SIMON PATRICK MICHAEL DURRANT v. INCORPORATED OWNERS OF SOUTHORN DEVELOPMENT

LDBM 230/2013

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 230 OF 2013

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J U D G M E N T

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Background

1.  The applicant is the owner of Flat 4204 Southorn Gardens, part of the Southorn Development (“the Development”) and the respondent is the Incorporated Owners of Southorn Development (“IO”).

2.  On 10 August 2013, the IO received a letter dated 8 August 2013 from the applicant (“A’s Letter”) (page 65 of Bundle) requesting for an inspection of :

“the books of account of Southorn Development for the period from January 2010 to December 2012, … the books of account should, but not exclusivity (sic), include :

(a) the time cards for workers who worked directly for the MTR or indirectly as an employee of any contractor hired by the MTR to carry out any form of work at Southorn Development;

(b) any and all invoices and receipts issued by the MTR or IO for any work carried out, maintenance, purchases, sales, at Southorn Development;

(c) Any and all invoices and receipts received by the MTR or IO in relation to Southorn Development;

(d) Any and all work sheets, job orders, description of work ordered/carried out, maintenance records, plus conformation of job inspected and carried out in Southorn Development;

(e) Details of any work the IO or the MTR instructed internal or external contractors to carry out in Southorn Development;

(f) Any and all records relating to Southorn Development not listed above;

(g) Any and all records documents required to create such invoices, receipts, records as list above.”

3.  In A’s Letter, the applicant asked for the documents requested to be “ready for inspection within 7 days of the date of this letter – i.e. the 15 August 2013”.

4.  MTR Corporation Ltd (“MTR”), the management company on the instruction of the IO, sent a reply letter dated 12 August 2013 to the applicant (“R’s reply”) (page 66 of Bundle).  Contents of the letter reads :

“The matter is now being handled by us and we will keep you informed of the progress in due course. Should you have any enquiries, please do not hesitate to contact our Mr. James Lau, Senior Property Officer at …”

5.  On 12 August 2013, the applicant filed the Notice of Application (“NOA”) in this case with the Lands Tribunal and the NOA was being served on the IO on the same day.  In the NOA, the applicant is asking for an order, pursuant to section 27(2) and Paragraph 2(5) Schedule 7 of the Building Management Ordinance (“BMO”), to inspect the books of account including but not limited to all the documents listed in paragraph 2 above as well as the following 2 additional document :

“(h) the visitor logs for flat 4204 on 27 October 2009 and for the full years 2010, 2011, 2012; and

(i)  all the security footage from all the lobby security cameras on 18 May 2013 from 2pm to 6pm inclusive.”

(Documents at §2(a)-(g) and 5(h)-(i) herein are collectively called the “Itemized Documents.)

6.  By a summons dated 8 October 2013, the respondent asked for the NOA to be struck out.  In the decision handed down on 18 November 2013 (“the Decision”) (page 33-48 of Bundle) for the striking out application, this court ruled that :

“17. To summarise from the above quoted legal provisions in the BMO, the incorporated owners is required to keep the books of account and other financial records, either by its management committee or its manager. The documents which an incorporated owners is required to keep are different from the documents which the owners are allowed to inspect. Whilst the management committee or the manager are duty bound to allow an owner to inspect “the books or records of account and any income and expenditure account or balance sheet” (“Financial Documents”), the “bills, invoices, vouchers, receipts and other documents” named in Paragraph 1 Schedule 6 (“Other Documents”) are not something which an owner is entitled to have an inspection as of right.

18. Under Schedule 6, any owner who seeks to inspect the Other Documents must meet one of the following 2 requirements :

(a) he must have the support of not less than 5% of the owners; or

(b) he must be authorized by the court.

19. In order to be authorized by the court to inspect the Other Documents, the owner has to apply to the court for an order to inspect and the court must be satisfied that the application is made in good faith and for a proper purpose.

