CHEUNG KAI CHI v. CHUN WO CONTRACTORS LTD AND ANOTHER

HCPI 572/2004

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 572 OF 2004

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D E C I S I O N

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1.  This is an application by the plaintiff for an order that the costs of this action be taxed on the High Court Scale.

2.  This case was a fatal personal injuries case.  I gave judgment on it on 29 December 2005.  After deducting 25% for contributory negligence of the deceased, I awarded the plaintiff $1,469,675.85.  The Court of Appeal later corrected my judgment by taking away the contributory negligence and added a sum of $152,000 to cover an omission of mine.  The correct judgment sum should thus be $2,111,567.80. 

3.  An Employees’ Compensation award (“EC award”) at $1,295,000 inclusive of the fixed funeral expenses at $35,000 was made in the District Court on 24 October 2004 in favour of the plaintiff.  The interest on the EC award accrued up to the date of the award was $135,957.26.  Further interest accrued from 25 October 2004 to 26 November 2004 was at $9,366.58.  Payment of the award was made by cheque on 25 November 2004 and interest was calculated up to 26 November 2004.  The total sum paid under the EC award inclusive of interest up to 26 November 2004 was $1,440,323.84.

4.  The judgment sum less the EC award is below $1,000,000.  There is therefore an argument on whether the costs of the action payable to the plaintiff since 26 November 2004 should be taxed on the High Court Scale.

5.  There is no dispute on the applicable principle.  It has been set out in the judgment of Glyn-Jones J in Hopkins v. Rees & Kirby Ltd (1959) 2 All ER 352 as follows:

“Putting myself as far as I can, in the position of the plaintiff at the time when he issued that writ, am I satisfied that it was then obvious that this was a county court action, or was it an action which, when tried by one judge rather than another, might have resulted in an award exceeding [the jurisdictional limit] excluding any reduction for contributory negligence.”

6.  Mr Justice Seagroatt in Lai Ki v. B+B Construction Co. Ltd, HCPI No. 63 of 2001 quoted the above passage and said in paragraph 12:

“The acid test therefore has been, ignoring all questions of contributory negligence, has the plaintiff a reasonable prospect of recovering a sum of money in excess of the County Court jurisdiction?”

7.  I am therefore asked to consider whether, after the payment of the EC award on 26th November, 2004, there was still a reasonable prospect for the plaintiff to obtain a judgment which, after deducting the EC award, will still be in excess of the District Court jurisdiction of $1,000,000.

8.  The dispute is on whether the two sums of interest on the EC award at $135,957.26 and $9,366.58 totalling $145,323.84 should be deducted from the amount claimed and whether the MPF claim should be included in the amount claimed.

9.  Mr Wong for the defendant accepts that it was reasonable for the plaintiff to claim a free balance of the deceased’s earnings at $18,500 per month.  There is no dispute that the multiplier should be 9.  The total claim for loss of dependency and loss of accumulation of wealth would be ($18,500 x 12 x 9 =) $1,998,000.  Mr Wong also accepts that it was reasonable to claim funeral expenses at $81,327, special damages at $1,000 and damages for bereavement at $150,000.  The total claim would be $2,230,327. 

10.  Mr Wong further submits that out of the total claim of $2,230,327 should be deducted the EC award inclusive of funeral expenses and accrued interests totalling $1,440,323.84.  That would bring the amount claimed down to $790,003.16 which was well within the jurisdiction of the District Court.

11.  Mr Wong further submits that when the plaintiff was paid the EC award plus interest, his legal representatives should consider the quantum of this claim and estimate the amount of interest payable on the interest bearing items up to the expected judgment date.  If the quantum plus estimated interest less the EC award and interest paid should be within the District Court jurisdiction, then the claim should be transferred to the District Court.

12.  Ms Chan for the plaintiff disagrees with this approach.  She says that interest is an uncertain element.  It is also difficult to tell when the trial of the action will come on.  I think Ms Chan is right.

13.  Furthermore, the $1,000,000 jurisdiction as stipulated in section 32 of District Court Ordinance does not include interest on the claim.  If interest should be included, the plaintiff may delay the bringing and/or the prosecution of an interest bearing claim so as to get the claim with accrued interest out of the District Court.  Interest bearing claims of nearly $1,000,000 may have to be brought in the High Court as the amount of claim with interest to accrue can grow to beyond $1,000,000 on the judgment day.  There are however interest bearing claims where the rate of interest has to be fixed by the trial judge in the judgment.  For these cases, it is difficult to predict whether the amount of claim with interest to accrue will or will not go beyond the jurisdiction of the District Court at the time of judgment.

14.  It is thus clear that when the jurisdiction of the District Court is considered, the interest on the claim should not be included in the consideration.  For this reason, it is only necessary to deduct from the claim of $2,230,327 the EC award inclusive of funeral expenses at $1,295,000.  After the deduction, the balance of the claim would be $935,327.

15.  Ms Chan further submits that when Mr Wong calculated the free balance of $18,500 per month, he had already deducted the deceased’s contribution to MPF.  However, in his calculation leading to the total claim of $2,230,327, he had not brought back the MPF item.

16.  In my judgment, I included an MPF element of ($2,000 x 12 x 9 =) $216,000.  That sum was reduced by 10% when I arrived at the total sum for loss of accumulation of wealth.  I think it is reasonable to include the MPF claim in the amount claimed. 

17.  If the MPF claim of $216,000 or 90% of it should be added to the balance of the claim at $935,327, the revised balance of the claim is well above the jurisdiction of the District Court.  The claim should have remained in the High Court despite the payment of the EC award on 26th November, 2004.  The fact that the judgment sum as corrected less the EC award is below $1,000,000 is not a ground for the costs to be taxed on the District Court Scale.

18.  I therefore allow the plaintiff’s application and order that the costs of this action as payable by the defendant to the plaintiff be taxed on the High Court Scale.  I further make a costs order nisi that the defendant do pay the plaintiff the costs of this application and the plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.