THE INCORPORATED OWNERS OF CHUNG WUI APARTMENTS v. WUI FU COMPANY LTD

LDBM 360/2014 & LDBM 361/2014
(Heard Together)

[2024] HKLdT 82

LDBM 360/2014

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 360 OF 2014

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AND

LDBM 361/2014

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 361 OF 2014

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(Heard Together)

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D E C I S I O N

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1.  On 6 June 2024, this Tribunal dismissed a second post-judgment time extension application sought by the same applicant in both actions (i.e. IO) to extend compliance deadline of mandatory injunctions made against it in favour of the 2 respondents after trial of their counterclaims (the 2^nd Time Extension Applications).

2.  On 20 June 2024, IO applied for leave to appeal against the above dismissal in both actions (the Leave Applications). This decision deals with the Leave Applications.

Procedural history

Mandatory injunctions after trial

3.  Judgment on respective counterclaims of the 2 respondents in these 2 actions was handed down by this Tribunal on 24 October 2023[1] (the Judgment) after 4-day trial back in 2023. The same abbreviations used in the Judgment will be adopted here.

4.  For WF’s counterclaim in LDBM 360/2014[2], this Tribunal in the Judgment ordered IO, among others, to comply within 120 days fully with such existing order issued by BD under s.28(3) of BO to rectify all existing problems and defects of underground drains and manholes of the Building (including sewage backflow and risk of sewage backflow to Toilet D1) to the satisfaction of BD (360 Injunction)[3].

5.  For Sarwin’s counterclaim in LDBM 361/2014[4], this Tribunal in the Judgment also ordered IO, among others, to comply within 120 days fully with such existing order issued by BD under s.28(3) of BO to rectify all existing problems and defects of underground drains and manholes of the Building (including sewage backflow and risk of sewage backflow to Toilet C, and foul water leakage and risk of foul water leakage to floor of Shop B and Shop C) to the satisfaction of BD (361 Injunction)[5].

6.  The 120-day deadline for IO to comply with the 360 and 361 Injunctions falls on 21 February 2024.

Injunctions varied after review

7.  On 17 November 2023, IO applied, and was granted a hearing, to review the wordings of the 360 and 361 Injunctions. At the review hearing on 17 January 2024, this Tribunal varied 360 Injunction in LDBM 360/2014 to become as follow: -

“The IO do within 120 days

(i) comply fully with such existing order issued by BD under s.28(3) of BO to the satisfaction of BD;

(ii) rectify all existing problems and defects of underground drains and manholes of the Building (including sewage backflow and risk of sewage backflow to Toilet D1)”

and varied 361 Injunction in LDBM 361/2014 to become as follows: -

“The IO do within 120 days

(i) comply fully with such existing order issued by BD under s.28(3) of BO to the satisfaction of BD;

(ii) rectify all existing problems and defects of underground drains and manholes of the Building (including sewage backflow and risk of sewage backflow to Toilet C, and foul water leakage and risk of foul water leakage to floor of Shop B and Shop C).”

(collectively the Varied Injunctions).

1^st Time Extension Applications

8.  On the same date of 17 January 2024, this Tribunal also heard IO’s first applications in both actions to extend compliance deadlines of the 360 and 361 Injunctions to 31 October 2024 (the 1^st Time Extension Applications).

9.  In support of the 1^st Time Extension Applications in both actions are affirmation of Mr Lam Koon Fung, IO’s chairman (Mr Lam)[6], dated 10 January 2024 (1^st Lam Affirmation).

10.  After hearing Ms Clara Wong (Ms Wong), IO’s counsel, and Mr Alex Lai (Mr Lai), counsel for the 2 respondents, on 17 January 2024, this Tribunal extended the compliance deadlines of the Varied Injunctions by 2 months only to 21 April 2024.

2^nd Time Extension Applications

11.  On 24 April 2024, IO took out the 2^nd Time Extension Applications, asking for new compliance deadline of 28 February 2025 for the Varied Injunctions.

12.  IO filed on the same date in each action 2^nd affirmation of Mr Lam dated 23 April 2024 (2^nd Lam Affirmation) in support of the 2^nd Time Extension Applications, which were fixed by IO to be heard on 4 June 2024.

13.  Mr Ng Man Kin (Mr Ng), solicitor for the two respondents, filed his affirmation in each action on 27 May 2024 in opposition to the 2^nd Time Extension Applications.

14.  At the hearing on 4 June 2024, instead of adjourning the 2^nd Time Extension Applications to another date for further evidence to be adduced as suggested by IO but opposed by Mr Ng, parties agreed for this Tribunal to hear oral evidence from such live witnesses to be called by IO in order for the 2^nd Time Extension Applications to be decided without further delay.

