Chu Hoi Dick and Another v. Secretary for Home Affairs

HCAL 87/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE PROCEEDINGS

NO. 87 OF 2007

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BETWEEN

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Before: Hon Lam J in Court

Date of Hearing: 31 August 2007

Date of Judgment: 6 September 2007

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JUDGMENT  ON  COSTS

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1.I dismissed the Applicants’ application for judicial review on 10 August 2007.  The Respondent asks for costs of the application to be borne by the Applicants.  The Applicants resist the application and invite this court to make no order as to costs on the basis that the Applicants brought the application to advance a legitimate public interest instead of pursuing it for private gain and the proceedings have contributed to the proper understanding of the law in question.  Parties have filed written submissions on costs. 

2.In the arguments advanced on papers, some general principles relating to the award of costs in public law cases were debated.  Given the general importance of this topic, this court decided that it would be helpful to hear oral submissions.  The question of costs was argued on 31 August 2007.  I am grateful to counsel for their assistance.

The Hong Kong authorities

3.I shall start by examining some recent local authorities in which the court departed from the usual order of costs follow event by reason of the public interest character of the judicial review application.  A review of these cases show that there is a trend in the common law world to have special regard to the public interest element in the exercise of the discretion as to costs.

4.At paragraph 58 of my judgment of 10 August 2007, I referred to Lo Siu Lan v Hong Kong Housing Authority CACV 378 of 2004, 1 March 2005 and Ho Choi Wan v Hong Kong Housing Authority FACV 1 of 2005, 5 Jan 2006.  These were decisions of our Court of Appeal and Court of Final Appeal respectively and they are binding on this court.  Unfortunately, there was no discussion in those judgments on the relevant principle governing how the element of public interest should be considered on the question of costs in public law cases.  Nevertheless, these authorities demonstrate that there are instances where it is proper for the court to depart from the usual order and award no order as to costs in view of the immense public interest involved. 

5.I am referred to other local authorities by counsel.  In Society for Protection of the Harbour Ltd v Town Planning Board (No.2) [2004] 2 HKLRD 127, Chu J awarded indemnity costs in favour of the applicant who succeeded in the judicial review application.  The analysis of the learned judge focused on the power to award costs on indemnity basis to a successful party to achieve a fair result.  At paragraphs 14 to 18 of the judgment, Her Ladyship considered the relevance of the public interest element by referring to some overseas authorities.  At para.18, Chu J summed up as follows,

“The authorities noted above have demonstrated that the character of the proceedings and the attributes of the parties are proper matters to be taken into account in achieving a fair allocation of costs between the parties.  Having regard to the fact that the applicant instituted these proceedings in the public interest, that the case carries general public importance and that the applicant is of limited means … I am of the view that this is an appropriate case to order that the applicant’s costs be taxed on indemnity basis.”  

6.Chu J’s decision on costs was upheld by the Court of Final Appeal, see Town Planning Board v Society for Protection of the Harbour Ltd (No.2) (2004) 7 HKCFAR 114.  At para.19, the Chief Justice said,

“The fact that proceedings are commenced to vindicate the public interest, more particularly to protect a public asset which is a central element in Hong Kong’s heritage, rather than to assert or enforce some private right or interest, is plainly relevant to the exercise of the discretion.  Also relevant is the fact that, but for the commencement of the proceedings by the Society, the public interest in securing compliance with the law would not have prevailed and resulted in the resolution of fundamental legal issues.  Likewise relevant are the manifest public importance of the case (the protection of the Harbour) and the Society’s limited finances dependent as they are on public donation.”

7.These were said in respect of a successful judicial review challenge.  The respondent was held by the court to have misdirected itself in law by failing to have proper regard to the presumption in the Protection of the Harbour Ordinance.  Hence, the applicant in that case had secured the due compliance with the law which, but for the challenge by way of judicial review, would have been flouted.  That is plainly an act in furtherance of the public interest.

8.The position is not the same when a challenge fails.  When a respondent successfully defends an application for judicial review and has incurred costs in so doing, there must be some good reason or reasons before it is justified to deprive him of costs, see Scott v Government of the HKSAR [2004] 2 HKLRD 989 at para.18; Leung Kwok Hung v The President of the Legislative Council HCAL 87 of 2006, 27 April 2007 Paras.15 to 19.  I accept that even in such context, the character of the proceedings and the attributes of the parties are proper matters to be taken into account.  Yet, the crucial question is whether these factors are of sufficient weight in the circumstances of a particular case to warrant a departure from the usual order.

