MILLION STARS TECHNOLOGIES LTD AND OTHERS v. THE INCORPORATED OWNERS OF CENTURY INDUSTRIAL CENTRE AND OTHERS

LDBM 24/2016

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 24 OF 2016

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J U D G M E N T

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1.  This Application raises the issue of whether or not, when a member of a newly elected management committee (“MC”) of an owners’ incorporation refuses to be appointed right after the election thus bringing the number of MC members apparently below the legal minimum, the said newly elected MC is still valid, or that the entire MC needs be re-elected again.

Brief background

2.  The 1^st respondent (“R1”) is the owners’ incorporation of Century Industrial Centre (“Building”) standing on 33-35 Au Pui Wan Street of Shatin.  All other parties (the applicants are referred to as A1 to A8 individually, and collectively “As”, and the other respondents R2 to R10, and collectively “Rs”) are registered owners of R1 at all material times. In fact, apart from being owner of a unit personally[1], R10 was the appointed representative of one Garfield Consultancy & Engineering Limited (“Garfield”) which was a registered owner of 2 units of the Building until 12 June 2014 when they were sold. R2 to R9 and Garfield constituted the 12^th Management Committee (collectively “the 12^th MC”). They were elected to office on 7 June 2013 with the following major office-bearers:

		Office	Party	Name of Owner/ Authorized Representative
i)		Chairman	R2 *	Mr Hui Kwok Kwong (“Hui”)
ii)		Vice-Chairman	R3	Chong Lai Wah
iii)		Secretary	R4	Lee Tai
iv)		Treasurer	Garfield*	R10

* denotes the office being occupied by a company instead of an individual.

3.  It was said by Rs that R10 was appointed as treasurer of R1 in his own personal capacity after Garfield ceased to be a registered owner of any unit of the Building[2].

4.  Unimax Property Consultancy Limited (“Unimax”) was the management company appointed by R1 carrying out the daily maintenance and management of the Building.

5.  By a Notice dated 5 October 2015 signed by Hui representing the 12^th MC[3], all owners were notified that an annual general meeting of R1 would be held on 23 October 2015 (“2015 AGM”). An agenda was issued. Item 10 is for election of the 13^th MC together with its chairman, vice-chairman, secretary and treasurer. The last item, i.e. item 11, is A.O.B.. 

6.  By another notice of the same date signed by Hui, “owners/authorized representative of company” of the Building were invited to stand for election of the 13^th MC using a pro forma application attached.  

7.  It is not in dispute that a total of 16 signed pro forma applications were received prior to the 2015 AGM. It was also not in dispute that these 16 applications were posted up in a conspicuous place in the Building on or about 16 October 2015. These forms were filled up by individuals who claimed to be owners of the Building even though the units they claimed to own were in fact registered in names of companies. The As said that they were representatives of the corporate owners of units stated by them in the forms. This is where one of the major disputes lies. All As (except A2) submitted the application forms.

8.  One day before the 2015 AGM, i.e. 22 October 2015, the 12^th MC posted up another notice setting out a finalized list of 16 candidates standing for election as members of the 13^th MC. It is noted that each candidate was introduced to the owners by a photo, his/her name with a description stating that he/she was the owner of a particular unit. Each was assigned a candidate number[4].

9.  The 2015 AGM was held as scheduled. Hui presided at the meeting. He was accompanied by R1’s legal advisor, one Mr Chan who was a solicitor. Ms Ng Lai Ching (“Ms Ng”) of Unimax was there to assist at the meeting. Ms Chan Shuk Man (“Ms Chan”) of the Sha Tin District Office were present as guest. There was no challenge as improper the proceedings up to and inclusive of the election presided by Hui. It was when it came to the latter part of the election that dispute arose, leading to the present proceedings.

10.  It was the As’ case that at the 2015 AGM:

i) After finishing agenda item No. 9, Hui as chairman of the meeting declared all the 9 members of the 12^th MC retired from office (this was disputed by Hui);

ii) Ms Ng declared the meeting proceeded to item No.10;

iii) At the juncture, one Ms Li Tung Wan Rachel (“Rachel Li”), indicated she wished to stand for election. She was subsequently accepted as a candidate after Hui had consulted Mr Chan. Candidate number 17 was assigned. Her name, candidate number and A2’s name were handwritten on a piece of paper. It was posted up alongside the other 16 pro forma applications at the venue. There were therefore a total of 17 candidates standing for election.

iv) The number of MC members for the 13^th MC was fixed at 9 by a resolution passed there and then.  

v) The meeting then proceeded to election. After counting the votes, the 9 highest votes went to A1 to A8 and R10. R10 obtained the 9^th highest vote in the election. It is noted that R10 was the one who filled up the pro forma application. The name of Voltax Supplies & Engineering Limited (“Voltax”), another owner of the Building was written thereon by Unimax[5]. Apparently R10 participated the election as Voltax’s representative instead of Garfield’s. According to the As, A1 to A8 together with R10 should be the newly elected members constituting the 13^th MC;

vi) However, R10 refused to be appointed. He left the meeting. Upon enquiry of Ms Ng of Unimax, all other candidates who obtained the next highest votes refused to be appointed. They all left the meeting;

vii) Hui also refused to further preside at the meeting and left. There is dispute as to whether before Hui left, he had declared the meeting coming to an end or adjourned.  It is the As’ case that Hui did not[6]. Hui said he did[7]. Mr Cheung Kwok Wai (“Mr KW Cheung”) of A1 said before Hui left, he even shook hand with him;

viii) Despite the leaving of all other owners, A1 to A7 (A8 was absent at the 2015 AGM) and/or their authorized representatives together with one Mr 黄永浩 (transliteration: Wong Wing Ho), holder of a number of proxies remained at the meeting[8]. Puzzled by the sudden ending of the meeting, staff of Unimax consulted Ms Chan of the Sha Tin District Office who advised that there might be a problem if a 9-member management committee could not be formed in the AGM in compliance with the Building Management Ordinance Cap 344 (“BMO”). She asked R2 or the management company to seek legal advice;

ix) There and then Mr KW Cheung consulted his lawyer by telephone. He was advised, inter alia, that provided a quorum of 10% owners were present, the remaining owners could elect among themselves a chairman in the absence of Hui and the vice-chairman to continue the meeting. They could then continue with item 10 of the agenda by electing among themselves the chairman, vice-chairman, treasurer and secretary[9];

x) A1 to A7, Mr Wong Wing Ho together with the proxies given to them, constituted more than 10% of owners required for a quorum under the BMO[10]. This was not challenged[11]. It was also As’ case that the presence of a quorum was confirmed by both Ms Chan of the Sha Tin District Office and one Ms Mak of Unimax. They told Ms Chan they would continue with the meeting. That was why Ms Chan remained present for the rest of the meeting;

xi) A1 to A7 together with the said Mr Wong Wing Ho then elected among themselves Mr KW Cheung, A1’s representative as chairperson to preside at the meeting. By a show of hands of those remaining present, the following were elected to offices:

