The Incorporated Owners of Grenville House v. Wong Tak Keung Stanley and Another

CACV 344/2024, [2025] HKCA 1104

On Appeal From [2024] HKLdT40

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 344 OF 2024

(ON APPEAL FROM LDBM NO. 199 OF 2020)

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J U D G M E N T

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Hon Cheung JA (giving the Judgment of the Court) :

I.  The appeal

1.This is an appeal against the judgment of Deputy District Judge S H Lee (now His Honour Judge S H Lee), Presiding Officer of the Lands Tribunal who gave judgment for the Applicant that the Respondents are liable to pay the Applicant their share of the contribution in the sum of $220,000 together with interest and collection charge pursuant to the Deed of Mutual Covenant (‘DMC’) and the 29 February 2020 General Meeting Resolutions. The Judge also dismissed the Respondents’ counterclaim that the Applicant is to comply with their request to inspect the submitted tender documents. The Respondents now appeal pursuant to leave granted by the Judge on the ‘interest of justice’ ground.

II.  Background

2.The background of the case is fully set out in the judgment. The relevant parts for this appeal are as follows.

3.The Applicant is the Incorporated Owners of Grenville House, a well‑known apartment building in the Mid Levels area of Hong Kong. The Respondents are the registered owners of one of the apartments in Grenville House.

4.In July 2016, the Building Authority (‘BA’) issued a notice to the Applicant under the Buildings Ordinance (‘BO’) (Cap. 123) requiring it to complete the prescribed inspection, and, if necessary, prescribed repair to the common parts of Grenville House within six months and 12 months respectively (‘MBIS Notice’) pursuant to the Mandatory Building Inspection Scheme (‘MBIS’).

5.David S K Au & Associates Ltd (‘DSKA’) was appointed by the Applicant as the MBIS consultant in place of another consultant who had already prepared and submitted a survey report as required by MBIS to the Buildings Department.

6.Between March 2019 and February 2020, DSKA conducted on behalf of the Applicant tendering process for the contractor to carry out prescribed works as required by MBIS (‘the Prescribed Works’).

7.On 14 February 2020, the Applicant gave notice to all owners of an annual general meeting to be held on 29 February 2020 (‘the 29 February 2020 AGM’) to deal with a total of nine agenda items, which include :

(1)  Agenda item 6 : ‘presentation by DSKA on tendering process for the contractor for the Prescribed Works.’

(2)  Agenda item 7 : ‘to consider the tenders of the contractors for MBIS, to approve the appointment of the contractor for MBIS, and to approve a contribution of a total amount of $26,400,000 ($220,000 per Apartment) (‘the Contribution’) to be made by Owners in order to settle the progress payments for the works of MBIS’.

8.The annual general meeting was duly held. In respect of Item 6 of the Agenda, the Judge found that five tender documents were returned. He held that :

‘ 30. ....DSKA had “shown” GH [i.e. Grenville House] owners present “the original tender sums of the 5 returned tenderers” and “the best offers from the 3 lowest tenderers (italics supplied)", and “recommended” the Contractor “by reference to its tender analysis, in both contractual and technical aspects, and job reference”. Such showing of the above sums or figures was expressly recorded in the minutes of the meeting. It is, however, unclear if the said “tender analysis” of DSKA was shown or explained to GH owners during the meeting.’

9.In respect of Item 7 of the Agenda, the Judge found that it was validly passed by 81.48% of the owners present to appoint the recommended contractor to carry out the Prescribed Works, and by 84.91% of the owners present to approve the contribution to fund the Prescribed Works (collectively ‘the 29 February 2020 GM Resolutions’).

10.The Management Committee of the Applicant subsequently resolved that the contribution shall be collected from the owners in one installment in April 2020 (‘the 18 March 2020 MC Resolution’) and written notice of the 29 February 2020 GM Resolutions was issued to all the owners requiring payment from them by 30 April 2020.

11.Despite demands sent to and received by the Respondents in April, July and August 2020, the Respondents had failed to pay their share of the contribution in sum of $220,000 before the Applicant commenced these proceedings against them.

12.In June 2020, the appointed contractor began the Prescribed Works.

13.On 23 December 2020, the Applicant commenced the present proceedings seeking to recover from the Respondents the contribution.

