廣豐台業主立案法團 v. NOMINSHARE LTD

LDBM 109/2019

[2022] HKLdT 37

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 109 OF 2019

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D E C I S I O N

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BACKGROUND

1.  This is a building management case, the trial of which was originally fixed for 16 and 17 February 2022. On 8 February 2022, the Respondent’s solicitors applied for adjournment of the trial on the reason that their key factual witness was unable to return from the United Kingdom to Hong Kong to attend the trial due to the “place-specific flight suspension mechanism” implemented by the government at that time. As a result, the original trial was vacated and re-fixed to September 2022 after consultation with parties’ diaries.

2.  By a summons filed on 28 February 2022 (“the Summons”), the Applicant applies for the following costs orders:-

(a)	The Respondent do pay to the Applicant the costs of and incidental to the Respondent’s application for the adjournment of the trial originally fixed for 16 and 17 February 2022, to be summarily assessed and payable forthwith (“Costs Order 1”);
(b)	The Respondent do pay the costs thrown away by the adjournment of the trial to the Applicant in any event, to be taxed on an indemnity basis if not agreed (“Costs Order 2”); and
(c)	Costs of the Summons be paid forthwith by the Respondent to the Applicant, to be summarily assessed and payable forthwith (“Costs Order 3”).

3.  Directions were given for the above costs application be dealt with on paper without oral hearing. Having considered the parties’ respective affirmations and materials and their respective written submissions, I now give my ruling on costs with the reasons below. I shall begin with Costs Order 2 which is the more contentious one.

COSTS ORDER 2

4.  The Applicant submits that the Respondent is the author of the difficult situation resulting in the adjournment of the trial and the adjournment application was made very late in every sense which resulted in some costs having been thrown away. The Applicant asks for taxation of such costs on an indemnity basis.

5.  The Respondent raises 4 grounds of opposition:- (a) the difficult situation was not created by the Respondent themselves. It was the pandemic which caused uncertainty for people to travel back to Hong Kong; (b) the Respondent had informed the judge in advance of the anticipated difficulty in returning to Hong Kong when the case was set down for trial; (c) the amount of costs thrown away as claimed by the Applicant is unreasonable; and (d) no prejudice was caused by the adjournment to the Applicant.

(a) Difficult situation not created by Respondent & (b) Judge had been informed of difficulty upon setting down

6.  The Respondent explains that in the hearing on 14 December 2021 when the HH Judge Michael Wong set the case down for trial, the Respondent’s solicitors already informed the judge that their only witness, Mr So Kai Tong Stanley, was residing in the United Kingdom. The Respondent’s solicitors asked for a trial date not earlier than March 2022 but the judge did not entertain and proceeded to fix the trial for 16-17 February 2022. The Respondent’s solicitors indicates[1] that they would apply for the transcript of the said hearing if the Applicant pursues their application for wasted costs order.

7.  The Applicant presents a slightly different version of events in the December hearing. According to the Applicant, during the hearing the judge enquired with the parties why mediation had not been conducted. In response, the Respondent’s solicitors, Mr Peter Wong, told the judge that the director of the Respondent, Mr So, was in the United Kingdom. Mr Wong said he was unsure of when Mr So would be able to make his return back to Hong Kong to mediate. As the Respondent’s solicitors was unable to confirm any concrete date for the parties to attempt mediation, the judge then proceeded to consult parties’ diaries for the purpose of fixing trial dates. Mr Wong then indicated to the judge that as Mr So would be required to undergo quarantine for 21 days upon returning to Hong Kong, a trial date not earlier than March 2022 would be preferred. The judge immediately expressed dissatisfaction of the long gap between that December hearing and the month of March. The judge added that Mr So could make his way back to Hong Kong at any time during late December 2021 or January 2022, allowing 21 days for quarantine, he should be able to attend the trial in mid-February 2022 in time. The Applicant submits that the trial date was given by the court after considering Mr So’s situation, the quarantine requirement and the parties’ diaries.

8.  From the court’s records, it does not appear that the Respondent has since applied for the transcript of the December 2021 hearing but, in my view, the transcript is not important for the present purpose.

