Asiabest Services Ltd. v. Harbour City Management Ltd.

LDBM 32/2000

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Lands Tribunal Application No. LDBM 32 of 2000

_______________

_____________

DECISION

_____________

1. On 25.8.2000, the Respondent took out a summons ("the summons") returnable on 10.10.2000 for an order that the application in this case be struck out, or alternatively an order that the Applicant do give security for the Respondent's costs in this application. On 1.12.2000, I dismissed the summons, and imposed an order nisi for costs, to be made absolute in 14 days' time, in favour of the Applicant.

2. On 11.12.2000, the Respondent took out an application for the following order: -

"1. the costs of the Summons filed on 25th August 2000 be apportioned as follows:-

(a) there be no order as to costs in respect of the part of the application for security for costs; and

(b) the part of the application for striking-out be apportioned that :-

(i) half of the costs be to the Applicant; or

(ii) costs save and except the part on legal research and preparation of Skeleton Submission and list of Authorities of the Applicant be to the Applicant.

2. costs of this application be to the Respondent in any event."

(a) Costs in respect of the application for security for costs

3. One of the grounds relied upon by the Respondent in applying for security for costs is that the Applicant had not paid its legal costs in LDBM56/1997 in which both parties were parties to that case.

4. On 12.9.2000, the Applicant wrote to the Registrar, High Court Registry, about taxation bills relating to LDBM 56/1997, the contents of which are shown below: -

"Re: LDBM 56/1997 Bill 1 and LDBM 56/1997 Bill 2

We disagree with the figures (i.e. HK$392,607.00 and HK$35,607.00) stated in your faxes dated 11th September 2000 to us.

The Respondents' costs draftsman had in fact worked out another set of different figures i.e. HK$369,628.00 and HK$35,116.00 (see enclosed copy draft allocatur sent to us by them as per their letter dated 21st August 2000).

Our own calculation arrived at the figures of HK$352,718.00 and HK$34,702.00.

Please check again your calculation."

5. A copy of this letter was faxed to the Respondent's Solicitors, W.K. To & Co., Solicitors.

6. On 22.9.2000, the Respondent's Solicitors, W.K. To & Co., wrote to the Registrar, High Court Registry, confirming that they accepted that the figures for Bill No. 1 and Bill No. 2 in respect of LDBM56 of 1997 were HK$352,718.00 and HK$34,702.00 respectively as stated in the letter from the Applicant. They also enclosed the draft Allocaturs for the purpose of sealing.

7. It is clear from the above letters that before 22.9.2000 the bills for the case LDBM 56/1997 had not yet been finalised. Before such costs were finally settled, there is no way the Applicant could have known what amount it was liable to pay. But the Respondent took out the summons on 25.8.2000 asking for security for costs. This application is a premature application.

8. The Applicant's Solicitor, Mr. Chan, paid to the Respondent on 10.10.2000 the taxed costs of $387,420.00, and upon receiving that amount, the Respondent's Solicitor, Mr. To, informed the Tribunal that it would not pursue the application any further. But that cannot be a ground for not ordering costs against the Respondent for such an application.

9. In support of the application for security for costs, the Respondent filed in an affirmation of Wong Chun Wah dated 27.9.2000, who had been authorized by the Respondent to make the affirmation on its behalf. In Paragraphs 9 and 11 respectively of his affirmation, Mr. Wong said :-

"9. I am informed by the Respondent and verily believe that the Applicant has no other valuable assets available for the satisfaction of the said costs in LDBM No. 56 of 1997 and the costs of this Application if ordered to do so."

" 11. I am advised by the Respondent's legal advisors and verily believe that by reason of the aforesaid there is sufficient reason to believe that the Applicant will be unable to pay the costs of the Respondent if ordered to do so. Alternatively, I respectfully ask this Honourable Tribunal to order the Applicant do give security for the Respondent's costs in this Application and that in the meantime all further proceedings be stayed until the payment is made by the Applicant ......."

10. Of course subsequent event proved that the Respondent was wrong in saying that the Applicant was unable to pay the costs under LDBM 56/1997, because it did pay such costs on 10.10.2000. But if the Respondent, through Mr. Wong, had genuinely believed that the Applicant had no means to pay the costs of the present proceedings, then despite the fact that the Applicant had paid off the costs for LDBM 56/1997, it should have continued to pursue the application for security for costs in respect of the present proceedings. Instead it dropped the application. The only reasonable inference in the circumstances is that it was satisfied on 10.10.2000 that the Applicant was able to satisfy the costs of these proceedings, if ordered to do so, because it was willing and able to satisfy the costs in respect of LDBM56/1997.

11. In any event before taking out the summons, it should have ascertained from the Applicant that it would really be unable to pay the costs to the Respondent in case of failure in this application. But it had never done so.

12. This Tribunal finds that it is only just and fair to order the Respondent to pay to the Applicant the costs in respect of the application for security for costs.

(b) Costs in respect of the striking-out application

13. The Respondent argued that in respect of the application for striking out, the Tribunal dismissed the Respondent's application because when the Applicant commenced its application, it was the registered owner of Room 509 of Tower 1, Silvercord within the meaning of section 2 of the Building Management Ordinance and therefore it had the locus standi to commence the application, despite its subsequent transfer of its interest in Room 509 to another person. But the Applicant argued that, despite the said transfer, according to the provisions of the Deed of Mutual Covenant, it was still an owner within the meaning of the Deed of Mutual Covenant. The Tribunal did not accept that argument. That part of the costs involved in that argument should be disallowed. But that part of the argument only took up a small portion of the hearing time. In any event the Applicant's solicitor, Mr. Chan, is under a duty to advance all the available arguments to protect his client's interest and to assist the Tribunal. Mr. Chan argued that despite the transfer of its interest in Room 509 in June, 2000, the Applicant was still an owner within the meaning of the Deed of Mutual Covenant, and by virtue of this legal status, it had the legal capacity to maintain the legal proceedings. Therefore the striking-out application could not succeed. Although this argument was not accepted by the Tribunal, it was not such an argument totally unconnected with the case. Before the Tribunal made its decision, how could the Applicant's solicitor know that this argument would not succeed and withheld that submission because it would be a time-wasting exercise? To deprive a successful application of the costs on this part of the argument, which only lasted for a short time, would be unreasonable.

14. In paragraphs 2 and 10 of his affirmation, Wong Chun Wai stated that the Applicant was no longer an owner of Silvercord. Those statements did not refer to Building Management Ordinance or any specific statute. It was a mere general allegation. To oppose the Respondent's application which was supported by the affirmation of Wong Chun Wai, the Applicant filed in an affirmation of Wong Mavis Moo Tzeng. In paragraphs 3, 8 and 11 of her affirmation, Wong Mavis refuted Mr. Wong's allegation. The Applicant is entitled to deny the general allegation. Other paragraphs of her affirmation contained materials relevant to the issues involved in the summons.

15. The written submissions prepared by the Applicant's Solicitors for use in the hearing of the summons provided arguments and made references to facts relevant to the legal and factual issues in the summons. I simply cannot find any reason to alter the costs order I imposed on 1st Dec., 2000. That order is in effect an order for costs to follow the event. I do not form the view that Mr. Chan was wasting the court's time, or that the materials or submissions are irrelevant to the issues. On that basis, it is simply unjust to make any apportionment for costs.

16. For the above reasons, the order nisi for costs is made absolute. I further order that in respect of the summons filed on 11.12.2000 and heard on 5th Jan., 2001, the Respondent is to bear the Applicant's costs occasioned by and incidental to the summons, to be taxed, if not agreed.