LEIZEL DALERE RAMONES, THE ADMINISTRATRIX OF THE ESTATE OF REBECCA DALERE RAMONES, DECEASED, SUING ON BEHALF OF AND FOR THE BENEFIT OF THE ESTATE OF REBECCA DALERE RAMONES, DECEASED AND ON BEHALF OF AND FOR THE BENEFIT OF THE DEPENDANTS OF REBECCA DALERE RAMONES, DECEASED v. LEE KUT TUNG

HCPI 1264/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 1264 OF 2015

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D E C I S I O N

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1.  This is the defendant’s application for costs of the proceedings to be taxed on the District Court scale.

BACKGROUND

2.  This is a personal injury claim concerning a fatal car accident.  The Deceased was a foreign domestic helper and the plaintiff was the daughter of the Deceased.

3.  The claim was commenced at the High Court on 24 November 2015 and the damages claimed was HK$1,110,453.20 plus interest.

4.  On 29 June 2016, the plaintiff accepted a Sanctioned Payment of HK$700,000 along with the “warning letter” from the defendant that the defendant would seek to vary the plaintiff’s scale of cost to the District Court scale.

5.  Accordingly, the current application was taken out by the defendant relying upon the “otherwise” proviso under Order 22, rule 20(1) of the Rules of the High Court (Cap. 4A) to seek to vary the plaintiff’s scale of cost.

THE LAW

6.  The law in the situation when a claim commenced in the High Court but settled by acceptance of sanction payments below High Court jurisdiction has been developing.  The latest precedent being Mr. Justice Bharwaney’s judgment on Wong Chim Hing v Discovery Bay Transit Services [2016] 1 HKC 491.

7.  The current law is that:

i) In a High Court action when a defendant’s sanctioned payment or sanctioned offer was accepted without leave of the Court, it follows that the plaintiff is entitled to costs of the action taxed in accordance with the High Court scale unless the Court otherwise orders.

ii) The court would consider “otherwise proviso” only if :‑ 

a) the defendant has given a prior warning that he will apply to invoke the “otherwise proviso” to the plaintiff upon acceptance of the sanctioned payment or sanctioned offer; and 

b) Upon such application, the defendant has showed “exceptional circumstances” to justify the departure.

iii) One example of such “exceptional circumstances” might be the plaintiff accepting an amount less than the High Court jurisdiction as settlement.

iv) The court will still apply the test of “reasonable prospect”, that is:‑ at the commencement of the proceedings, given the information and evidence then available to the plaintiff, was there a reasonable prospect of obtaining an award in excess of the District Court jurisdiction with the claim being evaluated on the basis of full liability?

8.  Pausing here, I note that there was submission from the defendant as to whether the plaintiff’s evaluation exercise should consider the issue of contributory negligence.  The issue of contributory negligence was very much alive in this case with what appeared to competing expert evidence in the preceding criminal action.

9.  However, I think if one reads further on Mr. Justice Bharwaney’s judgment, the position becomes clear.

10.  The Wong’s case concerned whether a) that claim should commence in the High Court and b) whether the claim should be maintained in the High Court.  Mr. Justice Bharwaney endorsed the “reasonable prospect” test but discussed “whether a more stringent test was required after the implementation of the CJR….taking into account the objectives of the CJR to promote proportionality and fairness…Active case management processes ensure that the parties continuously evaluated their case and, when appropriate, make application to transfer to the District Court.”

11.  My reading of all this is that the “reasonable prospect” test should not only be applied at the commencement of the proceedings for the plaintiff to show why the action should commence at the High Court, but there should also be a version of this “reasonable prospect” test that should apply during the proceedings when further evidence and information become available during the proceedings.

12.  This is especially applicable in personal injury claims because much evidence may come later in the proceedings: expert opinion, recovery from the injury, successful remedial treatment, changes in plaintiff’s employment situation etc.

13.  It is easy to understand why the original “reasonable prospect” test, which applies to where the action should commence, stipulated that evaluation must be on the basis of full liability.

14.  Contributory negligence must be pleaded by the defendant in the defence and this, of course, comes after the commencement of action.  Until it is pleaded, the plaintiff should not be making voluntary deductions in his claim in the Statement of Damages on account of possible defence of contributory negligence otherwise he will be prejudicing his own claim.  Thus, at the commencement of the action, the plaintiff should evaluate on the basis of full liability in deciding where to commence the action.

15.  By the same logic, the position regarding employee’s compensation is completely different from contributory negligence: if there is a preceding employee’s compensation award, this sum would always be deducted in the award so this should be taken into account in the plaintiff’s evaluation of the appropriate court to commence action (Seagroatt J in Lai Ki v B+B Construction Co. Ltd [2003] 3 HKC 322).

16.  However, once contributory negligence is raised, in view of the “evolving” nature of litigation and the objectives of the CJR, the plaintiff should reconsider whether the claim should be maintained in the High Court, and to continually monitor the prospect of the claim as more evidence and information become available.

