TANG PUN SANG v. TANG KWOK SHUA AND OTHERS

HCAL 1354/2023

[2024] HKCFI 359

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 1354 OF 2023

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C  O  S  T  S      R  U  L  I  N  G

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A.  Introduction

1.  The Applicant is an indigenous inhabitant (“II”) of the New Territories.

2.  In these judicial review proceedings, commenced by Form 86 dated 4 August 2023, the Applicant sought orders against the five putative respondents that, if granted, were designed to ensure that the 5^th Putative Respondent, the Director of Lands (“Director”), would accept the Applicant’s application for a land grant and begin to process it.

3.  The 1^st to 4^th Putative Respondents (“PR1”, “PR2”, “PR3” and “PR4” respectively) are indigenous inhabitant village representatives, with limited but certain responsibilities under the Director’s policy for handling land grant applications.

4.  On 5 October 2023, the Director agreed to accept and process the Applicant’s application for land grant. In those circumstances, the Applicant discontinued the judicial review application against all Putative Respondents. As the question of costs could not be agreed on discontinuance, I directed that those matters would be dealt with on paper.

5.  The Applicant’s submissions dated 21 November 2023 were drafted by Mr Philip Dykes SC leading Dr Stephen LW Tang of Counsel. PR1’s submissions dated 4 December 2023 were filed in person, and the Director’s submissions dated 5 December 2023 were filed by Mr Harrison Miao of Counsel. (No submissions were filed directly on behalf of PR2 to PR4.)

6.  Having considered those submissions, this is my Costs Ruling.

B.  The Parties’ Respective Stances

7.  The Applicant seeks an order that: (1) the Director pays all costs of the application, including those costs incidental to the application and the costs of the costs argument; (2) the costs should be paid on an indemnity basis except for (a) the Consent Summons seeking leave for the Applicant to withdraw the Application save for questions as to costs, and (b) the Joint Letter of 9 November 2023 making timetabling submissions; and (3) there should be a certificate for two Counsel.

8.  In case the Court considers that apportionment of costs is appropriate, the Applicant seeks that the Director should pay 80% of the costs, and that PR1-PR4 each bear 5% of the costs, all costs to be payable on the indemnity basis with certificate for two Counsel.

9.  PR1 submits that each party should bear his own costs of and incidental to the application, and those occasioned by the costs submissions. Alternatively, if the Court is minded to apportion costs against PR1-PR4, PR1 submits they should be awarded a party and party basis with the portion against him being as little as possible, without certificate as to two Counsel.

10.  The Director’s position is that there should be no order as to costs vis-à-vis the Applicant and the Director. Alternatively in the event that the Court considers that all Putative Respondents should bear costs, costs should be apportioned equally amongst them, so that the Director should bear no more than 20% of the costs. The Director also says that no indemnity costs should be awarded, and there should be no certificate for Counsel.

C.  Applicable Legal Principles

11.  The applicable legal principles for determining the appropriate costs order for judicial review proceedings which are concluded without a full hearing have been considered in, for example: SC v Torture Claims Appeal Board (unreported, HCAL 99/2014, 30 March 2016) at §34; R(M) v Croydon London Borough Council [2012] 1 WLR 2607 at §§52-63.

12.  I would offer my summary of the relevant principles as follows:

(1)  The general principles as to awards of costs in civil litigation apply equally to judicial review cases.

(2)  An applicant who chooses to discontinue judicial review can expect to pay the costs.

(3)  But an applicant who has effectively secured the substantial relief sought, after commencing the claim but without a hearing, can generally expect to recover the costs, unless there is a good reason to the contrary.

(4)  Partial success can lead to a different order, because the position is more nuanced.

(5)  In such cases, there may be argument as to which party was more “successful” (in the context of the relief claimed) or, even if the applicant is accepted as the successful party, there may be an argument as to the importance of the issue, or the costs relating to the issue, on which he failed.

(6)  Hence there is in judicial review proceedings which have settled a distinction between:

(a)  a case where the applicant has been wholly successful whether following a contested hearing or pursuant to the settlement,

(b)  a case where the applicant has only succeeded in part following a contested hearing, or pursuant to a settlement, and

(c)  a case where there has been some compromise which does not actually reflect the applicant’s claims.

