NG HAU WAN v. NG PIK CHU NAOMI

DCCJ4557/2014

[2018] HKDC 238

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4557 OF 2014

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DECISION

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Introduction

1.  Both the plaintiff and the defendant filed their respective summonses on 27 March 2017 and 13 March 2017.

2.  I handed down the judgment on 28 February 2017, written in Chinese (“the Judgment”). I shall briefly reproduce the background of this action. The plaintiff was the elder sister of the defendant. The plaintiff ranked third among the siblings and the defendant ranked ninth. The plaintiff claimed the defendant for (i) repayment of loan in sum of RMB 300,000; (ii) an account of 3 sums of moneys in sum of HK$100,000, HK$130,000 and HK$18,600; and (iii) payment of outstanding rent of a shop premise in Lee Po Lung Road.  The action was one purely on factual disputes.

3.  In the Judgment, I dismissed the plaintiff’s claim for reason the defendant’s and her witnesses’ evidence were more probable, on a balance of probabilities. I made a costs order nisi that the plaintiff do pay the costs of the defendant, with certificate of counsel, to be taxed if not agreed. The plaintiff seeks leave to appeal against the Judgment.

4.  Pursuant to Order 22 rule 23 of the Rules of the District Court, Cap 336H (“the RDC”), the defendant seeks an order to vary the costs order nisi to one of the following,

“the costs of this action be paid by the plaintiff to the defendant on a party and party basis up to 13 November 2015, being the time due for the plaintiff to accept the defendant’s sanctioned offer dated 16 October 2015, and thereafter on an indemnity basis with interest on costs at 5% above the judgment rate, to be taxed if not agreed, with certificate of counsel.”.

The plaintiff’s application for leave to appeal

5.  The plaintiff’s application is premised on the ground that on the evidence at trial, I have erred in law to find the defendant’s evidence is more probable than the plaintiff.

6.  The legal principles for an application for leave to appeal shall not be granted unless the court is satisfied the appeal has a reasonable prospect of success or there is some other reason in the interest of justice why the appeal should be heard. (See section 63A(2) of the District Court Ordinance, Cap 336.)

7.  Reasonable prospect of success connotes the prospect of succeeding must be reasonable and more than fanciful, without having to be probable.  An applicant is required to show more than just an arguable case, but he does not have to demonstrate the appeal will probably succeed. Even if the court takes the view that there is a reasonable prospect of success, it still remains adiscretion as to whether to grant leave, though the fact that there is, ex hypothesi, a reasonable prospect of success would heavily influence the court in exercising its discretion. (See commentary of Hong Kong Civil Procedure 2018, §59/2A/4)

8.  In the Judgment, I accepted the telephone conversation recording between the plaintiff and the defendant as a pointer to the intention of parties, whether a loan agreement existed between the plaintiff and the defendant with regard to RMB 300,000. On this part, I find the plaintiff was aware of the transfer of RMB300,000 to her sister, Ng Bik Wan and she agreed Ng Bik Wan should return the same to her, not the defendant.

9.  Ms Yeung, counsel for the plaintiff submitted, I should have taken a different interpretation of the conversation to the extent that the plaintiff has not authorized the defendant to transfer the same to Ng Bik Wan.  I should have considered the defendant’s bank account transactions; the evidence on how RMB 300,000 sum was given to Ng Bik Wan by the defendant and thus the defendant. I should have concluded the defendant and her witnesses’ evidence were not credible.

10.  With regard to the three sums of money, namely, HK$100,000; HK$130,000 and HK$18,600; and the rental payment of the shop premise of Lee Po Lung Road. Ms Yeung submitted from the same platform that I should not have found the defendant and her witness’ conflicting evidence more probable than the plaintiff.

