THOROGOOD ESTATES LTD v. THE INCORPORATED OWNERS OF ROBINSON HEIGHTS

CACV 58/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 58 OF 2012

(ON APPEAL FROM LDBM NO. 297 OF 2010)

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BETWEEN

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J U D G M E N T

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Hon Kwan JA:

1.  This is an appeal against the determination of a preliminary issue made by HH Judge M Wong, Presiding Officer of the Lands Tribunal, on 10 February 2012. The preliminary issue, which was answered in the affirmative by the judge, is as follows:

“Whether the whole costs of the repair and renovation works referred to in paragraph 5 of the Applicant’s Notice of Application dated 10 November 2010 shall be shared and contributed by all the owners of the Building in proportion to their respective management units as set out in the 2^nd Schedule of the Deed of Mutual Covenant dated 23 March 1990 without the need of identifying which part or parts of the said repairs and renovation works related to the Garage’s Common Areas and Facilities, the Tower’s Common Areas and Facilities and the Building Common Areas and Facilities”.

2.  This appeal, brought by the applicant, Thorogood Estates Limited, is concerned with the proper interpretation of the Deed of Mutual Covenant (“the DMC”).  Leave to appeal was granted by the judge on 19 March 2012.

The background

3.  The relevant background matters, taken from the decision of the judge and the agreed facts filed on 12 December 2011, may be stated as follows.

4.  Robinson Heights at No 8 Robinson Road, Mid-Levels, Hong Kong (“the Building”) is a development consisting of 3 residential towers and car parks or garage (“the Garage”) on the Lower Ground Floor and Upper Ground Floor.  The applicant was the developer of the Building and is at all material times the registered owner of the Garage on the Lower Ground Floor and Upper Ground Floor.  The respondent is the incorporated owners of the Building.

5.  Each of the residential towers is served by 3 lifts.  The lifts serving Blocks 2 and 3 of the residential towers also serve the Ground Floor, the Upper Ground Floor and the Lower Ground Floor.  One of the lifts serving Block 1 of the residential towers also serves the Ground Floor, the Upper Ground Floor and the Lower Ground Floor, whereas the other 2 lifts serving Block 1 also serve the Ground Floor, the Upper Ground Floor but not the Lower Ground Floor.  There is also a shuttle lift serving the Upper Ground Floor and the Lower Ground Floor at the rear entrance only but there is no access to this shuttle lift from the Garage on the Lower Ground Floor.

6.  On 22 October 2009, the respondent resolved at an owners’ meeting to carry out repair and renovation works to the Building at the provisional cost of $100,333,240 together with additional security and cleaning services at the cost of $1,892,850, making a total cost of $102,226,090.  The respondent also resolved that the owners of the Building should contribute to the total cost in proportion to their respective management units set out in the 2^nd Schedule to the DMC.

7.  The 2^nd Schedule stipulates there are 331,916 management units in total, 3,040 of which are allocated to the Lower Ground Floor Garage and 4,720 to the Upper Ground Floor Garage.  Thus, according to the respondent’s calculation, the applicant’s total contribution should be in the sum of $2,389,986 ($102,226,090 x (3,040 + 4,720)/331,916).

8.  The applicant did not agree with this basis of computation.  It contended it is only liable to pay for the total costs of repair and renovation and additional security and cleaning services attributable to “the Building Common Areas”, “the Building Common Facilities”, the “Garage” and “Garage Common Areas”, as defined in clause (1)(a) of the “Definitions” section of the DMC.  In other words, it should not be liable for those parts of the costs attributable to “the Tower’s Common Areas” and “the Tower’s Common Facilities”.  On that basis, the amounts of contributions payable by the applicant would be $247,496 for the Lower Ground Floor Garage and $384,269 for the Upper Ground Floor Garage, making a total sum of $631,765.

9.  The applicant has paid the respondent the sum of $631,765.  The respondent demanded the applicant to pay the further sum of $1,758,221, being the balance of the contributions payable on the basis of the respondent’s computation and registered charges against the Lower Ground Floor Garage and the Upper Ground Floor Garage when the applicant declined to make payment.  The applicant brought these proceedings in the Lands Tribunal to vacate the charges.  By consent, the issue as framed was ordered to be tried as a preliminary issue.  The question to be answered is just whether it is necessary to identify which parts of the works were related to the Garage’s Common Areas and Facilities, the Tower’s Common Areas and Facilities and the Building Common Areas and Facilities, for the purpose of determining the owners’ contribution towards the whole costs.  The court was not required to determine at that stage whether the whole of the costs was for the benefit of all the owners of the Building or whether part of the costs was not for the benefit of the Garage[1].

