CHENG CHEUNG WANG v. LO NOI YUNG AND OTHERS

Civil No. 194 of 1985

IN THE COURT OF APPEAL

(ON APPEAL FROM HIGH COURT ACTION NO. M.P. 2776 of 1984)

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JUDGMENT

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Decision : Reasons later

Power, J.:

1. Before this Court, the appellant, Madam Wong, who is the 6th defendant in the action, has today argued four appeals. The first was against an order of Deputy Judge Barnett, made on the 23rd November 1984, whereby the committee of management for the subject property was dissolved Ana Collier Petty was appointed as administrator. This appeal is out of time and we refuse leave to appeal out of time.

2. The second was an appeal against an order of Mr. Justice Mayo, made on the 6th December 1985, refusing to accede to the appellant's application to reconvene the Management Committee that had been dissolved by the order of the 23rd November 1984. This appeal is dismissed.

3. The next appeal was against the order of Mr. Justice Mayo dated the 19th December 1985. The appellant has no standing in relation to that order, which concerned other defendants who are not before this Court. That appeal also must, therefore, be dismissed.

4. The fourth appeal was against a further order of Mr. Justice Mayo, made on the 13th January 1986, approving an increase in the monthly management charges and the imposition of a management deposit. That appeal is also dismissed.

5. The appellant also asked this Court to deal with the Originating Summons which was taken out in 1984. This we refused to do. However, to ensure that that summons comes on for hearing at an early date, we order that the Clerk of Court shall fix a date for the hearing of that summons, not later than two months from today.

Power, J.:

Preliminary.

6. The appellant, Madam Wong Ching who appeared in person, sought to pursue four appeals before this Court. In the first, she sought leave to appeal out of time against an Order of Barnett, D.J. made on the 23rd November 1984, dissolving the Management Committee of the Han Palace Building situated at 441-447 King's Road, Hong Kong, and appointing Collier Petty, Chartered Surveyors as Administrators of that building.

7. In the second, she appealed against an Order of Mayo J. Made on the 6th December 1985 in which he refused to accede to her application to reconvene the Management Committee that had been dissolved by the Order of the 23rd November 1984.

8. In the third, she appealed against an Order of Mayo J. dated the 19th December 1985, whereby he renewed the Originating Summons in this action for a further 12 months. The application to renew was necessary because three of the defendants had not been served.

9. In the fourth, she appealed against an Order of Mayo J. made on the 15th January 1986 in which he directed that the monthly management charges being paid to Collier Petty be increased and that a management deposit be paid to them.

10. The appellant also asked this Court to deal forthwith with the Originating Summons by which the action was commenced.

History of action

11. The history of the action is a tortuous one. Proceedings commenced on the 10th October 1984 when Barnes, J. granted an ex parte injunction in support of an application under s.31 of the Multi-storey Building (Owners Incorporation) Ordinance Cap. 344 ("The Ordinance") which

The order was made returnable before Deputy Judge Sakhrani on 18/10/84.

12. On the following day, the 11th October 1984, an Originating Summons was issued in the High Court in which the plaintiff was Cheng Cheung Wang. Mr. Cheng stated that he applied on behalf of himself and the co-owners therein listed of 47 of the flats in the Han Palace Building. Six defendants were named, who were said to be members of the Management Committee of the building. Madam Wong, the 6th named defendant, is the appellant.

13. This Summons is entitled "In the matter of an application under section 31 of the Multi-storey Buildings, (Owners Incorporation) Ordinance ("Cap. 344") and in the matter of the Han Palace Building, 441-447 King's Road, Hong Kong". This summons asked for:

14. In a supporting affidavit, Mr. Cheng detailed numerous irregularities and breaches of duty by the Management Committee which he contended justified the making of the orders sought.

15. Madam Wong on. 18th October appeared before Deputy Judge Sakhrani and applied to have the injunction lifted. He ordered that the injunction continue until trial or until further order, with liberty to the defendants to apply on 2 days notice.

16. Madam Wong applied ex parte to have the injunction discharged. In the absence of the plaintiff no order was made.

17. Inter Partes Summons by Madam Wong, asking that the injunction be "released".

18. Madam Wong's application to discharge the injunction was adjourned sine die.

19. On the 1st November 1984 Madam Wong filed a defence and counterclaim in which she alleged that a Management Committee had been elected on the 6th September 1984 the members of which comprised the plaintiff, Mr. Cheng, and five of the other complaining co-owners. All in due course denied being members of any such committee.

