THE INCORPORATED OWNERS OF KA WAI BUILDING (JAVA ROAD) v. HWA YAT KWAN ALICE

DCMP 2900/2023

[2025] HKDC 1326

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 2900 OF 2023

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BETWEEN

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DECISION

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Introduction

1.  This is the defendant’s appeal by a Notice of Appeal dated 17 April 2025 (the “Notice of Appeal”) against an order made by a Master on 20 March 2025 (the “Order”) whereby the defendant was ordered to (amongst others):-

(1) pay to the plaintiff a sum of $40,168.00[1] (the “Sum”);

(2) deliver vacant possession of the property at ALL THAT Flat A1, on 2^nd Floor of Block A, Ka Wai Building, 146-166 Java Road, Hong Kong (the “Property”); and

(3) pay the legal costs of these proceedings summarily assessed at $130,000 (the “Costs Order”).

2.  By summons dated 17 April 2025 (the “Stay Summons”), the defendant also seeks a stay of execution of the Order pending her appeal.

Background

3.  The plaintiff is the Incorporated Owners of Ka Wai Building (the “Building”) in which the Property is located. The defendant is the registered owner of the Property.

4.  It is not disputed that the relationship between the parties is governed by a Deed of Mutual Covenant dated 23 November 1984 and registered in the Land Registry by Memorial No 2686184 (the “DMC”).

5.  The following provisions of the DMC are relevant:-

(1) Section V, Sub-Section D, Clause 1 provides, inter alia, that-

“Each of the Owners of the Estate shall pay a proportion of the management expenses in the manner hereinafter described. An estimate of the amount payable by the Owner of each Residential Unit or Commercial Unit upon the issuance of the Occupation Permit of the Estate is shown on the Second Schedule hereto. Any increase or decrease in the amount payable by the Owners under this Sub-Section shall be in direct proportion to the amount shown in the said Second Schedule. The Owners of the Estate shall pay a due proportion of the Management Expenses which shall be made up of the following:-

…

(i) All charges, assessments, impositions and other outgoing payable by the Owners in respect of all parts of the Estate’s Common Areas.”

(2) Section V, Sub-Section D, Clause 2(a) provides, inter alia, that:-

“Each Owners [sic] shall in respect of each Commercial or Residential Unit pay a due proportion of the cost and expenses mentioned in Clause 1 of this Sub-Section D (being the Management Expenses).”

(3) Payment of interest and a collection charge of $150 (the “Collection Charge”) for unpaid sums owed by the owners is separately provided under Section V, Sub-Section E, Clause 2 which provides, inter alia, that:-

“If any Owner shall fail to pay any amount payable hereunder within 30 days of the date on which the demand is made as aforesaid, he shall further pay to the Manager:-

(1) Interest calculated at the rate of $1 for each $100 or part thereof remaining unpaid for each period of 30 days or part thereof for which it remains unpaid.

(2) A collection charge of $150.00 or such other sum as the Manager may agree to cover the cost (other than legal costs of proceedings as hereinafter mentioned) of the extra works occasioned by the default.”

(4) Section V, Sub-Section E, Clause 4 provides, inter alia, that:-

“In the event of any Owner of Residential or Commercial Shares failing to pay any sum due and payable by him in accordance with the provisions of this Deed of Covenant or failing to pay any damages awarded by any court for breach of any of the terms or conditions of this Deed of Covenant within 30 days of the date on which the same became payable, the amount thereof together with interest as aforesaid and the said collection charge and all costs and expenses which may be incurred in recovering or attempting to recover the same including the legal expenses referred to in Clause 3 of this Sub-Section and in registering the charge hereinafter referred to, shall stand charged on the share or shares of the defaulting owner and the Manager shall be entitled without prejudice to any other remedy hereunder to register a Memorial of such charge in the Land Office against the share or shares of the defaulting Owner. Such charge shall remain valid and enforceable as hereinafter mentioned notwithstanding that judgment has been obtained for the amount thereof unless and until such judgment has been satisfied.”

6.  By a letter from the Buildings Department (“BD”) dated 7 August 2017, the plaintiff was required to carry out certain remedial works (the “Major Renovation Works”) in compliance with Order DBR/RB03-22/0001/11 (the “BD Order”).

