THE INCORPORATED OWNERS OF FINANCE BUILDING v. BRIGHT HILL MANAGEMENT CONSULTANTS COMPANY LTD

DCCJ 4738/2020

[2025] HKDC 982

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4738 OF 2020

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BETWEEN

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DECISION

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Introduction

1.  By a summons filed on 20 November 2024 (“the Summons”), the defendant applied for leave to appeal against my judgment dated 21 October 2024 (“my judgment”) out of time.

2.  By an application filed on 4 November 2024, the defendant applied to vary the costs order nisi of my judgment.

Legal principles

3.  Section 63A(2) of the District Court Ordinance (“DCO”) provides:

“(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that…

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

4.  The test of whether an appeal has a reasonable prospect of success under the new statutory provision is the same test as applied before the amendment to Cap 336, ie whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal as is laid down in Ma Bik Yung v Ko Chuen [2009] 3 HKC 359. A reasonable prospect of success means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”: see Wing Tat Haberdashery Co Ltd v Elegance Development & Industrial Co Ltd, HCMP 357/2011, 8/7/2011, unreported.

5.  Where the appeal is against the exercise of a discretion, the appellant ought to demonstrate that the decision was plainly wrong, or that the trial judge has taken irrelevant matters into consideration or has ignored relevant matters: see SMM v TWM (Child: Relocation) [2010] 4 HKLRD 37 at p 48.

Appeal out of time

6.  Order 58 rule 2(4)(b) and (10) provides:

“(4) An application for leave to appeal must be made to a judge, or to a master in the case of an appeal under paragraph (2), within---

…

(b) in the case of an appeal from a judgment, order or decision (other than an interlocutory judgment, order or decision) of a judge, 28 days from the date of the judgment, order or decision;

…

(10) The Court or the Court of Appeal may, at any time, and notwithstanding that the time for an appeal or an application for leave to appeal may have already expired, extend the time for the appeal or for applying for leave to appeal.”

7.  The defendant’s application is therefore late by 2 days.

8.  The defendant’s representative, Mr Lie Han Ji, confirmed in his affirmations that he received a copy of my judgment on 23 October 2024. He attempted to file a summons applying for leave to appeal on 19 November 2024 but was told by the Registry to add “out of time” in the summons. He had no choice but to rush to attend a medical review in a hospital. The Summons was filed on the next day, ie 20 November 2024. Mr Lie argued that as he received my judgment on 23 October 2024, “the filing deadline should be 20 November 2024”. Mr Lie further submitted that “at most there was miscalculation without any D’s intention to file late”.

9.  By the clear wordings of Order 58 rule 2(4)(b), the time should run from the date of the judgment, not the date of receipt of the judgment. The argument of the defendant must be rejected.

10.  The defendant has not put forward any explanation for the miscalculation of time. I find that the delay was inexcusable.

11.  In Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd [2001] 1 HKC 125, the Court of Appeal at 129F-G rejected the submission that where the delay is insubstantial but inexcusable, it is appropriate to grant an extension without considering the merits of the appeal. The Court of Appeal further held at 129I that where the delay is inexcusable, the party seeking an extension of time must show a real prospect of success on the merits.

12.  It is therefore necessary to consider the merits of the defendant’s intended appeal.

13.  Strictly speaking, the defendant did not formulate any specific grounds of appeal. The affirmations of Mr Lie and the written submission contain narratives of various matters, many of which are irrelevant.

Inability of Mr Lie to attend the trial

14.  The defendant placed heavy emphasis on the sickness of Mr Lie which rendered him unable to attend the trial.

15.  By his supporting affirmation filed on 20 November 2024, he produced 8 medical certificates dated between 25 January 2024 to 13 June 2024 showing that he was given sick leave from 22 January 2024 to 23 June 2024. The said period covers both the pre-trial review and the trial.

16.  Prior to the pre-trial review on 20 February 2024, Mr Lie applied for an adjournment of the pre-trial review and the trial. His Honour Judge Harold Leong was of the view that mere production of a sick leave certificate was insufficient to show that Mr Lie was incapable of attending a court hearing and therefore dismissed the application. The defendant was notified of the decision of the learned judge on 19 February 2024.

17.  No further application was made by the defendant for the adjournment of the trial. However, neither the defendant nor Mr Lie appeared on the date of the trial.

