Perfect Horizon Ltd v. Co Sam and Others
Read the full judgment text of LDCS 23000/2018 on BabelCite. This LDCS judgment was delivered on 18 June 2021.
1. This decision deals with the respective applications concerning costs by the applicant and the respondents by way of their respective letters to the tribunal to be elaborated below.
Cited by 8 cases · Cites 2 cases
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LDCS 23000/2018 [2021] HKLdT 46 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION LAND COMPULSORY MAIN APPLICATION NO. 23000 OF 2018 _______________________
_______________________ Before: Deputy District Judge Michelle Soong, Presiding Officer of the Lands Tribunal and Mr Lawrence Pang, Member of the Lands Tribunal, in Chambers Date of Decision: 18 June 2021 _______________________ DECISION ON COSTS _______________________ 1.This decision deals with the respective applications concerning costs by the applicant and the respondents by way of their respective letters to the tribunal to be elaborated below. Background 2.The various applications concerning costs originated from an earlier application for a compulsory sale order under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap 545 (“the Ordinance”) (“the Application”) to sell all the undivided shares of the Remaining Portion of New Kowloon Inland Lot No 3759 and Section A of New Kowloon Inland Lot No 3759 (“the Lot”). Erected on the Lot is a pair of 5-storey tenement buildings sharing 2 common staircases (“the Buildings”) with the postal address of Nos 73 & 75 Lion Rock Road respectively. 3.By our judgment handed down on 11 September 2020 (“the Judgment”), we ordered, inter alia, that all the undivided shares in the Lot, be sold by way of a public auction for the purposes of the redevelopment of the Lot under s.4(1)(b) of the Ordinance (“the Sale Order”). We also ordered in paragraph 120 of the Judgment that the applicant do pay the respondents’ costs in these proceedings including any costs reserved to be taxed on the High Court scale if not agreed with certificate for counsel granted. Applicant’s Failed Application to Review Reserve Price 4.On 9 October 2020, the applicant took out a summons to review the reserve price for the public auction (“the Summons”). 5.On 16 October 2020, this tribunal without inviting submission from the respondents, without receiving any documents from the respondents and without holding any hearing dismissed the Summons by reasons of procedural breaches and lack of substantive merits. 6.On 19 October 2020, the respondents by a letter invited the tribunal to make an order to award costs of the Summons to the respondents, the case Good Faith Properties Ltd v Cibean Development Co Ltd [2014] 5 HKLRD 534 was cited. The respondents did not request taxation of costs on an indemnity basis. 7.On 30 October 2020, the applicant by a letter indicated to the tribunal that they agreed to bear the respondents’ costs of the Summons and suggested a time table for the filing of a costs statement and a list of objection for summary assessment of costs by the tribunal if the parties could not agree among themselves. The respondents did not raise objections to the applicant’s proposed directions. 8.On 2 November 2020, the tribunal ordered costs of the Summons be to the respondents and directed the parties to file costs statement and objections for assessment by the tribunal (if parties could not agree) accordingly. The respondents filed their statement of costs on 9 November 2020 and the applicant filed their objections on 13 November 2020. The Auction 9.In the auction held on 6 November 2020, no bid was received and therefore the Lot now remains unsold. Pursuant to section 5(4) of the Ordinance, the Sale Order was deemed to be of no effect by 12 December 2020. Respondents’ Application (by Letter) for Indemnity Costs 10.By a letter dated 23 December 2020 from the respondents’ solicitors, the respondents asked that costs be given on an indemnity basis for :-
11.On 5 January 2021, the applicant by paper submissions opposed the respondents’ application. In relation to the Costs Order re Sale, the applicant submitted that paragraph 120 was a final order substantially disposing of the compulsory sale application. It was not an order nisi and there was no room for a party to apply for its variation. 12.It was further submitted that the tribunal is a court of record established under section 3 of the Lands Tribunal Ordinance, Cap 17 and is functus officio in respect of the costs order made. By now, the tribunal has no power to revisit the Judgment including the costs order therein which could only be set-aside or varied on appeal. It cannot re-open a matter after judgment/order has been entered and this principle is further fortified after the perfection and sealing of the order and/or the order being entered as part of its record. 