Wong Tak Keung, Stanley v. The Incorporated Owners of Grenville House

LDBM 180/2011

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 180 OF 2011

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BETWEEN

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RULING

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Application

1.This is an application of striking out of the proceedings by the Respondent.

Background

2.The Applicant was and is one of the two joint owners of Apartment C12, Grenville House, 1 Magazine Gap Road, Mid-levels, Hong Kong (“the Building”) whereas the Respondent was and is the Incorporated Owners of the Building.

3.On 31 May 2011, the Applicant commenced the present proceedings against the Respondent. Briefly, he complained that the Respondent had failed to convene an AGM as required by Schedule 3 s.1 (1) (b) of the Building Management Ordinance (Cap. 344) (“the BMO”).  He therefore asked this Tribunal to compel the Respondent to convene the AGM. Further, at the hearing, he made clear that he also intended to seek a declaration to clarify if the Respondent could delay the holding of the AGM for more than the statutory time limit, thereby effectively allowing the Committee Members to stay in their offices for longer period of time.

4.The Respondent did not file any Notice of Opposition.  Instead, they instructed their solicitors to apply for striking out of the whole proceedings.  In short, they admitted that they had been late in holding the AGM, but went on to explain that they were busy in handling the major renovation of the Building.  Further, they complained about various matters on the part of the Applicant including the taking out of a number of proceedings.  Nonetheless, it was submitted that, as a matter of law, the present proceedings should be struck out under O.18 r.19 of the Rules of the High Court (Cap.4) (“the RHC”).

5.After the call-over hearing of the application held by the Hon. Judge M. Wong on 4 August 2011, I further dealt with the matter on 25 August 2011 when I allowed the Applicant’s application for time to rely on his affirmation in opposition.

6.Parties appeared before me this morning for the substantive argument of the striking out application.  The Applicant appeared in person, and Mr. Chan of Messrs S.K. Lam & Co. represented the Respondent.

7.Mr. Chan started his application by telling me that he had a summons to adduce a reply affirmation. He further explained to me why he was late.  He did not know the exact order I made on 25 August 2011 and there was negotiation between parties in the meantime.  The Applicant opposed the application.  He said that he did not have sufficient time to consider the same.  Upon consideration, including in particular that, at a striking out application, there should usually be no dispute on facts as well as the prejudice caused by delay of the present hearing, I declined Mr. Chan’s application.

Ruling

8.Upon considering all the evidence authorities and submissions before me, I have come to the conclusion that the proceedings herein are to be struck out.  My reasons appear in below.

(a) I remind myself of the following principle.

“(1) Striking out only in plain and obvious cases – It is only in plain and obvious cases that the court should exercise its summary powers to strike out the indorsement on any writ or any pleading under this rule. There should be no trial upon affidavit. Disputed facts were to be taken in favour of the party sought to be struck out. Nor should the court decide difficult points of law in striking out proceedings. The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out.”

(HKCP 2011 at p.404)

(b) In relation to the mandatory injunction sought, I agree that it is bound to lose.  There is no doubt that the Applicant has been suing the wrong party.  He relies on Schedule 3 s. 1(1) (b) of the BMO.  However, the provision states clearly that it is the “Management Committee” who shall convene the meeting, not the Incorporated Owners.

(c) A Management Committee is distinguishable from an Owners Incorporation, as demonstrated by Mr. Chan when he pointed at s.45 of the BMO.

“(4) This section applies to the following persons, namely-

(a) an owner;

(aa) …

(b) …

(c) a management committee

(d) a corporation;

(e) a manager within the meaning of Part VIA;

(f) ….”

Hence, a Management Committee, on its own, as a separate legal entity, can sue and be sued.  The argument of the Applicant that one will not sue the Board of Directors of a limited company simply does not apply in building management matters.

(d) Further, I would agree with such interpretation, as stated in the following two authorities.

“47. 雙方不爭議的事實是該委員會1998年7月24日召開完業大會後，直到2002年7月29日才召開另一次業主大會。很明顯，該管委會確實違反了附表3第1(1)(b)段的規定。不過，現時申請人並不是向該管委會提出這方面的申請，而是向個別答辯人提出這方面申請。本席認為附表3第1(1)(b)段的責任是屬於該管委會整體的責任，而不是個別委員的責任。因此申請人就這方面向答辯人提出的指稱並不成立[emphasis added] 。”

(Deputy Judge M. Wong
(as he then was) in
LDBM 244/2002)

“43. Furthermore, under paragraph 1(1)(b) of Schedule 3, to convene an annual general meeting is an obligation that a management committee must perform[emphasis added], and it is a contravention of paragraph 1(1)(b) of Schedule 3 for the committee to decide whether to hold such a meeting punctually or at all.”

