The Real Estate Developers Association of Hong Kong v. The Town Planning Board

HCAL 58/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 58 OF 2011

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DECISION ON COSTS

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1.On 3 February 2015, this court handed down its judgment (“the Judgment”) allowing the applicant (“REDA”)’s judicial review and quashing the subject four decisions made by the respondent Town Planning Board (“the TPB”).  In the Judgment, the court further made an order nisi (“the costs order nisi”) that costs of the judicial review be to REDA, with certificate for two counsel, to be taxed if not agreed.

2.This is now the TPB’s application by summons to vary the costs order nisi to the extent that it shall only bear half or 60%[1] of REDA’s costs.

3.The primary basis of the TPB’s contention in support of this application is that, although REDA’s judicial review was ultimately successful, REDA had failed in a number of the major grounds raised in support of the judicial review, which grounds had significantly increased time and costs of the proceedings.  In the premises, it would not be just and fair to require the TPB to bear all of REDA’s costs in the judicial review.

4.REDA resists this application on the fronts that there should be no variation at all, or if variation is warranted, the quantum of deduction should be much less than what the TPB has asked for.

5.For the purpose of this decision, and for convenience, the court would adopt the expressions and abbreviations used in the Judgment unless otherwise stated.  This decision should also be read together with the Judgment.

6.As I have said in Fairbo Investment Ltd v Appeal Tribunal (Buildings) (unreported, HCAL 35/2012, 27 January 2015) at paragraph 2, the relevant principles governing costs are as follows: 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 prepared to depart from the general rule.  Cf: Commissioner of Inland Revenue v HIT Finance Ltd (No 2) [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, per 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).

7.In the present case, Mr Chan for the TPB submits that the court has rejected the following major grounds raised by REDA in support of the judicial review: (a) the ultra vires ground (see paragraphs 23-32 of the Judgment); (b) the systemic procedural unfairness ground (under which, there were a number of different attacks on the procedures generally)[2] (see paragraphs 33-97 of the Judgment); and (c) the constitutional ground (see paragraphs 129-131 of the Judgment).  These grounds were substantial grounds raised by REDA which resulted in substantial arguments and evidence being advanced by the parties.  As a result, significant costs and time had been incurred in the judicial review.  It would thus be unfair and unjust to require the TPB (which were successful in resisting these grounds) to bear REDA’s costs in these respects.

8.Mr Yu SC (appearing together with Mr Stock) for REDA in response says REDA was successful overall in the judicial review in successfully quashing all the challenged decisions made by the TPB.  The costs order must adequately reflect that position.  Further, it cannot be said that it was unreasonable for REDA to raise the above unsuccessful grounds.  Moreover, as remarked in the Judgment, REDA did not pursue in any substantive way the constitutional ground and thus it can hardly be said that this ground had caused a significant increase in costs and time.  In the premises, there are no exceptional circumstances to justify the departure from the usual and starting position of costs following the event.[3] In particular, it has been emphasised by the Court of Final Appeal that the court should not be too ready to depart from this general rule or else it will encourage unnecessary arguments which itself will increase costs.[4]  It is therefore fair and just for REDA to have all the costs of the judicial review.  Alternatively, Mr Yu SC submits that any deduction of costs should only be minimal to reflect these positions in the present case.

9.The above observations expressed by the Court of Final Appeal and relied on by REDA are consistent with the principles governing costs as I have mentioned above. As rightly submitted by Mr Chan, if it can be demonstrated in a case that the relevant unsuccessful grounds raised by the eventual winner of the litigation have significantly increased the costs and time incurred in the proceedings, this could be regarded as an exceptional circumstance to justify the departure from the usual costs following the event position, as it would then be unjust to require the losing party to bear all the costs, including the significant costs incurred by the wining party who is however unsuccessful over these grounds.

10.Applying these principles, I accept that the above unsuccessful ultra vires and systemic procedural unfairness grounds relied on by REDA did significantly increase the time and costs of the judicial review.[5]  Substantial evidence had been filed by REDA and extensive submissions had been made by the parties in relation to these grounds, in particular the procedural unfairness ground.  On the other hand, it must be noted that the evidence and submissions made in the systemic procedural unfairness ground (which was rejected by the court) were to a reasonable extent also relevant to the specific procedural unfairness ground (in which REDA was successful).[6] Thus, it cannot be said that all the time and costs incurred in relation to the systemic procedural ground represent time and costs incurred in a failed ground.

11.Taking all these into account in the round, I think it is fair and just in all the circumstances in the present case to deduct 20% of REDA’s costs in the judicial review to reflect the time and costs that had been significantly increased by pursuing the above unsuccessful grounds.

12.I therefore would vary the costs order nisi to the extent that the TPB should bear 80% of REDA’s costs in the judicial review.

13.As to the costs of this application, since neither party is fully successful, I think it is just and fair to make no order as to costs.  This no costs order shall become absolute 14 days from today.

Mr Benjamin Yu SC leading Mr Alexander Stock, instructed by Mayer Brown JSM, for the applicant

Mr Abraham Chan, instructed by Department of Justice, for the respondent