LI MAN CHI v. OR CHUN KIT

CACV 141/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 141 OF 2015

(ON APPEAL FROM HCPI NO 877 OF 2013)

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REASONS FOR JUDGMENT
AND
DECISION ON COSTS

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Hon Kwan JA:

1. I agree with the reasons for judgment and the decision on costs of Chu JA.

Hon Chu JA:

2. This is the defendant’s appeal against the judgment of Deputy High Court Judge Seagroatt (“the Judge”), awarding HK$5,616,491.67 to the plaintiff as damages for personal injuries she sustained as a result of a traffic accident.  At the hearing, we allowed the appeal to the limited extent of varying the multiplier for calculating future loss of earnings from 18 to 15.74.  We also reserved the decision on costs and gave directions for the lodging of written submissions on costs. Both sides have since put in their written submissions.  I set out below the reasons for judgment and the decision on the costs of the appeal.

The accident

3. The accident in question happened at 7:20 am on 1 February 2011 on Clear Water Bay Road.  The plaintiff was the front seat passenger in a private car driven by the defendant, which collided with a light goods vehicle near a road junction as the latter was turning across the dual carriageway.  At the time of the accident, the defendant was driving at a speed well in excess of the speed limit.  He was subsequently convicted upon his own plea in the magistracy of an offence of dangerous driving causing grievous bodily harm.

The plaintiff’s injuries

4. As a result of the accident, the plaintiff sustained serious  physical injuries, namely,

(1)  Liver rupture with haemoperitoneum;

(2)  Chance fracture at T12 vertebral body;

(3)  Fracture of right 10^th rib; and

(4)  Neck sprain injury.

5. The plaintiff was hospitalized for a total of 33 days.  She underwent resuscitation and urgent surgery, followed by an operation two days later for her abdominal injuries. She had another operation to deal with the fractured spine and a subsequent operation to remove the metal implants.  The plaintiff also received extensive in-patient and out-patient physiotherapy and occupational therapy treatments. 

6. After her discharge from the hospital, the plaintiff developed signs of post-traumatic stress disorder, for which she had received psychiatric care.  The plaintiff was given sick leave up to 6 February 2014.

The plaintiff’s employment

7. The plaintiff was born in June 1980.  She was educated up to Form 5.  She has a child care certificate, and also a higher diploma and a degree in early childhood education awarded by Baptist University.  Until the accident, the plaintiff had been working as a kindergarten teacher for 11 years.  At the time of the accident, the plaintiff had resigned from her employment with Yau Yat Chuen School, and was going to join Hong Kong Sheng Kung Hui Kei Oi Nursery School ("Kei Oi Nursery") on 10 February 2011.  Unfortunately, she met with the accident and could not take up the new employment.

8. On 2 December 2013, some two months before the expiry of the sick leave period, the plaintiff returned to work as a teaching assistant in a primary school near to where she lives.

The judgment below

9. On the first day of the trial, the defendant conceded liability and agreed to a number of heads of loss and damage.  The agreed heads came up to $1,154,123, compromising:

(1)  Pain and suffering and loss of amenity	$ 850,000
(2)  Past medical expenses	$ 130,000
(3)  Future medical expenses	$ 54,000
(4)  Cost of helper	$ 52,500
(5)  Tonic food	$ 20,000
(6)  Pain alleviation expenses	$ 15,466
(7)  Hair treatment	$ 10,000
(8)  Travelling expenses	$ 20,000
(9)  Inpatient expenses	$ 2,157

10. The contested heads of damages relate to expenses for future psychiatric care, pre-trial loss of earnings, future loss of earnings and loss of earning capacity.  After trial, the Judge found in favour of the plaintiff and made the following awards:

(1) Expenses for future psychiatric care	$90,000
(2) Past loss of earnings	$932,368.67
(3) Future loss of earnings	$3,240,000
(4) Loss of earning capacity	$200,000

The grounds of appeal

11. This appeal only concerns the awards on past loss of earnings, future loss of earnings and loss of earning capacity.  In summary, the grounds of appeal are that:

(1)  In assessing loss of earnings, the Judge should not have adopted the Government Master Pay Scale for civil servants. 

(2)  In calculating future loss of earnings, the Judge erred in adopting a multiplier of 18.

(3)  The Judge also erred in accepting that the plaintiff had mitigated her loss by working as a teaching assistant. 

(4)  The Judge should not have awarded $200,000 for loss of earning capacity, when the plaintiff only asked for $100,000 in the Revised Statement of Damages and in counsel’s submission.

