Leung Chun Kwong v. Secretary for The Civil Service and Another
Read the full judgment text of FACV 8/2018 on BabelCite. This Court of Final Appeal judgment was delivered on 6 September 2019 before Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Fok PJ, Mr Justice Tang NPJ, Mr Justice Gleeson NPJ.
Constitutional law – discrimination – sexual orientation – same-sex marriage – spousal benefits – tax assessment – remedial interpretation – relief – costs. Civil servant married same-sex spouse in New Zealand – Benefits Decision refusing spousal benefits and Tax Decision refusing joint tax assessment – judicial review – Court of First Instance granted relief – Court of Appeal allowed appeal in respect of Benefits Decision – appeal to Court of Final Appeal allowed – form of relief and costs. Whether the form of order made by Chow J regarding the Benefits Decision is appropriate – held yes, declarations of discrimination, certiorari to quash, and declaration of entitlement to benefits adopted. Whether remedial interpretation of the Inland Revenue Ordinance is appropriate regarding the Tax Decision – held yes, declarations of discrimination, certiorari to quash, and remedial interpretation of 'marriage', 'husband and wife' and related terms in s.2 of the IRO ordered. Whether to suspend operation of remedial interpretation order – held yes, six-month suspension granted to allow IRD to revise computer systems and guidelines, with the interpretation taking effect before end of current tax year on 31 March 2020. Whether costs should be taxed on indemnity basis – held no, party and party basis ordered despite sympathy for appellant's out-of-pocket expenses, as respondents' conduct was not so unreasonable as to warrant indemnity costs. Outcome: appeal allowed with comprehensive relief including declarations, certiorari, remedial interpretation of IRO with six-month suspension, and costs on party and party basis with certificates for three counsel at appellate levels and two counsel at first instance.
Legal issues: Form of relief for Benefits Decision · Form of relief for Tax Decision and remedial interpretation of IRO · Suspension of remedial interpretation order · Basis of costs taxation
Outcome: Appeal allowed; declarations of discrimination made, certiorari orders granted to quash both the Benefits Decision and the Tax Decision, remedial interpretation of the IRO ordered with six-month suspension, and costs awarded to the appellant on party and party basis.
Cited by 4 cases · Cites 3 cases
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FACV No. 8 of 2018 [2019] HKCFA 34 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 8 OF 2018 (CIVIL) (ON APPEAL FROM CACV NO. 126 OF 2017) _________________________
_________________________ Before: Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Fok PJ, Mr Justice Tang NPJ and Mr Justice Gleeson NPJ Date of Judgment: 6 September 2019 _________________________ JUDGMENT ON RELIEF AND COSTS _________________________ The Court: 1.The Court handed down its judgment in this appeal on 6 June 2019,[1] allowing the appellant’s appeal and directing (at [83]) the filing of further written submissions by the parties on the form of relief that should follow in the event the appeal were allowed and on the question of costs. 2.Written submissions dated 4 July 2019 were filed on behalf of the appellant, to which the respondents replied by written submissions dated 18 July 2019. Further written submissions in reply dated 29 July 2019 were filed on behalf of the appellant. 3.As foreshadowed by the Court in our main judgment (at [84]), we have proceeded to determine the relief to be granted and our costs order on the basis of the written submissions from the parties and without any further oral hearing. In this judgment on relief and costs, we adopt the abbreviations and definitions used in our main judgment. Relief 4.In respect of the Benefits Decision, the parties agree to adopt the form of order made by Chow J in the Court of First Instance, namely:
5.We are satisfied this is the appropriate form of order in respect of the Benefits Decision and we so order. 6.There is an issue between the parties regarding an undertaking given by the 1st respondent when a stay of Chow J’s order pending appeal was granted. That undertaking was to the effect that the Civil Service Bureau (CSB) would reimburse the appellant (and would issue a memorandum notifying other civil servants that the CSB would reimburse same-sex married civil servants) in respect of “any loss of benefits … caused solely by the extension of the time … to the final resolution” of the appeal before the Court of Appeal “should the [1st respondent’s] appeal in CACV 126/2017 be dismissed”. 7.The 1st respondent was successful in appealing against Chow J’s judgment in respect of the Benefits Decision and so the undertaking given was necessarily spent and of no further effect. It is beyond the scope of this appeal to make an order in respect of the reimbursement of lost benefits of other same-sex married civil servants. However, we would simply observe that, subject to administrative practicalities, fairness and good administration would seem to dictate that the reimbursement of benefits contemplated by the undertaking would be an appropriate outcome as from the date of Chow J’s order. 8.In respect of the Tax Decision, the parties are in agreement that remedial interpretation of the IRO is appropriate. The proposed form of order is in the following terms:
9.We agree that this form of relief is appropriate and that an order in these terms should be made. An order that only addressed the interpretation of s.10 of the IRO would be of limited assistance and would lead to possible inconsistencies and anomalies as set out in evidence filed on behalf of the 2nd respondent accompanying the respondents’ written submissions.[2] 10.The only issue between the parties as regards the order in respect of the Tax Decision concerns the question of whether the 2nd respondent should be given time to implement the proposed remedial interpretation. The 2nd respondent’s evidence refers to the need to revise the IRD’s computer system and various guidelines and practice notes. It is suggested that it would take “no more than 6 months” for the completion of the various steps necessary, although it is stated that, in the meantime, “the IRD will process tax returns and assessments accordingly”.[3] 11.The appellant submits that no suspension is necessary. However, it is not suggested that any prejudice will accrue to the appellant if a short suspension were granted. There clearly are practical matters that need to be addressed in order to anticipate the declaration taking effect. A suspension of six months would still mean that the remedial interpretation would become effective before the end of the current tax year on 31 March 2020. Accordingly, we suspend the operation of paragraph (3) of the order in respect of the Tax Decision for a period of six months from the date of our order. Costs 12.On costs, there is no dispute between the parties that the appellant must have an order for the costs of the proceedings. 13.The only issue regarding costs is whether the basis of taxation should be on the normal party and party basis of taxation, as the respondents submit, or on the more generous indemnity basis of taxation, as the appellant submits. 14.The appellant submits that it is appropriate that costs should be taxed on the indemnity basis because these proceedings involve the public interest, the conduct of the respondents was unreasonable and their cases were wholly unmeritorious, and the appellant will be out of pocket because of the substantial contribution he was required to make in order to obtain legal aid for these proceedings. 15.Whilst we have some sympathy for the appellant because of the extent to which he will be out of pocket despite winning this litigation, we are satisfied that this is not an appropriate case for indemnity taxation of the appellant’s costs. We do not consider that the behaviour of the respondents in making the challenged decisions and thereafter in contesting the judicial review proceedings, then pursuing the appeal to the Court of Appeal and thereafter resisting the appeal to this Court was so unreasonable and without merit as to be deserving of a costs sanction usually reserved for those cases in which there has been something improper or inappropriate or wholly unreasonable in the administrative decisions under challenge or in the conduct of the proceedings. 16.Accordingly, we make the following order in respect of costs:
Written Submissions by Ms Karon Monaghan QC, Mr Nigel Kat SC and Mr Azan Marwah, instructed by Daly & Associates, assigned by the Director of Legal Aid, for the Appellant Written Submissions by Mr Stewart Wong SC and Mr Johnny Ma, instructed by the Department of Justice, for the 1st and 2nd Respondents [1] FACV 8/2018, [2019] HKCFA 19. [2] Affidavit of Fong Wai Hang dated 18 July 2019 at [6] to [13]. [3] Ibid. at [15]. |
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