Harvest Top Development Ltd v. The Incorporated Owners of Harbour View Garden and Another
Read the full judgment text of LDBM 145/2008 on BabelCite. This Lands Tribunal judgment.
1. The Applicant, as the owner of 72 car parking spaces, seeks to challenge the validity of the 2008 Management Budget; to overturn the rate of the monthly management fee levied as early as from February 2002 onwards; to seek for the return of the alleged overpaid amount from February 2002 onwards to March 2007; and to challenge the validity of the introduction of security measures with effect from 2007.
Cites 3 cases
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LDBM 145/2008 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION Building Management Application No. 145 of 2008 _________________ BETWEEN
____________________ J U D G M E N T A. Background& Claim 1.The Applicant, as the owner of 72 car parking spaces, seeks to challenge the validity of the 2008 Management Budget; to overturn the rate of the monthly management fee levied as early as from February 2002 onwards; to seek for the return of the alleged overpaid amount from February 2002 onwards to March 2007; and to challenge the validity of the introduction of security measures with effect from 2007. 2.Since about 1992, the Applicant has been and still is the registered owner of 72 car parking spaces (“the Car Parking Spaces”)of Harbour View Garden, Kennedy Town, Hong Kong (“the Building”). 144 out of 11,618 undivided shares are allocated to the car parking space for the purpose of sharing the contribution towards the management expenses. 3.The 1st Respondent is the Incorporated Owners of the Building (“IO”). The 2nd Respondent became the manager of the Building within the meaning of section 34D of the Building Management Ordinance, Cap. 344 (“the BMO”) since February 2002. 4.The Applicant has been paying the monthly management fee at the rate of $15,000 from 1998 until March 2007. The Applicant paid $3,000 for the management fee for the month of April 2007 and stopped paying the management fee after April 2007 on the ground that the said sum of management fee at the monthly rate of $15,000 was not calculated in accordance with the DMC. The Applicant, as the sole owner of the Car Parking Spaces unfairly bears a greater proportion of the share of the management expenses. 5.As a result, by the Amended Notice of Application, the Applicant claims against the 1st and 2nd Respondents for various reliefs:
6.Prayer (a) was withdrawn at the outset of the trial with the question of costs that requires adjudication. In respect of prayer (b), it must be noted that without clarification, it is unknown which period did the Applicant seek for a determination. There is a subsidiary question as to whether the Tribunal shall have the jurisdiction to decide the appropriate amount or to make a determination as to whether the rate levied was in accordance with DMC and/or the Building Management Ordinance (“BMO”). On the question of the reasonable amount of the management fee payable, the Parties seem to have focused on the validity of 2008 Management Budget. In respect of prayer (c), although the Applicant contended that the original amount of HK$15,000 was excessive, the Applicant is unclear as towhat is the reasonable amount that the Applicant should pay, let alone the amount that the Applicant sought to recover on alleged overpayment. In respect of prayer (d), it turns out that there was no new route being created, it was just an introduction of a security proximity card or smart card system in early 2007 that the Applicant complained of its inconvenience caused to the hourly car park users. Such inconvenience caused them to walk along the roadway instead of using the smart card to go in and out of the car park. B. Opposition/Defence 7.The 1st Respondent contended that the management budget for the year of 2008 was prepared within the framework of the DMC. It was endorsed and approved in the owners’ meeting held on 15th December 2007. The approved amount in relation to the Applicant’s share is $21,936 for the year of 2008. But the 1st Respondent did not enforce the approved amount and continued to levy the original amount of $15,000 pending the determination of this case. In relation to the failure of the 2nd Respondent as the manager to prepare the management budget for the years before 2007 in accordance with the mandatory terms in Schedule 7, paragraph 1(2) of the BMO, the 1st Respondent relies on the management expenses actually incurred for previous years to justify the rate of HK$15,000 levied from 1998 to 2007. The rate based on “previous year of management expense for next year management budget” is supported by paragraph 1(3) of the same Schedule (“Sch.7, 1(3)”) which provides that:-