15.  IO therefore decided and called on the date of the hearing 1) Mr Billy Yeung (Mr Yeung), project manager of Shun Wo Engineering Consultant Limited (Shun Wo), and 2) Mr Peter Cheung Hoi Tat (Mr Cheung), registered surveyor, of China-Tech Surveyors Limited (China-Tech) to the stand to give oral evidence. Mr Yeung and Mr Cheung were cross-examined by Mr Ng.

16.  Thereafter, Mr Justin Ismail (Mr Ismail), counsel appearing for IO in both actions, and Mr Ng made their respective submissions on the 2^nd Time Extension Applications. Afterwards, this Tribunal reserved its decision on the 2^nd Time Extension Applications to be orally delivered 2 days later on 6 June 2024.

The Grounds of Appeal

17.  Against the dismissal of the 2^nd Time Extension Applications, three common grounds of appeal set out at paragraph 14 of 3^rd affirmation of Leung Man Man filed on 20 June 2024 in LDBM 360/2014 were put forward by IO in both actions.

18.  They are as follows: -

“(1) Despite having correctly held that the applicant was at all relevant times intent on complying with the [Varied Injunctions], the learned judge concluded that it had deliberately failed to comply with the same by failing to appoint an Authorised Person (AP) for the purposes of complying with the Drainage Order (and therefore the [Varied Injunctions]) (First Ground).

(2) The learned judge misunderstood or wrongly faulted the applicant, on grounds that:

(a) The learned judge failed to consider the applicant’s evidence that it had all along been led by Shun Wo to believe that the appointment of a Registered Inspector (RI) was sufficient to comply with the Drainage Order as part and parcel of a mandatory building inspection order applicable to the Building (the MBI Order).

(b) The learned judge also failed to consider the applicant’s evidence that the Building Department (BD) had expressed no objection to this approach prior to the change of personnel at the BD.

(c) Based on the above, the learned judge failed to consider the applicant’s evidence that Shun Wo and/or BD had acted to the applicant’s detriment in the sense of requiring the applicant to appoint an AP to comply with the Drainage Order in March 2024 (Second Ground).

(3) Accordingly, the learned judge erred in law in failing to take into account all relevant matters and considering the overall justice of the case, such that his decision to refuse the grant of an extension of time is unsustainable and must be set aside (Third Ground)”.

Discussions

Applicable law and principles

19.  Under s.11(2) of Lands Tribunal Ordinance (LTO)[7], any party to proceedings before the Tribunal may appeal to the Court of Appeal against a judgment of the Tribunal on the ground that such judgment is erroneous in point of law.

20.  S.11AA(1) of the LTO requires leave to be granted by the Tribunal or the Court of Appeal before an appeal under s.11(2) can be made.

21.  S.11AA(5)(a) of LTO provides that leave to appeal may be granted in respect of a particular issue arising out of the judgment.

22.  S.11AA(6) of LTO further provides that leave to appeal shall not be granted unless the Tribunal is satisfied that:

(a)  the appeal has a reasonable prospect of success; or

(b)  there is some other reason in the interests of justice why the appeal should be heard.

23.  Such criterion of “reasonable prospect of success” was described in SMSE v KL [2009] 4 HKLRD 125 at [17] by Le Pichon JA (as she then was) as involving the notion that the prospect of succeeding must be “reasonable” and therefore more than “fanciful” without having to be “probable”.

24.  Even if it is not demonstrated that the appeal has any reasonable prospect of success, there may be many reasons why leave should still be granted in the interests of justice. For example, the issue may be one which the court considers should in the public interest be examined by appellate court or the court may take the view that the case raises an issue where the law requires clarifying: Ma Bik Yung v Ko Chuen [2009] 3 HKC 359, 361B-C.

Reasons for dismissing 2^nd Time Extension Applications

25.  In short, this Tribunal gave the following reasons for dismissing the 2^nd Time Extension Applications, namely: -

(1)  This Tribunal disagreed with Mr Lam that there has been substantial progress as per paragraph 2(b) of the 2015 Drainage Order in terms of submissions, and BD’s approval, of remedial proposals.

(2)  On BD’s letter to IO dated 15 March 2024 cc Shun Wo[8], many basic matters were still outstanding in respect of the remedial proposals submitted by Shun Wo to BD. According to Mr Cheung, such proposals were likely not approved by BD due more (sic) to these outstanding basic matters than (sic) failure of IO to engage an AP.

(3)  Remedial underground drainage works by IO’s contractor called Hing Yip (Hing Yip) likely did not begin on 18 (sic) March 2024 as scheduled due to these outstanding matters pointed out by BD and not due to any change of personnel (from one Mr Siu to Mr Wong) on the part of BD as complained by Mr Yeung, whose evidence to that effect was rejected by this Tribunal.

(4)  Contrary to Mr Ismail’s submissions, there had not been any material change of circumstances due to BD allegedly outside IO’s control causing it unable to comply with Varied Injunctions (or 2015 Drainage Order) by the existing deadline.

