THE INCORPORATED OWNERS OF TAT MING BUILDING v. PC FORTUNE COMPANY LTD

LDBM 107/2019
[2023] HKLdT 51
IN THE LANDS TRIBUNAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
BUILDING MANAGEMENT APPLICATION NO. 107 OF 2019
_________________
BETWEEN
THE INCORPORATED OWNERS OF TAT MING BUILDING
(達明大廈業主立案法團)
Applicant
and
PC FORTUNE COMPANY LIMITED
Respondent
_________________
Before:
Deputy District Judge Michelle Soong,
Presiding Officer of the Lands Tribunal, in Court
Date of Hearing:
28 June 2023
Date of Decision:
9 August 2023
_________________
D E C I S I O N
_________________
BACKGROUND
1.
This is the respondent’s application for leave to appeal against my amended judgment out of time.
2.
In short, the applicant commenced the present proceedings against the respondent on 30 May 2019 to recover outstanding renovation contributions and management fees.
3.
Despite the time allowed by the Lands Tribunal Ordinance (Cap 17) which was extended by the tribunal on its own motion, the respondent did not file their Notice of Opposition to oppose the applicant’s application, neither did they file any witness statements or other documents before trial, or show up in any hearing including the trial scheduled for 23 October 2019.
4.
At the trial on 23 October 2019, having considered the solo evidence from the applicant’s side in the respondent’s absence, the tribunal granted a judgment in favour of the applicant (“the Judgment”).
5.
As the respondent did not pay the judgment sums, the applicant obtained and had a charging order registered against the respondent’s property in 2020. In August 2021, the respondent commenced DCMP 3187/2021 in the District Court for,
inter alia
, an order for sale of the respondent’s property.
6.
On 26 October 2021, the respondent instructed solicitors to issue a letter to the applicant’s solicitors accusing various management problems on the part of the management company, demanding production of accounts, books and records of the building and alleging some “
procedural problems
” in the District Court proceedings (i.e. DCMP 3187/2021) and the related intended sale by public auction.
7.
On 4 August 2022
[1]
, the respondent’s solicitors issued a letter to the applicant’s solicitors identifying some mistakes in paragraph 1 of the Judgment (which concerns the amount of the outstanding contributions owed by the respondent) and paragraph 3 of the Judgment (which concerns the outstanding management fees from November 2007 to January 2008). The respondent’s solicitors demanded that a Consent Summons be filed by the parties jointly to have the mistakes rectified.
8.
The applicant agreed that there was calculation mistake in paragraph 1 but disagreed that paragraph 3 was erred. Notwithstanding the disagreement, the applicant nonetheless agreed to have the two paragraphs both amended as per the respondent’s request to avoid further disputes.
9.
On 13 October 2022, the applicant and the respondent jointly filed a Consent Summons seeking to amend the said two paragraphs of the Judgment accordingly. Consequential amendments to the charging order absolute in respect of the judgment sums secured thereunder were also sought. The Consent Summons was approved by the tribunal on 13 October 2022. The amended Judgment (“the Amended Judgment”) and the amended Charging Order (“the Amended Charging Order”) were filed on 17 October 2022.
10.
On 27 March 2023, the respondent’s solicitors issued a Summons to apply for leave to appeal against the Amended Judgment. As a result, the adjourned hearing in respect of the application for order for sale in DCMP 3187/2021 (which had been scheduled for 29 March 2023) was adjourned pending the outcome of the present application.
11.
In the leave application, the applicant is represented by Mr Vincent Chan. The respondent is represented by Ms Wendy Lau.
GROUNDS OF APPEAL - DISCUSSIONS
12.
During the leave hearing, Ms Lau confirms that the respondent is seeking leave to appeal only paragraphs 6 and 7 of the Amended Judgment which are appended below:-
“6. 答辯人須向申請人支付上述欠款利息，從判決日開始以判定利率計算，直至付清為止；及
7. 答辯人須向申請人支付本申請的訟費，簡易評定為30,000元。”
13.
I shall flag up two fundamental matters at the outset.
14.
First, no opposition has ever been filed by the respondent in the Lands Tribunal proceedings. Pursuant to rule 36 of the Lands Tribunal Rules (Cap 17A), any respondent who wishes to oppose the application must file and serve their Notice of Opposition to indicate that he wishes to be heard and to state their grounds of opposition. The respondent has also failed to participate in the proceedings by filing no evidence and not attending any hearing or the trial. Those were the circumstances in which the Judgment was entered. Notably, there has not been any allegation of non or improper service of the originating process or notice(s) of hearings/trial by the respondent, nor is there any application to set aside the Judgment by that reason.
