LAI HOI PING AND ANOTHER v. PERSONS OCCUPYING PORTIONS OF NATHAN ROAD NEAR TO AND BETWEEN ARGYLE STREET AND DUNDAS STREET TO PREVENT OR OBSTRUCT NORMAL VEHICULAR TRAFFIC FROM PASSING AND REPASSING THE OCCUPIED AREAS AND OTHERS

HCMP 3090/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 3090 OF 2014

(ON AN INTENDED APPEAL FROM HCA NO. 2104 OF 2014)

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J U D G M E N T

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Hon Lam VP (giving the Judgment of the Court):

1.  On 25 November 2014, we refused to grant leave to the 2^nd Defendant to appeal against the grant of interlocutory injunction by Au J on 14 November 2014 as amended on 22 November 2014.

2.  By reason of Section 14AB of the High Court Ordinance, there cannot be any appeal from our decision on refusing such leave.

3.  On 23 December 2014, solicitors for the 2^nd Defendant issued a Notice of Motion on his behalf seeking leave to appeal to the Court of Final Appeal.  The 2^nd Defendant (and those advising him) were aware of the difficulty in terms of Section 14AB.  In order to overcome it, the 2^nd Defendant put forward a challenge to the constitutionality of Section 14AB by reference to Article 82 of the Basic Law in the Notice of Motion.  

4.  That notice of motion was issued whilst the 2^nd Defendant’s legal aid application was pending.  The court and the Plaintiff were notified of the legal aid application by a memorandum dated 19 December 2014 (filed in court on 22 December 2014). 

5.  In view of that challenge, this court gave directions for considering the joinder of the Secretary for Justice as an intervening party on 8 January 2015 and partially lifted the legal aid stay for that limited purpose.

6.  The directions were as follows:

“ 1. Notwithstanding the pending applications for legal aid, the following directions shall apply and to that extent, and to that extent only, the legal aid stay is lifted. The applications for leave to appeal to the Court of Final Appeal in HCMP 3090 of 2014 and HCMP 3028 of 2014 shall be listed for hearing together before three judges with an estimate of one day. The Listing Officer shall not fix a date for hearing until paras 2 to 4 below are complied with. If the Secretary for Justice is granted leave to intervene, the date shall be fixed in consultation with the diaries of all counsel, including those instructed by the Secretary for Justice.

2. In view of the challenge to the constitutionality of Section 14AB of the High Court Ordinance, the applicants shall serve the applications and papers relating thereto on the Secretary for Justice who shall indicate within 7 days after service of the papers whether he will intervene in the application.

3. If the Secretary for Justice is minded to intervene, the parties shall try to agree on the terms of intervention (including directions for filing of evidence pertaining to the issue of constitutionality of section 14AB, if necessary) and prepare a consent summons within 14 days after the indication by the Secretary pursuant to para 2.

4. If parties cannot agree on the terms of intervention, they should lodge their respective draft directions for intervention together with submissions thereon (not more than 5 pages) within 21 days after the indication by the Secretary pursuant to para 2.  Unless otherwise directed in the meantime, the court shall rule on the terms of intervention on papers.”

7.  By a letter dated 16 January 2015, the Secretary for Justice indicated that he would intervene and he would liaise with the parties as to the terms of his intervention. 

8.  On 22 January 2015, the Director of Legal Aid informed the court and the parties by a memorandum that he had refused to grant legal aid to the 2^nd Defendant.

9.  Solicitors for the 2^nd Defendant then filed a document on 27 January 2015 called “Application to withdraw an application for leave to appeal”. 

10.  The filing of such a document is not based on any applicable rule and its effect is doubtful.   Rule 11 of the Hong Kong Court of Final Appeal Rules has no application to proceedings in this court. Order 21 Rule 6 of the Rules of the High Court provides that a party who has taken out a summons in a cause or matter may not withdraw it without the leave of the court.   Though the application of the 2^nd Defendant for leave to appeal to the Court of Final Appeal was made by Notice of Motion, the same principle applies. 