14.On 14 December 2021, on a non-admission basis, the Respondents through their solicitors tendered to the Applicant their contribution of $220,000. On 28 December 2021, the Applicant accepted another cheque of the same amount issued by them as replacement.

15.Nonetheless, the Applicant had pressed on with its application against the Respondents to pursue its claims for interest, collection charge and costs pursuant to the DMC.

III.  Counterclaim by the Respondents

16.In their Amended Notice of Opposition and Counterclaim, the Respondents stated that, as early as 15 February 2020, they had, in response to the 29 February 2020 AGM notice, demanded the Applicant to allow them to inspect the returned tenders in response to the Applicant’s invitations for tenders for (and to take copies of relevant documents of) the Prescribed Works pursuant to the 2018 Code of Conduct for Procurement of Supplies, Goods and Services (‘2018 COP’) pursuant to section 44(1) of the Building Management Ordinance (Cap. 344) (‘2018 BMO’). They repeated the requests at the 29 February 2020 AGM and persisted thereafter, but was rejected or refused repeatedly by the Applicant, its manager and lawyers.

17.The Respondents claimed that the Applicant had, by its refusal to allow inspection of the tender documents and also by its failure to provide the MBIS Notice to the owners, been in breach of section 20A(l) of the BMO, and [3.6], [7.1] and [7.2] of the 2018 COP. Because of the breaches, the Respondents could not make an informed decision on the scope of the Prescribed Works or have sufficient information to calculate their future financial liability under the 29 February 2020 GM Resolutions. Had the above breaches not occurred, it was unclear whether the owners present at 29 February 2020 AGM would have passed 29 February 2020 GM Resolutions.

18.The Respondents sought the following orders pursuant to section 20A(7) of the BMO :

1)  The requests for the tender documents are to be complied with by the Applicant (‘1^st Order’);

2)  After compliance of the 1^st Order, a general meeting of the owners is to be held to decide whether or not to avoid the Applicant’s contract with the Contractor and whether or not the 18 March 2020 MC Resolution should be affirmed (‘2^nd Order’); and

3)  The Applicant is not entitled to any of its claimed reliefs including interest on the $220,000 until after its compliance of 1^st and 2^nd Orders above (‘3^rd Order’).

IV.  The Judge’s Decision

19.The Judge held that the subject matters of the 29 February 2020 GM Resolutions are within the power and duties of the Applicant under section 18(1)(a) and (b) of the 2018 BMO and also within the power and authority of the Management Committee as manager of the DMC. The apportionment of the contribution among all the owners was properly made in line with the DMC and section 22 of the 2018 BMO.

20.The Judge held that whilst the Applicant had disclosed many documents to the Respondents, two types of documents were not supplied. First, sufficient information about MBIS Notice had not been supplied twice to owners (including the Respondents) as required by [3.6] of the 2018 COP and second, the ‘returned MBIS tenders for the Prescribed Works’ were not supplied or disclosed to the Respondents in breach of [7.1] and [7.2] of the 2018 COP.

21.The Judge, however, held that the Respondents are not entitled to an inspection order pursuant to section 20A(7) on their counterclaim. Based on Chen Kun Ming v The Incorporated Owners of Tai On Building, Shau Kei Wan [2008] 2 HKCLRT 43 (‘The Tai On Building Case’), they have no legal right to obtain tender documents from Management Committee by virtue of [7.1] and [7.2] of the 2018 COP that could be directly enforced against the Applicant. He held that the 2018 COP is directory in nature, the consequences, if any, of their non‑compliance are limited to those set out in section 44(2), section 20A(5)‑(8) of the BMO. He held that section 20A(7) is not applicable because it is available only in legal proceedings taken out to enforce procurement contract that is said not to have followed tendering requirement under section 20A(2) or the owners’ resolution requirement under section 20A(2B).

22.The Judge held that had the section 20A(7) discretion been applicable to this case, in view of the Respondents having no legal right to the same under the 2018 COP or the 2018 BMO, he would have also exercised the discretion by refusing the order for inspection. He held that as the second and third orders sought are consequential upon the first order being obtained, the Respondents are not entitled to these two orders. He held :

‘ 194. In any event, on the authority of 麗苑業主立案法團 v韓炳基 & Anor, unreported, CACV 1716/2001, 6 August 2002 (Beauty Court Case), breach of 2018 COP could not affect 29/2/2020 GM Resolutions which (once they are found to have been lawfully passed) are binding on the [Respondents] under s.14 so far as payment of due share of the Contribution is required from them: see [79(4)] and [79(6)] above. For this legal reason, I also refuse the 3^rd Order sought.’

