HKSAR v. HUI SHUK YEE CHERRY

CACC 173/2024

[2025] HKCA 647

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 173 OF 2024

(ON APPEAL FROM DCCC NO 915 OF 2022)

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REASONS FOR JUDGMENT

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Hon Zervos JA (giving the Reasons for Judgment of the Court):

1.  On 31 July 2024, District Court Judge E Yip (the judge)  ordered that barrister Hui Shuk Yee Cherry (the appellant)  pay wasted costs in the amount of HK$200 personally to each of the parties at trial of DCCC 915 of 2022, including the six co-accused and the prosecution, for being late for court.

The grounds of appeal

2.  The appellant filed a notice of appeal on 21 August 2024 and a supplemental notice of appeal on 21 October 2024, under section 19(2)  of the Costs in Criminal Cases Ordinance (Cap 492)  (CCCO).  The appellant challenges the order on these grounds:

1.  The judge erred in fact and law in determining that the facts and circumstances in which the order was made came within the definition of “wasted costs” defined in section 2 of the CCCO, because:

(1)  there was no evidence that any party incurred costs and there was no finding of fact that any party incurred costs or any realistic basis for such finding;

(2)  (without implying that any conduct or failure on behalf of the appellant was improper)  there was no evidence of any seriously improper conduct on the part of the appellant and there was no finding of fact that there was any seriously improper conduct on the part of the appellant or any realistic basis for such a finding; and

(3)  to the extent that any such act, omission, delay or misconduct occurred within the meaning of wasted costs in (b)  of section 2, there was no basis upon which the court could consider it was unreasonable to expect that party to the proceedings to pay any such costs.

2.  The judge erred in law or, alternatively, to the extent that there was a discretion vested in the judge, such discretion miscarried because the appellant was not accorded any or any reasonable opportunity to show cause as to why the wasted costs order should not be made, as required by section 18(2); and

3.  The judge erred in law or, alternatively, to the extent that there was a discretion vested in the judge, such discretion miscarried because the appellant was not accorded a fair hearing as to (i)  whether any wasted costs order should be made and; (ii)  the timing of any such payments and the recipients of any such payments, resulting in the order being procedurally unfair and/or without consideration of all relevant circumstances contrary to section 18(2).

3.  Mr Andrew Bruce, SC, with Ms Denise Souza, for the appellant, sought orders to have read into the record the appellant’s affirmation dated 21 August 2024 and an extension of time for the institution of the appeal because the notice of appeal was not served and delivered to the judge as an interested party until 23 August 2024.  It was only delayed by two days.  Those orders were duly granted.

The background facts

4.  The wasted costs order was made in criminal proceedings in the District Court before the judge.  There were seven accused at trial, variously facing charges of assault occasioning actual bodily harm; false imprisonment; blackmail; theft; and criminal intimidation together or individually.  The appellant acted for the sixth accused.  The trial was fixed to be heard for 12 days from 22 July to 6 August 2024.  The wasted costs order was made on 31 July 2024, the eighth day of the trial.

5.  As the basis for the wasted costs order was the appellant’s late arrival at the trial proceedings, it is necessary to examine the court log concerning the hearing times.  The relevant hearings of the trial commenced at the following times: 10:06 am on 22 July 2024 (Day 1); 3:08 pm on 23 July 2024 (Day 2); 10:04 am on 24 July 2024 (Day 3); 10:19 am on 25 July 2024 (Day 4), the court was asked for an indulgence of 15 minutes regarding agreement of a sketch; 10:02 am on 26 July 2024 (Day 5); 10:08 am on 29 July 2024 (Day 6); 11:05 am on 30 July 2024 (Day 7), one of the accused had not arrived at 11:10 am and a warrant of arrest was issued against him; and 11:16 am on 31 July 2024 (Day 8), on the previous day the case had been fixed to commence at 11 am.  The appellant arrived at the courtroom at around 11:10 am, which was 10 minutes after the scheduled time for the commencement of the hearing.

