The Incorporated Owners of Ka Wai Building (Java Road) v. Hwa Yat Kwan Alice
Read the full judgment text of DCMP 2900/2023 on BabelCite. This District Court judgment was delivered on 26 August 2025.
1. This is the defendant’s appeal by a Notice of Appeal dated 17 April 2025 (the “Notice of Appeal”) against an order made by a Master on 20 March 2025 (the “Order”) whereby the defendant was ordered to (amongst others):-
Cites 4 cases
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DCMP 2900/2023 [2025] HKDC 1326 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO 2900 OF 2023 -------------------------------------
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--------------------------- DECISION --------------------------- Introduction 1.This is the defendant’s appeal by a Notice of Appeal dated 17 April 2025 (the “Notice of Appeal”) against an order made by a Master on 20 March 2025 (the “Order”) whereby the defendant was ordered to (amongst others):-
2.By summons dated 17 April 2025 (the “Stay Summons”), the defendant also seeks a stay of execution of the Order pending her appeal. Background 3.The plaintiff is the Incorporated Owners of Ka Wai Building (the “Building”) in which the Property is located. The defendant is the registered owner of the Property. 4.It is not disputed that the relationship between the parties is governed by a Deed of Mutual Covenant dated 23 November 1984 and registered in the Land Registry by Memorial No 2686184 (the “DMC”). 5.The following provisions of the DMC are relevant:-
6.By a letter from the Buildings Department (“BD”) dated 7 August 2017, the plaintiff was required to carry out certain remedial works (the “Major Renovation Works”) in compliance with Order DBR/RB03-22/0001/11 (the “BD Order”). 7.In light of the BD Order, on 19 September 2018, the plaintiff issued a notice to convene an Extraordinary General Meeting (“EGM”) of the owners on 4 October 2018 (the “19/09/18 Notice”). The agenda of the said meeting include the tabling of the following resolutions to:-
8.On 21 September 2018, the plaintiff issued a circular (the “21/09/18 Circular”) to the Building’s owners to explain the tendering process for selection of the contractor to carry out the Major Renovation Works and the costs of the Major Renovation Works as estimated by the independent consultant through the “Smart Tender” Building Rehabilitation Facilitating Services of the Urban Renewal Authority (“URA”). According to the 21/09/18 Circular, the relevant bidding prices and copies of the tendering documents supplied by the contractors bidding for the Major Renovation Works and the URA’s assessment report were made available for inspection by the owners of the Building. 9.According to the minutes (the “October 2018 EGM Minutes”) of the EGM held on 4 October 2018 (adjourned to 25 October 2018) (the “October 2018 EGM”) which was attended by over 44% of the owners, the following resolutions were passed by the majority in shares of the owners attending the October 2018 EGM to approve (amongst others):-
10.According to a Contribution Fee Notice dated 8 November 2018 (“1st Contribution Notice”) issued by the plaintiff:-
11.On 25 March 2019, the plaintiff entered into a contract with Man Yuen for the Major Renovation Works. 12.On 2 June 2019, the plaintiff issued another notice (the “02/06/19 Notice”) to convene an Extraordinary General Meeting of the owners on 19 June 2019 (the “June 2019 EGM”). The agenda of the said meeting include the tabling of the following resolutions to (amongst others):-
13.According to the minutes of the June 2019 EGM (“June 2019 EGM Minutes”), resolutions were passed by the majority in shares of the owners attending the June 2019 EGM as follows:-
14.According to a Contribution Fee Notice dated 16 July 2019 (“2nd Contribution Notice”) issued by the plaintiff:-
15.It is not disputed that the defendant failed to pay the MRW Contribution and the VO Contribution by the deadlines stated in the 1st and 2nd Contribution Notices. According to the plaintiff’s record at the time[7], the defendant only paid a sum of $32,762.00 (being the 1st instalment of the MRW Contribution) on 4 October 2019. 16.After issuing written reminders to the defendant on 8 March 2019 and 3 February 2021 respectively, the plaintiff issued a “Final Reminder” to the defendant on 13 December 2021 requesting her to settle the outstanding sum of $85,805 (representing the total of the outstanding MRW Contribution (2nd to 5th instalments) and the VO Contribution). It is expressly stated that:-
