DESIGNING HONG KONG LTD v. THE TOWN PLANNING BOARD

CACV 184/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 184 OF 2015

(ON APPEAL FROM HCAL NO 49 OF 2014)

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J U D G M E N T

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The Court :

1.  This is an appeal against the order of Au J dated 30 April 2015 refusing the applicant’s application for a protective costs order (“PCO”).  It raises important questions concerning the court’s jurisprudence and practice regarding PCO applications in the Hong Kong context. Since such questions are raised before this Court for the first time, we will take the opportunity to lay down general guidance, insofar as it is desirable, for future PCO applications.

A. Background

A1. The applicant

2.  The applicant is a Hong Kong non‑profit company limited by guarantee.  When it took out the PCO application below, its two directors were Mr Markus Shaw and Mr Peter HY Wong.  Its Chief Executive Officer was Mr Johannes Zimmerman.  That remains the position to date.

3.  The applicant was incorporated in 2007 in response to the plans announced by the Government for the Tamar Site and the Central Wanchai Waterfront reclamation.  Its avowed aim is to increase public awareness and to improve Hong Kong’s collective ability to plan and deliver a sustainable and “beautiful” city.  It advocates the adoption of sustainability, quality of life and good design as core values in planning and development. Pursuant to its avowed aim, the applicant is engaged in a number of on‑going projects concerning the planning development of various sites and areas over Hong Kong.

A2. HCAL 49/2014

4.  The applicant applied for leave to apply for judicial review against the decision (“the Decision”) of the respondent, the Town Planning Board (“the Board”) not to amend the Amended Draft Outline Zoning Plan 2/H24/4 (“ADOZP”) of the Central District.

5.  In issue under the ADOZP is a 150‑metre strip of land along the north shore of the Hong Kong Island (“the Site”) which is marked for the planned Central Military Dock.  The Site is situated along Victoria Harbour within the new Central Harbourfront Promenade.

6.  In the ADOZP, the Site is re-zoned from “Open Space” to “Other Specified Uses” annotated “Military Use (1)” (“OU(MU1)”).  The applicant together with some other representators objected to the proposed re‑zoning.  They complained, among other things, that the re‑zoning would interfere with and restrict Hong Kong residents’ right to enjoy the Site to walk along the Central Harbourfront uninterrupted (as they would be able to do so under the original “Open Space” zoning).  They asked, unsuccessfully, the Board to amend the ADOZP by zoning the Site back to “Open Space” from the proposed “OU(MU1)”.

7.  In May 2014, the applicant applied for leave to judicially review the Board’s refusal to amend the ADOZP on the following grounds :

“ (1) the Board erred in law in disregarding its own statutory duty under section 3(1) of the Town Planning Ordinance (Cap 131) (“the TPO”) in upholding the ADOZP which is contrary to its own declared planning intention;

   (2) the Board’s decision is irrational in the public law sense;

   (3) the Board failed to take into account relevant matters such as its own declared policy to protect the Harbourfront, ensure public access thereto and maintain visual access to the harbour, the Planning department’s own report made in 2011 prescribing public “Open Space” land use for the Site, the views and recommendations of the Harbourfront Commission and the Administration’s public commitment to effectively keep the Site open for public use;

   (4) the Board mistook or ignored an established and relevant fact that if the Site was to be closed for military use, there would not be a continuous pedestrian connection along the waterfront;

   (5) the Board misapplied the public law principle of “consistency” by saying that the proposed zoning of the Site was consistent with the existing military exclusive “Military Use” zoning of the PLA headquarters sited nearby in Admiralty;

   (6) the Board failed to give effect to the applicant’s legitimate expectation that it would take into account the relevant matters as identified; and

   (7) the Board abdicated its duty under section 3(1) of the TPO in not to amend the ADOZP so as to impose any development restriction on the Site other than height restriction.”

8.  The Judge granted the applicant leave to apply for judicial review in July 2014.

A3. PCO application

9.  At the same time when it applied for leave for judicial review, the applicant asked for a PCO in these terms :

“ (1) Protecting the applicant from all costs of the respondent in the interlocutory applications and the substantive proceedings herein.

   (2)  Alternatively limiting the costs that may be awarded to the respondent to HK$10,000 and limiting the costs that may be awarded to the applicant to the reasonable costs of a solicitor and junior counsel or such sum as the court may think fit.”

B. Au J’s decision on the PCO application

10.  In a careful and detailed judgment handed down on 30 April 2015, the learned Judge first set out at [13] – [16] the three board propositions that the parties agreed to be applicable to a PCO application.

11.  First, the court has jurisdiction to make a PCO.

12.  Second, the general principles laid down by the English Court of Appeal in R (Corner House Research) v Secretary of State for Trade and Industry [2005] 1 WLR 2600 at [74] in relation to the factors that the court should take into account in deciding whether to make a PCO are equally applicable in Hong Kong.  Those factors are :

(1) A PCO may be made at any stage of the proceedings, on such conditions as the court thinks fit, provided that the court is satisfied that :

(a) the issues raised are of general public importance;

(b) the public interest requires that those issues should be resolved;

(c) the applicant has no private interest in the outcome of the case;

(d) having regard to the financial resources of the applicant and the respondent and to the amount of costs that are likely to be involved, it is fair and just to make the order; and

(e) if the order is not made, the applicant will probably discontinue the proceedings and will be acting reasonably in so doing.

(2) If those acting for the applicant are doing pro bono this will be likely to enhance the merits of the application for a PCO.

(3) It is for the court, in its discretion, to decide whether it is fair and just to make the order in light of the considerations set out above.

13.  Third, the twin criteria of (1)(a) and (b) above, which are commonly referred to as the “public interest litigation” factors, are the overarching requirements that an applicant must meet before the court would consider whether to grant a PCO after taking into consideration the other relevant factors.

14.  The Judge then discussed at length the parties’ submissions and the authorities on, among other things, the concept of public interest litigation and the proposition, with which he disagreed, that even if an applicant is able to meet the principles set out in Corner House, there is still an additional requirement of “exceptionality”.

15.  The Judge then applied the Corner House principles to the facts before him.

16.  He accepted that the issues raised in the judicial review are of general public importance and it is in the public interest to have them resolved: [54]-[55].  He also agreed that the applicant has no private gain or interest from the outcome of the judicial review : [56].

17.  Turning to the financial resources of the applicant and the respondent, and to the amount of costs that are likely to be involved and the question if it is fair and just to make the order, the Judge set out the applicant’s case derived from Mr Zimmerman’s affirmations thus :

“ (1) [The applicant’s] current bank account balance as at 30 June 2014 was only $170,094.74. The applicant was expected to have a negative net income that would result in it exhausting its cash by 31 December 2014. It does not carry on any profit‑making business and has no assets of any real value against which it might be able to obtain funds by way of loan.

(2) The applicant’s directors have already dug into their personal resources to fund its activities and Mr Zimmerman “do not believe they would be willing or able to fund this action further”. Further, Mr Zimmerman had reported the status of the case to the Board of Directors and asked for their personal and financial support for the applicant’s costs. They had also been informed of the applicant’s exposure to costs of the respondent should it lose the judicial review. The other directors have told him that they were not in a position to provide additional funds to the applicant to pursue this case or expose themselves to an open commitment to the Government’s costs.

(3) It is difficult to raise money from outside sources, whether corporate bodies or the general public at large, as there are many environmental and civic causes which are continuously calling upon them for support. The applicant had at the commencement of the judicial review raised sponsorship of HK$50,000 through other concern groups, and Mr Zimmerman does not “believe” that the applicant or he himself would be able to raise more than this amount to pay legal costs and the applicant’s own legal costs for this project.

(4) Given the applicant’s limited resources, the applicant has obtained pro bono services from solicitors and counsel, who have agreed to act up to the decision of the PCO.

 (5)  In his 1^st affirmation at paragraph 19, Mr Zimmerman deposes that if a PCO order is not made to protect the applicant from exposure to costs, the applicant will abandon the proceedings.  In his second affirmation at paragraph 6, Mr Zimmerman further deposes that if no PCO is made, the applicant “would be unable to continue these proceedings.  It will not be able to meet its own costs, much less the costs of the Respondents from its own resources…”

18.  For the reasons that he gave at [58]-[67], the Judge rejected the submissions of Mr Nigel Kat SC, for the applicant, that as a matter of principle, the court should not look behind the corporate applicant to the financial positions or resources of its directors or members.   The Judge agreed with the submission of the amicus, Mr Stewart Wong SC, that the court should not be confined to considering the financial means of a corporate applicant alone, lest its directors and members are in fact resourceful and they are simply hiding behind an impecunious corporate vehicle (for which legal aid is unavailable) to seek a PCO, instead of funding the litigation themselves. He held that as a matter of public interest, a PCO is to be granted to litigants (provided they also satisfy the other relevant requirements) who are genuinely unable to bear the costs of the respondent.  That should not be extended to self- or artificially created situation of inability to bear costs.  The Judge therefore ruled that as a matter of principle, the court must be able to look at a corporate applicant’s sources of fund, including its members and directors, to satisfy itself that the applicant is genuinely unable to bear the costs of the respondent if it fails in the litigation and therefore has to reasonably withdraw the litigation due to its fear for costs liability if no PCO is obtained.

19.  On the facts before him, the Judge said at [68] :

“ In the present case, the applicant has given evidence why it has not been able to raise funds from other sources. However, other than an assertion of Mr Zimmerman’s belief that he and the other founder directors would not be willing or able to dig further into their own pockets to fund this particular judicial review, there is no evidence (as in the case of Plantagenet) as to their personal financial means and position. As such, the court is simply unable to assess whether there are legitimate or reasonable bases as to why they are unable or not willing to fund the litigation. This in my view is insufficient to satisfy the court that the applicant is genuinely not in a position to bear the costs of the respondent. Moreover, with the lack of this evidence, it would not be fair and just to require the respondent to bear the costs.”

