TIN HAU WUI ALSO KNOWN AS TANG TIN HAU WUI WITH TANG FUK LEUNG AS THE MANAGER v. TING WAI MING AND ANOTHER

DCMP 356/2013

[2024] HKDC 2203

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 356 OF 2013

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DECISION

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Introduction

1.  This is a review application made by the Plaintiff (“P”) under Order 62, rule 33 of the Rules of District Court (Cap 336H) (“the RDC”) against the order dated 17 October 2022 (“My Order”) in which it was ordered, inter alia, that P shall not claim against the Director of Legal Aid (“the DLA”) in relation to the hearing between the parties held on 19 February 2019 under Order 14A of the RDC by applying s.16C of the Legal Aid Ordinance (Cap 91) (“the LAO”).

Background

2.  In February 2013, P commenced legal proceedings against the 1^st Defendant (“D1”) and the 2^nd Defendant (“D2”) for recovery of Lot No 1357 in DD 106 under Order 113 of the RDC (“the Land Case”).

3.  In March 2013, D1 was granted legal aid to defend the Land Case.

4.  In April 2013, P filed the Statement of Claim.

5.  In August 2013, D1 filed the Defence and Counterclaim raising adverse possession as defence and claiming for possessory title of the disputed land (“the Counterclaim”).

6.  In April 2018, the Land Case was set down for trial on 20 March 2019.

7.  In December 2018, at the PTR hearing of the Land Case, the parties agreed that the question on “whether the Plaintiff was and is a Chinese customary trust (hereditary in nature) within the meaning of s15 of the New Territories Ordinance, Cap 97” be determined without a full trial of the action and such determination would finally determine the entire cause or one of the major issues of the Land case. The said question was directed to be heard pursuant to Order 14A of RDC.

8.  On 19 February 2019, it was at the Order 14A hearing held that P was a Chinese Customary Trust. Judgement was entered against D1. D1 was ordered to deliver vacant possession of the land to P. D1’s counterclaim was dismissed. D1 was further ordered to pay 99% of P’s costs and D2 was ordered to pay 1% of P’s costs (“the Order 14A Hearing”).

9.  In March 2021, an order extending time for P to file and serve the notice to commence taxation proceedings was made.

10.  In September 2021, P was ordered to file and serve the Notice of Commencement of Taxation and Bil of Costs on 29 October 2021.

11.  On 29 October 2021, P commenced taxation against D1.

12.  In May 2022, the DLA filed list of objections raising 3 preliminary issues.

13.  By the Order dated 4 August 2022, the present hearing was set down for the purpose of determining the 3 preliminary issues.

14.  By consent summons dated 10 October 2022, P and the DLA had reached agreement on two of the 3 preliminary issues. The remaining issue for the present hearing was whether DLA should be liable for P’s costs in relation to the Order 14A Hearing (“the Preliminary Issue”).

15.  On 17 October 2022, I heard both parties on the issue of the Preliminary Issue and ordered, inter alia, that P was not entitled to recover the costs of the Order 14A Hearing under s16C(1)(b)(ia) of the LAO.

16.  On 11 July 2023, the taxation hearing was held. The costs in relation to the Order 14A Hearing was agreed by P and DLA to be taxed off. The taxed off items are shown below:

Items	Description
63-70 of P’s bill of costs	legal work done on the preparation and attending the Order 14A Hearing
84a, b, c & d of P’s bill of costs	P’s counsel fee for the work done on whether P was Chinese customary trust, and brief fees for attending the hearing on 19 February 2019 before HH Judge MK Liu, ie the Order 14A Hearing

17.  On 25 July 2023, P took out the present summons to review My Order.

P’s argument on the Preliminary Issue

18.  P argued that the Order 14A Hearing in substance was heard in order to determine the counterclaim instead of the main claim. D1 in substance was “a plaintiff in the counterclaim” and P was “a defendant to a counterclaim”, thereby satisfying s.16C(1)(b)(ia) of LAO.

19.  Given that the main claim, ie P was the registered owner of the Land, was not disputed, the trial that was fixed would essentially relate manifestly to the D1’s counterclaim.

20.  P also argued that this case fitted squarely into the observation of the Court in Peter Man Ho Laye v Tam Ma Lai (HCA 1780/2009) that the Order 14A Hearing would be “virtually devoted to the counterclaim”. P submitted that this conclusion was supported by the fact that, the judge in the Order 14A Hearing actually stated that the complexity of these proceedings stems from the adverse possession claim raised by the 1^st Defendant and nearly all the time in these proceedings is spent on this matter.

