THE INCORPORATED OWNERS OF NO. 34F, BRAGA CIRCUIT v. WAI SO LIN SHIRLEY

DCCJ 1244 of 2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1244 OF 2010

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J U D G M E N T

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INTRODUCTION

1.  The Plaintiff is the Incorporated Owners (“the Plaintiff”) of No. 34F of Braga Circuit (“No. 34F”) whereas the Defendant is the owner of 1^st Floor of No. 34F.

2.  The Plaintiff claims against the Defendant for arrears of management fees since November 2007.  The fact that management fees were not paid since November 2007 is not in dispute but the Defendant denied her liability to pay for the same due to mis-management by the Plaintiff.  The Defendant also counter claimed against the Plaintiff for previous payments made and other relief as particularised in the pleadings (page 26-27 of Bundle C).

UNDISPUTED FACTS

3.  The building at No. 34F is adjoining the building at No. 34G to form one block of building sharing the same entrance, the same lobby and the same staircase.  The same applies to No. 34H and No. 34J and No. 34K and No. 34L.  Each building comprised of G/F, 1/F, 2/F, 3/F and Pent House and the Basement Floor (“B/F”) with one unit on each floor. 

4.  The 3 blocks of building are enclosed to form one development sharing one main gate (“the Main Gate”) at the entrance to the plots of land.  The physical layout of the 3 blocks of building is like a semi-circle with No. 34L/34K at one end next to the Main Gate, No. 34J/34H in the middle and No. 34G/34F at the other end. Once through the main gate, there is a piece of open ground used as car park (“Car Park”) for owners and occupiers of the buildings. 

5.  Each building is individually incorporated and each has its own Deed of Mutual Covenant (“DMC”).  The 6 incorporated owners (“the 6 IOs”) engaged the service of one management company and shared one common management office which is situated at No. 34L (“the Management Office”).  The management expenses incurred in common to the 6 buildings and the car parks are shared by the 6 IOs equally.  And the owners’ meeting and management committee meetings of the 6 IOs are always held together.

6.  At the owners’ meeting of the 6 IOs held on 10 April 2003, it was resolved that the management fees for each unit was revised to HK$1,700 and for each car park at HK$50 per month with effect from 1 May 2003 (page 979-981 of Bundle D).  The Defendant, being a flat owner as well as occupier of one car park, had been paying $1,750 per month ever since until November 2007 when she ceased making the payment.

7.  The issue of repair and maintenance works of the Car Park had been discussed in a number of management committee meetings of the 6 IOs.  It is eventually resolved on 22 November 2004 at an extraordinary owners’ meeting that each flat owner having the use of a car park space had to contribute $39,000 for the repair and maintenance works of the Car Park (page 1040-1042 of Bundle D).  The Defendant did pay her contribution of $39,000.  The repair and maintenance work commenced in about December 2004.  Upon completion of the work, the 6 IOs entered into a written confirmation (“the Confirmation”) and attached to it a Car Park Layout Plan (“the Plan”) (page 1211-1213 of Bundle D) specifying the car park space assigned to each unit.  The Defendant was assigned the car park space marked as No. 110.  The Plan was registered in the Land Registry.

THE ISSUE

8.  The list of issues to be tried as agreed by the parties is being attached to this judgment as Appendix A.  The Plaintiff has called its chairman Mr. Lee (“Mr. Lee”) to testify whilst the Defendant’s son Mr. Chan (“Mr. Chan”) is the only witness for the Defendant.

9.  The issues will be dealt with in seriatim adopting the number assigned on Appendix A.

A1 : INTERPRETATION OF DMC

10.  The Plaintiff is relying on Clause 3(a) and (b) of the DMC and Section 20 of the Building Management Ordinance (“the Ordinance”) in its claim for management fees.  The Defendant argued that there is no mention of management fees in Clause 3 of the DMC and the “costs” stipulated in Clause 3 is actual cost of repair only so the Plaintiff is not entitled to charge any management fees.

11.  Clause 3 (a) and (b) of the DMC reads as follows :

“(3) Each of the parties hereto shall pay his due proportion of :-

(a) The Crown rent the rates for water consumed on the said premises and insurance premium payable on the policy (if any) for insuring the said building against loss or damages by fire.

(b) The cost of keeping in good and tenantable repair and condition the foundation, the side walls, main walls, supports, beams, gutters, fencer, chimneys and all external parts of the said building and all the drains, well, electric pumps, pipes, conduits and all plumbing apparatus (if any) intended for the general service of the said building (except as regards damage caused or resulted from any act or default or negligence of any of the parties hereto their respective servants or agents or tenants or licensees) and the common entrance hall, staircases, landings and passages and the roof thereof.” (page 1162-1163 of Bundle D)

12.  Section 20 of the Ordinance reads as follows :

“(1) A corporation shall establish and maintain a general fund ---

(a) to defray the cost of the exercise of its powers and the performance of its duties under the deed of mutual covenant (if any) and this Ordinance; and

(b) to pay … or other outgoings (including any outgoings in relation to any maintenance or repair work) which are payable in respect of the building as a whole.

(2) A corporation may establish and maintain a contingency fund –

(a) to provide for any expenditure of an unexpected or urgent nature; and

(b)  to meet any payments of the kind specified in subsection (1) if the fund established thereby is insufficient to meet them.”

13.  Having considered the contention raised by the parties, this court found that the Defendant’s contention concerning the interpretation of the DMC must fail.  The word ‘management fees’ is not defined in the DMC.  Management fees charged by an incorporated owners must literally mean the fee charged for the management of the building itself.  The management of the building must mean paying of the Crown rent, rates for water consumed in common use, insurance premium for insuring the said building, the cost of keeping in good and tenantable repair and condition of the various common parts of the building as stipulated in Clause 3(a) and (b) of the DMC.  It must also include remuneration paid to the management company or person employed to be responsible for the upkeep of the building.  Just because of the fact that the word ‘management fees’ is not specifically mentioned in the clause itself cannot be taken to mean that the money charged for purposes specified under Clause 3 (a) and (c) is not management fees.  And the argument by the Dependant that Clause 3 only covers cost of repair is misconceived by taking the word “repair” out of context from the phrase of “good and tenantable repair” which is the duty to upkeep the common parts of the Building and not just to repair.

14.  Even if I am wrong on the interpretation of the DMC, I do find that the Plaintiff is still entitled to charge the management fees to form a general fund under Section 20 of the Ordinance to defray the cost of the exercise of its power and duties under Section 16 and 18 of the Ordinance as well as under Clause 3 of the DMC.  All these provisions of the Ordinance points to the fact that it is the duty of an incorporated owners to establish a fund to cover the management expenses and the Plaintiff is also bound by these provisions.

15.  I found the Plaintiff is entitled to levy the management fees based on the DMC and/or the Ordinance. 

A2(a)(i) : Whether there is any refuse clearing service provided

16.   It is not in dispute that there is a refuse collection point next to the Management Office and occupiers of all flats are expected to bring their garbage to the refuse collection point.  The Defendant’s contention is that no refuse clearing is available at No. 34F and since the Management Office is an illegal structure, the Defendant refused to leave her garbage there. 

17.   I found the Defendant failed to establish the basis for the requirement of having a refuse collection point at No. 34F.  The fact that the refuse collection point is being situated next to the Management Office which may be an illegal structure does not render the provision of such service a nullity or not in existence.  Neither can the Defendant’s own choice not to use the refuse collection point be an attack on the Plaintiff for failing to provide the said service.

