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Urban Property Management Ltd And Another v Tsang Wing Lam

Judgment Cited in Precedent Map Related
Vincent
Judgment Date20 January 2010
CourtDistrict Court (Hong Kong)
Judgement NumberDCMP2185/2004
Subject MatterMiscellaneous Proceedings
DCMP002185K/2004 URBAN PROPERTY MANAGEMENT LTD AND ANOTHER v. TSANG WING LAM

DCMP 2185/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 2185 OF 2004

____________

IN THE MATTER of a Deed of Mutual Covenant dated 13th October 1983 and registered in the Shatin New Territories Land Registry with Memorial No. 239788 (“the DMC”)
and
IN THE MATTER of the property known as All Those 19/27,772nd parts or shares of and in All Those piece or parcel of ground registered in the Shatin New Territories Land Registry as SHATIN TOWN LOT NO. 230 And of and in the messuages erections and buildings thereon known as “King Tin Court” Together with the full and exclusive right and privilege to hold use occupy and enjoy All That Flat 5, 23rd Floor Block C (Bing Sam House), King Tin Court, 12 Chui Tin Street, Shatin, New Territories, Hong Kong, comprised in a Memorandum of Charge dated 11th September 2001 made pursuant to the DMC and in favour of Urban Property Management Limited and registered in the Shatin New Territories Land Registry with Memorial No. 1244690
and
IN THE MATTER of section 19 of the Building Management Ordinance (Cap.344)
and
IN THE MATTER of Order 88 Rules 1 and 5A of the Rules of the District Court (Cap.336)

______________________

URBAN PROPERTY MANAGEMENT LIMITED 1st Plaintiff
THE INCORPORATED OWNERS OF KING TIN COURT 2nd Plaintiff
and
TSANG WING LAM (曾榮林) Defendant

______________________

Coram: His Hon Judge Poon in chambers (open to public)

Date of hearing: 14 December 2009

Date of decision: 20 January 2010

______________________

D E C I S I O N

______________________

Introduction

1. The Plaintiffs obtained an order for sale of the Defendant’s property (“the Property”) in enforcement of a Memorandum of Charge (“MOC”) for outstanding management fees owed by the Defendant. H.H. Judge H.C. Wong, who gave the said order for sale on 4 August 2006, also awarded the costs of the proceedings to the Plaintiffs, to be taxed if not agreed.

2. The said costs of the Plaintiffs were taxed at a hearing before Master Lai on 27 May 2008 at HK$411,012.00 and the allocatur thereof was issued on 2 July 2008. Subsequently, the Plaintiffs obtained a charging order against the Property in respect of the taxed costs. The charging order was made absolute on 27 August 2009. Having failed to persuade the Masters to set aside the charging order and the allocatur, the Defendant appeals before me against the decisions of the Masters.

3. To put the matters into context, I should go a little backward to the events happened after the order of Judge Wong. Pursuant to the order of the learned Judge, the Plaintiffs took possession of the Property with the assistance of the bailiff on 16 October 2007. However, the Defendant has somehow regained possession of the Property on 18 October 2007.

4. The effect of the above is that the MOC was being executed and the Plaintiffs were precluded from relying on it further to secure any sums owed by the Defendant to them. As such, the Defendant had succeeded in obtaining an order for the release of the Property from the security constituted by the MOC before H.H. Judge Leung. In his Decision dated 3 November 2009[1], the learned Judge set out in details the long history of this action, including the events leading to the recovery of possession of the Property by the Defendant. I do not propose to repeat here the same.

Defendant’s arguments

5. The Defendant basically argued that his liability to pay costs pursuant to Judge Wong’s order was extinguished upon the execution of the MOC. He submitted that as the costs of the proceedings formed part of the amount secured by the MOC, the court should not allow the creation of another charge against the same property in respect of the same debt.

6. Ironically, at the hearing before Judge Leung on the Defendant’s application to release the Property from security, the Plaintiffs put forward similar arguments. In rejecting the Plaintiffs’ arguments, the learned Judge had this to say[2]:

“33. It was argued on behalf of the Plaintiffs that costs of these proceedings are secured by the MOC. Therefore the release should be refused. For the following reasons, I do not agree with the Plaintiffs.

34. The notice under clause 6(f) is supposed to be served in the event of an owner failing to pay any sum due and payable by the owner within 7 days “from the date on which such sum becomes payable”. The notice served pursuant to clause 6(f)(i) is supposed to specify such sum due by then. According to clauses 6(e) and 6(f)(i), costs of the action are separate and distinct from the expenses in or in connection with the recovery or attempt to recover the amount due. However, by the time of the notice constituting the MOC subsequently registered pursuant to clause 6(f)(iii) came into existence, no civil action has been brought pursuant to clause 6(e), let alone these proceedings which were commenced in 2004. No legal costs of any civil action was due or payable by the time of the notice constituting the MOC.

35. To be in line with these provisions of the DMC, the “further moneys that may be due” under the MOC could not be any amount than that specified. [The Defendant] was deemed by clause 6(f)(ii) to have agreed to a charge for the amount specified in the notice together with interest. This did not include the legal costs to be incurred in these proceedings.

36. I note paragraph 5 of the 4/8/06 Order which sets out the manner...

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