LEUNG LAI HA AND OTHERS v. HON SAU LING AND ANOTHER

Civil Appeal No 71 of 1992

Headnote

Claim for damages for personal injuries resulting from a collision between two motor vehicles. The drivers of both were joined as defendants but the plaintiffs succeeded only as against one. On appeal the exercise of the judge's discretion as to costs and the appropriate order in the circumstances of the particular case considered. The Court of Appeal, finding that the judge's exercise of discretion was flawed, made a "Sanderson Order".

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J U D G M E N T

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Kempster, JA:

1. On the morning of 3 June 1987 near Fairview Park, Yuen Long, a collision occurred on Castle Peak Road between two motor cars; one driven by Madam Hon Sau Ling and the other by Ho Chun Kai. When a writ was issued by the two passengers who had been travelling in Ho Chun Kai's vehicle on 2 June 1990 claiming damages for personal injury Hon Sau Ling and Ho Chun Kai became the first and second defendants respectively.

2. When the action came on for hearing before Jones J on 20 January 1992 the first defendant conceded liability and judgment was entered against him in the plaintiffs' favour, with costs, for damages to be assessed by a master. Judgment was entered against the plaintiffs and in favour of the second defendant with costs.

3. Against the order for costs to be paid by them to the second defendant the plaintiffs appeal by leave of Penlington JA granted on 16 April. On 30 January, having handed down the Reasons for his Decision as to costs and adopted an approach to the application for leave to appeal perhaps more appropriate to a review pursuant to s 53 of the District Court Ordinance (Cap 336), Jones J had refused leave.

4. This court is now in the same position as it is on any appeal against the exercise of the court's discretion. In Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394 at pp 400 Stephenson LJ said:

"We must be very careful not to interfere with the judge's exercise of the discretion which has been entrusted to him. We can only do so if he has erred in law or in principle, or if he has taken into account some matter which he should not have taken into account or has left out of account some matter which he should have taken into account; or - and this is an extension of the law which is now I think well recognised - if the Court of Appeal is of opinion that his decision is plainly wrong and therefore must have been reached by a faulty assessment of the weights of the different factors which he has had to take into account."

At p 403 Griffiths LJ gave judgment to like effect:

"In such cases the ordinary rules as to a review of the judge's discretion apply. This court must not be tempted to interfere with the judge's order merely because we would have exercised the discretion differently from the way in which the judge did. Before a court can interfere it must be shown that the judge has either erred in principle in his approach, or has left out of account, or taken into account, some feature that he should, or should not, have considered, or that his decision is wholly wrong, because the court is forced to the conclusion that he has not balanced the various factors fairly in the scale."

5. Litigation arising from collisions at sea rather than on land seems to dominate the older English reports. The owners of a barge which, while on tow down the Thames by the tug "Scorpion", was struck and sunk by the steamship "River Lagan", sued the owners of both tug and ship for negligent navigation. The President of the Probate, Divorce and Admiralty Division, Sir James Hannen, assisted by Trinity House Masters, found the steamship solely to blame and ordered her owners to pay the costs both of the plaintiffs and of their co-defendants.

"If" he said "the 'River Lagan' had not attempted to throw the blame on the tug, things might have been different, but as I have said, the real contention in the case was, whether the tug or the 'River Lagan' was to blame. I think the plaintiffs, being in doubt as to which of these vessels was in fault, acted reasonably in joining them both as defendants. I shall therefore order the owners of the 'River Lagan' to pay both sets of costs."

The River Lagan (1888) 6 Asp MLC 281 at p 282.

6. In The Mystery [1902] P 115 a Divisional Court of the Probate, Divorce and Admiralty Division found a dock company alone liable for damage to the plaintiff's vessel and co-defendants, owners of the ketch 'Mystery'; were absolved of blame. The President, Sir F.H. Jeune, found at p 122:

"that the plaintiffs acted reasonably in joining both parties as defendants, and that, as the London and India Docks Company threw the blame on the owners of the 'Mystery', the plaintiffs' costs against both defendants, and the costs of the successful defendants here and in the Court below, must fall on the unsuccessful defendants."

