Conduct of owners’ meetings

In general, those present at an owners’ meeting are free to decide how to conduct the business of the meeting.

Kwan & Pun Co Ltd v Chan Lai Yee ([2002] HKEC 1401, CA) concerned an owners’ meeting that had been convened in accordance with section 3(2) of the Building Management Ordinance to consider whether or not to appoint a management committee. The owner of 69.74% of the shares intended to oppose the creation of a management committee. The chairman of the meeting asked the meeting to vote both on the appointment of nine committee members and then on the appointment of the officers of the committee. These appointments were each dealt with individual by individual. Owners were asked to raise their hands if they approved the appointment. Then they were asked whether anyone objected. No-one did and there was an acclamation to the effect that no-one objected. The majority owner did intend to object. His proxy expected there would be a resolution on the question as to whether or not there should be a management committee at all. This was never put to the meeting. The majority owner objected that the resolution to appoint the committee was invalid. Amongst the grounds on which he relied were the failure to consider whether there should be a committee at all and the way in which voting was conducted. The majority owner succeeded at first instance but failed in the Court of Appeal. It was clear that the meeting had been called to consider the question as to whether or not there should be a management committee. The appointment of individual members and office-holders implied that the meeting agreed with the creation of the committee. The majority owner should have objected to the appointments. As to the conduct of the meeting, this is in the hands of those present. If they are content to proceed as this meeting did, if there is no objection, then the resolutions are valid.

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