7.  In light of the BD Order, on 19 September 2018, the plaintiff issued a notice to convene an Extraordinary General Meeting (“EGM”) of the owners on 4 October 2018 (the “19/09/18 Notice”). The agenda of the said meeting include the tabling of the following resolutions to:-

(a) approve the carrying out of the Major Renovation Works (Item 5);

(b) select the contractor to carry out the Major Renovation Works (Item 6);

(c) decide each owner’s share of the costs of the Major Renovation Works and the payment amount, payment date and the instalments of such share (Item 8); and

(d) decide the amount to be raised for the Major Renovation Works (Item 9).

8.  On 21 September 2018, the plaintiff issued a circular (the “21/09/18 Circular”) to the Building’s owners to explain the tendering process for selection of the contractor to carry out the Major Renovation Works and the costs of the Major Renovation Works as estimated by the independent consultant through the “Smart Tender” Building Rehabilitation Facilitating Services of the Urban Renewal Authority (“URA”). According to the 21/09/18 Circular, the relevant bidding prices and copies of the tendering documents supplied by the contractors bidding for the Major Renovation Works and the URA’s assessment report were made available for inspection by the owners of the Building.

9.  According to the minutes (the “October 2018 EGM Minutes”) of the EGM held on 4 October 2018 (adjourned to 25 October 2018) (the “October 2018 EGM”) which was attended by over 44% of the owners, the following resolutions were passed by the majority in shares of the owners attending the October 2018 EGM to approve (amongst others):-

(1) the carrying out of Major Renovations Works for (amongst others) repair of the exterior wall of the Building, painting works in the common area, fire safety works, water-proofing works at the rooftop and on the 1^st floor podium, plumbing and metal works, see: Item 5 of the October 2018 EGM Minutes;

(2) selection of Man Yuen Construction Engineering Company Limited (“Man Yuen”) as the contractor for the Major Renovation Works[2], see: Item 6 of the October 2018 EGM Minutes; and

(3) that each owner would have to pay their respective share of contract amount in 5 monthly instalments at 30%, 20%, 20%, 15% and 15% of the total sum payable with effect from 1 November 2018, see: Item 8.1 of the October 2018 EGM Minutes.

10.  According to a Contribution Fee Notice dated 8 November 2018 (“1^st Contribution Notice”) issued by the plaintiff:-

(1) The total cost of the Major Renovation Works was $32,841,250 after relevant adjustments.

(2) The contribution to the Major Renovation Works by the defendant as owner of the Property[3] (“MRW Contribution”) was to be paid according to the following schedule:-

	Payment deadline[4]	Instalment ($)
1	10/12/2018	32,762
2	2/1/2019	21,842
3	1/2/2019	21,842
4	1/3/2019	16,381
5	1/4/2019	16,381

(3) Owners were expressly warned that the plaintiff would charge interest on any arrears and commence legal proceedings in accordance with the DMC if their shares of the contribution were not paid by the abovementioned payment deadlines.

11.  On 25 March 2019, the plaintiff entered into a contract with Man Yuen for the Major Renovation Works.

12.  On 2 June 2019, the plaintiff issued another notice (the “02/06/19 Notice”) to convene an Extraordinary General Meeting of the owners on 19 June 2019 (the “June 2019 EGM”). The agenda of the said meeting include the tabling of the following resolutions to (amongst others):-

(1) approve 16 items of additional works which were outside the scope of the original Major Renovation Works at a total cost of $3,880,200.00 (the “Variation Orders”) (Item 2);

(2) collect contributions from the owners in the net sum of $2,814,200.00 as additional reserve funds for the Variation Orders after taking into account the Common Area Repair Works Subsidy provided by the URA[5] (Items 3 and 4); and

(3) decide each owner’s share of the costs of the Variation Orders and the payment date of the instalments of such share (Item 5).

13.  According to the minutes of the June 2019 EGM (“June 2019 EGM Minutes”), resolutions were passed by the majority in shares of the owners attending the June 2019 EGM as follows:-

(1) Having specifically noted that the Variation Orders were outside the scope of the original Major Renovation Works, the Variation Orders at a total cost of $3,880,200 were approved, see: Item 2 of the June 2019 EGM Minutes.

(2) It was resolved that the URA subsidy in the sum of $1,066,000 would be clawed back for payment of the Variation Orders, hence the additional contribution required from owners to be made to the reserve funds was $2,814,200 (being $3,880,200 – $1,066,000), see: Items 3 and 4 of the June 2019 EGM Minutes.

