GREAT SOURCE ENTERPRISE LTD v. SINO ESTATES MANAGEMENT LTD

LDBM 167/2001

IN THE Lands tribunal OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

building management application no.167 OF 2001

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JUDGMENT

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1.  The Applicant is the registered owner of Unit B, 6^th Floor, Block 2 of Dynastic Heights, Kowloon Tong. The Respondent is the Property Manager (Manager) appointed under the DMC of the Dynasty Heights (the Development).

2.  The Applicant seeks declaration that the Respondent has failed its duty to provide proper and sufficient security service, and particularly by preferring the interest of the developer than that of the owners.  The Applicant further seeks declaration that the Respondent has breached its duty by showing favour in election of members of Owners’ Committee and thereby the Applicant also asks for an injunction restraining the Respondent from favouring and rendering assistance to its preferred candidates in the subsequent years.

Background

3.  Dynastic Heights is a residential development (the Development) comprises of 3 parts, Dynasty Villa of 11 blocks of low rise apartments; Tropicana of 6 blocks and Skylodge of 5 blocks of high rise apartments. The Development is situated at the hillside of Beacon Hill, Kowloon Tong, it is surrounded by slopes with bushes and trees on about 3 sides. (The layout plan of the Development in the Trial Bundle TB D2/660 and the bird’s-eye view of the Development in photos D2/600-603). 

4.  Since the occupation of the Development in about 1999, there had been a few burglary incidents raising concerns of the owners.  In March 2000, the 1^st Owners’ Committee (OC) was formed and Mr Fong Chau Kwai (Mr Fong), the director of the Applicant, was also elected one of its members.  In May 2000, there was a robbery case at Skylodge and subsequently, security matters had been raised and discussed in various OC’s meetings. (see minutes of meeting on 7/6/2000 TB D1/173-4 §3.3; on 30/8/2000 D1/186 §4.3.2; on 4/11/2000 D1/206-1; on 6/12/2000 D1/208 §2.3.1; on 10/1/2001 D1/227 §4.2; on 28/2/01 D1/237 §2.1; on 18/4/01 D1/245 §2.1; on 19/5/01 D1/249 §4; and on 20/6/01 D1/259 §2.5…).

5.  For security services, Sing-Ho Services Limited was engaged since its occupation for a term up to 31/12/2000.  On 17/11/2000 Sing-Ho volunteered a proposal (Sing-Ho Proposal D1/206-26-29) to improve the security system in the Development and tender documents were presented for renewal of contract.  However, in the OC’s meeting on 6/12/2000 (D1/208 §2.3.1), it was resolved that Sing-Ho’s services shall end and it was subsequently replaced by Uniformity Security Co Ltd (Uniformity) in 2001.

6.   In December 2000, it happened that Mr Fong was harassed by 2 male strangers in his unit and report was made to the police.  Mr Fong also wrote to the Respondent and Uniformity requesting to step up the security measures. At around the same period of time, Mr Fong also found dubious vehicles parked outside the car park of Dynastic Heights and he took time to record all these matters and report to the Respondent and police as well (D1/211-226).  Mr Fong’s evidence in Court revealed that his view seems to be ignored in the OC and he described himself being somewhat “isolated” in the said meetings.  There thus followed numerous correspondence through his solicitor on all these matters to the Respondent instead of simply by himself.

7.  On 9/4/2001, the present action was commenced alleging the mismanagement of the Respondent as aforesaid.  On 25/4/2001, the Crime Prevention Bureau of the Hong Kong Police Force did make some 19 recommendations to the Respondent for the improvement of security system. (Police Recommendations, D1/242, 243).  In May 2001, the Respondent had submitted a proposal of improvement works estimated of more than HK$4 million to the OC for consideration. (Respondent’s Proposal, D1/249 §4.4; D2/643-648). The OC resolved for further deliberation on the proposal. 

8.  What followed were questionnaires sent by the Respondent to the owners for collecting views on improvement works and tender documents were also prepared in around August 2001 (D1/252-255, 257).  Tender documents were then received in September 2001(D1/282 §2) and the results of questionnaires were analysed and published in October 2001 (D1/286-288). In the OC’s meeting on 12/12/2001, as consensus could not be made and of insufficiency of capital, it was resolved to postpone the Respondent’s Proposal pending further review.  Thus the recommendations aforesaid had not been implemented.

