SIU SIU HING t/a CHUNG SHING MANAGEMENT CO v. THE LAND REGISTRAR

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 3026 OF 2001

(ON APPEAL FROM HCAL 77 OF 2000)

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JUDGMENT

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Hon Woo JA:

          This is an application by summons dated 31 May 2001 for extension of time to appeal against the judgment of Cheung J on 31 January 2001 given in favour of the respondent in judicial review proceedings launched by the applicant Ms Siu Siu Hing ("Ms Siu"). The application for leave to issue judicial review proceedings was made by Ms Siu on 18 February 2000, and leave was granted by the Judge on 11 April 2000. It was after the hearing of the substantive application for judicial review itself on 2 and 3 January 2001 that the Judge gave judgment against Ms Siu.

2. It is well settled, and it has not been disputed by the parties, that the factors which are normally taken into account in deciding whether to grant an extension of time for serving a notice of appeal are: (1) the length of the delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if time for appealing is extended; and (4) the degree of prejudice to the potential respondent if the application is granted. However, the application must be supported by an affidavit deposing to any facts relied on by the applicant and giving a full account of, and explanation for, the whole of the delay since time expired. See para 59/4/14 at p 792 of the Hong Kong Civil Procedure 2001.

Delay - length and explanations

3. According to Order 59, rule 4(c) of the RHC, the time limit for appealing Cheung J's judgment was 28 days from the date when it was sealed or otherwise perfected. The date of sealing being 7 February 2001, the deadline was on 7 March 2001. According to the affirmation of Ms Siu filed on 31 May 2001 in support of this application, she applied for legal aid for the proposed appeal on 23 February 2001. However, that date is doubtful because according to the affirmation of Derek Bing Kay Quan ("Mr Quan"), her solicitor, the Legal Aid Department stated that they only received her application for legal aid on 15 March 2001. As Mr Quan's affirmation was filed on her behalf in support of the application, I think it proper to accept that she only made her application for legal aid on 15 March and not 23 February. A notification of application for legal aid was filed on 15 March 2001 by the Legal Aid Department, and the notification was served on the respondent's legal representatives, the Department of Justice, on 16 March 2001. That notification would, pursuant to section 15 of the Legal Aid Ordinance, Cap 91 and section 7A of the Legal Aid Regulations, have had the effect of staying proceedings for 42 days, which would have expired on 27 April 2001. Legal aid was only granted to her in respect of the proposed appeal on 27 April when Quan & Co was appointed and counsel was assigned on 2 May. The period of delay from the deadline of 7 March to 15 March (the date of the notification) was 8 days; and the delay from 27 April to 31 May (the date of the summons) was 34 days.

4. There is no explanation from Ms Siu why she delayed in launching the appeal. She says in her affirmation that after judgment was given by Cheung J on 31 January her solicitors advised her that there was merit in an appeal. However, she only applied for legal aid one and a half months later on 15 March, 8 days after the expiration of the period for appeal on 7 March. It is difficult to accept that she did not know the period within which an appeal should be launched, for if she was interested, she would have asked her solicitors who had advised her that there was merit in the appeal. There is, anyhow, simply no evidence before me showing any explanation for that delay of 8 days.

5. I take a view most beneficial to Ms Siu that after her application for legal aid and the fact being notified to the respondent time should be deemed not to run for 42 days by virtue of the spirit of the provisions of the Legal Aid Ordinance and Regulations cited above. While there is no explanation for the 42 days taken by the Legal Aid Department for the grant of legal aid, I presume that the time was taken for considering whether legal aid should be granted, as the statutory provisions obviously allow them the same period for such consideration. This took the time to 27 April 2001 when legal aid was granted to Ms Siu in respect of the proposed appeal. Solicitors were appointed on 27 April and counsel was assigned on 2 May, but there is no explanation why there was a delay of 34 days from 27 April to 31 May to take out the summons for the application before me. I would not expect that 34 days would have been required for anyone to prepare and take out such a simple summons, because any supporting document can be filed later. Indeed, the draft Notice of Appeal, setting out grounds challenging Cheung J's decision, was only exhibited to Mr Quan's affirmation of 15 June 2001, over a fortnight after the date of the summons. Anyhow, according to Ms Siu's affirmation, she sent a letter of 29 March to the Legal Aid Department to state that Mr Quan had advised her that there was merit in the appeal. Quan & Co sent a note on 25 April to the Legal Department stating that there was merit and that Mr Tim Kwok, the counsel assigned by the Department to conduct Ms Siu's application before Cheung J, shared the same view. Solicitors and counsel were both those handling Ms Siu's case before Cheung J and that alone tells against the necessity of taking 34 days to issue the summons and a further 15 days to have the draft Notice of Appeal prepared. Regardless of my analysis of the situation above, there is in fact no explanation offered for this period of delay for 34 days or any part thereof. Further, as I said before, the delay of 8 days between 7 March and 15 March has not been explained at all.