11.  Whilst at stage of applying for leave to appeal, that the test is  whether the plaintiff has real prospect of success, Ting Kwok Keung v. Tam Dick Yuen (2002) 5 HKCFAR 336 is applicable here. Bokhary PJ decided, the appellate court should be slow to reverse the finding of fact unless the trial judge’s finding is plainly wrong. (See paragraphs 35 – 38)

“35. The finding which the Court of Appeal reversed in the present case is a finding of primary fact which the trial judge made upon his assessment of the relative credibility of the main witnesses on each side. That being so, I turn at once to this well-known passage in Lord Reid’s speech in Benmax’s case at p.375:

“ Apart from cases where appeal is expressly limited to questions of law, an appellant is entitled to appeal against any finding of the trial judge, whether it be a finding of law, a finding of fact or a finding involving both law and fact. But the trial judge has seen and heard the witnesses, whereas the appeal court is denied that advantage and only has before it a written transcript of their evidence. No one would seek to minimize the advantage enjoyed by the trial judge in determining any question whether a witness is or is not trying to tell what he believes to be the truth, and it is only in rare cases that an appeal court could be satisfied that the trial judge has reached a wrong decision about the credibility of a witness. But the advantage of seeing and hearing a witness goes beyond that: the trial judge may be led to a conclusion about the reliability of a witness's memory or his powers of observation by material not available to an appeal court. Evidence may read well in print but may be rightly discounted by the trial judge or, on the other hand, he may rightly attach importance to evidence which reads badly in print. Of course, the weight of the other evidence may be such as to show that the judge must have formed a wrong impression, but an appeal court is and should be slow to reverse any finding which appears to be based on any such considerations.”

36. It is common to speak of a trial’s judge’s advantage of having “seen and heard” the witnesses. I have no quarrel with that way of putting it. But it may be preferable to speak instead of a trial judge’s advantage of having received the evidence at first-hand. There would appear to be two reasons why. First, it is as well to guard against giving the impression that no blind or deaf person can ever constitute an effective tribunal of fact. Secondly, the words “seen and heard” are perhaps capable of giving an exaggerated impression of the role which demeanour plays in the resolution of disputes of fact ¾ demeanour being, as Lord Pearce put it in Onassis v. Vergottis [1968] 2 Lloyd’s Rep. 403 at p.431, “mostly concerned with whether the witness appears to be telling the truth as he now believes it to be”. (Emphasis supplied)

37. Having said that about demeanour, I should make it clear that I accept that trial judges are entitled to take demeanour into account when assessing testimony. In life what really happened is not always what afterwards seems objectively probable. So demeanour has a role to play. Of course trial judges must bear in mind that demeanour can be deceptive and is therefore to be approached with care. In general, I would trust them to do that. Unless good reason to think otherwise appears, trial judges should be taken to have considered demeanour with caution, doing so only in the context of such inherent probabilities as may exist and the whole of the evidence.

38. It can of course happen that neither rival account is appreciably more inherently probable or improbable than the other, and there may be little or no evidence other than the testimony of the protagonists, each with an interest to serve. In such a situation, there will be little or nothing for the fact-finding judge to go on apart from demeanour.  At the other extreme, there can be situations like the one in a case I remember conducting as counsel before Cons J (as he then was).  That learned judge said that he got nothing from the demeanour of the witnesses there, and then proceeded to choose between their rival accounts according to the inherent probabilities (doing so very satisfactorily, as I thought).”

12.  The plaintiff’s ground of appeal plainly falls squarely within this category.  The disputes resolved here were purely on facts. Credibility was in issue. Ms Yeung tried her best endeavour to state the discrepancies of the defendant’s (and her witness’) evidence. She invited me to grant leave to appeal because the plaintiff’s (and her witness’) evidence should be believed. With due respect, in light of Ting Kwok Keung, the real prospect of success of the plaintiff’s appeal, solely on this ground on finding of fact, could not be established.

13.  I failed to see there are some other reason in the interest of justice why the appeal should be heard.

14.  I refuse to exercise my discretion to grant leave of appeal to the plaintiff.

The defendant’s variation of costs order nisi

15.  The defendant applies for an order to vary the costs order nisi. Mr Chen, counsel for the defendant submitted, the defendant had on 16 October 2015 made a sanctioned offer to the plaintiff with the following terms,

(i)   The plaintiff and the defendant shall abandon all claims and counterclaims (which each of them has or may have against the other) in full and final settlement of the action;

(ii)   As for costs, the defendant was prepared to accept costs order that the plaintiff shall only be liable for 80% of the defendant’s up to that stage;

(iii)   Within 3 days after the plaintiff’s acceptance of the sanctioned offer, the plaintiff shall file with the Court a consent order for discontinuance of the action and withdrawing all of her claim with 80% of the defendant’s costs be to the defendant, to be taxed if not agreed. (“the sanctioned offer”).