9.In Scott v Government of the HKSAR [2004] 2 HKLRD 989 at para.15, Hartmann J made these observations,

“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.”

10.That was clearly not intended to be a full statement of principle governing the exercise of discretion of costs in public interest litigation (I adopt this expression from the judgment of the High Court of Australia in Oshlack v Richmond River Council (1998) 193 CLR 72).  Hartmann J further discussed the law on this topic in Leung Kwok Hung v The President of the Legislative Council HCAL 87 of 2006, 27 April 2007 Paras.20-26.  Instead of quoting extensively from that judgment, I would highlight the following propositions that I derive from it,

(a)     Even in public law cases, the starting point is still costs should follow event (Paras.15 to 19);

(b)    There could be departure from the usual order when the pursuit of the litigation is not for private gain but for clarification of the law.  To that extent, the litigation is in furtherance of the interest of the society as a whole.  In such circumstances, the costs of the litigation can be described as being incidental to good administration (Paras.20 to 24).

(c)     But the application of the principle in (b) should not be elevated to a general immunity from costs for all public interest litigation.  One has to have regard to the circumstances of the case.  If the court makes no order as to costs, very often it means that the costs of the litigation would be borne by public funds (Paras.25 to 26).

11.Mr Yu SC highlighted the last point succinctly by submitting that in the contest on costs, the question is whether the Applicants or the general public should bear the costs consequences for their action.  Thus focused, it can readily be appreciated that the underlying rationale for departure from the usual order has to lie in the furtherance of the interest of the society as a whole. 

Litigation in furtherance of public interest: the relevant criteria

12.Given the inherent nature of case law in our legal system, every judicial decision is a precedent and can provide some guidance for future actions and decisions.  Further, there are many challenges in public law cases which have wider implications than the immediate subject matter.  Unless there is a principled and clear set of guidelines for deciding whether a judicial review is in furtherance of the interest of the society as a whole, there is a risk that this exception to the usual order for costs will be reduced to a rule that so long as some public purpose or purposes are being served by the litigation, a litigant pursuing the litigation without any personal gain would be immune from liability as to costs.

13.In this connection, I would respectfully agree with the powerful observations of McHugh J (who together with Brennan CJ were the minority) in Oshlack v Richmond River Council (1998) 152 ALR 83 at Para.72,

“If discretions concerning costs are to be exercised consistently and rationally, it is essential that the courts formulate principles and guidelines that can be applied with precision in most cases.  If characterization as ‘public interest litigation’ is a factor to be considered when making costs orders, costs must be able to define the term with precision.  They must eschew any notion of the ‘I know it when I see it’ type of reasoning.  If courts are to retain the confidence of litigants and the wider community, they must continually reaffirm and demonstrate that their decisions are based on objective reasons that are articulated and can be defended.”

And then at para.75,

“Without an organizing principle to apply or a set of criteria to guide, there is a real danger that, by invoking the ‘public interest litigation’ factor in cases that affect the public interest or involve a public authority, an award of costs will depend on nothing more than the social preferences of the judge, a dependence that will be masked by reliance on the protean concept of public interest.”      

14.In the present case, Mr Lee SC referred to the three criteria in the judgment of Kirby J (one of the three judges that constituted the majority) in Oshlack as providing the necessary guidelines.  At para.136, His Honour identified the following as the approach demonstrated by the common law authorities,

“… a discrete approach has been taken to costs in circumstances where courts have concluded that a litigant has properly brought proceedings to advance a legitimate public interest, has contributed to the proper understanding of the law in question and has involved no private gain.  In such cases the costs incurred have occasionally been described as incidental to the proper exercise of public administration.  Upon that basis it has been considered that they ought not to be wholly a burden on the particular litigant.” (my emphasis)

15.Counsel also referred to para.139,

“If a court considers that the litigant, whoever it may be, has wasted the court’s time, had no legal merits or should have prosecuted its objections elsewhere, the ordinary compensatory rule would prevail.”

That was said by way of an answer to the submission of the respondent set out in para.138,

“The council next urged that the endorsement of a special approach in the case of so-called public interest litigation would needlessly embroil the courts in what were, effectively, political campaigns.  These were properly to be waged in other public forums by public advocacy, letter writing campaigns, media interviews and the like.  Courts should not encourage their processes to be used for such purposes.”

