CHAN LAI CHUN MARIA v. STEADYPROFIT LTD
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LDBM 17/2024
[2025] HKLdT 44
IN THE LANDS TRIBUNAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
BUILDING MANAGEMENT APPLICATION NO 17 OF 2024
__________________________
BETWEEN | ||
| CHAN LAI CHUN MARIA | Applicant | |
| and | ||
| STEADYPROFIT LIMITED | Respondent | |
__________________________
| Before: | Her Honour Judge LJ Cruden, Presiding Officer of the Lands Tribunal |
| Date of Trial: | 23 January 2025 |
| Date of Submissions: | 27 June 2025, 11 July 2025 and |
| 24 July 2025 | |
| Date of Handing Down of Decision: | 15 August 2025 |
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D E C I S I O N
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1. By Summons dated 4 June 2025 the respondent applies for:
(1) Leave to appeal against my judgment dated 9 May 2025 (“Judgment”) upon the grounds set out in the draft Notice of Appeal annexed (“DNOA”);
(2) If appropriate, for the application to be disposed of on paper, directions to be given and the hearing date to be vacated;
(3) Costs of the application be in the cause of the appeal.
2. I determined that it was appropriate to deal with the application for leave to appeal on paper and gave directions to that end. The respondent lodged and served R’s Skeleton Submission dated 27 June 2025 (“R’s Subs”) and Respondents’ Submission in Reply dated 24 July 2025 (“R’s Reply”). The applicant lodged and served Statement of Opposition for the Applicant dated 11 July 2025 (“A’s Subs”).
3. The facts and material DMC provisions are set out at paragraphs 6 - 13 and 14 - 15 respectively of the Judgment. I shall not repeat them here. I adopt the same abbreviations as used in the Judgment.
4. Briefly, the applicant, her husband and son are the Majority Owners of the Premises. The respondent is the only other owner. The applicant sought a declaration that upon a proper construction of the DMC the Majority Owners of the Premises are entitled to change the name of the Premises by a resolution passed by majority vote, while the respondent contended that unanimity was required.
5. The Judgment granted declarations that upon a proper construction of the DMC (“the Declarations”):
(1) Owners of the land and building known as “LA VILLA (龍濤花園)” situated at No. 142 Waterloo Road, Kowloon (“the Building”) erected on New Kowloon Inland Lot No.4069 (“the Premises”) are entitled to change the name of the Building by a majority of Owners passing a resolution in accordance with clause 9 of, and the Fifth Schedule to the DMC; and
(2) The name of the Building may be changed without the unanimous consent of all Owners;
(3) There be a costs order nisi that the Respondent do pay the applicant’s costs taxed on the District Court scale with certificate for counsel [the costs order was not varied and became absolute].
6. The material DMC provisions construed were clause 9 of DMC, and the Fifth Schedule to the DMC, referred to as the “Meeting Provisions”. The most material parts provide:
(1) Clause 9 of the DMC “From time to time there shall be meetings of the owners to discuss and decide matters concerning the said premises and in regard to such meeting the provisions set out in the Fifth Schedule hereto shall apply”.
(2) The Fifth Schedule to the DMC:
(a) “A Meeting may be validly convened by those owners of the said premises who in the aggregate have vested in them for the time being not less than 3/4th of the undivided shares in the said premises”: paragraph 1.
(b) “Every owner shall have one vote for each share”: paragraph 6.
(c) “Any resolution on any matter concerning the said premises passed by a majority of the owners present in person or by proxy and voting at a duly convened meeting shall be binding on all the owners provided as follows:- …”: paragraph 10.
Draft Notice of Appeal
7. The DNOA applies for the Declarations and costs order to be set aside. The DNOA sets out 5 grounds of appeal, which are broadly:
DNOA §§1-3.7
(1) Falcome Co Ltd v Zhejiang Development Co Ltd[2024] HKCFI 2992, which the tribunal followed as a binding precedent, was wrongly decided and ought to be overruled on appeal: DNOA §§1-3.7.
(a) A covenant conferring a right on a co-owner to change the name of a building created a personal covenant that did not “touch and concern” land such that it is only enforceable between original parties but not assigns. The term “touch and concern” land may be traced to Sir Edward Coke’s report on Spencer’s case (5 Co. Rep.16a; 77 ER 72) (“Cokes Note”). In subsequent cases the expression “touch and concern” came to be used as if the 2 words had different meanings in the law of covenants, however according to the original source the 2 words had the same meaning and could be used interchangeably. A covenant would touch and concern land if it affected “the nature, quality, mode of user or value of the land covenantee”: DNOA §§3.1-3.4.
(b) A DMC is an instrument prepared by conveyancing lawyers to bind owners and assigns. As such the word “concern” or “concerning” is a technical expression used in the sense that a matter would concern land only if it affected the nature, quality, mode of user or value of the land. Thus, it is wrong to attribute a literal wide meaning to “concerning” as decided in Falcome. A resolution to change the name of a building passed by a majority of co-owners does not fall within the scope of “matters concerning the said premises” in a DMC, which is meant to bind assigns: DNOA §§3.5-3.7.
(c) In Pak Fah Yeow Investment (Hong Kong) Co Ltd v Proper Invest Group [2009] HKC 285 Rogers VP at §18 made an obiter remark that, irrespective of a naming and meeting provision, it would be necessary for all owners of the building to agree the change of name, that he did not explain, but it may be justified on the above basis of the respondent: DNOA §3.8.
DNOA §4
(2) Unfettered by Falcome, the DMC may be construed afresh. A purposive construction ought to rule out a change of name of the Building from the scope of the Meeting Provisions, taking into account particular contents, background and characteristics of the DMC: DNOA §§4.1-4.5.
(a) The word “concerning” should be given the technical conveyancing meaning throughout the DMC. Recital 5 of the DMC provides the DMC was entered for the purposes of making provisions for the management and defining rights between owners and subsequent owners. The word “management” ought to be construed to relate to management decisions on matters “concerning” the premises so as to bind assigns. The Meeting Provisions aim to resolve management issues concerning the premises for the common good in the common interest of all co-owners: DNOA §§4.1-4.3.
