Read the full judgment text of CACV 000234/2002 on BabelCite. This Court of Appeal judgment was delivered on 15 November 2002 before Leong CJHC, Cheung JA and Yuen JA.
Civil appeal – Building Management Ordinance – appointment of management committee – Appollo Building, an eleven-storey mixed use building in Castle Peak Road, Kowloon – Applicant Kwan & Pun Company Limited owned the commercial units (basement to third floor) and held 69.74% of the 2,102 undivided shares in the Deed of Mutual Covenant – domestic units on fourth to eleventh floor comprising 112 units – meeting convened on 27 July 2001 under s.3 of the Building Management Ordinance for the purpose of appointing a management committee – owners holding 86.3% of undivided shares present, including the Applicant's proxy Mr. Liu Kai Sang – nine committee members and office bearers appointed by acclamation – Applicant sought declaration in the Lands Tribunal that the appointments were invalid – Deputy Judge Wong found fatal irregularities and ruled in favour of Applicant – Respondents appealed to the Court of Appeal – whether a separate resolution specifically for the appointment of a management committee was required – held no separate resolution was required because the agenda contained only one item (appointment of the management committee) and the resolutions for members and office bearers necessarily constituted that appointment – interpretation of s.3(2)(b) of the Building Management Ordinance and the phrase 'a resolution of the owners of not less than 30% of the shares' – majority of the Court of Appeal (Cheung JA and Leong CJHC) held that the 30% threshold means the percentage of shares that must carry the resolution in favour of appointing the management committee, and is not merely a quorum requirement – Yuen JA dissenting held that on literal interpretation s.3(2)(b) requires only that owners of at least 30% of shares be present at the meeting, with a simple majority then sufficing – whether the procedure adopted by Mr. Leung of asking for objections rather than counting votes in favour was faulted – held not faulted – applying Carruth v. ICI [1937] AC 707, where no objection is taken at a meeting the meeting must be taken to be assenting to the course adopted – Mr. Liu did not object at the time to the method of voting and was bound by his acquiescence – his belief that a separate resolution for the management committee would follow was unreasonable – effect of Mr. Leung taking over conduct of the meeting when he was not the appointed chairman – held no material irregularity – the meeting acquiesced in Mr. Leung's conduct and must be taken to have agreed to him acting as chairman – appeal allowed – Applicant's application against the Respondents dismissed – costs order nisi ordering the Applicant to pay the Respondents' costs of the proceedings below and of the appeal.
Legal issues: Whether a separate resolution is required for the appointment of a management committee · Interpretation of 'a resolution of the owners of not less than 30% of the shares' in s.3(2)(b) · Validity of the meeting procedure adopted by Mr. Leung · Effect of Mr. Leung taking over the conduct of the meeting
Outcome: Appeal allowed; Applicant's application against the Respondents dismissed.
Cited by 4 cases