PACIFIC CROWN ENTERPRISES LTD v. TOPBASE INTERNATIONAL LTD

LDCS 32000/2011

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO 32000 OF 2011

_____________

_____________

_____________

DECISION

_____________

1. This is Topbase’s application for leave to appeal against my decision dated 20 November 2012 dismissing its earlier application to join in these proceedings as a respondent.

2. The leave application is opposed by Pacific Crown.

3. It is common ground that sections 11 and 11AA of the Lands Tribunal Ordinance apply.  Appeal is only available if the subject decision is erroneous in point of law, and leave should only be granted if the appeal has a reasonable prospect of success or if there is some other reason in the interests of justice why the appeal should be heard.  As to what amounts to “reasonable prospect of success”, I am guided by the Court of Appeal’s decision in SMSE v KL[2009] 4 HKLRD 125.

4. Topbase has formulated four grounds of appeal. Its counsel, Mr Chain, has articulated and elaborated on these grounds in his written and oral submission.  I have also heard Mr Lee, for Pacific Crown, in reply.  In the end, I have decided to refuse leave.

5. Topbase is complaining that it is unsure about many things in my earlier decisions.  In my view, all these alleged uncertainties have already been dealt with expressly, if Topbase would care to read my decisions more carefully.

(1)   Topbase says it is not sure whether by refusing to review myself I was declining to review wholly or in part and whether I was saying that the appeal had no prospect of success (see Topbase’s skeleton, paragraphs 4 and 6).

On 30 November 2012, I decided on paper not to review myself in accordance with the procedure set out in the President’s Direction after reading Topbase’s affirmation in support and Pacific Crown’s letter in reply.  I have rejected the whole application for review and I do not see how Topbase can think that I might only have refused to review in part. 

That review application was not an application for leave to appeal, and the test set out in section 11AA was not engaged.  I do not see how a refusal to review can be interpreted as a refusal to grant leave to appeal when there is no application for leave to begin with.

There is simply no basis for Topbase to think, insofar as it does, that I am not entertaining its present application for leave to appeal with an open mind (see Topbase’s skeleton, paragraph 5).

(2)   Topbase says it is unclear if I recognised the possibility that Pacific Crown may be using the Land (Compulsory Sale for Redevelopment) Ordinance (“the Ordinance”) as a device to get rid of its tenant (ie Topbase) or whether that possibility is irrelevant “or what”, and why I had accused Topbase of fishing (see Topbase’s skeleton, paragraphs 18 and 19).

I have dealt with these issues fully in paragraphs 24 to 27 of my decision and I stand by my decision. 

6. Of the more substantive points taken:

(1)  Topbase says I failed to fully recognise Topbase’s legal or property rights (see Topbase’s skeleton paragraph 11).  That is not correct, see the discussion in paragraphs 4, 15, 22 and 23 of my decision.

(2)  As to Topbase’s reliance on Re First Express Limited, see the discussion in paragraphs 19 to 21 of my decision.

(3)  Topbase says that I failed to recognise that the application then before me was one of joinder and merit should only be relevant to the extent of satisfying the minimum threshold.  It criticises me for trying to quantify the extent of Topbase’s right to be affected. 

I think this is a misreading of my decision.  I did ask whether it was necessary for Topbase to join in (in paragraph 23 of my decision) after ruling that Topbase was not a natural party to the proceedings (compare Order 15 rule 6(2)(b)).  I then discussed (in paragraphs 24-30) the grounds put forward by Topbase in support of its joinder application.  I discussed the extent of the inconvenience that Topbase would be expected to suffer because that was put in issue by Topbase’s director.  I was not trying to quantify the compensation payable to Topbase upon termination of its tenancies, which is a matter for the Connected Application (see paragraph 22 of my decision), and I was not trying to draw a line to determine which side Topbase fell (see Topbase’s skeleton, paragraph 14).

(4)  Mr Chain argues that the real question is one of costs. As I understand him, he is saying that if Topbase is allowed to join in and despite its opposition Pacific Crown still obtains an order for sale, then there may be something on costs for the court to consider (Topbase’s skeleton, paragraph 16).

