CHIU LUEN PUBLIC LIGHT BUS CO LTD v. PERSONS UNLAWFULLY OCCUPYING OR REMAINING ON THE PUBLIC HIGHWAY NAMELY, THE WESTBOUND CARRIAGEWAY OF ARGYLE STREET BETWEEN THE JUNCTION OF TUNG CHOI STREET AND PORTLAND STREET AND/OR OTHER PERSONS HINDERING OR PREVENTING THE PASSING OR REPASSING OF ARGYLE STREET AND OTHERS

HCA 2086/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2086 OF 2014

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HCA 2104/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2104 OF 2014

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DECISION ON COSTS

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A. INTRODUCTION

1.  On 10 November 2014, I handed down judgment (“the Judgment”) continuing the injunction under these two actions that the plaintiffs obtained on an ex parte basis on 20 October 2014.  In the Judgment, I also made an order nisi that costs of the applications to continue the injunction be to the plaintiffs, to be taxed if not agreed, with certificate for two counsel (“the costs order nisi”).

2.  By summons taken out respectively by the 2^nd and 3^rd defendants, respectively under these two actions, the 2^nd and 3^rd defendants seek to vary the costs order nisi to the extent that the costs of the injunction applications be in the cause, or alternatively the plaintiffs’ costs be in the cause.

3.  It is directed that the summonses be dealt with on papers, and the parties have respectively filed their written submissions.

4.  This is the decision on the costs variation applications.  This decision should be read together with the Judgment.  For convenience, the abbreviations used in the Judgment will be adopted here unless otherwise stated.  I will also not repeat herein any of the history and matters that have already been set out in the Judgment.

B. THESE VARIATION APPLICATIONS

B1. The parties’ contentions

5.  As I said, the 2^nd and 3^rd defendants (for convenience, collectively “the defendants”) ask for the costs of the injunction application to be in the cause or alternatively the plaintiffs’ costs be in the cause.

6.  The principal submissions made by the defendants in support of the applications can be summarised as follows:

(1) The costs of the interlocutory injunction should normally be costs in the cause, or the successful party’s costs in the cause.  This is so as normally it would not be just and fair to require the unsuccessful party to bear the costs at that stage when the successful party at the end of the day may lose after substantive determination, meaning that he should never have been entitled to the interlocutory relief in the first place.  The position is different if it can be shown that the contesting party has acted improperly or in some way to be penalised.  See: King Fung Vacuum Ltd v Toto Toys Ltd [2006] 2 HKLRD 785 at paragraph 27 (applied in Velatel Global Communications Inc v Chinacomm Ltd, unreported, HCA 1978/2011, 8 March 2013 at paragraph 4); Picnic At Ascot v Kalus Degris [2001] FSR 2 at paragraphs 5 ‑ 16, per Neuberger (as he then was), referring also to Desquenne et Giral UK Ltd v Richardson [2001] FSR 1.

(2) At the same time, post Civil Justice Reform (“CJR”), under Order 62, rules 3(2) and (2A), it is now specifically provided that costs follow the event is not the starting position, but only one of the options, for costs relating to interlocutory application in the court’s exercise of discretion in costs.

(3) In the present case, the defendants had not acted improperly or unreasonably in seeking to resist the continuation of the injunction by disputing at least, among others, the locus point.  This is particularly so when it is squarely for the plaintiffs to show that they had suffered special damage to bring them within the exception so that they as private individuals had the necessary title to bring a public nuisance claim against the defendants.  The issues arising (including legal as well as evidential ones) from this question of title to sue, which were hotly contested at the hearing, were only held by both this court and later the Court of Appeal to be arguable which merited thorough and serious consideration at trial.  In the circumstances, there cannot be any justifications to require the defendants to bear the costs now when the issues, which go to the important question of title to sue, would still need to be properly and no doubt heavily contested at trial.  In this regard, to highlight that the plaintiffs’ claims are not bound to win, the defendants also point to the observations by this court in the Judgment at paragraphs 63 and 65 that the plaintiffs’ evidence as to the specific loss and damage said to be suffered by them might well be subject to heavy cross-examination and challenge at trial in light of the defendants’ adverse observations raised in their submissions.