8.The 1st Respondent also contended that the Applicant was estopped from making a claim for the alleged overpayment on the ground that the Applicant continued to pay the management fee since 1998 until they purported to challenge the apportionment of expenses on or about 29th December 2006. 9.In respect of the prayer (a), the 1st Respondent contended that what is prayed in (a) does not fall within Schedule 6. Even if it does, prayer (a) is not made in good faith and/or for a proper purpose as required under Schedule 6. Further, the Applicant did not make any prior request before lodging this claim. 10.In relation to the smart card system, it was introduced for better security. The 1st Respondent relies on sections III(C), V(D), VI(A)(B) of the DMC regarding the power and duties in respect of security measures. There were reported thefts before the new measure was implemented and there was no such report after its implementation so far. 11.The 2nd Respondent, as the manager, made similar contentions. It also replied to each and every attack mounted by the Applicant on the calculation and apportionment of the following items of expenses: (1) repair and maintenance; (2) salaries of security guards; (3) cleaning charges; (4) electricity charges on fluorescent lights; (5) fire equipment (repair and maintenance); (6) lift maintenance. C. Issues 12.Counsel for the Applicant once confirmed the following issues after this Tribunal asked her to clarify the unclear parts of the Applicant’s pleading as identified above,
13.The above statement of issues could have resolved the problems arose out of the obscure parts of the Applicant’s pleadings. Unfortunately, having confirmed the statement of issues by making handwritten comments on it as marked as italic above, Counsel for the Applicant sought to resile from it on day 3 of the trial without explicable reasons. This would result in returning to the original state of obscurity, prolonging the trial, and it is not conducive to promote a sense of reasonable proportion and procedural economy. The consequences brought about by such change of front were against the underlying objectives under O.1A, r.1. After all, it is the Court’s duty to manage cases actively, to identify the issues at an early stage and to decide promptly which issues need full investigation and the order in which the issues are to be resolved under O.1A, r.4. All parties to any proceedings and their legal representatives shall assist the Court to further the underlying objectives of these rules under O.1A, r.3. As a result, to further the underlying objectives, I refused leave to the Applicant to withdraw from the statement of issues. Further, before the trial, I have directed that O.25 applies (with milestones dates concept) and the parties to file the listing questionnaires (under PD 5.2 including the duty to prepare a list of issues to be tried). The said statement of issues is treated as if the Applicant’s list of issues prepared under O.25, PD 5.2 and paragraph A18 of the listing questionnaires. It is binding on the Applicant. The detailed reasons can be found in my judgment dated 12th November 2010. D. How to determine the amount of management fees 14.Section VI (D), paragraphs 1 and 2 of the DMC provide that:-
15. Section VI (D), paragraph 4 of the DMC provides that:-
17.The above mechanisms in determining the share of management fee are comprehensive and well balanced. On one hand, it confers the greatest power and flexibility to the Manager to determine the suitable amount by using the words such as “whose decision is conclusive” or “in its absolute discretion”. On the other hand, the said powers are made subject to “save for manifest error” or “subject to the review of the Owners’ Committee.” Further, it also provides that, if on the strict application of the formula under the DMC,the budget may result in some owners unfairly and inequitably paying higher or lesser contributions, the Manager can in its absolute discretion to modify any annual Management Budget. 18.The Applicant’s main complaint is that on the strict application of VI (D), paragraph 7(d), as the sole owner of the Car Parking Spaces, is required to pay more than reasonable. Paragraph 7(d) provides that: “Each Owner (Car Parking Space) in addition to the amount payable under (a), (b) and (c) above shall in respect of each Car Parking Space of which he is the Owner contribute to the amount assessed under Part D”. The Applicant complained that, under such provisions, the sole owner of the Car Parking Spaces is required to pay the expenditure in Part A (whole building portion), some of Part B (residential portion) and Part C (commercial portion) and Part D (car parking portion). The Applicant says it is unfair and inequitable. The Applicant submitted that it should only share the expenditure which are pertinent or incidental to the upkeep or use of the Car Parking Spaces, namely, Part D, despite the existence