Financial Services and Systems Ltd v. Secretary for Justice

HCAL 101/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 101 OF 2006

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BETWEEN

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Before : Hon Fung J in Court

Date of Hearing : 15 August 2007

Date of Handing Down Reasons for Judgment : 16 August 2007

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REASONS FOR JUDGMENT ON COSTS

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1.The respondent is seeking costs against the applicant upon the dismissal of the application for judicial review.  At the hearing, I ordered costs of the action against the applicant, and I now give my reasons.

2.The applicant sought to challenge the constitutionality of the Certification for Employee Benefits (Chinese Medicine) (Miscellaneous Amendments) Ordinance (No. 16 of 2006) (“Amending Ordinance”).  The Amending Ordinance conferred upon the Registered Chinese Medicine Practitioners (“Registered CMPs”) to the exclusion of the Listed Chinese Medicine Practitioners (“Listed CMPs”) the right to issue medical certificates for the purpose of sick leave and other employees compensation and benefits comparable to those given by Registered Medical Practitioners.  The applicant is said to be carrying on the activities of the Hong Kong Association of Chinese Medicine Practitioners with members comprising of, inter alia, Listed CMPs. 

3.The respondent submitted that costs should follow the event as there are no special circumstances to depart from the general principle.

4.Mr. Siu, for the applicant, submitted that there should be no order as to costs as there are special circumstances in the case:

(1)	The action was brought in the public interest for the benefit of the public at large;
(2)	The case involves the interpretation of the Basic Law and the Hong Kong Bill of Rights touching on human rights principles and question of whether European human rights concepts are applicable to our society, and is of constitutional and great public importance and forms precedent to the interpretation of local enactments;
(3)	The applicant is a limited company and has a separate legal entity from the members of the Association, and there is no benefit accruing to the applicant as opposed to the members of the Association.

5.In reply, Miss Poon, for the respondent, submitted that:

(1)	The application is not a true public interest challenge but brought for the private interest of the Listed CMPs;
(2)	The respondent was wholly successful on the merits and the case did not turn on the interpretation of any legislation for the benefit of a large class of citizens;
(3)	The applicant was brought in for the purpose of funding the application and it is unreasonable for it to shield behind the corporate veil.

6.Mr. Siu referred to Scott v. Government of the HKSAR [2004] HKLRD 989 per Hartmann J at p. 995, para. 15:

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15.

If an action is brought in the public interest, often as a test case, so that the law may be clarified and if that clarification will benefit a large class of persons or the public generally, those circumstances may warrant a court in making a costs order that does not follow the event.”

7.In the Scott case, Hartmann J said at p. 996, paras. 18 and 19:

“	18.	First, not all public law challenges, even if constitutional issues of importance are raised, bring with them an automatic protection against adverse costs orders. Each case will depend on its own circumstances. The rule that costs should generally follow the event applies in public as well as private law matters. What cannot be ignored is that when an unsuccessful claim is brought against a public body, that body must expend costs in defending its position, those costs, as in the present case, coming from public funds.
	19.	Second, the applicant's challenge was not a public interest challenge in its proper sense. The essential characteristics of such a challenge are not only that issues of general importance are raised but that the applicant has no private interest in the outcome. See R v Lord Chancellor, ex p Child Poverty Action Group [1999] 1 WLR 347 at p.353G. In the present case, the applicant's stated purpose for making his challenge was to protect his own terms and conditions of employment. Even though issues of general importance were raised, the applicant was therefore looking to protect his own private interests.”

8.Miss Poon accepted that public interest litigation may justify a departure from the principle of costs following the event.  However, each case depends on its own circumstances and there is no immunity from costs where the applicant has a private interest in the outcome notwithstanding there are issues of general importance.  Miss Poon submitted that the present application is not public interest litigation brought in the public interest or for the benefit of the general public, but rather to pursue the private interest of the livelihood of Listed CMPs.

9.Mr. Siu also referred to the judgments on costs of the Court of Final Appeal in Lo Siu Lan v. Hong Kong Housing Authority FACV No. 10 of 2005 (date of judgment: 29 August 2005) and Ho Choi Wan v. Hong Kong Housing Authority FACV No. 1 of 2005 (date of judgment: 5 January 2006).

10.With respect, those judgments do not really assist.  In Lo Siu Lan, the respondent did not seek any order as to costs.  In Ho Choi Wan, the court ordered each party to bear its or her own costs having regard to the public interest in the issues involved.  There is no further discussions on the principles or the circumstances of the case.

11.Miss Poon pointed out that the main judgment in Ho Choi Wan touched on the interpretation of the Housing Ordinance, which affects the general public.  There is no similar incidence in the present case, and the class of Listed CMPs cannot be likened with the very large number of public housing tenants in Hong Kong. 

12.Mr. Siu said that after all, leave was granted and there must be some importance in the applicant’s arguments.  It must be borne in mind that application for leave to apply for judicial review is made ex parte and the threshold is low in that the case merits further arguments or investigation.  The present case is neither the first nor the last where regard is had to the international jurisprudence on human rights, and I see no great moment in the jurisprudential value argument. 

13.It cannot be that every case involving constitutional arguments or matters of public importance will warrant a departure of the principle of costs to follow the event in civil litigation, including judicial review. 

14.I am of the view that the application is brought for the private economic interest of the Listed CMPs.  On the contrary, the Amending Ordinance is for the public good.  It enhanced the choice of medical practitioners for the general public, and the separate treatment of Registered and Listed CMPs based on qualification and/or relevant experience is for the benefit of the public.  Mr. Siu urged me not to have regard to the merits of the case save that it involved a constitutional challenge.  With respect, any legal decision will be devoided of meaning and substance if the merits were completely overlooked.  Mr. Siu is unable to make any exception on the public interest challenge point.

15.As to the separate legal entity point, by way of background, previously Mr. Yung Chiu Wing David, a Listed CMP and a shareholder and director of the applicant, applied for leave for judicial review in HCAL 88/2006 seeking the same relief as the applicant.  Mr. Yung was of limited means, and other directors of the applicant agreed to fund the legal costs of the application provided that it be proceeded with in the name of the applicant.  Leave was granted to both Mr. Yung and the applicant, but the application by Mr. Yung was not proceeded with.  Mr. Yung participated as a representative of the applicant.

16.At the hearing of the application, Mr. Anderson Chow SC, for the respondent, submitted that while Mr. Yung or other Listed CMPs said to be members of the Association would have sufficient locus to challenge the constitutionality of the Amending Ordinance, the applicant did not, as it is an ordinary limited company carrying on commercial activities (including publishing) with object clauses not specifically related to Listed CMPs. 

17.Prima facie, the applicant do represent the interests of Listed CMPs said to be members of the Association.  As there was scant evidence as to the structure of the Association vis-à-vis the applicant, I proceeded to deal with the merits of the case. 

18.Miss Poon submitted that the applicant was brought in as a vehicle for funding the costs of the application in lieu of Mr. Yung.  The respondent will have no redress on costs against Mr. Yung or the members of the Association.  It is unreasonable for the applicant to shield behind the corporate veil.

19.I agree with Miss Poon.  Having been allowed to proceed with the application, it does not befall the applicant now, so to speak, to have the cake and eat it as well and gainsay its representation of the interest and benefit of the Listed CMPs.

20.In the premises, I ordered that the applicant do pay the costs of the action to the respondent, to be taxed if not agreed.

Mr. Sui See Chun, instructed by Messrs Wilkinson & Grist, for the Applicant

Miss Joyce Poon, Government Counsel of the Department of Justice, for the Respondent