		Office	Party	Name of Party/ authorized Representative
a)		Chairman*	A1	張國威 Mr KW Cheung
b)		Vice-chairman*	A2	李冬雲 Ms Racheal Li
c)		Secretary	A3	Mr Tommy Yu
d)		Treasurer	A4	Mr KK Wong

*   denotes office was filled up by company

11.  It is worth mentioning that 5 of the As are companies instead of individuals. It is the As’ case that they were respectively represented by the following representatives:

	Party	Name of Owner (Unit)	Representative
i)	A1	Million Stars Technologies Limited (Unit K, 7/F)	張國威 Mr KW Cheung
ii)	A2	Teambo Engineering Limited (Unit A, G/F)	李冬雲 Ms Rachel Li
iii)	A5	Ka Hang Decoration Limited (Unit I, G/F)	黃瑞儀 Ms Sui Yee Wong (“Ms Wong”)
iv)	A7	Sincere (Asia) Limited (Unit G1, G/F)	Ms Fung Yi Catherine Sheung (“Ms Sheung”)
v)	A8	Gain Goal Limited (Unit A, 7/F)	Mr Wai Hong Law (“Mr Law”)

12.  There is serious dispute as to whether or not the part of the 2015 AGM after Hui had left was valid. The As said it was. The 12^th MC said it was not.

13.  By a notice issued the day immediately after the 2015 AGM[12] signed by Hui for R1 and as chairman of the 12^th MC, it was stated that:

i)   according to Ms Chan of the Sha Tin District Office, the election exercise had completed but there was insufficient number of MC members elected to fill up the statutory minimum of 9 offices, another general meeting had to be convened; and

ii)   according to R1’s legal advisor Mr Chan, the 12^th MC should remain in office until the 13^th MC, properly constituted, was elected.

14.  Hui wrote to the Land Registrar requesting it not to accept registration of the aforesaid elected ones as members of the 13^th MC. Hui also refused to hand over the books and accounts and other documents of R1 to the As. Notices purported to be issued for R1 were continued to be issued by Hui for R1 and as chairman of 12^th MC. Despite As’ protest through lawyers, the 12^th MC did not accede to their requests.

15.  It is not in dispute that by a notice posted in various places of the Building on 2 November 2015, R10 claimed that at the 2015 AGM, he was simply not accepting appointment to the 13^th MC. He said, therefore, there was no question of he resigning from the 13^th MC[13].

16.  Apparently there is dispute as to what exactly had been said by Ms Chan of the Sha Tin District Office. Ms Chan did not agree with the notice issued by Hui the day after the 2015 AGM. She wrote to clarify. The gist of Ms Chan’s clarification is that she had not given a definite advice that the election was invalid and therefore another general meeting was required. By her letter dated 17 November 2015, she said she was only advising that for a building of over 100 units the minimum number of committee members prescribed under the BMO should be 9. Since only 8 were elected, R1 might wish to seek legal advice before deciding whether to hold another general meeting to elect a MC comprising not less than 9 members. Since there and then some committee members expressed that they had just consulted legal advice confirming the election was valid. They continued with the meeting[14].

17.  Despite Ms Chan’s said letter, a minutes of the 2015 AGM dated 15 November 2015 signed by Hui was posted up in the Building 2 days after Ms Chan’s letter, i.e. on 19 November 2015. The minutes repeated what Hui had said about Ms Chan’s advice to him despite the latter’s clarification[15]. It further stated that another general meeting would soon be held upon advice of Ms Chan.

18.  It is not in dispute that the 12^th MC had instructed Unimax not to recognize the As as the valid 13^th MC of R1, and accordingly, not to entertain any request from them.

19.  According to Hui, he received a written notice dated 8 January 2016 signed by not less than 5% of owners of the Building. They asked for another general meeting to be held for the purpose of electing a new MC so that R1’s affairs would not be disrupted, and dispute could be avoided[16].

20.  Eventually, a notice dated 13 January 2016 was signed by Hiu to convene an EGM on 28 January 2016 (“the 2016 EGM”) for the purpose of, inter alia, electing the 13^th MC and its major office bearers[17]. It was stated that 3 of the elected candidates in the 2015 AGM did not have proper authorization.

21.  A1 to A8 commenced the present proceedings against members of the 12^th MC and R1 on 21 January 2016.  No interim injunction was applied for.  The 2016 EGM went ahead as scheduled. 10 owners were elected members of the 13^th MC. According to Hui, some As did show up but refused to participate in the election despite invitation[18]. Hui was a member of the 10-member MC appointed at the 2016 EGM. He was elected chairman of that MC.

22.  It is the As’ case that the 12^th MC was acting unlawfully in:

i) convening the 2016 EGM;

ii) obstructing and/or preventing the As to properly manage the Building; and

iii) refusing to hand over accounts, books, records and documents of R1 to them.

23.  By the present proceedings, the As would like the Tribunal to make various declarations and injunctions to the effect that the As are entitled to take over the management of R1, and that R2, R4 to R10 as 12^th MC should refrain from interfering with their taking over of the management of R1. The As basically accepted R3’s explanation that she had resigned prior to the said 2015 AGM. They eventually discontinued wholly as against her. R1 does not enter into any presence and is maintaining a neutral stance. Only R2, R4 to R10 are opposing, and are referred to as “the contesting Rs”.

The Contesting Rs’ Defence

24.  The grounds of defence set out in the Notice of Opposition filed by the contesting Rs dated 19 February 2016 are a bit convoluted. However, Mr Siu, their counsel, has helpfully summarized the same into the following broad grounds:

i)   Under the BMO, only owners, no matter individual or corporation can stand for election as MC members of an owners’ incorporation. However, in the present case it is the individuals, namely the Mr KW Cheung, Ms Rachel Li, Ms Wong, Ms Sheung and Mr Law, instead of the 5 corporate owners that stood for election. Their election must be invalid. In other words, the individual candidates that were elected could not in the first place stand for election at the 2015 AGM, whether in their own capacity or as representative of the owners. Only owner can do;

ii)   Alternatively, there is no evidence to show that the purported representatives have been authorized by the corporate owners to represent them in the election;

iii)   In any event there was no resolution passed to dissolve the 12^th MC;

iv)   Further, R2 as chairman of the 2015 AGM has adjourned the meeting or has called it an end after the election results were announced, such that the subsequent purported election of chairman, vice-chairman, secretary and treasurer among the As is void; and

v)   The reliefs sought by As are academic as a newly constituted 13^th MC was elected by owners in a subsequent general meeting, i.e. the 2016 EGM.

