NG YUI TONG v. TAIKOO SHING (MANAGEMENT) LTD

CAMP 172/2018

[2019] HKCA 353

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 172 OF 2018

(ON APPEAL FROM LDBM 116 OF 2018)

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D E C I S I O N

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Hon Au JA (giving decision of the court):

A.     INTRODUCTION

1.  This is the applicant’s summons (“the Summons”) seeking leave to appeal to the Court of Appeal out of time against the order (“the Order”) of HH Judge KOT (“the Judge”) dated 24 August 2018.  By way of the Order, the Judge struck out the applicant’s Notice of Application (“NOA”) in LDBM 116/2018 commenced in the Lands Tribunal.  The Judge set out her reasons for striking out the NOA in her decision handed down on 24 August 2018 (“the Decision”).

2.  The applicant first sought leave to appeal before the Judge.  That was refused on 22 October 2018 after a hearing.  Under Order 59, rule 2B(3), the applicant had until 5 November 2018[1] to further apply to this court for leave to appeal.  However, the Summons was only taken out on 19 November 2018.  The leave application was therefore made 14 days out of time.

3.  This court has directed that this application for leave to appeal out of time be dealt with on paper[2].  The parties have since filed their respective written submissions.

B.     BACKGROUND

B1.    The dispute in LDBM 116/2018

4.  The dispute arose in this way.

5.  The applicant is the owner of a flat at Fu Shan Mansion of Taikoo Shing (“TKS”).  The respondent is the management company (“the Manager”) of TKS.[3]  The applicant was a member of the Representative Committee (“RC”) of TKS Stage III and was also elected therefrom as a member of the Management Liaison Council (“MLC”) of Stage III.

6.  The RC was established pursuant to Clause 6B of the Deed of Mutual Covenant (“the DMC”). The functions of the RC are prescribed by Clause 6B(ii).

7.  Further, Clause 12(3) of the DMC provides that a RC member can only be removed by ordinary resolution passed at an extra-ordinary general meeting of the owners called for that purpose.

8.  On 15 June 2012, the Manager on behalf of the RC issued a notice calling for a RC meeting to be convened on 22 June 2012 (“the 2012 RC Meeting”).  The notice set out the agenda for the meeting.  Item No 4 of the Agenda was “to discuss whether [the applicant], Owner’s Representative of Fu Shan Mansion is suitable to continue to be a Stage III MLC Councillor.”[4] (“Agenda 4”).

9.  At that time, the applicant wrote to the Manager by email stating his position that Agenda 4 was not permitted to be raised at a RC meeting under the DMC and should not be included for discussion at the 2012 RC Meeting.  Notwithstanding the applicant’s said position, the 2012 RC Meeting was held and Agenda 4 was discussed.  At the meeting when Agenda 4 was discussed, when asked whether the RC could depose a MLC Councillor in a RC Meeting, a Mr Sin of the Manager pointed out that, under the DMC, a RC member could only be removed by a resolution passed at an owners’ meeting[5].

10.  As a matter of fact, there was never an owner’s extra-ordinary meeting called for or held subsequent to the 2012 RC Meeting for the purpose of resolving whether or not to remove the applicant as a RC member.  The applicant was also never removed and indeed remained as a RC member until 31 December 2017.

11.  However, on 28 May 2018, some six years after the 2012 RC Meeting, the applicant issued the NOA against the Manager in the Lands Tribunal under LDBM 116/2018, seeking a declaration that Agenda 4 was unlawfully included in the 2012 RC Meeting in breach of the DMC.

12.  On 14 June 2018, the Manager took out a summons seeking to strike out the NOA on the grounds that the application was scandalous, frivolous or vexatious, or it was otherwise an abuse of process.

B2.    The Decision

13.  In the striking out application, the Manager contended that the mere inclusion of Agenda 4 at the 2012 RC Meeting did not breach any of the provisions in the DMC, and in any event, the declaration sought was academic as the applicant was not removed in the 2012 RC Meeting and instead remained as a RC member until December 2017.  In the premises, the Manager said the application was clearly an abuse of process or vexatious, in particular given that the applicant only brought it six years after the 2012 RC Meeting[6].