11.  By a letter dated 27 January 2015, solicitors for the Plaintiff indicated that the Plaintiff had incurred costs in the perusal and consideration of the matter and sought costs in the sum of $32,000. 

12.  In the absence of further progress in the matter, on 13 February 2015 this court directed that the application for withdrawal be proceeded by summons and upon the issue of such summons, the court would give directions for paper disposal of the application.

13.  On 16 February 2015, solicitors for the 2^nd Defendant issued a summons seeking leave to withdraw the Notice of Motion of 23 December 2014 with no order as to costs.

14.  On 2 March 2015, this court gave directions for the filing of submissions on the application to withdraw.  Parties filed written submissions accordingly.

15.  There is no dispute that the 2^nd Defendant should be permitted to withdraw the application for leave to appeal to the Court of Final Appeal.  The real issue between the parties is whether the 2^nd Defendant should bear the costs of the Plaintiff and if so, for how much.

16.  Mr Dykes SC, together with Ms Yu, advanced the submissions on behalf of the 2^nd Defendant on a pro bono basis, that there should be no order as to costs because at the material time there was a legal aid stay under section 15 of the Legal Aid Ordinance.  Notwithstanding the partial lifting of the stay for the purpose of consideration of joinder of the Secretary for Justice, the general stay was still in place.  He submitted that if the Plaintiff were allowed to claim costs for works done during this period, it would defeat the objects of the Legal Aid Ordinance in protecting persons with limited means exercising their right of access to the court and in giving time to the Director to carry out the necessary enquiries before reaching a decision on the grant or refusal of legal aid.  He further contended that to allow the claim for costs would encourage the late filing of applications with the incidence of the need to seek extension of time.

17.  On the other hand, Ms Leung, submitted on behalf of the Plaintiff that section 15 does not have the effect of precluding the making of an adverse order for costs against an applicant for legal aid in respect of costs incurred pending the decision of the Director of Legal Aid. Counsel contended that there is no justification for depriving the opposite party of costs incurred simply because a party chooses to apply for legal aid after initiating a step in an action. 

18.  Citing Societe Anonyme Pecheries Ostendaises v Merchants’ Marine Insurance Co [1928] 1 KB 750, Ms Leung submitted that as a general rule, an order of stay does not amount to a direction to the parties to hold their hands from the time when the order was made.  At p.759, Atkin LJ said:

“ One of the defendants’ contentions was that the effect of the stay of proceedings was that the plaintiffs could not recover any costs incurred by them during that period --- that they were, as the Taxing Master has put it in his answers to the objections, ‘paralysed’. That seems to me to be quite an incorrect view of the effect of the order. All that the order does is to stay proceedings, and ‘proceedings’ obviously do not include the preparations which may be made by the parties by seeing witnesses, taking proofs, carrying on correspondence, and so forth.”

And then, at p.760:

“ To my mind it is quite a mistake to suppose that an order to stay proceedings amounts to a direction to the parties to hold their hands from the time when the order is made and to indulge in no further activities with a view to ascertaining the facts, procuring evidence and so forth. Such a view would be quite contrary to the ordinary practice.”

19.  But a stay is a factor to be taken into account in terms of the extent to which costs could be reasonably incurred.  This is apparent from what Atkin LJ said further down the same page, after referring to the common practice of continuing with preparation during the period of stay (in the context of stay pending payment of security for costs):

“ They may, of course, go too far and make excessive preparations, and if they make excessive preparations it may well be that the costs will not be allowed …”

20.  The same point can be made by reference to the judgment of Lord Hanworth MR at p.757:

“ It is not a stay of activities, the steps which prudence dictates are not forbidden.”

(Our emphasis) 

See also the judgment of Lawrence LJ at p.765:

“ A solicitor must of course be careful in what he does during such a stay, because the Taxing Master would no doubt take the existence of the stay into consideration in coming to a conclusion whether any costs incurred during such stay were premature or not.”

