FORTUNE FRIEND LTD AND OTHERS v. APPEAL TRIBUNAL (BUILDINGS)

HCAL 2320/2023

[2024] HKCFI 1856

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 2320 OF 2023

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COSTS VARIATION

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1.  Following a rolled-up hearing in this matter, I gave my Decision dated 26 June 2024 [2024] HKCFI 1569. I continue to adopt the definitions and abbreviations used in that Decision.

2.  In my Decision, I granted judicial review relief to the Applicants. At paragraph 57 of the Decision, I stated that I saw no reason why the costs should not follow the event of the application, and therefore ordered the BA to pay the costs of the Applicants, to be taxed if not agreed.

3.  However, I also reserved to the BAT the costs incurred in relation to the Preliminary Hearing before the BAT, as it seemed to me that some of those costs may logically be relevant to the conduct of the now directed full hearing, and the way in which those costs should be dealt with may properly be influenced by the conduct at, and the result of the appeals following, the full hearing.

4.  I made that costs order on a nisi basis, and the Applicants have now sought a variation.

5.  There is no challenge to the order that the costs of the judicial review should be payable by the BA to the Applicants, to be taxed if not agreed. However, the Applicants seek a variation such that the costs of the Preliminary Hearing should also be payable by the BA to the Applicants.

6.  The basis of the variation application can be stated broadly as follows:

(1)  I allowed three out of the four grounds of judicial review, ruling that the Applicants had shown not only good cause for holding a full hearing before the BAT, but also that they had realistic prospects of success in the appeals of the SBOs.

(2)  Whether there should be a full hearing of the appeals had been an issue raised by the Applicants from the beginning, not least on the basis that their cases are complex and warrant further investigation on the structural risks to the Building.

(3)  The Decision found there to have been insufficient procedural fairness and integrity in the decision-making process of the BAT. Yet, the BA defended and adopted most of the rulings made by the BAT.

(4)  The BAT dealt improperly with the expert evidence, unfairly refused to deal with the Language Discrepancy point, mischaracterised the argument presented to them by the Applicants, and acted unfairly in reliance on an authority not addressed by the parties.

(5)  As the Applicants were subjected to that unfair process through no fault of their own, the appropriate remedy is for the Applicants to recover the costs incurred in and occasioned by the flawed Preliminary Hearing.

(6)  Alternatively, the Applicants should recover at least half of the costs of the Preliminary Hearing.

7.  The BA submits in summary that:

(1)  What was expressed in paragraph 57 of the Decision is logically correct, and the costs of the Preliminary Hearing should be reserved to be determined by the BAT at or following the full hearing.

(2)  Though the Decision granted judicial review relief and directed the full hearing to take place, the Decision also made clear that nothing in it was intended in any way to influence the BAT’s approach to the full hearing and the decision to be made on the appeals after that hearing.

(3)  Therefore, there was simply no ruling in the Decision that the Applicants have realistic prospects of success in the appeals.

(4)  Though the Applicants argue that they were subjected to unfair irregularities in the process below through no fault of their own, neither was the BA at fault.

(5)  Whether the Applicants’ argument at the Preliminary Hearing will eventually succeed is a matter for the BAT after the hearing of the appeals at the full hearing.

(6)  It is therefore fair for the costs of the Preliminary Hearing to be reserved pending the determination of the merits of the Applicants’ arguments.

8.  The BA is clearly correct that I did not rule on – nor did I express any particular view on the prospects of success of – the ultimate merits of the subject matter of the appeals. Those merits are for the BAT to decide. What I held was that the decision not to have a full hearing was procedurally flawed and unfair as would warrant interference by the Court exercising its jurisdiction in judicial review.

9.  Further, it does not seem to me to be likely correct that all of the costs of and relating to the Preliminary Hearing were necessarily ‘wasted’, in the sense of being incurred with no wider purpose than the Preliminary Hearing. There may be some continued reliance to be placed on the expert evidence at the coming full hearing – even if further evidence will be adduced in advance of and used at that hearing. That is why it seemed to me that the costs might best be reserved to the BAT as will at the end of the appeals be able to identify what costs were useful, and which costs were in effect wasted as a result of having a preliminary hearing rather than proceeding directly to a full hearing.

10.  I also have in mind that the Preliminary Hearing might have resulted – and, as I have found, ought procedurally fairly to have resulted – in a decision to have a full hearing, in which case the overall costs of the appeals would be in the discretion of the BAT.

11.  Nevertheless, I am persuaded that a variation of the nisi order is appropriate to some extent. On reflection, and with the benefit of the further submissions I have received, it seems to me that the costs of the Preliminary Hearing itself – i.e. the direct costs of the Applicants’ legal representatives’ attendance on the day (not witness costs) – should be borne by the BA, which in light of my ruling lost the event for which those costs were incurred. But, all other costs which were generated/incurred prior to or at the Preliminary Hearing should remain reserved to be dealt with by the BAT in its costs discretion at the conclusion of the full hearing of the appeals.

12.  Hence, the costs order as varied will be as follows:

The Applicants’ costs of (1) these judicial review proceedings, and (2) their legal representatives’ attendance on the day of the Preliminary Hearing before the BAT, shall be paid by the BA, to be taxed if not agreed. All other costs of and occasioned by the Preliminary Hearing are reserved to the BAT to be dealt with as part of the costs of the appeals.

13.  In light of the only partial variation granted, and in the broad exercise of my costs discretion, I make no order as to the costs of this variation application itself.