The Incorporated Owners Of Tsuen Wan Garden v. Sky Pacific Property Consultant Ltd.

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 102 of 2000

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J U D G M E N T

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1. Tsuen Wan Garden is situated at 15-23 Castle Peak Road, Tsuen Wan, New Territories (the estate).

2. The applicant is the Incorporated Owners of the estate.

3. The respondent is the manager of the estate.

4. A Deed of Mutual Covenant dated 3rd March 1981, was registered on 2nd April 1981, at the District Land Office Tsuen Wan, under Memorial number 215174 (the DMC).

5. A Management Agreement dated 3rd March 1981, was registered on 2nd April 1981, at the District Land Office Tsuen Wan, under Memorial number 215175 (the MA).

6. The applicant applies for a declaration as to whether clause 5 and the Third Schedule of the DMC should override the effect of clauses 3 and 4(a) of the MA or vice versa.

7. The respondent asked to be excused from attendance at the hearing. It has indicated that it will abide with the ruling of the Lands Tribunal.

8. The estate consists of Plot A and Plot B. Plot A includes Podium A, with commercial units and car parks, and 4 residential towers. Plot B includes Podium B, with shops and commercial units, and one residential tower. There are gardens and recreational facilities on each of the podium.

9. There are a total of 4,400 undivided shares allocated in accordance with the First Schedule of the DMC.

The Deed of Mutual Covenant

10. Clause 5 of the DMC provides:

"Excepting the owner for the time being of the COMMUNAL AREAS each and every owner described in Column II of Part I of the THIRD SCHEDULE hereto shall at all times hereafter pay the due proportion set out in Column III thereof against and opposite his description of the costs charges and expenses to well and sufficiently manage repair and maintain such part or parts of the said Land and TSUEN WAN GARDEN as described in Column I thereof such costs charges and expenses are set out in Part II of the THIRD SCHEDULE hereto and shall at all times hereafter be bound by and observe and perform the covenants provisions and restrictions set out in Part III of the THIRD SCHDULE hereto."

11. The Third Schedule provides:

"THE THIRD SCHEDULE
(Referred to in Clause 5)

PART I

COLUMN I	COLUMN II	COLUMN III
COSTS CHARGES AND EXPENSES FOR MAIN-TAINING AND INSURING ETC	DESCRIPTION OF OWNERS CHARGEABLE	DUE PROPROTION CHARGEABLE TO EACH OWNER
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1.The COMMUNAL AREAS as shown and delineated on the COMMUNAL AREAS PLAN hereto annexed thereon coloured YELLOW	All Owners of TSUEN WAN GARDEN except owner of the COMM-UNAL AREAS	Such Owner's Undivided Shares 4,000 Undivided Shares
2.The Common Parts of Podium "A" (except the Car Parks Floor) as shown and delineated on the PODIUM 'A' PLANS hereto annexed thereon coloured BROWN	All Owners Of Podium "A" (except owners of the Car Parks Floor)	Such Owner's Undivided Shares 881 Undivided Shares
3.The Common Parts of Podium "B" as shown and delineated on the PODIUM "B" PLANS hereto annexed thereon coloured BROWN	All Owners of Podium "B" (except owner of the caretaker's Rest Room on the 4th Floor)	Such Owner's Undivided Shares 570 Undivided Shares
4.The Common Parts of every Residential Tower as shown and delineated on the TYPICAL FLOOR PLANS of each Resident-tial Tower hereto annexed thereon coloured BROWN hatched BLACK	All Owners of the Residential Tower to which the Charges relate	Such Owner's Undivided Shares No. of Undivided Share of the Residential Tower to which the charges relate
5.The 2nd Floor of Podium "A" (Car Parks Floor) and the related approach roads ramps and pavements as shown and delineated on the CAR PARKS PLANS hereto annexed thereon coloured BROWN cross-hatched BLACK	All Owners of the 2nd Floor of Podium "A" (Car Parks)	@ a Fixed Rate from time to time determined by the Manager

The Management Agreement

12. Clause 2(e) of the MA states that the manager shall:

"Enforce the terms of these presents and the said Deed of Mutual Covenant."

