THE INCORPORATED OWNERS OF SEA VIEW ESTATE (WATSON ROAD) v. CHRISTINA CHUNG TAK TSING AND ANOTHER

                                                                  HCMP1885/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS No.1885 of 2008

(On an intended appeal from LDBM No. 87 of 2007)

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REASONS FOR JUDGMENT

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Hon. Yuen JA:

1.  On 21 October 2008 there were two summonses before me, one issued on 26 September 2008 (“the September summons”) for an extension of time to appeal and one issued on 20 October 2008 (“the October summons”) to amend the September summons to include an application for leave to appeal.  At the conclusion of the hearing I dismissed both summonses with costs to the Respondents.  My reasons appear below. 

The parties

2.  The Applicant is the Incorporated Owners of a building in North Point (“the IO”).  The 1^st Respondent was the former registered owner of a unit in the building (“the former owner”).  The 2^nd Respondent is the present registered owner of the unit (“the present owner”).  It became the owner by an assignment made in July 2005.

The claim

3.  The IO claimed that there were arrears of management fees in the sum of $23,820 for the period from March 2000 to August 2002 when the former owner was the registered owner.  In March 2007, the IO instituted proceedings in the Lands Tribunal against the former owner.  Subsequently in February 2008 it joined the present owner.  The claim was for the arrears, interest in the sum of about $33,000 and costs.

Original order

4.  After a 2-day hearing, on 24 July 2008 the Lands Tribunal (Deputy Judge Yiu) dismissed the claim against the former owner, but gave judgment against the present owner ordering it to pay arrears of $23,026 (the claim of arrears for one month having been abandoned at trial).  He did not make any order for interest or costs.

Application for review

5.  On 19 August 2008 the IO applied for a review to reverse the order that its claim against the former owner be dismissed, and for an order for interest and costs. 

Order on review

6.  On 5 September 2008 the Tribunal considered those 3 issues, i.e.

(1)     the dismissal of the IO’s claim against the former owner;

(2)     the IO’s claim for interest; and

(3)     the IO’s claim for costs. 

7.  The Tribunal maintained his order on issues (1) and (3) but varied his order on issue (2), ordering on review that the present owner should also pay interest on the arrears.  As for the costs of the review, he also gave no order except that the IO should pay the former owner’s costs for attending the review.

Consequence of review

8.  Pausing there, it would be noted that the consequence of the review was that vis-a-vis the present owner, the IO has succeeded in all its claims except for costs, and vis-a-vis the former owner, it has failed in all claims. 

Application for “extension of time to appeal”

9.  On 16 September 2008, the IO filed an ex-parte application in the Lands Tribunal for an order “that the [IO] be given 42 days from the date of the Order to be made herein to serve its Notice of Appeal”.  No draft Notice of Appeal was attached.  Nor was there any affirmation in support.  On the face of the application, there was no indication whether the appeal was directed only against the Tribunal’s order as to costs vis-a-vis the present owner, or also against its dismissal of the claim against the former owner.

10.  On the same day however the IO’s solicitors wrote a letter to the Tribunal ex-parte stating that it intended to appeal against the Tribunal’s order as to costs vis-a-vis the present owner, and asking how the time for appeal should be calculated (i.e. from the date of the original order or the date of the order on review).  

Tribunal’s refusal of extension of time for appealing

11.  On 17 September 2008, the Tribunal dealt with the application by letter, informing the IO that it was not in a position to advise how the period of appeal was to be counted, and refusing the ex-parte application for extension of time for appealing.

HCMP 1885/2008

12.  On 26 September 2008, the IO issued an inter-partes summons in this Court for an order that “the [IO] do have an extension of 42 days to serve its Notice of Appeal notwithstanding that the time limit therefor may have expired and that there be no order as to costs”.  Again no draft Notice of Appeal was attached.  Nor was there any affirmation in support. 

13.  This inter-partes summons was also served on the former owner, even though the IO had in its letter to the Tribunal dated 16 September 2008 stated that it was only intending to appeal against the Tribunal’s refusal to order that the costs be paid by the present owner. 