A2 (a)(ii) : Whether security service is provided

18.   The Defendant’s complaint is that there is no security service provided at No. 34F resulting in the Defendant’s front door and vehicle being vandalized time and again; Mr. Chan was being assaulted by the Plaintiff’s staff twice; and theft of vase, plant pots, packs of soil and rubber tube of the air-conditioner were committed by the Plaintiff’s staff.  There is no security or protection on the Defendant’s property.

19.   The Plaintiff denied there is no security as alleged by the Defendant since there are security guards employed and CCTV installed by the 6 IOs to provide security to the whole development.   

20.   Since there is no dispute that security guards and CCTV are available at the development, the Defendant’s allegation that there is no security provided is unsubstantiated. As submitted by Mr. Leung for the Plaintiff, no security system could prevent criminal acts with 100% effectiveness.  There is no evidence to suggest that the system in place at the development is in any way inadequate.  The allegation by the Defendant under this head is in fact pointing to the vandalized acts of the Plaintiff and/or its staff.  This is not a matter of whether there is security service provided.  The merits of these allegations will be dealt with in more detail below. 

A2(a)(iii) : Whether TV antenna signal is provided

21.   Mr. Chan’s evidence is that there used to be analog TV signal provided to the Defendant’s unit but ever since it changed to digital mode, no signal received.  Mr. Chan has to set up an indoor antenna for the Defendant in order to watch television.  Mr. Chan had checked but could not find out what was the problem.  The Plaintiff in reply said that there is an antenna system for common use of all units and each unit has to connect their own cable to the common system at the staircase.

22.   Having heard from the parties, I found on a balance of probabilities that Mr. Lee’s evidence is more likely to be the situation.  It is unlikely that no antenna system is being provided which is the kind of facility normally available in a building.  Even Mr. Chan could not tell what is the problem and if so, how can the Plaintiff be blamed for failing to provide the TV signal.  I found the Plaintiff did provide the TV antenna signal to the Defendant’s unit.

A2(b)(i) : Whether there is any illegal structures on the roof top and whether it is the Plaintiff’s liability

23.   The Defendant’s case is that according to the approved building plans of the roof (page 1349 Bundle E), there is no penthouse or other structures shown.  According to information provided by the Rating and Valuation Department, the floor area allocated to the 3^rd Floor unit is only 136 m2 which is the same size as for the other units.  This means the roof is not allocated to any owner and remained a common part of the building. Yet, there are structures erected on the roof and extended beyond the parapet wall resulted in a statutory order (No. CRT/RT/003572/05/K) issued by the Building Authority to the Plaintiff on 3 June 2005 (page 1462-1463 Bundle E).  Since the statutory order and letters from the Buildings Department (page 1465 Bundle E) concerning these illegal structures were being issued to the Plaintiff, it must be the liability of the Plaintiff.  The statutory order aforementioned was being complied with and the illegal structures were removed in January 2008 (photo at page 1509-1510 Bundle E).  However, the Plaintiff knowingly allowed illegal structures to be erected on the roof again in December 2008 (photo at page 1502-1505 Bundle E) and the situation persisted till today.

24.   The Plaintiff admitted that there were illegal structures on the roof erected by owner of 1/F to 3/F of No. 34F including the Defendant back in 2005.  Upon receipt of the statutory order in June 2005, respective owners had arranged for the structures erected to be removed in 2007 or 2008. It is Mr. Lee’s evidence that he did go to the roof to check in 2008 or 2009 and found no illegal structure there except for a penthouse on the side of the roof (photos at page 1194-1196 Bundle D4).  The assignment of the 3^rd Floor unit (page 1665 Bundle E) showed that the owner of the 3^rd Floor has been assigned the exclusive right to occupy and enjoy the 3^rd Floor as well as the penthouse on the roof, i.e. the part of the roof next to the main staircase.  So that part does not form part of the common parts of No. 34F and not the liability of the Plaintiff.  Apart from the penthouse, there is no structure on the roof of No. 34F. 

25.   Section 14 of the Building Ordinance requires that prior written approval be obtained from the Building Authority for the carrying out of building works.  Unauthorised building works (“UBW”) refer to buildings which are erected or building works which have been carried out without that approval.  UBW are commonly called illegal structures.  It is not in dispute that the statutory order back in June 2005 had been complied with.  There is no evidence to show that there is any other statutory order from the Building Authority after June 2005 in relation to any illegal structures on the roof. It is Mr. Chan’s evidence that officials from the Buildings Department did attend the roof in 2008 for inspection.  Had there been such illegal structures on the roof, it shouldn’t have been ignored during inspection with no statutory order issued.  Without evidence that there was any statutory order issued by the relevant authorities, the allegation by the Defendant that illegal structures were re-erected again after compliance of the previous statutory order is not accepted.  Neither had Mr. Chan adduced evidence to show that the illegal structures alleged by him on the roof are not approved works.  Had there been such illegal structure back in December 2008, it would be surprising for the Defendant or Mr. Chan not to raise it with the Plaintiff or brought it to the attention of the Buildings Department as he had been doing.

A2(b)(ii) : Whether there is any illegal structures in the covered playground area

26.   Mr. Chan testified that the approved building plan (page 1351 Bundle E) showed that there should be a covered playground below the ground floor level.  But the area had been converted into the Basement Floor (“B/F”) (photos at page 1199 and 1201-1202 Bundle D4) for a long time.  Windows and brick walls are constructed on the original parapet walls and the original solid 10 feet high wall is replaced by glass partition.  Mr. Chan cannot tell when such alterations were in existence.  A statutory order (No. CBZ/TE/030730/05/K) had been issued as far as the B/F is concerned dated 10 August 2007 (Exhibit P3).  Remedial works was only carried out in 2010 with such statutory order being withdrawn on 26 January 2010 (Exhibit P1).  But since there is no letter of compliance issued by the Buildings Department, the illegal structures at the B/F are still there up till now (page 1499-1500 Bundle E). There is also illegal structure digging into the stone retaining wall and slope under the B/F.

27.   The Plaintiff’s case is that according to the DMC dated 15 March 1957 (page 260-269), the B/F was already in existence and the first owner, Mr. Ching Man Chung was given exclusive right to occupy and enjoy the whole of the B/F.  Mr. Lee became the owner of the B/F since 1996.  Upon receipt of the statutory order, Mr. Lee had arranged for remedial works to be carried out and an Authorised Person had inspected the B/F and confirmed that it was safe in structure on 5 January 2010 (Exhibit P2).  The Buildings Department then withdrew the statutory order.

28.   From the photo attached to the statutory order issued on 10 August 2007 (Exhibit P3), it is clear that the B/F had extensive illegal structures which were required to be demolished.  When compared to the photos supplied by the Defendant at page 1499-1500 of Bundle E, remedial works had apparently been carried out with all the illegal structures shown on Exhibit P3 being removed.  Even though there is an argument as to when such remedial works were done but I found this not of any importance since what matters is whether there is still illegal structures in existence.  The fact that the Buildings Department, though had not issued letter of compliance, had withdrawn the statutory order concerning the B/F, the only conclusion is that the Buildings Department is satisfied that there is no illegal structures that required any further intervention.  This court is satisfied that the illegal structure on the B/F had been remedied.

