Silver King China Ltd v. Kong Shum Union Property Management Company Ltd
Read the full judgment text of DCCJ 1927/2023 on BabelCite. This District Court judgment was delivered on 29 September 2025.
1. The Plaintiff owns G/F, 1/F and 2/F of 67A Waterloo Road in Ho Man Tin. As its sole shareholder and director, Mr Koo Ming Kown (“ Mr Koo ”) obviously decides how the plaintiff should act.
Cites 9 cases
|
DCCJ 1927/2023 [2025] HKDC 1650 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 1927 OF 2023 ------------------------------- BETWEEN
-------------------------------
------------------------------- JUDGMENT ------------------------------- 1.The Plaintiff owns G/F, 1/F and 2/F of 67A Waterloo Road in Ho Man Tin. As its sole shareholder and director, Mr Koo Ming Kown (“Mr Koo”) obviously decides how the plaintiff should act. 2.The evidence suggests that 67A and 67B Waterloo Road is, in fact, one composite building known as Tung Nam Mansion. However, separate incorporated owners respectively exist for 67A Waterloo Road and 67B Waterloo Road. I shall refer to the Incorporated Owners of 67A Waterloo Road as “the 67A IO”; to the Incorporated Owners of 67B Waterloo Road as “the 67B IO”; and to them collectively as “the IOs”. 3.The defendant was engaged by the IOs to be the manager of Tung Nam Mansion between 30 January 2019 and 5 January 2022. 4.The plaintiff claims (i) a declaration that the defendant fraudulently misrepresented it in what will be known in this Judgment as “the 16/04/21 Letter” and in making what will be known as “the Request”; (ii) a declaration that the defendant was negligent in handling the renewal of the public liability insurance of Tung Nam Mansion; and (iii) HK$90,000.00 in damages. The facts 5.The defendant was appointed as the manager of Tung Nam Mansion by a management agreement in Chinese dated 30 January 2019 (“the Management Agreement”). Mr Simon Westbrook, SC, counsel for the defendant, summarized the relevant provisions of the Management Agreement in English in §15 of his closing submissions as follows:-
6.Mr Westbrook, SC also refers me to section 28(1) of the BMO, under which an incorporated owners is clothed a duty to procure and keep in force a policy of insurance for the common parts of the building in respect of third-party risks. And in section 28(3), an incorporated owners have a discretion to insure the common parts of the building against fire and other risks. 7.Mr Huy Yun Shiu (“Mr Huy”) was the owner of 3/F and the flat roof of 67A Waterloo Road. He was also the chairman of the 67A IO. 8.It is common ground that, since 2019, damage by water seepage occurred within the plaintiff’s premises on 2/F of 67A Waterloo Road. There was a dispute as to whether water leaked from Mr Huy’s premises on 3/F to the plaintiff’s premises below. The plaintiff engaged surveyors, whose investigation report dated 20 October 2020 suggested that the leakage was caused by rainwater penetrating through the roof slab of the flat roof of the 3/F premises, and/or penetrating through the surface channel on the flat roof. 9.Correspondence ensued between Messrs V Hau & Chow (“VHC”), solicitors for the plaintiff, and Mr Huy’s solicitors. In the letter sent by Mr Huy’s solicitors on 26 January 2021, it was alleged that the water leakage was caused by defective waterproofing system of the flat roof, which should be considered as the common parts of Tung Nam Mansion. It was further suggested that the Incorporated Owners of Tung Nam Mansion [sic] should be responsible for the damage caused to the plaintiff’s premises. 10.VHC then sent a letter to “the Incorporated Owners of Tung Nam Mansion” on 2 February 2021, enclosing the letter from Mr Huy’s solicitors. The letter demanded a reply within 14 days; otherwise legal proceedings would be instituted. 11.The defendant sent a letter to VHC on 24 February 2021. It was alleged that modification works were carried out in Mr Huy’s premises without prior approval of the 67A IO, which damaged the waterproofing of the flat roof. Thus, the defendant advised VHC to pursue the plaintiff’s claim against Mr Huy. A further letter by the defendant dated 25 February 2021 essentially repeated the same stance[1]. It enclosed, for the plaintiff’s information, the defendant’s earlier letter to Mr Huy on 21 February 2021, claiming that unauthorized works were carried out to the 3/F premises, such that the waterproofing layer of the parapet wall of the 3/F flat roof was damaged. 12.In the meantime, the public liability insurance for Tung Nam Mansion was about to expire in April 2021. It is common ground that the insurers the defendant approached were unwilling to provide coverage for Tung Nam Mansion, because of the ongoing water leakage dispute between the plaintiff, Mr Huy, and the 67A IO. Obviously, the insurers feared that they would face significant payout if there were to be legal proceedings, and if the 67A IO were to be liable for the water leakage. 13.It is against the above background that the defendant issued the plaintiff the 16/04/21 Letter on 16 April 2021, with the heading ‘Water Seepage at No 67A, 2nd Floor, Tung Nam Mansion, Nos 67A & 67B Waterloo Road, Kowloon “the Premises”.’. I think it is best for me to set the content out in full:-
