Winland Property Holding Ltd and Others v. Chang Sai Ho Formerly Known As Law Wai Kun and Others
Read the full judgment text of LDCS 7000/2022 on BabelCite. This LDCS judgment was delivered on 18 June 2025.
1. Under paragraph 7 of the Judgment of the Lands Tribunal dated 28 March 2024 (“the Judgment”), the Applicants are ordered to pay the Respondents the costs of the proceedings (“the Costs Order”).
Cited by 7 cases · Cites 1 case
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LDCS 7000/2022 [2025] HKLdT 41 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION LAND COMPULSORY SALE MAIN APPLICATION NO 7000 OF 2022 _________________
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_______________________________________________ REASONS FOR DECISION (Preliminary Issue of Undue Delay) _______________________________________________ Introduction 1.Under paragraph 7 of the Judgment of the Lands Tribunal dated 28 March 2024 (“the Judgment”), the Applicants are ordered to pay the Respondents the costs of the proceedings (“the Costs Order”). 2.On 5 November 2024, more than 7 months after the Costs Order, the 1st Respondent (“the Receiving Party”) commenced taxation proceedings by filing the Notice of Commencement of Taxation and the Bill of Costs (“the Bill of Costs”). 3.On 6 January 2025, the 1st to 3rd Applicants (“the Paying Party”) filed their List of Objections to the Bill of Costs. They raised therein a preliminary issue of undue delay, asking the Court to disallow interest or part of the taxed costs in accordance with Order 62 rule 22(5) of Rules of the High Court (“RHC”). 4.Pursuant to Order 62 rule 22(1) RHC, if within 3 months after the completion date, the Receiving Party has not agreed the amount of costs with the Paying Party, he shall commence taxation proceedings pursuant to Order 62 rule 21 RHC. 5.Order 62 rule 22(5) RHC provides that
6.The Paying Party’s complaint was that the Receiving party should have commenced taxation proceedings on or before 27 June 2024, i.e. within 3 months of 28 March 2024 when the Costs Order was made. There was undue delay of more than 4 months from 28 June 2024 to 4 November 2024, so the Receiving Party should be deprived of interest on the taxed costs for such period. 7.First of all, taking 28 March 2024 as the completion date is not correct. Since the Costs Order was an order nisi, according to Order 62 rule 22(9)(a)(ii) RHC, the completion date should be the date on which the Costs Order is made absolute, i.e. 11 April 2024. Therefore, the delay in commencing taxation proceedings is less than 4 months from 11 July 2024 to 4 November 2024. 8.At the taxation hearing on 18 June 2025, the Bill of Costs was taxed. There is no application within the prescribed time limit under Order 62 rule 33 RHC to review my determination in respect of the taxed costs. Regarding the preliminary issue of undue delay, I ruled in favor of the Receiving Party that there was no undue delay to attract sanction under Order 62 rule 22(5) RHC, with reasons I now give. Duty on Both Parties 9.In most if not all cases when the paying party raises the issue of undue delay, the receiving party will seek to rely on the case of Commissioner of Inland Revenue v Li & Fung (Trading) Ltd [2014] 4 HKC 61 as a shield. In it, Master Levy ruled that while the receiving party bore the ultimate responsibility of commencing taxation without delay, the paying party is also required to further the underlying objectives of Order 1A rule 3 RHC and to resort to the protection accorded under Order 62 rule 22(3) RHC i.e. to compel a receiving party to commence taxation. If the paying party does not, and chose to take a passive approach, he cannot later take advantage of the receiving party’s delay. 10.The Receiving Party in addition to his primary argument that the delay is not undue, also advanced the above argument that the complete inaction on the part of the Paying Party disentitled them of the relief under Order 62 rule 22(5) RHC. 11.I am of the view that the Paying Party’s inaction alone cannot be the Receiving Party’s shield to escape sanction for undue delay if any. While the duty is on both parties, if the Paying Party under inaction cannot reap the benefit of delay, neither can the Receiving Party take advantage of the Paying Party’s inaction. 12.In order to reflect the respective accountability for undue delay and inaction, the practice of some taxing masters is to apportion the blame and disallow half of the interest of the taxed costs for the relevant period. How discretion is to be exercised will depend on the facts of each case. Relevant Events in Chronological Order 13.The delay for the period from 11 July 2024 to 4 November 2024 will be considered against the following events in chronological order.
14.The Receiving Party has neither negotiated costs nor commenced taxation within the required period of 3 months under Order 62 rule 22(1) RHC. The 3-month Requirement 15.The 3-month period after the completion date was to enable parties to have time to actively negotiate for settlement, and when there was no prospect of agreement, to start preparing the bill of costs timely such that it would be ready for filing before the 3-month period expires. 16.Noticeably, practitioners taking the 3-month requirement light-heartedly has somehow become the norm in conducting taxation proceedings. Many solicitors for the receiving party are slack and loose during the 3-month period without taking active steps. Some even think that there is a 2-year period to commence taxation proceedings; this is of course misconceived. The 2-year limitation under Order 62 rule 22(7) RHC is a time bar provision; it operates differently from the 3-month requirement. 17.In order to strictly comply with the 3-month requirement, solicitors for the receiving party should discipline themselves by devising and following a timetable, ensuring that all necessary tasks are addressed at appropriate times. What should the timetable be like? 18.I am of the view that the following timetable (subject to necessary modifications and adjustments) is definitely achievable within the 3-month period, as long as solicitors for the receiving party act in all diligence and with utmost sincerity to observe the rules.