29.   As for the conversion of the covered playground into the B/F, this is apparently in existence as early as in March 1957.  It must be the case that no application had been made to amend the building plans which had been approved in 1955 when the covered playground was being converted into the B/F in 1957.  Since the owner of the B/F had been assigned the exclusive right to occupy and enjoy the B/F, this is not a common part of No. 34F and the Plaintiff will have no authority to intervene in its use.  Given the B/F had been in existence since 1957 which is inconsistent with the building plan, application should be made to the Building Authority to rectify the situation.

A2(b)(iii) : Whether there is any illegal structure or alteration in the “enclosure wall” in the staircase between 1/F and G/F and whether the “opening” is the sole access to the B/F unit

30.   Mr. Chan said that there is an illegal wall opening installed with a metal gate in the staircase enclosure between G/F and 1/F (“the wall opening”) (photo at page 1494 Bundle E).  The Buildings Department had, on 13 March 2008, issued a statutory order (No. C/TE/001729/08/K) to the owners of G/F unit against the wall opening (Exhibit P4).  On 12 September 2008, the Buildings Department had issued a letter stating that works in question had been removed except “the opening formed at the enclosing wall of staircase at G/F and steps leading to the rear yard of G/F are not tally with plans approved by the Building Authority”.  Yet the Buildings Department is prepared to withhold further enforcement action for the time being and withdrawn the statutory order concerned (Exhibit P4).  The opening is still there and is being used as an access way to the B/F.  According to Mr. Chan, the illegal wall opening is not the only access to the B/F since one can access via the entrance of No. 34F/34G to the podium of No. 34G, take the steps down, turn right and use the common area of No. 34G to reach the B/F of No. 34F.

31.   The Plaintiff contended that the statutory order concerning the wall opening was addressed to the owner of G/F unit and the Plaintiff knew nothing about it.  In any event, the statutory order had been withdrawn on 12 September 2008.  Since the Buildings Department had decided not to take any action against the wall opening, there is no good reason for this court to order the closure of it which is the only access to the B/F.  There is no through road from B/F of No. 34G to B/F of 34F since there is a wire mesh to separate the two.

32.   Having heard the evidence, I found on a balance of probabilities that the wall opening is the only access to the B/F of No. 34F. The alternate route suggested by Mr. Chan had proved to be inaccessible under cross-examination since that would involve the taking down of a wire mesh between No. 34F and 34G (photo at page 1500).  There is no evidence as to when such wall opening was being constructed but it is not in dispute that the wall opening was there in 1995 when Mr. Lee became the owner.  The fact that the B/F had been added to the building since 1957, it is a must for an access way to be constructed in order for the occupiers of the B/F to reach its unit.  It is quite likely that the wall opening was constructed ever since 1957 as well.  Judging from the statutory order and letter issued by the Buildings Department, the wall opening is not in conformity to the building plans and must be an illegal structure. 

A2(b)(iv) : whether the Management office is an illegal structure

33.   Mr. Chan contended that the Management Office is on the land of No. 34L and not on the Lot Index Plan prepared by the Government. According to the minutes of meeting of the 6 IOs on 24 August 2009 (page 1155 Bundle D4), it was reported that the Buildings Department had issued a letter stating that the Management Office is an illegal structure and requested the 6 IOs to take action.  It is decided that the matter should be followed up by the management company.  Yet, no action had ever been taken.

34.   The Plaintiff replied that there is no expert evidence to suggest that the Management Office is an unauthorised building work.  Even if it is, it is situated within the lot of No. 34L so it is outside the jurisdiction of the Plaintiff to do anything. 

35.   The minutes of the 6 IOs dated 24 August 2009 did support the contention of the Defendant that the Buildings Department found the Management Office to be an illegal structure.  No further expert evidence is required to establish this.

A2(b)(v) : whether 2 extra car park spaces were added by “illegal re-demarcation” in 2004 during renovation; if so, whether they caused any obstruction to the right of way

36.   Mr. Chan contended that there are 24 legally assigned car park spaces, 4 for each building, as provided in the Deed of Partition Car Park Layout Plan registered at the Land Office by Memorial No, 258529 (page 1479 Bundle E).  The Defendant is being assigned to use the car park space coloured green hatched black (page 1237 Bundle E).  The Confirmation and the Plan (page 1211-1213 Bundle D) registered with the Land Registry upon completion of the renovation work showed there are 26 car park spaces instead with 2 car park spaces No. 112 and 113 being added in the right of way.  The width of each car park is reduced and if vehicles on No. 112 and 113 are not properly parked, obstruction will be caused to car park space No. 110 assigned to the Defendant.  There was no renovation done to the car park and the re-surfacing was just for the illegal re-demarcation of car parks to legitimize the use of car park spaces by those owners who are not assigned any, like Mr. Lee.  Mr. Chan also confirmed that there were cars using car park space No. 112 and 113 before the renovation and he is not aware whether cars were being parked at the manner shown on page 1256 of Bundle E since 1976.

37.   Mr. Lee testified that all the 26 car park spaces were there since 1970s and no extra car park spaces had been added in 2004 when the renovation work only involved resurfacing of the floor and numbering of the spaces for better management.  The layout on the Confirmation is in accordance with the usage practice since many years ago.  The renovation work is required since the road surface of the Car Park were all cracked and rain water seeped through it to the slope outside the Car Park.  There is no complaint whatsoever that there is obstruction caused to anyone in the use of the Car Park.

38.   I found the evidence of Mr. Lee that no extra car park space had been added more credible on a balance of probabilities.  From the minutes of meeting of the 6 IOs dated 16 August 2004 (page 1030 Bundle D4) and 27 September 2004 (page 1032 Bundle D4), when the renovation work of the Car Park was being discussed, it was agreed that the number of existing car park spaces remained unchanged.  It is also stated in the minutes of meeting dated 8 November 2004 that the costs for the renovation work would be shared by 25 owners only and the remaining 3 owners who had no right in using the car park were exempted (page 1036 Bundle D4).  Contents of these minutes tend to support the evidence of Mr. Lee.  If there were only 24 car park spaces before, how can that be shared amongst 25 car park users.  And if it had been decided at the meetings that the existing number of car park spaces were to be maintained and eventually 26 car park spaces are marked, it must be the case that 26 is the number of spaces in existence before the renovation work.  Having found that no car park space had been added, I also accept Mr. Lee’s evidence that the renovation work for the Car Park is necessary due to the cracks on the road surface.

39.   Having said so, it is apparent from the Deed of Partition Car Park Layout Plan that there should only be 24 car park spaces. But the 2 additional car park spaces were added not by the Plaintiff in 2004. I think this is sufficient to resolve this issue here.  As for what follow up action the Plaintiff should take in legalising the extra 2 car park spaces are concerned is something for the Plaintiff to decide.

40.   I also accept the evidence of Mr. Lee that no obstruction was being caused to the Defendant in her use of car park No. 110. There is no evidence to suggest that such complaint had been raised by the Defendant ever.  Should there be such an obstruction, one would expect the Defendant or Mr. Chan to have raised it with the management.  In any event, the evidence of Mr. Chan is that only if the user of car park space No. 112 and 113 did not park their car properly then there would be obstructions.  This had nothing to do with the Plaintiff but the parking manner of the users instead.

