SECRETARY FOR JUSTICE v. KIN CHING BESSER CO LTD

HCA 561/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 561 OF 2003

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R U L I N G

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Introduction

1.  On 20 January this year I handed down judgment in this case in which I awarded the Plaintiff damages in the amount of HK$4,040,862.55.  This is a case concerning a landslide, caused by heavy rainfall, which occurred on 9 June 1998.  This landslide, substantially of pulverized fuel ash  which had been stored by the Defendant at the edge of an area of land at the top of a sloping hillside let to it by the Government so that it might build a brickworks.  My judgment provides the detail of how all of this came about.

2.  By the date of the landslide the Defendant had recently given up possession of the land.  Once the landslide occurred the relevant Government agencies set about restoring the hillside and clearing up the damage and obstruction to a road below the hillside.  What the Lands Department, who had arranged for the land to be let to the Defendant, did not do was to give the Defendant an opportunity to inspect the landslide and to take samples of the material that comprised the debris caused by the landslide.  At the trial a substantial issue related to the composition of what had come crashing down the hillside.  The Plaintiff submitted that it was pulverized fuel ash that the Defendant had stockpiled over a long period of time.  The Defendant’s case, which I rejected, was that the practice of stockpiling pulverized fuel ash had stopped sometime ago and that what had come down in the landslide was most likely construction waste and other rubbish illegally dumped by lorries from nearby building sites.

3.  Because the Plaintiff had failed to give the Defendant an opportunity to inspect the aftermath of the landslide it was in no position to challenge the Plaintiff’s evidence.  This is an aspect which I specifically referred to in my judgment.  I had considered that this might be something that I should have regard to on the question of costs and interest and I have therefore invited written submissions on these aspects.  The other feature is that, not having given the Defendant inspection facilities, the Plaintiff, although having indicated to the Defendant in July 1998 that it considered that the Defendant might have to bear responsibility for the damage caused by the landslide, did not present its bill of over $4 million until 31 December 2002 some four and a half years later.

Costs

4.  I take the question of costs first.  Where I have found the Defendant liable it seems to me that costs should follow the event.  There is the matter of delay between the accrual of the cause of action in June 1998 and the trial which took place in January 2009, some nine and a half years later.  The question that arises is whether the Defendant should have to bear the whole of the Plaintiff’s costs.  Mr Chow, SC has submitted that there is no evidence that this delay has caused any unreasonable increase in the Plaintiff’s costs which the Defendant should have to bear.  I agree in the sense that there is no evidence but usually, solicitors will charge an element of fees for “care and conduct” over the whole of the period of the litigation and so the longer that period the greater the charge under this head.  Nevertheless, in the absence of any assistance from the Defendant I propose to say nothing about that.  Accordingly, I will make an order that the Defendant should pay the Plaintiff’s costs of the action on a party and party basis to be taxed if not agreed.  Nevertheless, having said that, as I will indicate in a moment, there has been avoidable delay by the Plaintiff in bringing the action to trial, which I propose to reflect in respect of the period of time for which pre-trial interest should be awarded.  Given that this is my view it will be open to the Defendant, if it wishes, to take issue on taxation of the costs that it has to pay the Plaintiff in respect of items of costs which would not have appeared on the Plaintiff’s bill but for this avoidable delay.  And so although I have awarded the Plaintiff its costs of the action the delay in bringing the matter trial may result in some items being taxed off should the Defendant wish to challenge the bill in the way that I have indicated.

Interest

5.  Mr Chow concedes that interest should only run from 31 December 2002 which is four and a half years after the accrual of the cause of action, being the date when the Plaintiff sent the Defendant its demand for the costs of repairing the damage resulting from the landslide.

6.  The writ was issued soon after that in February 2003 and the action set down for trial just under five and a half years later in May 2008.  Mr Chow has pointed to some failures by the Defendant to file its defence timeously but in the greater scheme of things this did not materially contribute to the lengthy delay between writ and setting down.

7.  It strikes me that the Plaintiff, having the carriage of the action, should have been far more attentive and seen to it that the case was set down no later than, I would have thought, May 2006, that is three years after the defence was filed.  If it had done so I would have expected the trial to have taken place no later than May 2007 rather than in January 2009.  I therefore propose to restrict pre-trial interest from 31 December 2002 to the 31^st  May 2007 which is, if anything, generous.  The rate of interest will be at prime plus 1%, which is usual in such cases.

8.  Post-trial interest will be at the judgment rate from the date of judgment until payment.

9.  There will be no order costs in respect of the Plaintiff’s written submission on this issue in circumstances where it has not been entirely successful in its application on these outstanding matters.