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

• Jurisdiction: Singapore
• Judge: Chan Seng Onn J
• Judgment Date: 28 October 2013
• Neutral Citation: [2013] SGHC 226
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 569 of 2013
• Published date: 20 November 2013
• Year: 2013
• Hearing Date: 15 August 2013
• Plaintiff Counsel: Leo Cheng Suan & Teh Ee-von (Infinitus Law Corporation)
• Defendant Counsel: Lee Peng Khoon Edwin & Poonam Bai d/o Ramakrishnan Gnanasekaran (Eldan Law LLP),Tan Tian Luh & Lin Zixian (Chancery Law Corporation)
• Subject Matter: Land,Strata Titles,Meetings
• Citation: [2013] SGHC 226

Chan Seng Onn J: Introduction

This was an application by the Plaintiffs to invalidate certain rulings made by the 1st Defendant in his capacity as chairperson of the 2nd Defendant, the Management Corporation Strata Title Plan No 1024, and to restrain the 1st Defendant or any subsequent chairperson from making such rulings in the future.

Specifically, the Plaintiffs sought to invalidate the 1st Defendant’s ruling that the following motions, which were submitted by the Plaintiffs at an Extraordinary General Meeting (“EGM”) on 5 June 2013 (“the 5 June 2013 EGM”), were “out of order”: 1. That the following matters be determined only by the management corporation in a general meeting: (b) appointment of legal representatives; (e) appointment of any contractors or consultants or professional which costs or fees exceed $500 in total. 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 $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; (d) that the Management and Sinking Fund Contribution be increased to $24.00 and $19.50 per share value per month respectively; (e) that there be no restriction placed on the 28th Council. 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 9. That the applications by the subsidiary proprietors for the subdivision of the following lots at Block 53 be approved: (a) Block 53 5th floor: #05-02/04

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

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

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

(c) Block 53 3rd and 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 all relevant documents, forms, approvals required by the authority or statutory bodies.

10. That the MCST be authorised to commence legal action against Mok Wing Chong for unauthorized use of the management and sinking funds for Upgrading Expenses for Works done at Blocks 51 and 53 since June 2008 and for failing to declare his interest in Mun Hean Asia Pte Ltd.

The Plaintiffs also applied for the following orders: that the 1st Defendant, or any other chairperson subsequently elected, be restrained from making such rulings should the same or similar motions be put forth for consideration by the general body at an EGM or Annual General Meeting (“AGM”); that the rejection of certain votes by the 1st Defendant at the 5 June 2013 EGM on Motion 2 – which called for the termination of Chancery Law Corporation as legal representatives of the 2nd Defendant with immediate effect – on the basis that the voters were in conflict of interest be invalidated; and that the 1st Defendant, or any other chairperson subsequently elected, be restrained from rejecting votes by subsidiary proprietors who are entitled to vote under the provisions of the Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) (“BMSMA”).

After hearing the parties, I invalidated the 1st Defendant’s rulings with respect to Motions 1(b) and 1(e). However, I added the caveat that any future and/or intended amendments to Motions 1(b) and 1(e) ought not to touch on the legal representatives already appointed by the 2nd Defendant to defend itself as a third party in a separate action brought by the Plaintiffs against certain other parties (“S 311/2012”). Except for the 1st Defendant’s ruling on Motion 10, which application for invalidation was not proceeded with by the Plaintiffs, I validated the 1st Defendant’s ruling on the rest of the motions (as listed in [2] above), and refused the other orders sought by the Plaintiffs (as listed in [3] above).

I now give my reasons as the Plaintiffs have appealed against the following parts of my decision: that the 1st Defendant’s rulings with respect to Motions 3(a), 3(b), 8 and 9 are validated; that the Plaintiffs are not to table any amendments to Motions 1(b) and 1(e) that touch on the legal representatives already appointed by the 2nd Defendant in S 311/2012; and that the 1st Defendant’s rejection of the Plaintiffs’ votes on Motion 2 at the 5 June 2013 EGM on the basis that the voters were in conflict of interest is validated.