9.  As I see it, the judge’s proceeding to fix the trial dates for 16 and 17 February 2022 in the said hearing is self-explanatory of the fact that he did not accede to the Respondent’s request to fix the trial dates for not earlier than March 2022. The Respondent would not be able to excuse themselves or make themselves look any better by saying that the judge had been told of the anticipated difficulty and the preferred trial date but did not entertain. If and when a trial date is given, it shall then fall on the parties to get themselves ready for the trial with the scheduled dates in mind. Certainly if a factual witness is residing out of the jurisdiction at the time when the trial date is fixed, travel/accommodation arrangement should be expeditiously made without delay in order to make the witness available for court attendance.

10.  According to the Respondent’s solicitors, they immediately informed Mr So of the trial date after the hearing on 14 December 2021, which was more than two months in advance of the trial. It is not unreasonable to expect that had Mr So taken the matter seriously, he should have been able to take immediate actions to book flight with a view to returning to Hong Kong in time to testify at the trial in mid-February 2022.

11.  In their affirmation in opposition, the Respondent conveniently explained that Mr So was not able to book the flight to Hong Kong and the quarantine hotel (in Hong Kong) for the month of December 2021 after the hearing on 14 December 2021. However, the Respondent simply stopped there without providing further particulars about this statement, to say nothing of any documentary evidence to show that Mr So did attempt to book flight in December 2021.

12.  The Respondent has not said anything about what steps Mr So had actually taken to book his flight to Hong Kong and the quarantine hotel during December 2022 or at any time before the announcement of the place-specific flight suspension mechanism on 5 January 2022; what sort of difficulties he had encountered in the process; or why he had not booked indirect fight from places (not imposed with flight suspension) arriving to Hong Kong in January 2022.

13.  From the documents available, one could only see that Mr So booked his ticket on 7 January 2022, which was more than three weeks after the December 2021 hearing. By that time, the government had already announced two days ago (i.e. on 5 January 2022) that place-specific flight suspension would be imposed on the United Kingdom from 8 January 2022 onwards. Obviously, it was too late for Mr So to book flight at that moment in time.

14.  Upon Mr So’s confirmation of tickets on 7 January 2022 (with a flight to Hong Kong only on 15 July 2022), Mr So must be aware of his unavailability to attend the trial on 16-17 February 2022. But to make the matter worse and for reason unknown, the Respondent did not inform the court or the Applicant of the situation until 8 February 2022 (i.e. more than a month afterwards), which was just the day before opening submissions were due to be filed by both parties and was only 7 clear days before the original trial date.

15.  Again, in the Respondent’s affirmation in opposition, no explanation is given as to why the Respondent chose to remain silent about their intended application for adjournment all the times for over a month and why they still stayed silent when being served with the trial bundle on 28 January 2022. With the benefits of hindsight, had the Respondent voiced out the situation and made appropriate applications earlier, the possibility of arranging Mr So to give evidence via other means without disturbing the trial date could have been explored or, at the very least steps could have been taken by the Applicant to avoid incurring unnecessary costs at that stage.

16.  As to the Respondent’s submission that it was the pandemic which caused the uncertainty for people to travel back to Hong Kong, I shall take judicial notice of the fact that Covid-19 has been with us since early 2020. It is a piece of known fact that the government has been implementing flight restriction policies so as to adapt to the changing situation of the pandemic. In my view, the postponement of the trial was not a matter wholly beyond the Respondent’s control because this could possibly have been avoided had they expeditiously booked flight after knowing the trial dates. The Respondent and/or Mr So themselves were at least one of the architects of the situation.

(c) Unreasonable amount of costs thrown away

17.  The Applicant submits that they incurred wasted costs as a result of the last-minute adjournment of the original trial and such costs include, among other things, the issuance of the brief to counsel for court attendance and the pre-trial meetings with witnesses and counsel etc.

18.  The Respondent submits that if the tribunal is minded to grant an order for costs thrown away by the adjournment of the trial be paid by the Respondent, they would invite the tribunal to consider whether the brief of the Applicant’s counsel for trial was justified, to consider the necessity for the Applicant to have meetings with witnesses for the alleged purpose of refreshing their memory of the case; and to consider the fact that the opening submissions for the trial already submitted by the Applicant could still be used in the upcoming trial in September 2022.

19.  In my view, unless the Respondent is suggesting that no costs was thrown away at all (such argument is unrealistic), the Respondent’s arguments as summarized in paragraph 18 above actually go to the question of quantum (i.e. which item of costs claimed and what amounts therefor are to be allowed or disallowed) which should be more appropriately dealt with during actual assessment of the amount of costs thrown away as claimed by the Applicant. Since the Applicant’s position is that such costs cannot be quantified now for some reasons (which are explained in the Applicant’s affirmation but not to be elaborated here), they have not submitted costs statement for summary assessment but ask for taxation of such costs. This is therefore not the opportune occasion for submissions on quantum.