A2(b)(vi) : whether there are illegal structures in the 2 levels below the B/F

41.   This is related to Issue A2(b)(ii) above.  It is the Defendant’s case that the statutory order issued as far as the B/F is concerned dated 10 August 2007 (Exhibit P3) covers the 2 levels beneath the B/F as well. It is the evidence of Mr. Chan under cross examination that the big steps beneath the B/F (page 1499-1500 Bundle E) are possibly illegal structures since it should be a slope there instead.  There is no letter of compliance issued by the Buildings Department to show that the illegal structures beneath the B/ F had been remedied.  The stability of the building and the slope are adversely affected and there is potential danger of a risk of landslide causing the building to collapse. 

42.   Mr. Lee testified that the illegal structures in the 2 levels beneath the B/F had already been demolished upon receipt of the statutory order concerning the B/F.  The Authorised Person engaged by him had confirmed to the Buildings Department that the B/F is in safe structural condition.  And officers of the Buildings Department had inspected the site 2 to 3 times before they issued Exhibit P1.

43.   As indicated at paragraph 28 above, the illegal structures under the statutory order (Exhibit P3), including the 2 levels beneath the B/F, had in fact been remedied.  Upon completion of the remedial work, the condition of the 2 levels beneath the B/F is as it shown on page 1499-1500 of Bundle E.  The allegation that the 2 big steps are illegal structures is only raised by Mr. Chan under cross examination.  There is no evidence to show in what way the 2 big steps are illegal structure.  I found as a fact that the illegal structures on the 2 levels beneath the B/F had been removed as a result of the statutory order.  There is also no expert evidence to support the allegation that the stability of the slope and/or the building is affected and at risk of landslide.  On the contrary, the Buildings Department is satisfied with the remedial work and withdrawn the Building Order.  The only inference to be drawn is that it is safe and without any risk of danger.

A2(b)(vii) : whether there are any illegal yard structures

44.   Mr. Chan’s evidence is that on the approved building plan (page 1347 Bundle E) there is a yard in the south-east of the G/F which is a common part of the building (with the word ‘YARD CEMENT FINISH’ marked on it). Yet, illegal structures are erected thereat including a toilet with a large concrete canopy, a wall partitioning the yard and 2 other walls (as shown on photo at page 1496-1497 Bundle E). 

45.   Mr. Lee, in his evidence, agreed that there is no structure in the yard as shown on the building plan.  Yet his evidence is that he had no idea if the yard is a common part of the building or not and if the owner had got approval to build the structure.

46.   It is for the Defendant to establish that the yard is a common part of the building and the structures are illegal in a sense that they are unauthorised building works.  I found the Defendant had failed to adduce evidence to this extent.  The mere fact that the structures shown on the photos are not found on the building plan does not mean that it is illegal. And without the assignment of the G/F unit involved, one cannot tell if the yard is a common part or if it is to the exclusive possession of the owner of the G/F unit.  Neither is there any building order to confirm these are unauthorised building works.  I found this allegation is unsubstantiated.

A2(c)(i) : Behaviour of staff of the Plaintiff i.e. harassment of owners and government officials

47.   As far as harassment is concerned, the Defendant had raised a number of allegations including those set out at Schedule II to the Amended Defence and Counter-Claim (page 29-30 Bundle A).  I shall deal with it one by one.

Cutting off of water supply

48.   Mr. Chan said that the water supply to the bathroom of the Defendant’s unit had been cut off without prior permission or notification in November 2004 and the Defendant had to re-connect the plumbing pipe for incoming water (invoice for the work done at page 1437-1438 Bundle E).  The same thing happened again in November 2010 (photo at page 1546-1547 Bundle E).  Mr. Chan contended that since the Plaintiff is managing the place, it should see to it that water supply would not be interrupted.

49.  Mr. Lee testified that he was not aware of both incidents.

50.  I found the Defendant had failed to establish that the cutting off of water supply was caused by the Plaintiff.  There is no evidence to suggest as to why the water supply was cut off.  The invoice produced showed that the plumbing pipe for incoming water had to be replaced, it seemed that the problem is with the plumbing pipe and nothing to do with the Plaintiff, and there is no evidence to show that the plumbing pipe is the liability of the Plaintiff.

Trespass to the Defendant’s private car in December 2004 at the Defendant’s car park space

51.  Mr. Chan said that on a day in December 2004, the Defendant’s car parked inside its assigned car park space was boxed by wooden hoardings on 3 sides with a wooden plank on the ground (photo at page 1512 and 1549 Bundle E) which prevented her car from driving out of the car park space. Someone used a canvas to cover the Defendant’s car and the canvas caused damage to the car.  The Defendant had tried to stop the staff of the Plaintiff from so doing but was ignored.  The boxing was only removed after 24 hours.  Mr. Chan agreed all owners were notified to remove their cars on commencement of renovation in the Car Park but even so, he said that there was no right to trespass it.

52.  Mr. Lee explained that the boxing was for the protection of the Defendant’s car during renovation work done at the Car Park. At the meeting of the 6 IOs on 16 August 2004, it was resolved that the car owners had to remove their cars away from the Car Park for one month during the renovation work in order to avoid damage to the cars (page 1030 Bundle D4).  It is further resolved at the meeting on 27 September 2004 that the renovation work was to commenced in December 2004 and car owners should remove their cars away (page 1032 Bundle D4).  By the time when the renovation was to commence, all owners except the Defendant had removed their cars from the Car Park.  In order to allow the work to commence and not to cause any damage to the Defendant’s car in the course of the work, a hoarding was built by the contractor as protection with the Defendant’s car covered by a piece of cloth. The contractor was told to remove the boxing if the Defendant needed to use the car.  It is also Mr. Lee’s evidence that the boxing is a must since hydraulic device was being used to remove the concrete on the floor and flying debris may cause damage to the Defendant’s car.  And the plank on the ground is not to obstruct the Defendant’s use of the car but for the reinforcement of the hoarding; without it, the box will collapse.  In any event, the boxing only lasted for 1 day.  Mr. Lee said that he was there and never saw the Defendant and if the Defendant was there, she would be requested to drive her car away which would save the work and costs for setting up the hoarding.

53.  Having heard the evidence, I found the Defendant’s allegation of trespass against the Defendant’s car and car park space not established.  I did not accept the evidence of Mr. Chan that the Defendant was there during the boxing incident.  It will be unreasonable for the contractors to carry on with the hoarding which was extra work when all they needed to do was to ask the Defendant who was present to drive away her car.  I found the evidence of Mr. Lee more probable and should the Defendant so require, the contractor would remove the boxing for the Defendant to use her car.  And the boxing is not to interfere with the right of the Defendant but for the protection of her car.  The boxing is not an interference of direct nature and did not involve any kind of physical contact or affectation.  There is also no evidence to show that the cloth/canvas used to cover the car had in fact caused any damage to the Defendant’s car.

Dishonest appropriation or theft of the Defendant’s personal property

54.  Mr. Chan’s evidence is that 4 water pots, 2 packs of soil and a large vase belonging to the Defendant were taken away by the staff of the Plaintiff.  These items were placed on the illegal structure of the G/F unit below the Defendant’s unit, i.e. where the men on the photo at page 1551-1552 of Bundle E are standing.

55.  Mr. Lee said that he had heard about this incident but he is not sure if it is the staff of the management company who removed the same.

