D v. S AND ANOTHER

DCEO 3/2016 and DCCJ 4600/2016 (Consolidated)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EQUAL OPPORTUNITIES ACTION NO. 3 OF 2016

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4600 OF 2016

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(Consolidated pursuant to order of HHJ Alex Lee
dated 23 September 2016)

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REASONS FOR DECISION

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1.  These are consolidated proceedings arising from the sexual assault, sexual harassment and victimization of the claimant by the respondents. The claimant, being a domestic helper employed to work in the respondents’ household, made her claims under the Sexual Discrimination Ordinance, Cap 480 (“SDO”)[1] and Common Law tort[2]. This hearing concerns the question of costs of the consolidated proceedings after the parties have settled the liability, and eventually, the quantum.

2.  The respondents submitted that the default position of costs under section 73B(3) of the District Court Ordinance, Cap 336 (“DCO”) applies as there are no special circumstances. The claimant contended otherwise. S.73B(3) of the DC stipulates:

“(3) Each party to any proceedings in the Court in the exercise of its jurisdiction under the Sex Discrimination Ordinance (Cap. 480) shall bear its own costs unless the Court otherwise orders on the ground that—

(a)  the proceedings were brought maliciously or frivolously; or

(b)  there are special circumstances which warrant an award of costs.”

3.  After reading and hearing counsel’s submission, this Court ordered the respondents to pay the claimant costs of the consolidated proceedings, including the costs of this hearing, on indemnity basis, with certificate for counsel, to be taxed if not agreed.

4.  This Court also indicated brief reasons for decision would be handed down, and they are as follows.

Brief Background

5.  The 2 respondents are husband and wife. The claimant came from the Philippines. She was employed under a foreign domestic helper contract with the 2^nd respondent as employer (referred to as “the Wife”, and the 1^st respondent, “the Husband”) and working in the respondents’ household. It was the claimant’s pleaded case that on 6 occasions between 26 February to 3 March 2014, the Husband either masturbated and/or touched his genitals and/or exposed his penis behind her. His behavior made her very frightened and she was afraid that she would be raped or sexually assaulted by him.

6.  The claimant managed to video-record the 6^th occasion using her mobile phone. It can be seen that the Husband drew his penis out of his shorts and held it with his hand behind the claimant for about three seconds while watching her before getting away.

7.  The claimant sought assistance from a social worker. The matter was later referred to the Wife. The Husband immediately apologized to the claimant for what he had done by offering her a cup of tea standing up. However, no agreement could be reached on how the employment was to be terminated. It is the claimant’s case that the Wife did not permit her leaving her home with her belongings nor gave her any terminal compensation unless and until she signed a resignation letter, deleted the video and promised to file no claims. The claimant alleged she was eventually forced to sign a resignation letter despite the fact that she was summarily dismissed.

8.  The matter was reported to the Police. The Husband was charged with 4 counts of indecent assault and 1 count of common assault. He was finally convicted with attempted indecent assault on 20 April 2016 in a Magistrates’ Court with imprisonment sentence. The Husband lodged an appeal against conviction. It was dismissed by the High Court in March 2017. The Husband is now serving his imprisonment terms.

9.  The claimant’s application under the DCO was only filed with the Court on 25 February 2016, the last day of the 2-year limitation period under the said Ordinance, after pre-action negotiation failed. The said negotiation started through lawyers on 14 January 2016. After reading the correspondence exchanged between the parties it was fair to say such failure was mainly attributable to the Husband’s concern of any adverse impact of settlement on his then imminent criminal trial.

10.  The particulars of claims under the SDO were filed by the claimant by end of February 2016. On 29 March 2016, the respondents filed their defence, which was basically a pea of non-admission of liability.  The respondents pleaded that the tort of assault was irrelevant to the SDO proceedings. It is the claimant’s case that because of this plea, she has to institute separate proceedings under common law for basically the same relief in order to preserve her rights. After the Husband’s conviction in April 2016, the claimant initiated amendment of pleadings. The claimant’s amendment was made on 12 May 2016. Despite directions by HHJ Lee made on 13 May and 21 June 2016 directing the proceedings be stayed for mediation, the respondents filed and served their amended defence on 25 May 2016.

11.  Mediation did not bring about any settlement. A Calderbank offer of HK$190,000 with an apology were made on 6 September 2016 by letter by the respondents. However, at the hearing before HHJ Lee on 23 September 2016, the respondents’ open offer consisted only of the said monetary sum. It was not until 24 October 2016 at the hearings before HHJ Lee that the offer of 6 September was made open. At the same hearing, the respondents consented interlocutory judgment to be entered against them with damages to be assessed.

