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

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 23 May 2014
• Neutral Citation: [2014] SGCA 30
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 110 of 2013 and Summons No 6634 of 2013
• Published date: 05 June 2014
• Year: 2014
• Hearing Date: 19 March 2014
• Plaintiff Counsel: Leo Cheng Suan and Teh Ee-Von (Infinitus Law Corporation)
• Defendant Counsel: Lee Peng Khoon Edwin, Poonam Bai d/o Ramakrishnan Gnanasekaran and Chan Ying Keet Jasmine (Eldan Law LLP),Tan Tian Luh and Lin Zixian (Chancery Law Corporation)
• Subject Matter: LAND,Strata Titles,meetings
• Citation: [2014] SGCA 30

V K Rajah JA (delivering the judgment of the court): Introduction

The appellants (collectively, “the Appellants”) are five subsidiary proprietors of a strata development (“the Development”). The second respondent (“the 2nd Respondent”) is the Management Corporation Strata Title Plan No 1024 (“MCST 1024”), the management corporation of the Development. The first respondent (“the 1st Respondent”) is the chairperson of the 2nd Respondent.

At an extraordinary general meeting (“EGM”) of the 2nd Respondent held on 5 June 2013 (“the 5 June 2013 EGM”), the 1st Respondent, in his capacity as chairperson, ruled that certain motions put forth by the Appellants were out of order and that the Appellants were conflicted out of voting on another motion. The Appellants subsequently brought an application to invalidate the 1st Respondent’s rulings and to restrain him or any chairperson subsequently elected from making such rulings in future. Most of the prayers in the Appellants’ application were dismissed by the High Court judge who heard the matter (“the Judge”); this decision of the Judge (see Fu Loong Lithographer Pte Ltd and others v Mok Wai Hoe and another [2014] 1 SLR 218 (“the GD”)) forms the basis of the present appeal.

The key issue in this appeal is whether the 1st Respondent, acting in his capacity as the chairperson of a general meeting of the 2nd Respondent, was entitled to rule certain motions out of order and reject the votes of certain subsidiary proprietors on the basis of conflict of interest. This appeal therefore concerns the duties and powers of the chairperson of a general meeting of a management corporation under the Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) (“the BMSMA”).

Background to the dispute

The present dispute stems from a long-standing tussle between two factions of the subsidiary proprietors of the lots in the Development. One faction comprises companies run by the Mok family (“the Mok Camp”), which owns a majority of the number of lots in the Development and therefore controls the council of the 2nd Respondent (“the Council”). The other faction comprises the Appellants and other subsidiary proprietors aligned with them (“the Appellants’ Camp”), which possesses a majority in terms of share value in the Development and therefore can decide whether or not to pass motions requiring a simple majority that are put to a vote in a general meeting.

The disagreement between the two factions, which began in about 2008, concerns certain renovations works carried out on the Development and the acts of the former chairperson of the 2nd Respondent, Mr Mok Wing Chong (“MWC”). MWC is the father of the 1st Respondent. According to the Appellants, MWC wrongfully used the funds of the 2nd Respondent for the renovation works without authorisation and also breached his duties as chairperson by, inter alia, favouring the units owned by the Mok Camp in carrying out the renovation works.

In July 2011, the Appellants requisitioned an EGM to call for a vote of no confidence in MWC as chairperson and to elect a new chairperson with immediate effect. Upon receiving notice of the requisition, the Council, in what appeared to be a pre-emptive move, convened a meeting on 5 August 2011 (“the 5 August 2011 Council Meeting”), during which MWC resigned and the 1st Respondent was elected as the new chairperson of the 2nd Respondent.

The Appellants nevertheless proceeded to convene an EGM on 5 September 2011 (“the 5 September 2011 EGM”), which the Mok Camp attended. At the EGM, the 1st Respondent, in his new capacity as chairperson, explained that the motions put forth by the Appellants were out of order since MWC had already resigned; he then called the meeting to a close. However, the Appellants’ Camp purported to continue the meeting and elected one Lim Chee Yong (“Mr Lim”) as chairperson instead. The next day, 6 September 2011, the Council (with the 1st Respondent as chairperson) convened an annual general meeting (“the 27th AGM”), during which various resolutions were passed. The Appellants’ Camp did not attend this meeting as it did not recognise the 1st Respondent as chairperson. Instead, the Appellants’ Camp convened its own annual general meeting (“AGM”) in the same room wherein it purported to elect new members to the Council.

The Mok Camp then applied to a Strata Titles Board (“STB”) in STB No 78 of 2011 (“STB 78/2011”) to invalidate the election of Mr Lim as chairperson at the 5 September 2011 EGM and the election of new Council members by the Appellants’ Camp at its purported AGM on 6 September 2011. The STB allowed this application on 18 February 2013, and also validated MWC’s resignation as chairperson of the 2nd Respondent as well as the election of the 1st Respondent as the new chairperson by the Council during the 5 August 2011 Council Meeting. The Appellants’ Camp did not appeal against the STB’s decision.

