CHENG SHING SHI v. DIRECTOR OF LANDS

[English Translation – 英譯本]

HCAL79/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 79 OF 2006

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DECISION ON COSTS

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1. By Judgment handed down on 18 December 2006, I dismissed the applicant’s application for judicial review. An order was made in paragraph 62 of the Judgment as follows:

62. The general rule of litigation is that costs will follow the event. I therefore make a costs order nisi that the applicant is to pay the respondent’s costs incurred in this application, to be taxed if not agreed. …

2. The applicant wrote to the court on 27 December 2006 seeking to vary the said costs order nisi so that costs are to be paid by the respondent. In the letter, the applicant also provided details of the fees expended on the purchase of a new unit on 12 October 2005 and requested the court to order the government to pay for the purchase price and the subsequent decoration expenses.

3. Following the directions issued by me on 28 December 2006, the respondent filed written submissions on 3 January 2007 in respect of the applicant’s two applications; the applicant also responded in writing on 22 January 2007.

Application to vary the costs order nisi

4. The grounds put forward by the applicant in support of his application for an order that his costs be paid by the respondent can be summarized as follows:

(1) This litigation stemmed from the government’s desire to clear the Kowloon Walled City, but the compensation being offered was not sufficient for the applicant to purchase some other shop premises.     

(2) Page 8 of the pamphlet (“the pamphlet”) prepared by the Special Committee on Clearance of the Kowloon Walled City (“the Special Committee”) stated that persons affected by the clearance could, with the help of surveyors or valuers, negotiate with the government on the amount of compensation, and that the government would reimburse persons affected by the clearance such reasonable costs that they had paid the said professionals. In line with this spirit, costs should be paid by the government.

(3) The court has a discretion in dealing with costs. The legal proceedings were delayed because the applicant was not conversant with the law. The government not only failed to clear the Kowloon Walled City in accordance with law, but it also failed to make a compensation offer pursuant to the established mechanism. The applicant was not unentitled to compensation because he had already registered the title with the Registrar General’s Department as required by the pamphlet. Members of the Special Committee had also indicated that there would be compensation and placement. However, the compensation offered by the government was extremely unreasonable, and the applicant was even subjected to verbal and physical abuse in the course of the clearance. As the applicant was the victim, the relevant costs should be paid by the government.

5. On the matter of costs, the applicable statutory provision is Order 62 rule 3 of the Rules of the High Court, which provides as follows:

3.   When costs to follow the event

(1)  Subject to the provisions of this Order, no party shall be entitled to recover any costs of or incidental to any proceedings from any other party to the proceedings except under an order of the Court.

(2) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings, the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.

6. The relevant applicable legal principles can be summarized as follows:

(1)  Costs are in the discretion of the court.

(2)  Costs should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made.

(3)  The general rule does not cease to apply simply because the successful party has raised issues or made allegations on which he failed, but where it has caused a significant increase in the length or costs of the proceedings he may be deprived of all or part of his costs.

(4)  Where the successful party has improperly or unreasonably raised issues or made allegations, the court may, apart from depriving him of his costs, order him to pay all or part of the unsuccessful party’s costs: see Re Elgindata Limited (No. 2) [1992] 1 WLR 1207, 1214A-C.

7. I must also point out that, although costs are in the discretion of the court, in exercising its discretion the court must still follow established legal principles and must not make awards arbitrarily or out of sheer sympathy for any of the parties.

8. In this case, there was nothing improper or unreasonable in the evidence and grounds of defence submitted by the respondent or in his conduct of the litigation. It follows that the applicant who seeks as he does a departure from the usual rule under Order 62 rule 3 must show that the circumstances of this case warrant the making of some other order by the court.

9. As regards the first ground in support of this application, although the application for judicial review was concerned with the clearance of the Kowloon Walled City, the crux of the matter was that the applicant was unwilling to accept the respondent’s ex gratia compensation offer. In my Judgment of 18 December 2006, apart from holding that there had been an inordinate delay in the applicant’s application for judicial review, I also explained that the grounds put forward by the applicant in support of the application were unmeritorious. Accordingly, the applicant’s allegation that the litigation was triggered by the government and hence the government should pay costs thereof cannot be sustained.

10. Turning to the second ground in support of this application, the provision in page 8 of the pamphlet which relates to the payment of the reasonable costs of professionals such as surveyors and valuers should not be mixed up with the issue of liability in the litigation, much less taken as a reason for requiring the government to pay costs.

11. As to the third ground in support of this application, it is true that costs are in the discretion of the court. However, none of the reasons put forward by the applicant for requesting the court to exercise its discretion to order the government to pay his costs can be sustained. Issues as to whether the clearance was legally justified, whether the applicant was legally entitled to compensation, whether the respondent’s ex gratia compensation offer was irrational, and whether government officials had reneged on their promises and had said one thing and done another, have all been dealt with in my Judgment of 18 December 2006, which I shall not repeat here.

12. For the above reasons, I see no basis for ordering the respondent to pay the applicant’s costs.

Application concerning expenses for the purchase of a new unit and decoration costs

13. The applicant has submitted supplemental information which indicates that he purchased a new unit on 12 October 2005. He seeks an order requiring the respondent to compensate him for the relevant expenses and subsequent decoration costs of his Chinese medicine clinic.

14. As pointed out by the respondent, the applicant purchased the unit after the respondent had made the relevant decision (i.e. the decision against which the applicant sought judicial review). The applicant had never sought such compensation from the respondent prior to 27 December 2006. Therefore, the purchase of a new unit did not have any effect on the validity of the relevant decision. More importantly, what this court exercises is judicial review jurisdiction under public law as opposed to general civil jurisdiction. The role of the court is to review decisions made by decision-making authorities but not to make decisions afresh on behalf of those authorities or determine the actual amount of compensation payable to the applicant. Furthermore, the merits of this judicial review application have already been determined and I am not in a position to consider new information which the applicant did not provide until after judgment was delivered.

15. For the above reasons, I dismiss the applicant’s application for the expenses and costs in relation to the purchase of a new unit.

Conclusion

16. In summary, I dismiss the applicant’s application to vary the costs order nisi. The costs order nisi of 18 December 2006 hereby becomes absolute. I also dismiss the applicant’s supplemental application for the expenses and costs of the purchase of a new unit.

17. Applying the rule that costs follow the event, I also order the applicant to pay the respondent’s costs of these two applications, to be taxed if not agreed.