14.  The applicant on the other hand submitted that the DMC did not have any express provisions conferring (a) any power on the Manager to convene a RC meeting to discuss matters concerning the removal of a RC or MLC member, and (b) any functions on the RC to discuss the suitability of a member to continue to be a MLC councillor.  In the premises, the applicant maintained that the application had merits and the declaration sought served a practical purpose[7].

15.  In allowing the Manager’s striking out application, the Judge explained her reasons at paragraphs 16 ‑ 22 of the Decision as follows:

“Discussion

16. It is apparent from the NOA and the applicant’s submissions that he cannot pinpoint to a particular clause in the DMC which cater for the breach alleged in the NOA. The contention of the applicant is that since there is nothing in the DMC provided for the discussion of the suitability of a member at an RC meeting, to include Agenda 4 in the Meeting is in breach of the DMC.

17. I found the contention by the applicant is misconceived. One has to appreciate that the provisions in the DMC cannot cover all possible scenarios in real life, in particular for what topics can or cannot be discussed at a meeting convened in accordance with the DMC. The mere fact that there is nothing in the DMC empowering the RC to discuss an issue like Agenda 4 is neither here nor there and cannot be conclusive that this is something forbidden under the DMC. The RC, being a representative of all owners of TKS, should be entitled to discuss anything related to the management of TKS at the meeting.

18. The removal of a member of the RC is to be decided by way of a resolution before the owners’ meeting and Clause 13(a) stipulated that an owners’ meeting ‘may be validly convened by the Management Company or the Representative Committee…’ (B/42). Under such circumstances, would it not be appropriate for the RC to have a discussion in line with Agenda 4 before they decide whether to convene an owners’ meeting for a resolution to be passed for the removal of a member? If the contention of the applicant is right, ie the kind of discussion under Agenda 4 should have never been put before the RC, does it mean that the RC can never conduct any discussion before they convene an owners’ meeting on the issue of suitability of a member?

19. Clause 7(a) of the DMC provided that ‘the Management Company shall be responsible for and shall have full and unrestricted authority to do all such acts and things as may be necessary or requisite for or in connection with the said Land and any of the buildings thereon and the management thereof…’ (B/21-28). Clause 7(a)(24) specifically empowered the respondent ‘to do all such other things as are reasonably incidental to the management of the said Land and the said buildings’ (B/27). So, the duty of the respondent includes all things necessary or requisite for the management of TKS. The RC are representative of all owners to deal with the respondent and overseeing the management of TKS. I fail to see how the suitability of a member of the RC is not connected to the management of TKS. Even if the respondent can only convene ‘such meetings’ related to those ‘acts and things’ under Clause 7(a), the suitability of a member in the RC must be ‘acts and things … necessary or requisite for … the management’.

20. The Meeting was held on 22 June 2012 and the applicant had never been removed from office. Almost 6 years had lapsed and the applicant only issued this proceedings in May 2018 after he ceased to be a member of the RC (not being removed) by end of 2017. I failed to see how the applicant had suffered any infringement of his rights as a result of the Agenda 4 being included and discussed at the Meeting.

21. And even if I am wrong in the findings above, there is nothing to show what useful purpose can be served by the granting of the declaration sought. 6 years had lapsed and new RC had been in place, and the applicant had suffered no infringement of rights, no reasonable court will exercise the discretion in granting the declaration sought by the applicant in the NOA.

Disposition

22. Judging from the findings above, it is plain and obvious that the claim in the NOA is unsustainable and impossible to succeed, hence should be struck out.”

16.  Thus, in gist, the Judge held that:

(1)  Under Clause 12 of the DMC, a RC member can be removed from office by the owners by an ordinary resolution passed at an extra-ordinary general meeting of the owners called for that purpose.  Further, Clause 13(a) provided specifically that the RC can validly convene an owners meeting.  In the premises, it was only common sense and practicable that the RC be permitted under these provisions to first discuss at a RC meeting whether it should call for an owners meeting to pass a resolution to remove a particular RC member.  There was also nothing in the DMC provisions to prohibit that.  Hence, the RC was not in breach of the DMC to convene a RC meeting to discuss Agenda 4[8].

(2)  The Manager had power under Clause 7(a) of the DMC to do all such things that “are reasonably incidental to the management of” TKS.  Since the RC were representatives of the owners to deal with the Manager and to oversee the management of TKS, the suitability of an owner to be a RC member was something incidentally related to TKS’s management.  In the premises, the Manager had power under clause 7(a) of the DMC to call a RC meeting to discuss Agenda 4, and was not in breach of the DMC to include Agenda 4 for discussion at the 2012 RC Meeting[9].