DLA’s stance on the Preliminary Issue

21.  DLA disputed all costs incurred in relation to the Order 14A Hearing on the ground that DLA was not liable for P’s costs incurred on the main claim but only those on defending the counterclaim pursuant to s16C of LAO.

22.  According to the submissions of the DLA, the main issue is whether the costs incurred in relation to Order 14A Hearing falls into s16C(1)(b)(ia) of LAO, ie “costs occasioned by the counterclaim”.

23.  The DLA argued that the Order 14A Hearing was held under the main claim and the non-aided P was addressed as “the Plaintiff of the main claim”, instead of the Defendant of the counterclaim”, in the judgement and costs order made by judge in the Order 14A Hearing. Applying the legal principles in Common Luck Investment Ltd v Director of Legal Aid (FACV No 1 of 2002), the DLA submitted that the parties’ formal designation in the judgment and costs order of the Order 14A Hearing shall follow and therefore the present situation did not fulfil s16C(1)(b)(ia) of LAO.

Analysis of D1’s Review Application under Order 62 rule 33 of RDC

24.  My Order was made on 17 October 2022. The taxation hearing was held on 11 July 2023 and P’s summons to review My Order was taken on 25 July 2023, ie about 9 months after My Order was made (“the time bar issue”).

25.  The time bar issue had not been addressed in the written submissions filed by both parties. When it was being raised by this Court in the review hearing, P submitted that the review application could only be made after the conclusion of the taxation under Order 62 rule 33 of RDC. P also instantly referred this Court to Liu Anissa Mee Ling v Lam, Lee & Lai (HCMP 2186/2008, 18 June 2010) to support her submissions.

26.  D1 then submitted that they had no objection to P’s submissions. But they would also adopt the observation of this Court.

27.  Application to taxing master for review is governed by Order 62 rule 33 of RDC which states that:

“(1) Any party to any taxation proceedings who is dissatisfied with the allowance or disallowance in whole or in part of any item by a taxing master, or with the amount allowed by a taxing master in respect of any item—

(a) may apply to the taxing master to review his decision in respect of that item…

(2) An application under this rule for review of a taxing master’s decision in respect of any item may be made at any time within 14 days after the conclusion of the taxation in which that decision was made or such shorter period as may be fixed by the taxing master.

…

(3) Every applicant for review under this rule must at the time of making his application deliver to the taxing master objections in writing specifying by a list the items or parts of items the allowance or disallowance of which or the amount allowed in respect of which, is objected to and stating concisely the nature and grounds of the objection in each case, and must deliver a copy of the objections to each other party (if any) who attended on the taxation of those items or to whom the taxing master directs that a copy of the objections shall be delivered.

(3A) If an applicant fails to comply with paragraph (3), the taxing master may dismiss the application.” [Emphasis added]

28.  P’s reply to the time bar issue placed much reliance on Order 62 rule 33 of RDC which, as shown in the above, stipulates not only the time for making review application but also the procedures for the said application. It goes without saying that the procedures therein, like any other rules in the RDC, are meant to be observed, failing which, the application is doomed to fail.

29.  Paragraph (3) of Order 62 rules 33 stipulates that the applicant for review under this rule must at the time of making his application deliver to the taxing master a list specifying the items or parts of items the allowance or disallowance of which or the amount allowed in respect of which, is objected to and the grounds of objections. The applicant must also deliver a copy of this list of objection to all parties.

30.  In the present case, apart from P’s written submissions in relation to this review application, P has not delivered to this Court any list of objections specifying items or amount or allowance or disallowance being objected to and the grounds of objections. In short, P has failed to comply with paragraph (3) of Order 62 rule 33.

31.  Under such circumstance, this Court is empowered by paragraph (3A) of Order 62 rule 33 to dismiss the present application.

32.  Notwithstanding this, placing the wording of Order 62 rule 33 of RDC under close scrutiny, it is clear that the review mechanism stipulated herein is aimed at reviewing specific item/items or the amount of item(s) allowed or disallowed by a taxing master. It is for challenging the exercise of a taxing master’s power in relation to quantification of an item/items or amount but not the determination of a preliminary issue.

