Fu Loong Lithographer Pte Ltd v Mok Wai Hoe

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
Judgment Date23 May 2014
Docket NumberCivil Appeal No 110 of 2013 and Summons No 6634 of 2013
Date23 May 2014

Court of Appeal

Chao Hick Tin JA

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Civil Appeal No 110 of 2013 and Summons No 6634 of 2013

Fu Loong Lithographer Pte Ltd and others
Plaintiff
and
Mok Wai Hoe and another and another matter
Defendant

Leo Cheng Suan and Teh Ee-Von (Infinitus Law Corporation) for the appellants

Lee Peng Khoon Edwin, Poonam Bai d/o Ramakrishnan Gnanasekaran and Chan Ying Keet Jasmine (Eldan Law LLP) for the first respondent

Tan Tian Luh and Lin Zixian (Chancery Law Corporation) for the second respondent.

ANZ Nominees Ltd v Allied Resources Corp Ltd (1984) 2 ACLC 783 (folld)

Australian Olives Ltd v Livadaras (2008) 172 FCR 34 (refd)

Byng v London Life Association Ltd [1990] Ch 170 (folld)

C&C Fisher Pty Ltd v Livadaras (2010) 265 ALR 301 (refd)

Datuk Johari Abdul Ghani v QSR Brands Bhd [2007] 4 MLJ 19 (refd)

Link Agricultural Pty Ltd v Shanahan [1999] 1 VR 466 (refd)

MCST Plan No 473 v De Beers Jewellery Pte Ltd [2002] 1 SLR (R) 418; [2002] 2 SLR 1 (folld)

MCST Plan No 586 v Menezes Ignatius Augustine [1992] 1 SLR (R) 201; [1992] 1 SLR 807 (folld)

Mc Kerlie v Drillsearch Energy Ltd [2009] NSWSC 488 (folld)

R v D'Oyly (1840) 12 Ad & E 139; 113 ER 763 (folld)

Second Consolidated Trust Ltd, The v Ceylon Amalgamated Tea & Rubber Estates Ltd [1943] 2 All ER 567 (refd)

Steel and the Conveyancing (Strata Titles) Act 1961, Re (1968) 88 WN (Pt 1) (NSW) 467 (folld)

Wishart v Henneberry (1962) 3 FLR 171 (refd)

Companies Act (Cap 50, 2006 Rev Ed)

Building Maintenance and Strata Management Act (Cap 30 C, 2008 Rev Ed) ss 34 (4) , 37, 38 (3) , 40 (6) (b) , 40 (7) , 61 (1) , 104 (1) (a) , First Schedule paras 2 (1) , 4, 6 (consd) ;ss 24, 24 (1) (a) , 24 (1) (b) , 33 (1) , 34 (1) , 38-43, 38 (3) (b) , 59

Land Titles (Strata) Act (Cap 158, 2009 Rev Ed) s 12 (2) (consd)

Land—Strata titles—Meetings—Chairperson of management corporation rejecting votes of subsidiary proprietors on basis of conflict of interest at extraordinary general meeting of management corporation—Whether chairperson entitled to reject such votes—Section 104 (1) (a) and First Schedule para 2 (1) Building Maintenance and Strata Management Act (Cap 30 C, 2008 Rev Ed)

Land—Strata titles—Meetings—Chairperson of management corporation ruling motions out of order at extraordinary general meeting of management corporation—Standard of review of chairperson's rulings—Whether chairperson's rulings valid—Sections 34 (4), 38 (3), 40 (6) (b), 61 (1) and First Schedule para 4 Building Maintenance and Strata Management Act (Cap 30 C, 2008 Rev Ed)

The appellants (‘the Appellants’) were five subsidiary proprietors of a strata development (‘the Development’). The second respondent (‘the 2nd Respondent’) was the management corporation of the Development. The first respondent (‘the 1st Respondent’) was the chairperson of the 2nd Respondent.