15.
The second matter of concern is, as mentioned in paragraphs 7 to 9 above, the parties consented to, signed and filed a Consent Summons to seek amendments to two paragraphs of the Judgment (about the sums stood due and owing) without disturbing the rest including the two paragraphs about interest and costs.
16.
By submitting and endorsing on the Consent Summons, the respondent obviously has agreed to the terms of the judgment as amended. It is highly questionable whether the respondent could subsequently revoke on the agreement and seek to appeal the Amended Judgment which was granted and sealed by the court by and pursuant to their own consent.
17.
Mr Chan for the applicant cites
Postwell Limited v Cheng Kap Sang
[2004] 2 HKLRD 355, paragraph 19 to illustrate that for a consent order, it is a matter of public policy that the court should enforce compromises which are agreed in good faith and should be slow to set aside a compromise unless in exceptional circumstances where, for instance, there was unconscionable conduct on the part of the party seeking to enforce the compromise.
18.
I see no unconscionable conduct on the applicant’s part that justifies the setting aside of the Amended Judgment even though an application to set aside is made, not to mention that the respondent actually has made no such application thus far.
Specific Grounds re Costs
19.
Having set out my preliminary observations, I shall now turn to the respondent’s particular challenges to the paragraphs about interest and costs in the Amended Judgment.
20.
The respondent says that “
Due to the improper procedures in charging the legal costs against the Respondent, I verily believe that the Respondent should not be ordered to pay the legal costs and interests
[2]
”.
21.
During the leave hearing, I ask Ms Lau to clarify what exactly the “
improper procedures
” they are referring to. Ms Lau submits that in relation to the question of costs, in October 2021, the respondent’s ex-solicitors requested to inspect the accounts and minutes/resolutions of the applicant but could not identify any documents relating to the incurring of legal costs by the applicant for these proceedings (i.e. LDBM 107/2019)
[3]
. That is the “
improper procedures
” the respondent alleges in relation to costs.
22.
I notice that such request for documents was not made in the course of the Lands Tribunal proceedings but was raised by the respondent to the applicant quite some time after conclusion of the trial. The respondent received the applicant’s documents in or about November 2021
[4]
, well before the filing of the Consent Summons to seek amendments of the Judgment in or about October 2022. If the respondent considered that lack of documentary proof about the applicant’s incurring of legal expenses is problematic, there was simply no reason why they could not have raised it in their solicitors’ letter dated 4 August 2022 when they disputed the two paragraphs of the Judgment. If the respondent considered the costs order problematic, it is even more unexplainable why they would endorse the judgment by submitting a Consent Summons to amend just two paragraphs about the sums owed without disturbing the rest including the costs order.
23.
In any case, even assuming it is true that the applicant did not produce documents about legal expenses, Ms Lau is unable to explain why that would constitute a good ground of appeal and how that would show any error in law in the costs order.
24.
The costs order was made at the end of the trial after considering the costs statement submitted by the applicant in light of the work done in the proceedings from the start up to and including the trial.
25.
Sections 12 of the Lands Tribunal Ordinance (Cap 17) provides that the costs of and incidental to all proceedings in the Lands Tribunal are in the discretion of the tribunal which has the full power to determine by whom and to what extent the costs are to be paid. As the applicant was successful in obtaining reliefs against the respondent after trial, I see no reason why costs should not follow the event. In my opinion, whether the respondent managed to, outside the proceedings, obtain from the applicant documents concerning legal expenses is irrelevant.
26.
In this leave application, the respondent has failed to show that in making a costs order in the applicant’s favour, I failed to exercise the discretion on costs or exercised it upon a false principle, or did not exercise it judicially or the exercise of the discretion was demonstrably flawed. The respondent has not even suggested that the sum of $30,000, being the amount of costs allowed by the tribunal for the entire Lands Tribunal proceedings, was unreasonable or disproportional in quantum or why it is considered unreasonable or disproportional.
Specific Grounds re Interests
27.
As regards the “
improper procedures
” concerning interests, Ms Lau submits that since the judgment sum was wrongly calculated, interest should only be calculated “
up to
23 October 2019
”
[5]
.
28.
I shall point out that the Judgment was entered on 23 October 2019 and in the Judgment, no pre-judgment interest was granted actually. It therefore does not make sense for Ms Lau to contend that interest should only be “
calculated up to 23 October 2019
” for such contention is no different from suggesting that pre-judgment interests shall be granted against her client.
29.
Ms Lau also submits that interest shall not be granted because of the aforesaid mistakes in the Judgment.
30.