7. The following year a claim for £189-11-6, being the price of work done and materials supplied at or to a theatre, was heard. The occupiers of the theatre had denied the authority of their architect to place the relevant order and the plaintiffs had added him as a defendant; claiming against him the same sum on the footing that he was the principal or alternatively by way of damages for breach of warranty of authority. The jury found the occupiers solely liable. Grantham J thereupon entered judgment against them for the sum claimed with costs to include those which the plaintiffs were ordered to pay to the architect. The occupiers' appeal failed and in the course of his judgment Romer LJ observed that

"The costs so recovered over by the plaintiff are in no true sense damages, but are ordered to be paid by the unsuccessful defendant, on the ground that in such an action as I am considering those costs have been reasonably and properly incurred by the plaintiff as between him and the last-named defendant. ... The modern practice, in order to avoid circuity, has been in such cases, where there has been no jury, to order the unsuccessful defendant to pay directly to the successful defendant his costs. ... But of course a judge has jurisdiction to follow the old practice if he thinks fit to do so ... "

Sanderson v Blyth Theatre Company [1903] 2 KB 533 at p 539. "... the choice between them is a matter for [the judge's] discretion" per Lord Brandon in Bankamerica Finance Ltd v Nock [1988] AC 1002 at p 1011.

8. By about this time, albeit still in the age of the horse, road traffic accidents were becoming prevalent in London and an order as to costs, such as that made by Grantham J, was made by Bray J in circumstances where the plaintiff had been injured by a collision between two vehicles and sued the respective owners; succeeding only as against one of them. The unsuccessful defendant's appeal was dismissed but Cozens-Hardy LJ approved the passage from the judgment of Romer LJ just quoted. Bullock v London General Omnibus Company [1907] 1 KB 264 at p 272. In a subsequent decision reflecting the arrival of the internal combustion engine and in words which I gratefully adopt Vaughan Williams LJ felicitously and economically expressed the facts and issues as follows:

"There had been a collision, and it took place under such circumstances that the injured person would, naturally, not have full information as to whose fault it was, but it took place under such circumstances that it might have well been the fault of one or other or of both of these people. Those being the circumstances of the case, it turns out after the trial that there is only one wrong-doer, but that wrong-doer was sued and successfully sued. Under these circumstances, was it a reasonable thing for the plaintiff in his action against a man who ultimately turns out to be in fact the wrong-doer to join the other defendant in order that the matter might be thoroughly threshed out? If, in the circumstances of the case, it was a reasonable thing to do, then he was entitled to add as part of the costs in bringing this reasonable action in which he reasonably joined this other person the costs of that other person who is found not to be at fault. Of course, the fact that there were two people who upon the face of the transaction might, either of them, have been guilty is what made it reasonable in the plaintiff, when he brought this action, to join both of these defendants, and, as it was part of the reasonable course of the action that he properly brought his action against a man who as it turned out, was a wrong defendant, I agree that, under the circumstances, he ought to get the reasonable costs in that action in which both defendants were reasonably joined, although only one turned out to be the real defendant. I would wish in most emphatic terms to protest against this idea of the right to ask the question, 'Are you going to blame our co-defendant?' It cannot be done. The proper way is - do not join any defendant unreasonably; if the facts are such that it is reasonable to join them both and reasonable to be in a state of uncertainty as to which of the two is the really guilty one, then it is part of the reasonable costs of the action that the costs of the action which you have launched against one of those defendants, and who has succeeded in defending himself, should be borne by the man who is to blame. There is no rule in the matter; each case must turn upon its own circumstances, ... "

Besterman v British Motor Cab Company, Limited [1914] 3 KB 181 at pp 186 and 187.

9. In the instant case each defendant had blamed the other in the Magistrates' Court when the first defendant was prosecuted and went on to do so in their respective Defences. The first defendant issued a notice claiming indemnity from the second.

10. I return to the river Thames for the last authority I propose to cite which again resulted from collisions between steamships. Dealing with the material point Hill J said that the power to saddle an unsuccessful defendant with the costs of one who succeeds as against the plaintiff -

"applies in cases where the injured party is in real doubt and in reasonable doubt as to which of two other parties have by their negligence caused him the damage he complains of."

The Svein Jarl (1923) 129 LT 255 at p 256.

11. In his two "Decisions", handed down or given on 30 January, Jones J considered the materials available to the plaintiffs when, just before the expiry of the limitation period, they commenced their action. He referred to the first defendant's conviction for careless driving on the material occasion and to the magistrate's conclusion that such driving "to at least some extent caused this accident". He also referred to experts' reports subsequently obtained and which substantially blamed the first defendant albeit one of the experts, Dr Lingard, did say that both cars might have been on the wrong side of the road. The judge found that these materials showed -

"that the first defendant was wholly liable for the accident and that in the absence of any evidence to indicate a degree of responsibility on the part of the second defendant it was unreasonable to join him as a party. Upon a proper consideration of the evidence the first defendant should have been the only person to have been sued."