17.Thereafter, further reminders were issued by the plaintiff and its solicitors, Messrs Huen & Partners for the outstanding sum together with interest[8]. The defendant was repeatedly reminded that the plaintiff would (i) commence legal proceedings to recover all outstanding sums from the defendant; (ii) seek an order of sale of the Property; and (iii) hold the defendant liable for all relevant legal and other costs incurred. 18.Pursuant to the DMC and s 19 of the Building Management Ordinance (Cap 344) (“BMO”), a Memorandum of Charge dated 10 December 2020 (the “Charge”) for (amongst others) payment of the outstanding MRW Contribution, VO Contribution, accrued interest and the Collection Charge was also registered against the Property on 17 December 2020. 19.By Originating Summons dated 29 June 2023 and amended on 17 November 2023 (the “Amended O/S”), the plaintiff commenced the present proceedings against the defendant, seeking (amongst others) an account of the sums owed and an order of sale of the Property with the sale proceeds to be applied to settle the liability owed by the defendant under the Charge. 20.After hearing the parties’ argument, the learned Master made the Order on 20 March 2025. This appeal is out of time 21.The defendant only filed the Notice of Appeal on 17 April 2025. This is out of time because pursuant to O 58 r 1(3) of the Rules of the District Court (“RDC”), the Notice of Appeal should be issued within 14 days of the order made (ie no later than 3 April 2025) unless otherwise ordered by the court. 22.In considering whether to extend time to appeal, the court has to consider all relevant factors, particularly: (i) length of the delay; (ii) reasons for the delay; (iii) merits of the proposed appeal; and (iv) the degree of prejudice to the other parties, see: Hong Kong Civil Procedure 2025, vol 1 at §58/1/9[9]. 23.I take the view that the 14-day delay is insubstantial. As the plaintiff does not take issue with the delay, I am also prepared to accept that the delay does not result in material prejudice to the plaintiff. 24.It is noted that the defendant has not filed any affidavit evidence to explain the delay. At the hearing, the defendant claimed that she was late because she was told by the learned master at the previous hearing that she had 28 days to appeal. Given that the defendant is unrepresented, in the circumstances I am prepared to give her the benefit of the doubt that she was genuinely mistaken as to the filing deadline. 25.On the merits, as I have heard full arguments from both parties at the hearing, in my view the expeditious way to proceed is to grant a time extension and go on to determine the appeal substantively. The Appeal 26.It is trite that appeals from Masters’ decisions are dealt with by way of rehearing. The application is treated as though it came before the court for the first time, see: Hong Kong Civil Procedure 2025, vol 1, §58/1/2. Plaintiff’s Claim 27.I shall first deal with the plaintiff’s claim. 28.Section 14(1) of the BMO provides that:-
29.As held by the Court of Appeal in 黃瑞珊及另二人 訴 同利工業大廈業主法團另四人 HCMP 911/2011 (unreported, 21 October 2011) at §20 per Yuen JA, the resolutions of a corporation of owners passed at a meeting overrides the power of the management committee to determine the amount of contributions to be made by owners under s 21 of the BMO. 30.In light of the matters set out above, I am satisfied that the defendant is prima facie liable to pay the MRW Contribution, the VO Contribution, the accrued interest and Collection Charge in accordance with BMO and the DMC given that both the MRW Contribution and the VO Contribution were approved at the October 2018 EGM and June 2019 EGM respectively. 31.In the proceedings below, it emerged that the defendant had in fact paid a further sum of $76,446 to the plaintiff on 17 May 2021 (which is equal to the remaining 2nd to 5th instalments of the MRW Contribution). 32.Hence, the remaining sum claimed by the plaintiff in these proceedings is $40,168 which consists of the following:-
