THE INCORPORATED OWNERS OF PEARL ISLAND GARDEN v. HUI CHAN SOON HOY AND ANOTHER

[English Translation]

LDBM 110/2003

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 110 OF 2003

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BETWEEN

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J U D G M E N T

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1. The Applicant is the Incorporated Owners of Pearl Island Garden situated at 11 Tsing Lung Road, Castle Peak Road, Tuen Mun, New Territories.  The 1^st and the 2^nd Respondents (“the Respondents”) are the owners of Flat C on 3/F of Block 9 and car parking space number CP-98 of the above housing estate.  The Applicant applies for the following order from the Lands Tribunal:

“A resolution was passed during the extraordinary general meeting held on 6 July 2002, whereby a special fund was to be set up to pay the expenses incurred in repairing the sewage treatment plant.  The Respondents are to contribute towards the fund to the extent of $4,669 and to pay interest on the overdue payment, together with administration charges and legal expenses involved.”

2. The Respondents oppose the application on the following grounds: 

“(1) …

   (2)  The Applicant purportedly passed a resolution in the Extra-ordinary General Meeting held on 6^th July 2002 for establishing a special fund for funding the contract for repair to sewage treatment plant.  The resolution was clearly in breach of the DMC provision aforesaid and is therefore ultra vires and void.

   (3)  Further or alternatively, according to paragraph 2(1) of Schedule 3 of the Building Management Ordinance, Chapter 344, Laws of Hong Kong (‘the Ordinance’), notice of meeting convened under paragraph 1 shall be served … at least 14 days before the date of the meeting.

   (4)  The Revised Notice dated 9^th September 2001 for convening an Extraordinary General meeting to be convened on 23^rd September 2001 failed to comply with the paragraph 2(1) of Schedule 3 of the Ordinance in giving 14 clear days notice of meeting.  In the presences, all the resolutions, including the appointment of the then Management Committee, and void and of no effect.

   (5)  …

   (6)  As a consequence, all subsequent actions (including but not limited to the convening of the extraordinary General Meeting held on 6^th July 2002) conducted by the then Management Committee during the relevant period were void and of no effect.

   (7)  …

   (8)  …

   (9)  …”

[Original in English]

3. Meeting of the corporation on 23 September 2001

3.1 On 8September 2001, the corporation issued to the owners a notice of a meeting of corporation (Agenda ref: PM/PLG/09704/01A).  The meeting, which was to be held on 23 September 2001, had the following agenda:

“(1)    Dissolution of the members of the existing corporation and step-down arrangements for the members.

   (2)  Election of the members, the chairman and the secretary of a new corporation committee.

   (3)  Arrangements regarding the account for depositing and withdrawing management fees.”

3.2 On 9 September 2001, the corporation issued an amended notice of meeting, amending item (1) on the agenda.  The amended item (1) read as follows: “(1) Dissolution of the existing corporation committee.”  The Chinese and English amended notices respectively carried the following Chinese and English words in handwriting:

                   “各業主：

                    較早前所發議程編號： PM/PLG/09704/01 立刻取消。

韋堅信
2001年9月9日 
晚上7：30”

                   “To All Owners:

                      The agenda ref: PM/PLG/09704/01 issued earlier is cancelled with immediate effect.

AG Wilkinson
9.9.2001
7:30 p.m.”

It is clear from the above words that the notice issued on 8 September 2001 was superseded by the one issued on 9 September 2001.

3.3 The meeting of the corporation was held as scheduled on 23 September 2001.  A new management committee, with Mr Yip Koon Keung as the new chairman, was elected.

4. Extraordinary General Meeting on 6 July 2002

4.1 On 21 June 2002, the chairman of the management committee Mr Yip Koon Keung issued to the owners of the housing estate a notice of an extraordinary general meeting, which was to be held on 6 July 2002.  The extraordinary general meeting was held as scheduled.  The meeting approved the granting of a service contract for the repair of the housing estate’s sewage treatment plant.  It also passed a resolution on the method of collection of funds for the service contract.  Under this arrangement for collection of funds, the Respondents are to contribute towards the fund to the extent of $4,669.  Is the above resolution of the extraordinary general meeting valid?   This depends on whether the notice of that meeting, which was issued by the chairman of the then management committee, was valid.  The Respondents argue that the new management committee was not properly constituted because the notice of the general meeting at which the management committee was elected failed to comply with paragraph 2(1) of Schedule 3 to the Building Management Ordinance (“Schedule 3”) and was therefore invalid.

4.2  Paragraph 3(7) of Schedule 3 provides that:

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

4.3 Under paragraph 2(1) of Schedule 3:

“Notice of a meeting convened under paragraph 1 shall be served by the secretary of the management committee upon each owner and upon the tenants’ representative (if any) at least 14 days before the date of the meeting.” 

Paragraph 1 contains provisions on convening general meetings.

4.4 Notice of the above meeting was originally served upon the owners on 8 September 2001.  However, this notice was cancelled on 9 September 2001 and superseded by the notice of 9 September 2001.  The notice of 9 September 2001 was served upon the owners on the same day, but did it constitute sufficient notice as far as the requirement of 14 days’ prior notice of meeting is concerned?  It would depend on whether the day of 9 September 2001 should be counted towards the notice period.  Section 71(1)(a) of the Interpretation and General Clauses Ordinance (Cap. 1) stipulates that:

“(1) In computing time for the purposes of any Ordinance —

(a)   a period of days from the happening of any event or the doing of any act or thing shall be deemed to be exclusive of the day on which the event happens or the act or thing is done;”

Applying this section, the date when the notice was issued (9 September 2001) and the date when the meeting of corporation was held (23 September 2001) should not be counted towards the 14-day notice period.  Thus there was only 13 days’ notice for the meeting of the corporation held on 23 September 2001 (from 10 September 2001 to 22 September 2001 inclusive).  This did not meet the requirement of 14 days’ notice required by paragraph 2(1) of Schedule 3.  Hence, according to paragraph 3(7) of Schedule 3, the resolutions passed during the meeting of 23 September 2001 would have no effect.

4.5  During the meeting of the corporation on 23 September 2001, a new management committee was elected.  The new chairman was Mr Yip Koon Keung, and the posts of secretary and treasurer were also filled.  Since paragraph 2(1) of Schedule 3 had not been complied with, the above resolution had no effect, and the management committee elected was invalid.  The management committee mentioned in paragraph 2(1) of Schedule 3 refers to a valid management committee.  As regards the extraordinary general meeting on 6 July 2002, the notice of that meeting, being issued by an invalid management committee, was void.  Consequently, the general meeting was also invalid and the resolutions passed thereat had no effect.  It follows that the Applicant’s claim against the Respondents, which is based on resolutions passed at the invalid meeting, cannot be sustained.

5. For the above reasons, I dismiss the Applicant’s application.  The Applicant must, at its own costs and within 30 days, vacate the charge registered against the Respondents’ interest in the property.

6. Costs

I make the following orders nisi as to costs:

(i) The Applicant do pay the Respondents’ costs in the Small Claims Tribunal in respect of the present application;

(ii) The Applicant do pay the Respondents’ costs in the Lands Tribunal in respect of the present case (including the Applicant’s costs in retaining counsel), to be taxed on the District Court scale if not agreed;

(iii) This order nisi for costs will become absolute in 28 days if no application is made by either party.