20.  The Judge then went on to hold that as the applicant had failed to show with sufficient evidence that it was genuinely not in a position to bear costs, it was not reasonable for it to probably withdraw the application for judicial review if no PCO was granted : [70].

21.  Finally, the Judge dealt with Mr Kat’s submissions on the right to access to justice, and for the reasons that he gave at [72]-[77], he rejected it.  He took the view that the Corner House principles as guidelines “represent what the courts have already accepted as a proportionate response under the statutory discretion vested in them on how the right to access to court may be restricted in the context of costs” : [76].  He held that when the applicant was refused a PCO after applying the Corner House principles, no question that its right of access to court had been disproportionately restricted, arose.

C. GROUNDS OF APPEAL

22.  On 29 July 2015, the Judge granted leave to the applicant to appeal to the Court of Appeal on the following grounds :

(1) In applying the Corner House principles flexibly, the Judge misdirected himself in not applying the principles in accordance with the “overriding purpose” of the jurisdiction of the PCO (a) to ensure the underlying objective of giving the public wide access to justice, including in planning and environmental cases in particular; and (b) to protect the public interest in full and effective representation on both sides where points of genuine and significant public interest are raised.  (Ground 1)

(2) The Judge erred in the application of the principle in Corner House [74](1)(iv) (“having regard to the financial resources of the applicant and the respondent(s) and to the amount of costs that are likely to be involved it is fair and just to make the order”) in that the court (a) treated financial resources as a condition; (b) extended it to cover the financial resources of directors and shareholders of the applicant; (c) rejected the applicant’s evidence on financial ability as insufficient; and (d) failed to consider the financial resources of the respondent.  (Ground 2)

(3) The Judge erred in holding that Corner House simpliciter (as opposed to the version advocated by the applicant) is a proportionate restriction to the right of access to court enshrined in Article 35 of the Basic Law and Article 10 of the Hong Kong Bill of Rights enacted by the Hong Kong Bill of Rights Ordinance, Cap 383.  (Ground 3)

D. PCO IN THE HONG KONG CONTEXT – GROUND 1

D1. Public interest litigations in Hong Kong

23.  PCO is essentially a devise developed by the courts to address specific concerns of costs in the public law sphere.  The PCO jurisprudence in major common law jurisdictions has their genesis in concerns as to access to justice.  There are, however, nuances in the considerations as to the criteria adopted for the grant of PCOs, which reflect the differences in the actual circumstances peculiar to individual jurisdictions.  This importantly informs the proper approach in crafting our own PCO jurisprudence in Hong Kong.  Whilst overseas PCO jurisprudence provides valuable insight into the matter, we cannot simply transplant their regimes wholesale to our jurisdiction without due regard to our local circumstances. In searching for the guiding principles and identifying the relevant considerations for our own PCO regime, we must give due regard to what actually happens on the ground here.

24.  In the past decade, Hong Kong has developed its own jurisprudence on costs relating to public interest litigations (“PIL”).

25.  Though there were earlier cases where Hong Kong courts departed from the usual order (of costs to follow the event) in awarding costs in public law litigation, a convenient starting point is the judgment of the Court of Final Appeal in Town Planning Board v Society for Protection of the Harbour (No 2) (2004) 7 HKCFAR 114.  That was a case in which the applicant was successful and the Court awarded them indemnity costs because the proceedings were commenced to vindicate the public interest instead of enforcing some private right or interest.  The Court also took account of the public importance of the case and the limited means of the applicant.  At [20], the Court paid regard to decisions in PIL in other jurisdictions like New Zealand Maori Council v A-G of New Zealand [1994] 1 AC 466 and Oshlack v Richmond River Council (1998) 193 CLR 72.

26.  In July 2005, in Secretary for Justice v Lau Kwok Fai (2005) 8 HKCFAR 304 at [86], notwithstanding Mr Lau’s and Mr Scott’s failed attempt to challenge the Public Officers Pay Adjustment Ordinance, the Court of Final Appeal made no order as to costs (for the costs of the proceedings in the appeal and in the courts below) in view of the desirability in the public interest of clarifying the important issues raised in the case.  In that judgment, the Court of Final Appeal did not find it necessary to embark on a discussion of the jurisprudential basis for so ordering.  But it is noteworthy that it was a case in which Mr Lau had a private interest in the subject matter : see the earlier decision of Hartmann J in Scott v Government of the HKSAR [2004] 2 HKLRD 989 at [19].

27.  In both cases, the costs orders made by the Court of Final Appeal were made at the conclusion of the litigations.  Two months earlier, in May 2005, Hartmann J made a PCO in Chan Wai Yip Albert v Secretary for Justice HCAL 36/2005, 19 May 2005, at an early stage of the proceedings.  Though the order was made by consent (see [19]), Hartmann J examined the applicable principles (though without any reference to Corner House, which was actually decided in March 2005, but only reported in the Weekly Law Reports in August 2005).  Hartmann J affirmed the general rule that costs should follow the event even in public law cases.  Notwithstanding that, where important issues of public interest are raised by a person who has no private interest in the outcome, the court may depart from the general rule.  His Lordship referred to New Zealand Maori Council v A-G of New Zealand, supra and R v Lord Chancellor, ex parte Child Poverty Action Group [1999] 1 WLR 347 (the CPAG case) at 353G.  At [26], the learned judge said :

“ …it is today entirely legitimate … for a court, when dealing with an issue of genuine public concern, to look beyond the question of who has won and to take into account that an otherwise disinterested applicant, even if he has been unsuccessful, may nevertheless have advanced the public interest in bringing a matter before the court for clarification. If it was otherwise, many important issues of real public concern in the sphere of constitutional and administrative law would never be judicially determined for fear that an applicant with no desire for private gain would nevertheless in every case without exception be placing his neck beneath the guillotine of costs.”

28.  His Lordship examined the jurisdictional basis for making a PCO in advance of the determination of the substantive issues at [28] to [33] by reference to the CPAG case and Joseph Owen Davies v Eli Lilly & Co [1987] 1 WLR 1136, as well as Order 62 Rule 3(2).  The order made was that irrespective of the outcome, there would be no order as to costs.  He concluded at [32] :

“ …our courts do have the jurisdiction to make pre-emptive orders as to costs. Such orders, however, should only be made in exceptional circumstances.”

29.  This appears to be the first case in which a PCO was made in Hong Kong.  As far as we are aware, indeed that was the only occasion where a PCO was granted though there were some unsuccessful applications over the years.  Most of them were applications by litigants acting in person to pursue their own interests : for instance, 姚寶昌對統計處處長 CACV 87/2013, 14 Oct 2014; 黃志堅對調查委員會HCAL 113 of 2013, 15 Jan 2015.

30.  In June 2006, there was another attempt by an unsuccessful litigant before the Court of Final Appeal asking for no order as to costs on account of public interest : The Government of the Hong Kong Special Administrative Region v Scott FACV 16 of 2004, 12 June 2006.  The Court of Final Appeal, after referring to Lau Kwok Fai, supra, rejected that application because Mr Scott’s grounds were obviously and utterly devoid of merit.

31.  In Leung Kwok Hung v The President of the Legislative Council HCAL 87/2006, 27 April 2007, Hartmann J decided not to award costs against the unsuccessful applicant because he found that the case raised a fundamental issue of constitutionality in relation to the powers of LegCo members under the Basic Law.  At [25] his Lordship cautioned that PIL (even though it was brought with altruistic purposes) did not automatically attract immunity from costs or a ‘free kick’ in litigation.  In earlier paragraphs, his Lordship referred to differing degrees of public interest and public importance of the issues which arose for determination.

32.  Not long afterwards, the court had to examine the costs regime for PIL in the controversy arising from the demolition of Queen’s Pier.  In Chu Hoi Dick v Secretary for Home Affairs (No 2) [2007] 4 HKC 428, Lam J (as he then was) reviewed the relevant authorities in Hong Kong and elsewhere (including Oshlack v Richmond River Council (1998) 193 CLR 72 and Corner House).  It was held that even in public law cases there had to be some good justification for any departure from the usual order of costs to follow event.  The underlying rationale for departure was the furtherance of the interest of society as a whole.  Lack of private interest or personal gain was not enough.  It was necessary to have some principled and clear guidelines for determining whether there should be a departure from the usual order.  Based primarily on the judgment of Kirby J in Oshlack, these criteria were formulated at [29] :

“ (a) A litigant has properly brought proceedings to seek guidance from the court on a point of general public importance so that the litigation is for the benefit of the community as a whole to warrant the costs of the litigation be borne by the public purse as costs incidental to good public administration;

(b) The judicial decision has contributed to the proper understanding of the law in question;

   (c) The litigant has no private gain in the outcome.”

33.  Lam J explained the rationale behind the formulation of criterion (a) at [17] to [23].  In particular, it was emphasized at [19] and [20] that one must have regard to the role of the court in judicial review in assessing whether it is in the public interest for the proceedings to be brought.  The court is not the proper forum for political or social debate.  The arguments raised by the applicant must have a real prospect of success : see [21] to [23].

34.  In addition to the PIL character, the court must also pay regard to other relevant factors in the exercise of the discretion on costs.  Thus, at [30], the following was said :

“ I should also mention that the public interest element is only one of the factors that is relevant for the exercise of the discretion as to costs.  Even if all these criteria are satisfied, the court must also have regard to other relevant factors such as the conduct of the litigants in the proceedings in coming to a final decision on what is just in the circumstances.  It is ultimately a matter of discretion, hence the use of the word “occasionally” in the dicta of Kirby J.”

