WANG SHUITING AND OTHERS v. COMMISSIONER OF POLICE

HCAL 687/2022

[2025] HKCFI 352

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 687 OF 2022

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C O S T S D E C I S I O N

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A. Introduction

1.  These proceedings were commenced by Form 86 on 29 July 2022.  The case arose out of the regime (“LNC Regime”)  for the use of Letters of No Consent (“LNC”), with issues significantly overlapping with those raised in and determined by me in my Judgment dated 30 December 2021 in Tam Sze Leung v Commissioner of Police [2022] 1 HKLRD 480 (“Tam CFI”). 

2.  On 1 August 2022, I granted leave to apply for judicial review, on the papers.  I did so in significant part because of the findings made by me in Tam CFI. 

3.  However, the Judgment in Tam CFI was made the subject of an appeal (“CA Appeal”), brought by the Commissioner, and which was due to be heard by the Court of Appeal on 9 and 10 February 2023.

4.  By my Decision dated 20 November 2022 [2022] HKCFI 3499, I acceded to the Commissioner’s application for a general stay of these proceedings.  However, I also acceded to the Applicants’ submission that the Commissioner should nevertheless file his evidence in opposition to the application for judicial review, so that the proceedings would be ‘ready to go’ if appropriate after the CA Appeal. 

5.  I decided to grant the stay on the basis that I was ultimately persuaded on the balancing exercise required on the application of principle that the further ends of justice as between the parties and the due administration of justice generally required the grant of the stay.  There seemed to me to be sufficient overlap between the present proceedings and issues which would be dealt with in the CA Appeal that the determination of the present proceedings should await the determination of the CA Appeal. 

6.  Further, a Restraint Order (“RO”)  had been granted against relevant accounts of the Applicants on 21 September 2022, and had been varied on 10 October 2022 to cover accounts held by the 3^rd Applicant.  As a result, the LNCs were lifted.  I thought that the then circumstances of the granting of an RO, and the consequent lifting of the LNCs, pointed more towards the grant of a stay than its refusal. 

7.  Later, on 31 March 2023, I ordered the present proceedings to be adjourned sine die with liberty to seek directions upon handing down of the Court of Appeal’s judgment in the CA Appeal. 

8.  On 14 April 2023, the CA Appeal judgment was handed down, allowing the appeal by the Commissioner.  But the applicants in that case appealed to the Court of Final Appeal (“CFA”).  Though no formal further stay was granted pending final appeal, a stay remained in place as a matter of practicality and by agreement between the parties. 

9.  On 14 April 2024, the CFA handed down its judgment (“Tam CFA”), dismissing the applicants’ appeal.  The CFA unanimously held that: (1) the LNC Regime is not ultra vires; (2) the constitutional challenge against the LNC Regime failed, as property rights under BL 6 and BL 105 were not engaged; and (3) in any event, even if the property rights are engaged, the LNC Regime is ‘prescribed by law’ and satisfies the proportionality test. 

10.  After the handing down of Tam CFA, the parties in the present case engaged in negotiations on the further conduct of these proceedings.  By open letter dated 2 May 2024, the Applicants confirmed being agreeable to withdraw their application for judicial review and to discontinue the proceedings. 

11.  However, no agreement could be reached as to the appropriate costs order, and on 24 December 2024 the Department of Justice wrote to the Court seeking directions as to how the matter of costs might be resolved.  By my directions dated 30 December 2024, I noted the only remaining issue was as to the costs consequences upon the withdrawal of the proceedings, and I fixed a hearing for dealing with that issue. 

12.  At the hearing, the Applicants were represented by Mr Anson Wong Yu Yat of Counsel, and the Commissioner was represented by Mr Peter Dong of Counsel.  Both Mr Wong and Mr Dong made brief oral submissions with the benefit of prior written skeleton arguments (the Applicants’ skeleton having also been signed by Mr Hector Pun SC, who was unable to attend the hearing). 

13.  At the end of the hearing, I reserved my decision to be handed down on the following day. 

14.  This is my Costs Decision. 

B.  Applicable Principles

15.  There can be no dispute that general principles as to costs in civil litigation apply equally to judicial review cases, where the general rule is that a plaintiff or applicant who chooses to discontinue proceedings can expect to pay the costs: see my own recent decision in Tang Pun San v Tang Kwok Shu [2024] HKCFI 359 at §12. 

16.  But it is also correct that the Court has a wide discretion when dealing with matters of costs, and the discretion should be exercised judicially to seek to achieve justice in the particular circumstances of the case. 

17.  Where a case is resolved by some form of compromise, it may sometimes be appropriate and sensible to look at the underlying claims and enquire whether it is tolerably clear who would have won if the matter had not been compromised. If, upon consideration, it is tolerably clear that one party might have won (and so can be said to have done better out of the compromise), that may support that party receiving his costs. 

