items (e). (f) and (g), etc., the architect of the Applicant is still negotiating with the Buildings Department and it is expected that the work in these items will be approved. The counsel pointed out that the Applicant was not aware beforehand that such work was prohibited, it was only relying on the suggestions of the architect and the architect never told the Applicant that the work had not been approved by the Buildings Department. The Applicant had never intended to carry out work which is prohibited. The Buildings Ordinance did not specifically provide that this kind of contract in respect of the project was forbidden, so Counsel suggested that this contract was legal in form and the Applicant was entitled to compel the contractor to discharge its duties under the contract, and thus the court should order the Respondents to pay their share of the fees for the work. He cited a case in Archbolds (Freightage) Ltd. V. S. Spanglett Ltd. [1961]1QB374 to support his saying. Besides, Counsel for the Applicant was of the view that even if the court dismissed the claim of the Applicant in respect of the above-mentioned items(e), (f) and (g), etc., the Respondents would still have to pay their share of the fees for the rest of the maintenance work, which was in compliance with the law. Each household would then be paying only $3,450 less at the most. This cannot be used as an excuse for not paying the $50,000 maintenance fees.

From the evidence submitted, we come to know that the repair work started in the first half of 1994 and completed in the second half of 1995. The letter sent to the Applicant by the Buildings Department regarding the prohibited work was dated 8th July, 1997. We believe that the Applicant had entrusted the architect to deal with matters concerning the repair work. When they signed the contract in respect of the project and when the work was being carried out, they had no idea that some of the work was against the law. The important thing is, the Applicant had to pay for the work pursuant to the contract and the Applicant is a corporation owned by all the owners of the building. Raising fund from the owners is the source of its income, therefore, the fees for the work, whether the work is prohibited or not, should be shared by all the owners of the building unless the work is especially for a particular flat, in which case, the owner of the flat will have to bear the fees himself. We are of the view that the above 6 items of work were at the common parts of the building and not especially for individual units. Therefore, we hold that no owner is entitled to refuse to pay his share of the fees on this excuse. Of course, if the Applicant suffers loss because someone is negligent when dealing with matters in relation to the repair works and the Applicant is compensated in a successful claim in future, the Applicant may consider returning the money in the form of damages to all the owners or using it as public expenses for the management of the building. This, however, is not what we are dealing with in the present case.

(3) Improvement work which is not supported by facts or scientific methods

The Respondents are of the view that some of the improvement work did not make any improvement to the original condition nor were they supported by facts or scientific methods. For example :

a. The false ceiling at the lobby of the ground floor lowered the height of the ceiling, which made people feel uneasy. The false ceiling was made of inflammable material.

The Applicant replied that the false ceiling was to cover the exposed wires to make the lobby look nice. It was not made of inflammable material.

b. The split-type air conditioner installed at the lift lobby of the ground floor made it easy for the old and weak to catch a cold. Besides, the electricity and maintenance charges were high.

The Applicant replied that when it was hot and the humidity was high, the lobby would be wet and would make people feel uncomfortable as there were insufficient windows. There had long been complaints from the owners and the staff working at the lobby. In order to solve this problem and to improve the working environment of the staff, the Applicant decided to install an air conditioner at the lobby.

c. The manual of the new intercom system was in English only and the maintenance fee as well as the telephone charges have gone up.

The Applicant said it had originally planned to install an intercom system that came with a manual in both English and Chinese but it was told that the intercom systems on the market had English manuals only. After the new system had been installed, the Applicant arranged for the owners a demonstration on how to use the new intercom. The management staff of the building would also assist the owners and the visitors in using it. Apart from the Respondents, no one has ever complained to the Applicant that there was no Chinese manual or complained of any difficulty in using the new system. As far as the Applicant knows, the Respondents are university professors or lecturers, and they have good knowledge of English.

d. The durability of the new mason material on the floor of the lift lobby at the entrance is worse than that of the original one.

The Applicant's witness stated that the architect and the contractor designed and took charge of the work.

e. The round shade of the light in the lift lobby on each floor was replaced with a square one; there was in fact no improvement.

The Applicant did not accept it.

f. Regarding the glass door, the metal gates at the rear and the front staircases, the mail boxes at the entrance lobby and the aluminium window at the management office etc., replacement was unnecessary.

The Applicant did not accept it.

g. The consumption of electricity had increased largely since the decoration.

