Pokfulam Development Co. Ltd. and Others v. The Incorporated Owners of Scenic Villas

LDBM 70/2000

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 70 of 2000

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DECISION ON REVIEW

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1. This is an application for review of the judgment delivered by me on 1.2.2001. Mr. Anthony Ismail, the Applicants' counsel, put forward the purpose of the application : -

"This review is sought because relevant legal material was not placed before this Court. It is submitted that such material clearly shows that the intention of the Legislature is that the management committees should not have the power to commit owners to contracts to procure supplies, goods and services valued at more than $200,000 but that they should only have the power to commit owners to such contracts valued at less that $200,000."

He submitted that the issue in this review is whether paragraph 8 of the Codes of Practice is mandatory or merely directory. He placed before me the 1993, 1997 and 2000 Codes of Practice and submitted that having been published in the Gazette these Codes of Practice are subsidiary legislations, and as such they are part of the Building Management Ordinance ("BMO"), having been expressly incorporated by reference. Accordingly, the words "Subject to this Ordinance" in section 29 of the BMO mean subject to, inter alias, sections 20A and 44 of the BMO and the 1993 and 1997 Codes of Practice.

2. In support of his contention that the Codes of Practice are subsidiary legislations, Mr. Ismail referred to footnote 11 of Vol. 8(2) of Halsbury's Laws of England, Fourth Edition Re-issue (1996), which states : -

"Properly included under the head subordinate legislation are orders of an administrative nature ............ see also the Codes of Practice issued by the Secretary of State under the Police and Criminal Evidence Act 1984 ............, issued to provide 'clear and workable guidelines for the police, balanced by strengthened safeguards for the public' .............."

But the footnote does not provide assistance to the Applicants because those Codes of Practice were issued under the Criminal Evidence Act 1984, which does not apply to Hong Kong.

3. According to the Interpretation and General Clauses Ordinance, Cap.1, "subsidiary legislation" and "subordinate legislation" mean any "proclamation, rule, regulation, order resolution, notice, rule of court, bylaw or other instrument made under or by virtue of any Ordinance and having legislative effect". This definition does not refer to a Code of Practice.

4. Section 28(2) of the Interpretation and General Clauses Ordinance provides that subsidiary legislation shall be published in the Gazette. But Section 44 of the BMO does not contain any requirement that the Codes of Practice issued by the Authority have to be published in the Gazette. If there is such a requirement it will be expressly laid down in the relevant section concerned. An example is clearly shown in section 42(3) of the BMO : -

"The Authority may, by order published in the Gazette, amend the Ninth Schedule."

The absence of a statutory obligation under section 44 of the BMO requiring the Authority to have the Codes of Practice published in the Gazette is a clear indication that the Legislature does not intend the Codes of Practice to have the status of subsidiary legislations. The fact that in this case the Authority published the Code of Practice in the Gazette, whilst under no statutory obligation to do so, would not make it become a piece of subsidiary legislation.

5. Whether the term "Code of Practice" comes within the definition of "subsidiary legislation" depends on whether it is an instrument having legislative effect, and this in turn depends on whether the Legislature intended the Code of Practice to have the status as a piece of subsidiary legislation.

6. If the Code of Practice is a piece of subsidiary legislation, then it is inexplicable why Clause 1 should be included into the Code of Practice, because section 20A(2) of the BMO, has the same contents as Clause 1. In his written submission, Mr. Ismail did not address this important point.

7. In my judgment I ruled that the Code of Practice is only directory in nature. The aim of the Code of Practice, as shown by the clear wording in sections 20A(1) and (3), is to specify standards and guidelines in relation to the procurement of supplies, goods or services required by a corporation, and the procurement by invitation to tender of any supplies, goods or services under subsection (2) of section 20A and the tender procedures in respect thereof. Thus the Code of Practice provides standards and guidelines for the above purposes. These standards and guidelines cannot be rules of law, unless they are clearly enacted as law. Not being rules of law and being standards and guidelines they cannot be mandatory in nature.

8. Mr. Ismail further submitted that the Management Committee did not in fact accept/award tenders for the Consultancy Agreement and the Contract in question. I did deal with this matter in my judgment. He said that the notice of the Management Committee meeting dated 2.6.1999 to be held on 9.6.1999 specified that the resolution as regards the report from the Renovation Committee was that it should be received, namely, "To receive report from the Renovation Committee". He argued that "receiving" a report is not the same as approving such report, and in fact, there was nothing to "approve" since the Renovation Committee had on 25.5.1999 agreed to enter into the Consultancy Agreement and the Contract.

9. Paragraph 8(2) the Second Schedule of the BMO provides that the notice of a Management Committee shall specify the resolutions (if any) that are to be proposed. However, paragraph 8(2) does not specify the words required to be used in a resolution. There is nothing wrong to use the word "receive" in the notice, because the whole phrase is a proper resolution, which requires the Management Committee to pass a resolution whether or not to receive the report. If they resolved to receive the report, they must have approved it. I cannot see any difference between the words "receive" and "approve" in the circumstances.

10. I do not agree that there was nothing to approve. The Renovation Committee only agreed that the contracts in question be awarded to Lee Mark & associates Architects Surveyors Ltd. and Northcroft Hong Kong Limited. No written contracts had been signed yet. There decisions are not binding on the Management Committee. If the Management Committee resolved not to receive the report, the decisions to award the contracts made by the Renovation Committee simply could not be implemented. By receiving the report, the Management Committee was in fact approving these decisions.

11. For these reasons I reject the submissions advanced by Mr. Ismail. I am not persuaded that the judgment delivered by me 1.2.2001 should be varied or set aside. Therefore I dismiss the review with costs to the Respondent (with certificate for Counsel), to be taxed, if not agreed.

Translation of the judgment

12. The translation of the judgment delivered on 1.2.2001 contains a number of mistakes. It should be used with caution when there is an appeal.