SUEN MO JOEL v. DIRECTOR OF SOCIAL WELFARE

HCAL 117/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 117 OF 2012

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DECISION ON COSTS

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1. On 11 June 2014, I handed down judgment (“the Judgment”) dismissing the applicant’s judicial review. I also ordered on a nisi basis that costs of the application, including any reserved costs, be to the respondent (the Director), to be taxed if not agreed. This is the applicant’s application to vary the costs order nisi. This Decision should be read together with the Judgment.

2. In relation to the applicant’s earlier leave application, the Director, at the invitation of the court, had first filed a written Initial Response and later appeared at a hearing to oppose the leave application.  The court later granted leave to the applicant despite the Director’s opposition.  In granting leave, the court had not made any costs order concerning the leave application.

3. The parties have proceeded to treat it that the court has reserved the costs of the leave application.  As such, under the costs order nisi, the Director’s costs incurred in preparing the Initial Response and appearing at the leave hearing[1] (as reserved costs) would be recoverable from the applicant.

4. The applicant took out a summons dated 23 June 2014 asking to vary the costs order nisi to the extent to exclude from it the Director’s said costs incurred for opposing the leave application.  The Director opposes the variation application.

5. By consent, the variation application is to be disposed of by written submissions.

6. After considering the submissions, I would allow the applicant’s application.  My reasons are as follows.

7. It is now firmly established in Hong Kong that although costs is generally a matter of the court’s broad discretion, the general costs position in a contested judicial review leave application (where the putative respondent appears at the invitation of the court) is that there should be no order as to costs unless there are exceptional circumstances to justify a departure.  In other words, even in a situation where the applicant is unsuccessful in the leave application, he is generally not required to bear the costs of the putative respondent subject to the respondent showing exceptional circumstances.  What amounts to such exceptional circumstances is dependent on the circumstances of each case.  The court has in the past sought to set out some non-exhaustive factors that it could take into account in considering this question.  See: Re Ho Mei Ling (No 2) [2012] 1 HKC 400 at paragraph 25 per Lam J (as the learned VP then was); TVB v Communications Authority (unreported, HCAL 3/2013, 22 July 2013, Au J) at paragraph 6.

8. In re-affirming this general costs position (insofar as first instance costs are concerned), the Court of Final Appeal has recently laid down some guidelines in Leung Kwok Hung v The President of the Legislative Council (unreported, FACV 1/2014, Ma CJ, Ribeiro, Tang, Fok PJJ and Sir Anthony Mason NPJ, 5 December 2014) at paragraphs 17(1)-(6) (per Ribeiro PJ) as follows (footnotes omitted):

“17.  The present case therefore provides a useful opportunity for the Court to state the principles to be applied in relation to the costs of opposing parties in unsuccessful applications for leave to apply for judicial review.

   The basic principle at first instance

(1)  The basic principle remains that costs lie in the discretion of the court which must retain the flexibility to make or refuse to make an award of costs as the particular circumstances of the case and justice warrant.  Notwithstanding the guidance that follows, there may be exceptional cases in which the discretion, which is a broad one, may be properly exercised otherwise than it would in other cases.

(2)  Since applications for leave to apply for judicial review are, by the rules themselves, meant to proceed on an ex parte basis, the general rule should be that an unsuccessful applicant will not be ordered to pay the costs of a putative respondent or putative interested party unless there are special or unusual circumstances which justify such an award.  The discretion of making an award of such costs should be sparingly exercised. Good reason will therefore be required in order for the court to make an order in relation to these costs against an applicant.

(3)  There is no definitive list of reasons that may justify an award of costs against an applicant and in favour of a putative respondent.  As already indicated, the discretion as to costs is broad.  All facts and circumstances may be relevant and should be taken into account in the exercise of the discretion.

(4)  Without limiting what the court will take into account, it will certainly be relevant to focus on the reason that has led the opposing party to attend at the hearing, whether that party’s attendance has been of material benefit to the court in determining the leave application, and the underlying lack of merits of the application, always bearing in mind that the context is the end result that the court has refused to grant leave to apply for judicial review.

(5)  By way of example of these particular considerations: if the putative respondent or putative interested party has attended at the invitation of the court, the reason why the court has considered that party’s presence necessary will be relevant; so too, if the opposing party’s presence at the hearing may have been necessary because of an application for interim relief; if an application was thoroughly ill-conceived or unmeritorious, this may be a weighty factor justifying an adverse costs order; similarly, if it was so frivolous or vexatious, or motivated for a tactical purpose indicating bad faith; where, as a result of the attendance of an opposing party, the hearing has proceeded with full argument and documentary evidence so that the applicant has, in effect, had a full substantive hearing of the judicial review challenge, this may be sufficient to persuade the court to make a costs order as if the matter had proceeded at a full inter partes hearing.  These considerations may or may not justify a costs order in favour of a putative respondent and it is important to stress that the ultimate decision remains in the discretion of the judge. 