…

22. Judging from the statutory provisions, the request made by the applicant under the NOA should be considered by differentiating the documents into 2 categories, i.e. the books of account and the itemized documents stated in paragraph 3 and 6 above (collectively called the “Itemized Documents”). The books of account is covered by Section 27 and Schedule 7 whilst the Itemized Documents does not fall within these 2 legal provisions.

…

33. So, unless these Itemized Documents falls within the kind of documents named under Paragraph 1 Schedule 6, the applicant being the owner of the Development is not entitled to ask for an order for inspection.”

It is ordered that the applicant’s application for inspection of the books of account be struck out and the applicant’s request for inspection of the Itemized Documents named in the NOA be adjourned for trial.  The applicant then amended the NOA to add Schedule 6 of BMO as the basis for inspection of the Itemized Documents.

7.  This is the hearing of the applicant’s request for the Itemized Documents and at trial, the applicant confirmed that the period involved is between October 2011 to January 2012.  The Itemized Documents can be divided into 3 different types :

(a) documents relating to maintenance work at the Development as particularised at §2(a) to (g) above (“Maintenance Record”);

(b) visitor logs particularized at §5(h) above (“Visitor Logs”); and

(c) security footage particularized at §5(i) above (“Security Videos”).

Undisputed Facts

8.  In late August 2011, painting work was being performed on the lift doors on 42/F of Southern Garden. The applicant complained to the MTR about the different colour painted as well as the quality of workmanship.  Photographs were being taken by the applicant to show the condition of the lift doors (page 99-103 of Bundle) (“the Photos”).  As a result of repeated complaints from the applicant, the lifts doors were repainted time and again. 

9.  On 5 January 2012, the applicant filed a claim in the Small Claims Tribunal against MTR and the IO alleging that quiet enjoyment had been interrupted because of the repainting work (SCTC 430/2012 refers) (“the SCT Proceedings”) (page 149-150 of Bundle).  The SCT Proceedings was being dismissed on 11 June 2013.  In the course of the SCT Proceedings, Mr. Lau of MTR had filed a witness statement dated 13 July 2012 in which the work schedule for the repainting work on 42/F was being disclosed (“Work Schedule”) (page 104-108 of Bundle).

10.  The Work Schedule disclosed did not tally with what was being depicted on the Photos, i.e. on the dates shown on the Photos, no work was reported to be done on the lifts in the Work Schedule.  And the Work Schedule also showed that contractor as well as technical staff of the IO had been deployed to perform the repainting work.

11.  The applicant failed to pay any management fee since March 2010 and the sum is still outstanding as of today.  The IO had taken legal actions against the applicant for the arrears of management fees including an application for the enforcement of charging order by sale in the District Court (DCMP 2266/2012 refers) (“DC Proceedings”).  The background of the enforcement action leading to the DC Proceedings has been succinctly recorded in the judgment of the DC Proceedings dated 31 December 2013 between the applicant (as the Defendant) and the IO (as the Plaintiff) and I shall gratefully adopt the same :

“2. This is essentially a mortgage action commenced by an originating summons dated 6 August 2013 (“OS”) … Master Yip heard the arguments and gave judgment against the defendant on 7 November 2013.

3. The defendant took out the Summons on 6 December 2013 to appeal against the Order of Master Yip and ask for a stay pending his appeal.

…

10. The defendant has refused to pay management fees since March 2010.  The plaintiff’s manager, MTR Corporation Limited (“MTR”), commenced a recovery action against the defendant at the Small Claims Tribunal under SCTC 45424/2010.

11. Eventually, an award in the sum of HK$5,740 plus interests and costs (“Award”) was granted by the Small Claims Tribunal against the defendant on 3 November 2010.

12. The defendant having refused to satisfy the Award, pursuant to the DMC, the plaintiff relied on the Award to create a Memorandum of Charge dated 20 April 2011 (“MOC”) and caused the same to be registered against the Property in the Land Registry by Memorial No. 11050603280034 on 6 May 2011.

