LAU WING HONG AND OTHERS v. WONG WOR HUNG AND ANOTHER

HCA1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

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J U D G M E N T

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1. This proceeding was to be the sequel to the judgment reported at [2006] 4 HKLRD 671, in which the plaintiffs’ counterclaim to the defendants’ counterclaim would fall to be determined : see at page 681C–H.  The constitutionality of sections 7 and 17(2) Limitation Ordinance, measured against Articles 6 and 105 of the Basic Law, was to be the central issue.  To this end, now the Secretary for Justice represented by Mr Benjamin Yu SC appeared as an Intervener and Mr Godfrey Lam appeared as amicus curiae on the instructions of the Registrar of the High Court.  The fixture was listed for 4–6 July 2007.

2. Because of the intrinsic importance of the issue all counsel had surpassed themselves in terms of evidence of preparation, with no less than eleven box files of authorities and some 250 pages of detailed submissions having been placed before the court.  This was itself a proportionate response to the significance and complexity of the underlying issues.  However, on Friday 29 June the plaintiffs’ solicitors wrote an open letter to the other parties giving notice of their abandonment of the Basic Law point — the sole reason for the counterclaim to the counterclaim — a classic case of cold feet at the altar.  1 and 2 July were of course public holidays.

3. In open court on 4 July the plaintiffs’ application for leave to discontinue their counterclaim to the counterclaim was not opposed by the Intervener or the defendants : Order 21 rule 3 RHC.  Leave to discontinue was accordingly given.  The plaintiffs accepted that they had to pay the costs of the defendants and were ordered to do so.  The Intervener had in March 2007 upon becoming a party to the action, agreed with those parties that no costs would be sought from or awarded to any other party in relation to the Intervener throughout.  This left the issue of whether in all the circumstances, the plaintiffs should pay the costs of the amicus.  That raises issues of jurisdiction and of discretion which are dealt with later in this judgment.

4. However, prior to leave to discontinue being granted, at the instigation of Mr Yu SC all counsel discussed during a short adjournment whether the case could proceed on a formula that protected all parties’ interests as to costs.  This proposal foundered when the plaintiffs’ position was that their counsel would not make any oral submissions (although having filed written submissions) or participate further in any Basic Law argument.  The defendants equally instructed their counsel not to make oral submissions (although having filed written submissions) because the plaintiffs no longer intended to rely upon the Basic Law points.  No counsel for the original parties is to be in any way criticized, finding themselves in the awkward postures imposed upon them by pragmatic clients.

5. This fixture had been identified as an important test case.  A good number of other cases raising the identical constitutional law issue were flying in a holding pattern, pending the intended adjudication.  Because of the apparent state of uncertainty as to the constitutionality of the sections of the Limitation Ordinance, counsel and solicitors in the profession were for some years now routinely advising that a counterclaim on behalf of a paper title owner should be filed to any squatter counterclaim for adverse possession.  Some in the profession even took the view that it was negligent not to so act.

6. With the two sets of parties to the original private action having declined to participate any further, it would have been unreal in the extreme and violative of the classic conception of judicial power as being the determination of a controversy between parties according to existing law, to have proceeded with the Intervener and the amicus alone crossing swords (even more so when there was significant commonality in their respective submissions), for the sake of some formalistic forensic fulfillment.  The court must respect and protect the primacy of the parties.  However, a submission by Mr Mak that the court should indulge in gratuitously obiter views on the merits of the constitutional position was quickly dispatched.  In short, despite valliant efforts by the Intervener and amicus nothing could resuscitate the fixture : unlike the promise of the idiom this salted fish was not coming back to life : 咸魚翻生.

Necessary presence of Secretary for Justice as Intervener

7. In private law cases, such as this, where an issue arises as to the constitutionality of provisions in an Ordinance (or even where it is argued that a regulation, statutory notice, bylaw etc. is invalid) it is imperative that the proceedings and the issue be formally brought to the attention of the Secretary  for Justice, so that the Secretary can seek to apply to become an Intervener, if so desired.  In the present case this was overlooked by the parties, but was ordered to be done on the motion of the Court itself : Order 15 rule 6(2) RHC; [2006] 4 HKLRD 671, 682C.  Any decision in private law, that a statutory provision or other statutory instrument is unconstitutional or otherwise unlawful, without a formal opportunity provided to the Secretary for Justice to intervene or otherwise assist as to the considered position in law, would amount to a fundamental breach of natural justice.