of Paragraph 7(d). In respect of Part A expenses, the apportionment should adhere to the management shares allocated under the 3rd Schedule of the DMC. The Respondents’ position is that had the apportionment been decided merely by reference to management shares, the Applicant would have been unfairly paying less (just 1.2%, i.e about $3,042 in total or $43 per car parking space). However, had the apportionment been decided merely under VI (D), paragraph 7(d), the Applicant would have been unfairly paying more. Hence, the Respondents, in preparing the 2008 Management Budget, seem to focus on the percentage of the resources allocated or distributed to Part D with fairness in mind. At this juncture, it seems that the parties did not have great divergence because they both seemed to agree to use this concept: “apportionment of expenses based on resources allocated to various part of the Building.” What happened is that when how much and on what percentage should be allocated to the car parking spaces, they had a head on collision and questions of reasonableness of certain items or question of belief arise. 19.On the questions of how much and what percentage should be allocated to the car parking space, it goes back to the question of whether what the Respondents have done regarding apportionment is permitted by DMC and/or BMO. The subsidiary questions arising out of these issues are: (i) whether there is manifest error in calculating the respective expenditure,say in relation to the 2008 Management Budget under Section VI (D), paragraph 4 of the DMC; (ii) whether the 2008 Management Budget took into account the principles under Section VI (D), paragraph 7 of the DMC; (iii) whether 2008 Management Budget resulted in the Applicant unfairly or inequitably paying higher contributions, if so, whether the Applicant failed to exercise its absolute discretion to modify the 2008 Management Budget. The focus is whether 2008 Management Budget resulted in the Applicant paying higher contributions, if the answer is no, the challenge on its validity shall fail. E. Unfairly or inequitably paying higher contributions? 20.The Applicant called three witnesses to testify, Mr. Chan Tai Ken (“AW1”), Mr. Au Wai Keung (“AW2”) and Mr. Wong Wing On (“AW3”). AW1 testified on 2 issues, namely, how and why he perceived the apportionment of expenses to the Car Parking Spaces was unfair and unreasonable. He also testified on how inconvenience it was caused to car park tenants after the introduction of smart card system. AW2 is an accountant. He testified on whether the expenses allocated to Part D were supported by contracts, invoices and payment. AW3 testified that an independent electricity meter could be installed in the Car Parking Spaces to avoid dispute on apportionment. The 1st Respondent called 1 witness, Mr. Yuen Shek Fai (“Yuen”). The 2nd Respondent called two witnesses, Mr. Cheng Kam Hung (“Cheng”) and Lau Ping Kwai (“Lau”). Yuen was the former chairman of the IO. He accounted for the history leading to the present dispute. Cheng was and is the Senior Administration and Accounting Manager of the 2nd Respondent. He was responsible for preparing the draft budgets of the Building for the year of 2007 and 2008. He explained how and why he did the apportionment. Lau testified why the smart card system was introduced. 21.I do not intend to summarise all their evidence but it should not be treated as failing to take into account their evidence. In this judgment, I shall refer to the material parts of the key witnesses when I come to analyse the issues. On the issue of whether the Applicant paid more contribution unfairly or inequitably, AW1 and Cheng are more relevant witnesses. It is common ground that the 2008 Management Budget was prepared with reference to the actual expenditure for the year of 2006 and the 2nd Respondent divided the expenditure and the budget into Parts A to D pursuant to Section VI (D), paragraph 4 of the DMC. 22.It was on the percentage of the resources allocated to Part D that the Parties had conceptual difference. The divergence seems to be on the reasonableness of some items of expenses or the poor quality of the services that did or did not justify the amount and what is the suitable percentage to be allocated. 