XCHRX THE INCORPORATED OWNERS OF TROPICANA GARDENS v. TROPICANA GARDENS MANAGEMENT LTD. AND ANOTHER

LDBM374/98

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO.374 OF 1998

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JUDGMENT

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Background

1. The Applicant lodged its bills of costs on 3 March 2001 for taxation of its costs in the action herein pursuant to the Orders of Deputy Judge Tong (sitting as Presiding Officer of the Tribunal) made on 4 October, 3rd November and 29th November 2001 respectively whereby the 1st and 2nd Respondents were ordered to pay the Applicant's costs to be taxed if not agreed.

2. After 2 call-over hearings on 20 March and 10 April 2001 respectively, the formal taxation of the bill of costs was adjourned to be heard on 20 July 2001. Just 3 days before the scheduled taxation, on 17 July 2001, his Honour Judge Li (in his dual capacity of District Judge and Presiding Officer of the Lands Tribunal) handed down a Judgment in another Lands Tribunal Case of The Incorporated Owners of Honour Building v. Lou Chui Sim and Wong Kwong Wai (LDBM 266 & 373/1999) ("the Honour Building case"). While I shall deal with the said Judgment in more detail in the latter part of this Judgment, in gist, his Honour Judge Li held that taxation of Lands Tribunal costs should be handled in the Court of First Instance by a High Court taxing master and neither a District Judge nor a Master of the District Court have jurisdiction to handle such taxation.

3. In light of the Judgment of the Honour Building case, at the taxation hearing on 20 July 2001, in my dual capacity as the Acting Registrar of the District Court and the Lands Tribunal, I invited both parties to make written submission on whether the District Court or the Lands Tribunal have jurisdiction to tax the bills of costs for Lands Tribunal cases and in particular on the following 2 issues:

(a) whether I am bound by the said decision of Judge Li in the Honour Building case; and

(b) the effect of Section 7A of the Lands Tribunal Ordinance on the jurisdiction of the Registrar of the Lands Tribunal to tax the subject bill of costs.

While the Applicant's solicitors requested some more times to consider the issues, I directed that parties to file and serve written submission within 30 days and be at liberty to fix a hearing for the purpose of making oral submission (if necessary) after exchange of their respective written submission. Both parties have also agreed that there be no order as to costs of the said hearing.

4. At the request of the Applicant's solicitors, on 20 August 2001, I granted leave to them to file and serve their written submission out of time on or before 29 August 2001. The Applicant's solicitors eventually filed their written submission on or about 29 August 2001. The Applicant's solicitors in their written submission argued that the Registrar of the District Court and the Registrar of the Lands Tribunal have jurisdiction over the taxation of the Lands Tribunal bills and have all the powers and duties in the cause as in the case of a High Court Taxing Master. The Applicant's solicitors further submitted that the decision of his Honour Judge Li in the Honour Building case is not a binding precedent that I must follow.

5. No separate written submission was filed by the Respondent. Instead, on 31 August 2001, the Respondent's solicitors wrote to the Court confirming their agreement with the Applicant's submission that a decision of the District Court shall not be binding on the District Court.

The Honour Building Case

6. The case first came before Judge Li for an issue unrelated to the jurisdiction point but to deal with an application by the Respondents to set aside an order of Master Chow of District Court dated 29 May 2001. In that case, the Applicant lodged their bill of costs to the Lands Tribunal for taxation. The bill was provisional taxed and a Notice to the Party Commencing the Proceedings for Taxation was issued by the Tribunal to the Applicant on 8 March 2001 notifying the Applicant the outcome of the provisional taxation. On or about 9 May 2001, the District Court received a written request by the Respondents for an appointment of taxation and a notice was issued on 11 May 2001 to the parties requesting them to attend a call over hearing for taxation on 29 May 2001. However, on 10 May 2001, the Lands Tribunal has issued an Allocator for costs allowed by the Tribunal. On 29 May 2001, Master Chow found that the Respondent's application for review of the taxation was out of time under Order 62 Rule 33(2) and dismissed the Respondent's application accordingly. Since that part of the Judgment is not relevant to my decision in this case, I shall not set it out here in detail save that Judge Li finally decided to set aside the said Order of Master Chow and exercised his discretion to allow the Respondent's application for review out of time.

7. Judge Li then proceeded to deal with the taxation procedure of the Lands Tribunal. It is not clear from the Judgment whether the parties, in particular the Applicant's solicitors (the Respondents appeared in person at the hearing), had made any submission on the issue. Judge Li referred to Section 12 of the Lands Tribunal Ordinance which gives the Tribunal the power to award costs and Order 62 of both the Rules of the High Court ("RHC") and Rules of the District Court ("RDC"). Judge Li compared the difference in wordings of Order 62 Rule 2 of the RHC and RDC and concluded that Order 62 of RDC does not apply to non-District Court proceedings such as the proceedings in the tribunals.

