LI HAO TIAN v DEPUTY REGISTRAR LAI

HCAL 892/2024

[2024] HKCFI 2266

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 892 OF 2024

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D  E  C  I  S  I  O  N

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A.  Introduction

1.  By Form 86 dated 6 June 2024, the Applicant seeks leave to apply for judicial review, so as to challenge the decision of Deputy Registrar Lai dated 27 May 2024 (“LAA Decision”) on his legal aid appeal LAA 316/2024 (“LAA”).

2.  I gave directions for the filing of an Initial Response, and for the Applicant to file a Reply, after which I would consider whether to deal with the matter on the papers. The Initial Response was filed on behalf of the Director of Legal Aid (“Director”) on 19 July 2024, and the Applicant filed his Reply on 22 July 2024. The Deputy Registrar has, of course, remained neutral in these proceedings.

3.  Having considered the materials, I am satisfied that it is appropriate to deal with this matter on the papers. This is my Decision.

B.  Background

4.  The background of this matter can be summarised shortly.

5.  The Applicant was employed by the Civil Aviation Department of the Hong Kong Government. On 22 January 2024, he had been directed by the Secretary for Civil Service (“SCS”) to be retired from the civil service in the public interest under section 12 of the Public Service (Administration) Order.

6.  On 5 March 2024, the Applicant applied for legal aid to claim financial loss against the SCS. On the same date, the Legal Aid Department (“LAD”) conducted an interview with the Applicant, during which he was requested to provide further documents on means and merits for the processing of his application for legal aid. The Applicant signed an undertaking from which he would know that the legal aid application might be refused if he was unable to supply the further documents for LAD’s consideration.

7.  On 10 April 2024, the Director refused the Applicant’s application for legal aid (“Refusal Decision”), on the basis that the Applicant’s financial resources exceeded the upper limit of HK$440,800 stipulated in section 5(1) of the Legal Aid Ordinance Cap 91 (“LAO”).

8.  The financial resources of the Applicant were assessed by the Director at HK$3,053,842 and materially included a share in a property (“30C Property”) and in a sum withdrawn on 14 February 2024 from a joint bank account (“Joint Account”) held by the Applicant and his former girlfriend (“Karen”).

9.  On 11 April 2024, the Applicant issued an application for leave to apply for judicial review so as to challenge the decision of the SCS, in HCAL 585/2024. I have also given directions in that matter, which is currently fixed for a rolled-up hearing on 27 September 2024.

10.  On 17 April 2024, the Applicant lodged the LAA against the Refusal Decision. On 16 May 2024, the Director served on the Applicant the Reasons for Refusal. The Reasons for Refusal dealt in some detail with the approach taken by the Director to the 30C Property and the sum withdrawn from the Joint Account between the date of the SCS’s decision and the Applicant’s application for legal aid seeking to challenge and/or pursue financial loss arising from that decision.

11.  On 19 May 2024, the Applicant filed and served the Grounds of Appeal. In them, the Applicant asserted that the Director had incorrectly assessed his financial resources, by including resources which had been proven not to be resources of the Applicant. He set out the reasons why he said he “clearly is not in any form of beneficial ownership” of the 30C Property, and that the money in the Joint Account belongs solely to Karen.

12.  The LAA was heard by the Deputy Registrar on 24 May 2024. It can be noted that the Refusal Decision was made by the Director on the basis that the Applicant had failed the means test, in which circumstances the Director expressly did not go on to consider the merits test. Similarly, the Deputy Registrar dealt on the LAA and in the LAA Decision with the question of the Applicant’s means (and the Deputy Registrar indicated during the hearing that were he to rule in favour of the Applicant on that question, he would remit the matter back to the Director for further processing of the legal aid application by the Director).

13.  The LAA Decision was subsequently handed down on 27 May 2024, dismissing the Applicant’s appeal.

C.  Intended Grounds of Review

14.  As has been summarised in the Initial Response, the Form 86 essentially sets out six intended Grounds of review, being:

(1)  No details were given in the LAA Decision to show what had been considered by the Deputy Registrar when he made the LAA Decision (“Ground 1”).

(2)  The Deputy Registrar should consider the merits test even if the Applicant failed the means test, instead of remitting the case back to the Director if he were to rule in favour of the Applicant on the LAA (“Ground 2”).

(3)  The Deputy Registrar placed undue weight on evidence during the LAA hearing (“Ground 3”).