6. Mr Y C Mok, for the respondent, has in his Skeleton Argument drawn my attention to the judgment of this Court in Birkenhead Properties & Investment Ltd v Leung Yiu & Others [1998] 1 HKLRD 527, where Mayo JA (as he then was) said at p 534C:

"... I am mindful of the fact that no acceptable explanation has been given for the substantial delay which occurred. What is also true is that regardless of what the appellants' prospects may be it is more important that there should be finality in the law. The Rules of the Court have to be adhered to and compliance with them can only be waived if compelling reasons are forthcoming. They have not been forthcoming in this case."

Le Pichon J (as she then was) also said at 538I:

"Finality in litigation is of central importance to every litigant: it lies at the very foundation of our system. The rules designed to facilitate such finality are generally to be adhered to so that litigants will know where they stand. As this court held in The Adhiguna Meranti [1988] 1 HKLR 410, the purpose of the rules is to provide a timetable for litigation. Extensions of time would invariably defeat that purpose and should not be granted in the absence of special circumstances."

7. My finding on this part of the case is that there were the two periods of unexplained delay. Indeed, the delay was not so short as to be justifiably ignored, because it was altogether over two and three-quarter months from 8 March to 31 May. More importantly the delay must be viewed in the light that these are judicial review proceedings and that the application for leave to issue judicial review proceedings was made on 18 February 2000, the last day allowed by Order 53, rule 4 of the RHC for challenging the 18 November 1999 decision of the respondent in registering of the Incorporated Owners of Chun Fai Garden ("the Incorporated Owners").

8. There is another aspect of the delay, as stated in an affirmation made on 19 July 2001 by So Kam Fai, the chairman of the Incorporated Owners of which Ms Siu was the manager, the relationship between whom is more particularly dealt with below. Ms Winnie Chan, for Ms Siu, objected to the admission of this affirmation in my consideration of this matter before me. However, I overruled her objection for the following reasons. The Incorporated Owners were allowed by Cheung J to intervene in the proceedings before him and they were allowed to file evidence as well as being represented by counsel, although their counsel did not make any submission to the Judge and was merely present as an observer. Moreover, the position of the Incorporated Owners must be relevant as their interests are and will be affected by these proceedings. Apart from the legality of their incorporation being challenged by Ms Siu in these proceedings, they have been seeking a declaration from the Lands Tribunal that their incorporation was legal and valid. What they wish to inform the court must be relevant at least as to delay and prejudice, however slight those may be.

9. By the affirmation, it is revealed that there have been proceedings in the Lands Tribunal in LDBM 285 of 1999 ("LDBM 285/99") in which the Incorporated Owners claim against Ms Siu for various relief, including a declaration that their incorporation was validly registered, return of the books in Ms Siu's possession as manager and payment of the carparking fees collected by her without authority.

10. The hearing of LDBM 285/99 was initially fixed on 18, 19 and 20 April 2000. However, these trial dates had to be vacated because the Tribunal was informed of the judicial review proceedings having been taken out in the High Court. The fact was, Cheung J granted leave to Ms Siu for judicial review on 11 April 2000.

11. After Cheung J's judgment in the instant case was handed down on 31 January 2001, the Incorporated Owners applied to restore the date of hearing of LDBM 285/99 on 13 March 2001. As from 20 October 2000, Ms Siu was acting in person in LDBM 285/99. On 18 April 2001, when the application to fix dates for the trial was heard, a notice was also filed to notify the Tribunal that Messrs Quan & Co was appointed to act for Ms Siu in those proceedings. Messrs Quan & Co informed the Tribunal of Ms Siu's intention to apply for leave to extend the time to appeal against Cheung J's judgment. As she had not yet filed an application for such leave, the Tribunal still fixed dates for trial on 18, 19 and 20 July 2001.

12. Consequent upon this application before me, the Tribunal had to vacate those dates in July.

13. Ever since the Incorporated Owners instituted LDBM 285/99 towards the end of 1999, those proceedings have never reached trial because of the instant case. Shortly before the fixed dates for trial commencing on 18 April 2000, Ms Siu took the last opportunity to seek leave to issue judicial review proceedings on the last date permitted by Order 53, rule 4 of the RHC on 18 February 2000. That had the effect of having the trial dates vacated. When the Incorporated Owners sought to have new dates fixed to hear their claim in the Tribunal, again attempt was made to thwart it, though not successful. The summons taken out on 31 May 2001, which is before me now, has again successfully stalled the hearing of LDBM 285/99. The instant case has had the effect of obstructing the normal process of LDBM 285/99, and I am inclined to say, though I cannot be sure, that it seems that the judicial review and the present application has been pursued as a delaying tactic towards the Tribunal proceedings.