(5)  In the past 17 years, IO had altogether instructed 3 APs in order to comply with drainage orders issued against it by BD[9], including instructing a second one surnamed Ip (sic) to lodge remedial proposal by way of alternative drainage plan to BD and later reverting to approved drainage plan between 2010 and 2014 (and Mr Lam was first elected chairman of IO in the meantime in 2013)[10].

(6)  The terms of 2015 Drainage Order[11] expressly require IO to appoint an AP to carry out the works specified in the 3 paragraphs of the said order. BD therefore made no change when it reminded IO of the said existing requirement on 15 March 2024. And IO must be well aware of that explicit requirement.

(7)  Whether to engage an AP or not to comply with the drainage order was, this Tribunal believed, within the control of IO.

(8)  At hearing of 1^st Time Extension Applications, this Tribunal had also enquired, and reminded IO, about engagement of AP. However, Ms Wong produced an appointment form dated 6 September 2023[12] and claimed on instruction that Mr So Chi Wai of Shun Wo (Mr So) was AP when in fact Mr So was appointed RI in the said form signed by Mr Lam on behalf of IO.

(9)  Despite IO was reminded by this Tribunal on 17 January 2024 to make full disclosure of, inter alia, engagement of AP in any future time extension, Mr Lam (and IO) had, this Tribunal found, failed to explain fully in 2^nd Lam Affirmation why AP was not engaged for the 4^th time to comply with 2015 Drainage Order as IO did in the past 17 years and as the said order expressly requires.

(10)  IO took, this Tribunal found, risks of not complying with the 2015 Drainage Order in not engaging AP and only engaging a RI i.e. Mr So by way of “特事特辦” as claimed by Mr Yeung, who admitted that Hing Yip had to improvise depending on site situations (whereas an AP must be instructed by IO if IO is to remedy the underground drainage problem using the approved drainage plans[13]).

(11)  IO was, this Tribunal found, at fault in not engaging AP to comply with the 2015 Drainage Order since the Judgment was handed down (or since 17 January 2024) such that IO had to redo tendering of remedial underground drainage works, holding fresh general meeting to approve contractor etc. on top of engaging AP from China-Tech. Had AP been engaged by IO in the first place, such extra time could well not be required and remedial works could well have been completed by 21 April 2024 and, if not, by 6 June 2024.

(12)  Such extra time now wasted was, this Tribunal found, attributable to IO’s fault and not fault of the 2 respondents, whose fruit of their judgment after trial is, as a result, denied to them to their prejudice by IO’s default in the meantime.

(13)  Compliance of 2015 Drainage Order was long overdue on the part of IO[14]. The said order superseded previous drainage orders of BD going back as far as 2007. As such, the said BD’s requirement of AP appointment dated back to 2007.

(14)  The prospect of contempt proceedings to be faced by IO if time sought by it is not given by this Tribunal was IO’s own making or due to IO’s own failure above.

(15)  Having regard to all the circumstances of this case, it is inappropriate for this Tribunal to exercise its discretion to grant the 2^nd Time Extension Applications.

Second Ground

26.  This Tribunal starts with IO’s complaints at paragraphs (a) and (b) of this ground. Such submissions that IO was led by Shun Wo and Mr So to believe that AP appointment was unnecessary to comply with the 2015 Drainage Order and that BD (through Mr Siu) had never raised issue with that are the basis or foundation of Mr Ismail’s first main submission of material change of circumstances outside the control of IO that caused it unable to comply with the deadline of the Varied Injunctions (which this Tribunal rejected in the end).

27.  In giving his oral reasons, this Tribunal had specifically recited the above submissions when it repeated the main submissions of Mr Ismail before dealing with them.

28.  In other words, such submissions were never lost sight of (or not considered) by this Tribunal as allegedly complained by IO in the Second Ground or in Mr Ismail’s written submissions.

29.  The short answer to IO’s complaint, as was orally pointed out by this Tribunal in his oral reasons, is that there was simply no evidence to support the above submissions. Mr Lam never said so in 2^nd Lam Affirmation. And Mr Yeung never said so in the box.

30.  As between IO and Shun Wo, Mr Lam never said in 2^nd Lam Affirmation that he was led by Shun Wo or Mr So to believe that engagement of AP was unnecessary. Mr Lam never explained in 2^nd Lam Affirmation why IO allowed or instructed Shun Wo to deal with 2015 Drainage Order by RI only (when Mr Yeung claimed in the box that Shun Wo had also its own AP).

31.  And Mr Yeung only explained in the box Shun Wo’s past experience in a project in To Kwa Kwan and Shun Wo’s alleged communications with Mr Siu (and Mr Wong) of BD. He never explained in the box what he, Shun Wo or Mr So had allegedly told IO or Mr Lam (or led IO to believe) about non-engagement of AP (if any of them had discussed at all).

