The Incorporated Owners of Shatin New Town v. Yeung Kui
Read the full judgment text of CACV 45/2009 on BabelCite. This Court of Appeal judgment was delivered on 5 February 2010 before Cheung JA, Stone J, Lunn J.
Civil procedure – costs – variation of costs order – refusal to mediate – Practice Direction on Pilot Scheme for Building Management Cases – Deed of Mutual Covenant – building management dispute. The Court of Appeal allowed the applicant's appeal concerning the interpretation of a Deed of Mutual Covenant and ordered costs of the appeal and below against the respondent on a provisional basis. The respondent applied to vary the costs order, arguing that each party should bear its own costs because the applicant had unreasonably refused to participate in mediation directed by the Tribunal. The Court of Appeal considered the Practice Direction on Pilot Scheme for Building Management Cases, which encourages mediation and treats unreasonable failure to mediate as a costs factor, but provides that a party with a reasonable explanation for non-participation shall not suffer an adverse costs order. The court held that the case ultimately involved a point of law on DMC interpretation and the applicant had a responsibility to apply the DMC correctly, and that the applicant's earlier settlement offer immediately before the hearing below, which the respondent's counsel had rejected, further weakened the respondent's complaint. The application to vary was refused and the provisional costs order was maintained. Application dismissed.
Legal issues: Whether costs order should be varied for applicant's refusal to mediate
Outcome: Application to vary costs order refused; provisional costs order maintained in favour of the applicant against the respondent.
Cited by 8 cases
|
CACV 45/2009 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 45 OF 2009 (ON APPEAL FROM LDBM NO. 339 OF 2007) ----------------------
---------------------- Before : Hon Cheung JA, Stone and Lunn JJ in Court Date of written application by the Respondent : 17 December 2009 Date of written response by the Applicant : 31 December 2009 Date of written reply by the Respondent : 14 January 2010 Date of Decision : 5 February 2010 ---------------------- D E C I S I ON ---------------------- Hon Cheung JA : Variation of costs order 1.This Court allowed the applicant’s appeal and ordered costs of the appeal and below against the respondent on a provisional basis. 2.The respondent applied to vary the costs order. He argued that each party should bear its own costs because the applicant had unreasonably refused to resolve the dispute by mediation. 3.Both parties have lodged written submissions on this application and I make this decision based on their written submissions. Proposal to mediate 4.The respondent had on 16 October 2008 asked the Land Tribunal (‘the Tribunal’) to consider whether it would direct the parties to proceed to mediation. The hearing before the Tribunal was scheduled to be heard on 2 and 3 December 2008. 5.The applicant in response to the Tribunal’s inquiry stated that it was not prepared to participate in the mediation. The reasons are set out in its solicitors’ letter of 3 November 2008.
6.In view of the applicant’s response the Tribunal did not direct mediation. Practice Direction 7.According to the ‘Practice Direction on Pilot Scheme for Building Management Cases’, parties are encouraged to resolve their disputes by alternative means such as mediation and the unreasonable failure by the parties to make a good faith attempt to mediate will be taken into account by the Tribunal in deciding on costs. However, if a party has a reasonable explanation for non-participation, he shall not suffer any adverse costs order. In determining whether a party has acted unreasonably in refusing to proceed with mediation or other alternative dispute resolution mechanism, the Tribunal shall take into account all relevant circumstances. My view 8.While I share the desire that parties should make all possible attempts to resolve their disputes by alternative means such as mediation, this is a case which ultimately involves a decision on law concerning the correct interpretation of the terms of the Deed of Mutual Covenant (‘DMC’). Bearing in mind that the applicant has a responsibility in applying the DMC correctly, I do not consider that its refusal to take part in the mediation should be visited with an order that it could not recoup the costs below. In any event, the applicant’s counsel had immediately before the commencement of the hearing below proposed to the respondent’s counsel to settle the proceedings on the terms that the respondent should pay up the outstanding management fee (without interest) and the costs that had been already awarded in favour of the applicant (but not the costs of the whole proceedings in respect of which there would be no order leaving it to the parties to bear their own costs). The costs then awarded to the respondent were of modest amounts. 9.The offer was turned down by the respondent’s counsel who apparently put forward a different proposal. In my view the respondent cannot now justifiably complain when the outcome of the appeal was not in his favour. 10.Likewise the respondent should consider his chance of success realistically in the light of the applicant’s appeal. The applicant had to come to this Court in order to reverse the decision below. I do not see why the applicant should not be entitled to the costs of the appeal. Conclusion 11.Accordingly the costs order is maintained and the application to vary is refused. Hon Stone J : 12.I agree. Hon Lunn J : 13.For the reasons given by Cheung JA, I agree that the provisional order as to costs (paragraph 52 of his judgment) is to be affirmed.
Messrs Tony Kan & Co, for the Applicant Messrs S. K. Lam, Alfred Chan & Co, for the Respondent |
Other judgments that cite this case
Further hearings and rulings under CACV 45/2009