勞資審裁處H. H. Judge M. Wong, Presiding Officer of the Lands Tribunal6/9/2011
合併案件：LDBM76/2011LDBM77/2011
LDBM76/2011
由此
[English translation – 英譯本]
A A
LDBM 76/2011
B and LDBM 77/2011 B
(Consolidated)
C C
D IN THE LANDS TRIBUNAL OF THE D
E
HONG KONG SPECIAL ADMINISTRATIVE REGION E
BUILDING MANAGEMENT APPLICATIONS No. 76 of 2011 and No. 77 of 2011
F F
(Consolidated by Order of H. H. Judge M. Wong dated 15 April 2011)
G G
________________
H H
st
YOUNG KWOK SUI（楊國瑞） 1 Applicant
I I
CHIU SHUET LAN（趙雪蘭） 2nd Applicant
J J
AND
K K
THE INCORPORATED OWNERS OF Respondent
L L
FONTANA GARDENS（豪園業主立案法團）
M ________________ M
N N
O
Coram: H. H. Judge M. Wong, Presiding Officer of the Lands Tribunal O
Date of Hearing: 5 August 2011
P P
Date of Handing Down Judgment: 7 September 2011
Q Q
R R
JUDGMENT
S S
T T
U U
V V
-2-
Background
1. The 1st applicant is the owner of ground floor and one car parking
space, 5 Ka Ning Path, Block B of Fontana Gardens (“the Estate”), Tai Hang
Road, Causeway Bay, Hong Kong; the 2nd applicant is the owner of ground
floor and one car parking space, 3 Ka Ning Path, Block B of the Estate; and the
respondent is the incorporated owners of the Estate.
2. The two parties do not have much disputes over the factual
background of this case. The Estate comprises 7 blocks of flats, namely Block
A to Block G. Block B is situated at no. 3-6 Ka Ning Path and Block G is
situated at no. 7-10 Ka Ning Path. Both Block B and Block G are governed by
the same Deed of Mutual Covenant (“DMC”) and Supplemental Deed of
Mutual Covenant (“SDMC”), while the other 5 blocks are governed by other
DMCs which are different.
3. At an extraordinary general meeting of the owners held on 5 June
2006, the respondent resolved that repair and maintenance works should be
carried out to Block B. The repair and maintenance items included the
external wall, the air-conditioner support frames and protective boards, the
outlet pipe ducts and window heads. Votes were cast by the owners of Block
B who were present. After vote counting, it was resolved by the respondent
由此
A A
B that each unit of Block B should contribute $213,000 for paying the expenses of B
C
the repair and maintenance works and that the time limit for paying the C
contribution was the end of July 2006.
D D
E E
4. The 1st applicant and the 2nd applicant duly complied with the
F F
above-mentioned resolution and each paid $213,000 respectively in respect of
G G
the units owned by each of them. At that time, neither of them was aware of
H H
the provisions in the DMC or the SDMC relevant to this payment. In 2010,
I I
the respondent proposed to replace the lifts. Being owners of units situated on
J the ground floor, the applicants would not use the lifts. They therefore went J
K through the DMC and the SDMC to ascertain whether they were required to K
L share the expenses of the lift replacement project like the owners of the flats L
situated on the floors above.
M M
N N
5. Having consulted the DMC and the SDMC, the 1st and the 2nd
O O
applicants came to the conclusion that according to paragraph 20 of Schedule 1
P P
to the SDMC, the owners of Block B and Block G were not required to
Q Q
contribute equally to the expenses, and that the amount payable by each of the
R R
applicants should be calculated on the basis of the ratio 2/175.
S S
T 6. That being so, the applicants are of the view that the contributions T
U they paid in July 2006 towards the expenses of the repairs and maintenance U
3
V V
由此
A A
B should not have been calculated on a pari passu basis, and that the expenses B
C
should have been apportioned in accordance with the ratio as provided in C
paragraph 20 of Schedule 1 to the SDMC. According to their calculation, they
D D
asserted that each of them needed to pay $154,376.15 only; that is to say, they
E E
had paid $58,623.85 more. They therefore make these applications, claiming
F F
for a refund from the respondent of the excess amounts they paid.
G G
H H
Respondent’s grounds of opposition
I I
J 7. The respondent does not agree to refund to the applicants the J
K allegedly excess amounts paid by them. It puts forward 3 grounds of K
L opposition. First, the respondent considers that paragraph 20 of Schedule 1 to L
the SDMC cannot assist the applicants. Second, even if the SDMC supports
M M
the applicants’ claim, the contributions paid in 2006 were paid into a special
N N
fund established by the respondent pursuant to paragraph 4 of Schedule 7 to the
O O
Building Management Ordinance (“the Ordinance”), and the respondent was
P P
empowered to resolve that each owner should contribute equally to this special
Q Q
fund. Third, the applicants are, by their conduct, estopped from claiming for
R R
the excess amounts they paid.
S S
T 8. In its closing submission, the respondent further submitted that the T
U works carried out in 2006 were not repair and maintenance works, but were U
4
V V
由此
A A
B refurbishment works, because the purposes of carrying out the works was to B
C
improve the appearance of the Estate and enhance the value of the building. C
D D
Repairs and maintenance or refurbishment
E E
F F
9. First of all, I do not agree with the respondent’s argument that the
G G
2006 works were only refurbishment works but not repair and maintenance
H H
works. According to the evidence of Mr. Lam Hoi Ham, a witness of the
I I
respondent, beside[sic] trying to improve the appearance of the Estate and
J enhance the value of the building, the reason for carrying out the 2006 works J
K was that in the past 40 odd years no large scale repair and maintenance works K
L had been carried out in the Estate. On the external wall, some mosaic tiles had L
come off, and there were water seepage and damaged water pipes. The
M M
minutes of the 5 June 2006 meeting also show that the works in question were
N N
repair and maintenance works, including the eradication of the water seepage
O O
problem on the external wall.
