CAI GUOPING v. YIM HOK WING AND OTHERS

HCPI 494/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 494 OF 2013

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DECISION ON COSTS

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Introduction

1.  In my judgment, dated 18 February 2015, I found each defendant jointly and severally liable to the plaintiff for damages.  I also assessed the plaintiff’s contributory negligence at 50%.

2.  The amount of damages I assessed ($236,614) was less than the employees compensation received by the plaintiff ($333,300) and, so, it followed that no award should be made, even though liability was established:  So Loy Hing v Kowloon Motor Bus Company (1933) Ltd, HCPI 910/2011.

3.  I made an order nisi that there be no order as to costs because of the liability split.

4.  By summons, dated 3 March 2015, the defendants applied to vary my costs order nisi as follows:

(1) The plaintiff pay the defendants’ costs of this action, including any costs reserved, up to 5 November 2014, or alternatively up to 16 December 2014, on a party and party basis, to be taxed if not agreed, in accordance with the High Court scale with interest thereon at judgment rate from the date of judgment until payment.

(2) The plaintiff pay the defendants’ costs of this action, including any costs reserved, from 6 November 2014 up to the date of the Order made herein on an indemnity basis to be taxed if not agreed, in accordance with the High Court scale with interest thereon at judgment rate from the date of judgment until payment;

(3) Alternatively, the plaintiff pay the defendants’ costs of this action, including any costs reserved, from 17 December 2014 up to the date of the Order made herein on an indemnity basis to be taxed if not agreed, in accordance with the High Court scale with interest thereon at judgment rate from the date of judgment until payment;

(4) The plaintiff pay to the defendants enhanced interest on the following disbursements (such disbursements to be taxed if not agreed) incurred at the rate of 9% per annum from the respective dates of payment of the said disbursements up to the date of judgment:

	Particulars	Amount	Date of Payment
(i)	Half share of the mediation fees	HKD9,000.00	13 January 2015
(ii)	Surveillance DVDs duplicating fees	HKD90.00	16 January 2015
(iii)	Travelling expenses	HKD571.80	19, 20, 21, 22, 23, 26 & 29 January 2015
(iv)	Photocopying fees	HKD32.00	23 January 2015

5.  The defendants also seek the costs of their application to vary the costs order nisi on an indemnity basis, to be taxed if not agreed, in accordance with the High Court scale.

6.  The last order the defendants seek is that the plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.

7.  The defendants also sought leave to file a second affidavit of Lo Wai Yin Fiona for the purpose of producing further documentary evidence in support of their application.  This was not opposed and, so, leave is granted.

8.  The defendants’ counsel filed submissions on 24 April 2015, the plaintiff’s counsel filed submissions on 8 May 2015 and the defendants’ counsel filed further submissions on 28 May 2015.

The defendants’ application for costs up to 5.11.14 or 16.12.14

9.  The defendants submit that, because the total amount of damages awarded by me was less than the employees’ compensation award, such that no damages are to be paid by the defendants to the plaintiff, the defendants should be treated as the successful party and costs should follow the event.  I have been referred to Ho Wan Yung v AS Watson & Company Limited, unrep, HCPI 264/2008, Fok J.

10.  The plaintiff’s counsel noted that the plaintiff, as a loser of this litigation, has to accept that he needs to pay the winning party’s costs.

11.  I shall follow Ho Wan Yung v AS Watson & Company Limited and also in light of the plaintiff’s concession, I shall treat the defendants as the successful parties.  Costs shall follow the event and I award costs to the defendants.

12.  The defendants have proposed alternate periods.  The first period proposed is up to 5 November 2014 and this is because the defendants issued a sanctioned offer on 8 October 2014, which was not accepted when it expired on 5 November 2014.  The second period proposed is up to 16 December 2014 and this is because the defendants made a sanctioned payment on 18 November 2014, which was not accepted and expired on 16 December 2014.

13.  The sanctioned offer was that, if the plaintiff discontinued the action, the defendants would seek only costs up to the date of the offer.  The sanctioned payment was in the sum of $120,000 (net of employees’ compensation received in the sum of $333,330 and inclusive of interest) plus costs.

14.  The plaintiff’s counsel has made no submission as to the appropriate date.  For the reason that the plaintiff failed to do any better than the sanctioned offer, I award costs to the defendants on a party and party basis up to and including 5 November 2014.

