ORRICO, PHILIPPE AND ANOTHER v. MUNICIPAL SERVICES APPEALS BOARD

CACV 5/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 5 OF 2015

(ON APPEAL FROM HCAL NO. 24 of 2014)

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JUDGMENT
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Hon Lam VP (giving the Judgment of the Court):

Background

1.  On 17 January 2014, the Municipal Services Appeal Board [“MSAB”] heard 2 appeals in respect of the same decision by the Liquor Licensing Board [“LLB”] on 29 October 2013 in respect of the liquor licence for the premises located at Shop B, C & D, Ground Floor, Elegance Court, 6-14 Upper Station Street, Sheung Wan.  The LLB granted a licence to the 1^st Applicant for a period of 9 months with additional licensing conditions.  The 1^st Applicant operated a restaurant at that premises through a corporate vehicle, the 2^nd Applicant.  In MSAB Appeal No 84 of 2013, the 1^st Applicant appealed against these conditions.  At the same time, in MSAB Appeal No.  98 of 2013, some residents in the vicinity (represented by Ms Siu, a District Councillor of Central and Western District) appealed against the grant of the licence.

2.  On 13 February 2014, the MSAB gave its decision on these appeals.  It dismissed the appeal by the 1^st Applicant and the allowed the appeal by the residents.  The liquor licence was revoked. 

3.  The Applicants challenged the decision of the MSAB by way of judicial review in HCAL 24 of 2014.  After leave was granted, the MSAB informed the court by a letter of 21 March 2014 that it would adopt a neutral stance and would not take active part in the proceedings.  The MSAB undertook to abide by the decision of the court.

4.  The Applicants did not name the residents as Interested Party in the Form 86 filed in the application for judicial review.  Instead, the LLB was named as the Interested Party. 

5.  On 14 May 2014, a Government Counsel acting for the LLB, wrote to the solicitors for the Applicants enquiring whether the papers in the judicial review application had been served on the residents.  By a letter dated 14 May 2014, solicitors for the applicants replied that as Zervos J [“the Judge”] only directed service on the parties named as respondent and interested party in the proceedings, they had not served the papers on the residents. That was so notwithstanding that the Judge was aware that the decision of the MSAB was made partly in the context of an appeal by the residents[1].      

6.  MSAB did not attend the substantive hearing of the application for judicial review on 14 August 2014.  The LLB appeared by counsel with a view to assist the court.  However, as the decision of the MSAB was at variance with the first tier decision by the LLB, the LLB took a neutral stance and did not defend the decision of the MSAB.  In the skeleton submissions, counsel for LLB only set out the relevant background information and did not advocate any particular course.

7.  The residents were not notified and they did not attend the substantive hearing.

8.  On 15 August 2015, the Judge handed down a judgment quashing the decision of the MSAB and remitting the MSAB appeals to a differently constituted MSAB.

9.  The Judge made an order nisi that the costs of the application for judicial review be awarded to the applicants, without specifying who shall pay the same.  After further clarification, the Judge indicated through his clerk in a letter of 8 September 2014 that the costs order was made against the MSAB.

10.  By a summons dated 19 September 2014, the MSAB applied for a variation of the costs order.  That summons was heard on 27 October 2014.  The Judge handed down a decision on 11 December 2014 [“the Costs Decision”] maintaining his costs order which was made absolute. 

11.  The MSAB appealed against the Costs Decision, leave having been granted by the Judge on 2 January 2015.  We heard the appeal on 23 June 2015 and we reserved our decision.  We now give our judgment in this appeal.

The usual practice for inferior tribunals and appeal boards

12.  When the MSAB decided that it would not attend the substantive hearing in the application for judicial review, it considered itself to be following the usual practice of an inferior tribunal adopting a neutral stance in a challenge to its decision.  In Hong Kong, the usual position was considered by the Court of Appeal in Dato Tan Leong Min v Insider Dealing Tribunal [1999] 2 HKC 83 at p.99-100.  In that judgment, Mortimer VP (as he then was) endorsed these observations of Sears J:

“ The more modern practice when various tribunals are subject to judicial review is for them to take a neutral role, and to provide the court with as much information as possible, so that a just result follows.”

