KWAN PUI SIN v. THE INCORPORATED OWNERS OF MANDARIN COURT (SHANGHAI STREET)

LDBM 253/2014

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 253 OF 2014

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REASONS FOR DECISION
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1.  This is the hearing of the applicant’s summons dated 9 October 2015 seeking leave to appeal against my decision made on 2 October 2015 (“leave to appeal summons”). At the conclusion of the hearing, this tribunal dismissed her application with costs assessed by summary assessment at $2,600. The tribunal indicated that brief reasons for decision would be handed down, and they are as follows.

Brief Background

2.  The applicant is a registered owner of a unit in a building known as the Mandarin Court at 647 – 651 of Shanghai Street. The respondent is the owners’ incorporation of all the owners of the said Mandarin Court (“IO”).

3.  By an Application dated 15 September 2014, the applicant applied for an order to dissolve the management committee of the IO elected at its general meeting held on 12 September 2014 on grounds of non-compliance with various provisions of the Building Management Ordinance, Cap 344 (“BMO”). The alleged irregularities include, inter alia, the failure on the part of the chairman to determine the validity of proxies and to display them at the meeting place throughout the meeting, insufficient statutory notice for meeting and that the meeting was not properly presided over by the chairman. It is noted that prior to this meeting the applicant was the secretary of the IO. She was not elected to office after the meeting.

4.  The IO opposes the Application. In gist, all allegations are denied. It is the IO’s case that if there were any breach of the BMO as alleged, it was due to a breach of duty on the part of the applicant as secretary of the IO. It is pleaded that it would be inequitable that the applicant can rely on its own fault to found a cause of action against the IO.

5.  There was a discovery application by the applicant after filing of witness statements. The matter was disposed of in favour of the applicant at the argument hearing on 28 August 2015, after the applicant had dropped all except 2 requests.  

6.  It is not in dispute that the applicant will sell her only unit in the Mandarin Court soon. Two letters both of 21 August 2015 from the respective solicitors acting for the applicant and the purchaser in the conveyance transaction wrote to the IO making various enquiries. Completion is scheduled to take place on or before 30 October 2015. It is the IO’s case that despite the fact that the sale and purchase agreement should have been signed prior to 28 August 2015, the applicant was totally silent about her intended sale when her discovery summons was argued that date.

7.  From what has been stated in the affidavit filed on the IO’s behalf, it is the IO’s case that the applicant must have considered it not having a good case in the Application, otherwise she should have informed the tribunal at the hearing on 28 August 2015. The IO therefore entertains suspicion that the applicant would like to dispose of her unit with a view to avoid any costs consequence in the event she is defeated. The estimated costs of the IO already incurred are $99,300.

8.  By a summons of 18 September 2015, the IO applies for, inter alia, an injunction restraining the applicant from disposing of  the sale proceed of her unit to the extent of $99,300 as her security for costs (“security for costs summons”) in the Application.   

9.  The security for costs summons was listed for a first hearing on 2 October 2015 at 11:30 am with 1 hour reserved. However due to overrunning of other cases in the morning, it was not until 12:26 pm that the summons was heard by tribunal. The summons was adjourned at 1:26 pm with the following directions (“2 October directions”):

i) The security for costs summons be adjourned to 10:30 am on 26 October 2015 at Court No. 1 for argument with 2 hours reserved;

ii) Leave granted to the applicant to file and serve her affirmation in opposition on or before 9 October 2015;

iii) The IO is at liberty to file and serve an affirmation  in reply on or before 16 October 2015;

iv) There be no further affirmation without leave; and

v) Costs reserved.