9.  In 2002, Respondent took out a summons to strike out the Applicant’s present action, successful in Lands Tribunal but reversed in the Court of Appeal in 2004.  This action thus continued, the Applicant engaged a security expert in Canada where a comprehensive and thorough inspection and examination of all parts of the Development were made in 2005 and an extensive expert report was compiled.  The Respondent also engaged a local security expert to comment in reply (Trial Bundle C). 

10.  Thereafter, mediation was undertaken but in vain, the present trial has to commence in January 2009.  It has been raised at the outset whether the declaration sought would still serve any useful purpose concerning the state of affairs well before April 2001, and there is no dispute that throughout the subsequent years security measures have changed, yet the Applicant insists that the declaration could help improve and take preventive measures on security matters and inform all the owners the previous misdeeds of the Respondent and even the developer.  The issue on declaration shall be further elaborated in the latter part of my judgment.       

11.  Mr Wong of the Applicant accepts that now we only concern the matters of security matters on or before 9/4/2001 (commencement date of the present proceedings), and the incidents happened afterwards, event if quoted, only serves to prove the state of affairs before that date.

Security issue

12.  In gist, Mr Wong submits that the Manager shall have an unfettered discretion to undertake and improve the security measures, even independent of the views of the OC.

13. Mr Wong further submits that there is an express contractual duty for the Respondent to undertake, provide and even improve the security service under the provisions of the DMC,

“Clause 9 : The parties hereto have agreed with the Manager for the Manager … to undertake the management, operation, servicing, maintenance, repair, renovation, replacement and security of the Development…(D1/50)

Clause 36 : …the Manager shall have full and unrestricted authority to do all such acts and things as may be necessary or expedient for or in connection with the Development and the management thereof including in particular but without in any way limiting the generality of the foregoing :-

…(t) To provide and maintain as the Manager deems necessary security force, watchman, porters, caretakers, closed circuit T.V. system and burglar alarms and other security measures in the Development at all times;  (D1/65,67)

Clause 42 :   The Manager may delegate on such terms and conditions as it shall deem fit any or all of its power, rights and responsibilities under this Deed to any persons or company … PROVIDED THAT the approval of the Owners’ Committee shall be obtained in respect of any delegation to any person or company other than Sino Estates Management Limited (Respondent) (D1/74).”

14. It is therefore submitted by the Applicant that the Respondent shall have full and unrestricted authority to provide or even upgrade the security services if deemed necessary, Mr Wong further lends support from the Incorporated Owners of Provident Centre v Whampoa Property Management Limited LDBM 268/2002, where Judge Yung held that “The Applicant seemed to suggest that the Respondent was merely a servant and as such was bound to comply with every direction given by the Applicant. This cannot be right. A building manager has its own independent judgment in building management matters.”

15. Mr Wong further says that the Respondent also has implied contractual duty to carry out its duties with reasonable skill and care.  As the Development is a high class residential estate with luxurious amenities, therefore high standard of management service, including security service and facilities shall be achieved.

16. The Applicant in fact even pleaded the content of the advertisements posted by the developer for sale of the Development in 1998 to strengthen its case regarding the luxury amenities highlighted (D1-26-28), where Mr Wong submits that the standard shall therefore commensurate with that as required at a high class residential building. 

17. However, not only the said advertisements were made by the developer instead of the Respondent, but also the term of which was not that obvious to be implied nor was it necessary to give business efficacy to the DMC.  Therefore, it must be highly questionable to imply such a term to impose the duty on the Respondent to exercise its duty of care with reasonable skill as commensurate to such high standard as submitted.

18. In Lo Yuk Chu v Hang Yick Properties Management Ltd [1994]4 HKC 278, the Court of Appeal when dealing with the terms of DMC which apparently imposing strict liability on the Manager, (i.e.…the Manager shall be responsible for and shall have full and unrestricted authority to do such acts and things as may be necessary…to keep all common sewers…clear from obstructions…to keep all Common Facilities in good condition and working order..) it held at 282 that,

“These requirements, if they are absolute duties, could only be satisfied by employing a virtual army of maintenance and security staff.  This could never have been the intention of the parties…This, we are satisfied, was plainly never intended to pose an absolute duty to ensure that no common facilities ever break down. That would impose an impossible burden.