14.Attachment 2 to the 16/04/2021 was an undated letter signed by Mr Huy:-
15.In crux, Mr Huy stated in Attachment 2 that he would negotiate and resolve the water leakage problem with the plaintiff as the owner of the 2/F premises. He clarified this in order to not affect the insurers’ assessment of the liability exposure of the 67A IO, which might in turn have a bearing on the premium to be demanded by the insurers. 16.Attachment 3 to the 16/04/21 Letter was apparently an unsigned letter dated 10 March 2021 from Mr Huy to VHC. In it, Mr Huy claimed to have effected repairs upon receiving the surveyor’s report from VHC in October 2020. He also claimed to have instructed experts to suggest additional measures, if any, to resolve the issue. 17.Attachment 4 was the draft supplied by the defendant to the plaintiff, the content of which was as follows:-
18.“The Request”, as defined in the pleadings, is thus one the defendant made in the 16/04/21 Letter, requesting the plaintiff to issue a letter in the form of Attachment 4 to the insurers. 19.Mr Hectar Pun, SC, counsel for the plaintiff[2], asks me to take note that the content of Attachment 2 was different to that of Attachment 4, in that Attachment 4 ended with the clarification that the water leakage incident did not concern the 67A IO, which was absent in Attachment 2. I also note that Attachment 4 expressly referred to the possible increase in premium as a result of the water leakage incident, which was also absent from in Attachment 2. According to the defendant’s witnesses, the difference resulted from amendments made by Mr Huy to the draft before he engrossed Attachment 2. 20.VHC issued 4 letters consequent to the above correspondence:-
21.As confirmed by Mr Koo in his cross examination, the plaintiff never issued any letter to the insurers, in the form of Attachment 4 or otherwise. 22.On 28 May 2021, Mr Huy sent a reply letter in Chinese to VHC. As summarized by Mr Westbrook, SC in §22 of his closing submissions, this letter stated that:-
23.The defendant sent a reply letter to the plaintiff (and its tenant) on 1 June 2021. It was stated in this letter that, inter alia:-
24.Apparently, the plaintiff remained dissatisfied despite the defendant’s reply. It commenced a claim against the defendant in the High Court (ie HCA 1503/2021) on 30 September 2021[3]. Pursuant to the parties’ consent, HCA 1503/2021 was ordered to be transferred to the District Court on 13 April 2023. 25.In the Amended Statement of Claim dated 28 February 2022:-
26.In relation to the claim on fraudulent misrepresentation, the defendant argues that the 16/04/21 Letter was issued with the knowledge and authority and upon instructions of the IOs. Further, and/or alternatively, it had the implied authority to issue it as an act necessary or incidental to its position as the manager of Tung Nam Mansion. 27.In relation to the claim on negligence, the defendant argues that it did not owe the duties averred by the plaintiff; in any event, it committed no breach as it acted reasonably in managing the affairs of Tung Nam Mansion properly. The issues 28.The parties put in a Joint Statement of Issues in Dispute, and I quote below the issues framed therein:-
The plaintiff’s claim on fraudulent misrepresentation 29.There is no dispute that the plaintiff has to prove the following in order to establish its claim on fraudulent misrepresentation[4]:-
30.As a starting point, it is important to recognize that the alleged fraudulent misrepresentation centers on the first substantive paragraph of the 16/04/21 Letter. There is no plea, with respect to this cause of action, touching on the defendant making the Request. 31.In my judgment, the correct approach is to first consider whether the defendant was entitled to rely on any implied authority from the 67A IO to issue the 16/04/21 Letter; and if so, whether the implied authority covered the 16/04/21 Letter in the way it was worded. If both of these questions are answered in the affirmative, whether the defendant received any express authority and/or instruction to issue the 16/04/21 Letter is quite beside the point. 32.I agree with the defendant that it was entitled to rely on its implied authority as the manager of Tung Nam Mansion to issue the 16/04/21 Letter, and it did not exceed such implied authority in issuing the same. My reasons are as follows:-
33.As a matter of completeness, I find that Clause 12 of the Management Agreement only required the defendant to obtain the written approval from the IOs for the purpose of entering into a contract of insurance. In my judgment, it did not require any express approval to be obtained prior to doing any ancillary act in aid of taking out any insurance. 34.With the above analysis, I find it is unnecessary to consider whether the Representation was made with the express authority and/or instruction by the IOs. Should it become necessary, I would have found that the defendant has not put forward sufficient evidence to show that express authority and/or instruction was given:-
