FUNG PING SUM CONNIE v. APPEAL PANEL (ESTATE AGENTS ORDINANCE)

HCAL 514/2021

[2022] HKCFI 644

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 514 OF 2021

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COSTS VARIATION DECISION

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A.  Introduction

1.  In this action, I gave Judgment dated 27 January 2022 [2022] HKCFI 277 (“Judgment”), in a case where the Applicant sought to challenge the Decision made by a tribunal of the Panel, together with the later Reasons, by which the Panel confirmed the earlier decision of the Authority made under section 24 of the Ordinance, refusing to grant or renew a licence to the Applicant.  (All definitions used in the Judgment continue to be adopted.)

2.  The Judgment was given following a ‘rolled-up’ hearing, which was heard before me on 20 January 2022.  I dismissed the application for leave to apply for judicial review, holding that none of the three Grounds of intended challenge put forward by the Applicant were reasonably arguable with any prospect of success.

3.  In §70 of the Judgment, I stated that I then saw no reason why costs should not follow the event, and that the Authority had properly appeared as an interested party and its submissions were of genuine assistance to the Court.  I made an order nisi for the Applicant to pay the Authority’s costs, to be taxed if not agreed.  I also directed that any variation application would be dealt with on paper.

4.  By summons dated 10 February 2022, and written submissions of the same date, the Applicant seeks to vary the costs order nisi to an order that there be no order as to costs.  The application is opposed by the Authority in its written submissions dated 24 February 2022.

5.  In the written submissions, the Applicant was again represented by Mr Foster Yim and Mr Jasper Wong of Counsel, and the Authority was again represented by Mr Abraham Chan SC, leading Mr John Cheung of Counsel.

6.  This is my Costs Variation Decision.

B.  Applicable Principles

7.  It is common ground that in general costs follow the event.

8.  But, Mr Yim for the Applicant relies upon principles applicable to the awards of costs in public law cases involving ‘public interest litigation’.  Mr Yim submits that the Applicant’s application in this case (especially Ground 1)  “bears features” – as he puts it – of ‘public interest litigation’, justifying an exceptional departure from the general rule.

9.  Both Mr Yim and Mr Chan note that I recently considered the applicable principles on costs in public law cases in Loh Ming Yin v Hong Kong Examinations and Assessment Authority [2020] HKCFI 2115 at §§5-13.

10.  Those principles might again be summarised (without further reference to authority)  as follows:

(1)  The starting point remains the usual position that costs will follow the event.

(2)  However, depending on the particular circumstances of the case, the principles regarding ‘public interest litigation’ may justify a departure from the usual order.

(3)  The three criteria of ‘public interest litigation’ are:

(a)  the litigant has properly brought proceedings to seek guidance from the court on a point of general public importance, so that the litigation is for the benefit of the community as a whole, to warrant the costs of the litigation being borne by the public purse as costs incidental to good public administration;

(b)  the judicial decision has contributed to the proper understanding of the law in question; and

(c)  the litigant has no private gain in the outcome.

(4)  The criterion of contribution to the proper understanding of the law is not limited to issues where the legal principles have not been settled and thus need further development or clarification.  The criterion should cover a question of how the relevant law is applied to a particular set of facts.

(5)  Similarly, the second requirement that the judicial decision required to be made in the litigation should contribute to the proper understanding of the law in question is not limited to only resolution of issues that involve difficult or unsettled legal principles.

(6)  Nor is there any absolute standard by which to define what amounts to an issue of general public importance.  The question is ultimately a matter of degree, where identifying it is an objective exercise and where the court would pay regard to the qualitative significance of the issues at stake.

(7)  Nevertheless, it must be emphasised that, other than the overarching twin criteria of public interest litigation, the other factors (including the merits, the existence or otherwise of a private interest, the relative financial resources of the applicant and respondent, the reasonableness of the applicant in approach, etc)  are all matters that the court could take into account in its exercise of discretion to decide whether it is just and fair to depart from the usual position that costs follow the event.

(8)  For example, however important the point in issue may be in a public interest litigation case, a lack of merits will rarely (if ever)  save a party from an adverse order for costs.  Hence, the evaluation of merits and the conduct of the parties is part of the consideration as to whether or not the litigation really concerned a matter of sufficient public importance.

(9)  In a ‘rolled-up’ hearing, where the applicant is ultimately unsuccessful but where the court identifies that the applications were reasonably arguable to justify the grant of leave, that may (depending on the particular circumstances)  justify a departure from the usual order.

(10)  But, if an applicant cannot satisfy the minimum threshold for grant of leave to apply for judicial review, the applicant will ordinarily not be able to contend that canvassing his arguments in court is or was in furtherance of public interest.

11.  Those are the principles to be applied to this case.

C.  Analysis

12.  It seems to me that neither Ground 2 nor Ground 3 raised any issue of general public importance – and, to be fair, Mr Yim does not suggest otherwise.

13.  Mr Yim’s focus is on Ground 1.  Mr Yim submits that the key issue in the case was whether section 18 or section 19 of the Ordinance is applicable to an estate agent’s application to renew or re-apply for his licence.  He further submits that the general public importance of this issue was acknowledged by the Authority, and is reflected by the comprehensive review undertaken in the Judgment.