P P
Q Q
10. Of course, the improvement in the appearance of the Estate and the
R R
enhancement in value of the building subsequent to the repairs and maintenance
S might also be the purposes which the owners hoped to achieve, but I consider S
T that the main purpose of the works was to make good the external wall, which T
U was in a bad condition, and the outlet pipes, which were not working properly, U
5
V V
由此
A A
B while the improvement in appearance and the enhancement in value were only B
C
the positive results of the repairs and maintenance. C
D D
11. I therefore find that the 2006 works were repair and maintenance
E E
works.
F F
G G
Is paragraph 20 of Schedule 1 to the SDMC applicable
H H
I I
12. Paragraph 20 of Schedule 1 to the SDMC provides that:-
J J
K “20. Provisional payments of sundry out-of-pocket expenses K
and disbursements in regard to the said Buildings and their
L L
cartilage[sic] shall be made by such persons and in such
M M
proportions as set out hereunder no matter their apartments are
N N
vacant or occupied.
O THE OWNER OR OWNERS OF PROVISIONAL O
ANY ONE APARTMETN OF PAYMENT
P AND IN FONTANA GARDENS P
Nos. 3,4,5,6 $80.00
Q
(except the Ground Floor Owners) Q
Nos. 3,4 and 5 Ground Floor $60.00
R R
Nos. 7,8,9 and 10 $35.00
S S
Provided That Adjustment shall be made from time to time after
T T
the auditing of the accounts of the above sundry expenses by
U U
6
V V
由此
A A
B Messrs. Lowe, Bingham and Matthews Chartered Accountants B
who are annually retained as Accountants for Fontana Estates
C C
Limited so long as Fontana Estates Limited shall remain as Agent
D D
for the parties hereto and That if it is found that the actual
E E
expenses exceed the provisional payments the difference or the
F deficient amount shall be paid and borne by the above persons in F
G similar proportion as stated above And That if there is any G
surplus remained after payment of the actual expenditure the
H H
same shall be credited in favour of the above persons in the like
I I
proportion And it is further Provided That each of the
J J
above-mentioned persons shall on demand in writing of the
K Agent pay to the Agent his remuneration as set out in Rule 19 K
L hereof and moneys expended by him as mentioned herein And L
That in the event of non-payment of the said remuneration and/or
M M
the said expenditure for SEVEN DAYS after the date of demand
N N
it shall be lawful for the agent to recover the same as a debt by
O O
action or any other proceedings against any parties hereto in
P P
default.”
Q Q
R 13. Judging from the above provision alone, paragraph 20 only R
S
concerns “Provisional payments of sundry out-of-pocket expenses and S
disbursements”, and appears to have nothing to do with repairs and maintenance
T T
U U
7
V V
由此
A A
B carried out to the external wall and related works. However, clause 3(c) of the B
C
SDMC provides that:- C
D D
“Repairs:- The owner of every Apartment of the said Buildings except
E E
Fontana Estates Limited shall pay such part of the costs as included and
F F
indicated in Rule 20 of the House Rules contained in the First Schedule
G hereinafter mentioned of keeping in good and tenantable repair the G
H foundation side walks main walls supports beams gutters fences H
chimneys and all external parts of the said buildings their cartilage[sic]
I I
and all the drains walls electric pumps pipes conduits and all plumbing
J J
apparatus (if any) intended for the general service of the said Buildings
K K
(except as regards damage caused or resulting from any act or default or
L L
negligence of any of the parties hereto their respective servants or agents
M or tenants or Licensee) and the entrance-halls staircases private roads the M
N
public garage and the pool and the white-washing distempering and N
painting the exterior of the same and such parts of the interior as are
O O
used in common by the parties hereto and in operating repairing
P P
replacing maintaining and servicing the elevators.”
Q Q
R 14. It can be seen from clause 3(c) cited above that the expenses R
S mentioned in paragraph 20 of Schedule 1 to the SDMC include expenses S
T relating to “keeping in good and tenantable repair the foundation side walks T
U
main walls supports beams gutters fences chimneys and all external parts of the U
8
V V
由此
A A
B said buildings their cartilage[sic] and all the drains walls electric pumps pipes B
C
conduits and all plumbing apparatus (if any) intended for the general service of C
the said Buildings”.
D D
E E
15. The 2006 external wall repair and maintenance works are
F F
obviously within the scope of the items enumerated in clause 3(c). In other
G G
words, they are covered by the items “main walls”, “gutters”, “all external parts
H H
of the said buildings their cartilage[sic] and all the drains walls … pipes
I I
conduits”.
J J
K 16. The respondent argued that clause 3(c) only related to repairs and K
L maintenance “intended for the general service of the said Buildings”; but later, L
the respondent agrees with my view, i.e. the phrase “intended for the general
M M
service of the said Buildings” qualifies “all plumbing apparatus” only.
N N
O O
17. I therefore find that the ratio set out in paragraph 20 of Schedule 1
P P
is also applicable to the contributions payable for the 2006 repair and
Q Q
maintenance works.