13. The plaintiff commenced these proceedings against the defendant to enforce the MOC pursuant to the DMC.  Up till the date of the OS, the amount charged under the MOC stood at HK$10,154.30.

…

16. … Actually the defendant confirmed at the hearing that he has refused to pay his outstanding management fees and the Award.

17. The defendant’s contention is, in a nutshell, that he is not liable to pay the plaintiff any management fees under the DMC owing to an assault victimizing him in May 2010.

18. He further says that the security guard is still on duty at the Building and there is no reason why he should pay for the salary of such a person having assaulted him.

…

25. In the result, I agree with Master Yip that the plaintiff is entitled to the relief set out in the OS.  I accordingly dismissed the defendant’s appeal by way of the Summons.”

Relevant Statutory Provisions

12.  It is not in dispute that the following provisions in the BMO are relevant in the consideration of this application.

13.  Paragraph 1 Schedule 6 required:

“all bills, invoices, vouchers, receipts and other documents referred to in the books or records of account and other records maintained under section 27(1) shall be kept by the management committee”.

Paragraph 1A imposed a mandatory duty that:

“the management committee shall -

(a) at the request of not less than 5% of the owners, permit those owners or any person appointed by those owners to inspect any bills, invoices, vouchers, receipts or other documents referred to in paragraph 1 at any reasonable time; and

(b) permit any person authorized by the court to inspect any bills, invoices, vouchers, receipts or other documents referred to in paragraph 1 at any reasonable time.”

14.  For the purpose of Paragraph 1A(b), Paragraph 1B Schedule 6 of the BMO provided that:

“an owner may apply to the court for an order authorizing the owner, or any other person named in the application, to inspect any bills, invoices, vouchers, receipts or other documents referred to in paragraph 1”.

And the court may make an order under Paragraph 1B if it is satisfied that:

“(a) the application is made in good faith; and

  (b) the inspection applied for is for a proper purpose.”

15.  In a gist, under Schedule 6, any owner who seeks to inspect the bills, invoices, vouchers, receipts or other documents must meet one of the following 2 requirements:

(a) he must have the support of not less than 5% of the owners; or

(b) he must be authorized by the court.

16.  And in order to be authorized by the court to inspect the documents, the owner has to apply to the court for an order to inspect and the court must be satisfied that the application is made in good faith and for a proper purpose.

Party’s Contention

17.  The applicant contends in his testimony that the request for inspection of the Itemized Documents is justified because the Photos proved that MTR had falsified records of maintenance works done at the Development.  He suspected that the repainting work might not be registered for 42/F but instead registered as general repair work or for some other floors.  The Security Videos and the Visitors Log will show who had attended the Building for the maintenance work.  The Maintenance Records can assist in finding out the identity of the contractors, and with the job sheets, invoices and receipts issued for each job order, he can keep track of the maintenance occurs at the Development.  Without the Itemized Documents, he would not know what is going wrong.  Should any criminal element be found after inspection of the Itemized Documents, the applicant may consider further action including reporting to the police. 

18.  The respondent objects to the application on the ground that the request made by the applicant is not in good faith nor for a proper purpose and the whole action of the applicant is just a counter-action against the IO’s enforcement action against the applicant for non-payment of management fees since 2010.

Discussion

19.  An incorporated owners has often been thought of as being in some way analogous to a company incorporated under the Companies Ordinance (Cap. 622) (“CO”).  The CO has similar provisions empowering the court to allow a member of the company to inspect records or documents.  Section 740 of CO (Section 152FA in the repealed version) is a provision which is similar to Para. 1A and 1B of Schedule 6 involved in this case.  Section 740 of CO reads :

“(1) On application by a required number of a company’s members, the Court may make an order—

(a) authorizing a person who is the applicant or one of the applicants to inspect any record or document of the company; or

(b) authorizing a person who is not the applicant or one of the applicants to inspect any record or document of the company on behalf of the applicant or applicants.

