THE INCORPORATED OWNERS OF BALWIN COURT v. WONG YUM KWAN

HCSA 69/2024, HCSA 70/2024, HCSA 71/2024, HCSA 72/2024, HCSA 73/2024, HCSA 74/2024& HCSA 75/2024 (Heard Together) [2025] HKCFI 1078 HCSA 69/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE SMALL CLAIMS TRIBUNAL APPEAL NO 69 OF 2024 (On Appeal from Small Claims Tribunal Claim No 16399 OF 2023) BETWEEN The Incorporated Owners of Balwin Court Claimant (Appellant) and Wong Chun Kwung Defendant (Respondent) AND HCSA 70/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE SMALL CLAIMS TRIBUNAL APPEAL NO 70 OF 2024 (On Appeal from Small Claims Tribunal Claim No 16400 OF 2023) BETWEEN The Incorporated Owners of Balwin Court Claimant (Appellant) and Wong Yau ON Defendant (Respondent) AND HCSA 71/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE SMALL CLAIMS TRIBUNAL APPEAL NO 71 OF 2024 (On Appeal from Small Claims Tribunal Claim No 16401 OF 2023) BETWEEN The Incorporated Owners of Balwin Court Claimant (Appellant) and Ngai Chi Ho Defendant (Respondent) AND HCSA 72/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE SMALL CLAIMS TRIBUNAL APPEAL NO 72 OF 2024 (On Appeal from Small Claims Tribunal Claim No 16402 OF 2023) BETWEEN The Incorporated Owners of Balwin Court Claimant (Appellant) and Kwan Wui Che Defendant (Respondent) AND HCSA 73/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE SMALL CLAIMS TRIBUNAL APPEAL NO 73 OF 2024 (On Appeal from Small Claims Tribunal Claim No 16403 OF 2023) BETWEEN The Incorporated Owners of Balwin Court Claimant (Appellant) and Fong Shiu Chung Defendant (Respondent) AND HCSA 74/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE SMALL CLAIMS TRIBUNAL APPEAL NO 74 OF 2024 (On Appeal from Small Claims Tribunal Claim No 16404 OF 2023) BETWEEN The Incorporated Owners of Balwin Court Claimant (Appellant) and Wong Yum Kwan Defendant (Respondent) AND HCSA 75/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE SMALL CLAIMS TRIBUNAL APPEAL NO 75 OF 2024 (On Appeal from Small Claims Tribunal Claim No 16405 OF 2023) BETWEEN The Incorporated Owners of Balwin Court Claimant (Appellant) and Yiu Wing Tai Defendant (Respondent) (Heard Together) Before: Deputy High Court Judge Alan Kwong in Chambers Date of Hearing: 11 March 2025 Date of Decision: 11 March 2025 Decision Introduction On 24 October 2024, Deputy Adjudicator Michelle Chong of the Small Claims Tribunal dismissed the Claimant’s claims against the Defendant. On 20 December 2024, the Deputy Adjudicator further dismissed the Claimant’s application for review. On 27 December 2024, the Claimant applied for leave to appeal. Material Background These proceedings concern the management of Balwin Court, which is a multi-storey residential building on Argyle Street. The Claimant is the incorporated owners of Balwin Court. The Defendants are the registered owners of certain carpark spaces in Balwin Court. The Claimant asserted that under clause 4(f)(1) of the deed of mutual covenants in respect of Balwin Court (the “DMC”), the Defendants were liable to make contributions and pay management fees. The Defendants disagreed with the Claimant’s assertion. The relevant provisions of the DMC are as follows:- Clause 4(f)(1) provides that: “ All costs charges and expenses incurred in managing and providing services to [Balwin Court] and the common parts services and facilities shall be borne and paid by the owners in proportionate to the respective shares in the said premises for the time being owned by them, such costs charges and expenses to include but not limited to…” (emphasis added) Clause 4(f)(2) provides that:- “ The owner of each flat shall deposit with the Manager as security against his liabilities under this Deed the sum set out in the second column of the Third Schedule hereto opposite such flat.” (emphasis added) Clause 4(f)(3) provides that:- “ The owner of each flat shall pay to the Manager each month in advance the sum set out in the third column of the Third Schedule hereto opposite to such flat on account of his share of the costs charges and expenses above mentioned.” (emphasis added) The Third Schedule reads as follows:- Units Deposit Monthly Management Fee Shares Allotted