(b) To prevent abuse and oppression of minority owners a proposed resolution ought to clear an objective test first so the majority owners do not have unrestricted powers. Any matter not reasonably necessary for management concerning the premises in the common interest of all owners ought to be outside the scope of the Meeting Provisions which are not engaged, unless the proposed resolution can bind assigns: DNOA §§4.4-4.5.
DNOA §5
(3) The Declarations ought to be set aside for the reasons below:
(a) The existing name was part of the factual description of the unit bought. The DMC does not contemplate a change of name. Recital 2 description of the Building “known at the date hereof as ‘LA VILLA (龍濤花園)’” is neutral and carried no implication as to whether it could be changed by the Majority Owners: DNOA §5.1.
(b) The name had been used for 38 years, was a convenient way to identify the location, bus stops outside have used the same name, there is no need for any change of name and a change would only be for the personal liking of the Majority Owners: DNOA §5.2.
(c) A name change would cause unnecessary and unreasonable “nuisance and annoyance” adverse to the non-consenting owner. If allowed unrestricted it could open the floodgate for infinite changes in name at the whim of the majority: DNOA §5.3.
(d) §7 of the Second Schedule to the DMC, applicable by virtue of clause 4 of the DMC, prohibits “nuisance or annoyance” to owners, showing a general intent against causing nuisance and annoyance: DNOA §5.4.
(e) The applicant has not shown how a name change is on an objective view in the common interest of co-owners as a whole, reasonably necessary, or may assist management issues “concerning” the Building or Premises such that it may bind assigns: DNOA §5.5.
(f) The unreasonableness of the interpretation in favour of allowing the Majority Owners to change the name is relevant in choosing rival interpretations: DNOA §5.6.
THE LAW
8. Section 11(2) of the Lands Tribunal Ordinance, Cap. 17 (“the Ordinance”) provides:
“(2) Subject to section 11AA and the provisions of any Ordinance relating to appeals from the Tribunal, any party to proceedings before the Tribunal may appeal to the Court of Appeal against a judgment, order or decision of the Tribunal on the ground that such judgment, order or decision is erroneous in point of law.”
9. Section 11AA(6) of the Ordinance provides:
“(6) Leave to appeal shall not be granted unless the Tribunal, the Court of Appeal or the registrar 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.”
10. The respondent states the test whether an appeal has a reasonable prospect of success is whether the applicant for leave to appeal can show that he has an arguable case with reasonable chances of success: Hong Kong Civil Procedure 2025, Vol. 1, 59/2A/4 (“HKCP”). The applicant cites SMSE v KL [2009] 4 HKLRD 125 §17, Le Pichon JA, for the same test that a reasonable prospect of success involves the notion that the prospect of success must be “reasonable” and therefore more than “fanciful” without having to be “probable”. An applicant for leave is thus required to show more than just an arguable case, but he does not have to demonstrate the appeal will probably succeed.
11. Alternatively, leave to appeal will be granted if the tribunal is satisfied that there is some other reason in the interests of justice why the appeal should be heard. The respondent relies on section 14AA(4)(b) of the High Court Ordinance, Cap. 4. The court may grant leave if the question is one of general principle, decided for the first time, or a question of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage: HKCP 59/2A/4.
12. The applicant cautions that whilst the tribunal has jurisdiction to grant leave to appeal in the interests of justice, it should not be “overly generous; otherwise unmeritorious challenges would add to the costs to be incurred by the opposing parties and would waste court resources”: Dr Yeung Sau Shing Albert v Google Inc (No.2) [2015] 1 HKLRD 26 §33 (DHCJ Marlene Ng as she then was).
DOES THE APPEAL HAVE A REASONABLE PROSPECT OF SUCCESS?
Respondent’s case
DNOA §§1-3.6 Falcome wrongly decided
13. The DMC in Falcome provided that “From time to time there shall be meetings of Owners to discuss and decide matters concerning the Land and Building …”. Deputy High Court Judge Yuen held that “Construed literally and purposively, those words are wide enough to include owners deciding the name of the Building” by a majority resolution binding on all owners (§47).
14. I found that as a matter of plain language the name of a building is a matter which concerns the Premises. Falcome held that changing the name of a building was within the literal meaning of the words “matters concerning the Land and the Building”. I found that it is clearly also within the literal meaning of the words “matters concerning the said premises” where the land “and all erections or buildings thereon” is to be “called the said premises” in the DMC: Judgment §113.
15. Further, I found that the name of a building is a matter “concerning the said premises” within clause 9 of the DMC, affecting the interests of owners and their property. The naming of the Building is a proper subject matter of the DMC. The DMC provisions controlling how a building name may be changed and the Meeting Provisions fall squarely within the ambit of “defining and regulating the rights interest and obligations of co-owners and all subsequent owners in respect of the said premises” under Recital (5), so as to constitute a relevant purpose of the DMC. The notion that naming a building is a matter outside the proper purpose of a DMC was roundly rejected in Falcome. I rejected such a notion on the facts and construction of the DMC here: Judgment §114.
16. The respondent now submits that there are 2 possible interpretations of the DMC:
(1) A literal and wide interpretation that the word “concerning” as a general word, means “about”. This was adopted in Falcome, said to be a purposive interpretation. Thus nearly everything passed by a majority will bind all present owners even where the matter does not “touch and concern” or “affect” land, because it is of a personal nature, such as a change of name of the land and building, and cannot run with the land and bind future co-owners (that it cannot so bind is disputed).
(2) A narrow and technical interpretation: that “concerning” is a technical expression, used by conveyancing lawyers in drafting of a DMC as a land contract that aims to bind all owners, present and future. This is a new construction now being advanced by the respondent for an appeal. Under this interpretation, “concerning”, as a derivative of “concern”, has the same meaning as:-
(a) “touch” and/or “concern” land, the origin of which is seen in Coke’s Note, where the phrase “touch or concern” was used with the 2 words being alternatives, each having the same meaning: DNOA §§3.2-3.3; or
(b) The conjunctive expression of “touch and concern” land used in modern land cases, both being a label for a covenant that: (i) benefits only the owners for the time being of the covenantee’s land; (ii) affects the nature, quality, mode of user or value of the land of the covenantee; or (iii) is not expressed to be personal. So construed, only a matter concerning land would be within the scope of the DMC on which a majority resolution would bind all present and future owners (“the new construction”): DNOA §3.4.
