梁淑兒 v. 鄭沛濂

LDBM 268 OF 2003

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 268 OF 2003

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J U D G M E N T

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1. The Applicant is the owner of a car parking space in a multi-storey building. She together with other owners of flats, purportedly exceeding 5% of owners in the building, made a request under paragraph 1(2) of the Third Schedule of Building Management Ordinance to the Respondent, the chairman of the owners incorporation of the building, to convene a general meeting of the corporation. Only three items of the agenda of the requested meeting are proper and appropriate, namely (1) a resolution to dissolve the management committee and the appointment of an administrator, (2) to appoint a date for re-election of the management committee, and (3) a summary report by the Applicant on behalf of a concern group of which the Applicant is a spokesman. Those items relating to procedure of and conduct of the meeting are unnecessary. This is because the procedure and conduct is in the hand of the Respondent or other person who chairs the meeting in his place. The rest of the items in the agenda are something of tautology prescribing the duty of the administrator, if so appointed, etc. In any event the Respondent did not comply with the request and the Applicant brought these proceedings in her own name alone against the Respondent personally for an injunction compelling him to convene the meeting.

2. After several appearances before this Tribunal, Parties eventually reached settlement except as to costs. The Respondent agreed to convene a corporation meeting and to include in its agenda items requested for by the Applicant.

3. Ms Tong, counsel for the Applicant now asked for costs and asked for such costs to be taxed on indemnity basis. She submitted that the Respondent had conducted his defence in an unreasonable manner and the settlement came too late. On the other hand Ms Hui, counsel for the Respondent, asked for costs on the ground that the cause of action by the Applicant had not yet accrued until she proved the requisite percentage of owners. The Applicant only managed to prove that to the satisfaction of the Respondent shortly before the trial.

4. This case and another case were at one time consolidated for hearing. Looking at the materials available in these two cases and the attitude of the parties, one may say this case smacks of personal vendetta. Despite that, both sides denied that there was any. However, I am of the view that there was an element of factional dispute in this case.

5. One thing is certain is that both parties eventually let their common sense prevail or the case may go to trial for days without serving any useful purpose but to increase the enmity between the contending factions. Ms Tong went into details of the conduct of the Respondent attempting to demonstrate how unreasonable the he had been. It might be correct to say that the Respondent could have acceded to the request at a much earlier stage. However I cannot pass judgment on that without hearing evidence. For obvious reasons, hearing evidence for the purpose of deciding the question of costs would be most undesirable. It would probably take as long a time as the trial proper. I should proceed on those facts and materials which are not likely to be in dispute.

6. Ms Tong argued quite ably that the defences raised were all unmeritorious. As a matter of hind sight, the Respondent might think he had been unwise in not acceding to the request at a much earlier stage. His failure to convene the meeting so requisitioned by itself is not a ground for granting costs against him on indemnity basis. Now that the settlement comprises substantially what the Applicant seeks in these proceedings, whether she should be awarded costs at all depends on the merits of other defences. At least one of the defences in the Notice of Opposition cannot be ruled as unmeritorious without hearing evidence. The Respondent in his Notice of Opposition alleged that the owner incorporation/the management company was unable to verify the authenticity of the request forms, one reason being that the verification process was obstructed. She argued that a chairman's duty to convene the requested meeting is unqualified under the Ordinance and therefore the Respondent should not have embarked on the enquiry at all. I disagree. In my judgment a chairman of owners incorporation is under a duty to convene the meeting within 14 days. Ms Tong is right to submit that a chairman's duty is not qualified to the extent that the chair need only convene the meeting after verification. On the other hand I am of the view that in the meantime he is entitled to satisfy him generally that the requests comply with the statutory requirement. A chairman has a limited time to do that. He would still be in breach of his duty if after verification he convenes a meeting beyond the 14 days limit. No doubt he would face a dilemma when he cannot satisfy himself within the limited time. He would have to come to a decision, a difficult decision indeed. A decision to refuse to convene the meeting would put him or the owners incorporation at risk as to possible litigation. In this case the Respondent decided not to convene the meeting before he was satisfied with the verification process and now he came to face this litigation.

7. Ms Tong not only criticised him for making a wrong decision at the time but alleged that the decision was unreasonable. It is not appropriate for me to lay down any principles for the verification process a chairman should undertake. All depends on circumstances. It suffices for me to say in the instant case the Respondent had every reason to embark on the process of verification as he did with the help of the owners incorporation and the management company. It should be noted that the requests of the 5% owners were all handed in under a covering letter by the Applicant. This covering letter contains a conspicuous error in that the Applicant described herself as an owner of flat when she was not. This error would certainly taint the authenticity of all the requests under its cover.

8. In view of all this I do not think the Respondent had acted unreasonably when he insisted on verification. It can be argued, whether or not it would succeed is not relevant, no one can blame the Respondent for being cautious and sceptical about the authenticity of the request forms and the validity of the request under a erroneous covering letter. In these circumstances it can be argued that the request is not from the owners who signed the request forms. Particularly it would certainly be a good defence if the process of verification was in fact obstructed by the Applicant.

9. After the institution of the present proceedings, it is the right of the Respondent to make use any legal principle or technicality in his favour. The fact that he insists on strict proof of authenticity of the requests is no justification for awarding costs on indemnity basis. His liability to pay costs should be judged like any other litigant conducting his defence.

10. Challenging the authenticity is not the only defence. Other defences the Respondent has not pursued. At least one of these other defences is arguable and not unmeritorious. Therefore the agreement to include the Applicant's agenda in the forthcoming meeting which would be convened in any event in my judgment represented a concession on the part of the Respondent. Furthermore, ignoring my invitation at call-over hearings, both parties had declined to join the owners incorporation as a party before settlement. The absence of the owners incorporation limited my options in granting the relief best in the circumstances and deprived me of the benefit of the view of the owners incorporation on the dispute. Both parties indicated they had the best motive for the good management of the building and did not want to involve the owners incorporation in a costly litigation. If the owners incorporation had been joined as a party and in an appropriate case I might order costs to be paid by the owners incorporation. This option is now not open to me. I would regard this litigation as one strictly between private individuals for their own cause.

11. The settlement I find is a concession by the Respondent and it cannot said with any certainty that the aforementioned defence he raised or would have raised was doomed to fail. That being the case, the proper order for costs is that each party should bear its own costs and I so order.