THE INCORPORATED OWNERS OF CAMBRIDGE COURT v. TERESITA CECILIA BOTELHO

LDBM 83 OF 2002

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 83 OF 2002

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J U D G M E N T

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1. This is a case transferred to the Lands Tribunal by the Small Claims Tribunal. The Applicant is a corporation of owners of the building known as Cambridge Court situated at 84, Waterloo Road, Kowloon, whereas the Respondent is the owner of Flat B1 on 7/F, and vehicle parking space no. 110 on 5/F of the building. By this application, the Applicant applies for a declaration that the roof is the common part of the building and it also applies for an order that the Respondent is to pay the contribution money for water proofing work of roof and sewage repairing works at the rear lane of the building, in the sum of $2,748, particularized as follows: -

Renovation of roof ($405,300)	Drainage system ($80,000)
Residence
$405,300÷200=$2,027	$80,000÷200=$400	Total:	$2,427
Carpark
($2,027×12)÷118=$206	$400×34÷118=$115	Total:	$321
		Total:	$2,748
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2. The Applicant is represented by Mr. Alexander Chow Yiu Chor, a staff of the Land Asia Management Co. Ltd., the manager of the Cambridge Court. This manager commenced managing the building on 1st January 2002, when the services of the former manager, the Hsin Chong Property Management Ltd. expired at the end of 2001. Mr. Chow was also a staff member of this company. The Respondent is now residing in Canada and was represented by her father in these proceedings, and he is residing at the flat in question.

3. On 2nd March 2001, the Applicant held an owners' meeting. After Mr. Yeung of Yiu Hing Hong Company Limited had explained in detail the materials to be used and the construction work procedures adopted in Module 2 in respect of the water proofing work of the roofs of Block A and Block B, and had answered the questions raised by owners and owners' representatives, the meeting passed a resolution to adopt Module 2 (the construction costs in the sum of $405,300) for the water-proofing work of the roofs of Block A and Block B.

4. Mr. Botelho took part in the meeting on 2nd March 2001. He objected to the passing of the resolution. He told the meeting that he did not believe that the new owner (on the 25th floor) bought the flats without a roof, and if there was any repair, the owner should pay for the repair costs. Despite his objection, the meeting passed the resolution.

5. The meeting also passed a resolution that the contributions by the owners to the water-proofing work (Module 2) in the sum of $405,300, and the sewage repairing works at the rear lane in the sum of $80,000 are to be calculated according to the shares of the owners.

6. By notice dated 15.3.2001, the Hsin Chong Real Estate Management Ltd. informed the owners of Cambridge Court the amount of contribution payable by each owner.

7. These 2 items of work were completed in August, 2001.

8. Are the roofs of Block A and Block B common parts of the building?

The Applicant regarded the roofs of Block A and Block B as common areas. But the Respondent argued that the Deed of Mutual Covenant provides that the roofs were expressly reserved for the first owner. He felt that the existing owners of the 25th floor of each block should be the owners of the roofs. If they should be the owners, they should repair the roofs for just a couple of thousand dollars.

8.1 Clause 3(F) of the Deed of Mutual Covenant provides as follows: -

"(F) The First Owner expressly reserves the exclusive right to use the roof for its own lawful use whether for advertising or other purposes and also the lobbies on the 4th and the 5th Floors of the said Building and no other owners shall have any right of access thereto."

8.2 Clause 8 of the DMC provides: -

".......... AND IT IS HEREBY DECLARED that subject to Clause 3(B)(ii) hereof the First Owner shall have and retain the exclusive use of the penthouse (if any) and the roof of the said Building and the right to erect so on or other advertising signs thereon without reference to the owners or occupiers of any other part or parts of the said Building notwithstanding that the First Owner may have ceased to have any share or interest of and in the said premises."

8.3 The Applicant produced information obtained from the Company Registry on 16th May 2002 to show that the First Owner, Ming Man Land Investment Company Limited was dissolved on 5th February 1974. Since that day the reservation of the use of the roof referred to in Clauses 3(F) and 8 of the DMC for this company no longer existed.

