中紀投資有限公司 v. 青山道國際工業大廈業主立案法團 AND OTHERS

LDBM 256/2018

[2025] HKLdT 45

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO.256 OF 2018

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D E C I S I O N

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A.  Introduction

1.  This is a contested non-party costs application made in the context of a building management dispute. It arose after an owners’ corporation was held after trial, by this Tribunal, to have deliberately failed to enforce provisions of deed of mutual covenant (the DMC) of the subject building (the Building) and provisions of Building Management Ordinance (BMO)[1] against an owner of the Building in total disregard of its duties under the DMC and BMO.

2.  After a 6-day trial between the Applicant company[2] (CC) and the 1^st Respondent owners’ corporation[3] (IO) held from September 2023 to February 2024 (the Trial), CC prevailed and obtained its relief and was awarded costs of these proceedings on indemnity basis at High Court scale against IO[4] in a judgment written in Chinese handed down by this Tribunal on 7 August 2024 (the Trial Judgment)[5].

3.  On 21 August 2024, CC took out the subject summons (the Summons) seeking costs of these proceedings from Fun Islands Incorporation Limited[6] (FI) and Star Group Trading Limited[7] (SG) pursuant to ss.12(1) and (2) of Lands Tribunal Ordinance (LTO) [8].

4.  S.12(2) of LTO provides that the Lands Tribunal may make an order awarding costs against a party who is not a party to the relevant proceedings if the Tribunal is satisfied that it is in the interests of justice to do so. FI and SG both opposed the Summons.

5.  By way of first stage of the Summons, this Tribunal in October 2024 ordered that FI and SG be joined as 4^th Respondent and 5^th Respondent respectively to these proceedings for costs purpose.

6.  At the hearing of the second stage of the Summons, FI and SG maintained their opposition and this is the reserved decision of this Tribunal after hearing two counsels each from CC, FI and SG. Counsels for CC, FI and SG have respectively cited a total of 29, 19 and 6 authorities in their respective lists of authorities. This Tribunal is grateful for all their oral and written submissions.

B.  Parties, and procedural history, of these proceedings

7.  The background of the parties to these proceedings, the history of these proceedings, and the key findings of this Tribunal in the Trial Judgment (Trial Findings)[9], are as follows.

8.  At all material times, CC, FI and SG were, and are, respectively corporate owners of Flats 2A & 2B, Flat 9B, Flat 4B of the Building (Flats 2AB, Flat 9B and Flat 4B respectively)[10].

9.  At all material times, CC was effectively controlled by its director, Mr Ng Hin Chung[11] (Ng), who effectively also controlled at the same time Conqueror Development Ltd (CDL)[12] which owned Flats 11A & 11B of the Building (Flats 11AB)[13].

10.  At all material times since 2009, SG had appointed a director and shareholder of SG i.e. Mr Mok Poon Kwong (Mok)[14] as its “authorized representative” (AR)[15] to act as member of the management committee of IO (MC). Mok thereby became and acted as the chairman of MC (MC Chairman) at all material times[16].

11.  At all material times, Mr Mao Yau Fong, a director and shareholder of FI (Mao)[17], was also shareholder and director of STL Company Ltd (STL)[18] and M&P International Company Ltd (M&P) [19], the respective corporate owners of Flat 9A (Flat 9A), and of Flats 12A & 12B (Flats 12AB), of the Building. At all material times since about 2015, Mao, as FI’s AR (and M&P’s AR) served as a MC member. Mao’s personal secretary, Madam Hung (Hung)[20], appointed as STL’s AR, also served as a MC member at all material times since about 2015[21].

12.  In December 2018, CC filed its Notice of Application (NOA) against IO as the 1^st Respondent, the then manager of the Building (Top Property)[22] as the 2^nd Respondent, and FI as the 3^rd Respondent.

13.  A firm of solicitors thereafter represented both IO and FI. In May 2019, the same firm of solicitors filed FI’s Notice of Opposition (NOO) on the same day it filed IO’s NOO. In June 2019, the same firm filed Mao’s witness statement for FI on the same day it filed Mok’s witness statement for IO.

14.  In November 2019, CC discontinued these proceedings as against Top Property. In December 2019, on FI’s application, the Lands Tribunal struck out NOA (and dismissed CC’s claims) against FI on the ground that CC lacks locus standi to sue FI. IO thereafter became the sole respondent to these proceedings until this Tribunal joined FI and SG for purpose of costs.

15.  In November 2022, CC amended its NOA as against IO, and in May, June and August 2023 filed supplemental witness statements and expert evidence. IO in turn filed its Amended NOO settled by two counsels in January 2023, supplemental witness statements and expert evidence in May 2023.

16.  On 15 May 2023, these proceedings as against IO were set down for trial to begin on 18 September 2023. In mid-July 2023, IO filed notice to act in person. Mok thereafter appeared as IO’s AR[23] before this Tribunal, and conducted IO’s case, at, inter alia, pre-trial review held on 5 September 2023 and at the Trial. During the Trial, IO called Mok as its sole factual witness.

C.  Key Trial Findings in Trial Judgment

17.  In the Trial Judgment, this Tribunal first found that FI had, in about 2012, opened a hole on that side of the wall of the protected lobby adjoining Flat 9B (9/F Protected Lobby) [24] to make an opening at door B location (the Opening) [25]. In August/September 2013, FI further installed a glass door at the Opening (the Glass Door) [26].

18.  FI had maintained, this Tribunal found, up to the Trial the Opening and the Glass Door and used them as its direct access from Flat 9B (through the Glass Door at door B location, 9/F Protected Lobby and door A in turn) (the Direct Access) to 9/F lift lobby of the Building (9/F Lift Lobby). FI did not enjoy the Direct Access before it carried out these works[27].

19.  In coming to the above findings, this Tribunal rejected IO’s case that an order made against FI by the Building Authority (BA) in 2012 pursuant to s.24(1) of Buildings Ordinance (BO)[28] (2012 Order) was directed against door B (or any door at all). In fact, at the time of the making of the 2012 Order, there was no door at door B location; the 2012 Order was directed against the Opening only[29].

20.  This Tribunal also rejected IO’s case that the subject matter of proceedings commenced by IO in May 2013 at Lands Tribunal against FI (2013 LT Proceedings)[30], and of FI’s settlement agreement of the same reached with IO in June 2013 (the Settlement Agreement), was the Opening, or the Glass Door, at door B location. Their common subject matter was, in fact, door A adjoining 9/F Lift Lobby[31].

21.  Secondly, FI’s making of the Opening, and FI’s installation of the Glass Door, at door B location and FI’s subsequent retention of them up to the Trial were, this Tribunal held, unauthorized building works ((UBW); and the Opening and the Glass Door collectively Subject UBWs[32]) carried out by FI in breach of s.14(1) of BO and its subsidiary regulations concerning fire-resistant structures and safe means of escape[33], various provisions of the DMC[34] and of BMO[35] (as the 9/F Protected Lobby, and its wall adjoining Flat 9B, are “common parts” of the Building[36]).

22.  In coming to the above holding, this Tribunal rejected IO’s case that FI, in installing the Glass Door at door B location in August/September 2013, had reported completion of such purported minor works by arranging Profitgo International Ltd (PIL)[37] to submit a certificate of completion of class III minor works under the “simplified requirements” (the Certificate of Completion) to BA pursuant to the provisions of Building (Minor Works) Regulation[38].

23.  This Tribunal also rejected IO’s case that FI had complied with the 2012 Order by “installing” the Glass Door at the Opening (which opening the 2012 Order expressly required FI’s “reinstatement”). The 2012 Order had therefore, this Tribunal held, never been discharged by BA; BA had merely suspended its enforcement in its letter to FI in 2014 (BA 2014 Letter). The Subject UBWs remained UBWs under BO and are liable to future enforcement by BA under Mandatory Building Inspection Scheme (MBIS) prescribed by BO[39].

24.  Except for s.34I(1)(a) of BMO which was not applicable, this Tribunal further rejected IO’s case that MC could have, by two resolutions passed at two MC meetings held on 10 June 2019 (2019 MC Resolution) and 11 April 2023 (2023 MC Resolution, collectively the two MC Resolutions), lawfully approved or ratified FI’s conversion of part of 9/F Protected Lobby to its private use. This Tribunal held that the the two MC resolutions could not, and did not, excuse IO’s breaches of BO and its subsidiary regulations, various DMC provisions and other BMO provisions[40].

25.  Thirdly, this Tribunal found that MC had condoned FI’s aforesaid breaches from about 2012 until the Trial[41]. In so doing, in total disregard of its statutory duties under s.18(1) of BMO and those of the DMC, IO had, this Tribunal held, deliberately not compiled with the requirements of a statutory notice issued by BA to it in July 2015 covering all common parts of the Building under MBIS (MBIS Notice), including that of reporting by inspection report submitted to BA UBWs discovered in inspections carried out by registered inspector (RI) appointed by IO[42].

26.  In arriving at findings above, the Tribunal rejected IO’s case that it had, since July 2015, actively sought to compile with the MBIS Notice. To the contrary, due to their having reported Subject UBWs, and other private UBWs, and recommended their removal in their inspection reports, IO had, this Tribunal found, dismissed its first RI by name of AHL Contract Management Ltd (AHL)[43] and demanded its second RI by name of Kwok, Hauser and Partners Ltd (K&H)[44] to withdraw its 2^nd report from BA after submission. Moreover, IO, this Tribunal found, had threatened Top Property with legal action immediately after the latter had demanded FI to remove Subject UBWs[45].

27.  In the end, this Tribunal acceded to CC’s application and granted a mandatory order compelling IO to perform its duties under the DMC and BMO to enforce against FI provisions of the DMC and BMO to require FI’s removal of Subject UBWs and FI’s reinstatement of 9/F Protected Lobby, including, if necessary, by taking out legal proceedings against FI for the same[46].

28.  In so exercising its discretion, this Tribunal rejected IO’s last defence that CC did not come to the tribunal with “clean hands”[47] such that relief should be denied.

D.  Affidavit evidence for the Summons

29.  In support of the Summons, Ng on behalf of CC filed his 2^nd affirmation on 2 October 2024 (Ng’s 2^nd Affirmation).

30.  Mok on behalf of SG filed his affirmation on 4 December 2024 (Mok’s Affirmation), and Mao on behalf of FI filed his 2^nd affirmation on 20 December 2024 (Mao’s 2^nd Affirmation), in opposing the Summons.

31.  In reply to the aforesaid, Ng on behalf of CC filed his 3^rd affirmation on 20 February 2025 (Ng’s 3^rd Affirmation).

E.  CC’s grounds for the Summons

32.  CC submitted that costs order sought under the Summons should be made against FI and SG on the following 4 grounds[48].

33.  First, CC argued, it was FI’s erection of, and persistent refusal to remove, Subject UBWs, along with SG’s and FI’s control of MC (and thus IO) in resisting their removal (see second ground below), that caused CC to begin, and to continue until the Trial, these costly proceedings[49] (Ground 1).

34.  Secondly, FI (through Mao) and SG (through Mok) had, CC said, exercised practical control over MC (or IO)’s persistent refusal, and delay, in complying with the MBIS Notice and removing the Subject UBWs, and/or IO’s management of these proceedings. Their actions prioritised the interests of their companies over IO’s obligations under the DMC and BMO, or the collective interests of all owners of the Building. They obtained personal benefit from IO defending these proceedings and IO’s defence was not for its own benefit, but rather for the benefit of SG and FI, which should be considered as real parties to these proceedings[50] (Ground 2).

35.  Thirdly, FI (through Mao) and SG (through Mok) have, said CC, been guilty of impropriety in relation to these proceedings in that Mao and Mok had provided dishonest evidence, and the defences they presented were knowingly false. Such impropriety and bad faith makes it just to make a non-party costs order against FI and/or SG[51] (Ground 3).

36.  Fourthly, IO’s financial situation, said CC, was that it would be unable to pay CC’s costs of these proceedings without collecting contributions from all owners of the Building. Failing the grant of non-party costs orders against SG and/or FI, it would, CC argued, be manifestly unjust and prejudicial to it if it, the successful party after the Trial, would, through no fault of its own, be required, as an owner of the Building, to contribute towards its costs of these proceedings payable by IO, the unsuccessful party after the Trial, under the Trial Judgment[52] (Ground 4).