(2) The Court may make an order authorizing a person to inspect a record or document if it is satisfied that—

(a) the application is made in good faith; and

(b)  the inspection is for a proper purpose.”

20.  As far as the interpretation of “in good faith” and “proper purpose” in this section of the CO is concerned, Ng J had, in the case of Ho Kwok Keung Tony v Hub Global Freight Solutions (HK) Limited (HCMP 670/2012) 7 June 2013, set out the relevant considerations from 2 previous judgments :

“9. Section 152FA provides as follows:

(1) Subject to sections 152FD and 152FE, on application by such number of members of a specified corporation as is specified in subsection (2) (in this section referred to as “applicant”), the court may make an order—

(a) authorizing the applicant or any one or more of such members applying as applicant to inspect any records of the specified corporation; or

(b) authorizing a person (whether or not a member of the specified corporation) other than the applicant to inspect any such records on behalf of the applicant.

(2) For the purposes of subsection (1), an application may be made by—

(a) any number of members representing not less than one-fortieth of the total voting rights of all members having at the date of the application a right to vote at a general meeting of the specified corporation;

...

(3) The court may only make an order under subsection (1) if it is satisfied that—

(a) the application is made in good faith; and

(b) the inspection applied for is for a proper purpose.

(4) Any person who is authorized by the court to inspect the records of a specified corporation may make copies of the records unless the court orders otherwise.

10. A director is generally entitled to inspect the documents of a company in order to discharge his duties as a director. A shareholder is in a different position. Other than documents he is entitled to under the Ordinance, for instance, the financial statements which have to be put before a company in general meeting pursuant to section 122, a shareholder is in general not entitled to inspect a company’s documents or obtain copies of them. He can, however, apply to court for an order to inspect records of a company under section 152FA if he can fulfill the twin requirements that (a) the application is made in good faith; and (b) the inspection is for a proper purpose.

11. In Wong Kar Gee Mimi v Hung Kin Sang Raymond [2011] 5 HKLRD 241, Harris J said this in relation to the section:

“14. …In this regard, it appears to me that the two tests under section 152FA(3), to some extent, lay down a subjective and objective test: the applicant must first establish that he believes his purpose in applying for an inspection order is proper (i.e. that he is acting in good faith) and secondly, the Court must believe the circumstances are such that the inspection applied for is for a proper purpose.

…

24. ...In my view, section 152FA affords shareholders an often overlooked yet powerful right by which to expose wrongful conduct in relation to the company’s affairs. Where the shareholders and directors are at loggerheads, the right of access to corporate information is particularly important: in these circumstances, even if a member suspects that something is amiss, for example an egregious breach of fiduciary duty, he will be unable to protect his economic interest and financial investment within the company (through, for instance, a derivative action) unless he is able to obtain sufficient information.

25. By enacting section 152FA, the legislature provided an important new procedure for the protection of shareholder rights and interests and the community’s more general interest in the maintenance of good corporate governance. Section 152FA should therefore be interpreted and applied in a manner consistent with these legislative objectives. This can be achieved through taking a generous approach to the interpretation of what constitutes an interest ‘reasonably related’ or ‘germane’ to the applicant’s status as a shareholder. Given that a member’s status is based entirely on his shareholding in the company, I am inclined to think that where the purpose for seeking an inspection order is founded upon the protection against a change in the value of a member’s shares, that purpose is ‘germane’ to his status as a shareholder and ‘proper’ under section 152FA. Put another way, where a member seeks to protect his economic interest in the company, this should prima facie satisfy the ‘proper purpose’ requirement.

26. That, I think, was what the drafters of the American equivalent of s.152FA meant, when they said in paras. 286-288 of 18A American Jurisprudence 2d 2004: …

“288 Statutes providing for inspection by stockholders should be liberally construed in favour of stockholders, particularly in enforcing the inspection rights of stockholders in a close corporation, at least in the absence of a satisfactory showing of bad faith on their part.”

