CHAN SHEK v. MILKYWAY IMAGE (HONG KONG) LTD

HCPI 295/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 295 OF 2006

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RULING

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1. In a written judgment herein dated 6 October 2009 I gave judgment to the plaintiff in the sum of $789,696 against the defendant in respect of this personal injuries claim brought by the plaintiff against the defendant after a contested trial on both liability and quantum.

2. In the written judgment I also made the usual costs order nisi giving costs of the action to the plaintiff.

3. This is the defendant’s application for variation of the costs order nisi.  The application is made by Summons dated 19 October 2009.

4. The variation to the costs order sought by the defendant involves a variety of different areas or aspects of the case and/or the trial.  Those different aspects can be summarized as follows :

(a)  the adjournment of the trial on 26 March 2008;

(b) the late discovery by the plaintiff of his travel records;

(c) the interrogatories issued by the defendant;

(d) factual issues relating to liability raised by the plaintiff in the pleadings;

(e)  factual issues relating to quantum;

(f)  conduct of the plaintiff which significantly lengthened the trial; and

(g) the scale of costs whether it should be District Court or High Court scale by reason of the amount ultimately awarded.

Adjournment of the trial

5. The trial was initially scheduled for four days to commence on 25 March 2008.  On that day, plaintiff’s counsel opened the plaintiff’s case taking up the entire day.

6. When the matter resumed on 26 March, the defendant sought and was granted an adjournment of the entire trial on the basis of late discoveries of documents by the plaintiff.  The plaintiff did not oppose the application for adjournment but indicated that there would be substantial amendments to be made to the Revised Statement of Damages.  Costs was reserved.  The trial was adjourned part heard to 15 December 2008.

7. As part of the variation to the costs order nisi, the defendant now seeks to ask that the costs of and incidental to the adjournment of the trial on 26 March 2008 be to the defendant and to be taxed on High Court scale if not agreed.

8. This has not been opposed by the plaintiff and will accordingly be granted as sought.

Late discovery of travel records and interrogatories

9. During the adjournment of the trial between March and December 2008, the plaintiff sought from the Immigration Department his travel records and the defendant administered further interrogatories which the plaintiff answered.

10. The travel records were only received from the Immigration Department on the Saturday immediately before the resumption of the trial on 15 December 2008.  That late discovery however did not result in any further adjournment of the trial.

11. In the circumstances, I can see no necessity for making any separate costs order for the late discovery of the plaintiff’s travel documents.  To some extent that has already been covered by the costs order made above for the adjournment of the trial.

12. As for the interrogatories, they were administered by the defendant and answered by the plaintiff.  The costs in respect of such interrogatories ought to be part and parcel of the action.  Again I see no necessity in making a separate costs order.

Factual issues on liability, quantum and conduct of plaintiff

13. These can be dealt with together as they relate to the costs of the trial.  Indeed these matters had collectively formed the main thrust of the defendant’s application for variation of the cost order nisi.

14. Complaint was made by the defendant that the plaintiff had raised a number of subsidiary issues on liability which were found against the plaintiff. These subsidiary issued included :

(a)  whether there was a second camera set up on trolley on rails;

(b) how the safety mattress came to be removed;

(c) whether there was an L-shaped screen on the desk; and

(d) whether it was the plaintiff shown in the final product delivering a kick.

15. In the judgment given, I found against the plaintiff on facts in respect of all these subsidiary issues raised, albeit that the plaintiff was ultimately successful on the issue of negligence as to how the accident happened.

16. In respect of these unsuccessful subsidiary issues raised by the plaintiff, the defendant now seeks an order that the plaintiff bears the costs of the defendant for 4½ days of the trial as well as the costs of preparing the documentary evidence to meet these subsidiary issues, alternatively that the plaintiff be deprived of that part of his costs.

17. Complaint was also made by the defendant relating to the issue of quantum in that the plaintiff did not make complete disclosure of his earnings, both pre-accident and post-accident, and also failed to provide proper answers to the interrogatories administered by the defendant in relation to quantum issues.  In this respect the defendant estimates that some 4½ days were unnecessarily wasted on the issue of quantum had the plaintiff conducted himself properly on those matters by giving proper answers and making the necessary discovery.

The applicable principles

18. The applicable principles relating to the question of costs are set out in the case of In re Elgindata Limited (No. 2) [1992] I WLR 1207.  Those principles have been applied to Hong Kong by the courts here.  As applied to Hong Kong, those principles can be summarized as follows :

(i)  costs are in the discretion of the court;

(ii)  they should follow the event, except where it appears to the court that in the circumstances of the case some other order should be made;

(iii) the general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or part of his costs;

(iv) where the successful party raises issues or makes allegations improperly or unnecessarily the court may not only deprive him of his costs but may order him to pay the whole or part of the unsuccessful party’s costs.

