SEE WAH FAN v. TAM KAM YUK

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 300 of 1999

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J U D G M E N T

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The Background

1. The Applicant Mdm. SEE Wah Fan was the owner of G/F, and garden of Block 5, Ki Tat Garden Phase 1, Ping Tong Street West, Ping Shan, Yuen Long, New Territories. The Respondent on the other hand was the owner of the premises immediately above her on the first floor in the same development. In the present proceeding, the Applicant was seeking the tribunal to exercise its power to grant the necessary relieves in order to stop the Respondent to commit further breaches of the deed of mutual covenants (DMC) governing that development. The breaches, as alleged in the amended notice of application filed by the Applicant on 24th February, 2000, were as follows:-

"The alteration of Block 5, namely the partition wall at 1/F and Roof of Block 5 thus blocking the access to the common roof and has also resulted in the detachment of the television signal cable between the ground Floor and the roof"

2. It was common ground that the enforcement of the relevant provisions in the DMC all related to the management of the common parts of the development and the owner's rights and obligations relating to the same.

3. The respondent took out a summons on 11th August, 2000 to have the Applicant's amended notice of application struck out. I heard the arguments on 19thOctober, 2000 and I am now giving my decision on the respondent's application.

The Respondent's Argument

4. Mr. Francis for the Respondent put forward a relatively straight forward argument. He submitted that Section 16 of the Building Management Ordinance Cap. 344 Laws of Hong Kong had done away with claims between individual owners relating to the common parts of a building in respect of which the owners were incorporated. The wordings of Section 16 were promulgated in the following terms:-

"...rights, powers, privileges and duties of the owners in relation to the common parts of the building shall be exercised by ... the corporation to the exclusion of the owners, and accordingly:-

(a) .......

(b) any proceedings in court in respect of any of the common parts of the building may be brought and pursued by ..... the corporation.

5. Mr. Francis relied heavily on the Court of Appeal's decision in Chau Mei Lee Gragrance & Anor v. Ng Yee Tim 1995-96 conveyancing and property reports 119. That case was about a plaintiff - an owner of a unit in a building seeking an injunction in the High Court to restrain the breach of the relevant DMC committed by another owner by converting to the latter's own use certain common parts of the building. The plaintiff named the other owner as the first defendant and the incorporated owners of that building as the second defendant initially. In the course of the trial, the plaintiff was granted leave to amend the statement of claim by changing the incorporated owners' status to become the second plaintiff. However, the recorder hearing the case changed his mind at the end of the trial and reversed his earlier decision in granting such leave and then dismissed the plaintiff's claim. The plaintiff appealed. The Court of Appeal allowed the appeal on the basis that the amendment was crucial to the plaintiff's claim. But for such amendment, the plaintiff would have no locus to bring those proceedings because Section 16 of the Multi-story Buildings (Owners Incorporation) Ordinance (now renamed as the Building Management Ordinance) Cap. 344 had vested such right of action exclusively in the incorporated owners. Mr. Francis argued that this decision was directly on the point with its facts indistinguishable from those in the present case. Hence, Mr. Francis urged me to struck out the Applicant's application for she had no right to make the same.

The Applicant's Argument

6. Mr. Lam for the Applicant contended that Section 45 of the Building Management Ordinance gave Applicant the right to institute the present proceedings against the Respondent. The gist of his argument was Section 45(1) gave the tribunal jurisdiction to hear matters listed out in schedule 10. The application brought by the Applicant related to matters so listed. Section 45(2) prohibits persons other then those listed in subsection (4) to commence any proceedings in the tenth schedule. One kind of persons named in subsection (4) was "an owner" of the building concerned. Hence argued Mr. Lam, the Applicant was given the locus to make the present application.