The overall duty imposed on the respondent by the DMC is one of ‘proper’ management.  Such management entails doing all that is reasonably required of a manager in the circumstances…the mere fact that such a thing is listed without being qualified by expressions such as ‘take reasonable steps to’ does not turn a manager into an insurer…

To satisfy such a duty the managers would be required to :

(i)take reasonable steps, by way of notices and letters, to warn the tenants of the danger…;

(ii)undertake regular inspection, if it were shown that such inspection was feasible and was in accord with proper…practice;

(iii)take proper action if there was any indication of malfunction;

(iv)act expeditiously to remove obstructions which do occur.

19. Likewise, in the present case, although clauses 9 and 36(t) do provide the Manager full and unrestricted authority to provide and maintain security measures as deemed necessary, it clearly does not mean to impose an absolute duty on the Manager to prevent from any incident of burglary and theft happened in the Development.  What is required would simply be proper management, to take reasonable steps, inspection and action, and to act promptly as circumstances required.       

Particulars of breach

Collateral warranty

20. Amongst the allegation of breaches, the most serious one concerns Respondent’s deliberate refusal to improve the security measures to ensure that the developer would not be called upon to perform its undertaking to make up the deficits incurred in the management of the development.

21. The Applicant pleaded that by a collateral warranty given by the developer (Victory World Limited) to the owners of the Development, the developer agreed to pay all deficits of management expenses to be incurred in the Development for the first 2 years of occupation. As the developer and the Respondent are associated companies within the Sino Group, it is alleged that the Respondent had purposely kept down the management expenses by not installing sufficient facilities and deploying sufficient security staff so as to minimize the liability of the developer in fulfilling the warranty.

22. The Applicant refers to the Income and Expenditure Statement of Management Fee for the terms of the warranty (D1/147),

“Since the current level of management fee is not adequate to cover the management expenditure, the Developer of Dynasty Heights will, as committed, top up the deficit of the residential management account by subsidizing the shortfall between the management fee income and actual expenditure for the period of 2 years commencing from 1^st March 1999.   The residential management fee level will be reviewed after this 2-year subsidization period and all parties concerned will be notified in due course.”

23. However, as highlighted by Mr Chow of the Respondent, there are arrows shown in the said Statement referring to the columns containing the residential accounts but not that of the Common Area or Car Park.

24. In the minutes of OC’s meeting on 5/7/2000, it was recorded that up to 29/2/2000, the deficit of residential account was about 5.84 million, the developer shall top up this as warranted. As to the deficit of Carpark account of $450,000, the developer had not warranted to make up (D1/176 §2.5.1). 

25. Mr Thomas Tai, the then property manager of the Respondent, also stated that the developer agreed to keep the level of management fee within the limit of HK$1.80 per sq ft for the first 2 years and the developer would subsidize the difference.  To his understanding, the said arrangement did not cover expenditure of a capital nature, so it has never been a consideration of the Respondent that the developer might have to bear any costs of improvement of security facilities, which would be of substantial costs of capital nature. The developer had in fact already honoured the promise and topped up of about HK$9 million deficit in the management account of the Development in the said 2-year period.

26. He further said that the budget up to 28/2/2001 (when warranty expired) had been approved by the OC in about March 2000.  By that time, there was simply no major security problem occurred which would give rise to a need for substantial alteration of the existing security measures, thus the alleged keeping down of management fees of security measures to save developer’s pocket has never come across the mind of the Respondent (A/334-339).

27. The minutes of OC’s meeting on 30/8/2000 also stated to keep the level of management fee at HK$1.80 per sq ft (D1/185 §4.2.3).

As aforesaid, the developer’s warranty shall confine to the residential management account only, but not to the common area or car park.  Even if there is a major need of improving the security measures, of substantial costs and capital in nature, it is hard to conceive the warranty be extended to cover such costs.  The evidence also does not suggest any ill-thought or underlying motive on the part of the Respondent to keep it down to save developer’s money.  Therefore, I find that the Respondent did not breach its fiduciary duty nor did they prefer the interest of the developer than that of the owners.                        