56.  From the document disclosed by the Defendant, there is a letter dated 26 November 2007 (page 1393-1934 Bundle E) (“the Reply Letter”) from the management company to the Defendant in reply to a letter from the Defendant to it dated 23 November 2007 (page 1391-1392) (Defendant’s Letter”). In the Reply Letter, the management company was explaining why items belonging to the Defendant were being removed.  It is stated in the Reply Letter that since those articles were being placed at the light well area of the G/F unit which created nuisance to other residents in breach of Clause 10 of the DMC, a notice was then served on the Defendant on 22 November 2007 requiring the Defendant to remove those articles within 3 days.  This notice in fact caused the Defendant’s Letter queried about the management company’s decision as stated on the notice.  And since the Defendant had not removed the articles within the time frame stipulated, the management company had taken action by removing the articles.  In the Reply Letter, the Defendant was told to collect the said items from the management office within 7 days of the letter. 

57.  From the content of these letters produced by the Defendant, it is clear that the removal of the items was not an act of appropriation but an act to enforce the DMC.  The Defendant was well aware of the whereabout of the items concerned and in fact could approach the management office for the return of the articles.  Yet the Defendant had not done so but just complained about the taking away of the items.  I found there is no element of dishonesty involved in the removal of the items and the Defendant failed to establish this allegation.

Removal of a rubber tube attached to the air-conditioner of the Defendant

58.  Mr. Chan relied on the photo at page 1551-1552 of Bundle E to establish the fact that the rubber tube attached to the air-condition for the diversion of dripping water was being taken away by the staff of the Plaintiff in September 2008.  Mr. Chan said that the management staff refused to return the same to the Defendant so Mr. Chan reported the matter to the police.  The police had sent a reply letter to the Defendant upon completion of investigation (page 1467 bundle E) (“Police Reply Letter”). After removal of the rubber tube, in order to cause more nuisance to the Defendant, the Plaintiff complained to the Food and Environmental Hygiene Department (“FEHD”) about the dripping water of the air-conditioner at Defendant’s unit.

59.  Mr. Lee’s evidence is that he was not aware of such an incident nor was he aware of any complaint lodged with the FEHD.

60.  I found what is being contained in the Police Reply Letter revealed the truth of the matter, i.e. “the concerned rubber rube was in fact removed by the management office staff, as they found its condition had deteriorated.  This tube was installed by the management office some time previously… There is no evidence to suggest that any criminal offences have been committed …”.  The Defendant had not disagreed with the findings of the police as stated in the Police Reply Letter.  Again, I found there is no dishonesty on the part of the staff of the Plaintiff in removing the rubber tube nor this amounts to harassment to the Defendant.  As to the complaint lodged to the FEHD, there is no evidence to show that the staff of the Plaintiff had been behind it.  I found the allegation by the Defendant under this head unsubstantiated.

Scolding of the Defendant, Mr. Chan, visitors of the Defendant and government officials who were refused access to the building

61.  Mr. Chan said that there is systematic harassment of the Defendant and him by the staff of the Plaintiff and the Defendant was being scolded by the staff frequently including an incident where the watchman scolding and yelling at the Defendant loudly about the picking up of a piano. And officers of the Buildings Department had been refused access to the building obstructing them from carrying out their statutory duties as far as the illegal structures were concerned.  There was an incident in 2008 where officers of the Buildings Department were denied access to the building and asked Mr. Chan for assistance.  The officers were harassed and scolded by the Plaintiff’s staff which resulted in a quarrel between the officers and the Plaintiff’s staff.  When Mr. Chan led the officers to the roof of No. 34F, a security guard surnamed Kwok locked up the door to the roof and only let them out with the intervention of police (photos at page 1485, 1487 and 1489 Bundle E).  Mr. Chan said that these were all done under the instruction of the Plaintiff as can be seen from the minutes of meeting on 16 August 2004 (page 1030 Bundle D4) and 14 September 2005 (page 1090 Bundle D4) where the management company told the 6 IOs of the refusal to let officials to enter the building and begged for their understanding.

62.  Mr. Lee testified that he was not aware of any scolding or yelling incident but as far as he knew, the watchman respected the Defendant and addressed her Mrs. Chan whenever she goes in and out of the development.  As for the incident where government officials were being denied entry in 2008, Mr. Lee said that he was not aware of the matter.  In any event, the security guards are employees of the management company and the Plaintiff had never authorised the management company not to allow the officers of the Buildings Department to enter the building.  Rather, the management company was told to do appropriate things and not against the law.  As for the 2 meetings mentioned by Mr. Chan, Mr. Lee explained that the management company was only making a report of the matter to the 6 IOs.  It is the duty of the management company to check and decide who can be admitted into the development.

63.  I found on a balance of probabilities that Mr. Lee’s evidence is more credible.  Had there been frequent and systematic scolding of the Defendant and Mr. Chan, one would expect some kind of complaint from the Defendant or Mr. Chan.  The fact that there is none tends to show that no such incident occurred.  As for the harassment of government officials, the incident described by Mr. Chan was not mentioned in the Defence and Counter-claim as well as the 2 witness statements of Mr. Chan.  Had this been the truth, why did Mr. Chan not have it included in the pleadings or witness statement.  Mr. Chan explained that he did mention harassment in general in his statement and had the photos to elaborate it.  I found this explanation beyond belief.  I did not accept the evidence of Mr. Chan.  There is nothing to show that the Plaintiff had instructed the management company not to allow the government officials to enter the development.  I do not agree that to ask for the 6 IOs’ understanding at a meeting can be taken as the 6 IOs had authorised the management company to refuse the access of government officials.

Installation of a new gas pipe at the Defendant’s car park space without the consent of the Defendant

64.  Mr. Chan’s evidence is that the Plaintiff had caused a gas pipe to be installed along the wall at the end of the Defendant’s car park space in 2010 (as shown on photo at page 1188 to 1189 Bundle D4 and 1535 Bundle E).  Any car hitting the said gas pipe will cause gas leakage or even explosion.  Mr. Chan opined that the gas pipe should be relocated to go along with other utility pipes. 

65.  Mr. Lee’s evidence is that the gas pipe was being installed at such a place at the advice of Towngas (page 1129 Bundle D4) and the installation was in fact done by Towngas.  Towngas advised this was the best location for installation when considering maintenance and safety issue.  There is a distance of 1.5 metres from the kerb at the end of the car park to the wall where the pipe is located.  For car park No. 110, the distance is even greater.

66.  Having heard the evidence, I accept the evidence of Mr. Lee to be more probable.  The Towngas is an expert in any matter concerning the installation of gas pipe.  The Towngas, being the contractor to carry out the installation work, must be satisfied that the location of the pipe is safe.  As can be seen from the photos, the gas pipe is being installed alongside the wall at the end of the row of car park.  Even though Mr. Chan did not agree, there is clearly a curb between the wall and the car park as shown on the photo (page 1189 Bundle D4).  Given this curb and there is quite a distance between the wall and the end of the car park space, I find the Defendant’s worry of the risk of a car running into the wall bursting the gas pipe a bit far-fetched.

Vandalism of the Defendant’s front door and vehicle

67.  It is Mr. Chan’s evidence that the Defendant’s car and the front door of her property had been damaged time and again since 2007 (photos at page 1516 to 1522 and 1524 to 1533 Bundle E).  Mr. Chan said that this was being done with the Plaintiff’s or its members’ approval or knowledge.