With respect, I do not see how this can be relevant.  If Topbase were a party, of course the court would include Topbase in its overall consideration when dealing with costs at the end of the trial.  That does not provide an answer to the question why Topbase should be a party in the first place.

(5)  Perhaps Mr Chain’s strongest point is that the joinder application is a novelty that warrants the Court of Appeal’s consideration on appeal. 

I have accepted that the joinder application is a novelty (see paragraph 32 of my decision) but it does not follow that we should trouble the Court of Appeal every time a party loses a novel point in the court below.  It all depends on merit.  I have dealt with all the points taken by Topbase in its bid to join in.  Topbase is merely re-running its arguments here without, in my view, pointing out how I got it wrong.

7. Mr Chain takes a new point today, which was not expressly raised before me (see paragraphs 27 and 21 of my decision).  He said that Topbase should be allowed to join in to enable it to seek direction under section 4(6)(a)(ii) in relation to termination of its tenancies.  He suggests that Topbase may want to ask for direction to allow its tenancies to run their full course notwithstanding section 8(1)(b).  He goes so far as to suggest that that would earn Topbase the right even to oppose an order for sale in the Main Application.  With respect, I do not agree.

8. The jurisdiction to give direction under section 4(6)(a)(ii) is premised upon the making of an order for sale.  Unless and until an order is made, the court’s jurisdiction under that section is not engaged. The suggestion that the court should deal with Topbase’s request for such a direction at the trial of the Main Application before the court determines whether there should be an order for sale is not provided for in the Ordinance.

9. In my view, one would need to read the Ordinance as a whole in order to appreciate the statutory framework fully.  Consequent upon the making of an order for sale, the court will appoint sale trustees (section 4(1)(c)), and the provisions in section 7(1) and section 5 will kick in to pave the way for a public auction (unless the majority owner and the minority owners agree to dispose of the lot the subject of the order for sale by some other means).  The auction is directed by section 5(4) to be held within three months from the making of the order, although the court has the jurisdiction to extend that time.  Against this working timetable, section 8(1)(b) provides for statutory determination of all tenancies on the lot and when the tenants should deliver up vacant possession of their leased properties.  That is the overall framework binding everyone, including the tenants. 

10. Insofar as there is a need to revisit that framework, such as on the timing of termination of any tenancy on the lot or when a tenant should actually leave, the jurisdiction under section 4(6) may be invoked.   Presumably, a tenant who wishes to apply under section 4(6)(a)(ii) may do so but, even so, the court may not grant any direction which is inconsistent with any other provisions of the Ordinance – such as 8(1)(b) (section 4(6)(c)).  So, there may not be jurisdiction to grant the direction contemplated by Mr Chain to start with.

11. I must emphasise that the above discussion is made in the context of an application for leave to appeal.  Topbase has not yet invoked section 4(6)(a)(ii) and much would depend on the terms of the direction sought.

12. Despite the eloquence of Mr Chain, there are, in my view, no merit in the joinder application whether on the “reasonable prospect of success” limb or the “some other reason” limb.

13. Of course, I cannot rule out the possibility that the Court of Appeal may wish to seize the opportunity to provide some guidance to lower courts, but that is a matter for the Court of Appeal and for which Topbase would have to trouble the Court of Appeal for leave.

14. Topbase’s application for leave to appeal is therefore dismissed with costs.

(Discussion re the other application by Topbase)

15. As Mr Chain confirms, that other application dated 5 December 2012 stands or falls with the leave application.  That application is also dismissed with costs. 

(Further discussion re costs)

16. I direct Pacific Crown and Topbase to try to agree on the costs of these two applications.  In case an assessment is necessary, it will be done by me on paper.  For that purpose, Pacific Crown is directed to lodge and serve a statement of costs within 28 days from today and Topbase may lodge and serve a concise statement of objections within 14 days thereafter.

17. Both sets of costs awarded to Pacific Crown are with certificate for counsel.