R R
S Special find S
T T
U U
9
V V
由此
A A
B 18. The respondent submitted that the fund established in 2006 for the B
C
repair and maintenance works was within the meaning of paragraph 4 of C
Schedule 7 to the Ordinance, because the money contributed to this fund was
D D
treated separately from other monies by the respondent and it was a special fund
E E
established exclusively for managing the contributions.
F F
G G
19. Paragraphs 4(1) and 4(2) of Schedule 7 to the Ordinance provide
H H
that:-
I I
J In Chinese J
K “(1) 經 理 人 須 設 立 並 維 持 一 項 特 別 基 金，以 備 應 付 K
L 某 種 開 支，而 該 種 開 支 並 非 他 預 期 每 年 須 承 付 L
M 者。 M
N N
O (2) 如 有 法 團 ，則 法 團 須 藉 業 主 的 決 議， 釐 定 各 業 O
P 主在任何財務年度需對該特別基金繳付的款 P
Q 額，以及須支付所繳付的該等款額的時間。” Q
R R
S In English S
T T
U U
10
V V
由此
A A
B “(1) The manager shall establish and maintain a special fund to B
C
provide for expenditure of a kind not expected by him to be C
incurred annually.
D D
E E
(2) If there is a corporation, the corporation shall determine, by
F F
a resolution of the owners, the amount to be contributed to
G G
the special fund by the owners in any financial year, and the
H H
time when those contributions shall be payable.”
I I
J J
20. The respondent argued that according to paragraph 4(1) cited
K above, if there is expenditure of a kind not expected to be incurred annually, it K
L is entitled to establish a special fund to deal with such expenditure; and that the L
M expenditure for the repair and maintenance works in 2006 was exactly this kind M
of expenditure, because it was expenditure for a one-off large scale project, not
N N
expected to be incurred annually. Expenditure of this kind is an occurrence
O O
only once in many years.
P P
Q Q
21. The respondent further submitted that pursuant to paragraph 4(2), it
R R
can determine, by a resolution of the owners, the amount to be contributed to
S S
the special fund by the owners; and that therefore it could, by virtue of
T paragraph 4(2), passed the resolution, thereby sharing the expenses of the T
U repairs and maintenance equally among the owners. Moreover, the 2006 U
11
V V
由此
A A
B repairs and maintenance concerned Block B only and did not concern Block G. B
C
There was no reason to require the owners of Block G to share the expenses of C
the repairs and maintenance together with others in accordance with paragraph
D D
20 of Schedule 1 to the SDMC.
E E
F F
22. The respondent also relied on section 34E(2)(b) of the Ordinance
G G
and maintained that the provisions in Schedule 7 prevail over any provisions in
H H
a DMC which are inconsistent with them.
I I
J 23. However, I do not agree with the respondent’s argument. J
K Although the respondent could establish a special fund for managing the money K
L contributed for the purpose of the 2006 repair and maintenance works, it does L
not follow that the respondent could then ignore clause 3(c) of and paragraph 20
M M
of Schedule 1 to the SDMC. The items specified in clause 3(c) include items
N N
expenditures for which are not expected to be incurred annually; for example,
O O
keeping in good repair the external walls and replacing the elevators. It is
P P
clear that money to be spent on the items specified in clause 3(c) can be
Q Q
collected and managed by establishing a special fund as provided for in
R R
paragraph 4(1) of Schedule 7.
S S
T 24. In The Incorporated Owners of Yee On Court v. Li Zee Zing Hai, T
U CACV 181/2000, the Court of Appeal adjudicated on a similar provision in a U
12
V V
由此
A A
B DMC. In that case, the trial judge was of the opinion that the expenses of the B
C
repairs in question were expenditure of a kind not expected to be incurred C
annually, and that there was no provision in the DMC which provided for such
D D
expenses, so that paragraph 4 of Schedule 7 to the Ordinance was applicable.
E E
However, the Department[sic] of Appeal found that there was no warrant for the
F F
conclusion that the provisions in the DMC were not applicable, because some
G G
expenditures not expected to be incurred annually, for example, the expense of
H H
painting the external walls, came within the ambit of some provisions in the
I I
DMC, and that therefore the expenses should be apportioned among the owners
J according to the ratio stipulated in the DMC. J
K K
L 25. The arguments put forward in that case were very similar to those L
put forward in this case. I adopt the rationale expounded by the Court of
M M
Appeal. I find that although the expenses incurred as a result of the 2006
N N
repair and maintenance works were not expenditure expected to be incurred
O O
annually, they were within the ambit of clause 3(c) of and paragraph 20 of
P P
Schedule 1 to the SDMC. Therefore, such expenses should be apportioned
Q Q
among the owners according to the ratio stipulated in paragraph 20 of Schedule
R R
1. Even though the owners of Block G did not gain any benefit directly from
S the 2006 repair and maintenance works, they still had to comply with the S
T provisions of the SDMC and pay their share of the expenses. T
U U
13
V V
由此
A A
B 26. Furthermore, paragraph 4(2) of Schedule 7 to the Ordinance does B
C
not expressly state that a corporation can, by passing a resolution, require each C
owner to pay any amount of money. The English version of paragraph 4(2)
D D
says that a corporation shall determine, by a resolution, “the amount to be
E E
contributed to the special fund by the owners”. In this provision, “amount” is
F F
singular and “owners” is plural. My view is that this provision only provides
G G
that a corporation can determine, by a resolution, the total amount to be
H H
contributed by all the owners, but not the separate amounts payable by each
I I
owner.