19.Two points have to be emphasized. First, the need to accommodate LCD’s workload or personal engagement does not justify delay in commencing taxation proceedings. I note that it is not uncommon LCDs take months to prepare the bill of costs; probably because they have an over-whelming amount of tasks at one time, hence sitting on the papers causing the delay. If this is permitted to continue, the purpose of the 3-month requirement can hardly be achieved. To regulate the existing practice, if the intended LCD upon instructions is unable to commit himself/herself to finish preparing the bill of costs within 28 days, another available LCD ought to be instructed. 20.I regard 28 days reasonable and more than sufficient for LCD to prepare the bill of costs.
21.Second, on-going settlement negotiation does not ipso facto justify delay of commencement of taxation proceedings although one of the underlying objectives under Order 1A rule 1(e) RHC is to facilitate the settlement of disputes. 22.If there is genuine intention to settle, the commencement of taxation proceedings would not affect parties’ attempt to further their negotiation thereafter. In case parties are very close to reaching a settlement when the 3-month period is about to expire, for the purpose of saving costs, it is practical that a joint application be made to the court for extension of time to commence taxation. 23.As discussed above, it is high time we straightened and regulated the pervading bad habit of delay in the conduct of taxation proceedings. The Alleged Undue Delay 24.To attract sanction of Order 62 rule 22(5) RHC, there has to be undue delay, a delay which is unwarranted, inordinate and unjustifiable. Whether a delay can be reasonably explained will depend on the circumstances of each case. 25.In the present case, the Receiving Party failed to initiate settlement negotiations nor prepare the bill of costs before 11 July 2024. Explanation is as follows. By the Judgment, the Lands Tribunal adjudged inter alia that the subject Lot be sold by way of public auction for the purposes of redevelopment of the Lot, on the particulars and conditions of sale “substantially the same as those in the draft Particulars and Conditions of Sale” initialed and approved by the Tribunal. Therefore, there was the paragraph 6 in the Judgment expressly giving parties liberty to apply to the Tribunal for further directions. 26.The Receiving Party submitted that the public auction was scheduled to take place on 14 May 2024, after the Judgment parties were actively engaged in discussion concerning the draft Particulars and Conditions of Sale. Matters transpired that they had to seek further directions from the Lands Tribunal concerning the conditions of sale. It is submitted that it is justifiable the Receiving Party withheld commencement of taxation proceedings because the seeking of further directions from the Lands Tribunal may impact on the ultimate scope of the Costs Order. 27.The Paying Party submitted that notwithstanding parties had to seek further directions from the Lands Tribunal, the Receiving Party should have commenced taxation proceedings without delay. The Paying Party argued that seeking further directions from the Lands Tribunal would not have any bearing on setting off parties’ liability for costs; but it does not dispute that there is possible impact on the ultimate scope of the Costs Order. 28.Having considered parties’ argument in light of the relevant background, I am persuaded that the Receiving Party did not lie idly. When the public auction was pressing, there was an imminent need to finalize the particulars and conditions of sale. I accept that it is excusable to focus the effort thereon and withhold commencement of taxation proceedings for the time being. Further, it is practical to wait until further directions of the court were sought, because it may impact on the ultimate scope of the Costs Order. 29.Notwithstanding that inaction during the 3-month period is reasonably explained as above, justification is still required as to why taxation proceedings were only commenced on 5 November 2024 and not earlier. 30.LCD was instructed in August 2024. There is no explanation why it was not until 17 October 2024 the Paying Party was provided with a copy draft bill of costs. Although it is unclear to me whether there was delay on the part of the LCD, it is clear that the draft bill of costs could and should have been made available for the Paying Party much earlier, noting that the claim for LCD’s costs in preparing the bill is 35 hours. 31.The Receiving Party submitted that the Paying Party was the one who caused or contributed to the delay. Much time was spent in waiting for the Paying Party’s response to the estimate of costs provided on 16 July 2024 and the draft bill of costs provided on 17 October 2024. However, there was no response at all. 32.Worse still, there was no explanation of the neglect or refusal to respond. This attitude of the solicitors of the Paying Party is wholly unacceptable, instead they pointed fingers and placed blame on the Receiving Party. 33.Having considered matters in the round, I do not think the Receiving Party’s delay is inordinate or inexcusable, although the progress between August and October 2024 could have been expedited. I find that there was no undue delay to attract sanction under Order 62 rule 22(5) RHC.
Mr Barry Leung, Law Costs Draftsman, instructed by Messrs So, Lung & Associates, solicitors for the 1st Respondent/Receiving Party Mr Jimmy Tzu, Law Costs Draftsman, instructed by Messrs Lo & Lo, solicitors for the 1st to 3rd Applicants/Paying Party | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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