IN THE SUPREME COURT OF HONG KONG
SMALL CLAIMS TRIBUNAL APPEAL NO. 32/94
(CLAIM NO. 1463/94)
------------------------
BETWEEN
THE INCORPORATED OWNERS OF Claimants
BAYVIEW MANSION
AND
CHAN CHEUNG KIT MUI MARGARET Defendant
--------------------------
Coram : Hon Jerome Chan, J. in Court
Date of hearing : 1st June 1995
Date of delivery of judgment : 1st June 1995
Date of handing down reasons : 23rd June 1995
-------------------------------------
REASONS FOR JUDGMENT
-------------------------------------
This is an appeal from an award made by the learned adjudicator,
Mr T.C. Hon, against the appellant in the sum of $4,000 and costs $500 for his
share of the contribution towards the costs of “decorating” the common parts of
the building known as Bayview Mansion. The appellant is one of the owners,
and the respondents the management committee of the owners corporation, of
the said building.
- 2 -
The appellant relies on the following grounds of appeal :
(1) That the learned adjudicator erred in law in failing to
consider or sufficiently consider the defence raised by the
appellant in paragraphs 1(A), (B) and (C) of his defence.
(2) That the learned adjudicator erred in law in failing to
determine the issues raised by the appellant in the
aforementioned grounds of defence.
(3) That the learned adjudicator failed to consider the
procedures applicable to the passing of resolution in the
owners’ meeting as prescribed by the Deed of Covenant and
the provisions of Building Management Ordinance, Cap.344.
(4) That the learned adjudicator erred in law in failing to
determine the validity of the resolution allegedly passed at
the owners’ meeting held on 13 December 1992 in that there
was no determination on the authority to redecorate the
common parts of the building under the Deed of Covenant or
the Building Management Ordinance.
Validity of the Resolution under the Deed of Covenant
At a general meeting of owners held on 13 December 1992, a
resolution was purportedly passed, by a count of vote of 108 against 79, that
various parts of the common areas (e.g. entrance hall ) and common facilities
(e.g. lifts and main iron gate ) were to be renovated at a cost of $1.5 millions. It
was further resolved that each owner was to contribute $4,000 to the costs of
such works. The appellant was one of the owners who objected to the
renovation works. It is the contention of the appellant that the renovation works
were not authorised by the Deed of Covenant and thus the respondents had no
authority to require the owners to contribute towards the cost of such works.
The authority of the respondents to require contribution from the
owners towards costs incurred in respect of works carried out on the building is
founded in clauses 4, 8, and 10 of the Deed of Covenant. Clause 4 provides for
- 3 -
“cost of cleansing the said Building and keeping in good and tenantable repair
of” various common parts of the building. Clause 8 stipulates for the monthly
contributions from owners “towards the cost of servicing maintaining and
repairing the lifts” and various common parts and amenities of the building.
Clause 10 requires the owners to contribute towards the “expenses of repairing”
the staircases and landings. It is not controversial that renovation works were
carried out on the common parts and lifts of the building covered by the said
clauses. However, was the scope of works authorised by the said clauses?
To determine the issue, evidence relating to the nature and scope of
the renovation works must be examined. In his written judgment, the learned
adjudicator said : “His main ground is simply that the money contributed by the
owners were not properly applied and that the meetings was not valid for
passing the resolution. He did not call any other witness nor any other evidence
to support his allegations in the written defence which is partly in Chinese and
partly in English. It appears that he denied the claim because in his personal
opinion the defendant would not be liable to pay the amount claimed.” In the
light of his said observation of the appellant’s opinion, he ruled : “Having
considered all the evidence available and in all the circumstances of the present
case, the Tribunal is inclined to accept that the Claimant had proved the case
and that the defence was not sufficient to disprove the claim.”
