嘉澤管理服務有限公司 v. 南洋硅膠工業集團有限公司

LDBM 177/2015

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 177 OF 2015

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LDBM 180/2015

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 180 OF 2015

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D E C I S I O N

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1.By inter partes summons of 8 September 2015 (“the Summons”), the respondent is asking for a stay of these proceedings pending the determination of High Court Action 1996 of 2015 (“the HCA”).

Background

2.The Ground Floor and 1^st to 4^th floors of No. 28 Jordan Road Kowloon consists of commercial units known as “Jordan Square” (“the Square”) in which shop units are situated.  Ownership of shop units in the Square is subject to a Sub-Deed of Mutual Covenant (“Sub-DMC”) dated 5 August 1993. Appointment of a manager to manage the Square is provided under the Sub-DMC.

3.The applicant is the management company of the Square and the respondent is the owner of Shop 209 on the 2^nd floor and Shop 320 on the 3^rd floor of the Square (“the Shops”). 

4.On 12 August 2015, the applicant commenced the present proceedings alleging that the respondent, being the owner of the Shops (Shop 209 in LDBM 180/2015 and Shop 320 in LDBM 177/2015) had failed to pay its share for the renovation of the Square as well as the costs for the removal of rubble and debris left inside the Square, such work being decided by resolutions at a number of owners’ meetings (collectively referred to as the “LDBM Claims”).  The LDBM Claims are served on the respondent on 14 August 2015.

5.On 1 September 2015, the respondent commenced the HCA against, inter alia, the members of the Owners Committee of the Square named as 1^st Defendant (“D1”) and the Jordan Square Owners’ Association Limited named as 2^nd defendant (“D2”), a vehicle of D1 for the purpose of the management of the Square, together with the 3^rd and 4^th defendants, being the tenant and occupier of the Square respectively.  The HCA involved a claim of trespass alleging that the glass panels/glass walls enclosing the Shops had been demolished and destroyed by D1 and D2 and the Square, as a whole, was let out by the D2 depriving the respondent its right of use and enjoyment of the Shops as well as the common areas of the Square.  Damages for the trespass, delivery up of possession of the Shops as well as injunctive reliefs, including reinstatement of the panel walls are the relief sought in the HCA.

6.On 8 September 2015, the respondent takes out the Summons at this Tribunal. 

The Respondent’s Contention

7.Mr Li for the respondent submitted that D1 and D2 had caused the panel walls of the shops in the Square to be demolised and destroyed (“Demolition Works”).  Subsequently, D1 and D2 carried out renovation works (“Renovation Works”) to the entire Square.  Such works were being done without the respondent’s prior knowledge or consent and the purpose of so doing was to enable the Square to be let out as a whole.  

8.Mr Li confirmed that the defence of the respondent to the LDBM Claims is that the Demolition Works forms part and partial of the Renovation Works since the partition needs to be demolised before any renovation work can be carried out. And the Renovation Works was done with a view to change the Square from many shop units to 1 unit, this is not in accordance with the Building Plan of the Square, hence not within the power of the manager under Clause 20 of the Sub-DMC and ultra vires.  Since the Renovation Works is ultra vires, the respondent should not be held liable to pay for it.

9.In the HCA, although the Renovation Works is not mentioned, the Demolition Works and the Renovation Works are being pleaded as a single work and it is the combination of these 2 which formed the basis of the claim for trespass.  Since the legality of the Demolition Works and/or the Renovation Works is a common issue to be determined in the HCA as well as in the LDBM Claims, the latter should be stayed pending the determination of such issue in the HCA, which will dispose of the issues in the LDBM Claims as well.  This is to avoid multiplicity of proceedings with the additional time and costs that would be involved.  The balance of convenience clearly deserved for all issues to be disposed of at the HCA.

The Applicant’s Contention

10.Ms Tam for the applicant submitted that the LDBM Claims are entirely separate and distinct from the HCA, involving neither the same parties, nor same allegations or the same relief.  Nothing in the LDBM Claims hinge on the result of the HCA. 