Jurisdiction under section 52A (1) High Court Ordinance to award costs of amicus against a party?

8. Upon receipt of the letter of 29 June, the court directed that submissions should be made as to whether any party should be liable to pay the costs of the amicus.  The amicus was formally appointed in late March 2007.  It had been agreed by the plaintiffs and the defendants during the trial in August 2006 that an amicus should be appointed : [2006] 4 HKLRD 671, 681I–J if the court concluded, as it did, that the defendants had established adverse possession.

9. Mr Godfrey Lam, the amicus, submitted that section 52A(1) High Court Ordinance was easily able to accommodate jurisdiction for a court to direct that the costs of an amicus be paid by “a party” : see section 52A(2) for a restriction as to against whom an order may be made.

10. Section 52A(1) provides :

“Subject to the provisions of rules of court, the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction and in the Court of First Instance, including the administration of estates and trusts, shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid.”

11. In Re South China Strategic Ltd [1997] 1 HKLRD 131 Rogers J (now Rogers VP), made an order against a party in relation to the costs of an amicus in a company law case.  The judge was initially faced with an unopposed application for directions in a petition seeking the court’s sanction of a scheme under the Companies Ordinance.  At page 132J Rogers J indicated that because of grave concerns about the petition the court would need the services of an amicus if the petition was to be maintained.  In due course after the appointment of an amicus the court concluded that the application was “in many respects an affront to the court” (page 133A) and lacking in “candour” (page 136H–J).  However the report, only states in relation to the costs of the amicus at 137 :

“[After a discussion as to costs, the costs of the amicus curiae were ordered to be paid by the petitioner.]”

I am sure that section 52A(1) was in the forefront of that discussion and was the basis for that order; no other source of jurisdiction appears to be available to support it.  Academic commentary in Hong Kong also accepts the existence of the disputed jurisdiction : Prof. Johannes Chan Amicus Curiae and Non-Party Intervention (1997) 27 HKLJ 391, 397; Halsbury’s Laws of Hong Kong Vol. 8 “Courts and Judicial System” paragraph [125.014].

12. In HKSAR v. Hung Chan Wa unreported, CACC411/2003, 28 April 2006, (CA) Ma CJHC delivering the judgment of the Court of Appeal in a criminal case in relation to costs, (section 52A(1) High Court Ordinance does not apply to criminal cases) left open whether jurisdiction existed in the Costs in Criminal Cases Ordinance, Cap. 492 to order a party to a criminal proceeding to pay the costs of an amicus.  The principles for the award of costs in civil law are, however, a set of rules which cannot be directly transposed from the singularly different criminal law context, which is based on other imperatives and discretionary considerations. 

13. In England, Bracewell J in Re AW (Adoption Application)[1993] 1 FLR 62 had to decide a case where persons desperately seeking to adopt, but recognizing their own ineligibility to adopt, deliberately circumvented the statutory law by a sophisticated international strategm.  The judge had to decide the very difficult question of whether the prospective adopters, who had properly cared for the child in the meantime, should be permitted to formally adopt the child, by granting them statutory dispensations, despite their calculated behaviour.  After deciding to grant the dispensations Bracewell J then referred to the fact that the Official Solicitor, having acted as amicus curiae before the court, applied that all or some proportion of the costs of the amicus be paid by the adopters.  The judge described it as “a most unusual application” although noting that a previous such order against a party had been made in another case.  Upon a consideration of Rule 51 of the Adoption Rules 1984 [UK] which read :

“On the determination of proceedings to which these rules apply or on the making of an interim order the judge may make such order as to the costs as he thinks just.”

Bracewell J concluded that the necessary jurisdiction existed.  Section 52A(1) High Court Ordinance is certainly not narrower in its operative width and intendment, speaking as it does of the “full power” reposed in the court.  The judge ruled that an order in favour of an amicus would be appropriate in “very rare circumstances” where there were “very compelling reasons”.  She ordered half of the taxed costs of the amicus to be paid.