21.  Ms Leung accepted that the costs have to be reasonably incurred before they could be recovered.

22.  Further, Ms Leung submitted that there was no need for the 2^nd Defendant to take out the Notice of Motion before the Director reached a decision on legal aid.  As held in Brook v The Law Society of Hong Kong [1998] 1 HKLRD 113, the time limit for appeal does not run during the period of the legal aid stay.  Hence, once the 2^nd Defendant made an application for legal aid, the Director would be obliged to file a memorandum under section 15 which would have triggered the stay.

23.  In our judgment, as a matter of principle, a legal aid stay operates in the same way as a stay ordered by the court in respect of potential liability for costs incurred during the interim period. We agree with Ms Leung that such a stay does not amount to a direction to withhold all activities.  We can envisage scenarios where a party facing a legal aid stay would need to have legal advice from his lawyers as regards what should be done in the meantime, including consideration as to the possibility of applying for the lifting of the stay in cases where an application for legal aid is deployed as a delaying tactic.  Section 15(5) makes it clear that certain steps can be taken in the relevant legal proceedings notwithstanding the stay.  Whilst we are not dealing with those scenarios, we are of the firm view that it is not the intention of the legislature to impose a moratorium on the incidence of costs as soon as a legal aid stay comes into operation. 

24.  At the same time, we must emphatically state that a legal aid stay is an important matter in the overall background against which the reasonableness of the costs incurred has to be assessed.  Thus, in a situation like the one the Plaintiff is faced with in the present case, whilst we accept it was indeed reasonable for them to incur some costs in terms of perusals and consideration of documents (including the directions from this court) and incidental advice and correspondence, the costs must be circumscribed as we cannot see any urgency which requires much further activities on the part of the Plaintiffs during the period of stay.

25.  With such rider, we do not agree with Mr Dykes’ submission that the rejection of his contention as to the effect of section 15 will be contrary to the objectives of the Legal Aid Ordinance. 

26.  The above analysis also addressed Mr Dykes’ submission on the lack of judicial guidance on the effect of section 15. 

27.  In the present case, Ms Leung submitted that the activities of the Plaintiffs’ solicitors during the interim period were within reasonable bounds as they were confined to perusal and consideration of documents and correspondence.  She further submitted that the other factors relied upon by Mr Dykes (the lack of means on the part of the 2^nd Defendant, his conduct of proceedings with legal aid all along, the public importance of  the question in respect of section 14AB) were not pertinent to the question of reasonableness of the Plaintiffs in incurring those costs.

28.  By and large, we agree with Ms Leung.  We would grant leave to the 2^nd Defendant to withdraw the Notice of Motion of 23 December 2014 and order the 2^nd Defendant to pay the costs of the Plaintiff in respect of the same. 

29.  However, as far as quantum is concerned, we find the sum of $32,000 claimed in the letter of 27 January 2015 to be excessive. Instead of escalating costs by way of taxation, we are of the view that this court should do a summary assessment and we provisionally fix the costs up to 27 January 2015 at $20,000.  Any party who wishes to contend otherwise may write to this court within 7 days and we shall then make a final determination on paper. 

30.  It follows from the above that the Plaintiffs achieve better than what is proposed by the 2^nd Defendant in the summons of 16 February 2015 and they should have the costs of the application to withdraw.   Ms Leung asked for costs on indemnity basis in light of the lack of merit of the Notice of Motion and the opportunistic stance of the 2^nd Defendant.  We agree that the challenge as to section 14AB is a very bold challenge and the 2^nd Defendant did appear to be opportunistic.  Having said so, we also take into account of the prompt action on the part of the 2^nd Defendant to withdraw.  In the end, we decide to order costs on party to party basis.  In the statement of costs, the Plaintiffs asked for $75,691.67.  We think the modest fee charged by Ms Leung is very reasonable.  However, bearing in mind the works involved on the part of the solicitors for the Plaintiff in relation to the summons, there is room for deduction.  We shall fix such costs (including counsel fees) at $60,000.