J J
K 27. The phrase 釐定各業主 (determine … the owners) in the Chinese K
L version of section 4(2) may refer to individual owners, but as far as 款額 L
M (amount) is concerned, it is not stated to be 個別款額 (separate amounts). I M
N think that the Chinese version of section 4(2) should be construed in the same N
O way as the English version. 各業主 (the owners) should be construed as 所 O
P 有業主 (all the owners); that is to say, a corporation can determine, by a P
Q resolution, the total amount to be contributed to the special fund by all the Q
R owners, but not the separate amounts payable by each owner. R
S S
28. I therefore find that paragraph 4(2) of Schedule 7 to the Ordinance
T T
does not empower a corporation to determine, by a resolution, the ratio
U U
14
V V
由此
A A
B according to which each owner is to pay his share of the contribution, and that B
C
the respondent could not rely on paragraph 4(2) to resolve that the expenses of C
the 2006 repair and maintenance works should be shared equally among the
D D
owners of Block B, while the owners of Block G did not need to pay anything.
E E
The respondent should have required each individual owner, including the
F F
owners of Block G, to share the expenses of the 2006 repair and maintenance
G G
works according to the ratio set out in paragraph 20 of Schedule 1 to the SDMC.
H H
I I
29. Given that the respondent did not act in accordance with the
J SDMC and I accept the calculation method proposed by the 1 st and the 2nd J
K applicants, I therefore hold that the applicants did pay more than their due share K
L of the expenses of the 2006 repair and maintenance works. L
M M
Had the applicants waived their rights
N N
O O
30. However, I agree with the respondent’s argument that the
P P
applicants had waived their rights. The applicants claimed that when they paid
Q Q
their contributions towards the expenses of the 2006 repair and maintenance
R R
works, they were not aware of the provisions of the DMC or the SDMC. I also
S accept that that is true, but that does not mean that the applicants can use their S
T ignorance of the DMC provisions as the reason for claiming a refund of the T
U excess amounts they paid. U
15
V V
由此
A A
B B
C
31. In Wong Pun-Man v. Incorporated Owners of Tung Fat Industrial C
Building [1996] 1 HKDCLR 32, Judge Cruden gave judgment on a similar
D D
argument. In that case, the incorporated owners fixed management fees in a
E E
manner inconsistent with the proportions specified in the DMC, but the
F F
applicant in that case had all along paid his management fees as determined by
G G
the incorporated owners by resolution, which was more than the amount
H H
calculated in the manner stipulated in the DMC. Judge Cruden found that the
I I
applicant, in his capacity as owner, had access to and the right to hold a copy of
J the DMC, so that he had constructive notice of the DMC. By his failure to J
K raise any objection over the years, the applicant had acquiesced in paying the K
L management fees which were not calculated in accordance with the DMC L
proportions. The respondent would suffer detriment if it had to refund the
M M
amount by which the fees were overpaid and it was unconscionable to require it
N N
to do so. Therefore, the application for a refund of the overpaid part of the
O O
fees was refused.
P P
Q Q
32. I find that the legal principles elucidated by Judge Cruden are
R R
applicable to this case. The 1st applicant and the 2nd applicant, in their
S capacities as owners, were fixed with constructive notice of the DMC and the S
T SDMC, and they had acquiesced in paying the excess contributions towards the T
U expenses of the repair and maintenance works. In my judgment, the U
16
V V
由此
A A
B respondent will suffer detriment if it has to refund the excess amounts of the B
C
already paid contributions, and it is unconscionable to require it to do so. C
Many years have passed since 2006. The works in question were completed
D D
long ago and all the money relating to the expenses of the works had been paid
E E
to the contractors. It is impossible for the respondent to refund to the
F F
applicants the excess contributions. If the other owners were asked to
G G
contribute money again towards the 2006 works, they could have similarly
H H
relied on the reason that the respondent had waived its rights and refuse to
I I
contribute. Even though the respondent has enough money to refund to the
J applicants, the money is intended for other purposes. It is unfair to other J
K owners if it is used to refund the applicants, because the other owners would K
L then have to contribute money again for these other purposes. L
M M
33. Therefore, I hold that the 1st applicant and 2nd applicant are not
N N
entitled to a refund of the excess contributions they paid towards the expenses
O O
of the repair and maintenance works.
P P
Q Q
Conclusion
R R
S 34. For the above reasons, I hold that the applications made by the S
T applicants are not substantiated and must be dismissed. T
U U
17
V V
由此
A A
B 35. Turning now to costs, as the respondent has success[sic] only with B
C
regard to the argument about waiver and has loss[sic] in relation to all other C
arguments, I think that the fairest approach is that each party should bear his
D D
own costs; in other words, there shall be no order as to costs.
E E
F F
36. In conclusion, I make the following orders:-
G G
H H
(1) All the applications made by the 1st and the 2nd applicants in
I I
these consolidated cases shall be dismissed.
J J
K (2) There shall be an order nisi: no order as to costs of these K
L consolidated cases. If neither party makes any application L
for costs within 14 days after the handing down of this
M M
judgment, the order nisi shall become absolute.
N N
O O
P P
Q Q
Michael Wong
R R
Presiding Officer of the Lands Tribunal
S S
T T
U U
18
V V
由此
A A
B 1st Applicant, acting in person, present. B
C
2nd Respondent[sic], represented by Mr. Leung Kam Wang C
Mr. Patrick Fung S.C., and Mr. John Hui, instructed by K.B. Chau & Co., for
D D
the Respondent.
