The Commissioner of Rating & Valuation v. Chan Ho Chin Colin

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS REFERENCES APPLICATION

Application No. LDMR 48 of 2000

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RULING ON COSTS

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1. In my judgment dated 26 June 2001, I make an order nisi for costs that the respondent should bear the applicant's costs of this application.

2. By a summons dated 7 July 2001, the respondent applied for such costs order nisi to be varied. In the summons, the respondent asked for the following relief:

"(1) the respondent should bear the applicant's costs of this application and the costs order nisi be varied as follows:

(a) the costs of and incidental to the preliminary issue of whether or not the failure of the respondent to commence work on the date given in the possession order constitutes a strict liability offence and that attracts the penalty being applied for automatically should be borne by the applicant and paid to the respondent by the applicant;

(b) subject to aforesaid, respondent should bear the applicant's costs of this application; and

(c) costs to be taxed in accordance with the scale of costs set out in the schedules to Order 62 Rules of District Court if not agreed; and

(2) alternatively, the respondent shall bear the applicant's costs to such extent in percentage or manner as the tribunal thinks just and equitable."

3. The so-called preliminary issue referred to in the summons arose in this manner. At a hearing on 7 March 2001, before Deputy Judge Tong, there were arguments before the learned judge as to whether it was necessary to have a site visit. That was proposed by the respondent and, in response to that, the applicant submitted that whether there would be a penalty is a matter of strict liability offence, therefore it is not necessary for the tribunal to have a site visit.

4. There was no formal application for trial of preliminary issue before Deputy Judge Tong. However, in the light of those submissions, Deputy Judge Tong ordered, on 7 March 2001, inter alia, that

"Preliminary argument will be held on

(a) whether or not the failure of the respondent to commence work on the date given in the possession order constitutes a strict liability offence and will attract the penalty being applied for automatically, and

(b) whether or not site visit is to be carried out will be a matter for the trial judge."

5. With regard to that order, since there has not been any formal application for trial of preliminary issue, my own construction is that it was only, at the most, a direction that the issue of strict liability, if I may so call it, could be argued at the beginning of the hearing. There was, in fact, no separate hearing for trial of preliminary issue in this case.

6. When the matter came before me on the first day of the hearing, that was 18 June 2001, both parties cited the case of Sonic Development Limited, [1999] 2 HKLRD 477 decided by His Honour Judge Yung, in which the tribunal held that, in the exercise of the discretion under section 55A(5)(b), the tribunal will have regard to the circumstances of the case. Further, in the light of the fact that the section used the word "may", this clearly is a matter of discretion and the tribunal must have regard to all the circumstances.

7. In the light of all these, both parties agreed that the tribunal has to consider the evidence and the point about strict liability was not argued as a preliminary point. Rather, the points which the parties relied upon were argued after the close of the evidence by way of closing submissions; and a site visit did take place on the second day of the hearing. I have already explained in detail the reasons for my decision in my judgment dated 26 June 2001 in this matter and I would not repeat the same again.

8. It is right, as submitted by Miss Ho who appeared today on behalf of the respondent, that, in that judgment, I did not hold that the applicant succeed on each and every point they raised; there were points which were raised which I rejected. However, the question is whether, just because of that, I should order costs in the proceedings be apportioned in the manner as suggested by the respondent in their summons dated 7 July 2001.

9. I was referred to the case of Funco Limited v. Secretary for Justice HCAL 106/1999, a decision by Hartmann J on 19 July 2001. In that decision, Hartmann J applied the principles set out by the English Court of Appeal in the case of Re: Elgin Data (No. 2) [1993] 1 All ER 232. The principles as set out by Norse LJ at page 237 are as follows:

"The principles are these:

(1) costs are in the discretion of the court;

(2) they should follow the event, except when it appears to the court that in the circumstances of the case some other orders should be made;

(3) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs.

(4) where improperly or unreasonably, the court may not only deprive him of his costs but order him to pay the whole or a part or the unsuccessful party's costs".

10. Miss Ho submitted, on behalf of the respondent, that this is a case which falls within paragraph 3 and 4 of those principles. She submitted that there has been an increase -- or, rather, a significant increase in the cost of the proceedings because of the strict liability point raised by the applicant and, at the end of the day, they failed on that point. Although Miss Ho said she relied on paragraph 4, she did not elaborate on why she said that that issue was raised improperly or unreasonably, although she did submit to me that the section or the wording of the relevant section in this case is clear.

11. As I said during the course of the argument, the test is not whether this point was raised as preliminary issue. In fact, if one examines the course of the proceedings carefully, one would see that this point was not formally raised as a preliminary issue and has not been dealt with as a preliminary issue. There hasn't been any formal application for trial of preliminary issue and there hasn't been any separate hearing for preliminary issue. It was just a point raised by the applicant with a view to short-circuit the need for a site visit. But, at the end, as explained by me, both parties accepted that there would be a site visit.

12. Coming back to the test as set out in Elgin Data (No. 2), on the first limb, that is, paragraph 3 in that dicta, I have asked myself whether this strict liability issue has caused a significant increase in the length or cost of the proceedings. In my judgment, the answer is no.

13. Miss Ho said that the respondent had spent quite a number of hours in preparation on this point but that does not lie comfortably with her submission that, in fact, the wording of the section is clear. Furthermore, one has to bear in mind that it is not just an increase in the costs incurred which would be sufficient to satisfy this requirement. What is required is that there should be a significant increase because, otherwise, this exception would apply to almost every case where the successful party fails on some of the issues. Inevitably, there would be time and cost spent on those issues by both sides. If the court is to accept any increase as suffice to trigger this exception, this would no longer be an exception; rather, it would become the general rule.

14. So, before the court start to exercise a discretion by following this principle, there must be a significant increase in the length or cost of the proceedings. Applying that to the present case, I do not regard the raising of this point about strict liability as contributing significantly to the cost of the proceedings. Therefore, the respondent cannot rely on paragraph 3 in that dicta to ask for a departure from the general rule.

15. As to paragraph 4, as I have said, the respondent has not elaborated during the course of argument as to why it was submitted that the points were raised improperly or unreasonably. The fact that the section is clear is neither here nor there.

16. I am not prepared to say that the applicant raised this allegation improperly or unreasonably, bearing in mind that there is very few case law on this subject at the time of the hearing. I do hope that my judgment in this case will elucidate some of the issues regarding the application of that section. However, with regard to the present application, I hold that the respondent did not successfully make out a case that the applicant had raised this issue improperly or unreasonably.

17. In the circumstances, I would dismiss the application of the respondent in their summons of 7 July 2001 and my order nisi would become absolute with regard to costs.