Other breaches

28. The Applicant has particularized the following breaches of Respondent’s contractual, implied and/or fiduciary duties,

1)     fail to take heed of and implement the Sing-Ho Proposal in November 2000;

2)     fail to prevent trespassers on 14/12/2000;

3)     fail to deploy sufficient security staff;

4)     fail to supervise and control the quality of service of Uniformity;

5)     fail to install sufficient video camera and CCTV;

6)     fail to maintain proper security system and sufficient security facilities in the Development;

7)     fail to implement Police Recommendations made on 25/4/2001.

1)   Sing-Ho proposal

29. Mr Fong said the Proposal had never been put forward for OC’s consideration and there was no minutes recording any such discussion.   However, it is quite clear that the Proposal was attached to the tender document.  If it is in dispute, one may simply look at the content of the Proposal where paragraph 1.1 setting out immediate improvements required and paragraph 1.2 stated that “…as a goodwill gestures, Sing-Ho Security Services Limited are prepared to cover all costs involved if awarded this contract” (D1/206-26), so the proposal is clearly included to be considered for renewal purpose.  

30. Further, there was a minutes of meeting on 4/11/00 proposing ways and dates for considering the tenders (D1/106-1).  The OC did thereafter on 6/12/00 and 10/1/01 (D1/208,228) resolve that Sing-Ho’s contract shall end and Uniformity would take place since January 2001.  No doubt the Proposal must have been discussed and considered or at least in its sub-committee for security issue before decision was finally reached to refuse the renewal of Sing-Ho’s contract.  

31. For the substance of Proposal (D1/206-26), metal fencing and anti-burglar bars were suggested to be added to deter intruders particularly from the hillside of Lion Rock Country Park reaching the uncovered water pipes. Mr Tai, the then Respondent’s manager answered in court that as a guard booth had been placed on top of the pipes and the pipes was fixed with barbed wire (D2/783 photo-8) , Uniformity did not suggest for further fencing.  As to the metal fence, that was also only mentioned as a long term exercise to be considered.

32. Mr Wong of the Applicant objects that there have been some areas of evidence by Mr Tai not covered in his witness statements and the court shall not be giving weight to.  However, the tribunal is less formal so far as it is consistent with attaining justice (s.10(5)(a) of Lands Tribunal Ordinance) and more importantly, the Applicant simply did not have much details on this part at the outset to state (see pleadings A-007 para.11(1)), then how possibly the Respondent may anticipate the exact challenge to reply to, my overall view is that Mr Tai’s evidence shall not be ignored.  

33. As to the subsequent action taken by the Respondent, I need not repeat the follow-up actions by the Respondent and the resolution of the OC as stated above in paragraphs 7 and 8.      

34. Mr Wong seems further suggesting that the Respondent shall exercise its unfettered discretion on security issue, even to the extent to ignore the views of the OC and to initiate owner’s meeting as deemed necessary.  It is submitted by the Applicant that the OC is just taking an advisory role and that the Respondent could not simply delegate its duty to the OC for consideration.

35. There has not been owners’ incorporation formed and the DMC only refers to the formation of the Owners’ Committee (OC).  One of the functions of the Owners’ Committee is to represent the Owners in all dealings with the Manager (clause 47(a) of DMC, D1/77).  When the Manager considers it necessary to improve the security measures, no doubt proposal would be made to the OC for deliberation, as what the Respondent did in the present case.

36. If the proposal is turned down, should the Manager simply convene an owner’s meeting to consider the same issue ?  That seems to be the suggestion of the Applicant.  However, we must distinguish whether a decision is itself in breach of the DMC to call for such a meeting or whether that was a decision the OC is legitimate to make.  After all, the elected members of the OC are representing all the owners.  For expenditure purpose, the Manager shall prepare annual budget in consultation with the OC (Cl.12 of DMC D1/51), and with the approval of the OC, other items of expenditure could be considered if reasonably necessary for the management and maintenance of the Development (Cl.12 (xiii) D1/53). 

