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

HCSA 9/2023 &

HCSA 15/2023

[2023] HKCFI 2685

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 9 OF 2023

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL CLAIM NO. 11026 of 2022)

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 15 OF 2023

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL CLAIM NO. 11026 of 2022)

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D E C I S I O N

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A.  Introduction

1.  The Claimant (“IO”) claimed against the Defendants (“Mr Woo” and “Madam Lau”, respectively) for arrears of management fees. Mr Woo represented himself and Madam Lau at the Tribunal. The references to Mr Woo was found to have been absent from the part-heard trial but failed to comply with a Directions Order in producing medical or related proof in support. Invoking the sanction under an “unless order”, the Tribunal barred the Defendants from defending and made an Award.

2.  These are only Mr Woo’s applications for leave to appeal against the Directions Order and the Award.

B.  Background as Found by the Tribunal

3.  The IO had in the past sued the Defendants (through the same management company as in the present case) for management fees. The last case was SCTC 38480/2018. Leave to appeal against that decision was refused by M Ng J in [2022] HKCFI 1471 (“the 2022 Judgment”).

4.  In the present case, the IO claimed against the Defendants for arrears of management fees for September 2018 to April 2022, in the sum of HK$54,729.42. The Defendants did not dispute that they owed management fees but raised various defences.

5.  The trial lasted for 4 days up to 23 March 2023 before Deputy Adjudicator Newton Mak. Most of the time was spent by Mr Woo on cross‑examination of the IO’s only witness. Mr Woo was absent on 24 March 2023, the 5^th day of trial. He called up the Tribunal, claiming to feel unwell and could not attend. The Tribunal adjourned the case to 20 April 2023 and directed him to file, on or before 28 March 2023, medical proof of his inability to attend the hearing.

6.  Mr Woo did not produce medical proof but sent a letter dated 26 March 2023 to the Tribunal to ask for 3 more days for trial.

7.  On 3 April 2023, the Tribunal replied, stating that this would be dealt with on 20 April.

8.  On 13 April, 2023, upon Mr Woo’s assertion that he was not available on 20 April, the Tribunal further adjourned the case to 24 April 2023 and directed Mr Woo to provide evidence that he had to attend another hearing on 20 April.

9.  On 24 April 2023, Mr Woo did not attend for the 2^nd time. He called the Tribunal at 8:58 am to say that he was not feeling well. The Tribunal ordered that (i) the case be adjourned to 12 May 2023; (ii) Mr Woo should produce, on or before 5 May 2023 medical proof or other related proof as to why he could not attend on 24 March and 24 April; and (iii) unless Mr Woo could produce sufficient evidence and explanation for his absence at hearings, he would not be allowed to continue with his defence. This order was the Directions Order.

10.  On 26 April 2023, Mr Woo gave a letter to the Tribunal stating, amongst others, that “further to hearing of 20.4, it was adjourned to 5.6 and subject to any direction, as such there would be 2 hearings on 29.5 & 5.6, and a medical appointment on 10.9 in coming days …”

11.  On 5 May 2023, Mr Woo filed HCSA 9/2023 (“1^st Leave Application”) for leave to appeal against the Directions Order.

12.  On 12 May 2023, Mr Woo turned up at the resumed trial. However, he did not produce medical proof or other related proof as to why he could not attend at the previous hearings. He merely relied on the letters of 26 March and 26 April 2023. He told the Tribunal that he had launched the 1^st Leave Application and so the Tribunal had no power to deal with the related matters pending outcome of the leave application.

13.  The Tribunal explained to Mr Woo that the Tribunal would not wait for the outcome of an interlocutory appeal before proceeding with trial: Daimler AG v Leiduck (No. 3) [2013] 5 HKC 242. Mr Woo purported to distinguish that authority from his case, but his stance was not accepted by the Tribunal.

14.  The Tribunal declined to adjourn the case further and gave a further opportunity for Mr Woo to produce proof of his medical treatment on 23 April 2023 before letting him continue with his defence. Mr Woo said it should be after the outcome of his leave application.