V.  The statutory framework

23.The judgment below was delivered on 14 May 2024. The relevant versions of the BMO and COP considered by the Judge were the 2018 version. The current versions are the 2025 version which took effect on 13 July 2025. There is no dispute that at the time of the underlying dispute, the general requirement for the Applicant to comply with the 2018 COP (effective from 1 September 2018) was contained in section 20A(1) of the 2018 BMO, which is now repealed under the 2025 BMO. The key changes in the 2025 BMO relevant to this appeal are as follows: 1) Section 20A is removed. The general duty to comply with ‘any Code of Practice concerning the procurement’ is now located in the newly added section 28A of the 2025 BMO; 2) The specific right for owners to inspect documents, which was formerly located in [7] of the 2018 COP, has been incorporated under the newly added section 28C of the 2025 BMO; and 3) A new COP, effective from 13 July 2025 (‘2025 COP’) removes [7] of the 2018 COP and no longer contains similar provisions on inspection of tender documents.

24.The relevant provisions relevant to this appeal are as follows :

1)  2018 BMO

Section 18(2A) :

‘ the corporation in the performance of its duties and the exercise of its powers under this section shall have regard to and be guided by Codes of Practice issued from time to time under section 44(1).’

The Chinese version : 「法團在根據公契 (如有的話)或本條例行使權力或執行職務上所需的供應品、貨品或服務，其取得須符合與上述取得有關的工作守則所指明的標準及準則。」

Section 20A :

‘ (1) The procurement of all supplies, goods or services required by a corporation in the exercise of its powers and the performance of its duties under the deed of mutual covenant (if any) or this Ordinance shall comply with such standards and guidelines as may be specified in a Code of Practice relating to such procurement.

(2) Subject to subsection (2A), any supplies, goods or services referred to in subsection (1) the value of which exceeds or is likely to exceed— (a) the sum of $200,000 …; or (b) a sum which is equivalent to 20% of the annual budget of the corporation …, whichever is the lesser, shall be procured by invitation to tender.

...

(2B) Where any supplies, goods or services are required under subsection (2)(b) to be procured by invitation to tender, whether a tender submitted for the purpose is accepted or not shall be decided by a resolution of the owners passed at a general meeting of the corporation.

...

(4) All tender documents, copies of contracts, accounts and invoices and any other documents in the possession of a corporation and relating to the procurement of supplies, goods and services shall be kept by the corporation for such period, being not less than 6 years, as the corporation may determine.

(5) A contract for the procurement of any supplies, goods or services shall not be void by reason only that it does not comply with subsection (1).

(6) Where any supplies, goods or services are required under subsection (2) to be procured by invitation to tender, a contract for the procurement of the supplies, goods or services which does not comply with subsection (2) or (2B)—

(a) subject to any resolution passed by the corporation under paragraph (b) or any order made by the court under subsection (7), shall not be void by reason only that it does not comply with subsection (2) or (2B);

(b) subject to any order made by the court under subsection (7), may be avoided by the corporation by a resolution of the owners passed at a general meeting of the corporation but only for the reason that it does not comply with subsection (2) or (2B).

(7) In any legal proceedings in relation to a contract for the procurement of any supplies, goods or services to which subsection (2) or (2B) applies, the court may make such orders (including whether the contract is void or voidable) and give such directions in respect of the rights and obligations of the contractual parties as the court thinks fit having regard to all the circumstances of the case, including (but not limited to) the following factors—

(a) whether the supplies, goods or services have been procured by invitation to tender;

(b) whether a general meeting of the corporation has been convened to consider the procurement of the supplies, goods or services;

(c) whether the Code of Practice referred to in subsection (1) has been complied with;

(d)…

(e) whether the supplies, goods or services were urgently required;

(f) the progress of any activities or works in relation to the supplies, goods or services;

(g) whether the owners have benefited from the contract;

(h) whether the owners have incurred any financial loss due to the contract and the extent thereof;

(i) whether the supplier of the supplies, goods or services under the contract has acted in good faith;

(j) whether the supplier of the supplies, goods or services under the contract has benefited from the contract; and

(k) whether the supplier of the supplies, goods or services under the contract has incurred any financial loss due to the contract and the extent thereof.

