Case Detail

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS.4978, 17643, 20857 OF 1998 AND
9502 AND 9516 OF 2000

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HCA4978/1998

BETWEEN
	HOLIDAY RESORTS (MANAGEMENT) CO. LIMITED	Plaintiff

	AND

	THE INCORPORATED OWNERS OF THE SEA RANCH	Defendant

	--------------------------

AND		HCA17643/1998

BETWEEN
	HOLIDAY RESORTS (MANAGEMENT) CO. LIMITED	Plaintiff

	AND

	GRANDCORP LIMITED	Defendant

(Consolidated by the Order of His Honour Judge Lee
of the Lands Tribunal dated 13 October 1998)

--------------------------

AND		HCA20857/1998

BETWEEN
	HOLIDAY RESORTS (MANAGEMENT) CO. LIMITED	Plaintiff

	AND

	CHONG LAP FU GEORGE	1st Defendant
	MAISON ROUGE RESTAURANT INVESTMENT COMPANY LIMITED	2nd Defendant
	KWAN FAT TRADING COMPANY LIMITED	3rd Defendant
	TENG QUN JUNE	4th Defendant
	YAU HING FUNG JERRY	5th Defendant
	TENG WEI WUN ANNE	6th Defendant
	YU HOI SANG ERNST	7th Defendant
	LOW PUI WAH ELLEN	8th Defendant
	HARRIS, PETER BERNARD	9th Defendant
	HARRIS, MARY MINERLLA ROSEMARY	10th Defendant
	KWOK TAI MING	11th Defendant
	JEAN M. WONG SCHOOL OF BALLET LIMITED	12th Defendant
	FLOWER MARS LIMITED	13th Defendant
	FONG LAI KUEN	14th Defendant
	COSMOS MUTUAL LIMITED	15th Defendant
	GIOCONDO MARIO MAURIELLO	16th Defendant
	BON PROFIT DEVELOPMENT LIMITED	17th Defendant
	CHO KAR CHEONG WILSON	18th Defendant
	LIU YIN PING	19th Defendant
	KING DOH RESTAURANT LIMITED	20th Defendant
	KEATON INVESTMENT CO. LIMITED	21st Defendant
	KELLY INTERNATIONAL CO. LIMITED	22nd Defendant
	LU HO BIN ALICE	23rd Defendant

(Consolidated by the Order of Master Poon dated 8 December 1998)

--------------------------

AND		HCA9502/2000

BETWEEN
	HOLIDAY RESORTS (MANAGEMENT) CO. LIMITED	Plaintiff

	AND

	CHAN MEI LING	Defendant

(Consolidated by the Order of Deputy Judge Lee of the Lands Tribunal dated 30 July 1999)

--------------------------

AND		HCA9516/2000

BETWEEN
	HOLIDAY RESORTS (MANAGEMENT) CO. LIMITED	Plaintiff

	AND

	H.H. WONG INVESTMENTS LIMITED	Defendant

(Consolidated by the Order of Deputy Judge Tong of the Lands Tribunal dated 30 July 1999)

--------------------------

Coram: Deputy High Court Judge Muttrie in Court

Date of Hearing: 24 April to 27 April, 2 May 2001

Date of Judgment: 18 May 2001

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J U D G M E N T

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Judgment

1. These consolidated actions arise out of disputes between two factions of the owners of apartments at Sea Ranch, a housing development on Lantau Island. Other litigation is in progress.

Background

2. In about 1979, Holiday Resorts (HK) Ltd ("HK") was incorporated by the developer, John D Hutchison & Co. Ltd for the purpose of selling the apartments at Sea Ranch. In 1979, Holiday Resorts (Management) Co. Ltd ("Management") was incorporated to provide management services to the apartment owners and the Sea Ranch Estate and Holiday Resorts (Transport) Ltd ("Transport") was incorporated to provide a ferry service between Sea Ranch and Hong Kong Island. A Deed of Mutual Conditions ("DMC") was executed on 31 July 1979 under which the plaintiff had the right to manage Sea Ranch and to collect management fees and other payments, including those for the operation of the ferry service, from the apartment owners. In particular, Clause 6 appoints the plaintiff as manager and provides for its remuneration; Clause 7 sets out its powers as manager; and Clause 8 regulates the payment of management expenses and enforcement provisions. Clause 8(e) gives the plaintiff the power to take legal action against a defaulting owner, as agent of the other owners, for recovery of management fees and other payments.

3. The development did not make money, and the original developer sold out the clubhouse, common parts of the Sea Ranch and unsold apartments to the existing apartment owners for a nominal sum. A holding company, Holiday Resorts Holding Ltd ("Holding") was incorporated in about 1984 to hold shares in the existing companies. Each apartment owner was issued one share in Holding. Subsequently, some owners sold their apartments but retained their shares in Holding. The directors of Holding and the subsidiary companies were all apartment owners.

4. The Incorporated Owners of the Sea Ranch ("IO"), the defendant in HCA4978 of 1998 was set up in about 1980. For a long time, the directors of the plaintiff and the members of the Management Committee of the IO were common. In effect, there was no supervision of the plaintiff's management by any independent body. Some of the owners were not satisfied with the plaintiff's performance as manager. In particular, they complained of a non-functioning sewage treatment plant, the deteriorated condition of the pier, improperly maintained clubhouse premises, and general deterioration in the quality of the Sea Ranch. They also complained that no summary of accounts had been sent to the owners as required under the DMC.

5. In the years 1996 and 1997, the plaintiff had declared itself a dormant company. In effect, its accounts were consolidated with those of HK. The latter company collected the management fees.

6. In December 1996, a Mr George Chong Lap Fu, the owner either personally or through companies controlled by him of several apartments, and some other apartment owners were elected to the board of directors of the IO. They ousted the directors who had formerly controlled it. A struggle ensued between the new board of the IO and the board of directors of the plaintiff and its related companies, for control of the management of Sea Ranch.

7. In July 1997, the IO issued a writ in HCA7953 of 1997 against the plaintiff and HK seeking a declaration that the right of the plaintiff to manage the Sea Ranch under the DMC had expired on 31 July 1997. This action was settled on 25 September 1997 by a settlement agreement. Under that agreement the IO agreed that the plaintiff had the right to collect management and ferry fees in accordance with the DMC, and that it should continue its management of Sea Ranch. The plaintiff agreed to provide the correspondence addresses of all the registered owners of the apartments.

