Lai Chee Ying v. Secretary for Justice

HCMP 253/2023 and HCAL 566/2023
(Heard Together)

[2023] HKCFI 1991

HCMP 253/2023

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 253 OF 2023

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AND

HCAL 566/2023

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 566 OF 2023

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(Heard Together)

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DECISION ON COSTS

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Introduction

1.By a judgment handed down on 19 May 2023 (“Judgment”),[1] I dismissed the applicant’s claim for declaratory relief in the OS Proceedings; and his application for leave for judicial review in the JR Proceedings, leaving the question of costs to be disposed of on paper. As directed by me at [63] of the Judgment, the parties have filed written submissions on costs.

2.This is my decision on costs.

The parties’ respective positions

3.Both the Secretary for Justice in the OS Proceedings and the Putative Parties in the JR Proceedings sought costs against the applicant on an indemnity basis. They contended that the applicant’s proposed challenges in the JR Proceedings were wholly and plainly unarguable, and should never have been brought in the first place in light of the clear wording of NSL 14. Moreover, by a letter dated 13 April 2023 and marked “without prejudice save as to costs” to the applicant’s solicitors (“the Letter”), the Department of Justice already pointed out, among other things, that the NSC Decision is final, binding and not amendable to judicial review; and that the JR Proceedings was plainly unwarranted and totally devoid of merits; and that the OS Proceedings was academic and doomed to fail, and invited the applicant to discontinue both set of Proceedings but would, if he persisted, seek costs against him on an indemnity basis.  The applicant nevertheless still unreasonably persisted in prosecuting the two Proceedings and should therefore be visited with costs on an indemnity basis.

4.The applicant argued that there should be no order as to costs. After referring to the events leading to both sets of Proceedings, he pointed out that the Secretary for Justice did not mention the Decisions in the correspondence with his solicitors. And it was not obvious that the Interpretation empowered the NSC to make a decision on Mr Owen KC’s admission. He commenced the OS Proceedings in order to resolve the status of the Admission Judgments in the light of the Interpretation. And it was only in the course of the OS Proceedings that the Decisions were disclosed. The OS Proceedings became academic purely because of the conduct of the Secretary for Justice. It would appear to be his case that this would justify a departure from the normal rule that costs should follow the event.

5.As to the JR Proceedings, the applicant submitted that it was of the greatest public interest, given that the underlying criminal case involved the application of the recently enacted NSL, and that the issue was raised as to whether a public body can make a decision affecting the rights of a person without being subjected to the supervisory jurisdiction of the courts. In the circumstances, the normal rule that an unsuccessful applicant for judicial review should not be ordered to pay costs of a putative party should apply.

6.Wrapping up his submissions, the applicant invited the court to take a global view of both sets of Proceedings and make no order as to costs, pointing out that they were heard together, that the Secretary as a defendant in the OS Proceedings was also a member of the NSC and opposed the admission of Mr Owen KC; and reiterating the public interest in and the importance of amenability to judicial review.

Costs of the JR Proceedings

7.It is convenient to first deal with the costs of the JR Proceedings. What is in issue is the applicant’s liability, if any, towards the Putative Parties’ costs in his unsuccessful application for leave to apply for judicial review. In Leung Kwok Hung v President of the Legislative Council (No 2) (2014) 17 HKCFAR 841, the Court of Final Appeal at [17(1)-(4)] set out the applicable basic principles at first instance. In summary, the court retains a broad discretion as to costs as the particular circumstances of the case and justice warrant. Since leave applications are meant to be ex parte, an unsuccessful applicant would generally not be ordered to pay the costs of a putative respondent or putative interested party unless there are special or unusual circumstances which justify such an award. The discretion of making an award of such costs should be sparingly exercised only for good reasons. While there is no definitive list, such reasons include the reason that has led the opposing party to attend at the hearing, whether that party’s attendance has been of material benefit to the court in determining the leave application, and the underlying lack of merits of the application, always bearing in mind the context that the court has refused to grant leave to apply for judicial review. Relevantly, the Court went on to say:[2]

“(5) By way of example of these particular considerations: if the putative respondent or putative interested party has attended at the invitation of the court, the reason why the court has considered that party’s presence necessary will be relevant; … if an application was thoroughly ill-conceived or unmeritorious, this may be a weighty factor justifying an adverse order; … where, as a result of the attendance of an opposing party, the hearing has proceeded with full argument and documentary evidence so that the applicant has, in effect, had a full substantive hearing of the judicial review challenge, this may be sufficient to persuade the court to make a costs order as if the matter had proceeded at a full inter partes hearing. …