Relevant provisions in the DMC

10.  One of the purposes of the DMC is to “provide for a due proportion of the common expenses of the Lot and the Building to be borne by the Owners”[2].  “Owner” is defined to include the applicant and any person who may thereafter become the registered owner of any undivided share in the Lot and the Building[3].

11.  Section I makes provision for the rights and obligations of the Owners.  By the definitions of “the Building Common Areas” and “the Building Common Facilities” in clause (1)(a) of the “Definitions” section, it is apparent that these areas and facilities are for the common use and benefit of the Building, not for the use and benefit of a particular Tower[4].  This is reinforced in clause A3(i) in Section I, which provides that “the Building Common Areas shall be deemed to be common areas for the benefit of the Owners which areas may subject to the provisions hereof, be used by each Owner.”

12.  “Garage” is defined to mean those parts on the Lower Ground Floor and Upper Ground Floor for the parking of motor vehicles and “Garage Common Areas” are those parts of the Garage so designated by the applicant[5].  In clause A3(iii) in Section I “Garage Common Areas” are “deemed to be common areas for the benefit of the Car Park Owners which areas may subject to the provisions hereof be used by each Car Park Owner in common with all other Car Park Owners.”

13.  By the definitions of “the Tower’s Common Areas” and “the Tower’s Common Facilities”, it is clear that these common areas and facilities relate to a Tower[6].  This is also reinforced in clause A3(ii) in Section I, which provides that “the Tower’s Common Areas shall be deemed to be common areas for the benefit of the Owner of each Unit which is situate in that Tower Block which areas may, subject to the provisions hereof be used by each such Owner in common with all other Owners of that Tower Block.”

14.  There are 2 other definitions which should be noted before I come to the key provisions.

15.  Clause (1)(a) provides for the meanings ascribed to the expressions as defined “whenever the context permit”.

16.  “Unit” is defined as “flat(s), roof(s) (which is/are specifically attached to such flat(s)) or Car Parking Space(s)[7] and/or any other part or parts of the Building which the full and exclusive right and privilege to hold use occupy and enjoy has been or intended to be assigned to an Owner and “his unit” in relation to an Owner means the unit which the Owner has the full and exclusive right and privilege to hold use occupy and enjoy.”  The 1^st Schedule to the DMC sets out the number of undivided shares of the Lot and the Building allocated to the units in the Towers, the Garage and the store room and the space adjoining thereto on the Lower Ground Floor.

17.  The other expression is “Management Units”.  This is defined to mean “the number of units allocated to the Flats and the Garage and/or the Car Parking Spaces therein respectively for the purpose of the proportion of Management Expenses and Manager’s Remuneration to be contributed by the owners thereof.”  The 2^nd Schedule to the DMC sets out the allocation of Management Units to the Flats in each of the Towers and the Garage.  As mentioned earlier, 3,040 management units are allocated to the Lower Ground Floor and 4,720 to the Upper Ground Floor.  It is not in dispute that the costs in question are Management Expenses[8].

18.  Section V of the DMC relates to the management of the Building.  The key provisions are in Subsections D and E and are as follows:

“D. Management Expenses

1. The Manager shall prepare an annual budget showing the estimated management expenses for the ensuing financial year for the purpose of determining the contributions payable by the Owners. Such budgets except the first are to be prepared in consultation with the Owners’ Committee.

2. The budget shall be an estimate by the Manager of the sum which will be necessary to meet all the costs of the management of the Building and without limiting the generality of the foregoing shall include the following costs charges and items:-

…

(b) The cost and expenses of carrying out the duties of the Manager under this Deed.

…

(d) The cost and expenses of employing contractor and staff solely concerned with the administration, management, maintenance and servicing of the Building.

…

(j) The provision of a reserve fund for the depreciation of capital equipment and painting of the exterior of all the buildings and structures in the Building and anticipated repairs of a major nature to all such buildings and structures.

…

(l) The provision of the contingency fund for contingencies.

…

3. Such budget shall be made available for inspection in the office of the Manager and any Owner or his duly authorised representative shall be entitled to a copy thereof upon payment of a reasonable charge to cover the cost of copying the same.

