The Incorporated Owners of Tsui Chuk Garden v. Edentown Ltd

LDBM 303 OF 2004

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT Application No. 303 of 2004

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Between

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Before: H. H. Judge Yung, Presiding Officer of the Lands Tribunal

Date of Hearing: 27, 28 & 31October and 9 December 2005

Date of Handing Down: 26 January 2006

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J U D G M E N T

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1.I have previously given judgment in favour of the Respondent dismissing the claim against them for outstanding management fees.  The claim consists of 6 items in the budget. The Applicant is seeking a review on my ruling on four of these items, namely, security services, contractor maintenance, sundry expenses and remuneration to manager.

Security Services

2.Mr. Wong, the witness for the Applicant, gave further evidence at the review hearing, attempting to justify the apportionment.  This further evidence was available or should have been available at the trial.  His evidence was adduced to answer practically point by point of my findings.

3.Mr. Wong elaborated the duty of the guards at guard post No. 5.  He stressed the importance of their duty in overseeing the loading and unloading area and in particular after the theft of motor-cycles wherefrom. According to him the work had become so important that the duty of monitoring the traffic entering the estate was taken away from guard post No.5.  In cross-examination as to the operation at night of the drop bar outside guard post No.5, he said during the night another guard would be standing outside guard post No. 5 to man the drop-bar.  This arrangement, he claimed, was necessary, because the guard at guard post No. 5 could not perform this additional duty as he would be patrolling the loading and unloading area from time to time .

4.The loading and unloading area is a small area. It can be conveniently watched without the aid of security cameras. There might be blind spots. This problem is minor and can be easily tackled.    The guard can simply walk a few steps from the guard post to take a look at them occasionally or as often as circumstances require. It defies common sense to have another guard to man the drop-bar during night time.  Furthermore if the guard post is solely for the benefit of the loading and unloading area, the guard post could have been re-positioned so that the whole area would be under the close, direct and constant watch of the guard. The set up of the guard post No. 5 at the material time was the same as the present set up as noticed in the site visit. The guard was to watch the loading and unloading area through security cameras.  The guard post can be re-positioned to have the full view of the area under its command.  Even without moving the guard post, there is no reason why the guard should be so positioned inside the post so that he has to turn his head to have a direct view of the loading and unloading area which allegedly is his only concern.

5.The front and direct view of the guard in guard post No. 5 is the traffic going up the road entering the estate. The guard can watch the traffic up the road directly and at the same time through the security cameras the happenings in the loading and unloading area. The set up as seen during the site visit simply suggests that the guard post No. 5 is monitoring the traffic entering the estate.  Mr. Wong denied this. I do not accept his evidence. I also find the other criticisms made of him by Mr. Lam justified.

6.The Applicant has introduced an alternative argument. Mr. Wong said there was security service provided by guards other than those on duty in guard post No. 5. The Applicant argued that if these services were to be taken into account, apportionment could be justified. This argument and the alleged facts to support it were something new in these proceedings and had never been raised or alluded to in the correspondence between the parties. Photographs were taken and produced showing the guard on duty and this guard was seen during site visit.  Mr. Lam contended it was something staged by the Applicant to win its argument. 

7.The Applicant always knows that it has to justify the apportionment as the Respondent has made its case in the clearest possible terms at the very early stage.  I would be totally surprised that it did not occur to Mr. Wong to rely on these facts at the trial or to refer to them at an earlier stage. I accept the version of the Respondent and find that evidence in respect of these guards on special duty unreliable. 

8.Nothing that I saw during the site visit and nothing reliable from the evidence of Mr. Wong enable me to change my ruling that I have given.

Contractor Maintenance

9.Mr. Wong attempted to justify the apportionment by putting forward a formula. This only begs the question as he could not justify the formula, not to mention the fact that the formula does not tally with the figures.

10.Mr. Wong gave evidence to the effect that residential block owners and car park owners rarely use the lifts. His evidence is not reliable as Mr. Lam has rightly pointed out. Further the rationale he suggested is something like apportioning the expenses according to actual use.  The lifts are intended for their benefit whether they use it or not is beside the point. Unless there is a rational and fair way to apportion the expenses, the expenses should be shared by all owners. I cannot see any justification in apportioning such expenses to the Respondent.  I still maintain the view that the apportionment is arbitrary and I am of the view that the expenses should be shared by all owners in these circumstances.

Sundry Expenses

11.For the first time the Applicant explained what this item represents. The large part of it is for payment of Government Rent and Rates in respect of car parking spaces owned by all owners of Tsui Chuk Garden.  There is no justification for the Applicant to require the Respondent to bear all this payments alone. It is only fair and within the terms of the DMC that all owners have to share the Government Rent and Rates.  A small part of this item relates to managing the 4 car parking spaces.  For the same reasons all owners should share the expenses of managing their own property. Especially, as pointed out by Mr. Lam, all owners can use at least some of the car parking spaces. As to balance of this item, Mr. Wong failed to justify it.

Remuneration to the Manager

12.After the trial, Mr. Wong put forward two formulas for apportionment, one after another.  The last formula is to apportion the remuneration according to the ratio which the management expenses attributable to the Respondent bears to the total expenses of Chuk Tsuk Garden. This formula appears to be reasonable.  However Mr. Wong is totally discredited in cross-examination as to the existence of such formula. I agree with Mr. Lam that if there is any formula, it would not have come out at such late stage. Further even applying this formula, we cannot arrive at the apportionment as recorded in the affirmation. I am driven to the conclusion that Mr. Wong has no idea how the apportionment arrived at.

Conclusion and Orders

13.I must point out that management committee in adopting the budget proposed by the management company should have at least some understanding of the underlying principles. None of the management committee members has been called to give evidence. I do not want to speculate on the reason. It suffices to say that the Applicant has failed again to prove its case at the review hearing.  The previous order do stand and there be an order nisi for costs in favour of the Respondent on High Court Scale with Certificate for counsel and that such costs be taxed if not agreed.  The costs order be made absolute in 6 weeks.

The Applicant: represented by Mr. Thomas Kwan instructed by M/S Herbert Tsoi & Partners

The Respondent: represented by Mr. Allen Lam instructed by M/S Ng, Lai & Chan