(4)  The 30C Property cannot be reasonably disposed of by the Applicant, regardless of whether or not he has any beneficial ownership in it, so should be excluded from the assessment of the Applicant’s financial resources under the LAO (“Ground 4”).

(5)  The withdrawal of money from the Joint Account and repayments of debt to the Applicant’s mother and Karen belonged to another individual having a relationship with the Applicant and so should not be counted towards the Applicant’s financial resources under the LAO (“Ground 5”).

(6)  The Director had not sought further proof from the Applicant regarding the money and transactions at the mortgage account of the 30C Property (under the joint name of the Applicant and Karen) before arriving at the decision that the Applicant did have an interest in the 30C Property even though it was in the sole name of Karen (“Ground 6”).

15.  Though, in his Reply, the Applicant did not think that summary was entirely correct, he was prepared broadly to use those six grounds (with corrections) in his response. For example, the Applicant submits that the summarised ‘Ground 6’ was not by itself a ground, but was supplemental to the previous Grounds 4 and 5, and might be collectively considered with those two grounds.

16.  The Initial Response has also summarised the Director’s response as being:

(1)  By the Memorandum dismissing the LAA, the Deputy Registrar stated clearly that he had dismissed the LAA because he agreed with the Reasons for Refusal – which were previously provided to the Applicant and debated at the LAA hearing.

(2)  The Applicant did not satisfy the Director that his financial resources did not exceed the upper limit, and thus he failed the means test as set out in section 5(1) of the LAO.

(3)  The Deputy Registrar considered both the disposal of beneficial ownership in the 30C Property and withdrawals of money from the Joint Account dealt with in the Reasons for Refusal, which was discussed at the LAA hearing, and he did not put undue weight on the evidence.

(4)  The Applicant possesses beneficial ownership in the 30C Property, and has never disposed of it – and that beneficial ownership is correctly regarded as disposable capital for the purpose of the LAO and the Legal Aid (Assessment of Resources and Contributions) Regulations 91B (“ARC Regulations”).

(5)  The Deputy Registrar did not need to consider the merits test if the Applicant failed the means test, and the matter would have to be remitted to the Director for his consideration of merits if the Deputy Registrar ruled in favour of the Applicant on the means test issue.

(6)  The Applicant had been given adequate opportunities to furnish further information to satisfy the enquiries raised by the Director, and the available information was sufficient for the Director to make a decision to refuse the application for legal aid on means.

17.  The various points can be considered in more detail below. I would expressly note that I have kept the Applicant’s points about the framing of the Grounds in mind. But, as the Applicant is prepared to accept, with that caveat, the summarized Grounds are a convenient way to proceed to consideration of this application.

D.  Applicable Legal Principles

18.  On an application for leave to apply for judicial review, the burden is on the applicant to identify reasonably arguable grounds for judicial review with a realistic prospect of success, not subject to a discretionary bar such as delay or an available alternative remedy.

19.  Where an applicant for legal aid has exercised the statutory right of appeal against the Director’s decision, it follows that the Director’s decision is in principle not amenable to judicial review. On the appeal, the Deputy Registrar hearing it will approach the application for legal aid de novo on the materials available.

20.  As regards the role of the Court exercising its judicial review jurisdiction by reference to a decision of a Deputy Registrar/Master in a legal aid appeal, it is trite that the Court does not sit as a further tier of appeal. The Court does not re-examine the Deputy Registrar’s decision afresh, or consider whether the Court would have granted legal aid to the Applicant in relation to the appeal. The Court’s function is confined to reviewing the legality, rationality and fairness of the process leading to the decision of the Deputy Registrar.

21.  With those principles in mind, I can turn to deal with each of the intended Grounds of review.

E.  Merits of Intended Grounds

E.1  Ground 1

22.  It is settled law that the adequacy of reasons for a decision depends on context, and there is no general duty on the part of the court to address every single issue (whether of fact or law) raised by the parties. In the particular context of a legal aid appeal, there is no objection in principle if the Deputy Registrar adopts the reasons, in whole or in part, given by the Director or of any opinion provided by Counsel, without further elaboration – so long as those reasons adopted were in themselves sufficient in terms of the analysis of fact and law.

23.  In this case, the Deputy Registrar stated in the Memorandum containing the notice of the LAA Decision that he agreed with the Reasons for Refusal provided by the Director. In accordance with the procedural requirements of a legal aid appeal, those Reasons for Refusal had been provided to the Applicant in advance of the LAA, and naturally formed the main ‘battleground’ at the hearing of the LAA.