35.It is my judgment that the plaintiff’s claim on fraudulent misrepresentation fails. The plaintiff’s claim on negligence 36.The defendant made 2 arguments in defending the plaintiff’s claim on negligence:-
37.There appears to be no dispute from the plaintiff that its claim under negligence was one for pure economic loss. Mr Pun, SC submits that the duty to prevent pure economic loss has been pleaded in §12(g) of the Amended Statement of Claim, which states that the defendant had a duty “to prevent or avoid individual co-owner(s) from incurring unnecessary liability or expenses when inviting individual co-owner(s) to assist in procuring the renewal of the public liability insurance” of Tung Nam Mansion. 38.With respect, I do not agree that the plaintiff has properly raised a claim for pure economic loss by negligent misstatement in the Amended Statement of Claim. The plaintiff does not spell out the facts supporting the existence of a special relationship in its pleadings. In my judgment, §12(g) only makes an assertion that the defendant had a duty to prevent pure economic loss on the plaintiff’s part but nothing more. Indeed, in his closing submissions Mr Pun, SC referred to[5] (i) the defendant was a professional property management service company, the parent company of which was listed on the Hong Kong Stock Exchange; (ii) the defendant was providing professional building management service to the IOs; (iii) the IOs paid HK$18,350.00 per month for the management services provided by the defendant as part of the reasons why the defendant owed the plaintiff a duty to avoid causing pure economic loss. These facts, whilst one may think obvious, are simply not pleaded to support the existence of a special relationship between the plaintiff and the defendant. With respect, this rather shows that the Amended Statement of Claim was indeed defective as the defendant claims. 39.I do not think the plaintiff should be allowed to run its case on pure economic loss by negligent misstatement. 40.In any event, without going into detailed discussion as to whether a special relationship existed between the plaintiff and the defendant to allow the plaintiff to claim for pure economic loss[6], I find that the defendant was not negligent in making the Representation and putting forward the Request. Based on the findings I made above, the Representation was correctly made. It was also reasonable for the defendant to put forward the Request, on the reasonable belief that Mr Huy indeed accepted liability for the water seepage. In my judgment, the plaintiff’s assertion that the Request was a scheme devised by Mr Huy and the defendant to deceive the insurers was only a matter of pure conjecture. Mr Koo might well have believed in the propensity of such conjecture, but his strong conviction on there being something sinister cannot be blindly elevated to a piece of fact supporting the plaintiff’s claim on negligence. As a consequence, there could not be any breach on the defendant’s part for not providing an explanation to the plaintiff’s satisfaction. 41.References were also made in the course of evidence to the defendant’s statement that the plaintiff had to be responsible for ¼ of the additional expenses to be incurred by the 67A IO should the plaintiff decide not to acceded to the Request. It is the plaintiff’s case that this put pressure on it to succumb to the Request. In my judgment, this does not assist the plaintiff on its claim on negligence. Apart from the fact that the plaintiff never challenged the truthfulness of the defendant’s statement, there was also no plea in the Amended Statement of Claim that the defendant was negligent in putting forward the statement alongside the Request. There is also no evidence adduced to show the defendant’s statement would have put pressure on the plaintiff to accede to the Request – were it the case that the plaintiff would have been adversely affected by the additional expenses? In a vacuum, I do not think it is possible to make any factual finding on that one way or another. 42.I conclude that the plaintiff fails on its claim on negligence. The plaintiff’s relief 43.I shall briefly state my views on the relief sought by the plaintiff should this become necessary. 44.First, the issue is whether the plaintiff should be granted the declarations sought, the content of which I set out in §4 above. 45.It is trite that a declaration is a discretionary relief. There is no dispute that the court ought to consider whether any practical purpose would be served by the grant of a declaration: Koo Ming Kown v Rev Mr Mok Kong Ting (President of the Baptist Convention of Hong Kong) [2022] HKCFI 642 at §15 (Cheng J; 21 March 2022). The idea of “useful purpose” or “practical purpose” should receive broad and flexible interpretation. 