LAU KIN NAM CARMEL AND OTHERS v. THE INCORPORATED OWNERS OF NIN FUNG BUILDING, HOMANTIN AND OTHERS

LDBM 256/2006

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 256 OF 2006

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DECISION

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1.    This is an application made by Over And Above Limited (“O&A”) by way of inter partes summons dated 20 June 2007.  O&A is not a party to these proceedings, but applies for the following orders in this application:-

“	(1)	Over And Above Limited be joined as an intervenor for the purpose of the application for the order below.
	(2)	Paragraphs 2, 3, 4 and 5 of the Order of this Tribunal dated 2nd November 2006 granted in LDBM 256 of 2006 (“the said Order”) be set aside as the said Order was obtained by the misrepresentation of the Applicant and the Respondents (except the 1st Respondent) made to this Tribunal.
	(3)	Costs of and occasioned by this application be paid by the Applicants and the Respondents (except the 1st Respondent) jointly and severally to Over And Above Limited or otherwise be provided for.”

2.    The application is made pursuant to rule 11 of the Lands Tribunal Rules, Cap. 17, which reads as follows:-

“	At any stage of proceedings and either on or without the application of a party, the Tribunal may add, strike out, or substitute the name of any person as a party.”

3.    Mr. Li, counsel for O&A, submits that rule 11 of the Lands Tribunal Rules is the same jurisdiction as those under Order 15, rule 6 of the Rules of the High Court.  Order 15, rule 6(3) stipulates that:- 

“

An application by any person for an order under paragraph (2) adding him as a party must, except with the leave of the Court, be supported by an affidavit showing his interest in the matters in dispute in the cause or matter or, as the case may be, the question or issue to be determined as between him and any party to the cause or matter.”

4.    Thus, to entitle a person not a party to an action to intervene and to be joined as a party, the rule requires that the would-be intervenor should have some interest which is directly related or connected with the subject-matter of the action (see para. 15/6/8 of Hong Kong Civil Procedure).

5.    However, from the wordings of the inter partes summons, it seemed that O&A wanted to join in as an intervenor for a limited purpose, which was to set aside the Order dated 2 November 2006 (“the Order”).  On the first day of the hearing, Mr. Li submitted that it was not necessary for O&A to be joined as an applicant or a respondent, but simply as an intervenor.  However, he had no objection for O&A to be named as a respondent.  Mr. Li also indicated that once the Order was set aside, O&A would not be interested in the proceedings.  I therefore queried whether the tribunal had jurisdiction to join a party who had no interest in the proceedings except for a limited purpose.  Mr. Li submitted that the tribunal had such jurisdiction and would try to find more authorities on this issue.  Nevertheless, at the adjourned hearing, Mr. Li confirmed that O&A would like to be joined as a respondent and would take part in the proceedings even after the Order was set aside.  Thus, the issue on whether the tribunal has jurisdiction to add a party for a limited purpose is no longer a live one.

6.    The Applicants are 24 out of 38 owners of Nin Fung Building, 65A-65B Waterloo Road, Kowloon, Hong Kong (“the Building”).  O&A is also an owner of the Building.  The 1^st Respondent is the owners’ corporation of the Building.  According to the Applicants, as stipulated in the Affirmation of Yuen Chan Wah filed on 1 November 2006, the 2^nd to 5^th Respondents are all and the only registered members of the 1^st Respondent, that is, the 2^nd to 5^th Respondents are respectively the registered chairman, the registered vice chairman, the registered secretary and the registered treasurer of the 1^st Respondent.

7.    Paragraphs 2, 3, 4 and 5 of the Order are in the following terms:-

“	2.	The present Management Committee be dissolved;
	3.	Madam Wu Chuk Kwan, registered owner of Flat 9A, be appointed and acted as administratrix of the Incorporated Owners of the Nin Fung Building, Homantin until a meeting of owners be convened by the said administratrix to appoint a new Management Committee;
	4.	Costs of this application be to the Applicants to be borne by the 1st Respondent and to be taxed under the District Court Scale, if not agreed; and
	5.	There be no remuneration for the Administratrix.”

