Li Sang Edward v. Tang Wing Ming Jim and Another
Read the full judgment text of LDBM 144/2008 on BabelCite. This Lands Tribunal judgment was delivered on 23 February 2009.
1. Li, the Applicant, is the owner of one of the residential units in Sun Yuen Long Centre, 8 Long Yat Road, Yuen Long, New Territories ( the Centre ). Tang and Li are respectively the Chairman and the Vice-Chairman of the Incorporated Owners of the Centre, the 2 nd Respondent ( the IO ). This application relates to 2 sets of regulations resolved in the management committee meeting of the IO on 19 May 2008. Li seeks declaration from this Tribunal that these regulations are invalid. Tang is s
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LDBM 144/2008 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BUILDING MANAGEMENT APPLICATION NO. 144 OF 2008 ____________ BETWEEN
____________ Coram: His Hon Judge Leung, Presiding Officer Date of hearing: 10; 18 December 2008 Date of judgment: 23 February 2009 JUDGMENT 1.Li, the Applicant, is the owner of one of the residential units in Sun Yuen Long Centre, 8 Long Yat Road, Yuen Long, New Territories (the Centre). Tang and Li are respectively the Chairman and the Vice-Chairman of the Incorporated Owners of the Centre, the 2nd Respondent (the IO). This application relates to 2 sets of regulations resolved in the management committee meeting of the IO on 19 May 2008. Li seeks declaration from this Tribunal that these regulations are invalid. Tang is sued personally as 1st Respondent. THE BACKGROUND 2.Li is a solicitor. Prior to the IO’s incorporation, both Tang and Li have also participated in the then owners’ committee of the Centre. The IO was formed in January 2008. At the material time, the IO was in its early stage of operation. The 19 May 2008 meeting was only the second management committee meeting of the IO. 3.The 2 sets of regulations resolved in the 19 May 2008 meeting were:
4.In the meeting, the resolutions for these 2 sets of regulations were passed by an overwhelming majority. Li was the only dissenting member. 5.According to the Notice of Application, there are 3 major issues:
6.Regarding the last issue, the only allegation is that Tang ignored Li’s suggestions and put the relevant resolutions to vote in the 19 May 2008 meeting. But there is in fact no claim and no relief sought against Tang personally in the Notice of Application. 7.Both Li and Tang gave evidence. Man, the Secretary of the management committee, has filed his statement that was basically similar to that of Tang. Man was eventually not called and his statement is accordingly disregarded. THE REGULATIONS 8.The terms of the OR are as follows:
9.The terms of the ERR are as follows:
10.Parties did not provide certified translations of the 2 sets of regulations at the trial. I do not mean to provide such translations save that I will refer to the meaning of the relevant parts of these regulations in the discussion below. 11.It is important to know what happened in the 19 May 2008 meeting. Besides the minutes of the meeting, a transcript of part of the audio recording of the proceeding in that meeting was also produced. THE OR 12.Li contends that paragraphs 3, 4 and 5 of the OR are invalid for the grounds stated in the Notice of Application. Paragraph 3 13.This paragraph stipulates that sending or forwarding the IO’s internal documents to unqualified persons (recipients) without the authorisation of the Chairman amounts to theft. A person is unqualified if his or her name is not amongst those in the IO’s email account [email protected] or is listed as restricted recipients. The IO has the authority to terminate sending or sending selectively email to anyone violating this paragraph. The email address of such person shall also be listed as a restricted recipient forthwith. However, such person shall still receive the documents in the conventional way, namely, through the letterbox. 14.The ground of complaint is that the reference to “theft” is not in line with the legal definition of “theft” in the Theft Ordinance, Cap.210. In my view, whether the IO is right or wrong in its understanding of the definition of theft is immaterial. It is obvious that this paragraph is nothing more than a statement of the IO’s position towards unauthorised divulging of internal documents of the IO. Notwithstanding the use of the word “theft”, such statement cannot have any legal consequence in terms of whether the person violating the paragraph is liable for or guilty of theft. This is simply not for the IO to say. 15.In court, Mr Lee for Li added that the labelling of the person said to have violated the paragraph might expose the IO to action for defamation. Such labelling would also lead to resentment among the members of the management committee. In fact these are not grounds of complaint stated in the Notice of Application. But in any event, I do not see that this paragraph’s operation must entail the publication of the IO’s statement that the person violating the paragraph has committed theft. The suggestion of potential resentment among the members of the management committee is also not shared by the members’ actual overwhelming support for these regulations. 16.The other ground of complaint about this paragraph is that this paragraph divides the management committee members into 2 classes being entitled to different means of service of documents without justifiable ground. Mr Lee for Li added in court that this amounted to additional authority to restrict the circulation or transfer of documents. 