Issues to be Disposed of

25.  In the Tribunal’s judgment, the followings are issues required to be disposed of in order to resolve the dispute:

i)   Whether the BMO permits only individual candidates to stand for election, and if so, whether this defence is available to the Rs;

ii)   What is the legal effect of an elected candidate refusing to be appointed when the election result is announced;

iii)   Whether the respective purported representatives who stand for election for the corporate applicants herein have been authorized by these corporate owners;

iv)   Whether the 12^th MC has resigned or otherwise has dissolved;

v)   Whether the 2015 AGM was adjourned by Hui after R10 had resigned whereby any subsequent meeting continued by the As was void.  

vi)   Whether in the proper exercise of discretion, the declarative and injunction reliefs sought by the As should be granted.

Discussion

   The Issue of Individual Candidates

26.  There is no dispute that the total number of units in the Building exceeds 100. According to para 1(1)(c) of Schedule 2 (“Sch 2”) to the BMO, the minimum number of members of a MC shall at least be 9.

27.  The other relevant provisions are contained in Sch 2 paras 5(1) & (2), 11 and 12 which stipulate:

“5(1) At the second annual general meeting of a corporation convened in accordance with paragraph 1(1)(b) of Schedule 3 and thereafter at every alternate annual general meeting—

(a) all members of the management committee (other than the member (if any) deemed to be appointed under paragraph 2(2) in his capacity as the tenants’ representative);

(b) if the secretary of the management committee is not a member of the management committee, the secretary; and

(c) if the treasurer of the management committee is not a member of the management committee, the treasurer,

shall retire from office.

(2) At an annual general meeting of a corporation at which the members of the management committee retire under subparagraph (1)—

(a) subject to subparagraph (2A), the corporation shall, by a resolution passed at the general meeting, appoint, from amongst the owners, the members of a new management committee;

(b) the corporation shall, by a resolution passed at the general meeting—

(i) appoint a person, from amongst the members of the new management committee, as the chairman of the new management committee;

(ii) appoint a person, whether or not he is a member of the new management committee, as the secretary of the new management committee; and

(iii) appoint a person, whether or not he is a member of the new management committee, as the treasurer of the new management committee; and

(c) the corporation may, by a resolution passed at the general meeting, appoint a person, from amongst the members of the new management committee, as the vice- chairman of the new management committee.

…

11(1) Where an owner or other person, being a body corporate, is appointed as a member of a management committee under this Schedule that body corporate may appoint a director or other officer of that body or some other individual to act as its representative (authorized representative(獲 授權代表)) for the purposes of this Ordinance as if the authorized representative were a member of the management committee in his own right and paragraph 4(1), (2)(a), (b), (c), (d) and (f), (3), (4) and (5) shall apply to the authorized representative.

(2) If an authorized representative ceases to be a member of a management committee under paragraph 4(2)(a), (b), (c), (d) or (f) or (4), the body corporate may appoint another authorized

representative in his place, and paragraph 4(1),

(2)(a), (b), (c), (d) and (f), (3), (4) and (5) shall

apply to that other authorized representative.

 12. In the event of any inconsistency between this Schedule and the terms of a deed of mutual covenant or any other agreement, this Schedule shall prevail.”

(Emphasis added)

28.  It is therefore Mr Siu’s argument that at least 9 members must be appointed for R1’s MC in order for it to be valid. Further, it is also his submission that Sch 2, para 11(1) envisages only owners can stand for election. It is only after a corporate owner has been elected that it can then appoint an authorized representative to represent it in the MC. That authorized representative then acts as if he/she is a member of the MC in his own right: Sch 2 para 11(2). In other words, individual who is not an owner, or a representative even though duly authorized by the corporate owner, cannot stand for election as they are simply not the owners.

29.  Mr Siu relies on the decisions of Li Pak Lam v 英皇道嘉信大廈業主立案法團[19] (at p.4) and Good Castle Holding Limited v The Incorporated Owners of Hoi Luen Industrial Centre[20] (at [16] to [28]) to support his argument. It was decided in Good Castle Holding that the corporate owner who was a MC member could re-appoint the same representative even though the said representative had failed to comply with certain requirement and ceased to be such committee member for that reason.

30.  I totally accept Mr Siu’s legal proposition that only owners, not their representatives, can stand for election of a MC as contemplated by Sch 2 para 11. However, a corporate can only act through authorized individuals. Further, the following facts, which are accepted by the Tribunal cannot be ignored:

i)   R1 appealed to “owners/authorized representatives of company to enthusiastically participate in the election (呼籲各業主／公司授權者踴躍參選)”[21]. A pro forma application was attached to the notice of election given to each owner. It is noted that the followings are the only particulars required to be filled up in the pro forma application

(a)   “報名人”, i.e. applicant;

(b)   “單位”, i.e. unit concerned;

(c)   “職業”, i.e. profession;

(d)   “電話”, i.e. telephone;

(e)   “資料簡介”, i.e. brief introduction

(f)   “聲稱人正楷姓名”, i.e. name of person signing in print;

(g)   “聲稱人簽署”, i.e. signature of the applicant

ii)   It is stated that personal particulars collected are for reference of the incorporated owners and will not be disclosed. There is a space for a photo of the applicant. There is also a declaration “聲明” to the effect that the signatory being an individual (“本人”) and does not belong to any one of the categories referred to in para 4(1) of Sch 2 to the BMO, i.e. not an undischarged bankrupt; in the past 5 years, not a person having entered into a voluntary arrangement with creditors, not a discharged bankrupt with unsatisfied debts and not having been imprisoned for more than 3 months;

iii)   For each application R1 received through Unimax, Ms Ng or her colleague Ms Mak would counter-check against the owners’ record. Unimax’s staffs would write on the form the name of the company if the unit concerned is owned by a company[22];

iv)   Similar practice was adopted for election of the 12^th MC[23]. For a corporate owner, Unimax would help register with the Land Registrar the name of the company as the MC member instead of the individual even if when the said individual purported to represent that unit was elected. Accordingly there is, Ms Ng said, no breach of the relevant provisions of the BMO[24];

v)   The candidates who had submitted application forms standing for election were described by R1 as “owners/owners’ representatives”[25];

vi)   The 12^th MC also issued a notice dated 22 October 2015 setting out a finalized list of 16 candidates (except Ms Rachael Li of A2) standing for election as committee members of the 13^th MC. Each candidate was introduced to the owners by a photo, his/her name with a description that he/she was the owner of a particular unit. Each was assigned a candidate number.

31.  From what have been set out in the preceding paragraph, this Tribunal considers that no doubts, all owners of the Building, including all parties concerned and Unimax, were somehow acting under a mistaken belief that individual owners, and if an owner is a corporate, its representative, can participate in the election. That is why all documentation were set in such a way that only particulars of an individual are to be filled up. Presumably a company has no profession. It does not appear that the pro forma application caters for situation when applicant is a corporate or its representative.