The defendant’s objections 33.The defendant did not file any skeleton argument for the hearing before me. The defendant raised a plethora of complaints against the plaintiff in (i) her two affirmations in opposition made on 5 July 2024 (“D 1st Affirmation”) and 21 February 2025[11] (“D 2nd Affirmation”) respectively; (ii) her skeleton argument for the hearing on 20 March 2025 before the learned Master; and (iii) in her oral submissions at this hearing. Based on the same, the main arguments of the defendant are summarised as follows:-
34.Although the defendant’s complaint against the Major Renovation Works has become somewhat academic as she has paid the MRW Contribution (albeit belatedly), I shall deal with the above arguments in turn. Alleged concealment of the Major Renovation Works 35.In my view, this complaint has no substance. As set out in the 3rd Affirmation of Ms Lui Chu Wing Han, a management committee member of the plaintiff, details of the Major Renovation Works including the tender documents were made available to the owners prior to the October 2018 EGM. The progress of the Major Renovation Works was also discussed from time to time in the meetings of the Management Committee of the plaintiff. The minutes of such meetings were displayed in the Building from time to time. In fact, some of such minutes were exhibited to D1’s 1st Affirmation. Relevance of LDBM 82/2019 36.The defendant’s reliance on the LDBM 82/2019 Judgment is misplaced:-
Alleged fraud/concealment in financial statements 37.I cannot see how allegations of fraud or irregularities in the preparation of the plaintiff’s financial statements would give rise to any defence absolving the defendant’s liability to pay the sums claimed. In any event, I am not satisfied that the defendant has adduced any credible evidence to support this serious allegation. 38.In relation to the payments in the total sum of $109,208 made by the defendant (ie $32,762 + $76,446), there is no issue of any concealment as such sums have already been accounted for in the plaintiff’s claims[19]. Objection to charging of interest 39.As set out §5 above, the plaintiff is entitled to charge simple interest for any outstanding unpaid sums owed under the DMC. Hence, there is no basis for the defendant to claim that the charging of interest is unlawful. 40.I have also reviewed the plaintiff’s calculations of interest claimed (up to 20 March 2025) as set out in the 5th Affirmation of Lui Chu Wing Han[20] and substantially reproduced below:-
41.I am satisfied that the above calculations are in conformity with the terms of the DMC. For the avoidance of doubt, the plaintiff’s calculations have already taken into account the two payments in the total sum of $109,208 made by the defendant on 4 October 2019 and 17 May 2021. 42.The defendant also relied upon 軒寧大廈業主立案法團 訴 陳大明 LDBM 40/2000 (unreported, 14 April 2000) in support of her argument that the plaintiff was not entitled to claim interest. In my view, that case does not assist the defendant as the material facts of that case are distinguishable from the present:-
Complaints against the Variation Orders 43.The defendant made the following complaints that the Variation Orders were “deceptive”:-
44.In respect of complaint (1), the defendant has not condescend to particulars as to which parts were said to have overlapped. In any event, I have compared the items in the Major Renovation Works (as detailed in the tendering documents) against those set out in the Variation Orders and I do not find any overlap between the two. 45.On complaint (2), it was not legally mandatory to conduct a tendering exercise for procurement of the Variation Orders. Under s 20A(2A) of the BMO in force at the material time, the plaintiff may decide by a resolution of the owners passed at a general meeting of the corporation that the relevant supplies, goods or services shall be procured from that supplier on such terms and conditions as specified in the resolution, instead of by way of invitation to tender. 46.Complaint (3) has no substance. Once the resolutions for the approval of the Variation Orders have been duly passed by the owners at the June 2019 EGM, they are legally binding on the defendant and it is not open to the defendant to challenge the merits of such resolutions. 47.Complaints (4) and (5) concern irregularities leading to the passing of the resolutions. The defendant claims that insufficient time and information were given to the owners to consider the Variation Orders and that a single resolution was passed to approve the Variation Orders as a whole instead of item by item. 48.These complaints have no merits:-