37. No doubt any further expenses on security measures, substantial or not, shall be shared by all the owners eventually.  It is clearly a prudent practice for the Manager (even if not required in law), to put forward for OC’s consideration.  Having laid the possible measures to be upgraded and making proposal thereafter to the OC, the Respondent could not be said to be in breach of its duty.

2)  Incident on 14/12/00

38. Mr Fong stated that on 14/12/00, trespassers were able to gain access leading to his unit, it showed Respondent’s failure to carry out its duty.  Mr Tai of the Respondent gave detail account of this incident in his witness statement (A/322,323).  In fact, the trespassers had been intercepted by security guards on site for enquiry of identification, it was only when another resident came out from the lobby then the trespassers dashed in and proceeded upstairs.  All along the security guard had followed the trespassers (knowing not whether they were lawful visitors or invitees of the resident) until they left when Mr Fong was not at home.  Such incident was then informed to Mr Fong. 

39. Mr Wong also tries to make use of the Respondent’s letter of reply (D1/220), mentioning to strengthen up security procedures to say that the Respondent may have failed its duty at the outset, but the said letter was surely just a courteous way to respond to the resident instead of any form of admission. From the evidence, one can hardly see any failure on security measure, let alone that the duty is not absolute to prevent from any kind of possible trespassing for whatever means.

3)   Sufficiency of security guards

40. The Applicant avers that the total number of security guards had been cut down from 40 when Sing Ho was in charge to 26 when Uniformity took over.  However, from the service agreement of Sing Ho (D1/130), schedule of manpower deployment (D1/142) and work order form (D1/154), all these documents did show the total number of 26 security guards from Sing Ho as per day and night shift duty.  This was not more than 40 per shift as averred.  Mr Fong’s evidence also mentioned that extra guards had been deployed to show prospective purchasers the units and various facilities in the Development (§57 A/237), Mr Tai of the Respondent stated that these extra guards were simply employed by the developer and were not involved in the daily security works, it may explain why Mr Fong would form the impression of the reduction of guards when the units were gradually sold and these guards would no longer be necessary, thus the Applicant’s complaint of reduction of security guard is misconceived.

41. As to the adequacy, even the Applicant’s expert Mr Gisborne did not regard the number inadequate, instead, it was the manner of deployment which needed to be improved.  But when Mr Gisborne was asked how deployment could be improved, he offered no view because he was only engaged to assess the present security problem but not on designing the proper system. In this part, evidence by the Respondent’s expert Mr Woodward is preferred, where he stated the number of guards and its deployment is adequate and proper considering the associated duties and the physical presence (§F.1.43,44 C/206 ; §1.2 C/227).

4) Supervision and control of the quality of security guard

42. Mr Fong complains that many guards were newly employed, apparently old age and lack of vigilance.  These are all very subjective feeling by Mr Fong, there is no evidence showing that these guards were not properly licensed nor was there any evidence indicating dereliction of their execution of duties.  Even if some were relatively old or less vigilance (no actual evidence shown), it should not equate to any failure on their part.

43. It was further stated that the Respondent and Uniformity had failed to keep surveillance on the dubious characters outside the car park and that personal information had to be supplied on the occasion on 2/1/01.  These were in fact quite contrary statements taken by Mr Fong.  On the one hand, the Respondent was said not having taken initiative to check, but on the other, the Respondent was said it was not proper to take personal particulars when the car park entrance gate (smart access computer system) was temporarily out of order.                      

44. Mr Fong had been zealous to note down in details the dubious characters and registration numbers of vehicle parked outside the car park (D1/217-219), but it is obvious the area is a public place and a bus stop, where people may stay and loiter, security guards have no right to intercept nor question.  Mr Tai referred the same and had related Mr Fong’s concern to the police. (see also the minutes of OC on 28/2/01 §2.1.9 where police and Respondent were alerted to the situation D1/238; 2 security guards even received written compliments by police for their outstanding performance §2.1.1 D1/237)

45. In fact, Mr Tai also stated that security guards had been rendering assistance to Mr Fong, checking and enquiries had been done, and on some occasions it was only found that people were either on business errands or for personal reasons waiting to pick up passengers.