32.  In fact, Hui and Ms Ng’s evidence also support the aforesaid conclusion. Hui signed his own pro forma application as if he was running in his own personal capacity even though he said he was representing R2. The minutes for the 2015 AGM described the individuals as candidates[26]. In all documentation, individuals, no matter owner or authorized representatives of corporate owners, were described as candidates. Ms Ng admitted she and her staffs might not be conversant with the provisions of the BMO[27]. Acting under the mistaken direction of the 12^th MC with the assistance of Unimax, some of As who are corporate owners, e.g. A1, A5, A7 and A8 responded correspondingly in a mistaken manner. Only individual names were given in the application forms even though they may be representing the corporate owners.

33.  In this connection, this Tribunal considers that despite the provisions of Sch 2 para 11(1) of the BMO, it would be unfair and inequitable for Rs to raise the “individual candidate” ground against the As by reason of the principles of “estoppel by convention” enunciated by the Court of Final Appeal (“CFA”) in Siegfried Adalbert Unruh v Hans-Joerg Seeberger & Eganagoldpfeil (Holdings) Limited[28]. The relevant principles have briefly been summarized by me in a recent decision in Chartpack Machinery Company Ltd v 達之路32, 32A, 34及34A 號業主立案法團[29] at [111]. That decision was in Chinese and the principles were repeated briefly as follows:

i) The parties may have given (normally wrongly) representation to the other side. Relying on the representation, the parties entered into transactions or some legal relationship on the basis of an assumption shared by or common to them both[30];

ii) The common assumption may relate to facts (normally untrue) or laws (normally legally incorrect) or both[31];

iii) The common assumption must be sufficiently certain to enable the court to give effect to it[32];

iv) There is an attempt by one party to depart from the common assumption which departure would be unjust because of “the part taken by him in occasioning its adoption by the other party”[33] ;

v) The other party would suffer detriment arising out of his having entered into the relevant transaction on the basis of the common assumption “if the opposite party were afterward allowed to set up rights against him inconsistent with the assumption” when abandoning the common assumption[34].

34.  In the present case, corporate owners participated the election apparently through representatives instead of as corporate owners. They participated the election upon the invitation of R1, acting through the direction of the 12^th MC with the assistance of Unimax. It is a practice of this owners’ incorporation at least since and inclusive of the election of the 12^th MC. Ms Ng said it was likely the said pro forma might have already been so used since the 11^th MC[35].  Both sides fail to realize the apparent contradiction with Sch 2 para 11(1) of the BMO and proceeded to election. Even in the announcement of the election results in the 2015 AGM minutes signed by Hui as chairman of the 12^th MC, neither R1 nor the contesting Rs raised the issue of individual candidates based on Sch 2 para 11(1).

35.  Further, each candidate was referable by the 12^th MC acting through Unimax as owner of a particular unit even if that unit is owned by a corporate. Names of the corporate owners would be written on the applications. Given that the applications were submitted in good time before the 2015 AGM, this Tribunal accepts R1 must have checked and satisfied that the individual named in a particular application (except A2 who had submitted no application) should have been the representative of the relevant corporate owner.  In the cross-examination of Ms Ng, she admitted by writing the company’s name on a form, it could be said that R1 or Unimax had regarded those individuals were representing the corporate owner in the election[36]. According to Ms Ng, R1 would at the end of the day, like the case of the 12^th MC, registered the successful candidates in the name of companies as if the individuals were representing the corporate owners. Accordingly, even R1 acting under the direction of the 12^th MC through Unimax regarded the candidates are representing the corporate owners. In the circumstances, this Tribunal does not consider the contesting Rs are entitled to rely on the “individual candidate” ground and deny participation of duly authorized representatives of corporate owners.

36.  In the Tribunal’s judgment, the election will not be rendered invalid only because corporate representatives instead of the corporate itself participating in the election. It will be unjust and inequitable to allow the contesting Rs to rely on this ground. Of course, it will be a totally different matter if the so-called “authorized representative” in fact lacks the authority to represent the owner. He who is not the owner lacks the qualification to become member of the MC for that building.

Legal Effect of an Elected Candidate Refusing to be     Appointed

37.  There is dispute as to the legal effect of a candidate refusing to be appointed. The As contended that such would not invalidate those who have accepted appointment. Although the contesting Rs initially appeared to have asserted that the entire committee needs be re-elected, it is fair to say that Mr Siu of counsel did not take the issue seriously at his closing submission.

38.  From the provisions set out in [27] above, paragraph 5(1) of Sch 2 to the BMO provides for the minimum number of MC members for each owners’ incorporation. Paragraph 5(2)(a) stipulates only owners are qualified to be appointed. Paragraph 5(2)(b) sets out who are qualified to hold important offices of the MC.

39.  Paragraph 5(2)(b)(i) of Sch 2 provides that the chairman is to be appointed amongst members of the new MC. It may or may not want to have a vice-chairman but if it does he/she shall also be appointed from amongst the same newly constituted MC. The owners’ incorporation shall appoint a treasurer and a secretary. However, they can be appointed from amongst or outside the newly constituted MC: see paragraph 5(2)(b)(ii) & (iii) of Sch 2. However, if a treasurer/secretary is not a member of a MC, he/she will not, by virtue of be appointed as a treasurer/secretary becomes a member of the new committee: see paragraph 5(4) of Sch 2.

40.  Paragraph 5(2B) of Sch 2 stipulates how owners are to be appointed as MC members[37]. The provisions envisage certain “candidates”, and from amongst them the MC members are to be appointed. However, neither Sch 2 nor other parts of the BMO provide any mechanism on how an owner can become a candidate. No procedure whatsoever is prescribed. There is also no definition of candidate for the purpose of Sch 2. In the Tribunal’s judgment, so far as it is not prohibited by any express provisions of the BMO or well-settled principles, there is a wide spectrum of ways in which an owner can become a candidate.

41.  According to Shorter Oxford English Dictionary (6^th edition) Vol 1, “candidate” means:

“A person who seeks or is nominated for (election to) an office, honour, position, etc …”

42.  An owner who indicates he/she is interested to stand for election seeks to be appointed as a MC member. In the Tribunal’s judgment such owner is a candidate for the purpose of paragraph 5(2B) of Sch 2. An owner who has been nominated through certain mechanism can also be qualified as such. In fact, these are the most common ways of becoming a candidate for any election, so that voters know who to vote for in the election. It helps avoid electing someone who is totally not interested to an office, thus occasioning his resignation and necessitating holding of another election again.