8. In the Judgment of his Honour Judge Li, he decided that :

"13. According to Order 62 Rule 21 of RHC, after the Lands Tribunal has ordered taxation of costs, the bill of costs should be filed in the High Court, not in the Lands Tribunal or District Court, because the taxation procedure ought to be conducted in the High Court. In this respect, there was no legal basis for solicitors for the Applicant to file their bill of costs in the Lands Tribunal; and it was not in order for officers of the Lands Tribunal or the District Court to proceed with taxation.

14. According to Order 62 Rule I of the Rules of the High Court, Cap. 4 taxing masters are judicial officers of High Court Registrar grade. In practice, because of the combined effect of Order 62 Rule 13 and Rule 21, after the Court of First Instance has received bill of costs for taxation, a Chief Judicial Clerk (not a taxing master) will undertake preliminary taxation and issue a notice of provisional taxation. If the parties do not raise issue over the certificate, the amount of costs indicated in the certificate will automatically become confirmed. In case of dispute, the bill of costs has to be passed to a High Court taxing master for formal taxation by appointment and representation and evidence from the parties have to be heard.

15. In summary, taxation of Lands Tribunal costs should, according to the law, be handled in the Court of First Instance by a High Court taxing master (or Chief Judicial Clerk). However, for the two instant cases, when the Respondents requested taxation, staff of the Lands Tribunal referred them to the District Court, and the Registrar, District Court (acting through subordinates) took over the cases and fixed appointment for taxation by a Master of the District Court (Master Chow). Such steps were taken without lawful authority. Neither Master Chow nor the Court to which he is attached has the authority to handled taxation of the two instant cases.

16. In matters of taxation of costs in Lands Tribunal cases, neither I nor other district judges have jurisdiction, not to mention a master of the District Court. Nonetheless, because Master Chow and the Registrar, District Court have made decisions on matters relating to costs in the two instant cases, causing the Respondents to ask a district judge to intervene, I have to adjudicate on the validity of the decisions of the master and the Registrar."

9. Judge Li while setting aside the Order of Master Chow dated 29 May 2001, transferred the matters relating to the taxation of costs to the Court of First Instance.

Is the Honour Building case Strictly Binding?

10. The long established common law rules of precedent (or commonly known as the doctrine of stare decisis) are that courts of all levels of the judicial hierarchy must loyally adhere to decisions of the courts above them. In the premises, the District Court should follow the decisions of the Court of Final Appeal, the Court of Appeal and the Court of First Instance. However, as appeared from the previous authorities of the District Court, it is doubtful whether the District Court is bound by its own previous first instance decisions. Neither did the Applicant's solicitors refer me to any authority that a Master sitting in chambers is bound to follow a decision of the Judge in chambers of the same level.

11. Back in 1959, the Full Court decided in Tsang Shiu Tim v. Hang Fong &Others [1959] HKLR 308 that a District Judge, when exercising appellate jurisdiction under the provisions of the Landlord and Tenant Ordinance, would be right, when considering the previous decisions, to follow the principles applicable in the Court of Appeal in England so that it could depart from its own previous decision according to the 3 exceptions as established in Young v. Bristol Aeroplane Co. Ltd. [1944] KB 718. In my view, the principle of the said case would only apply to isolated incidents when a District Judge is exercising appellate jurisdiction and would clearly have no application in the present case.

12. In 1962, Judge Pickering held in Ngan Che Sum v. Mok Leung Choy [1962] DCLR 149 that he was bound to follow a previous District Court decision (KDC Action 829 of 1961, unreported) where the court there made a specific finding on the effect of a "receipt" for construction money and the "receipt" formed the subject matter of the 1962 action. Judge Pickering took the view that it was not open for him to rule that the previous finding was wrong and that should be the function of the Full Court. It appears that this decision was confined to its own facts and did not establish any general principle.

13. In the case of Liu Chi Cheung v. Tsang Wai Choi [1958] DCLR 165, Judge Huggins (as he then was) after referring to English authorities concluded that the District Court was not bound by its own decisions in cases tried at first instance but he expressly reserved the question whether the District Court was bound by decisions in its appellate jurisdiction. Judge Huggins remarked:

"It seems to me, therefore, that the so-called principle of judicial comity has been whittled down until it has, for all practical purposes, ceased to exist. A judge of first instance is not absolutely bound by a previous decision of the same court or of a court of co-ordinate jurisdiction and he must bring his own judgment to bear on the point in issue."

I am not aware of any recent reported Judgment of the District Court which decides on the issue. I agree with the views of Judge Huggins and conclude that the Judgment of his Honour Judge Li in the Honour Building case is not absolutely binding on me which I must follow and at most, the case is of persuasive authority.

Lands Tribunal Ordinance

14. Judge Li referred in his Judgment Section 12(2) of the Lands Tribunal Ordinance. For sake of completeness, I set out in full the provisions of Section 12:

"12. Costs

(1) Subject to the provisions of the Ordinance giving the Tribunal jurisdiction in any matter, the Tribunal may award costs to and against any party to any proceedings and may order that those costs be taxed on the basis of any one of the Scales of Costs set out in the First Schedule to the District Court Civil Procedure (Costs) Rules (Cap. 336 sub. leg.) and the Schedules to Order 62 of the Rules of the High Court (Cap. 4 sub. leg.).