35.  In Chu Hoi Dick, counsel for the applicant advanced a submission based on the chilling effect of an adverse costs order.  Lam Jaddressed this submission at [24] and [25] :

“ 24. In Oshlack at para.68, McHugh J considered the usual costs order could ‘instill in a party contemplating commencing … litigation a sober realization of the potential financial expense involved’. Mr Lee submitted that potential liability for costs could have a chilling effect on future applicants pursuing public interest litigation. I accept that liability for costs can be an inhibitive factor. However, it would be wrong and disproportionate to over-emphasize that factor such that public fund has to be deployed to underwrite litigations that only have little prospect of success. It is equally wrong to dictate that the public purse must pay for the court proceedings when the proper venue for the ventilation of the underlying issues should be elsewhere.

  25. In this connection, I see no reason why the need to have a discipline on the part of litigants should not be applicable to public interest litigation.  Though the court will have regard to the special character of public law challenges brought with a view to advance what an applicant perceived as public interest, it does not mean that such discipline should be completely disregarded.”

36.  The formulation in Chu Hoi Dick was subsequently applied by Hartmann J in The Democratic Party v Secretary for Justice HCAL 84/2006, 28 Dec 2007 and approved by the Court of Appeal in Chan Noi Heung v Chief Executive in Council [2009] 3 HKLRD 362.  In Chan Noi Heung, supra, Ma CJHC (as the Chief Justice then was) rejected the proposition that the grant of leave to apply for judicial review would necessarily mean that the litigation passes the merit threshold for PIL.  Counsel for the applicant in that case again referred to the chilling effect argument and liability for costs as a deprivation of access to court.  To address that argument, the Chief Judge recapped the rationale for the merit threshold at [9] :

“ In my judgment, it is clear from the cases (not to mention as a matter of plain commonsense) that, however important the subject matter of the relevant litigation or however important any particular legal point may be, it is highly relevant for a court (when considering the incidence of costs) to evaluate the merits of the failed challenge before it. In other words, the court has to ask itself: how meritorious were the issues raised before it? If the issues that were raised by the unsuccessful applicant were, upon analysis, really quite hopeless, then it is difficult to conceive of a court making any order other than costs following the event.”

37.  The Chief Judge then addressed the argument that leave had been granted for the application for judicial review at [12] :

“ (4) The fact that leave has been granted to bring judicial review proceedings is insufficient to prevent the usual order of costs being made. It is no real answer for an unsuccessful applicant to pray in aid of this fact. When granting leave, the court is doing no more than looking at the merits at the most preliminary of stages in the proceedings. By contrast, in determining the question of costs of an unsuccessful application, the court will obviously be examining the matter at the final stage, after all the arguments have been fully developed, considered and determined.

   (5)  The threshold test in the granting of leave is now definitively stated in the decision of the Court of Final Appeal in Po Fun Chan v Winnie Chung [2008] 1 HKLRD 319: the judicial review challenge must be reasonably arguable, meaning that it must enjoy a realistic prospect of success ….  This test appears to be the same as the test referred to earlier in sub-paragraph (3) above (the case must have been properly arguable, having a real prospect of success).  Indeed it is, but as I have emphasized, the determination by the court of, on the one hand, whether or not leave to commence judicial review proceedings should be granted and, on the other, where the incidence of costs should lie arises at two quite different stages.”

38.  As the Chief Judge further pointed out, Practice Direction SL3 para 1.8 requires those acting for an applicant to give further careful consideration to the merits after they have received the respondent’s evidence notwithstanding leave has been obtained.  On the facts of that case, the Court concluded that the appeal did not have any merits and the applicant ought to bear the costs even though he acted without any private gain in mind and the matter concerned was a matter of public interest, see [15] and [16].

39.  In Leung Kwok Hung v President of the Legislative Council (No 2) (2014) 17 HKCFAR 841, at [17] (10), the Court of Final Appeal also adopted the Chu Hoi Dick formulation of PIL in giving guidance on the exercise of discretion on costs in public law cases.  The Court endorsed the proposition that apart from the PIL factor, other relevant factors such as the conduct of the parties should also be taken into account.  Significantly, at [17] (11), the Court of Final Appeal endorsed the rejection by the Court of Appeal in Chan Noi Heung of the argument that the grant of leave in a PIL would by itself be a reason for departing from the usual order for costs.

40.  More recently, in Moulin Global Eyecare Trading Ltd v The Commissioner of Inland Revenue FACV 5 of 2013, 15 April 2015, the Court of Final Appeal declined to discuss the relaxation of the “no private interest” requirement in the context of that case.  Their Lordships were content to reject the plaintiff’s application to depart from the usual rule as to costs as the proceedings were brought for the private interest of the plaintiff and any benefit to the public as a result of the elucidation of the law was incidental.

41.  It would not be correct to read that judgment as the last word on the relaxation of the “no private interest” requirement.  It is quite clear their Lordships took the view that no matter how the requirement was to be relaxed, it could not cover a case where the primary driving force for the litigation was the private interest of the applicant and the elucidation of the law was incidental.

42.  Apart from Chan Wai Yip decided in 2005, other Hong Kong cases in which the principles governing the question of costs in PIL were discussed were decided in the context of a determination on costs after the merits of the application for judicial review had been resolved. It is also interesting to note that notwithstanding the introduction of the concept of PCO to Hong Kong in 2005, there has not been any application for a PCO by any represented applicants.  Regarding those applicants acting in person who had failed in their attempts to get a PCO, their attempts were doomed to fail since all these applicants were primarily trying to vindicate their private interests in the claims they pursued (as in the case of Moulin Global Eyecare).  An attempt to obtain a PCO was made by counsel in Lai Pun Sung v Director of Agriculture Fisheries and Conservation HCAL 83/2009, 13 Aug 2009 where the applicant could be said to be acting altruistically.  However, the court refused to grant leave to apply for judicial review and there was no need to determine the application for a PCO.

43.  As far as we can gather, there are two practical reasons for the absence of any meaningful PCO applications in Hong Kong in the past.  First, unlike England and Wales where applicants can secure the service of lawyers by a conditional fees agreement (“CFA”), this is not possible in Hong Kong.  Contingent or conditional fees arrangements are not permitted as a matter of professional ethics in Hong Kong.[1]  Thus, a litigant with limited means may well face difficulties in securing the service of lawyers unless he is fortunate enough to be able to find a team of pro bono lawyers willing to act for him, or a solicitor who is prepared to take on the risk of not getting paid in the event of an unsuccessful outcome to act for him.  By reason of the limits on the court’s jurisdiction in Hong Kong (contrast the advance costs order that may be made in Canada : see the discussion below), a PCO which can only remove or reduce an applicant’s exposure to costs simply cannot address this practical concern relating to the applicant’s own legal costs.  The only way one can obtain free (or highly subsidized) legal services here is legal aid.[2]

44.  This brings us to the second practical matter: legal aid.  Notwithstanding the submissions of Mr Kat and the evidence the applicant relied upon,[3] it is quite clear to us that legal aid in Hong Kong is much more liberal and generous than that available in England and Wales.  One only needs to look at all the important public law cases in Hong Kong which were litigated up to the appellate levels (including the Court of Final Appeal) in the law reports.  Most of them (and many of them were environmental cases) were funded by our legal aid regime.  As submitted by Mr Wong SC, for the Secretary for Justice, based on statistics before us, our legal aid system funded a substantial proportion of public law cases in Hong Kong in which the applicant was legally represented.  The number of applications for judicial review increased from 103 in 2011 to 259 in 2015, and during the same period those applications brought with legal aid increased from 58 to 107 (if one excludes immigration or asylum cases, the figures increased from 27 to 42).  Unlike England and Wales, the resources devoted to legal aid in Hong Kong have been ever increasing.  Though there are financial eligibility limits, the Director of Legal Aid has the power to waive such limits under Section 5AA of the Legal Aid Ordinance (Cap 91) where breaches of the Hong Kong Bill of Rights are in issue.  That power has from time to time been exercised liberally.  Further, again unlike the position in England and Wales, budgetary constraints have not been the concerns of the Director of Legal Aid in the exercise of his power to grant or refuse legal aid.  Decisions are strictly made according to the statutory criteria of merits and financial eligibility (and the latter can be waived).  The merit threshold is low and the decision of the Director is subject to review by way of legal aid appeal heard by a master of the High Court.  Because of that, and in light of the first practical consideration mentioned earlier, more often than not an altruistic litigant in Hong Kong with a public cause would manage to obtain legal aid to pursue his case.  Once legal aid is granted, there is no need for any protection by way of a PCO.  However, we recognise there are litigants who are not qualified for legal aid, either on account of their means or corporate status.  Hence, we accept that there is still some scope for having a PCO regime in Hong Kong notwithstanding that most PILs in the past were funded by legal aid.  

45.  Pausing here, the position may be recapped thus : For a legally aided applicant, he does not need a PCO at the commencement of proceedings, nor is he (as opposed to the Legal Aid Department) troubled by the grant or refusal of a Chu Hoi Dick PIL costs order at the end of litigation even if he loses.  For an applicant without legal aid, his exposure to costs is protected if he can get a Chu Hoi Dick order at the end even if he loses – assuming he has got means to hire lawyers to conduct the litigation for him to its logical conclusion in the first place, or managed to secure the service of pro bono lawyers.  Understandably, it was said at the hearing that this does not provide sufficient comfort because there are litigants (and the present applicant is one of them) for whom the risk of the court holding at the end of the day that the case does not come within the Chu Hoi Dick PIL criteria is so great and inhibiting that they have, in practice, no or little choice but to abandon their causes altogether.  It was submitted that in so doing they would not be acting unreasonably.