43.  In the present case, the owners’ incorporation invited those interested to stand for election by filling up a pro forma application. R10, according to his own application, sought to be appointed at the 2015 AGM as a member of the 13^th MC. In his application, he said he wanted to serve the owners’ incorporation[38]. His intention to seek an office is crystal clear. He was a candidate within the meaning of paragraph 5(2B) of Sch 2. 

44.  In the circumstances of this case, all 17 candidates, including R10, sought to be appointed as MC members at the 2015 AGM. They even competed with each other and a vote is necessary. In the Tribunal’s judgment, the situation of anyone seeking to be appointed as a MC member is akin to the situation of someone making an offer under the law of contract. Unless the offer is withdrawn before its acceptance, it will be too late for him to withdraw it after its acceptance. By then a contract has been made. And so is R10’s appointment when votes in his favour have been casted and result announced.

45.  It is undisputed that the appointment procedure did not offend paragraph 5(2B)(b) of Sch 2. R10 ranked the 9^th of those receiving the greatest number of votes. His offer to be appointed was only withdrawn after the election result announced. By then he had already been appointed by the owners’ incorporation through the process of election. Had he not offered himself as a candidate, voters would not have voted for him. His refusal to be appointed came in simply too late. In the Tribunal’s view, it is in substance a resignation after appointment.

46.  Viewing in this light and to the extent as discussed above, I share Mr Chiu’s submission that a 9-member 13^th MC had been elected at the 2015 AGM. The legality of those elected other than R10 as members of the 13^th MC would not be affected by his resignation.

47.  It is argued that since a vacancy has arisen, the total number of MC members falls below the legal minimum. The MC is therefore invalid or defective.

48.  Paragraph 6(1) of Sch 2 deals with the situation when vacancy in the management committee arises. It stipulates:

“(1) Notwithstanding paragraph 1, subject to subparagraph (1A) and paragraph 6A, a vacancy in a management committee which occurs other than by reason of the expiration of the term of office may be filled by the corporation or the management committee under subparagraph (3), (4) or (5), as the case requires. “

49.  The aforesaidprovision is expressly stated to be notwithstanding paragraph 1 which prescribes the minimum number of members for a MC, and in the present case, 9. Accordingly, the fact that the number of serving MC members falling below the prescribed minimum occasioned by a resignation would not render the MC invalid, unless and until either of the situations referred to in subparagraph 1A or paragraph 6A is engaged. Subparagraph 1A concern with vacancy caused by tenant’s representative. Paragraph 6A deals with the situation where the number of vacancies falls below 50% of the total MC membership. Bothe are relevant to the present case.

50.  When vacancies occur, paragraph 6(1) of Sch 2 envisages re-appointment of the vacancies, not re-election of the entire MC. Vacancies occurring in a MC do not pose a real problem so long as they do not exceed 50% of the number of the MC members decided by the owners. If that happens, no quorate meeting can be held. Paragraph 6A of Sch 2 comes into play. The provisions expressly empower the chairman, or if there is then no chairman, a member appointed by the remaining members of the MC to convene an EGM to fill up the vacancies.   

51.  Paragraph 6(1) of Sch 2 provides that vacancies may be filled in a number of ways. However, the filling of which is, in the Tribunal’s judgment, not a mandatory requirement provided the vacancies do not exceed 50% of the total number of the MC decided by owners so that a quorate meeting can be held. Accordingly, even as a matter of good practice vacancies should be filled before proceedings to appointment of office bearers, a 9-member management committee was born at the 2015 AGM, despite the subsequent resignation, though immediately, of R10.

Whether Ms Rachel Li, Ms Sheung and Mr Law have been     Authorized by the Respective Corporate Owners A2, A7 and    A8 to Represent Them in the Election

52.  Initially the contesting Rs took issues with whether the purported representatives of all the 5 corporate owners have been duly authorized to run election as their representatives. After trial, they only took issue on the following 3:

	Corporate Owner	Purported Representative
i)	A2	Ms Rachel Li
ii)	A7	Ms Sheung
iii)	A8	Mr Law

53.  The gist of the argument of the contesting Rs, initially, is this. As set out in [11], A1, A2, A5, A7 and A8 are corporate owners of the Building. Mr KW Cheung, Ms Rachel Li, Ms Wong, Ms Sheung and Mr Law claimed to be their respective purported representatives. All except Ms Rachel Li filled up the pro forma applications before the 2015 AGM. Ms Li, however, showed up at the 2015 AGM and was allowed to represent A2 on her representation that she had authority to act on A2’s behalf. She was allowed to be a candidate and was assigned candidate no.17. Her name, A2’s name and the candidate number were hand-written on a piece of paper displayed alongside with all other candidates. After the 2015 AGM, the 12^th MC found out that the proxies given by the aforesaid 5 corporate owners for attending the 2015 AGM were in fact given to others, not those set out in [11]. This was not disputed. The contesting Rs went so far as to suggesting that the 5 got elected by providing false information.

54.  As is apparent from Mr Siu’s submission, this line of argument is, and I think sensibly and correctly, not pursued. It is because the proxies referred to by the contesting Rs are those required by Sch 3 to the BMO. It is given when an owner cannot show up personally at the general meeting but intends to appoint someone else to attend the meeting and cast vote on his behalf. The proxy is therefore the owner’s agent to attend AGM/EGM and vote. It has nothing to do with becoming a candidate standing for election as a MC member referred to in Sch 2. There is no bar for a corporate owner, while authorizing someone to attend the general meeting and vote on its behalf, appoints somebody else to represent it standing for election as a MC member.

55.  By reason of the above, the allegation of the contesting Rs in the Notice of Opposition that A1, A2, A5, A7 and A8 had got elected as management committee members by providing false information an over-statement and cannot be substantiated.

56.  As said above, there is no procedural requirement on how an owner can become a candidate in the election as a MC member. There is even no requirement that the candidate should be present at the election. At the end of the day it is a matter of evidence as to whether an owner, in particular, a corporate owner, is represented by the purported representative in the said election.

57.  Mr Siu for the contesting Rs now accepted that since Mr KW Cheung had testified he had the authority to represent A1 and there was a company chop affixed to the pro forma application signed by Ms Wong of A5, the contesting Rs did not take issue with their authorization by A1 and A5 respectively. Mr Siu, however, contended that in their Notice of Opposition, they had, inter alia, expressly challenged the authorities of Ms Rachel Li, Ms Sheung and Mr Law to respectively represent A2, A7 and A8. Further, Mr KW Cheung, when giving evidence for the As,

i) did not know if the board of A2 had authorized Ms Rachel Li to run election as its representative;

ii) did not know if the board of A7 had authorized Ms Sheung to run election as its representative; and

iii) while acknowledging Mr Law and his father were directors of A8 comprising 4 to 5 directors, did not know as a matter of fact if A8 had authorized Mr Law to run election as its representative. Neither did he know whether Mr Law would be supported by other directors to run for the election.

