LEE SAU LING v. TSANG LIK CO. LTD.

Headnote

Renovation of the building includes work carried out to the outer wall, replacement of pipes & the refurbishment of entrance hall and common areas.

Held : -

1. Works in respect of the outer wall & pipes were the responsibility of the manager. It is part of the management expenses. The expenses to be borne by the owners shall be in the proportion set out in the DMC.

2. Refurbishment is a capital investment to enhance the value of the property. The DMC contained no such provision. The contribution shall be in the proportion of their undivided shares in the building to the total number of shares into which the building is divided in accordance with S.39(b) of Cap. 344

IN THE LANDS TRIBUNAL OF HONG KONG

(Building Management Application No. 12 of 1996)

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JUDGMENT

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1. This is an application by the owner of Flat B 7/F Block 1 of Pokfulam Garden, 180 Pokfulam Road, Hong Kong requesting the Lands Tribunal to determine the method of raising fund for the renovation project among the owners.

2. The renovation project consists of work to the outer wall, the change of pipes & refurbishment of the entrance hall and common area.

3. The work done on the outer wall was necessary because the manager received warning letter from the Building Authority & the replacement of pipes was due to wear and tear. These works come within the scope of duty of the manager as defined in Section V B(2) (4) (11) (12) of the Deed of Mutual Covenant ("DMC"). Under Section V D 1 the owners of the estate shall pay a due proportion of the management expenses. The management expenses include in clause (b) "the costs of carrying out all or any of the duties of the manager set out in clause 1 of sub-section B Section V hereof". Since these are management expenses the respective owners will have to contribute in accordance with the DMC in the proportion as set out in the second schedule.

4. As for the refurbishment expenses it was not within the contemplation of the developer when the DMC was drafted. It was not within in scope of the duty of the manager. These are not day to day expenses. It was carried out pursuant to a resolution passed by the incorporated owners. In my judgment it is a capital investment to enhance the value of the property. As the DMC contained no such provision S.39(b) of the Building Management Ordinance Cap 34 applies. S.39(b) states "An owner's share shall be determined --

(b) If there is no such instrument or the instrument contains no such provision, then in the proportion which his undivided share in the building bears to the total number of shares into which the building is divided".

5. For reasons above the contribution by each owner to the refurbishment expenses will be in the proportion of his undivided share in building to the total number of shares into which the building is divided.