14. For the above reasons alone, I am of the view that the court should be very hesitant in granting the indulgence sought by Ms Siu.

Prejudice

15. The prejudice, according to the affirmation of Yeung So Fong, Queenie, a senior solicitor of the Land Registry, is two-fold: that suffered by the respondent and that suffered by owners of flats of buildings standing on separate lots of land, similar to the situation that was challenged by these judicial review proceedings before Cheung J, who have applied to the respondent to be registered as incorporated owners. There have been numerous applications by such owners. The applications were all withheld after the receipt by the respondent of Ms Siu's judicial review application. The processing of the applications resumed after the judgment of Cheung J was handed down on 31 January 2001. Upon the lapse of the period for appeal, ie, 7 March 2001, the respondent gave registration guidelines to the officers responsible for processing applications from owners of flats of buildings standing on separate lots with shared common facilities governed by one single deed of mutual covenant to approve their incorporation. Since then, the respondent has approved 3 such applications, on respectively 19 March, 19 March and 22 March 2001. There is no procedure provided in the Building Management Ordinance, Cap 344 ("BMO") to reverse the approvals. The delay of this proposed appeal will prejudice the respondent because he will need to withhold the processing of similar applications. Obviously, this prejudice is also detrimental to good administration, in the judicial review context.

16. Further, in most of the pending applications, there is either no manager to arrange for the maintenance and repair of the buildings or the owners of the buildings are not satisfied with the performance of the existing manager appointed by the developers under the deed of mutual covenant and have applied for incorporation with a view to dismissing the existing managers. For the purpose of carrying out the maintenance and repair of the buildings and resolving the dispute between the existing managers and the owners, formation of incorporated owners under the BMO becomes necessary. The delay in processing these applications has already caused inconvenience to the owners and increased the conflicts between the owners and the existing managers in the management of the buildings.

17. These items of prejudice must be very pertinent for me to take into account in the exercise of my discretion whether to grant leave to Ms Siu to appeal out of time. The respondent's processing of applications by owners of flats in buildings standing on separate lots of land situate in the same estate or within the same development has been undeniably delayed since Ms Siu's application for judicial review. However, that prejudice was caused by the action itself and not the delay in launching the proposed appeal. The proposed appeal, if allowed to proceed, will delay the further processing of similar applications that have been made in the meantime and the processing of similar but new applications. The delay will not only cause the prejudice to those applicants and the managers in the way described in the preceding paragraph, but will also prejudice them in not having the applications decided as early as the absence of the proposed appeal would allow. This must be undesirable.

18. Although the Incorporated Owners were not parties to these proceedings, they were allowed to intervene and submit evidence before Cheung J. As referred to before, their claim in LDMB 285/99 has been delayed for over a year, if not longer, and they have at least suffered from the lack of books of management kept by Ms Siu without having whether she had the right to hold onto them decided by the Tribunal in the normal course of proceedings. The apparent delaying tactics of Ms Siu that I mentioned above must also be taken into account.

19. These items of prejudice militate against the granting of indulgence.

Merit of the proposed appeal

20. I now turn to the merit of the proposed appeal. The facts of the case are relatively simple. The applicant was the manager of Chun Fair Garden ("the Garden") under contract made pursuant to the Deed of Mutual Covenant dated 2 August 1996 ("the DMC") binding upon the owners of flats in various buildings standing on 18 different lots of land within the Garden ("the Owners"). On 24 February 1999, there was a meeting of the Owners, which appointed a first management committee under the DMC. On 25 June 1999, there was a further meeting of the owners pursuant to s 3 of the BMO, at which a resolution was passed for the appointment of a management committee ("the Management Committee"). The Management Committee subsequently made an application to the respondent for a Certificate of Registration of the Incorporated Owners of the Garden under s 7 of the BMO. On 18 November 1999, the Certificate of Registration was issued.

21. The Owners had issued two notices of termination of Ms Siu's appointment as the manager of the Garden on respectively 23 July and 22 November 1999. The first one was for terminating her appointment on 22 October and the second one on 22 November 1999. The Incorporated Owners issued a notice dated 23 December 1999 to terminate her appointment on 22 March 2000.

22. By the judicial review application, Ms Siu challenged the decision and act of the respondent in allowing the Owners to have an incorporation of the Owners registered under the BMO. Cheung J, by his judgment of 31 January 2001, dismissed the application. He decided, inter alia,

23. In the draft Notice of Appeal exhibited to Mr Quan's affirmation dated 15 June 2001, seven grounds are raised. No challenge is made to the Judge's decision in items (e) and (g) of the preceding paragraph, and all the grounds mainly dwell on the Judge's decisions regarding the true construction of ss 2 and 3 of the BMO. Although I should not allow this application to be turned into a mini appeal, I am persuaded by Mr Mok's submissions, both written and oral, that the proposed appeal is quite hopeless.

