廣豐台業主立案法團 v. NOMINSHARE LTD

LDBM 109/2019

[2022] HKLdT 63

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 109 OF 2019

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D E C I S I O N

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Background

1.  The applicant is the incorporated owners of Kwong Fung Terrace (“the Building”) and the respondent is the registered owner of Flat B & C on 33/F, Tower 2 of the Building (“the Units”). By this application, the applicant claims that the respondent has been in breach of the Deed of Mutual Covenant of the Building (“the DMC”) and/or Cap. 344 by occupying or damaging the following common parts or facilities of the Building, namely -

i.  installation of a water pump in the water meter room on 33/F Tower 2 of the Building;

ii.  installation of conduit and electricity wiring in the common area to connect the water pump to the Units; and

iii.  Connecting the pipe of the water pump to the public pipe of the Building.

2.  The applicant seeks injunctive relief to have those unauthorised items removed.

3.  The respondent does not dispute the said installation, and that the water meter room is common part. The defence is estoppel by representation.

4.  According to the Notice of Opposition, the water pressure for the Units was low. The respondent complained to the DMC Manager under the DMC (when the applicant has not been established). It was allowed to install the water pump at the water meter room. The pump has been replaced a few times, and the last replacement is in February 2019.

5.  As the applicant has not been established, the DMC Manager was then managing the Building. The respondent claims that the applicant is bound by the representation made by the DMC Manager, as after establishment, the applicant is exercising the power of management under the DMC as the manager.

6.  The trial of the application has originally been fixed on 8-9 September 2022. The applicant discovered that some of the said items, including the pump have been removed. A summons has been taken out by the applicant on 30 June 2022 for leave to file supplemental witness statement of 楊珮瑩. By a letter to the respondent, the applicant made enquiry if the summons would be opposed. In addition, the applicant asked the respondent to remove the pipes connected from the Units to the water meter room.

7.  And by reading the draft supplemental witness statement of 楊珮瑩, it appears that the only outstanding items as complained of in the Notice of Application is the two electricity switches for the pump. She further complained that the water pipes from the water meter to the Units is not at the original position and asked the respondent to reinstate.

8.  By a speaking note lodged with this Tribunal, the respondent confirmed that it would remove the electricity switch. But it disputes the request for reinstatement of the water pipes as it was not pleaded in the Notice of Application.

9.  The summons came before me on 8 July 2022 and was adjourned for parties to consider alternate resolution. On 21 July 2022, the respondent has removed all the items complained of by the applicant in the Notice of Application. The applicant is prepared to give up the further claim for reinstatement of the water pipes. I therefore grant leave for the summons be withdrawn save the costs thereof to be argued. I also grant leave for the application be discontinued with costs thereof to be argued.

10.  Subsequently, the argument on costs is directed to be disposed of on paper. Parties have lodged their written submissions and this is my ruling on the costs application.

Legal Principle

11.  By section 12(1) of the Lands Tribunal Ordinance, Cap. 17, costs are in the discretion of the Tribunal. Order 62 of the Rules of High Court, Cap. 4A, applies to the Lands Tribunal with necessary modifications. Section 12(1) and (7) reads -

“(1) The costs of and incidental to all proceedings in the Tribunal are in the discretion of the Tribunal, and the Tribunal has full power to determine by whom and to what extent the costs are to be paid.”

“(7) Notwithstanding subsection (1) and section 12C but subject to subsection (5) and any rules made by the Chief Justice under section 10(3), Order 62 of the Rules of the High Court (Cap. 4 sub. leg. A) applies, with the necessary modifications, to the award, taxation and recovery of costs in the Tribunal.”

12.  And further for the costs of the application, Ms Li, counsel for the applicant also refer to paragraph 21/5/12A of the HKCP 2022. I repeat the part that is relevant –

“…when a party has achieved substantially what he or she sought in the action or application, costs should be awarded to him or her. This is an application of the principle that normally costs should follow the event. Here, the court does not adopt a mechanical approach, but looks into the substance and the merits of an application. If, but for a plaintiff’s or an applicant’s application, she would not have obtained the relief she sought in a writ of summons or a summons, then she is in effect the substantive winner of the case. The fact that a defendant consents to the claims by a plaintiff or an applicant which renders it unnecessary for the plaintiff or the applicant to continue the action or summons should not be a reason for denying the plaintiff or the applicant her costs. Thirdly, if a plaintiff or an applicant withdraws an action or a summons because the defendant had done something, after the issuance of writ of summons or summons, which renders it unnecessary or academic for the plaintiff or the applicant to proceed with the action or application, the court has a full discretion to award costs to the plaintiff or applicant after taking all the circumstances of the case into consideration, including that the respondent could have acted sooner.”