8. In February, 1998 the IO held an extraordinary general meeting at which it resolved to collect the management fees from all the apartment owners. On 26 February HK wrote to the owners to the effect that despite this resolution the IO had no authority to collect management fees which were payable to the plaintiff under the DMC. On 9 March 1998, the IO sent a circular to the registered apartment owners informing them that it had taken over the responsibility of collecting the management fees and a further circular instructing them to disregard any demand notices from the plaintiff with effect from 1 March 1998. It also invited the plaintiff to contact it to work out a system whereby the IO would reimburse the plaintiff with the management fees collected.

9. Some owners thereafter paid management fees and other charges to the IO. Those concerned in this case had, it appears, all been in default in payment to the plaintiff before March 1998. A few of the defaults dated back to 1995.

10. On divers dates between 18 March and 24 June 1998, the plaintiff, pursuant to its entitlement under clause 8(f) of the DMC, registered charges in the Land Registry against the apartments whose owners were in default.

11. By a letter dated 1 September 1999, the IO purported to terminate the plaintiff's management of Sea Ranch as from 10 December 1999 under Paragraph 7 of the 7th Schedule of the Building Management Ordinance, Cap.344. I am advised that this is being challenged by HK in HCA19084 of 1999, though it is not now in dispute that the plaintiff has at least in part ceased to function as the manager of Sea Ranch. The evidence is that it now only manages those apartments which are owned on a "term" or time-share basis. These were unsold apartments originally taken over by the holding company.

The actions

12. In HCA4978 of 1998 the plaintiff on 30 March 1998 issued a writ seeking an injunction against the IO interfering in the relationship between it as manager and the individual owners, and damages for interfering with contracts of the plaintiff and the owners. On 31 December 1998， Suffiad J granted an interlocutory injunction and ordered the defendant to pay to the plaintiff the sum of $846,190 being fees paid by some of the owners to the defendant up to 30 November 1998.

13. The plaintiff no longer seeks a final injunction against the IO which is now in control of the management of Sea Ranch, through a professional estate management company. It seeks interest on the sum of $846,190 from the date of the writ to the date of the interlocutory injunction. It is suggested that this be at half the judgment rate. It also seeks its costs which, it is argued, should be awarded on the indemnity basis or at least on the solicitor and own client basis. The defendant does not proceed with its defence that the plaintiff, by reason of declaring itself a dormant company, had breached the conditions of the DMC. It does not object to paying interest at the rate suggested if it is found liable but it disputes the basis of the costs sought. Liability is disputed on the grounds mentioned below.

14. The other consolidated actions started in the Lands Tribunal in 1998. They were issued on divers dates between February and September of that year. In them, the plaintiff claimed against the individual owners for management and other charges under the DMC, including the costs of the charges and registration thereof, and a collection charge.

15. The plaintiff has provided a very clear and helpful schedule setting out its claims in tabular form. Liability for these claims is also disputed on the grounds mentioned below. There is no dispute as to the figures set out therein. However the defendants argue that the contributions to management expenses were never agreed; that the costs of the registered charges should not be included as damages but as the costs of the actions and are therefore in the discretion of the court; and that the collection charges are not payable because the plaintiff has adduced no evidence to show that any work was done in incurring them.

Dispute on liability

16. Originally, the defendants all pleaded that the plaintiff had breached the conditions of the DMC by declaring itself dormant in 1995 but they no longer persist in this defence. By a summons dated 31 October 2000, which was adjourned for hearing by the trial judge, the defendants applied to dismiss the actions on the ground that the plaintiff's appointment as agent of the owners had terminated on 10 December 1999 and therefore it had no locus standi to bring or continue these actions on the owners' behalf.

17. I heard the summons before the commencement of the trial. The plaintiff argued that since the management fees, ferry charges and the like had never been sufficient to cover expenses, it had advanced sums to pay for them. It was therefore not, by the current actions, collecting what was due to the owners, but what was due to itself. I allowed amendment of the pleadings to cover (as an alternative) this change of position, which had in fact been known to the defendants for some time.

18. As I have indicated, there is no real dispute that the IO, through a management company, is now managing Sea Ranch except for the term owners' apartments, none of which is concerned here. The plaintiff has not raised the issue of validity of termination in these proceedings nor has it been suggested that these proceedings be stayed until that matter is dealt with. Nor indeed has there been any argument that the agency has not been validly terminated. For the purposes of this judgment, I have to take it that it has.

19. There is, therefore, no dispute that the various defendants were in arrears of payment. The only dispute is as to who can now collect those arrears. The issue for trial is now quite simply whether the plaintiff made the advances, so that the sums claimed from the various defendants represent partial reimbursement to it of what it has paid out on the owners' behalf.

Evidence

20. Evidence for the plaintiff comes from Madam Leung Lo Ming, Diana, Madam Ip Mo Yin, Mona, and Madam Lo Wing See, Cynthia. Madam Leung is currently the plaintiff's manager and has been since August 1998. Madam Ip is a director of the plaintiff, and the owner of an apartment at Sea Ranch. Madam Lo is a qualified accountant, and the audit manager of Glass Radcliffe Chan and Wee, who are the plaintiff's auditors. The defendants called no evidence.

21. Madam Leung's evidence was contained in her statement dated 16 March 2001. She said that for years, the management fees and ferry service charges received by the plaintiff from the apartment owners had not been sufficient to cover the expenses properly incurred for the management and ferry services of the Sea Ranch. The management funds established under the DMC, from which such expenses could be met, were exhausted. The plaintiff had to make advances to cover the deficits. It could not recover its own remuneration which was included in the management fees and ferry service charges. The audited financial statements of the plaintiff showed that as at March 1999 the plaintiff was carrying an accumulated deficit of $1,556,608.00. Therefore, the various actions were brought by the plaintiff, not as agent but in its own right and interest.

22. She also said that the plaintiff's position was that the termination of its management was not valid in view of the claim by HK in HC Action no. 19084 of 1999.

23. From cross-examination it appears that Madam Leung started work as the plaintiff's manager in August 1998. Before that she had no knowledge of the plaintiff's affairs. She also said that she did not do the accounting work herself, though she would know what sums were received and what were not, and what was surplus and what deficit.

24. Madam Ip's evidence came in the form of various witness statements and affidavits which she adopted. I do not need to go into the earlier affidavits. The important one for these proceedings is that dated 4 December 1998, as well as a statement dated 2 September 1999 confirming it. In it she referred to a set of management income and expenditure statements for 1 April to 31 October 1998 a total of which showed a total of $1,900,000 unpaid management fees and ferry service charges. She said that in order to maintain the management services of the plaintiff, Holding had advanced a short term loan of $1,600,000 to the plaintiff since June 1998.