…

41. …[section 152FA] plainly requires that the court be satisfied that the applicant actually has a sufficiently reasonable ‘case for investigation’ by examining ‘what the applicant actually wants to achieve’ before exercising its discretion to intervene and grant the inspection order: see also Re LehmanBrown Ltd. per Deputy Judge Coleman SC at para. 45.”

12.      In a later decision Re Opes Asia Development Limited unrep. HCMP447/2012 17 May 2012, Harris J, at paragraph 6, adopted the following summary in counsel’s submissions as accurately reflecting the state of the case law on the subject:

“27.1 While the section expresses a composite notion, it does not mean that, if a proper purpose is proved, a case of good faith shall follow or is to be assumed. The ‘good faith’ and ‘proper purpose’ requirements constitute two separate and independent tests.

27.2 The burden is on the applicant to demonstrate that he is acting in good faith and that the inspection is for a proper purpose. The burden is not satisfied simply by suggesting that an inference can be drawn that the company resisting inspection must have something to hide.

27.3 Good faith means ‘honestly and with no ulterior motive’, and a proper purpose must be the primary or dominant purpose actuating the inspection.

27.4 The applicant must show that his application is not made out of a mere desire to obtain information, that the purpose of the inspection must be to assist him in his capacity as a member of the company, and that the proper purpose set up must be genuine and not a pretence.

27.5 The requirement of a ‘proper purpose’ is an objective test that calls for the court to look at all the circumstances and to determine whether the purpose for the inspection was indeed proper.

27.6 Even if the applicant is able to show that the application was made in good faith and for a proper purpose, the court may, in its discretion, ultimately consider that there is an insufficient prospect of anything useful resulting from the grant of the inspection order.

27.7 The section requires the court to be satisfied that the applicant actually has a sufficiently reasonable ‘case for investigation’ by examining ‘what the applicant actually wants to achieve’ before exercising its discretion to intervene and grant the inspection order.

27.8    The section should not be regarded as affecting the basic rule of company law that a shareholder should not ordinarily have recourse to the courts to challenge a managerial decision made by or with the approval of directors.”

21.  As can be seen from the quotation above, the “good faith” and “proper purpose” requirements constitute 2 separate and independent tests, i.e. subjective test to establish “good faith” and objective test to show “proper purpose”.  The burden is on the applicant to prove the 2 requirements.  “Good faith” means “honestly and with no ulterior motive and a “proper purpose” must be the primary or dominant purpose actuating the inspection.  Even if the applicant can show “good faith” and “proper purpose”, the court may, in its discretion, ultimately consider that there is an insufficient prospect of anything useful resulting from the granting of the inspection order.  The court has to be satisfied that the applicant actually has a sufficiently reasonable case for investigation by examining what the applicant actually wants to achieve before exercising its discretion to intervene and to grant the inspection order.

22.  I found the principles laid down in the case of Ho Kwok Keung Tony summarised above is applicable in this case.

23.  The applicant’s request for the Itemized Documents is premised on the fact that the Work Schedule was inaccurate leading to the applicant’s concern that the maintenance records kept are false document, hence the basis for an inspection. The applicant is relying on the Photos to establish that whilst the Work Schedule show the dates repainting work was being done on 42/F, this is inconsistent with the dates shown on the Photos which depicts repainting work was still in progress after the date on which the works was alleged to be completed by the IO.  And the applicant also contends that the minutes of the Management Committee held on 1 March 2012 produced by IO in these proceedings also supports his case since the report made by MTR on the maintenance works for October 2011 to January 2012 at the meeting showed nothing related to the repainting works on 42/F (page 152C-152D of Bundle).

