NG YUI TONG v. TAIKOO SHING (MANAGEMENT) LTD

LDBM 116/2018

[2018] HKLdT 67

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 116 OF 2018

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D E C I S I O N

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1.  This is the application by the respondent under O.18 r.19 of the Rules of High Court (“RHC”) to strike out the Notice of Application (“NOA”) filed by the applicant in this case on the ground that:

(a)   it is scandalous, frivolous or vexatious; and/or

(b)   it is otherwise an abuse of process of the Tribunal.

Undisputed Facts

2.  The applicant is the owner of a flat at Fu Shan Mansion of Taikoo Shing (“TKS”).  The respondent is the Manager of TKS.

3.  According to the Deed of Mutual Covenant (“DMC”) of TKS, there are the Representative Committee (“RC”) and the Management Liaison Council (“MLC”) established to represent the interest of all owners.  Serving members of the RC are owners, 2 from each completed block and 2 from the shops (Clause 6B(i) of DMC) (B/18-19).  And the RC shall elect from their members not more than 3 persons as representatives to serve on the MLC (Clause 6C of DMC) (B/19).

4.  Clause 12 of the DMC provided that “A member of the Representative Committee shall hold office until … (H)e is removed from office by the owners by ordinary resolution passed at an extra-ordinary general meeting of the owners called for the purpose” (Clause 12(a)(3) of DMC) (B/40-41) and this is the only provision in the DMC which governs the removal of any member of the RC.

5.  The applicant was a member of the RC of TKS Stage III and a Stage III MLC Councillor and remained an RC member until 31 December 2017. 

6.  By a notice of meeting issued on or about 9 June 2012, the applicant became aware of the fact that there would be an RC meeting to be held on 22 June 2012 (“the Meeting”) and Agenda 4 is “To discuss whether Mr Ng Yui Tong, Owner’s Representative of Fu Shan Mansion is suitable to continue to be a Stage III MLC Councillor” (“Agenda 4”) (B/84).  The applicant had raised with the respondent by email that Agenda 4 was not allowed under the DMC.  Despite such objection, the Meeting was held as scheduled with Agenda 4 discussed (minutes at B/86).

7.  On 28 May 2018, the applicant issued the NOA in this case asking for a declaration that Agenda 4 is in breach of the DMC (B/1).

8.  By a summons dated 14 June 2018, the respondent asked for the NOA to be struck out.

Respondent’s Contention

9.  It is the submission of Mr. Hunsworth that the NOA seemed to suggest that the mere inclusion of Agenda 4 at the Meeting is of itself a breach of the DMC but there is nothing in Clause 12, or anywhere else in the DMC, to say that this constitutes a breach of the DMC.  It had been made clear at the Meeting that a member could only be removed by a resolution at a meeting of owners but the RC are perfectly entitled to discuss the issue under Agenda 4.  There can never be a breach of the DMC.

10.  In any event, since the applicant was not removed in 2012 and he remained a member of RC until December 2017, even if the applicant’s contention is right, ie the RC should not have allowed Agenda 4 to be discussed, nothing has come out of the discussion so the question of whether Agenda 4 should be discussed becomes academic and the declaration sought by the applicant serves no useful purpose at all.  And the NOA was not issued until almost 6 years after the date of the matter purportedly complained, the court should discourage the bringing of this type of nuisance litigation which is an abuse of the process or are scandalous or vexatious.

Applicant’s Reply

11.  The applicant submitted that even though Clause 12 provided for the removal of a RC member by a resolution at an owners’ meeting, there is nothing in the DMC which allows for Agenda 4 to be discussed at an RC meeting.  Clause 7(a)(28) of the DMC empowered the respondent “(T)o convene such meetings of the Representative Committee … as may be necessary or requisite…” and “such meetings” must be meetings related to the powers and functions of the management company stipulated in Clause 7(a) of the DMC, which did not include any meeting to discuss the issue in Agenda 4.  The respondent has no authority to convene the Meeting to discuss the matter under Agenda 4 and the RC does not have the function to discuss about the suitability of a member or the removal of the same.

12.  The applicant also denied that the issue stated in the NOA had become academic since Agenda 4 had been discussed and this is in breach of the DMC.  Such a breach is an actual infringement of any legal rights and the declaration sought did serve a practical purpose.

Legal Principles

13.  O.18 r.19 RHC is the basis for the striking out application.  Mr. Hunsworth for the respondent is relying on 2 limbs in O.18 r.19, i.e. frivolous or vexatious and abuse of process.

14.  The legal principles of striking out has been succinctly stated in the Hong Kong Civil Procedure 2018 and the relevant provisions are copied below:

a.   it is only in plain and obvious cases that the court should exercise its summary powers to strike out (§18/19/4);

b.   the claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out (§18/19/4);

c.   if, on a careful reading of the Statement of Claim however complicated, it can be seen that there is no cause of action, a court can, and probably will, order it to be struck out (§18/19/4);

d.   the object of the rule is to stop cases which ought not to be launched – cases which obviously frivolous or vexatious, or obviously unsustainable (§18/19/7);

e.   a proceedings is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed (§18/19/7);

f.   a proceedings is vexatious when it is oppressive and/or lacks bona fides (§18/19/7); and

g.   the term “abuse of the process of the Court” connotes that the process of the court must be used bona fide and properly and must not be abused.  The court will prevent the improper use of its machinery, and will, in a proper case, summarily prevent its machinery from being used as a means of vexation and oppression in the process of litigation (§18/19/9).

15.  In the case of 曾婉玲訴兆隆苑業主立案法團 (LDBM 199/2001, unreported, 18/9/2001), HHJ Lam (as he then was) found that:

“21. Hence, it is possible for the Tribunal to grant a declaration without any consequential relief if the Tribunal is satisfied that it should exercise its discretion to do so.

22. A well established reason for a court to refuse to grant declaratory relief is a situation where the exercise does not serve any useful purpose. The principle is summarized in Zamir & Woolf, The Declaratory Judgment, 2nd Edn., at Para.4.087,

"If it can be shown that a declaration would not serve any practical purpose, this will weigh heavily in the scales against the grant of declaratory relief. If, on the other hand the grant of declaratory relief will be likely to achieve a useful objective, the court will be favourably disposed to granting relief. The question of whether or not any useful purpose would be served by granting declaratory relief is therefore of prime importance in determining how discretion should be exercised." (at §22)

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.

Costs

23.  Costs should follow the event.  The application in the NOA is totally devoid of merits and a costs order on indemnity basis is justified. 

24.  The respondent had submitted a Statement of Costs for summary assessment asking for costs in the total sum of $185,777 covering 46 hours of professional work. This is a simple and straight forward application for striking out and still in the very initial stage of the proceedings.  I think a total of 10 hours of professional work for a solicitor of 7-8 years standing should be more reasonable.  The costs is summarily assessed at $30,707.  This is a costs order nisi.  Unless any of the parties applies by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.

The Order

25.  It is ordered that:

a.   the Notice of Application be struck out and be dismissed; and

b.   costs of this application be to the respondent, to be taxed if not agreed on indemnity basis, at District Court scale and summarily assessed at $30,707.  This is a costs order nisi.  Unless any of the parties applies by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.