(3) Each owner would have to pay their respective share of additional contribution for the Variation Orders according to the terms of the DMC in 2 monthly instalments, with the first instalment to be collected on 1 September 2019 and the second instalment to be collected 2 months thereafter, see: Item 5 of the June 2019 EGM Minutes.

14.  According to a Contribution Fee Notice dated 16 July 2019 (“2^nd Contribution Notice”) issued by the plaintiff:-

(1) The total additional contribution required for the Variation Orders was stated to be $2,814,200 (ie the same amount as approved by the owners at the June 2019 EGM).

(2) The deadlines for contribution to the Variation Orders payable by the defendant as owner of Property (“VO Contribution”) are as follows:-

	Amount ($)	Payment deadline[6]
1st Instalment	$4,680	1/10/2019
2nd Instalment	$4,679	1/12/2019
Total:	$9,359

(3) As in the case of the 1^st Contribution Notice, it was expressly stated that interest would be charged in accordance with the DMC if the above instalments were not paid by the stipulated payment dates.

15.  It is not disputed that the defendant failed to pay the MRW Contribution and the VO Contribution by the deadlines stated in the 1^st and 2^nd Contribution Notices. According to the plaintiff’s record at the time[7], the defendant only paid a sum of $32,762.00 (being the 1^st instalment of the MRW Contribution) on 4 October 2019.

16.  After issuing written reminders to the defendant on 8 March 2019 and 3 February 2021 respectively, the plaintiff issued a “Final Reminder” to the defendant on 13 December 2021 requesting her to settle the outstanding sum of $85,805 (representing the total of the outstanding MRW Contribution (2^nd to 5^th instalments) and the VO Contribution). It is expressly stated that:-

“Please arrange payment for the arrears within three days from the date of this notice. Otherwise, we will take legal proceedings against you without further notice. Additionally, you will be held responsible for all the related legal costs and charges…” (emphasis added).

17.  Thereafter, further reminders were issued by the plaintiff and its solicitors, Messrs Huen & Partners for the outstanding sum together with interest[8]. The defendant was repeatedly reminded that the plaintiff would (i) commence legal proceedings to recover all outstanding sums from the defendant; (ii) seek an order of sale of the Property; and (iii) hold the defendant liable for all relevant legal and other costs incurred.

18.  Pursuant to the DMC and s 19 of the Building Management Ordinance (Cap 344) (“BMO”), a Memorandum of Charge dated 10 December 2020 (the “Charge”) for (amongst others) payment of the outstanding MRW Contribution, VO Contribution, accrued interest and the Collection Charge was also registered against the Property on 17 December 2020.

19.  By Originating Summons dated 29 June 2023 and amended on 17 November 2023 (the “Amended O/S”), the plaintiff commenced the present proceedings against the defendant, seeking (amongst others) an account of the sums owed and an order of sale of the Property with the sale proceeds to be applied to settle the liability owed by the defendant under the Charge.

20.  After hearing the parties’ argument, the learned Master made the Order on 20 March 2025.

This appeal is out of time

21.  The defendant only filed the Notice of Appeal on 17 April 2025. This is out of time because pursuant to O 58 r 1(3) of the Rules of the District Court (“RDC”), the Notice of Appeal should be issued within 14 days of the order made (ie no later than 3 April 2025) unless otherwise ordered by the court.

22.  In considering whether to extend time to appeal, the court has to consider all relevant factors, particularly: (i) length of the delay; (ii) reasons for the delay; (iii) merits of the proposed appeal; and (iv) the degree of prejudice to the other parties, see: Hong Kong Civil Procedure 2025, vol 1 at §58/1/9[9].

23.  I take the view that the 14-day delay is insubstantial. As the plaintiff does not take issue with the delay, I am also prepared to accept that the delay does not result in material prejudice to the plaintiff.

24.  It is noted that the defendant has not filed any affidavit evidence to explain the delay. At the hearing, the defendant claimed that she was late because she was told by the learned master at the previous hearing that she had 28 days to appeal. Given that the defendant is unrepresented, in the circumstances I am prepared to give her the benefit of the doubt that she was genuinely mistaken as to the filing deadline.

25.  On the merits, as I have heard full arguments from both parties at the hearing, in my view the expeditious way to proceed is to grant a time extension and go on to determine the appeal substantively.

The Appeal

26.  It is trite that appeals from Masters’ decisions are dealt with by way of rehearing. The application is treated as though it came before the court for the first time, see: Hong Kong Civil Procedure 2025, vol 1, §58/1/2.

