XCHRX THIAN SUI CHING v. AU YEUNG KWAI CHUEN AND OTHERS

HCPI1245/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES LIST NO.1245 OF 1998

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REASONS FOR DECISION

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1. This is an appeal of HIH Casualty & General Insurance (Asia) Ltd. ("the Insurer") against the Order of Madam Registrar Chu dated 12th July 1999 whereby the Insurer was ordered to make and file an affidavit making discovery of the following documents :-

(a) statements made by the Plaintiff and other witnesses to the Insurer and/or its agents or servants in relation to his accident (on 10th December 1995) up to 26th November 1997;

(b) internal investigation notes, memos or reports relating to the circumstances and cause of the said accident from 10th December 1995 to the date of signing of the Deed of Release/Discharge and Indemnity ("the Deed") (referred to in the Defence and Reply filed herein);

(c) all medical reports of the Plaintiff;

(d) receipts signed by the Plaintiff;

(e) sick leave certificates;

(f) notes of meeting between the Plaintiff and the agents and/or servants and/or employees of the Insurer, including but not limited to meeting the Plaintiff had with Kevin Wong and/or Shirley Wong; and

(g) correspondence between the Insurer and the police and medical expert.

The said order also awarded the costs of the application in the Plaintiff's favour against the Insurer, to be taxed if not agreed forthwith.

2. In an affirmation of Ms Wong Sai Ling dated 27th July 1999, the above-said documents were discovered by the Insurer.

3. The relevance of the Deed to this action has been set out in the Defence and Reply herein. The respective case of the parties regarding this matter can be summarised as follows.

4. It appears to be undisputed that on 10th December 1995, the Plaintiff was working as a formworker master in a construction site. While he was nailing wooden planks next to a steel framework above ground level, the steel framework suddenly collapsed. The Plaintiff's head and back were struck by the bar(s) of the framework which fell on him and he was thereby injured. The Plaintiff sues the 1st Defendant and/or the 2nd Defendant (described in the Statement of Claim as the Plaintiff's employer(s) and subcontractors of the 3rd Defendant) in :-

(a) negligence;

(b) breach of (employment) contract;

(c) breach of occupier's duty.

The Plaintiff also sues the 3rd Defendant (described in the Statement of Claim as the principal contractor of the site) in :-

(a) negligence;

(b) breach of occupier's duty;

(c) breach of statutory duty.

5. Although the same firm of solicitors acts for all three Defendants, two sets of Defence were filed herein. Among other lines of defence raised therein, a defence was raised and relied upon by all three Defendants relating to the Deed said to have been signed by the Plaintiff on 26th November 1997.

6. An extensive plea was made to this line of defence in the Plaintiff's Reply dated 14th June 1999 which includes :-

(a) the parties to the Deed were the Plaintiff, the 3rd Defendant and the 3rd Defendant's insurer only and hence the 1st and 2nd Defendants cannot rely on it;

(b) the 3rd Defendant cannot rely on the Deed without joining its insurer;

(c) undue influence on the part of the 3rd Defendant and its insurer;

(d) breach of fiduciary duty on the part of the 3rd Defendant and its insurer;

(e) misrepresentation on the part of the 3rd Defendant and its insurer;

(f) economic duress on the part of the 3rd Defendant and its insurer;

(g) unreasonable conduct on the part of the 3rd Defendant and its insurer and/or inequality of bargaining power;

(h) non est factum; and

(i) estoppel.

7. The Notice of Appeal dated 16th July 1999 asked for the said Order of the Registrar relating to costs to be set aside. At the hearing on 3rd September 1999, Mr Chik (who did not appear before the Registrar) for the Insurer confirmed that the Insurer only intended to appeal against the costs order and not the order for discovery. At the end of the hearing on 3rd September 1999, I allowed the appeal to the extent that the costs awarded in the Plaintiff's favour are to be taxable in any event instead of forthwith. I also ordered that :-

(a) costs of complying with the order be to the Insurer in any event;

(b) costs of the appeal be in the cause of the action.

These are the reasons for the decision.