16.  The plaintiff formally rejected the offer on 26 October 2015, an earlier date from the last day for acceptance (which falls on 13 November 2015).

17.  On 19 January 2016, the plaintiff’s former solicitors wrote to the defendant’s solicitors, on a without prejudice as to costs basis, counteroffered she would accept a sum of HK400,000, inclusive of interest, being full and final settlement of the plaintiff’s claim; the parties shall bear their own costs.

18.  On 27 January 2016, the defendant’s solicitors replied on a without prejudice as to costs basis, the defendant further proposed, inter alia,  “both parties drop hands in full and final settlement of the disputes so that the legal action shall come to an end with no order as to costs”. This offer was rejected by the plaintiff on 4 February 2016.

19.  The defendant seeks an order on the strength of Order 22 rule 23 of RDC. In case where a plaintiff fails to obtain a judgment that is more advantageous than a defendant’s sanctioned offer, the court may order the defendant is entitled to his costs on an indemnity basis after the latest date of which the plaintiff could have accepted the payment or offer without leave of court; and enhanced interest on costs at a rate not exceeding 10% of the judgment rate.  In accordance with Order 22 rule 23(5) of the RDC, the court shall make such order unless it is unjust to do so. The defendant submitted, there is none.

20.  The plaintiff opposed. Ms Yeung argued the defendant’s sanctioned offer was not valid. She relied on Wong Yim Man Anthea v. Wong Ho Ming Felix [2016] 3 HKLRD 249. In this case, DHCJ Kent Yee held a sanctioned offer is not valid due to inclusion of a term as to costs. The decision was accepted in a subsequent decision of Choi Tak Man v. Chan Yuk Lan Didi [2017] 5 HKLRD 619. DHCJ Kent Yee has summarized his reasons as follows:

“9. O.22 r.1 defines a “sanctioned offer” in the following terms: “sanctioned offer” means an offer made (otherwise than by way of a payment into court) in accordance with this Order.

10. O.22 r.3 provides that an offer by a defendant to settle the whole or part of a claim or an issue arising from the claim does not have the consequences specified in O.22 unless it is made by way of a sanctioned offer or a sanctioned payment or both.

11. O.22 r.5 concerns the form and content of a sanctioned offer. I note that there is neither express prohibition against nor reference to inclusion of any costs element in a sanctioned offer.

12. O.22 r.5(7) provides that a sanctioned offer made not less than 28 days before the commencement of the trial must provide that after expiry of 28 days from the date the sanctioned offer is made, the offeree may only accept it if the parties agree on the liability for costs or the court grants leave to accept it. Thus, a late acceptance of a well-timed sanctioned offer is allowed only with either the parties’ agreement on the liability for costs or leave of the court.

13. Similarly, O.22 r.5(8) provides that a sanctioned offer made less than 28 days before the commencement of the trial must provide that the offeree may only accept it if the parties agree on the liability for costs or the court grants leave to accept it.

14. O.22 r.15(2) further provides that where a defendant’s sanctioned offer or sanctioned payment is made less than 28 days before the commencement of the trial or the plaintiff does not accept it within the 28 days after the offer or payment was made, the plaintiff may accept the offer or payment without leave only if the parties agree on the liability for costs. If such an agreement is not unavailable, the plaintiff may still accept the offer or payment if the court grants the leave and makes an order as to costs.

15. O.22 r.20 provides that where a defendant’s sanctioned offer or sanctioned payment to settle the whole claim is accepted without requiring the leave of the court, the plaintiff is entitled to his costs of the proceedings up to the date of serving notice of acceptance, unless the court otherwise orders. It is remarkable that this rule is not made subject to any costs provision in the sanctioned offer accepted by the plaintiff.

16. It is thus clear that if a sanctioned offer made in good time by a defendant (28 days before the commencement of the trial), a plaintiff can accept the sanctioned offer within 28 days from the date of its making without leave of the court and any further agreement on the liability for costs, the consequences specified in O.22, to be precise, r.20 will automatically flow from the acceptance of the sanctioned offer.