6.  The appellant in her affirmation stated that on the morning of 31 July 2024, an Amber rainstorm warning took effect at 7:35 am, and it was cancelled at 10:45 am.  She left her residential address to go to court at around 9:45 am, and from her experience, this would have given her ample time to travel to the court and arrive there well before the scheduled commencement time, which had been fixed for 11 am.  At around 10:30 am, she was stuck in traffic at West Kowloon Highway and did not arrive at the entrance of the Western Harbour Crossing until around 10:45 am.  She called the assistant solicitor instructing her to explain her predicament and report it to the court clerk.  At around 10:48 am, realising that she was likely to be late for the hearing, she photographed her location, demonstrating that she was stuck in traffic at the entrance of the West Harbour Crossing.  She uploaded the picture to a WhatsApp chat group, of which the counsel for the accused and the prosecution were members.  Prosecuting counsel replied to her message and said “All right, wait for [you]”.  She finally reached the exit of the tunnel at around 11 am and saw an ambulance and fire engines stopped at the left lane of the roadway.  After parking her car, the appellant arrived at the court at around 11:10 am.  She noticed the accused, who had been issued with an arrest warrant the previous day, was having a conference with his counsel.  At around 11:15 am, all counsel were ready and the hearing commenced.

7.  When the judge came into the court at 11:16 am, he said he wanted to talk to the counsel who was late. The appellant identified herself as the counsel in question.  She said that she had arrived at 11:10 am.  She explained that she was late due to a traffic accident, causing extensive traffic congestion.  She mentioned that she had informed the prosecutor and her instructing solicitor of her circumstances.  She apologised for her lateness.  The judge then indicated that he was considering making a wasted costs order under the CCCO because all the parties had incurred legal costs.  The appellant responded by informing the judge that she had an explanation, namely the traffic accident.  He stated that he had to take action because Amber rainstorm warnings and traffic accidents were common occurrences, and he had to perform his case management function.[1]  He said traffic accidents happen every day and “technically, I have to take this action”.[2] 

8.  The judge calculated that the legal costs wasted due to the 10-minute delay, according to legal aid fees, was HK$200, and that the appellant should pay this sum to each of the parties.  It was at this point that he said he was considering to make the order but added, “I still have to hear what you have to say”.[3] However, he then indicated that he proposed to order that the appellant bear legal costs of HK$200 payable to each party.  While characterising this as a preliminary view, his subsequent comments revealed he had decided to make the order.[4]  He inquired if the appellant was willing to pay, and she answered affirmatively, while insisting that she had a reasonable excuse as the traffic situation was unforeseen.  The appellant offered to obtain proof of the traffic accident and the weather conditions.  The judge indicated he did not need such information and stated that he would still make a wasted costs order because traffic accidents and Amber rainstorm warnings happen all the time.[5]  He stated that he had no reason to disbelieve the appellant and accepted her explanation.[6]  He went as far as to say that he found that the traffic and weather problem did actually happen and did not question the appellant’s integrity.[7]  He stated that the appellant’s explanation was not a reason that he could accept for not making the wasted costs order against her.[8]  The judge ordered the appellant to pay HK$200 to each party within one month (a total sum of HK$1,400).[9] 

9.  The judge then addressed another matter, concerning the accused who had breached his bail conditions.  This concluded at 11:40 am, when the appellant, having perused section 18 of the CCCO, submitted to the judge that she would like to make a submission to review the order.  He responded that “… if I have to hear you further on this issue, the costs would probably go all the way up. … I have to hold up the hearing of the whole case but spend the time hearing your submission … if it turns out that you could convince me to accept that the order should be revoked, then there would be no problem.  But, if I do not accept it, the amount of costs might probably go up additionally ...”.[10] He stated that the appellant knew the situation, reiterating that “if eventually the order is revoked or the amount is increased, I have already forewarned you about this.” [11]  The judge directed the appellant that he did not need any submission, and again indicated that the amount of the wasted costs order might be increased if she were unsuccessful because he would have to spend more hearing time on the matter.  He also indicated that he had already made the order.

10.  When concluding that day’s hearing, the judge asked the appellant whether she had an application to make.  The judge then remarked that he had already made the order and asked the appellant on what basis she wanted him to deal with it.[12]  Prosecuting counsel interrupted, proposing that he discuss the matter with the appellant to determine the way forward.  The judge then commented again that he had already made the order, and if the proposed application was a review, it would not be appropriate.  He also indicated that at that moment, he did not have time to deal with the matter. [13]

11.  The judge appears to have erroneously believed that the awarding of wasted costs was akin to a strict liability offence where there was no room for consideration of a reasonable excuse.  As we will discuss later, he failed to consider all material circumstances as required under the provisions of the CCCO.  If the suggestion that he could not review the order is because he was functus officio, this was not correct as the order had not been sealed.  The order was sealed on 15 August 2024 and resealed after a further amendment on 20 August 2024.