15.  The Tribunal asked him if he would promise to file the proof of medical treatment on 23 April 2023 on or before 19 May 2023. If he would, the Tribunal would let him continue the defence. If not, the Tribunal could not believe that his need for medical treatment on 23 April was true. Mr Woo replied that for the purpose of continuing the trial, he would take the risk of violating the directions of the Tribunal and said “yes” but he would not guarantee that he would perform. The Tribunal considered that Mr Woo’s meaning was “no”.

16.  The Tribunal found that Mr Woo deliberately violated the previous orders and failed to attend on 24 March and 24 April 2023 (§42). The Tribunal exercised the power under section 26A of the Small Claims Tribunal Ordinance, Cap 338 (“SCTO”) to bar Mr Woo from defending and proceeded to judgment based on the evidence before the Tribunal. The Tribunal effectively rejected all of the defences, save as to the claim for management fees for January to April 2022. He awarded the IO the sum of $49,977.25 with costs of $818 and judgment interest (“Award”).

17.  In support of the Award, the Tribunal held that the IO had the locus of a “manager” under the DMC” to sue. The Chairman of the IO was validly appointed. The IO had power to sue for management fees without the need for a resolution. The Chairman had validly signed the Claim Form. The use of a rubber stamp instead of the common seal of the IO did not invalidate the present claim. The IO has produced documents (such as budgets, resolutions and notices of revision of management fees) to prove the overall management fees. The management fees of the individual residential units and the common parts were to be borne by each owner in accordance with their undivided shares under the DMC. The amount to be borne by the Defendants was correctly computed. The Defendants’ assertions that the IO had not provided proof in support of its budget, that the items set out in the budget did not follow the Building Management Ordinance (“BMO”) or the DMC and that the budget did not include some recurrent expenses, were rejected and held not to be defences to the claim. However, as regards the revision to management fees for 2022, the IO could not discharge its burden of proof to show that those fees were determined in accordance with statute. As there was no alternative claim to adopt the management fees for the past year, the Tribunal dismissed the claim for management fees for January to April 2022.

18.  The Defendants had claimed that the IO had acted in breach of the BMO and DMC and with apparent bias, which led to the increase in expenses of the estate. The Tribunal found these to be unsubstantiated by evidence. Their other assertions, such as the IO not following up on damage to and water leakage at the Defendants’ roof, were held to be unparticularized and insufficient to justify the non-payment of management fees.

19.  On 12 June 2023, Mr Woo filed HCSA 15/2023 for leave to appeal against the Award (“2^nd Leave Application”).

20.  The 1^st Leave Application relies on the grounds that:

(1)  The order was plainly wrong and/or made out of apparent bias;

(2)  The order was made without any reason given;

(3)  The order was made against own directions of 3.4 and/or without regard to that of 13 April 23;

(4)  The order was made on (sic) retrospective effect; and/or

(5)  The order was made without Mr Woo’s submission at misfortunate absence, but “similar order was refused to hand down in [writing] despite Mr Woo’s request for proceeding leave to appeal in High Court”.

21.  The 2^nd Leave Application relies on the grounds that:

(6)  Section 26A of the SCTO was invoked on the wrong basis, “say orders of 24.3 & 24.4.23, and wrongly applied”;

(7)  Failure to conduct inquiry under s 16(3) of SCTO;

(8)  Wrong application/consideration of burden of proof upon the claim and/or defence;

(9)  No assessment on witness credibility and “own evidence associated”, and wrong application of relative probability; and

(10)  Award was made out of apparent bias and in unfair manner.

C.  Legal principles

22.  It is for an applicant to show that there are arguable grounds of appeal in that the Tribunal erred on a question of law or that the claim was outside the jurisdiction of the Tribunal: section 28 of SCTO.