F.  Legal principles on non-party costs application

37.  Having considered parties’ detailed legal submissions[53], the overall consideration at the second stage of the Summons is, I think, whether it would be in the interest of justice to grant the costs order sought against the non-party: Leung Chung Ching Edwin v Estate of Leung On Mei Amy [2019] 1 HKLRD 109 (Edwin Leung case), at [72] per Chu JA (as she then was).

38.  For principles as to how this discretion to order non-party costs is to be exercised, Chu JA (as she then was) had, at [74] of Edwin Leung case, endorsed summary at [25] & [29] of Lord Brown’s opinion given on behalf of the Judicial Committee of Privy Council in the New Zealand case of Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 WLR 2807 (Dymocks case).

39.  Among other principles, non-party costs orders were said by Lord Brown in Dymocks case to be exceptional in the sense that they are outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expenses. The ultimate question is whether in all the circumstances it is just to make the order, and this is inevitably to some extent a fact-specific jurisdiction and there will often be a number of different consideration in play.

40.  Chu JA (as she then was) had, at [73] of Edwin Leung case, also referred to judgment of Millett LJ (as he then was) in Metalloy Supplies Ltd v MA (UK) Ltd [1997] 1 WLR 1613 (Metalloy case), 1620B-E, where it was said that there are 2 situations where it would be appropriate to make a non-party costs order.

41.  The first is where the third party is considered to be the real party interested in the outcome of the suit. And the second is where the third party has been responsible for bringing the proceedings and they have been brought in bad faith or for an ulterior purpose or there is some other conduct on his part which makes it just and reasonable to make the order sought against him.

42.  On the first situation, it is not necessary for the non-party to be the only real party to the litigation. It is sufficient if he is a real party in very important and critical aspects: Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd [2018] 2 HKLRD 1145 (Big Island case), at [39] per Au-Yeung J[54].

43.  On the second situation, a non-party’s conduct in giving dishonest evidence or running a claim which he knows to be false in the primary proceedings is a relevant factor in deciding whether to order costs against him: [11] of Big Island case, per Au Yeung J[55]. Impropriety or the pursuit of speculative litigation may of itself support the making of an order against a non-party, but its absence does not preclude the making of such an order: [33] of Dymocks case, per Lord Brown.

44.  In the different context of a director controlling or funding the company’s pursuit or defence of the litigation, it has been said that what matters most is whether it can be said that the director was seeking to benefit personally from the litigation. If the company’s stance was dictated by the real or perceived benefit to the director (whether financial, reputational or otherwise) or a personal windfall from the litigation, knowing that the company has no money to pay the other side’s costs if they lose, then it might be said that the director, not the company, was the “real party”: HJ InnoXcell Ltd v Teh Boon Khuan [2024] 5 HKLRD 462 (InnoXcell case), [29] & [31], per Simon Leung J[56].

45.  Alternatively, a non-party costs order may be made against a director where there is some form of impropriety or bad faith on his/her part which is causatively linked to the applicant unnecessarily incurring costs in the litigation. The touchstone is whether the director held a bona fide belief that the company had an arguable claim or defence and that it was in its best interest to advance. It is the impropriety in relation to the litigation, for which the non-party is to be regarded as responsible, that is relevant.

46.  One example is where a director knew that the company had no genuine cause of action and knew that the company by virtue of its insolvency or financial state would be unable ultimately to pay the costs of the unsuccessful litigation, yet still prosecuted, defended and/or continued the proceedings for his own reasons: [32] & [33] of InnoXcell case, per Simon Leung J.[57]

47.  In terms of evidence for non-party costs application, where the connection of the non-party with the original proceedings was so close that he will not suffer any injustice by allowing the admission of the evidence in the original proceedings, the evidence in the original proceedings is admissible against him in the non-party costs application: [13] of Big Island case, per Au Yeung J, applying 193G of Symphony Group Plc v Hodgson [1994] QB 179 (Symphony case).

48.  Whether it is just and fair that a third party be bound by the evidence given at trial and the judge’s findings of facts in any given case depend on the nature and degree of his connection with the proceedings. Each case has to be considered on its own merits in order to ascertain whether the third party will suffer an injustice if he is held bound by the evidence and findings at trial: Deutsche Bank AG v Sebastian Holdings Inc [2016] 4 WLR 17 (Deutsche Bank case), at [17], [18] & [21], per Moore-Bick LJ[58].

49.  Since a non-party costs application involves an exercise of discretion, limited assistance is likely to be gained from the citation of other decisions at first instance in which judges have or have not granted an order of this kind: Ng Yuk Pui Kelly v Dung Wai Man & Others [2019] HKCFI 1157 (Kelly Ng case), at [12] per L. Chan J[59].

50.  It is wrong to treat the reported cases as providing a comprehensive checklist of factors that must be present in every case before the discretion can be exercised in any particular case. What may be sufficient to justify the exercise of the discretion in one case should not be treated as a necessary factor for the exercise of discretion in a different case: Systemcare v Services Design Technology [2012] 1 BCLC 14 (Systemcare case), [26], per Lewison J (as he then was)[60].

51.  An non-party costs order could be made without the judge finding that the case was exceptional, or that the non-party funded the proceedings, or that the party to the litigation became insolvent during the course of proceedings: [27], [33], [43], [47] of Systemcare case, per Lewison J (as he then was)[61].

52.  The court will treat a non-party costs application with caution and will only make a costs order in plain and straightforward cases. As non-party costs application is a summary procedure, it would not be appropriate to resolve dispute of facts on affirmations without the benefit of discovery or oral evidence: [9(a)] & [15] of Big Island case, per Au Yeung J, and [7] of Kelly Ng case, per L. Chan J.

G.  Conducts of Mok as MC member attributable to SG

53.  In opposing the Summons, SG first submitted that Mok’s conducts (in particular his conduct of these proceedings) should not be attributable to it, at least for the purpose of deciding whether an non-party costs order should be made against it.

54.  Citing [95] of Reyes J’s judgment in Wing Ming Garment Factory Ltd v The IO of Wing Ming Industrial Centre & Another (Wing Ming IO case)[62], SG submitted that, though Mok was AR of SG, pursuant to para 11(1) of Schedule 2 of BMO, Mok “may be treated as a member of the management committee in his own right, with the capacity to be appointed as chairman (original bold and italics)” and, thus, his conducts should not be attributable to SG for costs purpose[63].

55.  Mok conducted, SG added, the defence of IO in these proceedings as MC authorized Mok (instead of SG) to do so. All minutes of MC meetings concerned recorded that MC resolved to appoint “MC Chairman Mok”[64] (instead of SG) to instruct solicitors on IO’s behalf and/or to attend hearings to conduct IO’s case at the Trial[65].

56.  When Mok gave evidence at the Trial, he did so, SG emphasized, “as an individual and qua MC Chairman in his own right (original bold and italics)”, not as SG’s representative. Mok (instead of SG) was authorized by IO to make his witness statement. And, SG says, Mok never purported to give evidence, or make his witness statement, on behalf of SG[66].

57.  For the reasons below, I reject all SG’s submissions in this section above.

(1)  Under para 5(2)(a) and para 11(1) of Schedule 2 of BMO, an owners corporation shall, by resolution passed at general meeting, “appoint, from amongst the owners, the members” of a management committee, and a corporate owner “appointed as a member of management committee” “may appoint a director or other officer of that body or some other individual to act as its representative (authorised representative (獲授權代表)) for the purposes of BMO as if the authorised representative were a member of MC in his own right (underline, italics and bold supplied)”.

(2)  Hence, 1) only owners, not their authorized representatives, can stand for election (and be appointed) as member of a management committee and 2) corporate member of a management committee can only act through an authorized individual as its representative: Million Stars Technologies Ltd & Ors v IO of Century Industrial Centre [2017] 4 HKC 557, [30] per Judge K.W. Wong (as he then was). [95] of Wing Ming IO case cited by SG illustrated only, I would point out, point 2) above and no more.

(3)  The words “in his own right” and “as if” are used together in para 11(1) of Schedule 2 of BMO to provide, I agree with CC’s submission, for AR appointed by corporate member of a management committee having the same qualification requirement, the same membership cessation liability, the same declaration requirement, and the same rights and duties under BMO like any other non-representative management committee member. Therefore, under para 11(1) of Schedule 2 of BMO, certain sub-paragraphs of para 4 of Schedule 2 regarding qualification, and cessation, of management committee membership shall apply to AR as they apply to other non-representative management committee members.

(4)  Having appointed an authorized individual to act as its representative i.e. AR, the corporate owner appointed as a management committee member at general meeting of owners corporation, I agree with CC’s submission, remains a management committee member.

(5)  Hence, should its appointed AR cease to be a member of MC like other non-representative management committee members under certain subparagraphs of para 4 of Schedule 2, the corporate management committee member may appoint another AR in his/her place: para 11(2) of Schedule 2 of BMO.

(6)  Not being owner of Flat 4B, Mok therefore, I think, cannot stand for election to become member of MC. Only SG can. SG, as corporate member of MC, can authorize Mok to act as its representative to MC, and Mok as AR of SG could act like other non-representative members of MC. Should Mok’s membership cease for reasons stated in certain subparagraphs in para 4 of Schedule 2, SG, as corporate MC member itself, could appoint another AR in Mok’s place.

(7)  As the name of AR suggests, Mok was therefore at all material times, I agree with CC, SG’s agent appointed and authorized by SG to serve as its representative to MC. Under para 5(2)(b)(i) of Schedule 2 of BMO, the chairman is to be appointed amongst the members of a management committee. Though Mok was chosen to be MC Chairman from among all MC members, he remained, I think, SG’s authorized agent/representative at all times. But not for his status as AR of SG, he would not and could not, one thinks, have been chosen as MC Chairman.

(8)  Under the provisions of BMO, individual chairman of management committee has no decision-making power on his/her own. Incorporated owners (and management committee) make decisions collectively by passing resolutions at their respective meetings: [50-51] of 羅小玲及另二人 對 鄭慧玲 [2022] HKLdT 34.

(9)  Management committee is not a legal entity independent from the incorporated owners. It is a body of natural persons who are the officer bearers of the incorporated owners. Their appointments are regulated by BMO. They are appointed for the purpose of carrying out the powers and duties of, and to make collective decisions for the incorporated owners, through and under the name of management committee. Decisions and acts taken by members of management committee are not only the decisions and acts of management committee, but also those of the incorporated owners: see s.29 of BMO and Incorporated Owners of Kwai Wan Industrial Building[67], [21-22], per Chu J (as she then was).

(10)  Though Mok was authorized by MC collectively to conduct these proceedings on IO’s behalf, to make witness statement for IO and to give evidence as IO’s witness at the Trial, he was, I think, so authorized in his capacity of MC Chairman and not otherwise (were Mok not MC Chairman, he would, one thinks, most unlikely be so authorized by MC). In that capacity, Mok remained, as explained above, SG’s authorized agent/representative to MC. Mok’s authority to serve in MC as SG’s AR comes from SG, and such authority could, at any time after Mok’s appointment, be revoked by SG, which could have Mok replaced by another AR if SG sees fit.

(11)  Looking at para 6 and 10 of Mok’s Affirmation, it is, I agree with CC, beyond doubt that Mok was, at all material times since 2009, properly authorized by the board of directors of SG (consisting of Mok and one Mr Wong) to act as its AR to MC.

(12)  In the context of this building management dispute, considering aforesaid BMO provisions, conducts made, and knowledge acquired, by Mok in his capacity of MC member as SG’s AR (including participating in 2013 LT Proceedings and MC meetings, handling the MBIS Notice and engaging RI, giving instructions to solicitors, and conducting IO’s defence, in these proceedings and giving evidence as IO’s witness at the Trial) could, I agree with CC, all be properly attributable to SG on general agency principles, with Mok treated as SG’s “directing mind and will” if required: Moulin Global Eyecare Trading Ltd v CIR (2014) 17 HKCFAR 218, [67], [77] & [106(6)], per Lord Walker NPJ.

