LTPD: CS No. 1/2011
Direction Issued by the President of the Lands Tribunal
Pursuant to Section 10(5)(a) of the
Lands Tribunal Ordinance (Cap. 17)
Mediation for Compulsory Sale Cases
Under the Land (Compulsory Sale for Redevelopment)
Ordinance (Cap. 545)
Part A
1. This Direction is issued pursuant to section 10(5)(a) of the Lands Tribunal Ordinance, Cap. 17 and applies to all cases ("Compulsory Sale Cases") under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 ("the Compulsory Sale Ordinance").
2. As stipulated in the Direction on Application of the Civil Justice Reform to the Lands Tribunal issued on 12 February 2009 (LTPD: CJR No. 1/2009), Order 1A of the Rules of the High Court is of general applicability in the context of cases in the Lands Tribunal ("the Tribunal"). Order 1A sets out the underlying objectives of the Rules of the High Court, and can be applied to the Tribunal by virtue of section 10(1) of the Lands Tribunal Ordinance.
3. An underlying objective of the Rules of the High Court is to facilitate the settlement of disputes. The Court has the duty as part of active case management to further that objective by encouraging the parties to use an alternative dispute resolution procedure ("ADR") if the Court considers that appropriate ("the duty in question"). The Court also has the duty of helping the parties to settle their case. The parties and their legal representatives have the duty of assisting the Court to discharge the duty in question1.
4. Thus, by applying Order 1A to the Tribunal, the Tribunal has the same duties as in the High Court to facilitate the settlement of disputes. The parties and their legal representatives involved in cases before the Tribunal also have the duty to assist the Tribunal to discharge the duty in question.
5. The aim of this Direction is to ask the parties to assist the Tribunal to discharge the duty in question in Compulsory Sale Cases. ADR means a process whereby the parties agree to appoint a third party to assist them to settle or resolve their dispute and a common mode of ADR is mediation. Settlement negotiations between the parties do not amount to ADR. This Direction, however, applies to mediation only.
6. The Tribunal is entitled to and may take into account of any unreasonable failure of a party to engage in mediation in its consideration of (a) whether to grant an order under a compulsory sale application, and (b) in exercising its discretion on costs. These will be addressed in greater detail in Part C below.
7. Legal representatives should advise their clients of the possibility of the Tribunal in refusing to make an order under a compulsory sale application and/or in making an adverse costs order as set out in Part C below.
Part B
B1. Where all the parties are legally represented
8. With effect from the effective date stated below, the following procedure shall be applied automatically to Compulsory Sale Cases where all the parties are legally represented, and the parties must comply with the procedure as if they were specifically directed by the Tribunal:-
(1) An applicant shall file with the Tribunal a Mediation Certificate at the same time when the Notice of Application is filed. The Mediation Certificate shall contain the information required and be in the form as per Appendix A, with modifications if necessary, and signed by the solicitors and the party they represent.
(2) A respondent shall file with the Tribunal a Mediation Certificate at the same time when the Notice of Opposition is filed. The Mediation Certificate shall contain the information required and be in the form as per Appendix A, with modifications if necessary, and signed by the solicitors and the party they represent.
(3) If a party (either the applicant or the respondent) wishes to attempt mediation, he should as soon as practicable after filing the Mediation Certificate serve a Mediation Notice on the other party or parties in the dispute in the form and containing the information as per Appendix B, with modifications if necessary, and signed by the party or his solicitor.
(4) Upon receiving the Mediation Notice, the other party or parties shall respond to the party serving the Mediation Notice by way of a Mediation Response within 14 days (or such other time as the parties may agree or as the Tribunal may direct) in the form and containing the information as per Appendix C, with modifications if necessary, and signed by the responding party or his solicitor.
(5) Where the parties put forward different proposals in the Mediation Notice and Mediation Response, the parties shall attempt to reach agreement on the proposals as soon as practicable. Any agreement reached upon such discussion shall be reduced into writing and be referred to as the Mediation Minutes, which shall be signed by all the parties or their solicitors.
(6) Where the parties are unable to reach agreement on certain proposals in the Mediation Notice and Mediation Response,
(a) but the parties are willing to have their differences resolved by directions of the Tribunal, they may make a joint application to the Tribunal for directions resolving the points of difference between them; and
(b) in the absence of such willingness, any party may apply to the Tribunal for directions and the Tribunal may give such directions as are appropriate.