4. The Manager shall have the right to revise the budget from time to time in consultation with the Owners’ Committee.

5. The Management Budget shall be divided into two parts:-

(a) the first part shall contain the estimated Management Expenses which are attributable solely to or solely for the benefit of the Garage and shall be apportioned between the Car Park Owners pro rata according to the number of management shares allocated to the Car Parks for the time being owned by them respectively, and

(b) the second part shall contain the estimated Management Expenses which are attributable solely to or solely for the benefit of the Units and shall be contributed by the Owner thereof according to the management units specified in Clause 1 of Subsection E of Section V hereof.

6. Where any expenditure relates solely to or is solely for the benefit of any Unit then the full amount of such expenditure shall be borne by the Owner of such Unit and the Manager shall be the sole judge as to whether any expenditure relates solely to or is solely for the benefit of any Unit.

7. The Manager shall in consultation with the Owners’ Committee apportion the Management Expenses on an alternative basis to that set out in the preceding Sub-Clause (a) and (b) of Clause 5 above.

8. The Manager may impose any reasonable additional charges to be payable by an Owner having regard to any special use of his Unit.

9. In the event of a surplus of receipts over expenditure for a financial year, the surplus may be treated as a receipt for the following financial year.

E. Payment and apportionment of Management Expenses

1. For the purpose of determining the contributions to be made by each Owner of a Unit to the Management Expenses and to the Manager’s Remuneration, there are allocated to each unit the number of Management Units are [sic] set out in the Second Schedule hereto.

2. Each owner shall be liable and pay a due proportion of the Management Expenses and Manager’s Remuneration according to the numbers of the Management Units allocated to his unit.”

The applicant’s case

19.  The applicant contended that the question posed in the preliminary issue should be answered in the negative.  Its case may be summarised as follows:

(1)  The object of the relevant provisions in the DMC is to ensure that only “exclusive beneficiaries” of management expenses should be liable to pay, namely, liability to make contribution to the full amount of expenditure is incurred where such expenditure relates solely to or is solely for the benefit of any Unit.  This would be a fair and reasonable way of sharing management expenses, with reference to the benefits exclusively conferred by the expenses on a particular category of the Units.

(2)  By clause D1, the purpose of the annual budget prepared by the Manager is for “determining the contributions payable by the Owners”.

(3)  In keeping with the object in (1), clause D5 requires the Management Budget to be divided into 2 parts.  The first part, as provided in clause D5(a), is to contain the estimated Management Expenses which are attributable solely to or solely for the benefit of the Garage.  These estimated Management Expenses in the first part are to be apportioned between the Car Park Owners pro rata according to the number of “management shares” allocated to the Car Parks for the time being owned by them.  “Management shares” in this provision has not been defined in the DMC but this is not to be confused with “Management Units” referred to in clause D5(b).  The second part is provided for in clause D5(b).  This provision, as properly construed, is to contain the estimated Management Expenses which are attributable solely to or solely for the benefit of the Units other than the Garage[9], namely the flats in the Towers.  The estimated Management Expenses in the second part are to be contributed by the Owners of these Units according to the Management Units specified in clause E1.

(4)  It is only after the division in (3) has been made that contributions payable by each Owner are to be determined in accordance with the allocation of Management Units as set out in the 2^nd Schedule, as provided in clauses E1 and 2.

The respondent’s case

20.  The contrary position taken by the respondent was along the following lines:

(1)  The charging provisions are in subsection E, not subsection D of Section V.  The heading in subsection E indicates that the provisions there relate to “payment and apportionment of Management Expenses”.  The terms in clauses E1 and 2 and clear and unequivocal.  It has not been provided that clauses E1 and 2 are subject to the clauses in subsection D.

(2)  Clause E1 provides for the allocation of Management Units in the 2^nd Schedule “for the purpose of determining the contributions to be made by each Owner of a Unit”.  “Unit” as defined in clause (1)(a) in Definitions includes the Garage.  “Management Units” as defined in clause (1)(a) in Definitions means “the number of units allocated to the Flats and the Garage” and under the 2^nd Schedule a total of 7,760 Management Units have been allocated to the Garage.  As all the costs in question fall within “Management Expenses”, the applicant is liable to contribute to the costs according to the numbers of Management Units allocated to the Garage pursuant to clause E1.