17.Properly construed, nothing in this paragraph suggests that either means of service of documents is mandatory and that the members of the management committee have no right of preference. A member who has an email account is not bound to accept this means of service. Termination or restriction on the service of documents by email comes into play only upon violation. But nothing in this paragraph deprives the person subject to such accusation of his right to defend. More importantly, the right to receive the same document is never compromised. 18.Lastly, Mr Lee also submitted in court that there are no clear criteria as to what belong to internal documents. Again this is not a ground of complaint stated in the application. But in any event, I fail to see how the members of the management committee would have understood them to mean anything other than documents to be circulated among them. 19.My conclusion is that this paragraph is not objectionable as alleged. Paragraph 4 20.This paragraph relates to posting up of documents such as notices and letters. Such notices and letters that the Chairman and the Secretary agree to post up will first be sent to the members of the management committee for comment. Members have 48 hours to raise objection or to propose amendment. Objection or proposal to amend requires the signified endorsement of more than half of the membership of the committee to be effective. Otherwise, the management office shall post up the notices and letters on the day following the 48-hour period. 21.Li first complains that this paragraph gives the Chairman and the Secretary veto right on any notice or letter to be posted up by the IO. I do not agree. Nothing in this paragraph prevents the members of the management committee besides the Chairman and the Secretary to propose any notice or letter to be posted up. If the members do so, nothing in this paragraph provides that the Chairman or the Secretary may veto any consensus among the members in respect of whether or not to post up a notice or letter. 22.Li also complains that 48 hours are insufficient time for the members of the management committee to comment on the proposed posting up of notices and letters. But by resolving in favour of this set of regulations, the overwhelming majority of the management committee membership clearly held a different view from Li’s as to the reasonableness of such consultation time. It should also be borne in mind that management of the building is carried out on a daily basis whereas management committee meeting is not convened and held in the like frequency. There are bound to be occasions when it is necessary to attend to matters relating to management expediently, for instance, by way of posting up notices for the benefit or information of the owners. 23.Li also complains that this paragraph holds all members of the management committee liable without the right to abstain from voting. I do not agree this has anything to do with the members’ personal liability as such. But this complaint does reflect where the problem with this effectively negative voting system lies. While nothing in this paragraph takes away the right of any member of the management committee to abstain or even not to respond at all, it effectively equates such stance to no objection and thus agreement to what the Chairman and the Secretary proposes. Mr Lee for Li also gave an example of that in his submissions. 24.In my view, this fundamentally differs from how matters should be resolved by a majority of the members present at the management committee meeting under paragraph 10 of Schedule 2 of the Ordinance. For this reason, I find that this paragraph may not stand. Paragraph 5 25.This paragraph provides that in the absence of contrary view or objection held by over half of the membership of the management committee, any email of the IO through its email account mentioned above or any other email account approved by the IO represents the collective view of the IO. 26.Regarding this paragraph, Li raises complaint similar to that in respect of paragraph 4 of the OR above. I do not repeat my discussion above. Li also complains that this paragraph defeats the spirit of sections 8, 9 and 10 of Schedule 2 of the Ordinance regarding how a management committee meeting is convened and held. Though assembling the majority view of the management committee does not necessarily take the form of a resolution, I am of the view that this paragraph still suffers from the same problem as in the negative voting system under paragraph 4 of the OR. THE ERR 27.Li argues that the ERR in their entirety are invalid. Though the OR are again referred to in the Notice of Application (paragraph 15), parties have common understanding that Li is referring to the ERR. 28.Essentially, the ERR are in the following terms:
29.Undoubtedly, the ERR provide a mechanism whereby the management committee may pass resolutions by way of email rather than in meetings. Mr Chan for Tang and the IO acknowledged that this makes the ERR controversial. Mr Chan also fairly acknowledged that the regulations might not comply with paragraph 10(2) of Schedule 2 of the Ordinance. The paragraph provides:
30.However Mr Chan submitted that there is no definition of “meeting” in the Ordinance. He submitted that the ERR tally with the spirit of statue because though there may be no meeting of faces, there is meeting of minds. He invited me to accept this as speedy communication and decision making of people facilitated by technology nowadays. 31.Considering the minutes and the transcript of the discussion of these regulations in the 19 May 2008 meeting, I do not doubt the good intention of the management committee for greater efficiency. I commend them for the initiative. Unfortunately, it is clear to me that the ERR are contradictory to the statue. 32.Section 34K(b) of the Ordinance provides that the members of the management committee shall in relation to their functions, powers and duties be subject to Schedule 2, even if that Schedule is inconsistent with the deed of mutual covenant. Paragraph 8(2AA) provides that the management committee meeting needs to take place on the date, time and place as specified in the notice of meeting. The notice of meeting shall also contain any resolution that is to be proposed at the meeting. According to paragraph 8(2A), such notice may be given in one of those 3 ways stipulated. Notice by email has no place among them. 33.However Mr Chan submitted that the management committee had in mind the use of this mechanism to resolve only minor matters. Again, from the minutes and the transcript of the 19 May 2008 meeting, I do see the clarification of such intention. However, the ERR, as they are worded, do not distinguish the matters that can or cannot be resolved by email without a meeting. I can only foresee potential dispute as to whether certain matters are minor or not so as to fall within the ERR. 34.As fall back, Mr Chan submitted that paragraph 4 of the ERR provides the safeguard against abuse in that if no majority view can be attained by members before the following management committee meeting, all views collected up to that point would be treated as invalid and the proposed resolution would be listed in the agenda of the management committee meeting. I do not see how this helps so long as a resolution may be proposed, notified and resolved by email pursuant to paragraph 3(a) of the ERR without a meeting contemplated by the Ordinance. 35.I find that the ERR are contrary to Schedule 2 of the Ordinance. DECLARATION 36.Mr Chan submitted that the Tribunal in exercising its discretion to grant a declaratory relief must have regard to all the relevant circumstances of the case. He referred to the case of 曾婉玲and兆隆苑業主立案法團, LDBM 199/2001, 18 September 2001 where the Tribunal spelt out the considerations peculiar to the context of building management. I embrace the principles discussed there. But the circumstances of that case and the present one are different. 37.The deciding factor for the Tribunal’s decision in the case of 曾婉玲was that the stance of the applicant in that case (as to the deficiency in the notice for the meeting in question) had already been vindicated by the amendment of the notice of opposition whereby the respondent incorporated owners indicated that they would not contest the applicant’s allegation. The chairman there even expressed regret about the mishap and thanked the applicant for her guidance on the matter. As such, the original issue in the action had been overtaken by subsequent events. In the best interest of the owners as a whole and considering that the declaratory relief sought would serve no practical value or utility, the Tribunal refused to grant it. 38.Mr Chan submitted that it was due to Li’s absolute refusal to elaborate his statement in the 19 May 2008 meeting that deprived the members of the management committee of the chance of considering and discussing the objection before deciding. That might be true. But it is also true that since the commencement of this application until today, and notwithstanding the resolution of the management committee dated 28 June 2008 to stay the regulations, the stance of the IO as at the date of trial remains that the regulations are valid. It is unlike the situation where the IO concedes that Li is right; and that had Li done what the IO said he should have done, the IO would have conceded even earlier so that this application would have been prevented. 39.In the circumstances, it is necessary for the Tribunal to intervene and to grant a declaration as to the validity of the contentious parts of these regulations. CLAIM AGAINST TANG 40.As mentioned at the beginning, there is actually no claim or order sought against Tang personally in the Notice of Application. The claim against Tang personally does not have any pleaded footing. 41.In any event, the resolutions in question were passed by an overwhelming majority of the management committee. Li was apparently the only dissenting one. Section 29A of the Ordinance provides:
42.According to the Notice of Application, the only allegation against Tang is that Tang allegedly ignored Li’s suggestion in the 19 May 2008 meeting and put the resolutions to pass the 2 sets of regulations to vote. Was it in fact the case and does it deprive Tang of the section 29A protection? Putting the resolutions to vote 43.According to the minutes and the transcript of the 19 May 2008 meeting, there was extensive discussion among Tang, the Secretary, Man, and the District Councillor, Wong, of various aspects of the OR. Amendments to the wordings were also made. Prior to the resolution was put to vote, the following conversation took place:
44.Briefly, Li read out his statement and asked the same to be put on record in the minutes of the meeting. Essentially Li stated that many aspects of the OR were contrary to the Ordinance. He suggested to adjourning the voting until after the management committee has obtained legal advice. Otherwise, Tang and the management committee members would be personally liable in case of any litigation. According to Li in court, the litigation that he referred to would include legal action that he might commence. 45.Li made clear that this was his statement and not a motion. When asked by Wong, the District Councillor, to elaborate which aspects of the OR might be contrary to the Ordinance, Li said that it would be for the management committee to seek legal advice and he could not and did not intend to provide any legal advice. Wong apparently disagreed with Li’s approach and resented Li’s making use of personal liability of the members as a threat to hinder free exchange of views during the meeting. At the end, Tang put the proposed resolution to vote. 46.In the meeting, there was also extensive discussion of various aspects of the ERR among Tang, Man and Wong prior to the proposed resolution to pass the regulations was put to vote,. Again, just before the resolution was put to vote, Li made an almost identical statement as mentioned above regarding the ERR and asked the same to be put on record:
47.According to Li in court, his statements in the meeting were sufficient that Tang and the other members of the management committee should have followed. 48.In my view, Li’s making of such a statement but despite request, absolutely refusing to explain the basis of his concern defies understanding. In court, Li explained that he was not familiar with the relevant part of the Ordinance. But this hardly explains his refusal to even elaborate which aspects of the proposed regulations he then had in mind that caused him to make such a statement. Blurring a fair request for elaboration somehow with a request for legal advice, as Li did, was in my view unexpected from Li with his background. 49.Li seemed to suggest that Tang discriminated against his views or suggestions. In my view, this is not a fair suggestion. According to the minutes of the same meeting (whether it is the version of the IO or Li), the management committee also discussed the issue of the controversial electricity installation, the so-called WR2, inspection work. During the discussion, Li also queried that the tender exercise was not carried out in accordance with the Ordinance. Unlike his approach in respect of the proposed resolutions to pass the OR and the ERR, Li actually explained his views with reference to the requirements under the Code of Practice on the procurement of supplies, goods and services (under section 20A of the Ordinance). Tang then acknowledged his deficiency in understanding the provisions of the Code of Practice and accepted that the matter needed to be followed up in accordance with Li’s explanation. 50.In the meeting, it was also not Tang but Wong, the District Councillor, who engaged in the debate with Li about his statement. Tang cared to ask if Li was actually moving to adjourn the voting on the proposed resolution. Obviously he heard no one in the meeting speak in support of Li. Only upon that did Tang put the proposed resolutions to vote. How the members would vote, as Mr Chan put it, was up to the members, not Tang. In court, Li also confirmed that Tang did nothing to prevent the other members to express their views in the meeting. 51.In court, Li also suggested since there were no such regulations before, there was no reason for the urgency of passing them unless they were passed for some other purposes or motives. I am not satisfied that the so-called ulterior motive on the part of Tang or any member is substantiated by the evidence and I reject the suggestion. 52.In the circumstances, I am not satisfied that the fact that Li’s suggestion at the meeting was not followed amounted to default on the part of Tang or any member of the management committee. I do not find it fair to accuse Tang of pressing to put the proposed resolutions to pass the regulations to vote. I am not satisfied that Tang acted in an unreasonable manner or in lack of good faith in proceeding with the voting on the proposed resolutions. Other allegations 53.By his statement, Li made series of allegations against Tang as if all the matters of management that he complained about were the fault and personal liability of Tang. Besides the issue of Tang putting the resolutions to vote in the 19 May 2008 meeting, Li also complained about the following matters against Tang:
54.In his submissions, Mr Lee for Li mainly dealt with (1) and (5) above. To begin with, they were not mentioned in the Notice of Application at all. These matters are also extraneous to the passing of the resolutions in the 19 May 2008 meeting. They are strictly irrelevant and do not call for any finding. 55.Even if I were to consider these allegations, I heard Tang’s evidence and explanations in respect of these allegations and Mr Chan’s submissions in the same regard, which I accept. I am not satisfied on the evidence relating to these other complaints that Tang has acted in an unreasonable manner or in lack of good faith so as to warrant the finding of liability against him personally. COSTS 56.I am satisfied a declaration ought to be granted in respect of the contentious parts of the regulations. Though these regulations were “stayed” by the management committee subsequent to the 19 May 2008 meeting, the stance of the IO remains in opposition of Li’s stance in this application. The documents also reveal that the IO has refused to resolve the dispute by way of mediation. Now Li has succeeded in substantiating his stance in respect of most of the contentious parts of the regulations. I do not see any reason why Li should not have substantial part of his costs of this application. The application against Tang personally must fail and be dismissed with costs. ORDER 57.I order as follows:
Mr Lee Yiu Chung instructed by Messrs Chin & Associates for the Applicant Mr David Chan instructed by Messrs Wong Kwan & Co for the 1st and the 2nd Respondent |
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