58.  For avoidance of doubt, though FI did not take the same point of attribution, Mao’s conducts, and knowledge, at all material times while serving as AR of FI to MC are, for same reasons I explain in this section, be all properly attributable to FI.

59.  Looking at minutes of annual general meetings of IO in the years of 2018[68], 2020[69] and 2022[70], para 4 of Mao’s witness statement for FI in these proceedings[71], and para 3 of FI’s NOO for these proceedings[72] put before me for the Summons, Mao was, I find, FI’s AR to MC from 2015 to 2017, and 2018 to 2020. Thereafter, Mao had served instead as AR of M&P to MC.

H.  Evidence of the Trial & Trial Findings admissible against FI on the Summons

60.  Trial Findings and evidence adduced at the Trial are, FI submitted, inadmissible against it as a general rule according to Symphony case as it was a stranger to the Trial. This rule serves, FI says, to ensure a fair trial for the non-party as 1) parties are entitled to the independent judgment of a tribunal of the evidence actually before the tribunal; 2) it is unfair to rule against a non-party based on materials never addressed by it; and 3) it shields a non-party from prejudice arising from choices made by the original parties[73].

61.  Thus, it was said not proven as against FI, among others, that it had erected, and kept, Subject UBWs in breach of the DMC, BMO and BO etc., or that it had provided false evidence, as alleged by CC. FI, it stressed, was entitled at law not to participate at the Trial as CC had wrongly sued FI without locus standing in the first place.

62.  Nonetheless, as [47] above shows, Symphony case itself also, I think, provides for exception to the above general rule.

63.  On all the materials put before me on the Summons, FI had, I think, a very close connection with these proceedings from its beginning until the conclusion of the Trial.

(1)  The subject matters in these proceedings that IO had failed to enforce DMC and BMO provisions against (i.e. Subject UBWs adjoining 9/F Protected Lobby) were erected, and kept, by Flat 9B owner i.e. FI.

(2)  The defaulting owner that IO was said in these proceedings to have failed to enforce the above provisions against is Flat 9B owner i.e. FI and no other owner.

(3)  Among other failures said to have been committed by IO in these proceedings, IO was said to have failed to compile with the MBIS notice. Among all members of MC, Mao (a director and shareholder of FI and FI’s AR to MC) and Mok were the ones who mostly (較多) handled the MBIS Notice[74].

(4)  FI was formerly sued by CC as the 3^rd Respondent to these proceedings. But not for FI’s election to strike out CC’s claim against it and IO’s election thereafter not to join FI as third party, FI would have appeared at the Trial to present its case and evidence as either a party or third party and be bound by its evidence and findings.

(5)  Save for FI’s defence of CC’s lack of standing to sue, the other three positive defence raised by FI in its NOO to these proceedings[75] are, I think, essentially the same three raised by IO in its NOO[76] i.e. the 2012 Order[77], the 2013 LT Proceedings[78], and the Settlement Agreement[79]. And FI must have, one thinks, known about IO raising the same 3 positive defence by having the same legal representation to those of IO.

(6)  IO, as the sole respondent to these proceedings after FI ceased to be 3^rd Respondent, continued to run at the Trial the said 3 positive defence raised by FI.

(7)  All these 3 positive defence raised by FI (and relied on by IO as its defence until the Trial) were related to FI one way or another. The 2012 Order was directed against FI, which allegedly arranged in 2013 for its discharge[80]. The 2013 LT Proceedings against FI were stayed[81] on terms of the Settlement Agreement FI made with IO in 2013.

(8)  Apart from the above 3 positive defence raised by FI, IO in its Amended NOO also sought to rely at the Trial on the two MC Resolutions passed by MC after the commencement of these proceedings.

(9)  The 2019 MC Resolution was passed with FI’s AR (i.e. Mao) and Hung, Mao’s personal secretary, attending the MC meeting concerned and voting as MC members[82]. The 2023 MC Resolution was also passed with Mao and Hung attending and voting as MC members[83] (but with Mao, a director and shareholder of FI, serving as AR of M&P). FI (through Mao) must well be aware of IO’s reliance of the former resolution, if not of the latter, at the Trial (in any event, minutes of the two MC Resolutions had, according to Mok’s words at para 25 of Mok’s Affirmation, been posted afterwards at a conspicuous part of the Building[84]).

(10)  At all material times between 2018 and 2020, FI’s AR (Mao), and Hung, Mao’s personal secretary, also participated as MC members in all MC meetings in that period that resolved for IO to defend, and to continue defending, these proceedings by solicitors[85].

(11)  At all material times after 2020, Mao (a director and shareholder of FI, but as AR of M&P), and Hung, Mao’s personal secretary, also participated as MC members in MC meetings that resolved to affirm and/or support the ways Mok as MC Chairman elected to conduct IO’s case in person at the Trial, including, of course, relying on the 3 positive defence raised by FI and the two MC Resolutions passed with the votes of Mao and Hung as MC members[86].

64.  For the following additional reasons on top of those in the preceding paragraph, FI suffers, I think, no unfairness or injustice if it is to be held to be bound by the evidence of the Trial and the Trial Findings.

(1)  CC’s claim against FI was not dismissed on its merits; it was struck out as CC does not have a concurrent right to sue FI. S.16 of BMO provides that all complaints about “common parts” of a building should be taken up “exclusively” with the incorporated owners[87].

(2)  Therefore, if CC succeeds against IO in these proceedings, IO could be compelled by order of this Tribunal to take separate enforcement proceedings against FI. Despite its temporary success of striking out, FI remained at risk of future proceedings by IO if IO fails in its defence (not to mention FI could be joined by IO as third party to these proceedings to be discussed below).

(3)  It is accordingly, I think, in every interest of FI to support IO in its defence. FI would benefit from IO’s successful defence, if any, against CC as Mao admitted at para 39 of Mao’s 2^nd Affirmation (see footnote [107] below).

(4)  Though it ceased to be a party, FI was certainly, one thinks, in a position to provide, and could have provided, IO with information, documents and witness testimony to support IO’s running at the Trial of at least the same 3 positive defence raised by it earlier in its NOO.

(5)  Indeed, Mao admitted at para 10 and 12 of Mao’s 2^nd Affirmation that “FI’s legal team and he himself had after FI’s striking out application, offered assistance to all MC members”, and that “MC members and others had together prepared and/or approved IO’s opening, IO‘s closing submissions and Mok’s defence documents (italics supplied)”[88].

(6)  FI could have, one thinks, also arranged for its director and shareholder i.e. Mao to testify as IO’s witness at the Trial as per contents of his witness statement filed for FI[89], whose contents are consistent with, and supportive of, Mao’s witness statement filed for IO on the same day by the same firm (though IO could, as an alternative to Mao’s live evidence, elect to rely on the said witness statement of Mao filed for FI at the Trial pursuant to s.10(6) of LTO[90]).

(7)  Regarding the alleged discharge of the 2012 Order, BA 2014 Letter[91] sent by BA to FI and the Certificate of Completion purportedly submitted by PIL[92] on FI’s behalf to BA, both found their way into the Trial as documentary evidence adduced by IO at the Trial.

(8)  Regarding Mao’s evidence in his witness statement for FI surrounding the Certificate of Completion relied and adopted by IO at the Trial, CC had specifically, by its solicitors’ letter written to FI in March 2023, warned FI that it would invite this Tribunal to rule that these evidence were false or misleading and would, should FI refuse to apply to join as party, object to it making claim in future of suffering injustice for having no chance to advance its defence or adduce evidence[93]. FI gave no reply nor objected then at all.

(9)  And, FI could have, one thinks, also provided IO as evidence to be adduced at the Trial information, documents and witness testimony regarding usage of Subject UBWs (and 9/F Protected Lobby) by occupants of Flat 9B (including such evidence now asserted at para 27 of Mao’s 2nd Affirmation that door B was, and is, not the sole access from Flat 9B to 9/F Lift Lobby).

(10)  Indeed, FI had further provided IO with its complaint letter dated 11 April 2023 to IO, and related CCTV video, regarding Ng’s alleged trespass to Flat 9B on 9 April 2023, which complaint letter and video also found their way into the Trial as documentary evidence adduced by IO at the Trial[94].

(11)  After the Court of Appeal in November 2021 gave its joinder decision of STL in litigation between CC and IO over Flat 9A in CACV No. 96/2021[95], CC had through its solicitors written to FI in November 2022 inviting it to apply to join as party to these proceedings to protect its right to advance its own defence and present its own evidence. FI was warned that, should it refuse, CC objected to FI claiming prejudice in future for not having chance to take these actions in these proceedings[96]. Again, FI gave no reply nor objected then at all.

(12)  Were FI minded, as it now asserts at section D3b of its skeleton, to object to IO taking enforcement proceedings against it over Subject UBWs as sought by CC on alleged grounds of acquiescence, waiver, issue estoppel and/or abuse of process on the basis of the 2013 LT Proceedings and/or the Settlement Agreement, FI could have, one thinks, applied to be joined again so as to persuade this Tribunal not to compel IO taking enforcement action or proceedings against it.

(13)  While one cannot complain about FI taking out its striking out application as against CC as it is so entitled to at law, FI should, one thinks, also take responsibility for, or be bound by, its own election made with legal representation.

(14)  Symphony case was decided as early as in 1993[97]. Unlike SG as we shall see in section P below, FI made no complaint in its skeleton (and Mao made no complaint in Mao’s 2^nd Affirmation) of CC not giving it prior warning of seeking non-party costs order against it[98]. FI therefore took, one thinks, its own risks in 2019 and thereafter of being held on the case law to be bound by the evidence and findings of the Trial that it elected not to participate directly as a party or elected to offer only some, but not all, assistance to IO indirectly.

(15)  There is, I think, much to say that any alleged unfairness or injustice that FI now complains of is of its own making or election, including not heeding such reminders given by CC’s solicitors in their two letters in November 2022 and March 2023.

65.  All things considered, I conclude for reasons stated above that evidence adduced at the Trial and the Trial Findings are admissible against FI in my determination of the Summons.

66.  For avoidance of doubt, though the point was not taken by SG, I also find SG (with Mok as its AR) having so close connection with these proceedings that SG suffers no injustice by being bound by the evidence of the Trial and the Trial Findings. They are therefore also admissible against SG in my determination of the Summons.

I.  FI caused these proceedings to begin and continue

J.  IO defended these proceedings not in its interest but to benefit FI personally

67.  I agree with CC and find that FI had caused these costly proceeding to begin, and to continue for more than 5 years until the Trial Judgment, for the following reasons.

(1)  I first repeat [63(1), (2) & (3)] above herein.

(2)  Prior to commencement of these proceedings in December 2018, CC had written to FI in April and May 2017 three times demanding it to comply with the DMC by removing Subject UBWs and reinstating 9/F Protected Lobby as per AHL’s inspection report[99]. FI gave CC no reply. Had FI complied with CC’s demands[100], CC would most unlikely, I think, have begun these proceedings.

(3)  After these proceedings began, had FI complied with CC’s demands above before the Trial ended, CC would most unlikely, I think, have continued the same against IO until the conclusion of the Trial (or have continued it against FI until its claim was struck out).

(4)  In comparison, not long after Top Property filed its NOO in May 2019 saying that it had related to MC (including MC Chairman and FI’s AR) that Subject UBWs are problematic (有欠妥地方) as per K&H inspection report[101], and written to FI (copied to IO) in June 2019 demanding FI to remove Subject UBWs[102], CC saw fit to discontinue its claim against Top Property in November 2019[103].

(5)  Furthermore, as shall be shown in section K below, FI, together with SG, had controlled MC to ensure that IO defended, and continued to defend, these proceedings until the Trial for FI’s benefit (and resisted, and delayed IO’s compliance of the MBIS Notice including reporting, and removing, of Subject UBWs for FI’s benefit) at all material times until the Trial Judgment.

