PROFESSOR CHAN YAN CHEONG v. THE RESEARCH GRANTS COUNCIL OF THE UNIVERSITY GRANTS COMMITTEE

CACV 78/2020

[2023] HKCA 473

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 78 OF 2020

(ON APPEAL FROM HCAL NO. 603 OF 2020)

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BETWEEN

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DECISION
(VARIATION OF COSTS)

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Hon Chu VP (giving the Decision of the Court):

1.  On 16 December 2022, this Court handed down our judgment in respect of the applicant’s appeal against the judgment of Au- Yeung J (“the Judge”) given on 18 March 2020[1]. At [109] of the judgment, we made the following orders:

(1) The applicant’s appeal is allowed limited to setting aside (a) paragraph 4 of the order dated 18 March 2020 dismissing the judicial review against the respondent’s decision on the applicant’s appeal, upholding a penalty debarring the applicant from applying under all research fund schemes administered by the University Grants Committee or the respondent for a term of two years; and (b) the costs order in paragraph 5 of the order.

(2) The applicant’s appeal against the Judge’s refusal to grant leave to apply for judicial review of the respondent’s decision on the applicant’s appeal, upholding the finding that plagiarism was established against the applicant in respect of the research proposal submitted for the SRFDP/RGC ERG Joint Research Scheme is dismissed.

(3) An order of certiorari to quash the decision of the respondent contained in a letter dated 7 July 2017 dismissing the applicant’s appeal against the penalty previously imposed on him for the finding of plagiarism and upholding the penalty.

(4) An order remitting the matter to the respondent for reconsideration of the applicant’s appeal against the penalty imposed for the finding of plagiarism.

(5) An order nisi that the applicant pays the respondent 50% of the costs of the appeal, including all costs reserved, and 50% of the costs below.

2.  By summons filed on 30 December 2022 (which the respondent sought to amend by a subsequent summons filed on 20 January 2023), the respondent applies to vary the costs order nisi to the following:

“(a) the Applicant shall pay to the Respondent five-sixths of the Respondent’s costs of the appeal and the costs below (including all costs reserved) save and except that any orders for costs made in respect of any interlocutory applications, including the Order of the Honourable Madam Justice Au-Yeung dated 18 May 2018, the Consent Orders dated 20 July 2018, 14 November 2018, the Order of the Honourable Mr Justice Lam VP dated 17 June 2020, the Order of the Honourable Madam Justice Au-Yeung dated 29 July 2020, and the Order of the Honourable Madam Justice Au-Yeung dated 3 September 2020, shall remain undisturbed; and

(b) there be a certificate for two counsel for the appeal and below (where applicable);”

3.  The application is opposed by the applicant.

4.  The respondent requests that the application be determined on paper. The applicant does not oppose. Having considered the written submissions, we consider it is appropriate to determine the application on the papers without an oral hearing.

5.  By the application, the respondent asks that: (1) the applicant pays 5/6^th (instead of 50%) of its costs of the appeal and below; (2) the costs orders made in the various interlocutory applications, which included the applicant’s application to the Judge for stay of execution[2] and the parties’ several applications to the Judge and to this Court for time extension[3], shall stand and not be affected by the costs order in (1); and (3) a certificate for two counsel be granted for this appeal and below.

6.  In relation to (2), the respondent has clearly misunderstood the effect of the costs order nisi. As acknowledged in the respondent’s reply submission (at [6]), we have not set aside or in any way dealt with the costs orders of the interlocutory applications made below and in this appeal. The costs order nisi only addresses the costs of the substantive appeal and the costs order made in paragraph 5 of the Judge’s order dated 18 March 2020. It is not intended to, and does not, affect the costs orders made in the interlocutory applications in this appeal and in the proceedings below. This part of the respondent’s application is unnecessary. It follows that we need not deal with the applicant’s submissions that the costs order nisi covers the interlocutory applications relating to enforcement of the Judge’s judgment (i.e. the Judge’s orders dated 26 August and 3 September 2020).

7.  As for (3), it is not really necessary for this Court to expressly provide for a certificate for two counsel as two counsel are in general appropriate for appeals in this Court and are to be allowed on taxation: The Yin Nin Savings Mortgage Loan & Land Investment Co Ltd v Occupier(s) of Premises [2022] HKCA 993 at [10]. We do, however, accept that as we have disturbed the Judge’s costs order of 18 March 2020, we should for clarity provide for a certificate for two counsel for the proceedings below. We do not understand the applicant to be opposed to this.

8.  Returning to (1), the issue is whether the applicant should pay 5/6^th (instead of 50%) of the respondent’s costs of the appeal and below. The respondent based its application on two primary grounds:

(1) The applicant has failed on almost all of the grounds advanced in the appeal and below. For the only successful ground, he did not obtain the relief sought.

(2) The conduct of the applicant in the appeal in raising new grounds and evidence and making substantial shift in his position was improper or unreasonable.

9.  The applicant, in contending there is no basis for varying the order nisi, puts forward the following arguments:

(1) The Privy Council’s practice with regard to appeals from disciplinary tribunals in circumstances where the appeal has failed on liability but succeeded on penalty is to make no order for costs: Walker v Royal College of Veterinary Surgeons (Costs) [2008] UKPC 20. Such an approach is reflective of the general rule that costs should follow the event.

(2) The courts have abjured readily acceding to the “filleting” of costs according to the success or failure of any specific issue arsing for decision within the composite whole, and such occasions are likely to be few and far between: Kam Hing Trading (Hong Kong) Ltd v The People’s Insurance Co of China (Hong Kong) Ltd (unreported) HCCL 27/2009, 15 December 2010, at [20] to [23].