24. The main thrust of the Judge's decision is that the incorporation of the Owners was formed pursuant to the provisions of the BMO and was lawful, and the respondent in approving the incorporation was acting lawfully. At p 5L of his judgement, the Judge said:

"The preamble of the Ordinance [BMO] states that the Ordinance is 'to facilitate the incorporation of owners of flats in buildings or groups of buildings and for matters incidental thereto or connected therewith'. The reference to 'groups of buildings' was introduced in 1993 when the Ordinance was amended. Prior to that, the preamble merely mentioned about incorporation of owners of flats in multi-storey buildings. Clearly, the intention of the legislation is to ensure that incorporation of owners can be formed so as to provide better managements for the buildings. In my view, this being the stated purpose of the Ordinance, in order for the applicant's argument to succeed, there must be clear and unambiguous provisions in the Ordinance itself that the owners of the Garden are unable to be incorporated. The Ordinance contains no provision which restrict incorporation to buildings both under a single piece of land or where there is only a single tenancy in common."

25. Indeed, Ms Chan has not been able to point to any provision in the BMO, which is clear and unambiguous, against incorporation of owners in the same situation as the owners of the Garden. Ms Chan, however, argues that definition of "building" under s 2 of the BMO, in conjunction with s 8(2)(aa) thereof, shows that owners who are entitled to form an owners corporation under the BMO must be owners of undivided shares in the same land, or else the Judge's interpretation of the definition of "building" would have the serious effect of altering the nature of ownership of owners of buildings on different lots of land and altering their rights and interests in land.

26. I do not think it necessary to even cite the provisions of s 8(2)(aa) of the BMO to dismiss the argument that that paragraph of the section means that an owners corporation must hold an undivided share in the building. That paragraph simply confers the power on an owners corporation to hold an undivided share.

27. The definition of "building" under s 2 of the BMO is as follows:

28. Ms Chan contends that the Judge's interpretation of paragraph (c)(ii) of the definition has the serious effect of creating new obligations on an owner of land that he does not know of and he does not intend to create, ie, the obligation to allow owners of other lots of land, not the tenants-in-common owning undivided shares in the same land owned by him, to use and enjoy his land. I must say that the argument is totally misconceived. The paragraph simply means that other than the land on which the relevant building stands, the word "building" includes other lots of land which are owned or held by any person for the common use, enjoyment and benefit of the owners and occupiers of the relevant building, in relation to the appointment of a management committee under the BMO. If there are no such other lots of land, then the paragraph simply does not apply. If there are, then the other lots of land are covered by the paragraph. Neither the Judge nor the paragraph creates an obligation over the owners of such other lots of land as contended.

29. Mr Mok has directed my attention to various provisions in the DMC that oblige the Owners of the 18 buildings in the Garden to allow the areas of their lots of land not covered by buildings to be used for the common benefit of all the Owners, notably clauses 1.11, 1.9, 2.1.1, 2.1.2, 4 and 5 thereof. It also seems to me that the Judge had made such a finding when he said at pp 9S to 10B of his judgment:

"Because for the purpose of the appointment of a management committee, each lot in the Garden would have included the other land owned or held by any person for the common use of owners and occupiers of the flats in that building. Hence the owners who can appoint the Management Committee are the owners of the 18 lots of land in the Garden."

30. I am not persuaded by Ms Chan that the proposed grounds of appeal relating to ss 2 and 3 of the BMO raise any seriously arguable point to say that the Judge was wrong. Nor am I persuaded that the Judge's decisions can be successfully challenged by any of the proposed grounds of appeal. There are also the following findings of the Judge, which are not made subject of any complaint in the draft Notice of Appeal, namely,

31. These findings are all supportive of the Judge's decisions on points of law. The failure to challenge these findings enhances the difficulty in appealing against his decisions.

Conclusion

32. In all the circumstances of this case, in particular, the unexplained delay which was not insubstantial in the context of judicial review, the fact that I am not persuaded that the matters proposed to be raised on appeal are reasonably arguable, that no special circumstances have been shown, and the prejudice that would be suffered by the respondent, the Incorporated Owners as well as by owners in similar situation as the Owners of the Garden seeking approval of their being incorporated, I think the proper thing to do is to refuse exercising my discretion in favour of Ms Siu. I therefore dismiss the application and make an order nisi that costs of the application be borne by Ms Siu. I also make an order that the costs of Ms Siu be taxed in accordance with the Legal Aid Regulations.