14. A similar conclusion as to jurisdiction was reached in Chapman-Smith v. Chapman-Smith [1997] NZFLR 968, a decision in the Family Court, a court of subordinate jurisdiction.  Judge Robinson noted that superior courts by section 99A Judicature Act 1908 [NZ] had power to require any party to contribute towards the costs and expenses of an amicus or of an Intervener.  It was argued that as that section did not extend to the Family Court, there was a deliberate absence of necessary jurisdiction.  The relevant proceedings were in relation to matrimonial property and costs were governed by s40 Matrimonial Property Act 1976 [NZ] :

“Subject to any rules of procedure made for the purpose of this Act, in any proceedings under this Act the Court may make such order as to costs as it thinks fit.”

It was held that under that section a party could be ordered to pay the costs of the amicus and on the particular facts the judge ordered one former spouse to pay a quarter and the other three quarters of the costs of the amicus.

15. In Seale v. National Coal Board (1948) 41 BWCC 111 (CA), which was decided well before the crucial decision of Aiden Shipping Co. Ltd v. Interbulk Ltd [1986] AC 965 (HL) emphasizing the plenitude in the modern general formula for costs in civil proceedings, Somervell LJ remarked in the context of a Workmen’s Compensation Act 1925 [UK] case that :

“Obviously, an amicus curiae, in the first place, is not defending any interests of his own.  In the second place, I think it clear that he does not either get, or give, costs”

In my judgment the first part of the second sentence of the dictum is, unlike the remainder, not of authority in Hong Kong — here the amicus may get costs, in an appropriate case.  The jurisdiction exists.

16. I reach this conclusion despite the fact that Bray CJ in the Full Court of South Australia in Blackwood Foodland Pty Ltd v. Milne and the Superintendent of Licensed Premises [1971] SASR 403, 411 stated :

“But the opposing party, as I see it, can in no circumstances be ordered to pay the costs of counsel acting in the capacity of an amicus curiae.”

However, that remark must be understood in the special context under consideration there, namely it was made in relation to the situation where “counsel, appearing in the normal way for a party entitled to be heard on one topic as of right, can also, if the court thinks fit, be heard as amicus curiae on another topic on which his client is not entitled to be heard as of right”.  The remarks of Bray CJ were therefore in reference to a peculiar hybrid role by counsel for a party and not a general statement of principle.  In the Federal Court of Australia, Lander J in Wilson v. Manna Hill Mining Co Pty Ltd (2004) 51 ACSR 404, 415 stated by reference only to Blackwood that : “An amicus curiae is not entitled to an order for costs”.

17. Whatever is the position in other jurisdictions, in my judgment the term “costs” in section 52A(1) High Court Ordinance should not be construed so narrowly as to exclude the cost or expense incurred in the remuneration of an amicus.  An amicus instructed by the Registrar of the High Court as is the case here, will be paid from the Judiciary exchequeur, out of the annual financial vote from the HKSAR Government i.e. ultimately by taxpayers.  While the amicus as a non-party has no entitlement to costs or to an order for costs vis-à-vis other parties in the lis, the court is empowered to determine that the “costs” of the amicus are to be paid by one or more of the parties.  The intention of s52A(1) is that any transactional costs of the litigation can be ordered to fall on any party in the litigation.

Discretion to award costs of amicus against a party

18. I accept that any discretion in favour of an amicus should be exercised sparingly as the amicus is generally an appointment made on the court’s own motion — albeit here with the express concurrence of the plaintiffs and defendants; further, costs are compensatory not punitive.

19. The position of amicus is an important role in the justice system.  In Secretary for Justice v. Chan Wah (2000) 3 HKCFAR 293 Bokhary PJ clearly differentiated between the role of an amicus and that of an intervener, while noting that while a court may itself seek the assistance of an amicus, an organization may also take the initiative of offering the court the services of counsel who would expound the law impartially.  In similar fashion Sir Anthony Mason in Interveners and Amici Curiae in the High Court : A Comment (1998) 20 Adelaide Law Review 173, 174 in one of 4 back-to-back articles by judges and practitioners alike on the same subject said :

“Interveners become parties who are liable to an order for costs being made against them; they have the rights of parties.  If we want to retain the existing classification of interveners with their existing rights and liabilities, we would be well-advised to structure participation by others around the grant of amicus status.  But there is perhaps a case for modestly widening the cope of intervention to include those who have a substantial interest in the case, leaving others to the status of amici.”