8.    The Applicants and the Respondents obtained the Order by way of a consent summons dated 31 October 2007.  O&A’s objection is in relation to the purported consent made on behalf of the 1^st Respondent.  In the consent summons, the 2^nd and 3^rd Respondents signed on behalf of the 1^st Respondent.  O&A contends that the 2^nd and 3^rd Respondent had no authority to sign the consent summons on behalf of the 1^st Respondent on the following grounds:-

(1)	There was no meeting of the 1st Respondent to discuss the question of appointment of the administrator and no resolution had been passed to authorize the 2nd and 3rd Respondents to sign the consent summons on behalf of the 1st Respondent.
(2)	The 2nd to 4th Respondent had respectively resigned from their posts as chairman, vice-chairman and secretary of the management committee and had no capacities to sign the consent summons as members of the management committee.

9.    O&A alleges that at an owners’ meeting on 8 March 2004, 9 persons were elected as members of the management committee (see minutes in pp. 55 to 57 of Bundle B).  They included the 2^nd to 5^th Respondents and Madam Wu Chuk Kwan, the administratrix appointed under the Order.  By letters dated 30 October 2004, 1 November 2004 and 5 November 2004 (see pp. 59, 60 and 62 of Bundle B), the 2^nd to 4^th Respondents respectively resigned from their posts as chairman, vice-chairman and secretary of the management committee.  Their resignations were the subject matters raised in a notice issued to all the owners by the management committee on 10 November 2004 (see p. 58 of Bundle B).  The resignations were also one of the businesses to be reported at the 3^rd management committee meeting on 19 November 2004 (see p. 64 of Bundle B).  O&A also discovered that the 2^nd Respondent had ceased to be a registered owner of the Building since 31 December 2004 (see land search in p. 118 of Bundle B).

10.    The Applicants do not seem to dispute O&A’s allegations, but contend that the signing by the 2^nd to 5^th Respondents on the consent summons in their respective capacities in the management committee must indicate that even they themselves were uncertain about the effectiveness of their earlier resignations, particularly when they are still recorded in the Land Registry as holding such posts.  The Respondents were absent at the hearing and did not put forward any evidence to rebut O&A’s allegations.  So there is nothing to contradict O&A.  In the absence of contrary evidence, I have to accept O&A’s allegations that the 2^nd to 4^th Respondents had resigned from their respective posts in the management committee and the 2^nd Respondent had ceased to be an owner of the Building when they signed on the consent summons.

11.    I do not accept the Applicants’ submission that the 2^nd to 4^th Respondents were uncertain about the effectiveness of their resignations.  There is no evidence to that effect and I do not think that they would have any doubt at all.  By tendering their resignation letters, they must know that the effects were to resign from their posts.  There is nothing to show that their resignations were not accepted.  They must also know that the records in the Land Registry have not been updated.  There is absolutely no reason for them to think that they are still holding the posts.  In the case of the 2^nd Respondent, he should also know that he was no longer an owner of the Building.  It is inconceivable that the 2^nd Respondent would still think that he had the authority to sign on behalf of the 1^st Respondent.

12.    Even assuming that the 2^nd and 3^rd Respondents had the doubt of the effectiveness of their resignations, it does not mean that they had the authority to sign on behalf of the 1^st Respondent.  There is no resolution or letter of authorization of the 1^st Respondent or the management committee to authorize the 2^nd and 3^rd Respondents to sign the consent summons on behalf of the 1^st Respondent.  It is stipulated in paragraphs 4(2)(d) and (e) of Schedule 2 of the Building Management Ordinance, Cap. 344, that a member of a management committee shall cease to be a member of the committee if he resigns his office by notice in writing delivered to the secretary or ceases to be an owner.  The 2^nd and 3^rd Respondents had clearly ceased to be members of the management committee and had no authority to act on behalf of the 1^st Respondent at all.