(3)  Further and in any event, even if she was wrong in the above conclusion, the declaration sought served no useful purpose as the applicant was not eventually removed, and did not suffer any infringement of right.  The Tribunal would not grant the relief sought[10].

(4)  The application was therefore unsustainable and bound to lose.  It should thus be struck out[11].

17.  On 27 August 2018, the applicant filed an application asking the Judge to review her decision. The grounds for review were summarized in the Judge’s Decision for Review dated 12 September 2018 (“the Review Decision”)[12].  The Judge rejected the review application and upheld the Decision.

B3.    The Judge’s refusal to grant leave to appeal

18.  On 24 September 2018, the applicant applied to the Judge for leave to appeal.  At the same time, he also made an application for the discovery of the audio recordings of the 2012 RC Meeting[13].

19.  The Judge heard both applications on 22 October 2018.  She gave an extemporary decision dismissing both applications.  For the discovery application, she refused it as there was no legal basis for the applicant to request for further documents when the NOA was already struck out[14].

20.  The Judge also dismissed the applicant’s leave to appeal application on the basis that the applicant had failed to satisfy the court that there was an error in law in the Decision under section 11(2) of the Lands Tribunal Ordinance (Cap 17) (“the LTO”) nor were there reasons in the interest of justice to grant the leave to appeal under section 11AA(6) of the LTO[15].

C.     THE PRESENT APPLICATION

C1.    Applicable principles

21.  The relevant approach to determine an application for extension of time to appeal is well established and has been conveniently summarized by Kwan JA in Lee Chick Choi v Best Spirits Co Ltd (HCMP 371/2015, 21 May 2015, Kwan and Chu JJA) at paragraph 19:

“The legal principles regarding an application to extend time for an appeal are well established. In the exercise of its discretion, the court will take into account the length of the delay, the reasons for the delay, the chances of the appeal succeeding if an extension of time is granted, and the degree of prejudice to the other party if the application is granted…”

22.  Further, where a delay is inexcusable although insubstantial, a party seeking an extension of time must show a real prospect of success on the merits: see Secretary for Justice v Hong Kong & Yaumatei Ferry Co Ltd [2001] HKCA 422; [2001] 1 HKC 125 at 129I applying Chiu Sin Chung v Yu Yan Yan Angela [1993] 1 HKLR 225 at p229.

23.  Bearing this principle in mind, we will now proceed to consider the applicant’s present application for extension of time to appeal.

C2.    Length and reasons for delay

24.  In his supporting affirmation, the applicant explained that he was late in filing his appeal with this court as he first wrongly sent the leave to appeal application to the Registry of the Lands Tribunal on 5 November 2018.  He said he did so as he had misunderstood the Judge when she said “可以向上訴庭上訴”.  He only realized he needed to take out a summons for leave to appeal out of time when he went to the Appeal Registry of the High Court on 12 November 2018 seeking to handle (“處理”) the matters relating to the appeal.[16]

25.  We do not accept this as an excusable explanation for the delay. First, there is simply no explanation from the applicant as to how the alleged mistake arose as to the place for filing the application for leave to appeal[17].  This is particularly so as the Judge expressly informed the applicant at the leave application hearing that he had the right to obtain leave from the High Court[18].  Second, it is also inconsistent with the alleged mistake that the applicant somehow would go to the High Court registry seeking to “handle” the appeal matter on 12 November 2018.  The explanation based on the alleged mistake is therefore not credible.

26.  Given the inexcusable though relatively insubstantial delay, we now turn to consider whether the proposed grounds of appeal fair a real prospect of success.