17.  Thus, I would venture a further subparagraph to paragraph 7 above, which may read:-

iv) After the commencement of the proceedings, the Court shall apply the test: given the information and evidence available to the parties (including pleadings of contributory negligence and / or failure to mitigate loss, and further evidence being made available etc.), was there still a reasonable prospect of obtaining an award in excess of the District Court jurisdiction for the claim to be maintained in the High Court?

18.  Thus, the Court has the discretion to decide that at a certain point of time in the proceedings, the case should have been transferred and thus the costs thereafter should be taxed in the District Court scale.

19.  On the face, it may appear harsh to ask of the parties to assess the prospect of success in hotly disputed matters like contributory negligence.  However, on careful consideration, I see this no more than what advice a competent legal adviser should be expected to give to his or her client.  

20.  In a case where the claim is just above the District Court jurisdiction, it may be sensible for a party to seek the agreement of the other for an application pursuant to section 44(1) of the District Court Ordinance, which provides: “The Court of First Instance may, if the parties consent, order the transfer to the Court of all or part of an action or proceeding, including a counterclaim, which is outside the jurisdiction of the Court, but would have been within its jurisdiction except for the monetary limits specified in section 32, 33, 35, 36 or37.”

21.  Under such circumstances, when considering the issue of scale of taxation, the court will consider whether a party has withheld its consent to such an application unreasonably by applying the “reasonable prospect” test given all the information and evidence available to the parties (including pleadings of contributory negligence etc.) after the commencement of proceedings.

ISSUES IN DISPUTE

22.  Turning to the current case, there is no dispute that the plaintiff has accepted the sanctioned payment below the jurisdiction of the High Court under the warning of the defendant’s intention to apply under the “otherwise provisio”.

23.  The only dispute is whether the plaintiff had a reasonable prospect of obtaining an award in excess of the District Court jurisdiction at the commencement of the action and during the action up until the acceptance of the sanctioned payment.

24.  The argument of Mr. Leon Ho, Counsel for the defendant, is simple: even if the plaintiff obtained judgment for whole of the claims under Special Damages on top of the Damages for Bereavement, the award would not be in the High Court jurisdiction unless the Court finds for the plaintiff’s claim on loss of dependency based on 100% of the deceased’s income.

25.  Mr. Ho submitted that there was no reasonable prospect of the Court finding that, citing the principle of calculation advanced in Harris v Empress Motors [1984] 1 WLR 212 at p. 216‑217 and followed in Fung Suen Sim v Liu Chung Pong & Another HCPI 896/2007.

26.  In short, the principle is that “unless there is striking evidence to make the conventional figure inappropriate because there is no departure from the principle that each case must decide on its own facts”, for a couple, the conventional figure would be 66.6% of the deceased’s earnings as the dependency for the widow and, in cases where there were children, 75% of the deceased’s earnings as dependency for the widow and children. 

27.  The dependents in this claim were the widower and 5 children of the deceased. Thus, Mr. Ho submitted that there was reasonable prospect that the court would allow 75% of the deceased’s earnings as dependency.  Even if the defendant would not dispute the claimed salary, food allowance and retirement age, the claim would come to around HK$800,000, well short of the High Court jurisdiction. 

28.  In support of the plaintiff’s claim in dependency, the plaintiff claimed in her own affidavit that:

i) “all my mother’s income including food allowance were wholly remitted back to the Philippines for my father, brother and sisters…” since the plaintiff herself came to work with the same employer in March 2012

ii) “My mother only led a very frugal life and had all along incurring no unnecessary spending such as shopping or entertainment.”

iii) “When it came to her weekly holiday, my mother usually spent the whole day in Church in Central with free meals provided and incurring no expenses there.”

iv) “When it comes to really necessary expenditure, I was the one she turned to for money and I did assist my mother accordingly so that she could remit her whole income…”

v) Remittance slip of such money transfer disclosed: they were under the plaintiff’s name because the deceased “did not know how to conduct the remittance”, and the records were incomplete because the plaintiff“did not deliberately try to keep any full records”as there were transfer confirmation by phone, but “as a matter of fact, every month I did remit the whole of my mother’s income to my family in the Philippines…”

29.  Mr. Bernard Yuen, counsel for the plaintiff, submitted that such were “the striking evidence to make the conventional figure inappropriate”.

30.  In assessing whether there was a “reasonable prospect”, I would think that a lawyer should not simply take his client’s word for it without investigating and applying some common sense principle to what he was told, since, of course, it was for him to convince the court that his client’s words should be accepted.

31.  In the current hearing, the court is not conducting a mini‑trial and it can only assess what evidence is made available.

32.  The plaintiff case very much depended on arguing that there was a reasonable prospect of the court finding that the deceased transferred 100% of her earnings to her dependents every month.  

33.  However, I find several issues which went unaddressed by the plaintiff’s affirmation or evidence.

34.  Firstly, if there was a church in Central that provided “free meals”, I would surely wish to know more about its existence.  By applying common sense, any such organisation would likely become very popular indeed and it would be overloaded with provision of many free meals.  To survive, I could only imagine that this organisation would have to be a rather major charity operation and it has to be very well funded.