25. The management income and expenditure statements referred to showed a deficit of income over expenditure for the first quarter of $677,836.26 and those for the second quarter a deficit of $988,642.05. In October the deficit was $238,389.64. Significant components of the total deficits were the deficits on the ferry services, of, respectively, $181,867.03, $282,609.56 and $122,700.04.

26. In her oral evidence, Madam Ip said that she had been a director of the plaintiff from 1992 to 1997 and again became a director in 1998. She said that as far as she knew, the income of the management company could never cover expenditure, except for one or two months in 1996 when it was the summer vacation, and many staff members of the corporations owning the apartments came to Sea Ranch for holidays. As a result, there was more income from ferry fares. The company could break even for about two months but apart from that it could never make ends meet.

27. She also gave evidence that as early as the AGM for 1994/1995 there had been a resolution of the IO that the owners should pay an additional contribution of up to $10,000, depending on the size of the apartment, to cover management expenses. She had put her signature to a letter to the owners dated 3 November 1996 calling for payment of 50% of these contributions, resolved at an AGM on 31 October 1996. She had written that the remaining 50% was to be discussed and confirmed at a resumed AGM in another 3 to 4 weeks. She did not agree with a letter sent in by one owner to the effect that only the 50% had been resolved at the AGM. She said that what had been agreed was that the contribution should be paid in two lots; what was undecided was when the second lot should be paid.

28. In fact, her letter of 3 November 1996 also asks those who did not pay the contributions for 1994/95 to note that "this resolution was reaffirmed at the meeting on 31 October 1996."

29. Cross-examined, Madam Ip agreed that she had just been a volunteer as director. She had no personal knowledge of the accounting or bookkeeping and she had not checked the accuracy of the accounts she referred to. She did not resile from her position on the contribution called for at the AGM. Actually, no minutes of that meeting or the 1995 meeting have been produced, and she could not now remember in detail what happened at the meeting.

30. I asked her about the short term loan, and she explained her memory of it. She said that there had been a share allotment as a result of which Holding had money. Also a shareholder had provided a loan of about $500,000. She believed that she had, in her capacity as a director of Holding signed a cheque in favour of the plaintiff.

31. In fact it is not in dispute that 64 shares were allotted at $20,000 per share after May 1998. Unfortunately, however, there are no documents to show a specific transfer of funds.

32. The third witness, Madam Lo, was, as I have indicated, the auditor. She said that she had audited the accounts of Holiday Resorts for the account years ending March 1988 and March 1999. In the course of her work she had reviewed financial statements going back to 1992, because the plaintiff had been dormant in 1995 to 1997. She said that the directors had told her that in 1996 to 1997 they were of the opinion that to save costs, all transactions should go through the books of HK.

33. She referred to various sets of accounts. In particular, she referred to the annual report and financial statements of the plaintiff for the year ended 31 March 1996. Another auditor had audited these, but they had been accepted by the directors. The balance sheet showed a net amount due to general cost pool fund (i.e. not including the term owners' apartments) of $9,907,741 and an amount due to ultimate holding company of $2,074,600. This latter figure was brought forward from 1995.

34. The auditor's report showed under the heading "Fundamental Uncertainty" that :

"The financial statements have been prepared on a going concern basis. In view of the significant accumulated losses and net liabilities as at 31 March 1996 continuance in business as a going concern is dependent upon the financial support of the ultimate holding company and fellow subsidiary companies and/or attaining future profitable operations".

35. This was echoed in the auditor's reports on the plaintiff for the year to 31 March 1998 and the year to 31 March 1999, prepared by Madam Lo herself. In 1998, the same amount was due to the ultimate holding company. In 1999, it had increased to $3,454,784; there was a figure of $4,008,393 due to a fellow subsidiary company and there were accrued expenses and sundry creditors of $1,551,616.

36. It appears that the basis of the accounts was changed in the year 1998/1999 to allow for the fact that Management had been wrongly shown as dormant, and the accounts combined in previous years. Figures were apportioned between the companies in the ratios which had applied before the combination. This was advanced to account for the differences in figures in the 1999 accounts.

37. Madam Lo's evidence was technical, lengthy and complicated and much concerned with refuting comments made by the defendants' accountant, Mr Chow Suk Ping, who did not himself give evidence. Much of that refutation was contained in a letter signed by a partner of her firm, which she said she had drafted. I do not propose to try to paraphrase her evidence here. I will, however, reproduce one passage of cross-examination, from my note which I think it encapsulates what the tenor of her evidence on the question of advances, as follows :

"Q: See the statement of Diana Leung, at para. 5. "In order to finance the management and the ferry service of the Sea Ranch, the plaintiff had to make advances to foot the deficits for such expenses". Can you say from auditing if this is right or not?
A: For the group, the most significant expenses are two, the motor vessel rentals and the staff salaries. These two items have been accounted for in the owners' accounts. In order to pay them, the plaintiff must have money to settle them. You can see from the balance sheets, Management does not have it. Advances, according to the balance sheets came from the ultimate holding company and sundry creditors. I say this because if you delay payment to the vessel owner, there won't be a cash payment out, so I agree with Diana Leung that Management is financing the owners' accounts from advances from ultimate holding company or other companies in the group."

Evaluation

38. Counsel for the defendants argues that it is for the plaintiff to prove that all the management fees in issue represent advances made by it to meet the management expenses. This is particularly so since the plaintiff was the agent of the owners and owed them a fiduciary duty to say nothing of the provisions of the DMC which required them to keep proper accounts and produce all such accounts and supporting vouchers. There are no vouchers; all we have are the accounts. The witnesses' evidence is of little value because it is vague and in any event any advances made in 1998 would not necessarily cover the management fees in issue. The accounting evidence highlights the deficiencies in the accounting systems and that casts serious doubt on the reliability of the financial statements. The evidence is too general and vague, and part of it is hearsay. The timing of the alleged advances does not match with the relevant time in respect of the bulk of its claims.

39. Now I accept that the plaintiff's evidence is somewhat vague and there is a lamentable lack of vouchers. However, there is no evidence to contradict it. Further, the accounts show consistently, over the period from 1995 onwards, that the plaintiff was running at a tremendous loss and was consistently, over the years, owing money to its holding company.

