Yeung Chung Lau v. Incorporated Owners of Century Industrial Centre and Others

DCCJ 381/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 381 OF 2006

BETWEEN

Coram: Deputy District Judge Anthony Chow in Chamberss (open to public)

Date of Hearing: 28^th August 2006

Date of Handing Down Decision: 30^th August 2006

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DECISION

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1.This is an application for leave for appeal, under Order 58 rule 2 of the Rules of District Court, against my interim order granted on 24/7/2006.

2.In his Draft Notice of Appeal, Mr. Chan, for the 1^st Defendant listed 9 grounds of appeal. These were further classified into 4 categories: First, I was wrong in my interpretation of clause 15 of the Deed of Mutual Convenant (“DMC”) and the applicable law [grounds of appeal no. 1, 2, 5 and 6]; second, I erred in my interpretation of clause 15 of the DMC or clause 15 should be deemed void and of no effect by virtue of s. 34J(2) of the Building Management Ordinance (“BMO”) [grounds of appeal no. 3 & 4]; third, the plaintiff had agreed to be bounded by the result of the owners’ meeting dated 6/5/2006 and is estopped from proceeding with the Plaintiff’s Inter-Parte Summons [grounds of appeal no. 7 & 8]; and fourth, this matter had been decided by His Honour Judge Yung in his order dated 11/4/2006 in LDBM 340/2005, res judicata applies [ground of appeal no. 9].

The Law:

3.Mr. Chan, cited Leong JA’s (as he then was) judgment in Ma Bik Yung v. Ko Chuen, HCMP 403/1999 (citing and approving Lord Woolf’s judgment in Smith v. Cosworth Casting Processes Ltd [1997] 1 WLR 1538) and submitted the relevant law is as follows:

“1. The Court will only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal. This test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case. Why however this court has decided to adopt the former phrase is because the use of the word “realistic’ makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.

2. The court can grant the application even if it is not so satisfied. There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success. For example, the issue may be one of which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raised an issue where the law requires clarifying.”

4.Mr. Chu on the other hand, stated that my order dated 24/7/2006, being an interim order, the applicable test is the one expounded by Lord Diplock L.J. in Hadmor Production Ltd. and Others v. Hamilton and Anor. [1982] 2 W.L.R. 322:

“An interlocutory injunction is a discretionary relief and the discretion whether or not to grant it is vested in the High Court judge by whom the application for it is heard. Upon an appeal from the judge’s grant or refusal or an interlocutory injunction the function of an appellate court would have exercised the discretion differently. The function of the appellate court is initially one of review only. It may set aside the judge’s exercise of his discretion on the grounds that it was based upon misunderstanding of the law or of the evidence before him or upon an inference that particular facts existed or did not exist, which, although it was one that might legitimately have been drawn upon the evidence that was before the judge, can be demonstrated to be wrong by further evidence that has become available by the time of the appeal; or upon the ground that there has been a change of circumstances after the judge made his order that would have justified his acceding to an application to vary it.”

5.The 2 approaches are not incompatible but only described the 2 steps appellate process. When deciding whether to grant leave to appeal, the correct approach is clearly the Smith v. Cosworth 2 steps considerations and in the appeal proper, the test whether to disturb the original decision is the Hadmor principles. As I am only dealing with an application for leave to appeal, I only have to consider Smith v. Cosworth 2 steps considerations.

Realistic prospect of succeeding on the appeal:

Grounds of appeal no. 1, 2, 5 & 6.

6.I have carefully considered all of the relevant law before I made my decision and nothing Mr. Chan said had convince me otherwise.

Grounds of appeal no. 3 & 4.

7.Clause 15 of the DMC is in language that is clear and unambiguous. It allowed no other interpretation than what I read into it.

So far as s. 34J(2) of the BMO is concerned, the section reads:

“No provision in a deed of mutual covenant (whether such provision is of procedural nature or otherwise) shall operate to prevent any business relating to the management of a building being conducted at any meeting by any owner or any person management the building and any such provision shall be void and of no effect.”

8.In paragraph 33 of my judgment, I held: “Clearly, the 6/5/2006 resolution had nothing to do with: ‘the operation, servicing, maintenance, repairing, rebuilding, insurance or management of the said premises and Building’ nor ‘the control, management and administration of the common parts or the renovation, improvement or decoration of those parts’ and the resolution was accordingly invalid.”

9.In other words, there was nothing in clause 15 that “operate to prevent any business relating to the management of a building”, but it was the 6/5/2006 resolution that had nothing to do with the “operate to prevent any business relating to the management of a building”.