32.  As was said at [25(3)], this Tribunal had also rejected Mr Yeung’s evidence that change of personnel on the part of BD (from Mr Siu to Mr Wong) had anything to do with non-commencement of remedial works on 18 March 2024.

33.  Moreover, as was also orally pointed out by this Tribunal, Mr Lam in paragraph 7 of 1^st Lam Affirmation put down the words “AP, as consultant” after Shun Wo but changed to describe Shun Wo and Mr So collectively as “consultant” at paragraph 6 of 2^nd Lam Affirmation. He, however, never explained the said material change in 2^nd Lam Affirmation.

34.  Indeed, as was held at [25(9)], this Tribunal had found that IO (and Mr Lam) had not made full disclosure about, inter alia, non-engagement of AP (and its reasons) in the 2^nd Time Extension Applications despite it was so reminded by this Tribunal on the 1^st Time Extension Applications on 17 January 2024.

35.  As such, this Tribunal could not, one thinks, have failed to consider applicant’s evidence as complained in Second Ground when they remain bare submissions of Mr Ismail at the end of the day.

36.  This is not to mention, as was rightly pointed out by Mr Lai, that 2015 Drainage Order and MBI Order were issued by BD at different times pursuant to different sections of Buildings Ordinance[15], and that MBI Order was not produced into evidence by IO.

37.  As a result, this Tribunal could not, one thinks, have failed to consider IO’s evidence complained at paragraph (c) of Second Ground either.

38.  Accordingly, this Tribunal had not, one thinks, misunderstood or wrongly faulted IO on any of 3 alleged grounds in the Second Ground.

First & Third Grounds

39.  As was also rightly pointed out by Mr Lai, these 2 grounds do not, this Tribunal agrees, stand on their own. They are made on the basis of the Second Ground.

40.  In particular, the Third Ground has (or contains) no particulars (or reasons) of its own. Such belated submissions about “punitive and disproportionate consequences”, and “public funds”, now raised by Mr Ismail in his written submissions had not been put down as particulars (or reasons) of this Third Ground.

41.  With respect, Mr Ismail had sought to amend or vary the Third Ground by his submissions.

42.  As this Tribunal had not failed to consider IO’s evidence as alleged in the Second Ground, this Tribunal could not have erred in law either “in failing to take into account all relevant matters and considering the overall justice of the case” as alleged in the Third Ground.

43.  Regarding the First Ground, while this Tribunal had held in its oral reasons that IO had not steadfastly declined to comply with the Varied Injunctions as submitted by Mr Ng, this Tribunal had never said that IO “had deliberately failed to comply with the same” by failing to appoint AP for the purpose of complying with the 2015 Drainage Order as was alleged in the First Ground.

44.  To put the record straight, as was said at [25(10)-(12)], this Tribunal orally held that IO “took risks”, and was “at fault”, in not engaging AP for the 4^th time to comply with 2015 Drainage Order, causing extra time to be wasted on another round of tendering etc. on top of instructing China-Tech as AP.

45.  There is, this Tribunal would stress, nothing inconsistent about the findings in the 2 preceding paragraphs as was complained in 3^rd Affirmation of Leung Man Man.

Conclusions

46.  In conclusion, this Tribunal agrees with Mr Lai’s written submissions that IO’s intended appeal was directed at factual findings, if any, of this Tribunal. This is not allowed by s.11(2) of LTO.

47.  In any event, as this Tribunal explains above, all 3 grounds of appeal are without merit and the intended appeal enjoys no reasonable prospect of success as is required by S.11AA(6)(a) of LTO.

48.  And Mr Ismail had not submitted in his written submissions that there is some other reason in the interests of justice why the intended appeal should be heard.

Disposition

49.  Accordingly, the Leave Applications in both actions are dismissed.

Costs

50.  All matters and parties’ written submissions considered, I find it appropriate to order the costs of the Leave Applications to follow their events.

51.  And I find it appropriate to make summary assessment of the above costs.

52.  Having considered statements of costs in both actions dated 25 July 2024 prepared by respondents’ solicitors for summary assessment and Mr Ismail’s reply submissions on them, I would adjust the formers as follows:-

(1)  NMK is allowed to charge $3,860/hour in both actions;

(2)  A total of 2 hours is allowed for both section C in both actions; and

(3)  1.5 hours is allowed for section D in LDBM 360/2014 and 1 hour is allowed for section D in LDBM 361/2014.

53.  Accordingly, in LDBM 360/2014, I order IO to pay costs of the Leave Application to WF, which costs are summarily assessed at $34,582.

54.  And, in LDBM 361/2014, I order IO to pay costs of the Leave Application to Sarwin, which costs are summarily assessed at $32,652.