There were two factions of subsidiary proprietors in the Development, one comprising the Appellants and other subsidiary proprietors aligned with them (‘the Appellants' Camp’), and the other comprising companies run by the Mok family (‘the Mok Camp’). On 8 May 2012, the Appellants commenced Suit No 311 of 2012 (‘Suit 311/2012’) against one Mok Wing Cheong (‘MWC’), the former chairperson of the 2nd Respondent and father of the 1st Respondent, in relation to certain renovation works carried out on the Development.

The Appellants' Camp requisitioned an extraordinary general meeting held on 5 June 2013 (‘the 5 June 2013 EGM’) to consider and pass various motions by ordinary resolution. At this meeting, the 1st Respondent, in his capacity as chairperson, ruled that Motions 1 (b), 1 (e), 3 (a), 3 (b), 8 and 9 (inter alia) were out of order for various reasons. In particular, Motions 3 (a) and 3 (b) sought to revoke past resolutions for the ratification of certain upgrading work expenses and the adoption of the financial reports for various years. Motion 8 sought to revoke and credit to the accounts of certain subsidiary proprietors the late payment interest charges levied on them. Motion 9 was to approve the applications by certain subsidiary proprietors for the subdivision of their lots. At the 5 June 2013 EGM, the 1st Respondent also rejected the votes of the Appellants and other subsidiary proprietors from the Appellants' Camp (‘the Contested Votes’) on Motion 2, which called for the termination of Chancery Law Corporation as the legal representatives of the 2nd Respondent with immediate effect, on the basis of conflict of interest.

The Appellants subsequently brought an application to invalidate the 1st Respondent's rulings at the 5 June 2013 EGM and to restrain him or any chairperson subsequently elected from making such rulings in future. The High Court judge (‘the Judge’) dismissed the Appellants' application except with respect to Motions 1 (b) and 1 (e), with the proviso that any future and/or intended amendments to these motions should not touch on the legal representatives already appointed by the 2nd Respondent to defend itself in Suit 311/2012.

The Appellants appealed against the following parts of the Judge's decision: (a) that the 1st Respondent's rulings with respect to Motions 3 (a), 3 (b), 8 and 9 were validated; (b) that the 1st Respondent's rejection of the Contested Votes on Motion 2 was validated; and (c) that the Appellants were not to table any future and/or intended amendments to Motions 1 (b) and 1 (e) that touch on the legal representatives already appointed by the 2nd Respondent to defend itself in Suit 311/2012. The Appellants also applied via Summons No 6634 of 2013 (‘SUM 6634/2013’) for liberty to adduce additional evidence in the form of an architect's report in relation to the proposed subdivision of lots that was the subject of Motion 9.

Held, allowing the appeal in part:

(1) There was no authority for the proposition that the role of the chairperson of a general meeting of a management corporation was fiduciary in nature. The duty imposed by s 61 (1) of the Building Maintenance and Strata Management Act (Cap 30 C, 2008 Rev Ed) (‘the BMSMA’) to act honestly and with reasonable diligence applied to a member of a management corporation's council qua council member; it did not necessarily apply to a council member acting as the chairperson of a general meeting of the management corporation: at [26] and [27] .

(2) The well-established principles in judicial review of administrative action applied to the exercise by the chairperson of a general meeting of a management corporation of his power to rule motions out of order at the general meeting. Apart from acting in good faith, the chairperson presiding over a general meeting of a management corporation had to exercise this power in accordance with the law and the proper purposes of the power. A ruling by the chairperson which, although made honestly, was plainly wrong in law and operated to deprive a member of his voting rights was ultra vires and should be set aside: at [37] and [38] .

(3) On Motions 3 (a) and 3 (b), the clarification sought by the 1st Respondent as to the Judge's decision was granted. The Judge's decision did not stand for the blanket proposition that a ratification of audited financial reports or audited accounts could never amount to a ratification of the individual expenditure items in those reports or accounts: at [41] , [42] and [68] .