12.  On 8 December 2016, consent judgment was eventually entered in substantially the following terms pursuant to, apparently, an agreement reached on 7 November 2016 on quantum:

i) Declaration to be made to the effect that:

(1) the respondents have engaged in unlawful discrimination against the claimant contrary to the SDO between 26 February and 5 March 2014;

(2) The Husband unlawfully sexually harassed and assaulted the claimant contrary to the SDO between 26 February and 3 March 2014;

(3) On 3 March 2014, the Wife unlawfully discriminated against and victimized the claimant by terminating her employment regarding the Husband’s acts and conduct, contrary to the SDO; and

(4) The purported termination letter of the claimant from her employment dated 5 March 2014 was made in contravention of the SDO;

ii) The respondents do pay the claimant a sum of HK$210,000 in full and final settlement of the claimant’s claim for damages on or before 16 January 2017;

iii) The Wife do render a written apology to the claimant within 21 days; and

iv) Costs be adjourned for argument.

Discussion

13.  Regarding what amounts to “special circumstances” under s.73B(3)(b), Mr Ho, counsel for the respondents, relied on [9] of Chan Choi Yin Janice v Toppan Forms (Hong Kong) Ltd[3] to support his proposition that the focus of the Court should be on the litigation conduct of the parties. HHJ HC Wong has this to say in the said paragraph:

“The Court’s discretion on costs in the light of “special circumstances” under s.73B(3)(b) should be assessed from the conduct of the party concerned at every stage of the proceedings.”

14.  Mr Ho also relied on [10] of Chan Choi Yin Janice where the learned Judge approved the then authorities submitted to the Court by counsel and considered the following conduct sufficient to constitute “special circumstances”:

i) Oppressive conduct of a litigant;

ii) Where litigation could have been avoided but for the unreasonable conduct of a litigant;

iii) Where a party had been dilatory, obstructive or oppressive during the course of litigation;

iv) Where the losing party had engaged in oppressive tactics such as harassing the complaint to drop her claim.

15.  In Chan Choi Yin Janice, the Court considered that the trial, which lasted for 10 days, could have been shortened had the defence acted sensibly and the number of witnesses reduced. The learned judge considered the litigation conduct oppressive and awarded 50% costs against the defendant.

16.  Mr Ho submitted that the respondents in the present proceedings acted sensibly and settled the claims soon after the proceedings were started and without preparation of witness statements and a trial. It is also submitted the respondents consented at a very early stage to judgment on liability to be entered. Applying his proposition, no special circumstances justifying a departure from the usual “no costs” position under s.73B(3) of the DCO exist. 

17.  Counsel for the parties submitted that the Hansard was not useful in understanding why discrimination proceedings adopt a no costs regime subject to exceptions.

18.  In the Court’s judgment, the SDO was enacted to reflect the principles of equality which is enshrined in international covenants adopted and protected constitutionally by Article 39 of the Basic Law. It seeks to condemn discriminatory conducts which should not be tolerated in a civilized society[4], some of which may even have been commonly accepted locally yet are discriminatory in nature. Accordingly, with a view to encouraging victims to be more forthcoming without fear of an adverse costs order, certain protection on costs is in place. On the other hand, these anti-discrimination Ordinances should not be a tool for frivolous and vexatious litigants to entangle, perhaps out of ulterior motive, someone in legal proceedings. A no costs regime with safeguards was enacted. 

19.  In my judgment, the real question remains whether, against the purpose for which the discrimination ordinances are enacted, a party should be awarded costs in the interest of justice. Victims of sex discrimination/harassment, as in many sex offences, are always under pressure and may be too shy to lodge any complaint. If there is costs implication as in usual civil litigation, claimants may be deterred in airing out their grievances. Accordingly, unsuccessful claimants should not be required to shoulder costs of those against whom complaints are made unless the proceedings are brought maliciously or frivolously. As a matter of parity, if in the interest of justice obvious wrongdoers should not be let off the hook, there is no reason why they can hide behind the no costs protection. This Court accepts that as a matter of unequivocal language employed, the second limb of s.73B(3) is equally applicable to claimants. They would also be liable for costs if there exist conducts which are other than bringing of action frivolously and maliciously but are falling within the ambit of “special circumstances”. The case of Sunny Tadjudin v Bank of America[5] is a good example. The indemnity costs awarded against the claimant was upheld by the Court of Appeal[6].

20.  Mr Ho’s proposition is that the special circumstances should only be assessed from “the conduct of the party concerned at every stage of the proceedings”, i.e. it is restricted to “litigation conduct”.

