程雪梅 v. 曾凡英 AND OTHERS

LDPD 371/2016

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 371 OF 2016

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D E C I S I O N

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Background

1.  This is the application by the applicant to vary the costs order nisi made on 6 September 2017 against her (“Costs Order Nisi”).

2.  The Costs Order Nisi was made after trial on the interlocutory application filed by the 2^nd and 3^rd respondents (“R2” and “R3” and collectively referred to as “Rs” in this judgment) seeking to set aside the possession order made on 9 March 2016 and the writ of possession issued on 1 April 2016.  The agreed issues to be tried are:

“9. 在2017年2月7日的審前覆核聆訊上，雙方同意本案的爭議點為 :

一) 該三房單位究竟是132A號還是132B號？

二) 葉氏父女是否強行霸佔該三房單位，如是，葉氏父女無權就該收樓令提出反對；及

三) 葉先生曾否出錢出力修復132號及興建該兩石屋，以換取該三房單位的權益，如是，程女士無權以該收樓令驅趕他們。”

3.  In the judgment handed down on 6 September 2017 (“Judgment”), it is ordered that:

“35. 本席頒令，本審裁處在2016年3月9日頒下的該收樓令，及在2016年4月1日發出的收樓令狀，均予以撤銷。

36.  在訟費應視乎訴訟結果而定的大前題下，本席頒令申請人須付第二及第三答辯人本申請的訟費，包括大律師證書，如雙方未能就訟費數額議定，則由法庭依區域法院基準作評定。這是暫准訟費命令，除非任何一方以傳票申請，否則本暫准訟費命令在本判決書發下後14天成為絕對命令。”

4.  By Summons dated 20 September 2017, the applicant seeks to vary the Costs Order Nisi to one of no order as to costs.

Applicant’s Case

5.  Mr Yiu for the applicant relied on 2 grounds in support of the variation application, namely:

a.   the claim by the R3 that he had beneficial interest in the Suit Premises is outside the jurisdiction of this Tribunal; and

b.   the conduct of the proceedings by the Rs.

6.  On the jurisdiction point, it is the submission of the applicant that since the Rs’ case was dependent on their beneficial interest in the Suit Premises upon which the Tribunal has no jurisdiction, the Rs ought to have applied to transfer the proceedings to the District Court or Court of First Instance under section 8A of the Lands Tribunal Ordinance.  Since the Rs had conducted the litigation on an issue that falls outside the jurisdiction of this Tribunal, they should not be awarded with costs.  Furthermore, as the Tribunal has no jurisdiction to adjudge on the issue of beneficial interest in the Suit Premises, even though the Rs have been successful in the proceedings, through the raising of the issue of beneficial interest, it cannot be characterized as a successful allegation (due to no finding) but such an issue caused a significant increase in the length and costs of the proceedings, in which the Rs should not be awarded with costs.

7.  It is also submitted that by raising the issue on beneficial interest in the Suit Premises in the conduct of these proceedings, the Rs had adduced a significant amount of evidence via oral examination-in-chief, with the evidence of the Rs taking up the original 4 days fixed for trial and leading to the trial being prolonged to 9 days.  Such orally adduced evidence can in effect be characterized as amounting to a supplemental affirmation without leave and this is against the underlying objectives and should not have been awarded with costs.  The Rs had induced the applicant spending costs and time to deal with such new issues and 60% of the costs of the proceedings should be awarded to the applicant.

Rs’ Reply

8.  Ms Chan for the Rs submitted that the issue on the beneficial interest is relevant as to why the Rs were occupying the Suit Premises and not that the Rs suddenly moved into the Suit Premises without consent of the applicant as alleged.  The Rs had never asked for any declaratory relief in respect of their beneficial interest.  In any event, this is an agreed issue to be tried and it is not an issue raised by the Rs.  The Tribunal was of the view that it is not necessary to rule on this issue, it does not mean that the court had ruled against the Rs or that the Rs had failed on this issue.

9.  As for the conduct of the proceedings, it is submitted that 2 hours of examination-in-chief for each witness is not excessive and the issue on beneficial interest is not a new issue which should take the applicant by surprise.  The Rs had not significantly increased the length of trial and the applicant should also be blamed for the need to re-call one of her witness which also lengthened the trial.  Since both sides had taken up more or less the same amount of the time during the entire 9-day trial, the extension of trial cannot be said to be solely caused by the Rs’ examination-in-chief. Since the Rs are the successful party in this case, there is no ground to depart from the normal rule of “costs should follow the event”.

Legal Principles

10.  Section 12(1) and (7) of the Lands Tribunal Ordinance (“LTO”) provides that:

“(1) The costs of and incidental to all proceedings in the Tribunal are in the discretion of the Tribunal, and the Tribunal has full power to determine by whom and to what extent the costs are to be paid.