17. The respondent submits that the literal and wide interpretation is flawed for being inconsistent with the purpose of the DMC intended to bind all future owners. It asks rhetorically how would management decisions work if future owners could ignore them? The respondent describes this as an “awkward” result which conflicts with the fundamental purpose of a DMC to “create a binding framework that governs the rights and obligations of all present and future owner”, and “ensure consistent management and maintenance of the premises over time”. If future owners could ignore certain majority resolutions, it would throw property management into a chaotic situation. Future owners, even those deriving title from the majority, will not be bound.
18. The respondent anticipates that proponents of the wide interpretation may argue that a narrow interpretation would impose limits that stultify majority owners’ management decisions under certain circumstances. However, the concern is unfounded because it ignores the principles of “uses incidental or ancillary to the principle use”, which impliedly authorises acts reasonably necessary to attain the purpose of the principle use: Halsbury Laws of Hong Kong (1995), Vol. 1, §15.015. An express grant of authority carries the implication that the agent is given authority to do whatever is necessary for the effective execution of the express authority. The respondent gives examples.
19. The respondent says it has “no problem” with Falcome’s holding that a naming right is personal, not proprietary in nature, hence a majority resolution for change of name does not bind future owners. The respondent actually requires a naming right to be personal, not proprietary, to advance the new construction. The applicant disputes the consequence is that a majority resolution is not binding on future owners. The respondent does not dispute the resolution passed on the facts in Falcome was in the common interests of owners under the Building Management Ordinance, Cap.344 (“BMO”). It enabled refurbishment work to be carried out at the cost of the owner proposing the name change. The respondent’s case does not involve the Incorporated Owners or the BMO. It says the construction should be resolved as a matter of interpretation of the DMC as a land contract. Further, it contends that here there is no evidence that the name change was in the common interest of the co-owners.
20. Therefore, the proposed appeal calls into question:
(1) Whether the wide interpretation of “concerning” in a DMC, meaning “about”, thereby broadly encompassing matters decided by majority owners, is a necessary measure notwithstanding it does not align with the primary purpose of a DMC meant to bind all future owners; and
(2) Whether the new construction of the DMC as a land contract equally achieves the same purpose but without the “awkward” result that future owners will not be bound.
21. The respondent submits that the answer is that the new construction of “concerning” meaning matters “touching and concerning” land equally achieves the primary purpose of a DMC to bind all present and future owners regarding the management and use of the property, without the awkward result that future owners may not be bound by certain resolutions. It provides a clear, legally sound framework consistent with Hong Kong cases and statutory provisions.
22. The respondent submits therefore Falcome, which the tribunal followed as a binding precedent, was wrongly decided and ought to be overruled on appeal: DNOA §3.7.
Applicant’s case
23. The applicant submits that leave to appeal should not be granted on any ground.
(1) Whether leave should be granted on the merits
(1)(a) The new construction was not pleaded
24. Rule 36 of the Lands Tribunal Rules, Cap. 17A (“LT Rules”) provides:
“The respondent shall, if he wishes to oppose the application, within 21 days of service of the notice of application upon him file with the registrar, and serve a copy on the applicant, a notice of opposition substantially in accordance with Form 7 stating the grounds thereof and that he wishes to be heard. The respondent shall, in his notice of opposition, state the facts relied upon by him in sufficient detail to enable the applicant to know the case he has to meet.”
25. The Rules of the High Court, Cap. 4A (“RHC”) provisions are instructive as to what has to be pleaded in the notice of opposition:
(1) Section 10(1) of the Ordinance provides:
“The Tribunal may, so far as it thinks fit, follow the practice and procedure of the Court of First Instance in the exercise of its civil jurisdiction, and for this purpose, has the same jurisdiction, powers and duties of the Court of First Instance in respect of such practice and procedure.”
(2) Practice Direction LTPD CJR No. 1/2009, Direction Issued by the President of the Lands Tribunal Pursuant to Section 10(5)(a) of the Lands Tribunal Ordinance (Cap.17) Application of the Civil Justice Reform to the Lands Tribunal provides, inter alia, the rational behind section 10(1), which gives the tribunal a discretion in applying the practice and procedure of the CFI instead of spelling out specifically the particular practice and procedure are to be applied bearing in mind the variety of cases in the tribunal, it is not possible to have a uniform approach.
(3) Order 18, rule 7(2) RHC provides that the effect of any document must, if material, be briefly stated. A party must plead what it contends is the meaning or proper construction of the contractual terms on which it relies.
26. The parties in the present case were legally represented. The Notice of Application was settled by leading counsel and a junior and Notice of Opposition (“NOO”) was settled by solicitors. The NOO expressly pleads the respondent’s construction of the DMC, condescending to particulars. Both parties were represented by counsel at trial.
27. The applicant submits that it was not the respondent’s case in the NOO that the word “concerning” under the Meeting Provisions should be read as meaning “touching and concerning” land in the conveyancing law sense. There is no mention of this at all. For this reason the respondent should not be permitted to rely on the new construction on appeal.
28. The respondent replies that its construction point is properly raised under Order 18, rule 11 RHC. The rule provides that a party may by his pleading raise a point of law: HKCP 18/11/1. The question of whether the word “concerning” in the context should be given a technical conveyancing meaning rather than a literal meaning is a pure point of law on the same documentary evidence before the tribunal, namely, the DMC. The question of construction arises on the facts as pleaded and the terms of the DMC. No additional evidence is required. The requirement to state “facts relied upon” do not extend to requiring parties to plead all conceivable legal arguments on the interpretation of contractual terms.
29. The NOO does not inform the applicant of the new construction. The applicant does not contend that the respondent is bound to plead all conceivable legal arguments on the interpretation of contractual terms. Rule 36 LTR requires the respondent state the facts relied upon in sufficient detail to enable the applicant to know the case he has to meet. The respondent only refers to Order 18, rule 11 RHC. Order 18, rule 7(2) RHC requires that the effect of any document must, if material, be briefly stated. A party must plead what it contends is the meaning or proper construction of the contractual terms on which it relies. The case was brought to construe a document. The respondent should have set out the new construction that it is now advancing so that the applicant knew the case she had to meet. It did not.