35.  I would expect that if the plaintiff instructed her lawyer of the existence of such a church, the lawyer should investigate and to present all these information to the court so that there is no issues about this claim.  As it happens, there is only a bare assertion of its existence.

36.  Secondly, if there was this arrangement for “all of the mother’s income including food allowance” to be wholly remitted to Philippines, again by applying common sense, one might expect that there would be a regular monthly transfer of a single sum of HK$4,795 (or, after August 2014, HK$4,930) to the Philippines, perhaps immediately after the deceased received the income.  After all, why retain any money and why waste time and effort to do several transfers when the arrangement was to transfer all the income?  If there was a reason for several transfers, some explanations should be offered.

37.  In fact, the remittance slips disclosed showed that there were irregular remittance of irregular amounts of money, varying from HK$494.59 (or 2,500 Peso) to HK$3,959 (21,000 Peso) and to various receivers.  In all, the records showed that the average remittance came to around HK$3,250 per month, or about 68% of the deceased’s salary.

38.  Whilst I can accept that the records may be incomplete, the irregular nature of the remittance did appear to show that it was more likely to be a “transfer on‑demand” or “transfer when there was money to spare” arrangement , rather than that a pre‑arranged system whereby all income of the deceased would be transferred no matter what.

39.  Further, if there was such an arrangement to transfer all income, surely, the plaintiff should be able to find the remittance slips of at least one month to show that the entire sum of HK$4,795 (or HK$4,930) was transferred (albeit perhaps through several remittance to various receivers).  It would be highly unlikely that the missing remittance slips were so regularly spaced in each month that the plaintiff could not find even one month that showed this.

40.  What we have instead, again, is the bare assertion from the plaintiff which is not supported by document produced.

41.  Thirdly, the plaintiff stated that: “When it comes to really necessary expenditure, I was the one she turned to for money and I did assist my mother accordingly so that she could remit her whole income to my family…”

42.  In other words, even on the plaintiff’s case, the arrangement was that there would be some sharing of the plaintiff’s own earnings between the deceased and the plaintiff so that this alleged sum of money could be remitted.

43.  As Mr. Ho suggested, the deceased must incur other expenses like transportation, clothing, phone and other spending (even assuming the existence of this very charitable church providing all the meals for the deceased).  These expenses, I must assume, would be what the plaintiff termed “really necessary expenditure”.

44.  As such, I cannot see any difference between what the plaintiff alleged was the arrangement and what Mr. Ho suggested: i.e. that the plaintiff and the deceased were pooling their earnings together and remitting part of that home.  Therefore, there is reasonable prospect that the court will find that the plaintiff must also have actually contributed to the dependency based on this arrangement.

45.  Such issues did not arise later in the proceedings.  It is not a case when unfavourable evidence emerged during discovery or when adverse opinion came after experts’ examination.  The plaintiff has claimed 100% dependency in the Statement of Damages so such issues should be obvious right at the commencement of the proceedings.

46.  As discussed above, the plaintiff’s case was much based upon bare assertions and, as such, there was no “striking evidence to make the conventional figure inappropriate”.  In fact, I would go further to say that, when considering the remittance records now disclosed, even the “conventional figure” of 75% might be considered generous.  Therefore, I find that there was no reasonable prospect of the plaintiff’s claim exceeding the District Court jurisdiction even at its commencement.

47.  The parties also raised various arguments on the impact of contributory negligence and expert evidence on liability.

48.  As stated above, when applying the “reasonable prospect” test at the commencement of the proceedings, the value of the claim should be assessed on the basis of full liability.  Therefore, I need not consider any arguments regarding contributory negligence or liability.

49.  Further, active case management under the CJR means that the parties are expected to continue to monitor the claim throughout the proceedings.  Once contributory negligence was raised in the defence, there might be even less reason why the claim should remain in the High Court.

50.  The plaintiff’s also raised an argument that the defendant, in their without prejudice letters, showed the calculation of the offer by deducting (accounting for contributory negligence) from a sum above HK$1M.  The plaintiff saw that as some form of admission by the defendant that the claim was within the High Court jurisdiction.

51.  I am of the view that this was entirely irrelevant.  How the defendant frames a without prejudice offer should not be considered as any form of admission and should not form any part of the consideration of the “reasonable prospect” test.

ORDER

52.  As such, I would order the defendant to pay the plaintiff the costs of this action (except the costs of and occasioned by this application) on the District Court scale.

53.  There be an order nisi for costs of and occasioned by this application be to the defendant with certificate to Counsel.  If no agreement on costs is reached, the defendant is to serve and lodge a summary statement of costs within 56 days of this Order and the plaintiff is to serve and lodge a list of objections 28 days thereafter for summary taxation on the High Court scale. Plaintiff’s own costs of this application be taxed in accordance with Legal Aid Regulations.