SUNEVISION HOLDINGS LTD v. HONG KONG SCIENCE AND TECHNOLOGY PARKS CORPORATION

HCAL 1890/2018

[2020] HKCFI 1162

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 1890 OF 2018

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DECISION ON COSTS

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1.  Following my judgment of 26 March 2020 dismissing the application for judicial review,[1] SUNeVision has applied to vary the costs order nisi. The sole issue that arises is whether SUNeVision should be ordered to pay all of Global Switch’s costs (as stated in the order nisi which Global Switch seeks to maintain) or only 20% (or some other percentage) of them (as SUNeVision submits).

2.  The general approach relevant to the question is not in dispute.  As submitted by counsel, it may be summarised as follows:

(1)     Costs are always in the discretion of the court, and there can be no hard and fast rules.[2] It has indeed been observed that, “as in all questions to do with costs, the fundamental rule is that there are no rules”.[3]  That said, there is guidance laid down in the decided cases which illuminates the way in which the discretion should be exercised.

(2)     The starting point is that an unsuccessful party in an application for judicial review which is opposed by more than one party should generally not have to pay more than one set of costs.[4]

(3)     Where several parties appear having the same interest in the proceedings, the general rule is that the unsuccessful party should not have to pay more than one set of costs, the rationale being that an unsuccessful party should not have to pay for costs which have been unnecessarily incurred.  Different parties with the same interest can engage the same solicitors and counsel or they can adopt the position of one of the other parties.[5]

(4)     It is for the additional respondent, interested party or intervener to justify his participation in the proceedings.[6]

(5)     The mere fact that a party has the necessary locus standi to appear in judicial review proceedings does not by itself entitle that party to an order for costs should the outcome be successful.[7]

(6)     Where, however, the party can show that there is a separate issue on which he was entitled to be heard, being an issue not covered by the other party or parties in the proceedings, he would be entitled to his costs.[8]

(7)     The fact that the outcome of the application for judicial review would have a far‑reaching practical impact on an interested party will be a relevant factor to take into account when awarding costs. However, it cannot be the decisive factor.  The real issue is whether the interested party has an interest which requires separate representation.[9]

3.  I refer to my Judgment on the application for judicial review and adopt the abbreviations used therein.  The background leading to the decision challenged is set out in paragraphs 1 to 54.  The more significant steps in these proceedings are described in paragraphs 55 to 59.  The pleaded case for judicial review is summarised in paragraphs 60 to 73.  These matters will not be repeated here.

4.  It seems to me that so far as relevant for present purposes, the course of these proceedings falls into two stages.  When the proceedings were begun, quite apart from the challenge to the Corporation’s May 2018 Letter, which was a response to SUNeVision’s complaint that the Corporation had condoned breaches of lease in the TKOIE and failed to take enforcement actions, there was a very significant dispute as to whether the proposed increase of the plot ratio for Site C — Global Switch’s site — should be allowed to proceed.  While the increase was not specified as the decision challenged, the relief sought in the Form 86 then included a declaration that the grant of the increased plot ratio would be unlawful and an interim order that there be a stay of the decision to grant the increased plot ratio or that such decision shall not take effect pending the challenge.  Global Switch was not named in the Form 86 as an interested party but was directed by the court, when leave was given, to be served as such, since it would plainly be directly affected by the application as it then stood.[10] It was ordered that Global Switch be at liberty to take such part in the proceedings as it might be advised.

5.  SUNeVision’s applications for interim injunction and interim stay were unsuccessful and eventually, on 19 June 2019, the leave given in relation to the ground that referred to the increase of plot ratio was set aside by consent.

6.  In my view, the primary target of the challenge to the increase of plot ratio for Site C was Global Switch, with whom SUNeVision was (and still is) a competitor.  In fact, Global Switch had already contracted with the Corporation to acquire the additional plot ratio.  Global Switch’s legal rights, not only its commercial interests, would be fundamentally affected by that challenge.  The questions of how Global Switch could and would be using the extra floor space and what Global Switch had done in reliance on the grant of additional plot ratio, were matters peculiarly within Global Switch’s province which could not be expected to be adequately covered by the Corporation.  During this stage, it seems to me that there were matters concerning primarily Global Switch which justified its participation in the proceedings through separate representation.

