WONG TSZ HANG by her uncle and next friend CHU MAN KONG v. INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LTD

DCEC 2470/2019

[2022] HKDC 1013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2470 OF 2019

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IN THE MATTER OF AN APPLICATION BETWEEN

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DECISION

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A. INTRODUCTION

1.  For the background of these employees’ compensation proceedings, it will be convenient to extract the relevant background facts from an earlier decision[1] of this court, by which I ordered the expunging of several paragraphs of the affirmation referred to in §9 below.

“Background

1. The Applicant, Ms Wong, was a senior personal banking manager employed by the Respondent, a bank institution in Hong Kong. In April 2018, Ms Wong was subject to an investigation by the Independent Commission Against Corruption (“ICAC”), and was then suspended from duty. In July 2018, although Ms Wong was allowed to resume work, she was assigned to work at the Respondent’s back office instead of being allowed to return to her original position as a banking manager. On 9 August 2018, she was diagnosed to have suffered from depression.

2. The above events and Ms Wong’s depression form the basis of Ms Wong’s Application (“Application”) for employees’ compensation that her privately engaged solicitors filed on 17 October 2019 on her behalf. The personal injury, according to the Application, was the diagnosed depression referred to above.

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6. On 3 January 2022, the Respondent issued a summons (“Strike-out Summons”) to strike out the Application on the grounds that it (a) “discloses no reasonable cause of action”; (b) “is scandalous, frivolous or vexatious; and/or” (c) “is otherwise an abuse of the process of the Court”.”

2.  Unless otherwise stated, I would adopt the same nomenclature set out above in this Decision.

3.  Shortly before the hearing of the Strike-out Summons on 30 August 2022, the Applicant issued a summons for leave to re-amend the Amended Application[2] (“Re-Amendment Summons”).

4.  On 29 August 2022, by an order made by consent, the Strike-out Summons and the Re-Amendment Summons were disposed of by the granting of leave to the Applicant to re-amend the Amended Application; and to the Respondent to withdraw the Strike-out Summons. The only outstanding issues are the costs of these Summonses, which this court ordered their disposition on paper in lieu of hearing.

B. COSTS OF THE RE-AMENDMENT SUMMONS

5.  The Applicant agrees to pay the Respondent’s costs of and occasioned by the Re-Amendment Summons (without certificate for counsel) in any event, to be taxed if not agreed.

6.  The Respondent however contends that these costs should be paid forthwith with certificate for counsel.

7.  It cannot be disputed that the Applicant’s proposed costs order is the usual costs order, which means that the Applicant will pay “in any event all the costs incurred and thrown away by the [re-]amendment and the costs of any consequent amendment”: see Hong Kong Civil Procedure 2022, Vol 1 (“HKCP”), §20/8/51, which costs include not only the costs that have already been incurred, but also future consequential costs directly attributable to the Applicant’s re-amendments: see HKCP, §62/1/3.

8.  Before discussing the Respondent’s submissions, it is convenient to briefly outline the main proposed re-amendments contained in the Applicant’s draft Re-Amended Application annexed to the Re-Amendment Summons. According to her Application (including the later Amended Application), the date – “9 August 2018” (“Diagnostic Date”) – on which the Applicant was diagnosed with depression (see Background §1 of §1 above) was averred to have been the accident date. The Applicant however no longer relied on the Diagnostic Date as the date of the accident. Instead, it is now averred that there was personal injury by an accident “or a series of accidents…during the period from 12 April 2018 to 27 April 2021”.

9.  In support of the Respondent’s seeking of a “forthwith” and “certificate for counsel” costs order, Mr A Cheng, counsel for the Respondent, argued that the Re-Amendment Summons was only belatedly issued just 2 weeks before the substantive hearing for the Strike-out Summons when the Applicant had had ample time and opportunity to make the proposed re-amendments since the commencement of these proceedings almost 2 years ago. In the affirmation of the next friend filed on 4 April 2022 to oppose the Strike-out Summons, although the affirmant already had alluded to the possibility of making further amendments to the Application,[3] the Applicant took no action to amend her claim. Mr A Cheng suggested that the late re-amendments were only made to avoid the inevitable defeat of the Strike-out Summons.

10.  Referring to the above usual-costs principle, Mr K Cheng, counsel for the Applicant, contended that the Respondent’s insistence for the costs to be paid forthwith is a departure from the usual costs order, and that it was incumbent on the Respondent to demonstrate the reasons for such departure. The Respondent has however failed to demonstrate any grounds for departure from the usual costs rule.

11.  Since some future costs occasioned by the re-amendments are as yet unascertained, Mr K Cheng submitted that the Respondent’s proposed “forthwith” costs order, referring to Charm Master Enterprises Ltd v Grand T G Gold Holdings Ltd & Anor,[4] §§12-13, is inherently problematic.