7.  In resisting these variation applications, the plaintiffs’ counsel in substance submit that it is nowadays open to the court to adopt an issue merits approach in deciding costs in interlocutory applications in granting costs to the successful party, including on a forthwith basis.  See: Waxman v Li Fei Yu [2013] 6 HKC 424 at paragraphs 3 – 20, per To J; Mendlowitz & Associates Inc v Winner International Group Ltd (unreported, HCA 574/2009, 14 May 2010, per Au J) at paragraphs 29 ‑ 30; and Midland Business v Lo Man Kui (No 2) [2011] 2 HKLRD 667 at paragraphs 7 – 8, per Lam J (as the learned VP then was).

8.  In the present case, the defendants should clearly be aware of the at the least arguable nature of the plaintiffs’ case (and thus their title to sue), and under the well established principles governing the grant of interlocutory injunction, the plaintiffs had a clear case for the injunction.  It was therefore unreasonable for the defendants to have opposed the continuation of the interlocutory injunction as they did.  The costs order nisi was thus rightly and justly made in all the circumstances and the defendants are in fact “lucky” not to be required to pay the costs forthwith.

B2. Court’s views

9.  It cannot be disputed that costs is in the wide discretion of the court by taking into account all the circumstance of the case.  In particular, post CJR, the court should also take into account the underlying objectives set out in Order 1A, rule 1 and the conduct of the parties: see Order 62, rule 5(1).  In the context of the wide discretion, in relation to costs in an interlocutory injunction, all the authorities, including Order 62, rules 3(2) and (2A), cited by the parties, show that in the exercise of that discretion, the court could take into account, among others, (a) the consideration that the inherent nature of an interlocutory injunction may make it fair to normally require the unsuccessful party only to bear the costs of the application if the successful party also succeeds in the substantive action; (b) any facts or factors, including the conduct of the parties and the reasonableness of resisting the application, which may render it just to require the unsuccessful part to bear the costs without being dependent upon the final outcome of the action, and even on a forthwith basis.  In so exercising its discretion, the court must as usual also take into account all the circumstances pertinent to that particular application, and the underlying objectives of CJR as set out in Order 1A, rule 1.

10.  Bearing these principles in mind, and looking at the continuation application globally, I agree that in the present case, the fair and just costs order should be that the plaintiffs’ costs be in the cause given in particular the following considerations:

(1) It cannot be said that the defendants had acted improperly to contest the continuation of the injunction, as:

(a) The hearing of continuation application provided the first occasion where the parties could address the question of title to use.  It is noted that at the ex parte hearing, the issues of whether the plaintiffs as private individuals could commence these claims in public nuisance had not been mentioned before Poon J.

(b) The legal arguments as to what constitutes special damage to found the title to sue are not straightforward questions, in particular as to what may meet the requirement for “direct” loss.[1]  Thus, it also cannot be said that the defendants acted improperly in seeking to resist the injunction by arguing that as matter of legal analysis, the plaintiffs did not come within this requirement.

(2) On the other hand, the defendants were unsuccessful in resisting the continuation application.  In this respect, other than the arguments on title to use, both this court and the Court of Appeal (in refusing leave to appeal against the continuation of the interlocutory injunction) observed[2] that (a) all the defendants did not have a legal right to occupy the subject roads in the way they did, and as such they would not suffer any legally recognisable loss or damage if the injunction was later held to be wrongly granted, and (b) the balance of convenience tilted “overwhelmingly” in favour of granting the interlocutory injunction.  In such a context, it would also be unfair to require the plaintiff in any event to bear the costs of their successful application for the continuation of the injunction whatever the outcome of the substantive claims.

11.  For these reasons, in my view, the fair and just costs order in the circumstances of the present case should be that the plaintiffs’ costs be in the cause.

C. CONCLUSION

12.  I will therefore vary the costs order nisi to the extent that costs of the application to continue to the injunction in each of these proceedings be the plaintiffs’ costs in the cause, with certificate for two counsel (as the case may be).

13.  All the parties seek costs of these applications in their submissions.  In my view, the defendants are successful in their applications to vary the costs order nisi.  I think it is only just that they should have costs of the variation applications, to be taxed if not agreed, with certificate for two counsel.