XCHRX LI KWOK SHING v. LAW KA FU & ANOTHER

DCEC654/2000

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 654 OF 2000

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Judgment

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This Application was originally fixed for trial before me on 17 October 2001. By that day, the Applicant had served notice of acceptance of amounts paid into court. Thus the substantive issues of liability and quantum fell by the wayside. However, there arose dispute over costs. It was agreed that counsel for the parties would make written submissions on that issue. The last of written submissions reached me on 14th November 2001. This is my judgment in the light of the submissions.

2. The chronology of the events affecting this matter is very usefully set out by Ms. Remedios, counsel for the Respondent:-

30.7.98	The accident
Sept 1999	Surveillance carried out
25.7.00	The ECC Application
25.8.00	The Answer
25.5.01	Report of Dr. Lau Hoi Kuen (instructed by Plaintiff) advising that the Applicant had a 20% loss of earning capacity.
4.7.01	Surveillance report disclosed (comment: surveillance report was disclosed before 1st witness statement of applicant was filed; no complaint should be entertained as to late discovery of the surveillance video tape)
13.7.01	Filing of the 1st Witness Statement of the Applicant (29.6.01) and the 1st Witness Statement of Sylvia Chan (for the Respondents)
3.10.01	3rd payment into court
5.10.01	3rd report of the Applicant's medical expert, Dr. Lau Hoi Kuen, noting after seeing the surveillance video (17.9.99, 22.9.99) that:
	"This is certainly much better than his complaint of severe pain with sitting for more than 30 min. or walking for more than 15 min. One tends to have the impression that he was recovered well from his back injury at that time."
	(This report was not disclosed to Respondents pending Applicant's attempts to negotiate a settlement higher than the payment into court.)
6.10.01	Applicant's Solicitors' letter rejecting the payment into the court in the following terms:
	"We refer to your client's Notice of Payment into Court filed on 3rd October 2001 which was served on us on the same date.
	Upon taking urgent instructions, we are instructed that your clients' offer is not acceptable. As the parties are too wide apart, it is clear that the trial will be unavoidable. For what it is worth, we put forward a final proposal for you take instructions:- ...
	Please appreciate that the trial is only 10 days ahead. Accordingly please revert to us within the next 3 days whether your client will offer the sum above with costs in full and final settlement of the captioned case.
	In the meantime, we shall proceed to trial."
	(Emphasis supplied)
9.10.01	At the conclusion of the 3 days given to the Respondents to consider the Applicant's offer, disclosure was then made of
	(a)	the report of Dr. Lau Hoi Kuen dated 5th October 2001;
	(b)	the 2nd Witness Statement of the Applicant (dated 9.10.01) with significant new material, including an alleged contemporaneous work record complied by the Applicant
	Comment: at this stage the Respondents could have applied for a withdrawal of the payment into court in the light of the fresh material but it would have appeared academic to do so as the Plaintiff had already rejected the payment in and the trial was fast approaching.
12.10.01	Respondents briefed Counsel
	Comment: but for the express rejection of the payment into court, briefing of counsel could have been postponed until the night before trial or the Respondent's Solicitors may have decided to do the trial themselves in case settlement could be reached at the door of the court.
15.10.01	Respondents arranged for video equipment to play surveillance tape in court
16.10.01	Applicant purported to accept payment into Court (after office hours)
17.10.01	Hearing

I accept for argument's sake that the comments in the chronology do reflect the true position of the Respondent.

The Applicant's case

3. The Applicant relies on Order 22 of the Rules of the District Court, Cap. 336:-

"Payment into Court (O.22, r.1)

(1) In any action for a debt or damages any defendant may at any time pay into court a sum of sums of money in satisfaction of the cause of action in respect of which the plaintiff claims or, where 2 or more causes of action are joined in the action, a sum or sums of money in satisfaction of any or all of those causes of action.