HCMP 3090/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 3090 OF 2014

(ON AN INTENDED APPEAL FROM HCA NO. 2104 OF 2014)

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REASONS FOR JUDGMENT

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Hon Lam VP (giving the Reasons for Judgment of the Court):

1. This is the application by the 2^nd Defendant in HCA 2104 of 2014 for leave to appeal against the order of Au J of 14 November 2014 (following the handing down of his judgment on 10 November 2014) which was then amended after a hearing on 21 November 2014. There are two versions of the order, the first one was sealed on 14 November 2014 whilst the second one (as amended) was sealed on 22 November 2014. Leave to appeal had been refused by Au J on 13 November 2014 (in respect of his judgment of 10 November 2014) and again on 21 November 2014 (in respect of his decision to amend the order).

2. After reading the application and the submissions by Mr Dykes on behalf of the 2^nd Defendant, on 25 November 2014 we dismissed the application for leave to appeal without a hearing on the  basis of written submissions only pursuant to Order 59 rule 2A(5)(a) of the Rules of the High Court Cap 4A.  We also dismissed the application for stay pending appeal.   Pursuant to Order 59 rule 2A(8), we also made an order that the 2^nd Defendant may not request our determination of the application for leave to appeal to be reconsidered at an oral hearing inter partes, as we consider that the application is totally without merit.  Here are our reasons. 

3. Before this application, we had heard a similar application for leave to appeal by the 3^rd Defendant in the same action on 14 November 2014.  By our judgment of 15 November 2014, we dismissed the application.  The need for amending the order in this action was spotted at the hearing of 14 November 2014 and the application for amendment was subsequently made pursuant to an undertaking given to this court, see para 23 of our judgment of 15 November 2014.

4. On 20 November 2014, we heard the 2^nd Defendant in his application for leave in HCA 2086 of 2014, a case of similar nature (subject to the question of amendment).  We dismissed the application by our judgment of 21 November 2014. 

5. In the present application, the 2^nd Defendant repeated some of the arguments which had been advanced and considered by us on those two unsuccessful applications for leave.  Though the 2^nd Defendant referred to some additional authorities, we remain of the same view as before.  We do not see the need to repeat what had already been said. 

6. In a letter of 24 November 2014 from the solicitors for the 2^nd Defendant to the clerk of the Chief Judge, it was highlighted that the 2^nd Defendant advanced grounds of appeal in two respects which we had not considered on the previous occasions. 

7. The first additional aspect is the representative capacity of the Plaintiffs in bringing an action on behalf of all members of the taxi association.  Au J dealt with this argument at paras 39 to 41 of his judgment of 10 November 2014.  From para (1) in the draft Notice of Appeal attached to the 2^nd Defendant’s summons of 24 November 2014, it appears that the 2^nd Defendant is unable to dispute that (as held by Au J) the law has moved on since Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021 and the modern approach is the one set out in Prudential Assurance v Newman Industries [1981] Ch 229 and Irish Shipping Ltd v Commercial Union Assurance [1991] 2 QB 206.  The complaint of the 2^nd Defendant boils down to this: the Plaintiffs cannot establish that each and every member of the taxi association suffered particular, substantial and direct damage.  Ultimately, therefore it goes back to the question whether a taxi driver suffered such special damage which gives him the right to sue for public nuisance.  We have already dealt with that in our judgment of 15 November 2014. 

8. We agree with Au J that the Canadian cases cited by Mr Dykes (Preston v Hilton (1920) 55 DLR 647 and Turtle v Toronto [1924] 56 OLR 252) should not be followed in view of the relaxation in the rule for representative action.  As observed by Megarry J in John v Rees [1970] Ch 345 at p.370E, the rule for representative proceedings should be treated as being not a rigid matter of principle but a flexible tool of convenience in the administration of justice. 