68.  The Plaintiff denied such an allegation.

69.  I found there is no evidence to support such an allegation except for a mere assertion by the Defendant.  This allegation is clearly not proved.

A2(c)(ii) : whether Plaintiff’s staff was being hired to cheat the government

70.  Mr. Chan testified that the Plaintiff allowed illegal structures to be rebuilt after compliance with the building order, had ignored the warning by the Buildings Department to remove the Management Office, had allowed its staff to harass the government officials and stopping them from performing their duties.  All these amounted to cheating of the government.

71.  The Plaintiff denied such an accusation.

72.  I found the allegation by the Defendant unsubstantiated.  As found in paragraph 25 above, this court did not accept there is unauthorised building work at the roof top again after the old ones had been demolished.  The Management Office may not have been removed yet, there is nothing to show that in so doing, the Plaintiff or its staff had practised any fraud or cheating the Buildings Department.  It is also my ruling at paragraph 63 above that there is no harassment of the government officials.

A2(d) : whether staff stopped government officials from performing their statutory duties, thus making the building unsafe

73.  Mr. Chan’s evidence is that since the staff of the Plaintiff had harassed and prevented the officials of the Buildings Department to enter the development for inspection of the illegal structures and to take necessary enforcement action, this made the building unsafe.

74.  I refer to my findings at paragraph 63 above, I found this allegation is not substantiated.  Even though the staff of the Plaintiff may have prevented the officers of the Buildings Department to enter the development, there is no evidence to show that the building is unsafe.  The fact that there are illegal structures within the development does not mean that the building must be unsafe.  Without any expert evidence in support, this court is not prepared to draw such a conclusion.

A2(e) : whether staff harassed the Defendant in the manner set out in Schedule II of the Amended Defence and Counter-claim; and whether there is a CCTV camera installed pointing directly at the Defendant’s front door

75.  The allegations contained in Schedule II had been dealt with at paragraph 48 to 69 above.  I shall deal with the allegation of the CCTV camera here.

76.   Mr. Chan’s evidence is that a CCTV camera had been installed to point directly at the Defendant’s front door.  This fact was confirmed by Mr. Lee Cheong Ming (“Mr. CM Lee”), a night shift watchman who had prepared a statement (page 1435 Bundle E).  Mr. Chan alleged that the handling of the CCTV recording system is not in accordance with the Personal Data (Privacy) Ordinance and is an invasion of privacy and nuisance. 

77.  Mr. Lee denied any CCTV pointing at the Defendant’s front door and was not aware of the incident described in Mr. CM Lee’s statement.   

78.  Mr. Chan relied upon the statement of Mr. CM Lee to support this allegation.  Yet Mr. CM Lee was not being called as a witness. Without being cross-examined in court, the identity and authenticity of the statement cannot be ascertained.  This court has hesitation in attaching any weight to Mr. CM Lee’s statement.  I did not accept such an allegation.  In any event, it is not Mr. Chan’s case that the situation persisted till now. 

A2 (f) : whether the fire insurance for the building has been rendered void or voidable by reason of the Plaintiff’s failure to perform its duties in respect of the UBW

79.  The Defendant’s case is that since the Plaintiff has failed to perform its duties in respect of the unauthorised building works in the common parts of the building and allowed illegal works to be constructed, any fire insurance for the building will be rendered void or voidable.

80.  I found this is just a bare assertion by the Defendant without any supporting evidence adduced.  There is nothing to show that because of these contraventions (if any), the fire insurance of the building is rendered void or voidable.

A2 (g) :   whether meetings were properly convened

81.  It is the Defendant’s case that no valid management committee had been established from 2001 to 2003, hence meetings of the management committee or of the owners during that period could not be properly convened.  Mr. Chan testified that according to a Notice of Change of Particulars dated 4 June 2001 filed with the Land Registry (page 1340 Bundle E), the Defendant was being named as the treasurer of the Plaintiff together with Mr. Lee as the Chairman and a Dr. Yih as the secretary of the Plaintiff. Mr. Chan said that the Defendant was never aware of herself being so appointed. The appointment was in fact a fake.  The Defendant had never performed or discharged any statutory duties as a treasurer.  Other than this, Mr. Lee, who is the Director of Ganford Enterprises Limited (“Ganford”), the named owner of B/F No. 34F, had failed to produce any authorization letter supporting the fact that he was appointed to represent Ganford to sit as a committee member.  The minutes of the meeting in which resolution had been passed to cover the said appointment is not produced either.  So the meeting held on 10 April 2003 in which the adjustment of the management fees had been decided was not properly convened since it was not convened by the chairman nor by any valid management committee in accordance with Schedule 3 of the Building Management Ordinance.

82.  Mr. Lee said in his evidence that no minutes was being kept for meetings back in 2001 since no management company had been hired then.  The committee members for 2001-2003 were being appointed in accordance with the Building Management Ordinance and the Defendant was well aware of her appointment.  Since there were only 5 owners for No. 34F, when meetings were being held, usually the three owners present will become the committee members. As for the authorization letter of Ganford, Mr. Lee said that there was one then but neither Ganford nor the management company had kept a copy of it.  As for the meeting on 10 April 2003, Mr. Lee said that 3 committee members of each of the 6 IOs agreed for a meeting to be convened concerning the revision of the management fees.  Chairman of the 6 IOs then decided on the date of the meeting and instructed the management company to issue notice of meeting to each owner.

83.  Having heard evidence from both parties, I accept the evidence of Mr. Lee as more credible on a balance of probabilities.  I see no reason why the Plaintiff had to fabricate the appointment of the Defendant in 2001.  And according to a letter signed by the Defendant to the management committee of the 6 IOs dated 18 October 2003 (page 319 Bundle D1), the Defendant claimed to be the treasurer of the Plaintiff.  This document is produced by the Defendant and no issue had ever turned on this document.  I found this document did support the fact that the Defendant had once been appointed as the treasurer and there was a valid appointment of the management committee in 2001.  And given the lapse of time, it would not be unreasonable for either Ganford or the management company not to keep the copy of the authorisation letter used in 2001.  There is no evidence to contradict Mr. Lee’s evidence as far as the convening of the meeting of 10 April 2003 is concerned.

A2(h) : whether minutes of meetings were provided to the owners

84.  Mr. Chan’s evidence is that no minutes of meetings had ever been provided to the owners.  The Defendant had sent written request for minutes from 2001 to 2007, (i) by way of letter dated 23 November 2007 (page 1391-1392 Bundle E), (ii) at the owners’ meeting convened by Mr. Chan and held on 12 December 2007 (minutes at page 1342-1344 Bundle E), (iii) in the Defence and Counter-claim filed with the Small Claims Tribunal (“SCT”) on 22 October 2008 and (iv) by way of letter dated 31 December 2010 (page 1595-1599 Bundle E); but all met with no reply.

85.  Mr. Lee replied that all notice and minutes of meetings were being sent to each and every owner by inserting into their letterboxes and he was unaware of any request made by the Defendant since letters were all addressed to the management company who had not related the same to the Plaintiff.  As for the SCT proceedings, it was also dealt with by the management company who had not shown any document to Mr. Lee.

