THE INCORPORATED OWNERS OF KAI TAK GARDEN (CHOI HUNG ROAD) v. WOO TAK YAN AND ANOTHER

[ENGLISH TRANSLATION – 英譯本]

CAMP 118/2018 &
CAMP 119/2018

[2019] HKCA 351

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 118 OF 2018

(ON AN INTENDED APPEAL FROM LDBM NO 330 OF 2014)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 119 OF 2018

(ON AN INTENDED APPEAL FROM LDBM NO 13 OF 2015)

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Judgment

Hon Chu JA (giving the judgment of the Court):

1.  In CAMP118/2018 and CAMP119/2019, the 1^st respondent applied to the Court of Appeal by summons for leave to appeal out of time against the costs order made by Judge Kot (“the trial judge”) on 26 June 2017 in two Lands Tribunal cases. The trial judge had refused the 1^st respondent’s application for leave to appeal out of time on 4 July 2018.

2.  The applicant opposed the application and filed an affirmation to such effect.

3.  The two applications for leave to appeal out of time concern the same costs order and they will be dealt with by this Court together.

4.  After considering the documents and submissions of the two applications, the Court found it appropriate to determine the 1^st respondent’s application without a hearing on the basis of written submissions only, pursuant to Order 59, rules 2A(5)(a) and 14A of the Rules of the High Court (Cap 4A).

5.  The applicant is the Incorporated Owners of Kai Tak Garden (Choi Hung Road). The 2 respondents are co-owners of one of the residential units of Kai Tak Garden.

6.  In the two Lands Tribunal cases, the applicant sued the 2 respondents for: (1) payment of arrears of management fees from January 2010 (case number LDBM330/2014, “Case 330/2014”); and (2) their contribution, which amounted to two months’ management fees, for the service charge payable to the contractor (case number LDBM13/2015, “Case 13/2015”). The two respondents made a counterclaim in Case 330/2014.  

7.  The two cases were heard together before the trial judge. In the judgment handed down on 26 June 2017, the trial judge ruled in favour of the applicant and dismissed the counterclaim of the two respondents. The trial judge ordered that: (1) in Case 330/2014, the two respondents do pay the applicant $62,652 plus interest; and (2) in Case 13/2015, the two respondents do pay the applicant $1,620 plus interest (“the original judgment”).

8.  The trial judge also made a costs order nisi that costs of the applicant in the two cases be borne by the two respondents with a certificate for counsel on the District Court scale and on an indemnity basis to be taxed if not agreed. The order nisi would become absolute after 14 days unless there was an application by summons from one of the parties (“the costs order”).

9.  The two respondents applied to the trial judge for a review. On 9 August 2017, the trial judge granted leave to vary the judgment sum in Case 330/2014 to $51,960, other rulings remained unchanged (“the reviewed judgment”).

10.  The respondent made an application for leave to appeal out of time and a stay of execution of the reviewed judgment on 22 August 2017. The trial judge refused the application on 10 November 2017 and ordered that the applicant’s costs be borne by the respondents.

11.  The 1^st respondent made an application for leave to appeal again to the Court of Appeal (case numbers CAMP 53/2017 & CAMP 54/2017). This Court handed down on 7 March 2018^[1] a judgment in which the 1^st respondent’s application was refused and he was ordered to pay the applicant’s costs. 

12.  On 29 March 2018, the 1^st respondent applied to the trial judge for leave to appeal against the costs order. After the trial judge refused the application, the 1^st respondent made the same application to the Court of Appeal.

13.  When determining an application for leave to appeal out of time, the Court will consider (1) the length of the delay; (2) reasons for the delay; (3) whether the intended appeal has reasonable prospects of success; and (4) prejudice to other parties if leave to appeal out of time is granted.

14.  Section 11(2) of the Lands Tribunal Ordinance (Cap 17) provides that any party to proceedings may appeal to the Court of Appeal against a judgment, order or decision of the Lands Tribunal on the ground that such judgment, order or decision is erroneous in point of law. Section 11AA(6)  of the Lands Tribunal Ordinance also provides that leave to appeal shall not be granted unless the Court of Appeal is satisfied that the appeal has a reasonable prospect of success; or there is some other reason in the interests of justice why the appeal should be heard.

