Asiabest Services Ltd. v. Harbour City Management Ltd.

LDBM 32/2000

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Lands Tribunal Application No. LDBM 32 of 2000

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Decision

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1. On 26.1.2000, the applicant instituted proceedings in the Lands Tribunal against the Respondent for various declarations and orders.

2. On 22.5.2000, this Tribunal fixed the trial dates of this case to be on 17th and 18th of Oct., 2000.

3. On 25.8.2000, the Respondent took out a summons returnable on 10.10.2000 for an order that the application be struck out, or alternatively an order that the Applicant do give security for the Respondent's costs in this application.

The strike out application

4. The application is made pursuant to Order 18 Rule 19(1)(d) of the Rules of The High Court on the ground that it is an abuse of the process of the Tribunal since the Applicant is no longer an owner of the building in question, namely, Silvercord.

5. When the Applicant took out the Notice of Application, it was the registered owners of Room 509, Tower 1, Silvercord, 30 Canton Road, Tsimshatsui, Kowloon.

6. In June, 2000, the Applicant assigned its title and interest in Room 509 to another company. Therefore on 25.8.2000 the Applicant had no more interest in Room 509 in Silvercord. By reason of this the Respondent contested that it is an abuse of the process of the Tribunal and it referred to 3 cases to support its contention, namely, Universal Property Management Services Ltd. v Incorporated Owners of Ying Ga Garden [1997] 4HKC349, Luk Chi Wing v Incorporated Owners of Mandarin Building [1997] 2HKC493, and Valiant Management Servcies Ltd. v Ho Kwai Yee (LDBM No. 123 of 2000). But the facts of these 3 cases and can be distinguished from the facts of the present application. In each of these 3 cases, when instituting proceedings against the respondent, the applicant did not possess the legal status required under Section 45(2) of the Building Management Ordinance, Cap. 344, which provides that "No person other than a person to whom this section applies shall be competent to commence any proceedings referred to in subsection (1)" and the classes of persons who are competent to commence proceedings as referred to in subsection (2) are set out in subsection 4. But it is not disputed that in the present case when it commenced the application, the Applicant was an owner of Silvercord within the meaning of section 45(4) and therefore it was competent to commence these proceedings against the Respondent. The Respondent contended that upon transferring its title and interest in Room 509 in June 2000 then the Application is liable to be struck out on the ground that it is an abuse of the process of the proceedings of the Tribunal.

7. In The Shorter Oxford English Dictionary (1993 edition) the word "abuse" is defined to mean "misuse; make as bad use of; wrongly take advantage of". According to Volume 1 of the Supreme Court Practice, 1999 the term "abuse of the process of the Court" connotes that "the processes of the Court must be used bona fide and properly and must not be abused".

8. The issue here is whether the Applicant's conduct, by assigning its interest and title in Room 509, thereby losing it legal status in June 2000 as an owner within the meaning of section 45(4), amounts to an abuse of the process of the Tribunal.

9. Under section 45(1), once a competent applicant has commenced proceedings in the Lands Tribunal, the proceedings continue in existence until they are disposed of. This is nothing in the Building Management Ordinance to the effect that if an applicant loses his legal status under section 45(4), then the subsistence of the proceedings will be affected.

10. The Applicant is at liberty to dispose of its own property. This right is separated from and independent of the proceedings in the Tribunal. In short the Applicant is not debarred from exercising its right to dispose of its property because of the presence of the proceedings in the Tribunal. The exercise of such a right is therefore not an abuse of the process of the Tribunal.

11. The Respondent contends that if the Application continues, it must be for the benefit of its successor. In the premises, it is pursuing its application as a nominal applicant. By reason of the matter above-said, this submission cannot stand.

Security for costs

12. The Respondent applied for order that the Applicant do pay security for the Respondent's costs in these proceedings. One of the grounds it relied on is that it has not paid the costs in LDBM 56/1997.

13. On 21.8.2000, the Respondent's Solicitors, W.K. To & Co., sent 2 related allocaturs to the applicant. The letter stated,

"We send you two Allocatur for your consideration. If we do not hear from you within the next 10 days, we assume you have no objection and we will file the said Allocatur into Court without further notice."

14. By letter dated 28.8.2000 to W.K. To & Co., the Applicant disputed the figures in the allocatur, and requested the figures to be revised.

15. By letter dated 2.9.2000 to the Applicant, W.K. To & Co., notified the latter that unless they heard from the Applicant the specific objection to the figures of their Allocaturs on or before 6.9.2000, they will lodge the draft allocaturs to the Court for approval without further reference. But by that time, the Respondent had already taken out the present application on 25.8.2000. The Respondent submitted that it is an reasonable inference that because of the transfer of its properties, the Applicant was dissipating its assets to avoid satisfaction of the Respondent's costs in LDBM No. 56 of 1997. The Applicant is unlikely to have assets to pay its costs if ordered to do so. There is nothing to support this inference. Indeed, before the costs were agreed, how could the Applicant know what amount it should pay? On 10.10.2000 the Applicant paid to the Respondent the taxed costs of $387,420. This clearly demonstrates that it is willing and has the ability to pay its debts.

16. The Respondent's application is wholly unjustified. I therefore dismiss the entire application.

17. I make an order nisi for costs, to be made absolute in 14 days' time, to the effect that the Respondent do bear the Applicant's costs of this application, to be taxed, if not agreed.