(8) For the purposes of subsection (7), where the court makes an order that the contract is voidable at the instance of the corporation, it shall also make an order that a general meeting of the corporation be convened and held in such manner as the court thinks fit, so as to decide whether the contract is to be avoided.

(9)…’

Section 44(1) :

‘ The Authority may from time to time to prepare, revise and issue Codes of Practice giving guidance and direction as to –

(a) the procurement of supplies, goods and services required by a corporation including such procurement by invitation to tender and the tender procedure in respect thereof;

(b) the standards and practices of management and safety that are to be observed and followed by a corporation including standards and practices relating to - (i) building management; (ii) … and (vi) …’

Section 44(2) :

‘ A failure on the part of any person to observe any Code of Practice issued under subsection (1) shall not of itself render that person liable to criminal proceedings of any kind but any such failure may, in any proceedings whether civil or criminal including proceedings for an offence under this Ordinance, be relied upon as tending to establish or to negative any liability which is in question in those proceedings.’

2)  2018 COP

‘[1.2] All owners’ corporations (OCs) shall comply with this Code of Practice.

...

[1.4] All OCs shall comply with section 20A of the BMO in relation to the procurement of supplies, goods and services. For the avoidance of doubt, all OCs shall comply with the requirements relating to tendering in this Code of Practice if invitation to tender is required for the procurement of the supplies, goods or services under section 20A of and paragraph 5 of Schedule 7 to the BMO.’

‘ [3.6] If the tendering exercises involve mandatory works as stipulated in relevant statutory notice(s), order(s) or direction(s) issued by relevant government department(s) or authority(ies) (collectively referred to as government repair orders), such information should be made available to the owners-

(a) before the invitation to tender is prepared (e.g. posting the government repair orders in a conspicuous place of the building when received; making available a copy of the government repair orders at the management office for inspection by the owners); and

(b) before the resolution concerned is put to vote (e.g. attaching a copy of the government repair orders to the notice of meeting at which the tender is to be approved),

so as to facilitate the MC members/owners in understanding and making well informed decision on the scope of the procurement.

...

[7.1] The MC shall permit the Authority, the tenants’ representative, an owner, a registered mortgagee or any other person authorised in writing by an owner or a registered mortgagee to inspect all tender documents, copies of contracts, accounts and invoices and any other documents in the possession of the OC and relating to the procurement of supplies, goods and services at any reasonable time. The MC shall on the payment of a reasonable charge, supply copies of the relevant.

[7.2] The documents referred to in paragraph 7.1 shall contain sufficient information to enable the person doing inspection to calculate the financial liability (including any future financial liability) of the OC at the time of inspection.’

VI.  The Respondents’ argument

25.There are two issues in this appeal. First, whether compliance with the 2018 BMO and 2018 COP is mandatory. Second, what remedies, if any, are available if the Owners’ Corporation breached the provisions of the 2018 BMO and 2018 COP. The only document that the Respondents now seek to inspect is the tender documents.

26.Mr Man SC and Ms Wong for the Respondents submitted that compliance is mandatory. He referred to the wordings of section 20A(1) of the 2018 BMO both in the English and Chinese versions which used the words ‘shall comply with’ or 「須符合」such standards and guidelines as may be specified in the 2018 COP. He also relied on section 18(2A) of the 2018 BMO which provides that the [Owners’ Corporation] ‘in the performance of its duties and the exercise of its powers under this section shall have regard to and be guided by Codes of Practice issued from time to time under section 44(1).’ He submitted that the 2018 COP itself reinforces this mandatory language. The relevant provisions are stated in terms that require compliance :

‘ [1.2] “All owners’ corporations shall comply with this Code of Practice.”

[3.6] “If the tendering exercises involve mandatory works…such information should be made available to the owners…”

[7.1] “The MC [Management Committee] shall permit ... an owner ... to inspect all tender documents...”