20. On the 7th November 1984 an application by Madam Wong to have the injunction discontinued was dismissed by Barnes, J. On this day Messrs. Collier Petty were appointed interim administrators to manage the building until an application to appoint them as administrators on 23/11/84 or further order. Leave was given to issue an inter partes Summons on all parties for the hearing on 23/11/84, with instructions as to service by registered post and newspaper advertisements.

21. On the 17th November Madam Wong, who was by then represented, took out a notice of motion asking that the injunction be dissolved.

22. On the 19th November, the summons for which leave had been given on 7th November was taken out. It sought:-

This was clearly an application for an extension of the injunctive relief granted by Barnes, J. on 7th November.Madam Wong filed an affidavit in this application in which she stated that a new Management Committee had been elected on the 6th September 1984 as detailed above, but that "despite that election, I am not actively opposing the application of the plaintiff to have Messrs. Collier Petty appointed as Interim Administrator to manage the Han Palace Building, except only that I question the plaintiff's right, both to apply for the said appointment and the interim injunction, which he has already obtained".

23. On 4th December 1984 T.L. Ip & Co. filed a notice to act on behalf of the 1st and 3rd defendants. In a further affidavit filed on the 23rd November 1984 Madam Wong stated "my position is that if the minority shareholders in the incorporated owners of Han Palace want to take over the interim management of the building, either by themselves or by professional managers, I personally am prepared to let them do so, but the cost must be reasonable, and payable by all units alike". Madam Wong went on to say that she objected to the extent of the powers that were proposed to be given to Collier Petty and that suggested that whoever "takes over the interim management should only have administrative powers confined to carrying on the day to day management of the said building, until such time these matters have been finally adjudicated by this honourable Court". She suggested the appointment of a new Management Committee which would supervise the professional managers, be they Collier Petty or some other firm.

24. As at 23rd November there was considerable doubt if any Management Committee existed and Deputy Judge Barnett on that day after hearing evidence from a surveyor and being addressed by Mr. Pixie for the plaintiff and Mr. Bernacchi, Q.C. for Madam Wong and D7 ordered that "the existing management committee (if any) ..... be dissolved" and directed that "Collier Petty continue to be administrator of the said building" for certain purposes, which were detailed in the order, "until the trial of the issues in these proceedings or until further order".

25. This order was, we are satisfied, a continuance of the interim injunction granted by Barnes, J. on 7th November. The order is not, in terms, a consent order. However, clearly neither party pressed for a full hearing and we were informed by Mr. Pirie, that there was a substantial measure of consent between the parties. Indeed, the record shows that, in his address Mr. Bernacchi, Q.C., said "If the Court makes the order, ask it be made clear to Collier Petty that they are appointed by Court and should take instructions from Court not solicitors. He said finally "Would like appointment to trial or until further order". There was no appearance by D1 to D5 at this application.

26. On 25th November, Madam Wong's motion to discharge the injunction filed on 17/11/84 was adjourned. It was heard on 11th and 12th December and judgment was given on 21st December. The Notice of Motion sought only to discharge the injunction granted by Barnes, J. on 10th of October and continued by Deputy Judge Sakhrani, on 18th October. It did not seek a discharge of the order of 7th November, appointing Collier Petty, which had been continued by the order of 23rd November.

27. It is not surprising that no discharge of that order was sought, as the granting thereof was not opposed by Madam Wong's counsel and it was at his request that it was made until trial or further order. Deputy Judge Barnett, discharged the injunction of 10th October as against Madam Wong because he did not feel that the plaintiff had shown circumstances strong enough to warrant the issue of an Anton Piller order. The injunctive relief given on 7th November and continued on 23rd November remained in force and does so up to the present time.

28. On the 12th February 1985 Madam Wong took out a summons seeking an order removing Collier Petty as Interim Administrator and an order convening a meeting of owners to appoint a Management Committee. On 26/2/85 26th February, she took out a further summons, seeking a variation of para. 2 of the Order of Deputy Judge Barnett made on the 23rd November 1984 whereby he had ordered that Collier Petty continue as Administrators of the building until trial or further order.

