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On the waterfront, a landmark ruling

Boase Cohen & Collins acted pro bono for a client in a judicial review, which went all the way to the Court of Final Appeal, concerning public access to land adjacent to Hong Kong’s famed harbour. As Senior Partner Colin Cohen explains, the case became highly significant for establishing the legal principles governing protective costs orders.

Hong Kong, 27 July 2018: In HCAL 49/2014, our client Designing Hong Kong Limited (“DHK”) obtained leave for judicial review of the Town Planning Board’s (“TPB”) decision to re-zone a strip of land next to Victoria Harbour for military use. The 0.3 hectare site, on the promenade along the stretch of reclaimed land between Central and Wanchai, was designated by the Government as a military dock for use by the People’s Liberation Army.

The judicial review concerned public access to Hong Kong’s famed waterfront. However, DHK had limited financial resources and, as a corporate body, was not eligible for legal aid. With no other applicant willing to come forward at the time, this public interest case would otherwise have been stifled. Our firm hence assisted DHK on a pro bono basis in an application for a protective costs order (“PCO”) that went up to the Court of Final Appeal.

In civil litigation, the starting point is that costs follow the event, ie that the losing party has to pay the costs of the winning party. Hence, costs have always been a major constraint in access to the courts. While the Government has vast financial resources, the applicant usually has limited means and may have little by way of personal interest to gain in the litigation. If the applicant obtains legal aid, then it is under little pressure in terms of costs. If not, the applicant has to secure a legal team willing to act on a pro bono basis. Even so, if they are unsuccessful in the end, the applicant may face a crushing bill of costs from the Government.

There are authorities in Hong Kong stating that the courts can make no order as to costs in public interest cases, ie that an applicant, even if they are finally unsuccessful, need not bear the costs of the Government. But all throughout litigation, the applicant would still be facing uncertainty over its possible costs exposure. In contrast, a PCO would be pre-emptive and made before substantive litigation. As recognised by the Court of Final Appeal, the rationale for a PCO is to ensure that proceedings in which points of great public importance arise are not stifled through lack of financial means.

In the DHK case, the courts considered for the first time the principles for making a PCO. At first instance, the court refused to make such an order in favour of DHK. Our firm and a team of distinguished counsel continued to act pro bono for DHK on its appeal to the Court of Appeal in CACV 184/2015 and its subsequent appeal to the Court of Final Appeal in FACV 4/2018.

While it was held that DHK was not eligible for a PCO in this instance, the Court of Final Appeal recognised that the case was brought in the public interest and held that DHK was not liable for the Government’s costs.

The Court of Final Appeal’s judgment is this case is now the authority setting out the principles governing PCOs in Hong Kong:

1. A PCO may be made at any stage of proceedings and on conditions as the court thinks fit, provided that:

(a) The issues raised are of general public importance;

(b) The public interest requires that those issues should be resolved;

(c) The applicant has no private interest in the outcome of the case;

(d) Having regard to the financial resources of the applicant and the respondent and to the amount of costs that are likely to be involved, it is fair and just to make the order;

(e) If the order is not made the applicant will probably discontinue the proceedings and will be acting reasonably in so doing;

2. If the legal representatives of the applicant are acting pro bono this is likely to enhance the merits of an application for a PCO;

3. It is for the court in its discretion to decide whether it is fair and just to make the order in light of the above.

The Court further held that the applicant has a burden to provide details as to its financial ability, in order for the court to come to a conclusion in particular on 1(e) and 3 above. Depending on the circumstances, it may also be appropriate to look at the financial ability or resources of the shareholders, directors or other supporters of a corporate applicant.

DHK PHOTO

Hong Kong’s waterfront, focus of the judicial review concerning public access.