16.Mr Yu did not disagree with the criteria identified by Kirby J.  However, there is a need to refine what is the meaning of “properly brought proceedings”.  Mr Lee submitted that if the judicial review was brought with the leave of the court and raised challenges on proper public law grounds, this criterion is satisfied.  On the other hand, Mr Yu submitted that should be read in the light of Paras.138 and 139.  Counsel urged the court to have regard to the proper purpose of judicial review and since the furtherance of public interest lies in the clarification of the law for the benefit of the community as a whole, the court should ask whether the purpose of the judicial review is to resolve a point of law which is of general public importance so that it is in the public interest to have the matter litigated in a court of law. 

17.Subject to one rider, I agree with Mr Yu.  I think Mr Lee’s formulation put the threshold too low.  The practice in our courts is that leave would be granted for judicial review if the judge considers that the matter is potentially arguable, see Ho Ming Sai v Director of Immigration [1994] 1 HKLR 21; Chu Woan-chyi v Director of Immigration CACV 331 of 2003, 5 July 2004.  The judge will examine the grounds to see whether they are formulated as public law grounds of challenge.  But it is generally not difficult to obtain leave.  In my view, it is an altogether discrete question to ask whether the judicial review is raising a point that guidance from the court should be sought so as to characterize the litigation as one for the benefit of the community as whole and to justify the costs of the same be borne by the public purse as costs incidental to good public administration. 

18.The rider I have is that the disputes that could properly be resolved by the court are not confined to points of statutory construction or development of common law principles.  Application of the law to the facts of a case is also a proper subject for judicial determination.  In some instances, how the law is to be applied in a particular factual matrix can contribute to the proper understanding of the law.  Sometimes it may not be easy to draw the line between a decision on statutory interpretation and a decision on how the law should be applied.  Depending on one’s formulation of the points in issue, Society for Protection of the Harbour Ltd v Town Planning Board (2004) 7 HKCFAR 1 and Lo Siu Lan v Hong Kong Housing Authority (2005) 8 HKCFAR 363 can be put into either category.  In a broad sense, the application of the law to the facts of a case is itself a question of law. 

19.Given the second criterion, the resolution of the points in issue must contribute to the proper understanding of the law before the test can be satisfied.  Thus, I do not think one should be narrowly confining the “properly brought proceedings” under the first criterion to points of statutory construction or development of common law principles.  In my view, under the first criterion, one should focus on whether it is in the interest of the community as a whole to pursue the litigation in a court of law having regard to the proper role of the court in judicial review.  

20.As I said in Para.1 of my judgment of 10 August 2007, the court is concerned with the legality of administrative decision in judicial review.  The court is not the forum for debating the political or social judgment embodied in an administrative decision.  

21.As observed in para.139 of Kirby J’s judgment in Oshlack, it is relevant under the first criterion to have regard to the merits of the challenge and the utility of litigating the matter in a court of law as opposed to the ventilation of the objection by other channels. 

22.Regarding the merits of a challenge, for reasons already canvassed, it is not enough to have a case that warrants leave to be granted for judicial review.  Since the question of costs arises in the context where an applicant has failed, it is to an extent unreal to refer to the probability of success in terms of merits.  However, Mr Lee quite rightly reminds this court that the matter should be tested by reference to the position at the time of the commencement of the proceedings. 

23.In R (Corner House Research) v Secretary of State for Trade and Industry [2005] 4 All ER 1, the English Court of Appeal gave guidance on the making of pre-emptive costs orders to protect an applicant from exposure of costs in public law cases.  Merits is one of the criteria and the test set by Lord Phillips MR is that the applicant’s case has to have a real prospect of success, viz.  the case is properly arguable (see Para.73).  It is a higher threshold than the grant of leave for judicial review under Ho Ming Sai.  I think this is the minimum that an applicant must satisfy before he can contend that the canvassing of his arguments in court is in furtherance of public interest.  It cannot be in the public interest of the community as a whole to require the use of public fund to pay for the costs of the legal proceedings for resolution of an argument which has no real prospect of success.  In fact it would be against public interest to deploy judicial and public resources in such manner.

24.In Oshlack at para.68, McHugh J considered the usual costs order could “instill in a party contemplating commencing … litigation a sober realization of the potential financial expense involved”.  Mr Lee submitted that potential liability for costs could have a chilling effect on future applicants pursuing public interest litigation.  I accept that liability for costs can be an inhibitive factor.  However, it would be wrong and disproportionate to over-emphasize that factor such that public fund has to be deployed to underwrite litigations that only have little prospect of success.  It is equally wrong to dictate that the public purse must pay for the court proceedings when the proper venue for the ventilation of the underlying issues should be elsewhere. 