13.  I believe there is no disagreement with these principles. I would add that after CJR, by Order 62 Rule 3(2), costs to follow the event is only a starting point and this Tribunal has to consider if some other cost order has to be given having regards to all the circumstances of the case.

14.  And in a case when the only outstanding issue is the costs, the Court would not have a full trial to determine the question of costs in light of the underlying objectives of Order 1A. I refer to the decision of Madam Justice Au Yeung given in Famous Marvel Company Limited & Ors v Conversant Group Limited & Ors HCA2153/2009.

“22. There is no dispute that even if a case is settled except as to costs, the Court still has power to determine which party should be liable for costs. There is no tradition for there to be “no order as to costs” in such a scenario. I am guided by the following principles in deciding costs:

(i)  The Court is to decide if the party seeking costs has substantially obtained the reliefs sought in the litigation: Re Chinese United Establishment Ltd, HCCW 291/1994, 5 October 1995, Rogers J (as he then was), approved in CACV 214/1995; Lai Yuet Chun v Super Deluxe International Limited & ors, HCCW 186/2001, 3 June 2003 Kwan J (as she then was).

(ii)  At each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the Court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties. Brawley v Marcynski (No.1) [2003] 1 WLR 813.

(iii)  The Court will first consider if it is in a position to say what the likely outcome after trial would have been. If it is not in a position to do so, the order may well be no order as to costs: Brawley v Marcynski (No.1),at para 18, Longmore LJ; followed in BCT Software Solutions Ltd v C Brewer & Sons Ltd [2004] FSR 150.

(iv)  The Court may permit parties to adduce evidence on the question of costs: Ta Tung China & Arts Ltd v Fontana Restaurant Ltd [1999] 1 HKLRD 404; Lai Yuet Chun v Super Deluxe International Limited & ors, at para 12. However, to say that the parties must go to trial in order to resolve any outstanding questions of costs would be contrary to the underlying objectives enshrined in RHC Order 1A rules 1 and 2: Graham M Morley v Kwan Wo Wan & others, HCA 4366/2003, 30 December 2009, Recorder Jat SC.

(v)  A broad brush can be taken by referring to all matters already laid before the Court, e.g. pleadings, correspondence, witness statements, transcripts of evidence and the terms of the settlement order: c.f. BCT Software Solutions Ltd v C Brewer & Sons Ltd, at para 9; Graham M Morley v Kwan Wo Wan & others.

(vi)  The objective is to do justice between the parties without incurring unnecessary Court time and consequently additional cost: Brawley v Marcynski (No.1).”

15.  I agree with the above principle. The said principle has also been applied by HHJ Simon Lo in 陳小華及另十五人v鄭道珍LDBM95/2018.

Costs of the Summons

16.  I shall first deal with the costs of the summons.

17.  I do not consider a supplemental witness statement has to be filed upon the respondent removing part of the items. I expect the applicant would take out a summons for further directions as the trial may be shortened. A letter application/report may also serve the purpose. Indeed, the respondent should inform the applicant if it is prepared to resolve the dispute (or part of it) without a trial and further directions on the trial should be sought.

18.  It is mentioned in the draft witness statement about reinstatement of the water pipes. I agree with the respondent that the issue of reinstating the water pipes has not been raised in the Notice of Application. Anyway, this issue has been withdrawn when the summons is withdrawn.

19.  The applicant asks for costs of the summons be in the cause and also ask for costs of the application. In effect, it is asking for costs of the summons. As analysed above, the applicant should report to this Tribunal on this progress. While a letter report could be sufficient, I accept a summons for further directions by this Tribunal is reasonable, as the trial could be shortened if the parties sensibly reduce the scope of evidence to be adduced.

20.  But I do not agree a supplemental witness statement has to be prepared. And part of the witness statement is to cover the water pipes issue. If an affirmation or a report is to be done, it would be a short one saying that some items have been removed.  Subject to what I have to say, if the applicant has followed my suggested conduct of case management, it should be allowed costs of the summons and one hearing on 8 July 2022, and may be a short affirmation in support.