E E
F F
G
Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. G
P. Y. Lo, Barrister-at-law.
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
19
V V
YOUNG KWOK SUI AND ANOTHER v. THE INCORPORATED OWNERS OF FONTANA GARDENS
由此
[English translation – 英譯本]
A A
LDBM 76/2011
B and LDBM 77/2011 B
(Consolidated)
C C
D IN THE LANDS TRIBUNAL OF THE D
E
HONG KONG SPECIAL ADMINISTRATIVE REGION E
BUILDING MANAGEMENT APPLICATIONS No. 76 of 2011 and No. 77 of 2011
F F
(Consolidated by Order of H. H. Judge M. Wong dated 15 April 2011)
G G
________________
H H
st
YOUNG KWOK SUI（楊國瑞） 1 Applicant
I I
CHIU SHUET LAN（趙雪蘭） 2nd Applicant
J J
AND
K K
THE INCORPORATED OWNERS OF Respondent
L L
FONTANA GARDENS（豪園業主立案法團）
M ________________ M
N N
O
Coram: H. H. Judge M. Wong, Presiding Officer of the Lands Tribunal O
Date of Hearing: 5 August 2011
P P
Date of Handing Down Judgment: 7 September 2011
Q Q
R R
JUDGMENT
S S
T T
U U
V V
-2-
Background
1. The 1st applicant is the owner of ground floor and one car parking
space, 5 Ka Ning Path, Block B of Fontana Gardens (“the Estate”), Tai Hang
Road, Causeway Bay, Hong Kong; the 2nd applicant is the owner of ground
floor and one car parking space, 3 Ka Ning Path, Block B of the Estate; and the
respondent is the incorporated owners of the Estate.
2. The two parties do not have much disputes over the factual
background of this case. The Estate comprises 7 blocks of flats, namely Block
A to Block G. Block B is situated at no. 3-6 Ka Ning Path and Block G is
situated at no. 7-10 Ka Ning Path. Both Block B and Block G are governed by
the same Deed of Mutual Covenant (“DMC”) and Supplemental Deed of
Mutual Covenant (“SDMC”), while the other 5 blocks are governed by other
DMCs which are different.
3. At an extraordinary general meeting of the owners held on 5 June
2006, the respondent resolved that repair and maintenance works should be
carried out to Block B. The repair and maintenance items included the
external wall, the air-conditioner support frames and protective boards, the
outlet pipe ducts and window heads. Votes were cast by the owners of Block
B who were present. After vote counting, it was resolved by the respondent
由此
A A
B that each unit of Block B should contribute $213,000 for paying the expenses of B
C
the repair and maintenance works and that the time limit for paying the C
contribution was the end of July 2006.
D D
E E
4. The 1st applicant and the 2nd applicant duly complied with the
F F
above-mentioned resolution and each paid $213,000 respectively in respect of
G G
the units owned by each of them. At that time, neither of them was aware of
H H
the provisions in the DMC or the SDMC relevant to this payment. In 2010,
I I
the respondent proposed to replace the lifts. Being owners of units situated on
J the ground floor, the applicants would not use the lifts. They therefore went J
K through the DMC and the SDMC to ascertain whether they were required to K
L share the expenses of the lift replacement project like the owners of the flats L
situated on the floors above.
M M
N N
5. Having consulted the DMC and the SDMC, the 1st and the 2nd
O O
applicants came to the conclusion that according to paragraph 20 of Schedule 1
P P
to the SDMC, the owners of Block B and Block G were not required to
Q Q
contribute equally to the expenses, and that the amount payable by each of the
R R
applicants should be calculated on the basis of the ratio 2/175.
S S
T 6. That being so, the applicants are of the view that the contributions T
U they paid in July 2006 towards the expenses of the repairs and maintenance U
3
V V
由此
A A
B should not have been calculated on a pari passu basis, and that the expenses B
C
should have been apportioned in accordance with the ratio as provided in C
paragraph 20 of Schedule 1 to the SDMC. According to their calculation, they
D D
asserted that each of them needed to pay $154,376.15 only; that is to say, they
E E
had paid $58,623.85 more. They therefore make these applications, claiming
F F
for a refund from the respondent of the excess amounts they paid.
G G
H H
Respondent’s grounds of opposition
I I
J 7. The respondent does not agree to refund to the applicants the J
K allegedly excess amounts paid by them. It puts forward 3 grounds of K
L opposition. First, the respondent considers that paragraph 20 of Schedule 1 to L
the SDMC cannot assist the applicants. Second, even if the SDMC supports
M M
the applicants’ claim, the contributions paid in 2006 were paid into a special
N N
fund established by the respondent pursuant to paragraph 4 of Schedule 7 to the
O O
Building Management Ordinance (“the Ordinance”), and the respondent was
P P
empowered to resolve that each owner should contribute equally to this special
Q Q
fund. Third, the applicants are, by their conduct, estopped from claiming for
R R
the excess amounts they paid.
S S
T 8. In its closing submission, the respondent further submitted that the T
U works carried out in 2006 were not repair and maintenance works, but were U
4
V V
由此
A A
B refurbishment works, because the purposes of carrying out the works was to B
C
improve the appearance of the Estate and enhance the value of the building. C
D D
Repairs and maintenance or refurbishment
E E
F F
9. First of all, I do not agree with the respondent’s argument that the
G G
2006 works were only refurbishment works but not repair and maintenance
H H
works. According to the evidence of Mr. Lam Hoi Ham, a witness of the
I I
respondent, beside[sic] trying to improve the appearance of the Estate and
J enhance the value of the building, the reason for carrying out the 2006 works J
K was that in the past 40 odd years no large scale repair and maintenance works K
L had been carried out in the Estate. On the external wall, some mosaic tiles had L
come off, and there were water seepage and damaged water pipes. The
M M
minutes of the 5 June 2006 meeting also show that the works in question were
N N
repair and maintenance works, including the eradication of the water seepage
O O
problem on the external wall.