C3.    Merits of the intended appeal

27.  The applicant sets out his intended grounds of appeal in his affirmation as follows:

“原審法官裁定答辯人有公契權力（公契條款7(a)(24)）接受另一業主委員陳志強先生的提議將議題 ‘討論是否適宜繼續委任富山閣業主代表吳銳堂先生（上訴人）擔任第三期太古城管理聯絡議會議員’ 加入2012年6月22日的會議為 ‘議程4’ 及在會議上進行討論，因而犯了事實上和法律上的錯誤。原審法官其實應該裁定答辯人沒有公契權力因應該委員對上訴人存有個人偏見而接受該委員的議題為 ‘議程4’ 在2012年6月22日會議上進行討論。” (法庭加註)

28.  He elaborates the grounds at paragraphs 7 - 8 of his affirmation as follows:

“7. 原審法官裁定答辯人有公契權力(公契條款7(a)(24))接受另一業主委員會成員陳志強先生的提議將議題‘討論是否適宜繼續委任富山閣業主代表吳銳堂先生（申請人）擔任第三期太古城管理聯絡議會議員’加入2012年6月22日的會議為‘議程4’及在會議上進行討論，是與管理(DMC Recital (5) ‘management’定義)有關，因而犯了事實上和法律上的錯誤。原審法官其實應該裁定答辯人沒有公契權力因應該成員對申請人存有個人偏見和針對申請人作出誹謗言詞的批評而接受該委員的議題為‘議程4’ 在2012年6月22日會議上進行討論。

8. 原審法官裁定申請人的申請已被剔除，因此該申請己不存在。所以不能因申請人以會議的錄音記錄作為在上訴申請時支持申請人的法律觀點，因而犯了事實上和法律上的錯誤。原審法官其實應該裁定答辯人向審裁處披露該錄音紀錄的存在及認為對申請人正在上訴申請的事宜的裁定具關鍵性及給予申請人機會查閱該錄音記錄，並複製該錄音記錄副本。” (法庭加註)

29.  As far as we can see, the applicant has raised two contentions under the grounds of appeal.  First, in gist, the applicant argues that the Judge erred in law and facts to hold that Clause 7(a)(24) empowers the respondent to include Agenda 4 in the 2012 RC Meeting, as that provision could not empower the Manager to put in an agenda item which was requested by a Mr Chan (another member of the RC) who was biased against the applicant, and who had made defamatory remarks against him.

30.  Second, the applicant also submits that in any event the Judge erred in law in her construction that the Manager had power under Clause 7(a)(24) to include Agenda 4 for the 2012 RC Meeting. In this respect, he has elaborated his contentions in the draft of Notice of Appeal, which can be summarized as follows:

(1)  Under Recitals 5(a) and Clause 7(a) of the DMC, there was no express power given to the respondent to convene a RC meeting to discuss Agenda 4[19].

(2)  Under Clauses 6B(ii) and 12(a), the membership and removal of a member of RC were not within the scope of RC and thus the discussion of Agenda 4 violated the DMC[20].

31.  It is clear to us that the intended appeal has no merits at all.

32.  First, the subject matter happened more than six years ago when the applicant brought the proceedings in the Lands Tribunal. The actual dispute that said to have led to the application has long past and is no longer a live issue.  The application brought serves no useful and practical purpose at all and the court is not here to adjudicate issues that have become academic.  Declaratory relief is discretionary and the Judge was correct in holding that no declaration should be granted in these circumstances.  On this basis alone, the NOA is rightly struck out, and there is therefore no merit in the intended appeal.

33.  Second and in any event, the proposed grounds of appeal raised by the applicant are unarguable.

34.  In relation to the first contention, the applicant had never raised before the Judge the issue that, since Mr Chan was biased against him, the Manager had no power under clause 7(a)(24) to include Agenda 4 for the 2012 RC Meeting.  This is an entirely new issue raised for the first time in the proposed appeal, which is fact-sensitive.

35.  In this respect, a party can only appeal against the decision of the Lands Tribunal on a point of law, but not on facts: the LTO, section 11(2). For this reason alone, it is not open to the applicant to raise this contention in the intended appeal.

36.  Moreover, it is trite that, save in exceptional circumstances, an appellant cannot raise a new issue of fact in an appeal to challenge the judgment of the lower court[21].  There are no exceptional circumstances in the present case, and the applicant should in any event not be permitted to raise this new issue of fact in the intended appeal[22].

37.  For the second contention, as mentioned above, as a matter of construction, the Judge has concluded at paragraph 19 of the Decision that the suitability of an owner representative to be a member of the RC is a matter incidental to the management of TKS, and hence it is within the Manager’s power under Clause 7(a)(24) to include Agenda 4 in the 2012 RC Meeting convened by it.