It is for the respondents to prove their case against the appellant
and his alleged liability to contribute towards the renovation works. It is thus
for the respondents to adduce evidence to satisfy the tribunal that the cost for
the renovation works was covered by the said clauses. The learned adjudicator
set out the evidence of the respondents as : “The Claimant produced 19 pages of
papers to support the claim. The papers consist of an outline of the sequence of
the events (pages 1& 2), a summary of the account (page 3), Mr Chow’s
statement (pages 5 - 8), a record of meeting on 13th December, 1994
(pages 13 & 15) and a further explanation of the facts (pages 17 - 19).” In none
- 4 -
of the said 19 pages of documents did the respondents make any reference to
clauses 8 or 10. Neither did any of the said documents seek to verify that the
renovation works were authorised by any of the said clauses; and if so in what
way did any of the said works come within the description of maintenance or
repair works particularised in those clauses. The papers relied on by the
respondents merely quoted the whole text of clause 4 and alleged that it was
wrong for the appellant to allege that the renovation works were not repair
works. The acute scantiness of evidence to support the respondents’ case
appeared to be matched by the bare allegations of the appellant in his written
submissions. However, it transpired during the appeal that it was not really the
case. In fact, the appellant had submitted to the tribunal a bundle of 8 pages of
photographs comparing the condition of the relevant parts of the building before
and after the renovation works. The photographs depicting the pre-renovation
condition of the building are of substantial evidential value to the determination
of the issue of whether the renovation works were necessitated or authorised by
the said clause or otherwise. The appellant submitted that the learned
adjudicator returned the said bundle of photographs to him during the trial
refusing to evaluate them as relevant evidence. This is not disputed by the
respondents. The learned adjudicator must, with respect, be wholly wrong in
this respect. The photographs were the only independent evidence showing the
condition of the relevant parts of the building prior to renovation. Furthermore,
the failure of the learned adjudicator to record in his notes of proceedings the
submission of the evidence, his ruling on the matter and his return of the
evidence to the appellant renders his record of trial defective and incomplete.
There is simply no record of such an occurrence at all. Despite the deficiency in
the tribunal record, both parties consented to treat the photographs as being
tendered as evidence at the trial. The learned adjudicator was wrong in his
rejection of the evidence and an order was made in the appeal to reverse the
ruling of the learned adjudicator on this matter. The evidence ought to have
been admitted and, with agreement of both parties, an order was made to have
them treated as evidence before the tribunal at the trial.
- 5 -
It was also revealed that the appellant also tendered a copy of the
Deed of Covenant before the learned adjudicator at the trial which was also
returned by the learned adjudicator. No copy of the Deed of Covenant can be
found in the tribunal file at all. The respondents said they could not recall if any
copy was tendered to the tribunal at the trial, but agreed that a copy ought to be
made available in the appeal. Even assuming no copy of the deed was ever
tendered to the learned adjudicator at all, it would appear to me that the learned
adjudicator would have failed to discharge his statutory duty to investigate the
claim properly in not calling for a copy of such document before adjudicating on
the claim. It is difficult, in view of the issues in dispute, to understand how the
learned adjudicator can determine the claim without considering, or even
knowing, the contents of the Deed of Covenant. No mention was ever made in
his judgment to the contents of the deed. An order was also made to treat the
Deed of Covenant as part of the evidence before the tribunal.
By reason of matters aforesaid, the learned adjudicator had erred in
rejecting the photographs and Deed of Covenant as relevant evidence at the trial
thereby failing to properly consider all relevant available evidence before him
prior to a determination of the respondents’ claim. In so far as necessary, leave
is given to the appellant to appeal on this ground. The appeal is allowed and the
awards made by the learned adjudicator is set aside in its entirety.
I note with regret that the unfortunate error of the learned
adjudicator was not corrected at the appellant’s review that took place shortly
after the award was made. In a letter dated 29 November 1994, one day after
the review, the appellant complained that at the review, which lasted for 3
minutes, her husband (who had represented her for the entire proceedings) was
not allowed to adduce further evidence or to make any further submission. In
the notes of proceedings, no note was kept of a submission of the appellant or
of anything said by him at the hearing. The appellant’s complaint was
- 6 -
dismissed by a letter written on behalf of the Registrar of the tribunal stating he
was “directed” to inform the appellant that no evidence was ever adduced by the
appellant at the hearing apart from a seven-page written defence.
Should there be a retrial before a different adjudicator or could the
appellate court proceed to make a determination on the claim without a retrial?
I had the benefit of the photographs and the Deed of Covenant before me.