(1)(b) The new construction was not advanced at trial
30. Further, the new construction was not argued at trial. New points which are fact sensitive or may otherwise affect the course of evidence or conduct of the case at the hearing below should not be allowed: Lehmanbrown Ltd v Union Trade Holdings Inc & Others (HCMP 977/2015, 17 June 2015) §§10-11 (Lam VP as he then was); High Fashion New Media Corp Ltd v Leong Ma Li & Co[2024] HKCA 1067 §58 (Kwan VP). This is a matter of fairness to the applicant and the tribunal’s ability to properly adjudicate upon the matter. Such issues of fairness arise where failure to take the point may affect the way the case was conducted, the arguments advanced, and the course taken by proceedings below.
31. There were 4 issues at trial: Judgment §30. They were Issue 1, whether each co-owner is entitled to his property being described as “LA VILLA (龍濤花園)” by virtue of the recitals (“Name Entitlement Issue”); Issue 2, whether the Meeting Provisions are enforceable against current owners (“Enforceability Issue”); Issue 3, proper construction of a “matter concerning the said premises” in clause 9 of the DMC and §10 of the Fifth Schedule to the DMC, the Meeting Provisions (“Construction Issue”); and Issue 4, whether declaratory relief should be refused because the issue is hypothetical or not based on facts (“Declaratory Relief Issue”).
32. At trial the respondent did not contend, as it now does, that the word “concerning” under the Meeting Provisions should be read as meaning “touching and concerning” land in the conveyancing law sense. Rather, the respondent’s case was that the Meeting Provisions did not enable the Majority Owners to change the name of the Building because (1) it would be contrary to Recitals (1)-(3) to the DMC; (2) the Meeting Provisions related to “the said premises” rather than “the said building”; and (3) the Majority Owners’ preference to change the name of the Building did not amount to “management” of “the said premises”: Judgment §§97-104 and Respondent’s Opening Submissions dated 13 January 2025 §§39-46.
33. The applicant submits that the respondent should be debarred from advancing a completely new construction on appeal when:
(1) There is no explanation why the new construction was not advanced at trial if it was thought to have merit, notwithstanding it was represented by counsel. The respondent should not be permitted to take such an opportunistic approach, advancing one construction at trial and then attempting another when the first failed.
(2) The applicant is prejudiced by having wasted her resources to face an entirely new case on appeal, having incurred substantial costs for the trial and the new construction could and should have been determined on that single occasion.
(3) The respondent’s new construction is wholly without merit (as shown below), had it been raised at trial, the applicant could have conducted her case differently, including seeking indemnity costs for the trial (for putting forward contentions which were bound to fail) but the opportunity to do so is now gone as the nisi costs order has become absolute.
34. The respondent replies that its interpretation of “concerning” as requiring matters to “touch and concern” land was clearly an issue at trial. The intended appeal would pursue a more refined formulation and articulation of arguments based on the same facts and “further legal research”: R’s Reply §4. Where a High Court decision is binding on the Lands Tribunal, there is no point in arguing against its application at the tribunal level save for possible distinguishing factors. The only possible avenue is to appeal to the Court of Appeal. Thus, it comes as no surprise that arguments are not to be rehearsed before reaching the Court of Appeal. The applicant’s assertion that were this advanced before the tribunal, she could have conducted herself differently is untenable. At trial the applicant could have sat back and simply relied on Falcome as a binding precedent without the need to argue against the respondent’s construction.
35. A point not taken at trial and presented for the first time in the Court of Appeal is closely scrutinised. A new argument may be raised on the same matter if the whole matter was before the court or a new argument as to the construction of the same document. However, a party may be precluded by his method of conducting his case from raising a different case on appeal.
36. This application was made to determine a question of construction. The respondent advanced its construction at trial. That construction having been rejected, it now seeks to advance a different construction on appeal. The words “touch and concern” were only considered under Issue 2, in determining the Meeting Provisions were enforceable. The trial proceeded on the basis of an agreed Statement of Facts: Judgment §4. While there may be some evidential matters that the applicant could wish to address, I am not persuaded that the evidence and facts relied upon would be materially different had the new construction been advanced at trial. That is, subject to DNOA §5 factual issues addressed below. However, I have no doubt but that the argument would have been wholly different. There is a wealth of authority on the meaning of “touch and concern” land. Further, if the respondent’s case was to include DNOA §§3.2 and 3.3, that Courts since Coke’s Note have been wrongly construing the words as having distinct different meanings, the trial would not have been the same at all. The DMC uses the word “concerning” not “touch and concern”. The respondent may now be seeking to argue first, that each word disjunctively means the same so that the word “concern” has the same legal meaning as “touch and concern”, that cases over the years that have held otherwise are wrong, in order to argue secondly, “concerning”, in the DMC is a derivative of “concern” so it must be construed to have the legal meaning of “concern” or “touch and concern”. Costs may be revisited on an appeal.
37. I do not accept that the respondent should have saved up its new construction for an appeal. The respondent was distinguishing Falcome: Judgment §§110, 111 and 115. If the DMC in this case ought to have been construed according to the new construction the respondent should have stated its case so the applicant could deal with it, however she saw fit. The respondent readily admits that the new case is based on “further legal research”: R’s Reply §4. I am in no doubt but that the applicant would have conducted her case differently and the hearing would have taken a different shape. Instead, the new construction has to be considered on a leave to appeal application.
38. However, given that this is a point of construction and the Court of Appeal would be well placed to construe the DMC afresh, I prefer to determine this leave application on the merits of the legal point.
(1)(c) The new construction is misconceived and without merit
39. The applicant submits that there is no merit in the new construction that only resolutions which “touch and concern” land in the legal sense are covered by the Meeting Provisions. The applicant summarises the respondent’s case thus:
(1) Matters which are decided by Majority Owners but which do not “touch and concern” land because they are of a personal nature, such as changing the name of a building, cannot run with the land and therefore cannot bind future co-owners: DNOA §3, R’s Subs §15.1.
(2) Given the purpose of a DMC is to “create a binding framework that governs the rights and obligations of all present and future co-owners” and “ensure management and maintenance of the premises over time”, it would be contrary to this purpose if future owners could ignore majority resolutions: DNOA §4.2, R’s Subs §16.
(3) The situation could be avoided if the word “concerning” is construed to only cover resolutions which “touch and concern” land, so as to bind all present and future owners: R’s Subs 21.