13.The applicant submitted that the same principle should equally apply in relation to the Costs Order re Summons which did not specify that the costs shall be taxed on an indemnity basis. Furthermore, in compliance with the tribunal’s direction dated 2 November 2020, the respondent has already filed their costs statement and the applicant has already filed their objections thereto for the tribunal to assess costs. Such order, which forms part of the court’s record and has already been acted upon by the parties accordingly, cannot be varied or amended. 14.On 7 January 2021, the tribunal considered that the respondents’ application for indemnity costs by way of a letter was improper and directed the respondents to file proper application by Form 1 with return dated fixed on 8 April 2021 for arguments. 15.On 9 March 2021, the respondents by a letter replied that they would not take out any interlocutory application as per the tribunal’s direction. The respondents did not indicate whether they were in effect abandoning or withdrawing their earlier application for indemnity costs but it was only fair to assume it to be the case. Applicant’s Application for Costs (by Letter) re. Respondents’ Application for Indemnity Costs 16.On 25 March 2021, it came the applicant’s turn to seek against the respondents their costs in resisting the respondents’ application for indemnity costs on an indemnity basis. 17.The applicant submitted that as a result of the respondents’ application which was “ill-considered and misconceived”, legal costs have been incurred by the applicant. Among other arguments, the applicant submitted that with the benefit of hindsight, the failure of the auction should be attributed to the respondents’ wrongful insistence in maintaining an unrealistic reserved prices which could not meet expectations of the market. 18.It was further submitted that despite the tribunal’s order dated 7 January 2021 directing the respondents to properly file the Form 1, the respondents did not notify the applicant or the tribunal that they were not going to file the Form 1 until 9 March 2021 which led to further costs having been thrown away by the applicant during the 2-month period between 7 January 2021 to 11 March 2021. The applicant considers it an aggravating factor that justifies indemnity costs against the respondents. 19.On 9 April 2021, the respondents by way of a letter (“R’s Letter”) resisted the applicant’s application, the relevant paragraphs of the respondent’s letter are appended below:-
Discussion 20.It should be noted that for both the Costs Order re Sale and the Costs Order re Summons, the respondents did not file any application for review or appeal. What the respondents did essentially was to, by way of a letter, seek to re-open the issue of costs and to vary the costs order months after the relevant costs order had been made[1]. 21.We agree with the applicant that the tribunal had no jurisdiction or power to re-open the order on costs in the present circumstance of the case. Discussion of the circumstances for rectification of a perfected order can be found in paras 20/11/6-20/11/8 of the Hong Kong Civil Procedure 2021, Vol 1 (“the White Book”). 22.In Re Leung Kit Hing Doris, CACV 67/2013 (unreported, dated 20 October 2014), the Court of Appeal said at §3 as follows:
23.In our view, even if the tribunal has the jurisdiction or power to re-open the costs issue, the respondents’ application shall not be entertained on merits. 24.In gist, the respondents blame the applicant for not putting in a bid at the auction on 6 November 2020 which led to the consequence of the Lot’s remaining unsold[2]. This forms the basis of the respondents’ request for indemnity costs against the applicant. 25.It should be noted that there is no provision in the Ordinance which enjoins the applicant to bid at the auction subsequent to the Sale Order. Section 5(5)(b) of the Ordinance only states that “nothing in this Ordinance shall operate to prevent the majority owner or any minority owner of the lot the subject of an order for sale from being the purchaser of the lot”. This provision obviously does not compel either the majority owner or any minority owner of the Lot to bid at the auction. There is actually no provision in the Ordinance that compels anyone to put in any bid. 26.Section 5(4) of the Ordinance has already provided for the situation where the Lot may not be sold within the 3 months immediately following the date on which the order is made and, in if that situation occurs, the order for sale shall immediately be deemed to be of no effect as if it had been cancelled by the Tribunal. 