There is no other fresh evidence that could be made available to the tribunal on
a new trial. I was in as good a position as a tribunal at a retrial to determine the
true merits of the case. I was not hampered by any technical prohibitions
against reversing findings of facts by the tribunal as the learned adjudicator had
not made any findings of facts at all in his judgment. In the premises, no order
for a retrial was made and I proceeded to consider the validity of the resolution.
Were the renovation works necessitated by a need to keep the said
parts of the building in good and tenantable repair; or for servicing, maintaining
or repairing the same? Upon a careful examination of the pre-renovation
condition of the relevant parts of the building as depicted in the photographs, it
is beyond a peradventure that the question must be answered in the negative.
The relevant parts of the building appeared to be very well maintained and
serviced. They were clean and in good condition. I was not able to detect any
cracks on the walls or floor, nor could I see any other form of defects. Far and
apart, parts of the wall or floor tiles might have suffered a slight degree of
insignificant discoloration at the edges and corners due to ageing. However, it
is a far cry from alleging that they were in need of replacement by new tiles. All
that was justified was a thorough cleaning, with the aid of chemical agents
perhaps if necessary. No replacement would be required at all.
Furthermore, the nature and scope of the renovation works as
particularised in the notice of general meetings provided insight on the true
nature of the works. The notice spoke of “decoration works” to be carried out.
- 7 -
Details of the works set out in the notice were of a decorative nature. Nowhere
was it ever alleged in the notice (or in the resolution) that such parts of the
building were in need of any repair. Nor was it ever alleged in any documents
that such parts of the building were in anyway defective or damaged. After
examining the pre-renovation and post-renovation condition of the building as
shown by the photographs, the description of “decoration works” is in my view
a most apt choice of words. The works were partly truly of a cosmetic nature to
enhance the appearance of the building, and partly to improve the amenities of
the building. No doubt the building now looks a lot more attractive and
“classy”. The main iron gate was replaced by a grand-looking electrically
operated aluminium gate. An electronic communication system was installed at
the entrance. Close-circuit television monitoring was installed. The
management office was provided with a magnificent counter.
The building was provided with a facelift that gives it a modern
look and enhanced amenities. No doubt all owners would benefit from such
improvements, and the value of their flats would probably benefit as well.
These, however, could not provide the legal foundation for the respondents’
conduct. There is no power or authority in the Deed of Covenant for the
respondents to improve the amenities or up-grade the condition of the building.
There is only power to maintain and keep the existing amenities and condition
of the building in a good and tenantable condition. Any attempt to improve the
amenities or to up-grade the building must be blessed with the consent of all
owners. No unwilling owner can be forced to contribute to any such
improvement or up-grading against his wishes. The resolution purporting to
authorise the renovation works was without lawful foundation and the acts of
the respondents in carrying out the said works void of any legal authority. The
resolution was thus not binding on the appellant and the respondents’ claim for
contribution against the appellant was without lawful authority.
Building Management Ordinance Cap.344
- 8 -
Can the respondents rely on any overriding statutory authority to
impose the resolution upon the appellant. Section 14 of Building Management
Ordinance, Cap 344, provides that a resolution “passed with respect to the
control, management and administration of the common parts” shall be binding
on all owners. The duties and powers of the respondents under s.18(1)(a) of the
Ordinance are to “maintain the common parts and the property of the
corporation in a state of good and serviceable repair and clean condition”. It
will be a wholly unreasonably stretch of one’s imagination to describe the
renovation works as works for the “control, management or administration” of
the common parts; or as necessitated by putting the said parts “in a state of good
and serviceable repair and clean condition”. I am satisfy that no assistance can
be found in the Ordinance to justify the conduct of the respondents or to afford
them any lawful basis for their resolution.
For the reasons given, the claim of the respondents for a
contribution of $4,000 against the appellant towards the renovation works must
fail. The respondents’ claim was thus dismissed. The appellant indicated that
he had no wish to claim any costs against the respondents, and thus no order as
to costs was made.
