CHAK YUET CHING v. LIN SHU MAN

cacv 174/2009

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 174 of 2009

(on appeal from DCCJ NO. 3836 of 2008)

________________________

J U D G M E N T

Hon Rogers VP:

1.  This is an appeal against an order made by His Honour Judge Yung on 7 May this year.  The matter before the judge was an application for judgment under Order 14.  The judgment was to be on liability with damages to be assessed.  The judge granted that order with one modification, but ordered that the costs of the Order 14 application and the Order 29 application, which had been made on 20 January, be to the defendant in any event.

2.  The judge refused leave to appeal but when the application came before myself, it was at once apparent that this was a wholly extraordinary order.  It is, perhaps, one thing to deprive a successful litigant of costs if that litigant has incurred costs or taken some steps unnecessarily.  It is the most exceptional thing to order costs against a party who has successfully applied for an order.

3.  On that basis alone, leave to appeal was given in what was seemingly a rather minor dispute as to costs of not, hopefully, an excessive amount.  But when the facts of this case became more apparent when a full set of papers was filed and the submissions were made, the order made by the judge was not only plainly wrong but seems to have been made under serious misconceptions of fact.  To a certain extent, unfortunately, the judge himself was responsible for it because, it appears from the transcript of the argument as to costs that the judge himself did most of the talking and, in so far as he permitted counsel to make any submissions, he appears to have conducted the proceedings in a way that was, I regret to say, slightly oppressive.

4.  The history of this matter was that the plaintiff had a flat underneath the defendant’s flat.  In simple terms, the defendant’s father had recently moved into the flat and was something of a ‘do-it-yourself’ person and had made substantial alterations to the plumbing arrangements in the flat.  As a result, on 4 April of 2008, there was a large quantity of toilet flush water from the defendant’s premises which leaked into the ceiling of the plaintiff’s premises and it flooded the plaintiff’s premises.  That was followed, on 23 May 2008, by a second water leakage.  Water again leaked from the defendant’s premises and, this time, it went very close to the main electricity switch board of the plaintiff’s premises.

5.  The plaintiff naturally complained to the management office.  The plaintiff was not unduly hasty and, on 16 September 2008, a writ was issued on her behalf against the defendant, with a statement of claim, claiming damages in respect of the water leakage.

6.  On 6 October, the defendant, then acting in person, filed a defence and admitted that he was liable for the damage but said that the amount claimed by the plaintiff was excessive and that is a very sensible sort of attitude.

7.  It appears that the defendant had then, probably - and I say no more than that - contacted his insurer, because it appears that the defendant’s solicitor must have written a letter, because there was a letter of 13 October of 2008 from the plaintiff’s solicitor to the defendant’s solicitor, saying that:

“In order to save time and costs, we are instructed to propose the following:

(1)        You let us have your Notice to Act; and

(2)        a Consent Order be signed by your firm, entering judgment on liability with damages to be assessed (see the draft Consent Order enclosed).  This should save much time and costs as the issues in contention will be reduced greatly.”

8.  Then they enclosed a consent order which was a very simple document which said precisely that.

9.  To that, as far as I can see, absolutely no exception could be taken.  It was a very sensible course for the plaintiff’s solicitors to take.  So what happened?  Nothing.  On 27 October, the plaintiff’s solicitors wrote again and they said:

“We note that up to the date hereof, you have not responded on our client’s offer made on 13^th October.  Given that your client appears to admit liability in his defence, we are surprised why your client does not respond on our client’s offer that judgment be entered against your client on liability.  In order to save time and costs, please advise your client and revert within the next 7 days, i.e. on or before 3^rd November, on your client’s position.”

10.  Again, what happened?  Nothing.  On 16 November, there was a third water leakage and water went into the plaintiff’s kitchen and the kitchen cupboards on that occasion and that necessitated a second action because, apparently, objection was taken to that matter being included in the first action.  Five days later, on 21 November, the defendant’s solicitors filed a notice to act on behalf of the defendant, but they did nothing.

11.  On 17 January, there was yet a fourth water leakage from the defendant’s premises.  By that stage, I have no doubt that the plaintiff must have become increasingly frustrated.  There was a constant succession of water leakages from the defendant’s premises.  The defendant appears to admit that he is responsible for them, but his solicitors are sitting on their hands doing nothing and not even replying to sensible letters from the plaintiff’s solicitors.