[7.2] “The documents…shall contain sufficient information…” ’

27.Reliance is also placed on section 20A(2) of the BMO, which provided that ‘[a]ny supplies, goods or services referred to in subsection (1) the value of which exceeds or is likely to exceed [prescribed sums] shall be procured by invitation to tender’. He referred to Wong Tak Keung Stanley v The Management Committee of the Incorporated Owners of Grenville House [2004] 2 HKC 194 (‘Grenville House (No. 1)’), where this Court per Yuen JA said at [36] ‘When a statute declares that a thing “shall” be done, the natural and proper meaning is that a peremptory mandate is enjoined.’ This is followed in the Incorporated Owners of Kadoorie Avenue Mansion v Rising Dragon International Ltd, LDBM 201/2013, 1 November 2013, where HH Judge Ko followed this approach :

‘ [35] The Code of Practice begins by reiterating that all owners’ corporations shall comply with the code and section 20A. So, compliance is mandatory and a statutory duty on the part of owners’ corporations. The BMO is the very fabric that connects an owners’ corporation and its owners. It would not be consistent for an owners’ corporation to, on the one hand, insist that its owners should comply with the law when, on the other hand, it is trying to shed its statutory duties. And it would be unprofessional for any lawyer to advise or encourage his client to act in breach of section 20A and the Code of Practice.’

28.Mr Man then submitted that the legislative material relating to amendments in 2005 and 2007 of the BMO also supported this construction by referring to the Bills Committee on Building Management (Amendment) Bill 2005 – Procurement by Owners’ Corporations and Manager, LC Paper No. CB(2)2617/04-05(05), September 2005, Home Affairs Department :

‘ [19] With the proposed amendments, it will be crystal clear that the procurement requirements are statutory and mandatory and have to be followed by both the OCs and the building managers.’

and the Report of the Bills Committee on Building Management (Amendment) Bill 2005, LC Paper No. CB(2) 1603/06‑07, Legislative Council Secretariat, 20 April 2007 :

‘ [150] The Administration has also explained that both sections 20A(1) and (3) refer to the need to comply with the Code of Practice on the Procurement of Supplies, Goods and Services. The Administration will therefore move a CSA to repeal section 20A(3) which is redundant.’

29.He submitted that it is entirely sensible for the legislature to require mandatory compliance with the 2018 COP in matters concerning procurement. These are situations where the Owners’ Corporation is spending other people’s money. It is reasonable to require compliance with detailed and specific rules contained in the 2018 COP.

30.In the Court below, the Judge had referred to Howard v Bodington (1877) 2 PD 203 where Lord Penzance discussed the distinction between matters that are imperative and matters that are directory. The Judge held that whether the 2018 COP is labelled as mandatory or directory is irrelevant, what matters is, by way of statutory construction, whether it is appropriate in any particular case to grant the remedy sought for their breaches. Mr Man agreed with the Judge’s view. He submitted that the common law principle on the imperative or directory distinction is irrelevant as this principle is about whether the contract is to be invalidated. He emphasised that the real question is ‘A thing has been ordered by the legislature to be done. What is the consequence if it is not done.’ He relied on Bennion, Bailey and Norbury on Statutory Interpretation (8^th edition) (‘Bennion’) page 336, [9.9] :

‘ It is of the essence of a legal command that there should be a sanction or remedy for disobedience to it. However, this is not necessarily provided.

There is a presumption that a legislative command carries a sanction or remedy, in accordance with the maxim ubi jus ibi remedium (where there is a right there is a remedy). Thus Coke said that “whensoever an act of parliament doth generally prohibit anything the party grieved shall have his action ‘for his private reliefe’ ”.’

31.He submitted that if a statute (ex hypothesi) requires the Applicant to allow the Respondents to inspect return tenders, a mandatory injunction ordering that is surely available and there is certainly nothing in the statute excluding an order for inspection. The scheme of remedies under section 20A(7) to (9), on their terms, only concern the Court’s powers in regard to the rights and obligations of the contractual parties where section 20A(2) or (2B) applies. They do not provide for remedies for breach of section 20A(l). These provisions (and also section 44(2)) give the Court flexible powers to deal with the consequences on the resultant contracts. They do not exclude other remedies for non‑compliance (e.g. mandatory injunctions for compliance). Any reliance on the expressio unius principle is therefore impossible. These provisions do not deal with ‘things of the same kind’ as section 20A(1): Bennion page 696, [23.l2(1)]. This is also plainly a case where ‘some reason other than the intention to exclude certain things exists for mentioning some but not others’: Bennion page 696, [23.l2(4)], because the Court would benefit from wide powers to adjust contracts where there is non‑compliance with section 20A(2) or (2B). That does not indicate that the legislature was intending to generally abrogate the remedy of injunction to compel compliance with mandatory provisions. In any case, as the Court of the Final Appeal stated in SFC v Tiger Asia Management LLC (2013) 16 HKCFAR 324 at [17], ‘arguments of this expressio unius variety are often unpersuasive’.