8.4 The Applicant produced searches made in the Land Registry regarding the ownership of the 2 residential premises (Flats A2 and A3) on 25th floor of Block A, and the ownership of the 2 residential premises (Flat B2 and B3) on 25th floor of Block B. A1 and B1 are water tanks and plant rooms. The information shows that the owners of these 4 flats are not owners of the roofs immediately above these flats.

8.5 Under Clause 3(D) of the DMC, the owners of flats or units from the ground floor to 25th floors were given shares for the purpose of calculation of contribution to various charges and expenses for the operation maintenance repairs and replacement of common utilities equipment and common parts, and the management of the whole Building. But no such share is given in respect of the roof. If it had been owned by any person, that owner would have been given such a share. The phrase "Commons parts" has the following definition under section 2 of the Building Management Ordinance ("the Ordinance"), Cap. 344 of the Laws of Hong Kong: -

"(a) the whole of a building, except such parts as have been specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner, and

(b) unless so specified or designated, those parts specified in the First Schedule;"

8.6 Under paragraph 3 of the First schedule to the Ordinance, the common parts include "the roofs". In the present case since 5th February 1974, the roofs of Block A and Block B are no longer subject to the use of the First Owner, because it no longer exists, so they form parts of the common parts of the Cambridge Court.

9. Is the Respondent liable to pay the repair charges?

On page 2 of the Notice of Opposition, the Respondent referred to an occasion of repair which took place in 1994 (see Exhibit No. R1). He said that on completion of the repair work, the roofs leaked very heavily since 1994, right up to the middle of 2001, and then the management committee called another meeting of owners to tell them everyone must contribute for the repairs. This time the cost of repairs for the roofs were indicated as $405,300. The meeting he referred to must be the meeting which was held on 2nd March 2001.

9.1 The Respondent said that the Chairman admitted that the contractor did nothing to repair the roofs except to touch up where it leaked. The Chairman also said that the $50,000 retention money was not paid to the contractor, and the contractor decided to have nothing to do with the roof. The Respondent queried, in respect of the amount of $280,000 for the repairs of the roofs and $50,000 retained, who pocketed the $230,000. He queried why the management committee in 2001 wanted people to pay again $405,300 for the same roofs and the same repairs. I cannot see how the occasion of repair work which took place in 1994 can have any connection with the repair work in 2001. The owners decided on 2nd March 2001 in the owners' meeting to repair the roofs and the sewage system at the rear lane. That decision is binding on all the owners of the Building because according to Clause 17(k) of the DMC "Any resolution passed at a duly convened meeting by a majority of the owners present in person or by proxy and voting shall be binding on all the owners entitled to attend and vote at such meeting."

9.2 The Respondent opined that the sum of $80,000 for repairs to the rear lane drainage system should not have been collected with the money for the roof repairs. Normally, the monthly maintenance fees totalling close to $200,000.00 always should have a surplus, and the money is supposed to be kept in a Special Fund account to meet emergency use. A few months before the last management company left, he spoke to the manager and learned that there was about $200,000 surplus funds. A couple of weeks later he asked the manager again. The manager said that there was no money left and the Incorporated Owners were in deficit and owed their company money. He asked why, and the manager replied that $130,000 was taken out for the surveyor and $80,000 for repairs to the rear lane. He opined that it was evident from this that the Applicant should not have demanded the $80,000 with cost of repairs to the roofs in the first place, and now they have taken $80,000 a second time. The manager was not called as a witness, and so the Respondent's evidence is hearsay evidence. I would not attach weight to what was said by the ex-manager.

9.3 In any event the resolution passed by the Owners' Meeting on 2nd March 2001 is binding on the Respondent.

9.4 The Respondent has no valid defence to the Applicant's claims. I therefore enter judgment in terms of its claims. The Respondent is to pay the sum of $2,748 within 7 days from today.

10. Costs

I make an order nisi for costs, to be taxed if not agreed, to the effect that the Respondent is to bear the Applicant's costs (including the costs of the proceedings in the Small Claims Tribunal). This order will become absolute if no application is made in 21 days' time.