25.In this connection, I see no reason why the need to have a discipline on the part of litigants should not be applicable to public interest litigation.  Though the court will have regard to the special character of public law challenges brought with a view to advance what an applicant perceived as public interest, it does not mean that such discipline should be completely disregarded.

26.It should also be obvious that whether the proceedings has been properly brought to advance public interest cannot be dictated by an applicant’s own perception of public interest.  There are many instances where different persons could have different perceptions as to what is in the best interest of the public.  The question has to be assessed objectively and the relevant interest is the interest of the community as a whole.  In the context of the prosecution of public interest litigation, the court has to assess whether the litigation raises a point of general public importance on which guidance from the court can properly be given and whether the court is the appropriate forum for the debate.

27.Mr Lee urged upon this court to draw a distinction between purpose and motive.  Counsel relied on para.140 in the judgment of Kirby J in Oshlack,

“The issue is not the subjective motivation of the litigant but the public or private character of the litigation.”

28.That statement was dealing with the question whether a piece of litigation was brought in the pursuit of public interest.  I agree with His Honour that the court should focus on the character of the litigation instead of examining the motive of the litigant behind the litigation to decide whether the relevant criteria are satisfied.  By the same token, a litigant cannot rely on his laudable motive to ask the court to invoke the exception if the character of the litigation cannot bring it within the exception.  The character of the litigation must be determined with reference to the issues raised and decided in the proceedings, not the wider problems which a litigant hopes to resolve incidentally with the commencement of proceedings.

29.I shall therefore formulate the three criteria as follows, 

(a)     A litigant has properly brought proceedings to seek guidance from the court on a point of general public importance so that the litigation is for the benefit of the community as whole to warrant the costs of the litigation be borne by the public purse as costs incidental to good public administration;

(b)    The judicial decision has contributed to the proper understanding of the law in question;

(c)     The litigant has no private gain in the outcome.

30.I should also mention that the public interest element is only one of the factors that is relevant for the exercise of the discretion as to costs.  Even if all these criteria are satisfied, the court must also have regard to other relevant factors such as the conduct of the litigants in the proceedings in coming to a final decision on what is just in the circumstances.  It is ultimately a matter of discretion, hence the use of the word “occasionally” in the dicta of Kirby J.

Application of the criteria to the present case

31.The first step is to identify the character of the present application.  Mr Lee submitted that the application raised a very important question, viz. whether the Queen’s Pier could be preserved in situ and this is identified as the question of general public importance.

32.With respect, that is a misidentification.  It might be the Applicants’ motive underlying their challenge in the present application to achieve the preservation of the Queen’s Pier in situ.  However, such target is not and cannot be the subject matter of this judicial review.  What is being challenged is the decision of the Authority of 22 May 2007 not to declare the Queen’s Pier to be a monument under Section 3 of the Antiquities and Monuments Ordinance. 

33.Even if the Applicants were successful in the judicial review, all they could have achieved is to have the matter remitted back to the Authority for a further consideration on whether such a declaration should be made.  The court does not have any power to make such a declaration.

34.Further, even if upon re-consideration the Authority were of the view that the process under Section 3 should be triggered, he had to consult the Board again.  Notwithstanding the Grade I classification, there is no guarantee that the Board would endorse a declaration being made under Section 3 given the difference in opinions at the meeting of 9 May 2007.  I have already explained in my judgment of 10 August why a Grade I classification is not equivalent to a decision that a declaration should be made under Section 3. 

35.There is also no guarantee that the Chief Executive would give his approval which is another pre-requisite under Section 3.

36.Still further, a declaration under Section 3 does not mean that the subject monument would not be demolished.  Section 6(4) gives the Authority the power, after consultation with the Board and with the approval of the Chief Executive to declare a monument be exempt from the restriction under Section 6.

37.Hence, the decision challenged by the Applicants are many steps remote from a decision to preserve the Queen’s Pier in situ.

38.All these should be apparent from the Ordinance.  Even though the Applicants are laypersons, they are well educated.  Also, they have been advised by experienced lawyers before they commenced their applications.

39.The issues raised for determination in the judicial review are those embodied in the grounds supporting the application.  The Wednesbury challenge was based on the argument that inadequate weight had been given to the Grade I classification of the Board.  It should be apparent that the Authority very much had the Grade I classification in mind when he made the decision of 22 May.  The Applicants tried to argue that it is Wednesbury unreasonable for the Authority to reach such decision notwithstanding the Grade I classification and they failed.  On a proper understanding of the roles of the Authority, the Board, the AMO and the purpose of the Classification system, the argument does not have much merit.  It is not an argument that had a real prospect of success.