24.  Mr. Choi, the chairman of the IO testified that the Work Schedule was accurate according to the record kept by MTR.  He said in his supplemental witness statement that :

“there is on-site technician in the Southorn Development and hemce, there was no cost incurred for the lift door repainting work except the material cost for the first time and repainting work was carried out by the on-site technician, therefore, no extra labour cost was involved; while for the subsequent repaintings, in response to the repeated complaints by the Applicant, both the labour and material costs were borne by the management company. Thus, the management company actually did not issue any invoices for the work. All these were recorded in the minutes of the Incorporated Owners and are now produced and shown to me and marked Attachment 2.” (at page 144 of Bundle)

25.  I do not agree with the applicant that the Photos show repainting works were still in progress on the dates the Photos were being taken.  It is apparent from the caption put on the Photos by the applicant that the purpose of taking the Photos is to show the condition of the lifts and the poor workmanship in the repainting. There is nothing in the Photos for this court to conclude that works are still in progress on the material day when the Photos are being taken.  It is also not the evidence of the applicant that he witnessed the work in progress on the date the Photos were being taken.

26.  The repainting work may not have been properly carried out and this explains the repeated complaint lodged by the applicant and the repeated work done.  Comparing the dates on the Photos with those on the Work Schedule, one can see that the dates on the Photos, except for the one taken on 7 January 2012 (page 103 of Bundle), are just a few days before the work recorded on the Work Schedule. The only inference to be drawn is that upon the complaint of the workmanship by the applicant after taking the respective photos, the IO arranged for repainting work to be done.  For example, photo taken on 31 October 2011 (page 99 of Bundle) and work done on 2 and 3 November 2011.  Photos taken on 13 and 14 December 2011 (page 100-101 of Bundle) and work done from 20 to 28 December 2011.  Photo taken on 29 December 2011 (page 102 of Bundle) and work done on 5 January 2012.  The last photo taken on 7 January 2012 and work done from 26 to 28 March 2012.

27.  Even though the applicant denied any knowledge of technical staff employed by the IO, it is apparent from the minutes produced in these proceedings that this is the case.  And the minutes of the meeting of 1 March 2012 also confirmed the fact that technical staff are being arranged to perform the repainting to save costs and MTR had also arranged repainting works at its own costs (page 152B of Bundle).  This corroborates the evidence of Mr. Choi and I accept his evidence in this regard.

28.  Since the technical staff is paid on a monthly basis, there is no extra costs incurred for the repainting works.  This is consistent with the suggestion at the 7 June 2012 management committee meeting that “lift door painting works were the general maintenance works of the building” (page 156B of Bundle).  This also explains why such work was not being included in the maintenance report of the MTR at the meeting on 1 March 2012 because as can be seen from the minutes (page 152C-152D of Bundle), all the maintenance works mentioned involved costs. Since the repainting work on 42/F was being performed by technical staff, it would only be reasonable for this not to be included in the report.  I do not agree that the maintenance work report supports the applicant’s case of false maintenance record.

29.  I am not satisfied that there is any basis to query the accuracy of the Work Schedule or whatever maintenance records kept by the IO or MTR.  Since the applicant failed to establish his basis for this application for inspection, he failed to show that he is acting on good faith.

30.  Even if the Photos can be taken to show that work had in fact been carried out on dates which were not shown on the Work Schedule, I still found that the applicant had failed to establish the 2 requirements under Para. 1B of Schedule 6 BMO.

31.  In the case of Ho Kwok Keung Tony (supra), the plaintiff being one of the shareholders of the defendant company, is asking for an inspection of the records, books and papers of the company on the ground that some entries in the audited accounts did not accord with his recollection.  Hon Ng J found that :

“31. The mere fact that a shareholder, from recollection, doubts the accuracy of one or two entries in a Company’s audited accounts does not in my view provide any support for a section 152FA application…. The section requires the court to be satisfied that the applicant has a sufficiently reasonable case for investigation before exercising its discretion to intervene and grant the inspection order.