13.  The Tribunal in that case took an active part in the judicial review and Sears J was of the view that it would have been better for the Financial Secretary to conduct the opposition to the challenge.  After the decision of the Tribunal was quashed at first instance, the Tribunal sought to appeal against that decision.  The Court of Appeal upheld the decision of Sears J. Regarding whether the Tribunal should have taken such an active role in the proceedings, Mortimer VP was persuaded by counsel for the Tribunal that as a matter of principle it was not wrong for the Tribunal to appear.  However, His Lordship added a caveat that it remained unusual and the normal practice should be that as stated by Sears J.

14.  There was another occasion where the court considered that a tribunal might appear and take an active role, see Wong Sin Hua Felix v Insider Dealing Tribunal, HCAL 124 of 1999, 11 January 2000.  After referring to the usual practice, Keith JA said in the particular case before the court:

“ … it is, in my view, appropriate for the Tribunal, if it wishes (a) to appear on the hearing of the application for judicial review, and (b) to seek to defend the ruling challenged. That is because the Financial Secretary did not take part in the argument before the Tribunal which resulted in the ruling which is being challenged.”

15.  On the other hand, there were cases where there was no effective opposition from a tribunal and an interested party.  The courts simply required an applicant to establish his challenges and it would decide whether it was appropriate to grant the relief sought.  In those cases, the courts did not order costs against the tribunal, see Kwong Ka Yin, Phyllis v The Solicitors Disciplinary Tribunal HCAL 93 of 2004, 12 July 2006; B v Torture Claims Appeal Board [2015] 1 HKLRD 681; RA v Betty Kwan HCAL 115 of 2013; 31 Dec 2014; KMM v Torture Claims Appeal Board HCAL 46 of 2014, 21 May 2015.

16.  The tribunal in those cases (as in the present case) relied on what has come to be known as the rule in R (Davies) v Birmingham Deputy Coroner [2004] 3 All ER 543 [“Davies”].  In Davies, the English Court of Appeal conducted a comprehensive review of the earlier cases and examined the relevant practices in light of some modern developments, including the general rules as to costs since the introduction of CPR, the impact of human rights jurisprudence and modern practices in applications for judicial review.  The object of the exercise was set out at [46]:

“ … it seems an opportune moment to state authoritatively the way in which the courts have exercised their discretion in these matters in the past and to identify what are the governing principles today,”

17.  The relevant principles and practices were set out by Brooke LJ at [47]:

“ (i) The established practice of the courts was to make no order for costs against an inferior court or tribunal which did not appear before it except when there was a flagrant instance of improper behaviour or when the inferior court or tribunal unreasonably declined or neglected to sign a consent order disposing of the proceedings.

(ii) The established practice of the courts was to treat an inferior court or tribunal which resisted an application actively by way of argument in such a way that it made itself an active party to the litigation, as if it was such a party, so that in the normal course of things costs would follow the event.

(iii) If, however, an inferior court or tribunal appeared in the proceedings in order to assist the court neutrally on questions of jurisdiction, procedure, specialist case law and such like, the established practice of the courts was to treat it as a neutral party, so that it would not make an order for costs in its favour or an order for cost against it whatever the outcome of the application.

(iv) There are, however, a number of important considerations which might tend to make the courts exercise their discretion in a different way today in cases in category (iii), above, so that a successful applicant, like Mr Touche, who has to finance his own litigation without external funding, may be fairly compensated out of a source of public funds and not be put to irrecoverable expense in asserting his rights after a coroner (or other inferior tribunal) has gone wrong in law, and there is no other very obvious candidate available to pay his costs.”

18.  The reference to Mr Touche was in relation to the case of R v Inner London North Coroner, ex p Touche [2001] QB 1206 discussed at [38] to [42] of Davies.  In that case, the Divisional Court ordered the coroner to pay costs.  The Court of Appeal upheld that order notwithstanding that Simon Brown LJ was of the view that his behaviour had not attracted the slightest criticism.  The order of costs was made because the coroner failed to defeat the challenge (see [53] of Touche).  However, that was a case where the coroner took part in the proceedings to argue what Brook LJ described as a very difficult issue of coronial law[2]. 