The legal framework for wasted costs orders

12.  Section 18(1)  of the CCCO provides that in criminal proceedings, a court or a judge may make a wasted costs order against a legal or other representative.  Section 18(2)  provides that no order shall be made unless the legal representative has been given “a reasonable opportunity to appear before the court or the judge and show cause why the order should not be made.”

13.  The term “wasted costs” is defined in section 2 of the CCCO as:

“… any costs incurred by a party to the proceedings —

(a)  as a result of —

(i)  any seriously improper act or omission; or

(ii)  any undue delay or any other serious misconduct,

on the part of any representative or any employee of the representative; or

(b)   which, in the light of any such act, omission, delay or misconduct occurring after they were incurred, the court considers it is unreasonable to expect that party to the proceedings to pay.”

14.  The authority and rationale for imposing a wasted costs order against a legal practitioner was examined by Macrae JA (as Macrae VP then was)  in HKSAR v Harjani; Re Sutherland (Appeal: Wasted Costs Order) [14]:

“234. Although expressed in terms which are compensatory, the wasted cost jurisdiction should be regarded as punitive. Its purpose is to punish the offending practitioner for his failure to fulfil his duty to the court. In order to establish a breach of that duty, it was not necessary to establish dishonesty, criminal conduct, personal obliquity or behaviour such as would warrant striking a barrister off the roll. Equally, mere mistake or error of judgment would not generally suffice.

235. The word ‘improper’ in the definition of ‘wasted costs’ in the CCCO covers, but is not confined to, conduct which would ordinarily be held to justify disbarment, striking off, suspension from practice or any other serious professional penalty. It covers any significant breach of a substantial duty imposed by a relevant code of professional conduct. It also extends to any conduct which would be regarded as improper according to the consensus of professional (including judicial)  opinion, whether or not such conduct violates the letter of a professional code.

236. By the use of the words ‘seriously’ and ‘serious’ in the definition of ‘wasted costs’ in the CCCO, a higher threshold is required under s.18 of the CCCO, when compared with its civil or United Kingdom counterparts.

237. A barrister is not to be held to have acted improperly simply because he acts for a party who puts forward a defence which is plainly doomed to fail. But it is quite another thing for him to lend assistance to proceedings which are an abuse of the process of the court. The essential point is that it is not errors of judgment which attract the exercise of the jurisdiction, but errors of a duty owed to the court.

238. Public policy requires any court considering making a wasted costs order to take into consideration that advocates should be free to conduct cases in court fearlessly under our adversarial system of justice. Full allowance must also be made for an advocates difficulties or limitations in court proceedings before a wasted costs order is made against him.

239. A wasted costs order against a barrister personally is a draconian order. It should only be made on the basis of a seriously improper act or omission, or serious misconduct, not mere lack of wisdom, discretion or valour.” (Footnotes omitted)

15.  As emphasised by Macrae JA, a wasted costs order against a barrister personally is a severe sanction and should only be imposed when clearly satisfying the terms of the conduct as defined under the CCCO.[15]  He endorsed the following three-stage test when deciding whether to award wasted costs:[16]

“(1)  Has the barrister of whom complaint is made acted seriously improperly or been guilty of serious misconduct?; (2)  If so, did such conduct cause the applicant to incur unnecessary costs?; (3)  If so, is it in all the circumstances just to order the barrister to compensate the applicant for the whole or any part of the relevant costs? In relation to stage (2), a causal link between the offending conduct and the extent of the costs incurred or wasted must be established; while stage (3)  involves an exercise of discretion.”

16.  We note that the offending conduct additionally encompasses “undue delay” and that stage (2)  necessitates determining whether it would be “unreasonable” to expect the affected party to pay the costs incurred by the impugned conduct (section 2 “wasted costs” (b)).