8. Mr Chik accepted that, as opposed to other appeals from an order of the Master to a Judge in chambers, an appeal as to costs ordered by the Master should be allowed only when it could be shown that the costs order was unreasonable or erred in law, namely, if the Master failed to take into account proper matters or took into account matters which should not have been taken into account : see, for example, Paul Y-ITC Construction Ltd. v. Kin Shing Co. Ltd. [1999] 1 HKC 511 and China Venture Techno v. New Century-Chain Development, Civ App No.20 of 1996.

9. Mr Chik argued that the costs order was unreasonable or erred in law because the application for discovery against the Insurer was an application against a non-party. He submitted that the normal rule provided for by R.H.C., O.24, r.7A and O.62, r.3(12) applies, that is, costs of the application should be awarded to his client.

10. It is true that the Insurer has not been named as a party to this action up to now. In that sense, the Insurer is technically not a party. However, as Mr Chik fairly accepted, the reality is that the defence of this action has been taken over by the Insurer. Further, the part of the defence relating to the Deed was a defence which involves the Insurer directly. In these circumstances, I considered that the Insurer was a "non-party" only in name but not in substance.

11. Moreover, the Court has a discretion pursuant to O.62, r.3(12) to make a different costs order because it provides that :-

"... the person to whom the order is sought shall be entitled, unless the Court otherwise directs, to his costs of and incidental to the application ..."

Taking into account the circumstances set out above relating to :-

(a) the role played by the Insurer in this action, and

(b) the nature of the defence relating to the Deed and the Insurer's involvement in it,

there was nothing unreasonable in the Registrar awarding the costs of the application in the Plaintiff's favour against the Insurer.

12. Mr Chik further contended that the Registrar erred in failing to take into account the unreasonable conduct of the Plaintiff and reasonable conduct of the Insurer. This part of his arguments related to the pre-summons correspondence between the parties. He argued that the Plaintiff had been unreasonable in :-

(a) failing to particularise the documents sought;

(b) demanding a reply from the Insurer within an unreasonably short period of time.

13. Point (a) above could only be relevant to the correspondence from 14th June 1999 to 22nd June 1999 because (as Mr Chik admitted) the Plainitff had provided the particulars to the Insurer by 23rd June 1999.

14. In relation to point (b) above, after providing the particulars of the documents to the Insurer on 23rd June 1999, the Plaintiff wrote to the Insurer again on 30th June 1999 and asked for a reply by 5th July 1999. There was however no reply and the summons in question was taken out on 8th July 1999. In these circumstances, I disagreed with Mr Chik that the time given by the Plaintiff for his client to respond was unreasonably short. Ms Mo (who appeared both before me and the Registrar) for the Plaintiff informed me that the Registrar considered it was the Insurer's delay in responding which resulted in the need to take out the summons. She therefore ordered the Insurer to bear those costs. In view of the circumstances set out above, I did not find the Registrar's view to be unreasonable. In fact, I would have approached this matter in the same manner.

15. Mr Chik also submitted that the costs should be taxable in any event instead of forthwith. Ms Mo informed me the reason why the Registrar ordered costs to be taxable forthwith was because the Insurer is a non-party. As I observed earlier, while that may technically be true, by virtue of the Insurer's involvement in (a) the conduct of this action and (b) the line of defence relating to the Deed, the Insurer is in substance a party to this action. On this basis, I considered that the usual rule that interlocutory costs should be taxable in any event should be followed.

16. Apart from the costs of the application, there are also the costs of complying with the discovery order : see O.62, r.3(12). This part of the costs has not been dealt with in the Registrar's order. The parties sensibly accepted it would be more time and costs effective for that part to be dealt with by me even though no formal application had been made in this regard. Although Ms Mo did not consent to the order I proposed to make, she raised no objection thereto. In these circumstances, I ordered that the costs for complying with the discovery order be to the Insurer, taxable if not agreed in any event.

17. Neither party has been wholly successful in the appeal. I found it appropriate to order that costs of the appeal should be in the cause of the appeal.