46.  For such litigants, it was submitted that access to justice would be denied if the court does not entertain an application for and make a PCO at an early stage of the proceedings.  Mr Kat submitted that a PCO should be considered as soon as the court granted leave to apply for judicial review.

47.  On the other hand, as Mr Mok SC forcefully submitted on behalf of the Board, there is an element of inherent unfairness when the court makes a PCO pre-empting a respondent from recovering costs without a full and proper consideration of the relevant questions pertaining to the PIL criteria.  Counsel reminded us that the picture painted by an applicant at an early stage of an application for judicial review (when the putative respondent has not even filed his evidence) may be inaccurate and there have been cases where the court simply resolved an application after a substantive hearing on an issue other than the issue of great public importance put forward by the applicant at the commencement of proceedings.

48.  Though Mr Kat at one stage seemingly submitted that the injustice could be avoided by the court having the power to revoke or modify the PCO at a later stage, counsel subsequently clarified that this is not his position.  Counsel’s clarification is understandable.  If the court had the power to revisit a PCO, it would in many cases defeat the very purpose of having it granted in the first place.

49.  Hence, it is necessary to strike a fair balance between the conflicting interests of the parties in deciding if a PCO should be granted.

D2. The relevant statutory rules

50.  It was said by Lord Lloyd of Berwick in Bolton Metropolitan District Council v Secretary of State for the Environment (Practice Note) [1995] 1 WLR 1176 at p.1178 :

“ As in all questions to do with costs, the fundamental rule is that there are no rules. Costs are always in the discretion of the court, and a practice, however widespread and longstanding, must never be allowed to harden into a rule.”

51.  Still the court exercises its discretion on costs within a statutory framework.  Section 52A of the High Court Ordinance (Cap 4) sets out the power of the court in relation to costs in civil proceedings.  Sub-section (1) is relevant for our purposes :

“ 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.”

52.  The discretion is indeed very wide.  In Hong Kong, the relevant rules of court are to be found in Order 62.  The starting point is  Order 62 Rule 3(2) which provides :

“ If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings (other than interlocutory proceedings), the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.”

53.  But costs following the event is no more than a starting point and, as we have seen, our courts have developed our jurisprudence on PIL as the criteria for departure from this starting point in public law cases.  For our purposes, Rule 4(1) is also relevant :

“ Costs may be dealt with by the Court at any stage of the proceedings or after the conclusion of the proceedings; and any order of the Court for the payment of any costs may, if the Court thinks fit, and the person against whom the order is made is not an assisted person, require the costs to be paid forthwith notwithstanding that the proceedings have not been concluded.”

54.  So is Rule 5 :

“ (1) The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account-

(aa) the underlying objectives set out in Order 1A, rule 1;

(a) any such offer of contribution as is mentioned in Order 16, rule 10, which is brought to its attention in pursuance of a reserved right to do so;

(b) any payment of money into court and the amount of such payment;

(c) any written offer made under Order 33, rule 4A(2);

(d) any written offer which is expressed to be "without prejudice save as to costs" and which relates to any issue in the proceedings, but the Court may not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22;

(e) the conduct of all the parties;

(f) whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(g) any admissible offer to settle made by a party, which is drawn to the Court's attention.

   (2) For the purpose of paragraph (1)(e), the conduct of the parties includes-

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

55.  Rule 7 authorizes the court to pay regard to the improper or unnecessary conduct or omission on the part of a litigant in dealing with costs arising from the same.

56.  The underlying objectives in Order 1A rule 1 are :

“ (a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;

(b) to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;

(d) to ensure fairness between the parties;

(e) to facilitate the settlement of disputes; and

(f) to ensure that the resources of the Court are distributed fairly.”

57.  Even in the context of PIL, a PCO (as awarded in cases in England, and the one Mr Kat sought in the present case) typically has the following features which are unusual as compared with other orders for costs :

(1) The order is made before the court has the opportunity to consider fully the merits and other relevant circumstances of the case;

(2) It either provides for no order as to costs in any event or caps the liability for costs of either party.

Subject to our discussion below, we accept that Hong Kong courts do have the power to grant a PCO.  Subject to what we say below, we agree with Au J that the Corner House guidelines (with some refinement as discussed below) are applicable in Hong Kong.  On the other hand, we are of the view that the post-Corner House cases in England and Wales were influenced by the obligations under the Aarhus Convention, and owing to the different legal aid environment in Hong Kong there is no justification for adopting in this jurisdiction the same approach in those cases.  Whilst it is not for us to comment if the Criminal Justice and Courts Act 2015 (“CJCA”) represents a reversal of the liberalism underlying the post-Corner House jurisprudence in England and Wales, we do not see a compelling case for Hong Kong to go down the same path as those English cases.

D3. The exceptional nature of PCO: pre-emptive order without full understanding of the merits and other relevant circumstances

58.  Though Order 62 Rule 4(1) gives the court power to deal with costs at any stage of the proceedings, Rule 5 requires the court to take account of matters which, as far as they relate to the costs of the whole proceedings, the court could only seize and fully apprise of after the substantive merits have been adjudicated upon.  Primarily, the purpose of Rule 4(1) is to make it clear that the court can make an order for costs of interlocutory proceedings notwithstanding that the main action is still pending. In ordinary civil litigations, at an interlocutory stage, costs thrown away by adjournments, amendments or improper or unnecessary steps aside, the court usually only makes an order for costs in respect of interlocutory applications which have been concluded before it.  In McDonald v Horn [1995] ICR 685 at 694, Hoffmann LJ concluded that Order 62 Rule 3(3) of the then English Rules of the Supreme Court (which was in similar terms to our Rule 3(2)) presented a formidable obstacle to any pre-emptive costs order as between adverse parties in ordinary litigation as it was difficult to have a case (other than those specifically exempted under Order 62 Rule 6 of the then English rules, which is partly reproduced in our rule 6) in which it would be possible for a court to exercise its discretion properly in advance of the substantive decision.

59.  Therefore the court rarely makes an order debarring a party from seeking costs to be incurred when the proceedings are still ongoing.  Feature (1) referred to in [57] above is by its nature unusual.

60.  Prior to the development of the jurisprudence on PCO, advance protection by way of indemnity for costs has been provided in the exercise of the Beddoe jurisdiction, which has been applied with modifications in the context of shareholders disputes in company cases in Wallersteiner v Moir (No 2) [1975] QB 373 and pension fund cases in McDonald v Horn [1995] ICR 685.  Family courts have also developed special approaches in children cases as well as the provision of fighting funds in ancillary proceedings (as to the latter, see the discussion in TCWF v LKKS (No 1) [2014] 1 HKLRD 896 at [354] to [368]).  However, these jurisdictions were developed in the special contexts of those types of cases which have no parallel in PIL.

61.  In Joseph Owen Davies v Eli Lilly & Co [1987] 1 WLR 1136, the English Court of Appeal held, in a test case situation, that notwithstanding Order 62 Rule 3(3), the court had the power to make an anticipatory costs order to the effect that any orders for costs against any plaintiffs in the lead actions should be borne proportionately by all the plaintiffs in all the actions covered by the test case.

62.  Based on that decision, Dyson J held in the CPAG case, supra, that the court had the power to make a pre-emptive costs order in PIL.  His Lordship then discussed the circumstances in which such an order could properly be made at pp.353-8.  He acknowledged the applicability of the general rule of costs following the event in ordinary judicial review applications (pp.355F to 356E).  The foundation for departure from this general rule was the general importance of and significant public interest in having a particular question resolved by the court (p.354E).  He came to the view that such an order should only be made in exceptional cases, primarily by reason of the uncertainty at the early stage of the proceedings as to whether the issue put forward by an applicant was of sufficient public importance (p.357A) and the insufficient assessment of the merits of the case (p.357D to F) notwithstanding the grant of leave.  His Lordship pinpointed the difficulty at p.358B to C in these words (which were echoed by Mr Mok in his submissions) :

“ What the court is being asked by the applicants to do is to say, in advance, that a public body should subsidise proceedings that have been brought against it, and to do so even at a time when the court has an incomplete appreciation of the merits of the claim, and when it may also be unable to assess properly the extent of the general public importance of the issues raised by the proceedings. I cannot accept that a departure from the basic rule that costs should follow the event is justified in such circumstances.”

63.  However, Dyson J went on to accept that there could be exceptional cases where the court could indeed form a view on whether an issue raised was of sufficient general public importance (see p.357C) at an early stage.  On that basis, he formulated the criteria for making a PCO as follows :

“ I conclude, therefore, that the necessary conditions for the making of a pre-emptive costs order in public interest challenge cases are that the court is satisfied that the issues raised are truly ones of general public importance, and that it has a sufficient appreciation of the merits of the claim that it can conclude that it is in the public interest to make the order. Unless the court can be so satisfied by short argument, it is unlikely to make the order in any event. Otherwise, there is a real risk that such applications would lead, in effect, to dress rehearsals of the substantive applications, which in my view would be undesirable. These necessary conditions are not, however, sufficient for the making of an order. The court must also have regard to the financial resources of the applicant and respondent, and the amount of costs likely to be in issue. It will be more likely to make an order where the respondent clearly has a superior capacity to bear the costs of the proceedings than the applicant, and where it is satisfied that, unless the order is made, the applicant will probably discontinue the proceedings, and will be acting reasonably in so doing.”

