TREASURE BASE DEVELOPMENT LTD v. THE SECRETARY FOR TRANSPORT AND HOUSING

LDRW 1/2015

[2018] HKLdT 22

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

RAILWAYS ORDINANCE APPLICATION NO 1 OF 2015

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D E C I S I O N

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Background

1.  The applicant was the registered owner of:

a.   Lot No. 1410sA and 1410sB in Demarcation District No. 114, Yuen Long, New Territories (“the Subject Lots”); and

b.   Lot Nos. 1340sC & sD, 1342sA, sB & sC, 1344. 1360, 1361sA & sB, 1362, 1363sA & sB, 1364, 1365, 1366, 1409, 1410sA & sB, 1411, 1412sA, sB & sC, 1413, 1414, 1416, 1417, 1433, 1435sA & sB, 1436, 1437 and 1438 in D.D. 114 (“the Neighbouring Lots”).

2.  By a notice of resumption dated 29 January 2010 and published in GN 544, the whole of Lot No. 1410sA and a portion of Lot No. 1410sB (“the Resumed Subject Lots”) and portions of the Neighbouring Lots (“the Resumed Neighbouring Lots”) are reverted to the Government at midnight on 29 April 2010 (collectively called “the Resumed Lots”).

3.  The applicant submitted to the respondent a written claim for compensation on 11 April 2011 and a payment of provisional compensation offered by the Director of Lands was accepted by the applicant on 26 April 2011.

4.  On 12 March 2015, the applicant commenced the present proceedings asking for its claim for compensation to be determined by the Lands Tribunal.  The Notice of Application (“NOA”) filed was formulated on the basis that the Resumed Lots were owned by the applicant as an owner-developer who had commenced the business of developing thereon a columbarium project for sale of urns and the NOA was amended on 27 June 2017.  Notice of Opposition was filed by the respondent on 27 March 2015 (subsequently amended on 3 July 2017).

5.  By the summons filed on 27 April 2017, the applicant asked for directions for evidence including expert reports to be filed in these proceedings (“the Summons”).  At the hearing of the Summons on 8 May 2017, it is brought to the attention of this Tribunal that the applicant had commenced another application by way of Originating Summons in the High Court (HCMP 3327/2015 refers) (“HCMP Proceedings”) on 15 December 2015 seeking various declarations turning on the interpretation of the Block Crown Lease of Lot No. 1410 in D.D. 114, the parent lot of the Subject Lots, including inter alia, that the construction of the superstructure of a columbarium project on the Subject Lots did not require the licence of the Government. 

6.  It is not in dispute that whether the Block Crown Lease allows the Subject Lots to be used as a columbarium is relevant to the basis of valuation in this case.  Hence, the respondent submitted that an order in terms of the Summons is not necessary and these proceedings should be stayed and let the HCMP Proceedings, which is already ready for setting down, to proceed.  The applicant does not agree that the HCMP Proceedings is ready for setting down since there will be further evidence to be adduced concerning the site formation work.  And it is also the contention of the applicant that the subject matter of the HCMP Proceedings is some neighbouring lot of land other than the Resumed Lots.

7.  Since the documents in the HCMP Proceedings are not before this Tribunal and whether the issue to be determined in the HCMP Proceedings is relevant to this case cannot be determined without the chance of reading the pleadings of the HCMP Proceedings, the hearing was adjourned to 18 July 2017 for parties to file the relevant information by way of witness statement.

8.  By a consent summons filed on 6 June 2017 (“Consent Summons”), parties agreed that pending the outcome of the HCMP Proceedings, the Summons be adjourned sine die with liberty to restore upon giving 1 month written notice in advance by either party and the hearing on 18 July 2017 be vacated.  Terms of the Consent Summons was made an order of this Tribunal on 7 June 2017 (“the Order for Stay”).

9.  The applicant informed the respondent of its intention to restore the hearing of the Summons by letter dated 20 December 2017 and the Summons is scheduled to be heard on 15 March 2018.