15.  Undoubtedly, the application for leave made by the respondent has gone far beyond the prescribed time limit (see paragraph 17 below). The 1^st respondent made the following statement in his grounds for application for leave out of time submitted on 13 August 2018: 

(1)  The costs order is incidental to the main issue, therefore, to avoid going through the same exercise and wasting court resources, it should be dealt with only after the Court of Appeal has decided on the application for leave to appeal against the original judgment and the reviewed judgment.  Therefore, 21 days after the Court of Appeal had refused his application for leave to appeal out of time, the 1^st respondent made an application for leave to appeal against the costs order, which was in compliance with section 11A(5)(b) of the Lands Tribunal Ordinance. It was neither a deliberate delay nor an abuse of process.

(2)  According to Astro Nusantara International BV v PT Ayunda Prima Mitra [2018] HKCFA 12, (2018) 21 HKCFAR 118 and section 10(5)(b) of the Lands Tribunal Ordinance, the court should adopt principles of broad and unrestricted approach when dealing with applications for leave to appeal out of time and any mechanistic approach should be eschewed.

16.  This court does not accept the submission of the 1^st respondent. Rule 30B of the Lands Tribunal Rules stipulates that:

“(1) An application for leave to appeal against a judgment, order or decision of the Tribunal must be made to the Tribunal first before the application may be made to the Court of Appeal.

(2) The application to the Tribunal must be made within —

(a) in the case of an appeal against a judgment, order or decision other than an interlocutory judgment, order or decision, 28 days from the date of the judgment, order or decision;

(b) in the case of an appeal against an interlocutory judgment, order or decision, 14 days from the date of the interlocutory judgment, order or decision.”

17.  The “judgment, order or decision” in the provision above means the judgments, orders or decisions of the Lands Tribunal in general, including costs orders. In the case of an appeal against a judgment, order or decision of the tribunal, it has to be made within the time limit set out in rule 30B. The time limit in rule 30B applies to appeals against costs orders, too. Therefore, instead of making a separate application after the Court of Appeal had refused his application for leave to appeal against the original judgement and reviewed judgment out of time, the 1^st respondent should have made his application for leave to appeal against the costs order within 28 days, or at the latest when he applied for leave to appeal against the original judgment and the reviewed judgment out of time.

18.  The 1^st respondent referred to section 11A(5)(b) of the Lands Tribunal Ordinance, which reads:

“subsequent to the commencement of proceedings by any party with a view to questioning the decision, by way of appeal or otherwise, unless such proceedings have been abandoned.”

19.  The 1^st respondent also referred to section 10(5)(b) of the Lands Tribunal Ordinance, which this Court believes should be section 10(5)(a), and it reads:

“The proceedings of the Tribunal shall be conducted with as much informality as is consistent with attaining justice and, for this purpose, the President may give directions as to the manner and form in which proceedings shall be conducted.”

20.  Neither section 11A(5)(b) nor section 10(5)(a) deals with an application for leave to appeal out of time, let alone the time limit for applying for leave to appeal. They cannot be construed as allowing a relaxed approach or that the time limit for application for leave to appeal in section 30B(2) can be ignored. Moreover, as the respondent has never applied to review the costs order in the Lands Tribunal, section 11A(5)(b) does not apply at all. Section 10(5)(a) is not applicable to the proceedings in the Court of Appeal. These two sections do not assist the 1^st respondent’s current application for leave to appeal out of time. 

21.  The Court of Final Appeal stresses in the judgment of Astro Nusantara International BV v PT Ayunda Prima Mitra that in deciding whether time should be extended, the court has to look at all relevant matters and consider the overall justice of the case. Therefore, the merits of the intended application anda reasonable prospect of success are important considerations.

22.  The intended appeal of the 1^st respondent is against a costs order. It is well-established law that a judge has the discretion to award costs; an appellate court will not interfere with the costs order unless it is satisfied that it involves an error of law or the judge’s exercise of the discretion is plainly wrong. More importantly, according to section 11(2) of the Lands Tribunal Ordinance, no leave to appeal will be granted unless the 1^st respondent can show that the costs order is erroneous in point of law.