Each of Flat A & B on the 1st to 14th Floors in Blocks 1, 2, 3, 4 and 5 HK$360 HK$180 14 shares x 140 flats = 1960 shares Flat A on the 15th floor in Blocks 1, 2, 3, 4 and 5 HK$280 HK$140 10 shares x 5 flats = 50‍ shares Flat B on the 15th floor in Blocks 1, 2, 3, 4 and 5 HK$360 HK$180 14 shares x 5 flats = 70 shares Each of Flats C and D on the 1st to 12th floors in Blocks 1, 2, 3, 4 and 5 HK$280 HK$140 11 shares x 120 flats = 1320 shares Flats C and D on the 13th and 14th floors in Blocks 1, 2, 3, 4 and 5 HK$360 HK$280 23 shares x 10 flats = 230 shares Flats C and D on the 15th floor in Blocks 1, 2, 3, 4 and 5 HK$280 HK$140 11 shares x 10 flats = 110 shares Each of 190 carpark spaces on Basement 1 share x 190 carpark spaces = 190 shares Each of 198 carpark spaces on the Ground floor 1 share x 198 carpark spaces = 198 shares Each of 47 carpark spaces on the 1st floor 1 share x 47 carpark spaces = 47 shares Roofs NIL Clause 4(f)(4) provides that:- “ If the total contributions payable to the managers by the owners of the said building in advance as aforesaid shall be insufficient to cover all the said costs charges and expenses then such owners shall make further contributions towards such expenses in the proportion in which they pay the monthly sums.” (emphasis) In light of the aforesaid provisions of the DMC, the Deputy Adjudicator held that the Defendants, being owners of carpark spaces, were not liable for paying contributions and management fees. Legal Principles governing Appeals from the Small Claims Tribunal Under section 28 of the Small Claims Tribunal Ordinance (Cap 338), any party who is aggrieved by a decision of the Tribunal may apply to the Court of First Instance on a ground involving a question of law alone, or on the ground that the claim was outside the jurisdiction of the Tribunal. The party who seeks leave to appeal must show that his or her intended appeal is arguable and has a reasonable prospect of success: Tsui Koon Wah v Ip Mei Ho [2021] HKCFI 3437 at para 65 (per Marlene Ng J); and 楊小彥 及 鄭家明 [2020] HKCFI 2977 at para 28 (per Lisa Wong J). Deliberation In 黎偉雄 v 信和物業管理有限公司 [2020] HKCA 448 at para 26, Lam VP (as Lam PJ then was) stated:- “ In a nutshell, the DMC must be construed in the context of the document as a whole and in light of the factual and legal background (which also provides the context) to its execution, and having regard to the practical objects which it was intended to achieve. The overriding objective in construction is to give effect to what a reasonable person would have understood the parties to mean. Instead of focusing on the ordinary and natural meanings of a few words in a clause, very often the broader context provides surer guide.” The Claimant stressed that the carpark owners hold undivided shares in Balwin Court. Relying on clause 4(f)(1) of the DMC, the Claimant contended that the Defendants are liable to pay monthly fees and make financial contributions. In this connection, Mr. Johnny So together with Mr. Chau Hin Chung (for the Claimant) submitted that insofar as there is any inconsistency between clause 4(f)(1) and other clauses in the DMC, clause 4(f)(1) shall prevail. It is important to construe the relevant provisions in the DMC in a holistic manner. Clause 4(f)(1) provides that the owners shall bear the costs, charges and expenses incurred in managing Balwin Court in proportion to their respective shares. Nonetheless, clauses 4(f)(2) and (3) further specifically provide that the amounts of deposits and monthly contributions required of the individual owners are set out in the Third Schedule, and the Third Schedule unequivocally stipulates that the carpark owners are not required to pay (i) security deposits; and (ii) monthly contributions. Moreover, clause 4(f)(4) also specifically provides that where the total contributions are insufficient to cover the expenses, the owners shall make “further contributions towards such expenses in the proportion in which they pay the monthly sums” (emphasis added). Since the carpark owners are not required to pay monthly contributions, they are also not liable to pay further contributions. In the premises, under sections 4(f)(2) to (4) and the Third Schedule, carpark owners are not required to pay any security deposits and are not required to make any monthly contributions. If the funds available to Balwin Court are insufficient, the Claimant may not even seek contributions from them, and the Claimant may only seek contributions from the owners of the residential flats. In this connection, I do not accept Mr. So’s suggestion that clauses 4(f)(2) to (3) and the Third Schedule have nothing to do with the carpark owners as they are not “flat owners”. If Mr. So’s suggestion were correct, the Third Schedule would not cover the carpark owners at all. On the contrary, the Third Schedule expressly sets out the deposits and monthly contributions required of them (which are zero). Had the drafter of the DMC intended that carpark owners should pay security deposits and monthly contributions, the payments required of them would have been spelled out in the Third Schedule (or alternatively some other provisions). This is not the case. None of the provisions in the DMC provides that carpark owners are required to make contributions. In my view, the objective intention evinced by the provisions of the DMC is abundantly clear. While clause 4(f)(1) provides that owners are required to pay costs, charges and expenses in proportion to their respective shares, the meaning of owners in this context only refers to those owners who have to pay deposits and management fees under the Third Schedule (ie the residential flats). This does not include carpark owners, who are not required to pay security deposits and not required to make monthly contributions under the Third Schedule. Under this interpretation, the relevant provisions of the DMC are consistent with each other, and all the provisions of the DMC make sense. In contrast, the interpretation propounded by the Claimant flies in the face of:- the Third Schedule, which stipulates that carpark owners are not required to pay security deposits and monthly management fees; as well as clause 4(f)(4), which stipulates that only owners who are liable to make monthly contributions (ie the owners of residential flats) are liable for making further contributions if the total contributions are insufficient. It is trite that in interpreting a contract, all parts of it must be given effect where possible, and no part of it should be treated as inoperative and surplus. This is a corollary to the principle that a contractual document should be construed as a whole: see Sir Kim Lewison, The Interpretation of Contracts (8th Ed) at para 7.24. The Claimant does not have a valid answer at all. It fails to demonstrate how its proposed interpretation is reconcilable with the relevant contents of the Third Schedule and clause 4(f)(4), which should not treated as inoperative or superfluous. Furthermore, where a contract contains general provisions and specific provisions, the specific provisions will be given greater weight than the general provisions where the facts to which the contract is to be applied fall within the scope of the specific provisions: see Sir Kim Lewison, The Interpretation of Contracts (8th Ed) at para 7.46. In the present case, the parties’ dispute falls within clauses 4(f)(2) to (3) and the Third Schedule. These are the specific provisions that determine the parties’ positions. I do not accept Mr. So and Mr. Chau’s submissions that clause 4(1)(f)(1), which is merely a general provision in the present context, shall prevail. Even if there is any inconsistency between clause 4(1)(f)(1) on the one hand and on the other hand clauses 4(f)(2) to (3) and the Third Schedule (which is not the case), I am of the view that the latter shall prevail. In the premises, I am of the view that:- the Claimant’s proposed appeal has no merits and is unarguable; and the Deputy Adjudicator’s findings and conclusion were sound and correct. Conclusion I accordingly dismiss the Claimant’s application for leave to appeal. I make no order as to costs. Other Matters I thank Mr. So and Mr. Chau for their helpful assistance. (Alan Kwong) Deputy High Court Judge Mr Johnny So and Mr Eric Chau, instructed by Henry Chiu & Partners for the appellant (claimant)