MAK KAM CHIU v. 富明閣業主立案法團

CAMP 196/2019

[2019] HKCA 1373

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 196 OF 2019

(ON AN INTENDED APPEAL FROM LDBM NO 204 OF 2017)

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JUDGMENT

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Hon Kwan VP:

1.  I agree with the judgment of Yuen JA.

Hon Yuen JA:

2.1  This is an application by Mr Mak Kam Chiu, the applicant in Lands Tribunal proceedings LDBM204 of 2017 (“the applicant”), for leave to appeal to this court from the decision of Deputy District Judge W Y Ho, Presiding Officer (“the PO”) given on 11 March 2019 (“the LT Decision”), striking out those proceedings on the grounds:

(1)    that the applicant is barred by issue estoppel from raising issues which had already been determined by the Small Claims Tribunal in SCTC 1989/2015 on 7 January 2016 (“the SCT Decision”) which was affirmed on review on 29 March 2016;

and in any event,

(2)    that the LT proceedings constituted Henderson v Henderson¹ type of abuse. 

2.2  The PO refused to give leave to appeal on 5 August 2019.

3.  We considered it appropriate to dispose of this application on paper.  We are grateful for the detailed written submissions prepared by counsel on both sides.   

Background

4.1  Briefly, the applicant is the owner of two car parking spaces (“CPS 13" and “CPS 14") in a development known as Fu Ming Court, of which the respondent is the Incorporated Owners (“IO”). 

4.2  The building plans for the development were approved on 18 August 1975, while the assignment plan for the car parking spaces was dated 11 September 1980.

5.1  It was the applicant’s case that in 2007, as a result of renovation works in the development, lines originally drawn on the ground delineating the car parking spaces were painted over, and as a result, he could no longer rent out CPS 13.

5.2  In November 2013, the IO caused new lines to be drawn in accordance with the building plans, but the applicant considered that the new lines for CPS 13 were incorrectly drawn when compared with the assignment plan. 

SCTC1989/2015

6.  The applicant having failed or refused to pay management fees for the car parking spaces from April 2007 to September 2014, the IO issued proceedings against him in the Small Claims Tribunal. 

7.1  In the applicant’s defence and counterclaim, he asserted that the new lines had not been drawn in accordance with the assignment plan as they should have been (“the delineation issue”), and as a result he was unable to rent out CPS 13, for which he counterclaimed a loss of $1,000 per month from April 2007 to September 2014 (a total of $72,000 which he reduced to $50,000²). 

7.2  The applicant also alleged that as a result of a statement made by the caretaker’s office to his mother, the IO had suspended the collection of management fees³.

8.  The hearing of the SCT proceedings took place before Adjudicator KL Cheng (“the Adjudicator”).  Documentary and oral evidence (including expert evidence) were adduced.  The assignment plan did not specify the dimensions of the CPS, but the applicant apparently sought to derive them by reference to a scale. 

9.  The applicant’s expert witness in respect of the delineation issue was Ms Law Mei Lun, a structural engineer.  In the course of her evidence, she accepted that the building plans contained more detailed information than the assignment plan, that the measurements required by the Building Authority had to be accurate and had to be complied with, and accordingly, the distance of 10 feet between the corner of CPS 13 and the corner of a column, which distance was clearly set out in the building plans, had to be complied with⁴. 

The SCT Decision

10.1  On 7 January 2016, the Adjudicator gave judgment in favour of the IO in the sum of $6,841.12 and dismissed the applicant’s counterclaim for reasons given in the SCT Decision. 

10.2  The Adjudicator held, among other things, that since the assignment only stated that CPS 13 and CPS 14 were “... shown and coloured pink on the plans annexed hereto ...”, the coloured parts on the plan only showed the location of the car parking spaces, and their actual dimensions were not specified⁵.

10.3  Further, the Adjudicator stated that she had also considered the First Schedule of the Deed of Mutual Covenant, which allocated management fees for all the car parking spaces on the basis of 1/1000 share each, not on the basis of area⁶.