(7)  Whilst the allocation of costs will depend upon the specific facts of each case, some points can be made about each of those different types.

(8)  In case type (a), the applicant should recover his costs, unless there is some good reason to the contrary.

(9)  In case type (b), assuming a settlement, the allocation of the liability for costs will often be best served by a no order as to costs. However, much will depend upon the particular facts.

(10)  In case type (c), where the Court is often unable to gauge whether there is a successful party in any respect, and if so who that is, the default position might be no order as to costs. Yet, there will remain cases where it is sensible to look at the underlying claims and enquire whether it was tolerably clear who would have won if the matter had not settled. In such circumstances, that may strongly support the contention that the party who would have won did better out of the settlement, and therefore did win, so should get his costs.

(11)  How far the court would be prepared to look into the unresolved substantive issues would depend upon the circumstances of the particular case, not least as regards the amount of costs at stake and the conduct of the parties.

D.  Relevant Background

13.  The Director has a policy concerning small house grants made to indigenous villages (“Policy”). Part of the Policy requires an applicant for such a grant to complete a Composite Application Form, together with a declaration regarding his status as an indigenous villager made by the Indigenous Inhabitant Representative, Vice-chairman of the Rural Committee concerned.

14.  From around early 2011, the Applicant had approached persons qualified under that Policy to make the required vouching declarations. They failed or refused to do so, without giving reasons. The evidence filed in these proceedings identifies various steps taken between Applicant and the District Lands Officer/North and the relevant Indigenous Inhabitant Representatives to seek to enable the Applicant to obtain the vouching declarations, albeit without success.

15.  In mid-2017, the Director insisted on handling the application only with an accompanying declaration. The evidence filed identifies that between 2017 and 2023, the Applicant tried various means to process the application without the need to produce a vouching declaration under the Policy, which PR1-PR4 had not supplied, even though the Applicant’s II status seemed to be accepted.

16.  Pre-action letters were sent to PR1-PR4. Despite the threat of proceedings, none of them provided the vouching declaration sought, or explained why they would not provide one.

17.  Despite previously insisting that the accompanying declaration was required before the Applicant’s claim to a small house grant could be processed, the Director has now agreed to process the Applicant’s claim to a small house grant without requiring a vouching declaration from any of PR1-PR4 (or anyone else).

E.  The Competing Submissions

18.  The Applicant’s argument is straightforward. Mr Dykes submits that the Director has conceded the relief sought by the Applicant, and that the Director will now process the application for a land grant. Had the application been pursued to a hearing, the Applicant submits that the Court would likely have granted relief against PR1-PR4, who had failed to discharge the duties owed to the Applicant.

19.  Mr Dykes submits that the Director should bear all, or most, of the Applicant’s costs on the indemnity basis because:

(1)  The Policy has been drawn up by the Director, including those paragraphs involving PR1-PR4, yet the Director’s late decision is a concession that their involvement was unnecessary when applying for a small house grant.

(2)  The Applicant’s objective of making application was that the Director should accept his application without an accompanying declaration, on which objective he has succeeded.

(3)  The Applicant had pressed the Director over many years to accept his application without an accompanying declaration, even pointing out that his predecessor acknowledged that he might consider some applications without an accompanying declaration.

(4)  The Applicant has done nothing himself to disqualify himself from obtaining all or some of his costs. Rather, he has been patient and courteous and tried to avoid litigation.

(5)  Whilst the Director has acted reasonably in the conduct of the proceedings after agreeing to accept the Applicant’s land grant application, that is applicable only to the Consent Summons and the Joint Letter.

20.  As to PR1-PR4, Mr Dykes submits that they should be liable to pay at least some costs on the indemnity basis because:

(1)  Had any one of PR1-PR4 provided the vouching declaration, the Director would have accepted the Applicant’s application for a small house grant, perhaps nearly 10 years ago.

(2)  PR1-PR4 hold elected posts, and have the statutory responsibility to look after the lawful interests of IIs.