68.  IO, FI submitted, had its “own good reasons”, and “arguable grounds”, to defend these proceedings and it was “in IO’s own interest” to defend them. The suggestion that “FI stands to benefit from these proceedings” is, FI argued, “farfetched” or “irrelevant”[104].

69.  I also reject all FI’s submissions above for the reasons given in the following paragraphs of this section.

70.  FI obviously, I think, enjoyed benefit for having erected, and for maintaining, Subject UBWs at all material times.

(1)  It is self-evident that the Direct Access was beneficial to FI (and Flat 9B occupants) at all material times.

(2)  If the Direct Access is not beneficial to FI, it

(a)  would not, one thinks, have spent time and money in 2012 to make the Opening at the wall of 9/F Protected Lobby, and would not have spent time and money again in August/September 2013 to install the Glass Door at the Opening;

(b)  would, one thinks, have complied with CC’s 3 written demands made in April and May 2017 (or Top Property’s written demand made in June 2019) to remove Subject UBWs in order to avoid these proceedings from beginning or continuing;

(c)  would not, one thinks, have spent time and money to have instructed solicitors to defend these proceedings, including taking out application to strike out the same;

(d)  would not, one thinks, have kept Subject UBWs to enjoy the Direct Access for as long as more than 11 years from August/September 2013 until December 2024; and

(e)  would not, one thinks, have delayed completing works to remove Subject UBWs (and reinstate 9/F Protected Lobby) until December 2024 when IO had first demanded it to do so in line with the Trial Judgment as early as in August 2024[105].

(3)  If indeed there was at all material times another route for Flat 9B occupants to access 9/F Lift Lobby through Flat 9A offices (the Other Route)[106] as is now asserted at para 27 of Mao’s 2^nd Affirmation, such benefit provided by the Direct Access to FI must, one thinks, be sufficiently strong enough to have caused FI to have acted in the manners mentioned above.

(4)  Compared with the Direct Access provided by Subject UBWs, the Other Route, if it existed at all, is, I think, clearly of longer distance and less direct for occupants of those parts of Flat 9B adjoining 9/F Protected Lobby to go to 9/F Lift Lobby.

(5)  Indeed, Mao admitted at para 39 of Mao’s 2^nd Affirmation to say that “unless IO succeeds in its defence, FI would have no benefit at all”[107]. Clearly, in this scenario mentioned by Mao himself, FI could continue to keep Subject UBWs, and the Direct Access, for its benefit. In the meantime, prior to the Trial Judgment, FI was, one thinks, also benefitting from the Direct Access in the same manner.

71.  Such continuing benefit to FI is no doubt, I think, a relevant consideration to be taken into account in deciding whether to make a non-party costs order against FI.

72.  IO’s stance in defending these proceedings was also dictated, I think, by the real or perceived benefit to FI. This is apparent for the following reasons or evidence. And the bold attempt by FI to argue to the contrary wholly fails for reasons given by me below.

(1)  Considering the terms of the two MC Resolutions passed by MC[108] and MC’s statement (嚴正聲明), signed by Mao, Hung and Mok, accompanying the 2019 Resolution (the 2019 Statement)[109], MC had, on their terms, allowed FI to convert part of 9/F “common parts” of the Building for FI’s private use [自用] (i.e. allowed FI to make use of the Opening and the Glass Door installed at the Opening).

(2)  It is therefore clear that MC at the material times (consisting, inter alia, of Mao, Hung and Mok) was well aware that the status quo in December 2018 (when these proceedings were commenced) was for the benefit of FI and that IO defending these proceedings was also for FI’s benefit (i.e. allowed FI to continue using the Opening and the Glass Door installed at the Opening for its private use).

(3)  It is, I think, no use for FI to assert at para 40 of its skeleton that, if IO’s defence of these proceeding ultimately succeeds - IO would not have to spend time or money restoring 9/F to its original state[110], nor take legal action against FI for that purpose i.e. IO could avoid future expenses or avoid taking future proceedings.

(4)  FI significantly gave, one notes, no clue in its submissions what existing benefit, if any, IO enjoyed when it made its decision in December 2018 to defend these proceedings to maintain the status quo (not to mention IO then had no crystal ball to tell it must ultimately prevail after trial of these proceedings).

(5)  The undeniable facts, I think, are that MC had knowingly and unilaterally given a privilege to FI to use part of 9/F “common parts” of the Building for, I would stress, no reward (or no consideration) at the expense of other owners of the Building.

(6)  It is also, I think, wholly hypothetical for FI to claim at para 41 of its skeleton that acceding to CC’s demands could have placed IO in a difficult position due to possible legal objections open to FI on the basis of the Settlement Agreement.

(7)  There is, as CC pointed out, no evidence at all that MC had, at any time prior to the Trial, written any single letter to FI demanding it to remove Subject UBWs and to restore 9/F Protected Lobby as CC repeatedly urged it to, let alone met with any reply letter from FI citing the Settlement Agreement as legal ground of objection. FI did, after the Trial Judgment, raise with IO the Settlement Agreement in September 2024 and November 2024, but FI finally elected and removed the Subject UBWs in December 2024.

(8)  The 2019 Statement itself, or the two MC Resolutions, also made no reference at all of MC (or IO) having made demands on FI, or met with objections from FI after such demands, if any (the only explanations given in the 2019 Statement for the passing of the 2019 MC Resolution by MC was 1) the settlement of the 2013 LT Proceedings by the Settlement Agreement, and 2) the alleged discharge of the 2012 Order by BA)

73.  To the contrary, IO (and all/other owners of the Building) had, as I found in the Trial Judgment, suffered numerous detriments by December 2018 by reason of Subject UBWs (and other private UBWs to be mentioned below), and could, one thinks, suffer continuing detriment if the status quo existing in December 2018 is maintained for FI’s benefit.

(1)  No progress was made by IO at all in complying with the MBIS Notice covering all “common parts” of the Building issued to it by BA as early as in July 2015[111] (AHL was dismissed in November 2016 after 7 months’ engagement[112]. K&H’s 2^nd inspection report submitted to BA on 21 August 2018 was quickly withdrawn by it on 30 August 2018 after Top Property on MC’s instructions demanded it doing so on 23 August 2018[113]. The compliance deadlines prescribed by BA in the MBIS Notice had been rendered completely meaningless). The MBIS Notice has been registered by BA at the Land Registry as an encumbrance since February 2016[114]. Such inaction of MC further exposed IO to criminal prosecution and penalty thereof[115].

(2)  FI’s erection, and maintenance, of Subject UBWs had also, this Tribunal found in the Trial Judgment, damaged and/or altered fire-resistance structure of 9/F Protected Lobby and its safe means of escape, posing risk of injury or death to occupants and visitors to the Building in the unfortunate event of fire[116].

(3)  “Property all risks insurance policy” purchased by IO covering all “common parts” of the Building could, this Tribunal also found, well have been rendered void or voidable as a result of Subject UBWs, or could have its premium liable to be increased for that[117].

(4)  As MC had failed to comply with IO’s statutory duties under BMO, and its duties under the DMC, to enforce DMC provisions[118] and to comply with notices over “common parts” issued by public officer[119], it had thereby exposed IO to possible allegations from owners, and possible legal actions from owners, for its failure to enforce against FI for FI’s breaches of the provisions of the DMC, those of BMO, BO and its regulations etc.

74.  On the Trial Findings, IO had in truth, I think, no arguable ground to defend these proceedings. Mao’s assertions at para 24 to 35 of Mao’s 2^nd Affirmation, and FI’s contrary submissions in its skeleton, on specific points of the Trial Judgment made with the benefit of hindsight of reading the Trial Judgment and subsequent case law[120], are, I think, incapable of altering, and do not alter, the Trial Findings and my overall conclusions therein.

(1)  The 2012 Order was, in fact, directed against the Opening to the knowledge of Mok (at the time of the 2013 LT Proceeding, he saw at 9/F of the Building that there was no door at all at door B location; only the Opening existed at that location at that time)[121]. And the Opening was never “reinstated” by FI as expressly required by the 2012 Order until December 2024. The 2012 Order was thus never discharged by BA prior to the Trial as alleged by FI[122].

(2)  The subject matter of the 2013 LT Proceedings and of the Settlement Agreement was, in fact, door A to the knowledge of Mok[123]. These two matters relied by IO in these proceedings (and again relied by Mao in Mao’s 2^nd Affirmation) therefore provide no defence whatsoever to these proceedings concerning Subject UBWs[124] at door B location (be it issue estoppel or abuse of process as claimed by FI in its skeleton).

(3)  Installation of the Glass Door at the Opening by FI was never, in fact, reported to BA as minor works by the Certificate of Completion purportedly submitted by PIL (as claimed by Mao in his witness statement for FI and adopted by Mok in his evidence at the Trial). According to BA’s official records, there was no such submission at all. There are also many irregularities on the face of the Certificate of Completion produced by IO as documentary evidence at the Trial[125]. Mao (or FI) must, I think, have known of the falsity of such alleged submission. Mao’s purported explanation at para 18 of Mao’s witness statement for FI[126] (and at para 12 of FI’s NOO for these proceedings[127]) is, I think, incapable of being believed.

(4)  Significantly, all the explanations given by MC in the 2019 Statement (signed by, inter alia, Mao, Hung, Mok) for MC (composing, inter alia, of Mao, Hung and Mok) passing the 2019 MC Resolution are, I think, “far from the truth”[128].

(5)  As Subject UBWs remains UBW under BO[129] (i.e. illegal structures) at all material times in breach of s.14(1) of BO, MC could not have lawfully approved (or waived) such conversion of 9/F “common parts” for FI’s private use even according to Court of Appeal judgment in CACV No. 96/2021 handed down in December 2024[130] (i.e. subsequent to the Trial Judgment) cited by FI.

(6)  If one reads carefully my reasoning in the Trial Judgment, one would discover that most, if not all, findings of FI in breach of divers provisions of the DMC, BMO, BO and its subsidiary regulations[131] do not at law require any finding of the Direct Access being the sole access of Flat 9B to 9/F Lift Lobby (it suffice at law for Subject UBWs being made and the Direct Access being used). The existence of the Other Route claimed by Mao in Mao’s 2^nd Affirmation, even if it is true, is therefore neither here nor there.

(7)  Absent contrary expert evidence adduced by Mao in Mao’s 2^nd Affirmation, I do not find bare submission of FI at para 48 and 49 of its skeleton capable of altering the Trial Findings of fire safety hazard posed by Subject UBWs based on my detailed assessment of fire safety guidelines and oral expert evidence adduced at the Trial.

(8)  Regarding Mao’s complaint in Mao’s 2^nd Affirmation about air-conditioning units installed at Flats 2AB and alleged UBW at 11/F lift lobby of the Building, I can do no better than to repeat my analysis in the Trial Judgment of the “clean hands” defence raised by IO[132]. Nothing said by Mao in Mao’s 2^nd Affirmation could suffice to cause to me to alter my analysis therein.

75.  For all the reasons given in this section, IO had therefore, I think, no arguable ground to defend these proceedings. Defending these proceedings to maintain the status quo in fact does not benefit IO. The status quo in fact causes IO to suffer numerous continuing detriments. Hence, it is, I think, not in IO’s own interest to defend these proceedings (which is for benefit of FI).

76.  Defending these proceedings is, I think, all the more so not in IO’s interest when IO:-

(1)  did not receive any funding (or obtain any costs indemnity) from FI and had to use its limited funds collected from all owners of the Building to pay for its legal costs (which costs escalated over time as it took as many as 5 years for the Trial to be set down, after which IO elected to act in person at the Trial for costs reason); and

(2)  had to defend, after December 2019, against CC alone as the sole respondent at the Trial, as it elected not to join FI as third party to these proceedings.

77.  IO should, at the latest by November 2021, if not earlier, be aware that it could apply to Land Tribunal to join FI as third party to these proceedings: see decision of Court of Appeal handed down in November 2021 on joinder of STL in litigation over Flat 9A between CC and IO in CACV 96/2021[133]. Indeed, solicitors for CC had twice written to IO’s solicitors in November 2022 and March 2023 inviting IO to apply in vain[134].