86.  Having heard the evidence, I accept Mr. Lee’s evidence on a balance of probabilities.  If no minutes had been provided since 2001, why didn’t the Defendant raise this with the Plaintiff earlier but wait till 2007 when parties had argument about the placing of personal properties in common parts of the building.  And what was being raised at the owners’ meeting convened by Mr. Chan on 12 December 2007 was not a request for the minutes.  The letter dated 31 December 2010 was just a request for discovery in this proceedings and cannot be treated as a request before proceedings.  His counter-claim in the SCT cannot amount to a request either.  Mr. Chan had included all these to support the fact that written requests had been made is unjustified.

A2(i) : whether the Plaintiff is in breach of duty in the manner it keeps bank accounts

87.  Mr. Chan’s evidence is that the Plaintiff had not opened the bank accounts in the name of the Plaintiff but in the name of some individuals from the 6 IOs.  This is in breach of Section 20 of the Ordinance.  What’s more, the bank accounts held by the individuals has not been audited.  Mr. Lee explained that the bank accounts were being held in the name of 3 chairmen out of the 6 IOs since it involved 6 IOs and it was undesirable to let only one IO to hold the bank account.  Such a move was in fact on the advice of the District Office and District Board members.

88.  The fact alleged by the Defendant is not in dispute but it is the submission of the Plaintiff that Section 20(3) of the Ordinance does not require the bank accounts to be set up in the name of the corporation nor is there any requirement that bank accounts held by individuals for the corporation has to be audited.

89.  Section 20(3) of the Ordinance reads “a corporation shall open and maintain an interest-bearing account and shall use that account exclusively in respect of the management of the building”.  On the face of it, there is nothing to suggest that the corporation should be named as the holder of the bank account.  But Section 20(7) of the Ordinance specifically provided that “any reference in this section to an account is a reference to an account opened … in the name of the corporation”.  By keeping the bank accounts not in the name of the Plaintiff is in breach of Section 20 of the Ordinance.

A2 (j) : whether the management committee members were validly appointed in 2001-2003

90.  This issue had in fact been covered in paragraph 81-83 under the issue A2 (g) and I don’t think I need to repeat myself save and except to state the findings that the management committee members for 2001-2003 were validly appointed.

Conclusion : whether (a) to (j) above, if established, can form a valid defence to the Plaintiff’s claim for outstanding management fees

91.  Even if any or all of the allegations under (a) to (j) above are substantiated, I still find none of them to be capable of a defence to the Plaintiff’s claim.  The management fees are required for the daily operation of the management of the building.  No matter how bad the Plaintiff managed the building, expenses have to be incurred in the running of it.  If owners were allowed to withhold their payment of management fees, the Plaintiff would not be able to maintain the basic service and to pay the public utilities.  If the Defendant was dissatisfied with the management of the Plaintiff, the proper course should be bringing it to the attention of the Plaintiff at meetings of owners or of the management committee.  If the Defendant was dissatisfied with the performance of the committee members or staff of the Plaintiff, she may consider requesting for a meeting of owners to be convened and for the committee members or staff to be replaced.  The Defendant cannot refuse to pay her share of the management fee because of her dissatisfaction.

92.  In the final submission, it is raised by the Defendant that the court should refuse to entertain the Plaintiff’s claim under the doctrine of “he who comes to equity must come with clean hands”.  I agree with the submission by Mr. Leung for the Plaintiff that this doctrine is not applicable to the Plaintiff’s claim which is one based on the DMC and the Ordinance, ie a contractual claim and equity had no place to play.  And even if this doctrine is applicable, as said at page 5 of Spry : The Principles of Equitable Remidies (7th ed) :

 “it is often found that a statement that has been extrapolated from an equity judgment, and is then construed out of its own context, gives rise to confusion and to attempts to misapply it.  An example is found in the use of the maxim, he who comes to equity must approach the court with clean hands.  This is doubtless a maxim which is both striking and succinct and which may be found to be of value for many explanatory or justificatory purposes.  But when its content is examined it is seen that it is of little or no use in assisting a court to decide whether, if specific performance is sought, relief should in the particular circumstances be refused.  So it has been established that even a plaintiff who has been guilty of fraud, which is hardly consistent with clean hands, may under some circumstances obtain equitable relief, such as where, for example, the fraud has been waived by the other party and there is no additional consideration that renders the grant of that relief unjust.  Again, it has been laid down that the absence of clean hands, is of no account “unless the depravity, the dirt in question on the hand, has an immediate and necessary relation to the equity sued for”. When such exceptions or qualifications are examined it becomes clear that the maxim that predicates a requirement of clean hands does not set out a rule that is either precise or capable of satisfactory operation.”

I do not think that it is reasonable to suggest that once the Plaintiff has committed any breach of the DMC and/or the Ordinance, it is debarred from enforcing any other provisions of the DMC and/or the Ordinance even when such enforcement is not related to the Plaintiff’s own breach at all.

A3 : validity of the resolution in respect of the revision of the management fees passed at the Owners’ Meeting held on 10 April 2003

93.  It is the Defendant’s case that since the said Owners’ Meeting was one for the 6 IOs, and the quorum of the meeting was counted by way of more than half of the number of all owners from the 6 IOs, this is in contravention of the Ordinance.  And it was also unknown as to whether the owners who had been present at the meeting had the necessary undivided shares to form the quorum and how many votes each owner should have.  The representative who attended the said Owners’ Meeting for the Defendant’s unit is someone unknown and the Defendant had never received any notice of meeting.

94.  Mr. Lee testified that the quorum for the said Owners’ Meeting was more than half of all owners for the 6 blocks of building.  Mr. Lee had not attended the meeting but Ganford had signed a proxy to authorise one Mrs. Law to attend.  The management company had checked the proxy for each representative.  It had all along been the practice that the 6 IOs will hold their owners’ meeting and management committee meeting together and due to the number of owners involved, all owners are invited to attend the management committee meetings as well. 

95.  Paragraph 5(1)(b) Schedule 3 of the Ordinance stipulated that “the quorum at a meeting of the corporation shall be 10% of the owners”.  And in calculating whether a quorum is present, those present by proxy as well as those physically present are included.  Since the said Owners’ Meeting was one jointly held by the 6 IOs, each IO should have a quorum required under the law.  To decide whether there was a valid resolution to bind the Defendant, this court should only look at the quorum of No. 34F.  According to the minutes of meeting (page 979 Bundle E), 3 owners of No. 34F were present.  Given the fact that there are only 5 owners for No. 34F, this clearly meets the basic quorum required under the Ordinance.  Mr. Chan had raised the fact that the “Mr. Chan” named as representative for the Defendant’s unit was someone unknown.  I found this is just a bare assertion.  I accept the evidence of Mr. Lee that the proxy of each representative will be checked before the meeting.  If there was no valid proxy for the “Mr. Chan” at the said Owners’ Meeting, he would not be allowed to stay and vote at the meeting.  The said Owners’ Meeting was being held at least 7 years ago and it would not be unreasonable for the Plaintiff or the management company not to keep the proxies for the said meeting.  I found the fact that no proxy for the said meeting had been produced does not affect my finding of the fact that there was in fact proxy produced from the Defendant and checked by the management company.