32.      … he has to have some evidential basis to satisfy the court that the Company’s directors who sign off the accounts and the Company’s auditors who audit the accounts are wrong, and he is right.  The plaintiff has failed to do so on the evidence.”

32.  I found the same reasoning is also applicable in this case and the applicant has failed to adduce any evidence to show that there is something wrong in the maintenance records which justified an inspection.  Even if the Work Schedule didn’t show that repainting work was being carried out on those dates shown on the Photos, this cannot be conclusive evidence that the different documents included in the Itemized Documents must be false or inaccurate.  As said by the applicant in his evidence, what he is doing now is to “find out if accounts and the records are false and wrong”, “if you don’t keep track of the maintenance occurs in the building, you don’t know what’s going wrong” and “I am gathering evidence to show how works are listed or recorded”.  The applicant is making use of this application to find evidence to show that there is something wrong with the maintenance records instead of adducing evidence to show that something went wrong which justified an inspection.  This is just a fishing exercise trying to find fault from the documents.  The applicant is putting the cart before the horse and this defeats the legislation intention of the enactment of Para. 1A Schedule 6 BMO in allowing an inspection of documents.

33.  The applicant also expressed his concern that the repainting works may have registered as general repair works or works related to other floors.  There is no evidence to show that the work for 42/F or for specific floors had all along been credited to a specific account for that particular floor.  As pointed out above, members at the meeting on 7 June 2012 also accepted that repainting work on lift door is general maintenance work, the applicant failed to show it is wrong for such to be registered as general repair works.

34.  Furthermore, I am not satisfied that the applicant is acting in good faith in taking out this application and I accept the contention of the IO that this is just a retaliation against the IO’s enforcement action for the arrears of management fees.  The applicant argued that the IO’s enforcement action is irrelevant to his application for inspection.  I beg to differ.  If the applicant is acting in retaliation by asking for an inspection, this is relevant to show an ulterior motive.

35.  The IO commenced enforcement action against the applicant in 2010.  The repainting work took place in October 2011 to January 2012 and the Photos were being taken then.  The applicant had the affirmation of Mr. Lau in July 2012 and well aware of the Work Schedule stated therein.  So, by August 2012, the applicant should have notice of the discrepancies between the Photos and the Work Schedule.  Yet, no action had been taken by the applicant until 8 August 2013 when he sent A’s Letter asking for the Itemized Documents.  The applicant had just let the sleeping dog lie until just 2 days after the OS was being taken out by the IO in the DC Proceedings.  This is too much of a coincidence.  I found this application of the applicant cannot be “honest and with no ulterior motive”. 

36.  And even if the applicant can show good faith and proper purpose, I am still not satisfied that the applicant has “a sufficiently reasonable case for investigation”.  As said above, the applicant had failed to show any wrong in this case to raise a sufficiently reasonable case for investigation.

37.  What the applicant actually wants to achieve is to find fault on the IO and/or MTR without any basis.  This is not what Para. 1B Schedule 6 is intended to achieve. Should the applicant find suspicion in the maintenance record kept by MTR, what he should do is to raise this with the IO for whom to conduct enquiry and should not take the matter in his own hands by asking for an inspection of the documents.  The applicant had said in his evidence that he had tried to raise the same in many management committee meetings but was disallowed by Mr. Lau. There is nothing to support such a contention and this bare assertion of the applicant had never been mentioned in the documents he filed in this case.  I did not accept his evidence. 

38.  To conclude, I found the applicant had failed to discharge the burden of showing the 2 requirements in Para. 1B of Schedule 6 BMO, nor had he been able to convince this court to exercise the discretion in his favour.

The Order

39.  It is ordered that :

(a) the application for inspection of the Itemized Document in the Notice of Application be dismissed;

(b) costs of this application be to the respondent, to be taxed if not agreed at District Court scale.  This is a costs order nisi.  Unless any of the parties apply by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.