HOSE SPECIALIST LTD v. YAN YUET MEI

LDBM 82/2009

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. 82 of 2009

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JUDGMENT

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Background

1. The Applicant is the owner of Shop 1 and Shop 2 on Ground Floor, Office on 1^st Floor and Office on 2^nd Floor of Fullic Court (“the Building”), 932 Canton Road, Mongkok, Hong Kong.  There is no dispute that the Applicant owns 58 out of 99 (i.e. 59%) undivided shares of the Building.

2. The Respondent, according to the Applicant’s case, is the secretary of the management committee of the Incorporated Owners of the Building.  The Respondent denies that she is the secretary, and alleges that the secretary should be Yick Tat Property Management Co., Ltd. (“Yick Tat”) and Yick Tat employs her.  Thus, the Respondent contends that she is just Yick Tat’s representative in performing its role and duty as secretary of the management committee.  Yick Tat is also the manager of the Building.  There is no dispute that both the Respondent and Yick Tat are not owners of the Building, and hence neither of them can be member of the management committee.

3. The Applicant issued the present application on 17 April 2009 to seek for an order that the Respondent do convene an owners’ meeting within 7 days for resolving that the appointment of Yick Tat as manager of the Building be terminated and that Leung Lai Chong, the chairlady of the management committee, be removed from office in the management committee.  Nevertheless, there was an owners’ meeting held on 10 July 2009 and these two matters had been dealt with at the meeting.  Thus, the Applicant no longer seeks for any substantive relief in the present application.  The only outstanding matter is just who should bear costs for the present proceedings.

Is the Applicant’s claim correct?

4. In order to decide who should bear costs, the first question I have to ask is whether the Applicant makes a correct claim.  The Applicant’s claim is based on Clause 8.1.4 of the Deed of Mutual Covenant of the Building (“the DMC”), which stipulates that:-

“The Owners’ Committee or Owners at any time of not less than twenty per cent of the Owners of the Undivided Shares in aggregate may at any time request the secretary of the Owners’ Committee (if any) or the Manager to convene a meeting of the Owners (other than an Annual General Meeting) and such secretary or the Manager shall upon such request convene the meeting in accordance with the provisions herein contained.”

5. As owner of more than 20% undivided shares of the Building, the Applicant is clearly entitled to invoke Clause 8.1.4 of the DMC to request the secretary of the owners’ committee to convene a meeting of the owners.  By virtue of section 34K of the Building Management ordinance (“the BMO”), the owners’ committee is deemed to be replaced by the management committee.  Thus, the Applicant is entitled to request the secretary of the management committee to convene a meeting of the owners pursuant to Clause 8.1.4 of the DMC.

6. Apart from the issue of who should be the secretary of the management committee, the Respondent contends that the request for an owners’ meeting should be directed to the chairman of the management committee pursuant to paragraph 1(2) of Schedule 3 of the BMO, which stipulates that the chairman of the management committee shall convene a general meeting of the corporation at the request of not less than 5% of the owners.  The Respondent also relies on paragraph 8 of Schedule 3 of the BMO to say that in the event of any inconsistency between Schedule 3 and the terms of the DMC, Schedule 3 shall prevail.

7. This contention is clearly wrong.  Clause 8.1.4 of the DMC is a provision that permits an owner of more than 20% undivided shares to request the secretary to convene an owners’ meeting, whereas paragraph 1(2) of Schedule 3 of the BMO is a provision that permits 5% of the owners to request the chairman to convene an owners’ meeting.  They are just two different modes of convening owners’ meeting and are not inconsistent with each other.  The BMO does not stipulate that there can be no other way for an owner or owners to convene an owners’ meeting unless it is convened under paragraph 1(2) of Schedule 3. Thus, paragraph 1(2) of Schedule 3 of the BMO will not override or replace Clause 8.1.4 of the DMC.

8. There is no dispute that the Respondent did receive the letter dated 30 March 2009 from the Applicant, which was a request made to the Respondent for convening an owners’ meeting under Clause 8.1.4 of the DMC.  There was dispute about the receipt of the other two letters dated 23 September 2008 and 14 October 2008 respectively by the Respondent, but the Applicant has confirmed at the hearing that only the request made in the letter dated 30 March 2009 will be relied upon.  As the Respondent did not convene such a meeting as requested in the letter dated 30 March 2009 before the Applicant commenced the present application, and if the Respondent is indeed the secretary of the management committee, the Respondent would be liable for the Applicant’s claim.

9. On the question of whether the Respondent is the secretary of the management committee, both parties did not adduce any direct evidence concerning the meeting at which the secretary was elected, but rely on some indirect evidence, such as the Notices of Change of Registered Particulars filed with the Land Registry and the minutes of various meetings, to argue their cases.  Based on the indirect evidence before me, and on the balance of probabilities, I find that it is more likely than not that the Respondent is just a representative of Yick Tat in performing Yick Tat’s role as secretary of the management committee.

