HKSAR v. EVERKING HOLDING LTD.

HCMA909/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. 909 OF 1999

(ON APPEAL FROM STS 3586 OF 1999)

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J U D G M E N T

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1. The Appellant company was summoned by the Inland Revenue Department for failing to make application to the commissioner to register a business and that summons was scheduled to be heard on 3 June 1999.

2. The Appellant company was incorporated on 17 June 1998 and the summons that I have mentioned was issued on 3 May 1999. After the receipt of the summons, the company on 15 May 1999 wrote to the Inland Revenue Department to explain that the company, even though incorporated, had not in fact commenced business and hence it asked the Inland Revenue Department to withdraw the summons. This was followed by another letter from the company dated 27 May 1999 to the Inland Revenue Department, again reiterating that the company had not commenced any business and requesting the Inland Revenue Department to withdraw the summons scheduled to be heard on 3 June 1999.

3. Nothing was heard from the Inland Revenue Department and so on 3 June 1999, the company, legally represented, appeared before a magistrate and a plea of not guilty was entered. The case was set down for hearing on 27 July 1999. On 22 July 1999, which was only three working days from the hearing date of 27 July 1999, the Inland Revenue Department faxed a letter to the company, their solicitors and their Counsel to inform them that no evidence will be offered on 27 July 1999.

4. On 27 July 1999, the company, legally represented by counsel, appeared before the magistrate when no evidence was offered and the information was dismissed. The company then applied for costs to the magistrate which was refused by the magistrate because the magistrate, in my view, quite erroneously came to the conclusion that because there had been no trial and because evidence had not be offered against the company, he, the magistrate, had absolute discretion not to award costs to the company.

5. Following that decision by the magistrate, the company lodged an appeal to appeal against that decision which is the appeal that I am dealing with now. The appeal was set down for today, but on 12 November 1999, the solicitors wrote to the Department of Justice to ask if the appeal might be conceded, and the solicitors said that if a reply was received by 17 November 1999, then a brief to counsel would not be delivered.

6. On 16 November 1999, Mr Cheung Wai Sun, on behalf of the Department of Justice wrote to the solicitors to say that the appeal would not be opposed today. After the receipt of that letter, the solicitors wrote on 18 November 1999, to Mr Cheung asking him to sign on the duplicate copy of the letter so that the appeal could be allowed and the hearing set down for today could be vacated, thereby saving costs.

7. That request by the solicitors to the Department of Justice was in error because as Mr Cheung pointed out to the solicitors, and as he mentioned in court today, a criminal appeal is not like a civil matter which can be settled between the parties, and the hearing date vacated. A criminal appeal has to be argued in open court and it is then allowed or dismissed in open court. So on the same day, Mr Cheung wrote back to the solicitors to say that the appeal had to be heard in open court, and the Appellant company still had to attend.

8. Mr Cheung conceded that this appeal should be allowed, but made the point that the legal costs for today's hearing should not be allowed because the appellant company should have turned up this morning without lawyers because they were aware that the appeal would be conceded by the respondent.

9. Dealing firstly with the magistrate's error, I have to mention that section 3 of the Costs in Criminal Cases Ordinance, Cap.492 says :

"(1) Where -

(a) an information or complaint laid before a magistrate is not proceeded with;"

[which is precisely what happened here]; or

"(c) where a magistrate dealing with a summary offence or any offence summarily dismisses the information or complaint or acquits the defendant; "

[that is also applicable to what happened here], then section 3 says :

".... the magistrate may order that costs be awarded to the defendant."

So, the magistrate was in error to have decided that because there had been no trial, he had absolute discretion to refuse costs. The discretion should have been exercised to award costs to the appellant company because the two main criteria for not awarding costs in favour of the defendant were not made out in this particular case, namely, that the Appellant's own conduct had brought suspicion on himself, and it had misled the prosecution into thinking that a case against him was stronger than it was; or that there was ample evidence to support a conviction which was only subsequently quashed on a technicality. So, for these reasons, the appeal against the magistrate's order is allowed and costs are awarded to the Appellant company.

10. The only remaining matter is whether those costs should include today's costs. In my view, the costs should include all the costs incurred by the appellant company up to and including today's hearing.

11. The reason I make that order is this : the hearing before the magistrate on 27 July 1999 was necessitated by the Inland Revenue Department only informing the company three days before the hearing that it would offer no evidence. By that time, the company had retained solicitors and instructed counsel, so the appearance by counsel on 27 July 1999 was justified.

12. As regards today's appearance by counsel, in my view, even though Mr Cheung had indicated that he would concede the appeal, it was still incumbent on the appellant to satisfy me that the appeal should be allowed, and inasmuch as counsel Mr Tang Kwok Wai had been dealing with this matter from beginning to end, it was reasonable to instruct Mr Tang to appear this morning to at least try and persuade me that the appeal ought to be allowed. The costs will be taxed if no agreement is reached.