64.  On the facts of the CPAG case (and another case also before Dyson J), the court did not grant any PCO.

65.  Given the rationale for departure from the general principle, the first and second criteria are the necessary (though not sufficient) conditions for the making of a PCO.  These criteria are in line with the Hong Kong jurisprudence on PIL.  In Chan Wai Yip Albert v Secretary for Justice, supra, Hartmann J followed the CPAG case in granting a PCO.

66.  In Corner House, supra, the English Court of Appeal affirmed the jurisdiction of the court to grant a PCO and modified the second criterion.  The Court of Appeal alluded to the character of public law dispute, the role of the public authority in such proceedings and identified the elucidation of public law as the ground for departure from the general rule : see [37], [68] to [70].  The second criterion was modified because Dyson J had laid emphasis on a short hearing in an application for a PCO. In the English experience, the requirement that the court attained a sufficient appreciation of the merits of the claim in such a short hearing had a tendency to preclude the making of a PCO in a case of complexity : see [71].  The Court of Appeal recast the second criterion at [73] as follows :

“ No PCO should be granted unless the judge considers that the application for judicial review has a real prospect of success and that it is in the public interest to make the order.”

67.  The Court of Appeal also envisaged that an application for a PCO should be disposed of on paper and if a hearing was required it should not take more than an hour : see [79].  It did not address specifically the difficulty arising from the uncertainty at the early stage of the proceedings alluded to by Dyson J.  Instead, at [73], the Court of Appeal said :

“ It commonly happens when a court has to take an important decision at an early stage of proceedings that it must do no more than conclude that the applicant’s case has a real (as opposed to a fanciful) prospect of success, or that its case is ‘properly arguable’. To place the threshold any higher is to invite heavy and time-consuming ancillary litigation of the type that disfigured the conduct of civil litigation 25 years ago.”

68.  In this connection, it is important to note the following in the Hong Kong context :

(1) When Corner House was decided, the English rules for application for permission to apply for judicial review were set out in Part 54 of the Civil Procedure Rules (“CPR”) which requires pre-action protocol to be followed as well as an acknowledgement of service by the putative respondent to be filed.  Hence, an English judge did not have to consider the matter at the permission stage without any input from the putative respondent.  It would therefore be easier for an English judge to identify the issues raised in the case and the extent of the public interest in having such issues decided by the court.

(2) In Hong Kong, as explained in Re Leung Kwok Hung HCAL 83 & 84 of 2012, unreported, 28 Sept 2012, unfortunately there were many instances where applicants for judicial review did not fully observe the duty of full and frank disclosure, and the papers placed before the court in an ex parte leave application were inadequate to facilitate the court to reach a fair view on the relevance of an issue and the merits of the application.  Notwithstanding the observations made by Litton PJ in Lau Kong Yung v Director of Immigration (1999) 2 HKCFAR 300, at 340E-G, a tedious and unduly lengthy Form 86 which is unhelpful in elucidating the real issues in the case remains a not uncommon phenomenon in this jurisdiction : see by way of example the observations of Chow J in Ho Loy v Director of Environmental Protection HCAL 21 & 22 of 2015, 22 Dec 2016 at [140] to [142].

(3) At [73] of Corner House, the English Court of Appeal set the merit threshold for a PCO at a real prospect of success, the same threshold for permission to apply for judicial review to be granted.  However, as discussed above, with the approval by the Court of Final Appeal of Chan Noi Heung in Leung Kwok Hung v President of the Legislative Council (No 2), supra, as a matter of Hong Kong law, the grant of leave is not conclusive in terms of the satisfaction of the merit threshold for departing from the general rule when considering whether a Chu Hoi Dick type of costs order should be made at the end of the proceedings.

(4) The upshot of all this is that in Hong Kong, it would usually take a longer process for the court to reach a provisional view with some confidence that it is in the public interest to grant a PCO in a particular piece of litigation.

69.  The second criterion in the Corner House guidelines at [74] is that the public interest requires that the issue in question should be resolved.  It must be implicit in this criterion that the issue should be a legal issue as only legal issues, as opposed to, say, political issues, could properly be resolved by the court.  In this context, a legal issue, however, is not confined to a point of law.  It may encompass a review of the legality of acts by the executive : see [52] of Corner House and Chu Hoi Dick, supra at [18] to [20].

70.  The second criterion (it is in the public interest to resolve a particular issue by the court) is not to be determined simply by reference to the first criterion (it is an issue of general public importance).  Further, it cannot be determined simply by assessing the prospect of success.  At the last sentence at [73] of Corner House, the English Court of Appeal referred to a real prospect of success “and that it is in the public interest to make the order” (our emphasis).  A similar formulation appears in the second criterion of Dyson J in the CPAG case.

71.  The court has to consider if it is in the public interest to resolve the issue in the context of the particular piece of litigation in question.  In England, this consideration is now explicitly stated in Section 88(7)(c) of the CJCA which provides as a criterion for public interest proceedings that “the proceedings are likely to provide an appropriate means of resolving [an issue of general public importance]”.  In our jurisdiction, in addition to an issue being a legal issue, the court should, in our view, take into account if the case in question provides a proper platform for the determination of the issue, involving an applicant with adequate knowledge and legal representation putting forward proper and responsible submissions for the court’s consideration.  It should be remembered that our judicial process is adversarial in nature and judges depend in no small measure on the assistance provided by counsel.  Thus, the quality of submissions that may be advanced has a direct bearing on whether a proper resolution of an issue can be achieved.  It is not in the public interest to have a complicated issue or issues resolved by the court in the absence of proper and well researched adversarial arguments.

72.  The Canadian jurisprudence since British Columbia (Minister of Forests) v Okanagan Indian Band [2003] SCR 371[4] is also relevant in the elucidation of the public interest criterion, in our present discussion, though the Canadian Supreme Court considered the matter in that case in the context of an advance costs order (viz. an order requiring the defendant to underwrite the costs of the claimant, an order which neither the English courts nor the Hong Kong courts have the power to make – see below).

73.  The Supreme Court had regard to the exceptional nature of an advance costs order in Little Sisters Book and Art Emporium v Commissioner of Customs and Revenue [2007] 1 SCR 38.  The court held that bringing an issue of public importance to the courts will not automatically entitle a litigant to preferential treatment in costs.

74.  Bastarache and Le Bel JJ explained the rationale for an advance costs order at [35] to [44].  The following observations are relevant for our purposes :

(a) An advance costs order is even more exceptional than the departure from costs following the event in PIL at the end of the litigation and should be rare : see [36];

(b) An application for such an order should only be entertained if a litigant establishes that it is impossible to proceed with the trial and await its conclusion, and if the court is in a position to allocate the financial burden of the litigation fairly between the parties : [ibid];

(c) The court must decide in view of all the circumstances whether the case is sufficiently special that it would be contrary to the interests of justice to deny the advance costs application, or whether it should consider other methods to facilitate the hearing of the case : see [37];

(d) It does not mean that every case of interest to the public will satisfy the test.  The justice system must not become a proxy for the public inquiry process, swamped with actions launched by test plaintiffs and public interest groups : see [39];

(e) An advance costs award is neither a substitute for, nor a supplement to legal aid or other programmes designed to assist litigants to take action : see [40].  Courts should not seek on their own to bring an alternative and extensive legal aid system into being as this would amount to inappropriate judicial overreach : see [44].

75.  McLachlin CJ also emphasized the exceptional nature and rarity of this kind of order.  She traced the rationale for making such an order to the equitable jurisdiction of the court to make interim costs order if the poverty of the person will not allow her to carry on the cause, citing Jones v Coxeter (1742) 2 Atk 400, 26 ER 642.  The jurisdiction should only be exercised where it is necessary to do so to avoid unfairness or injustice : see [83].  Then at [102] to [105], the Chief Justice discussed the requirement of special circumstances.  At [103], the rationale was explained :

“ The reasons for this stricture are apparent. They lie in the general rule that parties must bear the costs of their litigation, subject to post-judgment costs orders. It is an extraordinary and unusual thing to make a defendant pay not only its own litigation expenses, but to assist the plaintiff in bringing the case against him. Cases raising issues that transcend the plaintiff’s individual interest, are of public importance and are unresolved, are legion. The Court in Okanagan did not intend interim costs to be available in all such cases …”

And at [105], the Chief Justice elaborated :

“ What elevates a case to the special and narrow class where advance costs may be ordered cannot be determined by precise advance description. Generally, however, an award should be made only if the court concludes that issues raised are of high importance and are unlikely to proceed in the absence of an advance costs order, thereby producing a serious denial of justice. The injustice at stake here is … the injustice of denial of an opportunity to have a vital … public issue judged and resolved by the courts.”

76.  In the subsequent case of Rex v Caron [2011] 329 DLR (4^th) 50, Binnie J in the Supreme Court summed up the Okanagan jurisdiction at [6] as follows :

“ Okanagan was based on the strong public interest in obtaining a ruling on a legal issue of exceptional importance that not only transcended the interest of the parties but also would, in the absence of public funding, have failed to proceed to a resolution, creating an injustice.”

77.  As we have said, the Supreme Court of Canada was considering the matter in the context of an advance costs order providing for the payment of the costs of the claimant.  This is obviously something much more draconian than a PCO.  In England and Wales, the Court of Appeal held in Corner House at [77] that in light of the decision of the House of Lords in Holden & Co v Crown Prosecution Service (No 2) [1994] 1 AC 22, the courts do not have the power to make such type of order.  In a nutshell, making an advance costs order is regarded as an impermissible act of judicial legislation when Parliament has not seen fit to establish any central fund to meet such contingency.  The recommendation of the Law Commission at [10.6] of the Report on Administrative Law --- Judicial Review and Statutory Appeals, Law Com No 226 (26 Oct 1994) to set up such a fund, repeated in Lord Woolf’s Final Report on Access to Justice (July 1996) at p.225, has not been accepted.