Approach to the appeal

12. The Judge's finding that had the plaintiff been able to take up the employment with Kei Oi Nursery, her salary would be based on the Government Master Pay Scale and subject to increments and annual revisions is a finding of fact.  So is the finding that the plaintiff has discharged the duty of mitigating her loss.  The Court has in a line of authorities laid down the proper approach to challenging findings of fact on appeal: see for instance Ting Kwok Keung v. Tam Dick Yuen [2002] 5 HKCFAR 336.  In the recent cases of China Gold Finance Limited v. CIL Holdings Limited & Ors (unreported) CACV 11/2015, 27 November 2015 at §§11 to 24, and Yeung Cheung Chun v. Wing Shing Caisson & Foundation Ltd (unreported) CACV 39/2015, 25 April 2016 at §35, this Court restated the relevant propositions, inter alia, that

“In making findings of fact, judges can reasonably reach different conclusions from one another. The appeal court can only intervene when it is satisfied that the finding of the primary judge is “plainly wrong”. This phrase “plainly wrong” directs the appeal court to consider whether it was permissible for the trial judge to make the findings of fact he did in the face of the evidence as a whole, in the knowledge that the appeal court only has the printed record of the evidence and whose perception may be narrowed or even distorted by the focused challenge to particular parts of the evidence.”

13. The award on loss of earning capacity is the result of the Judge’s assessment.  In Tong Siu Wai v. Poon Wing Fu [2012] 5 HKLRD 407 at §§14 to 15, this Court reiterated the approach to an appeal against assessment of damages, namely, the appellate court would only interfere if the trial judge was in serious error or acted upon a wrong principle of law, or that the amount awarded was, in the light of all the facts and circumstances of the case, outside the generous range of general damages open to the trial judge. 

14. With these principles in mind, we turn to the grounds of appeal. 

Ground (1): Adoption of the Government Master Pay Scale (MPS)

15. Ground (1) relates to what the plaintiff would have earned had she not met with the accident.  The plaintiff's case is that Kei Oi Nursery is a government sub-vented kindergarten operated by Hong Kong Sheng Kung Hui Welfare Council (“HKSKHWC”), and that the salary structure of its teachers is similar to that of the civil service.  Accordingly, the teacher’s monthly salary is structured on the basis of the Government Master Pay Scale (MPS), and subject to annual increments based on years of service and also annual revisions.  Hence, had she not been prevented by the injuries from the accident to take up the employment, the plaintiff’s salary would have been adjusted upwards on account of the annual increments as well as the annual revisions.

16. The plaintiff dealt with this in her witness statement.  She also produced two documents to support her case.  The first is a Form 9 of the Social Welfare Department dated 7 March 2011 issued to Kei Oi Nursery requesting for information on the status of the plaintiff’s occupation and salary.  HKSKHWC replied in the ‘remarks’ section that the plaintiff had signed an employment contract, that she was to report to duty on 10 February 2011, that her monthly salary was to be HK$15,875, and thatthe plaintiff subsequently informed them that she had an accident and could not report to duty as scheduled.

17. The second document is a letter dated 11 January 2013 from HKSKHWC to the plaintiff.  It was issued in response to the plaintiff’s request for proof of the offer of employment from Kei Oi Nursery.  The letter certified that the plaintiff had been offered employment as a teacher with Kei Oi Nursery and was to report to duty on 10 February 2011. The letter went on to state that according to its salary system at the time, the starting point for the post ranged from HK$13,195 to HK$24,255.

18. In her evidence-in-chief, the plaintiff explained that HK$13,195 to HK$24,255 was the salary range for kindergarten teacher under the MPS.  She also stated that Kei Oi Nursery had offered to employ her on MPS Point 10, which wasabove the lowest entry point.  Copies of the MPS for the years 2011 to 2014 were adduced at the trial.  They show $24,255 to correspond to MPS Point 18. 

19. The defendant denied that the plaintiff suffered past loss of earnings and put her to strict proof.  There was, however, no cross-examination of the plaintiff on her evidence that the salaries of the teachers of Kei Oi Nursery are based on the MPS.  Neither was she questioned about the salary package she would have been entitled to had she taken up the employment with Kei Oi Nursery.  In his closing submission before the Judge, counsel for the defendant submitted that as the contract of employment with Kei Oi Nursery was not produced, and the Form 9 and letter from HKSKHWC did not set out the terms of the employment, the plaintiff had failed to prove that if she had taken up the employment with Kei Oi Nursery, she would be paid on the basis of the MPS and would enjoy the annual increments and revisions. 

