THE INCORPORATED OWNERS OF FLORA GARDEN v. LI DO WAI AND OTHERS

HCMP 3143/2016,
HCMP 3144/2016,
HCMP 3145/2016 and
HCMP 3146/2016
(Heard together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 3143 OF 2016

(ON AN INTENDED APPEAL FROM LDBM NO 283 of 2014)

________________________

________________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 3144 OF 2016

(ON AN INTENDED APPEAL FROM LDBM NO 285 of 2014)

________________________

________________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 3145 OF 2016

(ON AN INTENDED APPEAL FROM LDBM NO 288 of 2014)

________________________

________________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 3146 OF 2016

(ON AN INTENDED APPEAL FROM LDBM NO 289 of 2014)

________________________

________________________

(Heard together)

_________________________________

REASONS FOR JUDGMENT

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Hon Lam VP (giving the Reasons for Judgment of the Court):

1.  There were disputes between several owners and the Incorporated Owners of Flora Garden [“the IO”] about their liability to pay contributions to the renovation works carried out at Flora Garden. Such disputes led to building management proceedings in the Lands Tribunal in LDBM 283, 285-9 of 2014. The trial of these proceedings took place over 3 days in May to July 2016. On 25 August 2016, Deputy Judge A Kot sitting as presiding officer of the Lands Tribunal determined the disputes in favour of the IO and ordered the respondents to pay their respective shares of contribution.

2.  The respondents sought leave to appeal.  On 31 October 2016, Judge Kot refused leave.

3.  By 4 different summonses of 14 November 2016, the Respondents in four sets of proceedings renewed their application for leave to appeal in this court.  They were represented by the same firm of solicitors and Mr Lau appeared on behalf of all of them at the hearing before us.

4.  Section 11(2) of the Lands Tribunal Ordinance sets out the permissible scope of an appeal from the decision or judgment of the Lands Tribunal.  In short, there can only be appeals on point of law.

5.  Further, Section 11AA of the Lands Tribunal Ordinance provides that leave to appeal is required and it should only be granted if the court is satisfied that the appeal has a reasonable prospect of success or that there is some other reason in the interest of justice that the appeal should be heard.

6.  In the draft Notices of Appeal attached to the summonses (and the grounds are identical in the four sets of applications), seven grounds of appeal were relied upon.

7.  Though all the grounds were put forward as errors of law, Ground 2 is in substance a challenge to the judge’s finding of fact that the renovation works were authorized at a meeting of the owners.  We have read the written judgment of the judge of 25 August 2016 and we cannot discern any errors of law on the part of the judge in coming to such finding.

8.  Grounds 1 and 7 challenged the judge’s conclusion that the undertaking of the renovation works were within the power of the IO.  Mr Lau relied on The Incorporated Owners of Bayview Mansion v Chan Cheung Kit Mui Margaret Small Claims Tribunal Appeal 32/1994, 23 June 1995 and Grace International Ltd v The Incorporated Owners of Fontana Gardens HCA 13338/1995, 23 May 1996 in support of his contention. Those grounds also formed the basis for Grounds 4 and 5.

9.  With respect, the amendment of the Building Management Ordinance [“BMO”] in 1998, adding the words “renovation, improvement or decoration” to Section 14 and adding new sub-section (fa) to Section 18(2) were clearly intended to reverse the effect of these authorities, see PLC Paper No.CB(2)1125 placed before the Provisional Legislative Council in respect of the Building Management (Amendment) Bill 1998 and Malcolm Merry, Building Management in Hong Kong 3^rd Edn (2016) paragraph 5.364.

10.  In this respect, the amendments were not drawn to the attention of the Lands Tribunal in South China Amusement Co Ltd v Incorporated Owners of Sun Hing Building [2001] HKLRD 38 and insofar as it had been decided otherwise in that case it should not be followed.

11.  Mr Lau further contended that as the provisions in the BMO were inconsistent with the terms of the DMC, the DMC should prevail.  He recognized that the provisions in Part VIA of the BMO shall prevail over the DMC (as it is expressly provided by Section 34C(2) of the BMO).  Sections 14 and 18 are not in Part VIA. 

12.  However, Section 34J is in Part VIA.  Section 34J(2) provides that no provision in a DMC shall operate to prevent any business relating to the management of a building being conducted at any meeting by any owner or any person managing the building.  Sections 14(1) and 18 set out the power of the IO relating to the management of the building.

13.  In any event, there is no provision in the DMC which prohibits the IO from undertaking improvement to the building.  The judge construed Clause 4(f) of the DMC to encompass the works in question.  That clause provides for each owner’s obligation to pay contribution as follows,

“ All costs charges and expenses incurred in managing and providing services to the said building and the common parts services and facilities shall be borne and paid by the owners in the proportions mentioned in sub-clause (g) below such charges and expenses to include but not limited to the following, …

(4) The cost of repairing, renewing, maintaining, cleansing, painting or decorating the said building and the common parts services and facilities.

(5) The cost of operating maintaining repairing servicing replacing and renewing the lifts. …”   

14.  Irrespective of the scope of these specific sub-paragraphs, the general provision at the beginning of Clause 4(f) refers to managing and providing services to the building and common parts services and facilities.  In our judgment, those general expressions are plainly wide enough to cover the works in question.  There is no inconsistency between the DMC and the power of the IO provided under Sections 14(1) and 18 of the BMO.

15.  At the hearing before us, Mr Lau told us that he relied on Clause 9(b) of the DMC in his submission on inconsistency between the DMC and Sections 14(1) and 18 of the BMO.  However, the judge was entitled to attach no weight to Mr Wilson’s bare assertion in view of his answer in cross-examination, as explained at [41] of her judgment of 25 August 2016.  Thus, the judge was correct in holding that there was no evidence before her to support a case based on potential increase in liability for insurance coverage by reference to Clause 9(b).  In this connection, Ground 6 also has no merit.

16.  The other cases cited by Mr Lau are of no relevance.

17.  Hence, it is clear to us the judge was correct in holding that the IO did have the power to carry out the works in question and the respondents were liable to pay their respective contribution to the cost of the same.

18.  This conclusion also disposes of Grounds 4 and 5 which were premised upon the works not coming within the power of the IO.

19.  As to the $10,000 referred to at Ground 3 which the judge accepted she had overlooked, it had been taken care of by the agreement of the IO to give credit for that sum.  Mr Koo on behalf of the IO undertakes before us that the IO will give credit for such sums already paid and not refunded to the respondents. 

20.  For these reasons, we refused to grant leave to appeal to the respondents.

21.  We also ordered the respondents to pay the costs of the IO.  Having heard submissions, we fixed the costs in each set of proceedings at $25,000 as per the Statement of Costs and Supplemental Statement of Costs prepared by solicitors for the IO.