Bristle Ltd v. Wong Tsui Ching Venisa and Others

HCA 1094/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1094 OF 2011

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J U D G M E N T

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1.This is an action by, in effect, one householder against others in the same small development of four houses known as The Baroque.  As I hope will become clear it is a matter of great regret that there has been recourse to expensive litigation when the limited areas of dispute could have been resolved so easily and quickly by the Defendants taking a remedial course to correct some simple but important mistakes, even though the outcome may have been the same.

2.The Plaintiff, the registered owner of House 1 since 2000 sues the other three house owners, the management committee purportedly appointed by the Incorporated Owners, and the Incorporated Owners themselves.  The Statement of Claim pleads that the Incorporated Owners of the Baroque was invalidly registered by reason of invalidity vitiating the resolution purporting to establish it on or about the 4 August 2010.  Breaches of the Building Management Ordinance were pleaded particularly under Section 3 (3)(a) and 4, and paragraph 2 (1) of Schedule 3 — failure to give proper notice to all owners and to the person managing the estate i.e. to the Plaintiff in both capacities. Accordingly meetings on the 17 December 2010 and 14 January 2011 were alleged to be invalid.

3.Following an Affirmation by the First Defendant sworn on the 28 October 2011, matters took a different turn.  She gave details concerning her appointment (or otherwise) for the purposes of a meeting of the owners on the 13 July 2010.  What she disclosed alerted the Plaintiff to what seems, on the face of it, to be a far more serious situation.

4.Looking firstly at the Notice for that July 2010 meeting it is clear that the Agenda contained the formation of an owners’ corporation and management committee, the constitution of the management committee and its officers.  The Notice is signed by the First Defendant as “Convenor”.  The original Chinese Notice is dated 22 June 2010.  The English copy is not dated but that does not matter.  The record of the meeting itself shows that the Agenda was followed.  The owners of houses 2, 3 and 4 were elected to be members of the management committee with the First Defendant being appointed the Chairwoman of it.

5.In paragraph 21 of her affirmation she disclosed a number of matters but a consideration of the document purporting to effect her appointment as convenor is essential.  It shows that the persons signing the document were a Ms Lau Wai Shan on behalf of her father Mr Lau Fu Wing, the owner of House 3, and Apple Company Limited the owner of House 2 with the company’s chop on the paper and the signature of an individual.  The date at the bottom has been altered. Originally it appears to have been “13/7/2010” (13 July 2010).  The figure of ‘7’ has subsequently been overwritten by the figure ‘6’ purporting to make the date “13 June 2010”.

6.The relevant paragraph containing her explanation is as follows :

“In respect of the Notice of Appointment of Convenor referred to in paragraph 2(o), I was informed by Mr Lau Fu Wing (“Lau”) and verily believe that Miss Lau Wai Shan is his daughter and Lau authorized her to sign the Notice of Appointment of Convenor on his behalf in respect of the date of the appointment, the same was signed by Miss Lau Wai Shan and Apple Company Limited about one month before the meeting on 13 July 2010.  The Appointment was left undated until the day of the meeting.  I thought it was permissible for the Appointment to be dated the date when the meeting was held, so I dated it 13 July 2010 during the meeting.  However, it was pointed out to me by Mr Yip, the representative of the Home Affairs Department who officiated the formation of the 4^th Defendant, that the document must be dated the date when it was signed.  I recall that the document was signed about a month before so I changed it to 13 June 2010.”

7.She does not state that she was present at the signing, I doubt she was.  If she had been, I am sure a date would have been put on it.  She said the occasion of the signing was “about one month before the meeting on the 13 July 2010.” Both Ms Lau and a person on behalf of Apple Company Limited, who may have been the signatory to the document, were at the meeting on the 13 July 2010.  They could have been asked there and then when they signed the document.  I have to conclude that they were not.  Why did the First Defendant date the document 13 July 2010 when she could have asked either signatory to do so?  That would not have avoided the invalidity of it bearing that date.  She says that Mr Yip (or Ip) told her that it had to bear the date on which it was signed.  So she altered it there and then.  Twice she referred to the document as being signed “about a month” before the meeting.  What decided her to fix on the 13 June?  I suspect it was because that date would be about one month earlier.  But she did not, it appears, consult with, at least, Miss Lau concerning the date of the signing. There is no affirmation from Miss Lau about the document and the dating.  Nor is there one from the signatory on behalf of Apple Company.  Even Mr Yip (or Ip) has not provided an affirmation dealing with what the First Defendant says.