P P
Q Q
10. Of course, the improvement in the appearance of the Estate and the
R R
enhancement in value of the building subsequent to the repairs and maintenance
S might also be the purposes which the owners hoped to achieve, but I consider S
T that the main purpose of the works was to make good the external wall, which T
U was in a bad condition, and the outlet pipes, which were not working properly, U
5
V V
由此
A A
B while the improvement in appearance and the enhancement in value were only B
C
the positive results of the repairs and maintenance. C
D D
11. I therefore find that the 2006 works were repair and maintenance
E E
works.
F F
G G
Is paragraph 20 of Schedule 1 to the SDMC applicable
H H
I I
12. Paragraph 20 of Schedule 1 to the SDMC provides that:-
J J
K “20. Provisional payments of sundry out-of-pocket expenses K
and disbursements in regard to the said Buildings and their
L L
cartilage[sic] shall be made by such persons and in such
M M
proportions as set out hereunder no matter their apartments are
N N
vacant or occupied.
O THE OWNER OR OWNERS OF PROVISIONAL O
ANY ONE APARTMETN OF PAYMENT
P AND IN FONTANA GARDENS P
Nos. 3,4,5,6 $80.00
Q
(except the Ground Floor Owners) Q
Nos. 3,4 and 5 Ground Floor $60.00
R R
Nos. 7,8,9 and 10 $35.00
S S
Provided That Adjustment shall be made from time to time after
T T
the auditing of the accounts of the above sundry expenses by
U U
6
V V
由此
A A
B Messrs. Lowe, Bingham and Matthews Chartered Accountants B
who are annually retained as Accountants for Fontana Estates
C C
Limited so long as Fontana Estates Limited shall remain as Agent
D D
for the parties hereto and That if it is found that the actual
E E
expenses exceed the provisional payments the difference or the
F deficient amount shall be paid and borne by the above persons in F
G similar proportion as stated above And That if there is any G
surplus remained after payment of the actual expenditure the
H H
same shall be credited in favour of the above persons in the like
I I
proportion And it is further Provided That each of the
J J
above-mentioned persons shall on demand in writing of the
K Agent pay to the Agent his remuneration as set out in Rule 19 K
L hereof and moneys expended by him as mentioned herein And L
That in the event of non-payment of the said remuneration and/or
M M
the said expenditure for SEVEN DAYS after the date of demand
N N
it shall be lawful for the agent to recover the same as a debt by
O O
action or any other proceedings against any parties hereto in
P P
default.”
Q Q
R 13. Judging from the above provision alone, paragraph 20 only R
S
concerns “Provisional payments of sundry out-of-pocket expenses and S
disbursements”, and appears to have nothing to do with repairs and maintenance
T T
U U
7
V V
由此
A A
B carried out to the external wall and related works. However, clause 3(c) of the B
C
SDMC provides that:- C
D D
“Repairs:- The owner of every Apartment of the said Buildings except
E E
Fontana Estates Limited shall pay such part of the costs as included and
F F
indicated in Rule 20 of the House Rules contained in the First Schedule
G hereinafter mentioned of keeping in good and tenantable repair the G
H foundation side walks main walls supports beams gutters fences H
chimneys and all external parts of the said buildings their cartilage[sic]
I I
and all the drains walls electric pumps pipes conduits and all plumbing
J J
apparatus (if any) intended for the general service of the said Buildings
K K
(except as regards damage caused or resulting from any act or default or
L L
negligence of any of the parties hereto their respective servants or agents
M or tenants or Licensee) and the entrance-halls staircases private roads the M
N
public garage and the pool and the white-washing distempering and N
painting the exterior of the same and such parts of the interior as are
O O
used in common by the parties hereto and in operating repairing
P P
replacing maintaining and servicing the elevators.”
Q Q
R 14. It can be seen from clause 3(c) cited above that the expenses R
S mentioned in paragraph 20 of Schedule 1 to the SDMC include expenses S
T relating to “keeping in good and tenantable repair the foundation side walks T
U
main walls supports beams gutters fences chimneys and all external parts of the U
8
V V
由此
A A
B said buildings their cartilage[sic] and all the drains walls electric pumps pipes B
C
conduits and all plumbing apparatus (if any) intended for the general service of C
the said Buildings”.
D D
E E
15. The 2006 external wall repair and maintenance works are
F F
obviously within the scope of the items enumerated in clause 3(c). In other
G G
words, they are covered by the items “main walls”, “gutters”, “all external parts
H H
of the said buildings their cartilage[sic] and all the drains walls … pipes
I I
conduits”.
J J
K 16. The respondent argued that clause 3(c) only related to repairs and K
L maintenance “intended for the general service of the said Buildings”; but later, L
the respondent agrees with my view, i.e. the phrase “intended for the general
M M
service of the said Buildings” qualifies “all plumbing apparatus” only.
N N
O O
17. I therefore find that the ratio set out in paragraph 20 of Schedule 1
P P
is also applicable to the contributions payable for the 2006 repair and
Q Q
maintenance works.
R R
S Special find S
T T
U U
9
V V
由此
A A
B 18. The respondent submitted that the fund established in 2006 for the B
C
repair and maintenance works was within the meaning of paragraph 4 of C
Schedule 7 to the Ordinance, because the money contributed to this fund was
D D
treated separately from other monies by the respondent and it was a special fund
E E
established exclusively for managing the contributions.