14.  Mr Yim also relies upon the fact that the Court accepted neither of the constructions of section 18 of the Ordinance as advanced by the Applicant or the Authority.  Instead, the Court held that section 18 simply never became operative.

15.  In the Postscript, I reached the firm conclusion that, whatever its original intended purpose, section 18 of the Ordinance never became capable of being operated – as a matter of law and fact. Therefore, its presence in the Ordinance is of no effect, so that it would be best to make clear that section 18 can be ignored for all current and future purposes of regulation and licensing under Part III of the Ordinance.  I also pointed out that the position was not necessarily previously understood by the Authority, as it might have dealt with applications as though they had been properly made under a properly operable section 18.  But I went on to note that, even if that were so, that would have been by reference to a “relevant period” or other transitional period almost certainly ending as long ago as 31 December 2001 (over 20 years ago).

16.  That holding and Postscript in the Judgment, says Mr Yim, plainly advanced the proper understanding of the licensing regime for estate agents under the Ordinance. 

17.  Mr Yim also suggests that the confusion over sections 18 and 19 lies with the Authority, though it could have been readily avoided had there been a gazetted specification of a “relevant period” for section 18.  The Court’s clarification has therefore removed uncertainty from the general population of estate agents, and the costs relating to that clarification are properly to be considered “costs incidental to good administration”.

18.  As to the third criterion of ‘public interest litigation’, Mr Yim submits that what he calls the “potential private gain of the Applicant” should not debar her from an order of no order as to costs that would otherwise have been made.

19.  With respect, that is not the correct analytical approach.  The relevant question in a case such as the present case is not answered by considering whether no order as to costs should be made, and then considering whether the presence of private gain does or does not ‘debar’ such an order.  Rather, the presence or absence of private gain is one of the matters to be considered in determining whether or not the particular litigation is ‘public interest litigation’ such as might – depending on all other circumstances – justify a departure from the usual order that costs will follow the event.  To use a now popular word, the process of deciding what costs order to make is a ‘holistic’ one.

20.  Though the point is perhaps not central to the analysis, it might also be noted that Grounds 2 and 3 tend to identify that these proceedings were all about the Applicant’s own personal factual situation, and her intended private gain.

21.  Indeed, I also agree that the cases relating to protective costs orders, referred to by Mr Yim, provide no assistance to the analysis.  In any event, it cannot really be suggested that the Applicant brought these proceedings essentially to represent a number of persons with a similar interest.  I accept Mr Chan’s submission that, to the contrary, the Applicant brought the challenge to promote her private gain in the form of regaining her licence.  Of itself, that means that the Applicant cannot satisfy the third criterion for this litigation to be classified as ‘public interest litigation’.

22.  As to the prior points, it seems to me that ultimately my Judgment was really based on the view that the central question was whether the Authority committed an error of public law in taking into account the Applicant’s repeated non-disclosure of her prior conviction when considering whether she was fit and proper to hold an estate agent’s licence.  As I held, irrespective as to which of section 18 or section 19 might be applicable, such an assessment is a broad one, and it was not reasonably arguable that there had been a public law error on the facts.

23.  Further, as regards section 18 of the Ordinance, my Judgment might be thought to have had two main effects: (1)  it identified that the Applicant’s argument – that section 18 was the applicable section – was not reasonably arguable; and (2)  it identified that section 18 had never come into effect in the first place, even if there might have been some purported dealing under it 20 years or more ago. 

24.  In a sense, not least because of what was really the central question in the case, the latter effect was merely incidental (hence the reference to the sterility of the argument).  But, actually, both points were secondary to the central question.  As Mr Chan submits, the wider debate concerning the proper role of section 18 was not in fact raised by Ground 1, because Ground 1 was put forward on the basis that section 18 was operative and as to what on its proper construction could or could not be taken into account in the assessment of fitness and properness.  Quite simply, I rejected Ground 1 as advanced, and would have done so irrespective of my pointing out the sterility of the argument and why.

25.  Nor do I think there is anything in Mr Yim’s submission that the Authority is somehow to “blame” for any confusion over sections 18 and 19. 

26.  I would add that there may be many cases in which the Court will rule on the proper construction of legislation in the public law context.  But, of itself, that does not mean that the particular case is or is to be treated as having become ‘public interest litigation’; the full analysis of that question must be performed and applied.

27.  In this case, I do not think that the Applicant can show that this was ‘public interest litigation’.  In any event, where the Applicant was not able to satisfy even the threshold test for the grant of leave, it is not in the public interest to require the use of public funds to pay for the costs of proceedings for resolution of argument which had no real prospect of success. 

28.  For the sake of completeness, I take into account but give no particular weight to the fact that the Applicant apparently has some financial means because she has pursued these proceedings without legal aid.

D.  Result

29.  In light of my above views, I dismiss the application for variation of the costs order nisi.  Instead, the order becomes absolute.

30.  However, in the overall exercise of my discretion I make no order as to the costs of the argument on the variation application.