78.  Joinder of FI as third party to these proceedings plainly offers IO divers obvious tactical advantages, including:-

(1)  securing or enlisting FI’s legal and evidential support to buttress and/or bolster at least the same 3 positive defence raised by FI in its NOO and also relied by it;

(2)  allowing IO to rely on such additional defence, if any, to CC’s claim raised by FI;

(3)  protecting IO’s position, including costs position, especially in the unfortunate event it fails against CC after the Trial; and

(4)  avoiding FI from contending, as it sought to after the Trial Judgment and now asserts in its skeleton, that it is not bound by the Trial Findings as a stranger to the Trial, or that the Settlement Agreement affords it a defence by way of issue estoppel and/or abuse of process to separate proceedings brought by IO against it[135].

79.  But, IO, for reasons to be explained in next section, never availed itself of such application and had continued defending these proceedings alone for FI’s benefit using owners’ fund contributed by all owners of the Building.

K.  FI and SG together in effective control of MC

80.  FI, it stressed, did not fund nor control IO’s defence. CC, said FI, produced no evidence to make good its claim of FI in control of MC (or IO).

81.  MC, said FI by reference to evidence and exhibits, including minutes of MC meetings, in Mao’s 2^nd Affirmation, always made IO’s own decisions, including those on the MBIS Notice, independently by majority rule. FI (or Mao) alone was in the minority of MC and could not control MC. Mao never controlled MC’s decisions nor IO’s handling of the MBIS Notice[136].

82.  SG had, it also submitted, never exercised any control of IO (or MC) in defending these proceedings. On the evidence and exhibits in Mok’s Affirmation, including minutes of MC meetings, SG stressed that 1) MC members themselves made all concerned decisions, including those on defending these proceedings, unanimously by consensus, and 2) Mok was merely one member of MC and acting on the collective decisions of MC. Mok, said SG, never conspired with Mao to control MC and there is no evidence to that effect.

83.  SG should not, it added, be held responsible for having caused these proceedings. SG, it says, had nothing to do with the Subject UBWs. The dispute above UBW at Flat 4B (4B UBW) it owned, SG stressed, had already been settled prior to the commencement of these proceedings in December 2018. SG could not have been affected by the outcome of these proceedings. And SG did not stand to benefit from IO defending these proceedings[137].

84.  For the reasons that follow, I cannot agree with the above submissions of FI and SG. They focus mainly on what appear on the face of minutes of MC meetings. And these submissions do not give the full picture. One must have regard, I think, to the totality of the evidence adduced at the Trial, the Trial Findings and the evidence adduced on the Summons.

85.  First, on the Trial Findings and the evidence adduced for the Summons highlighted below, as the two among all MC members that “mostly” handled the MBIS Notice, Mok as MC Chairman and Mao as MC member (the two of them being on “friendly terms [份熟友好]” according to Mok’s evidence at the Trial[138]) had, I think, taken their turn at critical moments to have decided against, and had taken every means open to them to delay as long as they could, removal of Subject UBWs and other private UBWs at the Building (including 4B UBW) and IO’s compliance with the MBIS Notice (in the above process, as shown below, Mok had, I think, reached his limit as far as he could, or would like to, go delaying removal of 4B UBW).

(1)  One starts with the year 2013. Despite Mok knew full well that the 2012 Order issued by BA against FI was directed against the Opening, he signed on statement of truth in the NOA of the 2013 LT Proceedings as MC Chairman to verify its contents[139] to arrange IO taking proceedings against FI on the different subject matter of door A. This Tribunal concluded in the Trial Judgment that MC was “redirecting the attention or complaint away from the Opening [法團明顯在將視線或投訴轉移離開該洞口到【甲門】，嘗試魚目混珠]”[140]. As the 2013 LT Proceedings and the Settlement Agreement related in fact to a different subject matter, they were, this Tribunal found, made to “obscure the truth [實屬混淆視聼]”[141].

(2)  Next comes 2016. AHL submitted its inspection report to IO in June 2016. In compliance with the MBIS Notice issued in July 2015, it revealed not only Subject UBWs, but also UBWs at other “common parts” of the Building at/next to Flat 4B, Flat 9A and Flats 12AB (owned by SG, STL and M&P respectively, collectively other Private UBWs). AHL in its report recommended to IO removal and reinstatement of all these UBWs[142]. As things turned out, these recommendations were not acted upon by IO.

(3)  On Mok’s admission at para 13 of Mok’s Affirmation, BA had in fact, as early as in July 2008, pursuant to s.24(c)(1) of BO, issued to SG a warning notice (the 2008 Warning Letter) regarding demolition of 4B UBW[143] (the 2008 warning Letter was later registered at Lands Registry). By 2016 when AHL submitted its report, SG had thus delayed taking action on 4B UBW for over 8 years.

(4)  Regarding the fate of AHL, shortly after it submitted its report to IO, its appointment as RI was terminated by IO by way of resolution passed on agenda one[144] of an extraordinary general meeting held in November 2016 (2016 EGM) chaired by Mok as MC Chairman[145]. It should be noted that, while agenda two of 2016 EGM regarding 4B UBW was requisitioned at the request of 5% owners of the Building, other agendas, including agenda one for replacing RI, were “made at the request of other owners” whose identities were not spelt out in its minutes signed by Mok as MC Chairman[146].

(5)  At the same time of 2016 EGM, it was resolved on agenda two against SG’s interest that IO disclaimed responsibility for all legal liability or economic losses caused by 4B UBW[147].

(6)  Next comes early 2017 when CC begun LDBM 41/2017 at Lands Tribunal against IO (41 Action)[148] for its failure to enforce against SG regarding 4B UBW[149]. At the Trial, Mok spent much in his evidence to refer to other 7 litigations between IO and CC and CDL, but “deliberately omitted” to refer to 41 Action[150].

(7)  For his conflict of interest, as recorded on the minute of MC meeting held on 20 March 2017, Mok (as AR of SG) recused himself on the agenda of 41 Action (so did Ng). Also recorded on the said minute are that MC, having considered legal advice from its legal adviser that IO has “no defence” to 41 Action if CC’s allegations are true, resolved to enter agreement with SG to require SG’s removal of 4B UBW in order to save unnecessary legal costs[151].

(8)  Shortly afterwards, in April and May 2017, Ng, on behalf of CC, wrote 3 times to Mok as MC Chairman[152]. Referring to findings in AHL’s report, CC demanded IO to take action against Subject UBWs. Ng urged IO not to abdicate its legal responsibility towards all owners even though a MC member erected Subject UBWs and that Mok himself was also related to other Private UBWs[153].

(9)  Contrary to Mok’s claim at para 26(3) of Mok’s Affirmation that it was then too busy for MC to have taken care of the above 3 letters from CC, Mok had, at the Trial, I find, “falsely” asserted that he “did not recall” having received the said 3 letters from CC “in order to avoid cross-examination [莫的【選擇性記憶】，不外是逃避問題的伎倆]”[154]. And, more importantly, Mok as MC Chairman never replied to CC on the said 3 letters urging IO to take action on Subject UBWs.

(10)  Looking at para 13 of Mok’s Affirmation, SG continued delayed taking action on 4B UBW even up to May 2017, causing BA to issue another warning letter to SG on 31 May 2017 requiring SG’s immediate action[155]. It was not until October 2017 and November 2017 that SG finally arranged for its contactor to report to BA about 4B UBW removal works commencement[156] and works completion[157] under the “simplified requirements” that CC finally saw fit to discontinue 41 Action against IO in December 2017[158]. And BA did not write to SG giving its discharge or satisfaction of the 2008 Warning Letter registered at Lands Registry until May 2019[159].

(11)  In the meantime, at an extraordinary general meeting of IO (2018 EGM) held on 26 April 2018, Mao as MC member was recorded in its minute to have explained to other owners in the meeting that AHL was, in truth, “dismissed” for reporting Private UBWs in its inspection report and for its “refusal to rectify”[160], and that MC had resolved to require K&H to prepare two inspection reports, one addressing Private UBWs and not to be submitted to BA (and Mok knew full well of that arrangement)[161], in order to “avoid repetition of CC suing IO for its failure to enforce against owner like that occurred to Flat 9A owner in LDBM 118/2017”[162] (Mao never saw fit to deny at para 23.5 of Mao’s 2^nd Affirmation that he had so explained above to other owners at 2018 EGM the true reasons above for dismissing AHL at 2016 EGM).

(12)  Nonetheless, unlike what Mao desired, K&H issued on 13 July 2018 its 2^nd report revealing not only Subject UBWs but also Private UBWs[163] and submitted it to BA on 21 August 2018.

(13)  At a MC meeting held on 19 July 2018 chaired by Mok as MC Chairman and attended by, inter alia, Mao and Hung as MC members, MC opined after discussion that it was “unacceptable” for K&H not to have prepared two inspection reports[164].

(14)  On MC’s instructions, Top Property further wrote to K&H two days after its submission of 2^nd inspection report to BA requiring K&H to withdraw it, and threatening that “IO would take action to recover all its losses”. K&H had no choice but to withdraw its 2^nd report on 30 August 2018 and later resigned on 25 February 2019[165].

(15)  Three days before K&H resigned i.e. on 22 February 2019, Mao as MC member had “urgently” written on behalf of IO (claiming that MC Chairman Mok was away) to Top Property expressing MC’s dissatisfaction with K&H’s performance and its “refusal to rectify”, referring to repeated telephone calls from him and from Mok as MC Chairman on the matter, requiring Top Property to give warning to K&H and to seek the latter’s final indication whether to continue to serve as RI within the next 7 days, failing that IO will “dismiss” K&H and appoint another in its place[166].

(16)  About 2 months odd after K&H’s withdrawal of its 2^nd report, CC’s solicitors sent out its two letters before action to Top Property[167] and to Mok as MC Chairman on the same day of 19 November 2018[168], outlining breaches alleged by CC in these proceedings and requiring enforcement action against defaulting owner of Subject UBWs within the next 14 days. Mok as MC Chairman never replied to CC. Neither did IO nor Top Property take any follow up action. CC thus took out these proceedings against them and FI on 11 December 2018.

(17)  Top Property had in fact written to CC and its solicitors earlier on 22 May 2017 and on 30 November 2018 respectively saying that IO will take no action on Subject UBWs as it had been resolved by 1) the 2013 LT Proceedings, 2) the Settlement Agreement and 3) the alleged discharge of the 2012 Order by BA.

(18)  After the commencement of these proceedings, Top Property saw fit to change its stance in its NOO filed on 30 May 2019, telling the truth that MC Chairman Mok and FI’s AR on MC had known from it (i.e. Top Property) that Subject UBWs was found to be “problematic” in K&H’s report but that MC gave no instructions to it to require FI to make reinstatement[169]. Top Property saw fit later to have further written to FI (copied IO) on 24 June 2019 requiring FI to remove Subject UBWs in line with BMO guidelines[170].

(19)  On Mok’s admission that he was well aware that the subject matter of the 2017 LT Proceedings was only door A, this Tribunal found that MC had instructed Top Property to write to CC and its solicitors in May 2017 and November 2018 to give the purported explanations above, and passed the two MC Resolutions, in an attempt to “obscure the truth and to delay carrying out its duties” [法團依賴該案發出該聲明或通過決議，指示置佳以該案回應中紀及其律師的來信，也是混淆視聽的伎倆，目的無疑為不想履行（或拖延履行）其法定責任][171].

(20)  It didn’t take long for MC responding to Top Property’s new and truthful stance by writing to it on 4 June 2019, 11 June 2019 and 25 June 2019 (this last letter was signed by Mok as MC Chairman[172]) demanding explanation for its alleged irresponsible allegations against MC on K&H report, accusing Top Property to have “gone back on its words [出爾反爾]” and “reserving IO’s right to take legal action” on that[173].

(21)  On 4 July 2019, MC escalated its retaliation against Top Property. In MC meeting held on that day, MC “recommended” it to resign for its alleged unsatisfactory performance and gave it one week to consider. On 24 July 2019, MC could not wait any longer. It sent Top Property a letter (signed by MC Chairman Mok) giving it 1-month notice to terminate its appointment as the manager of the Building[174].