11.The applicant is going after the respondent for the contributions to the Renovation Works pursuant to the power under Clause 20(a), 20(e)(i), 21(c), 21(e) and 21(i)(ii) of the Sub-DMC subsequent to the approval of such works at owners’ meetings.  The HCA arises entirely out of the alleged Demolition Works and the alleged giving of possession of the Shops to the tenant.  The Demolition Works, performed in 2009, do not form part of the Renovation Works taken place in 2012.  The Renovation Works was done for the purpose of restoring the normal operations of the Square and not with a view to rent out the same as a unit. And whether the respondent had prior knowledge and/or consented to the Renovation Works does not involve the allegations of trespass and the unauthorised letting in the HCA and is not an issue to be addressed in the HCA.

12.Ms Tam also contends that should there be common issues between the HCA and the LDBM Claims, there should be a transfer of these proceedings instead of a stay.  It is also submitted that a stay should be refused since it will only further delay these proceedings to the prejudice of the applicant, prolonging an out-of-pocket situation that has existed since June 2012. 

Discussion

13.It is agreed that the burden is on the party who applies for a stay to satisfy this Tribunal that there is a good reason to do so.  It is also not in dispute that if there is a common issue in the two sets of proceedings, there should be a stay.

14.Having heard from the parties, I am not satisfied that there is any common issue between the HCA and the LDBM Claims.

15.I agree with Ms Tam that the HCA is one based on trespass with an allegation of demolition of the panel walls of the Shops (§11 of the Statement of Claim) and the renting out of the Shops without the prior knowledge and consent of the respondent (§§12-15 of the Statement of Claim), depriving it the right of use and enjoyment.  Under what circumstances the Renovation Works was being done or whether it was ultra vires had nothing to do with the claim of trespass.  The Renovation Works is not mentioned in the pleadings of the HCA and from reading the Statement of Claim, there is in no way that one can tell the Demolition Works and the Renovation Works are being pleaded as a single work.  I cannot see how the legality of the Renovation Works can be an issue to be determined in the HCA.

16.And I do not agree that the Demolition Works is part and parcel of the Renovation Works. In the affirmation filed by the respondent in support of the Summons, the Demolition Works and the Renovation Works are being raised as 2 different matters one after the other, with the Demolition Works completed and “subsequently, the Owner’s Committee members and/or the Owners’ Association Limited carried out the renovation works… The Demolition Works and the subsequent renovation works were carried out without the respondent’s prior knowledge or consent” (§6).  If the Demolition Works is part and parcel of the Renovation Works, why would the respondent need to differentiate between the two in the affirmation?

17.The fact that the respondent had no knowledge of the Demolition Works as well as the Renovation Works has nothing to do with the LDBM Claims since it is the applicant’s case that such works are being authorised by resolutions passed at owners’ meetings.  Any resolution passed at an owners’ meeting is binding on all owners irrespective of whether the owner knows or consents to it.  Knowledge or consent on the part of the respondent may be an issue to be determined in the HCA, but cannot be relevant in the LDBM Claims.

18.Mr Li is trying to link the Renovation Works to the unauthorised leasing of the Shops by saying that the Renovation Works was done with a view to convert all the units in the Square into one single unit for leasing.  There is no evidence to such effect, not even in the affirmation of the respondent.  I do not accept such a contention.

19.The HCA is based on a claim of trespass by the Demolition Works and the leasing of the Square whilst the LDBM Claims is about the legality of the Renovation Works. There is no common issue between the two actions hence nothing to justify a stay of these proceedings pending the determination of the HCA.

Order

20.The Summons taken out by the respondent dated 8 September 2015 be dismissed.

21.Costs should follow the event.  Costs order nisi that costs of the Summons be to the applicant, with certificate for counsel, to be taxed if not agreed at District Court scale.  Unless any of the parties apply by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.

Ms Isabel Tam, instructed by S K Lam, Alfred Chan & Co, for the applicant

Mr Philip S Y Li, instructed by Christine F L Ip & Young, for the respondent