40. The internal income and expenditure accounts show that the plaintiff did indeed have to pay out more in salaries, and in payments to the ferry company to which it contracted out its ferry service, than it was taking in, month by month. I accept that the auditor did not regard these accounts as auditing evidence; no doubt that is right, because she would want to look at the vouchers behind them; and I accept that they are hearsay, but there is no allegation that they are fraudulent, and no evidence to suggest that they are inaccurate. They were made in the ordinary course of business and there is no reason to think that they would not be reliable.

41. What is clear is that the plaintiff was running at a loss over a long period and it was necessary for Holding and HK (and one has to bear in mind that the directors were common to all of them) to prop it up throughout.

42. I accept the evidence that a specific advance of about $1.6 million was made in 1998 by the holding company to the plaintiff. This would tally at least in part with the fact of Holdings having taken in some $1.28 million from the share allocations. I do not see why it should be necessary for the advance to match, in time, the debts due by the defendants.

43. Part of the claims for management fees must have been referable to the plaintiff's own remuneration under Clause 6 of the DMC. The remuneration was to come from the fees. We do not know how much the remuneration should have been in the relevant period but there is evidence that the plaintiff never actually received it because there was not enough money coming in to cover it.

Finding

44. It seems to me that the only inference I can draw from the evidence is that the plaintiff did in fact pay out money, which it got from Holding or HK, to supplement the shortfall in what it took in from the owners, and particularly to pay for salaries and the ferry services. It does not seem to have been paying for some other things that it might otherwise have paid for, e.g. repairs to the sewage plant and pier. That was the basis of the owners' complaints in the first place.

45. The amounts owed by the plaintiff were well in excess of what they now claim from the defendants. It seems to me that the only inference is that in attempting to recover management fees and other charges from the defendants the plaintiff is seeking to recover, not what is due to the owners, but what is has advanced to keep the Sea Ranch running, as well as what is due to it by way of its own remuneration.

Contribution to management expenses

46. Madam Ip gave evidence that contributions were agreed at the meeting for 1994 to 1995 and at the meeting in 1996. There is nothing to gainsay her evidence, even if no minutes of the meetings have been produced. Even the letter of the defendant Grandcorp Ltd dated 22 July 1997 does not take issue with the fact that contributions of $5,000 were agreed at the later meeting. I also note from the plaintiff's schedule that in only three cases is a contribution of more than $5,000 sought. In all these cases the relevant periods of default go back to 1995.

47. I do not doubt that at contributions of at least $5,000 were agreed at the meeting in October 1996 and that contributions for the previous year had also been agreed.

Collection charge and costs of the registered charges

48. The plaintiff's claims against each defendant include a collection charge of $300 and legal costs of $4,000 plus registration fee of $210 for registration of the charge. The defendants argue that there is no evidence of any work done to justify the collection charge and that this $4,000 represents litigation costs and should not be claimed as damages. They rely for the first point on Discovery Bay Services Management Ltd v. Buxhaum [1995] HKDCLR 7 and for the second point on GTE Directories (HK) Ltd v. Mo Yung Kwok Wah [1985] 1 HKC 485. It is also argued that the plaintiff can only invoke clause 8(e) of the DMC, which deals with costs, if it is properly claiming arrears of management fees as an agent. This has no application to its claim based on reimbursement of advances.

49. The relevant parts of Clause 8 of the DMC read as follows:

"(d) If any owner shall fail to pay any amount payable hereunder within seven days of the date on which the demand for payment is served on to him, he shall further pay to the Management Company:
(2) A collection charge of $300 or such lesser sum as the Management Company may agree to cover the cost (other than legal costs of proceedings as hereinafter mentioned) of the extra work occasioned by the default.
(e) All amounts which may be or become payable by any owner responsible for making such payment in accordance with the provisions of this Deed together with interest thereon as aforesaid and the said collection charge and all at the expenses incurred in or in connection with recovering or attempting to recover the same shall be recoverable by civil action at the suit of the Management Company. The claim in any such action may include a claim for the solicitor and old client costs of the Management Company and the defaulting owner shall in addition to the amount claimed in such action be liable for such costs. In any such action, the Management Company shall conclusively be deemed to be acting as the agent or agent for and on behalf of all the owners other than the defaulting owner and no owner sued under the provisions of this Deed shall raise or be entitled to raise any defence of want of authority or take objection to the right of the Management Company as plaintiffs to sue or to recover such amounts as may be found to be due.

In the event of any owner failing to pay any sum due and payable by him in accordance with the provisions of this Deed within seven days of the date on which the same become payable, the amount thereof together with interest as aforesaid and the said collection charge and all costs and expenses which may be incurred in recovering or attempting to recover the same including the legal expenses referred to in paragraph (e) above and in registering the charge hereinafter referred to, shall be charged on the share or shares of the defaulting owner in the said land and the said Sea Ranch and the apartment held therewith and the Management Company shall be entitled without prejudice to any other remedy hereunder to register a Memorial of such charge in the District Land Office, Islands against the share or shares of the defaulting owner. Such charge shall remain valid and enforceable as hereinafter mentioned notwithstanding that judgment has been obtained for the amount thereof provided such judgment has not been satisfied."

50. There is indeed no evidence of extra work occasioned by the default but obviously some work was necessary to get the papers together and send them to the solicitor. $300 is a small amount and seems reasonable as a genuine pre-estimate of an item of damage caused to the plaintiff by the default. It is a proper item of liquidated damages provided for by the Deed and I do not see why the plaintiff should not have it.

51. As to the costs of registering the charges, it is clear that the "expenses in registering the charge hereinafter referred to" are quite separate and distinct from the litigation costs referred to in paragraph (e). They are not litigation costs at all. The case cited has no relevance here. These costs are item of expense met by the plaintiffs on behalf of the owners, in the same way as were the management expenses and the plaintiff is entitled to recover them on the same basis.

52. I note that the Memorials consist of three pages. The first page consists of recitals and is identical in each case. The second page shows the name of the owner and the description of the property to be charged and the third page sets out the sums due. Producing these Memorials and getting them registered is simple clerical work and one might ask whether the solicitor is reasonable to charge $4,000 for each one. I can see why the defendants would want this item to be subject to taxation. However, it is not an item of costs but an item of damages and the question of whether the plaintiff might have been able to mitigate the damages by negotiating a cheaper rate with its solicitors, or instructing a cheaper solicitor, if such exists, has not been raised.

