155/2003

LDNT 155/2003

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

New Tenancy Application No. LDNT 155 of 2003

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D E C I S I O N

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1. The above new tenancy application was heard with the judgment issued on 1st March 2004. On adjudication, the Tribunal had given no order on costs amongst other things. This Order of "no order as to costs" carries the meaning that the two parties had to bear their own costs if there were such costs incurred in respect of the application. The term of "costs" therein referred to does not confine to the costs of solicitors but any costs including the costs of employing the surveyor. The Respondent is not satisfied with this cost order. An application for a review of the Tribunal's decision pursuant to Section 11A of the Lands Tribunal Ordinance, Cap 17 was lodged on 15th March 2004 with its hearing finalised on 25th March 2004.

The Respondent's Case

2. The Respondent considered that the costs incurred for employing the surveyor to prepare the valuation report and to appear in court as expert witness be shared by the two parties notwithstanding the fact that the Applicant had not employed the same surveyor or her own surveyor to deal with the issue of valuation. The Respondent's argument that the surveyor's fee be shared is basically founded on three points. These are: -

(a) The Applicant had offered to the Respondent a monthly rent of HK$20,850 for the new tenancy prior to commencement of the proceedings in the Lands Tribunal. This amount of rent is less than that eventually ordered by the Lands Tribunal. Since the Applicant failed to offer a fair rent for the new tenancy, she should be held liable for part of the costs incurred (by the Respondent) for the legal proceedings. The Respondent's solicitor emphasized that this was common practice of the District Court in deciding the costs.

(b) The Tribunal arrived at the rent of $22,600 per month obviously with the assistance from the surveyor's report. The surveyor's evidence given in court was also relied on. Although not all the surveyor's opinion was accepted, the Tribunal did accept a substantial proportion.

(c) The Applicant was made fully aware of the surveyor's costs by the letter sent to her on 27th January 2004.

The Applicant's Rebuttal

3. The Applicant dismissed the need for sharing the surveyor's fees on the following grounds: -

(a) She had never received the letter dated 27th January 2004 from the Respondent and had no knowledge concerning the fees required.

(b) She had never indicated to the Respondent that she was prepared to share the fees.

(c) The surveyor was employed to prepare the valuation report only to substantiate the Respondent's case.

The Tribunal's Views

4. The Tribunal does not consider the Respondent's argument in Point (a) appropriate. If the rent determined by the Tribunal should be taken as the benchmark for assessing the costs, not only the rent offered by the Applicant during her negotiation with the Respondent but also the Respondent's offer to the Applicant should be taken into account. The expert witness of the Respondent suggested to the Tribunal a rent in the amount of $24,500 per month. The rent on offer to the Applicant before the hearing obviously is even higher. Comparing the respective rental figures of the Applicant and the Respondent to the Tribunal's Order, the Applicant has not won nor lost her case. Therefore, even if the Respondent's argument in Point (a) were to be accepted, the Applicant should still not be liable to the Respondent's costs.

5. The two parties have the responsibility to adduce evidence to support their respective arguments. Some evidence adduced by the Respondent's surveyor had assisted the Tribunal in the making of decision but some in fact had not. The fact that some evidence was useful as pointed out in Point (b) is not the corollary of costs sharing. The Lands Tribunal Ordinance, Cap 17, does not provide that the employment of a surveyor is a "must". It is, however, up to the two parties to decide whether the service of surveyor should be engaged. Without enlisting the assistance from the surveyor, the Applicant's interest might be at stake but, nonetheless, this is the Applicant's choice to take the risk in order to minimize her outlay.

6. The Tribunal does not concern whether the letter of 27th January 2004 referred to in Point (c) had reached the Applicant and whether by the content of this letter, there is an agreement on the surveyor's fees. The Tribunal does not have the jurisdiction over this issue. If the Respondent considers that an agreement exists, it may seek to recover the costs agreed by the appropriate means.

7. Above all, the Tribunal considers that Section 119R of the Landlord and Tenant (Consolidation) Ordinance, Cap.7 is relevant and crucial to the Respondent's present application. The provision on costs under Section 12 of the Lands Tribunal Ordinance, Cap. 17 cited by the Respondent's solicitor is not the hurdle to the application of Section 119R. Whilst the Respondent's solicitor so cited, he also admitted (in response to the Tribunal's inquiry) that the new tenancy application is subject to Part IV of the Landlord and Tenant (Consolidation) Ordinance Cap.7. This Section 119R provides that: -

"In any proceedings under this Part, the Tribunal shall not make any order as to costs against a party unless that party has conducted his case in a frivolous or vexatious manner"

8. The Tribunal does not consider that the Applicant has conducted her case in a frivolous and vexatious manner. The Tribunal also dismisses the Respondent's view that the meaning of "costs" in Section 119R refers to solicitor's fees only.

Costs of Review

9. The Respondent requested that its costs of review be borne by the Applicant whereas the Applicant made no claim in this respect against the Respondent.

Orders

10. The Tribunal hereby orders that the Respondent's review application be dismissed and that the orders made on 1st March 2004 be maintained intact. There shall be no order as to the costs of the review application.