Wing Cheung Shing Co Ltd v. Lee Shek Leung

HCSA000007/1979

-----------------

-----------------

Coram: Roberts, C.J., Leonard and Li, JJ.

Date of Judgment: 25 October 1979

-----------------

JUDGMENT

-----------------

1. This appeal is brought by the Wing Cheung Shing Co., who were the claimants before the Small Claims Tribunal, for management fees in relation to a flat, in a North Point building, owned by the defendant in the claim, Mr. Lee Shek-leung.

2. The building owners were not incorporated, but under the deed of mutual covenant they had appointed the claimants to carry out cleaning and management services in the building. The claimants sought to recover from the defendant management fees of $100 a month rising to $120 a month, a total of $1,280.

3. During the hearing before the tribunal, the defendant raised what was in effect a counterclaim. According to him a hut had been erected with a flat roof outside the window of his apartment and the claimants had failed to remove from that roof quantities of rubbish which accumulated on it. The defendant asserted that he therefore had to pay $30 a week to a cleaner to remove the rubbish on his behalf.

4. The adjudicator admitted this counterclaim and allowed a sum of $40 a month, for a period of nine months, to cover the cost of cleaning incurred, as he found, by the defendant. He reduced the full claim of $1,280 by $360 and awarded $920 to the claimants.

5. It has been submitted to us that the adjudicator was wrong in law, in that he should not have admitted a counterclaim without the proper forms having been completed and submitted under the Small Claims Tribunal Ordinance.

6. Section 12 of the Ordinance provides for a "claim" to be in writing in the prescribed form. However, the definition of "claim", taken in conjunction with the definitions of "claimant" and "defendant" in section 2 of the Ordinance, show in our view, that the word "claim", taken by itself, does not, unless the context otherwise requires, include a counterclaim. It is to be observed that other sections, for example, sections 10 and 11, contain special references to a "counterclaim".

7. Therefore save where it is inescapable from the context that the word "counterclaim" is included, references in the Ordinance to "claim" do not include it. Thus there is no obligation upon a person wishing to raise a set off, or counterclaim, to complete the same forms as a claimant must do.

8. This is very much in accordance with the spirit of the Ordinance, which was intended to enable persons to settle small as expeditiously and inexpensively as possible and to reduce formalities to the minimum.

9. However, it must be borne in mind that sometimes the absence of notice of a set off or counterclaim will cause unfairness to the claimant. When this occurs, it would be right for the adjudicator to exercise his discretion to adjourn the proceedings, in order that the counterclaim may be reduced to writhing or to ensure that the claimant will have a reasonable opportunity to consider the counterclaim and, if necessary, to call evidence to rebut it.

10. In this case, there was no application for an adjournment by the representative of the claimant company. However, even if there had been an application to adjourn, we do not think it likely that the adjudicator would have throught that an adjournment was necessary.

11. The defendant had given evidence that he had employed a cleaner at his own expense. It is hardly likely that the management company would have been in a position to say more than that they thought that they had made adequate arrangements to clean the roof. And the adjudicator based his award on the counterclaim on his finding that he believed the defendant's account of what had happened.

12. It was also submitted by counsel for the appellant that the adjudicator was wrong in law to permitting the defendant to counterclaim against the management company for expenses which the defendant had incurred in the cleaning, on the ground that the management company had been acting as agents of the owners in their claim, but that the counterclaim was against the company as principals.

13. The factual position disclosed by the evidence was that the defendant was one of the co-owners of the building. The co-owners appointed the management company (that is to say the claimants) to perform services of management and cleaning in the building.

14. The co-owners decided, in accordance with the deed, how much should be paid by each owner to the management company and payments were made to it directly by each owner, There was thus an agreement between each owner and the company.

15. The company, as the defendant claimed, had failed to carry out what it had been paid by him to do. It seems to us entirely practical and sensible that the defendant should be allowed to counterclaim (or set off) against the company to which he was in debt for management services, payments which he had incurred because those services had not been properly performed.

16. We dismiss the appeal. No order as to costs.

Representation:

Miss A. Eu (W.I. Cheung & Co.) for Applicant