(22)  In retrospect, this Tribunal found that MC had tried its best 1) to stop RIs from reporting Subject UBWs, and other Private UBWs, to BA in line with the requirements of the MBIS Notice, 2) “suppressed and excluded” un-cooperative RIs (i.e. AHL and K&H) [【打壓】及【排除】不服從的匯報者, 打壓排除不合作的顧問] in an attempt to deceive BA on inspection report [嘗試就驗樓報告欺瞞當局] and 3) “stopped” Top Property from requiring FI to remove Subject UBWs[175] in total disregard of it duties under s.18(1)(b) & (c) of BMO and under the DMC[176]. This Tribunal specifically rejected Mok’s claim in the box that he “did not know or understand” the DMC and found that MC (including Mok) must be well aware of its duties under the law and the consequence of failing to comply with the MBIS Notice[177].

(23)  This Tribunal also held that, for the self-interest of companies of individual MC members, MC had disregarded its duties under the DMC and BMO and sacrificed the safety of all owners of the Building to have ignored the 2012 Order and allowed FI to keep Subject UBWs [法團管委會為個別委員及其公司的私利，漠視法團在該公契及條例下的法定責任，犧牲該大廈所有業戶的生命安全，無視該命令，縱容樂園違法違章構建該違章建築] [178].

(24)  This Tribunal further found that, when it was called upon to enforce its duties, IO first put forward the 2013 LT Proceedings that were unrelated, and the Certificate of Completion that was never submitted, and later passed the two MC Resolutions to condone FI, so as to further delay rectification of Subject UBWs [當被催促執法時，法團再堆砌出包括無關的該案、從未經過簡化規定的該完工通知…後期更嘗試以管委會決議及該聲明，繼續包庇樂園…企圖進一步拖延該違章建築的更正] [179].

(25)  This Tribunal found it regretful that MC, “contrary to the interest of all owners of the Building”, had made “no real progress at all for the last 7 years or so” in complying with the MBIS Notice covering all “common parts” of the Building [而驗樓通知發出至今超過7年，遭法團多番阻礙幾乎進展全無，法圖一直置所有業主就該大廈所有公用部分遵辦驗樓通知的公共利益於不顧，實屬可悲][180].

86.  Secondly, though on the minutes of MC meetings produced by Mao and Mok in their affirmations, attending MC members had made all decisions, and passed resolutions (including the two MC Resolutions), over Subject UBWs, the handling of MBIS Notice and the defence of these proceedings unanimously, it should, I think, worth pointing out at the same time, and repeating my conclusions in earlier sections, that:

(1)  save except for 2016 EGM terminating AHL’s appointment on its agenda one at the request of unknown owners on its minutes (but its agenda two against 4B UBW was requisitioned by 5% owners), MC (and attending MC members concerned) did not see fit to arrange for general meetings to be held for all owners to decide, and resolve on, the aforesaid important matters affecting all owners of the Building;

(2)  Mok as MC Chairman, Mao, a director and shareholder of FI and as MC member (either as AR of FI or M&P), and Mao’s personal secretary i.e. Hung (collectively MMH), were present at all these MC meetings whose minutes are produced;

(3)  MMH present collectively held the majority of votes (inclusive of casting vote held by Mok as MC Chairman in the event of equality of votes) at all the aforesaid MC meetings to control the voting results if voting was required and if they acted in concert;

(4)  no dissenting or contrary views expressed by other attending MC member(s) than MMH were recorded in these minutes (Mok had referred at para 22 of Mok’s Affirmation to all MC members often reaching “consensus” before making decision or passing resolution since about 2019 i.e. after these proceedings were commenced by CC in December 2018);

(5)  those so-called “independent”[181] MC member(s) other than MMH attending these MC meetings concerned had not come forward on oath to explain why they had acted in the ways recorded in these minutes;

(6)  unlike that of Mok who had recused himself on agenda of MC meetings held on 20 March 2017 concerning 41 Action in respect of 4B UBW, Mao, as shareholder and director of FI (and as AR of FI at the time of passing of the 2019 MC Resolution), did not see fit to recuse himself at agendas of the said 2 MC meetings that passed the two MC Resolutions giving benefit or privilege to FI over part of 9/F “common parts” of the Building for no reward or consideration (or, at the very least, did not see fit to have declared his interest thereof, if not his conflict of interest thereof);

(7)  to the knowledge of Mok and Mao, the explanations given in the 2019 Statement for MC passing the 2019 MC Resolution are not the truth;

(8)  one reason for passing the 2023 MC Resolution recorded in the minutes of the said MC meeting, namely, BA had by letter “approved” Subject UBWs as “lawful” [屋宇署來信批准該防火門為合法裝置] was plainly, when one reads BA 2014 Letter, contrary to the terms on its face and, in any event, contrary to the Trial Findings[182];

(9)  unlike what happened in MC meetings held on 20 March 2017 before MC resolved therein how to follow up on 41 Action, there was no record whatsoever in the minutes of other MC meetings produced that MC had taken legal advice from IO’s legal adviser during, or before, those MC meetings before MC decided defending these proceedings (indeed, there was no minute produced by Mao and Mok to show that attending MC members had in any MC meeting to have discussed the pros and cons, or the merits and costs, of defending these proceedings);

(10)  there was no minute of any MC meeting produced by Mao or Mok to have recorded that MC had discussed or taken legal advice on the 3 demand letters written by Ng on behalf of CC to Mok as MC Chairman in April and May 2017 and the letter before action written by CC’s solicitors to Mok as MC Chairman on 19 November 2018;

(11)  there was no minute of any MC meeting produced by Mao or Mok to have recorded that MC had discussed or taken legal advice on joinder of FI as third party as suggested by letters of CC’s solicitors to IO in November 2022 and March 2023;

(12)  these is not a single letter written by IO to FI prior to the Trial Judgment demanding FI to remove Subject UBWs or persuading FI to do so in the interest of all owners and/or for the sake of avoiding costly litigation between IO and CC;

(13)  IO had, as I have demonstrated above, no arguable ground to defend these proceedings;

(14)  it was not, as was shown above, in IO’s interest to defend, or continue to defend, these proceedings, especially defending alone as sole respondent without joinder of FI as third party and using its limited fund collected from all owners of the Building, all the more so (as shall be shown in section O below) after IO in general meeting had resolved against setting up “legal fund” in June 2019 and that MC had resolved in its meeting held in December 2019 to resort to “management fee” of all owners to pay for legal costs;

(15)  defending these proceedings are in fact in FI’s interest and for its benefit, to the knowledge of those MC members, including Mok, Mao and Hung, passing the two MC Resolutions;

(16)  the way MC over the years since 2015 handled the MBIS Notice covering all “common parts” of the Building was, as was found in the Trial Judgment and highlighted in earlier parts of this decision, in clear breach of statutory requirements of the MBIS Notice, IO’s duties under the DMC and BMO, and to the detriment of all owners of the Building; and

(17)  the way MC had over the years since 2012 delayed enforcement action against FI over Subject UBWs was, as was found in the Trial Judgment, contrary to IO’s duties under the DMC and BMO to the knowledge of MC members, including Mok who dared to assert falsely at the Trial that he “did not know or understand” the DMC.

87.  On the totality of the evidence, including the above salient ones, the only reasonable conclusion that one could come to, or the only reasonable inference that could be drawn, is, I think, that MMH (i.e. Mok for SG, Mao and Hung for FI) had, in the self-interest of SG and FI, effectively controlled MC at all material times over its handling of the MBIS Notice, removal of Subject UBWs and IO’s defending of these proceedings for the respective benefits of SG (see below) and FI (as explained above).

88.  It does not matter, I think, whether or not other MC members attending these MC meetings with minority vote had, as alleged by Mok, acted “independently” in, what they believed, IO’s best interest, or had acted out of their self-interest or others’ interest. Were they to have any ulterior motive, they do not assist FI and SG. It simply means that these other MC members are at risk of having personal costs order made against them as well: Abdul Aziz Essa v Capital Globe Ltd & Anor [2012] 6 HKC 472, [33], per Barma J (as he then was).

L.  SG also caused these proceedings and benefitted personally

89.  It is true that SG does not enjoy, I agree with SG, any tangible benefit arising directly from retention of Subject UBWs, or arising directly from the resolution of these proceedings.

90.  But, notwithstanding Mok’s bare denial at para 16 of Mok’s Affirmation, on the totality of the evidence of the Trial, the Trial Findings and evidence adduced for the Summons, I maintain my earlier views expressed in the Trial Judgment that Mok could benefit from exonerating FI (or Mao) for its past misconducts over, inter alia, Subject UBWs and/or handling of the MBIS Notice and/or exonerating Mok’s own past misconducts as MC Chairman over the same [可能有動機替樂園（或茅）開脫，或為他作為主席的管委會的過去可能失責開脫] [183]. That enabled Mok to maintain his friendship with Mao and/or his reputation as MC Chairman within the Building. Such benefit above to Mok as AR of SG to MC could, at law, be attributable to SG for reasons I have already explained in section G above.

91.  On the case law, Mok’s intangible and indirect benefit above, I agree with CC, could be considered as “benefit” for the purpose of making a non-party costs order against SG: see [44] above; The Creative Foundation v Dreamland Leisure Ltd & Ors [2016] 3 Costs LR 509, [8], [57-58] per Arnold J; and Latimer Management Consultants Ltd & Ors v Ellingham Investments Ltd & Anor [2007] 1 WLR 2569, [52] per Bernard Livesey QC.

92.  But not for MMH’s effective control over MC (and IO) at all material times to resist and delay removal of Subject UBWs erected by FI, to resist and delay compliance of the MBIS Notice, and to defend, and to continue to defend, these proceedings for FI’s benefit, and also, for Mok’s control, and conduct, of, and in, these proceedings as MC Chairman and as IO’s factual witness (see section N below), these proceedings would not, I think, have been commenced in the first place, and would not have continued, at great legal costs, for 5 years against IO until the Trial. As such, I also agree with CC that SG should, like FI, be held responsible for causing these proceedings.

M.  FI and SG being the “real parties” to these proceedings

93.  Both FI and SG denied in their skeletons being “real party” to these proceedings. So did Mok and Mao in Mok’s Affirmation and Mao’s 2^nd Affirmation respectively.

94.  However, on my findings and conclusions in sections G to L above, I am driven to conclude that both FI and SG should be considered “real party” to these proceedings (each of them is a real party in important and critical aspect of these proceedings). The two of them together controlled IO, and caused IO, to defend these costly proceedings in order to benefit from these proceedings personally. And, as shall be shown below, both FI and SG were guilty of impropriety in relation to these proceedings as well.

95.  CC has therefore made out Ground 1 and Ground 2 against FI and SG. As to whether they (be it alone or together) warrant granting the costs order sought in the Summons, I would leave that important issue to “discretion” section below.

N.  SG and FI both guilty of impropriety in these proceedings at the expense of CC

96.  There has, SG submitted, been no impropriety or bad faith on its part. Such serious allegations, said SG, have not been proven by cogent evidence. SG was at best “nominally” connected to these proceedings and Mok’s actions as MC Chairman in acting on the collective decisions of MC should not, SG says, be attributed to it[184].

97.  FI argued likewise. FI, it stressed, had taken no further step after its successful striking-out application and could not have thereafter acted improperly. It never participated in the Trial and Mao never gave evidence, let alone gave false evidence, at the Trial. Mao’s witness statement filed for FI was never adopted by him in the box, or adduced as IO’s evidence, at the Trial.

98.  In any event, CC, said FI, had never incurred costs to deal with Mao’s witness statement at the Trial because it knew long ago that FI was no longer a party to these proceedings. If CC nonetheless chose to do so, FI could not be blamed for that[185].

99.  All the above submissions of SG and FI are, I think, without merit for the following reasons.

100.  I start dealing with submissions given by FI, which focused on the Trial, which focus is, I think, too narrow when the real issue is whether FI was guilty of any impropriety in this litigation, for which FI is to be regarded as responsible for: see [45] above.

