PACIFIC KNIGHT LTD v. GOLDEN CROWN RESTAURANT LTD AND ANOTHER

LDNT208/2002

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Application No.: LDNT No. 208 of 2002

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DECISION ON COSTS

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Background

1. Following the delivery of Judgment on 18 September 2003 on the review application taken out by the Applicant ("Review Judgment"), the Respondents made an application to the Tribunal for a costs order on the review application. This application was fixed for hearing on 21 October 2003. After hearing the parties' submission, the matter was adjourned to 12 November 2003 for the handing down of decision. This written decision sets out the reasons for my decision and the costs order so awarded.

The Respondents' submission

2. The Respondents submitted that, as the review application was a proceeding under section 11A of the Lands Tribunal Ordinance (Cap. 17), the provisions of that Ordinance but not those under Part IV of the Landlord And Tenant (Consolidation) Ordinance (Cap. 7) should apply. Therefore, the Respondent submitted that the Tribunal's power to award costs in the review hearing should "not subject to or in any way fettered by section 119R of Cap. 7".

3. As such, Order 62 of the Rules of the High Court (Cap. 4 sub. leg.) should apply to the award, taxation and recovery of costs in the Tribunal. Under the said Order 62, the underlying principle would be that "costs normally follow the event". That is, the party who wins in the proceeding will in general be entitled his costs.

4. The Respondents further submitted that whilst the Tribunal had a discretionary power on awarding costs, the discretion however had to be exercised judiciously.

5. The Respondents said that since the Applicant's grounds for review were not new but were merely repeating what it had said in the hearing for the original application, there was no reason why costs should not follow the event in respect of the review application. Since the Applicant did not succeed in changing any of the orders for the original new tenancy application, the Applicant totally lost the review application and consequently, costs should be awarded to the Respondents, at District Court Scale, on party and party basis.

6. In addition, the Respondents submitted that in the absence of special circumstances, the Respondents, being a successful litigant, should be awarded their costs (Hong Kong Civil Procedure 2002 at para. 62/3/3). There was also "no positive reason" why the Respondents should be deprived of costs when there was no fault on the part of the Respondents, in simply affirming the original decision made by the Tribunal in the review hearing.

The Applicant's Submission

7. The Applicant had two main points in the submission. Firstly, the Applicant said that the Tribunal as a court was functus officio and could make no variation to the order already given in the written Review Judgment dated 18 September 2003 on the review application. The Applicant said that the said Review Judgment included at the end an order that the previous orders "shall remain unchanged"; and the previous orders already contained an order (Order No. 5), "No order as to costs". Therefore, it was clear that the Tribunal had already decided and given in the Review Judgment a costs order that there should be "No order as to costs" for the review application. Hence, the Applicant said that as far as the Tribunal was concerned, the order made on 18 September 2003 on the matter of costs must be the final costs order. The Tribunal would have no jurisdiction to vary or annul the order already made on 18 September 2003. That is, the Tribunal was functus officio as far as the issue of costs of the review application was concerned. In support of her submission, the Counsel for the Applicant cited the case of Ampittia Inc. v B-Tech (Holdings) Ltd. & Ors. [2001] 2 HKC at 574 in which Deputy Judge Susan Kwan, as she then was, held,

"... Once an order had been perfected, the court was functus officio and could make no variation itself. Any variation which might be made must be made by a court of appellate jurisdiction."

8. The Applicant added that even under Order 62 of the High Court Order, the Tribunal would have no jurisdiction to make an order to award costs following the making of the costs order on 18 September 2003.