32.He submitted that two other judgments of this Court, referred to by the Judge are irrelevant. The cases are : 麗苑業主立案法團 v韓炳基 & Anor, unreported, CACV 1716/2001, 6 August 2002 (‘the Beauty Court Case’) and 陳坤明 v 筲箕灣太安樓業主立案法團 (Chen Kun Ming v Incorporated Owners of Tai On Building, Shau Kei Wan) (‘the Tai On Building Case’) [2008] 2 HKCLRT 32 are irrelevant.

33.In respect of the Beauty Court Case, as noted in Judgment [79], it did not address whether the COP had the force of law or the effect of section 20A(l). The only relevant sentence of the case is at [30] where the Court stated that 「《條例》第44(1) 條指守則的作用是給予法團指導及指示。第 44(2) 條並沒有明確說明任何沒有遵守守則的決定會令該決定無效。」[Translation: section 44(1) of BMO stated that the purpose of the COP is to give Owners’ Corporation guidance and directions. Section 44(2) did not clearly state any resolution not complying with the COP will render the resolution invalid.] At most this concerns the validity of resolution passed without compliance with the COP, but not whether an owner can insist on compliance with the COP, e.g. to inspect returned tenders. Further, section 44 covers the COP (concerning procurement as provided for in section 44(1)(a)) and Codes of Practices in other areas (listed in section 44(1)(b)). Accordingly, section 44(2) is a general provision applying to all Codes of Practices issued under section 44(1). It does not and cannot negative the more specific provision in section 20A(1) concerning the COP governing procurement.

34.In respect of the Tai On Building Case, as recognised in judgment [81], the appellant in the Lands Tribunal did not rely on section 20A or the COP. He relied on Schedule 6 of the BMO to seek inspection of accounting records. The appellant then sought to rely on the COP on appeal. But the Court explicitly refused to rule on this new point ([37]‑[38]). Therefore, any comments regarding the COP cannot be taken to lay down any proposition of law. Further, the comment of Yeung JA (as he then was) at [34] that the scope of the COP ‘cannot exceed that of the Ordinance itself’ does not affect the Applicant’s argument. As is clear from the above, his argument is squarely based on the wording of section 20A(1) of the 2018 BMO.

VII.  Our view

35.There is no dispute that the carrying out of the Prescribed Works in the present case is required to be procured by invitation to tender under section 20A(2) of the BMO and the procurement of such service is required to comply with the 2018 COP according to section 20A(1) of the 2018 BMO. We do not regard the words in section 18(2A) of the 2018 BMO ‘shall have regard to and be guided by the COP’ lessen this requirement. Nor do the words of ‘Codes of Practice that gives guidance and direction’ in section 44(1) of the 2018 BMO lessen the requirement. According to the Respondents, the Applicant failed to comply with [3.6] of the 2018 COP to provide the MBIS Notice twice and also failed to comply with [3.7] by not providing the Respondents all the tender documents for their inspection. It should be noted that in respect of the MBIS Notice, [3.6] uses the words ‘such information should be made available to the owners’ whilst in respect of the tender documents, the Owners’ Corporation ‘shall’ permit the owners to inspect. Notwithstanding the difference in wording, we are of the view that the Owners’ Corporation is required to comply with [3.6], [7.1] and [7.2] of the 2018 COP. This is made clear by the 2018 COP, namely ‘[1.2] All owners’ corporations shall comply with this [COP]’ and ‘[1.4] All [Owners’ Corporations] shall comply with section 20A of the BMO in relation to the procurement of supplies, goods and services. For the avoidance of doubt, all [Owners’ Corporations] shall comply with the requirements relating to tendering in this Code of Practice if invitation to tender is required for the procurement of the supplies, goods or services under section 20A of and [5] of Schedule 7 to the BMO.’