8.Mrs Dora Chan for the Defendants says that the backdating is of no consequence and that I should construe what the First Defendant says as being a clear assertion that she was present at the signing and that the date, as altered, is more or less the correct one.  I cannot accept that.  If the First Defendant was present she could have said so unequivocally.  A lawyer preparing her affirmation would have been alert to this because this aspect had become fundamental. It needed explaining properly.  I am inclined to the view looking at the whole picture, that it was not signed on the 13 June 2010.  I do not know when it was signed but the burden is on the First Defendant to persuade me, at the very least that it may have been signed then.  Everything however points against it.  This is not a trivial matter which can be remedied by my making suppositions on the Defendant’s behalf.  There are clear rules and requirements in relation to such matter which must be observed.  The absence of material from other sources is significant.  It could have been obtained if it exists.  The consequences are clear.  If it was not signed on or before the 22 June 2010 there was no valid appointment.  The notice would be invalid as the convenor did not have the requisite authority.  The meeting on the 13 July 2010 was invalid as were the resolutions passed.  The bodies purportedly established would have no legitimate basis.  I do not need to deal with any contention as to if and/or when the Plaintiff received the notice dated 22 June 2010.

9.The fact that she decided to date the document on the actual day of the meeting so as to make it effective from that date indicates that she had no concept of the need for accurate formality in the proceedings and re‑inforces my conclusion that she arbitrarily selected a second date.  How far Mr Yip’s (Ip’s) advice went we do not know.  Ms Chan made no application to adjourn the hearing in order to obtain an affidavit from him and, more pertinently, from the signatories to the appointment.  The inference inevitably drawn is that there is no other evidence to support the 1st Defendant that the document was signed on 13 June 2010 and, that she was properly appointed a convenor to make the notice of the meeting dated 22 June 2010 and the meeting itself on 13 July 2010, valid.

10.However, suspicious though I am regarding the circumstances of the dating of the document of appointment, it may be a simple technicality and although there is an absence of what might be regarded as confirmatory evidence, the 1st Defendant may yet be able to remedy that.  Ms Chan at the hearing before Master Kwang on 17 February 2012 indicated that she did not seek leave to file any more affirmations.  She may wish to re‑think that.  The implications of a finding that there has been irregularity in the procedure which invalidates the decisions taken at the meeting of 13 July 2010 are, or may be, significant viz. decisions taken by an invalidly constituted management committee have to be set aside.  That could involve substantial cost and has the potential for future litigation.  I have come to the conclusion that I should not accede to the Plaintiff’s application, albeit with some reluctance.  Despite the many question marks, I am faced with only one affirmation of limited and untested content.  I should not make what would in effect be a draconian order on that basis.  Another issue raised by the Plaintiff concerns whether or not one of the persons making the appointment was entitled to do so.  The daughter of one householder signed on her father’s behalf when the Ordinance requires the house owner to be the appointor.  That, too, is a matter for full consideration in due course and I would not make an order simply on that aspect.  Mr Andrew Bruce S C for the Plaintiff fixed his argument on the main point, ie the validity of the appointment of the First Defendant as convenor by reference to the altered date.  There are significant issues of fact which must be resolved before any of the concrete issues of law can be resolved.  Those cannot be dealt with by this procedure.

11.As I indicated to Counsel the issue for me to deal with, is the validity or otherwise, of the appointment.  The other issue concerning the question of notice to the Plaintiff is not a matter to be dealt with on the strength of affidavits only. It may be that there is an undercurrent of individual conflict permeating the management of the building.  A full trial is the only way of doing justice to such a conflict.

12.I note that Master Kwang considered the question of a transfer of this case to the Lands Tribunal, even though the High Court had jurisdiction.  She reviewed possible difficulties as well as the matter of costs involved.  I am in no better position than she was in this regard and can only encourage the parties to consider this carefully.  If this action continues to trial in the High Court and the trial judge considers that it ought to have proceeded in the Lands Tribunal, he has power to make a costs order which reflects this.

13.For present purposes, however, I dismiss the Plaintiff’s Order 14/14A summons.  On the question of costs, I am minded to reserve these to the trial judge.  He or she will be in a better position, to determine the merits or, otherwise, of this order 14/14A application in its full context.  There will be a certificate for Counsel limited to junior Counsel.  The order for costs is a nisi order permitting the parties to return to argue the matter if they deem it necessary.

Mr Andrew Bruce, SC and Mr Felix Ng, instructed by George Y C Mok & Co, for the plaintiff

Ms Dora K H Chan, instructed by Fred Kan & Co, for the 1^st – 5^th defendants