When can incorporated owners be made to bring proceedings?

In Estoril Court (IO) v Cheer Rich Enterprises Ltd ([2012] HKEC 694) C, an owner of undivided shares in a development, complained that the incorporated owners had failed to enforce the Deed of Mutual Covenant against owners who had committed breaches of it. C referred to the obligation in section 18(c) of the Building Management Ordinance to ‘do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant’. The Lands Tribunal held that the burden was on C to show that there is evidence suggesting a breach of the DMC (this seems not to be the same as proof that there has been such a breach). The question here was whether a reasonable incorporated owner would take action (or further action). If C could meet this burden then it would be for the incorporated owner to show why there should not be an injunction requiring it to take action. One relevant factor here would be the possibility of proceedings brought by the complaining co-owner personally ([29] – [30]). Further, it may be that the injunction sought would be excessive (eg requiring court proceedings when a warning letter would do) ([31]).

In this case, the Lands Tribunal rejected most of C’s complaints but did require it to take action against the owner of an illegally parked car. Hundreds of warnings letters had gone unheeded and the incorporated owners had to take more forceful action.


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