XCHRX MASS TRANSIT RAILWAY CORPORATION v. LAM KAI FAI AND OTHERS

1994, No. A1796

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. The Plaintiff in this action applied under O.14, r.1 for summary judgment against the 1st, 2nd and 3rd Defendants for an injunction restraining them from causing or permitting a fast food shop to be operated at Shop 272, 7/F Worldwide House ("the said shop") and damages with interest and costs. Writ herein was issued on 24 February 1994.

2. The 1st, 2nd, 3rd and 4th Defendants are the registered owners of the said shop. By a tenancy agreement dated 18 June 1993, the said shop was let to a third party for a fixed term of two years. The said tenancy agreement expressly provided that the third party should not contravene any of the covenants and conditions contained in the Deed of Mutual Convenants or any other deed affecting the said shop.

3. The Plaintiff alleged that the 4th Defendant operated a fast food shop at the said shop in breach of the Sub-Deed of Mutual Convenants ("Sub-DMC") and a declaration to that effect was obtained by the Plaintiff in default of the 4th Defendant's defence. The 1st, 2nd and 3rd Defendants did not know the identity of the 4th Defendant nor the fact that the said shop was at the material time occupied by the 4th Defendant.

4. It is not disputed that since November 1994 the said shop has been turned into a video rental shop and any breach of the said Sub-DMC had since ceased. The basis of the Plaintiff's claim against the 1st, 2nd and 3rd Defendants is that they failed to take any action against the 4th Defendant and therefore in breach of the Sub-DMC.

5. At the hearing of the O.14 summons of the Plaintiff, the Defendant took a preliminary point that this court has no jurisdiction to hear the case as it is the intention of the legislature to vest in the Lands Tribunal an exclusive jurisdiction to hear cases specified in the 10th Schedule of the Building Management Ordinance ("BMO").

Jurisdiction

6. Section 45(1) of the BMO provided that the Tribunal shall have jurisdiction to hear and determine any proceedings specified in the 10th Schedule. Section 45(2) of the BMO provided that no person other than a person to whom this section applies shall be competent to commence any proceedings referred to in sub-section (1). Section 2 of the BMO provided that "tribunal" means the Lands Tribunal established under s.3 of the Lands Tribunal Ordinance, Cap.17. It is undisputed between the parties that the 10th Schedule of the BMO is wide enough to cover the proceedings herein (see Clauses 2, 7, 8 and 9 of 10th Schedule). Section 45 of the BMO came into force on 6 May 1993. The BMO was amended by s.37 of Ordinance 27 of 1993 which came into effect on 1 June 1994 which vests exclusive jurisdiction on the Lands Tribunal on proceedings referred to in the 10th Schedule of the Ordinance.

7. In Winbase Industrial Ltd. v. Mightyton Property Management Ltd., HCA No.A10232 of 1994 (unreported) 25 October 1994, Mayo, J. (as he then was) held that it was the intention of the legislature to vest in the Lands Tribunal an exclusive jurisdiction to hear the cases specified in the 10th Schedule of the BMO. In his judgment, Mayo, J. said at p.6 :

" It would appear to be common ground that the present litigation does indeed come within the proceedings specified in the 10th Schedule.

Mr Chan however argued that the range of proceedings referred to in the 10th Schedule was so wide that it must be the case that the jurisdiction of the Lands Tribunal would be a concurrent jurisdiction together with the jurisdiction of the High Court. I do not think that this is right. I agree with Mr Tang that if the 10th Schedule is considered in the context of Part VIII generally it is quite clear that proceedings referred to in the 10th Schedule are limited to matters coming within the ambit of the Building Management Ordinance Cap.344. This is the only sensible way of interpreting the legislation.

The fact that the Ordinance, unlike the Labour Tribunal Ordinance Cap.25, does not contain an expresses exclusive jurisdiction provision is not significant. In this connection I would adopt the reasoning of Trainer J. in Kong Hoa (Hong Kong) Ltd. v. Lau Hung Kwan [1976] HKLR 62. I have no doubt that it was the intention of the legislature to vest in the Lands Tribunal an exclusive jurisdiction to hear the cases specified in the 10th Schedule. This being the case the High Court does not have jurisdiction to hear the action which has been commenced by the Plaintiffs."

8. Section 11(2) of the Lands Tribunal Ordinance provided that subject to the provisions of any ordinance relating to appeals from the Tribunal, any party to proceedings before the Tribunal may appeal to the Court of Appeal against the determination or order of the Tribunal on the ground that such determination or order is erroneous in point of law. Section 14 of the Supreme Court Ordinance provided that subject to sub-section (3), an appeal shall lie as of right to the Court of Appeal from every judgment or order of the High Court in any civil cause or matter. If the High Court has jurisdiction to hear and determinate the proceedings specified in the 10th Schedule in the ordinary way, the right of appeal to the Court of Appeal must lie not limited to erroneous point of law only. This will result in the existence of one court with right of appeal restricted to erroneous point of law and another with a general right of appeal. This is the reasoning of both Trainor, J. and Mayo, J. in the aforesaid cases cited.

9. Section 45(3) of the BMO divests the Lands Tribunal of jurisdiction to make any order to vary or avoid any contractual or proprietary rights enjoyed by any owner or occupier referred to in a registered instrument including a deed of mutual convenant. This section is nothing more than making it clear that the 10th Schedule is only concerned with the interpretation and enforcement of a registered instrument. It has nothing to do with the issue of variation (proceedings for rectification of a registered instrument) and validity of a registered instrument which remained within the jurisdiction of the High Court. Accordingly s.45 and the 10th Schedule vest exclusive jurisdiction in the Lands Tribunal in respect of, inter alia, the interpretation and enforcement of a registered instrument and exclusive jurisdiction in the High Court in respect of rectification and validity of a registered instrument. Consequently, it leaves the issues of interpretation and enforcement of a registered instrument to the Lands Tribunal which is less expensive and formal and to which the general public has more ready access.

Retrospective Effect

10. In Statutory Interpretation 2nd edn. F.A.R. Bennion at pp.217-218 and 558, it has been said by the learned author that :

"Rules of legal procedure are taken to be intended to facilitate the just and proper settlement of civil or, as the case may be, criminal, disputes. Changes in such rules are assumed to be for the better. They are also assumed to be neutral as between the parties, merely holding the ring. Accordingly the presumption against retrospective penalisation does not apply to them, since they are supposed not to possess any penal character. Indeed if they have any substantial penal effect they cannot be merely procedural."

11. Accordingly, even when this action was brought before the appointed date for the amendment to BMO, the change is only in relation to procedural matters, namely, the venue in which the proceedings specified in the 10th Schedule can be commenced. The presumption against retrospective operation does not apply here and that s.45 of the BMO does apply to pending proceedings.

Conclusion

12. In conclusion, I consider that the High Court has no jurisdiction to entertain the present application as the Lands Tribunal has the exclusive jurisdiction in the case before me. The Defendants promptly apply under O.14A to have the case dismissed and accordingly this action is dismissed with costs to the 1st, 2nd and 3rd Defendants.