The future appointment of any amicus should not be inhibited by an argument from parties that such an appointment potentially widens their costs liability.  The answer to that contention is that a proper exercise of discretion will ensure that it is only in a compelling case (which will be therefore plainly an unusual one) that an order would be made against a party to pay the costs of an amicus.

20. In HKSAR v. Hung Chan Wa Ma CJHC appropriately noted that as an amicus is very usually appointed at the request of the court.  That is a salutary reminder of the fact that an amicus in civil and criminal law (see s81D(2)(c) Criminal Procedure Ordinance, Cap. 221, for an example) is almost invariably imposed upon the litigants, so that fact should from a material backdrop in any discretionary calculus although it is not in itself a determinative feature.

21. In exercising the relevant discretion here the court should focus on the reasons for the plaintiffs’ counterclaim to counterclaim to have been initiated and actively pursued (and materially amended and enhanced as recently as 21 March 2007) until its abandonment on the cusp of the fixture.  Mr Mak stated that the decision to abandon was “for commercial reasons” adding for good measure that the plaintiffs were “not conceding” that the counterclaim to counterclaim would not have succeeded.

22. The only reason advanced by counsel for the last minute for the abandonment by the plaintiffs was that they were concerned they may become embroiled in litigation culminating even in the Court of Final Appeal.  This must have been glaringly obvious when the counterclaim to counterclaim was initiated.  It was an innovative claim that if successful would have had far-reaching consequences within the HKSAR for real property law and constitutional law alike.  Such a pleading should not therefore be a step to be taken lightly and then to be resiled from with the same jaunty spring.  A party unless permitted to discontinue is locked-in to the litigation and to any appeals.

23. In my judgment the proffered reasons were not at all convincing.  It is much more likely that having found that the submissions of the defendants and both those of the Intervener and of the amicus dated 21 June 2007 were cogently reasoned against the plaintiffs, that the plaintiffs decided to rapidly cut their losses.  The sudden change of mind is not otherwise satisfactorily explicable.  Mr Godfrey Lam submitted, and I agree, that the court should conclude that the other Counsel and their clients had been “given the run around” by the plaintiffs.

24. However, in accord with Mr Mak’s submission, I do not find that what had happened was an affront to the Court — it was the right of the plaintiffs to disengage with leave.  But the need to demonstrate that there has been an affront to the court is in my judgment neither a precondition to or a factor in the exercise of the discretion.  The relevant discretionary features are more textured and nuanced and do not depend on the impact of the blunt instrument of effrontery.

25. Mr Mak’s submission was that conduct by a party akin to that required for a wasted costs order was necessary to enliven this particular discretion.  I  reject that submission.  No misconduct is required to activate s52A(1) High Court Ordinance.  But where the explanation for the discontinuance advanced on instructions is simply disingenuous and where the timing of the application to discontinue is relatively proximate to the timing of the decision to revitalize the counterclaim to counterclaim, those are significant factors to be assayed with the other circumstances.  In the exercise of my discretion these are sufficiently compelling circumstances in the context of the case as a whole, to require that the plaintiffs should pay a portion of the costs of the amicus, who was only present to deal with the points to be raised by the pleading claiming far-reaching unconstitutionality.

26. The appointment of the amicus has become a wasteful cost only because the plaintiffs exercised their right to terminate their claim a few days after considering the submissions from the Intervener and amicus.  That special (apparently unique) scenario is quite distinguishable from that where a claim by plaintiffs proceeds but eventually fails on the merits, after the amicus has been heard — although even in that situation there may be still compelling reasons justifying a costs order against a party to pay the costs of the amicus, just as in Re South China Strategic Ltd [1997] 1 HKLRD 131.

27. It is possible that the submission of the amicus could be utilized in whole or in part in some other case.  But if an amicus was to be appointed there, that would involve a new set of costs.  In the exercise of my discretion, I order that the plaintiffs pay two thirds of the costs of the amicus to be taxed unless agreed.