Ghulam Rbani v. Secretary for Justice for and on behalf of Director of Immigration

DCCJ 531/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 531 OF 2010

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Before: His Hon Judge Leung in Chambers (decision on paper)

Date of the plaintiff’s written submissions: 11 November 2011

Date of the defendant’s written submissions: 25 November 2011

Date of the plaintiff’s reply submissions: 5 December 2011

Date of decision: 16 February 2012

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DECISION ON COSTS

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1.On 13 October 2011, I handed down the judgment in the present case (“the Judgment”) whereby I dismissed the claim of the plaintiff (“G”) against the defendant (“the Director”). I made a nisi order that G shall pay the Director’s costs of this action, including any costs reserved, to be taxed, if not agreed, with certificate for 2 counsel.

2.G applies to vary the nisi costs order.  He contends that the Director shall pay his costs of the action.  Alternatively, the Director should be liable for the costs of this action up to the filing of the amended defence.  In any event, G asks for the costs to be awarded to him and the costs of this application, both to be taxed on a common fund basis.

3.I shall adopt herein the same expressions and abbreviations as defined in the Judgment.

THE STARTING POINT

4.Under O.62, r.3, the Court shall order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.  That costs shall follow the event is not merely an option but the starting point in the exercise of the court’s discretion.  G seems to acknowledge that only when it comes to his reply submissions.

5.Failing on liability, the claim herein was dismissed.  The nisi costs order was made following such event.  Seeking to displace that, G bears the burden of showing that the circumstances justify the exceptional course of such displacement.

WHETHER SOME OTHER COSTS ORDER SHOULD BE MADE

6.O.62, r.5 provides that:

“(1) The Court in exercising its discretion to costs shall, to such extent, as may be appropriate in the circumstances, take into account:-

(aa) the underlying objective set out in Order 1A, rule 1;

……

(d) any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings, but the Court may not take the offer into account, if at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under O.22;

(e) the conduct of all the parties;

(f) whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(g) any admissible offer to settle made by a party, which is drawn to the Court’s attention.

(2) For the purpose of paragraph (1)(e), the conduct of the parties includes:-

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defend his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

Whether no choice but to litigate

7.The major contention of G is that the case would have been settled, but for the conduct of the Director both before and after the commencement of action.  He allegedly had no choice but to litigate and to continue to litigate.

8.My attention is drawn to the offer to settle at the sum of HK$50,000 made on behalf of G to the Director prior to the commencement of action.  The offer was not accepted; and the present action was commenced.

9.The offer was made at a time when the Director had yet to plead reliance on section 11 of the HKBORO.  At that stage the constitutionality of the power to detain under section 32(2A) (as opposed to section 32(3) or (3A)) was arguable. Nevertheless, I see no basis for reasonably expecting that the Director, as Mr Chow SC puts it in his submissions, should have just paid out of the public fund to get rid of the potential claim. This was so irrespective of any history of out of court settlement of similar claims by the Director.

10.On behalf of G, it is submitted that it was reasonable for him to initiate the present action, in view of the judgment in the case of A.  It does not appear to me that the Director ever takes issue as to whether the commencement of proceedings was itself improper.  But G could not fairly attribute his decision to commence the present action to the Director’s refusal to yield in view of the judgment in the case of A.  The fact was that G decided to commence the present action; but ended up with a result no better than his pre-action offer.

11.After the commencement of action, G filed his mediation certificate in September 2010.  The Director filed his in the following month; and the mediation response in November.  The correspondence thereafter recorded the parties’ effort in agreeing to the mediation arrangement.  G criticises that the Director actually had no intention to mediate because the terms and cost of the mediation proposed by the Director were all unreasonable.

12.Mediation could start off and be proceeded with only as a consensual arrangement.  Considering the parties’ correspondence, I do not agree that the Director was unreasonable in his proposal of the arrangement.  Nor could adverse inference be drawn that the Director merely paid lip service to mediation attempt.

13.Indeed the Director subsequently changed his mind in January 2011.  In February 2011, the Director filed a mediation certificate stating that he was not willing to mediate.  But an explanation was given, namely, that in view of the recently handed down judgments in the cases of Ubamaka (19 November 2010) and MA (6 January 2011), the Director decided to seek the court’s determination of the effect of section 11 of the HKBORO on the exercise of the power to detain under section 32 of the IO.  The Director proceeded to obtain leave and to amend the Defence along this line on 18 March 2011.  The Judgment proves the Director right.

14.G complains that his case was not the proper one for the purpose of seeking the court’s determination of the applicability and application of section 11 of the HKBORO.  It is argued that the Director should have brought the case of A to the Court of Final Appeal instead of “revisiting” the judgment in that case in the present case.  G was allegedly obliged to continue the proceedings as he was chosen by the Director to be the test case.  He could not discontinue or give up the action because of possible adverse costs consequence.

15.I have reservation about the fairness of the complaint.  The judgment in the case of A was handed down in July 2008.  By the time when the Director raised section 11 of the HKBORO in the appeal in Ubamaka in January 2010, a substantial extension of the time would have already been necessary for the suggested appeal on the same point in the case of A.  As Mr Chow SC submits, there would also be the concern about seeking an extension of time for the suggested appeal out of time merely on the basis of the change in the understanding of the law subsequent to the judgment in the cases of Ubamaka and MA (which came even later): see HKSAR v Hung Chan Wa (2006) 9 HKCFAR 614 (at §§21-25); Lau Luen Hung Thomas v Insider Dealing Tribunal (2009) 12 HKCFAR 955 (at §7).

16.In any event, whether the Director could or should have sought to raise the argument in respect of section 11 of the HKBORO in a further appeal in case of A, nothing prevented the Director from relying on the same as defence to G’s claim.  There could be no reasonable expectation that the Director somehow should have settled G’s claim and chosen another case for the purpose of testing legal argument.

17.One should not lose sight of the fact that the present case was from the outset till the end no different from any other civil cases as far as the parties to the case are concerned.  Whatever view the legal representatives might have taken about the significance of the determination of this case, G was here to claim for private remedies that he claimed to be entitled to.

18.Likewise, consideration by the legal representatives of the parties of whether or not this case might be a test case or whether some other cases should have been heard together was a question of case management, which had already been dealt with by the master.  That was however irrelevant to the plaintiff’s decision to continue the present litigation or not.

19.Whether the parties or either of them decided to continue with the claim or the defence was a matter of assessment of the merits and risk of litigation.  The decision to continue the litigation, as much as that to initiate it, reflected only the conscious undertaking of such risk.

20.If for some reason G ever changed his mind so that he did not want to continue the litigation, he had the liberty to do so.  Suffering adverse costs consequence, as it is suggested on his behalf, might be the result of such a decision.  But avoidance of the risk of further costs in the event of failure to establish liability would have been the justification for such a decision, particularly when G has been litigating with the support of public fund.

21.Whilst suggesting that he had no choice but to continue the litigation, G was apparently never passive or restrained in advancing his claim.  On the one hand, G took the view HK$50,000, later HK$30,000, would have been a realistic sum for settlement purpose.  On the other hand, he amended his claim in as late as February 2011 to increase his claim from HK$70,000 substantially to HK$800,000, comprising the claim for aggravated and exemplary damages as well as the novel claim for constitutional damages in the sum of HK$400,000.  All of these additional heads of damages failed at the end.

22.There is no counterclaim.  If the suggestion is that G would have had no intention of proceeding with his claim but for the Director’s decision to defend it all the way to a determination by the court, I find the suggestion to be unacceptable. As Mr Chow SC puts it in his submission, it is wholly ingenuous for G to suggest that.

Sanctioned offer

23.My attention is also drawn to a sanctioned offer made on behalf of G on 13 September 2010 to settle his claim at the sum of HK$30,000.  It is submitted that he has beaten the sanctioned offer because this court assessed the damages to be exactly HK$30,000.

24.I do not see how G could say that.  O.22, r.24 provides for the costs and other consequences, as set out in sub-rules (2) and (3), where the plaintiff does better than he proposed in his sanctioned offer.  Sub-rule (1) makes it clear that:

“This rule applies where:

(a) a defendant is held liable for more than the proposals contained in a plaintiff’s sanctioned offer; or

(b)the judgment against a defendant is more advantageous to the plaintiff than the proposals contained in a plaintiff’s sanction offer.”

Sub-rule (4) provides that:

“where this rule applies, the Court shall make the orders referred to in paragraphs (2) and (3) unless it considers it unjust to do so.”