10.  On 9 March 2018, the respondent took out an interlocutory application for leave to file a 2^nd witness statement to update on the progress of the HCMP Proceedings.  Facing no objection from the applicant, leave was granted at this hearing.

11.  Mr Wong for the applicant asked for an order in terms of the Summons, ie for this case to proceed to the stage of exchange of evidence, instead of any further stay pending the conclusion of the HCMP Proceedings.  Mr Pao for the respondent objected and asked for the Order for Stay to be maintained.

The Applicant’s Contention

12.  Mr Wong submitted that the Consent Summons was being made based on the representation by the respondent at the last hearing that the HCMP Proceedings was ready for trial and the common understanding that the respondent will arrange for the HCMP Proceedings to be set down within a month.  However, there is a change of circumstances after the Order for Stay in that parties had agreed and a consent order made in the HCMP Proceedings on 27 September 2017 that the proceedings be continued as if they had been begun by Writ and parties had filed their respective pleadings as a result.  So the HCMP Proceedings is in no way ready for trial.

13.  Mr Wong accepted that there are common issues between these proceedings and the HCMP Proceedings and also admitted that this is a complicated case.  But he submitted that this Tribunal is also competent in dealing with the same and given the nature of informality of this Tribunal in the conduct of its proceedings, this case can be determined soonest in an expeditious manner.  The common issues should be dealt with at this Tribunal instead of in the HCMP Proceedings which involved more stringent procedures and will take long to go for trial.

14.  In any event, compensation on resumption is within the exclusive jurisdiction of this Tribunal and the alternative basis of valuation pleaded in §17.3 of the Amended NOA is not an issue common in the HCMP Proceedings.  A stay will prevent this alternative claim to proceed.

15.  Justice delayed is justice denied and any deferment of these proceedings is an erosion of the applicant’s constitutional right.  So the applicant contended that the common issues should be dealt with in this Tribunal in an expeditious manner with an earlier trial date compared to the HCMP Proceedings. 

The Respondent’s Contention

16.  Mr Pao submitted that the applicant had not asked for a stay of the HCMP Proceedings which is actively progressing and upon close of pleadings, will proceed to exchange of list of documents and evidence to be filed.  If the HCMP Proceedings is said to be at an early stage, the same is also applicable to these proceedings.  There are complicated common legal and factual disputes between the parties in these proceedings and the HCMP Proceedings, involving the same piece of land, ie the Subject Lots as well as the same covenants in the Block Crown Lease.  With the HCMP Proceedings already into the late pleadings stage and are progressing to trial in accordance with the Rules of High Court, the common issues on columbarium development should be dealt with in the HCMP Proceedings, which is a more appropriate venue for complicated legal issues whilst this Tribunal has its expertise in valuation. 

17.  If the respondent succeeded in the HCMP Proceedings, there will be no basis for the applicant to claim compensation in these proceedings on the basis of a columbarium development.  It does not make sense for the parties to incur the time and expenses in preparing valuation evidence in these proceedings on the columbarium use if no stay is being granted.

18.  It is the insistence of the applicant in asking for further evidence in the HCMP Proceedings which resulted in the respondent agreed to treat the HCMP Proceedings as if begun by writ.  The applicant had agreed to the Order for Stay so the applicant must have accepted that there was commonality between the 2 sets of proceedings and that the HCMP Proceedings should be determined before these proceedings.  The applicant had issued these proceedings 5 years after the resumption and had remained inaction till the taking out of the Summons, there is no justification for the sudden urge to go ahead. 

19.  The stay will not deprive the applicant of its right to compensation and with the HCMP Proceedings determined on the legal issue on land use, the alternative case of the applicant can still be dealt with by this Tribunal with significant saving of time and costs in the preparation of evidence.

Discussion

20.  The burden is on the party asking for a stay to satisfy this Tribunal that there is a good reason to do so.  As Recorder Liao SC stated in Clinton Engineering Ltd. v. B-Tech (Holdings) Ltd. HCA 3608/1998 (28 September 2001), “[w]here a temporary stay is sought, ... the correct approach should be ... to consider the balance of convenience and fairness as between the parties” (at §9). 

