WONG KAM TONG v. THE INCORPORATED OWNERS OF TIN SHING COURT, YUEN LONG

[English translation – 英譯本]

HCMP 1454/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1454 OF 2011

(ON AN INTENDED APPEAL FROM LDBM NO. 284 OF 2011)

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BETWEEN

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DECISION

1.  The 1^st Respondent applies to this Court for leave to appeal against the decision made by Deputy Judge Kot, Presiding Officer of the Lands Tribunal, on 9 June 2011.

Background facts

2.  The Applicant is the owner of Flat 2001, Shing Him House, Tin Shing Court, Tin Shui Wai.  The 1^st Respondent is the Incorporated Owners of Tin Shing Court (“the Incorporated Owners”).  The 2^nd to the 16^th Respondents are the members of the 4^th Management Committee of the Incorporated Owners, and the 17^th Respondent is the legal adviser of the Incorporated Owners, who provides his/her service on a pro bono basis.

3.  The Applicant applied to the Lands Tribunal for an order:

(i)   That the resolution passed at the general meeting of the owners held on 17 October 2010 concerning the election of the 5^th Management Committee was invalid; and

(ii)   That the costs be borne by the 2^nd to the 17^th Respondents personally.

4.  The background and facts relevant to the application can be summarized as follows:  In the meeting held on 29 June 2010 the 4^th Management Committee of the Incorporated Owners resolved to appoint the 17^th respondent as the returning officer to be responsible for making arrangements for the election of the 5^th Management Committee, including drawing up rules to regulate the conduct of the candidates and rules to regulate the conduct of home visits.  These two sets of rules were printed on the election forms of the 5^th Management Committee election and each candidate was required to sign at the end of each set to confirm that he agreed to comply with everything stipulated therein, and that he agreed that if he did not do so, his candidacy would be revoked.  The signatures signifying agreement to observe the rules were absent in the election form handed in by the Applicant.  Even though he was reminded by [a] staff member of the services office of the estate, he still firmly refused to sign them.  Later, the 17^th Respondent pointed out to the Applicant that he had to append his signatures there, but the Applicant did not comply; therefore, the 17^th Respondent refused to accept his application for entering into the election.  At the owners’ general meeting held on 17 October 2011, the Applicant and 8 other owners, who were in situations similar to that of the Applicant, proposed that they be allowed to enter their names there and then for the election.  The owners who were present voted on whether they could be allowed to do so and this proposal, which was outside the agenda, was voted down by a large majority.

5.  The rules which the Applicant disputed were rule 5 of the rules for regulating the conduct of the candidates and rules 9 and 12 of the rules for regulating the conduct of home visits.  It was laid down in these provisions that if a candidate broke the rules, the returning officer had the power to disqualify him from running in the election.

Application made to the Lands Tribunal

6.  The application made by the Applicant to the Lands Tribunal was about the following issues:

(1)   Whether the 4^th Management Committee had the power to appoint a returning officer for the 5^th Management Committee election;

(2)   Whether the Management Committee or the returning officer had the power to make election rules; if the answer is affirmative, whether the provisions, the subject matter of the disputes in this case, were reasonable;

(3)   Whether the Management Committee or the returning officer had the power to disqualify an owner from running in the election;

(4)   Whether the 5^th Management Committee election was invalid as a result of one or both of the following matters:

(a)   The applicant being disqualified from running in the election; or

(b)   The voting down of the proposal put forward at the owner’s general meeting held on 17 October 2010 for allowing some owners to enter their names there and then for the election; and

(5)   Whether the 2^nd to the 17^th Respondents should personally bear the costs.

7.  The Deputy Judge made the following rulings in respect of these issues:

(1)   The 4^th Management Committee had the power to appoint a returning officer.  The 17^th Respondent was lawfully appointed.

(2)   The Management Committee had the power to lay down procedures and draw up rules for the re-election. The rules regulating the conduct of the candidates and the rules regulating the conduct of home visits made by the 17^th Respondent for the 5^th Management Committee election were, except for the rules about disqualification, all reasonable provisions.

(3)   As regards the issue of whether the Management Committee or the returning officer had the power to disqualify an owner from running in the election, in paragraph 25 of the Decision, the Deputy Judge made the ruling that “except in circumstances where the conditions set out in paragraph 4(1) of Schedule 2 of the Ordinance are fulfilled, the Incorporated Owners, the Management Committee or the returning officer has no power to impose restrictions on the eligibility of a candidate to run in an election or to disqualify that person from running in the election by reason of his failure to observe the election rules.”