12.  On 20 January, the plaintiff’s solicitors applied for interlocutory injunctions and they applied for two sorts of interlocutory injunctions.  The first was an injunction to require the defendant to carry out all the necessary repairs and remedial works to stop the continuing water leakage from the pipes solely servicing the kitchen and the unauthorised bathroom in the defendant’s premises.  The second was an injunction to restrain the defendant from repeating, continuing, causing, permitting or allowing water leakage from pipes.

13.  Obviously, the second injunction was a matter which would cause some difficulty because there is no suggestion that what the defendant has done has been other than negligent.  He had not done anything deliberately with the intention of causing the water leakage.  But the first injunction was a sensible sort of injunction.  It was a mandatory injunction which, at the interlocutory stage, has its difficulties because if a mandatory injunction is granted at the interlocutory stage, it may well grant the final relief in the action which is something which lawyers and judges are very careful about doing and they will only do it where it is necessary.

14.  At the return date of that application on 30 January, the defendant gave an undertaking to have the necessary works carried out.  The defendant has filed an affirmation saying that:

“After the court hearing on 30 January, I have instructed contractor and plumber to carry out all necessary work for complying with the orders given by the court”.

15.  In other words, complying with the undertaking given by the court.

16.  At that stage, the statement of claim and the writ in the action did not include a prayer for an injunction but a mandatory injunction having been given, or at least an undertaking in terms of the mandatory injunction having been given and embodied in an order of the court, it was necessary that the writ and the statement of claim should be amended to include a prayer for relief for the injunction.  Naturally, on 30 January, leave was given to include that prayer and so the matter went ahead.

17.  Very soon after the hearing on 30 January, the plaintiff’s solicitors wrote again to the defendant’s solicitors on 5 February.  They said:

“We are of the view that your client has no defence in this action, and to save the time and costs of protracted litigation, write to invite your client to consent to (i) judgment being entered on liability with damages to be assessed and (ii) costs to our client.  Please reply to us with your client’s position by 12^th February, failing which, we will apply for summary judgment without further notice and seek costs from your client.”

18.  Again, what happened?  Nothing.  The defendant’s solicitors neither replied by letter nor even had the courtesy to make a phone call.  They simply, again, sat on their hands.  Inevitably, the plaintiff had to do something, so the solicitors took out the Order 14 application.  Whether it was an application under Order 14 or an application for judgment on admissions, appears to me to matter very little.  But what had to happen is that there had to be an order giving judgment on liability and allowing the matter to proceed simply to an assessment of damages.

19.  So it was in that context that the matter came before the judge and he appears to have taken the view that, first of all, the application under Order 29 made on 20 January was unnecessary.  I cannot see how he could possibly have come to that conclusion if he had read the defendant’s affirmation in which he said, after he had given the undertaking, he had arranged for the necessary work to be done by contractors and plumbers and not left it to his father’s do-it-yourself way of doing things.

20.  That aspect of the judge’s order was clearly wrong and clearly made without having considered the full facts which must have been before him.  The judge appears to have ordered that the costs of the Order 14 application should be paid by the plaintiff on the basis that there was a claim for an injunction.  It may well be that there were difficulties in the negative injunction because, as I have already indicated, the defendant cannot be said to have been causing damage deliberately.  But as regards the mandatory injunction, the defendant had already conceded that by giving the undertaking and it was necessary to have that claim there.

21.  I see absolutely no reason why the judge should have made the order he did.  In my view, the order made by the judge was clearly wrong.  It is not a matter of interfering with his discretion.  It is a matter where the judge fell into error.

22.  One thing that can also be pointed out is that when counsel for the plaintiff attempted to draw the judge’s attention to the correspondence, in October last year and February of this year, which I have already referred to, it appears that the judge, rather than heeding the fact, took exception to the fact that it was without prejudice save as to costs.  However on that occasion, he was dealing solely with the costs and the judge appears to have refused to have even looked at it; rather, despite what seems to have been a proper intervention by counsel attempting to draw his attention to something, he indicated that, as far as he was concerned, had he been so minded, he would have directed a complaint to the Bar Council.  I am sorry that he had even made that suggestion.

23.  In my view, this appeal must be allowed.

Hon Le Pichon JA:

24.  I agree.