36.Mr Chan SC and Mr Ng for the Applicant accepted that the Applicant had the obligation to allow the inspection of the tender documents, but disagreed that the remedy sought by the Respondents for an order of inspection is available to them. The real issue in this case is what is the consequence of non‑compliance with these provisions. The task for us is one of statutory construction to ascertain what is the legislative intention as to the consequence of non‑compliance. As the Judge observed :

‘ 89. The conventional approach when there has been non-compliance with a requirement laid down by a statute is to seek to ascertain whether the requirement that was not complied with should be categorized as “directory” or “mandatory”. The modern approach for determining the consequence of non-compliance with such a requirement is to treat the matter as one of statutory construction, and the court’s task is to ascertain what the legislature intends to be the consequence of the non-compliance: Secretary for Justice v Chau Wan Ying & ors, paragraphs 22 & 23, per Chow J. (as he then was).’

37.The Respondents in their Amended Counterclaim solely relied on section 20A(7) of the 2018 BMO for their relief. Clearly, this section is not applicable because, first, the present dispute is not ‘legal proceedings in relation to a contract for the procurement of any supplies, goods or services’ and, second, the Respondents are not contracting parties to the contract. Both are essential elements for section 20A(7) of the 2018 BMO to be invoked. Mr Man accepted that the relief for the inspection of the tender documents is not based on section 20A(7). We would have thought that if the Respondents were not able to rely on this section which was the pleaded basis for their relief, then the Judge must be correct to dismiss their counterclaim.

38.Nonetheless, Mr Man’s position is that where there is a legislative command, there is a presumption that it carries a sanction or remedy. He submitted that the available remedy to the Respondents is an order allowing the Respondents to inspect the tender documents. We disagree. As a matter of statutory construction, we are unable to find that there is any such remedy available to the Respondents. On the contrary, apart from section 20A(7) of the 2018 BMO, the other provisions have stated exhaustively the consequence of a contract that does not comply with the standards and guidance of the 2018 COP (section 20A(5)) or one that is not procured by invitation to tender or not decided by resolutions passed at a general meeting of the owners’ corporation (section 20A(6)). These two sections provided that such situations will not render the contract void. Section 20A(8) deals with the consequence where the Court finds the contract is voidable under section 20A(7). Section 44(2) also does not empower an owner to obtain an inspection order for tender documents. Sections 1A, 1B, 1C and 3 of Schedule 6 of the 2018 BMO expressly empower the owners to request and apply for a Court order for inspection of accounting documents but not tender documents. [7] of the 2018 COP allows an owner to inspect tender documents on payment of a reasonable charge but does not provide that the Court may issue an order for inspection. As the management of multi‑storey buildings is expressly provided for in the BMO, one would expect the remedy of an order to inspect is to be found within the four corners of this legislation. Yet it does not. We agree with Mr Chan that the 2025 amendments to the BMO lend further support to the construction of section 20A of the 2018 BMO. The new section 28B(1) provides that the management committee must keep all procurement documents (defined in the new section 28B(7)) for a period of six years after the contract is entered into. The new section 28C empowers owners to apply to the management committee or the Court for inspection of procurement documents. In respect of an application to the Court, section 28C(5) provides that :

‘ The court may, for the purposes of subsection (1)(b) and on an application of an owner, by order authorize the owner or any other person named in the application to inspect any document kept by the management committee under section 28B(1) if it is satisfied that—

(a) the application is made in good faith; and

(b) the inspection is for a proper purpose.

......’

39.As Mr Chan submitted, in regard to section 20A of 2018 BMO, objectively viewed, had the legislative intent been that an owner has an enforceable right to inspect tender or procurement documents, it would not have been necessary to introduce these new enactments. This material is admissible as Bennion at [24.19] stated :

‘ [24.19] Where the legal meaning of an enactment is doubtful, subsequent legislation on the same subject may be relied on as persuasive authority as to its meaning.’