19.  We respectfully agree with Brooke LJ and notwithstanding the submissions of Mr Halkes and the judgment below, these principles should also guide our courts in deciding whether to award costs against an inferior tribunal.  We wish to emphasize at this juncture that by this judgment we are dealing with the position of an appeal board operating in an adversarial setting (and we believe the same principle should apply in respect of a tribunal exercising quasi-judicial function).  In view of the licensing impact on the right to operate a restaurant at the location in question, it is at least arguable (though we have not heard submissions on the point) that the right to a fair and public hearing by a competent, independent and impartial tribunal established by law under art 10 of the Hong Kong Bill of Rights is engaged.  Even if for some reasons such fundamental right is not engaged, the common law rules on natural justice would embrace the notion that those who appeal to the MSAB are entitled to expect their appeals to be heard by an impartial board and the rule against apparent bias is applicable[3].  

20.  The scheme of the Municipal Services Appeals Board Ordinance [“the Ordinance”], Cap 220 also underscores its quasi-judicial character and impartiality.  The composition of the MSAB is governed by ss 3 to 6 of the Ordinance.  Its chairman and vice-chairman have to be a legally qualified person, meaning that he or she must have the qualification for appointment as a District Judge.  Either one of them must preside at the hearings before the MSAB.  Section 5 of the Ordinance provides that in an appeal, the board shall not include a person who was involved in the making of the relevant administrative decision in question.  There are provisions governing how an appeal can be commenced by notice of appeal, the serving of statements by respondents and the lodging of other documents, the conduct of the hearings in public, representations by lawyers at the hearings, procedures and reception of evidence and calling of witnesses, reference of questions of law to the Court of Appeal by way of case stated.  All these are geared towards an adversarial process in the appeals before the MSAB.  There is also a requirement that the MSAB must give reasons in writing for its decisions.  The chairman, vice-chairman and members of the MSAB enjoy the same privileges and immunities as a judge of the Court of First Instance in the performance of their duties.  

21.  It is not very clear to us whether the Judge regarded the principles in Davies as incorrect.  However, at [47] of his Costs Judgment, he questioned the difference in treatment between a tribunal that actively participated in the judicial review proceedings and one that did not.  He was apparently critical of the MSAB taking the stance of leaving it to the court to determine the challenge against its decision, see [46] and [47] of the Costs Judgment. 

22.  Whilst this is a pertinent question in the context of ordinary adversarial civil litigation and in the context of a public law challenge to a first-tier administrative decision, we respectfully take the view that different considerations apply in respect of a challenge to the decision of an appeal board or an appeal tribunal which discharges a quasi-judicial function in an adversarial setting. 

23.  Generally, it is advisable for such appeal board or tribunal to adopt the usual practice as stated in Dato Tan Leong Min v Insider Dealing Tribunal, supra and leave the protagonists in the proceedings before it to contest the challenge.  In Nattrass v The Attorney General, HCMP 2337 of 1995, 19 Dec 1995, at [18] to [22], Keith J discussed why it was inappropriate for a judicial officer to appear as a party in proceedings in which his decision was challenged.  We think similar considerations apply in respect of a quasi-judicial appeal board or tribunal.

24.  In our judgment, the rationale for this general rule is that an appeal board or a tribunal discharging quasi-judicial function should not compromise its impartiality by taking a stance in court proceedings to support its own decisions.  To do so is to enter into the arena, as such inconsistent with the appearance of an impartial decision-maker in an adversarial setting.  Such a course could well be perceived as siding with one of the protagonists and, in the eyes of the party challenging its decision, submissions on behalf of tribunal may readily be regarded as manifestation of a bias which had been harboured by the tribunal when it made its own decision. Further, the record of the proceedings before the tribunal (including the record of its decision) should have sufficiently explained the reasons for its decision.   It would not be right for a tribunal to instruct counsel to appear at the judicial review to make submissions to support its decision which may be at variance or supplemental to what had already been set out in the records. The active participation of an appeal board or tribunal in the judicial review against its decision would necessarily involve counsel acting on its behalf advancing submissions adverse to the contentions of one of the protagonists.

25.  As observed above, there are exceptions.  But they should be rare.  In the present context, the Judge apparently regarded the MSAB should either come forward to defend its decision or to concede that it was wrong in view of the neutrality of the LLB.  With respect, we cannot agree that the neutrality of the LLB is an appropriate ground to require the MSAB to adopt a different stance from the usual one.  Whether it is appropriate for a tribunal, whether judicial or quasi-judicial in nature, to appear in judicial review to defend its own decision has to be considered from a principled approach and the same principle is applicable irrespective of whether there is any effective resistance to such challenge by other person or entity. 