46.I do not agree that a declaration would be necessary even if the plaintiff were able to establish its claim against the defendant on fraudulent misrepresentation and/or negligence. In my judgment, no useful purpose would be served by the declarations sought by the plaintiff. The defendant has ceased to be the manager of Tung Nam Mansion; no evidence suggests that it might be appointed as the manager again. Hence, a declaration would not be useful to inform the defendant as to how the affairs of Tung Nam Mansion should be managed. In Mok King Ting, there was evidence to suggest that the defendant school sponsoring body might consider the appointment as a manager a person Mr Koo had adverse views of in the future, so that it might be useful to grant a declaration (if the court was with the plaintiff) to guide the future conduct of the defendant. I find Cheng J’s judgment distinguishable on facts. In any event, the learned Judge was concerned with a striking out application; her opinion must be read to only mean that the declaration sought in that case was not plainly unarguable. It does not provide any authority for a proposition that a declaration must have practical purpose whenever a breach of duty occurs. 47.For damages, I put on record that the plaintiff has not discovered the documents supporting Mr Koo’s evidence in his witness statement that VHC rendered legal advice on 30 different days for a total of at least 15 hours (at HK$6,000.00 per hour) until shortly before the trial. At the eve of the commencement of trial, the plaintiff sought to put in as evidence the 14th, 15th, 16th and 17th interim bills issued by VHC to the plaintiff, which covered work done in April to July 2021. On those interim bills, various dates were highlighted. The plaintiff says the highlighted dates were the ones on which legal advice was rendered with respect to the 16/04/21 Letter and its sequalae. 48.Even if one overlooks the plaintiff’s delay in discovering the interim bills, I agree with the defendant, and I so find, that the plaintiff has not proved that legal advice of at least 15 hours was rendered by VHC. I reject Mr Koo’s evidence in this respect. Under cross examination, he accepts that he was not the person highlighting the interim bills; he could not speak of the extent of legal advice involved in each of those highlighted dates. On the interim bills, no narrative was provided to explain the extent of work involved[7]; worse still, the time spent by each fee earner in an interim bill was stated with reference to the particular type of work done across multiple dates, without any break-down as to the time spent for each specified date. I also accept the defendant’s argument that the plaintiff’s calculation is defective, in that some highlighted dates involved work done by a trainee solicitor with the charge-out rate of HK$1,800.00 per hour instead of HK$6,000.00 per hour. 49.Had liability been established, I would have awarded HK$10,000.00 as nominal damages for the reasonable legal fees the plaintiff should have incurred in response to the 16/04/21 Letter. Conclusion 50.I answer the Joint Statement of Issues in Dispute as follows:-
51.I dismiss the plaintiff’s claim with costs to the defendant, with certificate for counsel[8]. This costs order shall include the costs before the transfer of the present case to this court are concerned (ie the costs in HCA 1503/2021). Whilst it should be a matter for taxation, I state my view (if useful at all) that the costs in HCA 1503/2021 ought to be taxed on the High Court scale. 52.The defendant asks for costs to be taxed on an indemnity basis. Mr Westbrook, SC refers me to various decisions in which Mr Koo was said to be going on a personal vendetta or pursuing a campaign of personal vilification against his adversary; and was ordered to pay costs on an indemnity basis[9]. 53.Whilst I agree that Mr Koo was litigious, and the plaintiff’s choice to pursue this matter to a full-blown trial does not sit well with Order 1A rule 1(c) and (f) of the Rules of the District Court (Cap 336H), I have ultimately come to the conclusion that an order of indemnity costs is not called for. Most of the cases cited by Mr Westbrook, SC, in which indemnity costs were ordered, related to Mr Koo’s obsession of going after a Mr Hopkins Chan. At the moment, repeated vexatious claims over a personal obsession is absent. Although I am disappointed to see a property management squabble so bitterly fought using precious public resources, I am inclined to think that this only comes close, but does not amount to, an abuse of the process of the court. 54.I order the defendant’s costs to be taxed on party-and-party basis. 55.The above costs order is nisi; unless there is any application for variation within 14 days of this Judgment, it shall become absolute. 56.It remains for me to thank leading counsel and their respective teams for their helpful assistance.