12.  As for his contentions against certificate for counsel, Mr K Cheng argued that a court will only grant a counsel’s attendance in a hearing if counsel’s attendance is necessary and reasonable: Electronic Spider Technology Ltd & Anor v Au Cheong Tat & Ors.[5] Were counsel certificate be granted in this instant summons, Mr K Cheng contended that the certificate would have included the costs of many unascertained items, which work should have reasonably been performed by solicitors (eg the consequential amendments to the Answer). For this reason, Mr K Cheng contended that it is not necessary or reasonable to allow certificate for counsel.

13.  Having considered counsel’s submissions and the facts of this case, I am unable to find any unusual features justifying a departure from the usual rule to order that the costs of and occasioned by the amendment to be paid “forthwith” as the Respondent submitted. In my view, the rationale for “the costs of and occasioned by” an amendment application to be usually directed to be paid “in any event”, rather than “forthwith”, is the practicable difficulty of ascertaining future costs as Mr K Cheng has alluded to. For example, the costs of and occasioned by the Respondent’s amendments to the Answer arising from the Applicant’s re-amendments cannot yet be ascertained.

14.  The Applicant’s lateness in making the re-amendments which Mr A Cheng has greatly relied on in his submissions, in my view, is not a ground for a departure from the usual rule. I therefore reject the Respondent’s submissions, and order the costs to be paid in any event, to be taxed if not agreed.

15.  As for the disputes concerning certificate for counsel for the Re-Amendment Summons, it would be necessary to consider the substance of the re-amendments, which largely appear in the newly-inserted §3(c) (xii) to (xx) of the draft Re-Amended Application. As set out in §8 above, the Applicant no longer avers the single Diagnostic Date as the date of the accident, but relies on a number of events that allegedly occurred before and after the Diagnostic Date.

16.  After having carefully examined the contents of these re-amendments, I do not think that these are insignificant amendments. They have effectively, as Mr A Cheng has rightly submitted, substantially changed the entire landscape of the Applicant’s case. Given the extensiveness of the re-amendments, and the undeniable impact they have on the merits of the Respondent’s Strike-out Summons, I consider that it is reasonable for counsel, who was already engaged for the Strike-out Summons, to also consider the Applicant’s proposed re-amendments. As to any engagement beyond that, I do not think that it is reasonable for counsel to be so engaged. Plainly, matters relating to the consequential amendments to the Answer, for example, are factual and relatively uncomplicated. No certificate should be allowed.

17.  In conclusion, I order the Applicant to pay the Respondent the costs of and occasioned by the Re-Amendment Summons in any event, with certificate for counsel limited to the considering of the Re-Amendment Summons, to be taxed if not agreed. The apportionment of counsel’s fees will be a matter for taxation.

C. COSTS OF THE STRIKE-OUT SUMMONS

18.  The costs issues between the parties upon the withdrawal of the Strike-out Summons is the Applicant’s disagreement to pay costs forthwith with certificate for counsel as sought by the Respondent. The Applicant suggested in the letter of her solicitors dated 22 August 2022 that the costs should be the Respondent’s costs in the cause.

19.  Since the Strike-out Summons was disposed of without the court’s adjudication, the principles for determining costs set out (at §22) in Famous Marvel Company Limited & Ors v Conversant Group Limited & Ors[6] referred to by Mr K Cheng should be applied.

20.  The applicable principles are broadly that where the dispute has been compromised by the parties, the court will consider if the party seeking costs has substantially obtained the reliefs sought in the litigation. In deciding a just costs order, the court may use a broad-brush approach to evaluate the likely outcome of the application. If the court cannot so determine the same after having taken into consideration all matters already laid before the court, an appropriate order may be an order of no costs.

21.  In taking a broad-brush approach, and applying the striking out regime suitable only for the plainest and most obvious cases, I am of the view that this court will not be in a position to say what the likely outcome would have been for the Strike-out Summons. It is noted in particular that after the Strike-out Summons and all the evidence had been filed, a second joint psychiatric expert report was available on 30 June 2022. The latest updated expert report would have likely materially impacted on the merits of the Applicant’s case.

22.  The events subsequent to the Strike-out Summons – the second expert report and the Applicant’s further re-amendments to the Application – would have necessitated the Respondent’s legal advisers making a fresh assessment of the merits of the Strike-out Summons. I believe that the withdrawal of the Strike-out Summons shortly before the hearing for argument was the result of such re-evaluation of the strike-out application. Since the Respondent has already been awarded the costs of and occasioned by the Re-Amendment Summons, and the court cannot determine the ultimate winner of the Strike-out Summons, I therefore reject the Respondent’s proposed costs order. I believe that the Applicant’s proposed costs order of the Respondent’s costs in the cause is just in all the circumstances. I so order.

23.  As for whether a certificate for counsel is justified, I need to take into account that the Strike-out Summons was undeniably a very important application to the Respondent as its success would bring an end to the entire proceedings. For this reason, I believe that it is reasonable to allow certificate for counsel, and I so grant.

24.  In conclusion, I order that the Applicant do pay the Respondent’s costs in the cause, with certificate for counsel.