40. The applicant identifies that a key plank of the respondent’s case is that Owner’s resolutions which do not “touch and concern” land cannot bind future Owners. This contention is however misconceived:
(1) A procedural provision governing the conduct of passing resolutions in an owners’ meeting is binding on and enforceable against non-parties to the DMC, even though the resolution in question may concern matters of a personal nature, such as the renaming of a building: Pak Fah Yeow Investment (Hong Kong) Co Ltd v Proper Invest Group [2008] 5 HKC 474 at §65 (DHCJ Au (as he then was)); upheld on appeal in [2009] 3 HKC 285 at §17 (Rogers VP)).
(2) As DHCJ Yuen explained in Falcome this line of authority shows that “even though the resolution related to the name of the building, the procedural provision was applicable, the owners being bound if there is a compliant resolution” (§39).
(3) The respondent is therefore plainly wrong to contend that resolutions which concern personal matters are not binding on future owners. The contention is wholly contrary to Court of Appeal authority and has no prospect of success.
(4) Indeed, here the express intention of the drafters of the DMC that any resolutions “concerning the said premises” which are duly passed in accordance with the Meeting Provisions are binding on future owners is clear:
(a) §10 of the Fifth Schedule provides “Any resolution on any matter concerning the said premises passed by a majority of the owners present in person or by proxy and voting at a duly convened meeting shall be binding on all the owners provided as follows:- ... ”.
(b) The word “owner” is defined under clause 12(b) to include “each person in whom for the time being legal estate in any undivided share in the said premises is vested” This plainly covers future owners.
(c) Thus, the DMC expressly provides that “[a]ny resolution on any matter concerning the said premises” duly passed by the Majority Owners shall be binding on future owners. It follows from the authorities that a provision of this kind runs with the land.
(d) Accordingly, contrary to the respondent’s case, there is no need to construe the word “concerning” as meaning “touching and concerning” land in the conveyancing law sense in order for future owners to be bound by Owners’ resolutions.
(e) The respondent has failed to cite a single authority to substantiate its case that only Owners’ resolutions which touch and concern land bind future owners.
41. The applicant concludes that the respondent’s case in the intended appeal rests on a false premise which is contradicted by Court of Appeal authority. Leave to appeal should be refused on the merits.
42. The respondent replies that the applicant misunderstands the legal framework governing DMC’s and the distinction between procedural compliance and substantive power. The applicant cited Pak Fah Yeow for the proposition that “procedural provisions governing the conduct of passing resolutions” are binding even for matters “of a personal nature”. The applicant conflates two distinct issues: (1) whether a procedural provision about how to conduct meetings is binding, which it is; and (2) whether the substantive scope, so as to bind future owners, extends to all matters “about” the building. The respondent argues that Pak Fah Yeow concerned whether owners were bound by the procedural requirements for decision making where the DMC contained specific restrictions on name changes. It did not address the question of substantive scope arising here.
43. The respondent says that the argument that §10 of the Fifth Schedule makes resolutions binding on future owners because “owner” is defined to include future owners defies the principle that matters that do not “touch and concern” land cannot run with the land to bind future owners by operation of law. A contractual provision cannot override the law. The new construction would avoid that “legal impossibility” arising.
44. I accept that the respondent’s argument rests on a false premise. A resolution to change the building name duly passed in accordance with the Meeting Provisions would bind owners and their assigns, or future owners. Falcome followed the line of authority, including the Court of Appeal Pak Fah Yeow decision, that held a change of name may be made using the meeting provisions: Falcome §43, Judgment §§45, 113 & 114. The respondent cannot stop at Falcome. It would also need to persuade the Court of Appeal that that line of authority was plainly wrong. In Pak Fah Yeow Rogers VP at §17 held that the approach of the judge in the court below was correct, the provisions of clause 13 related to the mode of the conduct of an owners’ meeting, clause 3 would give the Second Owner the right to choose the name of the building but, under clause 13, that would be subject to the unanimous consent of all other owners.
45. If the Pak Fah Yeow ratio is indeed as stated in Falcome, that “when deciding the name of the building, the current co-owners were bound by the provisions of the DMC governing the conduct of meetings” (§43), the respondent must also overcome Court of Appeal authority. The Court of Appeal is bound by its previous decisions but it may depart from a previous decision where it is satisfied that it is plainly wrong: Solicitor (24/07) v Law Society of Hong Kong (2008) 11 HKCFAR 117. In my view the respondent does not have a reasonable prospects of success in persuading the Court of Appeal that the Pak Fah Yeow ratio was plainly wrong. Further, the fact that there was as express clause referring to naming rights in Pak Fah Yeow does not make the case wholly distinguishable.
46. In Falcome the 2nd defendant reserved the right to challenge the Pak Fah Yeow and Lamaya Ltd v Supreme Honour Development Ltd [1991] 1 HKC 189 decisions that a naming right covenant does not comply with section 41 Conveyancing and Property Ordinance, Cap. 219 on appeal and invited DHCJ Yuen to set out her views in case it may be of assistance to a higher court: §§68, 68-79. Whether a covenant runs with the land and the words “touch and concern” were actually considered in that context: §§71-79. The respondent has not provided a sound basis to challenge Falcome. I consider the respondent to have a task beyond formidable to show that Falcome was wrongly decided and should be overturned.
47. DNOA §3.5 provides that a DMC is an instrument prepared by conveyancing lawyers as a land contract, as such the word “concern” or “concerning” is a technical expression used by conveyancing lawyers in the sense that the matter would concern land only if it affected the nature, quality, mode of user or the value of the land. While the respondent’s argument is that the DMC should carry the conveyancing meaning, it must be recognised that the DMC uses the word “concerning” not “touch and concern”. The respondent relies on the DMC being drafted by lawyers as an instrument of title to be read and used by conveyancers. It may be assumed that the drafters would be familiar with the legal term “touch and concern”. If they intended to restrict the Meeting Provisions only to matters that “touch and concern” land in the technical legal sense, surely they would have drafted the DMC using those word. They did not.