58.  Mr Siu further submitted that none of A2, A7, A8, Ms Rachel Li, Ms Sheung and Mr Law had seen fit to adduce evidence at trial to prove the express authority despite of the evidence aforesaid. Additionally, A2’s proxy to attend and vote at the 2015 AGM was given to one Mr Wong, and in his absence Mr KW Cheung[39]. A7’s proxy was given to Mr KW Cheung and in his absence, another Mr Wong. According to Mr Siu, this is clear evidence casting doubts on whether these individuals really got authorities to represent the corporate owners which they purported to represent. Even at the trial they put in no evidence to show direct authority. He invited the Tribunal to draw an adverse inference against A2, A7 and A8, who bear the burden of proof, for no authorization to the said individuals to run election as their respective representatives.

59.  The above grounds, if accepted, would amount to a lack of authority on the part of A2, A7 and A8 to sue. This important preliminary issue has not been taken up at the interlocutory stage. This Tribunal, however, believes that, despite evidence suggesting Unimax staffs being very busy at the 2015 AGM, they should have grasped some background or information to enable them to satisfy that Ms Li was representing R2. Further, as set out by Ms Sheung in her pro forma application, she had been secretary to R1’s management committee before[40]. Mr Law was also director of A8. The applications in respect of the latter 2 were received in good time before the 2015 AGM. This Tribunal believed Unimax should have done verification otherwise they would not have written the name of the corporate owners on the applications and accepted their candidacies.

60.  Additionally, Ms Rachel Li, Ms Sheung and Mr Law have each signed a statement of truth annexed to the Notice of Application filed herein confirming what they have stated in the Notice of Application being truth. They described themselves as the authorized representatives of the corporate owners concerned. These statements, though unsworn, is the sort of evidence which the Tribunal is entitled to consider: s.10(6) of the Lands Tribunal Ordinance, Cap 17. They are at least, prima facie, evidence of their authorization by the respective corporate owners. In the circumstances, unless the contesting Rs can adduce further evidence to rebut what has been stated in these statements of truth, this Tribunal is going to accept Ms Racheal Li, Ms Sheung and Mr Law do have the requisite authority to represent A2, A7 and A8 respectively in the election.

Whether the 2015 AGM has been Adjourned

61.  There is a dispute of facts as to whether, after R10 had refused to accept appointment as MC member, the meeting was declared adjourned or ended by Hui, or Hui simply leaving the meeting together with the other owners without adjourning it such that it could be continued and presided over by an owner. In the present case Mr KW Cheung, appointed by those owners remaining.

62.  Mr KW Cheung’s evidence in this respect is basically set out in [10] above.

63.  Ms Ng testified that after R10 and candidates other than A1 to A8 had refused to be appointed, Hui as chairman of the meeting had declared the meeting adjourned (宣佈押後). She insisted when Hui declared the meeting adjourned he had raised his hand up. She did not see Hui shaking hand with Mr KW Cheung as said by the latter.

64.  It was Ms Ng’s evidence that before adjournment of meeting, Ms Chan of the Sha Tin Office had advised them to adjourn because no 9-member management committee could be elected. Hui and Mr KW Cheung were also present when Ms Chan expressed her view. Upon repeated questioning, Ms Ng insisted that it was Ms Chan’s advice that a MC short of 9 members was very likely to be subject to challenge. Almost all owners, except those from the As had left the meeting venue[41]. She confirmed the meeting minutes of the 2015 AGM[42] an accurate description of what had happened on that day. She agreed that when she left the venue of the meeting, the As and Ms Chan had not yet left. She said, however, she had not asked any of her staffs to assist further the As in their meeting after the adjournment.

65.  Hui was heavily cross-examined as to whether he had ever declared adjournment of the meeting. He said he did not exactly say “散會” (meaning “meeting ended”) but he did say “押後” (meaning “meeting adjourned”). He considered they were of the same meaning. Hui disagreed with the suggestion that Ms Chan had only given her advice after he had left the meeting. He also denied having shaken hand with Mr KW Cheung.

66.  After hearing the parties and comparing their evidence with their prior written statements and documents which are less or not controversial, this Tribunal tends to believe that the As and the Rs (except R1) are 2 fractions of the owners’ incorporation who, unfortunately, are not on good term. Judging from the correspondence exchanged between their lawyers, there is certain degree of hostility shown to each other. As such, R10 refused to work with the As, and so did the other candidates including Hui. This Tribunal believes that when this happened, more likely than not it instigated a row among those participating at the 2015 AGM. It is Mr KW Cheung’s evidence that after the result was announced someone had shouted that the keys and documents would be handed over[43]. Given the happening of this unforeseen event and it is a difficult question, the Tribunal believes Hui as chairman should have consulted Ms Chan of the Sha Tin District Office for her view, particularly when Mr Chan, R2’s legal advisor, had just left the meeting. It would offend common sense if he did not.

67.  The Tribunal believes on a balance, Ms Chan had advised the parties to seek legal advice as to whether the election was valid, and whether another general meeting should be held as no 9-member MC satisfying the legal minimum had been elected[44]. The Tribunal believes Hui had taken it to mean that since no 9-member MC could not be elected, another general meeting was required so as to re-elect a 9-member MC. Given this is the last item on the agenda, he declared the meeting adjourned.

68.  This Tribunal noted that in Ms Chan’s letter, it was stated that Hui and other owners left the meeting when one of the candidate R10 refused to be appointed as a committee member “其中一名候選人吳志明先生即時表示拒絶擔任委員，並與你及其他業主離開會議”. The letter seems to suggest that Hui had not declared the meeting ended or adjourned before they left. It also suggested that the advice was given to Mr KW Cheung and others in Hui’s absence.

69.  The Tribunal accepts this letter tallies with the As’ case. However, nothing express on whether Ms Chan did or did not hear the meeting being declared ended/adjourned had been said in the letter. Surprisingly, both sides had chosen not to summons Ms Chan to clarify this factual issue. Further the letter described that certain committee members had expressed that they had sought legal advice[45]. It is basically common ground that all 12^th MC members had left. The apparent meaning is that Ms Chan may be referring to the “newly elected management member(s)”, not that of the 12^th MC. However, she did not make the differentiation in her letter. Without examining Ms Chan it is doubtful whether she was referring to committee members of the 12^th MC or those newly elected. Further, when the witness statements were prepared, the said letter of Ms Chan has already been disclosed. In the Tribunal’s judgment, the possibility that Ms Chan had presented a too simplified version of what had happened or that the events set out not being in a precise sequential order cannot be ruled. After taken this letter into consideration, this Tribunal still prefers Hui had declared the meeting adjourned or ended after hearing Ms Chan’s view.

