DCCJ3736/2014

A A B B DCCJ 3736/2014 C C IN THE DISTRICT COURT OF THE D D HONG KONG SPECIAL ADMINISTRATIVE REGION E CIVIL ACTION NO 3736 OF 2014 E F F -------------------- G BETWEEN G GAINFIELD INVESTMENT LIMITED 1st Plaintiff H H SUCCESS SHEEN LIMITED 2nd Plaintiff I and I LAM YI LAI (林依麗) 1st Defendant J J 周竣隆 nd 2 Defendant K K 周棨隆 3rd Defendant L 徐化普 4th Defendant L -------------------- M M N Before: His Honour Judge Andrew Li in chambers (open to public) N Date of Hearing: 6 June 2016 O O Date of Decision: 8 June 2016 P Date of Handing Down Decision: 10 June 2016 P -------------------- Q Q DECISION R -------------------- R S S 1. At the pre-trial review (“PTR”) of this case before me on 6 T T June 2016, the parties raised an interesting jurisdictional point. U U V V  -2- A A B B C 2. In short, the plaintiff’s solicitors have recently discovered that C th the rateable value of the land in dispute, namely, the property situated at 4 D D Floor, No 2B Tak Shing Street, Kowloon, Hong Kong (“the Property”) is E at HK$257,400, which exceeds the HK$240,000 limit stipulated under E s 35 of the District Court Ordinance, Cap 336 (“DCO”). This raised the F F question of whether the District Court still has jurisdiction to hear this G claim under s 35 of the DCO. G H H Brief history of the proceedings I I 3. Before addressing this issue, it will be appropriate for me to J J set out the brief history to the present proceedings:- K K (1) On 11 December 2013, the plaintiffs commenced the L L present proceedings in the Court of First Instance of the M High Court (“the CFI”) by issuing a writ under HCA M 2418/2013 claiming, inter alia, possession of the N N Property; O O (2) On 26 February 2014, the 1st defendant filed a defence P P & counterclaim; Q Q (3) On 16 April 2014, the plaintiffs filed a reply & defence R R to the counterclaim. S S (4) There is no dispute that the rateable value of the T T Property at or around the time of issuing the writ in U U V V  -3- A A B B 2013 was at HK$191,760 and the plaintiffs’ claim C therefore falls within the jurisdiction of the District C Court under s 35 of the DCO; D D (5) By a consent summons filed on 22 September 2014, the E E plaintiffs and the defendants agreed to transfer HCA F 2418/2013 to the District Court; F G G (6) By an order made on 22 September 2014, Registrar H Lung of the High Court ordered HCA 2418/2013 to be H transferred to the District Court; I I (7) Upon the order given by Master M Lam of the District J J Court on 25 November 2015, the action was ordered to K set down for trial before a judge on the fixture list. At K that time, the rateable value of the Property was still L L below HK$240,000; M M (8) The action has been set down for a 6 day trial from 12 N N to 19 August 2016; O O (9) A PTR has been fixed at the same time for 6 June 2016; P P (10) It was only recently that the plaintiffs’ solicitors have Q discovered the rateable value of the Property for the Q year of 2016/17 (effective from 1 April 2016) has been R R increased to HK$257,400; S S T T U U V V  -4- A A B B (11) A letter dated 3 June 2016 was sent by the plaintiffs’ C solicitors to the court drawing the court’s attention to C this matter. D D E Discussion E F F 4. s 35 of the DCO provides:- G G “The court has jurisdiction to hear and determine any action for H the recovery of land, where the annual rent or the rateable value H of the land, determined in accordance with the Rating Ordinance (Cap 116), or the annual value of the land, whichever is the least, I does not exceed $240,000.” I J J 5. There is no dispute that the jurisdiction of this court is limited K to the rateable value of $240,000 under s 35 of the DCO. The issue before K me is whether the relevant time for determining the rateable value for the L L purpose of s 35 is at the commencement of the proceedings or at the time M when the case is due for hearing or determination. M N N 6. This involves a question of interpretation of s 35 of the DCO. O O 7. The legal principles on statutory interpretation are not in P P dispute and are helpfully summarized by Deputy District Judge Winnie Q Tsui in Ng Cho Chu Judy v Chan Wing Hung [2016] 1 HKLRD 1073 at Q §76. In a detailed and comprehensive review of the legislative history of R R the DCO (see §§79-85), its purpose (see §§86-95), the context under which S it was enacted (§§96-104), the learned deputy judge said (at §94):- S T “In summary, it is manifestly clear from the above that the T purpose of the establishment of the [DC] and the ongoing U U V V  -5- A A B enlargement of its civil jurisdiction throughout the years is to B divert more civil cases to the [DC] from the [CFI] to the extent C that it is feasible and appropriate to do so.” C D 8. The particular statutory provision under consideration in Ng D Cho Chu Judy is s 36 and not s 35 of the DCO, although the principles in E E relation to statutory interpretation are the same. Applying the principles F set out in §76 of the Judgment, the learned deputy judge followed Ma Yu F Cheung v Yu Wai Chun, DCMP 268/2001, unreported, 22 November 2001, G G a decision of HH Judge Andrew Cheung (as the Chief Judge of the High H Court then was) and adopted the liberal approach in the interpretation of s H 36 of the DCO. See §118 of the Judgment. I I J 9. It should be noted that s 19 of the Interpretation and General J Clauses ordinance, Cap 1 also provides that:- K K “An Ordinance shall be deemed to be remedial and shall receive L L such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance M according to its true intent, meaning and spirit.” [emphasis M added] N N 10. I agree with Mr Lawrence Ng, counsel for the defendants, that O this court should adopt a liberal approach in the interpretation of s 35 of the O DCO. P P Q 11. In adopting the liberal approach, I agree with Mr Ng that the Q following factors point strongly to the conclusion that the rateable value of R R the property should be determined at the time when the proceedings were S issued:- S T (1) First, it is the rateable value of the land at the time when T the proceedings are commenced which a plaintiff will U U V V  -6- A A B B take into consideration in deciding whether to institute C the claim in the CFI or the District Court. C D D (2) Second, §4 of Practice Direction 27 imposes a E requirement that all writs and originating summons E “should contain a plea that the relief sought do fall F F within the