24.  The Reasons for Refusal contained the Director’s analysis explaining why, as a matter of fact and applicable law, the Applicant’s financial resources – including the beneficial ownership in the 30C property and half of the sum withdrawn from the Joint Account – were considered to have exceeded the financial upper limit relating to the means test.

25.  By the Deputy Registrar’s agreement with and adoption of the Reasons for Refusal, the Applicant would have been aware of the reasoning underpinning the LAA Decision.

26.  In so far as the Applicant suggests that, if the Deputy Registrar did simply agree with the Reasons for Refusal, that somehow shows a different view as might have been indicated at the LAA hearing, that does not seem to me to change the merits of this proposed ground. First, it is open to the Deputy Registrar to ventilate potential views at the hearing, which are not the same as the views finally reached. Secondly, the reasoning that the Deputy Registrar has given is sufficiently apparent from his expressly adopting the Director’s Reasons for Refusal. Any argument as to whether that was the right decision on the merits is not a matter for judicial review.

27.  As to the points made in the Applicant’s Reply, they do not change the analysis. The Applicant says that the reasoning of the Deputy Registrar was insufficient because there have been at these two significant differences identified during and before the LAA hearing, namely the existence of the April transactions and his identification that the Director had misinterpreted his evidence. First, as will be seen below, the April transactions were not in fact determinative in any way of the rejection of the legal aid application by the Director, and were not part of the reasoning adopted by the Deputy Registrar. Secondly, the Applicant made submissions to the Deputy Registrar about the alleged misinterpretation of his evidence by the Director. The Deputy Registrar evidently did not accept those submissions, when he accepted the reasoning of the Director expressed in the Reasons for Refusal.

28.  Contrary to the suggestion by the Applicant, no question of any legitimate expectation arises. Though the Applicant seeks a declaration of his right to know the details of the LAA, the Applicant has been told why the LAA was dismissed.

29.  Ground 1 is not reasonably arguable with any realistic prospect of success.

E.2  Ground 2

30.  With respect, this ground seems to be entirely hypothetical or moot. As a matter of fact, the LAA Decision dismissing the LAA, and agreeing with the Director’s refusal of the Applicant’s legal aid application on the means test, necessarily made any further consideration of the merits otiose. This is because it is trite that legal aid may be made available only to a person who passes both the means test and the merits test.

31.  I reject the Applicant’s submission that, because the Deputy Registrar reserved his decision to be handed down later, that means that he should also have considered the merits test. What he had to decide did not change by reference to whether he gave that decision at the end of the hearing, or reserved it to be handed down subsequently. Whilst it is correct that the Deputy Registrar needed to make a decision on the de novo hearing whether or not legal aid should be granted, he was able to make that decision by reference to either one or both of the means test and merits test. Once he had decided that the Applicant failed the means test, that was sufficient to decide the LAA.

32.  To put it another way, there was no reasonably arguable public law error in the Deputy Registrar not considering the merits of the Applicant’s judicial review against the SCS, once the Deputy Registrar had concluded that the Applicant failed the means test.

33.  Ground 2 is not reasonably arguable with any realistic prospect of success.

E.3  Ground 3

34.  I acknowledge that the Applicant has sought to address Grounds 3, 4 and 6 collectively (with Ground 4, then separately Ground 5, as his focus). However, as already stated, it is helpful to an extent to breakdown the three grounds and to address them separately. Therefore, though I do not overlook the overlap between them, I shall continue to address them each in turn.

35.  A proposed ground of review based upon an assertion that the decision-maker gave undue weight to some part of the materials relevant to the decision-making does not usually provide fertile ground for a review. As already indicated above, this Court exercising its judicial review supervision does not act as a further tier of appeal, still less as though a primary decision maker.

36.  It is clear from the materials provided on this application that the Deputy Registrar had considered the evidential materials relating to the Applicant’s beneficial ownership in the 30C Property and the withdrawals from the Joint Account, as traversed in the Reasons for Refusal. As also already stated, these matters clearly formed the main ‘battleground’ on the LAA. Indeed, the Applicant has also stressed in his Reply what was canvassed by him at the LAA hearing, including by reference to particular parts of the evidence. The weight to be given to the evidence was a matter for the Deputy Registrar.

37.  Ground 3 is not reasonably arguable with any realistic prospect of success.

E.4  Ground 4

38.  As is apparent from the materials filed with this application, the main dispute in the LAA was what should be included as financial resources of the Applicant.

