JONNEX INTERNATIONAL LTD v. TOWN PLANNING BOARD

HCAL 130/2015

[2018] HKCFI 836

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 130 OF 2015

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DECISION ON COSTS

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1.  On 12 January 2018, I handed down judgment (“the Judgment”) allowing the applicant’s judicial review.  I also made a cost order nisi that costs of the application be to the applicant.

2.  On 25 January 2018 (by way of summons), TPB (the respondent) applies to vary the costs order nisi to the extent that TPB should bear 70%, or such percentage as the court considers fair and just in all the circumstances, of the applicant’s costs.  The parties have agreed to dispose of this application by way of written submissions.

3.  This is the decision of the costs variation application.  This decision should be read together with the Judgment, and the court adopts herein the abbreviations used in the Judgment.

4.  The parties have no dispute about the principles applicable to costs.  These have been helpfully summarized by Mr Litton (for TPB) as follows:

(1) The general rule is that costs should follow the event, but the court retains a wide discretion to order differently where it finds it just and fair in all the circumstances of the case.

(2) In particular, the court may disallow some of a successful applicant’s costs to reflect the fact that significant time and costs in litigation were incurred by the applicant raising unsuccessful grounds.

(3) While departures from the general rule will be approached with due circumspection, the court in the post-CJR era is more readily prepared to depart from the general rule.  Such departures do not necessarily require showing that the failed grounds were raised unreasonably or improperly.

See: The Real Estate Developers Association of Hong Kong v Town Planning Board [2016] 2 HKLRD 642 at paragraph 6; Pfeiffer GmbH v Cheung Hay Kit trading as Sun Wai Construction (CACV 245/2013, 29 October 2014, Kwan and Barma JJA, Poon J (as he then was)) at paragraph 20; Fairbo Investment Ltd v Appeal Tribunal (Buildings) (HCAL 35/2012, 27 January 2015, Au J) at paragraph 7.

5.  Further, as observed by Kwan J at paragraph 20 of Pfeiffer GmBH:

“too robust an application of the general rule encourages litigants to increase the costs of litigation since it discourages them from being selective as to the points they take.”

6.  This court has also said this in Fairbo Investment, at paragraph 7:

“It must also be borne in mind that, post CJR, the parties and the court should also take into account of, among others, the reasonableness of the proportionality of the costs incurred in pursuit of all the grounds (including unsuccessful ones) in support of a claim. See: O62 r5(l) and O1A, r1”.

7.  The principal basis of the TPB’s present costs variation application is that significant time and costs of this litigation had been incurred by the applicant raising a number of unsuccessful grounds of judicial review.

8.  As submitted by Mr Litton, the applicant raised some seven main grounds of challenge and various sub-grounds in the Form 86.  They can be summarized as follows:

(1) Ground (I) – the applicant alleged that (i) the TPB took into account irrelevant consideration (namely the “merging of sites” and “more comprehensive schemes”); (ii) the TPB’s consideration of such was irrational; (iii) the TPB failed to give the applicant an opportunity to make representations; and (iv) the TPB failed to make sufficient inquiry as to the feasibility of the merging of sites, ie, breach of Tameside duty.

(2) Ground (II) – the applicant alleged that (i) the TPB took into account an irrelevant consideration (namely, the “orientation of proposed buildings”); (ii) the consideration was irrational; (iii) the TPB did not give the applicant an opportunity to make meaningful representations on the TPB’s views.

(3) Ground (III) – the applicant alleged that (i) the objective of avoiding the permanent loss of open space was an irrelevant consideration; and (ii) the said objective was in any event irrational.

(4) Ground (IV) – the applicant alleged that (i) the setting of undesirable precedent demonstrated the adoption of an over-rigid policy; (ii) the TPB failed to take into account the actual circumstances of other “O” zoning in the Sai Ying Pun and Sheung Wan area; (iii) breach of Tameside duty; and (iv) the TPB’s reliance on “undesirable precedent” was irrational.

(5) Ground (V) – the applicant alleged that the failure to carry out an assessment of the impact on air ventilation led to (i) a material error of fact; and (ii) breach of Tameside duty.

(6) Ground (VI) – the applicant alleged that reasons given by the TPB were inadequate.

(7) Ground (VII) ground was concerned with an alleged undisclosed conflict of interest of one of the TPB members but was abandoned at the hearing.

9.  In allowing the judicial review, I accepted Grounds II(iii) and IV(iv) (see paragraphs 35 - 50, and 61 - 70 of the Judgment), but rejected all the other Grounds.

10.  As reflected in my reasons in rejecting the other Grounds (see in particular paragraphs 30 - 33 [for Ground I], 58 - 60 [for Ground III], 79 - 81 [for Ground V], and 86 - 87 [for Ground VI]), they are indeed not grounds that bear substantial merits, when viewed against the presented objective evidence fairly and in proper context.  In other words, the applicant could and should have been more focused and selective in deciding whether to continue to pursue these grounds, especially after the completion of the filing of evidence by both parties.  The applicant had made substantial submissions for these unsuccessful grounds both in the skeleton and the substantive hearing.  These grounds therefore had no doubt significantly increased the time (and thus costs) of the hearing and the determination of the challenge.

11.  Mr Law for the applicant, in opposing this application, has in gist submitted that the applicant has succeeded in obtaining the relief sought in the judicial review, and it cannot be demonstrated that it was unreasonable for the applicant to raise the unsuccessful grounds.  Mr Law therefore says the applicant should be entitled to all the costs.

12.  With respect, I am unable to agree with Mr Law.  As I have said in The Real Estate Developers Association, supra, at paragraphs 8 - 10, the court in exercising its discretion to make an appropriate costs order must take into account and reflect the applicant’s ultimate success in the judicial review and the position that the unsuccessful grounds cannot be said to be raised unreasonably.  However, it does not mean that the court in the right case should and could not reduce part of the applicant’s costs to achieve a just and fair result by applying the above principles.

13.  Applying the above principles to the present circumstances as mentioned above,[1] I think it is unfair to require the TPB to bear all the costs of the applicant.  Looking at the matters in the round, I agree that it is just and proportionate to deduct 30% of the applicant’s cost to reflect the position.

14.  In the premises, I would vary the costs order nisi to the extent that 70% of the applicant’s costs be borne by the TPB, with certificate for two counsel.  The costs of this application be to the TPB to be taxed if not agreed.