(6)  If a putative interested party has appeared in addition to a putative respondent, the same principle will apply, namely that no adverse costs order should be made against the applicant in respect of those costs unless there are special or unusual circumstances which justify such an award. Where there is already one opposing party in the person of a putative respondent, whose costs the court is minded to order the applicant to bear, the court will need to be persuaded that some additional justification exists if it is additionally to order the applicant to bear a putative interested party’s costs. The interested party’s circumstances, including its claimed interest in the matter and its reasons for seeking to be heard on the leave application, will be material as will its conduct and any additional benefit its presence will have provided to the court. Such a party will not normally be entitled to an award of costs in his favour ‘unless he can show that there was likely to be a separate issue on which he was entitled to be heard, that is to say an issue not covered by counsel for the [putative respondent]; or unless he has an interest which requires separate representation.”

8.As it was the applicant who joined the Secretary for Justice as a putative interested party “in his roles as guardian of the public interest in ad hoc admission proceedings, the head of the Department of Justice under BL 63 and as a member of the NSC”, he did not take any issue that the Secretary did have a separate interest to be heard in the JR Proceedings. Nor did he contend that an adverse costs order against the applicant, if made, should not also cover the costs of the Secretary for Justice. What remains therefore is the dispositive question whether there exist any good reasons to make an adverse costs order against him. Looking at the circumstances in the round, I am of the view that there are such good reasons.

9.First, as demonstrated by the Judgment, the JR Proceedings did raise important issues of law with immense public interest. The Putative Parties attended at the court’s direction and I heard full substantive submissions from the parties. The applicant had, in effect, had a full substantive hearing of the judicial review challenge, which were material to my determination of the issues. As such, it is justified to deal with the costs as if the matter had proceeded at a full inter partes hearing.

10.Second, the applicant’s application for judicial review was wholly unmeritorious. As held in the Judgment, the NSL on a proper construction has not vested the courts with any jurisdiction over the NSC ([35]-[39]); the NSC Decision lies squarely within its power under NSL 14 as interpreted by the Interpretation ([58]); and the Director must implement the NSC Decision faithfully, which was a lawful exercise of his power ([59]). On the other hand, the applicant’s reading of the Interpretation was completely wrong ([47]); his reliance on the Ultra Vires Rules was completely misplaced ([41]); and his intended judicial review application was plainly and wholly unarguable ([60]).

11.Third, by virtue of the Letter, the applicant had been advised to discontinue the JR Proceedings because of the lack of merits for the substantive reasons as articulated in the Judgment and if he did not, indemnity costs would be sought against him. The applicant should have acted on the advice but unreasonably persisted. That is unreasonable litigation conduct which justifies an order of indemnity costs: Huge Dragon Corp Ltd v Lung Mun Oasis (IO) [2014] 3 HKLRD 286 at [13].

12.For the above reasons, I agree with the Putative Parties that the applicant should have never brought the JR Proceedings. I will accordingly exercise my discretion to order the applicant to pay the Putative Parties’ costs of the JR Proceedings on an indemnity basis, to be taxed if not agreed.

Costs of the OS Proceedings

13.Turning to the costs of the OS Proceedings, as submitted by the Secretary for Justice, the general rule is that costs should follow the event, which is applicable even in public law litigation: Chan Noi Heung v Chief Executive in Council [2009] 3 HKLRD 362 at [12(1)]. And a departure from the general rule is exceptional: Mariner International Hotels Ltd v Atlas Ltd (No 2) (2007) 10 HKCFAR 246 at [18].

14.To justify the departure, the applicant relied on the public interest involved in the JR Proceedings. But that does not assist him as his arguments were wholly unmeritorious. The applicant next complained that it was the Secretary for Justice’s conduct that rendered the OS Proceedings academic. The fact that the applicant commenced the OS Proceedings with a view to clarifying the status of the Admission Judgments as he was not aware of the Decisions at the time does not absorb him from his liability on costs. Further, by the time of the Letter (13 April 2023), he would have had the opportunity to reflect and re-assess the position and discontinue the OS Proceedings. His persistence thereafter is unreasonable litigation conduct, justifying an order for indemnity costs.

15.For those reasons, I order the applicant to pay the Secretary for Justice’s costs in the OS Proceedings on a party to party basis up to 13 April 2023, and thereafter on an indemnity basis, to be taxed if not agreed.

Mr Robert Pang SC, Mr Steven Kwan and Mr Albert N B Wong, instructed by Robertsons, for the plaintiff in HCMP 253/2023 and the applicant in HCAL 566/2023

Mr Rimsky Yuen SC and Mr Martin Ho, instructed by the Department of Justice, for the defendant in HCMP 253/2023 and the 1^st and 2^nd putative respondents and the putative interested party in HCAL 566/2023