17. The specific requirement of the parties’ agreement on the liability for costs in the case of a late sanctioned offer (O.22 r.5(8)) or an intended late acceptance of a sanctioned offer (O.22 r.5(7)) fortifies my view that the specified costs consequences in O.22 r.20 and none others will without further ado flow from a plaintiff’s timely acceptance of a defendant’s sanctioned offer made no less than 28 days before the commencement of the trial.

18. In my view, the Offer does not fit in the O.22 mechanism due to its inclusion of a term as to costs. Its proposed costs order (no order as to costs) effectively prevents the specified cost consequences upon its acceptance by Madam Wong under O.22 r.20. It is not in dispute that the Offer was made more than 28 days before the commencement of the trial. If Madam Wong had accepted it within 28 days thereafter, she would have been completely deprived of her entitlement to her costs of the proceedings up to the date of serving her notice of acceptance under O.22 r.20.”

21.  Mr Chen replied, Wong Yim Man Anthea is not applicable  because sanctioned offer with terms of costs was accepted in two Court of Appeal decisions, namely, Central Management Ltd. v. Light Field Investment Ltd [2011] 2 HKLRD 34; and Chan Kwing Chiu v. 梁志球 (CACV 209/2012, 17 September 2013).  The decision of the latter two cases should be binding on this Court. DHCJ Kent Yee in Wong Yim Man Anthea decided, as no argument on validity of sanctioned offer was heard in the said two cases, he disagreed he should be bound by Central Management Ltd and Chan Kwing Chiu. DHCJ Kent Yee further considered a subsequent case, Leung Lai Kwan v. Lo Kai Wing (unrep, HCMP 1554/2015, 20 August 2015), the Court of Appeal hold that if a sanctioned offer was made outside the Order 22 regime, it would not attract the consequences specified in Order 22, unless the court so orders.

22.  I find it is clear in cases where argument on validity of sanctioned offers (with terms of costs) were heard, the authorities were in line to hold the sanctioned offer was invalid because it did not adhere strictly to the Order 22 requirement. It must be the case when the parties had chosen to depart from the form and content of sanctioned offers, that party should expect the costs consequence of Order 22 would not follow, unless with leave of court. In the present case, neither did the defendant promulgate in the sanctioned offer that it should be accepted with leave of Court. In this regard, in applying Order 22 rule 23 of RDC, the defendant’s sanctioned offer did not fall squarely into the Order 22 regime and thus shall have no entitlement of the costs consequence accordingly.

23.  Mr Chen invited me to consider the fallback position, the conventional Calderbank offer. He submitted, should the plaintiff accepted the offer, to drop hands with no order as to costs, the parties could avoid a 4-day trial. The defendant could apply for entitlement of indemnity costs and enhancement of interest on costs.

24.  The defendant relied on the finding of the Judgement, in that I have accepted the defendant’s evidence and had found her evidence was more preferred to the plaintiff’s, on a balance of probabilities. Bearing in mind the present action is a money dispute claim between sisters. Both the plaintiff and the defendant (and other sisters as well) have a long history on money dealings, most of the dealings were premised on the plaintiff’s love and affection to her siblings. And because of this, where the plaintiff’s money claim has never been reduced in writing, the trial itself was evaluation of evidence purely on factual disputes, it is understandable the plaintiff has attempted to prove her claim at trial. Be it the plaintiff’s claim was dismissed, in light of the Calderbank offer, I do not see any instance warrants a costs on indemnity basis and/or enhanced interests on costs.

Conclusion

25.  I make the following orders:

(i) The defendant’s summons filed on 13 March 2017 be dismissed.

(ii) The costs of the defendant’s summons filed on 13 March 2017 be paid by the defendant to the plaintiff, with certificate for counsel, to be taxed if not agreed.

(iii) The plaintiff’s summons filed on 27 March 2017 for leave to appeal against the Judgment be dismissed.

(iv) The costs of the plaintiff’s summons filed on 27 March 2017 be paid by the plaintiff to the defendant, with certificate for counsel, to be taxed if not agreed.

(v) The costs order nisi in the Judgment dated 28 February 2017 be made absolute.