46. As to the incident on 2/1/01 when Mr Fong was required to provide all personal particulars when entering the car park, the smart access system was out of order temporarily.  It was clearly a legitimate and proper security measure to be taken for security purpose and I do not see any problem arising there.      

5)     Sufficiency of video cameras and CCTV

47. In the Development, there were already 187 CCTV installed covering most areas of the premises.  The Applicant’s expert stated that the problem was not on number but on its deployment.  Mr Gisborne commented that the images were poor and it did not provide complete coverage. There were some areas pointed out by Mr Wong during the site visit which were not covered by any CCTV, for examples, the exercise area behind Tropicana Block 7 (C/133,155-31,32), and the basement car park area leading to entrances of individual blocks. 

48. Mr Woodward replied that Mr Gisborne had applied a maximum threat level scenario, which was more applicable to highly sensitive facilities such as correctional institutions, border crossing points, monetary authority printing and/or storing facilities but not for residential estate in Hong Kong.  To that, I am also of the view for Mr Woodward, after all we are not talking about a highly security areas such as the bank or prison.

49. On its deployment, Mr Gisborne said that there had been ergonomic restraints for the staff on doing the job properly, for examples, some screens were placed almost at about the knee level or there were too many pictures (16) in the screen for one to identify any suspicious movement (C/155-5, 20-22). Mr Woodward in his latest reply, however, stated that it was a common practice to have multiply images on a screen and full screen option may then be selected to view the area of concern more clearly (C/420).  Further, the CCTV was supplemented by physical security presence both static and patrolling and therefore the coverage would not pose any deficiency in security.  As such, I do not find the sufficiency of CCTV or its deployment causing any security problem.                    

6) Proper security system and sufficient security facilities

50. There were many areas where the Applicant stated of improper security system and insufficient security facilities, but emphasis were put on the following matters, namely, that the rear slope had not been properly maintained, where trees and grass shall be trimmed to prevent from becoming a hiding place for burglars or robbers; that the dividing wall between the premises of Dynasty Villa and Yin Ping Road was too low for one to gain access easily without proper security system installed to prevent from trespassing; and that there was insufficient maintenance on the fence adjacent to Lung Ping Road where hole on fence, rope and equipment were found.

51. As to the maintenance of rear slope, the DMC provides that the Yellow Hatched Black Area (rear slope) shall be maintained in good substantial repair and condition to the satisfaction of the Director Of Lands and qualified personnel shall be engaged to inspect, keep and maintain the slopes in accordance with the “Geoguide 5 – Guide to Slope Maintenance” issued by the Geotechnical Engineering Office. (Cls.(ax) & (bb) of DMC, D1/71).

52. Mr Chow submits that there is no requirement to trim trees, bushes and grass according to the Geoguide 5. On the contrary, positive action is required to ensure they grow properly and healthily, only the overgrown vegetation blocking drainage channels and slope access need to be trimmed (§3.1.4, D2/401).          

53. Mr Fong gave evidence that he saw vegetation had grown considerably at the rear slope in or about August 2000, but he had no idea when he was asked to what extent it should be cut. In fact, in June 2000, the Respondent had yet taken over the slope from the developer (see minutes of OC meeting on 7/6/2000, §2.5 D1/173-3).  In December 2000, specialist sub-contractor was engaged to undertake maintenance and clearing up weeds of the slope (see minutes of OC meeting on 6/12/2000, §2.1.3 & 2.5.1 D1/207,209), follow-up actions had also been made by the Respondent in January and February 2001(see minutes of meeting on 10/1/2001, §4.4.1 D1/231 & on 28/2/2001, §2.5.1 D1/240)  

54. As shown above, positive action had been taken by the Respondent. The Applicant also cannot show or indicate any positive evidence that the vegetation and/or the grass in question did provide a hiding place for the illegal immigrant or burglars which led to the incident of crimes happened in the Development. 