(7)   Notwithstanding subsection (1) and section 12C but subject to subsection (5) and any rules made by the Chief Justice under section 10(3), Order 62 of the Rules of the High Court applies, with the necessary modifications, to the award, taxation and recovery of costs in the Tribunal.”

11.  Order 62, rule 3(2) of the Rules of the High Court states the general proposition that costs should follow the event, unless in the circumstances of the case some other order should be made as to the whole or any part of the costs.

12.  Order 62, rule 5 reads:

“5(1) The court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account -

(aa) the underlying objectives set out in Order 1A, rule 1;

(a) any such offer of contribution as is mentioned in Order 16, rule 10, which is brought to its attention in pursuance of a reserved right to do so;

(b) any payment of money into court and the amount of such payment;

(c) any written offer made under Order 33, rule 4A(2);

(d) any written offer which is expressed to be ‘without prejudice save as to costs’ and which relates to any issue in the proceedings, but the court may not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22;

(e) the conduct of all the parties;

(f) whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(g) any admissible offer to settle made by a party, which is drawn to the Court’s attention.

(2) For the purpose of paragraph (1)(e), the conduct of the parties includes -

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

Discussion

13.  I do not agree with the applicant that the issue on beneficial interest is not within the jurisdiction of this court and should not be raised in the first place.  As I have indicated at the hearing, there must be a distinction between the jurisdiction to grant a declaratory relief concerning the R3’s beneficial interest in the Suit Premises and the jurisdiction to hear evidence and rule on the factual argument as to under what circumstances the R3 started to occupy the Suit Premises.  This Tribunal do not have the jurisdiction to grant a declaratory relief over any beneficial interest in any property but there is nothing to prevent this Tribunal to hear and rule on evidence in support of the Rs’ case.  I do not agree with the applicant that the Rs should have never raised this issue in this case or that the Rs should have asked for this case to be transferred to some other court. I fail to see how can the application by the Rs to set aside an order made by this Tribunal be transferred and to be disposed of by some other court.

14.  In the Judgment (at §34), it is found that this Tribunal should not make any findings in the issue of beneficial interest of the R3 since this Tribunal had no jurisdiction to grant any declaration over the beneficial interest of the R3 in the Suit Premises and most importantly, any ruling in this case will affect the right of the R3 to take the matter further in some other court due to the doctrine of res judicata.  This is the reason why the jurisdiction point is mentioned and not, as submitted by the applicant, that this Tribunal declined to deal with the issue due to a lack of jurisdiction or the Rs had failed in this issue.

15.  Given the findings on the jurisdiction point above, I do not agree that the Rs had caused a significant increase in the length and costs of the proceedings by putting before this Tribunal evidence relating to the R3’s beneficiary interest in the Suit Premises.  By the same token, the argument that this reflected on the conduct of the proceedings by the Rs cannot stand since evidence concerning the beneficial interest of the R3 in the Suit Premises is apparently relevant in this case.

16.  Having said so, this Tribunal cannot ignore the fact that most of the details about the issue on beneficial interest only come out in the examination-in-chief of the Rs when such details should have been included in their witness statements.  Keith J. said in Ng Kam Chun v Chan Wai Hing and Others [1994] 2 HKLR 89 at 90:-

“The time has now arrived when it is necessary for someone to spell out to those who are responsible for drafting witness statements that they must get their act together. The witness statement should contain the whole of the witness' evidence in the detail in which the witness would have given it if his evidence had been elicited by oral questions at the trial. Anything less than that prevents the statements from serving the purposes which they are intended to achieve - saving time, eliminating any element of surprise in the witnesses' evidence, enabling the parties to know the full strength of the case they have to meet, and enabling counsel to prepare a crisp and effective cross-examination.”

17.  There is no explanation as to why such details have not been stated in the witness statements.  Had such details been disclosed in the witness statements, much time spent in the examination-in-chief of the Rs could be saved.  I agree with the applicant that such a fact should be reflected in the Costs Order Nisi but not to the extent of 60% as suggested by Mr Yiu.  I think a deduction of 10% of the total costs to be awarded to the Rs should be a more reasonable account for the poor preparation of the witness statements by the Rs.

Conclusion

18.  The Rs are the successful party in this case and should be entitled to have the costs of these proceedings, save and except for the time spent in examination-in-chief of the Rs due to the poorly prepared witness statements.  Under such circumstances, the Cost Order Nisi should be varied to the applicant do pay the Rs 90% of their costs in these proceedings, with certificate for counsel, to be taxed if not agreed on District Court scale.

19.  As for costs of this variation application, since both parties are partially successful in their argument, I think the proper order should be no order as to costs.  This is a costs order nisi.  Unless any of the parties apply by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.