33.  Where the review mechanism under Order 62 rule 33 cannot be invoked because the challenge is on a decision by a taxing master on determination of a preliminary issue but not quantification of costs, the inherent jurisdiction of the court could be invoked to make good the want of an express right of appeal. (Macro v Macro (Ipswich) Ltd [1996] 1 WLR 145)

34.  In Macro v Macro (Ipswich) Ltd, an action and a counterclaim in respect of two petitions were heard together, a taxing master made orders adjourning the taxation proceedings until after the appeals against the substantive judgment. It was not disputed that the appeals would not affect the orders in respect of the costs of the petitions. The petitioners sought to appeal under R.S.C., Ord 58, r 1, which gave a right of appeal from a master to a judge in chambers, against the orders adjourning taxation of their bills of costs in the petitions. The respondent contended that the only means of challenging a taxing master's decision was by means of the special machinery provided by Ord 62, rr 33 to 35 and that, there being no other right of appeal, the court had no jurisdiction to entertain the petitioners' appeals.

35.  It was held that although the review machinery prescribed by Ord 62, rr 33 to 35 was appropriate to challenges in respect of technical matters concerning the taxation, it was inappropriate to challenges to the exercise by the taxing master of procedural powers of a general nature; that the inherent jurisdiction of the court could be invoked to make good the want of an express right of appeal.

36.  In the light of Macro v Macro (Ipswich) Ltd, P should not have challenged My Order through the review mechanism under Order 62 rule 33 of RDC but invoked the inherent jurisdiction of the court to do so.

37.  Moreover, as shown in the above paragraph 16, the costs in relation to the Order 14A Hearing had already been taxed off upon the agreement made between P and DLA in the taxation hearing in July 2023. This voluntary agreement to tax off the costs in relation to Order 14A Hearing is impliedly confirm My Order that P is not entitled to the costs in relation to the Order 14A Hearing. This taxing-off of the costs of Order 14A Hearing is utterly inconsistent with P’s stance in the present review application.

38.  Therefore, P’s summons taken under Order 62 rule 33 of RDC should be dismissed.

Analysis of s16C of LAO

39.  Even if I am wrong on the above analysis, I maintain that P was not entitled to recover the costs of the Order 14A Hearing under s.16C(1)(b)(ia) of the LAO due to the below analysis.

40.  DLA’s liability for costs to a non-aided party is governed by ss 19 and 16C of LAO.

41.  According to s.19 of LAO, a court may make an order for costs against an aided person but such an order may only be enforced against the aided person and DLA to the extent permitted by s16C of LAO.

42.  In the event that the party not receiving legal aid is a defendant to a counterclaim, s16C(1)(b)(ia) of LAO states that the costs occasioned by the counterclaim shall be paid by the DLA.

43.  Citing Peter Man Ho Laye v Tam Ma Lai (HCA 1780/2009), P argued that the Order 14A Hearing would be “virtually devoted to the counterclaim” since the judge in the Order 14A Hearing stated that the complexity of these proceedings stems from the adverse possession claim raised by the 1^st Defendant and nearly all the time in these proceedings was spent on this matter.

44.  With respect, the issue of adverse possession is a defence raised by D1 to challenge P’s claim and if nearly all the time in the proceedings was spent on this issue, ie whether there exists adverse possession, the costs was not occasioned by the counterclaim but the main claim.

45.  P’s argument rests heavily on Peter Man case that the court looks to the substance and not the form when determining whether costs have been incurred on a claim or counterclaim. In order to look to this issue closely, one has to look to not only the judgement entered or order made in the Order 14A Hearing but also the purpose of an Order 14A application.

46.  Order 14A rule 1 provides:

"(1)  The Court may upon the application of a party or of its own motion determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings where it appears to the Court that –

(a)  such question is suitable for determination without a full trial of the action; and

(b)  such determination will finally determine (subject only to any possible appeal) the entire cause or matter or any claim or issue therein.

(2)  Upon such determination the Court may dismiss the cause or matter or make such order or judgment as it thinks just.

(3)  The Court shall not determine any question under this Order unless the parties have either –

(a)  had an opportunity of being heard on the question; or

(b)  consented to an order or judgment on such determination."