I do not think the previous mistakes in two paragraphs of the Judgment shall deprive the applicant of post-judgment interests entirely. First, the post-judgment interest would only be calculated on the correct rectified amount as per the Consent Summons hence there should be no question of over-charging of interest.
31.
Secondly, had the respondent duly participated in the proceedings by filing their Notice of Opposition and evidence, the mistakes in the calculations of the amount stood due and owing should in the ordinary course have been raised by the respondent in their defence and brought to the tribunal’s attention. To view in this light, the respondent certainly had a role to play in creating the circumstances that led to the tribunal’s entering of the Judgment that contained errors.
32.
It cannot be disputed that the respondent was always at liberty to make payment of a sum which they consider to be correct. Had they done so, the accrual or further accrual of interest would have ceased upon payment. However, the respondent has still failed to make full, partial or any payment of the judgment sum up to the time of the leave hearing, according to Mr Chan.
33.
Perhaps I should pause at this juncture to mention the respondent’s allegation
[6]
that the Judgment had not been properly served on them by the applicant
[7]
. The applicant’s solicitors in their reply letter dated 5 August 2022
[8]
firmly denied such allegation and put on record that the Judgment had been duly served on the respondent through ordinary post on 6 November 2019 to its registered office which has not been returned through dead letter service of the Post Office.
34.
During the leave hearing, I enquired with the applicant about the service of the Judgment on the respondent and Mr Chan confirmed to me once again that the Judgment had been duly served. With leave, the applicant filed an affirmation of service to depose about the service of the Judgment on the respondent – by way of ordinary post under a covering letter in an envelope duly prepaid and properly addressed to the respondent’s registered office in November 2019. I see no reason why I should not believe the applicant on the question of service.
35.
In any event, even though the applicant actually failed to properly serve the Judgment on the respondent (for avoidance of doubt I make no such finding), I cannot see its relevance to the present application for leave to appeal. It is clear that the award of post-judgment interests derived its basis from section 12 of the Lands Tribunal Ordinance (Cap 17)
[9]
, subsequent problem in the service of the Judgment on the part of the applicant, if any, shall not retrospectively determine the legal rightness or wrongness of the order that grants post-judgment interest.
DCMP PROCEEDINGS
36.
The respondent mentioned about
“improper procedures”
in the application for order for sale in DCMP 3187/2021.
37.
During the leave hearing, Ms Lau agrees with me that such allegation, even if substantiated, should not concern the present application for the present leave to appeal application concerns my exercising the jurisdiction of the Lands Tribunal in LDBM 107/2019 rather than the exercise of the District Court’s jurisdictions by Master Chu in the order for sale proceedings in DCMP 3187/2021.
OUT-OF-TIME
38.
Rule 30B of the Lands Tribunal Rules (Cap 17A) stipulates that application for leave to appeal against a final judgment shall be made within 28 days.
39.
I shall be brief about the legal principles of seeking leave to appeal out-of-time which are well-settled. In considering whether to extend time to appeal, the court has to consider factors such as the length of the delay, the reasons for the delay, the merits of the appeal and the prejudice to the other party if application is granted. Limited education and understanding of court proceedings, late advice from a new firm of solicitors are usually not satisfactory explanation for substantial delay especially when the applicant had been legally represented
[10]
.
40.
The Judgment was made on 23 October 2019 and the 28-day period for application for leave to appeal expired on about 19 November 2019. The Amended Judgment was made on 13 October 2022 and the 28-day period expired on about 9 November 2022.
41.
The present application for leave to appeal was only made by the respondent on 27 March 2023, i.e. more than 3 years and 4 months after the date when the Judgment was granted and more than 4 months after the Judgment was subsequently amended by consent. The delay is substantial.
42.
In their supporting affirmation, the respondent explains that the delay was caused by the respondent’s director’s old age and lack of legal knowledge and also due to change of solicitors.
43.
In response, Mr Chan for the applicant submits that lack of legal knowledge and late advice from a new law firm is not a valid reason in face of the substantial delay, especially when the respondent has been legally represented since no later than 26 October 2021. The respondent shall bear the consequences of their own decision to engage another firm of solicitors
[11]
. It is further submitted that the respondent’s challenge to the orders on interests and costs has no reasonable prospect of success. Granting leave for the respondent to appeal out of time would cause prejudice to the applicant as the respondent has been playing delaying tactics by refusing to pay the applicant the judgment debts whether in whole or in part up to present but only chose to apply for leave to appeal barely two days prior to the scheduled hearing of the enforcement proceedings (i.e. DCMP 3187/2021).
44.