38.  In our view, this is clearly correct as a matter of proper construction.  We will explain why.

39.  Clause 7(a)(24) of the DMC provides:

“7. (a) Except as otherwise expressly provided by these presents, the Management Company shall be responsible for and shall have full and unrestricted authority to do all such acts and things as may be necessary or requisite for or in connection with the said land and any of the buildings thereon and the management thereof including in particular but without in any way limiting the generality of the foregoing: -

…

(24)   To do all such other things as are reasonably incidental to the management of the said Land and the said buildings;”

40.  At the same time, Clause 6B provides for the establishment of the RC, and Clause 6B(ii) limits the functions of the RC to as follows:

“(ii) The functions of the Representative Committee shall be limited to the following:-

(a) the representing of the owners in all dealings through the Management Liaison Council with the Management Company,

(b) the undertaking of such other duties as the Management Company may, with their approval, delegate to them,

(c) the election by secret ballot of not more than three of their number as representatives to serve on the Management Liaison Council covering all the completed phases of the Taikoo Shing Estate, and

(d) the exercise of all other powers and duties conferred on the Representative Committee by virtue of these presents.”

41.  In the premises, the functions of the RC are principally limited to dealings with the Manager through the MLC and undertaking duties delegated to it by the Manager.

42.  Clause 6C further sets out the functions of the MLC as follows:

“6C. There is intended to be established a Management Liaison Council for all completed buildings on the Taikoo Shing Estate which shall hold its meetings not less than eight times a year (though a lesser numbers of meetings shall be permissible for 1978) and each Representative Committee shall elect from their number not more than three persons to serve on such Management Liaison Council. In addition a representative of the Management Company appointed in writing whilst the managers of the Taikoo Shing Estate shall be a member of the Management Liaison Council and ex officio its Chairman. The functions of such council shall be

(a) to liaise with the Management Company in respect of all matters dealing with the management of the Taikoo Shing Estate as a whole and not exclusively the said Land and buildings

(b) the reviewing of the annual budget as hereafter provided

(c) the reviewing of House Rules and Estate Regulations made from time to time by the Management Company

(d) to review the costs mentioned in Clause 8(a)A(iii) hereof and the shares allocated to the various phases of the Taikoo Shing Estate, provided always that the Management Company shall not however be obliged to alter any decision as to the share of the costs to be borne by the Owners hereunder pursuant to any such review

(e) the undertaking of such other duties as the Management Company may, with their approval, delegate to them, and

(f)  the exercise of all other powers and duties conferred on the Management Liaison Council by virtue of these presents.”

43.  In other words, the MLC’s functions are again principally to do with the management of TKS through liaising with the Manager.

44.  When clauses 6B(ii) and 6C are read together, it is clearly and objectively intended under the DMC that the functions of the RC are principally to liaise with the Manager (through the MLC or otherwise) to deal with matters concerning or arising from the management of TKS.  In the premises, a fortiori, the functions of a RC or MLC member are also principally to deal with the management of TKS through his or her works in the RC or MLC with the Manager.

45.  Once understood this way, it is correct for the Judge to conclude that the suitability of an owner to remain as a member of the MLC in the RC is a matter at least incidentally related to the management of TKS[23]. It therefore falls within the scope of Clause 7(a)(24) which provides that the Manager has full and unrestricted authority to “do all such other things as are reasonably incidental to the management of [TKS]”.

46.  These provisions read together show that the Manager has the power to convene a RC meeting to discuss matters concerning the membership of RC (which is a matter that relates to the TKS’s management), albeit the actual removal of a RC member can only be done by a resolution passed at an owners’ meeting.

47.  In the premises, the Judge’s conclusion in this respect is correct in law.

48.  Given that the Judge is correct in her construction of the Manager’s power to include Agenda 4 in the 2012 RC Meeting and thus correct to strike out the NOA, she is also correct as a matter of law to say that there is no legal basis for the applicant to further seek the discovery of the audio recording of the 2012 RC Meeting as the NOA has already been struck out.

D.     CONCLUSION

49.  The intended appeal has no merits at all, and coupled with the lack of satisfactory explanation for the delay, we will refuse to grant extension of time to the applicant to appeal against the Decision.  We therefore dismiss the Summons.

50.  There are no reasons why costs should not follow the event.  We further order that costs of the Summons be to the Manager, taxed summarily at $45,000.00

51.  As this application is entirely without merit, pursuant to the power under Order 59, rule 2A(8), we order that no party may under rule 2A(7) request the determination to be reconsidered at an oral hearing inter partes.