Plaintiff’s Claim

27.  I shall first deal with the plaintiff’s claim.

28.  Section 14(1) of the BMO provides that:-

“Subject to this Ordinance, at a meeting of a corporation any resolution may be passed with respect to the control, management and administration of the common parts or the renovation, improvement or decoration of those parts and any such resolution shall be binding on the management committee and all the owners” (emphasis added).

29.  As held by the Court of Appeal in 黃瑞珊及另二人 訴 同利工業大廈業主法團另四人 HCMP 911/2011 (unreported, 21 October 2011) at §20 per Yuen JA, the resolutions of a corporation of owners passed at a meeting overrides the power of the management committee to determine the amount of contributions to be made by owners under s 21 of the BMO.

30.  In light of the matters set out above, I am satisfied that the defendant is prima facie liable to pay the MRW Contribution, the VO Contribution, the accrued interest and Collection Charge in accordance with BMO and the DMC given that both the MRW Contribution and the VO Contribution were approved at the October 2018 EGM and June 2019 EGM respectively.

31.  In the proceedings below, it emerged that the defendant had in fact paid a further sum of $76,446 to the plaintiff on 17 May 2021 (which is equal to the remaining 2^nd to 5^th instalments of the MRW Contribution).

32.  Hence, the remaining sum claimed by the plaintiff in these proceedings is $40,168 which consists of the following:-

(1) the outstanding VO Contribution in the sum of $9,359;

(2) accrued interest on the MRW Contribution and the VO Contribution up to 20 March 2025[10] in the sum of $30,659; and

(3) the Collection Charge of $150.

The defendant’s objections

33.  The defendant did not file any skeleton argument for the hearing before me. The defendant raised a plethora of complaints against the plaintiff in (i) her two affirmations in opposition made on 5 July 2024 (“D 1^st Affirmation”) and 21 February 2025[11] (“D 2^nd Affirmation”) respectively; (ii) her skeleton argument for the hearing on 20 March 2025 before the learned Master; and (iii) in her oral submissions at this hearing. Based on the same, the main arguments of the defendant are summarised as follows:-

(1) The plaintiff had “concealed” the Major Renovation Works.

(2) The Major Renovation Works were not completed by Man Yuen and the Variation Orders amount to a “double benefit” to Man Yuen, Reliance was placed on a judgment of the Lands Tribunal dated 26 January 2024 concerning a dispute between the plaintiff and certain owners in LDBM 82/2019 (the “LDBM 82/2019 Judgment”)[12].

(3) The defendant also complained about fraud in the financial statements of the plaintiff for 2022-2023 and that there were attempts to conceal the fraud and the defendant’s contribution to the plaintiff in the total sum of $109,208.

(4) The interest charged by the plaintiff was “unlawful”. Due to the plaintiff’s alleged failure to provide its financial statements and other documents, the defendant was not obliged to pay interest.

(5) The Variation Orders were “deceptive”.

(6) The defendant also advanced a “counterclaim” against various third parties.

(7) It was contended that the plaintiff has waived its claims against the defendant:-

(i) As the “Final Reminder” dated 13 December 2021 referred to in §16 above did not mention any claim for interest, such claim is therefore waived.

(ii) The plaintiff had represented to the defendant that it would not to pursue a claim against the defendant while she applied for a loan from the BD.

(iii) The plaintiff had represented to the defendant that it would only pursue its claim against the defendant at the Small Claims Tribunal. By failing to do so, the plaintiff has waived its right of claim against the defendant.

34.  Although the defendant’s complaint against the Major Renovation Works has become somewhat academic as she has paid the MRW Contribution (albeit belatedly), I shall deal with the above arguments in turn.

Alleged concealment of the Major Renovation Works

35.  In my view, this complaint has no substance. As set out in the 3^rd Affirmation of Ms Lui Chu Wing Han, a management committee member of the plaintiff, details of the Major Renovation Works including the tender documents were made available to the owners prior to the October 2018 EGM. The progress of the Major Renovation Works was also discussed from time to time in the meetings of the Management Committee of the plaintiff. The minutes of such meetings were displayed in the Building from time to time. In fact, some of such minutes were exhibited to D1’s 1^st Affirmation.

