TANG FUNG YIU DORA AND ANOTHER v. CHONG PUI HANG

LDPE523/2014

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. 523 OF 2014

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REASONS FOR DECISION

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1. This is the hearing of the respondent’s summons of 10^th October 2014 to vary a costs order nisi made by this tribunal on 26^th September 2014 in her favour. After hearing the parties I dismissed her summons with costs of $230. I made the said costs order nisi absolute and indicated that brief reasons would be handed down in writing in due course. My brief reasons are as follows.

Brief background

2. The parties had a tenancy dispute. The applicants as landlord considered the respondent the tenant to a written tenancy agreement. They sued for possession of the suit premises after negotiation for rent increase for a third term had broken down. The respondent’s primary defence was that the tenant should be somebody else - a company called Dance in Motion Limited (“DIM”) which was tenant to a prior tenancy agreement. The respondent had once been a director and shareholder of DIM. Her mother has now become the sole director and shareholder of the company.

3. After a 2-day trial on 11^th and 12^th September 2014, this tribunal found in the respondent’s favour on the preliminary issue of tenant’s identity. A written judgment was handed down on 26^th September 2014. In the decision, the usual party and party costs was granted in favour of the respondent without counsel’s certificate in the form of an order nisi. By the said summons, the respondent sought to vary this costs order from the usual party and party basis to a more generous scale (of course to the receiving party) of full indemnity basis and asked for a certificate for counsel.

Full Indemnity Scale

4. Miss Fong, counsel for the respondent, put in neither written skeleton submission in support of her argument nor any authorities for her proposition of law despite the argument hearing had been listed for 3 hours and that the burden is on the respondent to justify a departure from the usual rule. She read out the following from paragraph 62/28/2 Vol. 1, Hong Kong Civil Procedure, 2014 (Sweet & Maxwell) at 1169[1] which she borrowed from the bench as her only authority for claiming indemnity costs in the present case:

“…Taxation of a successful party’s costs on an indemnity basis may be ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously or for an ulterior motive or in an oppressive manner (Choy Yee Chun (The representative of the estate of Chan Pui Yiu) v Bond Star Development Ltd [1997] H.K.L.R.D. 1327).”

5. After hearing Miss Fong’s submission, it is fair to summarize her grounds of submission into the following 2 broad grounds:

i) the applicants had been made known of the respondent’s position that they had sued the wrong party at the first hearing on 23^rd June 2014. However, despite this clear indication they chose to continue with the application which they ought to have discontinued immediately after, the latest, the said hearing; and

ii) the applicants had “forged” the tenancy agreement by unilaterally inserting the respondent’s personal name in it as party. The legal proceedings are, according to Miss Fong, scandalous.

6. This Tribunal accepts what Miss Fong has referred to above a good summary of the circumstances under which the court can grant costs on indemnity basis. However as pointed out by Stock J (the learned Stock V-P then was) in Choy Yee Chun[2], the circumstances referred to in the above paragraph should not be taken as an exhaustive list of circumstances for indemnity costs[3]. In KJ v KMLM & KCK (unreported) HCMC4/2010 21/5/2014 at §§21-23, Hon To J set out a useful summary of the principles on which the court exercises its discretion to grant indemnity costs. Since Miss Fong only relied on the White Book passage as her sole bases for the respondent’s application, it will be unnecessary for this tribunal to go to other grounds for the purpose of the present discussion.

7. The tribunal does not wish to repeat the evidence of the parties in details together with its discussion as set out in its decision of 26^th September 2014. In a nutshell it was this: the 1^st applicant first enquired with the respondent on 6 March 2012 on renewal of the first tenancy entered with DIM. On 22 April 2014 she sent out a partly filled up pre-printed tenancy agreement form with DIM entered as tenant. She said prior to sending out the said draft agreement she had already reached an oral agreement with the respondent whereby the latter was to take up the tenancy personally in DIM’s stead. The 1^st applicant said it was her oversight not deleting from the agreement DIM and substituting the respondent as the tenant before sending it over, though the respondent’s HKID no. had been inserted. After the agreement duly signed by the respondent was returned by end of May 2014 she inserted the respondent’s personal name and submitted the same for stamping. According to the certificate issued by the Collector of Stamp the tenant was the respondent, not DIM. This tribunal did not accept her evidence that the oral agreement as alleged had been reached after a consideration of all evidence, including oral testimony of the parties and in particular the contemporaneous Whatsapp messages exchanged between them.

8. I do not think the first issue raised by Miss Fong is of any substance. It is because in the Notice of Opposition, the respondent raised no issue at all about the tenant’s identity. It can therefore be argued that she might also have mistaken herself to be a party to the tenancy. It was not until the first hearing that Miss Fong raised this issue. This tribunal accepts the respondent might not be aware of such argument when she drew up the defence for she was then unrepresented. However, at least it shows that the issue of identity might not be apparent to the parties and might at least be arguable.

9. The two points raised by Miss Fong boils down to this, i.e. whether the proceeding herein brought by the applicants is scandalous, or is an abuse of the legal process or they are malicious in prosecuting their claims.

