Aia International Ltd v. Appeals Tribunal of the Hong Kong Federation of Insurers and Another

HCAL 163/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 163 OF 2015

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Before: Hon Zervos J in Chambers

Dates of Written Submissions: 27 and 31 July and 3 August 2017

Date of Decision: 11 August 2017

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DECISION ON COSTS

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1.The Insurance Agents Registration Board and the Appeals Tribunal of the Hong Kong Federation of Insurers (the respondents), through single legal representation, actively participated in the present judicial review proceedings by contesting the application. They were unsuccessful for the reasons this Court gave in its judgment dated 20 July 2017.

2.When an inferior court or tribunal actively resists an application for judicial review which is unsuccessful, it faces the prospect of costs being awarded against it on the general principle that costs follow the event.  This was made clear by Lam VP in Orrico Philippe v MSAB [2015] 4 HKLRD 111, at paragraph 19, who ruled that the principles set out in R (Davies) v Birmingham Deputy Coroner [2004] 1 WLR 2739 should guide Hong Kong courts in deciding whether to award costs against an inferior tribunal, having previously referred to paragraph 47 of the judgment of Brooke LJ where he said:

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

3.In the exercise of the court’s discretion, although the starting point is that costs generally follow the event, it is entitled to deprive a successful party of whole or part of its costs because it had caused a significant increase in the length or costs of the proceedings by raising issues on which it was unsuccessful, even where it was not unreasonable for that party to have raised those issues.  A court will exercise its discretion in this regard, depending on all the circumstances and with due circumspection so as not to undermine the utility of the general rule that costs follow the event.  See Commissioner of Inland Revenue v HIT Finance Ltd (No 2) [2014] 4 HKLRD 412, at paragraph 7 per Bokhary PJ, and Zhuhai International Container Terminals (Jiuzhou) Ltd v Lo Hong Hoi, CACV 181/2011, 31 July 2012, unreported, at paragraph 33 per Kwan JA. 

4.The respondents accept that in the present case they fall into the category as described by Lam VP in Orrico Philippe for the reason that they actively opposed the judicial review. The respondents seek, however, to argue that the costs that the applicant would otherwise be entitled to should be apportioned on the basis that it was unsuccessful on its argument that the IARB was not entitled to make an order requiring payment.  That is not correct.  The applicant accepted the practice of the IARB or the Appeals Tribunal to require an insurer to repay premiums and cancel or reinstate policies as a result of the misconduct of an insurer’s agent.  They took issue with the payment in the present case as being outside the terms of the accepted practice, which remains to be resolved as explained in this Court’s judgment.

5.In the circumstances of the present case, after weighing the arguments on costs, I do not consider that it is appropriate to deprive the applicant of any of its costs.  I therefore order that the respondents pay the applicant’s costs to be taxed if not agreed.

Mr Robin McLeish, instructed by Winnie Mak, Chan & Yeung, for the applicant

Mr Jin Pao, instructed by Reed Smith Richards Butler, for the 1^st and 2^nd respondents