BARNES & NOBLE PROPERTY MANAGEMENT LTD. AND ANOTHER v. HODSUN LTD.

HCSA27/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO.27 OF 1999

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J U D G M E N T

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1. This is an appeal against the order made by Adjudicator Catton on 9 November 1999, when upon transferring the claimants' claim to the Lands Tribunal, she made an order that the defendants should pay costs of $8,279.70 forthwith to the claimants. The defendant now appeals against that order.

2. Prior to 9 November 1999, there had been seven hearings or mention hearings of the claimants' claim. These were by way of mention hearings, or as they are sometimes known as "call over hearings" when matters relating to pleadings and the issues were decided. Eventually on 20 September 1999, which is the seventh hearing, the matter was set down for trial on 9 November 1999.

3. Prior to that, on 26 October 1998, the defendant, together with the defendants in three other similar claims by the claimants, had filed a joint defence, in which, inter alia, they denied that there had been a deficit in the management fund of the building in question which was the basis of the claimants' claim. Filed together with the defence was a joint application by the defendants in the four cases to set aside an order of the tribunal dated 20 September 1999, ordering the defendants to focus in their defence on the numerical substance of deficits. There was also a joint application by the defendants in the four cases for an order to strike out the amended claims on the ground that the Amended Claim by the claimants was an abuse of process, or otherwise frivolous, vexatious and/or scandalous. In that application, the defendants also sought an order that they should not be required to file a defence.

4. All these matters were before the adjudicator on 9 November 1999. For reasons which are not entirely clear to me but which I shall not go into, the adjudicator of her own volition, decided that the whole matter should be transferred to the Lands Tribunal for a determination. One of the reasons as advanced by her, it would appear, was that this was a matter which involved the jurisdiction of the Lands Tribunal, thereby, perhaps, suggesting that she did not have the jurisdiction and only the Lands Tribunal had it.

5. Be that as it may, the Transfer Order was made. The claimants were unhappy with the proposed Transfer Order and in effect wanted their claims to be determined there and then. In the transcript which has been made available for this appeal, the adjudicator, while addressing the parties, referred on at least three occasions to penalizing the defendants for their delaying tactics and for their refusal to cooperate. It is not clear what she meant by cooperating, whether this was a lack of cooperation with the tribunal or a lack of cooperation with the claimants.

6. The basis of the appeal, as argued by Ms Ho for the appellant, is that under the Small Claims Tribunal Ordinance, Cap.338 ("the Ordinance"), the costs order could only have been made by the adjudicator after the conclusion of the hearing of the claim as provided for in section 18 of the Ordinance. She further contended that under section 11 which deals with the transfer of cases from the tribunal to other courts, the question of costs of the proceedings, both before and after transfer, shall be in the discretion of the transferee court, subject to any order of the tribunal. She submitted that the phrase "subject to any order of the tribunal" meant that the costs order could only have been made by the transferee court and not by the tribunal, and at most, the tribunal can recommend to the transferee court what the order of the costs should be.

7. I do not agree with that submission. In my view, under section 11, the tribunal could have made an order providing for the costs of the proceedings, both before and after the transfer. As a matter of practicality, of course, the tribunal could only make an order for costs relating to the costs of the proceedings before the transfer and would leave the costs of the proceedings after the transfer to the transferee court.

8. The power to award costs is provided for by the Ordinance in section 24. In my judgment, therefore, the appellant's contention that the adjudicator had no power to make the order for costs cannot succeed. However, the appellants also, as an alternative argument, attack the exercise of the discretion by the adjudicator in making the order that she did.

9. In my view, since the defence had been filed by the day of the hearing on 9 November 1999, and since there was an application to, inter alia, set aside the claim, the adjudicator should have dealt with these matters by way of a normal hearing. In my view, it was not necessary for the transfer order to have been made. I therefore find that the exercise of the discretion which appeared to have been based upon a desire to penalize the appellants for costs, is a wrongful exercise of her discretion and the order has to be set aside. The appeal is therefore allowed and the costs order made by the adjudicator is quashed.

10. As regards the costs of the appeal, I am informed that before today, the Lands Tribunal has in fact determined the claimants' claim and the appellants' counterclaim, and judgment was delivered by the Lands Tribunal on 29 March when both the claimants' claim and the defendant's counterclaim were dismissed and no order for costs against either party was made by the Lands Tribunal.

11. In view of that order and especially in view of the appellants' very proper attitude that they do not seek the costs of this appeal, I make no order as to the costs of this appeal.