10. First of all, the Respondent is not an owner of the Building and there is no evidence that she has any personal connection with the Building or the owners of the Building, except through Yick Tat, which is the manager of the Building.  Thus, it is very unlikely that the owners would appoint the Respondent as secretary in her personal capacity.  On the other hand, as Yick Tat is the manager of the Building, it is very likely that Yick Tat would act in the capacity of secretary for the management committee as well.  Indeed, Yick Tat was stated to be the secretary in the Notices of Change of Registered Particulars dated 4 March 2003 and 6 October 2005, and the Respondent was stated to be the representative of Yick Tat in these two notices.

11. The Applicant, however, relies on the Notice of Change of Registered Particulars dated 13 February 2007 to argue that there was a change of secretary from Yick Tat to the Respondent, as in this notice the secretary was stated to be the Respondent.  The Applicant also submits that if there was no change of the secretary, there was no need to file this notice.  However, there is a bracket next to the Respondent’s name in this notice and the words “代表人: Yick tat Property Management CO. LTD” were stated in the bracket.  There is also a company chop of Yick Tat next to the Respondent’s signature in this notice.  The literal meaning of the words inside the bracket is that Yick Tat is the representative, but it would not make any sense to interpret the words in this way.  I simply cannot see that Yick Tat would be a representative of the Respondent under any circumstances in this case.  There must be a mistake in the way these words are put together.  I think the writer of these words must have meant that the Respondent is the representative of Yick Tat.  The company chop next to the Respondent’s signature also supports this interpretation.  If the Respondent was the secretary in her personal capacity, there is absolutely no reason to apply the company chop of Yick Tat next to her signature.  In the two previous notices dated 4 March 2003 and 6 October 2005 respectively, there was no change in the particulars of the secretary, but Yick Tat’s name and particulars were also mentioned in these notices.  It shows that these notices were filed not just when there were changes.  Thus, I do not accept that the Applicant can rely on the notice dated 13 February 2007 to conclude that the Respondent is the secretary.

12. The Applicant also relies on the minutes of the meeting of the management committee on 9 October 2007 to say that the Respondent was described as the secretary in the minutes.  Although this minutes was signed by the chairlady, it was not signed by the Respondent as secretary.  Again, this could just be a way of expression.  The Respondent was described as secretary because she was representing the secretary.  In fact, the Respondent has produced another minutes for the owners’ meeting on 30 July 2007 showing that her colleague signed as secretary in the minutes.  If the Respondent was the secretary in her personal capacity, it is unlikely that her colleague would sign as secretary.  Thus, I accept the Respondent’s explanation that she is only a representative of Yick Tat in carrying out its role as secretary of the management committee.

13. The Applicant submits that paragraph 2(1)(c)(ii) of Schedule 2 of the BMO provides that “a person” shall be appointed as the secretary of the management committee, and “a person” cannot include a limited company.  I do not agree with this interpretation.  There is no definition in the BMO to define “a person” to mean a natural person only.  On the contrary, paragraph 11(1) of Schedule 2 of the BMO suggests that where a member of a management committee is a body corporate, the body corporate may appoint an individual to act as its representative.  Since a member can be appointed as secretary, it means that a body corporate can be appointed as secretary and then the body corporate may appoint an individual to be its representative.  Thus, it is wrong to suggest that “a person” cannot be a body corporate.

14. The Applicant further submits that if the Respondent is a representative of Yick Tat, she would still be liable in her own right by virtue of paragraph 11(1) of Schedule 2 of the BMO.  However, paragraph 11(1) of Schedule 2 only applies to a body corporate appointed as a member of the management committee.  As Yick Tat is not a member of the management committee, paragraph 11(1) of Schedule 2 is not applicable.

15. In the circumstances, I find that the Respondent is not the secretary of the management committee and the Applicant’s claim against her is wrong.

The Respondent’s conduct

16. The next question I have to consider is whether the Respondent’s conduct could justify the Applicant making a claim against her.  The Applicant submits that the Respondent had never denied that she was the secretary of the management committee and when she made this allegation in the Notice of Opposition, the Applicant wrote to Yick Tat to seek to clarify whether Yick Tat was holding the office as secretary of the management committee.  However, Yick Tat was unwilling to confirm its status.

17. I do not accept that the refusal of Yick Tat to confirm its status could justify the Applicant making a claim against the Respondent.  Yick Tat is a separate legal entity from the Respondent.  Its action could not be regarded as the Respondent’s action.  In any event, neither the Respondent nor Yick Tat has any obligation to clarify anything for the Applicant.  The Applicant must on its own part make sure that the claim against the Respondent is correct before instituting legal proceedings against her.  In fact, as can be shown from the Applicant’s letter to Yick Tat dated 30 March 2009, the Applicant was already aware that the Respondent claimed herself to be a representative of Yick Tat before the present application was commenced.  When the Applicant was not sure that the Respondent is the secretary or did not have sufficient evidence to support the contention, it should not have commenced the application at all.

18. Thus, I do not find that the Applicant is justified in making the present application because of the Respondent’s conduct.

Conclusion

19. Since I find that the Applicant’s claim against the Respondent is wrong because it cannot establish that the Respondent is the secretary of the management committee and there is no justification to commence the proceedings, the Applicant must bear the Respondent’s costs of the proceedings.  The parties have no dispute that the costs can be taxed on District Court Scale with Certificate for Counsel.

20. I therefore order that the Applicant do pay the Respondent costs of the application to be taxed on District Court Scale with Certificate for Counsel if not agreed.