XCHRX CHAN KING WAN AND OTHERS v. HONEST SCAFFOLD GENERAL CONTRACTOR CO. LTD. AND ANOTHER

HCPI1267 & 1269/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1267 & 1269 OF 1996

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J U D G M E N T

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1. The plaintiffs seek a Sanderson order against the 2nd defendant in respect of their costs of pursuing the claim against the 1st defendant and the 1st defendant's costs of defending that claim. The appropriate test for making such an order has not been disputed, namely, whether it was reasonable for the plaintiffs in all the circumstances to join the 1st defendant as a defendant.

2. The principal contention put forward by Mr LIU on behalf of the 2nd defendant is that it was not reasonable in view of the fact that Madam YIP, the sole surviving director of the 1st defendant, was herself one of the 1st plaintiffs. All the factual circumstances relating to the liability of the 1st defendant were therefore known to the plaintiffs before the commencement of these proceedings.

3. I am persuaded by Mr Bharwaney that it was reasonable for the plaintiffs' solicitors to join the 1st defendant as a defendant in all the circumstances of the case. These circumstances included the fact that the same solicitors were acting for both the 1st and the 2nd defendants. The fact that very little additional time would be expended at trial in relation to the liability of the 1st defendant, bearing in mind the fact that it was clear that contributory negligence was going to be a very significant factor in the proceedings against the 2nd defendant, and the deceased's relationship to the 1st defendant was going to be a highly material factor to such an issue, and the fact that the 1st defendant as the deceased's employer, was the party required by law to carry compulsory insurance.

4. I do not consider that the issue of the liability of the 1st defendant was as a matter of law so clear as to make the contrary argument unarguable. Even on factual matters, the issue of whether it was reasonable for the 1st defendant to leave it to the deceased to decide on a suitable design and method of construction without, for instance, seeking the advice of an engineer, was a matter which could not, with confidence, be predicted at the outset at the proceedings.

5. Accordingly, I am prepared to make a Sanderson order. The order I make is as follows:

(i) the 2nd defendant pay to the 1st and 2nd plaintiffs their entire costs of the actions, including all costs ordered to be in the cause and the costs incurred against the 1st defendant from the commencement of the action up to the date of the first payment into court;

(ii) the 2nd defendant pay to the 1st and 2nd plaintiffs their entire costs of the actions, including all costs ordered to be in the cause and the costs incurred against the 1st defendant from the date of the first payment into court up to the date of the interlocutory judgments, to be taxed, if not agreed, provided however, that in the event that:

(a) the amount of final judgment in favour of the 1st plaintiff be less than the amounts paid into court in satisfaction of the 1st plaintiff's claims then the costs of the 1st plaintiff's action from the date of the effective payment into court be reserved to the Master to be determined after the assessment of damages have been completed;

(b) the amount of final judgment in favour of the 2nd plaintiff be less than the amounts paid into court in satisfaction of the 2nd plaintiff's claims, then the costs of the 2nd plaintiff's action from the date of the effective payment into court be reserved to the Master to be determined after the assessment of damages have been completed;

(iii) save as varied by any orders contained herein, all orders relating to costs made previously in the actions and the consolidated actions are hereby expressly confirmed,

(iv) this order be sealed and brought to the attention of the Master assessing damages in this matter only after final judgments have been entered for the 1st and 2nd plaintiffs against the 2nd defendant;

(v) there be liberty to apply.

6. Insofar as interim payment is concerned, I order that there be payment out of $1 million from the amounts paid into court to the 1st plaintiffs by way of interim payment. I order that there be payment out of $1.6 million out of the amounts paid into court to the 2nd plaintiffs by way of interim payment. The 1st and 2nd plaintiffs do have costs of today's hearing with certificate for counsel, damages to be assessed by a Master with four days reserved for the assessment.