jurisdiction of the District Court, specifying G which section (2) of sections 32 to 39 of the [DCO] do G apply to the case”. Obviously, whether the relief H H sought fall within the jurisdiction of the District Court I must be decided at the time of the proceedings are I commenced. J J (3) Third, if the time for determining the rateable value of K K the land were at the time of trial, then given the ever L increase in the value of real properties in Hong Kong L over the past several decades, litigants would find M M themselves caught in the following unwarranted N N situation: whilst at the time when proceedings are O commenced the District Court has jurisdiction to hear O their claim, when it comes to the hearing or trial (which P P may sometimes be several years after the Q commencement of proceedings), the District Court has Q no jurisdiction to hear their claim. This would defeat R R the purpose in establishing the District Court (see §7 S above). S T T U U V V  -7- A A B B 12. Mr Anthony Chow, counsel for the plaintiffs, submits that the C court should take a literal approach in interpreting s 35 of the DCO and that C the court should determine the rateable value of the land at the time of D D hearing and determining of the case in accordance with the wordings of s E 35. He admits that the plaintiffs are not able to identify any authority E directly on point. Mr Chow further submits that while the plaintiffs are F F keen to proceed with the trial set down before this court in August, they are G more concerned that the judgment to be made by this court upon trial is not G open to challenge for lack of jurisdiction by the defendants. According to H H Mr Chow, that is the reason why the plaintiffs prefer to take a more I cautious approach. I J J 13. The plaintiffs suggest this court to make an order to transfer K the case to the CFI while keeping the scheduled trial dates in August 2016 K in the District Court; then by consent the parties would seek an order of the L L CFI under s 44 of the DCO to transfer the present action back to the M District Court; and then the parties to proceed with the trial in this court as M scheduled. N N O 14. While I fully understand why the plaintiffs would take a O cautious approach in the matter, I cannot agree with the suggestion that the P P proper date of determining whether the court has jurisdiction over the Q matter should be at the time of hearing and determining the matter for the Q following reasons:- R R S (1) It is clear that the date of hearing of a case will be S different from the date of determining the matter. It is T T not difficult to envisage a situation where a case will be U U V V  -8- A A B B heard (or tried) while the rateable value is still within C the District Court jurisdiction and a few weeks or C months later when the case is determined (ie when D D judgment comes out) it already exceeds the E jurisdictional limit due to the fluctuation of the E property market. In such situation, it will be absurd to F F suggest that the District Court while having jurisdiction G to try the case at the time of the hearing will have no G jurisdiction to determine the matter at the time of H H delivering the judgment. I (2) I do not think it would be the legislature intent that the I parties should keep checking the rateable value of a J J property at different stages of the proceedings and to K transfer the case in and out of the District Court each K time when the rateable value has been changed by the L L Rating and Valuation Department. M (3) The legislature intent must be that there will be some M sort of certainty for the parties to know in which court N N to issue the proceedings and to maintain that case in, O according to a property’s rateable value. In my O judgment, the best time to do so must be at the time of P P issue of the proceedings. Q (4) It has been acknowledged that in many cases a transfer Q to the District Court would bring about more R R expeditious and more cost effective disposal of the case: S see the comments of Johnson Lam J (as he then was) in S Re Estate of Chow Nai Chee [2010] 5 HKLRD 640 at T T §42. Therefore, it must be in the interest of justice and U U V V  -9- A A B B parties to keep the case in the District Court once the C case has commenced. C (5) This case started life in the CFI. The writ was D D originally issued on 11 December 2013. In the defence E and counterclaim filed by the 1st defendant on 26 E February 2014, the defence raised the point that the F F rateable value of the Property from April to June 2013 G was at HK$191,760 only. The plaintiffs admitted this G in the reply & defence to counterclaim. The case was H H then transferred to the District Court by consent. In I other words, this case ought to have been commenced I in the District Court in the first place. It will be absurd J J that just because a recent search indicates the rateable K value of the Property has slightly exceeded the K jurisdictional limit, the whole case should now be L L transferred back to the CFI just for the parties to obtain M an order to have it transferred back to the District Court M for trial. N N (6) The plaintiffs suggestion will not only add unnecessary O costs and time to the proceedings, it will most likely O frustrate the trial dates fixed for August as there is no P P guarantee that the parties will able to obtain the order of Q transfer under s 44 before the trial dates. In my view, Q this will be against the spirit and underlying objectives R R under Order 1A of the Rules of the District Court. S S T T U U V V  - 10 - A A B B Conclusion C C 15. For the above reasons, I find that the District Court has D D jurisdiction to hear this claim. E E 16. I would like to thank the plaintiffs’ solicitors for bringing this F F matter to the court’s attention. I consider that it was right and proper for G them to do so. As the parties have agreed, I think the proper costs order to G make for the time spent in arguing this interesting jurisdictional point H H should be costs in the cause. I I 17. I should also thank both counsel for their helpful assistance J J despite the shortage of time in preparing the submissions. K K L L M ( Andrew SY Li ) M District Judge N N O Mr Anthony Chow, instructed by Zhong Lun Law Firm, for the 1st and 2nd O plaintiffs P P Mr Lawrence Ng, instructed by Au-Yeung, Cheng, Ho & Tin, for the 1st, 2nd and 3rd defendants Q Q R R S S T T U U V V