Relevance of LDBM 82/2019

36.  The defendant’s reliance on the LDBM 82/2019 Judgment is misplaced:-

(1) LDBM 82/2019 is a separate dispute between the plaintiff and the owners of certain flats on the 1^st Floor (the “1^st Floor Owners”). In that case, certain components of the Major Renovation Works on the 1^st floor (“Outstanding Works”) could not be completed in time due to apparent obstruction by the 1^st Floor Owners.

(2) As Man Yuen was not able to carry out the Outstanding Works within the timetable provided in the original tender programme. The consultant issued a completion certificate on 29 July 2020 certifying that the Major Renovation Works were completed by 3 July 2020 even though the Outstanding Works were in fact completed only by about 5 September 2020[13]. Thereafter, the plaintiff had to re-engage Man Yuen to carry out the Outstanding Works[14]. Hence, some of the issues raised in LDBM 82/2019 was whether the re-engagement amounted to a new contract with Man Yuen and the resulting consequences[15].

(3) Even though the learned Judge in LDBM 82/2019 found the Outstanding Works to amount to a new contract[16], nevertheless he refused to hold that the new contract was voidable notwithstanding the non-compliance with s 20A of the BMO[17].

(4) Importantly, there was no challenge at all in that case against the validity of the resolutions passed to approve the original Major Renovation Works at the October 2018 EGM. The works of the new contract concerning the Outstanding Works in LDBM 82/2019 also do not concern the Variation Orders or any part of the plaintiff’s present claims.

(5) Hence, it follows that whether or not Man Yuen received any “double benefit” with respect to the Outstanding Works under the new contract has no relevance whatsoever to the plaintiff’s claims[18] in the present case.

(6) Finally, the defendant’s complaint that the Major Renovation Works were not completed is not valid:-

(i) There is no evidence that the Major Renovations Works were not completed.

(ii) The plaintiff has also adduced a letter from the BD stating that it was satisfied that the plaintiff has complied with the BD Order.

(iii) In any event, even if the Major Renovations Works were not completed, this does not amount to a valid justification for late payment of the MRW Contribution.

Alleged fraud/concealment in financial statements

37.  I cannot see how allegations of fraud or irregularities in the preparation of the plaintiff’s financial statements would give rise to any defence absolving the defendant’s liability to pay the sums claimed. In any event, I am not satisfied that the defendant has adduced any credible evidence to support this serious allegation.

38.  In relation to the payments in the total sum of $109,208 made by the defendant (ie $32,762 + $76,446), there is no issue of any concealment as such sums have already been accounted for in the plaintiff’s claims[19].

Objection to charging of interest

39.  As set out §5 above, the plaintiff is entitled to charge simple interest for any outstanding unpaid sums owed under the DMC. Hence, there is no basis for the defendant to claim that the charging of interest is unlawful.

40.  I have also reviewed the plaintiff’s calculations of interest claimed (up to 20 March 2025) as set out in the 5^th Affirmation of Lui Chu Wing Han[20] and substantially reproduced below:-

Amount of contribution ($)	Deadline for payment	Payment date	Interest rate	No of days in arrears	No of 30 Day periods or parts	Interest ($)
MRW Contribution			Interest calculated at the rate of $1 for each $100 or part thereof remaining unpaid for each period of 30 days or part thereof for which it remains unpaid
32,762.00	10/12/2018	04/10/2019		298	10	3,280.00
21,842.00	02/01/2019	17/05/2021		866	29	6,351.00
21,842.00	01/02/2019	17/05/2021		836	28	6,132.00
16,381.00	01/03/2019	17/05/2021		808	27	4,428.00
16,381.00	01/04/2019	17/05/2021		777	26	4,264.00
VO Contribution
4,680.00	01/10/2019	Unpaid		1997	67	3,149.00
4,679.00	01/12/2019	Unpaid		1936	65	3,055.00
				Total:		30,659.00

41.  I am satisfied that the above calculations are in conformity with the terms of the DMC. For the avoidance of doubt, the plaintiff’s calculations have already taken into account the two payments in the total sum of $109,208 made by the defendant on 4 October 2019 and 17 May 2021.

42.  The defendant also relied upon 軒寧大廈業主立案法團 訴 陳大明 LDBM 40/2000 (unreported, 14 April 2000) in support of her argument that the plaintiff was not entitled to claim interest. In my view, that case does not assist the defendant as the material facts of that case are distinguishable from the present:-

(1) In that case, the applicant corporation passed a resolution at an owner’s meeting to collect additional contribution from the owners to cover a budgetary deficit and certain expenses for lift maintenance. The respondent owner refused to pay the contribution to cover the deficit.

