THE INCORPORATED OWNERS OF CHAMPION COURT v. PANG PING FAN PETER AND ANOTHER

DCCJ 55/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 55 OF 2005

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BETWEEN

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REASONS FOR DECISION

1.  This is the application by the Defendants to set aside the charging order in respect of their jointly owned property in Happy Valley, Hong Kong, that has been obtained by the Plaintiff (“IO”). The 2^nd Defendant appeared and, as she represented, also for and on behalf of the 1^st Defendant.

2.  At the end of the hearing, I dismissed the appeal with costs to the IO to be taxed on an indemnity basis (if not agreed) with certificate for counsel.  Here are the reasons in detail.

Background

3.  The present case started as the IO’s claim against the Defendants in relation to certain illegal structures erected by the Defendants on the roof of the building in question. The Defendant resisted the claim and put forward a counterclaim.

4.  After trial, the court gave judgment in favour of the IO; ordered the Defendants to remove the illegal structures and to rectify the premises affected; as well as dismissed their counterclaim.  In his written judgment, the trial judge made a nisi costs order that the Defendants should pay the IO’s costs of the claim and the counterclaim. For details, see the written judgment of Deputy District Judge Wesley Wong dated 6 July 2006.

5.  Pursuant to the IO’s application, the above costs order nisi was varied in that the Defendants should pay the IO’s costs of the claim and the counterclaim with certificate for counsel.  The Defendants were also ordered to pay the IO’s costs of such application. This was the order of H H Judge Lok dated 21 August 2006.

6.  The Defendants appealed the above judgment (CACV 317/2006).  The appeal was dismissed by the Court of Appeal in May 2008.  Leave to appeal to the Court of Final Appeal was also refused in January 2009.

Subsequent proceedings and outcome

7.  Due to the failure of the Defendants to comply with the order of the trial judge dated 6 July 2006, the IO applied for and was granted leave to instruct its own contractor to enter the Defendants’ premises to remove the illegal structures (DCCJ 55/2005). The Defendants were ordered pay the costs of the application on an indemnity basis with certificate for counsel. For details, see the written decision of H H Judge Lok dated 4 November 2010.

8.  The Defendants sought to appeal the above decision but was dismissed by H H Judge Lok in January 2011.  Following that event, the Defendants were ordered to pay costs too on an indemnity basis with certificate for counsel.  For details, see the written decision dated 3 January 2011.

9.  The Defendants further sought leave to appeal against both decisions of H H Judge Lok above but was dismissed with costs in March 2011.  For details, see the written decision dated 2 March 2011.

10.  For completeness, I should mention that the Defendant’s subsequent application for leave to appeal against the above decisions of H H Judge Lok was too dismissed with costs by the Court of Appeal (HCMP 359/2011).  For details, see the written reasons for decision dated 27 April 2011.

Costs and the charging order

11.  Pursuant to the costs orders by Deputy District Judge Wesley Wong dated 6 July 2006 and H H Judge Lok dated 21 August 2006 (above), the IO presented the bills of its costs for taxation.

12.  By an Allocatur dated 11 April 2011, the Master certified that the party-and-party profit costs, disbursement and taxing fee were allowed at the total sum of HK$360,054.

13.  The sum of HK$360,054 was unpaid.  On 7 June 2011, the IO obtained a charging order nisi against the Defendants’ property in respect of the unpaid sum.  The charging order was made absolute by the Registrar on 7 July 2011.

14.  By notice of appeal dated 19 July 2011, the Defendants ask that:

(1)  the charging order be set aside or dismissed;

(2)  the Allocatur be set aside;

(3)  if the Allocatur is not set aside, stay of execution of the Allocatur;

(4)  costs in the cause.

The appeal

15.  By her affirmation in support of this appeal, the 2^nd Defendant complains about the lack of adequate time for her to make her point during the hearing below when the charging order was made absolute.

16.  As an appeal under O.58 of the Rules of the District Court, I am rehearing the IO’s application for the charging order.  The 2^nd Defendant’s complaint about the allegedly inadequate hearing time below is immaterial.

17.  The 2^nd Defendant also mentioned other matters in her affirmation in support of the appeal.  Pursuant to O.58, r.1(4), no further evidence (other than that as to matter which have occurred after the date of the judgment or order or decision) may be received on the hearing of the appeal under this rule except on special grounds.

18.  ‘Special grounds’ for the purpose of this rule effectively consist of the 3 conditions as laid down in the case of Ladd and Marshall [1964] 1 WLR 1489:

(1)  The further evidence could not have been obtained with reasonable diligence for use at the hearing below.

(2)  The evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive.

(3)  The evidence must be such as is presumably to be believed.

19.  The other matters mentioned in her affirmation for this appeal belong to those that could have been raised in the hearing below.  Strictly the test for adducing further evidence for this appeal is not complied with.

20.  The 2^nd Defendant contends that the Allocatur should not have been issued in the first place.  In substance, she objects to the taxation on the grounds that there was alleged lack of proper authorisation of the IO to instruct legal representatives, contingency fee arrangement between the IO and its legal representatives and the infringement of the indemnity principle.

21.  Allegations of that sort ought to have raised as a preliminary issue at the commencement of the taxation proceedings.  As a matter of fact, when the Master seized the taxation of the bill of costs for the Defendants’ failed appeal in CACV 317/2006 (above), similar argument has already been raised as a preliminary issue and dismissed by the Master after hearing.