Costs

53. In all the consolidated actions, the plaintiff seeks costs on the indemnity basis. It is argued that the history of the litigation between the two factions shows that the actions of the defendants were scandalous and vexatious. They were all part of an ongoing plan to get rid of the plaintiff as manager. Further, it is argued that the plaintiff was doing its duty as agent in pursuing the actions and should not suffer thereby. In the recovery actions, the plaintiff relies on the general indemnity provided to it as manager under Clause 7(d) of the DMC. Alternatively, it relies on the provision in counsel relies on the provision in Clause 8(e) for costs on the solicitor and own client basis.

54. Clause 7(d) reads:

"(d) The Management Company shall not be liable to the owners or any of them or to any person or persons whomsoever whether claiming through, under or in trust for any owner or otherwise, for or in respect of any act, deed, matter or thing done or omitted in pursuance of purported pursuance of the provisions of this Deed not being any act or omission involving criminal liability or dishonesty or wilful negligence and the owners shall fully and effectually indemnify the Management Company from and against all actions, proceedings, claims and demands whatsoever arising directly or indirectly out of or in connection with the management of the said land and the said Sea Ranch and the operation of the ferry services or any act, deed, matter or thing done or omitted as aforesaid and all cost and expenses in connection therewith and not involving criminal liability, dishonesty or wilful negligence on the part of the Management Company."

55. For the defendants, it is argued that the defendants had real and genuine grievances concerning the management. The accountant confirmed that over the years, proper records were not kept. The financial system was a mess. The owners' queries were never answered. Ultimately, they were able to oust the plaintiff as manager. Most owners were happy to pay what was due by them and paid it to the IO who in turn told the plaintiff that they would pay over what they had collected, on production of proper evidence of the expenses. Once the action was started the defendants behaved properly and the IO complied with the order for injunction and payment.

56. There is no dispute that costs are ultimately in the discretion of the court and that I have jurisdiction to award costs on the indemnity basis. Costs on that basis may be awarded where there are some unusual or special features in the case. Such an award may be appropriate where

"the proceedings were scandalous or vexatious, had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner"

per Godfrey J (as he then was) in Overseas Trust Bank v. Coopers and Lybrand [1991] 1 HKLR 177 at 183. However, these examples are not to be taken as limiting the discretion; Sung Foo Kee Ltd v. Pak Lik Co. (A Firm) [1996] 3 HKC 578.

57. I have found that plaintiff was running at a loss over a long period and it was necessary for Holding and HK to prop it up throughout. That means that the plaintiff did not do its job properly. So the defendants did have a genuine grievance. However, they went about redressing their grievance by the wrong means. They should either have sought to vote out the directors at a general meeting of Holding or else they should have done what they ultimately did and terminate the plaintiff's appointment under the provisions of the Buildings Management Ordinance.

58. The IO should not have collected management fees from the owners and withheld them from the plaintiff particularly following the settlement of HCA7953 of 1997 by which the IO agreed that the plaintiff had the right to collect management and ferry fees in accordance with the DMC, and that it should continue its management of Sea Ranch. For a party to such an agreement to sue, in defiance of the agreement, would be an affront to the court. The IO is the defendant and it now appears that apart from the fact of the agreement it never had any real defence because the defences of dormancy and fundamental breach were not maintained.

59. Another consideration is that the plaintiff was, when it instituted the proceedings, acting as agent of the owners. It may no longer be the agent of the owners; but any costs it has to pay must come, ultimately, from Holding; and the shareholders of Holding are, in the main, the owners. This is not the usual situation where the management company is a subsidiary of the developer. Any shortfall between the costs awarded and the costs the plaintiff has to pay must come ultimately from the owners. It is difficult to see why the owners should now be penalised.

60. For these reasons, I consider that indemnity costs in the action between the plaintiff and the IO are appropriate.

61. As to the individual owners, it now appears that they never had a real defence either. That must have been obvious to them, if not from the outset, at least once Suffiad J ordered the interlocutory injunction and ordered the IO to pay to the plaintiff the money it had collected.

62. It seems to me that the same considerations apply. I do not see why the other owners should pay any part of the costs of recovery from a defaulting owner. That is no doubt why the DMC provides for solicitor and own client costs. Such costs, incidentally, are not now provided for in Order 62 of the Rules of the High Court. Under the rules as they stand a taxing master cannot tax on that basis.

63. For these reasons, there will be indemnity costs against the individual defaulting owners also.

Judgment

64. In HCA4978 of 1998, there will be judgment in favour of the plaintiff for interest at half the judgment rate on the sum of $846,190 from the 30 March to 31 December 1998.

65. The defendant's counterclaim be dismissed.

66. Costs of the action including the reserved costs of the interlocutory injunction be to the plaintiff to be taxed on the indemnity basis if not agreed.

67. In the remaining consolidated actions, in each case there will be judgment in favour of the plaintiff against the defendant, for the sum shown against the defendant's name in the chart below :

Action No.	Name of Defendant	Judgment for	Balance of Management fees etc outstanding
LDBM101/1998	Chong Lap Fu George	10,849.60	6,090.00
LDBM102/1998	Chong Lap Fu	29,793.49	23,559.00
LDBM103/1998	Chong Lap Fu	68,165.12	59,794.00
LDBM104/1998	Chong Lap Fu	16,041.60	11,090.00
LDBM105/1998	Chong Lap Fu George	40,811.90	33,560.00
LDBM106/1998	Chong Lap Fu	21,366.50	15,700.00
LDBM107/1998	Maison Rouge Restaurant Investment Co. Limited	22,726.90	16,700.00
LDBM108/1998	Kwan Fat Trading Co. Ltd	22,649.50	16,895.00
LDBM125/1998	Chong Lap Fu George	16,285.69	11,121.00
LDBM161/1998	Teng Qun June, Yau Hing Fung Jerry & Teng Wei Wun Anne	48,458.50	40,090.00
LDBM162/1998	Teng Qun June, Yau Hing Fung Jerry & Teng Wei Wun Anne	51,007.50	42,290.00
LDBM166/1998	Yu Hoi Sang Ernst & Low Pui Wah Ellen	60,178.20	50,280.00
LDBM167/1998	Harris Peter Bernard and Haris Mary Minerlla Rosemary	4,602.34
LDBM169/1998	Kwok Tai Ming	7,335.20	2,522.00
LDBM170/1998	Jean M. Wong School of Ballet Ltd	30,526.00	20,400.00
LDBM171/1998	Flower Mars Ltd	4,621.50
LDBM172/1998	Fong Lai Kuen	36,224.26	27,813.00
LDBM208/1998	Keaton Investment Co. Ltd	4,723.00
LDBM178/1998	Cosmos Mutual Ltd	10,530.30	5,720.00
LDBM181/1998	Giocondo Mauriello	27,057.50	21,520.00
LDBM182/1998	Bon Profit Development Ltd	17,977.90	12,525.00
LDBM25/1998	Lu Ho Bin Alice	119,610.60	100,151.80
LDBM184/1998	Kwok Tai Ming	5,224.10	280.00
LDBM185/1998	Cosmos Mutual Ltd	4,942.50
LDBM186/1998	Cho Kar Cheong Wilson & Liu Yin Ping	10,280.30	5,000.00
LDBM187/1998	King Doh Restaurant Ltd	16,837.26	11,574.00
LDBM218/1998	Kelly International Corp. Ltd	4,730.00
LDBM268/1998	Grandcorp Ltd	11,114.90	5,000.00
LDBM163/1998 (H.C. Action No.9502/2000)	Chan Mei Ling	0.00
LDBM221/1998 (H.C. Action No.9516/2000)	H.H. Wong Investments Limited	39,555.10	32,240.00