(6)  If a putative interested party has appeared in addition to a putative respondent, the same principle will apply, namely that no adverse costs order should be made against the applicant in respect of those costs unless there are special or unusual circumstances which justify such an award.  Where there is already one opposing party in the person of a putative respondent, whose costs the court is minded to order the applicant to bear, the court will need to be persuaded that some additional justification exists if it is additionally to order the applicant to bear a putative interested party’s costs.  The interested party’s circumstances, including its claimed interest in the matter and its reasons for seeking to be heard on the leave application, will be material as will its conduct and any additional benefit its presence will have provided to the court.  Such a party will not normally be entitled to an award of costs in his favour ‘unless he can show that there was likely to be a separate issue on which he was entitled to be heard, that is to say an issue not covered by counsel for the [putative respondent]; or unless he has an interest which requires separate representation’.

  …”

9. At the same time, as I said in Leung Hon Wai v Director of Environmental Protection [2014] 3 HKC 317 at paragraphs 23 and 24, this general position on costs in a contested unsuccessful leave application should as a matter of principle apply at least equally to a case where the applicant is in fact successful in the leave application, although he has lost subsequently in the substantive judicial review.  This is also so as, barring exceptional circumstances, it would be odd to suggest that, in term of his liability for the putative respondent’s costs, an applicant would be worse off when he is successful in obtaining leave than when he is unsuccessful.

10. This similarly applies to the present case.  In my view, there are no special circumstances in the present case to justify departure from this general costs position:

(1) In particular, I do not agree with the Director’s submissions that the judicial review was advanced purely for the applicant’s own interest.  It is true that the applicant has a personal interest in the judicial review, but (as I summarised in the Judgment) he was challenging the Director’s failure to adhere to the 1996 Policy, which would affect generally those CSSA recipients renting private premises.  I therefore accept Mr Lo’s submissions (for the applicant) that the judicial review was made not only for the personal interest of the applicant.

(2) Further, I also accept Mr Lo’s submissions that the dismissal of the judicial review was principally decided on the basis of the evidence revealed by the relevant internal memos which shows that the Government had never adopted the 1998 Policy as formulated and contended for by the applicant.  These memos however were only provided as evidence by the Director in contesting the substantive application after leave was given, and the applicant could not have had knowledge of those memos before taking out the leave application.  This a fortiori supports the contention that the applicant should not be “penalised” to bear the Director’s costs in applying for leave to commence the judicial review, especially when the court had come to the view at the leave stage that (based on the evidence and the public documents presented at that time) it was reasonably arguable that there was the 1998 Policy.

11. In the premises, I agree with Mr Lo that the applicant should not be required to bear the Director’s costs incurred in opposing the leave application.  The costs order nisi should thus be so varied.

12. Mr Lo in his detailed and helpful written submissions has also referred this court to a number of English authorities and an article to support the variation application.  They are R(Ewing) v Deputy Prime Minister (Practice Note) [2006] 1 WLR 1260 (CA) at paragraphs 42 and 47 per Carnwath LJ (as he then was); R (Davey) v Aylesbury Vale District Council (Practice Note) [2008] 1 WLR 878 at paragraphs 1, 5, 15 and 21 per Sedley LJ, paragraphs 29, 32 and 33 per Sir Anthony Clarke MR; and James Maurici, Cost and the Permission Stage [2009] Judicial Review 33.

13. The court is grateful to Mr Lo for referring it to these authorities and writing.  However, given that Hong Kong with her own line of authorities has developed and established the above principles on the general costs position in a contested leave application where the respondent has attended, and I have in the above determined this variation application on the basis of these principles, I do not think it is necessary for me to further rely on any of the above English authorities in considering this application. In any event, what have been said by the English Court of Appeal in these authorities as to what are the relevant considerations that the court should have regard to before requiring an applicant to bear the costs incurred by the putative respondent in the “permission stage” (which is similar to the leave stage in Hong Kong) do not appear to me to be very different in principle from what the Hong Kong courts have observed in developing the general costs position mentioned above.

14. For these reasons, I would allow the applicant’s variation application and vary the costs order nisi to the extent that the applicant should not be required to bear the costs incurred by the Director in preparing and opposing the granting of leave to apply for judicial review.

15. The applicant has asked for no order as to costs in this variation application as there has not been any guidance in Hong Kong’s jurisprudence on the scenario as the present one.  I agree.  I therefore further order that there be no order as to costs of this variation application.

16. Lastly, I thank counsel for their assistance in this matter.