CHAN LAP KWAN v. SKYPY LTD AND ANOTHER

HCPI 258/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 258 OF 2012

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D E C I S I O N

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1.  On 29 March 2012, the Plaintiff issued proceedings to seek damages for his personal injuries. The claim made in the Statement of Damages filed on 11 September 2012 (and revised on 15 November 2013) was for a net sum of $2,494,571, after deduction of employees compensation received of $241,000. The trial of the action took place in February and March 2016, and judgment was handed down on 1 April 2016 (“Judgment”). Under the Judgment, the total damages awarded to the Plaintiff was $1,464,440.45, and after deduction of employees compensation received, the net award came to $611,720.225, as the Plaintiff was held to be 50% contributorily negligent for his injuries. The Defendant was ordered to pay the Plaintiff’s costs of the action.

2.  On 18 June 2014, the Defendant had made a 1^st sanctioned payment of $750,000 into Court (“1^st Sanctioned Payment”).  Thereafter, the Defendant had made 4 other additional sanctioned payments in December 2014, March 2015, June 2015 and January 2016, bringing the total sum to $1.8 million.  These sanctioned payments were never withdrawn.

3.  Since the Plaintiff failed to recover an amount under the Judgment which is higher than the 1^st Sanctioned Payment, the Defendant applied under O 22 r 23 RHC to vary the order for costs made under the Judgment, for interest payable under s 48 of the High Court Ordinance (“Ordinance”) to be disallowed, for interest on its costs incurred from 17 July 2014, and for costs to be taxed on an indemnity basis.  The Defendant further seeks costs to be paid by the Defendant up to and inclusive of 16 July 2014 to be taxed on the District Court scale, since the amount awarded under the Judgment is within the jurisdiction of the District Court, but for the Plaintiff to pay the Defendant’s costs incurred from 17 July 2014 onwards on the High Court scale.

4.  Since the Plaintiff has failed to obtain a judgment which is better than the 1^st Sanctioned Payment, the Court shall make the orders referred to in O 22 r 23 (2), (3) and (4) RHC, unless it considers it unjust to do so.  In deciding whether it would be unjust to make the orders, the Court shall take into account all the circumstances of the case including the terms of the sanctioned payment, the stage in the proceedings at which the sanctioned payment was made, the information available to the parties at the time when the sanctioned payment was made, and the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the payment to be made or evaluated.

5.  The 1^st Sanctioned Offer was made on 18 June 2014.  By then, the issues in dispute between the parties had long been identified.  The medical experts had by then filed 2 joint assessment reports on the Plaintiff.  The Court had been able to make, on 13 June 2014 and on the parties’ consent application, directions for trial bundles and for preparations to be made for trial, including directions on specific issues to be further addressed by the experts, and the critical issue of whether the Plaintiff’s use of a wheelchair was due to injuries sustained in the accident.  The Plaintiff was advised by lawyers at the relevant time and up to February 2016, and should have been aware by June 2014 of the aspects of his claim which are disputed by the Defendant.  As early as in the Supplementary Joint Report of the medical experts dated 8 November 2013, they had identified and agreed that the Plaintiff’s condition had been stable by 27 January 2011, and that there should not have been any substantial change in his medical condition since then.  In the experts’ Joint Supplemental Report of 13 August 2014, after the 1^st Sanctioned Payment but before the increase in sanctioned payments made in December 2014 and thereafter, the medical experts had made it clear that the left foot pain complained of by the Plaintiff since April 2012 had no relationship with the injury sustained in the accident, and further, that the Plaintiff’s alleged ambulatory disability since September 2013 was not caused by the accident.

6.  I can find no evidence to conclude that under O 22 r 23 (5) and (6), it would be unjust to make the orders under O 22 r 23 (2) to (4). 

7.  As to whether the Plaintiff is entitled to his costs of the action up to and inclusive of 16 July 2014 on the High Court scale, or whether the Defendant should only be liable for costs on the District Court scale, the Intervener (who are the former solicitors for the Plaintiff) on the Plaintiff’s behalf relies on the decision in Lai Ki v B + B Construction Co Ltd [2003] 3 HKC 322.  It was argued that at the time when the Writ was issued, and ignoring all questions of contributory negligence, the Plaintiff had a reasonable prospect of recovering damages in excess of $1 million within the jurisdiction of the District Court, and as such, the Plaintiff should be entitled to costs on the High Court scale.

8.  The Defendant relies instead on the decisions in Wong Chim Hing v Discovery Bay Transit Services Limited, unreported, HCPI 254 of 2011, 14 October 2014 and Oriental Daily Publisher Limited v Ming Pao Holdings Ltd [2011] 3 HKLRD 425, where the court advocated more stringent tests in the aftermath of the Civil Justice Reform. 

9.  Even if the Plaintiff and his legal advisers took a reasonable view, at the time when the Writ was issued and the Statement of Damages was filed, that the Plaintiff had a reasonable prospect of recovering damages in excess of $1 million, parties and their legal advisers are, in the aftermath of the Civil Justice Reform, duty-bound to assist the Court to further the underlying objectives of the RHC, which include promoting a sense of reasonable proportion and procedural economy, the facilitation of settlement of disputes and to ensure that the resources of the court are distributed fairly.  At the time when the 1^st Sanctioned Payment was made, the Plaintiff and his legal advisers had the duty to assess, on the factual and expert evidence that had been discovered by then, whether or not the Plaintiff had a reasonable prospect of recovering a sum of money in excess of the District Court jurisdiction, so as to warrant the case being continued in the High Court.  When the 1^st Sanctioned Payment was made by the Defendant on 18 June 2014, the Plaintiff was already informed that the Defendant would be seeking costs of the action on the District Court scale.  As indicated above, the medical experts confirmed in their joint report that the Plaintiff’s condition had stabilised by January 2011, and at the  latest by 13 August 2014, that the complaints made by the Plaintiff in the left foot and his ambulatory disability had nothing to do with the injuries he sustained in the accident.  It was for this reason that the Plaintiff’s claims were rejected under the Judgment, with the result that the damages were substantially reduced. 

10.  From the time of the 1^st Sanctioned Payment, the Plaintiff and his legal advisers were, or should have been, aware of the consequences set out in O 22 r 23, including the costs consequences specified in r 23 (3) and (4), if he should fail to obtain a judgment better than the sanctioned payments.  The Plaintiff had further been forewarned on 18 June 2014 of the Defendant’s claim that the costs of the action should only be allowed on the District Court scale, if the Plaintiff should accept the 1^st Sanctioned Payment.  The Plaintiff did not accept the 1^st Sanctioned Payment, so the consequences specified in r 23 (3) and (4) flow. 

11.  For all the above reasons, I will order that the Defendant is to pay the costs of the action to the Plaintiff up to 16 July 2014 on the High Court scale, but that the Plaintiff should pay the Defendant’s costs of the action incurred from 17 July 2014 onwards.  These costs of the Defendant are also to be taxed on the High Court scale, and be paid by the Plaintiff on an indemnity basis (pursuant to O 22 r 23 (4)).  The Plaintiff is also to pay interest on these costs incurred from 17 July 2014, at 2% above the judgment rate.  The costs to be paid by the Plaintiff and those to be paid by the Defendant as taxed or agreed are to be set off against each other.

12.  Considering the Plaintiff’s limited means, and in view of the orders made, I agree that there are good reasons in this case to justify the retention of the moneys in court pending disposal of the question of costs including taxation, which should proceed forthwith without further delay.

13.  Save as revised above, I will make the orders in terms of the Defendant’s summons issued on 13 April 2016.