Discussion

14.  Pausing there, in view of the inquiry in the letter dated 16 September 2008 from the IO’s solicitors, I should perhaps first examine the general position of a litigant in the Lands Tribunal who is aggrieved by an order.

Jurisdiction for appeal

15.  A person aggrieved may only appeal against an order of the Tribunal if there has been an error of law: s.11(2) Lands Tribunal Ordinance Cap. 17.  If this criterion is satisfied, then under Order 60A of the Rules of the High Court, he should – within 21 days of the date on which the order was made – serve a Notice of Appeal on the parties and on the Tribunal, which Notice must specify the grounds of the appeal together with the question of law to be decided by the Court of Appeal: O.60A rule 2(2) RHC. 

Jurisdiction for review

16.  However if a litigant wishes the Tribunal to review an order (which jurisdiction is not confined to errors of law), then under s.11A(1) and (2) of the LTO, he should –  before 1 month from the date on which the order was made – apply to the Tribunal to review the order.  The Tribunal’s decision whether or not to exercise its power of review should be made within 1 month of the date on which the original order was made: s.11A(1) LTO, but if there is an extant appeal, then the Tribunal is not permitted to exercise its power of review: see s.11A(5)(b) LTO which provides:

“The Tribunal shall not exercise its power of review in respect of a decision –

(a)        ...

(b)        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”.  

Timing

17.  So it seems to me that a person aggrieved by an order must first decide if he satisfies the criterion for an appeal from the Lands Tribunal, i.e. that there is an error of law.  If he considers that there is an error of law, then he should lodge a Notice of Appeal within 21 days of the order, specifying the grounds of appeal and formulating the question of law. 

18.  If however he wishes to persuade the Tribunal to change its mind (whether on fact or law), then he can apply to the Tribunal for a review, but he must not lodge an appeal first. 

-        Then if the Tribunal declines to exercise its power of review, and if the criterion for an appeal on law is fulfilled, he can then lodge an appeal.  If by the time the Tribunal declines to exercise its power of review (which may be up to 1 month) the 21 days for lodging an appeal has already expired, then he would have to ask for an extension of time to lodge the Notice of Appeal (though the reason for the delay would be self-evident).

-        On the other hand if the Tribunal exercises the power of review but upholds the order on review, and if the criterion for an appeal on law is fulfilled, he can then lodge an appeal – not against the original order – but against the order made on review within 21 days of the date of that order.  It seems to me that it would make no sense to count the time of appeal from the date of the original order when the purpose of a review is to enable a tribunal to reconsider the matter and to vary its order if considered appropriate, and when the legislation forbids an appeal and a review from being progressed simultaneously.

19.  Translated to the present case, since the order on review was made on 5 September 2008, the IO would have been within time to lodge a Notice of Appeal on 26 September 2008 (it being the last of the 21 days from the date on which the order was made) if it was appealing against an order other than for costs only.

Appeal on costs only - leave required

20.  However as the IO was only appealing against the Tribunal’s refusal to order the present owner to pay costs, leave was required before there could be an appeal: see s.14(3)(e) High Court Ordinance Cap. 4 which provides:

“(3)      No appeal shall lie –

                                    ...

(e)      without the leave of the ... tribunal in question or of the Court of Appeal, from an order of the ... tribunal ... relating only to costs which are by law left to the discretion of the ... tribunal”.         

21.  Costs before the Lands Tribunal are left to the discretion of that tribunal:   s.12(1) LTO, and so s.14(3)(e) HCO applies and leave to appeal must first be obtained before there can be any question of extending time to lodge a Notice of Appeal.  

22.  Accordingly the September summons was misconceived in seeking an extension of time to lodge a Notice of Appeal when leave to appeal had not been granted.  (This is not a reflection on counsel for the IO who I accept has only recently been instructed).  

October summons

23.  The IO sought to put things back on the right track procedurally with the October summons which included an application for leave to appeal.  That application would have been in time if made on 26 September 2008.  However it was not made until a day before the hearing in this court, i.e. 20 October 2008. 

24.  Quite apart from the issue of delay, the more important issue is whether leave should be granted for the costs-only appeal.  Before I deal with that however, there is an issue of forum that I should consider.  

