CHAN KA KIN v. LAI KAM TONG AND ANOTHER

HCPI 698/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 698 OF 2007

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D E C I S I O N

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Introduction

1.  This is the appeal of the 1^st defendant (“D1”) against the master’s order dated 21 July 2008.

2.  The order under appeal was in essence a costs order.  Although its wordings are not entirely clear, the parties accept that the master ordered that there be no order as to the costs of:-

(a)  this action as between the plaintiff and D1;

(b)  D1’s summons to set aside the default judgment dated 20 December 2007 (the summons was dated 6 May 2008) (“D1’s setting aside application”);

(c)  plaintiff’s summons to set aside the said default judgment, and for leave to discontinue this action in relation to D1 (the summons was dated 13 June 2008) (“P’s setting aside application”);

(d)  D1’s court attendance at the hearing of the above summonses (on 21 July 2008).

3.  D1 seeks to have the order set aside and for all the above costs to be awarded in his favour.

Background

4.  The background is largely undisputed.

5.  The plaintiff was a scaffolding worker.  He was injured on 26 March 2005 when he fell from height while at work, and now sues by his wife (as his next friend).

6.  The plaintiff commenced this action in August 2007.  Initially, the only defendant was the present 2^nd defendant (“D2”).

7.  In September 2007, the plaintiff took out an application to join D1 as an additional defendant.  The application was based in short on an employer’s return filed with the Inland Revenue Department.  The document showed D1 to be the plaintiff’s employer.

8.  The said application was heard by the master on 8 October 2007.  D1 was late and, by the time he arrived the court building, the hearing was already over and an order for joining him has already been made.

9.  It is undisputed notice of hearing of the joinder application was given by the plaintiff by way of a letter dated 28 September 2007.  According to D1’s affirmation, the postal chop showed that the letter was posted on 29 September.  D1 received the post office’s notice of registered mail on 5 October 2007 but he only went to collect the letter on 8 October 2007 (the same day as the hearing of the said application).  Because he lived in the New Territories, the trip to court took a relatively long time.

The Master’s Approach

10.  The master gave extemporary reasons for her decision.  The general tenure of the reasons shows that she considered both parties to be equally at fault.

11.  On the part of the plaintiff, the master concluded that she (through her former solicitors) failed to comply with Practice Direction 18.1.  The relevant parts of that Practice Direction provide:-

“2.1 Prior to the commencement of proceedings, the claimant should send to the proposed defendant(s) two copies of a letter of claim ...

2.2 In the event of a claimant failing to send such a letter, or failing to send a letter which contains information enabling a defendant's Solicitor or insurer to commence investigations and thereby evaluate the merits of the claim, the claimant and/or his Solicitor may be required to justify the incurring of costs of commencing proceedings and/or of any expenditure incurred which is argued to be premature” (emphasis supplied).

12.  On the part of D1, the master considered he failed to:-

(1)  go to the post office in good time to appraise himself of the 8 October 2007 hearing;

(2)  leave home in good time to attend the 8 October 2007 hearing;

(3)  file a notice of intention to defend in accordance with the Rules of High Court.

13.  The master’s costs order was made on the above basis.

Can the Master’s Approach be Faulted?

14.  It is trite law:-

“In general, a judge in chambers will not allow an appeal from a master’s costs order unless it is unreasonable or the master erred in law” (Hong Kong Civil Procedure 2008, para. 58/1/6 citing Hoddle v. CCF Construction [1992] 2 All ER 550; Lessy SARL v. Pacific Star Development Ltd and Another [1997] HKLRD 1248; China Venturetechno International Co Ltd v. New Century Chain Development Ltd (t/a Century Chain Property Agency) [1996] 2 HKLR 18; Paul Y-ITC Construction Ltd v. Kin Shing Co Ltd [1999] 1 HKC 511, 515).

15.  I do not consider the costs order made by the master to be unreasonable or erroneous in law.

16.  Strictly speaking, the costs as between the plaintiff and D1 in this action can be divided into 3 sets.  One, the costs of the action itself; two, the costs of the joinder application; and three, the costs of the applications to set aside the default judgment (“the setting aside applications”).

17.  The plaintiff has been unable to put forth any clear explanation as to why she decided to discontinue this action against D1.  Some vague reason was given during the appeal hearing (discontinuance after taking into account the risk of litigation).  The court’s discretion in such instances is:-

“The general rule that a defendant is entitled to costs when an action is discontinued may be departed from in a case where the discontinuance of the proceedings is due to the matter having become academic, rather than to any acknowledgement by the plaintiff of likely defeat” (Hong Kong Civil Procedure 2008, para. 21/5/11).

18.  I infer from the lack of a satisfactory explanation that this is a case the general rule ought to apply; that is, costs of this action should be to D1.  The failure to comply with Practice Direction 18.1 reinforces that conclusion.

19.  Such being the case, the costs of the joinder application (which have been ordered to be costs in the cause (para. 6, 8 October 2008 order)), should be treated as part of the above costs and awarded to D1 as well (see also Hong Kong Civil Procedure 2008, para. 62/10/8; an express order to this effect is needed).

20.  The default judgment was regular because service of the writ was regular.  Further, I agree with the master that the judgment was entered due to D1’s failure to comply with the rules.  Ignorance of the legal requirements is not a factor properly to be weighed in D1’s favour.  For those reasons, costs of the setting aside applications should be to the plaintiff.

21.  In view of the above matters, an alternative costs order could have been made:-

(a)  costs of this action be to D1;

(b)  costs of the joinder application be to D1;

(c)  costs of the setting aside applications be to the plaintiff.

22.  Upon taxation, the amount of costs payable by the plaintiff to D1 may be greater than that payable by D1, or the reverse may be the case.  But the fact remains that not all costs should be awarded to the plaintiff  (nor should all costs be awarded to D1).  Moreover, it is quite arguable the 3 sets of costs are inter-related.

23.  By reason of the above matters, it was well within the master’s discretion to adopt what in effect was a robust and global approach, and make an order in the way she did.

Conclusion

24.  This appeal is dismissed.

Costs Order Nisi

25.  There is no apparent reason to depart from the usual rule that costs should follow the event.  There will accordingly be a costs order nisi pursuant to Ord 42 r 5B(6) that the costs of this appeal be paid by D1 to the plaintiff to be taxed if not agreed.

26.  D1’s own costs are to be taxed in accordance with the Legal Aid Regulations (Cap. 91A).