In replying, the Applicant said that the illumination of the carpark and other common areas of the building had been improved since the decoration. Besides, an air conditioner was installed. Therefore, the consumption of electricity has increased. Counsel for the Applicant said that according to the calculations of the Respondents, each household paid only $81 more per month; this was not unreasonable.

Furthermore, Counsel for the Applicant averred that the Respondents lacked a valid reason for refusing to make payment. If the Respondents were allowed to refuse to make payment on these grounds, other owners would also refuse to pay for the same reasons or other reasons such as they did not like the colour of the paint or the material used, etc.

We have considered the arguments of the parties. On the issue of whether the work was "supported by facts or scientific methods", the parties did not call any expert witness. We do not understand what the Respondents meant by "facts or scientific methods".

We are of the view that there is no basis in what the Respondents said: the above work served no substantial purpose. We believe that the Applicant entrusted the architect and the contractor to design and handle most of the work mentioned above; this is clearly reasonable. In any event, the Applicant, the Corporation, belongs to all owners of the building. It has to pay the fees for the project and it relies on the owners to jointly share the fees under the provisions of the Deed of Mutual Convenant. After consideration, we are of the view that it is not unreasonable for the Applicant to entrust the architect and the contractor to design and carry out the work, the Respondents are not entitled to refuse to pay for the reasons they stated in the above.

(4) The work carried out, including the improvement work, was beyond the scope of power of the Incorporated Owners.

The Respondents take the view that the Deed of Mutual Convenant only gave the Applicant the power to repair and the work on improvement, beautification and decoration, etc. was in fact beyond their scope of power.

Counsel for the Applicant retorted this argument. He pointed out in his final submission that S18(1)(a) of the Building Management Ordinance provided that the duties and the powers of a corporation included: "maintain the common parts ... in a state of good and serviceable repair and clean condition.". Moreover, Article 1(b) of the Deed of Mutual Convenant states that each owner has to contribute, according to his share of ownership, to the expenses on "# # keeping in good and tenantable repair and condition # #". He cited what was written in Woodfall's Law of Landlord and Tenant (vol. 1, Para. 13. 034) which said that "to keep in good condition" when compared with "to keep in repair" gave the one who made the promise greater responsibility. He also deemed that the Hon. Justice Jerome Chan was wrong in his judgment in the case of The Incorporated Owners of Bayview Mansion v. Chan Cheung Kit Mui Margaret (Small Claims Appeal Case no. 32 of 1994). He cited Halsbury's Laws of England (4th ed, vol. 4(2), para. 355) in which it said " 'maintain' has a double meaning, namely to maintain in exactly the same state as it was found, or by making improvements without any alteration of purpose." He also quoted the judgment in the case of Sevenoaks, Maidstone & Tunbridge Railway Co. v. London, Chatham & Dover Railway Co. [1879] 11 Ch D 625: "maintenance" includes reasonable improvements.

We will first refer to the Bayview Mansion case. The facts of the case are unique, part of the work was purely for decoration purpose and the rest was additional facilities. The document of the meeting of the Incorporated Owners did not expressly state that there was any need for renovation and from the photos submitted, the Hon. Justice Chan could also see that there was no major defect on the wall or the floor involved, they could be cleaned by chemicals and need not be replaced. We do not think the Hon Justice Chan is wrong in his judgement. We accept the explanation of the Applicant's Counsel in respect of the word "maintain". In fact, the Hon. Justice Chan did not give a different meaning to this word in the case of Bayview Mansion, it is indeed unfortunate that his judgement has been misinterpreted.

In order to decide if a project is within the scope of power of the corporation, one has to consider various aspects. One cannot break the project into small parts and criticize them one by one. The urgency of the various repair work, the costs incurred, the beneficial result and other relevant factors have to be taken into consideration and the ultimate criterion is to see whether the decision is a reasonable one. As to what it is meant by repair work in the Deed of Mutual Convenant and in S18(1) of the Building Management Ordinance, it is difficult to define. As the President of the Court of Appeal of England, Jessel, M.R., said in the case of Sevenoaks, Maidstone & Tunbridge Railway Co. v. London, Chatham & Dover Railway Co. [1879]11 Ch D 625 at P. 634:

"It is very difficult to define what works of maintenance are. It is a very large term, and useful and reasonable amelioration are not excluded by it."