Whilst I am not certain whether the respondent’s application for leave to appeal out of time is entirely a delaying manoeuvre, I feel compelled to express the impression I have about the respondent’s attitude and manner towards legal proceedings. Clearly, from the start of the proceedings in 2019 up to this leave application in 2023, the respondent has been persistently ignoring and defying the rules, the orders and the directions of the court. The situation from the beginning up to the time after the Judgment has been briefly set out in paragraphs 2 to 5 above and shall not be repeated.
45.
As for the present leave application, the Lands Tribunal ordered the respondent to file and serve skeleton submission and authorities no less than 14 days before the hearing (i.e. by 14 June 2023) but the respondent did not file their skeleton until the afternoon of 26 June 2023, which was less than 2 days before the leave hearing. As a result, by the time the applicant filed their skeleton submissions on 20 June 2023 in compliance with the tribunal’s direction, the applicant was handicapped and did not fully know the respondent’s case in their intended appeal. The respondent also “lodged” a second affirmation of Cheng Po Chu to attach some documentary evidence in support of their leave application without first obtaining leave from the court for them to do so. All these have caused both the applicant and the tribunal difficulties and extra work in the handling of the leave application.
46.
The respondent has been treating court proceedings and orders with indifference until imminent enforcement actions are happening at their door steps. They shall face the legal consequences of their own deed and inertia.
DISPOSITION & COSTS
47.
Section 11(2) of the Lands Tribunal Ordinance (Cap 17) stipulates that any party may appeal to the Court of Appeal against a judgment, order or decision of the tribunal on the ground that such judgment, order or decision is erroneous in point of law.
48.
Section 11AA of the Lands Tribunal Ordinance (Cap 17) provides that leave to appeal shall not be granted unless the tribunal is satisfied that the appeal has a reasonable prospect of success, or there is some other reason in the interest of justice why the appeal should be heard.
49.
I am not satisfied that good reasons have been provided by the respondent to explain for the substantial delay, nor do I see any prospect of success in their intended appeal as discussed above or any reason in the interest of justice why the appeal should be heard. The respondent has not identified any error of law in the two paragraphs
[12]
in the Amended Judgment which they now seek to appeal. I refuse to grant leave for the respondent to appeal the Amended Judgment out of time and hereby dismiss the respondent’s summons dated 27 March 2023.
50.
At the end of the leave hearing, parties agree that costs of the leave application shall follow the event. I therefore order that the respondent, having failed the leave application, do pay the applicant’s costs of this application with certificate for counsel, to be taxed on the District Court scale if not agreed.
(Michelle Soong)
Deputy District Judge
Presiding Officer
Lands Tribunal
Mr Vincent Chan instructed by Pansy Leung Tang & Chua, for the Applicant, present
Ms Wendy Lau instructed by H F Yip & Co, for the Respondent, present
[1]
See paragraph 3 of the 2
nd
Affirmation of Cheng Po Chu lodged on 26 June 2023.
[2]
Paragraph 7 of the 2
nd
Affirmation of Cheng Po Chu lodged on 26 June 2023.
[3]
See paragraph 17 of the respondent’s skeleton arguments: “
… The Incorporated Owners, i.e. the Applicant has no provisions in the accounts and minutes/resolutions to prove the Applicant had incurred legal costs against the Respondent in the Actions and the proposed auction.
”.
[4]
Paragraph 4 of the 2
nd
Affirmation of Cheng Po Chu.
[5]
See paragraph 20 of the respondent’s skeleton arguments.
[6]
As transpired in a letter dated 4 August 2022 (see paragraph 3 of the 2
nd
Affirmation of Cheng Po Chu lodged on 26 June 2023) from the respondent’s solicitors to the applicant.
[7]
Apart from the Judgment, the respondent has made no allegation of non-service of court documents in the LDBM 107/2019 proceedings by the applicant.
[8]
See paragraph 10 of the affirmation of service filed by the applicant’s solicitors on 10 October 2022.
[9]
Which stipulates that judgment debts carry simple interest on the aggregate amount of the debts, or on such part of the debts as for the time being remains unsatisfied, from the date of the judgment until satisfaction, and that interest shall be at such rate as the tribunal may order or in the absence of such order, at such rate as may be determined from time to time by the Chief Justice by order
[10]
Postwell Limited v Cheng Kap Sang
[2004] 2 HKLRD 355 at paragraphs 33, 36-37.
[11]
Citing
Wealth Growth (HK) Investment Limited v Si Bun Bun Carmen Company Limited & Another
[2021] HKDC 1363
[12]
Paragraph 6 concerning post-judgment interests and paragraph 7 concerning costs.