Counterclaim 49.As the alleged counterclaim was made not against the plaintiff but only against third parties, this cannot amount to any valid set off against the plaintiff’s claim given the lack of mutuality[21]. The rights, interest and capacity of the plaintiff are obviously different from those of the third parties (which include its chairperson and former and current members of the Management Committee) against whom the defendant alleged to have a counterclaim. Therefore, the alleged counterclaim does not amount to a valid defence to the plaintiff’s claim. Alleged waivers by the plaintiff 50.Waiver may be held to have occurred if, one party represents to the other that he will forbear to enforce or rely on a term of the contract to be performed or observed by the other party, and the other party acts in reliance on that representation, see: Chitty on Contracts, 35th Ed, 2024, vol 1 at §26-043. 51.The modern tendency is to treat “waiver” and “promissory estoppel” as substantially similar doctrines, the requirements and effects of the one being stated in terms equally applicable to the other. The expressions “waiver” and “promissory estoppel” have been judicially described as “two ways of saying exactly the same thing”, and the courts often use them interchangeably when discussing situations in which it is alleged that one party to a legal relationship has indicated that they will not enforce their strict legal rights against the other, see: Chitty, vol 1 at §7-036. 52.To give rise to a valid waiver, the representations made by the party must be “clear and unequivocal”. The purpose of the requirement that the promise or representation must be “clear” or “unequivocal” is to prevent a party from losing their legal rights under a contract merely because they have granted some indulgence by failing to insist on the strict performance throughout the term of the contract. Where more than one matter is in dispute between the parties, emphatic reliance upon some important disputed point does not by itself imply any unequivocal representation that compliance with other parts of the bargain is thereby waived, see: Chitty, vol 1 at §§7-039 to 7-042. 53.The promise or representation must in some way have influenced the conduct of the party to whom it was made. It is not necessary for the promisee to have done something they are not bound to do which causes them to suffer loss. It is sufficient if the promisee has altered their position in reliance on the promise so that it would be inequitable to allow the promisor to act inconsistently with it, see: Chitty, vol 1 at §§7-043 to 7-044. 54.Further, waiver generally does not extinguish, but only suspend rights. A party can revive the rights which were waived by giving reasonable notice, see: Chitty, vol 1 at §7-047. 55.In Center Chase Investment Ltd v International Industrial Building (Castle Peak Road) (IO) (No 3) [2025] 1 HKRLD 532, the Court of Appeal held at §§41-50 that neither the incorporated owners’ statutory duty to enforce a DMC nor the characterisation of certain DMC covenants as “total preclusions” prevented the incorporated owners from approving breaches of those covenants. It was further held that issues of waiver and acquiescence should not depend on whether there are consent provisions in the DMC or whether the relevant covenant is qualified or unqualified. 56.I cannot see how the “Final Reminder” from the plaintiff can amount to any waiver of its claim for interest:-
57.Similarly, there is no basis for the defendant to allege that the plaintiff has waived its right of claim pending the defendant’s application for a government loan to pay the outstanding sums:-
58.Finally, on a fair view, even if the plaintiff has previously indicated that it intended to pursue its claims through the Small Claims Tribunal, this cannot be reasonably construed as the plaintiff having agreed to abandon its claims for other reliefs which are not available from the Small Claims Tribunal (eg an order of sale of the Property). Other complaints 59.For the avoidance of doubt, I have also considered the various other miscellaneous complaints made by the defendant. They have not been expressly set out or dealt with above for the sake of brevity but I do not consider them to be meritorious or would in any way amount to valid objections to the plaintiff’s claims. New Evidence on appeal 60.On 17 April 2025, the defendant filed another affirmation (the “New Evidence”) exhibiting the following documents:-