12. But when the writ was issued on 2 June 1990 the expert evidence was not available and in the Magistrates' Court, as the judge himself remarked, the first defendant had given evidence that the second defendant, whom he blamed for the collision, was driving on the wrong side of the road. The second defendant had admitted to exceeding the speed limit and did not suggest that he had braked. A contemporaneous sketch tended to suggest that both vehicles had been on the wrong side of the road at the time of impact. In their Statement of Claim the plaintiffs alleged against the second defendant that he failed to keep a proper lookout or to control his vehicle with reasonable competence and that he was driving at an excessive speed. In his Defence the first defendant alleged that the collision was due solely to the negligent driving of the second defendant, adopted the plaintiffs' case against him and added the allegation that the second defendant was "driving onto the wrong side of the road". The second defendant, by his Amended Defence, alleged that the first defendant had been driving under the influence of alcohol or drugs. These were the issues arising as between the parties until the day of trial.

13. In the circumstances the plaintiffs were throughout entitled to assume that the first defendant would give evidence in support of the case pleaded by the plaintiffs and by her against the second defendant and, in my opinion, would have been foolhardy to regard the second defendant's exoneration from blame at the conclusion of the trial as assured. What the effect of the evidence would have been if called and adduced no one will now ever know. Indeed, it is difficult to think that any competent counsel or experienced solicitor, aware of the vicissitudes of litigation, would have advised the plaintiffs to sue only the first defendant. If proceedings are reasonably maintainable it is usually wise to seek judgment against two defendants, whatever their relative responsibility for the plaintiff's injuries as between themselves, rather than one. The judge, who properly held that the onus was on the plaintiffs to show that, in all the circumstances, it was reasonable to join the second defendant as a party to the action, erred in failing to appreciate that they could reasonably have felt doubts and uncertainties as to what would transpire at the hearing and have commenced and maintained the proceedings against both defendants accordingly.

14. The conclusion that the judge's order was wrong, due to his failure fairly to balance the various factors in the scale is, in my opinion, inescapable.

15. In the premises, I would allow this appeal and, having regard to the relative costs of taxation as between a Sanderson and a Bullock Order and to the wishes of the second defendant, substitute for the judge's order relating to the costs of the second defendant an order that his costs be paid by the first defendant.

Sir Derek Cons, V-P:

16. I agree with my Lord for the reasons that he has given that the appeal should be allowed and with the order that he suggests we should make.

Bokhary, J:

17. I also agree that the order appealed against is wholly wrong and should be replaced by a Sanderson Order. As we are disagreeing with the learned judge in a matter of discretion and for that reason only, I would add a few words of my own.

18. It seems to me that after a trial or capitulation, it is very easy with the benefit of the hindsight which one obtains in that fashion, to lose sight of some of the uncertainties which surrounded the case at an earlier stage. It is never easy to decide these things on paper. In fact, it is impossible if "decide" means to come to a final conclusion rather than merely form a tentative view of the probabilities.

19. This case involves, among other things, credibility; and the difficulties which that throws up is illustrated by this. In evidence before the learned magistrate, the adult plaintiff said that, at the scene of the accident and immediately after it, she had upbraided Miss Hon for driving in a manner tantamount to "murder". But when the learned magistrate came to his decision, notwithstanding that he accepted the adult plaintiff's evidence, he said no more than, as my Lord, Kempster JA has pointed out, that he was satisfied that Miss Hon's driving "at least to some extent" caused the accident.

20. It is true that it was not pleaded by the plaintiffs that Mr Ho had gone on to his incorrect side of the road. But in her defence Miss Hon, in addition to pleading that Mr Ho went on to his incorrect side of the road, adopted the allegations of negligence which the plaintiffs did plead against him. In any event, the plaintiffs' failure to plead that Mr Ho went on to his incorrect side of the road may go more to their tactics than to showing that they had no doubt as to liability. Still less would it go to show that they no basis thinking that they were faced with cross-allegations which no counsel would be well-advised to make a final choice between at an early stage of the proceedings.

21. So, having added those words and difference to the fact that we are reversing the learned judge in a matter of discretion, I repeat my wholehearted agreement with everything that has fallen from my Lord, Kempster JA.