(7) Where the parties reach agreement on mediation in accordance with the Mediation Notice, Mediation Response and any Mediation Minutes, the parties shall proceed in accordance with the agreement and, if appropriate, may apply to the Tribunal for an interim stay of the proceedings.
(8) The Mediation Notice and Mediation Response shall be filed with the Tribunal at the time of the service of the same on the other party. The Mediation Minute shall also be filed with the Tribunal within 3 days after it has been signed by or on behalf of both parties. These documents may be taken into account by the Tribunal in considering whether to grant an order under a compulsory sale application and in exercising its discretion on costs as stipulated in Part C below.
(9) The Tribunal may, on the application of one or more of the parties or of its own motion, stay the proceedings or any part thereof for the purpose of mediation for such period and on such terms as it thinks fit, bearing in mind the importance of avoiding so far as possible, disruption to the progress of the case, and of avoiding, save in exceptional circumstances, any postponement of the trial dates.
(10) Where the Tribunal stays the proceedings, the applicant must promptly inform the Tribunal if a settlement is reached and the parties should take the necessary steps to conclude the legal proceedings formally.
B2. Where not all the parties are legally represented
9. When one or more parties in Compulsory Sale Cases are not legally represented, the Tribunal may at a suitable stage, either on the application of a party or on its own motion, consider whether mediation is appropriate, taking into account of all the circumstances. The Tribunal may seek information from the parties for this purpose, always respecting privilege.
10. Where the Tribunal considers that mediation is appropriate, the Tribunal may at call-over hearings or in chambers give directions that the parties shall follow the procedure set out in paragraph 8 above, or any part thereof, with any necessary modifications.
Part C
C1. Reasonable steps to acquire under section 4(2) of the Compulsory Sale Ordinance and costs sanction for unreasonably failing to engage in mediation
11. Section 4(2) of the Compulsory Sale Ordinance stipulates that the Tribunal shall not make an order for sale unless it is satisfied that, amongst other things, the majority owner has taken reasonable steps to acquire all the undivided shares in the lot (including, in the case of a minority owner whose whereabouts are known, negotiating for the purchase of such of those shares as are owned by that minority owner on terms that are fair and reasonable).
12. With the implementation of the Civil Justice Reform and the availability of mediation as a mode of ADR in settling or resolving disputes, parties in Compulsory Sale Cases should also attempt mediation to settle the dispute including the purchase of the shares that are owned by the minority owner.
13. The majority owner in Compulsory Sale Cases may not be considered by the Tribunal as having taken all the reasonable steps under section 4(2) of the Compulsory Sale Ordinance to acquire the minority owner's undivided share of the lot, if he unreasonably fails or refuses to attempt mediation with the minority owner. The Tribunal is entitled to take into account such failure or refusal in determining whether an order for sale should be granted.
14. Further, in exercising its discretion on costs, the Tribunal shall take into account of all the relevant circumstances, including any unreasonable failure of a party to engage in mediation, where it can be established by admissible materials.
15. Legal representatives should advise their clients of the possibility of the Tribunal refusing to make an order for sale and/or making an adverse costs order when a party unreasonably fails to engage in mediation.
16. However, the Tribunal shall not refuse to grant an order for sale or make any adverse costs order against a party on the ground of unreasonable failure to engage in mediation when:
(1) The party has engaged in mediation to the minimum level of participation agreed to by the parties or as directed by the Tribunal prior to the mediation in accordance with paragraph 8(6) of this Direction.
(2) A party has a reasonable explanation for not engaging in mediation.
C2. Protection afforded by privilege
17. In all contexts, including dealing with matters arising under this Direction, in exercising its discretion on costs and considering whether an order for sale should be granted, the Tribunal will not compel the disclosure of or admit materials that are protected by privilege, other than under the circumstances that are allowed in accordance with legal principles.
Effective date
18. This Direction shall come into effect on 15 February 2011.
Dated this 28th day of January 2011.
| (Thomas Au) | |
| President, Lands Tribunal | |
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1 See Order 1A, rule 1(e), rule 3 and rule 4(2)(e) and (f).