10. It has to be remembered that in the circumstances of this particular case, the conclusion of the tribunal was arrived at after consideration of all evidence on a balance of probability. The evidence of the case does not overwhelmingly support the respondent’s case or point to an inevitable conclusion that the applicants were deliberately lying or deceitful. One of these doubts was that after receipt of the signed tenancy agreement returned from the respondent, the 1^st applicant asked the respondent for her full name, HKID and the address for stamping purpose. The respondent did provide as requested. The 1^st applicant then inserted the respondent’s name at the commencement and execution part of the tenancy agreement for the purpose of stamping. The fact that said request had been made was not in dispute. It was supported by an Whatsapp message. The applicants relied on this piece of evidence to support her case that agreement for the respondent to take up personally the tenancy had been reached, otherwise she would not have asked and the respondent would not have provided such particulars. It might be possible that the applicants really had a ploy in mind to mislead the respondent. It might also be equally possible that for reasons unknown the 1^st applicant was under certain misunderstanding that the respondent had replaced DIM as the tenant. There was no evidence or insufficient evidence to support an irresistible inference that the applicants were devising a ploy.

11. Further, it is not a case where the respondent’s signature was forged. It was duly subscribed by the respondent. Neither is the written agreement fabricated. The dispute was why the respondent’s name was added without her knowledge. Although in the overall assessment of evidence this tribunal weighed against the applicants, this tribunal had not and in fact could not come to any positive finding as why the 1^st applicant asked for her personal particulars for the purpose of stamping. One really cannot conclude the name of the respondent was entered with a view to deceive. This tribunal do not accept there is any basis to say that the tenancy is therefore forged by the applicants.

12. The respondent has not demonstrated that the applicants are malicious or scandalous in bringing the litigation. Even in hostile litigation, the fact that a party fails does not entitle the winning party costs on a scale other than party and party costs[4]. In the present case, the applicants have no alternative but to sue whoever they considered to be their tenant for possession of the suit premises. To the applicants, the suit property was and is now still occupied by the respondent, either by her personally as tenant or by DIM as tenant through her. It would be difficult to envisage that the applicants would deliberately choose to sue only the respondent for the sole or dominant purpose to disgrace or cause embarrassment to her for the obvious reason once the action is struck out, they have to sue again otherwise they might be unable to recover possession of the suit property. Is it not better that both the respondent and DIM be sued at the same time if the applicants really wanted to disgrace or embarrass the respondent. It is because by so doing the applicants could avoid coming back to court again thus wasting time and costs. It is noted in Choy Yee Chun (supra), the learned Stock J (as he then was) had this to say:

“Of course there will in most litigation be evidence which a court rejects, and it is far from rare that a court will find that evidence has been deliberately untruthful. Such a finding will not necessarily in itself warrant an order for costs upon either of the bases alternative to party and party taxation. But there will be cases - and it is true that they will be the exception and not the rule - where the conduct of a party in a case is of a more venal kind, where the conduct of the litigation has in some sense been wicked, and in such a situation the exceptional power can quite properly be applied.”

13. The learned To J also summarize the following principles in KJ v KMLM & KCK[5]:

“Advancing a case which is difficult, unlikely to succeed or which in fact fails, or without any foundation in law or fact, or devoid of merits, is not necessarily in itself a sufficient reason for an award of indemnity costs: see Overseas Trust Bank[6]; Shaina Investment Corporation v Standard Bank London Ltd[7]; Golden Sand Marble Ltd v Hsin Chong Construction Co Ltd[8]; Kao, Lee & Yip (a firm) v Midland Realty International Limited[9]. The court’s finding that the claim or the ground of defence is plainly and obviously incredible on the fact, or that the evidence has been deliberately untruthful will not necessarily in itself warrant an order for indemnity costs. The conduct of the losing party must be of a more venal kind and the conduct of the litigation has in some sense been wicked: see Choy Yee Chun v Bond Star Development Ltd[10]; and Kao, Lee & Yip[11].”

14. This tribunal does not find that conduct of the applicants venal or wicked in the application. Though litigious hostility normally found in litigation can be shown, it is simply insufficient to justify indemnity costs. The respondent has not made out a case justifying a departure from the usual party and party costs.

Certificate for Counsel

15. This case is a simple tenancy dispute and does not involve any issue of law. The only dispute of fact is whether before the sending over of the partially filled up agreement the parties had reach an oral agreement on the identity of tenant as alleged by the applicants. The evidence is rather straight forward and is basically contained in their Whatsapp exchanges. I do not consider special skill of cross-examination is required though counsel’s involvement will normally be a great service to a party, and of valuable assistance to the court if there is proper preparation. I do not consider counsel’s involvement in this case necessary.

Costs of the Hearing

16. As the respondent is unsuccessful in seeking to vary the costs order, I consider she should pay the applicants costs. By summary assessment, I award to the applicants costs of the hearing in the sum of $230, being the aggregate of costs of $200 and travelling expenses of $30 for the 1^st applicant.