26.  Thus, in Nattrass, Keith J said at [18] and [19]:

“ 18. Is Judge Caird a proper person to be heard? The notion of a judge being able to be heard by counsel to justify a ruling which he has given in an inferior court is a bizarre one. Where he has given reasons for his ruling, he should allow his own words to speak for themselves. Apart from the natural wish to see his own views vindicated, a judge has no legitimate interest in the outcome of the challenge to his ruling. There may be cases in which there is understandable concern that the litigant in whose favour the ruling was made may not be in a position to advance the arguments which may be deployed in order to support the ruling. That might arise, for example, if the ruling was on a matter of law, and the successful litigant is unrepresented. But if that concern is a real one, the remedy lies in the appointment by the Court of an amicus to assist the Court. It is wholly inappropriate for an attempt to be made to meet that concern by the unseemly spectacle of the judge who made the ruling seeking to justify the stance he took.

19. What would happen if, despite the judge's intervention, the challenge to his ruling succeeded? A moment's pause reveals a series of bizarre possibilities.  Would the judge be liable for part of the costs? Would the judge be able to appeal to an even higher court? And would he be able to do so even if the litigant in whose favour the ruling was originally made chose not to appeal? …”

27.  We agree with these observations and in our view, they are also applicable to an appeal board or tribunal discharging a quasi-judicial function in an adversarial setting.  Subsequently in Wong Sin Hua Felix v Insider Dealing Tribunal, supra, the learned judge appeared to adopt a more relaxed view in respect of an application by the Insider Dealing Tribunal to participate in a judicial review challenging its ruling on costs. This case was relied upon by the Judge.  With great respect, it is not very clear from that judgment why the tribunal deemed necessary to appear at the substantive hearing of the judicial review application.  It would also appear that Keith JA only acceded to the summons taken out by the tribunal based on what he was told on that occasion.  However, subsequent history in that case seems to suggest that the course was unnecessary.  The Financial Secretary did effectively oppose the application and in the main judgment delivered on 22 December 2000, Keith JA said these in respect of his earlier ruling at [24]:

“ 24. This application for judicial review was also opposed by the Tribunal, which instructed leading counsel to appear on its behalf.  In an interlocutory ruling which I gave on 11 January 2000, I said that it was ‘....  appropriate for the Tribunal, if it wishes, (a) to appear on the hearing of the application for judicial review, and (b) to seek to defend the ruling challenged.  That is because the Financial Secretary did not take part in the argument before the Tribunal which resulted in the ruling which is being challenged.’ But that did not mean that the Tribunal had to appear.  It could have left the opposition to the application for judicial review in the capable hands of leading counsel instructed on behalf of the Financial Secretary. Indeed, in my interlocutory ruling, I made the point that I was not ordering the Tribunal to conduct the opposition to the application.  I was merely directing that it may defend the ruling, and counsel instructed on its behalf may make submissions in defence of the ruling, in addition to any submissions made on behalf of the Financial Secretary in defence of the ruling.  Although I do not in any way criticise the Tribunal for appearing by counsel to oppose the application, I do not think that it would be right to saddle the Applicant with two sets of costs.  Accordingly, the order nisi which I make in connection with the Tribunal's costs of the application is that there be no order in relation to them.”

28.  Subsequently, there was an appeal to the Court of Appeal[4] and then a further appeal to the Court of Final Appeal[5]. In those appeals, the Tribunal did not appear and the matter was only argued between the Financial Secretary and the applicant.

29.  In light of these, we cannot regard Wong Sin Hua Felix v Insider Dealing Tribunal, supra, as an authority supporting a departure from the usual practice endorsed in Davies. 

30.  Coming back to the present case, we do not see any valid ground for criticizing the MSAB for adopting the usual stance.  As the Judge had clearly been influenced by his criticism against the MSAB in this regard in his decision on costs, he had taken into account an irrelevant consideration and his exercise of discretion is therefore flawed.

31.  Mr Halkes on behalf of the Applicants submitted that the approach in Davies is not applicable in Hong Kong because of a two-part structure in the Ordinance: the immunity conferred upon the members of the MSAB does not immunize the MSAB for costs as a statutory body.  With respect, we cannot accept this submission.   Even though the incidence of costs may not fall on the shoulders of the members, once the MSAB could be exposed to liability for costs on the ordinary costs follow the event principle, its members would have to actively consider whether the MSAB should enter into the arena.  The problems associated with a perception of partiality would arise once the MSAB takes an active part as its stance must necessarily be informed by the views of the members. 