9. The Applicant also had a fallback argument. The Applicant submitted that in the Review Judgment of 18 September 2003, the Tribunal admitted that in the original Judgment of 24 June 2003, the Tribunal had omitted the words "the effects of" in the 4th line of paragraph 22. And the Tribunal further stated that the said omission "might be the reason behind Mr. Lane's filing the Affidavit stating that I erred in finding that neither the occupants of the Applicant (i.e. Mr. Lane and his family) nor those of either Comparable 5 or 6 (Mrs. Bye and family) knew of the existence of the said construction site" prior to December 2002. Therefore, the Applicant submitted that since the Applicant did not know of the omission of the words "the effects of" in the above said Review Judgment, the Applicant was not at fault in making the Affidavit and in filing the application for review. And since the Applicant was not at fault, the Applicant should not be ordered to bear the costs of the review.

The Respondents' response

10. In replying to the Applicant's argument that the Tribunal had clarified upon review that there was an omission of a few words in the original judgment, which was a cause of the review application by the Applicant, the Respondent said that the Applicant could seek a clarification from the Tribunal instead of filing a review application.

11. The Respondents also in response to the Applicant's submission pointed out that in the present case, there was no perfected order. Also, there was no argument on costs at the end of the review hearing on 8 August 2003. Therefore, the Respondents submitted that the hearing on costs on 21 October 2003 was merely a continuation of the hearing of the review application, although it was only on the matter of costs and the date of hearing was fixed upon application by the Applicant made on 2 October 2003. The Respondent reminded the Tribunal that the Review Judgment in writing was handed down on 18 September 2003 without giving the parties an opportunity to argue on costs of the review application.

Tribunal's jurisdiction to award costs

12. The Tribunal has the jurisdiction to award costs to and against any party to any proceedings conducted in the Tribunal. Section 12 of the Lands Tribunal Ordinance (Cap. 17) sets out the relevant provisions:

"12 Costs

(1)	Subject to the provisions of the Ordinance giving the Tribunal the jurisdiction in any matter, the Tribunal may award costs to and against any party to the 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."

Is the Tribunal functus officio as far as the matter of costs of the review application is concerned?

13. Both parties had no dispute that if the Tribunal had given an order on the matter of costs of the review application, the order must be final as far as the Tribunal was concerned. If any party was not satisfied with the order so granted, the remedy lied with an appeal to the Court of Appeal. In the present case, therefore, the question as to whether the Tribunal was functus officio was, whether the Tribunal had given any order on the matter of costs of the review application.

14. I find that at the end of my Review Judgment delivered to the parties on 18 September 2003, I had not dealt with the matter of costs even though upon checking my notes, the parties had in closing of their submission on 9 May 2003 invited the Tribunal to give a costs order nisi. Although my order of 18 September 2003 stated that the earlier orders of 24 June 2003 shall remain unchanged, and the said earlier order contained a costs order (i.e. No order as to costs), this said costs order does not have any meaning other than that with regard to the proceedings in connection with the original new tenancy application, there shall be no order as to costs. That is, this said costs order could not mean to cover the proceedings relating to the review application.

15. Hence, I agree with the Respondents that the hearing on 21 October 2003 was a continuation of the review hearing, or more particularly, the hearing on the matter of costs relating to the review hearing. Therefore, the issue of functus officio does not exist in the present case.

16. There was no dispute among the parties on the principles applicable to the award of costs in relation to the review hearing. As to the matter of costs of the review application, I agree with the fallback argument of the Applicant. There was no fault on the part of the Applicant when they lodged the review application after finding that there were obvious differences between the findings of the Tribunal in the original Judgment and in their record of the evidence of their witnesses. Since this discrepancy was not in the form of obvious typo or arithmetic errors, I do not know how the Applicant could seek the Tribunal to clarify the matter other than to apply by way of a review application. In addition, this matter could have an important bearing on the choice of relevant comparables and the valuation of the prevailing market rent of the suit premises at the relevant date. Therefore, I agree with the Applicant that under the special circumstances of the case, it was not the fault of the Applicant in applying for a review. Although at the end, the Applicant lost the review, I agree that the exception rather than the usual rule should apply here. For this reason, I agree that for the review application, there shall be no order as to costs.

Order

No order as to costs for the review application including the hearing on 21 October 2003