78.  Whilst we have not undergone a similar public consultation exercise in Hong Kong, the legal aid policy in Hong Kong is encapsulated in the Legal Aid Ordinance and the legislature has not set up another public fund or source of fund to meet the costs of unsuccessful litigants bringing PILs.  The rationale in Holden & Co v Crown Prosecution Service (No 2), supra, is equally applicable in Hong Kong.  Thus, Hong Kong courts also do not have the power to circumvent this limitation via the backdoor by making an order against a public authority to meet the costs of an unsuccessful applicant in PIL.

79.  Notwithstanding that, the principles discussed in Little Sisters, supra, mentioned above are germane in the present context, albeit they should be applied with moderation in light of the relatively less draconian nature of a PCO.  In Canada, those principles were applied in Lockridge v Ontario (2012) 350 DLR (4^th) 720 in relation to an application for a PCO.

80.  Since we are not concerned with an advance costs order underwriting the costs of the applicant, ex hypothesi if the issue is resolved against the applicant (and it is in that scenario that a PCO assumes the greatest significance), he normally would have to bear his own costs.  If the court finds the case coming within the PIL criteria in Chu Hoi Dick, it may exonerate the unsuccessful applicant from his liability for the costs of the respondent.  However, as demonstrated by Chan Noi Heung, despite the grant of leave and the raising of an issue of general importance, the court may conclude after hearing the substantive judicial review application that the case does not come within the PIL criteria and order the unsuccessful applicant to pay costs.

81.  To overcome the potential injustice to a respondent occasioned by a PCO being made in a case which after the substantive hearing turns out not to be a PIL case, there has to be some additional justification compelling such an exceptional measure to be adopted.  Thus, at the interlocutory stage when the court is asked to assess whether a PCO should be made without knowing with some certainty that the PIL criteria would be satisfied at the end of the day, we are of the view that the court should bear in mind the following additional considerations (on top of those set out at [70] and [71] above) which are germane in assessing whether a PCO should be made in the public interest :

(a) Because of the lack of full understanding of the issues and their merits at the interlocutory stage, a PCO represents a more exceptional departure from the general rule of costs following the event as compared with a Chu Hoi Dick order made after judgment on account of PIL;

(b) The mere raising of a point of general public importance by an altruistic litigant (viz. one having no private gain or interest in the proceedings) is not a ground for the making of a PCO.  The issue raised must be sufficiently special so that it would be contrary to the public interest and the interests of justice to deprive the court of the opportunity to adjudicate on the same in this particular case;

(c) As the applicant would have to fund his legal representation and as appropriate legal representation is necessary for the proper determination of an issue of such importance, and since a conditional fees agreement is not permitted in this jurisdiction, the court should be provided with information on how the applicant’s litigation is to be funded.

82.  In coming to the above conclusion, in particular consideration (b), we have not lost sight of Mr Kat’s submissions based on post-Corner House jurisprudence in England, in particular the judgment of the English Court of Appeal in R (Compton) v Wiltshire PCT [2009] 1 WLR 1436.  In that case, the majority (Waller and Smith LJJ) held that there was no additional requirement of exceptionality apart from the criteria set out at [74] of Corner House.  Instead, the reference to exceptionality was only a prediction as to the effect of applying the relevant principles : see [24] and [82].  Buxton LJ disagreed.  In a powerful dissent, his Lordship explained why a PCO should not be granted in the case before the court as it was not, on any view, an exceptional case.  The decision of the majority in Compton was endorsed in the subsequent Court of Appeal decision in R (Buglife) v Thurrock Thames Gateway Development Corp [2009] 1 Costs LR 80, a challenge to a planning decision on environmental grounds in which those representing Buglife were funded by a conditional fee agreement.

83.  With the greatest respect, irrespective of whether exceptionality should be regarded as an additional requirement, the exceptional nature of a PCO (and its potential injustice when it is granted in a case which ultimately cannot satisfy the PIL criteria) must inform the court on its assessment of whether it is in the public interest to grant the same.   If the criteria were applied in a manner which would result in PCOs being granted in cases which had no special significance from the public law point of view, in our judgment that would be clearly inappropriate, given that there is adequate provision for access to justice by way of our legal aid regime.

84.  In the Hong Kong context, with our experience on the funding of public law cases by legal aid in the past two decades, including public law challenges in important environmental cases, we do not find a compelling case for the revolutionary liberalization of the PIL costs regime as has been gone through in England in terms of the post-Corner House jurisprudence.  The English developments culminated in the recent legislative changes in the form of Part 4 of the CJCA.  It is not for us to comment on those changes in the English context.  In the Hong Kong context, it suffices for us to say that under our legal aid regime, it is unimaginable that the scenario in In re appeals by the Governing Body of JFS [2009] 1 WLR 2353 would occur in Hong Kong, and as stated above we believe our legal aid regime has so far done a good service to promote and facilitate access to justice in public law cases.

85.  Before Compton, there had been two studies leading to the publication of reports relevant to the development of PCOs in England: the report of a working group on facilitating public interest litigation chaired by Maurice Kay LJ published in July 2006 and a report on Access to Justice in Environmental Cases by Sullivan J in May 2008.  Those reports clearly influenced the decision of the majority in Compton and Waller LJ referred to them at [18] and [19] of his judgment.

86.  In the report by the working group chaired by Maurice Kay LJ, though there were references to Article 9 of the Aarhus Convention and the relevant European Directives at [41] to [44] (Article 9 of the Convention requires these proceedings must not be “prohibitory expensive”), the discussion in the report was much broader.  It was the consensus of the working group that to satisfy the public interest requirement for a PCO to be granted, it was not enough that the case should raise some public law issues or even significant ones as this would bring most, if not all, judicial review cases within the scope of PCO : see [71]. 

87.  The Sullivan report contained references to the Aarhus Convention.  Though the Aarhus Convention is only applicable in environmental cases, Waller LJ took the view that the rules should be the same for all public law cases : see [20] of Compton.

88.  Subsequent cases highlighted that the requirement in the Aarhus Convention (against the background of inadequacy of legal aid in England based on the policy of litigation funding by conditional fees agreements) had influenced the development of PCOs by the English courts : see Morgan & Baker v Hinton Organics (Wessex) Ltd [2010] 1 Costs LR 1; R (Garner) v Elmbridge Borough Council [2011] 1 Costs LR 48.  However, the European Court still held that such developments fell short of the requirement under the relevant Council Directive : see R (Edwards) v Environment Agency (No 2) [2013] 1 WLR 2914 and R (Edwards) v Environment Agency (No 2) [2014] 1 WLR 55.  Eventually, these decisions led to statutory changes setting up two different regimes: one for environmental cases and one for other cases.  We shall not go into the details of such developments in this judgment as the Aarhus Convention and the Council Directive have no application in Hong Kong.  As we said above, we do not see a compelling case in Hong Kong for similar developments in this jurisdiction.

D4. Pro-bono representation and costs capping orders

89.  It was held in Corner House that the court would grant a PCO more readily if a claimant is represented by lawyers on a pro bono basis.  We would endorse that approach.  Whilst we accept Mr Kat’s submissions that it should not be a pre-condition for the grant of a PCO that lawyers for the applicant must act on a pro bono basis, in cases where the lawyers do act on a pro bono basis it must be a relevant consideration.  The implication of the applicant’s lawyers acting pro bono is that the respondent will be subject to minimal exposure to costs even if the applicant succeeds at the end of the day.  Whilst it would not by itself be a sufficient ground for the grant of a PCO, this would be a weighty consideration if the other criteria were satisfied.  At the interlocutory stage, if the court is satisfied that there is an issue of general public importance of a special nature which calls for resolution by the court and the applicant’s case has a real prospect of success, the risk of unfairness to the respondent in the case of a wrong assessment by reason of the handicap at the interlocutory stage will be balanced by the lack of costs exposure on the part of the respondent if the claim succeeds due to the fact that the applicant’s lawyers act on a pro bono basis.

90.  This advantage is reduced if lawyers for the applicant are not acting on a pro bono basis.  In that event, the court must consider if a PCO should provide for costs capping on the costs of both sides.  This is the second unusual feature of a PCO mentioned at [57] above.

91.  In Corner House, the Court of Appeal explained why there should be costs capping on the costs of both sides :

“ 76. …The purpose of the PCO will be to limit or extinguish the liability of the applicant if it loses, and as a balancing factor the liability of the defendant for the applicant’s costs if the defendant loses will thus be restricted to a reasonably modest amount. The applicant should expect the capping order to restrict it to solicitors’ fees and a fee for a single advocate of junior counsel status that are no more than modest. … The overriding purpose of exercising this jurisdiction is to enable the applicant to present its case to the court with a reasonably competent advocate … The beneficiary of a PCO must not expect the capping order that will accompany the PCO to permit anything other than modest representation, and must arrange its legal representation (when its lawyers are not willing to act pro bono) accordingly.” (our emphasis)

92.  There is no specific provision in our rules for the making of a costs capping order.  The English Court of Appeal in Corner House referred to some general provisions in the English rules under the CPR at [64] to [66].  Whilst section 51 of the Supreme Court Act 1981 is similar to Section 52A(1) of the High Court Ordinance, CPR r 44.3(1) is differently worded as compared with our Order 62 Rule 3.  Such difference, however, is not material since under our rules, we have a broad discretion on costs.