101.  It cannot, I think, be denied that Mao made his witness statement for FI for this litigation while FI was a party to these proceedings. Mao had further verified its contents by signing on a statement of truth, which statement is solemn and carries serious consequence as a matter of law.

102.  Under O.41A r.9(1), Rules of High Court[186], proceedings for contempt of court may be brought against a person if he makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth. Among the three elements to succeed in an application for contempt, the second one is that the statement has or would have interfered with the course of justice in some material respects. Actual interference with the course of justice is not required, provided that the making of the false statement was likely to cause such interference[187].

103.  Significantly, Mao had, as CC pointed out, made the following 2 material statements in his witness statement verified by his statement of truth i.e.

(1)  “A door B” was installed at the Opening in November 2012 at para 11.2[188] thereof (with sketch illustration exhibited as “MYF-2A” in Mao’s witness statement) and that “it was replaced” by the Glass Door in August/September 2013 at para 17[189] thereof (compare the Trial Findings at [19] and [74(1)] above); and

(2)  PIL had, after installing the Glass Door at the Opening at door B location “to replace an existing old door” in September 2013, “submitted to BA the Certificate of Completion” (exhibited as “MYF-5” to Mao’s witness statement) pursuant to “simplified requirements” of BO at para 17 & 18[190] thereof (compare the Trial Findings at [22] and [74(3)] above).

104.  Mao was at all material times a shareholder and director of FI, which owned Flat 9B, received the 2012 Order from BA in 2012 and arranged the installation of the Glass Door by its contractor at the Opening in August/September 2013.

105.  Considering the evidence adduced at the Trial and the Trial Findings, at the time of his signing his statement of truth in his witness statement for FI in about June 2019 (i.e. before FI succeeded in its striking out application 6 months later), Mao must, I think, have known of the falsity of, and had no honest belief of the truth of, the above 2 material statements and knew of their likelihood to interfere with the course of justice in these proceedings (i.e. when he gives evidence of them in the box in future or when Mok adopts them as his oral evidence in the box in future as per his witness statement for IO with similar contents[191] or in his supplemental witness statement, if any[192]).

106.  CC had, in March 2023, made clear to FI (and Mao) of its serious allegations that Mao’s evidence in above respects in his witness statement are false when it invited FI to apply to join as a party. After the Trial Judgment was handed down in August 2024, the Trial Findings contrary to Mao’s statement in these respects cannot, one think, escape Mao’s attention. In any event, Ng had specifically repeated the said serious allegation against Mao by repeating para 17 and 18 of Mao’s witness statement in section E of Ng’s 2^nd Affirmation

107.  Nevertheless, in Mao’s 2^nd Affirmation, Mao had, one notes, avoided specifically dealing with, or denying, these serious allegations raised by CC, including at para 34 thereof, where he no longer claimed that 1) the Glass Door was installed “to replace an existing old door at door B [取代當時在乙門洞口使用的舊門]”, or that 2) “PIL had submitted to BA the Certificate of Completion”, as he saw fit to verify these omitted contents by his signed statement of truth in his witness statement for FI over 5 years ago.

108.  FI had avoided participating in the Trial. Mao had also avoided going into the witness stand at the Trial. But these false statements in Mao’s witness statement for FI, including the Certificate of Completion exhibited thereto as “MYF-5”, which statement was filed to Lands Tribunal in this litigation by FI’s then solicitors formerly also acting for IO in these proceedings, had found their way into the Trial as oral evidence of Mok, and as IO’s documentary evidence, for CC to tackle at the Trial.

109.  And the above false statements (and false document) sourced from Mao are also, one notes, part of IO’s case that Mok had opened, and closed, for IO at the Trial (to the knowledge of Mao as MC member as he had assisted Mok in this respect) that CC must rebut at the Trial in order to prevail. After all, the alleged discharge of the 2012 Order was said to be one of the reasons for MC passing the two MC Resolutions (and one of the 3 positive defence for IO defending these proceedings alone for FI’s benefit until the conclusion of the Trial).

110.  In order to deal with such false evidence and document adopted by Mok at the Trial (and sourced from FI or Mao) and not otherwise, CC had, I think, no choice but to have incurred substantial legal costs in amending NOA, in filing supplemental witness statements, in making enquiries with BA, in seeking and producing expert evidence, in cross-examining Mok and IO’s expert at the Trial[193], and in making factual and legal submissions on them.

111.  But not for Mao’s “serious impropriety” regarding these false evidence put forward by FI in these proceedings before FI ceased to be a party, all the above substantial costs incurred by CC as a result could well have been saved.

112.  Hence, I agree with CC, and conclude, that FI (or Mao) had committed serious impropriety in relation to these proceedings in bad faith, causing CC to incur legal costs unnecessarily in prosecuting these proceedings to its very end.

113.  Turning to CC’s “impropriety” case against SG, I first repeat my reasons and conclusions at section G above.

114.  Charged with the conduct of IO’s case at the Trial as MC Chairman in his capacity as SG’s AR, I regret to conclude that Mok had pursued IO’s defence at the Trial knowingly that it was false in material respects mentioned above, and that he called IO’s sole factual witness at the Trial knowing that his own evidence was also false in material respects mentioned above. Of course, Mok had also signed statement of truth to verify contents of his witness statement.

115.  I can do no better than to repeat my observations about Mok’s credibility at the Trial i.e. there are so many discrepancies between his oral evidence and IO’s case on so many material respects that it is unheard of before. He had substantially revised his oral evidence in the stand as compared against contents of his witness statement and contents of documentary evidence adduced at the Trial [莫遭吳大律師盤問下，作出了大量和法團案情不一（或符合中紀案情）的招認，數量之多，所涉的關鍵之處之多，實屬少見。仔細比較，莫的庭上證供，和他的證人陳述書内容，在關鍵之處多處前後不一（莫大幅度修改或撤回其證人陳述書經他簽署屬實申述確認的眾多關鍵内容），也與呈堂關鍵文件的内容不符][194].

116.  At the trial, IO had, I find, put forward Mok, a witness “full of lies” [滿口謊言], “seeking to deceive this Tribunal” [嘗試欺瞞審裁處] “in an attempt to delay further the rectification of Subject UBWs” [企圖進一步拖延該違章建築的更正][195].

117.  Mok’s impropriety in this litigation − including his giving of false evidence and knowingly running a false defence – and his bad faith in conducting and maintaining IO’s false defence by means of false evidence have undoubtedly, I agree with CC, compelled (or caused) CC to continue these proceedings through to the conclusion of the Trial, incurring unnecessarily substantial costs in the process.

118.  CC has therefore also made out Ground 3 against SG and FI. Again, I leave to “discretion” section below to consider whether this ground and/or other grounds established warrant me to exercise my discretion under s.12(2) of LTO.

O.  Manifestly unjust for CC to contribute its own costs of these proceedings

119.  In support of this ground, Ng at para 36 and 37 of Ng’s 2^nd Affirmation relied on the following facts (I accept them as they are not opposed by Mok or Mao in their affirmations filed for the Summons), namely that:

(1)  On IO’s balance sheet as at 30 June 2024, IO’s net asset is only $209,892 and most of IO’s current assets are “receivable”[196] (one should add that, on IO’s income and expenditure account for the month of June 2024, “management fee” in the sum of $170,000 odd makes up most of IO’s income and its net income for that month is only $51,000 odd after deducting total operating expenses of $122,000 odd[197]);

(2)  at annual general meeting of IO held on 27 June 2019 (shortly after FI and IO filed their respective NOOs by the same firm), the owners of the Building had veto a resolution setting up a “legal fund” proposed by MC for recent litigations[198];

(3)  5 months odd later, MC, in its meeting held on 5 December 2019 (shortly after CC discontinued its claim against Top Property and a week odd before its claim against FI was struck out) and attended by Mok, Mao, Hung and 2 others members, resolved unanimously that all owners should contribute to legal costs of litigations by way of “management fees” apportioned as per their shares set out in the DMC after judgment or at the relevant moment (the Contribution MC Resolution)[199];

(4)  CC, as owner of Flats 2AB, holds 40 out of total 396 shares of the Building in the DMC while CDL, controlled by Ng, holds another 28 shares as owner of Flats 11AB; and

(5)  but not for non-party costs order made against FS or SG, it is therefore likely that CC (and CDL) would be required to contribute by way of “management fees” as per its (or their) shares in the DMC towards paying its own costs of these proceedings awarded against IO after its successful prosecution of these proceedings.

120.  Therefore, the factual premises of CC for Ground 4 has, I think, been made out on the evidence before this Tribunal.

121.  In its submissions, CC, it stressed, began these proceedings in the interest of all owners of the Building, in order to compel IO to comply with its duties under the DMC and BMO. Due to, said CC, misconducts of SG and FI, these proceedings against IO had to be pursued until the conclusion of the Trial before CC prevailed. Were non-party costs not awarded against SG and FI, it would, CC argued on the above facts, result in a manifestly unjust outcome – where CC (and its related company i.e. CDL), despite being the successful party at the Trial and through no fault of its own, would be unfairly penalized and required to bear its own costs[200].

122.  In opposing this ground, SG argued that any alleged costs unfairness to CC as CC might suggest does not per se justify making a non-party costs order against it.

(1)  Were it otherwise, SG submitted, it would make an unlawful inroad to the principle of “limited liability”, making a director handling the unsuccessful defence on behalf of a company personally liable to pay the costs of opposing shareholder after its corporate dispute with the company.

(2)  Alternatively, it would, said SG, make every chairman of management committee acting on the collective decisions of the committee personally liable to pay the costs of unsuccessful defence of an owners’ corporation after its litigation with an owner[201].

123.  Relying on [58]-[62] of judgment of UK Supreme Court in XYZ v Travelers Insurance Co Ltd [2019] 1 WLR 6075 (XYZ case), FI also opposed Ground 4 by submitting that any imbalance in cost liabilities caused by a losing party’s impecuniosity only supports a non-party costs order if that imbalance arose from the non-party’s conduct. But CC produced, said FI, no evidence to show that FI is the reason that IO lacks sufficient fund, necessitating it seeking contributions from all owners to pay legal costs.

124.  FI next argued, by reference to [60]-[61] of XYZ case, that a party cannot rely on another’s impecuniosity to justify non-party costs liability if it knew about the asymmetry beforehand yet still chose to incur expenses litigating. CC, said FI, had known as early as on 5 December 2019 that IO had to resort to “management fees” payable by all owners to pay for its legal costs for litigation[202].

125.  With respect, XYZ case does not, I think, assist FI much on this ground. I give the following reasons.

(1)  The appeal, and the issues for the Supreme Court to decide, in XYZ case concerns in what circumstances a non-party costs order could be made against a liability insurer and whether it was rightly so made in the particular circumstances of the appeal[203]. That is, I think, far removed from the different issues, and the different circumstances, of our case over (as FI stressed) a building management dispute between an owner and its owners’ corporation.

(2)  The Supreme Court did not, one notes, set out in its judgment to reassess comprehensively principles generally applicable on non-party costs order application but to focus on particular principles applicable to liability insurer[204].

(3)  [58]-[62] of the judgment in XYZ case relied by FI concern “asymmetry – lack of reciprocity” [205] as between uninsured claimants and liability insurer in relation to costs risk, which risk arose in that case from, I think, completely different circumstances[206]than those relied by CC above said to make CC liable as an owner of the Building to contribute to IO’s funds (or management fees) to pay its costs of these proceedings.

(4)  The two points FI had raised by reference to XYZ case really concern, I think, causative link between the incurring of costs sought to be recovered from the non-party and such conduct of the non-party said to warrant non-party costs order, which goes in turn to whether it is in the interest of justice to grant the costs order sought[207].

126.  This Tribunal therefore finds it more appropriate to consider this causation point raised by FI in “discretion” section below, where I am obliged on the case law to consider whether it is in the interest of justice on Ground 4 and/or other grounds established to grant the costs orders sought against FI and SG.

127.  But, let me make a few observations here first.

(1)  CC had, I think, made no complaint at all in the entirety of its submissions that FI and/or SG had by any wrongful conduct caused IO to arrive at the financial situations as was shown by its balance sheet as at 30 June 2024.