21.  The respondent request for costs of the summons on the ground that the applicant tries to slip in a new cause of action for the water pipes. I agree that this is not covered by the Notice of Application. That supports my earlier ruling that the applicant should not prepare a supplemental witness statement. This has been served and withdrawn. The applicant should bear the costs of the respondent thereto. And balancing what I consider the costs the applicant is entitled for reporting on the progress of removal of some of the items by the respondent, a fair ruling on costs should be no order as to costs for the summons.

Costs of the Application

22.  Moving to the costs of the application, as the matter has not been tried, this Court would take a broad brush approach to determine the question of costs. In some cases, we have to assess what is the likely outcome after trial. But in this case, the respondent has removed all the items complained of by the applicant. Viewing in this way, the applicant is successful in obtaining what it asked for in the application. Generally speaking, the successful party shall have the costs of the application. The burden rests on the respondent to satisfy this Tribunal why the applicant should not be entitled to its costs.

23.  The respondent submits that the applicant’s case should fail on the ground of estoppel by representation. It is the case of the respondent that the “representation” was made by a Mr Wu of the DMC Manager at the time. And it is obvious that without the approval of the DMC Manager, the respondent could not be able to carry out such large scale installation work.

24.  It is submitted that the evidence on the representation was to be given by Mr Stanley So of the respondent, who said the representation was given over 20 years ago. No evidence on the part of the applicant could rebut the statement of Mr So. I believe the respondent is suggesting that he would have a high chance of success in proving estoppel by representation.

25.  But the exact representation from Mr Wu is not clear. This is important to assess the unequivocality of the representation. And we do not know his position in the DMC Manager. Is he in a capacity to bind the DMC Manager? And further, as the applicant submits, in fact in 2003, the DMC Manager has written to the respondent for removal of the pump. Ms Li refers to a number of copy letters exhibited to the witness statement of Mr So.

26.  According to the witness statement of Mr So, the DMC Manager instructed Messrs. Hui & Lam to issue a letter to the respondent. Ms Li submits that it could be inferred from the reply letter from the respondent dated 25 September 2003 to Messrs. Hui & Lam (and exhibited to the witness statement of Mr. So) that enforcement action against the pump had been taken out. I agree with the view of Ms Li, having read the letter. And there is no suggestion in this letter that the installation of the water pump was with approval of the DMC Manager.

27.  There appears to be a series of discussion on the issue from the letters exhibited by Mr. So. And by letter from the respondent to the Manager of the Building dated 18 May 2004, it had agreed to remove the pump as soon as possible and before 31 July 2004. While the pump has not been removed, it shows that “the representation” would at best be a temporary measure and enforcement action has been taken out long ago. It would not be an unequivocal representation that supports the estoppel as claimed.

28.  Ms Li further refers another letter from the respondent to the manager of the Building dated 29 November 2016. The respondent reiterated that the water pump is a temporary measure and reconfirm the agreement to remove the pump once the water pressure to the Units has improved.

29.  It is sufficient to show that the respondent does not have such a strong case on the defence of estoppel as claimed and I do not agree with the view of respondent’s solicitors.

30.  The applicant further submits that the respondent fails to prove any detrimental reliance on the part of the respondent. Building the pump and the expense thereto would not assist as it is paying for what it enjoyed. The applicant refers to The Incorporated Owners of Lung On Building v Occupants & Another HCMP 2576/2008. I agree.

31.  In conclusion, I do not agree that the respondent has a strong case on estoppel. If the respondent has such a strong case, why it agrees to remove the items? Or put it this way, if it has a strong case, and is prepared to accede to the request of the applicant, a sensible litigant would come to term with the applicant at a much earlier stage to save everybody’s costs, and the judicial time. There is no explanation for taking a drastic step shortly before trial to remove the items.

32.  Having considered all factors raised by the parties, and all evidence before me, I conclude that the applicant should be entitled to the costs of the application with certificate for counsel, including all costs reserved, subject to any costs granted earlier to the contrary. The costs, if no agreement could be reached be taxed at District Court scale. And for this application for costs, the applicant shall be entitled to 75% of the costs and there be certificate for counsel taxed at District Court scale.