Grounds of appeal no. 7 & 8.

10.The basis of Mr. Chan’s argument is, in a series of correspondences between the parties’ solicitors, the plaintiff had agreed to be bounded by the decision of the 6/5/2006 owner’s meeting and is now estopped to argue otherwise.

11.A review of these correspondences however did not reveal any words to that effect.

12.In the letter dated 12/4/2006 [page 280 of the agreed bundle] from Messrs. Michael Pang & Co., solicitors for Ka Hang Decoration Company Limited (the applicant in LDBM 340/2005 and not the plaintiff herein), to Messrs. S.K. Lam, Alfred Chan & Co. solicitors for the defendants, the plaintiff’s solicitors merely stated:

“And the learned Judge has ruled that, inter alia, the owners’ meeting has to be held on 6^th May 2006 at 3:00 p.m. to discuss and resolve the said matter.

In this regard, we believe the forthcoming hearing of the Plaintiff’s Inter-Partes Summons herein fixed for 24^th April 2006 at 2:30 p.m. has to be adjourned pending the outcome of the said owners’ meeting on the matter.”

There was nothing that stated the plaintiff would obey the outcome of the owners’ meeting.

13.In the letter dated 4/5/2006 from Messrs. Michael Pang & Co., the applicant’s solicitor merely required the applicant’s suggested topic be discussed and voted first.

14.In the letter dated 26/5/2006, Messrs. S.K. Lam, Alfred Chan & Co. stated they strongly believe the injunction order made by H.H. Judge Chow on 23/1/2006 served no purpose and invited the discharge of the same by consent. The plaintiff clearly disagreed and therefore no consent was given.

15.From the aforesaid, it is clear that the plaintiff had never agreed to be bounded by the decision of the owners’ meeting on 6/5/2006 and the estopple argument is bound to fail.

Ground of appeal no.  9.

16.Mr. Chan’s argument is that H.H. Judge Yung in his order dated 11/4/2006, have already decided the interim injunction ordered by H.H. Judge Chow was to be resolved by the Owners’ Meeting to be convened on 6/5/2006 and I was not entitled to “reconsider” this matter.

17.A reading of Judge Yung’s order clearly shows there is no substance to this argument. Judge Yung’s order was simply:

“1. Injunction Order: The Respondent to convene the Owners’ Meeting to be held on 6^th May 2006 at 3: p.m.; and

2. The Respondent do pay 50% costs to Applicant on High Court Scale with Certificate for Counsel to be taxed if not agreed.”

18.Mr. Chan argued that the words “Injunction Order” in paragraph 1 of Judge Yung’s order referred to Judge Chow’s interim injunction order.

In The Blue Book of Grammar and Punctuation, 2006 Jane Straus, MILL VALLEY, CA USA, the learned author stated the use of colons as follows:

19.Mr. Chan’s reading of words “Injunction Order:” in paragraph 1 of Judge Yung’s order does not comply with any of the proper use of the colon mark. Proper use of punctuation in the English language can only meant the term “Injunction Order” when followed by a colon, only referred to the order that came immediately after it.

20.I have also carefully read the transcript of the proceedings in the Land’s Tribunal and there was nothing that convinced me Judge Yung made a ruling that Judge Chow’s interim injunction order was to be decided in the Owners’ Meeting to be held on 6^th May 2006.

Any other reasons to grant leave:

21.Now that I have considered all of the grounds of appeal and can see no realistic prospect of succeeding on any, I must further consider if I should grant leave to appeal on other grounds. Mr. Chan argued I should grant leave to appeal because “the points of law in relation to grounds 3, 4 and 9 should in the public interest be examined by the Court of Appeal so that guidance may be given on these questions of general and public importance”.

22.As already stated above, Mr. Chan was plainly wrong, ground no. 9 is clearly a non-starter. Grounds no. 4 dealing with s. 34J(2) of the BMO is not relevant because my ruling was the resolution passed in the owners’ meeting dated 6/5/2006 had nothing to do with the “business relating to the management of a building”.

23.Finally, my ruling dealt with only those resolutions passed in the owners’ meeting on 6/5/2006 vis-à-vis the specific restrictions contained in the DMC of this building. There is no question of general and public interest involved.

24.Accordingly, leave to appeal is refused. Costs of this application be to the plaintiff, with certificate for counsel, to be taxed if not agreed.

Mr. George Chu and Mr. Lawrence Cheung, instructed by M/s Michael Pang & Co., for the Plaintiff.

Mr. Samuel K.Y. Chan, instructed by M/s S.K. Lam, Alfred Chan & Co., for the 1^st Defendant.