THE INCORPORATED OWNERS OF YUEN SUN MANSION v. LUK NGAILING IRENE AND ANOTHER

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. A4303 OF 1998

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RULING ON PRELIMINARY POINT

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1. This matter came before me upon the application of the Plaintiff by way of Summons asking firstly, for Lip Seng Investment Company Limited ("Lip Seng") to be joined as a further defendant to this matter and secondly, asking for certain interlocutory injunctions against Lip Seng. Although such application do not directly affect the present Defendants, nevertheless Mr. Spicer, appearing for the Defendants asked to be heard on several "preliminary points" as he called them.

2. Mr. Spicer's first point is that because clause 30 of the Deed of Mutual Covenant makes provision for any dispute as to breach of any of the terms therein to be referred to an arbitrator, the proceedings taken out by the Plaintiff in this forum should be stayed for the matter to be arbitrated. He accepts that the present Defendants have filed a Defence to the Plaintiffs claim in this matter and thereby have taken a step in the proceedings and in so doing have submitted to jurisdiction of this Court. However, he argues that by reason of the Plaintiff now seeking to re-amend its Amended Statement of Claim, thereby re-opening the entire case, the Defendants are entitled to take this point despite having submitted to jurisdiction previously.

3. I know of no law and indeed no authority has been cited to me to back up this proposition by Mr. Spicer. Moreover, there is no application before me for a stay of the present proceedings by the Defendants. The short answer to Mr. Spicer's argument must be that once the Defendants have submitted to jurisdiction then in so far as this matter is concerned this Court will have jurisdiction to hear it and all matters related to it. It militates against common sense that each time the Plaintiff sought leave to amend its claim, the Defendants can have the opportunity to elect afresh as to whether or not it will submit to the jurisdiction of the Court.

4. In so deciding I have taken account of the fact that whilst the Defendants have submitted to the jurisdiction of this Court previously, that is not the position with Lip Seng. I had specifically enquired from Miss Lam who appeared for Lip Seng her client's position in so far as the points taken by Mr. Spicer was concerned and I was informed by her that she neither supports nor disputes the points argued by Mr. Spicer although she reserved her clients position as to whether or not her client may wish to take any of those points at a later stage, assuming of course that those points are still open to be taken by Lip Seng at that stage.

5. The next point taken by Mr. Spicer is that there is nothing to show that the Plaintiff has the proper authority or the power to bring these proceedings. He submits that under the Deed of Mutual Covenant authority is vested with the Manager, and not the Plaintiff, to bring proceedings against a defaulting party.

6. A further point taken by him as a preliminary point is that the Plaintiff has only $200,000.00 in its kitty which is hardly sufficient to support its undertaking as to damages insofar as the injunction sought by it is concerned.

7. These two points, if they are to be argued at all, ought properly to be argued either at trial or when the merits of the interlocutory injunction are gone into. They have to be argued based on the evidence and should not be taken at this stage as preliminary points.

8. The one point which has been properly raised by Mr. Spicer as a preliminary point concerns the jurisdiction of this court. The point taken by him is whether or not the Lands Tribunal has exclusive jurisdiction in such a case as the present one where the dispute is over the rights and liabilities of parties to a deed of mutual covenant in respect of multi-storey buildings, depending on how Section 45 and the Tenth Schedule to the Building Management Ordinance Cap. 344 is construed.

9. There appears in Hong Kong to be conflicting authorities on this point. On the one hand Findlay J. in the case of Ngan Chor Ying & Anor v. Year Trend Development Ltd. & Anor. [1995] 1 HKC 605 took the view that Section 45 gave to the Lands Tribunal jurisdiction to hear and determine proceedings specified in the Tenth Schedule of the Building Management Ordinance, but it was not an exclusive jurisdiction such that the High Court can still have jurisdiction over those matters.

10. On the other hand Yam J. in the case of Mass Transit Railway Corp. v. Lam Kai Fai & Others HCA No. A1796 of 1994 and Mayo J. in the case of Winbase Industrial Ltd. and Others v. Mightyton Property Management Ltd. and Anr. HCA No. A10232 of 1994 took a different view to that of Findlay J. Both Yam J. and Mayo J. came to the conclusion that Section 45 of the Building Management Ordinance had conferred exclusive jurisdiction to the Lands Tribunal in respect of proceedings specified in the Tenth Schedule.

11. Having considered the judgments in the above cases and the reasons given by Findlay J., Yam J. and Mayo J. respectively, I am in full agreement with the decision arrived at by Findlay J. in Ngan Chor Ying's case and the reasons given by him in support of that decision. In the circumstances I take the view, as did Findlay J., that this Court can have jurisdiction in the present matter.

12. Accordingly, I shall give the following directions as to the further conduct of the Plaintiff's application:-

13. I shall make the following cost order nisi in respect of the hearing on 13^th November 1998. Cost of that day's hearing in respect of the arguments in chambers relating to the above preliminary points to be borne by the 1^sh Defendant in any event.