It is our understanding that there is no provision in law which says that facilities can only be replaced when they are unserviceable and cannot be used anymore. We are of the view that under reasonable circumstances, earlier replacement of some facilities is in conformity with the provisions. The work in the present case indeed involved replacing of some of the facilities that were still serviceable, for example, the main door, the glass wall of the front staircase, etc. However, having considered the reasons given by the witness of the Applicant and the extremely small proportion this work makes of the whole project, we find that the decision of the Applicant is reasonable and the replacment of such facilities is a kind of repair work. We agree with what the Hon. Justice Chan said in the Bayview Mansion case: "There is only power to maintain and keep the existing amenities and the condition of the building." (page 7 of the Judgment). From all the evidence, the documents and photos submitted, especially the descriptions of each item of work in the tender, it is considered that the whole project did not involve any addition to the facilities of the building and the work carried out was within the scope of power given to the corporation under the Deed of Mutual Convenant and the Building Management Ordinance.

(5) Resolution was not passed through legitimate procedures

In the Notice of Opposition (Form 7), the Respondents did not challenge that the resolution was not passed through legitimate procedures. About two months before the trial, in the supplementary Statement of Defence, the Respondents challenged the resolutions of the General Meeting of Owners held on 7th October saying that there was no such resolution. Although this statement was submitted and served on the Applicant without leave of this Tribunal, the Applicant indicated that it would not raise any objection on that. The burden of proof is on the Applicant to prove that this resolution is indeed in existence and valid. When cross-examining the Applicant's witness, the 1st Respondent, Mr. Hon Ping Kei, pointed out that what the owners returned in respect of the work concerned were merely questionnaires (refer to pages 45 to 78 of the exhibit bundle attached to the Witness Statement of the Applicant) which carry no legal effect. However, the Applicant's witness did not accept this saying. He considered those to be resolution documents. Besides, someone from the District Office was present there as an observer, he did not notice anything wrong.

Speaking on behalf of both the Respondents, the 1st Respondent, Mr. Hon, said in his final submission that there was no registration with the Land Registry of Mr. Leung Tung Hoi being the chairman of the Corporation and so he was not a legitimate chairman. Moreover, Mr. Leung could not be the chairman for more than two years/two terms and his term of office should be for two years starting from 7th January, 1993. During his term of office, the meetings were not conducted through legal procedures. The owners were not informed by the Applicant of the meeting for passing the resolution in respect of the work concerned. The Applicant simply posted a notice on the notice board. Therefore, the meeting as well as the resolutions were invalid. This resolution was not passed in a General Meeting of owners.

Counsel for the Applicant pointed out in his final submission that no law laid down such a restriction that a chairman could only sit for two terms and the fact that the name of the chairman was not registered with the Land Registry would not render the chairman dismissed. The Respondents only said the procedures of the meeting held on 7th October, 1993 were not proper and the resolution in respect of the relevant work was not valid but he did not explain where the impropriety lay in the procedures. The Applicants (sic) did not raise their argument at the outset, and by the time it was raised, the witness(es) had already finished giving evidence. Mr. Hon (the 1st Respondent as well as the representative of the Respondents) alleged that he was not notified but he did raise objection on 7th October, 1993, that is, the date on which the meeting was held; therefore, he could not say he was not notified. Moreover, according to Section 37 of the Building Management Ordinance, a resolution passed at a meeting shall not be invalid by reason only of the omission of notification.

Counsel for the Applicant claimed that in respect of the resolution passed in the meeting, what the owners returned were ballots and not questionnaires because there was not much choice for the owners. They could either choose "agree" or "disagree". Counsel for the Applicant pointed out that the personnel of the Corporation were not professionals in preparing and holding meetings. He accepted that the procedures of the meeting were not flawless but the meeting was conducted seriously and the replies of the owners were all put into the ballot box.

The secretary of the Management Committee has the responsibility to inform the Land Registrar of any change in the Management Committee. He would be neglecting his duties should he fail to do so but it would not affect the legality of the meetings and the resolutions. We also do not accept the argument that the Respondent was not notified of the meeting. This point of argument was only raised in his final submission and was not mentioned in the Statement of Defence which ran to the length of several tens of pages. The witness was not questioned about it, nor was it brought up in his own testimony. We rule that the Respondents were unreasonably making trouble deliberately making it difficult for the Applicant. Having considered that the Applicant was unprepared to make a reply, we decide not to take this point of argument into consideration.