(d) No prejudice caused by the adjournment to the Applicant

20.  The Respondent submits that the subject matter in the current litigation is a water pump which had been installed in the water meter room since around 1995 but it took the Applicant more than 2 decades to issue a demand to the Respondent in 2016 for its removal. It is further said that the Applicant commenced proceedings against the Respondent in July 2019 but they let the case idle until the tribunal took the initiative to enquire the case progress with the parties on 26 November 2020. The Respondent submits that in comparison to the inaction on the part of the Applicant for over 20 years before commencement of proceedings and then for 1 year during the proceedings, the delay caused by the present trial adjournment for a period of some 7 months was insubstantial and would not cause any prejudice to the Applicant.

21.  First off, the suggestion of nil prejudice is hard to comprehend. The costs thrown away by the Applicant as briefly discussed in paragraph 17 are the prejudice by themselves.

22.  In running this argument, the Respondent is mingling up the Applicant’s manner of pursuit of these proceedings with the Respondent’s application for trial adjournment but the two are clearly separate and unrelated. Should the Respondent consider that the Applicant’s delay in the commencement of proceedings could offer them a valid defence in the substantive dispute, they could by all means run such a defence in the substantive proceedings if such has been pleaded. Should the Respondent consider that the Applicant’s delay during the proceedings should be reflected by an adverse costs order against the Applicant, they could address the court accordingly when it comes to the determination of the costs of the proceedings. What the Respondent must not do is to lose sight of the fact that the current costs application by the Applicant is being dealt with as an interlocutory application on its own.

23.  Above all, it is not right for the Respondent to say that because the Applicant themselves had been slowed before, the Respondent could also be lax in treating the trial (which is a milestone date as per Order 25, rule 1B of the Rules of the High Court, Cap.4A) and could cause it to be vacated without any consequences. Such argument is unintelligent and deserves no more discussion but rejection.

Legal Principles

24.  It is undisputed that the tribunal has the discretion to decide the costs of and relating to the Respondent’s application for adjournment of the trial.

25.  Order 62, rule 5 of the Rules of the High Court, Cap.4A, provides that the court in exercising its discretion on costs shall, as may be appropriate in the circumstances take into account, inter alia, the underlying objectives set out in Order 1A, rule 1 of the Rules of the High Court, Cap.4A as well as the conduct of the parties.

26.  Order 1A, rule 1 of the Rules of the High Court, Cap.4A stipulates that the underlying objectives include promoting a sense of reasonable proportion and procedural economy in the conduct of the proceedings, ensuring fairness between the parties and dealing with a case as expeditiously as is reasonably practicable.

27.  The Applicant submits that an application for adjournment not brought with promptitude should invite severe criticism from the court, which may be reflected in an appropriate order for costs, Arko Ship Leasing Ltd v Winsmart International Shipping Ltd[2]is cited. They further submits that indemnity costs may be ordered upon adjournment of the trial to show the court’s disapproval of the conduct of the property, China Metal Recycling (Holdings) Ltd (in liquidation) and Another v Chun Chi Wai and Others[3] is cited.

28.  Taking into account the circumstances and events pertaining to the postponement of trial as analyzed above and since the Applicant actually played no role in causing or contributing to the postponement, I see no reason why their costs thrown away should not be borne by the Respondent. With that being said, I do not think this is a suitable case for taxation on an indemnity basis having considered inter alia the said two cases cited by the Applicant.

29.  In Arko Ship, the judge found that the plaintiffs must have been aware that the relevant witnesses were under investigation by the Mainland Customs authorities and that they had been detained as early as in January and February 2012, yet they let dates be fixed for the trial without raising any potential problem and did not apply for adjournment until December 2012, many months after the witnesses in question had been arrested and put in custody.