29. On the 1st March Madam Wong filed a lengthy affidavit setting out facts which she suggested justified the making of an order removing 5/3/85Collier Petty. On the 5th March 1985 Deputy Judge Barnett gave directions as to the hearing and adjourned both of Madam Wong's summons to a three-day hearing on dates to be fired. Further affidavits were filed by Collier Petty pursuant to this Order. Madam Wong has never proceeded to a hearing of these 2 summonses.

30. On the 8th April 1985 she took out a further summons asking that the plaintiff's action be dismissed for want of prosecution. This 25/4/85application was dismissed by Master Betts on the 25th April.

31. On the 19th November 1985 Collier Petty took out a summons asking for a Court Order that the management charges be raised and that a management deposit be ordered to be paid. This application was made to the Court in its supervisory capacity over the administrator appointed under the injunction.

32. On the 30th November 1985 Madam Wong took out a summons in which she stated that she acted "on behalf of 51% of shares of Han Palace Building" and asked for an Order that the Management Committee be reconvened and that Collier Petty be accountable and subordinate thereto.

33. On the 6th December 1985 Mayo, J. heard Collier Petty' s summons of 19th November and Madam Wong's summons of 30th November. His ruling on Madam Wong's summons, which he made on 6th December, was as follows:

"I have considered carefully Deputy Judge Barnett's Order. I have also considered carefully the relief being sought in (Madam Wong's summons).There is r no doubt, in my mind that effectively what I am being required to do is to act as a Court of Appeal in respect of Deputy Judge Barnett's Order. No submissions have been made to me that there has been a change in circumstances from November, 1984 to the present day which would, in any way, justify one in making the drastic Order which is sought It is not difficult to see that if I made the Order which is desired it will almost certainly have the effect of undermining the position of Collier Petty and having regard to the past history of the proceedings, would in all probability be a prescription for chaos. This application is dismissed".

34. Having considered the application by Collier Petty, he ordered that a meeting should be convened, in accordance with the provisions of the Deed of Mutual Covenant, as far as they were applicable, at which Collier Petty was to be Chairman and Mr. Kwong, of Hastings & Co., solicitors for Collier Petty, was to be Secretary, and that, at the meeting, the matters raised in Collier Petty's summons were to be discussed. It is to be noted that at this hearing Mr. Ho of counsel appeared, representing the 1st, 3rd and 7th defendants "and others". It is not clear who the "others" were.

35. Collier Petty's summons came on again for hearing on the 15th January 1986. Mr. Ho again represented the 1st, 3rd, 7th defendants "and others". Madam Wong was in person and the 2nd, 4th and 5th defendants were absent. At the conclusion of that hearing Judge Mayo held:

"I am satisfied that it is not open to me on this application to determine the basic authority of Collier Petty to provide management services as this could not be an application against the Order already made. I am also satisfied that a useful function was served by the meeting which was held at my request. It would appear that those objecting to Collier Petty' s proposals did not mace any detailed criticisms of the proposals put forward but essentially criticised them for performing their functions under the Court Order. Notwithstanding the fact that the defendants are in a slight majority and that they object to the proposals in the Court Order, I have decided to make an Order in the terms sought. I am satisfied that if I do not make such an Order there is every prospective of chaos ensuing. I am disturbed at the amount of delay there has been in this litigation but this is e. matter which seems to me to fall outside the scope of this application. There will be an Order in terms and costs will be to Collier Petty".

Order of Barnett D.J.

36. Madam Wong's first appeal, which is against the Order of Deputy Judge Barnett made on the 23rd November 1984, is clearly out of time. Madam Wang has given no reason of any sort as to why this long delay occurred and we have no hesitation in refusing leave to appeal out of time. Indeed, although the Order appealed against was not a consent order, it was made only after both Counsel had been heard and had made suggestions which were incorporated in the order.In such circumstances, even had Madam Wong not been out of time, she would have had great difficulty in persuading us that it would be proper to interfere with that Order.