20. The Judge rejected the submission, holding at §13 of the Judgment that:

"The defence contend that there is no evidence that the school concerned had its salary scales based on the civil service scales. The plaintiff’s evidence which was not seriously challenged supported the civil service basis and I accept this. The pay scale of the school as set out in their letter of 11 January 2013 supports this and therefore I am able to rely upon the Master Pay Scales in the schedules provided. This factor must therefore guide the assessment of the basic monthly loss for the ensuing years."

21. On appeal, Mr Lim for the defendant reiterated the criticisms that the contract of employment with Kei Oi Nursery was not produced, and that the letter dated 11 January 2013 did not contain the full terms of the contract of employment. He made the further criticism that no witness from Kei Oi Nursery was called to give evidence on the terms of the employment.  Relying on Wisniewski v. Central Manchester Health Authority [1998] PIQR 324, he submitted that the Judge erred in law in failing to draw an adverse inference against the plaintiff by reason of her failure to produce the contact of employment and to call evidence from Kei Oi Nursery to support her case.

22. I do not accept the criticisms.  On the strength of the plaintiff’s unchallenged evidence, the Judge was entitled to accept and act on it.  There is additionally evidence at the trial that the range of salary for the post offered to the plaintiff, as set out in HKSKHWC’s letter dated 11 January 2013, does correspond to the MPS.  It is true that the burden is on the plaintiff.  However, in the light of the evidence at the trial, the plaintiff has made out her case.  The Judge did not err in adopting the MPS in assessing the plaintiff’s loss of earnings.

23. As to the submission that the Judge should have drawn inferences adverse to the plaintiff on the issue by reason of her failure to call evidence from Kei Oi School and/or to produce the contract of employment, this is a new point.  It was not raised or argued below.  The Judge was not invited to draw adverse inference from the absence of evidence on the terms of the employment.  It is not permissible for the defendant to advance this new point on appeal, not only because there is no proper foundation, but also because it would be unfair to the plaintiff (see below). 

24. In any event, there is no proper basis on which the court can be asked to draw an adverse inference.  In Wisniewski v. Central Manchester Health Authority, Brooke LJ summarized the relevant principles as follows (at 340):

“(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

(2) If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

(4) If the reason for the witness’s absence or silence satisfies the court then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”

25. In the present case, the defendant has not adduced any evidence on the issue in question.  The necessary condition for the court to draw adverse inference is therefore not present.  Further, the defendant has neither sought discovery from the plaintiff of her employment contract with Kei Oi Nursery, nor cross-examined the plaintiff as to why the employment contract was not produced and/or why no one from Kei Oi Nursery was called to give evidence on the terms of employment. There was no opportunity for the plaintiff to proffer an explanation.  The court is simply not in a position to decide whether an adverse inference could be drawn against the plaintiff.  It is also unfair to invite the court to draw an adverse inference on the assumption that the plaintiff has no satisfactory explanation for the absence of witness or evidence.  It is even more unfair to mount this argument for the first time on appeal. 

26. For these reasons, the defendant’s challenge to the Judge’s adoption of the MPS in assessing the plaintiff’s loss of earnings must fail.

Ground (2): The multiplier

27. Ground (2) concerns the multiplier of 18 adopted by the Judge for assessing future loss of earnings. In his skeleton submission for the appeal, Mr Lim argued that following Chan Wai Ming v. Leung Shing Wah [2014] 4 HKLRD 669 and adopting the actuarial tables and discount rates in Chan Pak Ting v. Chan Chi Kuen (No 2) [2013] 2 HKLRD 1, a multiplier of 15.69 should be adopted.  Using this multiplier and on the basis that the plaintiff should be able to earn $13,000 (see §37 below), he quantified the plaintiff’s future loss of earnings to be ($17,000 - $13,000) x 12 x 15.69 x 105% = $790,776.  Mr Lim’s calculation had therefore taken into account loss of mandatory provident fund (MPF) contribution by the employer, which the Judge had omitted in his assessment for this head of loss.  The loss of MPF contribution was included in the plaintiff’s Revised Statement of Damages, and the defendant had taken no issue on this at the trial. 