55. As to the dividing wall at the Yin Ping Road, the wall is relatively low as seen during the site visit particularly at some areas along the road (C/103-110). However, having heard the evidence of Mr Tai, I find that before April 2001, there was a guard booth placed along the road or just opposite the road with security guard on 24 hours’ shift along the Yin Ping Road, up and down patrolling (see Annex A, C/235).  Mr Wong suggests further measures must be taken, however, one must not forget the enclosing wall did form part of the actual boundary of individual units, it seems much better for the individual unit to design and choose what further measures be taken and whether it is truly necessary.  I also accept at the outset, owners had been recommended to install anti-burglar sensors or alarm system and the Owner’s Handbook also advised on crime prevention measures to be taken (D2/634).    

56. As to the hole found on the fence on the slope adjacent to Lung Ping Road (A/391), first, it was discovered in 2005 and there was no evidence to suggest it existed in or prior 2001, the same also applied to the rope or equipment found (C/155-37-39). The Applicant also seems to have suggested that patrolling should also be made along the whole rear slope, but it is clearly too steep on various areas as seen during the site visit where it must be too dangerous to attempt doing so and thus it is practically infeasible.

57. There had much been said by the Applicant by referring to the incident reports (TB(E)/182-465), and it is submitted that the Respondent should have well been alerted to upgrade the security measures but failed to do so.  However, on the contrary as shown from the reports, it was in fact the security guards who spotted and discovered the trespassers or suspects at first and actions had been taken immediately to prevent from possible crimes.

58. Mr Gisborne had undertaken a comprehensive investigation of the security system in the Development, he had adopted the security provisions at the Main Entry Gate to Dynasty Heights as a good benchmark of the level of security scrutiny and control that is appropriate for the Development and applied it to other areas to see if there is a consistent level of security throughout (C/48).  He also mentioned the crime displacement theory saying that if a particular point is of weaker security control than others, that particular point may attract more commission of crimes. He further listed the inconsistent level of security measures in his report.

59. Mr Woodward of the Respondent, however, responded that the compartmentalized approach to the site as adopted by Mr Gisborne was contrary to the actual situation, instead, a pragmatic approach should be used taking into account the cost implication and cultural perspectives (C/195).

60. A clear example was on the lighting system on the rear slope.  As seen in the minutes of OC on 7/6/2000, §3.3 (D1/173-4), following the robbery incident on 23/5/2000, the illumination intensity on the rear slope was then enhanced with additional barbed wire installed.  However, as residents complained that the lightings were too much affecting one to sleep, it had to be further adjusted downwards or even switched off partially.  This may serve as an example where there has to be balance of all interest of owners of appropriate security measure to be taken.

61. Mr Woodward further quoted the police statistics of crime rate at Dynastic Heights as compared with the adjacent development Beacon Heights and of the Shumshuipo district, the crime rate at the Development was comparatively lower (C/204, 308-310).  In fact, it was also observed during site visit that the adjacent Beacon Heights even had much lower dividing boundary wall than that of the Development. 

62. Mr Woodward was right to say that no location is impenetrable and that security can always be improved upon. For the evidence before me, I am also of the view that the Respondent had already ensured a standard of security being adequate, comparable and competent in Hong Kong.

7 )   Police Recommendations on 25/4/2001

63. The Applicant refers to a list of recommendations on improvement of security measures by the Hong Kong Police Force on 25/4/2001 sent to the Respondent (D1/242, 243).  It is submitted that the 19 proposals hinted the deficiency of the security system and failure on the part of the Respondent in carrying out its duty. 

64. In gist, the proposals aimed to prevent from trespassing mainly from the rear slope including fencing off the whole slope area from Tropicana at Yin Ping Road to Skylodge, where conspicuous pathway be maintained with grass on the slope be trimmed frequently.  Iron gates be installed and illumination be increased with additional anti-burglary alarm, CCTV and barbed wires be fixed.  Further, owners are advised to install window grill and doors and gates be locked, visitors’ identity should also be confirmed and registered.  All equipment shall be properly maintained and regular contacts be made between the OC, management company and police regarding appropriate preventive measures to be taken.

65. The Applicant further alleged that the above proposals had been withheld by the Respondent and the OC was not aware of it.  However, having heard the evidence of Mr Hui Chun Mo of the Applicant, I find a copy of the said letter of Police Recommendations had in fact been made to the then chairlady of the OC, and more importantly, it was implicit in the subsequent meetings of the OC, that the Respondent did submit proposal for improvement works for OC’s consideration (D1/249 §4.4; D2/643-648).  The Respondent’s proposal essentially adopted the police recommendations including the fencing off the whole rear slope with 12 feet high and about 820 long metal fencing.  Questionnaires were sent to residents for collection of views but eventually the OC had shelved the proposal as stated above in paragraphs 7 and 8.