17.  Macrae VP expounded these principles in HKSAR v Apelete (No 1) [17], quoting the remarks of this Court in HKSAR v Tam Yi Chun (No 2)[18], which established that the requisite standard to make a wasted costs order concerned conduct that had an element of seriousness:

“The legislature in Hong Kong has made a deliberate choice to circumscribe the circumstances in which the power may be exercised in a way which is much narrower than the circumstances permitted by the legislation of England and Wales. There is, for example, no reference in Hong Kong to a negligent act. It must be something much more than that, as emphasised as well by the repeated use of the word ‘serious’.” (Emphasis added)

18.  He further observed that delay impedes the efficient and proper administration of justice, and a legal practitioner has a professional obligation to use his or her best endeavours to avoid unnecessary expense and waste of the court’s time.[19] However, we observe, when considering the question of delay in making a wasted costs order, it is important, first, to note that the threshold is “undue delay”, and secondly, to take into account all the relevant circumstances, and objectively evaluate the nature, causation and consequences of the undue delay.  The meaning of “undue delay” is that the delay was unwarranted or inappropriate because it was excessive or disproportionate.

19.  In our view, the mischief against which section 18 of the CCCO is aimed is the incurring of unnecessary but additional costs by an affected party in criminal proceedings because of serious and unjustified conduct of the legal representative of another party.  To this end, the wasted costs regime ensures that legal professionals are held accountable for their conduct that has resulted in unnecessary costs incurred by other parties to the proceedings.

20.  An award for wasted costs is for the costs incurred by an affected party to the proceedings because of the conduct of a legal or other representative of another party involving a seriously improper act or omission, or undue delay or other serious misconduct, and it would be “unreasonable” to expect the affected party to pay such incurred costs.  As stated under section 18(3), when determining whether or not to make a wasted costs order, the court should consider all relevant circumstances, including taking into account the interest that there be fearless advocacy under the adversarial system of justice. 

21.  Under the wasted costs regime, an aggrieved party has the right to appeal against a wasted costs order under section 19 of the CCCO.  Section 19(3)  provides that an appeal against an order for costs by the District Court shall lie to the Court of Appeal.  Rule 4 of the Costs in Criminal Cases Rules (Cap 492A)  (CCCR)  provides the procedural rules on an appeal against a wasted costs order.  Rule 4 (7)  provides that the court can affirm, vary or revoke the order as it thinks fit and must give notice of its decision to the appellant, the court that made the order and any interested party.

22.  Having outlined the governing legal principles, we turn to a consideration of the test and how the matter was addressed in the present case.

Ground 1:making a wasted costs order

23.  Ground 1 addressed the facts and circumstances for making a wasted costs order.  Mr Bruce referred to the comments of this Court in Harjani and Apelete (No 1) that wasted costs awarded against a legal practitioner can cause a grave imputation on his or her professionalism.  For these very reasons, we agree that a wasted costs order is not a matter to be taken lightly or routinely. 

24.  Mr Bruce contended that the appellant’s conduct causing a relatively minor delay to the proceedings of around 10 minutes did not, in the circumstances, amount to misconduct to the level of seriousness of impropriety as provided by the wasted costs regime and explained by the relevant authorities.  He further submitted that the appellant sought to explain in the course of the hearing, that the delay to the proceedings was one for which she had a reasonable excuse, by reason of unforeseen weather conditions and a traffic incident.  He pointed out that the minor delay involved in the present case was not caused by any serious misconduct or dereliction of duty warranting a wasted costs order. 

25.  Moreover, Mr Bruce submitted that the three-stage test in Harjani had not been satisfied on the facts and circumstances of the case.  He contended that: (1)  the appellant’s conduct did not amount to seriously improper conduct or serious misconduct; (2)  the brief delay to the proceedings did not result in the parties incurring unnecessary costs; and (3)  it would not be just to order the appellant to compensate the parties for any such costs.  The judge fell into serious error in that he failed to apply the test or hear the appellant on any of these considerations prior to making the wasted costs order.  In this regard, it would seem that the judge did not consider the appellant’s conduct to amount to seriously improper or professional misconduct as he repeatedly indicated that he accepted the appellant’s explanation and did not question her integrity.

26.  Ms Jennifer Fok, for the respondent, very properly conceded that the facts and circumstances of the case did not fall within the conduct contemplated by the wasted costs order regime. 