(2) Subject to any rules made by the Chief Justice under section 10(3), Order 62 of the Rules of the High Court (Cap. 4 sub. leg.) shall apply to the award, taxation and recovery of costs in the Tribunal."

Under Section 12(1), the Tribunal has the power to award costs and may order costs to be taxed according to the Scale of Costs under Order 62 of the RHC or under the First Schedule to the District Court Civil Procedure (Costs) Rules. However, upon implementation of the RDC in September last year, the District Court Civil Procedure (Costs) Rules has been repealed so that for the time being, the costs of the Lands Tribunal cases will be taxed under the Scales of Costs of the Schedule to Order 62 of the RHC. The Landlord and Tenant (Consolidation) (Amendment) Bill 2001 proposes to restore to the previous position to allow the Presiding Officer to order costs to be taxed according to Schedules to Order 62 of RHC or RDC.

15. Section 10(3) of the Lands Tribunal Ordinance empowers the Chief Justice after consultation with the President may make rules and in particular under subsection (e) for the award, taxation and recovery of costs. Therefore, before the Lands Tribunal has its own rules for the taxation of costs in the Tribunal, Section 12(2) provides that the Rules of High Court shall apply. So far, up to now, the Lands Tribunal do not have its own rules for taxation of costs.

16. Section 12 was replaced to the present form in 1982 when at that time there was no taxing master in the District Court nor the Lands Tribunal. Further, the Registrars of both the District Court and the Lands Tribunal were not Judicial Officers. Not until September 2000 when the RDC was implemented, taxation of bill of costs of the District Court case save provisional taxations were by then handled by the Taxing Masters of the High Court. This may explain why under Section 12(2) of the Lands Tribunal Ordinance, Order 62 of the Rules of High Court shall apply to taxation of costs.

17. Judge Li in his Judgment then referred to various provisions of the RHC and then concluded that because Order 62 of the RHC applies to taxation of costs in the Lands Tribunal and Order 62 Rule 1 of RHC defines taxing master as judicial officers of High Court Registrar grade, bill of costs of Lands Tribunal cases should be filed in the High Court Registry and the taxation should be handled in the Court of First Instance by a High Court taxing master.

18. I take a different view from Judge Li on the interpretation of Section 12(2) of the Lands Tribunal Ordinance. Section 12(2) does not specify the venue for taxation of the bill of costs of the Lands Tribunal cases. Instead, it just provides that for the purpose of taxation, RHC shall apply. So it only specifies the procedure rather than the venue for the taxation. Further, it does not confer exclusive jurisdiction to the High Court Taxing Master to handle the taxation of Lands Tribunal costs.

19. Without the benefit of legal submission by parties in the Honour Building case, Judge Li has overlooked the effect of Section 7A of the Ordinance and the definition of "registrar" under Section 2. Since the implementation of the District Court (Amendment) Ordinance 2000, the Registrar and the Deputy Registrars of the District Court are Judicial Officers. Section 2 of the Lands Tribunal Ordinance was also amended so that the registrar of the Lands Tribunal means the Registrar of the District Court so that the Registrar of the District Court will also look after the Registry and other business of the Lands Tribunal. Section 7A (2) of the Ordinance provides :

"In addition to the powers and duties conferred or imposed by or under this Ordinance or any other enactment, the registrar, any deputy registrar, assistant registrar, bailiff, clerk, interpreter and other officer attached to the Tribunal my exercise such powers and perform such duties, insofar as the same are applicable to the business of the Tribunal, as those respectively exercised or performed by the registrar, deputy registrar, assistant registrar, bailiff, clerk, interpreter or other officer attached to the High Court."

Therefore, the registrar of the Lands Tribunal when exercising his powers and duties conferred upon him under the Ordinance has the same powers of the registrar of the High Court. Since the Registrar of the High Court can perform the function of a taxing master for taxation of bill of costs under Order 62 of the RHC, it is my view that by virtue of Section 7A(2) of the Lands Tribunal Ordinance, the registrar of the Lands Tribunal can tax the bill of costs of the Lands Tribunal cases.

Order

20. For the reasons as stated above, I conclude and find that the Registrar of the Lands Tribunal has the powers to tax bill of costs of the Lands Tribunal cases in accordance with the provisions of Order 62 of the Rules of the High Court. Accordingly, I make the following directions and order for the present action:-

(1) the formal taxation of the Applicant's bill of costs under the Appointment To Tax filed herein on 6 March 2001 be adjourned to a date to be fixed for arguments to be heard before the Registrar of the Lands Tribunal, 3 hours be reserved;

(2) there be no order as to costs of and incidental to the hearing on 20 July 2001 and arising out of this Judgment.

21. Finally, I have the parties' consent to circulate this Judgment.