93.  The basis for a costs capping order, as explained in Corner House, stems from the overriding objective under CPR rr 1.1 and 1.2, in particular the objective in r 1.1(2): “dealing with a case justly includes, so far as is practicable (a) ensuring that the parties are on an equal footing … (d) ensuring that [the case] is dealt with … fairly …”

94.  The emphasis in our rules is not exactly the same.  We have underlying objectives in our Order 1A Rule 1.  There is no equivalence of CPR r 1.1(2)(a) in our rules though Order 1A Rule 1(d) stipulates ensuring fairness between the parties as one of the underlying objectives.  Further, our Order 1A Rule 2(2) provides that in giving effect to the underlying objectives, the court shall always recognize that the primary aim in exercising the powers of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.

95.  The commentator of Hong Kong Civil Procedure 2016 suggested that our Rule 1(d) has the same effect as promoting greater equality between the parties : see §1A/0/7.  This is in line with the recommendation of the Chief Justice’s Working Party on Civil Justice Reform : see [23] of the Executive Summary and [99] of the Final Report.  The initial drafts of Rule 1(d) were in terms as per the recommendation though in the final version the wording changed to that appearing in the Rules of the High Court (Cap 4A).

96.  Notwithstanding the difference in wordings, the concept of promotion of equality must fall within the broader concept of ensuring fairness between the parties.  With that objective in mind, our courts can exercise the discretion on costs in such a manner as to redress any inequality between the parties when it is consistent with the other underlying objectives to do so.

97.  The English Court of Appeal also referred to CPR r 3.1(2)(m) which gives the court an unqualified power to ‘take any other step or make any other order for the purpose of … furthering the overriding objective” : see [65].  We have a similar provision in our Order 1B Rule (2)(l).  Thus, a costs capping order is within the power of our courts to make if it is necessary to ensure fairness between the parties by way of addressing any inequality between them stemming from their different financial resources and the potential financial consequences of any costs order.

98.  Citing the case of King v Telegraph Group Ltd [2005] 1 WLR 2282, the English Court of Appeal explained how unfairness could arise from the disparity in the resources of the parties.  In that case, it was the unfairness in terms of the costs that would not be recoverable from the impecunious plaintiff which prompted the court to make a costs capping order.  The situation was generated by the fact that the plaintiff’s litigation was funded by a conditional fees agreement without the benefit of an ‘after the event’ insurance cover.  Hence, the plaintiff did not have to worry about his own costs though he would not have the means to pay the costs of the other side if he lost.  The unfairness was identified at [101] :

“ … It cannot be just to submit defendants in these cases, where their right to freedom of expression is at stake, to a costs regime where the costs they will have to pay if they lose are neither reasonable nor proportionate and they have no reasonable prospect of recovering their reasonable and proportionate costs if they win.”

99.  A costs capping order achieves equality by limiting the costs exposure on comparable if not entirely equal footing.  In the context of PIL, if a costs cap is imposed on the costs exposure of the applicant, it would be unfair to the respondent if the latter’s costs exposure is unlimited.  The English Court of Appeal in Corner House therefore held at [73] that there should be a costs cap on the costs of the applicant as well (unless the applicant’s lawyers acted on a pro bono basis).

100.  The requirements that costs caps be applied in both directions and the cap on the costs of the judicial review application should only allow for modest representation were upheld by the Court of Appeal in Buglife, supra, at [25] notwithstanding the recommendation to the contrary in Appendix 3 in the Sullivan Report.  

101.  In our judgment, bearing in mind that the justification for imposing costs caps in the first place is to ensure fairness between the parties, where they are to be imposed, they should be applied in both directions.  In pro bono cases, instead of imposing any costs cap, the court may simply make a PCO for no order as to costs between the parties.  Those cases aside, the court should impose costs caps on the costs exposure of both parties.  However, as explained in Buglife, supra, at [26], the costs caps in different directions need not be the same given the difference in the financial positions of the applicant and the respondent.  To facilitate a proper assessment in this regard, it is right that the court should have information on the financial resources available to a party.

102.  We also agree that normally the costs cap applied to the costs of the applicant should be modest though we do not think one should confine it to the costs of junior counsel.  Instead, the costs cap must be proportionate to the reasonable costs to be incurred in light of the complexity of the issues in the case.  At the same time, the discrepancy between the cap on the costs of the applicant and that on the costs of the respondent should not be out of proportion to the discrepancy in their financial resources.  Otherwise, the order cannot be justified as a measure to ensure fairness between the parties.

103.  In this connection, costs caps also serve the important function of imposing some discipline on the procedural steps that should be taken and the responsible exercise of professional judgment on the arguments to be advanced in the proceedings.

D5. The financial resources available to an applicant

104.  Criteria (iv) and (v) of the Corner House guidelines are in these terms :

“ (iv) having regard to the financial resources of the applicant and the respondent and to the amount of costs that are likely to be involved, it is fair and just to make the order; and

   (v) if the order is not made the applicant will probably discontinue the proceedings and will be acting reasonably in so doing.”

105.  Mr Kat submitted that as the guidelines should be applied with flexibility, these criteria should not be regarded as preconditions which an applicant must satisfy before a PCO can be made.  Instead, they should be taken as part of the overall relevant circumstances.

106.  We do not accept this submission.  Whilst there is scope for argument as to the extent to which the presence of private interest would militate against the making of a PCO, we do not regard criteria (iv) and (v) as non-essential elements.  As we have said, criteria (i) and (ii) as discussed above are necessary but not sufficient justification for the grant of a PCO.  In The Plantagenet Alliance Ltd v Secretary of State for Justice [2013] EWHC 3164 (Admin), a case on which Mr Kat placed great reliance, the judge found that criteria (iv) and (v) were satisfied before making a PCO.  Under the regime of the CJCA, the English court has to consider the financial resources of the parties when determining whether to make a costs capping order and what its terms should be.  Section 88(5) of the CJCA provides for the making of rules to specify information of financial resources available, or likely to be available to an applicant in the application for a costs capping order.

107.  In principle, as the rationale for the making of a PCO lies in the injustice stemming from the inhibition of a party’s access to court on account of his financial ability to meet the potential liability for the costs of the respondent, the financial resources available to that party must be relevant in the determination of the fairness of a PCO, which would shield him from such liability no matter how much costs the respondent may have to incur in successfully resisting the claim.  As submitted by Mr Wong, a person who has substantial means would not be able to demonstrate that it is fair and just to grant him a pre-emptive exemption from the usual costs consequence of litigation.  The refusal to proceed on account of the risk of costs exposure when a party has the means to bear such risk is simply a matter of voluntary choice of that party.  It is not an inhibition of his access to court on account of his financial ability.  This is not to say that a wealthy party cannot have the benefit of bringing PIL with an absolution from liability for costs.  Such a party can still enjoy the protection afforded by the Chu Hoi Dick line of cases if at the end of the day the court is of the view that the PIL criteria are satisfied.

108.  As McLachlin CJ said in Little Sisters, supra, a departure from the usual course of dealing with costs is only justified if it is necessary to do so to avoid unfairness or injustice.  Concerns with costs exposure are normal incidents of modern litigations.  Many litigants choose to settle private claims on account of costs considerations.  Such costs concerns per se could not be a ground for the making of a PCO.  In the context of a PCO, the situation is unjust only if proceedings (which prima facie raise an issue of general public importance which it is in the public interest to be determined by the court) are reasonably aborted due to the lack of means of the applicant to meet the costs exposure.  For a litigant who can afford to pay, we cannot see any injustice in requiring him to bear the costs consequence if the court ultimately holds that the PIL criteria cannot be satisfied.  If he does not have confidence in making good his case in terms of the PIL criteria and chooses to abandon the proceedings in the meantime, it is only a matter of his own choice.  No injustice is involved.

109.  In this connection, the following observations of Bastarache and Le Bel JJ in Little Sisters, supra, at [37] are enlightening :

“ … These orders must be granted with caution, as a last resort, in circumstances where the need for them is clearly established. …If litigants raising public interest issues will not always avoid adverse costs awards at the conclusion of their trials, it can only be rarer still that they could benefit from advance costs award. An application for advance costs may be entertained only if a litigant establishes that it is impossible to proceed with the trial and await its conclusion …”

110.  Thus, the first of the three Okanagan absolute requirements was summarized as follows :

“ The party seeking interim costs genuinely cannot afford to pay for the litigation, and no other realistic option exists for bringing the issues to trial --- in short, the litigation would be unable to proceed if the order were not made.”

111.  Putting the same point in the Hong Kong context, Chan Noi Heung supra illustrates that the court’s assessment of the public interest in having a public law claim litigated at the time when leave was granted could be different from such assessment after the substantive hearing.  Fairness ordinarily dictates that the court should only determine if the PIL criteria are satisfied to warrant the exemption of an unsuccessful applicant from his costs liability to the successful respondent after the substantive hearing.  However, the court may take the exceptional course of making a PCO if the withholding of such an order will result in injustice because the applicant cannot reasonably be expected to carry on with the litigation due to his lack of means to meet his potential liability on costs.  If a litigant does have the means to meet his potential liability, there is no injustice in leaving the incidence of costs to be determined after the substantive hearing and there is no justification for any PCO to be made.

112.  Mr Kat laid emphasis on the need to apply the guidelines in Corner House with flexibility, an approach espoused by the authorities in England.  We have no problem with this proposition.  However, we do not accept that such an approach may lead to a PCO being granted even though an applicant cannot show the above mentioned injustice arising from his lack of means.

113.  For these reasons, we reject Mr Kat’s arguments on Ground 1 in the Notice of Appeal.  Though criteria (i) and (ii) in the Corner House guidelines are often described as the overriding purposes for the exercise of the PCO jurisdiction, in our view it by no means follows that the other criteria need not be fulfilled.  As explained above, without fulfilment of criteria (iv) and (v), a court in this jurisdiction should not take the exceptional course of making a determination on the PIL status of a set of proceedings at an interlocutory stage when parties have not placed before it all the relevant materials and full arguments.

