HUSSAIN KAMRAN v. KHAN, AMAR formerly t/a THREE STAR RECYCLING CO (A FIRM) AND ANOTHER

CACV 255/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 255 OF 2014

(ON APPEAL FROM HCPI NO 953 OF 2012)
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DECISION ON COSTS

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Hon Chu JA (giving the Decision on Costs of the Court):

1.  In paragraph 72 of the Judgment handed down on 5 October 2016, this Court made the following order in respect of the plaintiff’s costs in the assessment of damages (“Costs Order”):

(1) The 1^st defendant pays the plaintiff and the 2^nd defendant the costs of the assessment of damages, to be taxed if not agreed.

(2) The 2^nd defendant pays the plaintiff the costs of the assessment of damages as from the date of its joinder, to be taxed if not agreed.

2.  The 2^nd defendant applies to amend the Costs Order as follows:

“The 2^nd defendant pays the plaintiff the costs of the assessment of damages as from the date of its joinder, to be taxed if not agreed, and the 1^st defendant pays the 2^nd defendant the costs paid by the 2^nd defendant to the plaintiff pursuant to this paragraph, if any.” (addition underlined)

3.  The plaintiff does not oppose to the application.  The 1^st defendant has not made any representation.

4.  The 2^nd defendant’s application is to achieve two effects:

(1)  To provide the 2^nd defendant with recourse against the 1^st defendant for full indemnity against any amount of the plaintiff’s costs which is paid by the 2^nd defendant; and

(2) To disentitle the 1^st defendant from relying on any restitutionary right of contribution from the 2^nd defendant.

5.  The 2^nd defendant’s reasons for the application are:

(1) Under the general law, if the 2^nd defendant has paid the plaintiff’s costs, its right to seek contribution from the 1^st defendant is limited to 50% of the plaintiff’s costs.

(2) Without an express order from the court, it is not able to recover from the 1^st defendant all the costs it has paid to the plaintiff.

(3) The 1^st defendant should ultimately be liable for the plaintiff’s costs. Without the amendment to the Costs Order, he would fortuitously stand to save 50% of the plaintiff’s costs which they would otherwise have had to bear.

(4) Further, without the amendment to the Costs Order, when the 1^st defendant has paid the plaintiff’s costs, he would be entitled to seek contribution from the 2nd defendant for 50% of the plaintiff’s costs that he has paid.  

6.  For the reasons set out below, we do not accept that the Costs Order should be amended:

(1) The Costs Order is intended to make the 1^st and 2^nd defendants jointly and severally liable for the costs of the plaintiff in the assessment of damages as from the date of the joinder of the 2^nd defendant.

(2) When the 2^nd defendant has paid the plaintiff the costs of the assessment of damages, it is entitled to seek contribution from the 1^stdefendant under the general law. In the absence of contractual arrangement, the general rule is to apportion the liability equally.  Hence, the 2^nd defendant can seek a contribution from the 1^st defendant of 50% of the plaintiff’s costs.  We note in this regard the 2^nd defendant’s case that because it is not a joint tortfeasor, the exceptions to equal apportionment do not apply.  

(3) The 2^nd defendant’s central argument is that the 1^st defendant should ultimately be responsible for all the costs of the proceedings.  This argument, however, overlooks the fact that the plaintiff’s costs in the assessment of damages have escalated because of its intervention. In paragraphs 17 and 67 of the Judgment, we have pointed out that the 2^nd defendant had actively participated in the assessment of damages and was the only party contesting the plaintiff’s case.  We further concluded that as a matter of principle the 2^nd defendant, having intervened in the proceedings, is liable to be visited with an adverse costs order, unless there are good reasons not to do so.

(4) When we stated in paragraph 69 of the Judgement that it is open to the 2^nd defendant to seek contribution from the 1^st defendant, it is in the context of addressing the Master’s concern that the 1^st defendant should not be allowed to benefit from an adverse costs order against the 2^nd defendant. We were not suggesting that the 2^nd defendant ought to be fully indemnified for the costs it pays to the plaintiff.

(5) While we are conscious that the 2^nd defendant, in the proper discharge of its statutory duty to administer the Employees Compensation Assistance Fund, will have to intervene in appropriate cases to test or defend the claimant’s case. This, however, does not mean that the 2^nd defendant should in all cases be fully protected as to its costs position.  Litigation conduct is a relevant and important consideration when the court exercises its discretion on costs.  Hence, it does not follow from the fact that the 1^st defendant bears the primary responsibility of compensating the plaintiff for his injuries that the ultimate responsibility for the plaintiff’s costs should be wholly borne by him.

7.  Accordingly, we refuse the 2^nd defendant’s application.