(4)   The members of the 5^th Management Committee were elected through lawful procedures.  The legality of the election should not be affected by the disqualification of the Applicant from running in the election.  The resolution passed at the owners’ general meeting held on 17 October 2010 which disallowed some owners to enter their names there and then for the election was lawful.

(5)   In this incident, the 2^nd to the 17^th Respondents acted in good faith, and the election procedures which gave rise to the disputes had actually been in use for a long time, the appropriateness of which had never been challenged before; therefore, they should not bear the costs of this case.

8.  In short, the Deputy Judge held that the Applicant’s claim failed.  As far as costs are concerned, she considered that since neither side had a complete victory in this case, she made an order nisi that there be no order as to costs.  The 1^st Respondent applied to the Tribunal for variation of the order nisi.  On 19 July 2011, the Deputy Judge refused its application.

Application for leave to appeal

9.  The 1^st Respondent applies for leave to appeal against the following two items, i.e. a ruling and an order:

(1)   The ruling in paragraph 25 that “except in circumstances where the conditions set out in paragraph 4(1) of Schedule 2 of the Ordinance are fulfilled, the Incorporated Owners, the Management Committee or the returning officer has no power to impose restrictions on the eligibility of a candidate to run in an election or to disqualify that person from running in the election by reason of his failure to observe the election rules”; and

(2)   The order that there be no order as to costs.

Item (1) of the subject matters of the intended appeal — the ruling

10.  The Deputy Judge’s reasons for making the ruling which is item (1) of the subject matters of the intended appeal are (paras 21 to 25 of the Decision):

“Whether the Management Committee or the returning officer has the power to disqualify an owner from running in the election

21. The Applicant’s argument is that paragraph 5(2)(a) of Schedule 2 of the Ordinance stipulates that the general meeting of the owners shall appoint the members of a management committee from amongst the owners, and that paragraph 4(1) of Schedule 2 prescribes which categories of persons are not eligible to be appointed, it follows that the Ordinance prescribes the eligibility criteria to run in an election for members of a management committee, namely that a person is eligible to run if he is an owner and does not belong to either one of the categories of people set out in paragraph 4(1) of Schedule 2. Therefore, according to the Ordinance, the Applicant is already entitled to run in the election. It is illegal for the Respondents to disqualify the Applicant from running in the election by reason that he did not sign against the declaration [under] the rules, and to specify in the rules that anyone who breaks the rules shall be disqualified from running in the election.

22. The Respondents’ answer is that after the rules were made, if there was no sanction in the form of disqualification from running in the election, the returning officer would not be able to perform his/her duty. Paragraph 4(1) of Schedule 2 of the Ordinance only indicates which categories of people cannot be appointed as a member of a management committee, but it does not prescribe whether an owner can be barred from entering into an election and who has the power to make decisions as to the eligibility of an owner to run in an election. In interpreting these legal provisions, the court should adopt an interpretation that gives effect to the meaning of these provisions. The legal provisions having said nothing about what should be done about these matters, the Respondents should have the power to disqualify the Applicant from running in the election when be broke the election rules.

23. I do not accept the argument put forward by the Respondents. The Ordinance expressly provides that anyone who is an owner is eligible to run in the election and to be appointed as a member of a management committee, unless he/she is a person as described in paragraph 4(1) of Schedule 2. This fact is not disputed. This is the only legal provision which lays down a requirement on the eligibility of an owner to run in an election. Any owner who meets this requirement is qualified to run in an election. Given that this requirement is stipulated in the legal provision and that there is no other requirement stipulated in any other provision, I think the only interpretation is that the Ordinance does not allow the deprivation of an owner’s eligibility to run in an election in any other circumstances. The Respondents argued that because there was no other legal provision touching upon these matters, the interpretation which gives effect to the meaning of the provisions should be adopted. Such argument has no legal basis. If the interpretation favoured by the Respondents is adopted, then actions can be taken in circumstances and in a way neither provided for nor specified in the law. Such an approach is against the principles of statutory interpretation.

24. As for the need of the returning officer to enforce the rules, as mentioned above, the prerequisite of the enforcement of any rules must be its compliance with the statutory requirements. If the rules in question deprived the Applicant of his right to run in the election, this is against the law and the rules in question cannot stand. The rules which allow the returning officer to disqualify the Applicant from running in the election when he did not observe the rules violate the provisions of the Ordinance and are invalid.