70.  This Tribunal has to stress that Ms Chan should not be blamed for her apparently ambivalent advice, given the unforeseen result and the row that arose that day. In any event she was not legally qualified and was under no legal obligation to the parties for any advice. It is also not the Tribunal’s finding that the adjournment of the meeting by Hui was capricious, deliberate and was in bad faith with a view to defeat the election result. It had never been suggested in the cross-examination that it was the case. At least according to Mr KW Cheung’s evidence Hui even shook hand with him (which this Tribunal does not believe). Hui might have mis-apprehended or misunderstood Ms Chan’s view in the midst of a row resulting from R10’s refusal to be appointed. This is the finding of the Tribunal.

71.  It is not a case where the chairman’s decision to adjourn was challenged. It is a case of whether or not there is such decision to adjourn. It is the Tribunal’s finding that the meeting was declared adjourned or ended when item 10 was not finished because of the doubts entertained by Hui as the chairman of the meeting. This Tribunal believes that it was Hui’s intention to re-convene another owners’ meeting to re-elect the entire 13^th MC again as he was then under the misconception that the committee elected did not meet the statutory requirement.

72.  As said above, a 9-member MC was born at the 2015 AGM. However, no chairman and other important office bearers had been elected to offices at the same time. It was not a functional one. For instance, no one from the newly elected committee can be able to convene owners’ meeting as the owners had not yet appointed a chairman. As a finding of the Tribunal, the 12^th MC had not resigned as alleged when the election started. It is in fact not necessary as by operation of law the newly elected one will replace the old one. The old MC should therefore continue in office until a fully and operational new MC is elected: see The Incorporated Owners of Finance Building v Bright Hill Management Consultants Company Limited[46] and Leung Ho Sing & Others v Shum Yiu Tung & Others ^[47].

73.  It would be appropriate for the 12^th MC to convene the 2016 EGM electing office bearers of the 13^th MC only or perhaps, filling up the vacancy left by R10’s resignation so as to complete item 10 on the 2015 AGM agenda.

Whether as a Matter of Discretion the Declarative and    Injunctive Reliefs sought by the As should be granted

74.  The As ask for a mandatory injunction against the contesting Rs, being members of the 12^th MC, for delivery all books, accounts and records in their possession or custody to them.  Further, they asked for a prohibitory injunction against the contesting Rs restraining them from claiming to be members of the 12^th MC. They also sought injunctions against R2, R4 and R5, stopping them from claiming to be the respective chairman, secretary and treasurer of the 12^th MC.

75.  However, ten owners (some were the contesting Rs) were appointed as the 13^th MC at the 2016 EGM. Books, accounts and records required for the proper management of R1 have already been delivered to this newly elected MC. Of course when the present proceedings were instituted, the 2016 EGM had not yet been held. However, no interim injunction was sought to restrain the 12^th MC from holding the 2016 EGM. Neither were owners appointed at the 2016 EGM named as parties subsequently with a view to stopping them from assuming offices and taking over of documents.

76.  In the circumstances, it will be otiose for the Tribunal to grant any injunction asked for by the As. It is undisputed evidence that the 10-member MC elected at the 2016 EGM has already assumed role of the 13^th MC managing the affairs of the Building. The documents sought to be delivered are now in their hands. The Tribunal does not believe the contesting Rs are still claiming as members of a MC managing the Building any more. This is also not what the As have asserted at trial.   

77.  As regards the declarative reliefs, the As are basically asking the Tribunal to make the following declarations:

i) The 12^th MC has been dissolved or ceased to exist at the 2015 AGM;

ii) The appointments of A1 to A8 as members of the 13^th MC at the 2015 AGM are valid;

iii) The appointments of chairman, vice-chairman, treasurer and secretary at the latter part of the 2015 AGM after the leaving of Hui are valid;

iv) purported resolutions passed at the 2016 EGM appointing the 13^th MC were null and void and have no binding effect on the As and all other owners of Building.

78.  As analysed above, the Tribunal holds the view that since no functional 12^th MC was elected at the 2015 AGM, the 12^th MC continued to be in force until the 13^th MC when a newly 10-member MC with important office bearers appointed was elected. This alone would be sufficient for refusing paragraph 77(i).

79.  Additionally, the declaration set out in paragraph 77(i) has similar effect to an injunction restraining the contesting Rs from claiming to be members of the 12^th MC. As said, the Tribunal does not believe they will continue claiming to be the MC in force. There is no evidence suggesting they are still managing R1 as at the date of trial.

80.  As regards whether to grant the other declarations, the approach of the learned HHJ Lam (as the Vice-President then was) as set out in [18] to [22] of 曾婉玲  v 兆隆苑業主立案法團[48] is appositive in the context of building management disputes. Mr Siu of counsel has helpfully prepared a summary of the approach which this Tribunal would like to adopt, save and except a subparagraph (vii) derived from [19(f)] of曾婉玲 is also added by this Tribunal:

i) Members of the corporation are co-owners of a building and they are neighbours. Harmonious relationships between them are important to the well-being of the community;

ii) Whilst there would inevitably be differences in opinion amongst members, in the interest of the whole, such differences should be resolved if possible by the quickest and most cost-effective means;

iii) It is understandable that errors would be made from time to time with regards to affairs of a corporation. So long as the errors was made without any fraudulent or dishonest intent, although one needs to learn from mistakes, it is more important to rectify or remedy the situation in a positive manner;

iv) Personal vendetta has no proper place in dealing with affairs of a corporation. It would only destroy the overall well-being of the corporation. It would be inconsistent with the overall objective of the BMO;

v) In the exercise of its jurisdiction, the Tribunal should primarily be concerned with the proper management of the building instead of any personal conflicts between individuals. In deciding a case, the Tribunal should consider what would be the course in the best interest of the owners as a whole;

vi) The Tribunal may refuse to grant declaratory relief where the exercise does not serve any useful purpose;

vii) The management of the building is placed in the hands of the MCs who are obliged to follow resolutions of the owners in general meetings. It is for the owners, either acting through a MC appointed by them or through resolutions passed in general meeting, to decide on matters relating to the management of the building.

81.  The 12^th MC, under the mistaken belief that 3 of the members elected at the 2015 AGM were without proper authorities, and that no 9-member management committee was formed consequent upon R10’s resignation, held an EGM to do the election again. From what has been discussed above, it is a mistake. They ought to have convened an EGM to finish the remaining part of the election agenda. However, the answers to the problems they then faced are not obvious and apparent. One should not be blame simply because he got the answers wrong.

