Great Tower Development Ltd. v. The Incorporated Owners of Luso Apartments

LDBM000076/1999

IN THE LANDS TRIBUNAL OF

THE HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 76 of 1999

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Coram : Deputy Judge LEE and Member W K LO

Date of Hearing : 25 October 1999

Date of Judgment : 24 December 1999

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J U D G M E N T

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1. The Applicant is the owner of Unit D71, Block D Luso Apartments, 5 Warwick Road, Kowloon.

2. The Respondent is the Incorporated Owners of Luso Apartments.

3. The Applicant sought the supply of copies of the Respondent's documents. The documents sought were the annual budgets; audited income and expenditure accounts and balance sheets, signed by the Chairman and treasurer; and summaries of the income and expenditure, for the past six years.

4. On 2nd August 1999, the parties appeared in the Lands Tribunal. The application was clarified to be a demand for the budgets and audited accounts from 1993 to 1998.

5. The Respondent's representative, who has been the secretary of the Incorporated Owners since 1997, informed the Tribunal that there was no budget prepared, nor any auditors engaged, prior to 1998. In November 1998, the Respondent engaged auditors to audit the accounts from 1996. For the period before August 1997, there were no complete balance sheets prepared. The previous management committees had hired a manager, who had since left the job. It was alleged that documents had been handed to this ex-manager. When the present management committee took over, there were not many documents handed over to it.

6. On 25th October 1999, the parties again came before the Lands Tribunal. The Applicant informed the Tribunal that it had received all the documents asked for, except the audited accounts for 1993,1994,1995, the annual budgets and summary of income and expenditure for 1996 to 1998.

7. The Respondent supplied the audited accounts for the years 1996 to 1998, the annual budgets for 1998 and 1999, the income and expenditure accounts from February to December 1996, March, June, August to December 1997,January to December 1998. These were, according to the Respondent's representative, all the documents in its possession.

8. It was not in dispute that a Deed of Mutual Covenant (DMC) had been registered in the Land Registry on 23rd October 1970.

9. The Applicant referred to the DMC to say that the management committee has certain duties that should be carried out. Under paragraph 7 (ii) (c), it should prepare an annual budget; under paragraph 7 (v) (a) to maintain a management fund bank account, keep an income and expenditure account and a summary of this, and to produce the same for inspection by any owner on reasonable notice being given. Paragraph 19 also referred to the keeping of proper income and expenditure account for the management committee, and the owners' right to inspection. Paragraphs 1 and 5 of the 5th Schedule to the DMC were also referred to.

10. The Applicant considered paragraph 7 (iv) of the DMC to impose a liability on the management committee, to compensate owners for its failure to comply with the DMC.

11. This paragraph reads as follows:

"Neither the Management Committee nor the professional Managers appointed hereunder shall be or become personally liable to the owners or any of them or any person or persons whomsoever whether claiming through under or in trust for any owner or otherwise for or in respect of any act, deed, matter or thing done or omitted in pursuance or purported pursuance of the provisions of this Deed not being an act or omission involving criminal liability or dishonesty or wilful negligence and the owners shall fully and effectually indemnify the Management Committee and any professional managers who may at any time be appointed hereunder form and against all actions, proceedings, claims and demands by any person whomsoever arising directly or indirectly out of or in connection with the management, repair and insurance of the said premises and building or the carrying out or failure to carry out their duties and obligations hereunder not being an act involving criminal liability or dishonesty or wilful negligence."

12. There is no evidence to show that either the Management Committee or the professional manager had committed any act involving criminal liability, dishonesty or willful negligence. There is no evidence that their omission to comply with certain aspects of the DMC involved any criminal liability, dishonesty or willful negligence. The evidence was that the present Management Committee did not have all the documents requested by the Applicant.

13. The Applicant had asked for the production of the documents. The Respondent had supplied them as far as it could. There was no other relief sought.

14. The Tribunal makes no orders.

Representation:

The Applicant in person.

The Respondent in person.