37. We consider that we should refer to one part of it which id causing Madam Wong considerable concern. The Judge ordered that "Collier Petty may apply informally to the Court at any time for directions". This is an unusual form of order but appears, it should be noted, to have been inserted at the express request of Madam Wong's counsel. Madam Wong suggested that this could be taken to mean that Collier Petty could, without formal application and without informing the other parties, approach the Court for directions as to its work and charges. We do not consider this to be so at all. It is true that the Order states that Collier Petty can apply informally but it does not state that such an application can be made without notice to concerned parties. We are satisfied that this part of the Order does no more than to allow Collier Petty to make an application without having to file a summons or notice of motion. It does not remove from Collier Petty the responsibility, which lies on any party to in action, to inform all other parties of the time, place and nature of the application.

Order of Mayo J. of 19th November

38. We turn next to the appeal against the Order of Mayo J. dated the 19th November, in which he renewed the Originating Summons. This Order in no way concerned Madam Wong. She had already been served with the summons and had, indeed, made numerous applications in the matter. It concerned only the 1st, the 4th and the 5th defendants who at that time had still not been served with the proceedings. Madam Wong clearly has no standing in relation to that Order and her appeal must be dismissed.

Orders of Mayo J. of 6th December and 15th January

39. On 6th December 1985, Mayo J. refused to accede to the appellant's application to reconvene the Management Committee and on the 15th January 1986 he allowed Collier Petty to increase the management fees and to require payment of a management deposit.

40. Madam Wong complains that the Judge wrongly held himself to have no power to deal with her application to vary the Order of Deputy Judge Barnett. When making this submission she referred to the words in the decision of the 6th December: "There is no doubt in my mind that effectively what I am being required to do is to act as a Court of Appeal in respect of Deputy Judge Barnett's Order" and to the words in the decision of the 15th January: "I am satisfied that it is not open to me on this application to determine the basic authority of Collier Petty to provide management services as this could not be an application  against the Order already made".

41. If the Judge was ruling that he did not have power to vary the Order, or that Madam Wong was not entitled to melee the application, we think that he was in error, since Barnett, D.J. had made his Order "until trial of the issues or until further order" and had given either party liberty to apply.

42. On the other hand, we consider that he was right to refuse to vary Barnett, D.J.'s order, since Madam Wong had failed to show in her affidavit any proper ground for a variation. She had asserted only that "the Anton Pillar order was misconceived" and that "the enormous proposed increase will greatly affect all the owners and tenants of the building".

43. When asked by us as to whether she had raised any other matter with the trial judge at the hearing, she said that she had also submitted that the Order was "tantamount to varying the Deed of Covenant and that Collier Petty had no need to call any meeting because of para. 9 of the Order they were able to make informal requests". We are satisfied, as was Mayo, J., though for different reasons, that Madam Wong raised nothing to justify any variation of the Order.

44. As to the order of 15th January 1986 nothing has been raised in the argument before us which would suggest either that the application by Collier Petty was not a reasonable and necessary one or that the order acceding thereto should not have been made.

45. The appeals against the orders of Mayo, J. of the 6th and 15th  January are, for the foregoing reasons also dismissed.

Jurisdiction

46. We feel obliged to refer to a matter which does not appear to have been raised by any of the parties during the numerous applications that have been made in this matter.

47. The relief sought in (i) end (iii) of the Originating Summons is relief that can only be given under section 31 of Cap. 344, which provides that "the court" may, upon application by an owner, dissolve the Management Committee and appoint an Administrator; by section 2 of the Ordinance "the court" means "the District Court". Consequently, relief under Cap. 344 should have been sought in the District Court. We considered whether, at this late stage, we should, in accordance with the powers described in Liu Ying Wah and Others v. Great Mace Trading Co. Ltd. and Another (1980) H.K.L.R. 881, exercise our inherent jurisdiction to transfer those applications for relief to their proper forum, the District Court, but informed counsel that we would not do so but would direct that the Originating Summons be heard within two months.

48. We ought to warn the parties that, although an application for an account lies within the jurisdiction of the High Court, the other forms of relief sought under Cap. 344 do not. If the plaintiff seeks to pursue his Originating Summons in the High Court, he may be faced with an objection as to its jurisdiction. He might, therefore, be well advised to seek a transfer of the Originating Summons to the District Court by application to the Registrar under section 46 of the District Court Ordinance.