23.It is important to know how the 2nd Respondent allocated the expenditure or resources to Part D to determine the issue of fairness. To begin with, Cheng explained that it made use of the past actual expenditure to prepare the budget. The 2008 Management Budget is divided by 12 months so as to arrive at the average monthly management fee. It is attached with an explanatory note and a chart dealing with 6 main items now in dispute. It is because the said items in dispute were raised as early as in 2007. According to the explanatory note and the chart, Cheng of the 2nd Respondent apportioned the expenses in this way: (i) Part D to share 6.6 % of the Building’s maintenance and repair; (ii) Part D to share 8.3% of the Building’s security guards’ salaries, based on the notion that 1 out of 12 security guards’ man-hours were deployed for the benefit of the Car Parking Spaces; (iii) Part D to share 10.8% of the expenses on fire maintenance and repair, based on 12 fire hose reels installed in the Car Parking Spaces out of the Building’s 89 hose reels; (iv) Part D to share 12.5% of the Building’s lift maintenance and repair, based on 18 lift doors installed in Car Parking Spaces out of the Building’s 144 lift doors; (v) Part D to share 33.86% as the electricity chargesincurred for the fluorescent lights, based on 173 sets installed in Car Parking Spaces out of the Building’s 511 sets. This looks like “an actual use concept”. 24.Cheng also gave a detailed explanation as to how such “fair and equitable” concept is applied to the disputed items as summarized in a table below. Further, in respect of the share of 6.6% of the Building’s maintenance and repair, according to AW1’s evidence, the Building has 27 and 32 residential floors in Tower 1 and Tower 2 respectively. The Car Parking Spaces occupied 2nd to 4th floors. The shops are located on the Ground floor and 1st floor. Taking the approximate of 35 floors in total in which Part D (car park) occupies 3 floors, that is about 8.5% (3/35), allocation of 6.6% seems to be reasonable. I do not agree that this “actual use concept” is unfair as contended by the Applicant, to the contrary, it is not only fair and equitable, it avoids the strict application of Section VI (D), paragraph 7(d) that may result in the Applicant unfairly or inequitable paying more. 25.What is more important is the operation of the above Proviso, apart from the above Cheng’s explanations, the Budget was approved by the Owners’ Committee, hence it is binding on all owners, it is incumbent upon the Applicant to establish that there is manifest error in such apportionment. The Applicant failed to do so. 26.The Applicant’s accountant witness AW2, did not avail the Applicant. He said that he was instructed to review the accounting documents so as to testify on whether Part D expenses were properly supported by contracts, invoices and payment. But the substance of his testimonies was that the Applicant unfairly borne a greater proportion of the management expenses. He also made use of his accounting knowledge to create some statistics or figures to paint the picture that what the Applicant has paid was excessive. He also gave his views on the interpretation of the DMC but he seemed to have overlooked the crux of the issue here is how the manager applies the fair and equitable concept on apportionment of expenses. His evidence is not helpful on the framed issues. I put little weight on his evidence save and except there is no conflict with the Respondents’ version. 27.In gist, it is just a conflict between the Applicant’s belief of unfairness and the manager’s belief of fair apportionment resulted in this litigation. Since their differences were spread into different statements, it is more desirable to summarise their differences on evidence and views in a table form:-
28.I do not know what is the factual basis of AW1 to say that there are only 111 sets out of florescent lights installed in the Car Parking Spaces as compared with 173 as suggested by the 2nd Respondent. I do not know the basis why he said that 26 out of 111 sets of florescent lights are on for 24 hours. Cheng said that there were 173 sets in total and they were turned on for 24 hours, albeit there were a few out of order occasionally. AW1 failed to explain who did the counting exercise, he merely said that it was so counted by the Applicant. However, his evidence in cross examination seemed to suggest that some lights were out of order during inspection. I do not see how some lights were out of order could be treated as some lights were “on” for 14 hours, some were “on” for 24 hours. His evidence is unreliable. 29.Put the Applicant’s case to the highest, it seems to me that in calculating the amount of share under 2008 Management Budget, the Applicant fails to establish manifest error under Section VI (D), paragraphs 4 and 7 of the DMC. It fails to establish that the 2008 Management Budget did not take into account the principles under Section VI (D), paragraph 7 of the DMC. The “actual use concept” in respect of the 2008 Management Budget was in fact a flexible, fair and equitable approachto avoid a particular owner unfairly or inequitably paying higher contribution. Last but not least, the 2008 Management Budget was approved in the owners’ meeting held on 15th December 2007. As a result and according to the Proviso, it is binding on all owners. 