(J. Chan)
Judge of the High Court
Chow Yim Cheong, representing Claimants/Respondents, in person
Chan Wing Wai Raymond, representing Defendant/Appellant, in person
HCSA32/1994 THE INCORPORATED OWNERS OF BAYVIEW MANSION v. CHAN CHEUNG KIT MUI MARGARET - LawHero
THE INCORPORATED OWNERS OF BAYVIEW MANSION v. CHAN CHEUNG KIT MUI MARGARET
IN THE SUPREME COURT OF HONG KONG
SMALL CLAIMS TRIBUNAL APPEAL NO. 32/94
(CLAIM NO. 1463/94)
------------------------
BETWEEN
THE INCORPORATED OWNERS OF Claimants
BAYVIEW MANSION
AND
CHAN CHEUNG KIT MUI MARGARET Defendant
--------------------------
Coram : Hon Jerome Chan, J. in Court
Date of hearing : 1st June 1995
Date of delivery of judgment : 1st June 1995
Date of handing down reasons : 23rd June 1995
-------------------------------------
REASONS FOR JUDGMENT
-------------------------------------
This is an appeal from an award made by the learned adjudicator,
Mr T.C. Hon, against the appellant in the sum of $4,000 and costs $500 for his
share of the contribution towards the costs of “decorating” the common parts of
the building known as Bayview Mansion. The appellant is one of the owners,
and the respondents the management committee of the owners corporation, of
the said building.
- 2 -
The appellant relies on the following grounds of appeal :
(1) That the learned adjudicator erred in law in failing to
consider or sufficiently consider the defence raised by the
appellant in paragraphs 1(A), (B) and (C) of his defence.
(2) That the learned adjudicator erred in law in failing to
determine the issues raised by the appellant in the
aforementioned grounds of defence.
(3) That the learned adjudicator failed to consider the
procedures applicable to the passing of resolution in the
owners’ meeting as prescribed by the Deed of Covenant and
the provisions of Building Management Ordinance, Cap.344.
(4) That the learned adjudicator erred in law in failing to
determine the validity of the resolution allegedly passed at
the owners’ meeting held on 13 December 1992 in that there
was no determination on the authority to redecorate the
common parts of the building under the Deed of Covenant or
the Building Management Ordinance.
Validity of the Resolution under the Deed of Covenant
At a general meeting of owners held on 13 December 1992, a
resolution was purportedly passed, by a count of vote of 108 against 79, that
various parts of the common areas (e.g. entrance hall ) and common facilities
(e.g. lifts and main iron gate ) were to be renovated at a cost of $1.5 millions. It
was further resolved that each owner was to contribute $4,000 to the costs of
such works. The appellant was one of the owners who objected to the
renovation works. It is the contention of the appellant that the renovation works
were not authorised by the Deed of Covenant and thus the respondents had no
authority to require the owners to contribute towards the cost of such works.
The authority of the respondents to require contribution from the
owners towards costs incurred in respect of works carried out on the building is
founded in clauses 4, 8, and 10 of the Deed of Covenant. Clause 4 provides for
- 3 -
“cost of cleansing the said Building and keeping in good and tenantable repair
of” various common parts of the building. Clause 8 stipulates for the monthly
contributions from owners “towards the cost of servicing maintaining and
repairing the lifts” and various common parts and amenities of the building.
Clause 10 requires the owners to contribute towards the “expenses of repairing”
the staircases and landings. It is not controversial that renovation works were
carried out on the common parts and lifts of the building covered by the said
clauses. However, was the scope of works authorised by the said clauses?
To determine the issue, evidence relating to the nature and scope of
the renovation works must be examined. In his written judgment, the learned
adjudicator said : “His main ground is simply that the money contributed by the
owners were not properly applied and that the meetings was not valid for
passing the resolution. He did not call any other witness nor any other evidence
to support his allegations in the written defence which is partly in Chinese and
partly in English. It appears that he denied the claim because in his personal
opinion the defendant would not be liable to pay the amount claimed.” In the
light of his said observation of the appellant’s opinion, he ruled : “Having
considered all the evidence available and in all the circumstances of the present
case, the Tribunal is inclined to accept that the Claimant had proved the case
and that the defence was not sufficient to disprove the claim.”
