THE INCORPORATED OWNERS OF HANG FAT TRADING BUILDING v. JOYFUL SPARKLE CO LTD

LDBM 165, 166 & 167 of 2012

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION

NO. 165, 166 AND 167 OF 2012

__________________________

(Consolidated by the Order of HH Judge Ko,
Presiding Officer of the Lands Tribunal on 13 September 2012)

________________

________________

J U D G M E N T

________________

1.  The Applicant is the Incorporated Owners of Hang Fat Trading Building and the Defendant the registered owner of the following Premises: (i) Show Room including the Canopy on Mezzanine Floor, No. 3 Heung Hing Lane, Hong Kong; (ii) Shop A on Ground Floor including the Yard thereof, No. 53 Bonham Strand West & No. 3 Heung Hing Lane, Hong Kong; and (iii) Shop B on Ground Floor, No. 53 Bonham Strand West & No. 3 Heung Hing Lane, Hong Kong (“they will be collectively called the Premises”).

2.  By a judgment made in this Tribunal on 12 March 2013, the Respondent was ordered to pay the Applicant the sum of HK$237,060 and the costs of the application assessed at HK$30,813 (“the Judgment Debt”) being repair cost and legal costs.

3.  The Applicant has been granted a charging order nisi on 4 June 2013 as this Tribunal was satisfied that the Judgment Debt was wholly unsatisfied upon reading the affirmation of Mr Wong Fai Hung Andrew acting for the Applicant.

4.  On the same date, the Applicant issued a Notice to Show Cause   to the Respondent and asked for an order that the charging order nisi to become absolute unless good cause is otherwise shown by the Respondent.

5.  On the return day, 9 July 2013, Ms Lau, representative of the Respondent, attended court and said that the Respondent had not received any documents.  Court gave directions for documents to be served on the Respondent and also affirmation in opposition was to be filed and served within 14 days upon receipt of the same. The Respondent then filed an affirmation in opposition on 17 July 2013 saying that it is not liable to pay the Judgment Debt because the tenant of the Premises had agreed to pay the repair costs.  It is said that such agreement had been incorporated into the lease.  The Respondent has for this purpose produced part of the lease to support its assertion.

6.  On 8 August 2013, Mr Tsui attended the hearing on behalf of the Respondent.  To further advance its case, Mr Tsui on behalf of the Respondent applied for leave to file an affirmation of the tenant and such application was eventually granted.  I shall go into further details when I deal with the issue on costs below.  As factual dispute is envisaged, the application was adjourned to 26 September 2013 for trial.  No affirmation was however filed by the tenant pursuant to the direction.

7.  At the commencement of the trial, Mr Wong for the Applicant informed me that the witness of the Applicant was ready.  I expressed my view that as there was no affirmation filed by the tenant as directed and there seemed to be no evidence from the Respondent to raise any factual dispute, I doubt whether the Applicant needed to call any witness to rebut the assertion.  When the court asked Mr Tsui for his stance, he informed the court that the Respondent would concede that the order nisi should become absolute.

8.  It is therefore my order that the Applicant’s application should be granted and the order nisi should become absolute.

9.  It was not disputed that the Respondent should bear costs of this application to be assessed at District Court scale.  Mr Wong asked that costs be summarily assessed by me but discretion should be exercised in consideration of the conduct of the Respondent.  Mr Tsui said that the usual costs of $5,000 should be ordered.  The usual costs order is for unopposed application and I cannot agree with Mr Tsui that such costs should be awarded in the present application.

10.  I am of the view that the conduct of the Respondent or its solicitors in this application is a concern when it comes to costs.  At the call-over hearing on 8 August 2013, without taking out a summons with supporting affidavit, Mr Tsui asked to file an affirmation by the tenant.  I have raised doubt as to how the assertion of the Respondent could amount to good cause and whether further costs should be incurred with filing another affirmation.  The application was adjourned for Mr Tsui to reconsider his position to see whether the Applicant’s application should be opposed especially when there was no application to set aside the Judgment.

11.  At the call-over hearing on 21 August 2013, Mr Tsui among other things still asked for leave to file an affirmation by the tenant despite my question as to the value of the same.  Mr Tsui submitted that the tenant’s agreement had been made known to the chairman of the Applicant and he should have known that the Respondent was not liable and therefore it was most inequitable for the Applicant to sue the Respondent for the repair cost and pursue to levy a charge on the Premises.  This assertion was disputed by the Applicant.

12.  I have again raised with Mr Tsui that by filing the affirmation of the tenant, factual dispute would be created.  Mr Tsui went ahead with his application knowing well that it would take a trial to resolve the factual dispute.

13.  The Respondent however did not file any affirmation as directed but conceded to the application of the Applicant on trial date.  When asked why his concession could not be made before the trial date, Mr Tsui said he was not given any instructions to write to inform the other side and the court about this.  This is of course something between Mr Tsui and his client.  This is however one of the incidents which show that time has been wasted by the Respondent or its solicitors.  I am sure Mr Tsui is well aware of the costs consequence when conducting the case of the Respondent in a manner as such.  

14.  Order 62 rule 5 of the Rules of the District Court sets out the special matters to be taken into account in exercising discretion:

(1)	The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account-
	(aa)	the underlying objectives set out in Order 1A, rule 1;
	(a)	any such offer of contribution as is mentioned in Order 16, rule 10, which is brought to its attention in pursuance of a reserved right to do so;
	(b)	any payment of money into court and the amount of such payment;
	(c)	any written offer made under Order 33, rule 4A(2);
	(d)	any written offer which is expressed to be "without prejudice save as to costs" and which relates to any issue in the proceedings, but the Court may not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22;
	(e)	the conduct of all the parties;
	(f)	whether a party has succeeded on part of his case, even if he has not been wholly successful; and
	(g)	any admissible offer to settle made by a party, which is drawn to the Court's attention.
(2)	For the purpose of paragraph (1)(e), the conduct of the parties includes-
	(a)	whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
	(b)	the manner in which a party has pursued or defended his case or a particular allegation or issue;
	(c)	whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and
	(d)	conduct before, as well as during, the proceedings.

15.  I think that it is just incumbent on me to consider rule 5(1)(e) together with rules 5 (2) (a) and (b).  I am of the view that it is unreasonable for the Respondent to oppose the Applicant’s application with the reason held.  There was nothing in it to stand as good cause; and yet, it strived to put in evidence to create a factual dispute which had to be resolved by further hearing.  Worst still having spent time on asking for leave to put in such evidence, such evidence was not forthcoming after leave was granted.  Concession was made but only after the trial had commenced.  I find it most unfair if the Applicant is to bear any costs reasonably arising from and incidental to the Applicant’s opposition.  

16.  I have read the Statement for Costs prepared by Mr Wong and heard submissions from both parties, I find costs listed therein necessary and reasonable.

17.  Having considered the whole of the circumstances, I assessed the costs to be at $34,000.

18.  It is therefore my order that the charging order nisi should become absolute and the Respondent is to pay costs at the amount of $34,000 to the Applicant.