Leave to Appeal Summons

10.  By the leave to appeal summons the applicant basically seeks leave to appeal against my 2 October directions. An affirmation made on 9 October 2015 together with a written skeleton argument was filed on the same date. It is fair to summarize the grounds of the application as follows:

i) I failed to “rectify” the situation where the IO failed to comply with section 26A of the BMO to display information about the legal proceedings. If the IO was not directed to do so immediately, no owner would be able to supervise the business of the IO;

ii) I failed to have regards to the “erroneous statements” in the security for costs summons and supporting affidavit which are oppressive. Instead, I directed her to respond to something which she had difficulty to understand in 7 days, giving rise to hardship on her part;

iii) I erred in deciding that the security for costs summons should be heard before 30 October 2015; and

iv) The matter is of legal importance as it concerns how a Lands Tribunal judge can depart from Rule 21 of the Lands Tribunal Rules (“LTR”) and Order 41 of the Rules of High Court (“RHC”) in light of sections 10(5)(a) and 10(6) of the Lands Tribunal Ordinance, Cap 17 (“LTO”).  

11.  At the commencement of the leave to appeal hearing, Mr Wong, solicitor representing the IO, informed the tribunal that the IO is not going to pursue its security for costs summons further and would be withdrawing it. Despite the said indication, the applicant insisted that she would in any event pursue her leave to appeal summons, and therefore the hearing continues.

Discussion

12.  As at 2 October 2015, the applicant did not file any affirmation in response. Since the applicant is unrepresented, the tribunal had some exchanges with her at the hearing with a view to know whether she understood the IO’s application. The tribunal was given the impression that she fully understood what she was facing. She was well-prepared and equipped herself with some prior jotted down notes when making submission. She raised quite a number of issues on legal technicalities, such as the affidavit filed on behalf of the IO failing to comply with the required form of affidavit prescribed under RHC O.41, and non-compliance with s.26A of the BMO. The applicant also criticized the IO’s supporting affidavit being drafted in poor English. Many statements in the supporting affidavit were imprecise and were capable of having several meanings. She was prejudiced because she did not know how to respond to the IO’s application.

13.  In the course of the exchange between the bench and the parties, the question of whether prejudice needed be shown for non-compliance of s.26A of BMO before dismissal or otherwise staying of the security for costs summons was raised. The IO was also challenged whether the matter raised in the supporting affidavit a sufficient ground for security for costs. The question of whether the applicant would lose her locus to sue after ceasing to be an owner was also raised, and whether the question sought to be clarified by the Application would then become academic after the sale had also been explored.

14.  The applicant expressed she would pursue the Application despite her intention to sell her unit shortly. On the other hand the solicitor for the IO indicated that it had instruction to go ahead with the security for costs summons. Further, it did not appear to the tribunal that the IO had sufficiently prepared to address the tribunal on the question of locus. Since by then the time had already been beyond 1 pm, the summons was adjourned for full argument before the scheduled completion date.

15.  Initially the tribunal intended to direct the IO to produce a Chinese translation of the affidavit in order to assist the applicant to respond to the IO’s summons. However, in the course of the exchange, it did not appear that a Chinese translation could help nor was necessary as the applicant appeared to know what the IO was talking about in the affidavit, though it could have been better drafted. Further, all along the applicant was using English but not Chinese in the proceedings. After perusing the supporting affidavit, it is the tribunal’s view’s that its meaning is quite apparent though there are rooms for better drafting. This tribunal thus made the 2 October directions without directing a Chinese translation. The failure to direct a Chinese translation is not one of the grounds for the leave to appeal application.

16.  From what has been set out above, it is obvious that the tribunal makes no decision for disposal of the IO’s substantive security for costs application on 2 October 2015. The directions given are in the nature of case management directions regulating how the security of costs summons is to be disposed of.  If the applicant would like to take issue on s.26A of the BMO, or O.41 of the RHC, the poor English or erroneous or suppressive statements contained in the IO’s supporting affidavit, she is free to take issues on any or all of them at the adjourned hearing of 26 October 2015. Paragraph 2 of the 2 October 2015 is there exactly to provide for the applicant an opportunity to fully set out her case in opposition. In fact she did file her opposing affirmation in purported compliance with the 2 October directions. It shows that even the applicant considers the issues raised by her are still alive and she is not debarred from relying on them to counter the IO’s summons.