(3)  The term “Management Budget” in clause D5, which has not been defined, must be a reference to the annual budget in clause D1.  Clause D5 is not engaged in the present situation as the costs in question relate to a large scale repair and maintenance which was not done annually but was done for the first time since the incorporation of the respondent in 1992.

(4)  Further, there is no suggestion that clauses D5(a) and 5(b) are mutually exclusive.

(5)  As it would appear from clause D7 there could be an alternative basis for the apportionment of Management Expenses to that set out in clauses D5(a) and 5(b), clause D5 could not have been intended to be a charging provision.

The construction of the judge

21.  The judge noted that whilst clause A3 in Section I provides for 3 categories of common areas – Building Common Areas, Tower’s Common Areas and Garage Common Areas – it does not stipulate that the contributions of Management Expenses for these 3 categories are different from each other.  Hence, he did not find it helpful to refer to clause A3 in the construction exercise[10].

22.  Turning to clause D5(a), the judge did not “see any point in placing such great reliance on this clause”.  He took the view as this clause refers to the apportionment “between the Car Park Owners”, it is not concerned with the apportionment between the Car Park Owners and the other Owners of the Building.  And as the Garage is wholly owned by the applicant, there is no need to apportion “between the Car Park Owners” concerning the Management Expenses which are attributable solely to or solely for the benefit of the Garage[11].

23.  As for clause D5(b), it refers to the Management Expenses for the benefit of “the Units”, and the Owner of “the Units” as defined covers all the Owners of the Building including the Owner of the Garage.  Clause D5(b) stipulates that the apportionment is based on the Management Units specified in clause E1.  So there is no different basis of apportionment[12].

24.  The judge did not regard clauses D6 and D7 as relevant[13].

25.  Hence, the judge did not find any provision in the DMC which suggests that the identification of the 3 different categories of common areas and facilities would cause different basis of apportionment to be applied.  He held that the only basis of apportionment that is relevant to the present case is the one based on Management Units as mentioned in Clause E2 or Clause D5(b).  He concluded it would be pointless to identify the 3 different categories of common areas and facilities, when the applicant would be liable to contribute according to its Management Units in any event[14].  He therefore answered the question in the preliminary issue in the affirmative.

The proper construction of the DMC

26.  In resolving this dispute on the proper construction of the DMC, both parties have urged this court to adopt a purposive construction and apply common sense to the relevant provisions of the DMC (Grande Properties Management Ltd v Sun Wah Ornament Manufactory Ltd (2006) 9 HKCFAR 462 at para 2; Incorporated Owners of Summit Court v Full Surplus Investment Ltd [2007] 3 HKLRD 351 at para 64).  I bear in mind the well-known principles to be adopted in construing an agreement, as conveniently set out by Ribeiro PJ in Leung Ka Lau v Hospital Authority (2009) 12 HKCFAR 924 at para 37:

“The parties also accept (in my view correctly) that construction of those documents should be approached applying the well-known principles stated in Jumbo King Ltd v Faithful Properties Ltd[15], where Lord Hoffmann NPJ described the process as “an attempt to discover what a reasonable person would have understood the parties to mean” which involves “having regard, not merely to the individual words [the parties] have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve”. Furthermore, as his Lordship stated in Investors Compensation Scheme Ltd and West Bromwich Building Society[16], the interpretation of a document involves “ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”.

27.  I do not find the reasoning adopted by the judge in the construction exercise convincing.  He arrived at a negative conclusion in coming to the view that there is no provision in the DMC which suggests that the identification of the 3 different categories of common areas and facilities would cause different basis of apportionment to be applied.  He has not tested his negative conclusion by asking what possible effect the provisions in subsection D would have, if they should not be construed as providing for different basis of contributions for different common areas and facilities.  He did not inquire into the reason or purpose for requiring the Management Budget to be prepared in 2 parts.

28.  The contention adopted by the respondent before the judge and on appeal suffers from a similar drawback.  The respondent’s approach is to focus on subsection E as the charging provision without regard to other parts of the DMC, notably subsection D, which makes provision for the preparation of a budget “for the purpose of determining the contributions payable by the Owners”.

29.  Mr Ho, SC, who appeared for the respondent[17], strove to give some meaning to clause D5.  He contended that the purpose of requiring the Management Budget to be prepared in 2 parts is not to determine the contributions payable by the Owners, as this is governed by the provisions in Subsection E, but the purpose is for presentation to the Owners, to provide them with information so that they would know which part of the estimated Management Expenses is “attributable solely to or solely for the benefit of the Garage” and which part is “attributable solely to or solely for the benefit of the Units”.