10.4  Taking all the matters set out previously in the SCT Decision (including Ms Law’s evidence, and the matters set out in §10.2 - 10.3 above), the Adjudicator held that it was doubtful that CPS 13 and CPS 14 was originally 15 feet by 7 foot 2 inches each (as the applicant alleged), and that the applicant had failed to prove that the distance of 10 feet⁷ (set out in the building plans) should not be taken into account.  Accordingly, in respect of the delineation issue, the Adjudicator rejected the applicant’s case that the new lines deviated from the original⁸.

Review

11.  The applicant applied for a review of the SCT Decision.  For reasons set out in brief reasons for decision⁹, the Adjudicator dismissed the application and upheld the original Decision.

12.  The applicant did not appeal the SCT Decision.

LDBM204/2017

13.  However, one and a half years later, the applicant issued a notice of application in the Lands Tribunal against the IO, seeking an order that the lines delineating CPS 13 and CPS 14 be rectified according to the assignment plan.

14.  The IO opposed the application on the ground, amongst others, that it had been decided in the SCT Decision that the coloured parts on the plan only showed the location of the car parking spaces, and their actual dimensions were not specified.  The IO raised the issue of res judicata.

15.  The PO ordered the issue of res judicata to be determined as a preliminary question.  Both parties were represented by counsel. 

The LT Decision  

16.1  For reasons set out in detail in the LT Decision, the PO held that:

- there was no issue estoppel insofar as the delineation issue was raised for the purpose of defending the IO’s SCT claim, because delineation was irrelevant in determining whether management fees were outstanding¹⁰;

- however, the delineation issue was central to the applicant’s counterclaim, as his claim that the IO had failed to delineate the CPS properly according to the assignment plan had caused him loss¹¹; this issue was adjudicated against him by the SCT¹²; consequently, issue estoppel arose¹³;

- in any event, the LT proceedings should be struck out on the basis of Henderson v Henderson type of abuse, because not only was the applicant trying to re-litigate the same issue¹⁴, he was seeking to launch a collateral attack on the SCT Decision by bringing the LT proceedings, when:

(a) he had not explained why he had not appealed the SCT Decision¹⁵;

(b) he is seeking to “improve” his case as:

- he is trying to adduce new evidence, some of which differed from the evidence in the SCT¹⁶,

- the same expert was challenging points made in the SCT Decision¹⁷, and

- the expert has reneged on some of the matters set out in § 9 above¹⁸;

- it was therefore unjust to the IO to not only meet the same issue twice, but also to have to meet an “improved” version of the applicant’s case¹⁹.

16.2  Accordingly, the PO struck out the LT proceedings.

16.3  As noted earlier, the applicant’s application for leave to appeal was refused by the PO.

Discussion

17.1  In the applicant’s proposed primary ground of appeal (“no issue estoppel”), his first submission was based on a passage in the Adjudicator’s brief reasons for refusing review (§8):

“案中重要議題並非要決定車位的準確尺寸，才可決定被告應否繳付其車位的欠交管理費。正如本席在簡要理由已說出大廈車位是按照每個車位的--而每--是按照每個車位以一千分之一份劃分，而並不是以面積作考慮計算。而繳付管理費則按照該車位業權所佔的份數而定，因此，與車位面積並無關連。而本案亦無需就此議題作事實的裁定。”

It may be translated as follows:

“The important issue in the case was not that it was necessary to determine the exact dimensions of the CPS before it could be determined whether the [applicant] was liable to pay the management fees for his CPS. As this court has said in the brief reasons, the building’s CPS is according to each CPS’s ... and each ... is according to each CPS being allocated 1/1000 share, and not calculated according to the area, and the management fees were charged on the basis of the share in the title, therefore, were not related to the area of the CPS. Nor was it necessary to make a factual determination on this issue in this case”.

17.2  The applicant submitted that this passage (in particular the first and last sentences) showed that the delineation issue was not necessary for the Adjudicator’s determination of not only the defence, but also the counterclaim as well, and hence no issue estoppel arose.

18.1  With respect to the applicant’s counsel, that submission is artificial.  It has been said many times that a judgment should not be minutely construed as if it was a piece of legislation.  A fortiori, when the above passage appears in a transcript of extemporaneous reasons given for refusing an application for review, and in part of the passage in question, the Adjudicator was clearly focusing on the defence rather than on the counterclaim.  

