高英姿 v. 何東道貳、肆、陸、捌號業主立案法團

LDBM 264/2015

[2018] HKLdT 51

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 264 OF 2015

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D E C I S I O N

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1.  By the judgment handed down on 11 May 2018 (“the Judgment”), the application by the applicant in this case is being dismissed with a costs order nisi that 65% costs of these proceedings be to the respondent to be taxed if not agreed on party and party basis (“the Costs Order Nisi”).

2.  By a summons dated 25 May 2018 (“the Summons”), the respondent asked for the Costs Order Nisi be varied to the whole of the costs of these proceedings be to the respondent on an indemnity basis.

IO’s Ground for Variation

3.  The IO relied on the following grounds in support:

a)   even though the IO had failed in 3 of the issues (Issue 3, 4 and 9 in the Judgment), the IO, being the overall winner, should still be entitled to 100% of its costs since the failed issues are legal issues with not much time spent at trial;

b)   the IO should be entitled to indemnity costs since:

i)   as found in the Judgment, Ko was making allegations without basis, incredible or unsustainable;

ii)   Ko had suffered no damage at all at the time of her application and with the finding that she should be estopped by the waiver of her predecessor, Ko should have never instituted these proceedings;

iii)   Ko had introduced irrelevant evidence in her 3^rd witness statement and tons of new material adduced in examination-in-chief, all these prolonged the trial; and

c)   alternatively, the IO should be entitled to indemnity costs from 27 October 2017 since Ko failed to do better than the IO’s offer in a without prejudice letter dated 23 October 2017 (“the WP Letter”) (B/44) for acceptance within 3 days.

Applicant’s Reply

4.  In reply, Ms Wong for the applicant submitted that:

a)   for the 3 failed issues, time had spent on cross-examination of the witnesses for the IO on whether the Mesh Fence and the Spotlight are for the common good of residents and not purely legal argument involved;

b)   i)   it was never suggested to Ko at trial that she was making up her case, this is just a case of Ko’s evidence being insufficient or not being accepted by the Tribunal.  Insufficient evidence or poor evidence is not tantamount to an unreal case and there is nothing to show that there is an ulterior motive in pursuing with this litigation;

ii)   Ko was acting in person when she issued these proceedings and had not asked for damages then;

iii)   the 3^rd witness statement is in answer to the points raised in the supplemental witness statement of Chan so the irrelevant evidence are introduced not by Ko but by Chan in the first place.  And Ko was only asked to explain on the contents of the video clips in examination-in-chief and no new evidence was adduced; and

c)   Ko initiated the settlement discussion and had taken pro-active approach in exploring an amicable settlement including making big concession.  The IO’s counter-offers did not address the major concern of Ko.  In any event, all WP offers are not sanctioned offer which triggers off the “doing better” consequence.

Discussion

100% costs

5.  It is trite that where the party who has been successful overall has failed on one or more issues, particularly where such issues have occupied a significant amount of hearing time, the court may in its discretion order a reduction in the award of the costs to him.

6.  I agree with Ms Wong that the failed issues concerning whether the Mesh Fence is an UBW and whether it is reasonable to maintain the Mesh Fence and the Spotlight for the common good of the residents are issues unnecessarily pursued.  As found in the Judgment, the Mesh Fence is an UBW as confirmed by the BD is beyond argument (§35) and reasonableness is not a defence to any breach under s.34I (§39).  And according to the court record, about one third of the time spent on cross-examination of the witnesses for the IO touches upon these issues.  This cannot be said to be not a significant amount of the hearing time.

Indemnity Costs

7.  In Town Planning Board v Society for Protection of the Harbour Ltd (no. 2) (2004) 7 HKCFAR 114, the Court of Final Appeal confirmed that in order to obtain an order for costs on an indemnity basis, the successful party should show that the case has some “special or unusual feature”. 

8.  As can be seen from the Judgment, the bulk of the findings by this Tribunal is that Ko’s complaint is not serious enough to constitute a nuisance either due to the strength of the evidence or the extent of the nuisance complained of.  It is not a case that Ko’s case is found to be without basis, incredible or unsustainable.  Nor is there a finding by this Tribunal that Ko is making up a case of nuisance or fabricating evidence.

9.  The issue on waiver and acquiescence is a legal point which is subject to argument.  One cannot say that this argument is bound to fail.  As for the fact that Ko had suffered no damage at all at the time of her application since she had not moved into the Premises, one have to bear in mind that Ko was acting in person when she issued these proceedings. 

10.  As for the new materials in Ko’s 3^rd witness statement and examination-in-chief, this Tribunal agrees with Ms Wong’s submission that the irrelevant parts, if any, in Ko’s witness statement are in answer to the evidence of Chan.  And the elaboration of the content of the photographs and video clips under examination-in-chief cannot be considered an introduction of new material.  This is necessary to assist this Tribunal to have a better understanding of the evidence before the court and is necessary for the determination of the issues and had not prolonged the trial.

11.  In the WP Letter, the IO “put forward the tentative terms of settlement (which is subject to our client’s confirmation of instructions) as follows:

1.   The spotlight be adjusted;

2.   The part of the mesh fence outside the Applicant’s premises be removed provided that the Applicant shall relocate the air conditioners so as not to occupy the ground of the common area; and

3.   There be no order as to costs of these proceedings.”

12.  It is the contention of the IO that since Ko’s claim had been dismissed and didn’t get anything she wants, Ko failed to do better than the offer in the WP Letter so the IO should be entitled to have indemnity costs from 27 October 2017, the date after the offer could have been accepted by Ko.

13.  Sanctioned offer is governed by O.22 of the Rules of High Court (“RHC”).  O.22 r.3 RHC stipulated that “an offer by the defendant to settle … does not have the consequences specified in this Order unless it is made by way of a sanctioned offer or a sanctioned payment or both”.  Technically, the WP Letter is not a sanctioned offer.

14.  However, O.22 r. 2(4) RHC states that “nothing in this Order prevents a party from making an offer to settle in whatever way he chooses, but if that offer is not made in accordance with this Order, it does not have the consequences specified in this Order, unless the Court so orders”.  Hence, this court is entitled to take into account any offer other than sanctioned offer as a matter of discretionary consideration in the question of costs.

15.  It is beyond argument that the offer in the WP Letter is more advantageous to Ko compared to the end result of this litigation.  I do not see it unjust to impose the sanctions of indemnity costs against Ko from 27 October 2017.  The fact that Ko had initiated the settlement negotiation and had actively taken part in it is neither here nor there.

Conclusion

16.  Judging from the findings above, the Costs Order Nisi be varied to 65% costs of these proceedings be to the respondent, with certificate for counsel, to be taxed if not agreed on party and party basis up to and including 26 October 2017 and thereafter on an indemnity basis.

Costs

17.  Costs should follow the event.  Out of the 3 grounds in support of the Summons, the IO had only been successful on 1 ground, the IO should only be entitled to 30% of the costs of the Summons, to be taxed if not agreed on party and party basis, with certificate for counsel.  This is a costs order nisi.  Unless any of the parties applies by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.