28. Mr C K Wong, who together with Mr Anson Wong Yu Fat appeared for the plaintiff, accepted that the multiplier of 18 was too high.  He agreed that Chan Wai Ming v. Leung Shing Wah should be followed and the Chan tables should have been adopted.[1]  As the plaintiff was one month to 35 at the time of the trial, and the Judge’s finding is that the appropriate retirement age is 55[2], Table 6 of the Chan tables applies.  Mr Wong suggested in his skeleton argument for the appeal that, on a broad brush approach, a multiplier of 16 would be appropriate. 

29. Mr Limargued in his reply submission that this was still too high and that the court should adopt 15.74, which is the exact figure based on Table 6 and after applying a 2.5% discount in accordance with Chan Wai Ming v. Leung Shing Wah. At the hearing of the appeal, Mr Wong did not seek to argue against this. Accordingly, we allowed this part of the appeal, and held that 15.74 should be adopted as the multiplier. 

30. As mentioned above, we had directed counsel to lodge further written submissions on the costs order to be made on the appeal.  The written submission lodged by Mr Lim, however, included further argument on future loss of earnings.  He argued that in re-assessing the future loss of earnings, no account should be taken of the loss of MPF contribution because the plaintiff had not filed a Respondent’s Notice to contend that this should have been included in the award under this head. 

31. In my view, this is a surprising submission since it has always been common ground between the parties that the loss of MPF contribution should be included in the quantification of the plaintiff’s loss of earnings.  In allowing the appeal on the multiplier, we effectively set aside the amount awarded by the Judge for future loss of earnings, and substituted in its place our assessment of this head of damage.  I do not see any obstacle or good reason for not including the loss of MPF contribution in this court’s assessment of the plaintiff’s future loss of earnings.   

Ground (3): Duty to mitigate

32. Ground (3) concerns whether the plaintiff has mitigated her loss by working as teaching assistant in a primary school at a monthly salary of $8,240.  The plaintiff’s orthopaedic specialist, Dr Peter Ko, was of the view that the plaintiff was unfit to resume working as a kindergarten teacher in that she would have great difficulty handling small children because of her problems with back bending movement, squatting, lifting of weights and standing for long duration.  The defendant’s orthopaedic specialist, Dr Richard Lau, agreed that the plaintiff would have difficulties with frequent bending and lifting of children, and there might be limitations to her working as a kindergarten teacher.  Dr Henry Tang, the specialist in general surgery jointly appointed by the parties, shared Dr Ko’s view.  Dr Tang also stated in his report that the plaintiff could take up clerical work in office, and that she could sit unlimited time and work as long as she had ready access to toilet facilities, which was to do with her abdominal colic pain and the frequent occurrence of diarrhoea.

33. At the trial, the plaintiff gave evidence that after the accident, she had sent out many applications for clerical jobs, but received no replies.  Even though she was invited to one interview, after she informed the interviewer she had to regularly take leave to attend medical appointments, she was just told to await notification of the outcome.  In her witness statement, the plaintiff spoke of her love of children and her passion about child education.  She also explained that because of the physical problems flowing from her injuries, she could not travel long distance to go to work.  The primary school where she works as teaching assistant is near her home.  As teaching assistant, her work is mostly clerical in nature.  Occasionally, she would stand in for teachers who were absent or in meetings.  She would also provide extra Chinese lessons to non-Chinese speaking students.  Once a week, she helps to escort cross-border students to travel to school.

34. The defendant disagreed that the plaintiff was unable to return to work as kindergarten teacher.  It was suggested that she could at least teach K3 students.  The plaintiff was also cross-examined on the possibility of her being retrained to be a primary school teacher.  Alternatively, it was submitted that the plaintiff should be able to work as a general office clerk or receptionist earning a higher salary of over $13,000.

35. The Judge did not accept the submissions.  At §§23 to 25 of the Judgment, the Judge said:

“23. I am entirely satisfied that she has done her best to mitigate her loss. That is in keeping with her sustained desire to get back into the educational milieu.

24. Mr Lim, for the defendant, broached the possibility of her being retrained over a one or two year period to obtain the necessary qualification as a primary school teacher. She was not confident of being able to meet this challenge. In any event children of primary school age are no less boisterous and demanding and would still pose a significant risk to her. There are activities which primary school teachers are called upon to carry out inside and outside the classroom, and I am satisfied that she could not undertake those without risk to herself. Her duty to mitigate her loss does not extend to retraining for another career with its probationary period and essential break in employment. Having deprived her effectively of her chosen career for which she was obviously well‑regarded, the defendant cannot call upon her to start training again in another direction.