(3)  That responsibility includes providing a vouching declaration if a claimant for a small grant is an II. This is one of the routine functions.

(4)  It is unlikely that PR1-PR4 believe the Applicant is not an II.

(5)  Where there is no explanation for not providing a vouching declaration, the Court should assume there was no good reason to withhold it.

(6)  Obduracy, indifference, and giving the Applicant the bureaucratic run-around are special and unusual features warranting an indemnity costs order.

21.  Mr Dykes has emphasised the chronology of the case, to identify the special and unusual features justifying an indemnity costs order. He submits that, “shockingly”, the Applicant – a now 72-year-old II – has spent almost 12 years trying to get a vouching declaration, or failing that to persuade the Director to process his application for a small house grant without a vouching declaration.

22.  PR1 submits that the Applicant’s suggestion that he needed to take out the present proceedings is not true. He submits that the Applicant was always fully aware of the reason for refusal to provide a vouching declaration, which refusal was lawful and reasonable as had been clearly stated in correspondence.

23.  PR1 further submits that he did indeed adopt the position of his predecessor in title, namely not to provide a vouching declaration, but did so for a clear reason. This was because the relevant land was originally owned by Tso Tong but gifted to Tang Ah Yiu and Tang Ah Suen for their own purposes, which did not allow reselling the land. Nevertheless, in breach of their promise, the two Tangs sold the land to the Applicant for a small house grant. According to the directions of Tso Tong, PR1 was unable to provide the vouching declaration. Therefore, it was for the Applicant to take responsibility to remedy those breaches, instead of applying to the Court.

24.  Mr Miao submits that it is unclear as to whether the Applicant was the successful party. First, he did not obtain all the relief sought, so that the present case falls within case type (b) or (c) – see above. For example, the Applicant did not obtain the mandatory order for PR1-PR4 to perform their respective statutory functions and decide the Applicant’s II status, and the Director has agreed to process the application nevertheless. Hence, the issue of whether PR1-PR4 are required to decide the Applicant’s II status has not been resolved, and the Director has not conceded that his decision was unlawful or should otherwise be impugned on the grounds alleged by the Applicant.

25.  Further, Mr Miao submits that the compromise does not fully reflect the Applicant’s claim, in particular because the Director has only agreed to process the small house grant application by reference to the criteria laid down in the Government’s statements of Policy, rather than by reference to the Applicant’s contentions on how that policy should be applied. Also, it is clear that the Director has not failed to apply the Policy, where it is a basic requirement that an applicant under the Policy must be an II. Mr Miao also submits that a number of the other arguments advanced by the Applicant would not have succeeded, including as to BL40 and legitimate expectation. Hence, Mr Miao submits that the default position of no order as to costs should apply, and if the Applicant should be entitled to costs at all, he should look to PR1-PR4 to recover them.

26.  If there is to be any apportionment, Mr Miao submits that neither of the proposals put forward for the Applicant are reasonable. If any apportionment is appropriate, the Director should pay no more than 20%, where (1) there is no justification for requiring the Directed to bear 80% or 100% of the costs, when the Applicant has also sought relief against PR1-PR4, and (2) the Applicant’s proposals are at odds with his own contentions as to the strength of his case against PR1-PR4, where the Applicant has chosen to join them as putative respondents and to seek mandatory orders against them.

27.  Mr Miao also submits that the Applicant’s request for costs on the indemnity basis is untenable, where there are no special or unusual features in the case to justify such an order. The Applicant’s allegations focus not on the conduct of the proceedings by the Director, but by the Director’s prior refusal to accept his application for small house grant without the vouching declaration. The Applicant’s argument that he has done nothing to disqualify himself from obtaining some or all of his costs is irrelevant to the claim to indemnity costs, as that does not amount to a special or unusual feature.

