HO KWOK KEI v. A.S. WATSON & CO, LTD AND OTHERS

HCPI 325/2016

[2019] HKCFI 3163

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 325 OF 2016

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D E C I S I O N   O N   C O S T S

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1.  Under the costs order nisi made in my judgment[1] after trial at §118, the plaintiff has to pay, inter alia, the 1^st defendant’s costs of the action. The 1^st defendant now applies to vary the order to one that requires the plaintiff to pay the 1^st defendant’s costs of the action on the indemnity basis together with interest on such costs at 10% above the judgment rate.

2.  The 1^st defendant primarily relies on three matters in support of the application.

3.  First, the 1^st defendant wrote to the plaintiff on 19 October 2016 and again on 2 June 2017, on a “without prejudice save as to costs” basis, urging the plaintiff to discontinue the claim against the 1^st defendant with no order as to costs.  Had the plaintiff taken up that offer, his position would have been better than the actual outcome in that he would not have had to pay the 1^st defendant’s costs. 

4.  As the 1^st defendant acknowledges, these letters did not contain a “sanctioned offer” within the meaning of Order 22 of the Rules of the High Court (Cap 4A): see Wong Yim Man Anthea v Wong Ho Ming Felix [2016] 3 HKLRD 249 at §18; Heung Wing Yan v Hangway Housing Management Ltd & Others (unrep, HCPI 347/2012, 14 February 2017), §14.  It follows, by virtue of Order 22 rule 3(1), that the offer does not have the consequences specified in Order 22 such as the provision in rule 23(4) that where a plaintiff fails to obtain a judgment that is more advantageous than a defendant’s sanctioned offer,the court may order the plaintiff to pay (a) the defendant’s costs on the indemnity basis; and (b) interest on costs at a rate not exceeding 10% above judgment rate.  The 1^st defendant is essentially saying that the same consequences should obtain notwithstanding that it did not make a sanctioned offer.

5.  The 1^st defendant contends that it could not have made a sanctioned offer without risking it being accepted by the plaintiff resulting in the 1^st defendant having to pay costs under Order 22 rule 20, unless it could persuade the Court to order otherwise under rule 20(1).  The 1^st defendant says that even if it gave an Etratech notice at the time of the offer (ie a warning to the plaintiff that the 1^st defendant would apply to invoke the “otherwise” proviso in rule 20(1)),[2] there would still be a substantial risk for the 1^st defendant that the normal costs consequence of an accepted sanctioned offer would apply.  However, it seems to me this is an inherent risk in the system.  The rules do not cater for a sanctioned offer to invite a plaintiff to “drop hands” with no order as to costs, and there is no warrant for the courts to create such a facility for defendants.  The fact that the 1^st defendant was not willing to take this risk is not a sufficient reason to accord to the calderbank letter the equivalent effect to a sanctioned offer. 

6.  Secondly, the 1^st defendant submits that the plaintiff exaggerated his injury and that he should have known that the employee’s compensation he had received was more than enough to cover the actual damage caused by the accident.  However, it should be borne in mind that the plaintiff actually succeeded on the question of liability as against the 1^st defendant (and also as against the 3^rd defendant) which was vigorously contested.  This court found that the 1^st defendant had breached its own duty by failing to provide a safe system of work, in that it had failed to give clear instructions to ensure that the pallet jack’s prongs and laden pallet should be lowered before the tailboard was moved.[3]  The action failed in the end because the plaintiff was unable to prove an entitlement to common law damages in excess of what he had received by way of employee’s compensation, including in particular the allegation that the Mueller‑Weiss syndrome he suffered had been caused by the accident.  The court found, based on the factual and medical evidence, that it was not shown that the syndrome was caused by the accident, in which the plaintiff only suffered injury to his toes.  But while the plaintiff’s allegations of the extent of his injury were rejected, there was no finding that the plaintiff lied or deliberately exaggerated his injury either to the court or to his orthopaedic expert.  In my judgment the circumstances of this case fall decidedly short of being an affront to the court or conduct so culpable as to warrant condemnation by an order for indemnity costs.

7.  Thirdly, the 1^st defendant points to the fact that the 3^rd defendant had made a sanctioned payment of $200,000 on 20 March 2017 and that the plaintiff had failed to obtain any better outcome at trial.  It was, however, a sanctioned payment made by the 3^rd defendant.  If the plaintiff accepted it, the costs consequences under Order 22 rule 20 would only operate as between the plaintiff and the 3^rd defendant.  Different considerations apply with regard to any other defendant who has not made the payment: see Order 22 rule 18.  I do not see on what principle the 1^st defendant can claim the benefit of the sanctioned payment made by the 3^rd defendant.

8.  For these reasons the 1^st defendant’s application is dismissed with costs to the plaintiff.  The plaintiff’s own costs are to be taxed in accordance with the Legal Aid Regulations.