18.  As the trial was not re-fixed or adjourned by an order of the court, it should and did take place as scheduled. Like the plaintiff, the defendant was obliged to appear and to proceed with the trial. The absence of the defendant at the trial was totally unjustified. The defendant did so at the risk of the trial proceeding in its absence as is the present case.

19.  Albeit that the trial was proceeded in the defendant’s absence, the plaintiff was obliged to and did call evidence in support of the plaintiff’s claim. I considered the evidence and made findings of fact according to the evidence.

20.  There is no justification to hold a 2^nd trial due to the fault of the defendant itself. I see no merits in the defendant’s submission in this respect.

Other matters

21.  The defendant made submission to the effect that the action was wrongly commenced in the District Court and the interpretation of Deed of Mutual Covenants and the Building Management Ordinance falls within the exclusive jurisdiction of the Lands Tribunal.

22.  The claim of this action was for the outstanding balance of the defendant’s share of contribution to the repair works and management charges. The claim falls within Section 32 of the District Court Ordinance. The so-called exclusive jurisdiction of the Lands Tribunal in interpreting Deed of Mutual Covenants and the Building Management Ordinance is incorrect.

23.  The defendant also made submission disputing the apportionment method.

24.  The defendant as one of the owners of the building, is bound by the resolutions of the incorporated owners. The defendant’s submission is a non-starter.

Variation of costs order nisi

25.  The defendant complained that no explanation was given for the costs order nisi and the defendant had no opportunity to make closing submission on 22 April 2024. Then the defendant repeated its submission for leave to appeal.

26.  The costs order nisi was given on the basis of the general rule that costs to follow the event. The defendant being the losing party, it should therefore bear the costs of the action.

27.  The defendant had elected not to attend the trial. The complaint that the defendant had no opportunity to make closing submission is its own making. There is no substance in the complaint.

28.  The other submission are not relevant in the consideration of varying a costs order nisi.

29.  I see no reason to depart from the general rule that costs to follow the event. The defendant’s application must fail.

Conclusion and order

30.  By reasons of the foregoing, the defendant has failed to demonstrate any prospect of success (not to mention real prospect of success) of its intended appeal. No extension of time is granted to the defendant to apply for leave to appeal out of time. The defendant’s application is dismissed.

31.  The defendant’s application for the variation of the costs order nisi is also dismissed. The costs order nisi is made absolute.

Costs

32.  Costs to follow the event. I order the defendant to pay the plaintiff the costs of the Summons and the application for variation of costs order nisi with certificate for counsel, to be taxed if not agreed.

Mr Ryan W. K. Poon, instructed by S H Chan & Co, for the Plaintiff

The defendant appeared in person

DCCJ 4738/2020

[2024] HKDC 1773

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4738 OF 2020

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BETWEEN

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JUDGMENT

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Introduction

1.  This is the trial between the plaintiff (ie Incorporated Owners of Finance Building) and the defendant as the owner of Flat C on 2^nd Floor of Finance Building, 254-256 Des Voeux Road Central, Hong Kong (“the premises”).

Absence of the defendant

2.  The defendant was absent at the pre-trial review and the trial.

3.  In the case management conference on 30 May 2023 when the dates for the pre-trial review and the present trial were fixed, the defendant was represented by Mr Lie Han Ji, its director.

4.  4 days before the pre-trial review, Mr Lie applied for an adjournment. His Honour Judge Harold Leong was of the view that mere production of a sick leave certificate was insufficient to show that he was incapable of attending a court hearing and dismissed the application.

5.  I am satisfied that the defendant has had due notice of the present trial and that the defendant has elected not to attend this trial.

6.  I therefore allowed the trial to proceed.

The plaintiff’s case

7.  By an extraordinary general meeting of the plaintiff held on 15 June 2016, it was resolved that the plaintiff was:

(a) to proceed with the repair works required by the Mandatory Building Inspection Scheme and to proceed with certain selected repair works of the building (“the repair works”);

(b) to engage Sunarts (Holdings) Engineering Limited as the assigned engineering company for the repair works; and

(c) to collect funds in the sum of HK$5,291,800 for the repair works by 3 instalments.

8.  The defendant’s share of contribution to the repair works was HK$155,641 of which the defendant only paid HK$18,158.20 leaving the outstanding balance of HK$137,482.80 unpaid.

9.  By a resolution of the plaintiff in a general meeting on 22 January 2016, the management charges which should be paid by the defendant was revised to HK$1,640 with effect from 1 March 2016.

10.  By a resolution of the plaintiff in a general meeting on 22 March 2019, the management charges which should be paid by the defendant was revised to HK$1,863 with effect from 1 May 2019.