114.  Further, the rationale of having criteria (iv) and (v) as conditions for the grant of a PCO must inform the court on the approach to the financial resources of an applicant which we shall discuss at greater length in dealing with Ground 2.

E. LACK OF PCO UNCONSTITUTIONAL? – GROUND 3

115.  Mr Kat advanced the bold submission under Ground 3 in the Notice of Appeal that a PCO regime based on the Corner House guidelines is unconstitutional as being in contravention of a litigant’s right guaranteed under Article 10 of the Hong Kong Bill of Rights and Article 35 of the Basic Law.  Counsel submitted that the constitutional right of access to court embodies the notion of equality of arms and each party must be afforded a reasonable opportunity to present his case under conditions that do not place him at a substantial disadvantage vis-à-vis his opponent.  He submitted that the right is rendered nugatory by the ordinary rule as to costs as no ordinary, individual member of the public or small NGO can reasonably be expected to foot or risk liability for the Government’s legal costs.

116.  However, none of the authorities cited by him support such a bold submission.  Airey v Ireland (1979) 2 EHRR 305 and Pine v Law Society [2001] EWCA Civ 1574 concerned the non-availability of legal aid in the context of the right to a fair trial under Article 6 of the European Convention on Human Rights.  According to these cases, there is no general right to legal aid in civil cases.  The right to fair trial is only infringed in exceptional circumstances, where the withholding of legal aid would make the assertion of a civil claim practically impossible, or where it would lead to an obvious unfairness in the proceedings.

117.  It is difficult to see how these authorities could assist Mr Kat when, as we explained above, there is an adequate legal aid regime in Hong Kong to support PILs.  There is no challenge to the constitutionality of the restriction in the legal aid regime regarding non-availability of legal aid to body corporates.  Further, as held by the European Court at Strasbourg in MAK & RK v United Kingdom [2010] ECHR 363, a legal aid system can only operate if machinery is in place to enable a selection to be made of those cases qualifying for it.  We have no reason to hold that the exclusion of body corporates from the scope of legal aid is disproportionate.

118.  In any event, as discussed above, the PCO regime is not meant to function as an alternative legal aid regime.  In Hong Kong the court has no power to make an advance costs order requiring a respondent to fund the costs of an applicant in public law litigations.  Mr Kat accepted in the course of his submissions that he is not going that far in this appeal.

119.  In terms of potential costs liabilities towards the other parties, Mr Kat cited no authority to support the proposition that a costs rule requiring an unsuccessful litigant to pay the costs of his successful opponent can be an infringement of the constitutional right of access to court by reason of the inhibitive effect arising from costs concerns.  Whilst Dombo Beheer BV v The Netherlands (1994) 18 EHRR 213 referred to the requirement of equality of arms, the matter was discussed in the context of the procedural imbalance in terms of material witnesses that could or could not be called.  We cannot extrapolate from that judgment a proposition that there has to be redress for concerns as to potential liability for costs.

120.  Whilst there are dicta in other cases cited by Mr Kat commenting on the inhibitive effect of concerns as to costs, we do not find any statements which remotely suggest that the criteria in the Corner House guidelines are so restrictive that they are unconstitutional.

121.  In the discussion at Section D, we have adapted the Corner House guidelines to meet the circumstances in Hong Kong bearing in mind the exceptional nature of a PCO and balancing the competing interests of different parties involved in public law litigations.  It should be borne in mind that the PCO regime operates against the background of the existing PIL jurisprudence which already provides some assurance for altruist litigants suing for public interest.  Based on the adapted guidelines, a NGO or an individual who cannot pass the means test under our legal aid regime can apply for a PCO.  The criteria in the guidelines, as explained above, serve the legitimate interest of striking a fair balance between the conflicting interests involved.  Mr Kat has not even begun to articulate why such guidelines are not proportionate.

122.  For these reasons, we reject Mr Kat’s Ground 3.

F. THE FINANCIAL RESOURCES AVAILABLE TO THE APPLICANT – GROUND 2

123.  Ground 2 involves both law and facts.

124.  On law, we have for the reasons stated above decided that in determining whether to grant a PCO, the courts must be provided with the necessary information on how the applicant’s own costs are to be funded, including its own financial ability and the financial resources available to him : see [81], [101] and [107].  The applicant bears the burden of providing the necessary information by way of credible and sufficient evidence.

125.  Where the applicant is a limited company said to be of no or scanty financial ability of its own, financial resources available to it would necessarily include financial assistance that its members or shareholders, directors or backers of the litigation can reasonably be expected to provide.  It follows that the applicant must provide information on the financial resources of these individuals or bodies and if they are financially capable but are unwilling to fund the litigation, the reasons why.  Requiring the corporate applicant to provide such information does not involve lifting its corporate veil as such.  It only ensures that the court is provided with all the necessary financial information for it to make an informed decision on whether a PCO should be granted.

126.  If the applicant, be it individual or corporate, is unwilling or unable to provide all the necessary financial information, or if the evidence adduced is not satisfactory, the court will refuse the PCO application in the exercise of its discretion.

127.  This disposes of all the arguments on law to the contrary by Mr Kat.

128.  As regards the evidence adduced by Mr Zimmerman on behalf of the applicant on its financial resources, the Judge summarized it at [57] of his judgment thus :

“ 57. Under this consideration, the applicant has filed affirmations made by Mr Zimmerman to the following effect :

(1) Its current bank account balance as at 30 June 2014 was only $170,094.74. The applicant was expected to have a negative net income that would result in it exhausting its case by 31 December 2014. It does not carry on any profit-making business and has no assets of any real value against which it might be able to obtain funds by way of loan.

(2) The applicant’s directors have already dug into their personal resources to fund its activities and Mr Zimmerman “do not believe they would be willing or able to fund this action further”. Further, Mr Zimmerman had reported the status of the case to the Board of Directors and asked for their personal and financial support for the applicant’s costs. They had also been informed of the applicant’s exposure to costs of the respondent should it lose the judicial review. The other directors have told him that they were not in a position to provide additional funds to the applicant to pursue this case or expose themselves to an open commitment to the Government’s costs.

(3) It is difficult to raise money from outside sources, whether corporate bodies or the general public at large, as there are many environmental and civic causes which are continuously calling upon them for support. The applicant had at the commencement of the judicial review raised sponsorship of HK$50,000 through other concern groups, and Mr Zimmerman does not “believe” that the applicant or he himself would be able to raise more than this amount to pay legal costs and the applicant’s own legal costs for this project.

(4) Given the applicant’s limited resources, the applicant has obtained pro bono services from solicitors and counsel, who have agreed to act up to the decision of the PCO.

(5) In his 1^st affirmation at paragraph 19, Mr Zimmerman deposes that if a PCO order is not made to protect the applicant from exposure to costs, the applicant will abandon the applicant from exposure to costs, the applicant will abandon the proceedings. In his second affirmation at paragraph 6, Mr Zimmerman further deposes that if no PCO is made, the applicant “would be unable to continue these proceedings. It will not be able to meet its own costs, much less the costs of the Respondents from its own resources…”.

129.  In his 6^th affirmation filed on 30 May 2016, Mr Zimmerman confirmed that as at that date the applicant’s financial position remained qualitatively unchanged except that the current balance of the applicant as at 30 April 2016 was HK$234,984.67.

130.  In his 7^th affirmation filed on 1 November 2016, Mr Zimmerman reiterated :

“ 18. Neither the Directors nor myself were eligible for legal aid or willing to expose ourselves to the risk of substantial legal costs for a case in which we had no personal interest (other than that shared by the public and [the applicant] itself), even though it was clearly a community interest championed by [the applicant]. However, the directors did agree to allow [the applicant] to bring proceedings if our lawyers would proceed on a pro bono basis and if [the applicant] could obtain a PCO.”

131.  The applicant has so far paid HK$30,000.00 to its solicitors on account for disbursements.  As at 27 May 2016, disbursements (including court fees) totaling HK$27,307.80 have been incurred.  Similar disbursements in the sum of HK$15,000.00 to HK$20,000.00 are likely to be incurred in the main proceedings.  Up to now, the applicant’s legal team has been acting on a pro bono basis.  As at 17 May 2016, the estimate costs to be incurred and anticipated costs are in the tune of HK$2,000,000.00.

132.  In short, the financial information provided by the applicant up to date remains very much the same as it was before the Judge below.

133.  In our judgment, on the evidence available before the Judge, he was entirely correct to have sought evidence on the directors’ financial resources in order to verify the assertion of their inability or unwillingness to finance the litigation.  When there was no such evidence other than the bare assertion that the directors (and Mr Zimmerman as well) were unwilling to fund the litigation because of their unwillingness to expose themselves to the risk of costs associated with the proceedings, the Judge was perfectly entitled to find that as a matter of evidence, the applicant had not discharged its burden to show that it was genuinely not in a position to fund the litigation or to bear the respondent’s costs in the main proceedings.  We can see no basis to disturb the Judge’s finding.  The evidence now before us does not make the position any materially different because, as observed, the evidence remains effectively the same as it was before the Judge.

134.  We reject Ground 2.

G. DISPOSITION

135.  We dismiss the appeal.

136.  On costs, we think it is fair and reasonable not to make any order as to costs.  We so order.

137.  Last but not least, we would like to thank counsel for their able assistance in this matter.  In particular, we would like to commend Mr Kat, his juniors and his solicitors for providing pro bono service to the applicant.