FAIRBO INVESTMENT LTD AND ANOTHER v. APPEAL TRIBUNAL (BUILDINGS)

HCAL 35 of 2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 35 OF 2012

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D E C I S I O N   O N   C O S T S

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1. This is the Building Authority’s application by summons to vary the costs order nisi to the extent that the applicants (who were successful in the judicial review in my Judgment handed down on 28 April 2014) should only have half of the costs of the application, or such reduction as the court considers fair and just in all the circumstances.  The costs order nisi is that the applicants should have the costs of the application to be taxed if not agreed.

2. It is not in dispute that in civil proceedings (including public law proceedings), the general rule is that costs should follow the event.  However, the court still retains a wide discretion to make a costs order which it thinks is just and fair in all the circumstances of the case.  In particular, it is now established that the court, in departure from the general rule, may disallow a successful applicant’s costs to reflect the fact that certain significant time and costs have been incurred in the litigation by reason of unsuccessful grounds raised in support of the claim or judicial review.  The exercise of that discretion does not necessarily require the showing that the unsuccessful grounds have been raised unreasonably or improperly.  However, it must be noted that any departure from the general rule must be approached with some due circumspection, noting the rationale behind the general rule, although the court in post CJR era may be more readily to be prepared to depart from the general rule.  Cf: Commissioner of Inland Revenue v HIT [2014] 4 HKLRD 412 at paragraph 7 per Bokhary PJ; Pfeifer GmbH v Cheung Hay Kit trading as Sun Wai Construction (CACV 245/2013, 29 October 2014, Kwan, Barma JJA, Poon J) at paragraph 20 per Kwan JA; R (M) v Croydon London Borough Council [2012] 3 All ER 1237 (CA) at paragraphs 60-62 per Lord Neuberger MR (as he then was).

3. In the present application, Mr Chan for the Building Authority mainly contends that the applicants had raised a substantial number of grounds in support of the judicial review which were unsuccessful.  These had raised significantly the costs of the application.  Counsel reminds this court to its own observations and reasons for the disposal of those grounds at paragraphs 33-38, 46-51, 57-60, 63-66, 68 and 92-99 of the Judgment.  This is underlined by the fact that most of those grounds had not been pursued by the applicants’ leading counsel in any realistic way at the hearing although they were contained in the skeleton and of course the Amended Form 86.

4. I agree with Mr Chan that these unsuccessful grounds had significantly increased the costs of the litigation in the sense that both the applicants and Mr Chan for the Building Authority had obviously had to spend much time to prepare and deal with each of these grounds.  Similarly, the court had to spend not insignificant time before the hearing to look at these grounds and the related written submissions made by both parties.

5. I therefore agree that, in light of the significant time and costs that had been incurred by these failed grounds, the applicants should be deprived of some of their costs despite of the fact that they were the eventual winner in the judicial review.  This is also to underline the court’s repeated reminders in the past to applicants in judicial review that they should not simply repeat all the grounds run before the relevant tribunal (or the decision maker) and should be more careful in selecting only those grounds that are seriously worth running in support of a judicial review so as not to increase the costs of litigation.  Cf: the observations in Pfeifer GmbH, supra, at paragraph 20.

6. In this respect, I am however of course conscious of the fact that Mr Neoh SC had not pursued most of these grounds at the hearing, which in turn had saved some time and costs in relation to the actual hearing.

7. I am also aware of Mr Neoh’s submissions that leave was given (either by the court or by consent for the amendments) to these grounds in support of the judicial review, although they had either not been pursued at the hearing or dismissed by the court.  Leading counsel therefore says those grounds were at least, on an ex parte examination, reasonably arguable with a realistic prospect of success.  I have taken this into account.  However, the considerations in the examination of the merits of the grounds in support of a judicial review at an ex parte leave stage are not necessarily the same as to those in relation to whether costs of the proceedings have been significantly increased by reason of the unsuccessful grounds.  As mentioned, unreasonableness or impropriety in raising the unsuccessful grounds are no longer considered as the necessary elements to justify the exercise of the discretion.  It must also be borne in mind that, post CJR, the parties and the court should also take into account of, among others, the reasonableness of the proportionality of the costs incurred in pursuit of all the grounds (including unsuccessful ones) in support of a claim.  See: O62 r 5(1) and O1A, r1.

8. In my view, having taken into account all these circumstances, and after revisiting the skeleton and materials filed initially in support of these grounds, I think it is fair and just to deprive one third of the applicants’ costs to reflect the extent of the costs that had been significantly incurred in this judicial review by the reliance on them.

9. In other words, I would vary my costs order nisi to the extent that the applicants shall have two-thirds of their costs of the judicial review to be taxed if not agreed, with certificate for two counsel.

10. I would also order that costs of this vary application be to the Building Authority, to be taxed if not agreed.

11. Lastly, I thank counsel for their assistance.