18.2  The reasons in the SCT Decision itself are clear for all to see.  It is obvious from §26 of the SCT Decision that the Adjudicator held that the reference to the coloured parts in the assignment plan was to show the location of the CPS, and their actual dimensions were not specified.  As stated in §28, that was one of the points which led the Adjudicator to reject the applicant’s case that the new lines deviated from the original. 

18.3  Given that background and context, what the Adjudicator meant in the first and last sentences of §8 was that it had not been necessary for the SCT to determine as a matter of fact what were the actual dimensions of the CPS²⁰ (and that must be correct for the issue was whether the new lines should or should not have been drawn in accordance with the assignment plan)²¹. 

19.  The Adjudicator having determined that issue against the applicant as part of the reasons for disposing of the counterclaim, issue estoppel clearly arose.  It is immaterial that the Adjudicator had other reasons for disposing of it, e.g. lack of evidence of previous rentals.  It is clear from the SCT Decision that the counterclaim was not dismissed for lack of evidence of previous rentals alone.

20.1  The applicant’s second and third submissions can be discussed together.  He submitted that the SCT had no jurisdiction to determine the dimensions of the CPS which he regards as a “property right issue” as “the scope or extent of his property right” is involved. 

20.2  I do not agree.  The SCT’s jurisdiction is delimited by the type of claim²², not by the type of issue involved in determining the claim.  In any event, the SCT did not determine the actual dimensions of the CPS.  All it did was to hold that in drawing the new lines, the IO was not obliged to do so according to the assignment plan, because the coloured parts in the plan were only to show the location of the CPS, and no actual dimensions were specified.  In other words, the assignment plan did not provide enough material to show that the IO had failed to redraw the lines correctly, which was the issue raised by the applicant for his monetary counterclaim.  The order sought by the applicant in the LT proceedings raises the same issue, although he has now cast it in the form of a claim for rectification of the lines. 

21.  The applicant’s fourth submission was that issue estoppel should not be applied because it would work an injustice.  He submitted that if he is barred by issue estoppel, he would be “out of court and his constitutionally guaranteed property right will be restricted without compensation”.  

22.1  It is well-established that one of the purposes of estoppel is to work justice between the parties.  Thus, there may be an exception to issue estoppel if further material, which could not have been adduced in the previous proceedings even with reasonable diligence, has since become available²³. 

22.2  However, that is not the case here.  It was the applicant himself who chose to advance the delineation issue in the SCT (indeed, by abandoning the balance of his counterclaim to satisfy the SCT monetary limit).   He adduced expert evidence to support his case.  Having failed in the SCT, he did not appeal and yet one and a half years later, commenced the LT proceedings, in which he is seeking to adduce new materials but without showing that his new materials could not have been adduced by the same expert in the SCT proceedings. 

22.3  The applicant has had his day in court.  With the benefit of hindsight, he may now wish his expert had been better prepared, or he may now wish he had engaged lawyers to argue his case in another court, but these are not special circumstances that would disapply issue estoppel, and there is no question of any infringement of his constitutional rights.

23.1  The second proposed ground of appeal (“no abuse of process”) relates to Henderson v Henderson type of abuse.  The applicant’s submission rested on the argument that the PO was wrong to find issue estoppel.  This submission has been discussed and rejected above. 

23.2  In any event, as a matter of law, Henderson v Henderson abuse of process is juridically different from res judicata.  As Lord Sumption JSC held in Virgin Atlantic (§25):

“ ... Res judicata and abuse of process are juridically very different. Res judicata is a rule of substantive law, while abuse of process is a concept which informs the exercise of the court’s procedural powers. In my view, they are distinct although overlapping legal principles with the common underlying purpose of limiting abusive and duplicative litigation”.

23.3  In a clear and cogent decision, the PO referred to the relevant legal authority²⁴ on this type of abuse²⁵ and took into account relevant factors²⁶ before concluding that in the exercise of the court’s discretion, the LT proceedings should be struck out for Henderson v Henderson type of abuse. 

24.  Notwithstanding the efforts of counsel for the applicant, I see no reasonable prospect of success in either proposed ground of appeal.  I would refuse leave to appeal, with an order that the applicant pay the respondent’s costs which I would summarily assess at $46,000.