(Mr. Louis Chan,
Presiding Officer
(as he then was) in
LDBM 178/2004)

(e) The Applicant said that it was the first time he heard about such argument.  He should be allowed to amend his “mistake”.  Upon thought, I decline to accept it. O.19 r.18 of the RHC is wide enough to cover the grounds relied upon by the Respondent.  There is no disputed fact that an AGM will be held on 17 September 2011.  Even if I were to allow the amendment, the AGM would be held soon, effectively disposing the present case completely.  There is no point to pursue the matter further.

(f) As to the declaration sought, I take the view that the Applicant is asking for an academic question which Courts will not entertain.

(g) There is no dispute from the Respondent that the Management Committee has been delaying in holding the AGM.

(h) I have the confirmation from the Applicant that he is not challenging the legality of the office of the Committee Members and/or any of their decisions made in such capacity. Indeed, it has been decided in CACV 386/2000.

“40. In the result, albeit without hesitation, I would prefer the interpretation of the provisions of the Ordinance in this respect that when a management committee fails to convene the first annual general meeting, and for that matter, any subsequent annual general meeting, the management committee will continue to operate and its members will continue to hold office until the next annual general meeting is held. When the second general meeting is held, then the members of the management committee shall retire from office in accordance with para 5(1) of the Second Schedule. I am of the view that the decision of HH Judge Chow on the same point in Incorporated Owners of Maple Mansion v Ho Yiu Keung & Regent Talent Industrial Ltd, LDBM 98/2000 (15 February 2001, unreported), p3, is correct.”

Such point is further confirmed in a subsequent Court of Appeal case CACV 108/2006.

(i) So, the Management Committee shall convene an AGM not earlier than 12 months and not later than 15 months.  It ought to be done.  However, if for whatever reasons, it was not done and the Committee Members still hold the office until the new ones are to be elected.

(j) The position is clear and the Court cannot declare an obvious.  If the Applicant is not satisfied with the holding of their office, a declaration will not help him at all.

(k) Finally, I should also mention that the Applicant made quite some complaints against the Respondent on various matters at the hearing.  However, not only that they were not stated in any of the affidavit evidence before me, but they were also not relevant for the purpose of this present action as well as the striking out application. I therefore do not intend to deal with them at all.

(Hearing from the parties on submission of costs)

Costs

9.There is no reason why the Applicant should not bear the costs of the Respondent, save that :

(a) After all, the Applicant has been delayed in convening the AGM.

(b) The application for striking out was rightfully taken out.  However, time and costs should not have been spent on the factual disputes between the parties.

Hence, I will ask the Applicant to bear only half of the costs of the Respondent.

10.I further summarily assess the same in the followings.

(a)		Mr. Chan was admitted in 1993, hourly rate is allowed at $2,600 and his clerk, $600	$	$
(b)		Service/Filing of papers	375
(c)	(i)	Communication with clients ($2,600 x 6 hrs.)	15,600
	(ii)	Communication with the Applicant ($600 x 0.5 hr.)	300	15,900
(d)		Preparation and Perusal of documents
	(i)	$2,600 x 8.25 hrs.	21,450
	(ii)	$600 x 6 hrs.	3,600	25,050
(e)		Hearings
	(i)	Call-over ($2,600 x 0.5 hr.)	1,300
	(ii)	Striking Out ($2,600 x 4 hrs.)	10,400	11,700
(f)		Disbursements		1,000
				54,025
			Half	27,012 =====

Conclusion

11.To conclude, I will make the following orders.

(a) The proceedings herein are struck out.

(b) The Applicant do bear half of the costs of the Respondent in the striking out application and the proceedings herein, other than costs in the sum of $550 agreed by parties on 25 August 2011, summarily assessed at $27,012.

The Applicant appeared in person.

The Respondent was represented by Mr. C. W. Chan of Messrs. S.K. Lam, Alfred Chan & Co.