66. It must also be mentioned that by April 2001, there were only isolated incidents of burglary on 21/11/1999, 1/11/2000 and 14/4/2001, car theft on 2/12/2000 and robbery on 23/5/2000.  Given the newly occupation since 1999, the scale of the Development and its unique location and environment, I am not of the view that there existed major problem on security issue.  Moreover, the security issue had also been constantly reviewed and discussed in the OC’s meetings and proposals being fully canvassed and explored.  Special notices to take preventive measures on security matters had also been posted by the Respondent to all owners (A/361-363).  To conclude, the Respondent had not failed its duty as alleged by the Applicant.

67. For the sake of completeness, the Applicant also seeks for damages to be assessed, but I fail to see any actual loss suffered by the Applicant.  Even if the Respondent were in breach of its duty in providing sufficient security services, the award of compensation, if any, shall go to all owners as a whole and not merely to any individual owner.                

Election issue

68. The Applicant alleged that prior to the first election of members of the Owners’ Committee in 2000, the Respondent had accompanied some candidates to visit the residents of the Development and then also arranged its preferred candidates to sit at the front row during the election, and eventually these candidates had won landslide victory in the election.  The Applicant says that the Respondent by so doing had breached its fiduciary duty as manager and agent of all owners.

69. Mr Fong, however, in court revealed that in fact he only heard from someone during casual talk that there had been a visit carried out, but he did not know any particulars about the actual time, place or which candidate or staff of the Respondent involved.

70. Further, as to the sitting arrangement of the first election, Mr Fong even admitted that he thought it was because he was walking too slow to be able to sit on the front row.  At the time when the election was due to start, all candidates were invited to sit on the arranged rows.  As the front row was by then already occupied, he was then invited to sit on the second row.  Nonetheless, Mr Fong was also elected as one of the member of the OC.

71. As to the allegation of votes of the developer to the preferred candidates, Mr Fong only saw the so-called preferred candidates holding some proxy votes but no more, it is clear that there was no actual evidence implicating the developer or the Respondent for choosing some preferred candidates.

72. Mr Tai of the Respondent gave clear evidence in court that there had never been any election campaign for any candidates at all nor was there any selected or pre-arranged seat for any candidate for the election.  As such, the Applicant could not possibly establish its case to say that the Respondent had breached its duty in the election matters, particularly without any factual basis to substantiate the allegation.     

Declaratory relief

73. It is a well established principle that the court shall refuse to grant declaratory relief when it does not serve any useful purpose, see Zamir & Woolf, The Declaratory Judgment, 2^nd Edn., at Para.4.087,

“If it can be shown that a declaration would not serve any practical purpose, this will weigh heavily in the scales against the grant of declaratory relief. If, on the other hand the grant of declaratory relief will be likely to achieve a useful objective, the court will be favourably disposed to granting relief. The question of whether or not any useful purpose would be served by granting declaratory relief is therefore of prime importance in determining how discretion should be exercised.”

74. According to Mr Fong, he insists to seek declaration mainly because he wanted to improve the security facilities in the Development where residents may reside peacefully and safely. However, as aforesaid, the alleged incidents occurred in or prior 2001, it is not in dispute that throughout the subsequent years, there has been much alteration or improvement in the security system and facilities, for examples, additional CCTVs and lightings in various areas with the approval of the OC.  As submitted by Mr Chow, the security measures of the Development in 2001 was unique in place and time.  Even if there were breach on the part of the Respondent, it no longer serves any useful purpose to grant declaration by now.

75. In conclusion, the Respondent was not in breach of any duty as alleged by the Applicant, the application must be dismissed accordingly.

Order

1. The Applicant’s application be dismissed.

2. Costs order nisi : The Applicant shall pay costs of this application to the Respondent, to be taxed on District Court Scale if not agreed, with certificate of counsel, and be made absolute after 14 days unless either party applies to vary otherwise.