68. These figures include interest to the date of the application. So as to avoid awarding interest on interest, Counsel has asked me to award interest on the "balance of management fees etc. outstanding" at the judgment rate from the date of the application. The DMC provides for interest at1% for every 30 days. The equivalent annual rate is a little more than the judgment rate. In each case, therefore, there will be an award of interest at the judgment rate on the figure shown as "Balance of management fees etc. outstanding" from the date of the application.

69. In each case, costs of the action will be to the plaintiff to be taxed on the indemnity basis if not agreed. In the case of LDBM163/1998 (H.C. Action No.9502/2000) the defendant, Chan Mei Ling, has paid up so the costs will be restricted to those incurred before the date of final payment.

	( G.P. Muttrie )
	Deputy High Court Judge

Representation:

Mr Walter Lau, instructed by Messrs M.K. Lam & Co., for the Plaintiff in all actions

Mr Paul Lam, instructed by Messrs Y.S. Lau & Partners, for the Defendants in all actions

Remarks: On appeal by the Appellants to the Court of Appeal: Appeal allowed with costs. Please refer to CACV000107/1999.

HCA017643/1998

HCA 4978/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS. 4978 and 17643 OF 1998

--------------------------

BETWEEN
	HOLIDAY RESORTS (MANAGEMENT) CO. LTD.	Plaintiff

	AND

	THE INCORPORATED OWNERS OF THE SEA RANCH	Defendant

--------------------------

AND HCA 17643/98

BETWEEN
	HOLIDAY RESORTS (MANAGEMENT) CO. LTD.	Plaintiff

	AND

	GRANDCORP LTD.	Defendant

-----------------------------

(Consolidated)

Coram : Suffiad, J. in Chambers

Date of hearing : 11 December 1998

Date of handing down judgment : 31 December 1998

---------------------

J U D G M E N T

---------------------

1. The Plaintiff, in this case, Holiday Resorts (Management) Co. Ltd., is the manager for the Sea Ranch on Lantau Island, and the Defendant is The Incorporated Owners of The Sea Ranch. The Plaintiff is seeking an interlocutory injunction to restrain the Defendant from inciting the owners of the Sea Ranch not to pay the management fees to the Plaintiff and, from collecting the management fees by itself.

Background

2. Under the Conditions of Exchange dated 2nd September 1975, the grantee of the land on which the Sea Ranch stands is Holiday Resorts (Hong Kong) Ltd. ("the Parent Company"). Under Special Condition 6 thereof, the parent company is responsible for the maintenance of all buildings, structures and other facilities in the Sea Ranch. If in breach, the Government can re-enter the land under General Conditions 8 and 9 thereof. The Sea Ranch was developed and the Plaintiff was incorporated for the purpose of carrying out the management duties under the said Conditions of Exchange. In the event, the Plaintiff was a party to the Deed of Mutual Covenant governing the Sea Ranch under which the owners for the time being agreed to pay to the Plaintiff monthly management fees and ferry service charges. As usual, these terms contained in the Deed of Mutual Covenant is biding upon all subsequent owners. Furthermore, the Plaintiff is empowered to sue any of the owners for non-payment of management fees.

3. In about 1984, Hutchison Whampoa Ltd., the actual developer of the Sea Ranch, no longer wanted to operate the management of Sea Ranch and the individual apartment owners of the Sea Ranch at that time incorporated a new company called Holiday Resorts (Holdings) Ltd. ("the Holdings Company") to acquire all of Hutchison's shares in the Parent Company and in the Plaintiff. Each apartment owner was subscribed one share in the Holdings Company irrespective of his shares in the divided interest in the Sea Ranch. However, as time went on, some of the apartment owners sold their apartments without selling their shares in the Holdings Company, and in time although the great majority of the existing shareholders of the Holdings Company are still apartment owners of the Sea Ranch, some of the shareholders of the Holdings Company have no more property interest in the Sea Ranch.

4. For long it has been the practice of the Plaintiff to request the owners to pay their management fees not to the Plaintiff but directly to the Parent Company who collected it on the Plaintiff's behalf. Up to about December 1996, the management committee of the Defendant was mainly composed of members who were also on the board of directors of the Plaintiff. In those circumstances, since the Plaintiff and the Defendant were managed and controlled by more or less the same group of people, there was no supervision on the Plaintiff's management of the Sea Ranch by an independent body. Some owners were not satisfied with the performance of the Plaintiff in their management of the Sea Ranch. Some of these complaints included the non-functioning sewage treatment plant, the deteriorated condition of the pier, the improperly maintained clubhouse premises and the general deterioration in quality of the Sea Ranch under the Plaintiff's management. There was also a complaint that no summary of accounts has ever been sent to the owners as required under the Deed of Mutual Covenant.

5. As the dissatisfaction of these owners with the Plaintiff's management mounted, some of the owners decided to do something about it, and in December 1996, a Mr Chong Lap Fu and a few others were elected to the board of directors of the Defendant, Mr Chong, being elected as the chairman, and thereby ousting the former persons who controlled the board of the Defendant. The first step this newly elected board of directors of the Defendant wanted to take was to oust the Plaintiff as managers of the Sea Ranch. For this, they had to secure over half the vote of the then existing owners, but as most of the owners do not normally reside at the Sea Ranch, it being a holiday resort, and due to the fact that, for some reasons, the newly elected board to the Defendant did not have a list of the then existing owners, the Defendant wrote to the Plaintiff requesting to be supplied with a list of addresses of the owners. This request was not met.