96.  Paragraph 3(3) Schedule 3 of the Ordinance provides that “all matters arising at a meeting of the corporation at which a quorum is present shall be decided by a majority of votes of the owners voting either personally or by proxy”.  And according to the Second Schedule of the DMC for No. 34F (page 267 Bundle D1), each owner of No. 34F has a equal share, i.e. each owner has the same number of votes for their share.  Given the fact that the resolution concerning the revision of management fees was being passed by way of unanimous vote (page 980 Bundle D4), the resolution must be a valid resolution as far as the owners of No. 34F are concerned.  I found the resolution passed on 10 April 2003 concerning the revision of management fees validly passed and binding against the Defendant.

A4 : Res judicata

97.  It is the Defendant’s case that the Plaintiff had lodged a claim with the SCT against the Defendant for management fees between July 2004 to October 2007.  Such a claim was dismissed by the SCT on 28 November 2008.  And at the hearing of the SCT on 24 September 2008, the Plaintiff agreed and the Adjudicator found that the DMC did not stipulate any management fees (page 1460 Bundle E).  It is an abuse of process for the Plaintiff to go after the Defendant again for the management fees of the same period in this proceedings.

98.  The Plaintiff agreed there was such a claim at the SCT but denied that the claim was being dismissed on merits.  Mr. Lee’s evidence is that the claim was dismissed on 28 November 2008 since the representative of the management company had failed to show up (transcript of hearing at page 1230-1232 Bundle D4).

99.  The general statement of principle of res judicata can be found in the case of Ray Chen v. Wan Ching Lam & another , HCA 4582 of 2001, Ma J (as he then was).

“Res judicata in its narrow sense simply means that a party will not be permitted to relitigate in subsequent proceedings issues which have already been adjudicated upon in previous proceedings by a court of competent jurisdiction. This form of abuse of process is often known as res judicata proper or res judicata in its classic or narrow sense.” (at paragraph 22)

100.  From the transcript of the hearing before the SCT on 28 November 2008, the reason for the dismissal of the claim by the Plaintiff was that “the representative from the claimant has not arrived yet, so I intend to dismiss the claimant’s claim” (page 1231 Bundle D4).  So the issue concerning the outstanding management fees had not been adjudicated by the SCT.  As for the comment made by the Adjudicator at an earlier hearing relied upon by the Defendant, such a comment was not found in the copy of transcript produced (page 1460 Bundle E).  The page of transcript produced just shown an exchange of conversation amongst representative of the Plaintiff, representative of the Defendant and the court interpreter.  Nothing had been said by the Adjudicator, least to say a comment as alleged by the Defendant.  I found the Defendant failed to establish the defence of res judicata.

B1 : whether the management fees paid for the period from July 2004 to October 2007 ought to be refunded

101.  Given my ruling that the Defendant had failed to establish a valid defence as far as the revision and charging of management fees are concerned and the DMC and/or the Ordinance did allow such to be levied, I found no justification for the refund of the management fees paid by the Defendant within the said period.  The Defendant’s counter-claim on this must fail.

B2 : whether the management fee deposit of $3,000 ought to be refunded

102.  Given my ruling in paragraph 100 above, the Defendant’s claim under this head must also fail.

B3 : whether the payment of $39,000 made by the Defendant for the car park space ought to be refunded

103.  Given my ruling in paragraph 38 above, there is no basis for the refund of the payment of $39,000.  The Defendant’s counter-claim under this head must fail.

B4 : whether an injunction should be granted against the illegal structures if proved to exist

104.  Given my ruling on illegal structures above, the allegation of illegal structures on the wall opening and the Management Office are established.  As for the illegal wall opening, given my finding at paragraph 32 above that it is the only access to the B/F unit of No. 34F, to fill up the wall opening is to prevent the owners of B/F to have exclusive occupation and enjoyment of the B/F unit.  This cannot be right.  I found it to be unjust and inequitable to impose an injunction for the filling up of this wall opening. As for the Management Office, I accept the submission by Counsel for the Plaintiff that since it is situated on the land of No. 34L, to impose an order against the Plaintiff serves no purpose since the Plaintiff cannot do anything without consent of the land owner of No. 34L.  I declined to grant an injunction against the Plaintiff as far as these illegal structures are concerned.

B5 : whether an injunction should be granted to restrain the Plaintiff from further breach of the DMC or the Ordinance

105.  According to my findings, the only breach committed by the Plaintiff is in the establishment of a bank account under the name of the corporation and in the display of the Certificate of Registration (see paragraph 106 below). I found these breach should be remedied by the Plaintiff but this does not mean that a mandatory injunction ought to be granted.  According to the leading case of Morris v Redland Bricks Ltd [1970] AC 652, “a mandatory injunction can only be granted where the plaintiff shows a very strong probability upon the facts that grave damage will accrue to him in the future”.  I found the Defendant had failed to show that there is any damage, least to say grave damage likely to accrue in the future and hence, I will exercise my discretion in declining to grant an injunction.

B6 : whether the display of certificate of registration in the management office a valid display

106.  It is not in dispute that the certificate of registration of the Plaintiff is being displayed inside the Management Office which is not within the building of No. 34F (photo at page 1227 Bundle D4).  Section 11(1) of the Ordinance required the certificate of registration to be displayed at the building.  What the Plaintiff had done in regard to the display of the certificate of registration is clearly in breach of Section 11(1) of the Ordinance. 

B7 : whether a CCTV camera is wrongly pointing at the Defendant’s front door

107.  As found in paragraph 78 above, I found this allegation not substantiated and in any event, there is no suggestion by Mr. Chan that the situation persisted.

B8 : whether the Plaintiff is liable for the loss and damage suffered by the Defendant in respect of matters pleaded in Schedule II of the Amended Defence & Counter-claim

108.  According to my finding above at paragraph 48 to 69 above, all the allegations pleaded in Schedule II are not substantiated.  The Plaintiff should not be liable for any loss and damages suffered, if any.  In any event, there is no evidence from the Defendant as to what loss and damages were being suffered as a result of the allegations even if substantiated.  The Defendant’s counter-claim for damages must fail.

B9 : whether the harassment pleaded in Schedule II has been established and if so whether the court ought to grant an injunction

109.  Since all the allegations of harassment are found not to be substantiated, this court failed to see any ground to justify an injunction against the behavior alleged.

B10 : whether the insurance coverage has been compromised by reason of the UBW and whether an injunction ought to be granted

110.  As found by this court in paragraph 80 above, there is no evidence to show that the insurance coverage has in any way been affected by the UBW.  Hence, no injunction will be granted.

B11 : whether the installation of gas pipe is the liability of the Plaintiff or Towngas and whether it poses any real risk to the Defendant

111.  According to the ruling at paragraph 66 above, the gas pipe is being installed at the advice of Towngas and done by Towngas.  I found the Plaintiff is only acting on the expert advice of Towngas and should not be liable for it.  And it is also ruled that no real risk is established by the Defendant. 

CONCLUSION

112.  I found the Defendant is liable to pay the outstanding management fees to the Plaintiff and all the counter-claim of the Defendant must fail.

The Order

113.  It is ordered that :-

a. The Defendant is to pay the Plaintiff the sum of $87,500 being management fee from November 2007 to December 2011;

b. Interests on the said sum at half of the judgment rate from the date of writ to the date of judgment, and thereafter at judgment rate until full payment;

c. All counter-claims by the Defendant be dismissed;

d. Costs order nisi that costs of this action be to the Plaintiff without Certificate for Counsel, to be taxed if not agreed. Unless any of the parties applies by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.