21.  With due respect, this Court disagrees. Although I fully accept the principles distilled from Chan Choi Yin Janice as set out in [14] above, I do not think it an authority to support a proposition that “special circumstances” should be confined to conducts after the institution of legal proceedings. In the Court’s judgment, it is just the other way round.

22.  K & Others v Secretary for Justice[7] was a case referred to in Chan Choi Yin Janice. In K & Others, HHJ Christie was dealing with discriminatory employment policies of the Fire Services Department and Customs and Excise Department. In arriving at the conclusion that the relevant departments should pay costs of the applicants, the learned Judge considered that had the departments followed the suggestion of their task force on employment policy, discrimination would not have occurred, and the litigation would not have been necessary[8]. Internal policies, which are obviously pre-proceedings conducts, have been taken into account in assessing whether “special circumstances” exist.

23.  Circumstances qualified as discriminatory or unwelcome advances or harassment are of infinite variety. They are on a very wide spectrum with conducts and/or languages which may well be regarded as acceptable by certain sector of our society on the one end, and gross and obvious conducts on the other. However, we are here not dealing with a controversial case. In the present case, even assuming for the purpose of discussion the conduct complained of may not belong to the most gross and disgusting category, this Court cannot believe, at any rate and by any standard, the exposure of one’s penis before a lady, and playing with it can be argued as conduct not unwelcoming! Further, the evidence is over-whelming.

24.  In fact, both respondents had acknowledged what the Husband had done to be wrong. Yet, they chose initially to avoid the consequence by asking the claimant to leave Hong Kong, sign a letter of resignation and delete the video. When the claimant was unable to make an immediate decision, they refused to let her leave. Although the claimant subsequently left the respondents’ home, the respondents refused to let her bring along her own belongings. She eventually signed a resignation letter against her will. One has to remember that the claimant is an overseas Filipino leaving her home to take up employment here. She does not have a home here except to stay at the respondents’ home. She looked upon her employer and family for protection and shelter. She does not speak the Punti dialect, and her English is limited. She is in a vulnerable position. What the respondents have done to her amounted to oppression.

25.  No settlement could be reached between the parties during the 2-year limitation period under the SDO. There is absolutely no explanation given by the respondents as to why the case cannot be settled without litigation. From the correspondence exhibited, this Court comes to the conclusion that on a balance, it is mainly because the respondents did not want any compromise reached having an adverse impact on the Husband’s impending criminal trial. In the Court’s judgment, any tactical step taken by the respondents is with a view to protecting the Husband’s position in his criminal trial. It is entirely for the wrongdoer’s own benefit, not that of the claimant. The aforesaid may explain why the respondents cannot settle promptly. However, it definitely cannot be an excuse for the respondent not paying the unnecessary or added costs and time of the claimant which could have been avoided totally.

26.  In light of the above, there is absolutely no merit in the submission on behalf of the respondents that they have accepted liability and the quantum promptly without proceeding to the witness statement stage. What is difficult to understand is that after the Husband’s conviction in April 2016, instead of immediately conceding on liability, the respondent saw fit to incur further costs and expenses to amend their defence. What is the point of amending one’s pleading if one is minded to concede. The only inference is that the respondents are prepared to fight further the litigation, or were making another holding defence to protect the Husband’s contemplated appeal. The defence is so devoid of merit and is a deliberate dragging on of the litigation. It amounts to further oppression on the claimant who is of limited means. Faced with the reality of life in Hong Kong she was under great pressure to yield. It was not until October 2016 that the respondents conceded on liability. In the overall assessment of all the circumstances including the nature of conduct and the overwhelming evidence available, to say that the admission came promptly constitutes an affront to everybody’s wisdom. The proceedings should have been avoided totally. Further, had the respondents not raising a challenge concerning whether common law damage for the tort of assault could be raised under the SDO, a writ for the tort action would not have been necessary. This Court is satisfied that there are special circumstances that warrant an award of costs against the respondents.

27.  In the Court’s judgment, the overall circumstances, including the nature of the conduct being complained of, the pre and post-proceedings conducts should be taken into account for the purpose of assessing the “special circumstances”.

28.  This Court also awarded costs on indemnity basis. The reason is simple. This Court accepted Mr Marwah’s submission that the aforesaid pre and post-litigation conducts of the respondents oppressive: see 62/App/12 Hong Kong Civil Procedure 2017. Further, the underlying conduct is unlawful and criminal. It is, in my view, also a ground for indemnity costs.

29.  For the above reasons, it will not be necessary for this Court to consider the other points raised by Mr Ho and Mr Marwah.