32.  If we shall adopt a different approach to costs from Davies, in every case where a decision of a tribunal or appeal board is challenged, prudence dictates that the tribunal or appeal board should generally take a more active role in the applications for judicial review. Apart from the problems associated with the descent into the arena, such an approach may increase the costs in the proceedings.        

33.  Nor can we accept Mr Halkes’ submission that the statutory framework under the Ordinance in effect created a central fund to cater for meeting the costs liabilities for successful legal challenges to the decisions of the MSAB.  There is no express provision to that effect. Further, as demonstrated by the local authorities cited by Mr Ismail, the underlying rules summarized by Brooke LJ had been applied in Hong Kong before the enactment of the Ordinance in 1999[6]. In Steele Ford & Newton v Crown Prosecution Service [1994] 1 AC 22 at p.40, Lord Bridge alluded to the position where a party could not have recourse on costs when he had to come to court to seek relief by way of judicial review due to a misjudgement by an inferior court or tribunal.  These common law rules forms part of the relevant context for the enactment, and thus the construction, of the Ordinance.  We do not think one can legitimately infer from s 16(1) of the Ordinance that the legislature intended to create a central fund for MSAB appeals.

Flagrant improper behaviour

34.  There are well recognized exceptions to the rule that a tribunal that did not appear in the judicial review would not be liable for costs.  Brooke LJ stated the exceptions in these terms in Davies:

“ … when there was a flagrant instance of improper behaviour or when the inferior court or tribunal unreasonably declined or neglected to sign a consent order disposing of the proceedings.”

35.  The Judge made no explicit finding that the MSAB unreasonably declined or neglected to sign a consent order disposing of the proceedings though he criticized it for adopting a neutral stance. 

36.  There is no dispute that the MSAB did not take any step to concede the challenge against it. However, it does not follow that the MSAB acted unreasonably.  Before a tribunal or appeal board can properly consider whether it should sign a consent summons in a challenge to its decision by judicial review, its members would have to revisit their decision and take a stance on its correctness.  In our view, for reasons similar to those which lead us to the conclusion that the tribunal or appeal board should not take an active part in the proceedings, in general it is not advisable to impose an obligation on the tribunal or appeal board to consider whether a consent summons should be signed.  In an adversarial contest, where there are real protagonists in the proceedings before the tribunal or appeal board (and, as explained below, they should also be notified and, if interested, permitted to join in as interested parties to the judicial review), the signing of a consent summons by the tribunal or appeal board could equally be perceived by the interested parties as taking side.        

37.  However, there could be exceptions when, for example, there are obvious errors in the decision of a tribunal and the real protagonist accepts that the decision was flawed.  When these conditions are satisfied, the concern for impartiality cannot be a reason for the tribunal not co-operating with the other parties to secure the cost-effective disposal of the judicial review pursuant to paragraph 23 of Practice Direction SL3.  At the same time, we are of the view that an indication that the tribunal would abide by the decision of the court coupled with an endorsement of a statement by the first tier decision-maker (who is usually joined as a co-respondent or an interested party) should be sufficient for the purpose of paragraph 23.

38.  In the present case, the real protagonists in the appeal before the MSAB were the Applicants and the residents.  Both of them brought appeals to the MSAB and the decision in question was made in the appeal by the residents. Unfortunately, the residents were not given notice of the judicial review and papers were not served on them.  In our judgment, they should have been notified and served as potential interested parties.  It is the duty of the Applicants to serve and notify all potential interested parties.  The fact that the Judge overlooked this aspect of the case does not exonerate the Applicants from the consequence of their failures.  As it happened, the Applicants had not ascertained their positions in respect of the judicial review and in such circumstances we do not think the MSAB can be criticized for not signing a consent summons or a statement pursuant to paragraph 23 of PD SL3.

39.  The Judge found that the errors of the MSAB constituted flagrant improper behaviour at [43] of the Costs Judgment.  He did not spell out in that paragraph what conducts on the part of the MSAB were flagrantly improper.  Reading the Costs Judgment (in particular [30]) together with his main judgment of 15 August 2014, it would appear the Judge was of the view that the errors of the MSAB identified by him in the main judgment indicated that it has acted obviously and blatantly contrary to accepted principle or practice that it should have otherwise complied with and adhered to, and which it ought to have known. 