61.In the New Evidence, the defendant also complained that: (i) the plaintiff knew about her earlier payment on 17 May 2021; and (ii) she was excluded by the Management Committee from attending a committee hearing in May 2023. 62.RDC O 58 r 1(4) provides that:-
63.It is well established that the court would only allow such new evidence on appeal where the Ladd v Marshall conditions[23] are satisfied, see: Hong Kong Civil Procedure 2025, vol 1 at §58/1/3. 64.In the present case, I refuse leave to admit the New Evidence:-
Conclusion on the merits 65.Accordingly, the appeal against the substance of the Order is unmeritorious. Appeal against the Costs Order 66.For appeal as to costs, generally a judge in chambers will not allow an appeal from a master’s costs order unless it is unreasonable or the Master has erred in law, see: Hong Kong Civil Procedure 2025, vol 1 at 58/1/6. 67.At the hearing below, the learned Master ordered costs against the defendant summarily assessed at $130,000 out of the $165,665.53 claimed by the plaintiff. 68.There is no suggestion that there is any error of law. Further, in the circumstances, I do not consider the costs order made below to be unreasonable:-
Stay Summons 69.In light of my dismissal of the appeal, the Stay Summons must be dismissed as well. Costs of the appeal 70.There is no reason why costs should not follow the event. I make an order nisi that the defendant do pay to the plaintiff the costs of the appeal and the Stay Summons, to be taxed if not agreed. This costs order shall become absolute within 14 days of this decision in the absence of any application to vary. Disposition 71.Accordingly, I make the following order:-
Mr Wong Charn Hung, Andrew, of Huen & Partners, for the plaintiff The defendant appeared in person [1] See breakdown of the sum at §32. [2] Based on Option 3 of the works on the exterior wall, see: Item 5.3 of the EGM minutes. the relevant contract sum in the bid submitted by Man Yuen was $33,511,800. [3] ie Unit A1 on the 2nd Floor. [4] Being not less than 30 days from the stipulated payment dates according to the October 2018 EGM Minutes, see: Section V, Sub-Section E, Clauses 3-4 of the DMC. [5] In the sum of $1,066,000. [6] Being not less than 30 days from the stipulated payment dates according to the June 2019 EGM Minutes, see: Section V, Sub-Section E, Clause 2 of the DMC. [7] Unbeknownst to the plaintiff at the time, a further sum of $76,446 was paid by the defendant, see §31 below. [8] See reminder from the plaintiff dated 24 April 2020 and letters from Huen & Partners dated 1 June 2020, 19 November 2020, 31 March 2021, 4 January 2022 and 29 August 2022. [9] Concerning O 58 r 1 of the Rules of the High Court (Cap 4A) which is substantially similar to RDC O 58 r 1. [10] When the Order was made. [11] I note that this affirmation was filed in violation of the order of Master Vienne Luk dated 17 December 2024. I am prepared to consider its contents on a de bene esse basis. [13] At §7.2 of the LDBM 82/2019 Judgment. [14] Ibid at §§3.33-3.39. [15] Ibid at §2.1. [16] Ibid at §3.39. [17] Ibid at §4.10-4.11. [18] ie interest accruing from the amounts payable under the 1st Contribution Notice (which relates to the original Major Renovation Works but not the “new contract” considered in LDBM 82/2019); the costs of the Variation Orders under the 2nd Contribution Notice and the Collection Charge. [19] See §§31-32 above. [20] §18. [21] See: I Pipe Technologies & Engineering Ltd v Kwan On Construction Co Ltd [2024] HKCFI 3722 at §§39-49 per Fung J. [22] The 1st instalment of the MRW Contribution was paid on 4 October 2019, about 10 months after the payment deadline and before the government loan was disbursed. [23] Namely that: (1) the evidence could not have been obtained with reasonable diligence for use at the hearing below; (2) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and (3) the evidence must be such as is presumably to be believed. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment