HKSAR v. Kevin Egan

FACC Nos. 3 and 5 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 3OF 2009(CRIMINAL)

(ON APPEAL FROM CACC NO. 248 OF 2006)

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Between:

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FINAL APPEAL NO. 5 OF 2009 (CRIMINAL)

(ON APPEAL FROM CACC NO. 248 OF 2006)

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Between:

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JUDGMENT ON COSTS

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Mr Justice Litton NPJ (for the Court):

1.Following the judgments of this Court delivered on 28 June 2010, the parties made applications for orders for costs.  Some of these have been disposed of by agreement.  There remain two matters for the determination of this Court:

(1) The basis for taxation of the costs incurred in the proceedings in this Court: An issue common to both Mr Egan (the party in FACC No. 3 of 2009) and Mr Lam (the party in FACC No. 5 of 2009), and

(2) Whether the costs incurred by Mr Egan in the two courts below should be ordered by us to be paid by the prosecution.

It is conceded by the government (the prosecution) that both Mr Egan and Mr Lam are entitled to orders for costs incurred in this Court in their favour: A concession rightly made.

Basis for Taxation

2.There are two provisions of the Hong Kong Court of Final Appeal Ordinance (Cap. 484) relevant to the incidence of costs in this Court:

s. 17(1): “The Court may confirm, reverse or vary the decision of the court from which the appeal lies or may remit the matter with its opinion thereon to that court, or may make such other order in the matter, including any order as to costs, as it thinks fit”.

s. 43(1): “Costs, including costs in the courts below or before a magistrate, shall be paid by such party or person as the Court shall order, and such costs shall be taxed by the Registrar, or some other officer of the Court to whom the Registrar may delegate this function”.

3.As can be seen, the responsibility for “taxing” costs – that is to say, assessing the amount that ought to be paid – rests with the Registrar or his delegate.

4.We are concerned here with costs incurred by parties who have been successful in their defence in criminal proceedings.  This stands upon rather different footings from those of parties in civil suits.  In civil litigation, over the years, the courts have formulated a range of orders to deal with the varying situations which can arise in the course of such litigation: See the notes to Ord. 62 r.1, Rules of the High Court [pp.1077-9 Hong Kong Civil Procedure, 2010 ed.]  Most of these situations simply do not apply in the context of criminal proceedings. 

Costs in Criminal Cases

5.The Costs in Criminal Cases Ordinance (Cap. 492) received the Governor’s assent in January 1997, before this Court came into existence.  In section 2 the expression “Court” was widely defined: It included “a magistrate, the District Court, the High Court and the Court of Appeal.”  (The expression “High Court” was changed to “Court of First Instance” in 1998 to reflect the new hierarchical structure after the handover).  It was envisaged at that time that this Court would replace the function of the Judicial Committee of the Privy Council, thus giving effect to Article 82 of the Basic Law which said that “the power of final adjudication of the Hong Kong Special Administrative Region shall be vested in the Court of Final Appeal of the Region ……”.

6.When the Court of Final Appeal Ordinance became law on 1 July 1997, prima facie this Court came within the definition of “Court” in the Costs in Criminal Cases Ordinance (“Cap. 492”)  This is because, in modern principles of construction, a statute is not treated as being embedded and fossilized in its own time but is generally to be construed as “always speaking”: See, for instance, Lord Steyn in R (on the application of Quintavalle) v. Secretary of State for Health [2003] 2 All ER 113 at 123g.  Thus, the general principles as set out in Cap. 492, in relation to costs awarded by this Court, would apply. 

Section 15(a) states:

“15. General principles

In any criminal proceedings –

(a) the costs that may be awarded by virtue of an order shall not be punitive but shall be such sums as appear to a court or a judge reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings, including any proceedings preliminary or incidental thereto;”

7.This, in our judgment, is a sufficient direction to the taxing authority to properly assess the sums which ought to be paid.  We emphasize this point for this reason: The written submissions presented to us by the parties, pursuant to the Registrar’s procedural directions, raise issues wide of the mark. On the part of the government, it is submitted that the two defendants’ bills of costs should be taxed on the party and party basis, as if they were parties in a civil suit, under Ord. 62 r. 28(2) of the Rules of the High Court, Cap. 4.  On the other side, it is submitted that their bills of costs should be taxed on the common fund basis under paras. (3) and (4) of Ord. 62 r. 28, being a more generous basis than that provided for by para. (2).  This controversy arises partly for this reason: Section 20[1] of  Cap. 492 provides for taxation of bills of costs by the Registrar of the District Court and the Registrar of the High Court, but makes no provisions for taxation by the Registrar of this Court.

8.This is a procedural gap which cannot affect the substantive issue of costs and the liability of the party ordered to bear those costs.

9.To fill the procedural gap, we must look to the rules governing the proceedings of this Court.  Rule 57(1) of the Hong Kong Court of Final Appeal Rules states:

“(1) All bills of costs ordered to be taxed by the Court shall be taxed by the Registrar in accordance with Order 62 ….. of the Rules of the [High] Court (Cap. 4 sub. leg.) and that Order shall accordingly be construed with such modifications, adaptations, qualifications and exceptions as may be necessary for this purpose”.

As can be seen, this Rule provides the procedural framework and speaks of “modifications, adaptations, qualifications and exceptions” to Ord. 62 as may be necessary for the Registrar to do his job properly. This enables the Registrar of this Court to apply the guiding principles and to award such sums as appear to him reasonably sufficient to compensate Mr Egan and Mr Lam for expenses properly incurred by them in the proceedings in this Court, including proceedings preliminary or incidental thereto, under the provisions of s.15(a) of Cap. 492.

Certificate for Counsel: Mr Lam

10.Normally, in taxing bills of costs in this Court, the Registrar would allow the expense incurred by a party who has employed two counsel (subject to the reasonableness of the fees paid).  In this context it is of interest to note Rogers VP’s remarks in relation to the Court of Appeal’s practice with regard to certification:

“12. We have generally adopted the approach that even if people do not ask for it, they will be entitled to a certificate for two counsel ….. But we now will make it clear, as very often people forget to ask for it. In this court we think that no case should come to this court unless it merits two counsel”: Cheung Cho Kam Sindy & anor v. Cheung Yuet Ying Rose CACV 178/08 [unreported].

Giving the judgment of the Court on costs in Hebei Enterprises Limited v. Livasiri & Co. (a firm), FACV No. 23 of 2007 (5 December 2008), Mr Justice Chan PJ said this at para. 4:

“4. In his written submission, Mr Clifford Smith SC for the 1^st Defendant argues that this Court should only give a certificate for two counsel in relation to the Plaintiffs’ costs. Rule 43 of the Hong Kong Court of Final Appeal Rules allows for two counsel to be heard for each party without the leave of the Court. It is thus not necessary to ask for such a certificate for the purpose of taxation of costs, but if any party seeks to recover the costs of more than two counsel, the Court should be invited to certify to this effect. The Plaintiffs have not made any application for such a certificate, although three counsel were engaged on their behalf. As far as the situation before the Court of Appeal is concerned, the recent decision of that court in Cheung Sun Lam v Lai Kam Man and others [2008] 5 HKLRD 1, makes it clear that parties are usually entitled to be represented by two counsel in the Court of Appeal and it is not necessary to ask for a certificate for two counsel unless there are reasons to the contrary.”

11.Mr Lam, in his written submissions, has asked us (i) to award to him all his taxed costs incurred from the commencement of the proceedings and (ii) to certify that his case was fit for two counsel at trial and three counsel in respectively the Court of Appeal and this Court.   As to (i) above, this is Mr Lam’s entitlement consequent upon the judgment in his favour on the appeal and we need say no more about it.  As to (ii) above, we note that the prosecution, with the responsibility for the entire indictment, has employed only two counsel throughout.  Although there is no express provision for certifying a criminal case fit for the employment of any particular number of counsel, it is open to a Court to assist the taxing officer by so certifying. We would grant certificates for two counsel in Mr Lam’s favour throughout.

Certificate for Counsel: Mr Egan

12.Mr Egan, the successful respondent in FACC No. 3 of 2009 in relation to charges 4 and 5, is entitled to an award of costs in his favour in respect of the proceedings in this Court.  We would likewise give a certificate for two counsel in his case.  As regards his costs in relation to these two charges incurred at trial and on the intermediate appeal, these were awarded to him by the Court of Appeal (by judgment on 23 October 2009) and we need say no more about it.

Mr Egan’s costs in the two courts below

13.Mr Egan was acquitted at trial on charges 1 and 3.  His application for costs consequent upon those acquittals was refused by the trial judge.  There the matter ended.  In his written submissions in the Court of Appeal Mr Egan asked the Court of Appeal to award costs in his favour in respect of charges 1 and 3.  The Court of Appeal declined to do so, holding that there were no provisions in the Costs in Criminal Cases Ordinance, Cap. 492, for an appeal against such refusal.

14.Mr Egan lodged no appeal against the Court of Appeal’s order.  We have entertained no argument at the hearing from either side as regards this matter.  It cannot be introduced by the side door on an application for costs now.

Conclusion

15.We determine these applications by the matters set out in paras. 8, 10, 11, 12 and 14 above.  The parties must pay their own costs in these applications.

Written submissions by Mr David Leung and Mr Anthony Chau (of the Department of Justice) for the prosecution (being the appellant in FACC No. 3 of 2009 and the respondent in FACC No. 5 of 2009)

Written submissions by Messrs Robertsons for Kevin Barry Egan (being the respondent in FACC No. 3 of 2009)

Written submissions by Mr Graham Harris and Mr Benson Tsoi (instructed by Messrs Pang, Wan & Choi) for Andrew Lam (being the appellant in FACC No. 5 of 2009)