6. In July 1997, the Defendant issued a writ in HCA No. A7953 of 1997, naming the Plaintiff as 1st Defendant, and the Parent Company as 2nd Defendant. In that High Court Action, the Defendant attempted to seek a declaration that the management of the Sea Ranch by the Plaintiff ceased on 31st July 1997. However, two days before the hearing of an inter partes summons in that matter, the parties to that action entered a settlement agreement on 25th September 1997, and under Clause 3 of that settlement agreement, it was agreed that the present Plaintiff is entitled to collect management fees and ferry fees in accordance with the Deed of Mutual Covenant, and that it shall continue managing the Sea Ranch in the ordinary course as before, By Clause 7 thereof, the parties agreed that the present Plaintiff do provide the correspondence addresses of the owners for the use by the present Defendant under lawful conditions.

7. At an Extraordinary General Meeting of the Defendant held on 15th February 1998, two resolutions were passed, namely :-

"(1) THAT the Management Committee of the Incorporated Owners of the Sea Ranch, be and it is hereby authorised to collect the management fee and any other related fees from the apartment and facilities owners of the Sea Ranch to keep in custody in a designated bank account for and on behalf of the owners, with effect from 1st March, 1998.

(2) THAT the Management Committee, be and it is hereby authorised to release such fees collected from owners to settle the Sea Ranch operating expenses as it thinks fit and proper."

At that meeting, the chairman of the Defendant expressly stated that the purpose of the two resolutions were to gain control of the owners' fund and to bring pressure to bear upon the management company to be responsive to the owners' demands for the management information to which they are entitled.

8. On 26th February 1998, the Parent Company wrote to all registered owners to the effect that despite the resolutions passed by the EGM of the Defendants on 15th February, the Defendant has no authority to collect management fees which are payable to the managers under the Deed of Mutual Covenant. It further reminded all owners to pay management fees to the Parent Company for and on behalf of the Plaintiff, otherwise any unpaid management fees may be recovered by legal proceedings.

9. On 9th March 1998, the Defendant then wrote to the Plaintiff informing them that the Defendant had taken over the responsibility to collect the management fees from owners of the Sea Ranch pursuant to the resolutions passed at the EGM on 15th February 1998. That letter further reminded the Plaintiff that the Plaintiff has no authority to deal with, and must not harass owners for collection of outstanding management fees after 1st March 1998. It also invited the Plaintiff to contact the Defendant to work out a system whereby the Defendant will reimburse the Plaintiff with management fees to settle the Sea Ranch operating expenses after 1st March 1998.

10. As a result of the confusion, on 11th March, the Defendant wrote to all owners, residents and shareholders of the Sea Ranch in an attempt to clarify the position. In that letter, it is stated :

" IO hereby clarifies that once the owners have paid their management fees by addressing it to the IO they have already fulfilled their duties and liability. IO resumes the responsibility to remit it to the management company but at an amount meeting what has been budgetted and approved. The members of IO, are actually the owners, definitely would not authorise the management company to demand a repeated fee, nor interests from owners. Therefore all owners can disregard any demand note from Holiday Resorts commencing March 1, 1999 [sic]. IO is informing Holiday Resorts to stop disturbing owners further."

This therefore led to the Plaintiff issuing the present proceedings and the present application for the interlocutory injunction.

The Plaintiff's arguments

11. In a nutshell the Plaintiff's argument is that firstly, it is common grounds that there is a serious question to be tried between the parties. Secondly, that it is wrongful of the Defendant to usurp the Plaintiff's function in collecting the management fees as provided for by the Deed of Mutual Covenant. This is particularly so since to date the Plaintiff has not been terminated as the mangers of the Sea Ranch. Moreover, it is submitted on behalf of the Plaintiff that there are legitimate methods for the Defendant to obtain information from the Plaintiff which it alleges to be entitled to under the Deed of Mutual Covenant, but that it is wrong for the Defendant to have gone about it the way that they have which is tantamount to in effect blackmailing the Plaintiff. It is also submitted, on behalf of the Plaintiff, that it is wrongful of the Defendant to induce the owners to act in breach of the Deed of Mutual Covenant in refusing to pay management fees to the Plaintiff. Lastly, the Plaintiff, in reliance on the decision of Mayo J in the case of The Incorporated Owners of South Seas Centre, Mody Road v. South Seas Centre Management Co. Ltd. and Others [1985] HKLR 457, argues that as long as there is no disruption or discontinuance of the essential services performed by the management company, then there cannot be said to be a fundamental breach by the management company such as to exclude the management company from the management duties, and therefore at best it can only be said that the Plaintiff company has delegated the collection of the management fees to its Parent Company.

12. In so far as the balance of convenience is concerned, the Plaintiff submitted that it would be impossible for the Plaintiff to continue to provide management services if the Parent Company had not extended a short term loan of $1.6 million to the Plaintiff. Furthermore, unless the injunction is granted, the quality of service provided will deteriorate and will seriously affect the Plaintiff, as well as the owners of the Sea Ranch, with the ultimate result that the Government may step in for re-entry under the said Conditions of Exchange. In the meantime, the Defendant is holding onto a sum of $800,940 as at 30th November 1998, being the amount of management fees paid to the Defendant by some of the owners of the Sea Ranch. The Plaintiff says that applying the principle of taking whichever course that appears to carry the lower risk of injustice in case it should turn out to be wrong, the circumstances are in favour of granting the relief sought.

The Defendant's arguments

13. Firstly, the Defendant accepts that there is a serious question to be tried and that there are issues which can only be resolved at trial. The main thrust of the Defendant's arguments is that the Plaintiff had failed to show daily running accounts for the management of the Sea Ranch, and have persistently refused to produce to the Defendant, for its inspection, accounting information of such management. In this connection, I was referred to Clause 7(19) of the Deed of Mutual Covenant which reads :-

"To keep proper accounts of all expenditure incurred by and of all payments made to the Management Company in respect of carrying out their duties hereunder and to permit each owner at any time during office hours to inspect such accounts and to take extracts therefrom."

and also Clause 9(b) thereof, which reads :-

"All monies collected by the Management Company in the exercise of their powers and duties hereunder (save and except sufficient petty cash for day to day requirements) shall be paid into separate bank accounts and the Management Company shall keep true and proper accounts of all such monies and the expenditure thereof and shall send to each owner a summary of such accounts together with copies of the Annual budgets for the ensuing year in respect of the Estate Management Account and a Ferry Services Account. The Management Company shall further produce all such accounts and the vouchers supporting the same for the inspection of any owner on reasonable notice being given."