Application for leave to Tribunal or the Court of Appeal?

25.  The first question on the October summons is whether leave to appeal should be sought from the Tribunal or from this Court.  Mr Douglas Lam counsel for the IO has suggested that there is no jurisdiction for the Tribunal to grant leave to appeal as that tribunal is a creature of statute and there is no explicit provision in the LTO giving it power to grant leave.  Mr Lam referred to Graham Brown (Oasis Trading) Ltd v Oxford City Council (Lexis transcript, 3 June 1987).  In that case, an industrial tribunal which had the power to give costs had exercised its discretion by declining to give costs to the appellant.  The appeal was heard by Taylor J who considered whether to adopt the same approach governing appeals from the High Court to the Court of Appeal.  In the course of considering the right approach, the judge said (at p.5 of the transcript) that “there is no power in the tribunal to grant leave to appeal against an order for costs.  Accordingly the appellant comes to this court neither with leave not without leave.  He comes as of right”.

26.  The relevant statute in Graham Brown was not referred to me, and it would appear from the transcript that the jurisdiction of the tribunal to grant leave for a costs-only appeal was not argued between the parties.  In the circumstances, that case was of little assistance.

27.  In my view the fact that the LTO itself contains no explicit provision for the Tribunal to grant leave for a costs-only appeal is not conclusive, because the relevant provisions of other ordinances are incorporated in s.11(2), viz. that a party’s right of appeal is “subject to the provisions of any Ordinance relating to appeals from the Tribunal”.  That brings into play s.14(3)(e) HCO (para. 20 above) and that provision expressly refers to leave of the tribunal in question.  I see no good reason why the Lands Tribunal should not be included in the term “the tribunal in question”.  Accordingly I take the view that both the Tribunal and this Court have jurisdiction to grant leave in a costs-only appeal from the Tribunal. 

28.  Where an application may be made either to a tribunal below or to the Court of Appeal, Order 59 rule 14(4) RHC  provides that it should be made in the first instance to the tribunal below.  However neither party asked me to decline jurisdiction, and to avoid a further waste of time and expense by sending the matter back to the Tribunal, I proceeded to consider the merits of the application for leave for the costs-only appeal.   

Merits of the IO’s application

29.  Mr Lam realistically accepted that there is a high threshold in the challenge that an order of costs made in the exercise of a tribunal’s discretion is erroneous in law.  He argued however that the Tribunal had failed to take one matter into consideration – that the IO was acting in furtherance of its statutory obligations – and that matters prior to the commencement of litigation (as set out in para. 24 of the Tribunal’s Reasons for Judgment dated 24 July 2008) were not relevant considerations.

30.  First, the fact that the application was made by incorporated owners who exercise rights and duties under the Building Management Ordinance was evident from the name of the applicant.  The Tribunal as a specialist tribunal deals with incorporated owners’ functions day in and day out.  It could not have failed to appreciate that incorporated owners exercise rights and duties under the Building Management Ordinance and it was not necessary to mention that expressly.

31.  Secondly, it is well-established that facts connected with or leading up to the litigation which have been canvassed during the trial may be relevant considerations (Donald Campbell & Co v Pollak [1927] AC 732, 812).  In the Reasons for Judgment, the Tribunal referred to the “peculiar” facts of the case which led one “to take the view that there was no further outstanding sum”.  The Tribunal gave some illustrations in support of that view, the most distinctive being the fact that in March 2005 (before the present owner acquired the unit) the IO caused to be made a Memorandum of Release discharging the charge registered against the unit for unpaid management fees.  The claim by the IO in the proceedings before the Tribunal for arrears of  fees was contradictory to the release of the charge in the IO’s own document.  Clearly the Tribunal considered that in the light of that public document, the present owner was entitled to test the IO’s case in court to see whether an explanation for that public document would be accepted by the Tribunal. 

32.  It is clear that the weight of factors is a matter for the first-instance tribunal and an appellate court should not interfere even if the latter may disagree with his conclusion.  In the circumstances, I am not persuaded that there is any reasonable prospect of success in the IO’s costs-only appeal.  Accordingly I dismissed both summonses.