30.In so far as the evidence is concerned, I prefer the evidence from the Respondents than the Applicant’s evidence. The Respondents’ evidence on apportionment and fairness is straightforward and more convincing. It tallies with fair and equitable concept. In contrast, the Applicant’s subjective evidence on reasonable amount is far from reasonable. Most of their evidence related to quality of services. For example, AW1 said thatsecurity guard could hardly be seen in car park area,patrol by security guards in the Car Parking Spaces is minimal. To say that the cleaning charges was excessive, AW1 said thatonly 4 trash bins were found in the Car Parking Spaces and cleaning work is minimal. He deemed those services that he has not seen were not in existence. Their testimonies were mostly speculative, lacking evidentiary basis. They were against objective matters or otherwise an indicia of loss of confidence or biased against the IO and the 2nd Respondent, like the applicant in Speedy Gainer Ltd. v. I.O. of Malahon Apartments & anr. CACV336/2004supra. They spent too much effort on the reasonableness of the apportionment but failed to establish “manifest error”. I do not accept the Applicant’s evidence unless there is no conflict. My findings on the framed issues are that(i) there is no manifest error in respect of the 2008 Management Budget; (ii) the 2008 Management Budget did not result in the Applicant’s unfairly or inequitably paying higher contributions. The Applicant’s claim on prayer (b) must be dismissed. F. Court is empowered to determine the reasonable amount of management fee? 31.The Applicant’s prayer (b) seeks this Tribunal to determine on the appropriate amount of management fee payable by the Applicant. The Respondents submitted that the Tribunal has no jurisdiction to determine the reasonable amount, it is the duty of the manager to prepare the management budget within the framework of DMC and BMO, if there is any challenge that such budget is not prepared in accordance with DMC or BMO, appropriate declaration has to be sought, the Court should not place itself into the position to determine the appropriate amount, though in case of dispute, guidelines may be given with reference to DMC or BMO. 32.Having made a ruling on prayer (b), I do not find it necessary to rule on this contention. But I do agree with the Respondent’s submission above. G. Overpayment between February 2002 and March 2007? 33.It is common ground that the 2nd Respondent has not prepared the management budget for the years of 2002 to 2006. However, there are audited reports of the IO for the said period. There are management accounts, including the income and expenditure statements, balance sheet with explanatory notes covering the period from February 2002 to December 2008 justifying why $15,000 was levied on the Car Parking Spaces. The Applicant seemed to have ignored the existence of those documents and painted a picture of “excessive charge”, albeit these documents were mentioned in the Applicant’s accountant’s statement. The ultimate question is whether Schedule 7, paragraph 1(3) of the BMO is applicable in this case to the effect the Applicant is required to pay the previous amount before a management budget was approved. Schedule 7 is the mandatory terms in the DMC. Paragraphs 1 to 3 provide that:-
34.In Cheng’s 1st witness statement, he mentioned the history of the management fee for the Car Parking Spaces. On or about 15th April 1998, the Applicant agreed to the proposed increase of the monthly management fee to $15,223 in respect of the Car Parking Spaces. It was finally rounded up to $15,000 with effect from May 1998. Since May 1998 up to March 2007, the Applicant paid the said rate of $15,000 for 72 car parking spaces. 35.On or about 29th December 2006, apparently after the change of the shareholders and personnel inside the Applicant, the Applicant began to question how $15,000 was arrived at. After paying $3,000 for the month of April 2007, the Applicant stopped paying their share of the management fee. In the present case, although the 2nd Respondent failed to prepare a draft management budget in accordance with paragraph 1(2) of Schedule 7 for the years before 2007,income and expenditure statements show that the total amount of management expenses for the period from February 2002 to March 2007 did not fluctuate. Based on these steady pattern of expenditure and continued to levy $15,000year after year from 2002 to 2007 falls squarely within the sub-paragraph:
36.In a nutshell, my findings on the framed issues are that even if the 2nd Respondent failed to prepare the management budget for the relevant period, Schedule 7 paragraph 1(3) of the BMO is applicable in this case to the effect the Applicant is required to pay the previous amount before a management budget was approved, hence there is no overpayment. In brief, the Applicant fails to establish the claim on overpayment. Prayer (c) is dismissed. 37.Since I find that there is no overpayment, it is unnecessary for me to decide on whether the application for recovery is estopped by convention on the assumption that there is overpayment. H. New Route? If so, breach of DMC? 38.At first, the Applicant pleaded as if there was a new route created by the introduction of the smart card system. However, the Applicant refined its position at trial by making 2 complaints: (i) the use of the smart card system caused delay to car park tenants to enter into or to leave the car park area; (ii) by charging an unreasonable amount of $100 for each of the extra smart card effectively compelled the non-resident car park tenants to use the roadway to and from the car park area. 39.It is beyond debate that the introduction of the smart card system is to improve the security measures. Before its introduction, the car park tenants, including “hourly car park users”, could have accessed from the car park area to the residential area by key in the password. Such electronic security code became an open secret and several theft cases were suspected to be in connection with the leakage of the security code by the car park operator to hourly car park users. After its introduction, there was no report on theft or burglary cases. In short, the smart card system worked and reduced the risk of trespassers from entering through Car Parking Spaces into the residential area. 40.I do not agree that the non-resident car park tenants were compelled to use the roadway to and from the car park area. They do have a reasonable option. In respect of non-resident monthly car park tenant, they could have obtained a smart card through the car park operator at $100. In respect of non-resident hourly car park users, they could have obtained the smart card from the car park entrance where a booth was set up there and should return the smart card soon after they park the vehicle. I do not see how this would cause delay if the car park operator makes available sufficient quantity of smart cards for use during peak hours. The car park operator, by failing to obtain extra cards at $100 each and complained of delay, seems to distort what is true or false. Counsel for the Applicant further submitted that each smart card costs only $6 at cost value, hence $100 is an exorbitant amount. I do not agree. Her submission ignored the administrative works over the registration, issuance and replacement of the smart card. Consequently, I do not see how she could make use of $6 cost value to develop her argument by saying that the car park tenants were compelled to use the roadway and hence they were denied the access as guaranteed by the DMC. 41.In summary, my findings on the framed issue are that (i) there was no new route created as a result of the new security measures introduced in early 2007; (ii) the security measures were not in breach of Part C(1) of the DMC. 42.The Applicant simply focus on the costs of operating the car park without taking into account the actual percentage of resources put into the car parks. I. Prayer (a) within Schedule 6? Request to inspect made in good faith and for a proper purpose? 43.Prayer (a) was withdrawn at the outset of the trial subject to the question of costs. The Respondents asked for costs of the withdrawn prayer on three grounds, firstly, the prayer does not fall within Schedule 6, secondly, even if prayer (a) is within Schedule 6, it was not made in good faith or for proper purpose, thirdly, the Applicant must have a prior request before the claim and it failed to make a prior request as required: Speedy Gainer Ltd. v. I.O. of Malahon Apartments & anr. CACV336/2004 dated 22 July 2005, paragraphs 9 – 13, 27. 44.Unlike the principles on inspection and discovery under O.24 of the Rules of the High Court, owner’s right on inspection and discovery before litigation on building management-related document is governed by Schedule 6 of the BMO, The relevant provisions are as follows:-
45.Under Schedule 6, an owner is entitled to inspect “all bills, invoices, vouchers, receipts and other documents maintained under section 27, that is, the financial statements or audited account of the IO”. Such right does not extend to take copies. Right to take copies is confined to “financial statements or audited account and a summary of the income and expenditure of the IO.” 46.It is more convenient to set out prayer (a) again and to see if it is within Schedule 6. Prayer (a) states that:
47.The Applicant seemed to ask for discovery and inspection of all bills, invoices and documents for the compilation of the management budget. It was not asking to “inspect all bills, invoices, vouchers, receipts and other documents maintained under section 27, for example, the financial statements or audited account of the IO”. Nor was it asking to take copies of the “financial statements or audited account and a summary of the income and expenditure of the IO.”. In brief, prayer (a) does not fall within Schedule 6. 48.Since prayer (a) falls outside the ambit as permitted by Schedule 6, it may not be necessary to deal with the argument of “good faith and for a proper purpose”. For completeness sake, had prayer (a) fallen within Schedule 6, next question is whether the application to request for inspection was made in good faith and for a proper purpose within the meaning of the BMO, 6th Schedule, paragraph 1C. 49.In Chan Kwan Ming v. I.O. of Tai On Building, Shau Kei Wan, CACV 279/2007 dated 26 June 2008, the applicant requested to inspect and obtain copies of each invoices issued by a construction contractor and each cheque payment issued by the IO. The Court of Appeal held that even if the application was made under 1C above, the application was made merely because he lost confidence on the IO and the applicant was biased against the IO. Hence, it was not made in good faith. 50.In the present case, the Respondents submitted that the evidence of AW1 is that he knew that the IO had not demanded the Applicant to pay the approved management fee of $21,936.00 for the year of 2008. Instead, the Applicant is demanded to pay for $15,000.00 per month for the year of 2008. As to why the Applicant still pursued the said prayer (a),AW1 explained that he wished to know whether the amount of $15,000 was calculated correctly. Had prayer (a) fallen within Schedule 6, I am of the view that the Applicant barely satisfied the two conditions. Simply put, the Applicant may be entitled to demand from the Respondents the manner of the management fee calculation and documentary support, subject to the question as to whether the request is too oppressive, reasonable and proportional to the intended action. J. Any prior request? 51.It was held that before commencing court proceedings, anapplicant should show that it has made prior request followed by wrongful refusal to the request, otherwise the Court will not order inspection: Speedy Gainer Ltd. v. I.O. of Malahon Apartments & anr. CACV336/2004 dated 22July 2005, paragraphs 9 – 13, 27. This issue does not require adjudication as I found that prayer (a) went beyond Schedule 6. For completeness sake, had prayer (a) fallen within Schedule 6, I would have found that prior request had been made. 52.The Applicant submitted that on evidence, the Applicant did make the prior request while the Respondents disagreed. 53.The Applicant referred me to a few letters from the Applicant to support the contention of prior request. By a letter dated 27 November 2006 from the Applicant to the 2nd Respondent, the Applicant sought inspection on recent management accounts (查閱管理帳目) of the Building. By a letter dated 28 November 2006 from the Applicant to the 2nd Respondent, the Applicant related what the 2nd Respondent replied that the balance sheet and profits and loss account(收支概算表, 收支表, 資產負債表) were posted within the Building and the Applicant could inspect the copies posted. The Applicant offered to pay for the copying charges and any administration charge involved but needed to know how to calculate the charge. By a letter dated 8 December 2006 from the 2nd Respondent to the Applicant, the 2nd Respondent informed the Applicant that the requested documents were for inspection only, if copies are required, written application has to be made. If requested documents were those published for more than 3 months ago, administrative charges may be levied. 54. Nevertheless, even if the Applicant reasonably justified why they prayed for (a) but was withdrawn subsequently because the Respondents have permitted them to inspect before trial. The Applicant lost in other substantive issues. I do not intend to make a fragmented costs order. In exercising the discretion, there is no compelling reason as to why the Applicant should not bear the costs of the action: see Kam Ming Trading (Hong Kong) Limited v The People’s Insurance Company of China (Hong Kong) Limited and others HCCL 27/2009 dated 15 December 2010 by Stone J. In essence, I am of the view that the Applicant shall pay for the costs of the action. K. Conclusion 55. The Application pursuant to the Amended Notice of Application be dismissed. Costs order nisi be made in that the costs of the Application be to the 1st and 2nd Respondents. Such costs shall be taxed if not agreed. Unless any of the parties seek to vary the costs order nisi by way of summons within 14 days from the date hereof, the cost order nisi shall become absolute 14 days from the date hereof.
Ms. Winnie Chan, instructed by Messrs. Deca Lin & Partners for the Applicant Mr. C.W. Chan of Messrs. Chung & Kwan for the 1st Respondent Mr. D. Pang of Messrs. YC Lee Pang Kwok & Ip for the 2nd Respondent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under LDBM 145/2008