25.The statutory mechanism as to costs and other consequences under r.24 can be invoked only if sub-rule (1) is satisfied.  In the absence of finding of liability or judgment in favour of G, sub-rule (1) is in no way satisfied in the present case.

The issue approach

26.The Director sought to distinguish the present case from the case of A on the basis that the present case involved the power to detain under section 32(2A) of the IO as opposed to that under section 32(3) and (3A) in the case of A.  I found that G was detained under section 32(2A); and such detention was also contrary to Art 5 of the HKBOR.

27.The Director disputed the causation between the lack of certain and accessible detention policy and G’s detention and thus his sufferings.  As explained in the judgment, this was raised in the context of quantum, not liability.  G was said to be entitled to no more than nominal damages, even if liability were established.  I found causation was proved.

28.G asks that the costs order should reflect the failure of the Director in respect of the above issues.  Effectively G is asking the court to ‘fillet’ the costs.

29.The relevant principles in Re Elgindata Ltd (No 2) [1993] 1 All ER 232 (at 237e-h, per Nourse LJ) are well known and were applied in La Chemise Lacoste SA v Crocodile Garments Ltd [2000] 4 HKC 317 (at 327, per Rogers VP); and Rabobank, Hong Kong Branch v Bank of China, HCCL 56/2001 (23 July 2004 at §17).  They were set out in Wang Din Shin v Nina Kung, CACV 460/2002 & CACV 67/2003 (19 April 2005 at §39) as follows:

(1)  Costs are in the discretion of the court.

(2)  Costs should follow the event, except where it appears to the court that in the circumstances of the case some other order should be made.

(3)  The general principle that costs follow the event does not cease to apply simply because the successful party raises issues or made allegations that failed, but that he could be deprived of his costs in whole or in part where he had caused a significant increase in the length of the proceedings.

(4)  Where the successful party raised issues or made allegations improperly or unreasonably, the court could not only deprive him of his costs but could also order him to pay the whole or part of the unsuccessful party’s costs.

30.In G’s reply submission, reference is made to what Lord Woolf advocated in AEI Rediffusion Music Limited v Phonographic Performance Limited [1999] 1 WLR 1507 (at 1523A-B) in favour of making partial orders for costs which reflect the level of success achieved by the successful party (cited from Hong Kong Civil Procedure 2012, Vol.1 at 62/5/7).

31.However, in Akai Holdings Limited (in liquidation) v Thanakharn Kasikorn Thai Chamkat (Mahachon) [2008] 6 HKC 82, Stone J commented [*]:

“26. For my own part I am able to identify no predisposition in the Hong Kong courts similar to that to which Lord Woolf made reference in AEI Rediffusion Music Ltd, op cit, that is, to a movement away from the Elginata approach towards a situation wherein, as Lord Woolf expressed it, even prior to the fundamental changes in English civil procedure there had been a change of emphasis abroad requiring the courts to be more ready to make separate orders reflective of the outcome of different issues, and that the new Civil Procedure Rules simply had accentuated this pre-existing tendency

27. I do not consider this to be the case in Hong Kong.”

32.The discussion of the English authorities since Re Elgindata Ltd (No 2) contained in the rest of the passage (62/5/7) in the Hong Kong Civil Procedure 2012 referred to in the reply submission on behalf of G, in my view, should be read in the light of Stone J’s comment about the local situation.

33.The principles summarised under paragraphs 29(1) and (2) above are still in line with the current O.62, r.3.  Paragraph 29(3) above sets out the circumstances where the successful party may be deprived of part of his costs.  I would have thought that they could belong to the circumstances that the court should take into account under the current O.62, r.5(1)(e) and r.2.  Paragraph 29(4) above goes further; and covers the situation where the successful party may be ordered to pay the unsuccessful party’s costs.  Besides O.62, r.5(1)(e) and r.2, O.62, r.7 clearly covers such situation.  In my view, the principles in the above cases remain the valuable guidance to the exercise of the discretion as to costs under the current statutory framework.

34.Stone J in Rabobank, Hong Kong Branch (above at §§13; 17) and Akai Holdings (above at §28-31) [**] reiterated that unless discrete points can safely be isolated and can be shown to have led to a wastage of time and costs, the practice of the court is not to engage in any “filleting” of cases according to the success or failure of the disparate issues which, when taken cumulatively, constitute the dispute to be judged.  In such case, a more general assessment should be made.