(2) As the agenda of the meeting only referred to the seeking of additional contribution for lift maintenance but not the budgetary deficit, the Lands Tribunal held the applicant’s claim for the deficit component of the contribution to be invalid.

(3) In the present case, both the Major Renovation Works and the Variation Orders were included in the agenda sent in the 21/09/18 Circular and the 02/06/19 Notice prior to the October 2018 EGM and June 2019 EGM respectively.

(4) As the Major Renovation Works and the Variation Orders were validly approved, the defendant is liable to pay interest in accordance with the DMC as she failed to make the payments by the deadlines stipulated in the 1^st Contribution Notice and the 2^nd Contribution Notice.

Complaints against the Variation Orders

43.  The defendant made the following complaints that the Variation Orders were “deceptive”:-

(1) the Variation Orders overlapped with the Major Renovation Works;

(2) no tendering exercise was conducted for the Variation Orders;

(3) the items in the Variation Orders were too expensive, unnecessary and/or unreasonable;

(4) the plaintiff failed to provide sufficient information including price quotation for the Variation Orders; and

(5) the resolutions passed at the June 2019 EGM to approve the Variation Orders were invalid.

44.  In respect of complaint (1), the defendant has not condescend to particulars as to which parts were said to have overlapped. In any event, I have compared the items in the Major Renovation Works (as detailed in the tendering documents) against those set out in the Variation Orders and I do not find any overlap between the two.

45.  On complaint (2), it was not legally mandatory to conduct a tendering exercise for procurement of the Variation Orders. Under s 20A(2A) of the BMO in force at the material time, the plaintiff may decide by a resolution of the owners passed at a general meeting of the corporation that the relevant supplies, goods or services shall be procured from that supplier on such terms and conditions as specified in the resolution, instead of by way of invitation to tender.

46.  Complaint (3) has no substance. Once the resolutions for the approval of the Variation Orders have been duly passed by the owners at the June 2019 EGM, they are legally binding on the defendant and it is not open to the defendant to challenge the merits of such resolutions.

47.  Complaints (4) and (5) concern irregularities leading to the passing of the resolutions. The defendant claims that insufficient time and information were given to the owners to consider the Variation Orders and that a single resolution was passed to approve the Variation Orders as a whole instead of item by item.

48.  These complaints have no merits:-

(1) The purpose and proposed contract price for each item of the Variation Orders were explained in the agenda of the June 2019 EGM as set out in the 02/06/19 Notice issued for convening the June 2019 EGM. The 02/06/19 Notice complies with the notice requirements under Paragraph 2 of Schedule 3 to the BMO which requires (amongst others) a notice calling an owners’ meeting to be sent no less than 14 days prior to the meeting.

(2) It is clear from the June 2019 EGM Minutes that each item of the Variation Orders was tabled and voted on as separate resolutions.

(3) The defendant’s reliance on Alico Management Limited v Grace Hope Limited LDBM 232-235/2000 (unreported, 5 December 2000) is incorrect. In that case, the Lands Tribunal rejected the claim for management expenses because of a failure to give proper notice to the owners. As discussed above, notice for the June 2019 EGM was given in compliance with the BMO.

Counterclaim

49.  As the alleged counterclaim was made not against the plaintiff but only against third parties, this cannot amount to any valid set off against the plaintiff’s claim given the lack of mutuality[21]. The rights, interest and capacity of the plaintiff are obviously different from those of the third parties (which include its chairperson and former and current members of the Management Committee) against whom the defendant alleged to have a counterclaim. Therefore, the alleged counterclaim does not amount to a valid defence to the plaintiff’s claim.

Alleged waivers by the plaintiff

50.  Waiver may be held to have occurred if, one party represents to the other that he will forbear to enforce or rely on a term of the contract to be performed or observed by the other party, and the other party acts in reliance on that representation, see: Chitty on Contracts, 35^th Ed, 2024, vol 1 at §26-043.

51.  The modern tendency is to treat “waiver” and “promissory estoppel” as substantially similar doctrines, the requirements and effects of the one being stated in terms equally applicable to the other. The expressions “waiver” and “promissory estoppel” have been judicially described as “two ways of saying exactly the same thing”, and the courts often use them interchangeably when discussing situations in which it is alleged that one party to a legal relationship has indicated that they will not enforce their strict legal rights against the other, see: Chitty, vol 1 at §7-036.