27.  We agreed with counsel’s submissions that the judge erred in not following the proper procedure and applying the requisite threshold when making a wasted costs order.  As rightly pointed out, this was not a case that warranted consideration for or the imposition of a wasted costs order.  It was not a serious matter, where the appellant’s slight lateness was fully understandable given the prevailing circumstances, including an Amber rainstorm warning and the occurrence of a traffic accident.  Delays of this nature occur every day of the week without anyone being at fault.  This was such an instance.  We note that there was no contumacy on the part of the appellant, where there had been repeated conduct or defiance of any previous warnings.  The delay in the proceedings was minor, and the costs incurred by the affected parties was minimal.

28.  The judge did not account for all relevant factors.  He accepted the appellant’s explanation, but refused to take it into account on the basis that it had no bearing on whether to make a wasted costs order.  This was a serious mistake on the judge’s part because the appellant’s explanation was a relevant matter in deciding whether to make a wasted costs order.  Moreover, it was clearly apparent that the delay involved was not “undue”, or of a level of seriousness that it warranted consideration for a wasted costs order.

Grounds 2 and 3: the right to be heard

29.  Grounds 2 and 3 were dealt with together as they concerned the fundamental right to be heard.

30.  Mr Bruce submitted that the appellant was denied the right to be heard on liability to pay costs and as to quantum.  This right enjoys constitutional protection under the Basic Law, and is also specifically required in section 18(2)  of the CCCO.  As he rightly observed, a wasted costs order, which is not only a pecuniary penalty, can also have serious consequences for a person’s professional reputation and standing.

31.  In the following cases, the Court of Final Appeal has articulated the principles that apply when the courts are required to determine costs in the context of criminal proceedings.  In Chan Tit Shau v HKSAR [20], it was held that it was of fundamental importance that the rules of natural justice must be strictly observed in court proceedings and the failure to abide by these rules was a departure from accepted norms to the prejudice of the party involved.  This was echoed in HKSAR v Chui Shu Shing [21], where it was held that a failure to accord to a party against whom an order for costs was made, a right to be heard was “an elementary breach of natural justice and a failure to take account of statutory principles regulating the making of cost orders in favour of the prosecution.”

32.  Ms Fok contended that the judge provided a reasonable opportunity for the appellant to show cause.  She submitted that the judge invited submissions from the appellant after he said he was minded to make a wasted costs order and assess the costs incurred by each party to be HK$200.  The judge accepted the appellant’s explanation for the delay but he was convinced that the wasted costs order should be made.  She further submitted that the judge had also given the appellant the opportunity to make further representations at the end of the court day.

33.  Under the statutory regime for wasted costs, there is a specific requirement in section 18(2)  that the legal or other representative concerned be given a reasonable opportunity to appear before the court or the judge and show cause why the order should not be made.  We regret to say that this fundamental requirement was not properly adhered to in the present case.  The appellant explained to the judge why she was late and requested that she be heard on why her lateness was excusable.  However, the judge refused to consider the appellant’s explanation, treating it as an irrelevant matter.  He was obliged to consider all relevant circumstances, which included the appellant’s explanation for her late arrival at court.  Having refused to take into account her explanation, which he accepted, he made the order against her simply on the basis of the delay in the proceedings due to her late arrival at court.  The appellant requested a further hearing after considering the matter, but the judge refused.  He suggested that if she insisted on being heard further, the order could be revoked, but stressed that it could also be increased because he would have to spend more hearing time on the matter.  By these remarks, the judge insinuated that the wasted costs in the sum of HK$200 to each party would be increased because more time would be taken to consider the appellant’s submission.  This was not correct because wasted costs are not based on the time spent by the court adjudicating whether an order should be made, but on the costs incurred as a result of any act, omission, delay or misconduct by the party’s representative.

34.  The record of the proceedings reveals that the judge was adamant that the wasted costs order should be made against the appellant and did not give her a reasonable opportunity to be heard or a reasonable hearing.  In our view, the manner in which the matter was handled did not reflect the fundamental right to be afforded an opportunity to be heard, which was largely due to the judge treating the appellant’s explanation as irrelevant in deciding whether to make a wasted costs order.

Conclusion

35.  We allowed the appeal and quashed the wasted costs order against the appellant.  We also ordered that the appellant be awarded her costs of the appeal to be taxed if not agreed (with a certificate for one counsel).