9. We do not see any conceptual difficulty in having a representative action in a claim based on public nuisance.  There is no reason in principle why a group of people cannot suffer injuries (by reason of an attribute common to that particular group) over and above those suffered by the public at large[1], thus satisfied the special damage requirement for the tort of public nuisance. In such eventuality, we do not see why that particular group of people cannot be said to have the same interest in a claim for injunction to stop that public nuisance and resort to the procedure of representative proceedings under O 15 r 12 to pursue their claims on that basis.  With respect, we do not find the two American authorities cited by Mr Dykes in footnote 2 of the draft notice of appeal to be helpful in this regard. 

10. In the present context, whatever one may say regarding the difference in the quantum of damages suffered by taxi drivers operating in different parts of Hong Kong, there are clearly members of the two associations represented by the Plaintiffs who arguably suffered particular, substantial and direct damage and as such have the right to come to court to seek an injunction to restrain the wrongful occupation of the stretch of Nathan Road in question.  In that respect, they have the same interest in the proceedings.    

11. There is no merit in this ground of appeal. 

12. The second additional aspect is the grant of leave for the amendment of the order on 21 November 2014.  The 2^nd Defendant contended that Au J did not have the power to grant such amendment.  Mr Dykes submitted that the judge was functus officio and could not imply a liberty to apply to achieve what in essence was a variation of the injunction in the absence of material change in circumstances. 

13. As mentioned, the amendment came about in light of this court’s observation at the hearing of 14 November 2-14.  The problem was spotted by the court rather than any party.  It is a trite principle of law that an injunction should be expressed in clear, certain and unambiguous language, see Harris v Harris [2001] 2 FLR 895 at [288].  It follows that if there were uncertainties in the injunction as originally drafted, the court must have the power to amend it in order to clearly set out what should be done in compliance with it.  Pending that, such order should not be executed (so that the defendant and other parties concerned would not be affected).  This was exactly what happened on 14 November 2014 when the Plaintiffs gave an undertaking to this court to amend or vary the injunction and not to execute the same in the meantime. 

14. In our judgment, Mr Dykes’s argument that Au J was functus officio and there could not be any variation without any material change of circumstances is wholly unmeritorious.  It has to be borne in mind that this is an interlocutory injunction.  As such, it is always open to the judge (or any judge sitting as a judge in the Court of First Instance) to vary the injunction or to discharge it as granted and grant another interlocutory injunction in more precise language in order to satisfy the requirement of precision.  It could hardly be disputed that a defendant, faced with an injunction which was imprecise and uncertain, can come to court to apply for the discharge of such injunction.  The court will not shut him out on the ground that it is functus.  In that event, if a judge finds the complaint to be valid and accedes to the application to discharge the injunction, we do not see any reason in principle why the judge could not entertain an application by a plaintiff to seek an injunction in more precise language if the circumstances so warranted.  We do not see any reason why the same analysis cannot be applicable when a plaintiff takes the initiative to rectify the imprecision in the language used in formulating an injunction.  The court always has the power to re-grant another injunction at the same time when it discharges an injunction.  The same result can be achieved by an order for amendment or variation.  Whether it should discharge, vary or amend the injunction is a matter of discretion.  This has been so in case of ex parte injunction, see Excel Courage Holdings Ltd v Wong Sin Lai [2014] 2 HKLRD 642 where the court considered the relevant principles on how the discretion would be exercised in the context of an ex parte injunction being discharged on the ground of material disclosure.  We are not dealing with that sort of situation.  However, the jurisdiction of the court to vary or discharge or re-grant another injunction is beyond dispute. 

15. In the present case, instead of discharging the injunction as originally sealed and re-granting another injunction in its place with more precise language, Au J achieved the same result by an order amending or varying the original order.  This was done against the background that an undertaking was given by the Plaintiffs to the Court of Appeal not to execute the original order on 14 November 2014 (which was the date on which the order was sealed).  Further, the order had to be served by placing advertisement in newspapers which could not have taken place before the undertaking was given.  No event of consequence could have taken place between the perfection of the original order and the withholding of execution of the order by the Plaintiffs in accordance with the undertaking given on 14 November 2014.  The objective of the amendment was to rectify the problem as to the imprecision of language in the original injunction.  In light of these, it is immaterial whether Au J exercised his discretion by way of granting leave to amend or ordering the discharge of the original injunction and the re-grant of an order in the revised term.  There is no question of Au J not having jurisdiction to entertain the application for amendment on the ground of his being functus officio. 