22.  The Defendants appealed against Master’s decision but the appeal was dismissed by the Court of First Instance.  The taxation proceedings therefore continued.  For details, see the written decision of Deputy High Court Judge Mayo dated 5 January 2010 (particularly paras.9-15).

23.  The Defendants sought leave from the Court of Appeal to appeal against the decision of the Deputy High Court Judge (HCMP 172/2010) but was dismissed.  For details, see the written decision of Hon Rogers VP dated 5 March 2010.  This conclusion was confirmed by the Court of Appeal subsequently.  For details, see the written decision of Hon Tang VP dated 22 April 2010.

24.  In her affirmation, the 2^nd Defendant admits the above legal proceedings and their outcome. But she claims (in her affirmation) that the Defendants should have been entitled to appeal in respect of the taxation proceedings in CACV 317/2006 as of right under section 14(1) of the High Court Ordinance, Cap.4.  By refusing them leave to appeal, the court has deprived them of such right of appeal.

25.  The 2^nd Defendant’s contention is incorrect.  Section 14 provides that an appeal lie as of right to the Court of Appeal from every judgment or order of the Court of First Instance in any civil cause or matter.  But this is expressly subject to section 14AA.

26.  Section 14AA(1) provides that except as provided by the rules, no appeal shall lie to the Court of Appeal from an interlocutory judgment or order of the Court of First Instance unless leave to appeal has been granted.  Subsection (4) provides that leave to appeal shall not be granted unless the appeal has a reasonable prospect of success or there is some other reason in the interest of justice why the appeal should be heard.

27.  The determination of the preliminary issue of the alleged contingency fee and indemnity principle by the Master relates to taxation of costs subsequent upon the final disposal of the action including the incidence of the costs liability.  The appeal to the Court of Appeal cannot be treated as one against a judgment or order as of right. The decision of the Vice Presidents of the Court of Appeal in refusing leave to appeal in March and April 2010 respectively confirmed that.

28.  As Deputy High Court Judge Mayo said (in HCMP 172/2010), the important thing to bear in mind is that the Taxing Master was bound by the mandate contained in the relevant costs orders that were the subject of the taxation.  The relevant costs orders that were the subject of the taxation in question were the two dated 6 July 2006 and 21 August 2006 respectively, which remain intact despite attempt to appeal by the Defendants.

29.  There is simply no basis for challenging the taxation proceedings or setting aside the Allocatur.

Stay of execution

30.  By the Allocatur, the Taxing Master certified the costs as taxed.  The liability of the party having to pay such costs was imposed by the costs order, not the Allocatur.  There is no question of stay of execution of the Allocatur as suggested.

31.  In any event, O.58, r.3 provides that except so far as the court may otherwise direct, an appeal shall not operate as a stay of the proceedings in which the appeal is brought.

The charging order

32.  In view of the admittedly unpaid taxed costs, the IO is entitled to a charging order.  It would have been the burden of the Defendants to show cause why the nisi order should not be made absolute.  No proper cause has been shown whether by reference to what the 2^nd Defendant argued in her affirmation or in court.  The Registrar was clearly right in making absolute the charging order nisi.

Conclusion

33.  The appeal was devoid of merits and hence dismissed.

Costs

34.  The court cannot ignore the history of the Defendants’ conduct of litigation as steered ahead by the 2^nd Defendant, including the adverse comment by H H Judge Lok in his written decision dated 4 November 2010.  In my view, this appeal is another instalment of that.

35.  I say this because what the Defendants sought to argue for the purpose of the present appeal was no different from reopening the argument on the issues that had been decided against her by the High Court Master and the Court of Appeal.

36.  During the hearing, the 2^nd Defendant insisted that that the court had given no or adequate reasons for its previous decisions against her on the above issues.  Such suggestion is unacceptable.

37.  In his Lordship’s written decision dated 5 March 2010, Hon Rogers VP did explain and leave no one in doubt that he found no breach of the so termed “indemnity principle”; and that it could not be suggested that the solicitors were not acting on behalf of the IO; and there was no ground for suggestion that the terms of engagement of the solicitors was on the basis of a fixed fee.

38.  In the written decision dated 22 April 2010, Hon Tang VP agreed that for the reasons given by Hon Rogers VP above, it was plainly right in refusing the Defendants leave to appeal.  The Defendants’ application for leave to appeal was so devoid of merit that his Lordship even made an order debarring them from requesting an oral hearing for reconsidering the determination.

39.  At one stage, the 2^nd Defendant also criticised counsel for the IO for serving his written submissions just before the hearing commenced.  When I suggested allowing her time to read it before resuming her submission, the 2^nd Defendant indicated that nothing of that sort would help unless I adjourned the hearing to another day so that she could seek outside assistance or legal advice.  I did not, as I should not, accede to such request.

40.  Bringing this appeal on the grounds and conducting the appeal as the 2^nd Defendant did, in my judgment, was an abuse of process.  I therefore accepted the request of the IO, as I found it right to do so in the circumstances, that the Defendants ought to bear the costs of and occasioned by this appeal to be taxed on an indemnity basis (if not agreed).  I so ordered.  I certified the engagement of counsel, who has been handling this case on behalf of the IO; and his appearance in this appeal was not unreasonable.