(4) The 1st Respondent's ruling that Motion 8 was out of order for being in conflict with the BMSMA involved an error of law and should be set aside. As a matter of law, late payment interest charges that had been paid by a subsidiary proprietor into the management fund could be refunded and disbursed to the subsidiary proprietor, provided the management corporation had so determined in a general meeting pursuant to s 40 (6) (b) of the BMSMA: at [47] and [48] .

(5) SUM 6634/2013 was dismissed as the architect's report sought to be adduced was not available to and was not considered by the 1st Respondent prior to or at the 5 June 2013 EGM, and was therefore not relevant to the validity of his ruling at the 5 June 2013 EGM that Motion 9 was out of order: at [51] .

(6) The 1st Respondent's ruling that Motion 9 was out of order for being in conflict with the BMSMA because it called for an ordinary resolution and not a 90% resolution was wrong in law and should be invalidated. Section 34 (4) of the BMSMA did not require a 90% resolution to be passed for the subdivision of lots that was the subject of Motion 9: at [53] , [54] and [57] .

(7) The 1st Respondent's rejection of the Contested Votes on Motion 2 at the 5 June 2013 EGM on the basis of conflict of interest was not valid. The chairperson of a general meeting of a management corporation did not have the power to reject votes from a subsidiary proprietor who had satisfied the requirements in para 2 (1) of the First Schedule of the BMSMA. Even if the chairperson had such a power, the exercise of that power by the 1st Respondent at the 5 June 2013 EGM was not justified in this case, given that the 2nd Respondent was an artificially created legal entity comprising the subsidiary proprietors of the lots in the Development, including the Appellants: at [63] to [66] .

(8) The Judge's direction that the Appellants were not to propose any future and/or intended amendments to Motions 1 (b) and 1 (e) that touched on the lawyers already appointed by the 2nd Respondent to defend itself in Suit 311/2012 was set aside. The subsidiary proprietors of the lots in a strata development were entitled to control the management corporation by voting in a general meeting, even if it meant that the management corporation might not have legal representation in a suit to which it was a party: at [67] .

Judgment reserved.

VKRajah JA

(delivering the judgment of the court):

Introduction

1 The appellants (collectively, ‘the Appellants’) are five...

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3 cases
  • Lee Tat Development Pte Ltd v Management Corporation Strata Title Plan No 301
    • Singapore
    • High Court (Singapore)
    • 26 Mayo 2017
    ...duties analogous to those of a company director (Fu Loong Lithographer Pte Ltd and others v Mok Wai Hoe and another and another matter [2014] 3 SLR 456 (“Fu Loong Lithographer”) at [27]) and their inaction in such circumstances would have potentially exposed them to allegations of breach of......
  • Fu Loong Lithographer Pte Ltd and others v Mok Wing Chong (Tan Keng Lin and others, third parties)
    • Singapore
    • High Court (Singapore)
    • 4 Mayo 2017
    ...Mok to be out of order at the 5 June 2013 EGM (see Fu Loong Lithographer Pte Ltd and others v Mok Wai Hoe and another and another matter [2014] 3 SLR 456 (“Fu Loong (CA)”) at [68]): Dr Mok was wrong to rule out of order Motions 8 and 9, and his rulings were accordingly invalidated; The High......
  • Chan Sze Ying v Management Corporation Strata Title Plan No 2948 (Lee Chuen T'ng, intervener)
    • Singapore
    • Court of Three Judges (Singapore)
    • 24 Diciembre 2020
    ...Wednesbury unreasonableness:35Byng at 190G–H and Fu Loong Lithographer Pte Ltd and others v Mok Wai Hoe and another and another matter [2014] 3 SLR 456 (“Fu Loong”) at [37]. The Appellant emphasised that the facts justified the inference that the Intervener was delaying the resolution of th......

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