27.Under section 3 of the Ordinance, any person or persons who owns or own not less than the specified percentage of the undivided shares in a lot may make an application for sale. There may be a group of owners joining together applying for a collective sale. These owners may right from the start never intend to bid at the auction but only wish to join force in selling their interests in the lot together. They would not be made to pay indemnity costs simply because they did not bid in the auction. The applicant in the present case should be treated alike. In our view, the fact that the Lot could not be sold successfully at the auction cannot justify an indemnity costs order against the applicant. 28.A fortiori, once an application for compulsory sale is determined by the tribunal after giving the Judgment and making the Costs Order re Sale in paragraph 120 therein, the proceedings came to an end. In principle, the costs order shall only reflect the conduct and events which took place during (or before) the proceedings. It is not contingent upon events happening afterwards. The outcome of the auction sale was only a post-litigation event which should be independent of and has no bearing on the position of costs. 29.Concerning paragraph 5(c) of R’s Letter, we agree with the applicant that paragraph 20/11/6 (3) of the White Book cannot come to their rescue. There is simply no new fact that may require an order supplemental to the order for sale or the Costs Order re Sale made on 11 September 2020. Apparently, the applicant gave no undertaking and the Ordinance imposed no obligation on the applicant that it must be a bidder or an underwriter in the auction. 30.As for paragraph 5(a) of R’s Letter, in our view Rule 4(1)[3] of Cap.17A is not that relevant to the present concern but since the respondents seek to rely on it, our only comment is that the respondents’ application by way of letter dated 23 December 2020 was not substantially in accordance with Form 1 and, by the direction on 7 January 2021, the tribunal disapproved of the respondents’ manner of application. 31.Concerning paragraph 5(b) of R’s Letter, no doubt under section 12(1) of Cap.17, the tribunal has full power to determine by whom and to what extent the costs are to be paid but that power obviously shall not undermine the principle of finality of proceedings as discussed in paragraphs 20 to 23 above. Once that power has been exercised by the tribunal by the making of a costs order, the issue of costs shall be taken as concluded and shall not be lightly re-opened at the whim of the parties except in certain permitted situations which did not happen in the present case. 32.About the “liberty to apply … to clarify existing (costs) obligations” argument in paragraph 5(d) of R’s Letter, in our view, there was no ambiguity in the relevant costs orders that require clarifications. As a matter of fact, the respondent’s letter application[4], in the entirety of its contents, never mention about “clarify” or “clarification(s)” at all. The respondents literally were asking the tribunal to vary, as opposed to clarify, the existing costs orders by reason of what happened after the costs orders had been made. Such speciously made argument shall be rejected. 33.As regards paragraph 5(e) of R’s Letter (which is about whether costs on indemnity basis is appropriate), we believe the discussion above has sufficiently dealt with it. Order 34.Concerning the Costs Order re Summons, having considered the respondents’ costs statement (quantifying their costs at $184,600) and the applicant’s objections, we assess the respondents’ costs at $48,000. 35.As for the respondents’ abandoned application for indemnity costs, the general rule is that a party who discontinues or withdraws his claim or summons should pay the costs of the other partyand the burden of persuading the court to depart from this general rule rests on the party who seeks to withdraw. 36.In our view, no good reason has been shown for the departure from the general rule. In any event, the respondents’ application for indemnity costs is devoid of merits both in jurisdiction/procedure and in substance, we therefore order that:-
So, Lung and Associates, for the applicant Cheung & Liu, for the 1st, 2nd and 3rd respondents [1] For the Costs Order re Sale, the respondents applied to re-open more than 3 months after the costs order was made; for the Costs Order re Summons, the respondents applied to re-open about 51 days after the costs order was made. [2] Paragraphs 2 and 3 of R’s Letter refer. [3] Rule 4(1) : An interlocutory application unless the Tribunal otherwise permits shall be made in writing by filing with the registrar an application substantially in accordance with Form 1. [4] Respondents’ letter dated 23 December 2020. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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