52.  To give rise to a valid waiver, the representations made by the party must be “clear and unequivocal”. The purpose of the requirement that the promise or representation must be “clear” or “unequivocal” is to prevent a party from losing their legal rights under a contract merely because they have granted some indulgence by failing to insist on the strict performance throughout the term of the contract. Where more than one matter is in dispute between the parties, emphatic reliance upon some important disputed point does not by itself imply any unequivocal representation that compliance with other parts of the bargain is thereby waived, see: Chitty, vol 1 at §§7-039 to 7-042.

53.  The promise or representation must in some way have influenced the conduct of the party to whom it was made. It is not necessary for the promisee to have done something they are not bound to do which causes them to suffer loss. It is sufficient if the promisee has altered their position in reliance on the promise so that it would be inequitable to allow the promisor to act inconsistently with it, see: Chitty, vol 1 at §§7-043 to 7-044.

54.  Further, waiver generally does not extinguish, but only suspend rights. A party can revive the rights which were waived by giving reasonable notice, see: Chitty, vol 1 at §7-047.

55.  In Center Chase Investment Ltd v International Industrial Building (Castle Peak Road) (IO) (No 3) [2025] 1 HKRLD 532, the Court of Appeal held at §§41-50 that neither the incorporated owners’ statutory duty to enforce a DMC nor the characterisation of certain DMC covenants as “total preclusions” prevented the incorporated owners from approving breaches of those covenants. It was further held that issues of waiver and acquiescence should not depend on whether there are consent provisions in the DMC or whether the relevant covenant is qualified or unqualified.

56.  I cannot see how the “Final Reminder” from the plaintiff can amount to any waiver of its claim for interest:-

(1) The mere omission of an express claim for interest in the reminder does not in the circumstances amount to a clear and unequivocal representation that the plaintiff would not seek to claim interest, especially when the plaintiff has specifically stated in the document that it would seek to recover related charges arising from the defendant’s failure to pay the outstanding sum.

(2) In any event, it is clear that the plaintiff has subsequently insisted on its claim for interest such that any related contractual right (even if suspended) would have been revived by the time the present proceedings were commenced, see eg: demand letters from Messrs Huen & Partners dated 4 January 2022 and 29 August 2022.

57.  Similarly, there is no basis for the defendant to allege that the plaintiff has waived its right of claim pending the defendant’s application for a government loan to pay the outstanding sums:-

(1) On a fair reading, the WhatsApp message relied upon by the defendant cannot amount to a complete waiver of any right of action. Taking at its highest, it can only amount to an indication by the plaintiff that it would not immediately commence proceedings against those owners who were applying for a government loan.

(2) In any event, the said WhatsApp message was apparently sent in about 2019. As I have considered in the preceding paragraph, even if I assume that any right of action or claim for interest was temporarily suspended between 2019 to 2021, it would in any event be revived by notice in 2022.

(3) Further, even if there has been a valid waiver from the plaintiff to withhold action against the defendant pending application of government loan, whether the waiver still applies would depend on whether the loan has been disbursed to the defendant. There is in evidence a letter from the BD to the defendant dated 8 October 2020 that the loan for the MRW Contribution had already been disbursed to the defendant. Yet, the defendant only paid the remaining instalments of the MRW Contribution on 17 May 2021[22]. Hence, the Defendant’s delayed payment of the MRW Contribution has nothing to do with the timing of disbursement of the government loan.

(4) In respect of the VO Contribution, the defendant has adduced no evidence on affirmation as to whether and if so when she applied for and obtained any loan. At the hearing, the defendant admitted that in fact she did not apply for any loan in respect of the VO Contribution. Hence, this argument is no defence for the plaintiff’s claim for interest accruing on the unpaid VO Contribution.

58.  Finally, on a fair view, even if the plaintiff has previously indicated that it intended to pursue its claims through the Small Claims Tribunal, this cannot be reasonably construed as the plaintiff having agreed to abandon its claims for other reliefs which are not available from the Small Claims Tribunal (eg an order of sale of the Property).

Other complaints

59.  For the avoidance of doubt, I have also considered the various other miscellaneous complaints made by the defendant. They have not been expressly set out or dealt with above for the sake of brevity but I do not consider them to be meritorious or would in any way amount to valid objections to the plaintiff’s claims.