40.Mr Lee submitted that the respective roles of the Authority, the Board and the AMO and function of the Classification system are not clearly mapped out in the Ordinance.  However, they have been clearly spelt out in the Legco papers that were available to the Applicants before they decided to embark on the judicial review.  The Applicants should have been aware of their lack of merits.

41.The Wrong Test challenge was based on certain parts of the Authority’s public statement when he announced the decision of 22 May 2007.  But that was only a brief account of the decision.  The Applicants were also aware of the internal minute and Legco papers setting out the full reasons of the Authority’s decision.  It is apparent from these documents that the Authority did not confine his consideration to pre-war buildings and consistently a high threshold had been adopted.  The Ordinance gives the Authority a wide discretion to decide whether a Section 3 declaration should be made and there is no proper reason to suggest a high threshold is wrong in law.  This challenge also did not have any real prospect of success.

42.Thus, as far as the issues that were actually raised in the judicial review are concerned, I do not think they are of sufficient merits to justify the public purse to underwrite the costs of determining the same.  Since the answers to those issues could have readily been found in the Ordinance and the Legco papers, I do not think it serves any public interest to have the matter litigated in court.  The Applicants may not like those answers and they were at liberty to test them in court.  However, they could not claim to have done so for the benefit of the society as a whole.

43.Likewise, the Applicants may feel that the present system is inadequate.  However, the court is not the place for debating whether there should be any legislative changes.  Nor should judicial review be deployed as a platform for lobbying support for a review of the existing legislation.

44.Hence, I am of the view that criterion (a) cannot be satisfied.

45.As regards criterion (b), Mr Lee submitted that this was the first occasion where the court was called upon to consider section 3 of the Ordinance and the statutory scheme.  It is said that the judgment of 10 August 2007 has clarified the respective roles of the Authority and the Board and the AMO as well as the nature of the Classification system. 

46.As I have said, in a sense, every judicial decision has a contribution to the proper understanding of the law.  To satisfy criterion (b), it has to be a significant contribution to a point of general public importance.  Whilst I agree that the heritage protection system is a matter of general public importance, I do not think the decision on the narrow points raised in the grounds of challenge could be described as a significant contribution to the proper understanding of the law.  Though the Wednesbury challenge did bring about an examination of the respective roles of the Authority and the Board and the AMO as well as the nature of the Classification system, the resolution of the same is quite straightforward if one has read the Ordinance carefully together with the Legco papers.  The Wrong Test challenge was primarily based on a misconception that the Authority had adopted a pre-war criterion.  It was simply wrong on the facts. 

47.I do not think the present case comes within criterion (b). 

48.Notwithstanding the submissions of Mr Yu, I am prepared to accept that the Applicants had no personal gain in the matter.  However, that by itself is not enough to justify a departure from the usual order.

49.Therefore, the Applicants cannot rely on the public interest litigation exception to the general rule. 

50.Having come to this conclusion, it is not necessary for me to consider whether the court should still exercise its discretion against the Applicants on account of their conducts (in particular the timing of the application) notwithstanding that the Applicants were otherwise able to make out a case for the public interest litigation exception.  I shall confine myself to these observations.  I agree with Mr Yu that given the background leading to the dispute, the court expects a litigant to challenge the decision of 22 May 2007 expeditiously.  The Applicants said they had waited for the outcome of the Legco’s approval for the funding of the preservation project on 15 June before serious consideration was given to apply for judicial review.  This explanation smacks of tactical manoeuvre.  If the Applicants’ real objective were the exercise of the power of the Authority under Section 3 instead of exploring all possible means to prevent the demolition of the Queen’s Pier, they should proceed with the preparation of the judicial review right away without regard to the Legco’s later decision on funding.  There is evidence that the delay in the progress of the works relating to the demolition of the Queen’s Pier will occasion monetary liabilities that may have to be borne by public fund.  The importance of proceeding with promptitude in an application for judicial review was highlighted by Stock JA in Lo Siu Lan v Hong Kong Housing Authority CACV 378 of 2004, 17 December 2004.  Any applicant who wishes to launch a judicial review, whether in furtherance of public interest or otherwise, should pay attention to that judgment, in particular paras.33 to 40.

51.I shall make an order that the Applicants shall pay the Respondent’s costs of the judicial review and such costs shall be taxed if not agreed.

Mr Martin Lee, SC and Ms Jocelyn Leung, instructed by Messrs Or, Ng & Chan, for the 1^st and 2^nd Applicants

Mr Benjamin Yu, SC and Mr Godfrey Lam, instructed by Department of Justice, for the Respondent