30.  I do not agree with this interpretation.  Mr Ho acknowledged that not all the provisions governing the liability of the Owners to pay Management Expenses are found exclusively in Subsection E.  So there is not the kind of neat division between Subsections D and E as he has submitted.  He accepted that clause D6 is a provision governing the liability of the Owners to pay.  Clause D8 would be another such provision.  In my judgment, when clause D5 is read with clauses D1 and D6, it is clear that the requirement of preparing the Management Budget in 2 parts is not merely for the purpose of presentation and it is not the case that it would have nothing to do with the liability of the Owners to make contribution.  The latter part of clause D5(b) expressly states that the Management Expenses so estimated “shall be contributed by the Owner thereof according to the management units specified in Clause 1 of Subsection E of Section V hereof.”

31.  I do not accept Mr Ho’s submission that clause D5 is not engaged in the present situation just because the costs involved relate to repair and maintenance on a large scale not done annually.  I agree with Mr Ismail, who appeared for the applicant, that the costs involved may be included in the annual budget because they would fall within clause D2(b), (d), (j) and/or (l).  Furthermore, an annual budget may be revised by the Manager from time to time in consultation with the Owners’ Committee, as provided in clause D4.

32.  The words “attributable solely to or solely for the benefit of”, which appear in clauses D5(a) and (b) and D6 with regard to estimated Management Expenses, are significant. Clause D6 in particular makes clear the intention and purpose for dividing the Management Budget into 2 parts in clauses D5(a) and (b): “where any expenditure relates solely to or is solely for the benefit of any unit then the full amount of the expenditure shall be borne by the owner of such unit”.

33.  It is not uncommon for provisions to be made in a DMC to differentiate between the contribution to be made by owners to management expenses in respect of different types of common areas and facilities, to cater for different requirements for maintenance owing to the different usage of common areas and facilities and to achieve a degree of fairness among the owners.  Examples of such differentiation can be found in developments of a mixed commercial and residential nature, as in Promising Realty Ltd v Lam Wai Shan, CACV 120/1998, 4 January 1989, and The Incorporated Owners of Tsui Chuk Garden v Edentown Ltd, LDBM 303 of 2004, 11 March 2005.

34.  Understood and construed in that light, it makes perfect sense to require the Management Budget to apportion the estimated Management Expenses into 2 parts.  The first part is concerned with estimated Management Expenses “attributable solely to or solely for the benefit of the Garage”.  Hence, Owners of flats in the Towers would not be required to contribute to Management Expenses of the Garage Common Areas, which are deemed in clause A3(iii) to be “common areas for the benefit of the Car Park Owners which areas may subject to the provisions hereof be used by each Car Park Owner in common with all other Car Park Owners”, as such expenses are “attributable solely to or solely for the benefit of the Garage”.

35.  Adopting a purposive construction to the words “estimated Management Expenses which are attributable solely to or solely for the benefit of the Units” in clause D5(b), the second part is concerned with the Units other than the Garage.  This construction does not do violence to the language used as the meaning ascribed to “the Units” in clause (1)(a) in Definitions is “whenever the context permit”.  Estimated Management Expenses relating to “the Tower’s Common Areas”, which are deemed in clause A3(ii) to be “common areas for the benefit of the Owner of each Unit which is situate in that Tower Block which areas may, subject to the provisions hereof be used by each such Owner in common with all other Owners of that Tower Block”, would be covered by clause D5(b).

36.  What about the Management Expenses relating to “the Building Common Areas”, deemed in clause A3(i) to be “common areas for the benefit of the Owners which areas may subject to the provisions hereof, be used by each Owner”?  This was raised by Mr Ho to make the point that as the Management Expenses for some of the common areas are not covered by clause D5, the division of the Management Budget into 2 parts in clauses D5(a) and (b) cannot be a comprehensive division and hence not an appropriate basis for the apportionment of liability.

37.  I do not see this as a difficulty.  The guiding principle is that provided in clause D6, which is that “where any expenditure relates solely to or is solely for the benefit of any unit then the full amount of the expenditure shall be borne by the owner of such unit”.  Clauses D5(a) and (b) make provision for those parts of the expenditure that are “attributable solely to or solely for the benefit of” certain Units.  Where, in the case of “the Building Common Areas”, the expenditure for those parts does not “[relate] solely to or is solely for the benefit of any unit”, clauses D5(a) and (b) do not apply and the fallback or default provisions are clauses E1 and 2, by which all the Owners would be liable to pay a due proportion according to the Management Units allocated to each in the 2^nd Schedule.