35.In respect of the applicability of case of A, it is not correct to say that the Director completely failed in his contention.  To start with, there was the dispute as to whether G was and could be detained pursuant to section 32(2A) instead of section 32(3A).  I found in favour of the Director (see §§60-63 of the Judgment).  Then there was the dispute as to whether the judgment of the case of A relates to section 32(2A) or, as the Director contended, section 32(3) and (3A) only.  I also found support for the Director’s contention (see §§64-70 of the Judgment).

36.It was on the above basis that I proceeded to consider whether according to the principles discussed in the case of A the power to detain under section 32(2A) should also be condemned as sections 32(3) and (3A).  I found against the Director only on that.

37.In other words, in my judgment and with respect, the conclusion in the case of A (and that it is binding) is not itself the answer to whether the detention of G was contrary to Art 5 of the HKBORO, a question that G has the burden of proving, besides striking down the section 11 HKBORO contention, in order to establish liability.

38.In respect of causation, the Director succeeded in his argument on the burden of proof of causation but failed in his argument on whether the burden was discharged (see §§96-109 of the Judgment).  Neither was isolated or distinct from the issue of causation as matter of quantum which was properly raised and a necessary element of the claim that G needed to prove so as to be entitled to substantial damages.

39.In suggesting that the above issues led to the incurring of time and costs, I also note that G makes no mention of the other issues of quantum raised by him.  As mentioned, it was G who substantially amended the heads and amount of claim in as late as February 2011.  All these were seriously argued and tried as well.

40.Reference is made to the number of paragraphs in the Judgment devoted to the discussion of these issues.  That, I am sure, does not provide the correct measure of the time and costs incurred in respect of the resolution of the above issues in dispute for the present purpose.

41.Upon the above principles, it cannot be said that the Director has raised or pursued discrete issues that had no bearing on the real questions that G would have had to establish in the present suit.  Nor can it be said that the determination of these issues has significantly prolonged the trial (which finished well within the 2 days scheduled) or led to significant wastage of time and costs.  In the circumstances, I do not agree with the suggested “filleting” of costs.

Costs up to the Amended Defence

42.It is argued that but for the contention in respect of section 11 of the HKBORO, G would have succeeded.  The contention however was not made in defence until it was introduced by way of amended defence on 18 March 2011 (pursuant to leave dated 18 February 2011).  It is argued that G should have the costs of this action up to that date.

43.As mentioned, G’s claim already entailed the burden of proving that (even without section 11 of the HKBORO) the judgment in case of A (which concerned section 32(3) and (3A) of the IO) gave rise to his right to claim damages for his detention under section 32(2A), which was in dispute.  His claim also entailed the need to prove his right to substantial damages in the amount claimed.  In the circumstances, it cannot be said that he should be entitled to the costs of the action up to the amended defence as if the costs incurred prior to the amended defence were wasted.

Witnesses not called

44.By the reply submission, it is pointed out on behalf of G that only 1 of the 4 witnesses for the Director whose statements had been filed was called during the trial.  Hence the costs of the Director in connection with the statements of the witnesses not called should be disallowed.  Such costs were clearly wasted and I agree that G should not be made to bear them in any event.

Scale of taxation

45.G asks for costs to be taxed on a common fund basis, which is of course higher than the normal party and party basis.  But I do not see the circumstances as discussed warrant not only the variation of the incidence of the costs liability but also the scale of taxation of costs.

Conclusion

46.Subject to the qualification under paragraph 44 above, the nisi costs order should be made absolute.

COSTS OF THE PRESENT APPLICATION

47.The Director argues that regardless of whether G is ordered to pay the Director’s costs or vice versa, ultimately the costs of litigation will have to be borne by the taxpayers.  No useful purpose can be served by G’s present application; and this only leads to further costs.  Therefore even if G succeeds in the present application, the costs it will recover will not go into his pocket.  On this basis, the court, the Director argues, should disallow G’s own costs of and incidental to the present application on legal aid taxation.

48.I do not agree.  As much as a party who is legally aided could be made subject to an adverse costs order following the outcome of the case, the approach to determining the incidence of the costs liability between the parties who are both supported by public fund should make no material difference: see Chan Sau Kut & Anor v Gray & Iron Construction & Engineering Co [1986] HKLR 84 (at 91F-92).