17.  As this tribunal has not ruled on the merits of the applicant’s argument, her present application is, in the tribunal’s judgment, totally misconceived. It will be unnecessary and in fact inappropriate for this tribunal to discuss the merits of her several grounds raised herein in the context of a leave to appeal application. No decision has been made on the issues raised. These are live issues and will be discussed, if necessary, in the context of the IO’s security for costs summons[1].

18.  The setting down of the hearing before completion cannot be said to be wrong, not to mention plainly wrong. If the hearing was set down after the agreed completion date, in the event the tribunal rules in the IO’s favour, by then completion has already taken place. Dissipation of assets, if found to be likely on a balance, will then become a real risk to the IO. The purpose of the IO’s security for costs application may be defeated if assets have already been dissipated after sale. In fact if not for the tribunal’s tight diary and the requirement for affirmation evidence, the tribunal considers the IO’s summons should have been set down as soon as possible instead of after completion as now contended by the applicant.

19.  The appellate court has made it plain and clear that when a judge orders the adoption of a particular course of conduct for the trial or future conduct of a case in the interests of justice, his decision is not to be interfered with by an appellate court unless it is plainly wrong: see Korea Building Materials Trading Corp. v Hong Kong Dongil Trading Co. Ltd[2]. This approach is very likely to survive the Civil Justice Reform: see §25/1A/14 of Hong Kong Civil Procedure, 2015.

20.  This tribunal cannot see how the 2 October directions can be regarded as plainly wrong. In fact even the applicant saw fit to observe the tribunal’s directions by filing her affirmation on 9 October 2015.

21.  The following provisions of the LTO are relevant to decisions of the tribunal and leave to appeal against such decisions:

i) Section 11

“(2) Subject to section 11AA and the provisions of any Ordinance relating to appeals from the Tribunal, any party to proceedings before the Tribunal may appeal to the Court of Appeal against a judgment, order or decision of the Tribunal on the ground that such judgment, order or decision is erroneous in point of law.”

ii) Section 11AA

“(1) Subject to subsection (2) [not relevant in the present case], no appeal may be made under section 11(2) unless leave to appeal has been granted by the Tribunal or the Court of Appeal.

…

(5) Leave to appeal may be granted –

(a) in respect of a particular issue arising out of the judgment, order or decision; and

(b) subject to such conditions as the Tribunal, the Court of Appeal or the registrar hearing the application for leave considers necessary in order to secure the just, expeditious and economical disposal of the appeal.

(6) Leave to appeal shall not be granted unless the Tribunal, the Court of Appeal or the registrar hearing the application for leave is satisfied that –

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

22.  The 2 October directions are in the nature of simple case management directions. They raised neither points of law nor cannot be said at any rate to be erroneous in point of law.  As discussed above these directions cannot be said plainly wrong and the appellate court will be unlikely to interfere. The applicant’s application herein is misconceived as she is still free to raise at the adjourned argument hearing the issues which she raised on 2 October 2015. This tribunal does not consider the applicant’s appeal will have any reasonable prospect of success at all. The applicant’s leave to appeal application is accordingly dismissed.

23.  The hearing lasted for 1¼ hour. When this tribunal granted leave to the IO to withdraw its security for costs summons, the applicant was awarded costs of $2,300[3] to be paid forthwith by summary assessment. Half hour of the hearing was apportioned to the IO’s summons.

24.  This tribunal cannot see why the usual principles of costs to follow the event not applicable. Mr Wong for the IO had indicated he was prepared to accept his time costs for one hour as the IO’s costs of the leave to appeal summons, being ½ hour for attending the leave to appeal summons and ½ hour for perusal of papers and meetings with his client. The tribunal considered the time claimed reasonable and accepted Mr Wong’s hourly rate at $2,600/hr. Accordingly the respondent was ordered to pay the IO costs of her leave to appeal application, assessed summarily at $2,600, to be paid forthwith.