MK v. REGISTRAR OF HIGH COURT

CACV 355/2021

[2023] HKCA 494

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 355 OF 2021

(ON APPEAL FROM HCAL NO 2433 OF 2019)

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DECISION ON COSTS

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The Court:

1.  In a judgment handed down on 9 January 2023 (“the Judgment”) ,[1] this Court allowed the appeal by the Director of Legal Aid and dismissed an application for judicial review by the applicant, thereby reversing an order by Keith Yeung J (“the Judge”),[2] which quashed the Master’s decision dismissing the applicant’s appeal against the Director’s revocation of legal aid.[3]  On the issue of costs, pursuant to our direction at [42] of the Judgment, written submissions have been filed by the parties for paper disposal. 

2.  Having succeeded on appeal before this Court, the Director relied on the usual rule that costs should follow the event and submitted that he should be awarded costs of the appeal and below.  He contended that the usual rule should not be displaced by the public interest litigation factor, as the issues raised in the appeal were not of general public importance warranting consideration for the benefit of the community as a whole, and that the applicant pursued the proceedings for her own private gain.

3.  Citing Leung Kwok Hung v President of the Legislative Council (No.2),[4] the applicant accepted that, for appeals to this Court even in public law cases, the usual rule is for costs to follow the event, but she relied on the public interest litigation factor to displace the usual rule, pointing out that, unlike Leung Kwok Hung, she had succeeded before the Judge at first instance.  She submitted that there should be no order as to costs.

4.  For the public interest litigation factor to apply, the applicant has to show that (1) she brought the proceedings to seek guidance on a point of general public importance for the benefit of the community as a whole, (2) she stood to obtain no personal private gain from the outcome; and (3) her case had a real prospect of success.  Even then, any costs order remains in the Court’s discretion, and other relevant factors such as conduct of the parties need to be considered: Leung Kwok Hung.[5]  

5.  Before the Judge, the applicant took issue generally with the abrogation of legal professional privilege by regulation 21 of the Legal Aid Regulations.[6] On appeal, the issue was narrowed down to whether such abrogation would take effect only after legal aid has been granted.  In the Judgment at [32]-[38], we held that, to properly achieve the purpose of regulation 21 in preventing legal aid abuse, its abrogating effect must extend to relevant communications before the grant of legal aid; and that any temporal limit on it would defeat its very purpose.  We further held that such abrogation was highly targeted, focused on and limited to communications related to abuse prevention.  Properly understood, instead of raising a point of such general importance for the benefit of the community as a whole, the appeal would only impact on communications of very limited scope by aided persons whose assigned representatives were those they had retained privately before they applied for legal aid.  Further, the applicant stood to gain personally from the outcome of the proceedings.  And as seen below, her case, though succeeded before the Judge, did not have a real prospect of success.  We therefore do not accept that the public interest litigation factor applies.

6.  Although the Judge granted leave and quashed the Master’s decision, the applicant’s judicial review failed before this Court.  In determining costs, the merits of the failed case fall to be evaluated after all the arguments have been fully developed and determined. If upon analysis, the issues raised by the applicant were really hopeless, then costs should follow the event: Chan Noi Heung v Chief Executive in Council.[7]  On this approach, having regard to the reasoning in our Judgment, in particular the clear legislative intent of regulation 21 and the necessary implications it entails, our view is that the case on appeal did not have sufficient merits to displace the usual rule of costs following the event.

7.  That said, a successful party may be deprived of the whole or part of his costs in the event that he has acted unreasonably or improperly in raising an issue, or has caused a significant increase in the length or costs of the proceedings by failed allegations, In re Alpha Tool. Com. HK Ltd.[8]

8.  As noted in our Judgment at [13]-[14], the Director advanced three grounds in the Notice of Appeal, and sought to rely on a fourth ground in his written submissions.  Two of the grounds, the first and the fourth, were not argued before the Master or the Judge.  We had reservation about the first ground but, in the way that the appeal was eventually disposed of, we did not need to deal with it.  The fourth ground was not pursued in the hearing after our indication that it was not to be entertained as it was not raised in the Notice of Appeal.  The third ground was effectively abandoned at the appeal hearing, without being addressed in the written submissions. 

9.  In the end, the Director only succeeded on the second ground.  The applicant submitted that, even on the second ground, the Director was only partially successful as the Judge’s ruling, that the Master erred in taking account of the Information as disclosed by Mr Wong, was not disturbed.[9] It was submitted that, given the Director’s limited success overall, even if the Director were to be awarded costs, such costs should be reduced by at least 70%.

10.  Having regard to the Director’s partial success on the second ground, and the extent there had been wastage of costs on those grounds which the Director did not pursue, we accept the applicant’s submissions and, adopting a holistic view, reduce the costs of the appeal to be awarded to the Director by 30%.

11.  As for the costs below, given that the application for judicial review was dismissed in the Judgment, and that the hearing below was a rolled-up hearing, with the respondent, the Registrar of the High Court, taking a neutral stance and was excused from the proceedings, leaving the Director to his own stance, we take the view that the Director should be awarded his costs (see Leung Kwok Hung[10]), and that the public interest litigation factor does not apply for the same reason that it does not apply to the appeal before us as set out above.

12.  In consequence, we order the applicant to pay the Director his costs below and 70% of his costs for the appeal, with a certificate for two counsel for the appeal, to be taxed if not agreed.