7.  In my view, the fact that upon successfully resisting the application for interim injunction and stay, Global Switch obtained orders for its costs in full reflected Global Switch’s entitlement separately to contest those applications and the application for judicial review (at least to the corresponding extent).  Indeed, by letter of 9 August 2019, SUNeVision’s solicitors stated to Global Switch’s solicitors that in view of the fact that the decision concerning plot ratio was no longer an issue in the judicial review, Global Switch had no further role to play, and put them on notice that SUNeVision would contest any claim that Global Switch might make “for any costs incurred from the date of this letter”.  The stance taken seems to me to recognise that Global Switch’s participation in the first stage had been legitimate.

8.  Further, at that stage, where Global Switch was so particularly and vitally interested in the outcome, significant extra costs would have had to be incurred even if it were to consider alternative ways of participating, whether by instructing the same legal representatives as the Corporation or instructing its own lawyers to prepare evidence and arguments for use by the Corporation, as recognised by Hartmann J in Cathay Pacific Airways Flight Attendants Union v The Director‑General of Civil Aviation & another (unrep, HCAL 19/2005, 6 December 2005), §28.

9.  Even so, it can be said, with justification in my view, that there was some overlap between the opposition raised by the Corporation and by Global Switch respectively, and that it would be unfair to SUNeVision not to take account of that duplication.  Taking everything in the round, it seems to me fair and just that SUNeVision should pay 75% of Global Switch’s costs up to 19 June 2019.

10.  During the second stage of the proceedings, after 19 June 2019, when the increase of plot ratio was no longer the subject matter of the litigation, the position of Global Switch in the judicial review became much closer to that of the two other grantees who also feature in the application, namely, NTT and HKCOLO, neither of whom has taken any part in these proceedings. 

11.  It is submitted on behalf of Global Switch that even so, it had a direct interest in the outcome of these proceedings.  As acknowledged by SUNeVision, however, the application for judicial review was not about whether the grantees had in fact acted in breach of their respective leases (see Judgment §71(6); Evidence Decision §§7 and 17).  It was about whether the Corporation was labouring under misdirections in law or misapprehension of its own policies or had failed or refused to take reasonable or necessary actions in relation to the complaint of alleged breaches of lease by the three grantees.  The relief sought, namely, a certiorari to quash the May 2018 Letter and a mandamus requiring the Corporation to come to a fresh decision in accordance with law, do not have any direct legal effect on the grantees including Global Switch. 

12.  Although Global Switch and the Corporation are counterparties to the lease and their interests as lessor and lessee respectively may potentially conflict, their position on the principal issues arising from the Amended Form 86, including what the relevant policies were, the proper interpretation of those policies and the adequacy of enforcement steps, were aligned.  This is clear not only from the affidavits filed but also from their written and oral submissions made at the hearing.

13.  For the substantive hearing of the judicial review, Global Switch’s counsel lodged full written submissions.  In oral submissions, Mr Man SC who spoke for about 3 hours addressed this court mainly on the history of the matter from his client’s point of view, the shifting of the focus of the judicial review from exclusive possession to occupation, why his client’s business model fell within the terms of the lease, and the court’s discretion to refuse relief in any event.  As acknowledged by Global Switch, much of its submissions overlapped with those of the Corporation.

14.  Global Switch submits that it did raise a separate and distinct material issue for the determination in the judicial review, namely, that the court should in any event exercise its discretion to refuse to grant relief even if SUNeVision established that the Corporation had committed a public law wrong.  It is, however, self‑evidently a secondary issue.  Global Switch did not limit its participation to that question. Further, as I said in the Judgment at §202, the issue boiled down to a narrower submission that the Corporation should not be directed to come to a fresh decision that would have the effect of impugning or repudiating Global Switch’s pro forma service agreement which had previously been approved by the Corporation.  As explained in the Judgment at §203, on my conclusions on the grounds raised for judicial review, the issue did not actually arise.

15.  In these circumstances, it seems to me that the proportion of 20%, as proposed by SUNeVision, reflects in a broadbrush the extent to which Global Switch’s participation in the second stage was justified and therefore the extent to which SUNeVision should be required to pay Global Switch’s costs.

16.  For the above reasons, the order nisi will be varied as follows:

(1)     SUNeVision do pay 75% of Global Switch’s costs up to 19 June 2019.

(2)     SUNeVision do pay 20% of Global Switch’s costs thereafter.

17.  Given SUNeVision’s substantial success in its variation application, it seems to me on a nisi basis that it should have 75% of the costs of the application, to be taxed if not agreed, with a certificate for two counsel.