STEEN SKYUM HEILESEN v. THE INCORPORATED OWNERS OF COSTA BELLO

   LDBM  9 of 2009

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 9 OF 2009

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BETWEEN

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J U D G M E N T

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1.  The Respondent is the Incorporated Owners of Costa Bello and the Applicant is the owner of a unit in the said estate.

2.  The Applicant commenced proceedings in this case on 13 January 2009 asking for an order to compel the Incorporated Owners to take necessary action to remove the unauthorised or illegal structure (“UBW”) in the estate. At the trial on 23 April 2009, parties came to an agreement and an order was made (“the Consent Order”) requiring the Respondent to, inter alia, “convene an owners meeting within 3 months to discuss and resolve the procedures to be taken, including legal actions, against illegal structures in Costa Bello” (“Paragraph 3 of The Consent Order”). Paragraph 4 of the Consent Order states “There be liberty to apply”.

3.  It is not in dispute that an owners extraordinary meeting was convened and held on 22 August 2009 (“the EGM”). According to the minutes of the EGM, discussion for the procedures to handle the UBW was made among the owners and it was resolved that no immediate legal action will be taken against the owners with UBW at this moment and the Incorporated Owners reiterated that all UBWs in the estate would be monitored regularly and the procedure would be reviewed whenever necessary.

4.  On 17 November 2009, the Applicant takes out an interlocutory application asking for an order that the Respondent shall institute legal proceedings against the owners with UBW within 2 months and further order this court deems fit to give effect to the spirit of the Consent Order (“This hearing”).

The Applicant’s Case

5.  The Applicant is saying that the Respondent had not complied with or alternatively had not given effect to Paragraph 3 of the Consent Order since no resolution was passed as to when and how the Respondent would effectively tackle the UBWs in the estate. In reliance on the liberty to apply provision in the Consent Order, the Applicant is asking for further directions or orders to be made setting down time frame for the Respondent to institute legal proceedings against the owners with UBW.

6.  The Applicant submitted that Paragraph 3 of the Consent Order was for the purpose of compelling the Respondent to take necessary action to remove the UBWs, whether by way of legal action, mediation or negotiations. Yet up till now, nothing had been done to give effect to this purpose nor was there any road map or detail plan for the enforcement action. This clearly defeated the intention and spirit of the Consent Order.

7.  Since there is ambiguity in Paragraph 3 of the Consent Order as to what should be done by the Respondent, the Court is entitled to take into account the surrounding circumstances of the settlement agreement in ascertaining the common intention of the parties. The intention must be for the Respondent to take necessary actions against the defaulting owners in an effective and timely manner otherwise the purpose to take out this case was defeated.

8.  Given the above-mentioned circumstances, the Applicant has to seek for clarification and further directions from this court and this is not a variation of the terms of the Consent Order nor a re-opening of the case as alleged by the Respondent. The liberty to apply clause empowers the court to intervene and to make further directions.

The Respondent’s Case

9.  It is submitted that if the Applicant is alleging a non-compliance of Paragraph 3 of the Consent Order, the proper application is to cite the Respondent for contempt and the present application is misconceived.

10.  In any event, the Respondent had already complied with Paragraph 3 of the Consent Order since the order only required the Respondent to convene an owners meeting for the purpose of discussing and resolving the procedures to be taken, including legal actions. The order itself did not require the Respondent to take immediate legal action against the owners with UBW. Neither can the Respondent have control over the owners as to how to resolve a particular issue.

11.  It is also submitted that the directions sought by the Applicant in the present application are different in form and substance from Paragraph 3 of the Consent Order and this amounts to a variation or setting aside of the Consent Order which this court lacks jurisdiction.

Discussion

12.  It is trite law that if a court order requiring positive acts to be done had not been complied with, this amounts to contempt of court and the proper course for the enforcement of such breach should be by way of committal. Even though the Applicant said that this application is not founded on non-compliance of the order by the Respondent, the real complaint raised is in fact one of non-compliance, i.e. the Respondent had not done what they should have done in accordance with the Consent Order. So the proper application to be taken by the Applicant should be leave to issue committal proceedings.

13.  The Applicant submitted that the order is ambiguous and required further directions in order to give effect to the Consent Order. But was there any ambiguity in the order itself?

14.  In the present case, the Applicant, through his legal representatives consented to have the Consent Order made. The Applicant must have considered the terms of it. Whatever purpose the Applicant intended to achieve through this litigation and/or the Consent Order must have been canvassed before the Applicant agreed to the order. Should it be the intention of the parties to require the Respondent to take legal action and not just to discuss and resolve, the wordings of the Consent Order should be more explicit. The Applicant’s interpretation of Paragraph 3 of the Consent Order requires reading far too many words into the order which are not there.

15.  On the contrary, the wordings of Paragraph 3 of the Consent Order are simple and straight-forward. All that the Respondent is required to do was to convene an owners meeting for the discussion and resolution (my emphasis) of the procedure to be taken against the UBW, with legal action being one of the procedure to be considered. I cannot see how the interpretation of the Applicant that legal action had to be taken or time-tables for such action had to be resolved is intended under the Consent Order. I found no ambiguity in the order itself nor was it equivocal. Nothing should be read in and nothing should be read out of the order. It is not up to the parties to give to the order the meaning he desires which is contrary to the clear and unequivocal words of the order. And any ambiguity in the order should be resolved in favour of the Respondent. Even if accepting the Applicant’s case, the only ambiguity lies in what is compliance and what is not compliance. This has to be resolved by way of committal proceedings but not for further directions to be sought.

16.  The terms of the Consent Order were terms arrived at by bargaining between the Applicant and the Respondent. There was clearly consideration for the agreement on each side and the order must in my judgment have contractual effect. This court has no power to set it aside or vary its term. I accept the Respondent’s submission that the directions proposed by the Applicant in this hearing amounts to a variation of the Consent Order.

17.  Lastly, the liberty to apply clause of the Consent Order does give this court the power to construe the terms of the Consent Order and decide on their true meaning and effect. But this should only confine to circumstances where there is ambiguity in the order itself. As mentioned above, I do not find any ambiguity in the order itself nor any room for an interpretation of the Consent Order in the way suggested by the Applicant. Nothing in the Consent Order connotes an intention that the Respondent had to take legal action against the UBW.

Conclusion

18.  By reason of the above, I found the Applicant’s application in this hearing misconceived and unjustified. The application is dismissed accordingly.

Costs

19.  Costs are in the discretion of the court. The starting principle is costs should follow the event. I see no reason why I should deviate from this principle. I made an order for costs of this application be to the Respondent, with Counsel’s Certificate. This is an order nisi to be made absolute upon expiry of 14 days.