It is for the respondents to prove their case against the appellant
and his alleged liability to contribute towards the renovation works. It is thus
for the respondents to adduce evidence to satisfy the tribunal that the cost for
the renovation works was covered by the said clauses. The learned adjudicator
set out the evidence of the respondents as : “The Claimant produced 19 pages of
papers to support the claim. The papers consist of an outline of the sequence of
the events (pages 1& 2), a summary of the account (page 3), Mr Chow’s
statement (pages 5 - 8), a record of meeting on 13th December, 1994
(pages 13 & 15) and a further explanation of the facts (pages 17 - 19).” In none
- 4 -
of the said 19 pages of documents did the respondents make any reference to
clauses 8 or 10. Neither did any of the said documents seek to verify that the
renovation works were authorised by any of the said clauses; and if so in what
way did any of the said works come within the description of maintenance or
repair works particularised in those clauses. The papers relied on by the
respondents merely quoted the whole text of clause 4 and alleged that it was
wrong for the appellant to allege that the renovation works were not repair
works. The acute scantiness of evidence to support the respondents’ case
appeared to be matched by the bare allegations of the appellant in his written
submissions. However, it transpired during the appeal that it was not really the
case. In fact, the appellant had submitted to the tribunal a bundle of 8 pages of
photographs comparing the condition of the relevant parts of the building before
and after the renovation works. The photographs depicting the pre-renovation
condition of the building are of substantial evidential value to the determination
of the issue of whether the renovation works were necessitated or authorised by
the said clause or otherwise. The appellant submitted that the learned
adjudicator returned the said bundle of photographs to him during the trial
refusing to evaluate them as relevant evidence. This is not disputed by the
respondents. The learned adjudicator must, with respect, be wholly wrong in
this respect. The photographs were the only independent evidence showing the
condition of the relevant parts of the building prior to renovation. Furthermore,
the failure of the learned adjudicator to record in his notes of proceedings the
submission of the evidence, his ruling on the matter and his return of the
evidence to the appellant renders his record of trial defective and incomplete.
There is simply no record of such an occurrence at all. Despite the deficiency in
the tribunal record, both parties consented to treat the photographs as being
tendered as evidence at the trial. The learned adjudicator was wrong in his
rejection of the evidence and an order was made in the appeal to reverse the
ruling of the learned adjudicator on this matter. The evidence ought to have
been admitted and, with agreement of both parties, an order was made to have
them treated as evidence before the tribunal at the trial.
- 5 -
It was also revealed that the appellant also tendered a copy of the
Deed of Covenant before the learned adjudicator at the trial which was also
returned by the learned adjudicator. No copy of the Deed of Covenant can be
found in the tribunal file at all. The respondents said they could not recall if any
copy was tendered to the tribunal at the trial, but agreed that a copy ought to be
made available in the appeal. Even assuming no copy of the deed was ever
tendered to the learned adjudicator at all, it would appear to me that the learned
adjudicator would have failed to discharge his statutory duty to investigate the
claim properly in not calling for a copy of such document before adjudicating on
the claim. It is difficult, in view of the issues in dispute, to understand how the
learned adjudicator can determine the claim without considering, or even
knowing, the contents of the Deed of Covenant. No mention was ever made in
his judgment to the contents of the deed. An order was also made to treat the
Deed of Covenant as part of the evidence before the tribunal.
By reason of matters aforesaid, the learned adjudicator had erred in
rejecting the photographs and Deed of Covenant as relevant evidence at the trial
thereby failing to properly consider all relevant available evidence before him
prior to a determination of the respondents’ claim. In so far as necessary, leave
is given to the appellant to appeal on this ground. The appeal is allowed and the
awards made by the learned adjudicator is set aside in its entirety.
I note with regret that the unfortunate error of the learned
adjudicator was not corrected at the appellant’s review that took place shortly
after the award was made. In a letter dated 29 November 1994, one day after
the review, the appellant complained that at the review, which lasted for 3
minutes, her husband (who had represented her for the entire proceedings) was
not allowed to adduce further evidence or to make any further submission. In
the notes of proceedings, no note was kept of a submission of the appellant or
of anything said by him at the hearing. The appellant’s complaint was
- 6 -
dismissed by a letter written on behalf of the Registrar of the tribunal stating he
was “directed” to inform the appellant that no evidence was ever adduced by the
appellant at the hearing apart from a seven-page written defence.
Should there be a retrial before a different adjudicator or could the
appellate court proceed to make a determination on the claim without a retrial?