40.  Mr Ismail cited to us a number of authorities to illustrate that the criteria for flagrant improper behaviour are stringent. Counsel submitted that it has to be improper behaviour that is so serious that it is unthinkable that a tribunal could be guilty of it.  Thus, the impropriety must be grave.

41.  We do not think it would be helpful for us to elaborate on the test of flagrant improper behaviour.  Suffices for us to reiterate that the standard is the same as the test laid down by Parker CJ in R v Liverpool Justices, ex parte Roberts  [1960] 2 All ER 384:

“ … it has been the practice not to grant costs against magistrates or tribunals merely because they have made a mistake in law but only if they have acted improperly, that is to say, perversely or with some disregard for the elementary principles which every court ought to obey, and even then only if it was a flagrant instance.”

42.  We agree that the criteria are stringent and not all obvious or even blatant errors on the part of a tribunal come within this test.  After all, even the most conscientious and competent decision-maker would have made mistakes which with the benefit of hindsight, can be described as obvious or blatant.  With respect, we do not think the interpretation of the test at [30] of the Costs Judgment sufficiently reflected the gravity of the errors which qualify as flagrant improper behaviour.  Therefore we have to assess the position afresh. 

43.  The errors which the Judge found the MSAB to have committed fall into several categories: (a) error of facts (in terms of identification of the location, the locus of those who claimed to be residents); (b) failure to give reasons; (c) failure to take account of relevant matters and taking account of irrelevant matters. 

44.  We have read the decision of the MSAB of 13 February 2014 in light of the main judgment of the Judge.  Whilst we respectfully share the Judge’s view that the MSAB’s decision is erroneous for the reasons he gave, we do not regard those errors as flagrant improper behaviour.  They are not different in nature from errors which regrettably beset decisions from tribunal or appeal boards from time to time.  The quality of the reasoning in the decision does not meet the statutory requirement and for that the Judge quite rightly criticized it as “totally inadequate” at [42] of the main judgment.  However, in our view, it is not a case of flagrant impropriety. 

45.  In the circumstances, applying the approach in Davies, the Judge erred in ordering costs against the MSAB.

The real protagonists and the role of LLB

46.  The Judge also regarded it as oppressive and unfair that the Applicants should have to bear its own costs in the present circumstances, see [53] of his Costs Judgment.  Before we deal with this question, we need to examine whether there are other parties who might have been liable for costs. 

47.  In accordance with usual practice in judicial reviews challenging the decisions of the MSAB on liquor licence, the LLB appeared at the hearing before the Judge.  This usual practice was explained by Cheung JA in Sze Ning Hung v Director of Food and Environmental Hygiene CACV 160 of 2014, 29 Dec 2014 at [33] and Andrew Chan J in Reid v The Municipal Services Appeals Board HCAL 71 of 2013, 10 December 2013 at [9]. 

48.  As the decision of the LLB (in granting a licence) was overturned by the decision of the MSAB, whilst acknowledging that the decision of the MSAB was binding on it, the LLB took a neutral stance in the judicial review.  Its attendance of the hearing was restricted to providing the court with submissions relating to factual matters to assist the court.  The Applicants did not ask for costs against the LLB.  The Judge did not award costs against the LLB.  In this appeal, though this court raised the question by a letter of 18 June 2015 and supplemental submissions were filed, Mr Halkes on behalf of the Applicants said that they would not ask for costs against the LLB.  

49.  Mr Pao, appearing in this appeal on behalf of the LLB, also reminded us that there is no appeal against the Judge’s decision on costs in respect of the LLB.  He also submitted that the LLB did not play the role of a respondent in substance in the present case.  He relied on some recent first instance authorities[7] and advanced the proposition that where an interested party adopts a neutral stance, the court will ordinarily make no order as to costs against such party even though the respondent appeal tribunal follows the practice of Davies in not appearing.  Further, this is not a case where the Applicants challenged the decision of the LLB as well as that of the MSAB in the judicial review[8]. 

50.  Against these backgrounds, and given the stances of the parties, we agree that it was reasonable for the LLB to adopt a neutral stance at the hearing before the Judge.  We also agree that in the circumstances it would not be appropriate to order costs against the LLB. 

