PENNY’S BAY INVESTMENT CO LTD v. DIRECTOR OF LANDS

LDMR23/1999

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS REFERENCE APPLICATION NO 23 OF 1999

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LDMR 1/2005

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS REFERENCE APPLICATION NO 1 OF 2005

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REASONS FOR DECISION
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Background

1.  On 15 October 2014, this Tribunal had handed down our judgment on the determination of the compensation to be paid to the applicant under the Foreshore and Seabed (Reclamations) Ordinance Cap 127 (“the Order”).  In our judgment, we have also made an order for all consequential and ancillary matters, including professional fees, interest and costs, be adjourned to a date to be fixed by the listing officer at the request of the parties.

2.  Upon the respective application by the parties, leave to appeal against the Order was granted by this Tribunal on 16 January 2015 and also by the Court of Appeal (“CA”) on 15 May 2015.  The appeal is set down to be heard on 19 April 2016 with 4 days reserved. 

3.  On 12 August 2015, parties had approached the Listing Officer of the Lands Tribunal for a date to be fixed for the parties to argue on the question of professional fees, interest and costs.  The case is then set down to be heard on 17 March 2016 (“the Hearing”).

4.  Parties had filed and exchanged written submissions for the purpose of the Hearing.  Mr Barnes QC for the respondent had raised in his submissions that it would be appropriate for the Tribunal to defer any decision on rates of interest and on costs until the decision of the CA has been given on the forthcoming appeals.

5.  We invite parties to address us on the issue as to whether we should proceed to hear the argument on the question of interest and costs at the start of the Hearing.  Upon hearing from the parties, this Tribunal decided that it would be inappropriate to deal with the question of interest and costs given the impending CA hearing and made an order that the question of interest and costs be adjourned sine die with liberty to restore after the CA’s decision of the appeal is known.  We have indicated reasons for our decision will be handed down in due course.  This we now do. 

Applicant’s Contention

6.  Mr Chang SC for the applicant submitted that the decision on interest and costs should be one based on the findings made by this Tribunal.  One cannot assume that there will not be further appeal after the CA decision and one would wonder till when the question of interest and costs should be dealt with.  By not dealing with the argument at this Hearing, it is wrong in principle and in effect, a de facto stay of execution of the order.  Furthermore, the CA may touch upon the question of costs in dealing with the appeal and with a decision from this Tribunal on costs, the CA will know what order it can make.  If the question of interest and costs are only to be dealt with after any likely appeal to the Court of Final Appeal (“CFA”), there will be another round of appeal on the question of costs and interest.  In any event, no authority had been cited by the respondent in support of its contention.

Respondent’s Contention

7.  Mr Barnes QC submitted that this court has a discretion as to when to hear the question of interest and costs.  The appeal before the CA involved 3 main issues, ie whether there should be any compensation, if yes how much should it be and the legal argument on the interpretation of the documents involved in this case.  The possible result of the appeal can be the CA is with either party and overturned the Tribunal’s decision or with the Tribunal and uphold the decision.  The question of interest and costs is dependent on the result of the appeal in the sense that if the CA found no compensation is payable, no interest is payable and the respondent should have costs of the proceedings and if the amount of compensation is found by the CA to be more than the Order, the rate of interest and costs will be affected.  Given the fact that the appeal hearing is just 4 weeks from now, it is inappropriate and not in the interest of the parties or public interest for the question of costs and interest to be dealt with at this Hearing.  Another month’s delay of the matter is acceptable and the applicant’s right to interest will not be lessened if the Hearing is adjourned.  And it would be a procedural tragedy, if the decision of the Tribunal is overturned on appeal, for the whole matter on question of interest and costs to be dealt with again.

Discussion

8.  We agree with the respondent’s submissions.

9.  As can be seen from the written submissions filed by the parties for the Hearing, the question on interest and costs did turn on the reasonableness of the parties’ stance taken at trial and the correctness of the Tribunal’s findings on the expert evidence.  These are also the subject matter of the appeal hearing.  If the question of interest and costs are to be dealt with at the Hearing based on the findings of this Tribunal which turns out to be overturned by the CA on appeal, whatever ruling made at this Hearing will likely be subject to appeal and be overturned as well since the decision is made on a wrong premise.  All the time and effort spent on the question of interest and costs at this Hearing will turn out to be a waste.

10.  As for the argument of a de facto stay of execution raised by the applicant, we do not accept that by not dealing with the question of interest and costs at this Hearing, the applicant had been deprived of the fruits of his litigation or locking up funds to which prima facie he is entitled since the liability on interest and costs had not been finalised.  Given our findings above and the impending hearing of the appeal in 4 weeks’ time, even if it may amount to a de facto stay of further proceedings in respect of interest and costs, this is more than justified.  In any event, we cannot see how the applicant will be prejudiced or will suffer any loss if there is such a stay of execution.

11.  Mr Chang had also suggested that the CA may deal with the matter of costs as well at the appeal and will know what order it can make if this Tribunal deals with costs at this Hearing. Since the grounds of appeal to be dealt with by the CA did not touch upon the question of costs, we fail to see why the CA will deal with the question of costs of this case whilst the costs of the appeal had nothing to do with the question of costs before us.  We found no urgency for this Tribunal to deal with the question of interest or costs before the appeal hearing.

12.  As for the concern of having another round of appeal against the question of interest and costs, this is inevitable if the parties so wish.  We fail to see how can this be avoided if the question of interest and costs is to be dealt with at this Hearing given the fact that such a question is not within the ambit of the appeal to be heard next month.  And as stated above, if the question of interest and costs is to be dealt with at this Hearing but the findings of this Tribunal is overturned on appeal, an appeal against our decision on question of interest and costs is also inevitable.

13.  We must emphasise that the decision to adjourn the question of interest and costs till after the CA has delivered its decision on the appeal is based on the special circumstances that the appeal is to be heard in 4 weeks’ time.  This does not mean that should there be further appeal after the CA to the CFA, it will necessarily mean that the question of interest and costs must be adjourned till final decision.  The situation must be considered again in the context of the progress of the case then.