14. Secondly, it is submitted that the Plaintiff is dormant, and being dormant, it can carry on no activities and could not and did not manage the Sea Ranch. Therefore that is a fundamental breach of the Deed of Mutual Covenant and the settlement agreement. The basis for this submission came about because the Plaintiff, in its directors' reports and financial statements filed with the Inland Revenue, had stated therein that it was dormant.

15. Lastly, it was submitted that because of the Plaintiff's breaches, the Defendant has taken these steps to pass the resolution on 15th February 1998 to adopt interim measures to protect the interests of the owners pending steps to be taken to terminate the Plaintiff's management of the Sea Ranch. In this connection, it is submitted by Mr Liao that the Plaintiff can receive management fees collected by the Defendant by submitting to the Defendant expense claims. It was emphasized that what the Defendant has done was a just measure to protect the owners in the light of the Plaintiff's repeated and continued refusal to provide proper accounts to the owners; that if the Plaintiff is prepared to be accountable as it was required under the Deed of Mutual Covenant, then management fees collected by the Defendant are available to the Plaintiff for use as management expenses. Under these conditions, Mr Liao submits that there can be no damage, let alone irreparable damage to the Plaintiff by the measures that have been adopted by the Defendant, starting with the passing of the resolutions on 15th February.

16. It was further urged upon me that the Plaintiff, being a limited company, and looking at its balance sheet as at 31st March 1997 which shows a capital deficit of $160,145, the Plaintiff would not be good on any undertaking in damages, and that in all the circumstances of this case, there would be a lower risk of injustice to refuse the injunction sought. But that the interim measures adopted by the Defendant are just, fair and reasonable in the circumstances.

Balance of convenience

17. Since it is accepted by both parties that there is a serious question to be tried between them, what falls to be decided by me at this stage is whether I should exercise my discretion to grant, or to refuse, an interlocutory injunction based on the balance of convenience. Firstly, I take into consideration that if the interlocutory injunction is granted, the Plaintiff would be put back into the position it was in before the resolutions were passed on 15th February 1998, in that the Plaintiff would be able to resume collecting management fees by itself from the various owners of the Sea Ranch. In that event, there may arise a possibility of the allegation by the Defendant of the Plaintiff's mismanagement of funds. If this should happen, it can still be remedied at the trial of this matter by the Court ordering the repayment of such amounts as are found to have been overpaid, or those amount found to have been misappropriated.

18. On the other hand, if an interlocutory injunction is not granted, and the Defendant is permitted to carry on collecting the management fees directly from the owners, as well as exhorting the owners not to pay the management fees to the Plaintiff. This could well result in the risk of disruption to the management services being provided. Furthermore, it could also have an effect on the contractual obligations of the Plaintiff with other independent parties. At the extreme, breach of Special Condition 6 will enable the Government to re-enter the land. If such should happen, they are not capable of being satisfactorily remedied by damages.

19. As for the submissions made by Counsel for the Defendant, the main thrust of his submissions is really that the Plaintiff failed to provide accounts in respect of the management expenses, and that these measures taken by the Defendant are to arm-twist the Plaintiff into providing those accounts which they are obligated to provide under the Deed of Mutual Covenant. The point made about the Plaintiff being dormant, and therefore not in a position to perform the management services is a non-starter. I do not accept that because the Plaintiff has claimed itself to be dormant in its accounting documents lodged with the Inland Revenue, it must necessarily follow, therefore, that the Plaintiff is not in a position to perform any of its management services, and therefore in fundamental breach of its obligations. Whether or not the Plaintiff is in fundamental breach of its obligations to provide management services to the Sea Ranch must be a question of fact and not to be decided by the accounting treatment in its accounts lodged with the Inland Revenue. This argument, put forward by the Defendant, is inconsistent with his submission that right up to the end of November 1998, the Defendant has, at the end of each month, invited the Plaintiff to present its management expenses account so as to be paid the management fees by the Defendant. This invitation by the Defendant suggests to me that the Defendant acknowledges that basic management services have been performed (no matter how poorly) by the Plaintiff, or its agents, including its Parent Company. In those circumstances, it could hardly have been the case that the Plaintiff was in fundamental breach of its obligations to perform management services.

20. The Plaintiff was given the right to collect management fees under the Deed of Mutual Covenant. That right was further agreed to between the Plaintiff and the Defendant under the settlement agreement. It seems to me the only way in which that right could be taken away from the Plaintiff was if the Plaintiff was in fundamental breach of its obligations to provide management services, or if the Plaintiff's appointment as managers of the Sea Ranch was validly terminated. In the present case, it does not appear that either of those events have occurred. It follows therefore that whatever steps that have been taken by the Defendant to prevent the Plaintiff from collecting their management fees must be wrongful.

21. Lastly, having been referred to Clauses 7 and 9 of the Deed of Mutual Covenant, I cannot find any provision there to make the Plaintiff's collection of management fees conditional upon their providing the proper accounts. This in effect is what the Defendant is hoping to achieve by its resolution passed on 15th February 1998.

22. Accordingly, I shall grant the interlocutory injunction sought by the Plaintiff in terms of paragraphs 1, 2, 3 and 4 of the Plaintiff's inter partes summons dated 30th March 1998. There will be a further order that the Defendant do pay over to the Plaintiff the amount of $800,940, being the management fees collected by the Defendant as at 30th November 1998 together with any other management fees or charges so collected by the Defendant thereafter. There will be a costs order nisi that the costs of the application for interlocutory injunction be the Plaintiff's costs in the cause.

	(A.R. Suffiad)
	Judge of the Court of First Instance

Representation:

Miss Audrey Eu, leading Mr Alfred Fung, inst'd by M/s M.K. Lam & Co., for the Plaintiff

Mr Andrew Liao, leading Mr John Yam, inst'd by M/s Cheung, Chan & Chung, for the Defendant

HOLIDAY RESORTS (MANAGEMENT) CO. LTD. v. GRANDCORP LTD.

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