(3) A defendant may, without leave, give notice of an increase in a payment made under this rule but, subject to that and without prejudice to paragraph (5), a notice of payment may not be withdrawn or amended without the leave of the Court which may be granted on such terms as may be just.

3. Acceptance of money paid into Court (O.22, r.3)

(1) Where money is paid into court under rule 1, then, subject to paragraph (2), within 14 days after receipt of the notice of payment or, where more than one payment has been made or the notice has been amended, within 14 days after receipt of the notice of the last payment or the amended notice but, in any case, before the trial or hearing of the action begins, the plaintiff may -
(a) where the money was paid in respect of the cause of action or all the causes of action in respect of which he claims, accept the money in satisfaction of that cause of action or those causes of action, as the case may be; or ... by giving notice in Form No. 24 in Appendix A to every defendant to the action ....

(3) On the plaintiff accepting any money paid into court all further proceedings in the action or in respect of the specified cause of causes of action, as the case may be, to which the acceptance relates, both against the defendant making the payment and against any other defendant sued jointly with or in the alternative to him, shall be stayed."

Because the Notice of Acceptance of Payment into court was filed and served on 16th October 2001, Mr. Gidwani, counsel for the Applicant, contends that the Applicant is entitled to automatic judgment on costs calculated to 16th October 2001.

The Respondent's Case

4. Ms. Remedios contends that Order 22 of the Rules of the District Court, Cap. 336 is applicable only to "an action for debt or damages". In cases other than for "debt or damages" the payment into court provision does not apply and a defendant in such cases should resort to open or closed letters offering settlement such as a Calderbank letter. An Application for "compensation" under the Employees Compensation Ordinance, Cap. 282 is not an "action for debt or damages" to which Order 22 applies. See: Ng Ming Chor v Pui Hing Construction Co. Ltd. DCCJ 496 of 1996.

5. It is submitted by counsel that to bring an ECC claim to an end, a "determination" of the District Court is necessary because Section 18A of the Employees Compensation Ordinance Cap. 282 provides that

"Except where otherwise provided under this Ordinance, all claims for compensation, except to the extent that such claims are determined -

(a) by agreement under section 8 or

(aa) (Repealed)

(ab) by a Certificate of Compensation Assessment for Fatal Case or Review Certificate of Compensation Assessment for Fatal Case; or

(ac) by a Certificate for Funeral and Medical Attendance Expenses or Review Certificate for Funeral and Medical Attendance Expenses; or

(b) by certificate under section 16A;

(c) by agreement under section 16CA; or

(d) (Repealed)

any matter arising out of proceedings in respect of such claims shall be determined by the District Court, whatever may be the amount involved, and the Court may, for that purpose, call upon any person to give evidence, if the Court is of the opinion that such person is, by virtue of his expert knowledge, able to assist the Court." (Emphasis supplied)

6. Order 22 of the Rules of the District Court, Cap. 336 dealing with payment into court and acceptance with an automatic stay of proceedings cannot apply because it is implicitly displaced by Rule 20, Employees' Compensation (Rules of Court) Rules, Cap. 282 which reads:

"(1) A respondent from whom compensation is claimed may pay into court a sum which is considered by him to be sufficient to cover his liability.

(2) If no greater compensation be awarded than the sum of money which the respondent has paid into court, the court may order that any costs incurred by such respondent, after payment by him into court of the said sum of money shall be paid by the applicant."

Insofar as Rule 20 is inconsistent with Order 22, Rule 20 must prevail.

7. It is noted that Rule 20 permits a respondent to make payment into court but does not provide for acceptance of payment nor stay or termination of the proceedings upon acceptance of payment in. According to Ms. Remedios, the method by which payment into court in ECC proceedings can be "accepted" are by the parties submitting a consent summons for the District Court to approve so that "compensation" is "awarded" by the Court.

8. Costs are usually provided for in the consent summons for acceptance of payment in of ECC cases. However, it is submitted, the court retains the discretion to make an appropriate cost order in these circumstances. And in the instance case, the Respondent seeks the exercise of that discretion. Rule 20 expressly grants the District Court the discretion to order that "any costs incurred by such respondent, after payment by him into court ... shall be paid by the applicant if no greater compensation be awarded". Here, as the Applicant has purported to accept the payment into Court, there has been an award of compensation "no greater than" the payment into court. It is therefore submitted that upon making such an "award", the court should exercise its discretion by ordering that the Applicant be entitled to his costs up to the time when notice of the payment in was received and that the Applicant pays the Respondent's costs of the action thereafter.

9. I find Ms. Remedios' arguments most persuasive. I believe there are two reasons for Rule 20 of the Employees Compensation Rules, Cap. 282 not to provide for acceptance of payment. First, an Application for compensation under the Employees Compensation Ordinance, Cap. 282 may involve infant interests for which the court has a duty to protect. If an applicant can terminate an ECC case by acceptance of payment in, the court cannot effectively protect the interests of infants who are not the nominal party. Secondly, there may be dependents not necessarily infants who may have a share in the compensation that the court should justly apportion. If the nominal applicant can by simply filing a form obtains the money paid in, the money may be unlawfully distributed or dissipated before the court has the opportunity to decide on apportionment among dependents.

10. In the premises, I hold that an applicant for compensation under the Employees Compensation Ordinance, Cap. 282 is not entitled to invoke Order 22 of the Rules of the District Court, Cap. 336 to accept payment into court. If an applicant wishes to accept monies paid into court in full and final settlement, a consent summons may be taken out for approval by the court. Alternatively, the applicant may on the day of trial apply for compensation to be determined in the same amount as the total of monies in court.

11. Since monies paid into court is not "acceptable", I agree with Ms. Remedios that theoretically a respondent may object to awarding the total of monies already paid into court as compensation lawfully due. In other words, payment into court is not admission of liability. Even if payment into court should be taken as admission of liability, it is not an admission as to quantum. A respondent, in any event, is entitled to insist on trial as to quantum.

12. In the present case, the parties have agreed that the balance of compensation (there was already earlier advance payment to the Applicant) to be awarded in full and final determination should be the total amount paid into court. There is therefore award accordingly.

13. The parties have also agreed that the Respondent should pay the Applicant's costs upto a certain date and that the Applicant should pay the Respondent's costs after that date. The question is which date. Mr. Gidwani suggests 16th October 2001 which is the date of notice of acceptance of payment into court. Ms. Remedios on the other hand says it should be the date on which the Applicant received notice of the last payment into court.

14. In exercising my discretion, I note that Rule 20 indicates that costs after service of notice of payment into court should be paid by the Applicant. The court is not bound to draw the line at that date but, since that is indicated and parties following the Employees Compensation Rules, Cap. 282 are deemed to be aware of it, in the absence of grounds to adopt another date, I am inclined to make an order for costs in terms suggested by Ms. Remedios.

15. It may be argued that Order 22 of the Rules of the District Court, Cap. 336 has shifted the date to the date of notice of acceptance of payment into court. My view is that, since the Rules of the District Court, Cap. 336 were enacted in 2000 but the opportunity was not taken to change Rule 20 of the Employees Compensation Rules, Cap. 282 to bring it in line with Order 22 of the Rules of the District Court, Cap. 336, it was not intended that the new reckoning date should be applied to ECC cases.

16. In conclusion, the Respondent has succeeded on every point in this dispute over costs. I am prepared to order that :-

(1) the Respondent do pay the Applicant's costs of the entire Application upto and including the date of receipt of notice of the last payment into court;

(2) the Applicant do pay the Respondent's costs incurred after the date of receipt of notice of the last payment into court, including costs of and occasioned by the dispute over costs;

(3) usual taxation on party and party basis and legal aid taxation;

(4) certificate for counsel.

Since there may be reservation as to what amount in court may be paid out to the Applicant, I invite counsel for the parties to settle the precise terms of the award and the final order that the court should make.