18.  In the particular context of circumstances similar to the present, Mr Dong pointed me to the case of Newcastle Wallsend Coal Co Pty v Industrial Relations Commission (NSW) (2006)  153 IR, as authority for the following proposition.  Where proceedings are discontinued because of a significant, if not the principal, issue sought to be agitated before the court has, in another case been ruled upon adversely to the claimant, there is in substance a hearing on the merits as to that issue in which the claimant should be taken to have failed and thereby, prima facie, be liable to bear a costs order.

19.  I take all these principles into account and apply them in the way that seems to me to be fit to the circumstances of this particular case. 

C.  The Contest

20.  Mr Wong submitted that the appropriate order to make in the circumstances is that there be no order as to costs.  He pointed to 5 factors which he said should come into play in the exercise of the discretion, leading to such an order, being:

(1)  From the time of the commencement of these proceedings until the grant of the stay, the judgment in Tam CFI represented the state of the law, and it was appropriate for the Applicants to rely upon it.  Further, even after the CA Judgment, no substantive steps were taken by the parties to these proceedings. 

(2)  The period of “informal freezing” of accounts suffered by the Applicants in this case was in excess of four times the maximum period identified in the Commissioner’s own policy, a situation “much more egregious” than that in the Tam Sze Leung case.  That gave rise to the argument that, irrespective of whether Tam Sze Leung was correctly decided, the Commissioner’s failure to give consent to deal with the funds in the bank accounts of the Applicants was illegal, irrational and/or disproportionate – and that argument had significant merit. 

(3)  The RO in this case was only made on 21 September 2021, after the commencement of these proceedings and the grant of leave to apply for judicial review. 

(4)  The Commissioner’s persistent refusal to unfreeze the accounts, notwithstanding the decision in Tam CFI, amounted to “deliberate flouting” of the declaratory relief granted by me in Tam CFI, so that there is good reason in the public interest for the Court to declare unlawful and express public disapproval of the Commissioner’s persistence, which can be reflected in the costs order. 

(5)  The Applicants’ decision to withdraw these proceedings was a pragmatic one, in order to save time and costs, and should not be taken as a concession as to the underlying merits.  In practical terms, since the making of the RO, there was no point in further proceeding with the judicial review. 

21.  I note that many of these arguments were also run in a similar form in the context of the argument as to grant or refusal of stay. 

22.  On the other hand, Mr Dong submitted that there is no dispute as to the appropriate starting point that costs should follow the event. Further, the event can be seen from the decision in Tam CFA, which rejected the fundamental parts of the Applicants’ case.  Mr Dong submitted that, in light of Tam CFA, the Applicants waved the white flag before the battle commenced.  

23.  Mr Dong submitted that the current proceedings are similar to – and should trigger the approach taken in – the Newcastle Wallsend case.  The key points of the Applicants’ case were decided against them in Tam CFA.  Further, the remaining case-specific arguments of illegality, irrationality and disproportion would not realistically succeed given that the declaratory relief granted in Tam CFI was set aside, and the CFA held that no property rights are engaged as a result of the LNC Regime. 

D.  Decision

24.  It seems to me that there is no escape from the starting position that, in light of the Applicants’ withdrawal of their application for judicial review and agreement to discontinue these proceedings, they could ordinarily expect to pay the costs. 

25.  I also accept that the Applicants have, in substance, had a hearing on the merits of their primary arguments relied upon by the Applicants – evident from their Form 86 and the reliance on Tam CFI.  Those arguments have been decided against them, and ordinarily costs would be expected to follow that event.  As Mr Dong submitted, the Applicants must have taken a calculated risk when launching and pursuing these proceedings – by which time the Tam CFI decision was already being taken on appeal. 

26.  In those circumstances, I am not sure it is fair to say that the Commissioner “deliberately flouted” the declaration made by me in Tam CFI – though it might have been better had a formal application been made to suspend the effect of that declaration pending the CA Appeal and any further appeal to the CFA. 

27.  I acknowledge that there were also individual case-specific arguments raised by the Applicants, which might still have been pursued.  But, the fact is that the Applicants have chosen not to pursue them. Further, I do not think the merits of those arguments are realistically very strong in light of the findings of the CFA in Tam CFA. 

28.  Also, if it is said that the Applicants have taken a pragmatic approach in light of the existence of the RO, it is to be remembered that the RO was granted in September 2021 and yet the Applicants opposed the Commissioner’s application for a stay (including on grounds that the making of the RO had rendered these proceedings academic which the Applicants then denied).  It is also to be remembered that the Applicants successfully insisted that the Commissioner should nevertheless file his evidence in opposition to the application for judicial review – the costs of which evidence are no doubt a significant part of the incidence of costs the subject of the present discussion. 

29.  Ultimately, I do not think any of the arguments advanced on behalf of the Applicants provide circumstances where in the exercise of my discretion I should depart from the general rule. 

30.  Therefore, I order the Applicants to pay the Commissioner’s costs of these proceedings, to be taxed if not agreed.  In light of the event of the argument on costs, I include the costs of that argument within the costs of the proceedings so payable.