48. The construction exercise includes consideration of the effect or consequences that flow from rival constructions. I do not accept the respondent’s hyperbolic submission on the effects of the construction found. I note that there is no evidence that property management has been thrown into a “chaotic situation” since Falcome, or before, because the name of a building may be changed by owners duly voting a change in compliance with meeting provisions of a DMC. When future owners purchase shares, they are bound by the DMC. If they wish to change the name of the building they would have to do so in accordance with the meeting provision of the particular DMC. What would cause management far more difficulty would be to discover that only resolutions that “touch and concern” land in the conveyancing sense may be covered by meeting provisions and that all other matters fall outside the scope of the DMC. The respondent’s suggestion that majority management decisions would not be stultified or that the problem may be alleviated by the principles of “incidental or ancillary use” giving implied authority to acts reasonably necessary is no answer. There are decisions made all over Hong Kong that could not be taken by voting in accordance with the provisions of the DMC. A vast array of matters would be wholly excluded as outside the scope of the DMC because they do not “touch and concern” land. Proposed resolutions could not be notified and issues determined within the DMC prescribed time frame in a fair transparent manner. Large estates would have to seek unanimity from hundreds or even thousands of owners individually. In any event there is no need to construe the word “concerning” as meaning “touching and concern” land in the conveyancing law sense in order for future owners to be bound by Owners’ resolutions. The “awkward” result or “chaotic” situation does not arise.
DNOA §3.8
49. The respondent also relies on the observation of Rogers VP in Pak Fah Yeow §18 that “[i]n my view, quite irrespective of the provisions of clause 13, it would be necessary for all the owners of the building to agree to the change of name”. The respondent accepts this was obiter and there is no explanation as to why unanimity was necessary, but emphasises that it was a deliberate remark presumably made on good grounds. The respondent seeks to justify it on the same basis as the new construction.
50. That observation does not assist the respondent, unless Falcome was wrongly decided. DHCJ Yuen held in Falcome, (1) Rogers VP’s statement at §18 “would appear to be obiter”, and he “did not explain why, if the DMC did not contain clause 13, a majority vote passing a resolution to change the name of the building would not bind all owners” (§§41-42); (2) “the ratio of both DHCJ Au and the Court of Appeal … was that when deciding the name of the building, the current co-owners were bound by the provisions of the DMC governing the conduct of meetings” (§43); (3) it follows that, in the present case, the Majority Owners were entitled to change the name of the Building without the respondent’s consent. The ratio of Pak Fah Yeow was accepted in Falcome, both authorities were followed here: Judgment §§45, 113-114. The prospect of the Court of Appeal now holding that the Pak Fah Yeow ratio was plainly wrong in favour of the obiter observation, that was without reasons, and accepting the respondent’s reasons instead, is in the realm of fanciful.
51. The applicant submits that the respondent’s case is that the DMC is unfair, but “the mere fact that a contractual arrangement, if interpreted according its natural language, has worked out badly for one of the parties, is not a reason for departing from the natural language”: Eminent Investments (Asia Pacific) Ltd v DIO Corporation (2020) 23 HKCFAR 487 §45. A party may simply have made a bad bargain, as explained in Jumbo King v Faithfuil Properties LTD & Others (1999) 2 HKCFAR 279, where Lord Hoffmann at 296C-I held that the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean.
52. For the reasons above reasons I find that the respondent does not have a reasonable prospect of having Falcome overruled. DNOA §§1-3 have no reasonable prospect of success.
53. The respondent may have set itself a higher hurdle than strictly necessary. In Falcome DHCJ Yuen determined a question of construction. While precedents are authoritative in relation to principles and matters of law, each instrument must still be construed according to its own terms in its own factual and legal context. DMC’s contain many similar terms but subtle differences may be material. Falcome did not purport to determine the meaning of “concerning” in every DMC meeting provision in Hong Kong. The applicant could not simply rely on Falcome without addressing the material DMC. It may be that the respondent takes on the task of overturning Falcome in order to show an appeal on a point of law to satisfy section 11(2) of the Ordinance, but the construction of an instrument is a question of mixed law and fact, so an appropriate construction issues are appealable.
(2) Respondent’s construction absent Falcome
54. DNOA §4 sets out the respondent’s construction “unfettered” by Falcome. A purposive construction taking into account the following is said to rule out a change of name from the scope of the Meeting Provisions.
DNOA §§ 4.1 and 4.2
55. The respondent applies the new construction contending that as set out in DNOA §§1-3.7 and above (1) the word “concerning” under the Meeting Provisions is a technical expression which is used by conveyancing lawyers with an intent to bind assigns; and (2) Recital 5 to the DMC provides that the Vendor and First Owner entered the DMC for the purposes of making provisions for the management and defining rights and obligations of themselves “and all subsequent owners”. It specifically envisages assigns to be bound. The word “management” ought to be construed to relate to management decisions on matters “concerning” the premises so as to bind assigns: DNOA §§4.1-4.2.
56. I agree with the applicant that this does not assist the respondent to show that the word “concerning” should mean “touching and concern” land in the conveyancing sense. Resolutions of a personal nature, such as those for renaming the Building, can also bind future Owners and thus can equally achieve the intention of binding assigns.
57. Recital 5 was taken into account: Judgment §§101-103, 114. Even without Falcome, the DMC must be construed in light of Pak Fah Yeow. However, assuming also that Pak Fah Yeow can be distinguished, I must construe the DMC free of any authority. There is simply no need to construe “concerning” to mean “touch and concern” land in the conveyancing and property law sense. A purposive construction does not require replacing the ordinary natural meaning of “concerning” with a legal meaning. In my view were the Court of Appeal to construe the DMC afresh there is no reasonable prospect of the legal meaning being attributed to the word “concerning” or the meaning of the DMC being so confined.
DNOA §§4.3-4.5.
58. The respondent contends that for the protection of the minority owners and to prevent abuse by the Majority Owners the matter to be resolved under the Meeting Provisions ought to be also in the common interest, on an objective view, for the co-owners as a whole. In other words, “a proposed resolution ought to clear an objective test first so that the majority owners would not have unlimited or unrestricted powers”: DNOA §4.4. Any matter which a reasonable person, in the position of a co-owner, would not consider reasonably necessary for management “concerning” the premises in the common interest of all co-owners ought to be outside the scope of the Meeting Provisions. And the Meeting Provisions are not engaged unless the matter proposed to be decided is properly within the scope of the proposed resolution and can bind assigns of the owners: DNOA §§4.5.