25. I rule that except in circumstances where the conditions set out in paragraph 4(1) of Schedule 2 of the Ordinance are met, the Incorporated Owners, the Management Committee or the returning officer has no power to impose restrictions on the eligibility of a candidate to run in an election or to disqualify that person from running in the election by reason of his failure to observe the election rules.”

11.  The grounds of appeal relied on by the 1^st respondent in relation to this ruling can be summarized as follows:

(1)   Paragraph 4(1) of Schedule 2 of the Building Management Ordinance is only concerned with what categories of persons cannot be appointed as a member of a management committee.  It does not stipulate that owners of the building other than those people can be members of a management committee as a matter of course.  Whether by applying the literal rule or taking into account the meaning necessarily implicit in the words, paragraph 4(1) of Schedule 2 should not be interpreted as:  All the owners are entitled to be members of a management committee except the persons specified in that provision.

(2)   Paragraph 4(1) of Schedule 2 only specifies what categories of persons cannot be appointed as members of a management committee. It does not define what categories of persons are not entitled to run in an election.  The right to be appointed is in essence different from the right to run in an election.  To interpret these two kinds of rights as identical rights is contrary to the literal rule.

(3)   The scope of paragraph 4(1) of Schedule 2 cannot be extended to lead to the conclusion that an owner’s right to run in an election cannot be revoked or taken away by any person, organization or body.

(4)   The interpretation given by the Deputy Judge to paragraph 4(1) of Schedule 2 is inconsistent with the requirements laid down in section 19 of the Interpretation and General Clauses Ordinance in that she failed to interpret the provision in the light of the object of the legislation and failed to give the provision a fair, large and liberal construction or interpretation.

(5)   The Building Management Ordinance contains no provision which governs the rules or procedures of a management committee election.  How to elect suitable persons to manage the affairs of a building is a matter of collective decision making amongst the owners.  The Deputy Judge’s equating the eligibility to be a member of a management committee with the eligibility to run in an election is not in line with the legislative intent.

(6)   The Deputy Judge on the one hand ruled that the Incorporated Owners had the power and the duty to establish rules and procedures for the re-election so as to ensure that the re-election could proceed smoothly and systematically, but on the other hand she ruled that neither the Incorporated Owners nor the returning officer had the power to disqualify anyone from running in the election on the ground that he broke the election rules.  This approach would disable the Incorporated Owners from effectively enforcing the rules and procedures which it established, with the result that the re-election could not proceed smoothly and systematically.

12.  The Applicant opposes to granting leave to appeal to the 1^st Respondent.  His main grounds of opposition are as follows:

(1)   The powers of the Incorporated Owners come from the Building Management Ordinance and are subject to the restrictions and limitations contained therein.  Paragraph 4(1) of Schedule 2 stipulates who are eligible to be appointed as a member of a management committee.  However, throughout the Ordinance, there is no provision which permits or empowers the Incorporated Owners or any person to impose any restriction on the eligibility to run in a management committee election, or to disqualify a person who is eligible to be a candidate in an election from running in the election.  It was held in paras 20-22 of Lau Ying Han v 11^th Management Committee of the Incorporated Owners of Tai On Building CACV 4011/2001 that the Ordinance provided a complete set of rules to govern the composition and procedure of a management committee.  Therefore, if no relevant power has been conferred by Schedule 2 on the Incorporated Owners, then it has no power to disqualify an owner from running in an election.

(2)   The application made by the Applicant has been dismissed and the Applicant has not appealed.  The appeal intended to be lodged by the 1^st Respondent will not affect the Land Tribunal’s decision.  The 1^st Respondent’s intended appeal against ruling (1) above is about an academic question, lacking in practical significance. The applicant relies on paras 34 and 35 of the determination in Deacons v White & Case LLP & Others (2003) 6 HKCFAR 322.

13.  My view is that whether the Incorporated Owners, the Management Committee or the lawfully appointed returning officer has the power to impose any restriction on an owner’s eligibility to run in an election, or to make any decision as to under what circumstances an election form will become invalid, or even to make the decision to disqualify an owner from running in an election, and in what way paragraph 4(1) of Schedule 2 should be interpreted are issues concerning points of law and they are arguable.  The correctness of the ruling made by the Deputy Judge is not unquestionable.  The grounds of appeal put forward by the 1^st Respondent are not unworthy of debate.  It is noteworthy that in paragraph 4(1) of Schedule 2 there is no mention of the eligibility of an owner for running in an election.  Indeed, nowhere in the Ordinance is there any provision which governs the eligibility of an owner to be a candidate in an election.  On the other hand, in Schedule 2, besides paragraph 4(1), paragraph 4(2)(f) also gives power to the Incorporated Owners to remove by resolution an owner from the office of member of a management committee.  It can be seen that an owner who does not belong to either one of the categories of people specified in paragraph 4(1) may, under certain circumstances, forfeit his membership in a management committee or be dismissed by the Incorporated Owners from that office.