30.  In China Metal which is a set of civil proceedings, the 2^nd defendant there sought to reschedule the trial date. The case was set down in February 2018 for trial. Trial dates (30 days) were fixed for end of 2019 by the listing clerk in April 2018 in consultation with parties’ diaries. On 27 December 2018, the 2^nd defendant informed the liquidators (acting on behalf of the plaintiffs) for the first time that the trial for the criminal proceedings where the 2^nd defendant was also a defendant had been fixed and that there was overlapping between the civil trial dates and criminal trial dates. The 2^nd defendant sought the liquidators’ consent to civil trial postponement but the liquidators disagreed. The judge found that the 2^nd defendant herself was the author of the difficult situation. She had never informed the civil court of the progress of the criminal proceedings in all the 13 case management conferences which took place between 2014 to 2018. Furthermore, the 2^nd defendant did not draw the civil court’s attention to the fact that the criminal case had been committed to the High Court on 18 December 2017. Had this been done, the civil court would have been able to take into account the progress of the criminal proceedings in deciding whether to set down for trial. In the criminal proceedings, in all the case management hearings which took place between April 2018 and December 2018, the 2^nd defendant did not tell the criminal court the civil trial dates. She all along did not tell the criminal court nor the prosecution, nor the civil court, nor the liquidators of the risk of the overlap of the trial dates in the criminal case and the civil trial dates. When it came to the 5^th case management hearing on 21 December 2018 where the criminal court proceeded to fix the trial dates, the 2^nd defendant still did not tell the criminal court the existence of the civil trial dates. The judge was disapproved of the 2^nd defendant’s conduct and ordered her to bear the plaintiffs’ costs including those thrown away on an indemnity basis.

31.  Considering that the present case does involve some factors, such as the epidemic situation and the flight control policies, that are beyond the Respondent’s control and since the extent of delay and laxness of the Respondent in the present case is less severe and appalling as compared with the behavior of the parties who caused the trial postponement in Arko Ship and China Metal, I believe taxation on party-and-party basis should be more appropriate.

COSTS ORDER 1

32.  In relation to Costs Order 1, the Applicant submits that the Respondent, by way of the postponement application, has been given indulgence from the tribunal to vacate the original trial date solely to cater for the availability of their witness to attend trial. The Applicant is innocent of any fault for the derailed trial and should be compensated for their costs of and incidental to the Respondent’s application.

33.  I agree with the Applicant. For the reasons discussed under “Costs Order 2” above and since the Applicant played no role at all in leading to the postponement of trial, I likewise see no reason why the Applicant’s costs of the Respondent’s postponement application should not be borne by the Respondent. Summary assessment of such costs to be payable by the Respondent forthwith is appropriate.

COSTS ORDER 3

34.  In relation to Costs Order 3, the Applicant submits that before they took out the Summons on 28 February 2022, the Respondent had been fully aware of the reasons why the Applicant sought costs because those reasons had been set out in the Applicant’s letter dated 11 February 2022.

35.  On 23 February 2022, the Applicant’s solicitors wrote to the Respondent’s solicitors to enquire whether the Respondent would agree to bear the Applicant’s costs of the postponement application and the costs thrown away but the Respondent’s solicitors replied in the negative by their letter dated 25 February 2022. The Applicant therefore considered that they had no alternative but to take out the Summons to apply for costs.

36.  I agree that the Summons was duly taken out by the Applicant for the effective disposal of the outstanding costs issues between the parties arising from the adjournment of the trial. Since I substantially rule in favour of the Applicant in the applications under the Summons, it is fair for the Applicant being the winning party to have the costs of the Summons. Summary assessment of such costs to be payable by the Respondent forthwith is appropriate.

CONCLUSION

37.  For the reasons above, I order that:-

(1)	The Respondent do pay the Applicant’s costs of and occasioned by the trial adjournment application, to be summarily assessed on paper and payable forthwith after assessment;
(2)	The Respondent do pay the Applicant’s costs thrown away by the adjournment of the trial in any event, to be taxed on a party-and-party basis if not agreed; and
(3)	The Respondent do pay the Applicant’s costs of the Summons, to be summarily assessed on paper and payable forthwith after assessment.

38.  The Applicant submitted a composite statement of costs for summary assessment of their costs of the Respondent’s adjournment application (i.e. Costs Order 1) quantified at $6,961.50 and for summary assessment of their costs of the Summons (i.e. Costs Order 3) quantified at $71,901.33. The Respondent have yet to provide their comment thereon.

39.  For summary assessments of the costs mentioned in paragraph 37(1) and (3) above, I direct the Respondent to file and serve a written reply to the Applicant’s composite costs statement dated 14 April 2022 within 14 days from the date hereof.