38.  Thus, viewing the DMC as a whole, and the practical object which it was intended to achieve, in my judgment a reasonable person having all the background knowledge would have understood clauses D5(a) and (b) to provide for a mutually exclusive apportionment of the estimated Management Expenses.  The practical effect of clauses D5(a), 5(b) and 6 is that flat Owners who do not benefit from the use and enjoyment of the Garage would not be required to contribute to the Management Expenses attributable solely to or solely for the benefit of the Garage including the Garage Common Areas, and the Garage Owner who does not benefit from the use and enjoyment of the flats in the Towers would not be required to contribute to the Management Expenses attributable solely to or solely for the benefit of the flats in the Towers including the Towers’ Common Areas and Facilities.

39.  The judge has misconstrued clauses D5(a), 5(b) and 6. I do not agree with him that as clause D5(a) refers to the apportionment “between Car Park Owners”, it is not concerned with apportionment between the Car Park Owners and the other Owners of the Building.  Clauses D5(a) and (b) must be read together, and in conjunction with clause D6.  I agree with Mr Ismail the intention of the words “between Car Park Owners” in clause D5(a) is consistent with the object of apportionment of expenses between the Car Park Owners of the first part and the flat Owners of the second part.  The use of these words made clear that it is only “Car Park Owners” and not other Owners who would be responsible for the Management Expenses attributable solely to or solely for the benefit of the Garage.  The fact that the applicant owns the whole of the Garage and there is no need to apportion “between Car Park Owners” is irrelevant.

40.  Mr Ho argued against the apportionment of Management Expenses between the Garage Owner and the flat Owners by submitting that if the intention were to differentiate between contributions to different categories of common areas, the Management Budget in clause D5 would have to be apportioned into 5 parts not just 2, to differentiate between the Garage, the 3 Towers and the Building Common Area.  As mentioned earlier, I do not see expenses relating to the Building Common Area as posing any difficulty.  And if Management Expenses are “attributable solely to or solely for the benefit of” just one and not all of the Towers, there is no difficulty with apportioning liability for such expenses to be contributed by the Owners of that particular Tower, in accordance with the wording in clauses D5(b) and D6.

41.  Mr Ho sought to argue that the repair and renovation work in question would benefit all the Owners indirectly in that there would be enhancement of value of the Building and reduction of the risk of the potential liability of the respondent for occupiers liability in respect of the common parts of the Building.  I do not think indirect benefit of the kind as envisaged would assist in the proper construction of the DMC, in view of the clear wording of the phrase “attributable solely to or solely for the benefit of” in the relevant clauses.

42.  In the respondent’s notice, it was contended that the decision of the judge should be affirmed on an additional ground by invoking clause D7, which provides that “the Manager shall in consultation with the Owners’ Committee apportion the Management Expenses on an alternative basis to that set out in the preceding Sub-Clause (a) and (b) of Clause 5 above”.  By virtue of section 34K of the Building Management Ordinance, Cap 344, the owners’ committee of the Building has been replaced by the management committee of the respondent.  Mr Ho submitted that as there could be an alternative basis for the apportionment of the Management Expenses to that set out in clauses D5(a) and (b), clause D5 could not have been intended to be a charging provision.

43.  I do not accept this submission.  The fact that the Manager, after consultation with the management committee of the respondent, could apportion the Management Expenses on an alternative basis to that set out in clause D5 does not detract from the proper interpretation of clause D5, which provides for a basis of apportionment between the Garage Owner and the flat Owners.  Further, as the judge rightly pointed out, the present case is not concerned with the alternative basis suggested in clause D7 at all.

44.  Mr Ho also sought to invoke the contra proferentem rule.  I do not think this rule has any application here, as there is no ambiguity in the provisions of the DMC properly construed and analysed.

45.  For the above reasons, the question in the preliminary issue should be answered in the negative.  I would allow this appeal with an order that the costs of the appeal and below be paid by the respondent to the applicant, to be taxed if not agreed.

Hon Fok JA:

46.  I agree with the judgment of Kwan JA.

Hon Barma JA

47.  I agree.