CHAN CHI MAN OLIVER AND ANOTHER v. KENNETH C.C. MAN & CO AND OTHERS

HCSA10/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 10 OF 2011

(ON APPEAL FROM SCTC 50800 OF 2010)

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J U D G M E N T

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1.  The 1^st and 2^nd claimants applied for leave to appeal from a decision of the learned presiding officer, Mr So Man Lung, of the Small Claims Tribunal.

Background

2.  

(i) The 1^st and 2^nd claimants are now the registered owners of the suite property and they were described as the 3^rd owner in the court below.

(ii) The 1^st owner was the 5^th defendant, who sold the suite property at the end of 2005 to the 2^nd owners, being the 2^nd and 3^rd defendants.  The 4^th defendant is the firm of solicitors acting for the 5^th defendant whereas the 1^st defendant was the firm of solicitors acting for the 2^nd and 3^rd defendants in the respective 1^st and 2^nd sale and purchase of the suite property.

3.  In the assignment of the aforesaid 1^st sale and purchase, from the 1^st owner to the 2^nd owners, a sum of $80,000 was reserved for the repair of the building which had two Repair Orders issued by the Buildings Authority registered against it.

4.  Shortly afterwards, at the beginning of 2006, the 2^nd owners sold the suite property to the claimants, and in the aforesaid sale and purchase, the 2^nd and 3^rd defendants also reserved $20,000 for the aforesaid two Repair Orders.

The dispute

5.  The claimants claimed that the respective sums of $80,000 and $20,000 were reserved for repairs generally and were not restricted to meet the repairs under the said two Repair Orders.  Thus they claimed that the reserved sums should be applied to repair charges incurred in respect of the repair to the building, not being the subject matter of the two Repair Orders but any repairs thereafter.

6.  In an application for leave to appeal against the decision of the Small Claims Tribunal, the claimants/appellants have to satisfy this court that there is an arguable point of law.  In other words, the learned presiding officer is arguably wrong in the point of law raised.

Any point of law in the Appeal?

7.  However from the nine points of ground for leave to appeal, the claimants have not satisfied me that there is any arguable point of law in both causes of action which the learned presiding officer had found against the defendants, namely :

(i) on the proper construction of the 2 agreements of sale and purchase in respect of the 1^st and 2^nd sale, the reservation of $80,000 and $20,000 respectively were only for the two said Repair Orders and not for any future or subsequent orders after the completion of sale and purchase in respect of the 1^st and 2^nd sale;

(ii) the solicitors acting for the 2 respective vendors were not negligent and they did not owe any duty of care to the claimants.

1^st Cause of Action

8.  First of all, as decided by the presiding officer, if the two sums would include any subsequent repair charges, the vendor might as well deduct $80,000 and $20,000 respectively from the sale and purchase price and the new owner would be responsible for all repair charges.

9.  On the proper construction of all the documents before the presiding officer, the agreements could not be construed in the way put forward by the claimants.  In this respect, the claimants put forward ambiguous grounds of appeal and some of them are very difficult to understand.  For example, it was submitted that the “agreement should be construed as a whole : by quoting Clause 25(b) and (d)”, but the claimants did not elaborate at all how that could be construed in the claimants’ favour.  In fact Clause 25(b) specifically provided that the vendor would still be responsible for the repair or redecoration to any common part of the said building up to the time of the completion even when he was not aware that any notice or order had been served or issued on or before the actual date of completion.  As such, Clause 25(d) said that Clause 25 should survive completion, meaning that after completion the vendor would still be responsible to effect repair or redecoration to any common part of the said building up to the time of completion.  That is to say he would not be responsible for any repair after the date of completion.

10.  Similarly the claimants referred to Clause 10(d) of the agreement of sale and purchase dated 23 January 2006, but then this clause only provided that the vendor should procure such deposits and funds to be transferred or held in favour of the purchaser on the property relating to the property by the owner’s committee or manager for the time being of the building to which the property form part.  This clause did not help the claimants at all.

11.  In the end, I find the decision of the presiding officer to be impeccable in his detailed and thorough consideration of the agreements.