59. The applicant submits that this contention is hopeless: (1) it is not the respondent’s pleaded case which therefore cannot be run; (2) it is contrary to the clear and unequivocal terms of the Meeting Provisions, which do not contain the alleged fetter on the Majority Owners power; (3) the respondent has cited no authority for its bare assertion that any such fetter exists; and (4) in any event, it was held in Falcome that it would have been in the common interest of co-owners to change the name of a building (§§45-47): Judgment §§45, 107-115.
60. Having considered the terms of the DMC here and the relevant factual and legal background I construed this DMC in the same way as the authorities. In my view, even without Falcome that would be the proper construction of the DMC. There is no such fetter. The respondent accepts the resolution in Pak Fah Yeow was in the common interest as it allowed refurbishment works to be carried out by the owner seeking the name change. Whether a name may be changed pursuant to Meeting Provisions as a matter of construction cannot turn on subsequent events, such as whether someone offers to pay for the new plaque or to refurbish common parts. Management would be put in a difficult position if required to determine whether a proposed resolution passes a common interest test before it may even come under the Meeting Provisions.
61. It is not sufficient that the respondent’s new construction may be merely arguable. I find that there is no reasonable prospect of the respondent’s new construction being accepted on appeal.
DNOA §5
62. DNOA §5 provides additional “reasons” why the Declarations ought to be set aside. Not all of the reasons are addressed in the R’s Subs, but that states all DNOA grounds are relied upon and R’s Reply touches on some of them. The additional DNOA §5 reasons, albeit for different purposes, were substantially taken into account under Issue 3, the Construction Issue and Issue 4, the Declaratory Relief Issue. The DNOA §5 reasons are factors to be taken into account in construing the DMC, so the issue is one of weight attached to each in the construction exercise, rather than any new ground or additional point of law.
DNOA §5.1
63. The Building has an existing name, “LA VILLA (龍濤花園)” which as a matter of fact was the description of an owners unit when bought. The DMC does not contemplate a change of name and made no provision therefore. The description in Recital 2 “known at the date hereof as ‘LA VILLA (龍濤花園)’” is objectively neutral and carried no necessary implication as to whether the name would be changed or that it could be changed by the Majority Owners. The Judgment addressed Recital 2 under Issue 1, in the context of the respondent’s argument that by reason of Recital 2 the respondent was entitled to have the Building so named as part of its property right, which was rejected. The applicant had submitted that the words “known at the date hereof” indicate that the name of the building was not intended to be permanent. I found that those words objectively construed necessarily imply that it may not be so known at some other date. Readers of the DMC from time to time would understand that the DMC is in respect of the Premises, even if the building is then known by some other name: Judgment §69. Recital 2 is not entirely neutral. DNOA §5.1 does not assist the respondent.
DNOA §5.2
64. The respondent contends that the name had been used for 38 years, was a convenient way to identify the location, bus stops outside have used the same name, there is no need for any change of name and a change would only be for the personal liking of the Majority Owners: DNOA §5.2. The applicant submits that this is meritless as it is a completely different issue from whether the majority are entitled to rename the Building. Also, the various factual points relied upon by the respondent have not been pleaded and should not be raised.
65. Such facts were raised at trial: Judgment §§ 48, 51-54, 109, 125 & 131. Most of the reasons or indications were considered in the context of the respondent’s case under Issue 3, the Construction Issue and Issue 4, the Declaratory Relief Issue. Entitlement in terms of the DMC is a different issue to whether there is a need to change name. The points do not enhance the prospects of success on appeal.
DNOA §§5.3-5.4
66. The respondent contends that changing the name of the Building would cause unnecessary and unreasonable “nuisance and annoyance” to the non-consenting owner. This would include expenses to install a new nameplate and require change of address notices. If allowed in an unrestricted manner it could open the floodgate to an infinite number of changes at the whim of the majority with the said adverse consequences to the non-consenting minority. The respondent refers to §7 of the Second Schedule to the DMC, applicable by virtue of clause 4 of the DMC, which prohibits owners causing “nuisance and annoyance”. This is said to show a general intent against causing nuisance and annoyance: DNOA §§5.3-5.4.
67. The applicant replies that this contention is bound to fail because: (1) the point is wholly unpleaded and cannot be run; (2) it was not argued at the trial and is a fact sensitive issue which the applicant could have adduced evidence on. The respondent should therefore be debarred from running it; (3) in any event, the respondent has no evidential basis for the bare assertion that changing the name of the Building would create “nuisance or annoyance”; and (4) as a matter of construction, the terms of the Meeting Provisions are clear and unequivocal, they do not contain any restriction based on the notion of “nuisance or annoyance”. §7 of the Second Schedule provides that Owners shall not “use or permit to suffer any unit of which he is the owner to be used for …”. It plainly concerns acts done by Owners in their units, rather than collective decisions made in Owners’ meetings. Further, the mere fact that a contract, if interpreted according its natural language, works badly for one party, is not a reason for departing from the natural language: Eminent Investments (Asia Pacific) Ltd §45; Jumbo King 296I .
68. The respondent contends that whether a change of building name causes nuisance and annoyance is a matter of common sense and daily experience of which the tribunal may, and the Courts do routinely, take judicial notice. Courts may take judicial notice of facts that are so notorious or clearly established that they are beyond reasonable dispute. The inconvenience and disruption caused to property owners by an unwanted change of building name, affecting addresses, legal documents and identity of the property is a matter of common experience requiring no specific evidence. Even if this were a new fact sensitive issue, matters of which judicial notice may be taken do not require evidence, because they are matters of common knowledge.
69. It would appear that the respondent, having found §7 of the Second Schedule now seeks to bolster rejected points with a DMC reference. Clearly §7 of the Second Schedule concerns nuisance or annoyance caused by use of an owners unit. A document must be construed as a whole and one clause may shed light on another, but in my view it is a stretch to suggest that provision shows a general intent against causing nuisance and annoyance. Even if I were prepared to go that far, construing the Meeting Provisions as being subject to a requirement that resolutions must not cause nuisance or annoyance to any owner in any way, whether objectively or subjectively, is a step too far.