(3) In light of the above, the costs order nisi is already favourable to the respondent in that the applicant, having won on the major issue of penalty, pays 75% of the total costs incurred by both parties whereas the respondent, having lost on that issue, pays only 25% of the total costs.

(4) Even if costs are to be decided according to the success or failure of specific issues, the costs order nisi is entirely reasonable. This is because the respondent succeeded on three out of the four issues argued on appeal and the applicant succeeded on the remaining one; hence the respondent should be awarded ¾ of its costs while the applicant should be awarded ¼ of his costs, and after set-off, the respondent should receive 50% (i.e. ¾ - ¼ = ½) of its costs.

(5) The respondent’s application has ignored the fact that the applicant succeeded on the penalty issue and the Court has granted the relief sought by quashing the decision.

(6) The applicant’s conduct in the appeal was not unreasonable.

(7) In any event, the Court has already taken into account the points made by the respondent in making the costs order nisi.

10.  We do not think the Walker case[4] demonstrates that it is the established practice of the Privy Council to make no order for costs where an appeal from a disciplinary tribunal fails on liability but succeeds on penalty. At [5] of the judgment, the Privy Council merely indicated it had in practice made costs orders against disciplinary tribunals where the appeals succeeded, and that no order for costs was made in two previous cases where the appeal failed on liability, but succeeded on penalty. In any event, the court has a wide discretion over costs and the exercise of the discretion must have regard to the circumstances of the case in question. The fact that a split order was rejected in the Walker case does not mean that a split order should not be made if the circumstances of the case warrants it.

11.  Post-CJR and since the decision in Kam Hing Trading (Hong Kong) Ltd, the courts are more readily prepared to depart from the starting point of costs follow the event, and to make a costs order that reflects the fact that significant time and costs in litigation were spent on raising unsuccessful grounds: Chan Shun Kei v Hong Kong Construction (Hong Kong) Ltd (unreported) CACV 192/2014, 7 March 2016, at [24] t0 [25] cited in Building Authority v Appeal Tribunal (Buildings) [2020] HKCFI 1245 at [15]. Further, as pointed out in In Re Elgindata Ltd (No 2) [1992] 1 WLR 1207 at 1214B-C, a successful party who has raised issues or made allegations improperly or unreasonably may be deprived of his costs and may further be ordered to pay the whole or a part of the unsuccessful party’s costs.

12.  In this case, it is relevant to have regard to the way in which the applicant conducted his case both below and here, as well as the overall outcome of the case. In the proceedings below, the applicant had twice amended his Form 86. In the end, there were six issues for determination by the Judge (i.e. Justiciability, Lack of Definition, Non-disclosure of Identity, Inadequate Reasons, Non-disclosure of Materials, and Penalty). Five of them go to the respondent’s finding that plagiarism was proved against the applicant while the remaining one concerns the penalty imposed by the respondent[5]. The Judge refused leave to apply for judicial review against the finding of plagiarism, holding the grounds to be unarguable or not relevant, and gave leave to judicially review the penalty imposed but dismissed the judicial review[6].

13.  In this appeal, in addition to the Notice of Appeal, the applicant has filed an Amended Notice of Appeal and a Supplemental Notice of Appeal, which seek to appeal the Judge’s decision on all the six issues. It was only in counsel’s written submission that two of the issues and one part of another issue relating to the finding of plagiarism were abandoned[7]. Among the remaining issues, two of the arguments relied upon (i.e. the Fair Labelling Argument and Alignment Argument) were new points not raised before the Judge, with one of them (i.e. the Fair Labelling Argument) being outside the grounds stated in the Form 86[8]. Ultimately, the applicant succeeded on the penalty issue but fails on the other issues.

14.  The penalty issue only took up a small part of counsel’s written and oral submissions. It should also be noted that the applicant did not set out in his Notice of Appeal, Amended Notice of Appeal or Supplemental Notice of Appeal the order that he asked this Court to make. At our direction, he put in a draft of the relief sought after the appeal hearing. While we have quashed the respondent’s decision relating to penalty, we did not grant the declaration or indication sought by the applicant that the appropriate penalty should be a warning letter.

15.  As the respondent points out, the penalty issue is a discrete issue separate from the other issues relating to the finding of plagiarism. As is evident from the judgments of the Judge and this court, the arguments on the finding of plagiarism occupied a substantial part of the submission and had taken up very significant time in the hearings.

16.  The respondent is also correct in saying that the applicant has shifted his case substantially in the course of the appeal. Despite the filing of three notices of appeal, his case continued to evolve and shift in counsel’s written and oral submissions.

17.  In short, notwithstanding the applicant’s success on the penalty issue, he should not only be deprived of his costs, but should also be ordered to pay part of the costs of the respondent both in this appeal and below, having regard to his limited success on one discrete issue, the very significant time spent on the issues and arguments on which he has failed, and his far from satisfactory conduct in the proceedings here and below.

18.  In the light of the above, on reflection, we agree that the applicant should be ordered to pay a higher proportion of the respondent’s costs. On a rough and ready basis, we consider the applicant should be ordered to pay two-thirds of the respondent’s costs in this appeal and below.

19.  As for the costs of this application, while the respondent has succeeded in varying the costs order nisi, there are aspects of its application that are unnecessary (including the summons to amend the first summons, see also [6] and [7] above). In the circumstances, we consider it is appropriate to make no order as to the costs of this application.

20.  Accordingly, we make the following orders:

(1) The costs order nisi be varied as follows:

The applicant pays the respondent two-thirds of the costs of the appeal (including all costs reserved) and the costs below with a certificate for two counsel.

(2) There is no order as to the costs of the respondent’s application by summonses filed on 30 December 2022 and 20 January 2023.