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DCCJ2989/2007
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO. 2989 OF 2007
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BETWEEN
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THE INCORPORATED OWNERS
OF HONG LOK SQUARE
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Plaintiff |
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TOP GRACFUL LIMITED |
Defendant |
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Coram : Deputy District Judge K Lo in Chambers (Open to Public)
Date of hearing : 14 September 2007
Date of Delivery of Decision : 14 September 2007
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D E C I S I O N
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Background
1. This is an application by the Defendant pursuant to order 18 rule 19(1)(a) Rules of District Court to, inter alia, strike out the statement of claim on the ground that the same discloses no reasonable cause of action.
2. Plaintiff is the Incorporated Owners of Hong Lok Square (‘the said Building’).
3. Defendant is an owner of a property (‘the Property’) within the said Building, and has been so since year 2000.
4. In the statement of claim dated 10 July 2007, Plaintiff claims against the Defendant for the sum of $864,761.61. The same consists of, inter alia, management fees of the property for the period from June 2005 to June 2007 at the rate of $4,867 per month.
5. Defendant filed defence and counter claim on 4 August 2007 stating inter alia that as from July 2000, the management fees had been incorrectly and wrongly calculated in a manner not in accordance with the provisions of DMC.
6. Plaintiff by reply and defence to counter claim dated 18 August 2007 admitted the same. Plaintiff says, however, that by resolutions of the owner on 27 July 2004 (‘the first resolution’), the same had been rectified with effect from 1 October 2002 in accordance with the provisions of the DMC.
7. Plaintiff says further that by another resolution of the owners on 29 December 2006 (‘the second resolution’), the said resolution shall only take effect subject to certain conditions.
8. Defendant now says that the resolutions of the owners cannot have retrospective effect. She relied on the case of Grande Properties Management Ltd v Sun Wan Ornament Manufactory Ltd [2006] 3 HKLRD 473 at 484 C to D, which states that resolutions with retrospective effect should not be allowed where, “they are contrary to the provisions of the DMC.”
9. She says that by attempting to calculate the management expenses in a manner contrary to explicit provisions of the DMC, rectification is ineffective.
10. She further submits that even if the management fee has now been correctly adjusted as per the DMC, that as the owners had previously overpaid the management fee, the overpayment could be used to offset the management fee presently due and payable.
11. She contends further that if there is to be rectification, the same should, as far as the Defendant is concerned, cover the period since the Defendant became an owner of the property, i.e., since year 2000.
12. She said further that as far as the second resolution is concerned, attachment of conditions to such a resolution is not in accordance with provisions of DMC and the said resolution is not valid.
13. Plaintiff says the figure on which the Plaintiff’s claim was based are the correct/revised figures according to revisions and calculations according to the provisions of the DMC. He says further that as long as the subject resolutions with retrospective effect are not contrary to the DMC nor against the law, the same shall be effective and valid.
14. He says that this is the ratio desidendi of Grande Properties Management Limited, quoted by counsel for the Defendant.
15. He relied on the case of The Incorporated Owners of Flats E & H of Sun Kai Mansion v Chan Kon Chuen, LDBM563/2001, judgment dated 4 July 2002 and submitted that if an owner accepts and is acquiesced in paying management fee, though wrongly calculated, such an owner cannot demand a refund of overpayment.
16. Again, he submitted that the grounds of refusal to pay air-conditioning charges on the part of the Defendant as pleaded, i.e., by claiming water-leakage is a matter for the Court at trial.
Applicable Laws
17. Now, the applicable law in relation to a striking out application could be found in paragraph 18/19/6 of the Hong Kong Civil Procedure 2007:
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A reasonable cause of action means a cause of action with some chance of success when only the allegations in the pleadings are considered. So long as the statement of claim or the particulars disclosed some cause of action, or raise some questions fit to be decided by a judge or jury, the mere fact that the case is weak, and not likely to succeed, is no ground for striking out.” |
18. Now, in the present case, the claim of the Plaintiff includes management fee of the property-covering period from 27 July 2004 to June 2007, i.e., after the first resolution. Although the defence of the Defendant is that whatever management fee is payable, the same should be offset against the management fee overpaid by the Defendant in previous years as an owner. Clearly, this is a matter that has to be resolved in trial.
19. The Defendant has not disputed the validity of this first resolution, save that it should have no retrospective effect. This is disputed by the Defendant that the management fee adjusted after the first resolution is not calculated in accordance with the provisions of the DMC. Defendant determined and confirmed the right to the Plaintiff to claim management fee at the adjusted rate from the Defendant, at least as from the date of the first resolution.
20. Accordingly, there is clearly a cause of action in this case. Application dismissed.
21. Costs of and incidental to the Summons (including all costs reserved) be to the Plaintiff, the same to be taxed if not agreed.
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(K Lo)
Deputy District Judge |
Mr C Kam, of Messrs Edward C T Wong & Co., for the Plaintiff
Miss Rachel Y K Lam, instructed by Messrs Rowland Chow, Chan & Co., for the Defendant
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