11.  The defendant however only paid HK$1,040 per month from March 2018 to December 2019. Accordingly, the defendant had failed to pay outstanding management charges in the sum of HK$29,888.

The defence

12.  By it’s defence, the defendant put the plaintiff to strict proof and denied the plaintiff’s claim.

Findings of fact

13.  Section 14(1) of the Building Management Ordinance, Cap 344 provides:

“(1) Subject to this Ordinance, at a meeting of a corporation any resolution may be passed with respect to the control, management and administration of the common parts or the renovation, improvement or decoration of those parts and any such resolution shall be binding on the management committee and all the owners.”

14.  Section 18(1) and (2)(fa) of the Building Management Ordinance, Cap 344 provides:

“(1) The corporation shall —

(a) maintain the common parts and the property of the corporation in a state of good and serviceable repair and clean condition;

(b) carry out such work as may be ordered or required in respect of the common parts by any public officer or public body in exercise of the powers conferred by any Ordinance;

(c) do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant (if any) for the control, management and administration of the building.

…

(fa) carry out any renovation, improvement or decoration work, as the case may be, to the common parts;”

15.  Mr Tsui Tat Wing, the treasurer of the plaintiff, gave evidence. He produced, among others, the resolutions of the following general meetings of the plaintiff held on:

(a) 15 June 2016 (“the 1^st resolution”);

(b) 22 January 2016 (“the 2^nd resolution”); and

(c) 22 March 2019 (“the 3^rd resolution”).

16.  The 1^st resolution resolved, inter alia, to proceed with the repair works; to engage Sunarts (Holdings) Engineering Limited as the assigned engineering company for the repair works; and to collect funds in the sum of HK$5,291,800 for the repair works by 3 instalments.

17.  The 2^nd resolution resolved, inter alia, to increase the management charges by 25% with effect from 1 March 2016.

18.  By a notice dated 23 February 2016, the plaintiff informed all owners of the revised management charges. In the case of the premises, it was $1,640.

19.  The 3^rd resolution resolved, inter alia, to increase the management charges with the use of lifts by 35% with effect from 1 May 2019.

20.  By a notice dated 8 April 2019, the plaintiff informed all owners of the revised management charges. In the case of the premises, it was $1,863.

21.  There is no evidence (and is not the case of the defendant) that those resolutions have been invalidated.

22.  I accept that those resolutions were binding on the defendant as the owner of the premises.

23.  By a notice dated 1 September 2016 issued by Messrs Pansy Leung Tang & Chua, solicitors on behalf of the plaintiff, all the owners were informed of the deadlines and amounts of contribution. All owners were notified to pay the sum of HK$51,880 before 30 September 2016 and 31 October 2016 respectively and the sum of HK$51,881 before 30 November 2016.

24.  It is Mr Tsui’s evidence that the defendant only paid HK$18,158.20 on 28 February 2017 which is supported by a deposit slip of Public Bank. I accept his evidence. The outstanding balance on the contribution is therefore HK$137,482.80 (HK$155,641 - HK$18,158.20).

25.  It is Mr Tsui’s evidence that the defendant had only paid the sum of HK$1,040 per month on management charges for the period from March 2018 to August 2020. I accept his evidence. The outstanding balance on management charges is therefore HK$21,568 (HK$600 × 14 months (from March 2018 to April 2019) + HK$823 × 16 months (from May 2019 to August 2020)).

CACV 386/2000

26.  In the defence, the defendant drew the attention of the court to CACV 386/2000. This is a case between the defendant and the plaintiff but entirely on different issues. It is therefore of no assistance to the defendant.

Conclusion and order

27.  By reasons of the aforesaid, I give judgment in favour of the plaintiff for the sum of HK$159,050.80 (HK$137,482.80 + HK$21,568).

Interest

28.  The plaintiff is entitled to interest at 1% above the best lending rate of HSBC from the date of writ (ie 7 September 2020) to the date of judgment and thereafter at judgment rate to the date of payment.

Costs

29.  I make a costs order nisi that the defendant shall pay the plaintiff the costs of this action (including all costs reserved) with certificate for counsel, to be taxed if not agreed.

30.  In the absence of an application for variation by letter within 14 days from the date of this judgment, the costs order nisi shall become absolute.

Mr Ryan Poon, instructed by S H Chan & Co, for the plaintiff

The defendant was not represented and did not appear