New Evidence on appeal

60.  On 17 April 2025, the defendant filed another affirmation (the “New Evidence”) exhibiting the following documents:-

(1) a copy of the minutes of the plaintiff’s management committee meeting on 27 November 2018; and

(2) a “Final Reminder” dated 13 December 2021 from the manager of the plaintiff to the defendant;

61.  In the New Evidence, the defendant also complained that: (i) the plaintiff knew about her earlier payment on 17 May 2021; and (ii) she was excluded by the Management Committee from attending a committee hearing in May 2023.

62.  RDC O 58 r 1(4) provides that:-

“No further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) may be received on the hearing of an appeal under this rule except on special grounds” (emphasis added).

63.  It is well established that the court would only allow such new evidence on appeal where the Ladd v Marshall conditions[23] are satisfied, see: Hong Kong Civil Procedure 2025, vol 1 at §58/1/3.

64.  In the present case, I refuse leave to admit the New Evidence:-

(1) The New Evidence concerns events which took place before the previous hearing before the learned Master, and no explanation has given been by the defendant on affirmation as to why she could not have adduced the New Evidence at the hearing below.

(2) In the management committee minutes dated 27 November 2018, the management committee resolved to commence proceedings at the Small Claims Tribunal against owners who have not applied for government loan. As I have already found in §58 above, this cannot amount to a valid justification for non-payment of the sums claimed by the plaintiff.

(3) The “Final Reminder” dated 13 December 2021 is already in evidence and in any event does not support the defendant’s case, see: §§16, 56 above.

(4) The complaint about her earlier payment is unfounded as the payment was already taken into account for the purpose of calculating interest, see §40 above.

(5) In relation to the alleged exclusion of the defendant at the management committee meeting, I cannot see how that could amount to a justification of the defendant for not paying the sums claimed. In any event, as the said meeting apparently involved discussions concerning the commencement of legal proceedings against the defendant it does not appear to me that it was improper to exclude the defendant.

Conclusion on the merits

65.  Accordingly, the appeal against the substance of the Order is unmeritorious.

Appeal against the Costs Order

66.  For appeal as to costs, generally a judge in chambers will not allow an appeal from a master’s costs order unless it is unreasonable or the Master has erred in law, see: Hong Kong Civil Procedure 2025, vol 1 at 58/1/6.

67.  At the hearing below, the learned Master ordered costs against the defendant summarily assessed at $130,000 out of the $165,665.53 claimed by the plaintiff.

68.  There is no suggestion that there is any error of law. Further, in the circumstances, I do not consider the costs order made below to be unreasonable:-

(1) The learned Master was perfectly entitled to order costs against the defendant in light of the Order made by her which is now upheld on appeal.

(2) Having considered the Statement of Costs filed for the hearing below, I also do not consider the quantum of costs assessed by the learned master to be unreasonable or disproportionate in the present circumstances. I give particular weight to the following matters:-

(i) the defendant raised a myriad of arguments which were irrelevant and/or plainly unmeritorious; and

(ii) the defendant had exhibited a large volume of irrelevant documents (including various tender documents submitted by Man Yuen) to her affirmation evidence which no doubt significantly increased the time and costs spent by the plaintiff’s legal team in reviewing and addressing such evidence.

(3) At the hearing, the defendant also complained that the plaintiff had refused to give her a chance to settle the case amicably. However, I do not consider this to be a material factor in the determination of costs:-

(i) On the materials before me, I am not satisfied that the defendant has taken any genuine and reasonable steps to reach amicable settlement with the plaintiff.

(ii) In any event, given the various serious allegations made by the defendant which were ultimately rejected by this court, I do not consider it unreasonable for the plaintiff to insist on proceeding to obtain judgment against the defendant.

Stay Summons

69.  In light of my dismissal of the appeal, the Stay Summons must be dismissed as well.

Costs of the appeal

70.  There is no reason why costs should not follow the event. I make an order nisi that the defendant do pay to the plaintiff the costs of the appeal and the Stay Summons, to be taxed if not agreed. This costs order shall become absolute within 14 days of this decision in the absence of any application to vary.

Disposition

71.  Accordingly, I make the following order:-

(1) Extension of time be granted for the defendant to appeal out of time.

(2) The appeal is dismissed.

(3) The Stay Summons is dismissed.

(4) Leave to adduce the New Evidence is refused.

(5) The defendant do pay to the plaintiff the costs of the appeal and the Stay Summons, to be taxed if not agreed.