39.  The Applicant has identified that, under section 2 of the LAO, “financial resources” means assets or resources as determined in the prescribed manner, which leads on to the consideration of the ARC Regulations.

40.  Section 2A of the ARC Regulations defines “financial resources” as being assessed by multiplying the person’s monthly disposable income by 12 and adding his disposable capital to that sum. Under section 2 of the ARC Regulations, “disposable capital” means disposable capital as determined or to be determined by the Director under the ARC Regulations.

41.  I would also note that section 4 of the ARC Regulations requires the disposable capital of a person to be determined in accordance with Schedule 2, which contains the applicable rules for computing disposable capital.

42.  The Applicant submits that the discretion thereby given to the Director means that the Director has to consider capital to be reasonably disposable by the legal aid applicant within a reasonable timeframe of the legal assistance that is sought by the applicant, or otherwise it would be Wednesbury unreasonable. He also tied it to the concept of a comparison with capital being free for the disposal of an individual to pursue private litigation.

43.  In the Form 86, the core complaints made by the Applicant seem to me to be essentially that:

(1)  the Deputy Registrar failed to accept the Applicant’s argument that the Director had incorrectly confused the situation between the Applicant and Karen as regards the 30C Property;

(2)  the Deputy Registrar failed to give the Applicant sufficient opportunity to produce further evidential materials relating to the point;

(3)  even putting aside the ownership issue, it was impossible for the Applicant to dispose of the 30C Property as his own financial resources to meet his own legal needs, even if he took legal action to claim his own rights.

44.  The first and third complaints are essentially complaints going to the merits. Indeed, in his Reply, the Applicant has stressed that he does not possess any beneficial ownership in the 30C Property, so could not dispose of an ownership that he does not own. He rehearsed his arguments in some detail, stressing that he had raised them in the LAA. However, those arguments on the merits are not relevant to the present exercise of considering an application for leave to apply for judicial review. Whilst the Applicant has sought to emphasise the aspect of the law, and its development, the real determination as to whether the 30C Property constitutes in part a financial resource of the Applicant also turned on the approach to the facts. Further, on the finding of the Director, endorsed by the Deputy Registrar, no question in fact arose as to the timeframe (reasonable or otherwise) of the disposability of the 30C Property – and there is no need to engage in debate about the bounds of the Director’s discretion to determine whether the property is or was disposable.

45.  The second complaint might suggest a procedural unfairness. However, I do not think on the materials available there is any reasonably arguable procedural unfairness in the Deputy Registrar dealing with the matter on the materials available to him, essentially on the basis of the materials which had been made available by the Applicant to the Director in the context of the original application for legal aid. The Applicant’s submission, that just because he had signed the undertaking does not mean that he would automatically have been regarded as clearly knowing how the Director would interpret or misinterpret his submissions, seems to me to be misplaced. By the time of the LAA, the Applicant had been made aware of the Reasons for Refusal, and had sought to address them, both in his Grounds of Appeal and in his oral submissions at the LAA hearing. I reject the suggestion that there was some sort of ‘legitimate expectation’ given by the Deputy Registrar to the Applicant at the hearing in relation to the materials and arguments presented. I do not think the Applicant was reasonably arguably denied a fair hearing of the LAA.

46.  I therefore also accept the submission made on behalf of the Director that, by agreeing with the Reasons for Refusal after consideration and discussion at the LAA hearing, there is nothing to demonstrate that the Deputy Registrar has committed an error of law or has acted Wednesbury unreasonably.

47.  In those circumstances, it does not seem to me to be necessary to traverse the arguments deployed by the Director and by the Applicant as regards whether the Director and/or the Deputy Registrar should or should not have come to the conclusion that the Applicant’s financial resources exceeded the relevant limit under the LAO.

48.  I have, however, read those arguments and considered them as a matter of completeness, and I can state – though it is strictly not necessary for this Decision – that the approach taken on behalf of the Director on the law applicable to the facts as were apparent from the materials does not seem to me to be an approach which was not open to the Director, or not open to the Deputy Registrar to accept on the LAA. For example, I see force in the points that, even if the Applicant had “gifted” the 30C Property to Karen, the circumstances permitted him to revoke or renounce that gift, and that there is evidence that Karen had agreed to transfer the legal title to the Applicant three years from January 2021, but the Applicant has not taken the initiative to ask for transfer, or to bring the resulting or constructive trust over the property to termination.