49.G is hardly the successful party in the present application.  Therefore the Director should have the costs of the present application, which shall be taxed, if not agreed, with certificate for 2 counsel; and G’s own costs shall be taxed in accordance with the Legal Aid Regulation.

ORDER

50.I make an order in line with paragraph 46 above.  In respect of the costs of the present application, I make an order as concluded in the preceding paragraph.

PROCEDURE

51.Finally a few words about the procedure.  This application first came by way of letter from the solicitors for G.  The letter set out the submissions and the costs order sought, with a view to obtaining the court’s ruling on paper.

52.There came the letter from the Department of Justice criticising the mode of application by G for variation of the nisi costs order.  The cited PCCW-HKT Telephone v Telecommunications Authority, CACV 274/2003 (7 September 2004), in particular (at §11):

“Lastly, I would just like to make some observations on the way in which the TA has made the present application to vary the costs order nisi under O.42, r.5B(6). As mentioned above, this was done by way of letter. This was wrong. Applications to court should be made by way of a summons or motion, and not by the informal way that was chosen in the present case. The reason for this requirement is to enable the other side and the Court to understand exactly the nature and extent of what is being asked for. Otherwise, there is a danger that it becomes unclear just what is being sought from the Court, thereby allowing parties to ask for relief in a haphazard manner. The present case provides a good example. On the TA’s part, an application that the costs order nisi be changed to one of no order as to costs developed into an application that while this was the primary order sought, the alternative relief was one of partial costs in favour of both sides. On PCCW’s part, a late application was made in its written submissions for a certificate for 2 counsel (which, as it turned out, was unnecessary).”

53.The Department of Justice was right (and indeed I did direct the solicitors for G to fix an inter partes hearing upon receipt of their letter of application).  However it was not that the Department was opposed to the disposal of the application on paper.  On the contrary, they too took the view that an oral hearing would not be necessary.  However they took issue that G should nevertheless have taken out a summons while the court at the same time gave directions for the filing of written submissions.  In reply, the solicitors for G confirmed no objection to a ruling on paper; but were silent about the taking out of a summons.

54.In PCCW-HKT Telephone, the Court of Appeal nevertheless proceeded to consider the application in hearing.  When the Court said application by informal letter was wrong; and a summons or motion would have required, they explained the purpose of that would be to enable the other side and the court to understand exactly the nature and extent of what is being sought.  The summons serves the purpose of setting out the costs order, as varied from the nisi order, being sought; and prevents the evil that would happen, as that actually happened in that case.  Rather than differing from the appellate court, I venture to suggest that with the parties applying the necessary prudence, the same purpose may be achieved, and the evil be prevented, without the form of a summons.

55.An application such as the present one could have been taken out in one of two ways: The applying party takes out a summons for a hearing; and the parties, if appropriate, could jointly apply for directions for ruling on paper so that the hearing could be vacated.  Alternatively, the applying party could set out in writing precisely the order being sought; and seek the other party’s agreement to jointly apply to the court for directions for a ruling on paper in respect of the order being sought.  The latter course, if taken properly, should ensure the matter would be fairly and properly resolved while saving costs, now that the underlying objectives of the new rules (O.1A) since the Civil Justice Reform should be given effect to.

56.In the present case, the solicitors for G took neither course from the outset. Nevertheless, as mentioned, they did set out their submissions in detail and the costs order being sought in their application by letter.  In view of the stance of parties indicated though separately, I gave directions for the filing of written submissions; and set aside the previous direction for the fixing of a hearing.  I now dispose of this application on paper.

Mr Philip DYKES SC and Mr Hectar PUN instructed by Messrs Yip & Liu for the plaintiff upon the assignment of the Director of Legal Aid

Mr Anderson CHOW SC and Miss Grace CHOW instructed by the Department of Justice for the defendant

[*]  Stone J’s view in Akai Holdings was expressly endorsed in Moulin Global Eyecare Holdings Limited, in liquidation, HCCW 470/2005 (17 October 2008 at §11, per Kwan J) (not cited by the parties).

[**] The same were repeated in Moulin Global Eyecare Holdings Limited, in liquidation (above at §10(4)).

Please refer to HCMP308/2012 for the relevant appeal(s) to the Court of Appeal.