TAI YUK CHEUNG v. HUNG SING CONSTRUCTION ENGINEERING CO. AND ANOTHER

HCPI 298/2015

[2018] HKCFI 739

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 298 OF 2015

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D E C I S I O N

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1.  This is a hearing to consider two wasted costs orders.

BACKGROUND

2.  Mr. Burke, the solicitor for the plaintiff, took out an application for specific discovery around August 2015 (the “First Discovery Application”).  In this court’s decision dated 1 June 2016 (the “First Decision”), most of the items sought under the application were dismissed and the parties were invited to fix a hearing for costs.

3.  I have indicated in the First Decision that, for the reasons specified in some details (which I need not repeat here), the hearing “would be an opportunity for Mr. Burke to address the court why a wasted costs order should not be considered”.

4.  Mr. Burke made an appeal against the First Decision and I have ordered that the costs hearing be adjourned pending the result of the appeal.

5.  Before the hearing of the appeal, Mr. Burke took out another application for specific discovery around May 2017 (the “Second Discovery Application”).  In a decision dated 30 November 2017 (the “Second Decision”), this court has dismissed the entire application.

6.  In the Second Decision, this court again set out reasons in some details and expressed concern in the way Mr. Burke has been handling the case.  I also note that Legal Aid Department has notified that the aided person’s Legal Aid Certificate did not cover the application.  I warned that a wasted costs order was being considered and again invite the parties to fix a hearing on costs.

7.  Subsequently, the appeal against the First Decision was heard before the Hon Mr. Justice Bharwaney and was dismissed with costs to the defendants summarily assessed at HK$80,000.  According to the Reasons for Decision, at that point, “Mr. Burke indicated that not only was he acting pro bono for the plaintiff but also that he wold personally discharge the costs order in favour of the 1^st and 2^nd defendants by paying the sum of HK$80,000 out of his own pocket.” Bharwaney J “did not make any order as to costs below as that matter still has to be determined.”

MATTERS IN DISPUTE

8.  As such, the current hearing was fixed to hear the issues for costs concerning both the First Discovery Application and the Second Discovery Application.

9.  Before the hearing, Mr. Burke has written to the court indicating that he has agreed with the plaintiff that he would personally “pay all adverse costs in respect of such applications – and will not charge him any common fund costs”. However, it would seem that he was only referring to the Second Discovery Application.

10.  During the hearing, Mr. Burke agreed that the hearing should deal with the costs of both the First and the Second Discovery Applications.

11.  After some submissions, Mr. Burke informed the court that he agreed to the court imposing wasted costs orders in both applications, except that he would only dispute as to the extent of the wasted costs order and the basis of the costs.

12.  According to PD14.5, imposing a wasted costs order would involve a 2‑stage procedure so that, amongst others, the party against which the order is considered would have ample opportunity to address the court.  As Mr. Burke now agreed to wasted orders being imposed, he has also agreed that such a procedure would not be required.

13.  As such, “the first stage hearing” is now redundant and this hearing is like “the second stage hearing” for the court to consider “how much of the wasted costs are the responsibility of the legal representative, specifying the extent of the costs recoverable in the award.” (see Hong Kong Civil Procedure 2018 PD14.5/7 on page 1937).

EXTENT OF THE WASTED COSTS ORDER

14.  As far as the extent of the wasted costs order was concerned, Mr. Burke submitted that there were 4 stages in the matter: the date of the initial request for the items, the date of the application to court with the plaintiff’s affidavit, the date of the affidavit in opposition, and the hearing date. He invited the court to look at each individual items requested for specific discovery and decide from which stage the wasted cost order should apply.  He raised criticisms on the defendants’ handling of the case including the lack of response to his initial requests.

15.  I would not take this approach as this would make this into a “full-on” taxation process.  The jurisdiction exercised under O.62 r.8 is a summary jurisdiction bearing in mind the principle of proportionality (see Hong Kong Civil Procedure 2018 under 62/8/8 on page 1240).

16.  Further, the legal principle of specific discovery should apply even at the earliest stage.  The plaintiff cannot justify seeking costs of writing letters requesting specific discovery of numerous items when it was later shown that all along there was no evidence to show his belief that such documents existed and, as such, the letters were all along “fishing exercises”.  This was especially when the whole specific discovery exercise was done in an unreasonable, unsatisfactory, oppressive, frivolous and costs-disproportionate manner that has been described in details in the First Decision, Second Decision as well as the Reasons for Decision of the appeal.

17.  Accordingly, I would adopt a summary approach.

18.  For the First Discovery Application, as I stated in paragraph 105 of the First Decision, out of the 40 items requested, only 3 were of possible relevance to the claim.  I would therefore find that Mr. Burke should personally be liable for 90% of the 1^st and 2^nd defendants’ costs of and occasioned by this application.  The remaining 10% should be remain as costs in the cause.

19.  As for the Second Discovery Application, I have stated in paragraph 51 of the Second Decision my concern that Mr. Burke did not take heed of any “fair warning” in the First Decision but had persisted.  The entire application was dismissed.  I would therefore find that Mr. Burke should personally bear the entire costs of and occasioned by the 1^st and 2^nd defendant’s in this application.

BASIS OF COSTS

20.  Mr. Burke suggested that the costs should be on a party and party basis.

21.  Under paragraph 62/8/9 on page 1240 of the Hong Kong Civil Procedure 2018: “The jurisdiction is not merely punitive but compensatory.  The order is for payment of costs thrown away or lost because of the conduct complained of.  It is frequently exercised in order to compensate the opposite party in action…The costs are usually ordered on indemnity basis.”

22.  However, Mr. Burke referred to PD14.5/7 on page 1937 of the Hong Kong Civil Procedure 2018: “33. Where a wasted costs order is made such costs would normally be payable by the legal representative on a party and party basis...”

23.  This may appear contradictory but one must read the paragraph above: “32. The costs of the wasted costs order application itself are also discretionary.”

24.  Further, what follows in paragraph 33 states: “…But account should be taken of any account on the part of the legal representative and the applicant in the course of the wasted costs proceedings which may indicate a different Order should be made.”

25.  Thus, it is clear that “the party and party costs payable normally” only refers to the costs of the wasted costs proceedings, not to the costs of the subject application of the wasted costs order where paragraph 62/8/9 still applies.

ORDER

26.  I would therefore make the following order:

a) There be a wasted costs order for Mr. Burke to personally bear 90% of the costs of and occasioned by 1^st and 2^nd defendants in the First Discovery Application on an indemnity basis, with the remaining costs be in the cause;

b) There be a wasted costs order for Mr. Burke to personally bear 100% of the costs of and occasioned by the 1^st and 2^nd defendants in the Second Discovery Application on an indemnity basis;

c) The costs of and occasioned by the wasted costs proceedings be personally payable by Mr. Burke to the 1^st and 2^nd defendants on a party and party basis;

d) There be no Legal Aid taxation for the plaintiff’s own costs; and

e) If there is no agreement as to costs, the 1^st and 2^nd defendants shall within 28 days of the order lodge and serve a summary bill of costs and Mr. Burke shall lodge and serve a list of objections 28 days thereafter.  The costs will be summarily assessed on paper.