LEE KAI YU v. HONG KONG KWONG TAI BUILDERS LTD

HCPI 1184/2016

[2020] HKCFI 827

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 1184 OF 2016

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DECISION ON COSTS

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1.  On 13 January 2020, I gave judgment in favour of the plaintiff (“P”) in the sum of HK$93,104.64 as damages for the personal injuries sustained by him (“Judgment”). I also made an order nisi that the defendant (“D”) is to pay P’s costs to be taxed on the District Court scale if not agreed.

2.  By a summons dated 20 January 2020 (“Summons”), D applied to vary the costs order nisi as follows:

 (1)  D do pay P’s costs of this action, to be taxed on the District Court scale if not agreed on a party and party basis for the period up to 10 January 2017.  P do pay D’s costs on indemnity basis from 11 January 2017 onwards, together with interest on such costs assessed at the rate of 10% above the Judgment rate; and

 (2)  the Sanctioned Payments of HK$150,000, HK$100,000, HK$30,000 and HK$20,000 paid into court by D on 13 December 2016, 25 January 2018, 1 August 2018 and 3 September 2018 respectively together with interest thereon be paid out to D’s Solicitors on behalf of D forthwith.

3.  The basis of the application is readily apparent.  13 December 2016 was the date of the 1^st sanctioned payment made by D and it was in the sum of HK$150,000.  Further sanctioned payments were subsequently made by D for the sums and on the dates set out in paragraph 2(2) above.  P had refused to accept any of the sanctioned payments.

4.  On 23 January 2020 (“23 Jan Letter”), solicitors for P wrote to the court indicating that:

 (1)  In paragraph 57 of the Judgment (dealing with pre-accident income), I said “[a]ccording to the calculation provided by Mr Chong [counsel for D], P only earned around HK$14,266 per month in the relevant periods identified by him and he submitted that the Court should adopt this figure as P’s pre-trial income.”

 (2)  I went on to say at paragraph 60 that “[t]aking all the evidence into account, I will adopt a monthly figure of HK$15,000 as P’s pre-trial income.”

 (3)  It was then pointed out that in paragraphs 22.8 and 22.9 of D’s Closing Submissions, the figure of HK$14,266 was in fact P’s average income between April 2012 and December 2013.  D submitted that this was the “best period” identified in his calculation.  D invited the court to adopt this figure as P’s pre-trial income.

 (4)  P then suggested that the “best period” was in fact not the period between April 2012 and December 2013.  P’s solicitors submitted that between December 2012 and 21 December 2013 (i.e. for about 12.7 months), the monthly salary should be around HK$20,707.40.  The calculation in D’s Closing Submissions was therefore incorrect as the monthly average of HK$20,707.40 was his income during the “best period”.

 (5)  It is said that the court “might have considered and adopted the incorrect calculation and figures” provided by D and concluded that P only earned around HK$14,266 per month during the “best period”.  I was therefore asked to “make appropriate adjustment and/or amendment on the Judgment as it deems fit and proper”. 

 (6)  The basis of the request was not identified in the 23 Jan Letter.  

5.  The Summons and the application contained in the 23 Jan Letter were scheduled to be heard on 5 February 2020 which was adjourned due to the general adjournment of court proceedings in view of public health considerations.  It was subsequently agreed that the Summons and the application by letter be disposed of on paper.

6.  The basis of D’s application to vary the cost order nisi is straightforward.  P had clearly failed to obtain a judgment that is better than the sanctioned payment.  It was subsequently made clear in the submissions of Mr Poon (counsel for P) that their answer is the point contained in the 23 Jan Letter. 

7.  In short, Mr Poon argued that since the monthly earnings “during the best period” should be HK$20,707.40, I should find that a pre-trial monthly earning of HK$20,000 would be reasonable.  He submitted that the knock-on effect of this is that the total sum awarded should increase to HK$1,029,494.64.  The award will therefore be significantly higher than the sanctioned payments and P should therefore have their costs payable in High Court scale.        

8.  It was also clarified in his submissions that the basis of his application is Order 20, rule 11, ie an application under the slip rule.

9.  Leaving aside the question of whether the application under the slip rule should have been made by summons and whether the slip rule is engaged in circumstances where the court had adopted an erroneous calculation provided by the parties, I am of the firm view that the application is of no substance as it is based on a misunderstanding of the Judgment. 

10.  As I have explained in paragraph 55 and 56 of the Judgment, P was never continuously employed and his income prior to the accident has been unstable. The figures referred to in paragraph 56 demonstrated that there were periods where his monthly average income was less than HK$10,000 and I have obviously taken them into account.  On the other hand, I have also taken into account (in paragraph 58) Mr Poon’s submissions that P’s average monthly income for the 5 months when he was employed by Sum Wing was over HK$30,000 but declined to simply adopt that figure because it was for a very relatively short period of time and his average income was substantially lower than the amount claimed.

11.  I have made it clear in paragraph 60 that I have taken all the aforesaid circumstances into account in arriving at the figure of HK$15,000 per month and it was certainly not based on the figure of HK$14,266 put forward by D being the best period.  It is clear that there was no such finding.  The mistake in Mr Chong’s calculations and whether the monthly average for the “best period” was HK$14,266 or HK$20,707.40 are therefore irrelevant.   

12.  Further, Mr Poon also argued that even if the court is to reject the aforesaid submissions, P should nevertheless only be liable for 50% of the costs in the periods identified by D as D had all along contested liability but failed.  Reliance is placed on Lai Yau Tai v. Moral Accord Ltd & Others, DCPI 22/2015, [2019] HKDC 1316 to support his contention. 

13.  With respect to Mr Poon, the decision is of no assistance to P as it was not decided in the context of a sanctioned payment.  The effect of sanctioned payment is trite and as explained by DHCJ Marlene Ng (as she then was) in Tsang Chiu Yip v Ho Kwok Leung, HCPI 305/2013, 8 August 2016, once a sanctioned payment is made, the lis between the parties becomes simply this: “is the amount of sanctioned payment sufficient to cover the damage that has been suffered?”.  Given that P had clearly failed to obtain a judgment better than the sanctioned payment, the fact that liability was contested is irrelevant.

14.  In light of the aforesaid, I would allow D’s application to vary the costs order nisi.  In Mr Chong’s written submissions, he asked for interest on costs at 4.5% instead of 10% as per the Summons.  I believe this is appropriate and Mr. Poon did not contend otherwise.  I shall therefore make an order in terms of paragraph 1 of the Summons as amended by awarding 4.5% instead.

15.  I also allow D’s application for the sum of HK$300,000 to be paid out of court and make an order in terms of paragraph 2 of the Summons.  As P’s liability on costs will certainly exceed the damages awarded under the Judgment, I cannot see any basis to oppose and Mr Poon did not make any submissions in opposition.

16.  By reason of the aforesaid, costs should follow the event and costs of the Summons should be given to D.  The parties have prepared their respective Statement of Costs for summary assessment under Order 62, rule 9A.  Having considered the costs incurred by D, I order P to pay D costs summarily assessed at HK$80,000.