Indemnity costs and enhanced interest

15.  Pursuant to Order 22, rule 23(5) of the Rules of the High Court (Cap 4A, Sub Leg) I should order indemnity costs and enhanced interest unless I consider it unjust to do so.  By Order 22, rule 23(6) I should take into account all the circumstances of the case, including the matters set out in that rule, namely:

(1) the terms of any sanctioned payment or sanctioned offer;

(2) the stage in the proceedings at which any sanctioned payment or sanctioned offer was made;

(3) the information available to the parties at the time when the sanctioned payment or sanctioned offer was made; and

(4) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the payment or offer to be made or evaluated.

16.  With regard to the sanctioned offer, I have taken into account its terms (that the plaintiff discontinue and pay the defendants’ costs to the date of the offer) and the stage in the proceedings at which it was made, 8 October 2014. The terms of the offer are based on an assessment of liability and giving everything to the defendants.  In this regard, I note that the Defence, denying liability, was filed on 30 July 2013, about 14 months before the date of the offer and 3½ months before trial.  In my view, it would be unjust to award indemnity costs from 6 November 2014 because the matter had proceeded for about 14 months after the defendants had taken their position on liability when filing their Defence.

17.  As to the sanctioned payment, I see the position differently, for that was an offer of a sum of money plus costs.  In other words, although the sanctioned payment was made only five weeks before trial, the position was reversed such that plaintiff was offered a payment plus costs, which he failed to beat. 

18.  The plaintiff’s counsel submits:

(1) It was reasonable for the plaintiff, in the light of legal advice, to consider that he could establish full or a high degree of negligence or breach of duty on the defendants’ part, such that he should not be penalized by indemnity costs.

(2) The outcome of resolving the issues was unpredictable.

(3) The sanctioned payment followed the sanction offer, vindicating the plaintiff’s refusal to accept.

(4) For these reasons, it was reasonable for the plaintiff to pursue his claim.

19.  The thrust of the submissions is that it was reasonable for the plaintiff to refuse the sanctioned payment and to continue with the action.  In my view, a plaintiff’s subjective belief that he has a good claim does not constitute a relevant consideration and, in this regard, I follow Shih Pik Nog v G2000 (Apparel) Ltd [2011] 4 HKLRD 121 in which Bharwaney J noted:

“To rule otherwise would be tantamount to driving a coach and horses through [O.22, r.23(5)].”

20.  As to the plaintiff’s submission that he should not be penalized by indemnity costs, I note the observation of Lord Woolf MR in Petrotrade Inc v Texaco Ltd [2002] 1 WLR 947, at paragraph 63, that:

“The ability of the court to award costs on an indemnity basis and interest at an enhanced rate should not be regarded as penal… .”

21.  For these reasons, I award the defendants’ their costs from 17 December 2014 on an indemnity basis.

22.  As to the scale of costs, the defendants submit that, since the plaintiff elected to commence proceedings in the High Court, the defendants had no choice but to defend in the same venue.  The plaintiff’s counsel made no submission on this point.  I agree with the defendants and award costs in accordance with the High Court scale.

23.  In his submissions, the defendants’ counsel advised that the defendants would seek enhanced interest on the half share of the mediation fees ($9,000.00) only. 

24.  The prevailing prime interest rate has been 5% since 2008 and the defendants’ submit that 9% should be adopted as the enhanced interest rate.  The plaintiff’s counsel did not make any submission on this point.  I agree with the defendants.

25.  The defendants seek costs on an indemnity basis for this application.  The plaintiff’s counsel made no submission on this particular application.  I note the defendants’ solicitors wrote to the plaintiff’s solicitors inviting them to agree a consent order but there was no response.  In the circumstances, I award the costs of this application on an indemnity basis.

26.  My orders are as follows:

(1) The plaintiff pay the defendants’ costs of this action, including any costs reserved up to 16 December 2014, on a party and party basis, to be taxed if not agreed, in accordance with the High Court scale with interest thereon at judgment rate from the date of judgment until payment.

(2) The plaintiff pay the defendants’ costs of this action, including any costs reserved, from 17 December 2014 up to the date of this Order on an indemnity basis to be taxed if not agreed, in accordance with the High Court scale with interest thereon at judgment rate from the date of judgment until payment.

(3) The plaintiff pay the defendants enhanced interest on disbursements of $9,000.00 being the half share of the mediation fees (such disbursements to be taxed if not agreed) at the rate of 9% per annum from 13 January 2015 to the date of judgment.

(4) The costs of this application be to the defendants on an indemnity basis, to be taxed if not agreed, in accordance with the High Court Scale.

(5) The plaintiff’s own costs to be taxed in accordance with the Legal Aid Regulations.

27.  I am told that the plaintiff has appealed my judgment.  As I have made reference to the sanctioned offer and the sanctioned payment, I order that this costs decision should not be published (including on the judiciary website) until further order.