XCHRX INCORPORATED OWNERS OF MILLION FORTUNE INDUSTRIAL CENTRE v. JIKAN DEVELOPMENT LTD. AND ANOTHER

HCA14915/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.14915 OF 1998

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J U D G M E N T

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1. This is an appeal by the 1st Defendant from the Order of the Master whereby the Master dismissed the application of the 1st Defendant to strike out the name of the Plaintiff from the Action and to have the Action dismissed.

2. At the hearing of the appeal, two issues were raised by Mr Wong for the 1st Defendant. The first issue is that there was no jurisdiction of the High Court to hear this Action because the jurisdiction was conferred exclusively on the Lands Tribunal. The second issue raised by Mr Wong is that the Action was improperly commenced by the Plaintiff and there was no authority for the Plaintiff to commence this Action. I will deal with each of the issues in turn.

3. So far as the first issue is concerned, this can be disposed of fairly quickly. The matter argued is that section 8 of the Lands Tribunal Ordinance which conferred jurisdiction on the Lands Tribunal to determine disputes in matters such as this, between the owners association and the various owners touching on matters of management and deed of mutual covenant; confers exclusive jurisdiction on the Lands Tribunal. I disagree. It is conceded that section 8 of the Lands Tribunal Ordinance did not provide for an express ouster of the High Court's jurisdiction. We have in a number of other provisions, such as section 5 of the Small Claims Tribunal Ordinance and section 7 of the Labour Tribunal Ordinance, express clear provisions which confer exclusive jurisdiction on a specific tribunal and on no other court. Therefore, these express provisions made it clear that the specific tribunal had exclusive jurisdiction over the specific matters referred to in these specific ordinances. Here we have no such express ouster and the normal rule, which is very well known principle of law, that the High Court having unlimited jurisdiction, could not have its jurisdiction ousted except by the clearest of statutory language. I have indicated in the course of the submission of Mr Wong that absent a binding decision by the Court of Appeal, the various possibly conflicting decisions at first instance of my brother judges really cannot help me very much. It is a simple interpretation of the statute and the application of the clear principle of ouster of jurisdiction of the High Court requiring express clear language. So I decide the first issue against the 1st Defendant.

4. The second issue is a little bit more involved. Mr Wong and Mr Yeung both agreed that for the Defendant to succeed on this issue, Mr Wong would have to convince the court that both the First Resolution, i.e. a resolution of the Management Committee to commence this action, and the Second Resolution, which is the resolution of the Owners Association to commence this action, are no good.

5. In respect to each of the two resolutions, Mr Wong takes two separate points. I will first state the points before I go on to consider them.

6. In relation to the first point in respect of the First Resolution of the Management Committee, my understanding is that it was argued that meeting was not convened by the Chairman and therefore being contrary to paragraph 8 of the Second Schedule of the Building Management Ordinance ("the Ordinance"). The second point under the First Resolution is that the minutes of that resolution was not certified as required under paragraph 10(4)(a) of the Second Schedule.

7. In relation to the Second Resolution, two similar points were taken. The first point taken was that the meeting of the Owners Association was not properly convened, contrary to paragraph 1(1)(c) of the First Schedule of the Ordinance. The second point raised is that there was no proper certification of the minutes of the general meeting of the owners, contrary to paragraph 6(2) of the Third Schedule of the Ordinance.

8. It seems to me fundamental to first consider, in relation to the four points taken under the two Resolutions, the effect of any breach of those provisions. If the effect of such breach renders these resolutions void and of no effect, then obviously it helps to determine the issue in favour of the Defendant. But if the effect is such that they are mere irregularities, and do not impinge the resolutions, then the Defendant fail in the present appeal. It seems to me that the Ordinance has given us the clearest indication of where a breach of provisions under the Schedules might carry an adverse effect. Reference was made to paragraph 3(7) of the Third Schedule which reads :

"No resolution passed at any meeting of the Corporation shall have effect unless the same was set forth in a notice served in accordance with paragraph 2 or is ancillary or incidental to a resolution or other matter so set forth."

Paragraph 2 in fact refers to notice of a meeting to be served by the secretary.

9. There is no equivalent statutory "no effect" provision touching on the four points that I have to consider, that is under paragraph 8 and paragraph 10(4)(a) of the Second Schedule in relation to the First Resolution, paragraph 1(1)(c) and paragraph 6(2) of the Third Schedule in relation to the Second Resolution. It seems to me that the proper construction of those four provisions in the Second and Third Schedules I referred to earlier point to the court that a breach of these provisions would not carry the effect of rendering these resolutions void and of no effect. That seems to be a proper way to read these provisions.

10. This being the case, it seems to me that the application and appeal of Mr Wong's client must fail. Strictly speaking, therefore, it is not necessary for me to go into the detail of each of those provisions. However, for the sake of completeness and in the event that this case might go elsewhere, I will just briefly state also my views on the alleged breach of the four provisions.

11. In relation to the first breach, i.e. under the First Resolution that the meeting of the Management Committee was not properly convened by the Chairman, I must say that for my part, having regard to Mr Chui's evidence, that this point is simply not borne out. The proper way to read it, as I see it, is that the meeting of the Management Committee was convened by the Chairman as referred to in paragraph 5 of the second affirmation of Mr Chui.

12. So far as the non-certification of the First Resolution is concerned, that would seem to be the case. But, I agree with the skeleton argument of Mr Yeung that this is a mere technical irregularity and it is not suggested anywhere that the First Resolution would have read any differently if it had been certified. It was so passed, was properly decided and the non-certification was only a technicality which would have made no difference to the outcome.

13. So far as the Second Resolution is concerned, again on the second point, i.e. the certification of the minutes of the general meeting, again it would have made no difference, there is no suggestion that the minutes would have read any differently, so, for me, again it is a mere technical irregularity and certainly does not deserve to carry the consequence of rendering this Action a nullity or unsustainable.

14. So far as the last point is concerned, that is the Second Resolution was not convened pursuant to paragraph 1(1)(c) of the Third Schedule, the evidence is to the contrary. There is the evidence from paragraph 3(2) of Mr Chui's Second Affirmation, that the Management Committee had resolved to convene the said Owners' Meeting and it was convened therefore by the Management Committee.

15. The point taken by Mr Wong at the hearing, in the absence of any proper skeleton argument on this point, is that there was no backup properly documented Management Committee resolution, but that is not a matter on which there is proper ventilation on the evidence. As far as I am concerned, there had been a compliance with paragraph 1(1)(c) of the Third Schedule. There is again, therefore, for me, no substance in that last point.

16. I therefore conclude that the objections to the continuation of this Action by the Defendant is wholly without merit and from the material put before me, I can only deduce that the Defendant is trying to stall and delay the continuation of this Action which is why it is taking the procedural step to appeal to this court. The appeal must be dismissed with costs and I am now proposing to assess the costs of the present appeal by way of gross sum assessment under Order 62, rule 9(4)(b).

17. After having studied the costs material presented to me and without objection from the Defendant, I assess the gross sum costs of the appeal in the sum of $39,126 is to be paid immediately.