SAM WOO MARINE WORKS LTD v. THE INCORPORATED OWNERS OF PO HANG BUILDING

SAM WOO MARINE WORKS LTD v. THE INCORPORATED OWNERS OF PO HANG BUILDING

The Tribunal held that the DMC does not impose an obligation to maintain separate class-specific surplus accounts nor require exhaustion of any class surplus before demanding management fees; the prior construction in DCCJ 1271/2011 is binding and applicable; the IO had remedied accounting deficiencies and validly adopted revised budgets and audited accounts; accordingly Sam Woo's declaratory and accounting claims fail and the IO is entitled to recover the outstanding management fees of HK$237,884 plus interest.

Citation
[2020] HKLdT 56
Parties
Applicant (ldbm 252/2014); Respondent (ldbm 255/2018): Sam Woo Marine Works Ltd; Respondent (ldbm 252/2014); Applicant (ldbm 255/2018): The Incorporated Owners of Po Hang Building
Court
Lands Tribunal
Jurisdiction
Hong Kong
Judgment Date
24 December 2020
Case Number
LDBM252/2014
Procedural Posture
Building Management Applications Heard Together (lands Tribunal) / Judgment (decision on Merits)
Outcome
LDBM 252/2014: all claims by Sam Woo dismissed. LDBM 255/2018: judgment for the Incorporated Owners for outstanding management fees in the sum of HK$237,884; post‑January 2019 arrears not awarded. Costs to IO; costs to be paid by Sam Woo.
Legal Topics
Deed of Mutual Covenant Interpretation, Management Fees Collection, Accounting and Surplus Allocation, Res Judicata, Building Management Ordinance Powers, Declarations and Accounts
Source Language
EN
Property Law Building Management Contract Law Civil Procedure Deed of Mutual Covenant Interpretation Management Fees Collection Accounting and Surplus Allocation Res Judicata +2 more

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Parties

Sam Woo Marine Works Ltd

Applicant (ldbm 252/2014); Respondent (ldbm 255/2018)

The Incorporated Owners of Po Hang Building

Respondent (ldbm 252/2014); Applicant (ldbm 255/2018)

Procedural Posture

Building Management Applications Heard Together (lands Tribunal) / Judgment (decision on Merits)

Legal Issues

  1. 1 Whether the Deed of Mutual Covenant (DMC) requires the Incorporated Owners (IO) to keep separate class-specific accounts and to allocate and exhaust class-specific surplus before demanding management fees
  2. 2 Whether terms should be implied into the DMC obliging IO to maintain running/class-specific surplus accounts
  3. 3 Whether previous decision DCCJ 1271/2011 is binding (res judicata) on interpretation of Clauses 3(h),(i),(j) of the DMC

Ratio Decidendi

The Tribunal held that the DMC does not impose an obligation to maintain separate class-specific surplus accounts nor require exhaustion of any class surplus before demanding management fees; the prior construction in DCCJ 1271/2011 is binding and applicable; the IO had remedied accounting deficiencies and validly adopted revised budgets and audited accounts; accordingly Sam Woo's declaratory and accounting claims fail and the IO is entitled to recover the outstanding management fees of HK$237,884 plus interest.

Court Disposition

LDBM 252/2014: all claims by Sam Woo dismissed. LDBM 255/2018: judgment for the Incorporated Owners for outstanding management fees in the sum of HK$237,884; post‑January 2019 arrears not awarded. Costs to IO; costs to be paid by Sam Woo.

Orders

  • Sam Woo Marine Works Ltd to pay HK$237,884 to The Incorporated Owners of Po Hang Building together with interest at judgment rate from date of judgment until payment
  • Claim for management fees accruing after January 2019 dismissed as cause of action had not accrued at commencement of proceedings