THE INCORPORATED OWNERS OF BELVEDERE GARDEN PHASE III v. LING FUNG DEVELOPMENT LTD AND OTHERS

HCMP 405/2007

in the high court of the

hong kong special administrative region

court of appeal

MISCELLANEOUS PROCEEDINGS no. 405 of 2007

(ON AN INTENDED APPEAL FROM HCA NO. 19586 OF 1999)

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D E C I S I O N

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1.  Unfortunately, litigation concerning incorporated owners in the management of buildings is often some of the most hard-fought litigation.  In this case, there is an argument as to how the original developers should be paying and what contribution they need to pay in respect of the commercial development.

2.  There is a question on the pleadings as they originally stood as to whether there should be expert evidence.  That was refused by the Master and, it seems to me, probably correctly.  The matter then went before the judge.  The first hearing was adjourned.  Then the Defendants changed their pleadings and they are really quite different-looking pleadings to me, although I have not had a chance to consider them fully.  Nevertheless, it is now conceded by the Plaintiffs that expert evidence is required on the new pleadings.

3.  The judge below not only set aside the order of the master below, but ordered the costs before the master to be in favour of the Defendants as well as the costs before him.  In my view, there may well be a matter of principle here because the pleadings have been changed and that changes everything.  Previous orders in relation to procedural matters seem to me now to be something of the past.  I think the parties may well find authority to show that.  It seems to me that probably the right order that might have been made was that the costs before the master had to remain and perhaps all the costs before the judge might have been costs in the cause.  It may be that the costs of the first appearance and the costs of the second appearance should be set off against each other, the Defendants getting the second costs and the Plaintiffs getting the first.  Whether that amounts to anything different, or the costs being the costs in the cause, I am not sure.

4.  I am reluctant to give leave in this case because I am reluctant to expand this case into satellite litigation.  Satellite litigation this undoubtedly is, it is an appeal as to costs.  The costs do seem to be substantial, but I do hope the parties could see sense along the lines I have given an indication, and not waste any more money coming to the Court of Appeal on a matter like this.

5.  The matter arises because the Plaintiff was a day late because their clerk did not know where to file a notice of appeal - they probably had a very junior clerk doing it.  It has not caused anybody any prejudice, but the question is whether there should be an appeal as to costs.  Presumably, the application should have been made in the court below, but I am not going to send it back to the court below on something like this.  That only adds to the costs of the whole matter.

6.  Therefore, I am going to give leave to appeal.  But as I say, I really hope the parties can see sense and not spend the money on litigation.  I have to say that one of the matters I have taken into account is that the Defendants appear to be deciding on how they are going to make their contributions which does not seem to be quite the manner in which perhaps it was envisaged that the matters would be carried on.  But I will leave the matter there.

7.  So I will give leave to appeal out of time and, if necessary, leave to appeal on the question of costs.  The costs will be costs in the appeal.