13. At Clause 2(g)(vii), the manager is to pay:

"The cost of providing any or all the services to be performed by the Manager under the terms of these presents and the said Deed of Mutual Covenant."

14. Under Clause 3 (c), each owner shall :

"Pay to the Manager in advance on the first day of each calendar month his due proportion of the costs charges and expenses to well and sufficiently manage repair and maintain TSUEN WAN GARDEN as referred to in Clause 5 of the said Deed of Mutual Covenant such due proportion to be as follows:-

OWNERS PLOT 'A'	COSTS, CHARGES AND ESPENSES
Owners of Shop units on the Lower Ground Floor and the Upper Ground Floor, Entrance and Exit on the Upper Ground Floor	HK$65.00 per calendar month per undivided part or share of and in the said Land registered in the Owners' name
Owners of Commercial units on 1st Floor	HK$11.00 per calendar month per undivided part or share of and in the said Land registered in the Owners' name
Owners of Car Park on the 2nd Floor	HK$30.00 per calendar month per undivided part or share of and in the said Land registered in the Owners' name
Owners of Flats and the Main Roof	HK$27.60 per calendar month per undivided part or share of and in the said Land registered in the Owners' name
PLOT "B"
Owners of Shop units on the Lower Ground Floor and the Upper Ground Floor	HK$100.00 per calendar month per undivided part or share of and in the said Land registered in the Owners' name
Owners of Commercial unit on the 1st Floor	HK$60.00 per calendar month per undivided part or share of and in the said Land registered in the Owners' name
Owners of Commercial units on the 2nd and 3rd Floors	HK$40.00 per calendar month per undivided part or share of and in the said Land registered in the Owners' name
Owners of Flats and the Main Roof	HK$45 per calendar month per undivided part or share of and in the said Land registered in the Owners' name

15. Provided That each such sum may be increased at the option of the Manager the first of such increase may not be made earlier than 12 months after the date of the Occupation Permit for TSUEN WAN GARDEN and any subsequent increase may not be made earlier than 12 months after any of such last increase And Provided Further that each such increase shall not be greater in percentage than the percentage which the total deficit suffered by the Manager during the year immediately before such increase bears to the total of all such sums collected by the Manager during that year.

16. Under Clause 3 (d) the owners are to :

"Pay to the Manager in advance on the first day of each calendar month a fee of HK$3.00 per calendar month per undivided part or share of and in the said Land registered in his name Provided That such fee may be increased at the option of the Manager on the same days and in the same proportion and manner as provided in Clause 3 ( c ) above.

17. Clause 4(a) provides:

"The Owner whose unit is unoccupied for one or more complete calendar months shall nevertheless be required to pay the whole of the Management Fee payable under Clause 3 (d) above and onehalf of the monthly payments payable under Clause 3( c) above during the period the unit is not occupied."

18. The terms of the DMC and the MA, so far as the payment and responsibility for management expenses are concerned, are inconsistent with each other.

19. The owners and the manager had not been able to reconcile the two different approaches. It was decided to bring the matter to the Lands Tribunal for a decision.

Judgment

20. The DMC is the instruments binding on all owners. The covenants run with the land. It covers all aspects of the relationship between the owners.

21. The DMC made no reference to the MA. It does not operate under the constraint of the MA. The MA, by its wordings, operates under the provisions of the DMC.

22. The MA is a contract between the developer, the owners and the manager. It takes effect with reference to the DMC.

23. Under the MA, the manager is to enforce the DMC and the MA. The owners are to pay the management charges primarily with reference to Clause 5 of the DMC. All the relevant clauses of the MA are subject to the DMC.

24. It is clear the DMC should prevail over the MA.

Order

25. Clause 5 and the Third Schedule of the Deed of Mutual Covenant shall override the effect of Clauses 3 and 4(a) of the Management Agreement.

26. This order is to take effect from 2 August 2000.

27. There is no order as to costs.