F F
G G
19. Paragraphs 4(1) and 4(2) of Schedule 7 to the Ordinance provide
H H
that:-
I I
J In Chinese J
K “(1) 經 理 人 須 設 立 並 維 持 一 項 特 別 基 金，以 備 應 付 K
L 某 種 開 支，而 該 種 開 支 並 非 他 預 期 每 年 須 承 付 L
M 者。 M
N N
O (2) 如 有 法 團 ，則 法 團 須 藉 業 主 的 決 議， 釐 定 各 業 O
P 主在任何財務年度需對該特別基金繳付的款 P
Q 額，以及須支付所繳付的該等款額的時間。” Q
R R
S In English S
T T
U U
10
V V
由此
A A
B “(1) The manager shall establish and maintain a special fund to B
C
provide for expenditure of a kind not expected by him to be C
incurred annually.
D D
E E
(2) If there is a corporation, the corporation shall determine, by
F F
a resolution of the owners, the amount to be contributed to
G G
the special fund by the owners in any financial year, and the
H H
time when those contributions shall be payable.”
I I
J J
20. The respondent argued that according to paragraph 4(1) cited
K above, if there is expenditure of a kind not expected to be incurred annually, it K
L is entitled to establish a special fund to deal with such expenditure; and that the L
M expenditure for the repair and maintenance works in 2006 was exactly this kind M
of expenditure, because it was expenditure for a one-off large scale project, not
N N
expected to be incurred annually. Expenditure of this kind is an occurrence
O O
only once in many years.
P P
Q Q
21. The respondent further submitted that pursuant to paragraph 4(2), it
R R
can determine, by a resolution of the owners, the amount to be contributed to
S S
the special fund by the owners; and that therefore it could, by virtue of
T paragraph 4(2), passed the resolution, thereby sharing the expenses of the T
U repairs and maintenance equally among the owners. Moreover, the 2006 U
11
V V
由此
A A
B repairs and maintenance concerned Block B only and did not concern Block G. B
C
There was no reason to require the owners of Block G to share the expenses of C
the repairs and maintenance together with others in accordance with paragraph
D D
20 of Schedule 1 to the SDMC.
E E
F F
22. The respondent also relied on section 34E(2)(b) of the Ordinance
G G
and maintained that the provisions in Schedule 7 prevail over any provisions in
H H
a DMC which are inconsistent with them.
I I
J 23. However, I do not agree with the respondent’s argument. J
K Although the respondent could establish a special fund for managing the money K
L contributed for the purpose of the 2006 repair and maintenance works, it does L
not follow that the respondent could then ignore clause 3(c) of and paragraph 20
M M
of Schedule 1 to the SDMC. The items specified in clause 3(c) include items
N N
expenditures for which are not expected to be incurred annually; for example,
O O
keeping in good repair the external walls and replacing the elevators. It is
P P
clear that money to be spent on the items specified in clause 3(c) can be
Q Q
collected and managed by establishing a special fund as provided for in
R R
paragraph 4(1) of Schedule 7.
S S
T 24. In The Incorporated Owners of Yee On Court v. Li Zee Zing Hai, T
U CACV 181/2000, the Court of Appeal adjudicated on a similar provision in a U
12
V V
由此
A A
B DMC. In that case, the trial judge was of the opinion that the expenses of the B
C
repairs in question were expenditure of a kind not expected to be incurred C
annually, and that there was no provision in the DMC which provided for such
D D
expenses, so that paragraph 4 of Schedule 7 to the Ordinance was applicable.
E E
However, the Department[sic] of Appeal found that there was no warrant for the
F F
conclusion that the provisions in the DMC were not applicable, because some
G G
expenditures not expected to be incurred annually, for example, the expense of
H H
painting the external walls, came within the ambit of some provisions in the
I I
DMC, and that therefore the expenses should be apportioned among the owners
J according to the ratio stipulated in the DMC. J
K K
L 25. The arguments put forward in that case were very similar to those L
put forward in this case. I adopt the rationale expounded by the Court of
M M
Appeal. I find that although the expenses incurred as a result of the 2006
N N
repair and maintenance works were not expenditure expected to be incurred
O O
annually, they were within the ambit of clause 3(c) of and paragraph 20 of
P P
Schedule 1 to the SDMC. Therefore, such expenses should be apportioned
Q Q
among the owners according to the ratio stipulated in paragraph 20 of Schedule
R R
1. Even though the owners of Block G did not gain any benefit directly from
S the 2006 repair and maintenance works, they still had to comply with the S
T provisions of the SDMC and pay their share of the expenses. T
U U
13
V V
由此
A A
B 26. Furthermore, paragraph 4(2) of Schedule 7 to the Ordinance does B
C
not expressly state that a corporation can, by passing a resolution, require each C
owner to pay any amount of money. The English version of paragraph 4(2)
D D
says that a corporation shall determine, by a resolution, “the amount to be
E E
contributed to the special fund by the owners”. In this provision, “amount” is
F F
singular and “owners” is plural. My view is that this provision only provides
G G
that a corporation can determine, by a resolution, the total amount to be
H H
contributed by all the owners, but not the separate amounts payable by each
I I
owner.