51.  In coming to this conclusion, we also bear in mind that the LLB itself is a board which has been empowered by the Dutiable Commodities (Liquor) Regulations Cap 109B to consider applications for liquor licences pursuant to the statutory criteria in Regulation 17(2).  Those who sit on the LLB are not public officers, see reg 2A(3) though the Secretary for Food and Health provides secretarial support to the LLB. 

52.  It would of course be different if the LLB resisted the application for judicial review (as in cases cited before us where the LLB successfully resisted challenges to decisions of the MSAB and costs were awarded in its favour).  If the LLB were unsuccessful in so resisting, absent other considerations, it would have been liable for costs, see Ming Pao Newspaper Ltd v Obscene Articles Tribunal HCAL 96 of 2007, 9 January 2009.     

53.  At paragraph 38 above, we have mentioned that the real protagonists in this matter were the residents and the Applicants.  We have also referred to the fact that they were neither served nor notified of the judicial review application.  In our judgment, given that the decision of the MSAB was made in the context of the appeal by the residents, they should at least be notified of the proceedings and given an opportunity to consider whether to join in as an interested party or intervenor.  The matter can be tested this way: assuming that there is a decision by the MSAB in favour of a licensee in an appeal by him opposed by some residents, it could hardly be argued that the residents could bring a judicial review against that decision without even notifying that licensee. The licensee definitely falls within the definition of “interested party” under Order 53 Rule 1A and should be joined as a party to the judicial review. Whilst we accept that the residents may not be as directly affected as the licensee by a judicial review against a decision of the MSAB (as they would not have their licence revoked), as a matter of fairness, having been successful in their appeal before the MSAB, the residents in the present case had a legitimate right to expect that they be notified if the decision of the MSAB is challenged. 

54.  Regrettably, the residents were not notified.  We do not know whether they, or some of them, would have chosen to appear to oppose the judicial review if they had been so notified.  If a resident appeared and contested the judicial review, he or she would become a party and the Applicants may seek costs against that resident if they succeed despite such opposition. 

55.  It is possible that after due notification the residents may have chosen not to oppose the judicial review.  In that event, as we have observed earlier, the Applicants could properly invite the MSAB and/or the LLB to sign a statement pursuant to paragraph 23 of PD SL3.  In our view, bearing in mind the general practice mentioned at paragraph 47 above, the endorsement of such statement by the LLB would have been sufficient and the court can dispose of the judicial review without requiring the MSAB to sign the same. 

56.  Thus, there are mechanisms for minimizing the costs exposure in judicial review of this nature.  Unfortunately, perhaps due to a lack of appreciation of the rationale for the rule in Davies and the legitimate interest of the residents in the matter, the procedures actually adopted at the court below are not as costs effective as it could have been. 

57.  It can be said that some costs would have to be incurred even if one were to adopt the procedure suggested by us.  However, as noted by Lord Bridge in Steele Ford & Newton v Crown Prosecution Service, supra, it is the position under the common law that there are occasions where a successful party may not be able to recover the costs incurred by him in correcting an error of an inferior tribunal.  In the context of a liquor licence application, the LLB and MSAB have no power to award costs even though legal representation is permitted.  An applicant for liquor licence has to absorb these costs as part of his licensing expenses.  If one were to follow the correct procedure as outlined above, the costs of an uncontested judicial review application should not be an undue additional burden to costs already incurred in the LLB and MSAB.  Viewed thus, the inability to award costs in favour of the Applicants in the present circumstances cannot be regarded as oppressive.  Whilst it may be more satisfactory from the Applicants’ point of view that their costs should be borne by a central fund, whether public resource should be utilized to set up such a fund should be a matter for the legislature.  As the law stands, we do not have such a fund in place and this court cannot achieve a similar outcome by not following established common law rule.       

Disposition

58.  For these reasons, we allow the appeal by MSAB and set aside the order for costs made by the Judge against MSAB.  We shall order in its place that each party shall bear his own costs at the court below (including the costs for the hearing of the summons of 19 September 2014).

59.  As regards the costs of this appeal, we are minded to order, by way of costs order nisi, that there shall be no order as to costs.  The issues raised in the appeal are of some general public importance and we certainly hope that by this judgment the principles governing the potential liabilities of inferior tribunal or appeal boards for costs in judicial review have been clarified.