In relation to the existence and legality of the resolution, the Applicant was able to supply only the testimony of the witness(es) and the circumstantial evidence. Such resolution was not recorded in writing. In the minutes of the meeting concerned, there was no record of such resolution or any resolution. The chairman, Mr. Leung, of the Corporation was present in the meeting. He did not say how the resolution was passed. In his affidavit and testimony, he insisted that the questionnaires were ballots. We believe Mr. Leung and other persons present in the meeting thought that the questionnaires collected were valid ballots. That is why no casting of votes was carried out. As a matter of fact, the majority of the owners were favour of carrying out the work concerned. Whilst this mistake is forgivable, the principle of the legislation cannot be disregarded. Firstly, these questionnaires are invalid ballots. Although the procedure of the meeting of the Corporation is governed by the Building Management Ordinance, and to a certain extent, the Corporation can determine on its own procedure (see Third Schedule, para. 7), there are clear stipulations in law in respect of the procedure for passing a resolution and they cannot be violated. The owner may personally attend the meeting or appoint a proxy to vote for him. From any point of view, the "opinion slips" concerned are not instrument appointing the proxy. There was no mention as to who would stand proxy for the owners nor was there any mention about the appointment of proxy. The "opinion slips" of those owners absent from the meeting cannot be ballots. As to the "opinion slips" of those owners present, as they were returned to the management office before the meeting, they could not have been valid ballots. We rule that in the meeting of 7th October, there was no resolution passed in respect of the repair work to be carried out and the amount payable by each owner. Besides, no resolution shall have effect unless the resolution to be proposed in a meeting is set out in the notice of the meeting (see Third Schedule, para. 3(7)). There has been no indication in either the "opinion slip" or the notice on the notice board that the motion in respect of raising money from the owners would be on the agenda. Even if the resolution of raising money from the owners had really passed in the meeting, it would have been an invalid one.

The Corporation has the power by virtue of the Building Management Ordinance to determine the amount to be contributed by the owners within a period of time (usually not more than 12 months) but the amount collected shall not exceed a sum equivalent to 150% of the preceding amount unless the subsequent amount is approved by the Corporation by a resolution passed at a General Meeting (except in cases where fund is raised to meet the payment in compliance with an order of the Tribunal or a public body)(see Section 21). Should there be any inconsistency between the terms in the Deed of Mutual Convenant and the provisions of the Ordinance, the Ordinance shall prevail (see Section 21, subsection 5). Therefore, the Corporation cannot simply rely on the terms in the Deed of Mutual Convenant to raise fund from the owners, it must follow the relevant legislation. Generally speaking, if the Corporation has not accumulated a huge surplus to meet the expenses of a big project, a general meeting will be convened for the resolution of raising fund with the owners to be passed. As the Applicant did not do anything for the resolution to be passed, the collection of money from the Respondents is without basis.

Counsel for the Applicant takes the view that since all the other owners have already paid, if only the Respondent is not required to pay, it will be unfair to the other owners. Whether it is fair or not, is a matter of point of view. The law limits the ways in which the Corporation raises fund. The reasons are obvious, and ultimately, it is to protect the interests of the owners. There are different ways to manage a building and different ways to do repair, someone adopts the expensive way and others do not. The fairest and the most efficient way is to let the owners determine collectively. The relevant legislation is to ensure the procedure through which a decision is reached is followed in a fair manner. The Respondents did not have the chance before a decision was made in the meeting to express their opinion to persuade the owners present in the meeting to object to the project. We cannot be sure if he would succeed or not but even if he did not succeed, it would be most unfair to him if he was deprived of the chance. We have no discretion to overlook the Corporations' fault of not following the legal procedure. Even if we had the discretion, we should not exercise it in the circumstances of the present case. It is irrelevant to the present case whether the Applicant has a remedy or not. If there is no remedy, it will not necessarily be unfair to the other owners. Members of the Management Committee are not professionals in managing a building, they should not be criticized severely for the mistake they make incidentally and it is not unfair to have all the owners shoulder the consequence.

Basing on the above reasons, we dismiss the claim of the Applicant. The parties shall bear their own costs. The order as to costs will be confirmed unless there is objection raised within 6 weeks.