49.  Indeed, even were I to say that I see some force in any of the points made by the Applicant (which he has canvassed at some length in his Reply), that does not change the fact that the weighing of the particular submissions and the evidence said to support them was a matter for the Deputy Registrar to decide. What was or was not the common intention of the Applicant and Karen in relation to the 30C Property was largely a question of fact, to be decided by reference to inferences drawn from the evidence as a whole, given such weight as the decision-makers thought to be appropriate to each part of it.

50.  Ground 4 is not reasonably arguable with any realistic prospect of success.

E.5  Ground 5

51.  This intended ground relates to the Joint Account. The Applicant says that the withdrawal of money from the Joint Account and repayments of debt to the Applicant’s mother and Karen belonged to another individual having a relationship with the Applicant and, so should not be counted towards the Applicant’s financial resources under the LAO. Again, this point is really a merits argument.

52.  However, the ARC Regulations – see section 9 – state that if it appears to the Director that the applicant has with intent to reduce the amount of his financial resources directly or indirectly deprived himself of any resources, the resources of which he has so deprived himself shall be treated as part of his resources. Therefore, as a matter of law, it was open to the Director (and subsequently the Deputy Registrar) to form the view that the Applicant had directly or indirectly deprived himself of resources in that manner.

53.  On the particular facts, the Applicant stated in his LAA Grounds of Appeal that he had received the sum of HK$1,075,639 as funds from the voluntary contribution from the Civil Service Provident Fund into his own bank account, and he subsequently transferred the sum of HK$550,000 to the Joint Account, of which HK$440,000 was withdrawn on the same day – which the Applicant explained as Karen withdrawing the sum as her own invested money plus interest. Also on the same day, the Applicant transferred HK$340,000 to his mother, his explanation being that it was repayment of a loan to his mother for lending and the money for the purchase of the 30C Property. It seems to me that it was open to the Director to take those matters into account and to weigh the Applicant’s explanations in the balance. This was a matter also dealt with at the hearing before the Deputy Registrar on the LAA.

54.  Nevertheless, as it happens, those withdrawals were not in fact included in the Director’s calculation of the resources available to the Applicant, and so did not actually constitute a relevant consideration of the Director or, on the LAA, of the Deputy Registrar when he agreed with the reasoning of the Director explained in the Reasons for Refusal. As a result, any suggested ‘legitimate expectation’ that the Applicant’s explanations as regards the April transactions had been accepted by the Director is beside the point. For the Deputy Registrar also not take those matters into account does not reasonably arguably amount to Wednesbury unreasonableness.

55.  Further, as has been pointed out on behalf of the Director, even if the HK$500,000 (being a proportion of the sum which was extracted from the Joint Account) which was taken into account in the calculation of available resources, that would make no difference to the conclusion where the Applicant’s beneficial ownership in the 30C Property would still be well above the statutory limit under the LAO. In so saying, this is not (contrary to the suggestion of the Applicant) some form of admission that the approach taken to the HK$500,000 was erroneous.

56.  Ground 5 is not reasonably arguable with any realistic prospect of success.

E.6  Ground 6

57.  This Ground is apparently looking at the Director for not seeking further ‘proof’ from the Applicant in certain respects. However, insofar as that as a criticism of the Director in reaching the Refusal Decision, that is not amenable to judicial review precisely because the Applicant exercised his rights of appeal to the Deputy Registrar. I have in any event noted above that the Applicant does not say that this is really a free-standing Ground.

58.  In any event, there is also force in the point made on behalf of the Director that the Applicant had throughout been notified that it was necessary for him to furnish proof to satisfy the Director’s enquiries. For example, an attendance note records that the Applicant had been notified that the Director might take the view that half of the funds withdrawn from the Joint Account would be taken into account in assessing his financial resources, if he could not provide sufficient evidence that the funds belonged solely to Karen.

59.  Ground 6 is not reasonably arguable with reasonable prospects of success.

F.  Result

60.  In the circumstances described above, where the Applicant has failed to identify any public law grounds of review which are reasonably arguable with any realistic prospect of success, the Applicant’s application for leave to apply for judicial review stands to be dismissed.

61.  As I have dealt with this matter on the papers, albeit with the assistance of the Initial Response, I exercise my broad discretion on costs to make no order as to costs.

The applicant, acting in person

Ms Fanny Fung, Senior Government Counsel and Mr Louis Poon, Government Counsel, of the Department of Justice, for the putative respondent