(2)  Certainly, CC (or Ng) knew about the Contribution MC Resolution as early as from December 2019. So did, one thinks, FI (or Mao) and SG (or Mok).

(3)  Given the limited size of IO’s net assets[208] and that its main source of income being management fees, one imagines, even without the passing of the Contribution MC Resolution in December 2019, IO would also have to resort to contributions from all owners, including calling general meeting in future to pass necessary resolution, in order to raise necessary funds to pay any substantial costs of these proceedings, if any, awarded to CC after the Trial.

(4)  With the passing of the Contribution MC Resolution, CC, SG and FI all knew as from December 2019 that any costs ordered payable by IO to CC for these proceedings after IO fails in its defence would be met in part from “management fees” to be contributed by CC (and CDL) as per shares in the DMC (but that CC would get from nowhere any contribution to pay legal costs of IO should it fail in its claim and is ordered to pay IO’s costs in these proceedings);

(5)  Under ss.20(2) and 22(1)(a) of BMO, the amount to be contributed by an owner towards any contingency fund established by a corporation shall be fixed by the management committee in accordance with the deed of mutual covenant.

(6)  And liability of CC to contribute to IO’s funds to meet any costs order awarded against IO is, I think inherent in CC’s status as an owner of the Building (though its size varies depending on the amount of costs awarded against IO) in the financial situation of IO.

(7)  The said costs contribution liability of an owner above would, I think, likely to be found in the majority[209] (if not all) of building management proceedings between an owner and its corporation that comes before the Lands Tribunal for resolution from time to time.

128.  Moving to SG’s opposing submissions on this ground, for similar reason of different context of building management in our case, I do not find it particularly helpful or suitable to apply the principle of “limited liability” to our case as SG had submitted.

129.  Similarly, for reason of different context, I do not find the two cases of 1) Goldberg v Primelodge [2023] Costs LR 469 and 2) Transomas Ltd v Kheri Trading Ltd [2024] EWHC 1349 (Ch) cited by CC to support this ground entirely helpful or suitable, and I therefore do not address SG’s submissions in its skeleton on them.

130.  In substance, SG’s submission, I think, also goes to whether Ground 4 alone justifies this Tribunal exercising its discretion under s.12(2) of LTO. Save except to give my observations at [127] above, I also defer my consideration of the remaining “undisposed” parts of SG’s submissions on this ground to “discretion” section below.

P.  Lack of timeous warning to SG

131.  This is the last of SG’s submissions. CC’s failure to give a timeous warning of seeking non-party costs order against SG is, SG submitted, a material factor militating against the costs order sought in the Summons against it.

132.  It is common ground that CC had given no prior warning of this costs application to SG (or Mok) before it took out the Summons in August 2024.

133.  An important purpose of a timeous warning is to alert the non-party to the risks of being personally liable for the legal costs so that he may give due consideration to whether to play, or continue to play, a role in the proceedings and, if so, the extent of it, before taking any or any further step in the proceedings: [92] of Edwin Leung case, per Chu JA (as she then was).

134.  However, absence of a warning to the non-party is simply one factor which the court will take into account in an appropriate case when deciding, whether, viewed overall, it would be unjust to exercise the discretion in favour of making an order for costs against the third party: [12] of Ng Yuk Pui case, per L. Chan J[210]. The importance of a warning varies from case to case and it might depend on the extent to which it would have affected the course of the proceedings: [73] of Big Island case, per Au Yeung J[211].

135.  If the third party against whom an order for costs is sought is the real party to the litigation, the absence of a warning may be of little consequence: [32] of Deutsche Bank case, per Moore-Bick LJ. Given my earlier finding that SG is a “real party” to these proceedings, this principle applies, I think, against SG.

136.  Moreover, it is not open to a third party who had decided to pursue a claim with dishonest evidence in an attempt to deceive the court to complain that it has received no warning beforehand. The third party must bear the consequences of its futile deceitful exercise: [74] of Big Island case, per Au Yeung J[212]. Again, on my earlier findings of “impropriety” against SG, this principle, I think, also applies against SG in our case.

137.  In any event, Mok never, I note, said in Mok’s Affirmation that he (or SG) would have acted otherwise than he (or it) did had he (or SG) received any timeous warning from CC beforehand.

138.  As with Ground 4 and other grounds above, I will leave this one factor to be considered together with other factors in “discretion” section below, where I will consider the ultimate question whether it is just to make the order sought in the Summons.

Q.  Discretion exercised against SG and FI in these proceedings in the interests of justice

139.  Considering all grounds (for Ground 4, at least its factual premises) made out by CC, the causation and warning points raised by FI and SG respectively, in the round, on the authorities cited, and for reasons given, in the last section, I first decide to give no weight to the warning point made by SG.

140.  After careful consideration, Ground 4 per se, I agree with SG, is insufficient to warrant a non-party costs order against SG for my observations at [127] above. Put simply, this is a ground that could apply “across the board” in almost every building management dispute between an owner and its owners’ corporation.

141.  I also agree with causation point raised by FI against Ground 4. CC had not complained, nor proven by evidence, that any alleged misconducts of SG or FI had turned IO into its financial situation as at 30 June 2024. After all, CC had engaged in other costly proceedings with IO (e.g. LDBM 118/2017 over Flat 9A) at the same time of these proceedings. Moreover, after, and knowing, the passing of the Contribution MC Resolution in December 2019, CC, as FI submitted, still pressed on incurring great costs to prosecute these proceedings to its end. As such, Ground 4 is, as I hold above, insufficient on its own for the purpose of the Summons.

142.  Considering the way CC put forward them, Ground 1 and Ground 2 are, I note, intertwined, as Ground 1 also requires effective control of SG and FI over MC complained in Ground 2. I therefore find it appropriate to consider them together.

143.  On Ground 1 and Ground 2 combined against FI, I beg to differ from FI’s incorrect description at para 3 to 7 of its skeleton of the circumstances of the subject tripartite building management dispute among CC, IO and FI over Subject UBWs.

144.  The true circumstances on all the cogent evidence before this Tribunal adduced at the Trial and on the Summons, together with the Trial Findings, are that IO had sided with FI over Subject UBWs in FI’s favour and defended these proceedings caused by FI and SG to its very end for their benefit and to the detriment of all owners (as MC was under their joint control of FI and SG) in total disregard of IO’s duties under the DMC and BMO and in deliberate breach of the same. FI (not IO), is, as I find, a “real party” to these proceedings.

145.  Regarding CC’s case on Ground 1 and Ground 2 combined against SG, in contra-distinction from the general scenario postulated by SG at [122(2)] above, by way of added features to our case, Mok, as MC Chairman by way of SG’s AR to MC, misconducted himself over removal of Subject UBWs, controlled MC together with Mao (and Hung) to side with FI, and caused IO to defend, and to continue defending, these proceedings alone for FI’s (and his) benefit until its conclusion in total disregard of IO’s duties under BO, the DMC and BMO. SG (not IO), as I find, is a “real party” to these proceeding as well.

146.  This Tribunal at all times remembers protection given to a member of a management committee under former s.29A(1) of BMO that prevailed prior to 13 July 2025[213] (i.e. before commencement of Building Management (Amendment) Ordinance 2024). But, on my findings above, Mok as MC Chairman had, I regret, not to have acted in good faith or in a reasonable manner over Subject UBWs and these proceedings.

147.  All things considered, I find it in the interests of justice to exercise my discretion under s.12(2) of LTO against SG and FI on Ground 1 and Ground 2 together.

148.  For the record, let me make it clear that there is sufficient causal link between misconducts of FI and of SG on Ground 1 and Ground 2 and CC’s costs of these proceedings now sought to be recovered from them under the Summons.

149.  Moving to Ground 3, on the authorities and in the particular circumstances of this case, this ground alone, I conclude, is also sufficient to warrant me exercising my discretion against SG and FI.

150.  It is, I think, just and reasonable to hold FI and SG responsible for their serious improprieties in these proceedings, which have caused CC to have unnecessarily incurred substantial costs in order to overcome the false evidence and document adduced by, and the false defence of, IO in these proceedings conducted by Mok (as AR of SG) but with their origin from Mao (of FI).

151.  Were I wrong on either my conclusion in [147] or [149] above, I am also convinced that it is in the interests of justice to make non-party costs order against SG and FI as sought in the Summons on Ground 1, Ground 2 and Ground 3 together.

152.  Were I still wrong on my conclusion in the preceding paragraph, I also find it just on Grounds 1 to Ground 4 combined to exercise my discretion to make SG and FI personally liable to pay CC the costs of these proceedings payable by IO to it after the Trial.

153.  While Ground 4 alone is insufficient for the above purpose, it adds, I think, weight to CC’s overall case on the Summons.

154.  The outcome envisaged on Ground 4, I agree with CC, is unjust, if not manifestly unjust, in the particular circumstances of this building management dispute for the following reasons.

(1)  Grounds 1 to Ground 3, for which SG and FI are responsible, did, I find, cause CC to begin, and to continue for 5 years, these costly proceedings against IO to the conclusion of the Trial.

(2)  CC, I accept, began and continued these proceedings in the collective interest of all owners of the Building, at its own costs in compelling IO to enforce its duties under the DMC and BMO, and in removing fire safety risks posed by Subject UBWs (if not in compelling IO to comply with the MBIS Notice).

(3)  CC did emerge after the Trial as the successful party of these proceedings against IO, which became the losing party.

(4)  It has not been suggested by SG or FI as against Ground 4 raised by CC that CC had fault of any kind.

(5)  There is, however, no reciprocity as between CC and IO in terms of getting contribution for paying legal costs of its opponent in the event of its failure after the Trial. CC can get no contribution from IO if CC loses after the Trial, but IO could get partial contribution from CC if IO loses after the Trial.

(6)  Moreover, knowing of the above lack of reciprocity as between CC and IO latest from December 2019 when the Contribution MC Resolution was passed, SG and FI jointly controlled MC in arranging and ensuring IO to defend these proceedings to its very end with false defence, false and dishonest evidence and false document at the expense of CC in terms of legal costs.

(7)  In the above circumstances, the costs outcome to CC after its successful prosecution of these proceedings against IO is indeed, I agree, unjust if the “real parties” behind these proceedings are not required or ordered to compensate CC for the substantial costs that it had incurred for these proceedings for the common good.

R.  Disposition of the Summons

155.  On my conclusion in the last section, I therefore make the orders below on para 2 of the Summons: -

(1)  the 4^th Respondent be ordered to pay personally the Applicant the costs of the Applicant in these proceedings i.e. such costs ordered by way of order nisi to be payable by the 1^st Respondent to the Applicant pursuant to para 4 and 5 of the Judgment entered on 7 August 2024 as it was varied and made absolute by para 1 of an Order made on 7 October 2024;

(2)  the 5^th Respondent be ordered to pay personally the Applicant the costs of the Applicant in these proceedings i.e. such costs ordered by way of order nisi to be payable by the 1^st Respondent to the Applicant pursuant to para 4 and 5 of the Judgment entered on 7 August 2024 as it was varied and made absolute by para 1 of an Order made on 7 October 2024; and

(3)  solicitors for the Applicant do draft, file and serve all orders in this decision on the 1^st Respondent, the 4^th Respondent and the 5^th Respondent.

S.  Costs of the Summons

156.  Costs normally follow the event.

157.  As between the Applicant and the 4^th Respondent, I make my first costs order nisi that all the costs of and incidental to the Summons, including all reserved costs and the costs of the hearing on 28 April 2025, together with certificate for two counsels for the Applicant, be paid by the 4^th Respondent to the Applicant, to be taxed on High Court scale if not agreed.

158.  And, as between the Applicant and the 5^th Respondent, I make my second costs order nisi that all the costs of and incidental to the Summons, including all reserved costs and the costs of the hearing on 28 April 2025, together with certificate for two counsels for the Applicant, be paid by the 5^th Respondent to the Applicant, to be taxed on High Court scale if not agreed.

159.  Each of the above two costs order nisi shall become absolute if no application to vary the same is taken out by the parties concerned after expiry of 14 days from the handing down of this decision.