25. She has sought other more remunerative jobs (for which she is probably over‑qualified) but her physical limitations and need for continuing medical supervision, as well as the residual psychological/psychiatric problems, have most probably discouraged potential employers.  Competition in the workplace remains high and although over‑qualified for the posts for which she has applied, experience and commonsense dictate that the fit applicants who do not require time off work and are fully mobile, will always have the edge on her.” 

36. When referring to the fact that the plaintiff returned to work as teaching assistant before the expiry of the sick leave period, the Judge also observed (at §19):

“Her return to work before her sick leave expired (some two months hence) reflects this lady’s keenness to immerse herself in work as close to her area of skill and professional commitment as possible. The nature of the work fall someway short of what she wanted and for which she was trained, and of course, of the level of remuneration which she had previously enjoyed. But her physical injuries necessarily imposed limitations on the extent to which she could be involved in the physical aspects of kindergarten education. New [sic] employed as a teaching assistant at less than half the salary she had enjoyed before the accident, she still had to have time off for medical treatment and check‑ups.”

37. On appeal, Mr Lim no longer took the position that the plaintiff could return to the pre-accident work or be retrained as a primary school teacher.  He, however, reiterated the argument that the plaintiff could work as a general office clerk, receptionist, telephone operator, bookkeeper/accounting clerk, and should be able to earn an average monthly salary of $13,000, according to the Government statistics.  In his submission, the Judge should have assessed the plaintiff’s residual earning capacity at $13,000 per month having regard to the opinion of Dr Henry Tang that the plaintiff could undertake any clerical work that allows her to work in any office. 

38. I do not agree to this submission.  It is the plaintiff’s evidence that she had made efforts to look for clerical jobs that gave a higher income, but she met with no success.  Her evidence in this respect was not challenged.  Notwithstanding the opinion of Dr Tang, the uncontroverted fact remains, despite her many attempts, the plaintiff was not able to secure a more remunerative clerical job. 

39. Moreover, the plaintiff’s job as teaching assistant is clerical in nature.  Although the plaintiff is under a duty to mitigate her loss, she is only required to act reasonably.  Having regard to her love of children, the training she had received in child education, and the fact that she had been working in schools for 11 years before the accident, it is not unreasonable for the plaintiff to prefer working in a school environment, with which she is familiar and will feel more comfortable.  

40. It had not been demonstrated that the Judge erred in his finding that the plaintiff had done her best to mitigate her loss.  Ground (3) therefore failed. 

Ground (4): The award for loss of earning capacity

41. Ground (4) complains that the Judge’s award for loss of earning capacity is too high, being twice the amount asked for by the plaintiff.  Mr Lim, however, accepts that this is not a matter of exact arithmetic. 

42. At §§33 and 34 of the Judgment, the Judge explained the reasons for awarding $200,000 for loss of earning capacity:

“33. On the strength of the medical reports, aided by the photographs of the principal areas of major, severe injury, which themselves speak more eloquently than the written word of what has happened and what will continue to be problematic for her, there is a real risk that she may not be able to sustain the appointment as teaching assistant. I am satisfied that she will try and hold on to it however difficult that may be for her. Quite apart from her physical problems which could cause increasing and more severe problems necessitating absence for treatment or otherwise she may find that younger and more energetic potential colleagues are able to do her work more consistently. As she gets older her problems will occasion more discomfort and limitations, not less.

34. This forms a clear basis for a loss of earning capacity and an award on the Smith v Manchester/Meyrick v Reyrolle basis: a loss of this reduced salary, currently $8,240 monthly, amounts to $98,880 annually.  I think Mr Wong’s suggestion of $100,000 is rather too modest.  The risk is, in my view, on the medical evidence and having seen her, greater than that and the figure I award is $200,000.”

43. Other than contending that the Judge was too generous, Mr Lim had not been able to point to any error, let alone serious error, in the Judge’s reasoning.  On the facts and having regard to the circumstances of this case, I do not feel able to say that the award made by the Judge has fallen outside the generous range open to him.  There is no basis for the appellate court to interfere.

Conclusion on the appeal

44. For the reasons set out above, the appeal was allowed to the limited extent of varying the multiplier for calculating loss of future earnings from 18 to 15.74.  The amount of future loss of earnings and the total amount of damages are varied to $2,974,860 (i.e. $15,000 x 12 x 15.74 x 1.05 = $2,974,860) and $5,351,351.67 respectively.