Mr Hectar Pun, SC leading Mr Anson Wong Yu Yat & Mr Jason Kung, instructed by V Hau & Chow, for the plaintiff Mr Simon Westbrook, SC, instructed by Fairbairn Catley Low & Kong, for the defendant [1] I note that, in paragraph 6 of the defendant’s letter to VHC, the defendant asked VHC to remind the plaintiff that it would be responsible for ¼ of any expenses incurred by the 67A IO, presumably on the basis that the plaintiff owned ¼ of all the undivided shares in 67A Waterloo Road. [2] Leading Mr Anson Yu Yat Wong and Mr Jason Kung [3] I am also told that, in August 2021, the plaintiff commenced proceedings against Mr Huy and the defendant in DCCJ 3960/2021 for the water leakage problem. [4] See Koo Ming Kown v The Baptist Convention of Hong Kong & Ors [2024] HKCFI 2869 (K Yeung J; 16 October 2024) at §115, quoting Haifa International Finance Co Ltd v Concord Strategic Investments Ltd [2009] 4 HKLRD 29. [5] At §§46-51 of the plaintiff’s closing submissions. [6] The plaintiff has not shown me any authority recognizing such relationship in the property management context between a manager and an individual co-owner. Mr Pun, SC refers to Malcolm Merry, Building Management in Hong Kong (3rd ed, 2016) at §§5.199-5.204, in which the learned author argues that a special relationship existed between a manager and owners. The learned author also refers to Hui Kay Cheong v Chi Wo Properties Ltd [1992] HKDCLR 51 and Reebok Trading (Far East) Ltd v Pokfulam Property Management Ltd [1994] 3 HKC 1 as cases in which the court recognized a duty owed by a manager to prevent financial losses. I note that both cases involved theft of a co-owner’s property, which was not pure economic loss. Further, as learned author recognizes, the notion of “assumption of liability” is not capable of easy demarcation. I do not think the learned author’s arguments provide any definitive view that a special relationship exists between a manager and a co-owner (as contrasted to all the co-owners as a collective group). [7] At tab 61 of the Hearing Bundle, for some items of work in the interim bills, there were cross references to other parts of the Hearing Bundle. Clearly, these references were inserted after the event, and cannot be accepted as part of the narrative of the interim bills. [8] It is a matter for the taxing master to determine the amount of reasonable fees in engaging a competent counsel of suitable seniority to appearing on behalf of the defendant, in light of the complexity of the issues involved. [9] Koo Ming Kown v Next Media Limited & Ors [2009] 2 HKC 214; Koo Ming Kown v Chan Chi Mong Hopkins & Ors HCA 1619/2014 (Anthony Chan J; 2 June 2017); Koo Ming Kown v Pacific Online Limited HCA 2333/2016 (Registrar Lung; 24 February 2017 ; on appeal, Deputy Judge To; 16 May 2017); Koo Ming Kown v Talent Property Group Limited HCA 2335/2016 (Master M Wong; 18 August 2017); Koo Ming Kown v Eddie Ng Hak Kim HCA 2334/2016 (21 June 2017); Koo Ming Kown v Carrie Lam Cheng Yuet Ngor HCA 2336/2017 (21 June 2017); Koo Ming Kown v Securities and Futures Commission HCA 2599/2016 (Master M Wong; 21 July 2017); Koo Ming Kown v Baptist Convention of Hong Kong & Ors HCA 1481/2014 (K Yeung J; 16 October 2024) | |||||||||||||||||||
Cases cited in this judgment