14.  However, in view of section 11(2) of the Lands Tribunal Ordinance, my conclusion is that leave to appeal against the ruling in question should not be granted to the 1^st Respondent.  Section 11(2) provides that:

“... any party to proceedings before the Tribunal may appeal to the Court of Appeal against a judgment, order or decision of the Tribunal on the ground that such judgment, order or decision is erroneous in point of law.”

15.  In relation to proceedings before the Lands Tribunal, the jurisdiction of the Court of Appeal is restricted to “a judgment, order or decision of the Tribunal”; and “a judgment, order or decision” refers to the result of a trial or hearing rather than the reasons given by the judge for reaching that result: Cie Noga d’ Impatation et d’ Exportation SA v Australia and New Zealand Banking Group Ltd & Others [2003] 1 WLR 307, paras 27 and 53.

16.  The ruling against which the 1^st Respondent intended to appeal is not a “judgment”, “order” or “decision” made by the Deputy Judge on the applicant’s claim, but is only one part of her analysis and a conclusion reached by her in the course of her making the final judgment and order.  According to section 11(2), the 1^st Respondent is not entitled to appeal against it and the Court of Appeal has no jurisdiction to entertain the appeal intended to be brought by the 1^st Respondent.

17.  The legal representative of the 1^stRespondent, in his written submission (paragraph 4(b)), referred me to section 11AA(5)(a), which provides that:

“Leave to appeal may be granted –

(a) in respect of a particular issue arising out of the judgment, order or decision;”

18.  I am of the view that what section 11AA(5)(a) refers to is a particular issue which appears in a judgment, order or decision; that is to say, the issue originates from the judgment, order or decision.  It does not refer to the grounds or reasons for making the judgment, order or decision.  This view can be confirmed by the English version of section 11AA(5)(a).[1]

19.  As for the case Deacons v White & Case LLP & Others which the Applicant relies on, the circumstances there are different from those in this case.  In this case, the 1^st Respondent submitted that this ruling of the Deputy Judge would affect the operation of the Management Committee in future re-elections, and impact on how the Incorporated Owners could regulate re-elections to ensure that they would be done smoothly and in an orderly manner.  The 1^st Respondent also pointed out that this ruling is bound to have far reaching influence on the procedures and the regulation of re-elections of management committees of the Incorporated Owners of other buildings.  I think that the 1^st Respondent’s submission in this respect is not devoid of merit.  Therefore, this issue should not be viewed as purely a matter of theory or an academic question.

Costs order

20.  As regards the costs order, when the Deputy Judge refused to grant leave to appeal, she gave further explanation.  She said that the Applicant’s claims arose as a result of the election rules giving power to the returning officer to disqualify an owner from running in the election, that this was the central issue of the litigation and that as far as this central issue was concerned, the Applicant was the successful party, while the 1^st Respondent was the losing party; so that therefore the Applicant’s claims were not ones without any basis in law.

21.  The ground put forward by the 1^st Respondent for its intended appeal is that all the Applicant’s claims were dismissed by the court except the one relating to the issue about disqualification; therefore, according to the usual rule that costs shall follow the event, the Applicant should bear the whole or 80% of the 1^st Respondent’s costs.  The 1^st Respondent relies on Kwan Siu Wa Becky v Cathy Pacific Airways Limited CACV 92/2010 (unreported) 19 April 2011 paras 6-9.

22.  It is not disputed that the Deputy Judge had discretion to deal with the costs of the litigation. The clear and definite legal principle is that in general the Court of Appeal will not interfere with a trial judge’s exercise of discretion unless he is erroneous in matters concerning legal principles. In my judgment, the 1^st Respondent has failed to demonstrate that the Deputy Judge’s exercise of discretion had violated any legal principle.  The appeal which it intended to lodge against the costs order does not have a reasonable prospect of success, and in this case there is no other reason which shows that in the interests of justice there should be a hearing of the appeal.

Conclusion

23.  On the basis of the above analysis and reasons, I refuse to grant the 1^st Respondent leave to appeal.  I make no order as to costs of this application.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.

[1] “Leave to appeal may be granted –

(a) in respect of a particular issue arising out of the judgment, order or decision.”