The 2^nd Cause of Action

12.  The claimants claimed that the two firms of solicitors acting for the 1^st and 2^nd owners respectively owed the claimants a duty of care and they were negligent in that they did not ensure that the sums of $80,000 and $20,000 respectively held by the 4^th and 1^st defendants respectively should be used for all repair charges after completion. 

13.  In the first place that was not the intention of the parties as found in the previous Cause of Action.  The 4^th defendant acted for the 1^st vendor and the 1^stdefendant acted for the 2^nd vendors. They owed no duty of care to the claimants.  The 1^st defendant is a solicitor himself and his own firm acted for him in the sale and purchase of the suite property in question.  Each firm of solicitors is responsible for its own client and not for the client on the other side. 

14.  The claimants cited and relied on Ross v Caunters [1980] Ch. 297. However this is a very special case in which the solicitor involved received instructions from the testator to procure the estate in favour of the beneficiary.  The solicitor failed to warn the testator that he should not ask the spouse of the beneficiary to be the witness of the will.  Eventually, as the will was witnessed by the spouse of the beneficiary, the beneficiary could not inherit that part of the estate.  In the first place that solicitor was negligent to his own client as the will could not be effective to devolve that part of the estate to the beneficiary.  The beneficiary was owed a duty because “she was someone within their direct contemplation as a person so closely and directly affected by their acts and omissions in carrying out their client’s instructions” (per Megarry VC).  It was only in such special case that the court find there was a special relationship between the solicitor and the beneficiary.  There was no such special relationship in the present case.

15.  Further, the aforesaid solicitor admitted negligence to the testator but disputed that the duty was owed to the beneficiary.  His argument failed for the aforesaid reason.

16.  In fact, in our case, it is inconceivable that the claimants would join the solicitors acting for the 1^st owner, i.e. the 4^th defendant and the solicitors acting for the 2^nd owner, i.e. the 1^st defendant. There is absolutely no duty of care of these 2 firms of solicitors owed to the claimants and they are not negligent towards their own clients nor to the claimants.

17.  The other incidental minor points raised in this appeal are so trivial that they did not establish any arguable point of law. 

Costs

18.  Apparently the claimants now appealed on the costs awarded to the defendants as follows :

	D1	$53,250.00
	D2	$10,299.50
	D3	$1,838.70
	D4	$85,500.00
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	Total :	$150,888.20

D5 did not claim any costs in the Tribunal.

19.  The claimants now submitted that such an amount is “unreasonable and contrary to the inexpensiveness of Small Claims Tribunal’s principle”.  They cited two cases to support their submission.  However in the transcript of the court below, it was recorded that the learned presiding officer said in para. 32 :

「 各方同意訟費歸勝方的原則。而申索方並不爭議被告一至四的訟費數額。第五被告並沒有訟費申請。….」

In other words, the claimants in the Small Claims Tribunal did not dispute the amount put forward by the four defendants. Those sums were awarded without the objection of the claimants and the presiding officer ordered those amounts as sought accordingly.  There is no error in law involved when the order of court was made without any objection from the claimants.

Conclusion

20.  By reason of the aforesaid, I refuse to grant leave to the claimants to appeal against the decision in the court below.

21.  Since the application for leave to appeal is made ex parte, I make no order as to costs. 

Application for stay of execution of the judgment on costs

22.  In the first hearing on 21 April 2011, the Reasons for Judgment in the court below had not been given to this court yet, since the deadline for submitting such Reasons for Judgment had not expired.  Thus the application for stay of execution of the Judgment on costs was adjourned on 21 April 2011.  In the hearing on 1 June 2011, all the defendants present indicated that they would not execute on the Tribunal’s order on costs until there is a decision on the ex parte application of the claimants for leave to appeal.  Since the claimants are not successful in this application for leave to appeal, there is no ground for granting any stay of execution on the costs order.  The claimants’ application therein is accordingly also dismissed.

23.  However the stay of execution application was not argued and the dismissal was simply on the ground that the claimants did not succeed in their application for leave to appeal, I will make an order nisi on the question of costs that there should be no order as to costs in this application.