16. We have read the authorities Mr Dykes relied upon and, with respect, none of them supported his contention.  The observation of Munby J in Harris v Harris [2001] 2 FLR 895 at [288] that terms could not be implied into an injunction has nothing to do with the present situation.  We do not find it necessary to discuss whether the amendment can be effected by liberty to apply.  In our view, even if there is no provision for liberty to apply (whether express or implied) in the original injunction, the position is as analysed above as a matter of law.  The other case cited by Mr Dykes, Cathay Pacific Airways Flight Attendants Union v Cheung & Choi HCMP 1863 of 2007, 3 February 2009, is wholly irrelevant.  That case was about an application to vary a final consent order.  The consideration is completely different in that situation. 

17. Nor can Mr Dykes derive support from Au Lung v Lam Ho Ling (No 2) [1962] HKLR 668.  First, it is not a case about jurisdiction as Mills-Owens J was of the view that if it was agreed that there was problem with the original injunction, a variation could be achieved by a consent for variation (see p.672).  Second, on the facts of that case, there were disputes pertaining to the subject of variation which could not be resolved pending trial and the court therefore refused to entertain the matter.  Third, the main concern in that case was the finality of interlocutory proceedings.  Yet finality is not absolute.  One of the principles approved (by citing from a commentary on the Indian Code) was that application could be made for variation when an injunction has, owing to fresh circumstances, become unduly harsh or unnecessary or unworkable. 

18. In our view, though finality is important, the overriding consideration must be what is in the interests of justice in the particular circumstances of the case.  In this respect, the discussions in Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642 at [56] to [58], though in a different context, can provide some insights.  The relevant public interests in the present scenario are: (a) the interest of finality in interlocutory injunction proceedings; (b) the need for precision in the terms of an injunction; and (c) the general duty to do justice.  When it is discovered that the original wording of the injunction is too imprecise to be workable or enforceable, the court has a duty to amend, vary or discharge it. To do nothing is to bring the administration of justice into disrepute.  At the same time it would be disproportionate and carrying the penalty for imprecision in drafting the original order to an unjustified extent if a party (who, but for such mistake, would have been entitled to a properly worded injunction) would be deprived of the protection of any injunction.  Such an outcome would transform the need for finality and need for precision in the drafting of an injunction into an instrument of injustice.  That cannot be right.      

19. We cannot see how the 2^nd Defendant can legitimately complain about the revision of the injunction in the present circumstances.  Mr Dykes accepted that an injunction has to be clear, certain and unambiguous.  The court had found that part of delineation of the area subject to the original injunction to be unclear and the Plaintiffs agreed to have the offending words (“near to and”) deleted.  In the meantime, the 2^nd Defendant was not affected by the original injunction. 

20. Apart from taking points on jurisdiction and the absence of material change of circumstances, the 2^nd Defendant had not been able to contend that he would suffer any prejudice if a properly worded injunction was granted. 

21. In our judgment, Au J was plainly right in exercising his discretion as he did on 21 November 2014.  As we said, once the defect of the original order was brought to his attention, Au J had a duty to amend, vary or discharge the original injunction.  Pursuant to such duty, Au J had to consider what should be the terms of the injunction in place.  In light of what had been said in respect of the merits of the Plaintiffs’ case for interlocutory injunction, there can only be one answer: there should be an injunction in terms as per the sealed order of 22 November 2014. 

22. Thus, we have no hesitation in rejecting Mr Dykes’ submissions on the amendment of the injunction.        

23. We do not see any ground for granting leave to appeal in the interest of justice.