DIRECTOR OF LANDS v. PENNY’S BAY INVESTMENT CO LTD

FACV No. 1 of 2017 and FACV Nos. 2-9 of 2017 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 1 OF 2017 (CIVIL) (ON APPEAL FROM CACV NOS. 13, 14, 15, 16, 115, 116, 119 & 120 OF 2015) ____________________ BETWEEN PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant (Appellant) and DIRECTOR OF LANDS Respondent (Respondent) ____________________ IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NOS. 2-9 OF 2017 (CIVIL) (ON APPEALS FROM CACV NOS. 13, 14, 15, 16, 115, 116, 119 & 120 OF 2015) ____________________ BETWEEN PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant (Respondent) and DIRECTOR OF LANDS Respondent (Appellant) ____________________ Before: Mr Justice Ribeiro PJ, Mr Justice Tang PJ, Mr Justice Fok PJ, Mr Justice Bokhary NPJ and Lord Neuberger of Abbotsbury NPJ Date of Judgment: 27 December 2017 JUDGMENT ON COSTS Mr Justice Fok PJ: This is the judgment of the Court as to costs. On 16 October 2017, the Court unanimously dismissed PBIC’s appeal (in FACV 1/2017) and allowed the Director’s appeal (in FACV 2-9/2017), making an order nisi that PBIC pay to the Director the costs of both appeals, giving the parties liberty to lodge written submissions as to costs. Such submissions have been received. Costs of the appeals to the CFA While the Director submits that the order nisi should be made absolute, PBIC seeks a direction that there be no order as to costs in respect of both appeals. PBIC seeks to argue that the Court allowed the Director’s appeal “upon an argument which has not really been run by the Director as such” and attempts to dissect the Director’s arguments at various stages of the litigation. The Director joins issue with PBIC’s characterisation of the various arguments and submits that “the Director has not wavered ... in contending that for the purposes of the after valuation it should be concluded that industrial development would have been regarded as a certainty by the hypothetical purchaser of the land”, the position upheld by the Court. PBIC advances the bold submission that even though its appeal on the meaning of “godown” was dismissed, it should not have to pay the costs because the Court’s decision was “almost a matter of impression”. We do not accept that PBIC has demonstrated any basis for departing from the usual order that costs follow the event. Accordingly, we direct that, in relation to the costs of the substantive appeals, the order nisi stand as an order absolute. Costs of the applications to the Appeal Committee for leave to appeal The Director submits that the costs of applying to the Appeal Committee for leave to appeal to this Court should be paid by PBIC. PBIC, for its part, does not separately address the question of costs of the applications for leave to appeal but its position would seem to be that, like the costs of the substantive appeals to this Court, there should be no order as to the costs of such applications. As with the costs of the appeals, we see no reason for departing from the usual rule that costs should follow the relevant event. Although the Director did not obtain leave to appeal on all questions of law advanced, the application for leave had to be made to the Appeal Committee and the appeal ultimately succeeded. The costs in relation to the unsuccessful portions of the leave application are, in the present circumstances, properly to be regarded as absorbed in the overall costs of applying to the Appeal Committee for leave. Hence, the costs in relation to the Director’s applications for leave to appeal before the Appeal Committee should be paid by PBIC to the Director. Similarly, the costs in relation to PBIC’s applications for leave to appeal before the Appeal Committee should be paid by PBIC to the Director. Costs before the Court of Appeal The Court of Appeal made no order as to the costs of the appeals to it. The Director now seeks a different order, in light of his success in the appeals to this Court, namely that PBIC pay a portion of the Director’s costs in the Court of Appeal. The Director submits that it would be appropriate to order that PBIC pay 50% of those costs. PBIC seeks to uphold the Court of Appeal’s disposition of no order as to costs. The Director also submits that the order sought that PBIC pay 50% of the Director’s costs in the Court of Appeal also apply to the costs of various ancillary matters, namely the costs of determining: (a) the costs order of the Court of Appeal, (b) the form of order to be made by the Court of Appeal, (c) the applications made by the parties to the Court of Appeal for leave to appeal to this Court, (d) the applications made by the parties to the Court of Appeal for leave to appeal to it from the Lands Tribunal, and (e) the applications made by the parties to the Lands Tribunal for leave to appeal to the Court of Appeal. There is force in the Director’s submission that, with the result now achieved following the appeals to this Court, the costs orders in the Court of Appeal should be varied. The ultimate aim of PBIC was to obtain rulings on the basis of which it could claim a sum of approximately HK$340 million by way of compensation for the extinguishment of its marine rights under the Court of Appeal’s judgment. Instead, it must now content itself with a sum of around HK$9.4 million on the basis of the Lands Tribunal’s judgment. It is right, therefore, to regard the Director as being substantially successful overall. In these circumstances, an order that PBIC should pay 50% of the Director’s costs in the Court of Appeal is appropriate and we would so order. We consider that this conclusion would similarly apply to the ancillary matters in respect of the costs of which the Director also seeks an order that PBIC pay 50%. I would add that the Director has indicated that he intends to return to the Lands Tribunal to seek his costs before it. That is not a question with which the Court is now concerned and so we say nothing as to that. Conclusion Accordingly, the Court: Makes absolute the costs order nisi in paragraph [100] of the judgment of Lord Neuberger NPJ as to the costs of the substantive appeals to this Court. Directs that the costs of those appeals should include (a) the Director’s costs of applying for leave to appeal to this Court before the Appeal Committee in FAMV 58-65/2016, and (b) the Director’s costs of resisting the application for leave to appeal to this Court in FAMV 57/2016. Orders that PBIC pay 50% of the Director’s costs in the Court of Appeal, such order to apply also to the costs of the various ancillary matters referred to in paragraph [11] above. We also order PBIC to pay the costs of and occasioned by the written submissions on costs. (R A V Ribeiro) Permanent Judge (Robert Tang) Permanent Judge (Joseph Fok) Permanent Judge (Kemal Bokhary) Non-Permanent Judge (Lord Neuberger of Abbotsbury) Non-Permanent Judge Written submissions by Mr Denis Chang SC, Mr Johnny K.C. Ma and Mr Jeremy S.K. Chan, instructed by Wilkinson & Grist, for the Applicant (Appellant in FACV 1/2017 and Respondent in FACV 2-9/2017) Written submissions by Mr Michael Barnes QC and Mr Valentine Yim, instructed by the Department of Justice, for the Respondent (Appellant in FACV 2-9/2017 and Respondent in FACV 1/2017)