I had the benefit of the photographs and the Deed of Covenant before me.
There is no other fresh evidence that could be made available to the tribunal on
a new trial. I was in as good a position as a tribunal at a retrial to determine the
true merits of the case. I was not hampered by any technical prohibitions
against reversing findings of facts by the tribunal as the learned adjudicator had
not made any findings of facts at all in his judgment. In the premises, no order
for a retrial was made and I proceeded to consider the validity of the resolution.
Were the renovation works necessitated by a need to keep the said
parts of the building in good and tenantable repair; or for servicing, maintaining
or repairing the same? Upon a careful examination of the pre-renovation
condition of the relevant parts of the building as depicted in the photographs, it
is beyond a peradventure that the question must be answered in the negative.
The relevant parts of the building appeared to be very well maintained and
serviced. They were clean and in good condition. I was not able to detect any
cracks on the walls or floor, nor could I see any other form of defects. Far and
apart, parts of the wall or floor tiles might have suffered a slight degree of
insignificant discoloration at the edges and corners due to ageing. However, it
is a far cry from alleging that they were in need of replacement by new tiles. All
that was justified was a thorough cleaning, with the aid of chemical agents
perhaps if necessary. No replacement would be required at all.
Furthermore, the nature and scope of the renovation works as
particularised in the notice of general meetings provided insight on the true
nature of the works. The notice spoke of “decoration works” to be carried out.
- 7 -
Details of the works set out in the notice were of a decorative nature. Nowhere
was it ever alleged in the notice (or in the resolution) that such parts of the
building were in need of any repair. Nor was it ever alleged in any documents
that such parts of the building were in anyway defective or damaged. After
examining the pre-renovation and post-renovation condition of the building as
shown by the photographs, the description of “decoration works” is in my view
a most apt choice of words. The works were partly truly of a cosmetic nature to
enhance the appearance of the building, and partly to improve the amenities of
the building. No doubt the building now looks a lot more attractive and
“classy”. The main iron gate was replaced by a grand-looking electrically
operated aluminium gate. An electronic communication system was installed at
the entrance. Close-circuit television monitoring was installed. The
management office was provided with a magnificent counter.
The building was provided with a facelift that gives it a modern
look and enhanced amenities. No doubt all owners would benefit from such
improvements, and the value of their flats would probably benefit as well.
These, however, could not provide the legal foundation for the respondents’
conduct. There is no power or authority in the Deed of Covenant for the
respondents to improve the amenities or up-grade the condition of the building.
There is only power to maintain and keep the existing amenities and condition
of the building in a good and tenantable condition. Any attempt to improve the
amenities or to up-grade the building must be blessed with the consent of all
owners. No unwilling owner can be forced to contribute to any such
improvement or up-grading against his wishes. The resolution purporting to
authorise the renovation works was without lawful foundation and the acts of
the respondents in carrying out the said works void of any legal authority. The
resolution was thus not binding on the appellant and the respondents’ claim for
contribution against the appellant was without lawful authority.
Building Management Ordinance Cap.344
- 8 -
Can the respondents rely on any overriding statutory authority to
impose the resolution upon the appellant. Section 14 of Building Management
Ordinance, Cap 344, provides that a resolution “passed with respect to the
control, management and administration of the common parts” shall be binding
on all owners. The duties and powers of the respondents under s.18(1)(a) of the
Ordinance are to “maintain the common parts and the property of the
corporation in a state of good and serviceable repair and clean condition”. It
will be a wholly unreasonably stretch of one’s imagination to describe the
renovation works as works for the “control, management or administration” of
the common parts; or as necessitated by putting the said parts “in a state of good
and serviceable repair and clean condition”. I am satisfy that no assistance can
be found in the Ordinance to justify the conduct of the respondents or to afford
them any lawful basis for their resolution.
For the reasons given, the claim of the respondents for a
contribution of $4,000 against the appellant towards the renovation works must
fail. The respondents’ claim was thus dismissed. The appellant indicated that
he had no wish to claim any costs against the respondents, and thus no order as
to costs was made.
(J. Chan)
Judge of the High Court
Chow Yim Cheong, representing Claimants/Respondents, in person
Chan Wing Wai Raymond, representing Defendant/Appellant, in person