Archive for the ‘owners’ corporation’ Category

Canopy as a common part

September 7, 2011

Hollywood Shopping Centre Owners’ Committee Ltd v Incorporated Owners of Wing Wah Building  ([2011] HKEC 1063, CA) concerned a mixed commercial / residential development. There was an owners corporation for the development as a whole. There was a sub-DMC for the shops at ground, mezzanine and first floor levels (Hollywood Shopping Centre). There was a separate owners’ corporation for the shopping centre. The dispute between the two corporations centred on a canopy attached to the outside wall of the building between the ground and mezzanine floors. The plaintiff (the Hollywood Shopping Centre Owners) had allowed the canopy to be used for advertisements. The defendants claimed that this was a breach of section 34I since it meant that the shopping centre owners had converted a common part to their private use. The Court of Appeal agreed and Hollywood Shopping Centre was ordered to account for the sums received for advertising in respect of the advertising agreement entered into after the Incorporated Owners of the building had voiced their opposition to the use of the canopy for the exclusive benefit of the shopping centre.

Can incorporated owners bring proceedings where the duty was owed only to some owners?

September 6, 2011

Incorporated Owners of One Beacon Hill v Match Power Investment Ltd ([2011] HKEC 1156) (reversed by the Court of Appeal) concerned proceedings brought by incorporated owners against the developer of the building. The proceedings alleged that sub-standard materials had been used and poor workmanship allowed in the construction process. The developer, Match Power, sought to strike out the action on the basis that the incorporated owners had no locus standi. The relevant duty concerned the common parts but it was a contractual duty owed to only some of the original purchasers: different forms of sale contract were used at different stages of development and only some incorporated the relevant duty. Match Power argued that incorporated owners could only bring proceedings where the relevant duty was owed to all of the owners. The court rejected this; it was enough that the duty was owed to one or more owners and concerned the common parts. The incorporated owners could bring proceedings even though the duty was contractual.

Incorporated owners took over right to require managers to account for fees from common parts

September 5, 2011

Where money is owed to the owners of a property for the time being and an owners’ corporation is then formed, the right to enforce the obligation passes to the owners corporation under section 16 of the Building Management Ordinance.

In Jikan Development Ltd v Incorporated Owners of Million Fortune Industrial Centre ([2004] 1 HKLRD 181, CFA) the managers of an industrial building wrongly paid the fees derived from car parks that were common parts to be paid to one of the owners. After these sums had been collected by the managers, an owners’ corporation was formed and the corporation brought proceedings to recover the sums (which should have been held on behalf of all of the owners for the time being). The managers contested the corporation’s right to bring these proceedings since the corporation had not been formed when the sums were collected. This failed. Section 16 passed the right to enforce the reimbursement obligation to the corporation). Section 18(2) did not have this same effect since it merely conferred management powers and did not give any rights to the corporation.