呂潔冰及另一人 v. 李漢斌
Read the full judgment text of LDBM 356/2012 on BabelCite. This Lands Tribunal judgment was delivered on 30 September 2014.
1. This is an application for costs made by the Respondent upon the Applicants’ filing of a Notice of Discontinuance. The application is made out of time and leave for extension of time has also to be sought.
Cites 2 cases
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LDBM 356/2012 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BUILDING MANAGEMENT APPLICATION NO. 356 OF 2012 __________________________ BETWEEN
__________________________ Coram: Deputy Judge Tracy Chan, Presiding Officer of the Lands Tribunal Date of Hearing: 24 September 2014 Date of Judgment: 30 September 2014 ________________ J U D G M E N T ________________ 1.This is an application for costs made by the Respondent upon the Applicants’ filing of a Notice of Discontinuance. The application is made out of time and leave for extension of time has also to be sought. Extension of Time 2.The procedure on discontinuing an action in the Tribunal and the consequence thereupon is set out in rule 27 of Cap 17A:
3.The Respondent said that the application for costs was not made within the prescribed time because the legal representative had never received the Notice of Discontinuance until they did a search in the court file 9 months afterwards. It is not disputed that the Notice of Discontinuance was only served on the Respondent himself notwithstanding that it had been made clear in the Notice of Opposition that the address of service should be that of his lawyers. The reason for not serving on the lawyers was, according to the Applicants, that they did not agree that the Incorporated Owners should hire a lawyer for the Respondent. 4.Mr Lun, counsel acting for the Applicants, submitted that the Notice of Discontinuance had actually been received by the Respondent and therefore he was not prejudiced. I could not agree. The Respondent had the right to be properly served the Notice of Discontinuance under the law; upon notice of discontinuance he had the right to apply for costs but within a prescribed time. As what had happened in this case, when it was not served on the lawyers, no application for costs had been made within time and application for extension of time had to be made necessary. Yet, the Applicants refused to grant consent for extension of time despite of their own breach. I am of the view that in the circumstances, the Respondent must have been prejudiced. I am of the view that if the Applicants chose to take such course of action, they have to bear the consequence. I now grant leave for extension of time for the application for costs and find that the Applicants should bear costs for such application. Costs of the Proceedings 5.The Respondent asked for costs from commencement of proceedings to the date they discovered the Notice of Discontinuance by searching the court file on 4 March 2014, as mention, which was 9 months from the actual date of issuance of the same in June 2013. I was informed that fortunate to the parties the delay did not cause any difference in costs because no professional work had been done during the time. 6.There was no argument on the legal principles on costs upon discontinuance of an action. It is trite that in the normal course of event the party who discontinues the action should pay costs. This does not however mean that the other party is entitled to costs as of right. There are exceptions. See Trend Publishing v Vivien Chan & Co (a firm) [1996] 2 HKLR 227 and Lai Kwok Wah v Leung Kwok Hung LDBM 292/2004. The exception relevant to the present proceedings is that, according to the Applicants, “the issue had become academic”. 7.The Applicants, by their affirmations, asserted that they took out these proceedings because the Respondent, who was the chairman of the Incorporated Owners, had twice refused to convene an owners’ meeting upon request made by 5% of the owners. The purpose of the requests was to remove the then management committee and to re-elect members to the same (“the Requests”). Since there was an AGM held on 27 January 2013, about one month after the Notice of Application was filed, and a new management committee had been elected, the issue had therefore become academic. They explained that they did not file the Notice of Discontinuance soon after the AGM because they did not know how to discontinue an action. 8.The Respondent said that not only had they not refused to convene the meeting, they had a formal discussion with the owners who made the Requests including the 2nd Applicant at a management committee meeting held on 24 December 2012 (“the 24 December MC Meeting”), which was 10 days after the 2nd Request. According to the Respondent, the Request was costly because the then committee members were about to step down in the natural course of event by March 2013. The Respondent who was the then chairman endeavoured to find out from the owners who made the Requests whether they would agree to have the Request dealt with in the AGM brought forward to January 2013. This would save a lot of time and money for the owners. At the 24 December MC Meeting, there was discussion as to how and when the Request should be acceded to. The owners who made the Requests had been alerted to the fact that if the AGM was to be brought forward to 27 January 2013, it would be 2 days outside the prescribed 45 days for the owners meeting to be held under the 2nd Request. If they took issue on these 2 days, the AGM would be brought further forward to 24 January 2013 instead to abide by the rule. The Respondent’s case was that the Applicants had agreed that the 2nd Request would be dealt with at an AGM to be brought forward to 27 January from March 2013. 9.The discussion had been recorded as minutes of the 24 December MC Meeting. Relevant passages of the minutes are as follows:
10.From the above, although it was not very clear that there was agreement from the Applicants themselves that the 2nd Request would be dealt with by bringing forward the AGM but it was the 2nd Applicant who had raised the question as to whether the 2nd Request could be dealt with by an AGM to be held in January 2013. There was no opposition raised except there was a discussion on the delay of 2 days. No owners insisted that the AGM should take place on 24 January 2013 instead. The real contention there and then was on whether the Requests should be withdrawn. It is however clear that at the conclusion of the discussion the management committee resolved that an AGM would be held to elect a new committee on 27 January 2013. 11.As I can see from the minutes, the 2nd Request was the only agenda item for the 24 December MC Meeting. I am of the view that the Applicants should at least be aware of the resolution that a new management committee would be elected in a brought forward AGM to be held on 27 January 2013. This was in any event not disputed by the Applicants. What they said was they had not agreed to it. Be that as it may, I am of the view that knowing that an AGM would be held on 27 January 2013 to elect a new management committee and yet insisted in bringing an action on 27 December 2012, the Applicant would have to bear the consequences of their decision. 12.Even if for whatever reasons they said they did not know about such resolution, or they did not trust that this resolution would be carried out and therefore they issued the Notice of Application on 27 December 2012 (in fact this was not their case), there was a notice announcing the resolution issued by the Incorporated Owners on the same day, i.e. 27 December 2012, probably after their filing of the Notice of Application with the Tribunal at noon time. Content of the Notice is as follows:
13.There was no allegation that they did not come across this notice. If they discontinued these proceedings promptly after knowing about this notice, the costs issue would be immaterial because resolution was passed to appoint lawyers for the Respondent on 11 January 2013. Unfortunately, the action was not discontinued. There was yet another notice; and that was the Notice of the AGM issued on 11 January 2013. The Applicant must have learnt from it that there would be election of a new management committee at the AGM to be held on 27 January 2013, yet they did not discontinue the proceedings. The Respondent filed a Notice of Opposition on 17 January 2013, 6 days after the Notice of the AGM. Even after a new management committee was elected on 27 January 2013, they did not discontinue the proceedings. Although there would not be much difference in the costs incurred if the Applicants had discontinued the action on or soon after 27 January 2013, their failure in doing so is definitely not going to assist them in resisting the Respondent’s application for costs. Their saying that they did not know how to discontinue an action is not a good reason even if accepted. If they decided not to find it out they should be responsible for their ignorance, to say the least. 14.The Applicants said that they discontinued because the issue had become academic. Such assertion was not supported by their evidence. The Applicants said in their affirmations that although they had no intention to proceed after the AGM, they filed no Notice of Discontinuance. Such notice was only filed in June 2013, 5 months afterwards, and that was for the purpose of facilitating the investigation of the ICAC officers. 15.Even if I accept that the action was discontinued because the issue had become academic, I am of the view that such event should have been apparent to them before or soon after they filed the Notice of Application on 27 December 2012. I am of the view that it would be wise had they waited until 27 January 2013 to see whether it was necessary to commence these proceedings; or in any event they had ample opportunities to discontinue the proceedings before the Respondent filed his Notice of Opposition on 17 January 2013. 16.The Applicants had advanced an argument that they should not bear costs of these proceedings because the hiring of lawyers to represent the Respondent had not been properly authorized by an owners’ meeting. I am of the view that this point could not assist them either. The I.O., the alleged funder of the litigation, had not been joined as party to deal with this point. Or even if the Applicant could successfully make out this point, one of the consequences would be to declare the contract null and void and that the Respondent might have to bear the costs personally or that the I.O. would still have to shoulder the legal fees on the basis of quantum meruit. Since costs order is now made against the Applicant, these consequences are not material. 17.I see no valid reason for the Applicants to ask this Tribunal to exercise discretion in their favour by departing from the usual costs order that the party who discontinues the action should bear costs. Discretion should be exercised judicially. I find that the Applicants should bear costs from commencement of these proceedings to 4 March 2014, the date on which the Respondent’s legal representative discovered a copy of the Notice of Discontinuance from the court file. Costs of the Application for Costs 18.Costs of the present application should follow the event. This is an order nisi that costs of this application be to the Respondent, to be taxed at District Court Scale with certificate for counsel if not agreed. This order nisi is to become absolute if no application is taken out to vary the same within 14 days. 19.Further, the legal representative of the Respondent is to bear costs personally for 10 minutes of the present hearing for wasting the court’s time. Order 20.My order is as follows:-
Mr Edward T.L. Lun, instructed by Messrs. Lee & Associates Law Office, for the 1st and 2nd Applicants Mr Jeffery Li, instructed by Messrs. Christine M. Koo & Ip, for the Respondent |