On 8 May 2012, while the proceedings in STB 78/2011 were still ongoing, the Appellants commenced Suit No 311 of 2012 (“Suit 311/2012”) against MWC seeking, inter alia, to compel MWC to make restitution to the 2nd Respondent for the moneys used without authority to carry out the renovation works to the Development. The 2nd Respondent and other individuals who were Council members at the material time were subsequently added as third parties to Suit 311/2012 pursuant to an application by MWC.

This brings us to the 5 June 2013 EGM, which was requisitioned by the Appellants’ Camp to consider and pass various motions by ordinary resolution. At the 5 June 2013 EGM, the 1st Respondent ruled that a number of motions were out of order for various reasons. The 1st Respondent also rejected the votes of the Appellants and certain other subsidiary proprietors from the Appellants’ Camp (“the Contested Votes”) on Motion 2, which was a motion “[t]hat the appointment of Chancery Law Corporation as legal representatives of MCST 1024 be terminated with immediate effect”,¹ on the basis that the voters concerned were in a conflict of interest.

Dissatisfied with the 1st Respondent’s rulings, the Appellants filed an application in the High Court to invalidate his ruling that Motions 1(b), 1(e), 3(a), 3(b), 3(d), 3(e), 8 and 9 were out of order, These motions were as follows:² 1. That the following matters be determined only by the management corporation in a general meeting:

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b. appointment of legal representatives;

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e. appointment of any contractors or consultants or professional which costs or fees exceed $500 in total.

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3. That the following past resolutions, passed at the 26th and/or 27th Annual General Meetings be revoked: a. The ratification of the Upgrading Work Expenses of about S$530,000 or any other sum; b. The adoption of all Financial Reports ended 30 June in years 2009, 2010, 2011 and 2012 and the interim Financial Report from 1 July 2012 to 31 July 2012[;]

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d. That the Management and Sinking Fund Contribution be increased to S$24.00 and $19.50 per share value per month respectively; e. That there be no restriction placed on the 28th Council.

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8. That the following late payment interest charges levied from October 2011 to March 2013 on the following Subsidiary Proprietors be revoked and credited to the Accounts of the following Subsidiary Proprietors: (a) Block 53 #02-01/02, Fu Loong Lithographer Pte Ltd – $3,913.91 (b) Block 53 #03-01, In-Lite Enterprise (S) Pte Ltd – $1,681.35 (c) Block 53 #03-02/04, Caldecott Direct Marketing (Pte) Ltd – $2,018.19 (d) Block 53 #03-03, Poh Kim Video Pte Ltd – $1,681.35 (e) Block 53 #04-01, CKT Thomas Pte Ltd – $1,681.35 (f) Block 53 #04-02/04, Hock Guan Cheong Builder Pte Ltd – $2,232.33 (g) Block 53 #04-03, LCE Electrical Engineering Pte Ltd – $1,681.35 (h) Block 53 #05-02/04, KDT Holdings Pte Ltd – $2,751.32

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9. That the applications by the subsidiary proprietors for the subdivision of the following lots at Block 53 be approved: (a) Block 53 5thfloor: #05-02/04

Job No. 1303 – Drawing No. URA-101 of 7 Mar 2013

(b) Block 53 3rd & 4th floor: #03-02/04, #04-02/04

Job No. 1033 – Drawing No. URA-101 of 7 Mar 2013

(c) Block 53 3rd a& 4th floor: #03-01, #03-03, #04-01, #04-03

Job No. 1302 – Drawing No. URA-101 of 7 Mar 2013

(d) Block 53 2nd floor: #02-01/02

Job No. 1301 – Drawing No. URA-101 of 7 Mar 2013

and that the Managing Agent be duly authorised to sign the Consent Letters to URA [the Urban Redevelopment Authority] and all other relevant documents, forms, approvals required by the authority or statutory bodies.

In addition, the Appellants applied for the following orders: that the 1st Respondent or any other chairperson subsequently elected be restrained from ruling the same or similar motions out of order should they be put forth for consideration by the general body of subsidiary proprietors at an EGM or AGM; that the rejection of the Contested Votes on Motion 2 by the 1st Respondent at the 5 June 2013 EGM on the basis that the voters concerned were in a conflict of interest be invalidated; and that the 1st Respondent or any other chairperson subsequently elected be restrained from rejecting votes by subsidiary proprietors who were entitled to vote under the provisions of the BMSMA.

We should point out at this juncture that although the opening words of Motion 3 referred to “the 26th and/or 27th Annual General Meetings” (see [11] above), the Appellants clarified in the proceedings below that this was an error and that they meant to refer instead to “the 27th and/or 28th AGM” (see the GD at [47]). According to the Appellants, this error affected Motions 3(d) and 3(e) in particular, which deal with resolutions purportedly passed at the 28th AGM. These two motions are...