7. As for Section 16 and the Court of Appeal's interpretation over it in the Chau Mei Lee's case, Mr. Lam pointed out that the parties of that case in the Court of Appeal were not represented and the law in issue was not fully argued. For this reason, Chau Mei Lee was no good authority. On the other hand, Mr Lam placed much reliance on what His Lordship McMullin had said in the Court of Appeal in Grenville House Ltd v. The Incorporated Owners of Grenville House [1978] HKLR 235 at 243:

"Under section 16 the rights and duties of the corporation in matters of suit touching the common parts of the property are limited to circumstances which concern all the owners as a result of their joint interest in the joint interest in the due maintenance management and control of those parts."

8. Hence, argued Mr. Lam, the corporation was only given an exclusive right to take legal action when the matters of suit concerning those common parts touching upon the common interest of all owners. If the common parts from which the matters of suit arose only concerned an individual owner, that individual owner could still bring legal proceedings against the wrong doing owner. Also because of this interpretation, an owner still retained his right in these circumstances to take legal action against another owner relating to cause of action arising from common part of a building. As a result, Section 16 was not inconsistent with Section 45.

9. The second limb of Mr. Lam's argument was that if I ruled that Chau Mei Lee was good law, Section 16 would then be inconsistent with Section 45. As subsections (1), (2) and (4) did not have the proviso saying that these subsections were subject to other provisions of the ordinance as it was the case in subsection (3), the three subsections should have at least the same status of that of Section 16. In the circumstance, Mr. Lam urged me to prefer Section 45 to Section 16 in order to give owners like the Applicant a right to bring legal action. It was because if Section 16 were to take its full force as interpreted by the Court of Appeal in Chau Mei Lee's case, absurd result would be produced if a corporation refused to take legal action against an owner who abused common areas which did not concern the interest of all the owners.

The Effect of Section 16 and Section 45

10. In my judgment, there is no inconsistency between Section 16 and Section 45. Section 16 vested in the owners' corporation the exclusive right to sue on matters of suit arising from common parts of a building. Section 45 on the other hand by subsection (1) gives the Land Tribunal jurisdiction to adjudicate upon matters contained in the Tenth Schedule of the Building Management Ordinance. Section 45 (2) and (4) work together to exclude persons or bodies other than those appearing on the list in Section 45 (4) from making application to the Lands Tribunal. Hence, if the subject property dose not has an owner's corporation, Section 45 applies and an owner is entitled to make an application on cause of action arising from the common parts of the building. However, in the case of a building which has an owners' corporation, the right of individual owners to bring action for matters of suit arising from common parts would be vested in the corporation by virtue of Section 16. This interpretation is in line with the Court of Appeal's decision in the Chau Mei Lee's case. The Chau's case was a decision directly on the point in determining whether the plaintiff in that action had the necessary locus in bringing the action as a result of Section 16. I can find no reason to distinguish it from the present case.

11. As for Grenville House case, the issue fell to be decided there was whether the incorporated owners was able to institute action in tort as a corporation in perpetuity despite the fact that some owners who had been its constituents had already been replaced by other new owner ever since the cause of action had become accrued. The incorporated owners of Grenvill House was the only respondent in the appeal and no individual owners were involved. His Lordship McMullin's quoted words was delivered by His Lordship in His Lordship's attempt to preserve the right of action by former individual owners of Grenville House who might sue the Applicants for consequential loss suffered by them personally when they were still owners. Hence His Lordship also said in page 241 of the judgment:

"There can be no question of a new owner acquiring the cause of action possessed by the old owner merely by the assignment of the old owner's interest in the land. The personal cause of action remains with the old owner even after he has ceased to be the owner. The corporation is the persistent persona of all the owner of the premises at any moment of time but in respect only of one part of all possible actionable damage which might derive from a tort affecting the common parts."

The applicant in the case before me is suing on breach of the terms in the deed of mutual covenants and not in tort. She is also an existing constituent of the owners' corporation of the development. In the end, I hold that the Applicant, by virtue of Section 16 of the Building Management Ordinance, has no locus standi in making the present application in this tribunal. As a result, I order that the Applicant's application be struck out with cost to the respondent to be taxed if not agreed.