Urban Parking Ltd v. The Commissioner of Rating & Valuation

LDRA000377A/2002

LDRA 377 & 378 of 2002

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

RATING APPEAL NOS. 377 & 378 OF 2002

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Coram: Mr. W. K. Lo, Member of the Lands Tribunal

Date of Hearing: 29 September 2003

Date of Judgment: 15 October 2003

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DECISION ON COSTS

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Background

1.Under Section 42 of the Rating Ordinance, Cap. 116 ("the Ordinance"), the Appellant sought to reduce the rateable value of the subject tenement from $7,680,000 to $4,075,834.61 for the year of assessment 2001/2002, and from $6,780,000 to $4,075,834.61 for the year of assessment 2002/2003. On 10 September 2003, this Tribunal gave a written judgment and ordered that the rateable value of the subject tenement be fixed at $7,443,600 and $6,379,200 for years of assessment 2001/2002 and 2002/2003 respectively. This Tribunal also gave an order nisi for costs in favour of the Appellant, with leave to either party to apply within 14 days to vary the order; otherwise the order shall become absolute.

2.On 23 September 2003, the Respondent applied by a summons application for an order to be made that -

(i)	The order nisi for costs in favour of the Appellant be varied to "no order as to costs"; and
(ii)	There be no order as to costs of and incidental to this application.

3.The Respondent's application was heard on 29 September 2003 during which both parties made their submission.

The Respondent's submission

4.The Respondent submitted that although my Judgment dated 10 September 2003 had allowed the appeals, reducing the rateable values for both years of assessment, the Appellant had indeed failed to discharge its burden of proof because (1) all the comparables relied upon by the Appellant's expert witness were rejected, (2) the comparables chosen by the Respondent's expert were adopted as the best comparables, (3) the Tribunal had not found the adjustments made by the Respondent's expert as wrong or unreasonable and (4) the Tribunal adopted, as a matter of professional judgment, slightly higher adjustments in the factors of "location" and "size" than those adopted by the Respondent's expert, hence resulting in the differences in the assessments between the Tribunal and the Respondent's expert.

5.In support of its contention that in rating appeal case, the appellant has to charge its burden of proof, the Respondent quoted the case of Kader Industrial Co. Ltd. v CR & V [1958] HKDCLR 207 at p.210 in which HH Macfee J said, "I will therefore proceed in this case upon the basis that the burden of proof is upon the appellant company to show that the present assessment is beyond the rateable value of the tenement to which it relates."

6.The Respondent admitted that where a party successfully enforced a legal right, and in no way misconduct himself, he should be entitled to costs as of right.

7.Finally, the Respondent submitted that the adjustments "obtained" by the Appellant were nominal. Since the Appellant had not in true sense succeeded in the subject rating appeals, costs should not be awarded in favour of it, and no order as to costs would be appropriate.

The Appellant's submission

8.The Appellant submitted that the appeals were allowed and the percentage differences in the assessments of the rateable values by the Tribunal and by the Respondent were by no means nominal, both in terms of monetary value and percentage (i.e. $236,400 or 3.08% for 2001/2002, and $400,800 or 5.91% for 2002/2003). The Appellant submitted that the saving in rates of $11,820 and $20,040 for the years of assessment 2001/2002 and 2002/2003 respectively were both not insignificant and negligible.

9.The Appellant further submitted that although in civil litigation, the correct and proper approach to protect the Respondent against the possible award of costs was by way of a "calderbank offer"; the Appellant did not receive such offer from the Respondent prior to and after the exchange of expert evidence.

10.Therefore, the main argument raised by the Appellant was that, as far as the Appellant was concerned, why it should be deprived of the costs, which was a legal right afforded to it, the successful party in the present two cases. The Appellant also drew the Tribunal's attention that the appeals were made pursuant to Section 42 of the Ordinance. As such, the appeals were statutory remedies under the Rating Ordinance available to the Appellant against the decisions made by the Respondent. These were different from, in the words of the Respondent, "a contractual dispute where one party sues another for breach of contract". Therefore, the Tribunal should not follow the practice of the courts in contractual disputes.

The findings of the Tribunal

11.Both parties agreed that the issue of costs is a matter of the Tribunal's discretion, which has to be exercised judicially. The rules are set out under s.12(1) of Cap. 17 and O. 62, rule 62, paragraphs 62/2/5 and 62/2/6, Hong Kong Civil Procedure.

12.There is no specific rule on costs made under sub-section 10(3) or 12(2) of Lands Tribunal Ordinance (Cap. 17). Therefore, Order 62 of the Rules of the High Court applies. In particular, Order 62, Rule 3(2) reads as follows: -

"(2) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings, the Court shall, subject to this Order, order to the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs."

13.I agree with the Appellant that the reduction in the rateable values for both years were by no means nominal. Also, I find that the principle of nominal damages in cases pf contract and tort has no direct application in the subject appeals, which were made under Section 42 of the Ordinance. Therefore, there is no doubt that as far as the appeals are concerned, the Appellant is a successful party and that under Order 62, Rule 3(2), the guiding principle should be that the Court should order the costs to follow the event, except when there are circumstances in the cases that warrant other orders to be made. Are there any factors in support of the Respondent's application that the costs order nisi be varied?

14.I have reviewed the whole process of the subject appeals. A total of two and a half days were used for the hearing of the evidence and the submission. I agree with the Respondent's submission that in the Judgment, I have rejected all the comparables of the Appellant's expert but have accepted all the comparables of the Respondent's expert, and that I have disagreed with the adjustments of the latter in the factors of location and size, hence resulting in my assessments being different from those of the latter. Therefore, should the Appellant and its expert be correct in their choice of comparables, the time spent in the hearing will be very much shortened. An overwhelming majority of the hearing time was spent in the experts' evidence in chief, cross-examination and the parties' submission because the Appellant's expert had adopted comparables that were contrary to the general rule in valuation and were all rejected by me. I decide that this is an important factor that I should have had regard to when deciding on the issue of the award of costs in the present cases.

15.In conclusion, I find in the circumstances of the present appeal cases that an order, other than the usual order that the costs to follow the event should be made. And, I decide that the appropriate order should be no order as to costs. As for the costs of this costs application, I also decide that there be no order as to costs.

Order

Representation:

Messrs T.H. Wong & Co., Solicitors for the Applicant

Secretary for the Justice, for the Respondent