KWAN TAK SHEUNG v. FAIRWOOD FAST FOOD LTD

DCEC 1159/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1159 OF 2015

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REASONS FOR DECISION

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Introduction

1.  The applicant brought the present employees’ compensation proceedings against her employer, the respondent, in respect of personal injuries she had allegedly suffered in an accident on 16 August 2014 in the course of her employment.

2.  On 24 December 2015, the applicant’s solicitors, Leung & Associates (“Leung”), filed a summons for leave to amend the applicant’s Application by substituting the pleaded date of the accident of 16 August 2014 by 15 August 2014.

3.  In spite of the respondent’s consent to the amendment, the hearing could not be vacated as the parties were unable to agree on costs.  Whilst the applicant agrees to pay the respondent’s costs of and occasioned by the amendment, Leung contends that the respondent should pay the applicant’s costs of and occasioned by the respondent’s unreasonable objection to the proposed amendment before the summons was issued.

4.  Solicitors for the respondent, Lee & Tang (“LT”), through Mr Fung, argue that they have acted reasonably and contend that the applicant should bear the entire costs of and occasioned by the amendment application.

5.  After hearing the parties’ submissions, I made the following costs orders:

(1) Costs of and occasioned by the applicant’s amendment be to the respondent in any event, which costs should include the costs of perusing the amended Application, the summons (excluding the supporting affirmation) and the amended Answer.

(2) Costs before the hearing (including the correspondence exchanged between 10 December 2015 and 28 December 2015, and the supporting affirmation) and of the hearing of the summons be paid forthwith by the respondent summarily assessed at $5,200.

6.  Costs order (1) is not controversial.

7.  These are the reasons for costs order (2).

Has the respondent objected unreasonably

8.  After the Civil Justice Reform, all amendments, generally speaking, will, subject to two conditions, be allowed at any stage of the proceeding on such terms as to costs or otherwise as the court thinks just. The first condition is that an amendment will be refused or disallowed when the resulting amendment would prejudice or cause injury to the opponent which cannot be properly compensated for by costs. The second condition (as introduced by the Civil Justice Reform) is subject to the court being satisfied that the proposed amendment is “necessary” either for disposing fairly of the cause or matter, or for saving costs: Hong Kong Civil Procedure 2016 Vol 1 (“HKCP”), para 20/0/2, p 476.

9.  Thus, the court would generally grant leave to amend on terms by ordering the party seeking the amendment to pay in any event all the costs incurred and thrown away by the amendment.  In the event, however, that a party has objected to the amendment unreasonably or is unsuccessful in resisting an application to amend, the court has a discretion to make a separate order that the costs occasioned by such resistance or objection to be paid by the objecting party: see Lessy SAR v Pacific Star Development Ltd [1996] 2 HKLR 1.

10.  Thus, the parties are in agreement that were this court to find that the respondent has objected unreasonably, I have the discretion to order the respondent to pay the applicant the costs occasioned by the respondent’s objection.

11.  After having carefully perused the correspondence exchanged between Leung and LT before the hearing, I come to the view that the respondent has, before the summons, objected to the amendment unreasonably. The reasons are as follows.

12.  Before issuing the amendment summons on 24 December 2015, Leung, on 10 December 2015, wrote to LT to seek their consent to an amendment the applicant intended to make in her Application by amending the date of accident to 15 August 2014 instead of 16 August 2014. Enclosed with the letter were a draft Amended Application and a copy of the Amended Form 2 to the Labour Department which shows the amended date of the accident. 

13.  The applicant’s proposed amendment is relatively simple and clear-cut. Further, in my view, it also satisfies the two conditions outlined in the HKCP discussed in para 8 above, namely, the resulting amendment would not prejudice or cause injury to the respondent which cannot be properly compensated for by costs; and that the proposed amendment is “necessary” either for disposing fairly of the matter, or for saving costs.

14.  I consider that a reasonable response to the applicant’s proposed amendment should have been for LT to agree to the proposed amendment    but subject to the applicant’s agreement to pay for all the costs of and occasioned by the proposed amendment.

15.  LT did not adopt this reasonable attitude. Instead, LT, in their written response on the same day, stated that they did not consent to the proposed amendment and that that they would contest the applicant’s intended application for leave to amend.

16.  Faced with such an uncompromising stance, Leung, in my view, was left with no choice but to issue a summons applying for the grant of leave to amend.

17.  This led to the further correspondence exchanges, with Leung informing LT on 16 December that they were compelled to prepare a draft summons and a supporting affirmation. 

18.  Even though Leung had, on 23 December, refused LT’s request for the sight of the summons and the supporting affirmation, I accept the submissions by Mr Leung (solicitor for the applicant) that costs - given LT’s indication of their objection in the previous correspondence - would not have been saved whether LT had sight of those documents or not, as the applicant had already incurred costs in preparing these documents by that stage. 

19.  In exercising my discretion in making a separate costs order against the respondent, I have not lost sight of the fact that LT had immediately withdrawn their objection to the proposed amendment as soon as they were served with the summons. I consider, however, that their consent came too late as the costs had already been unnecessarily wasted by LT’s earlier objection, and the hearing had further been necessitated by LT’s unreasonable refusal to accept Leung’s reasonable offer in their letter of 28 December for the costs from 11 December to be in the cause. 

20.  I further reject Mr Fung’s argument that the respondent had been reasonable in maintaining their objection on the ground that they had not been informed of the applicant’s reason for the proposed amendment.

21.  From the correspondence exchanged between the parties,   it is abundantly clear to me that when Leung first wrote to LT on 10 December for their consent to the proposed amendment, LT would have had knowledge of the applicant’s reason for the proposed amendment. This is because the applicant’s work attendance records for the month of August 2014 were provided by LT to Leung on the latter’s request after LT had accused the applicant of having brought the present fraudulent application against the respondent in their letter to the Commissioner for Labour on 10 July 2015.  LT would have known that as the work attendance record showed that the applicant was in fact on duty (albeit having been late for two hours) on 16 August 2014, the applicant would have realized that the pleaded accident date of 16 August 2014 was wrong and an amendment was needed to cure the error.

22.  Even if I were prepared to accept that the respondent did not know the reason for the amendment before they were served with the summons on 24 December, had LT acted sensibly, they could have in their reply on 10 December simply asked Leung to provide the reason for the amendment.   That they had not done. Instead,   contrary to the underlying objectives of the Civil Justice Reform, LT gave a contentious response without giving any reasons for their objection.

23.  For the reasons above, I exercised my discretion and made costs order (2) against the respondent.