Darlingford Ltd and Others v. The Incorporated Owners of Evelyn Towers and Others

IN THE COURT OF APPEAL

No. 172 of 1986
(Civil)

BETWEEN

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Coram: Hon. Yang, Kempster & Clough, JJ.A.

Date of Hearing. 6th March 1987

Date of Judgment: 6th March 1987

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JUDGMENT

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Kempster, J.A.:

1. On 30th January 1986 the first defendants, the incorporated owners of Evelyn Towers, a development in Cloudview Road, North Point, held an extraordinary general meeting at which, purportedly pursuant to section 14(1) of the Multi-storey Buildings (Owners Incorporation) Ordinance, two resolutions were passed. They required the owners of flats in blocks J and K, on behalf of whom the plaintiffs later issued an originating summons in the High Court, to pay a monthly contribution of $945 and a deposit of $1,850 per flat towards management expenses. Owners of flats in the other blocks in the development were assessed at a monthly figure of $420 per flat. Section 14(1) reads:

Subject to this Ordinance, at a meeting of a corporation any resolution may be passed with respect to the control, management and administration of the common parts and any such resolution shall be binding on the management committee and all the owners.

Section 4(g) of the Deed of Mutual Covenant here, to which all the owners concerned were parties, dated 20th November 1975, as amended, requires deposits only of $240.

2. By their originating summons the plaintiffs sought a series of declarations to the general effect that they should be assessed for management expenses in accordance with their respective shares in the development or, alternatively, for the same contribution as other owners and be required to pay no more than $240 each by way of deposit. The summons was heard by Hooper J. in chambers on 3rd November and he gave judgment in the plaintiffs' favour holding that, like the owners of flats in the other blocks, the owners of flats in blocks J & K should pay $420 towards management expenses and only $240 by way of deposit per flat and. that the resolutions impugned were ultra vires. He necessarily found that the management committee could alter the assessment but the assessment had to be the same in relation to each flat in each of the blocks in the development. Against that judgment the defendants appeal and, by Notice, the plaintiffs advance further grounds why the judgment should be upheld and seek other declarations in the alternative.

3. I turn to section 21 of the Ordinance which reads:

(1) A management committee shall determine the amount to be contributed by the owners to the fund established and maintained.

and then to section 22:

"(1) The amount to be contributed by an owner towards the amount determined under section 21 shall be -

(a) fixed by the management committee in accordance with the deed of mutual covenant; and

(b) payable at such times as the management committee may determine.

(2) If there is no deed of mutual covenant, or if the deed of mutual covenant does not provide for the fixing of contributions, the amount to be contributed by an owner towards the amount determined under section 21 shall be fixed by the management committee in accordance with the respective shares of the owners.

4. The first difficulty in the way of Mr. Polson, who appears before us for the appellants, is that the resolutions in question were passed in an extraordinary general meeting of the corporation and not fixed by the management committee. As I construe the Ordinance until and unless a management committee, validly appointee pursuant to section 3, has passed the appropriate resolution nothing by way of contribution can be levied from an owner in a development. This is an aspect to the matter that was not dwelt upon by the judge below who was concerned to construe the terms of section 22(1)(a) in the context of the deed of Mutul Covenant. Section 4(h) of which reads as follows:

Each owner shall pay to the Manager on account of his share of the said costs charges and expenses the sum of $120.00 per calendar month for each his flat payable monthly in advance. If the total contributions payable to the Manager by the owners of the said Building as aforesaid shall be insufficient to cover all or any of the said costs charges and expenses then such owners shall make further contributions towards such expenses in the shares as above provided.

The unit for payment is, in my view, a flat in the development and it is a necessary inference not merely that the initial fee of $120 is payable in respect of each flat but also that, in so far as expenses exceed the aggregate sum collected from all the members, such excess must be apportioned between all the flats in equal shares regardless of the blocks in which they are situated. The trial judge so found and, despite Mr. Polson's gallant attempt to establish really a very wide discretion pursuant to section 14(1), I feel bound to uphold him both on the point of construction and because a resolution at an extraordinary general meeting of itself imposes no obligation on any of the owners. The judgment of Hooper, J. was plainly right and the appeal should be dismissed.

Yang, J.A.:

5. I agree.

Clough, J.A.

6. I also agree and have nothing to add.

Ian Ho Polson (Anthony Y.L. Au & Co.) for Defendants/Appellants

Anthony F. Neoh (Chow & Hui Bon Hoa) for Plaintiffs/Respondents