LIU PIK HAN v. HONG KONG FEDERATION OF INSURERS APPEALS TRIBUNAL AND ANOTHER

HCAL50/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE  LAW

LIST NO. 50 OF 2005

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DECISION ON COSTS

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1. Having heard submissions from counsel, I am satisfied that, firstly, as far as the costs relating to the application for leave as well as the hearings on 9 and 15 June are concerned, they should be dealt with in the same manner as the costs of the substantive hearing.  In other words, the costs of those preliminary hearing as well as the application for leave should be costs in the cause of the substantive judicial review hearing. 

2. I agree with Mr Jin’s analysis of the matter on this aspect.  In other words, I do not see any reason why the costs of the application for leave and those preliminary hearings should be treated in a different manner from the substantive judicial review.  The question of fair hearing has been raised in the application for leave from the outset and this is a challenge which has succeeded at the end of the day. 

3. Coming to the costs of the substantive judicial review itself, Miss Lam invited this court to consider depriving the Applicant of part of the costs on the basis that the Applicant did not succeed on all the points raised.  More importantly, the Applicant failed in regard to the ultra vires challenge.  The general principles basing on which the court will exercise its discretion in situations like this are set out in Elgindata No. 2 [1992] 1WLR 1207.  At page 1214 of the report, Beldham LJ set out the relevant principles.  But the starting-point is that costs should follow the event and this general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails. 

4. In the present case, it is not suggested, nor can it be suggested, that the Applicant raised the ultra vires challenge or, for that matter, other challenges which this court did not find necessary to resolve at the end of the day improperly or unreasonably.  Miss Lam did not invite this court to say that the Applicant should not only be deprived of his costs in relation to the ultra vires challenge but also to pay for the costs of the Respondent regarding the ultra vires challenge.  Miss Lam has quite properly confined her submission to that because the ultra vires challenge did increase the length of the proceedings, the Applicant should be deprived of that part of her costs. 

5. In order to trigger that sort of treatment, in my judgment, one must first consider whether the raising of an issue which has failed has significantly increased the length of the hearing and the costs of proceedings.  Bearing in mind how that point has been argued at the trial, although I accept that that was a very important issue to the Respondents as well as to the Insurance Authority and I also accept that the parties must have spent quite a bit of costs in terms of preparation on the ultra vires issue, as far as the argument in court is concerned, I do not consider that the raising of the ultra vires point significantly increased the length of the hearing.  In fact, if I recall correctly, Mr Jin quite sensibly confined the challenge to a very narrow point at the hearing. 

6. But more importantly in the present context in my judgment, not only was the challenge reasonably raised, it was raised because the relevant rules set out in the Code were not clear enough and respectable arguments can be mounted to challenge it.  At the end of the day, as I said in the course of the hearing, the point is a matter that will sooner or later come to court.  The decision in this case actually did a service to the Respondent in terms of clarification of the Code.  The Respondent succeeded to persuade me that there were implied powers of investigation on the part of the Board in the rules. 

7. Also, I accept Mr Jin’s submission that the resolution of that issue is necessary, although this court, at the end of the day, decided in favour of the Applicant on the fair-hearing point.  The resolution of that issue is necessary in the sense that it had a bearing on how the court should exercise its power in terms of granting remedies to the Applicant.  If I were to conclude that the Board itself has no power to investigate, different remedies would have to be granted.  As it were, I conclude that the Board does have the power to investigate and therefore the remedy was to remit the matter back to the Board for a further hearing.

8. Hence, this issue was not raised unnecessarily and in this regard I am reminded by Mr Jin as to the type of cases where discrete issues should be treated separately in terms of costs in the judgment of   Beldham LJ in Elgindata No. 2 at page 1218. 

9. Having regard to all these, I do not think it is an appropriate case for me to segregate the costs on the ultra vires issue from the other. 

10. The order I make is that I will confirm my costs order nisi and, as far as today’s hearing, subject to what counsel have to say, costs should follow the event. 

11. The 1st and 2nd Respondents have to pay the costs of the Applicant for today’s application.