47.  The requirements for employing the procedure under Order 14A may help the analysis herein. In B + B Construction Ltd v Sun Alliance and London Insurance Plc (2000) 3 HKCFAR 503, the Court of Final Appeal held at 507I-508C that:

“In order to invoke Order 14A, certain criteria must be satisfied: it must be shown that it is a suitable case for this procedure, that the determination on the question of law or construction of the document is one which will finally determine the entire cause or matter and that the parties have consented to abide by the determination (or have had an opportunity to be heard on the question). But the court may not make such a determination if it does not consider that it is a suitable case to take such a course. This can be the situation where, for instance, the court does not agree that its decision will have the effect of finally resolving the controversy between the parties, or there are serious disputes of fact or the trial may take place very shortly. If however the court does proceed to hear the application on the basis that its determination will have the effect of finally disposing of the cause or matter before it, an order made pursuant to such an application should be regarded as a final order for the purpose of section 22(1)(a). The application which the court proceeds to hear on that basis would satisfy the application test. Whatever the outcome of the application, the order made will finally determine the action. After all, it is the intention of the parties and the court that such a decision would put an end to the dispute instead of requiring the parties to go through the trouble and expense of a full trial.” [Emphasis added]

48.  An issue suitable for Order 14A application should be “a disputed point of fact or law relied on by way of claim or defence. [Emphasis added]” (Korso Finance Establishment Anstalt v John Wedge, February 15, 1994, CA Transcript 94/387 cited in Hong Kong Civil Procedure 2024, 14A/2/4)

49.  At the PTR hearing, parties agreed that the issue “whether the Plaintiff was and is a Chinese customary trust (hereditary in nature) within the meaning of s15 of the New Territories Ordinance” should be determined. The Order 14A Hearing was then directed.

50.  The parties’ agreement at the PTR hearing was a sensible one since it is obvious that the determination of the issue of whether P was a Chinese customary trust would in fact determine whether the defence of adverse possession could stand and accordingly determine the whole of the Land Case.

51.  And at the end of the Order 14A Hearing, it was decided that P was a Chinese customary trust and, in other words, the defence of adverse possession failed. It followed that the Counterclaim, which solely relied upon the defence of adverse possession must also fail. The court then rightly entered judgement against D1 and dismissed the Counterclaim. As ruled in B + B, the said decision in the Order 14A Hearing finally determined the action and put an end to the dispute.

52.  This then, in substance and in form, shows that the judge in Order 14A Hearing has disposed of the Land Case by rejecting the defence of adverse possession. This in turn shows that the costs of this hearing could not be “costs occasioned by the counterclaim”.

53.  P argued that the Order 14A Hearing was dealing with the Counterclaim rather than the main claim. On principles regarding the requirements of an Order 14A application, one can hardly see that the resolution of a counterclaim could determine the action and put an end to the dispute. Only determination of issues in relation to the claim or the defence could determine the action.

54.  The direction for the Order 14A Hearing was made upon the parties’ agreement that the issue “whether the Plaintiff was and is a Chinese customary trust (hereditary in nature) within the meaning of s15 of the New Territories Ordinance” should be determined. All parties and the judge in the PTR hearing must have thought that the said issue was a disputed point of fact or law relied on by way of claim or defence but not an issue in the Counterclaim. It is understandable that the resolution of a counterclaim will probably not have the effect of finally resolving the controversy between the parties.

55.  It is obvious that the Order 14A Hearing was conducted in a way to deal with the defence of the main claim, namely the adverse possession raised by D1. The decision in the hearing resulted in the Counterclaim being dismissed. Therefore, the costs in the Order 14A Hearing could not be “the costs occasioned by the counterclaim” as stated in s16C(1)(b)(ia) of LAO.

Conclusion

56.  In the light of the above analysis, P was not entitled to recover the costs of the Order 14A Hearing under s16C(1)(b)(ia) of the LAO. I order that P’s summons be dismissed.

Costs

57.  Costs should follow event. I order that costs of the present P’s summons including all costs reserved and the hearing on 31 October 2024 be paid by P to the DLA, to be taxed if not agreed.

Order

58.  By the reasons aforesaid, I make the following orders:

(1)  The Plaintiff’s summons filed on 25 July 2023 be dismissed;

(2)  The Costs of the Plaintiff’s summons including all costs reserved and the hearing on 31 October 2024 be paid by the Plaintiff to the Director of Legal Aid, to be taxed if not agreed; and

(3)  The 1^st Defendant’s own costs to be taxed in accordance with the Legal Aid Regulations.

59.  Lastly, I remain grateful to P’s counsel Miss Teresa Yu and Legal Aid Counsel Miss April Wong for their assistance in this hearing.