Bridgewater Management Ltd. v. The Incorporated Owners of Braemar Hill Mansions

HCA008069/1999

HCA8069/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.8069 OF 1999

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Coram: Hon Cheung J in Chambers

Date of Hearing : 19 January 2000

Date of Judgment : 19 January 2000

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J U D G M E N T

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Requests for Particulars

1. The defendant appeals against the master's decision to order it to provide Further and Better Particulars of Defence to the plaintiff. Very briefly the plaintiff claims payment from the defendant for expenses incurred by the plaintiff while it was the manager of Braemar Hill Mansions, pursuant to a Deed of Mutual Covenant ("DMC") and a Management Agreement ("the Agreement"). The defendant denies that the plaintiff is entitled to the expenses.

Request No.1

2. Paragraph 5 of the Defence averred that the plaintiff has failed to prepare the budget in respect of the estate. The plaintiff's request for particulars is which year's budget was not prepared.

3. This is a legitimate request. The fact that the plaintiff was appointed for two years from 1 April 1998 to 31 March 2000 and the invoices were between June 1998 and March 1999 and the DMC refers to financial years do not mean that the defendant is not required to specify the particulars of the allegation.

Request No.2

4. The defendant pleaded that it is not liable to pay to the plaintiff the expenses pleaded in paragraph 7 of the Statement of Claim because the expenses were unnecessarily incurred by the plaintiff.

5. The plaintiff asked whether the defendant is alleging that each and every single item of the expenditure contained in the invoices as particularized in paragraph 7 were unnecessarily incurred by the plaintiff.

6. Paragraph 7 sets out eight invoices in the total sum of HK$716,739.43. The fact that the defendant pleaded that the plaintiff had not prepared the budget so that the defendant is not in a position to ascertain the expenses for each financial year does not mean that the defendant is not required to state its case. The details contained in the invoices are, of course, not itemized in the Statement of Claim but the defendant admitted that it had received the invoices. Clearly the defendant's argument that it is for the trial judge to decide what items of expenses are recoverable cannot be right. The defendant has put forward a positive case that expenses are not recoverable for specific reasons. It must be in a position to state whether all or some of the expenses are not recoverable for the reasons pleaded. It must provide the particulars asked for.

Request No.3

7. The plaintiff requested the defendant to state all facts in support of the allegation that the expenditure were unnecessarily incurred.

8. Apart from the pleading that the defendant is not in a position to ascertain the expenses because of the absence of the budget, the defendant is making a specific plea that it is not liable to pay to the plaintiff because the expenses were unnecessarily incurred. This being the case, the defendant must give particulars of such a pleading. This is not simply a request for evidence.

Request No.4

9. This request deals with the situation of specific items of expenses unnecessarily incurred. The defendant must provide the particulars.

Request No.5

10. Paragraph 8(a) of the Defence pleaded that the plaintiff had failed to prepare or present to the defendant for approval the management budget. The plaintiff asked for particulars as to which year's budget was not prepared. The defendant must clearly state its case on which year's budget was not prepared.

Request No.7

11. Paragraph 9 of the Defence stated that the expenses incurred by the plaintiff were without the prior approval of the management committee of the defendant pursuant to the terms of the DMC and the Agreement.

12. The plaintiff asked whether each and every item of the expenditure particularized in paragraph 7 of the Statement of Claim were subject to the prior approval of the management committee.

13. The defendant argued that in paragraph 9 of the Defence it had already pleaded that it does not admit the plaintiff had incurred the management expenses. It asked rhetorically what else can it plead. The answer to this argument is this : whether the plaintiff had incurred the expenses and whether the expenses were incurred without the prior approval of the defendant are two separate matters. If the defendant pleads a positive case that the expenses were made without approval, then it must state its case on it.

Request No.8

14. This follows from Request No.7 where the answer is the negative and it requested the defendant to state what items were subject to the prior approval of the management committee. This is a legitimate request, the defendant must answer this.

Request No.9(a)

15. Of Request No.8, the plaintiff asked whether each and every item were allegedly incurred without prior approval of the management committee. The defendant must give particulars to this request.

Request No.9(b)

16. The plaintiff further asked for particulars of the facts and circumstances in support of the allegation that the items were incurred without prior approval of the management committee.

17. The defendant submitted that paragraph 9 had already pleaded that the expenses were incurred without the prior approval of the management committee, what else can the defendant plead.

18. The answer to this must depend on the answer to Request No.7 whether all or some of the items in paragraph 7 of the Statement of Claim were subject to the prior approval. As such the defendant must provide the particulars.

Request No.10

19. Paragraph 9 of the Defence pleaded that "Nor were the exact expenses incurred by the plaintiff pursuant to the terms of the DMC and the Agreement."

20. The request is whether the defendant is alleging each and every single item of the expenses were not incurred pursuant to the terms of the DMC and the Agreement. If the defendant is putting forward a positive case that the expenses were not incurred pursuant to the terms of the DMC and the Agreement, then it must be in a position to state whether each and every expenses falls within this category.

Request No.11

21. If the answer to Request No.10 is yes, the plaintiff asked for the facts and circumstances whereby the defendant alleged that the expenses were not incurred pursuant to the DMC and the Agreement.

22. Again the answer to the request depends on the answer to Request No.10. The defendant must provided the particulars.

Request No.12

23. This request deals with the situation if the answer to Request No.10 is no. The defendant is asked to identify the items and the particulars of those items that were not incurred pursuant to the DMC and the Agreement. The defendant must give particulars.

Request No.13

24. Paragraph 10 of the Defence pleaded that the defendant on 23 April 1998 resolved that all expenses exceeding $10,000 should not be made unless they had been approved by the management committee of the defendant and the limit was reduced to $1,000 on 23 July 1998 and the plaintiff had failed to obtain such prior approval from the management committee. In relation to the expenses set out in paragraph 7, the defendant was not reliable for such expenses.

25. The plaintiff asked whether each and every single item under paragraph 7 was subject to the two resolutions. Paragraph 7 of the Statement of Claim only referred to the dates of the invoices. If the defendant relies on the resolutions, then it must state whether the expenses under the invoices were covered by the resolutions.

Request No.14

26. This deals with the converse situation where the answer to Request No.13 is no. The defendant must provide the particulars.

Requests Nos.15 and 16

27. Paragraph 11 of the Defence pleaded that the defendant is under no obligation to reimburse the plaintiff with the expenses since such expenses fall within the ambit of remuneration of the manager as defined under section E of the Management Agreement, i.e. profit of the plaintiff and the costs of provision of supporting services.

28. Requests No.15 and 16 are requests for particulars of whether each and every item of the expenses falls within the remuneration of the manager.

29. The defendant said that it had already pleaded that the expenses claimed in paragraph 7 fall within the ambit of remuneration of the manager. If this is indeed the defendant's case, then, of course, the defendant needs not go further. However, if this is not the case, then the defendant ought to provide the particulars. Since it is the defendant's stance that all the expenses pleaded in paragraph 7 fall within the ambit of manager remuneration, I would not make the order now.

Order

30. Appeal dismissed, other than for Requests Nos.15 and 16. The plaintiff is to have the costs of the appeal in any event.

Representation:

Mr Spencer Lee Ka Kit of M/s Spencer Lee & Co, for the Plaintiff

Mr Wong Chi Kau of M/s Charles Yeung, Clement Lam, Liu & Yip, for the Defendant