13.    The Applicants, however, argue that there is no evidence that the resignation letters were delivered to the secretary.  From the contents of the resignation letter issued by the 2^nd Respondent, it indicates that the letter was addressed to the 1^st Respondent.  The contents of the resignation letter issued by the 3^rd Respondent, on the other hand, indicate that the letter was addressed to the secretary of the 1^st Respondent and all the owners.  In fact, in the resignation letter issued by the 4^th Respondent, i.e. the secretary, it states clearly that the 4^th Respondent had received the resignation letter of the 3^rd Respondent.  In the absence of any contradictory evidence, I think it is reasonable to assume that the letters, or at least the one issued by the 3^rd Respondent, had been delivered to the secretary.  After all, there was a management committee meeting on 19 November 2004 to report their resignations. Even if the 2^nd Respondent’s resignation letter had not been delivered to the 4^th Respondent, the 2^nd Respondent had ceased to be an owner of the Building and could not be a member of the management committee in any event.  Thus, I think O&A has at least established a prima facie case that the 2^nd and 3^rd Respondents no longer had any capacity or authority to sign the consent summons on behalf of the 1^st Respondent.  The Order was therefore irregularly obtained.

14.    O&A, being an owner of the Building, clearly has an interest in the present proceedings and in having the Order set aside.  The Order in fact gives the same reliefs as applied by the Applicants in the main application.  O&A is clearly affected by the appointment of an administratrix replacing the existing management committee.  There are still some other remaining members of the management committee.  They could have appointed some other owners to fill the vacancies in the management committee (see paragraph 6 of Schedule 2 of the Building Management Ordinance, Cap. 344).  O&A is entitled to contend that the management committee is not defunct and should not be dissolved at all.  Even assuming that there would be no other owners willing to join the management committee, O&A is still entitled to challenge the invalid appointment of the administratrix.  O&A is also affected by the costs order against the 1^st Respondent, as the owners would ultimately be responsible for paying the costs. 

15.    The Applicants suggest that the 1^st Respondent was joined as a nominal party, and it was not necessary for the 1^st Respondent to give its consent to the consent summons and/or to be a signatory to the consent summons.  There is however no indication that the 1^st Respondent was joined simply as a nominal party.  The 2^nd and 3^rd Respondents had in fact signed the consent summons purportedly on behalf of the 1^st Respondent.  The 1^st Respondent was also ordered to pay costs to the Applicants by the Order.  The Applicants’ submission in this regard is plainly without any foundation.

16.    The Applicants also suggest that the appointment of the administritrix was legitimate and in the best interest of the owners, and that the appointment became necessary because of O&A’s own actions in High Court Action No. 10016A of 1995.  I do not see how an order that was obtained irregularly could be regarded as legitimate and in the best interest of the owners.  I also fail to see how O&A’s actions in another case could have any relevancy in the present application.  I should just be concerned with whether the 1^st Respondent had given its true and proper consent and whether the 2^nd and 3^rd Respondents had the capacity or authority to sign the consent summons.  I therefore reject the Applicants’ submission in this regard.

17.    Both the Applicants and O&A have raised many other points in the course of arguments, including whether the Order was obtained by ex parte application, whether there are other ways to set aside the Order instead of making the present application and the practical considerations if the Order was to be set aside.  I do not find them to be relevant to the questions of whether O&A should be joined as a respondent or whether the Order should be set aside in the present application.  Thus, I will not deal with these other points.  Suffice to say is that whether there were other ways to deal with the Order or whether the setting aside would cause any practical problems should not form part of the considerations at all.  As aforesaid, I am of the view that O&A has an interest in the proceedings and should be joined as a respondent.  The Order was irregularly obtained and should be set aside.

18.    As to the question of costs, I think it is very likely that the Applicants and O&A will argue the same.  I will not therefore make a costs order nisi, but adjourn the question of costs to a date to be fixed by the listing officer with consultation of counsel’s diaries.

19.    I therefore order as follows:-

(1)	Over And Above Limited be joined as the 6th Respondent in the present proceedings.
(2)	Paragraphs 2, 3, 4 and 5 of the order dated 2 November 2006 be set aside.
(3)	The Applicants do have leave to amend the Notice of Application to include Over And Above Limited as the 6th Respondent and to file and serve the Amended Notice of Application within 14 days from today.
(4)	Over And Above Limited, as the 6th Respondent, do file and serve its Notice of Opposition within 21 days thereafter.
(5)	The question of costs in relation to the inter partes summons dated 20 June 2007 be adjourned for argument to a date to be fixed by the listing officer with consultation of counsel’s diaries.