J J
K 27. The phrase 釐定各業主 (determine … the owners) in the Chinese K
L version of section 4(2) may refer to individual owners, but as far as 款額 L
M (amount) is concerned, it is not stated to be 個別款額 (separate amounts). I M
N think that the Chinese version of section 4(2) should be construed in the same N
O way as the English version. 各業主 (the owners) should be construed as 所 O
P 有業主 (all the owners); that is to say, a corporation can determine, by a P
Q resolution, the total amount to be contributed to the special fund by all the Q
R owners, but not the separate amounts payable by each owner. R
S S
28. I therefore find that paragraph 4(2) of Schedule 7 to the Ordinance
T T
does not empower a corporation to determine, by a resolution, the ratio
U U
14
V V
由此
A A
B according to which each owner is to pay his share of the contribution, and that B
C
the respondent could not rely on paragraph 4(2) to resolve that the expenses of C
the 2006 repair and maintenance works should be shared equally among the
D D
owners of Block B, while the owners of Block G did not need to pay anything.
E E
The respondent should have required each individual owner, including the
F F
owners of Block G, to share the expenses of the 2006 repair and maintenance
G G
works according to the ratio set out in paragraph 20 of Schedule 1 to the SDMC.
H H
I I
29. Given that the respondent did not act in accordance with the
J SDMC and I accept the calculation method proposed by the 1 st and the 2nd J
K applicants, I therefore hold that the applicants did pay more than their due share K
L of the expenses of the 2006 repair and maintenance works. L
M M
Had the applicants waived their rights
N N
O O
30. However, I agree with the respondent’s argument that the
P P
applicants had waived their rights. The applicants claimed that when they paid
Q Q
their contributions towards the expenses of the 2006 repair and maintenance
R R
works, they were not aware of the provisions of the DMC or the SDMC. I also
S accept that that is true, but that does not mean that the applicants can use their S
T ignorance of the DMC provisions as the reason for claiming a refund of the T
U excess amounts they paid. U
15
V V
由此
A A
B B
C
31. In Wong Pun-Man v. Incorporated Owners of Tung Fat Industrial C
Building [1996] 1 HKDCLR 32, Judge Cruden gave judgment on a similar
D D
argument. In that case, the incorporated owners fixed management fees in a
E E
manner inconsistent with the proportions specified in the DMC, but the
F F
applicant in that case had all along paid his management fees as determined by
G G
the incorporated owners by resolution, which was more than the amount
H H
calculated in the manner stipulated in the DMC. Judge Cruden found that the
I I
applicant, in his capacity as owner, had access to and the right to hold a copy of
J the DMC, so that he had constructive notice of the DMC. By his failure to J
K raise any objection over the years, the applicant had acquiesced in paying the K
L management fees which were not calculated in accordance with the DMC L
proportions. The respondent would suffer detriment if it had to refund the
M M
amount by which the fees were overpaid and it was unconscionable to require it
N N
to do so. Therefore, the application for a refund of the overpaid part of the
O O
fees was refused.
P P
Q Q
32. I find that the legal principles elucidated by Judge Cruden are
R R
applicable to this case. The 1st applicant and the 2nd applicant, in their
S capacities as owners, were fixed with constructive notice of the DMC and the S
T SDMC, and they had acquiesced in paying the excess contributions towards the T
U expenses of the repair and maintenance works. In my judgment, the U
16
V V
由此
A A
B respondent will suffer detriment if it has to refund the excess amounts of the B
C
already paid contributions, and it is unconscionable to require it to do so. C
Many years have passed since 2006. The works in question were completed
D D
long ago and all the money relating to the expenses of the works had been paid
E E
to the contractors. It is impossible for the respondent to refund to the
F F
applicants the excess contributions. If the other owners were asked to
G G
contribute money again towards the 2006 works, they could have similarly
H H
relied on the reason that the respondent had waived its rights and refuse to
I I
contribute. Even though the respondent has enough money to refund to the
J applicants, the money is intended for other purposes. It is unfair to other J
K owners if it is used to refund the applicants, because the other owners would K
L then have to contribute money again for these other purposes. L
M M
33. Therefore, I hold that the 1st applicant and 2nd applicant are not
N N
entitled to a refund of the excess contributions they paid towards the expenses
O O
of the repair and maintenance works.
P P
Q Q
Conclusion
R R
S 34. For the above reasons, I hold that the applications made by the S
T applicants are not substantiated and must be dismissed. T
U U
17
V V
由此
A A
B 35. Turning now to costs, as the respondent has success[sic] only with B
C
regard to the argument about waiver and has loss[sic] in relation to all other C
arguments, I think that the fairest approach is that each party should bear his
D D
own costs; in other words, there shall be no order as to costs.
E E
F F
36. In conclusion, I make the following orders:-
G G
H H
(1) All the applications made by the 1st and the 2nd applicants in
I I
these consolidated cases shall be dismissed.
J J
K (2) There shall be an order nisi: no order as to costs of these K
L consolidated cases. If neither party makes any application L
for costs within 14 days after the handing down of this
M M
judgment, the order nisi shall become absolute.
N N
O O
P P
Q Q
Michael Wong
R R
Presiding Officer of the Lands Tribunal
S S
T T
U U
18
V V
由此
A A
B 1st Applicant, acting in person, present. B
C
2nd Respondent[sic], represented by Mr. Leung Kam Wang C
Mr. Patrick Fung S.C., and Mr. John Hui, instructed by K.B. Chau & Co., for
D D
the Respondent.
E E
F F
G
Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. G
P. Y. Lo, Barrister-at-law.
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
19
V V
LDBM76/2011 YOUNG KWOK SUI AND ANOTHER v. THE INCORPORATED OWNERS OF FONTANA GARDENS - LawHero