28.  As to whether there should be a certificate for two Counsel, Mr Dykes submits that there were a number of important and difficult points of law potentially in play in the proceedings, including:

(1)  a review of the political system in the New Territories and the construction of government policy on small house grants, which might have required traversing the historical development of village governments and whether the condition precedent of recognition through a vouching declaration was unnecessary, as well as the scope and application of BL40 to the Policy and the statutory regime;

(2)  the interconnected matters necessary for defining and identifying an indigenous villager/inhabitant require substantial, meticulous legal, and social / anthropological / historical research;

(3)  this is the first case where elected public office holders under section 6 and Part 8 of the Rural Representative Collection Ordinance Cap 576 have been challenged by judicial review;

(4)  the complexity of the application required a team of Leading Counsel and Junior Counsel working closely under a tight schedule, where both Counsel were selected because of their familiarity with the New Territories’ political structures.

29.  PR1 submits that it would not be fair and justifiable to any of the putative respondents if a certificate for two Counsel were allowed in light of the fact that the case was simple and straightforward.

30.  Mr Miao submits that it was not necessary for the Applicant to maintain a team of two Counsel, especially given that (1) Dr Tang is of 27 years’ call and, according to the Applicant, has had extensive involvement and understanding of New Territories affairs, (2) the documents involved in the judicial review application unlimited, and (3) the Applicant has not pointed to any statistics to show that the present fact pattern is commonplace for the case to have wider significance.

31.  I take all these various submissions (and the fuller description of them in the written materials) into the balance in reaching the following conclusions.

F.  Decision on Incidence of Costs

32.  First, it seems to me that the Applicant has obtained some substantial success in the proceedings. This is probably a type (b) case. Whilst it is correct that he has not obtained all of the relief to which he laid claim in the Form 86, the real purpose of the proceedings was to require the Director to accept and then action the Applicant’s application for the land grant under the Policy.

33.  Secondly, it seems to me that the proceedings were properly pursued against PR1-PR4 as well as the Director, because the Policy would ordinarily require all of their involvement. I acknowledge that it might be thought that the steps necessary to be taken by PR1-PR4 were to satisfy a condition prior to the Director’s involvement. However, the Director has now agreed to process the application without that prior condition being satisfied, as indeed a predecessor had suggested might happen. That is what the Applicant had been seeking for many years as an alternative to obtaining the vouching declaration (he having encountered significant obstacles in that regard).

34.  In those circumstances, it seems to me that the Applicant is entitled to his costs, and that all of the Putative Respondents should bear some liability as to those costs, apportioned between them, but that the Director should bear the larger portion. Not simply because it is the middle ground, but as a matter of what seems to me to be the correct exercise of the discretion on costs in this context, I order the Director to bear 60% of the costs, and for each of PR1, PR2, PR3 and PR4 to bear 10%.

35.  For the avoidance of doubt, I do not think this apportionment of costs between the parties would act to discourage defendants in other cases from settling, for fear of having to pay the claimant’s or applicant’s costs. It is simply that the circumstances seem to me to identify clearly that a no costs order would not appropriately reflect what has happened in and as a result of the Applicant’s application for judicial review.

G.  Indemnity Basis or not

36.  I do not think there are any, or any sufficient, special and unusual features as justify the award of costs on the indemnity basis.

37.  There is little dispute that the proceedings have themselves been conducted appropriately by the various parties involved, and I do not think that the matters giving rise to the proceedings – though potentially relevant – identify special or unusual features to justify indemnity costs.

H.  Whether Certificate for Two Counsel

38.  I acknowledge the factual and legal complexity of some of the arguments which might potentially have been engaged in, had the proceedings gone to a full hearing. Therefore, instructing Counsel with appropriate skill, specialised knowledge and expertise was reasonable and appropriate.

39.  However, not least because of the seniority, knowledge and expertise of the Applicant’s Junior Counsel in this case, I am not persuaded that it is appropriate to give a certificate for two Counsel. I also take into account that this was not case of heavy documentation and, had the matter gone through a full hearing, the argument would have been dealt with by way of submissions on written materials.

I.  Result

40.  In conclusion, I order the Applicant’s costs of these proceedings (including the costs of the argument on costs) to be payable by the Putative Respondents, apportioned between them as to 60% payable by the Director and 40% payable by PR1-PR4, 10% each. The costs will be payable on the party and party basis, without certificate for two Counsel.