40.We do not consider that a breach of section 20A(1) or section 44(2) will entitle the Respondents to apply for an order of inspection. As no injunction was applied for in this case, we will refrain from expressing any view about the availability of an injunction. In our view, in the event for non‑compliance, the remedy for the owner is to raise this issue in the general meetings of the Owners’ Corporation. This is what the Judge had decided when he held :

‘ [85(12)] In practice, if a majority of owners at GM is not satisfied with MC’s non-disclosure of tender documents and/or information in breach of 2018 COP, they could, one thinks, cast their votes to reject the agenda concerned, resolve to adjourn the meeting to another date, resolve to demand their provision from MC and/or even resolve to remove the entire MC if they see fit.’

41.Mr Chan further referred to section 40A of the 2018 BMO which allows the BA to appoint building management agent in the event that the management committee of a building failed to perform substantially the duties of the owners’ corporation.

42.We do not find the legislative materials referred to by the Respondents assist us on the construction issue. We also do not regard that the three judgments of this Court referred to in the arguments would assist us in the construction exercise. In Grenville House (No. 1), this Court was dealing with a striking‑out application and the focus was on section 20A(2) of the BMO and not on section 20A(1). Yuen JA in addressing the argument that there was no specific remedy for contravening section 20A(2), held :

‘ 40. It was also submitted for the Respondent that there was no specific remedy for contravention of s.20A(2). However, it is at least arguable that at common law, where the intended consequence of the failure to comply is not stated in the legislation, the thing done under the statute is invalidated. Whether the thing done is wholly void or merely voidable depends on the circumstances (Bennion, Statutory Interpretation 4^th ed Section 10, [32]‑[35].’

43.This Court did not engage in a final determination of the consequence of non‑compliance as we have done in this appeal. In any event, the concern in the present appeal is whether the Respondents are entitled to an order for inspection which was not an issue in Grenville House (No. 1).

44.In the Beauty Court Case, the Owners Corporation’s demand for fees, for, amongst other things, the refurbishment of the lifts, was refused by the Respondents who were one of the owners in the building on the ground that the COP required five contractors to bid for the contract, but only three contractors did so. This Court referred to section 44 of the BMO and held that breach of the COP would not render the owners’ resolution void or avoid the respondents’ liability to pay their share of the contribution. As Mr Chan submitted, it is an authority to support the decision below (unchallenged on appeal) that the Respondents must pay. It does not support the Respondents’ contention that they have an enforceable right to inspect tender documents. The issue was again different from the present case.

45.The Tai On Building Case is of limited assistance in view of the context of the case. An owner requested accounting documents under Schedule 6 of the BMO. The Owners’ Corporation was willing to supply the documents (except an audited report which was still being prepared) subject to the owner paying the photocopying charges. The owner’s application for the documents was dismissed by the Lands Tribunal. On appeal, the owner relied on the Code of Practice on procurement. This Court per Yeung J held :

‘ 38. At trial, Mr. Chen did not rely on the Code of Practice as support for his arguments, and hence the Tribunal did not address or rule on the application of the Code. Mr Chen cannot invoke the Code of Practice for the first time at the appeal stage in order to justify the requests that he made to the Corporation.’

46.His holding that

‘ 34. ...... The Code of Practice is merely a document issued under s.44 of the Building Management Ordinance in respect of the procurement of supplies, goods and services. The scope of the Code of Practice cannot exceed that of the Ordinance itself.’

must be considered in its proper context, particularly when it was held at [37] that it was not necessary for the Court to make a final decision on this point.

47.Mr Chan has relied on a number of principles of statutory construction including the principle that where the express remedies are intended to be the ones available and any other remedies are excluded by implication (i.e. the expressio unius est exclusio alterius principle). We do not need to rely on these principles in aid of the construction exercise. As stated in Bennion at page 697 quoting Cross Statutory Interpretation (3^rd edn by Bell and Eagle, 1995) at 140 :

‘ ... it is doubtful whether the maxim does any more than draw attention to a fairly obvious linguistic point, viz that in many contexts the mention of some matters warrants an inference that other cognate matters were intentionally excluded.’

VIII.  Conclusion

48.Accordingly, the appeal is dismissed with costs to the Applicant.

Mr Bernard Man, SC and Ms Carol Wong, instructed by Jones Day, for the Respondents

Mr Anthony Chan, SC and Mr Warren Suen, instructed by King & Co., for the Applicant