23.  An appeal against findings of facts in not permissible unless the applicant can show that the Tribunal has not considered relevant evidence, or considered irrelevant evidence or that the lack of inquiry has led to injustice. In Kwong Mile Services Ltd v Commissioner of Inland Revenue (2004) 7 HKCFAR 275, Bokhary PJ held that:

“37. In an appeal on law only the appellate court must bear in mind what scope the circumstances provide for reasonable minds to differ as to the conclusion to be drawn from the primary facts found. If the fact-finding tribunal's conclusion is a reasonable one, the appellate court cannot disturb that conclusion even if its own preference is for a contrary conclusion. But if the appellate court regards the contrary conclusion as the true and only reasonable one, the appellate court is duty-bound to substitute the contrary conclusion for the one reached by the fact-finding tribunal. The correct approach for the appellate court is composed essentially of the foregoing three propositions. These propositions complement each other, although the understandable tendency is for those attacking the fact-finding tribunal's conclusion to stress the third one while those defending that conclusion stress the first two.” (underline added)

These principles have been consistently followed in various appeals against the Tribunal’s decisions, such as the 2022 Decision and Lee Wai Kei Wicky v World Family Limited [2017] HKCFI 1743, §13, Lok J.

24.  An appeal against exercise of discretion is not permissible unless it is shown that the Tribunal has exceeded the generous ambit within which reasonable disagreement is possible and is in fact plainly wrong and not merely that the appellate court would prefer a solution which the Tribunal had not chosen.

25.  An appeal against a case management decision is not permissible unless it is shown that the Tribunal has gone clearly wrong, made orders which clearly involved an injustice or an inability for the trial court to carry out its task, has erred in principle or that the order was irrational.

D.  1^st Leave Application against the Directions Order (Grounds 1-5)

26.  With regard to ground (1), the Directions Order was a case management order which contained an “unless order”, ie it imposed a condition for Mr Woo to comply with, failing which the sanction would bar him from continuing to defend. It was a well-considered exercise of discretion in facing a litigant’s unexplained absence that took into account Mr Woo’s conduct of the trial before his absence, the history of his absence, and the documents that he had placed or not placed before the Tribunal. The sanction imposed was proportionate to the non-compliance and would ensure the trial to proceed. Mr Woo would still have the opportunity to defend or request for 3 days for trial had he complied with the Directions Order.

27.  There was no error or law or principle involved. Mr Woo is not able to show how the tests for appealing against an exercise of discretion or a case management decision (§§24-25 above) can arguably be met.

28.  A reasonable, fair-minded and well-informed observer would not conclude that there was a real possibility that the Tribunal was biased, but that he had approached the matter with prudence.

29.  Mr Woo referred to his request for the Tribunal’s inquiry as to witnesses giving false evidence during cross-examination which the Tribunal declined. In my view, that was wholly irrelevant to the 1^st Leave Application. The Tribunal had rightly regarded the allegation of falsity of evidence as a matter to be dealt with at the trial instead of making an interim inquiry; so he directed Mr Woo to continue his cross-examination.

30.  In summary, ground (1) is unarguable.

31.  With regard to ground (2), the meaning of the Directions Order was clear on its face. Detailed reasons have since been given in §§10-23 of the transcript for 12 May 2023. Ground (2) has no merits.

32.  With regard to ground (3), the directions on 3 and 13 April 2023 were to adjourn the hearing further and to deal with Mr Woo’s request for further days for trial then. Mr Woo submits that there was no word about his default in compliance with the 24 March 2023 Order.

33.  I fail to see how these can show any error on the part of the Tribunal. When the trial resumed on 24 April, Mr Woo was absent. There was no need to deal with his request for 3 days for trial.

34.  The failure of the Tribunal to mention Mr Woo’s default in compliance with the 24 March 2023 Order was irrelevant. The directions in 24 March 2023 Order were clear and never revoked.

35.  Ground (3) is unarguable.

36.  With regard to ground (4), it is not clear what Mr Woo meant by the Directions Order being “made on retrospective effect”. I repeat the §§26-27. Ground (4) is unarguable.

37.  With regard to ground (5), Mr Woo was given the opportunity to remedy his default in compliance. The application of Mr Woo for leave to appeal (not even an appeal) could not hinder the Tribunal in the conduct of the proceeding before it. Again, this court sees no reason for disturbing a case management direction. Ground (5) is unarguable.