70. As a matter of construction, the terms of the Meeting Provisions are clear and unequivocal, they do not contain any restriction based on the notion of “nuisance or annoyance”. I accept that would be a fact sensitive issue. There was no evidence of nuisance or annoyance. That is not a matter that is notorious or of which I should simply take judicial notice. There must at least be some evidence from which the tribunal could draw inferences. There may be dispute as to what a name change would entail. Were there evidence for example, of the costs or the impact on the minority say to notify change of address that may be met with evidence that the Majority Owners would cover costs or otherwise challenged. The tribunal may then determine whether that amounts to nuisance or annoyance, but there must be an evidential basis. This point is similar to the implied terms argument made at trial against exercise of the discretion, which was rejected: Judgment §§125, 134-135. In my view the DNOA §§5.3-5.4 reasons do not improve the respondent’s prospects of success.
DNOA §5.5
71. DNOA §5.5 reasons are that the applicant has not shown how a change of name is on an objective view or otherwise, in the common interest of the co-owners as a whole to pursue, reasonably necessary or may otherwise assist in any management issue “concerning” the Building or the Premises such that it may bind assigns. Change of name is a matter that has been held objectively to be in the common interest of co-owners: Judgment §115. The authorities are indistinguishable, but even without Falcome that must be so. This reason does not strengthen the respondent’s appeal.
DNOA §5.6
72. The respondent also submits that it is relevant to consider the unreasonableness of allowing the Majority Owners to change the name of the Building: DNOA §5.6. This is another iteration of the nuisance and annoyance argument and also the implied terms arguments advanced and rejected at trial: Judgment §§134-135. The applicants says this ground also has no merit: (1) there is nothing inherently unreasonable in the name of a building being changed by a majority vote. As DHCJ Yuen held in Falcome “if all current co-owners acting together can decide to change the name of the Building, there is no reason why that decision cannot be made by a majority who reached that decision in accordance with the procedures agreed in the DMC” (§47); and (2) in any event, the language of the Meeting Provisions is plain and cannot be overridden by any alleged considerations of reasonableness. Even without Falcome, I maintain the view that an owner duly exercising a voting right in accordance with the DMC Meeting Provisions cannot be deemed to be acting unreasonably: Judgment §104, 117. The Meeting Provisions are not subject to that restriction or implied term: The Judgment §135 found that the issue of implied terms was raised obliquely and far too late. Even if these factors are now deployed in aid of construction, they do not indicate that the new construction should be adopted.
73. In my view the DNOA §5 reasons, whether taken alone or cumulatively, do not provided a basis to revisit the construction or to sustain an appeal with a reasonable prospect of success.
SHOULD LEAVE BE GRANTED IN THE INTERESTS OF JUSTICE?
74. The respondent contends that the question of interpretation in this intended appeal is one of importance due to the “vast number of strata titles in Hong Kong similarly governed by deeds of mutual covenants”. The determination of this question is said be to “the public advantage”.
75. The applicant responds that it cannot be in the interests of justice for leave to appeal to be granted: (1) for the reasons above the intended appeal is hopeless and to allow it to proceed would be a waste of party and judicial resources; and (2) in any event, the respondent’s case turns on a point which has already been decided by the Court of Appeal, and the respondent has failed to identify any reason for such appellate authority to be re-examined.
76. The respondent replies that the point has not been decided by the Court of Appeal in Pak Fa Yeow. That DMC contained provisions on name change. This case involves the general scope of management powers absent such provisions. R’s Reply repeats that the question of how to interpret “concerning” affects tens of thousands of “strata title” properties in Hong Kong. Public interest requires clarification and a definitive determination of the issue at the Court of Appeal level.
77. Hong Kong does not have a “strata title” system. The Hong Kong system of co-ownership of multi-storey buildings in multiple occupation, applicable here, is unique. The main feature is that the owners hold their interests as tenants-in-common, the interest is acquired by an assignment of undivided shares. The second principle feature is that the developer and first owner execute a DMC regulating by contract the rights of owners inter se regarding the exclusive use and occupation of the units allotted to their respective parcels of undivided shares, use of common parts and mutual obligations. The Court of Final Appeal, including in Jumbo King (at 290A-G), has explained the system.
78. I shall treat the respondent’s point as referring to the vast number of so held titles subject to a DMC. The question is not one of general principle, decided for the first time, or a question of importance upon which further argument or a decision of the Court of Appeal would be to the public advantage. The Judgment construed the DMC in respect of the Premises. Each DMC must be construed according to its own terms in its factual and the legal context. Indeed, at trial the respondent submitted that whether a change of name is within the scope of a DMC depends on the construction of that DMC: Judgment §95. Further, that the case turns of the construction of a particular DMC and whether there is a “common interest” on a specified set of facts: Judgment §125(4). There is no broader public interest. I reject the contention that the appeal would be to the public advantage. In my view DNOA §§1-5 grounds are without merit. The respondent has not shown any other reasons in the interests of justice to grant leave. It would not be right to waste the parties and judicial resources by granting leave on the interests of justice basis.
DISPOSITION
79. Having considered the DNOA and submissions of both parties, I am not satisfied that the appeal has a reasonable prospect of success. Nor am I satisfied that there is some other reason in the interests of justice why the appeal should be heard. The respondent’s application for leave to appeal by summons dated 4 June 2025 is refused.
Costs
80. Both parties submit that costs should follow the event. I see no reason to depart from that starting point. The respondent shall pay the applicant’s costs assessed on the District Court scale with certificate for counsel. They also seek a summary assessment. I have assessed the applicant’s Statement of Costs dated 11 July 2025. The hourly rates claimed are in accordance with the Solicitors Hourly Rates for a Party and Party Taxation District Court rates. There are no items included that ought not to be, nor excessive time claimed. The applicant was represented by senior counsel as well as junior counsel at trial. Quite properly only the junior counsel has been instructed on the application for leave to appeal. The fee claimed is reasonable. I assess the costs of the applicant in the sum of $58,000. The costs order is on a nisi basis. Either party may apply to vary the nisi order within 14 days hereof, failing which the costs order shall become absolute.
ORDER
81. I make the following order:
(1) The applicant’s application for leave to appeal by summons dated 4 June (“the Application”) be dismissed.
(2) Costs order nisi that the respondent do pay the applicant the costs of the Application on the District Court scale with certificate for counsel, summarily assessed in the sum of $58,000, to be paid forthwith.
| (LJ Cruden) Presiding Officer Lands Tribunal |
Mr Cedric Yeung, instructed by Messrs Iu, Lai & Li, for the applicant
Messrs Wong, Hui & Co., for the respondent