23.  The grounds of appeal advanced by the 1^st respondent in his application for leave to appeal out of time are about the same as those he submitted when he made the same application to the trial judge. In paragraphs 13 to 17 of the judgment^[2] dated 4 July 2018, the trial judge summarized the grounds of appeal and responded to them. She also gave reasons for making a costs order on an indemnity basis:

“13. As for the merits of the grounds of appeal, the respondent has advanced the following grounds of appeal (see the Supplementary Witness Statement filed by the respondent on 3 May 2018 for details):

1 The IO failed to seal and serve a copy of the judgment to the respondent in accordance with the direction dated 21 June 2017;

2 The judgment gives no reasons for the costs order;

3 The applicant is not entitled to costs due to the conduct of the applicant’s witness, which included failing to provide direct answers to the questions, producing 33 new documents as exhibits, discussing with others before finishing her evidence and fabricating exhibits,failing to assist in the trial and wasting considerable court’s time;

4 The IO’s immediate rejection of the direction for mediation; and

5 The respondent did not act improperly or put forward any groundless defence, and so should not be subject to taxation of costs on an indemnity basis.

14. I have checked the record in the court’s file. The direction dated 21 June 2017 only informed both parties of the date on which the judgment would be handed down, the tribunal did not give any direction as alleged by any of the respondents; the IO’s failure to seal or serve the judgment is not a ground of appeal either.

15. While it is true that no reasons for making the costs order were given in the judgment, but, as stated in paragraphs 6-7 above, it was just a costs order nisi. The respondent made no application to vary it, and so the court could not deal with the grounds he advanced in this application for leave to appeal out of time. The respondent only has himself to blame.

16. I do agree that the conduct of the applicant’s witness while giving evidence was questionable. Most of the documentary exhibits she produced during her testimony was produced at the request of the respondents. I do not agree with the respondents that what she did was a waste of the court’s time or resources. In fact, none of the respondents’ defence and counterclaim had any merit. I have pointed out in the judgment numerous times that the proposition of the respondent was groundless, unreasonable, confusing and gratuitous. During the trial, the respondents’ challenges included the management fees budget and contributions between 2010 and 2015, some of the owners’ meetings between June 2012 and 2014, and the validity of some of the committee’s meetings. The matters they challenged, which this Court has found to be unsubstantiated, existed since 2012, but the respondents did not raise them until the claim in this case was made. I find that the intention of the respondent was obviously to advance a tenuous defence and counterclaim that wasted the court’s time and resources. Costs should be awarded on an indemnity basis to show that the court disapproves of such action. The respondents’ claim that there was nothing inappropriate on their part and their denial of a groundless defence are unacceptable.

17.  It is true that the IO did turn down mediation at an early stage of this case, but this is not the first time that parties have brought legal proceedings about management fees. This case involves a lot of issues which concern defences which might have been dealt with in previous proceedings, thus success of mediation is doubtful. Where mediation may only cause unnecessary delay to the case, I do not find that the IO’s refusal of mediation was unreasonable.”

24.  This Court finds that the trial judge has correctly considered the legal principles and exercised her discretion. The submissions and arguments made by the 1^st respondent cannot show the trial judge has erred in law in making the costs order.

25.  For the reasons above, the 1^st respondent’s intended appeal has no prospects of success. It is therefore pointless to grant an extension of time for making an application for leave to appeal in the circumstances. It also goes against the principle of justice. Accordingly, the application for leave to appeal against the costs order out of time is refused and the summonses dated 18 July 2018 taken out by the 1^st respondent in the two cases are dismissed.

26.  We order that the 1^st respondent do pay the applicant costs of the two applications, which are summarily assessed at $5,000 in total.

27.  Since the 1^st respondent’s application for leave to appeal is totally groundless, pursuant to Order 59, rule 2A(8) of the Rules of the High Court, we make an order that no party may, under Order 59, rule 2A(7) of the Rules of the High Court, request the determination to be reconsidered at an oral hearing inter partes.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.