38.  Having regard to the analyses above, I decline to grant leave under the 1^st Leave Application.

E.  2^nd Leave Application - against the Award (Grounds 6-10)

39.  With regard to ground (6), Section 26A of the SCTO provides that:

“Where the tribunal directs a party to comply with an order within a specified time and the party fails to do so, the tribunal may dismiss the claim or counterclaim filed by the party, stay the proceedings or enter judgment against the party, as the case may be, on such terms as it thinks just.”

40.  Since Mr Woo had twice failed to attend, or to comply with previous directions or to promise to produce medical proof by 19 May 2023, the Tribunal was entitled to come to his view that Mr Woo deliberately violated previous orders and failed to attend with adequate explanation. It was a view open to him on the evidence and I cannot see any error of law in the exercise of his discretion in deciding not to allow Mr Woo to defend. It was similarly a case management decision on the part of the Tribunal and Mr Woo has not shown how the tests in §§24-25 above are arguably met.

41.  Mr Woo submits that it was wrong and unjust to apply section 26A in prohibiting his exercise of rights of cross-examination and making his own defence. The Tribunal only has power to “dismiss the claim or counterclaim filed by the party, stay the proceedings or enter judgment against the party”.

42.  I am unable to agree. Under section 36(1)(c) and (f) of the SCTO, the Chief Justice may make rules providing for matters of procedure which are not provided for in this Ordinance and generally for the better carrying out of the provisions of this Ordinance.

43.  Under section 37 of SCTO, “where no provision is made by this Ordinance or rules made under section 36, the practice and procedure in the tribunal shall be such as the tribunal may determine, either generally or in any particular proceeding.”

44.  In compliance with the spirit of disposing of a case expeditiously, economically and informally, it is open to the Tribunal to regulate the procedure so that there would be no delay or abuse of process by a party. The making of the Directions Order was plainly within the case management power of the Tribunal under section 37.

45.  The Tribunal had given Mr Woo the opportunity to make representation as to his failure to attend. When Mr Woo claimed that the order of 24 March 2023 was not received by him, the Tribunal offered another opportunity for Mr Woo to produce medical proof as set out in §15 above. Given Mr Woo’s non-committed attitude, the Tribunal’s finding that Mr Woo’s answer was “no” was a decision on the facts open to the Tribunal. The sanction applied and the Tribunal was entitled to consider entering judgment against Mr Woo pursuant to section 26A. Ground (6) is not arguable.

46.  With regard to ground (7), there was no failure to make inquiry. The further inquiry had to halt because the sanction took effect. However, the Tribunal did not jump to a conclusion as soon as he invoked section 26A. He had taken into account the evidence from both parties including the oral evidence and gave a very well-reasoned decision. Ground (7) is not arguable.

47.  With regard to grounds (8) to (10), the Tribunal had properly guided himself as to the burden of proof, legal principles on analyzing credibility of witnesses, the law on hearsay evidence and the relevant principle under the Building Management Ordinance, Cap 344 (“BMO”) as set out in §§31 and 32 of the 2022 Judgment. There was no error of law committed by the Tribunal.

48.  I have also a few general observations. The Tribunal was plainly aware that the IO had to rely on hearsay evidence as some primary documents were not available or the persons attending certain meetings had not given evidence. He had referred to the 2022 Judgment in the course of his analyses but it was never blind adoption of that Judgment without analyses of the evidence on both sides. The Tribunal may not have followed exactly the list of issues laid down by a prior Adjudicator. The Tribunal was not bound by that list anyway but the Tribunal has not missed any material issue. On each issue, the Tribunal has set out the case of each party, giving detailed reasons for his decision. His findings of facts were open to him on the evidence. He was plainly aware of the burden and standard of proof and did not accede to the claim for January to April 2022 when he was not satisfied that the IO has discharged its burden up to the requisite standard.

49.  Mr Woo effectively challenges the holding on each issue. Despite the submission of Mr Woo, I am not persuaded that he has shown any error of law on any part of the Award. His challenge is in substance on the findings of facts. Quite apart from the fact that it is not shown that the Tribunal had arguably failed to take into account relevant matters or took into account irrelevant matters, it is not shown to be arguable that there was a contrary conclusion on each issue that was the true and only reasonable one.

50.  For the reasons given, I decline to grant leave under the 2^nd Leave Application.