21.  The basis of the respondent’s argument is that there are concurrent proceedings elsewhere dealing with the same or similar subject matter.  In my view, these proceedings stand on the same footing as the HCMP Proceedings, not only in identity of subject matter, but also identity of parties. 

22.  Having had the chance of reading through the pleadings in the HCMP Proceedings exhibited in the witness statement filed by the respondent, it is beyond argument that the followings are the commonalities between the 2 proceedings:

a.   The same parties are involved;

b.   The same Subject Lots is involved;

c.   Common issues are:

i)   whether the use for columbarium development is prohibited on the Subject Lot which turns on the interpretation of the same covenants (“1^st and 2^nd Covenant” respectively) in the Block Crown Lease; and

ii)   whether the government should be estopped from denying that the Certificate of Exemption granted by the District Lands Office on 8 September 1989 for the erection of exempted buildings was an approval granted under the 2^nd Covenant.

23.  As can be seen from the list above, although the claims are not similar, the crux of the dispute in both proceedings is the columbarium use and the majority of consequential issues are the same.  The duplication of proceedings created the risk of inconsistent findings and the inevitability of increased costs which should be avoided. 

24.  In particular, for the proceedings at this Tribunal, valuation of the Resumed Lots is an issue in dispute where expert evidence is required.  To allow these proceedings to proceed, expert evidence to cover the assessment of columbarium development is a must.  Should these proceedings be stayed till after the HCMP Proceedings had determined on the issue of columbarium development, if the result is in favour of the respondent, valuation evidence on columbarium use will be spared and time and costs to be spent on this can be saved.  Even if the findings in the HCMP Proceedings is in favour of the applicant, valuation evidence on columbarium use will then be prepared without the risk of being wasted at the end of the day if the reports are to be prepared now without a stay.

25.  Given the fact that both litigations are in their initial stage, delay in reaching ultimate decision, whichever forum deals with the matter, is inevitable.  Even though this Tribunal is well equipped to deal with the legal issues, it would be more appropriate for the difficult question of construction of the Block Crown Lease to be determined in the High Court, a more authoritative forum and to lay down authoritative precedent in the interpretation of similar covenant in other Crown Lease. 

26.  Even though this Tribunal enjoys the same jurisdiction, powers and duties of the Court of First Instance, the jurisdiction of this Tribunal over the compensation claim in this case is confined to compensation only as stipulated in section 36 of the Railways Ordinance Cap. 519.  Hence the declaration sought by the applicant in the HCMP Proceedings cannot be entertained in these proceedings.  On the contrary, with the legal and factual issues determined in the HCMP Proceedings, such findings will be binding on the parties as well as this Tribunal which can proceed with the assessment of the compensation based on such findings with a defined basis of valuation as well.

27.  The stay of these proceedings may cause some delay in the determination of this claim, but this will not deprive the applicant of its constitutional right to compensation or the denial of the applicant pursuing with its alternative claim in this Tribunal.  The delay will be made up, after compensation assessed by this Tribunal, by way of interests to be paid for the assessed amount and no injustice is likely to  be caused to the applicant.

28.  There is no application by any parties for the HCMP Proceedings to be stayed.  The undesirable results of waste of time and expenses for the parties and waste of the judicial resources if both litigations are allowed to proceed points to the necessity of staying these proceedings.  In view of the fact that there is commonality between these proceedings and the HCMP Proceedings, to avoid the risk of inconsistent findings and unnecessary expenses and with the High Court being a more appropriate forum to determine the complicated legal issues involved, these proceedings should be stayed pending the determination of the HCMP Proceedings.

Order

29.  The Summons taken out by the applicant dated 27 April 2017 and these proceedings be stayed pending the determination of the HCMP Proceedings. Liberty to apply.

30.  Costs should follow the event.  Costs order nisi that costs of this hearing be to the respondent, with certificate for counsel, to be taxed if not agreed at District Court scale.  Unless any of the parties apply by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.