82.  Most of these MC members are laymen and not legally trained. They use their spare time to serve the other owners. However, when differences arise sometimes they may not approach a matter rationally. Minds may have been masked by anger and hostility. In the present case, this Tribunal believes, perhaps out of bad feelings against each other or even animosity, one camp insisted to dwell on technical issues unfavourable to the other side without seriously considering the other side’s argument. What they have insisted turns out to be wrong. On the other hand, the other camp might have lost trust and confidence in the MC without realizing that it is the owners in general meeting that have the final say on who has the mandate to manage the corporation. They might also have lost confidence in their supporters that they would vote for them again in the election to come. However, dishonest intent or bad faith cannot be inferred simply when one has made a wrong decision or relied on bad advice. Although there are lot of rooms for improvement on the part of 12^th MC especially for matters occurring post 2015 AGM, it is not the Tribunal’s findings that Hui and the contesting Rs were deliberately depriving the As the fruit of the election out of bad faith. Neither has this Tribunal found them dishonest. As observed in 曾婉玲, errors with regard to the affair of a corporation do occur from time to time and unfortunately, it is what had happened to R1 at the 2015 AGM.   

83.  From the evidence, it does not appear to the Tribunal that the 2016 EGM a general meeting held pursuant to the 5% request. Be that as it may, this Tribunal believes a notice dated 8 January 2016 signed by not less than 5% of the owners of the Building had been issued and received by Hui. It is a request to convene an EGM with a view to appointing a new MC, the chairman, the vice-chairman, the secretary and treasurer[49]. Although Mr KW Cheung said he was only aware of it when the Notice of Opposition was filed, the existence of said owners’ request is basically not challenged. Paragraph 1(2) of Sch 3 to the BMO mandates the chairman of the MC to convene the requested EGM in 45 days. The 2016 EGM, though not specified to be pursuant to this notice, fits in exactly the purpose of these 5% of owners.

84.  In the circumstances, even if the Tribunal were wrong and the part of the 2015 AGM after the leaving of Hui were valid, Mr KW Cheung as chairman of the new MC was also obliged to hold the general meeting requested by these 5% owners. As a matter of facts, the Tribunal believes that Hui had invited the As to attend the 2016 EGM and participate in the election[50]. In fact some of them did attend[51]. It is basically Mr KW Cheung’s answers that they did not want to participate in any election organized by the contesting Rs or jointly with them because they did not trust them. It was because the 12^th MC had painted a picture that the As were dishonest. Their reputation had been tarnished. It will cause unfairness to them in the election held in the 2016 EGM.

85.  The sentiment expressed by Mr KW Cheung is fully understandable. It is a mistake that unfortunately happened in the 2015 AGM. However, there is no evidence to suggest that those supporting the As in the 2015 AGM had turned away from them as a result of the allegation of the contesting Rs. It is not suggested that votes were counted in a dishonest manner in the 2015 AGM. Neither is there the slightest evidence to suggest that the contesting Rs would be perpetrating fraud or dishonest practice at the election at the 2016 EGM. In the management of an owners’ incorporation, supremacy is given to owners in general meeting. Any resolution passed is binding on all owners and the management committee: s.14(1) of the BMO. Even committee member(s) appointed in prior owners’ meetings can be removed and replaced: s.14(2) BMO. No matter what stance the parties would like to adopt, it has to be remembered the office and power of a MC member is conferred upon him by owners through a democratic process at the owners’ meeting.   

86.  The BMO has a built-in mechanism whereby issues of concern to owners can be brought to the attention of all owners for a debate and put to vote in a democratic way. It is achieved by, inter alia, paragraph 1(2) of Sch 3 to the BMO. The said paragraph sets out that once not less than 5% of the owners have jointly sent a request to the chairman, he/she has little option but shall (as opposed to may) convene a general meeting for the purpose specified in the request. In the present case, as the Tribunal has stated above, no matter who the chairman was at the material time, a general meeting had to be held to appoint a new MC. The Tribunal accepts that all owners of the Building had been properly notified of the intended re-election at the 2016 EGM.

87.  Now another 10-member MC was appointed. It was initiated by a MC which was still valid. In any event all owners were notified and an owners’ meeting was held. It fits in the democratic determination of dispute designed in the BMO. The As were invited to participate. They refused despite the facts that some did show up. As stated above, there is no evidence to suggest that those who had supported them have ceased to support them because of the allegation of the 12^th MC. Neither was there any evidence of fraud or dishonesty suggested for the 2016 EGM. The newly elected 10-member MC had already taken up R1’s management since the said EGM. In the proper discharge of its duties, this Tribunal believes this newly elected MC have already made a lot of important decisions on R1’s behalf, e.g. decisions relating to R1’s litigation with the Bank of China, insurance, appointment of contractors, etc[52]. Declarations sought by the As, if made, would necessarily ouster all these 10 members (not all of them are members of the 12^th MC) from offices. Not only are those newly elected not given a chance to defend, given the poor relationship between the 2 fractions, decisions made by the new 10-member MC being challenged, thus causing confusion and uncertainties to R1, cannot possibly be ruled out. This may give rise to serious ramifications to R1. Its smooth operation will be affected. Interest of owners at large will be affected by their disputes. They might even be embroiled in litigation that may ensue between the affected committee members. This obviously is not in the best interest of the owners. This is a serious consideration that this Tribunal should take into account.   

88.  It is the As’ allegation that the notice of 2016 EGM only specified a new MC was to be elected. It did not state that the number of MC members required re-determination. Accordingly, submitted by Mr Chiu on As’ behalf, the resolution to change the number of MC members from 9 to 10 was void pursuant to paragraph 3(7) of Sch 3 to the BMO[53]. The number of MC members should remain 9 which was fixed at the 2015 AGM.

89.  The short answer of the Tribunal is that the number of members in any MC is either ancillary or incidental to the resolution of appointing a new MC.

90.  Having considered all the above, no matter who is right and wrong in relation to the election at the 2015 AGM, in the interest of all owners of the Building this Tribunal do exercise its discretion NOT to make the declarations sought by the As, and in particulars, that the As and R10 are members of the 13^th MC. The owners have made their choice at the 2016 EGM. If the As really consider that they have the support of the majority of owners, and that their election to offices serves the best interest of owners, they may, equipped with not less than 5% of owners of the Building, request another election pursuant to paragraph 1(2) of Sch 3 to the BMO.  

Disposition and Costs

91.  No declarations and injunctions sought by the As in the Notice of Application are granted. The Application is dismissed.

92.  Although the Tribunal refuses to grant the reliefs sought by the As, this Tribunal finds against the contesting Rs on many of the issues in dispute. Mr Siu proposes to the Tribunal that even if the contesting Rs are successful in resisting the Application, they will not be asking for costs. This is a sensible and reasonable proposal on costs. This Tribunal now makes an order nisi that there be no order as to costs in the Application, including all costs orders reserved. The order nisi will be made absolute if no application is made to have it varied in 14 days.