The statutory context

A broad overview of how the BMSMA framework operates is helpful to understanding the context giving rise to this dispute (I will examine the relevant provisions in greater detail later).

The BMSMA is a piece of legislation governing the maintenance and management of buildings, in particular strata developments. Under the BMSMA, certain powers, duties and functions are vested in the management corporation (“MC”) for a strata development, which comprises the subsidiary proprietors of all lots in the development. Usually, the MC exercises its powers through an elected council. The chairperson of the council is the chairperson of the MC. The election of council members is based on the number of lots – each person entitled to vote has one vote in respect of each lot which he is entitled to vote: para 8 of the First Schedule of the BMSMA (“First Schedule”).

In addition, the MC can also exercise its powers in a general meeting. The value of the votes cast for motions at a general meeting are calculated based on the number of lots, unless a person entitled to vote demands a poll or unless the motion is for a resolution which is required by the BMSMA to be a special resolution or 90% resolution. In the latter two cases, the value of the votes cast are calculated based on the share value of the lots in respect of which they were cast: para 9(3) of the First Schedule.

The chairperson of the MC presides over the general meetings of the MC. He has the power to rule that a motion submitted at the meeting is out of order if he considers that the motion, if carried, would conflict with the BMSMA or the by-laws or would otherwise be unlawful or unenforceable: para 4, First Schedule. Such motions would not be put to a vote.

The facts

The preceding features of the BMSMA set the stage for the dispute in this case, which involves a tussle between two factions. One faction owns a majority of the lots in the development and controls the council (“the Council”), while the other faction possesses a majority in terms of share value and can therefore decide whether motions that are put to a vote in a general meeting are passed (assuming only a simple majority is required). For ease of reference, I shall refer to the former faction as “the Mok Camp” and the latter faction as the “Plaintiffs’ Camp”. It should be noted that not all members of the Mok Camp or the Plaintiffs’ Camp are parties to these proceedings.

The disagreement between the Plaintiffs’ Camp and the Mok Camp concerns the acts of Mr Mok Wing Chong (“MWC”), the former chairperson of the 2nd Defendant. The Plaintiffs allege that MWC had wrongfully used the funds of the 2nd Defendant for upgrading works that were not approved by the general body of the 2nd Defendant. They further allege that MWC had breached his duties as chairperson by (a) favouring the units owned by the Mok Camp in carrying out the upgrading works, and (b) unilaterally appointing a company which he had an interest in as managing agent of the 2nd Defendant without declaring his interest and without obtaining approval of the appointment at a general meeting.

On 22 July 2011, the Plaintiffs 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 convened a council meeting on 5 August 2011 (“the 5 August 2011 council meeting”). In that meeting, MWC resigned as chairperson and the council members proceeded to re-elect key appointment holders to the Council. The 1st Defendant was elected as the new chairperson.

The Council then wrote to the subsidiary proprietors informing them that as a result of the 5 August 2011 council meeting, the 1st Defendant had replaced MWC as chairperson, thereby obviating the need for the EGM requisitioned by the Plaintiffs. The Plaintiffs replied that the council meeting had no force and effect because inadequate notice had been given of it and because any discussion of the requisition for the EGM should be in a general meeting and not pre-empted by a council meeting.

On 5 September 2011, the Plaintiffs went ahead to convene an EGM (“the 5 September 2011 EGM”) (para 14(3) of the First Schedule allows the requisitionists of a meeting to convene the meeting themselves if the council fails to do so within 14 days after the date of the requisition). The Mok Camp attended this meeting. At the meeting, the 1st Defendant, in his capacity as the new chairperson of the 2nd Defendant, explained that the motions requested by the requisitionists were out of order as they had been overtaken by events since MWC had already...