Costs of the appeal

45. By letter dated 23 February 2016 (“the Letter”), the plaintiff purported to make a sanctioned offer under Order 22 of The Rules of the High Court, Cap. 4A as follows:

“Solely for the sake of reaching an amicable settlement but not otherwise, we are instructed that our client is willing to accept HK$5,116,491.67 (a deduction of HK$500,000.00 from the Judgment sum of HK$5,616.491.67) (“the Settlement Sum”) plus interest, costs and disbursements in HCPI 877/2013 to be taxed if not agreed with no order as to costs in CACV 141/2015 in full and final settlement of our client’s claim herein.” 

46. The Letter went on to state that it was a sanctioned offer made pursuant to Order 22, and further made offer as to interest pursuant to Order 22 rules 5(3)(c) and 26(2).  It concluded by giving the defendant 28 days to accept the offer, and stated that the plaintiff reserved the right to produce a copy of the letter to the court if so warranted.  The defendant did not reply to the Letter.

47. In CEP Ltd v. Wuxi Solar Energy Technology Co Ltd [2016] 1 HKLRD 960, the Court of Appeal held that the regime of sanctioned offer/ payment under Order 22 does not extend to appeal proceedings.  However, it was open to a party to protect his costs position on appeal by way of Calderbank offer.  In Montrio Ltd & Anor v. Tse Ping Shun David [2012] 2 HKC 392, Poon J (as he then was) held that, other than sanctioned payment or sanctioned offer under Order 22 and a Calderbank offer, a party may also offer to settle by means of an open offer.  The decision was affirmed on appeal: see CACV 291 of 2011 (unreported), 28 December 2012 at §§ 68 & 69.  Similarly, in Hung Sau Fung v. Lai Ping Wai & Anor (unreported) CACV 240 of 2011, 1 March 2015, it was held that, although the sanctioned offer made in the court below could not be relied on to invoke the provisions of Order 22 in respect of the costs of the appeal, the sanctioned offer could, and should in appropriate cases, be taken into account in dealing with the costs of the appeal.

48. In the light of CEP Ltd v. Wuxi Solar Energy Technology Co Ltd, Mr Wong rightly conceded that the regime of sanctioned offer under Order 22 did not extend to appeal proceedings.  The Letter therefore cannot take effect as a sanctioned offer.  Mr Wong, however, argued that the court should take into account the offer in the Letter when exercising the discretion on costs, and that the costs order should reflect what is just and fair in all the circumstances of the case.  In his submission, the plaintiff should be entitled to the costs of the appeal, but that for the costs incurred before 22 March 2016 (i.e. the end of the 28 days within which the offer was to be accepted), it may be reduced to reflect the defendant’s partial success in the appeal.

49. Mr Lim, on the other hand, submitted that the defendant had to bring the appeal to obtain the reduction in the award for future loss of earnings, and the costs order should reflect his success in the appeal.  While the defendant has not been successfully on some of the issues, the arguments on those issues had not substantially lengthened the appeal process.  His primary position is that the defendant should have the costs of the appeal.  Alternatively, the defendant should be entitled to half of the costs of the appeal.

50. Costs are within the court’s discretion.  In exercising the discretion in this case, it is relevant that the defendant has to bring the appeal to obtain the reduction to the award for future loss of earnings, and the costs order should reflect this.  It is also relevant to consider that the defendant’ success in the appeal is limited to an issue which was not really contentious, and he has failed on all the other grounds of appeal. 

51. At the same time, although the Letter cannot take effect as a sanctioned offer under Order 22, it is a genuine and proper settlement offer that the court should take into account when deciding on the costs of the appeal.  Notwithstanding the successful variation of the multiplier, the defendant has failed to do better than the offer in that the reduction to the total amount of damages awarded to the plaintiff is only $265,140.  In my view, the defendant should have accepted the offer and brought an early conclusion to the appeal proceedings. 

52. Having regard to the above considerations, I am of the view that the defendant should be given 30% of his costs up to and including 22 March 2016.  I am further of the view that the costs of the appeal incurred after 22 March 2016 should be paid by the defendant to the plaintiff.  The plaintiff has not pressed, and I am not inclined to order the costs to be paid on a higher scale.

53. In summary, I would make the following order on costs:

(1)  The plaintiff pays the defendant 30% of the costs of the appeal incurred up to and including 22 March 2016, to be taxed if not agreed; and

(2)  The defendant pays the plaintiff the costs of the appeal incurred after 22 March 2016, to be taxed if not agreed.

Hon G Lam J:

54. I agree.

[1] This is in line with the plaintiff’s position below, as reflected by the Revised Statement of Damages and the closing submission.

[2] Judgment at §30.