19. Kwan J (as she then was) in the case of Active Base Ltd v Roderick John Sutton and ors HCCW470/2005 further focused in on and summarized the relevant propositions in respect of the applicability of principle (iii) above, and which I can do no better than to repeat as follows :

(1) the party seeking to displace the general rule that costs should follow the event bears the burden of showing that the circumstances justify the exceptional course of such displacement;

(2) the court has a discretion to exercise whether to deprive a party of all or part of his costs in respect of those issues on which he has failed.  It would be wrong to read principle (iii) in Elgindata as laying down a rule, instead of a discretion.  The court has to exercise its discretion to achieve a just result having regard to the circumstances of the case;

(3) where the party who has been successful overall has failed on one or more issues, particularly where such issues have occupied a significant amount of hearing time or led to the incurring of significant expense, the court may in its discretion order a reduction in the award of the costs to him.  An issue for this purpose must be something so distinct and separate in itself that the decision of it constitutes an “event”;

(4) it is not the case that lack of success in any specific argument of itself attracts a costs sanction.  It is only if it is possible to isolate an issue in the case that it can properly be said it is unnecessarily pursued as having no bearing on the real questions in the suit that it would be proper to deprive the successful party of all costs of that issue, otherwise a more general assessment should be made.  So unless discrete points can safely be isolated and can be shown to have led to a wastage of time and costs, the practice of the court is not to engage in any “filleting” of cases according to the success or failure of the disparate issues which, when taken cumulatively, constitute the dispute to be judged.

Decision

20. I have no hesitation coming to the view that principle (iv) in the Elgindata case referred to above has no application in the present case and that there is no question of the plaintiff having to bear any part of the costs of the action.

21. The only question is whether I should exercise my discretion in applying principle (iii) in Elgindata to the cost order here.

22. In that respect, and applying the propositions summarized by Kwan J in the case of Active Base Ltd v Sutton I am of the view that my discretion should not be exercised in applying principle (iii) in Elgindata here for the following reasons.

23. In so far as the unsuccessful subsidiary issues raised by the plaintiff are concerned, all of those subsidiary issues were factual matters alleged to have taken place at the time of the filming of the stunt when the accident occurred.  In that sense they cannot be wholly isolated from the cause and the occurrence of the accident, even though at the end of the day those factual allegations made by the plaintiff were found against him.  And in that sense, these subsidiary issues do not constitute an “event” as being so distinct and separate in itself.

24. It is clear from the propositions summarized above, the court must not engage in any “filleting” of cases, which is precisely what the defendant is asking the court to do in coming to a decision that on these unsuccessful subsidiary issues the plaintiff should be deprived of part or all of its costs.

25. Secondly, while it is true that an inordinate amount of time has been taken up in dealing with the question of liability, the blame for that does not lie solely with the plaintiff for raising these subsidiary issues.  The defendant is also itself to blame for its failure to produce the NG film which was taken when the accident occurred.  Had the NG film been produced to the court for viewing, some or all of these subsidiary issues may well have been laid to rest (as well as the question of how the accident occurred) without the wastage of the time actually spent in the trial to determine that issue.

26. Thirdly, it is also true that the plaintiff has from the very outset grossly exaggerated the amount of his damages by exaggerating his pre-accident income and also by playing down what he was able to earn after the accident during the pre-trial period.  This is clearly seen by the fact that during the trial, the plaintiff did tone down the amount claimed in his Revised Statement of Damages.  Moreover, during cross-examination the plaintiff had to make a number of concessions regarding his alleged earnings.  At the end of the day, after findings of fact was made by the court, the amount of damages awarded to the plaintiff was as per the judgment, much less than what the plaintiff claimed.

27. However, be that as it may, in the absence of any payment into court (or structured payment in as it is now termed), the plaintiff was left with no alternative but to proceed with the trial to the bitter end, even in order to recover the amount for which judgment was ultimately given.

28. It would have been a simple matter for the defendant to have made a payment into court and to show at the end of the day (if such payment in was not accepted by the plaintiff) that the payment in was sufficient to beat the amount ultimately awarded.

29. However, it was clear to all concerned that the defendant’s stance throughout the trial was that it was not liable to the plaintiff at all.  The issue of liability was fought tooth and nail by the defendant.  Not one inch was conceded by the defendant on the issue of liability.  That probably explains the absence of any payment in by the defendant.

30. In those circumstances, having now failed on the issue of liability, it does not augur well for the defendant to say that the plaintiff should be deprived of some part of his costs of the action for exaggerating his damages.

31. Accordingly, I decline to accede to the application of the defendant that the general rule that costs should follow the event should not be applied here.

Scale of costs on taxation

32. At the end of the day the plaintiff obtained judgment in the amount of $789,696.00, well below the jurisdiction level of the District Court.

33. On the basis of that amount recovered, the defendant submits that such costs of the action given to the plaintiff should be taxed on the District Court scale and not the High Court scale.

34. On the other hand, the plaintiff submits that by applying the proper test, the question to ask was when the proceedings started, whether there was reasonable prospect of the plaintiff recovering damages beyond the level of the District Court jurisdiction ignoring any question of contributory negligence. In this respect the plaintiff submits that there was and therefore the High Court scale of taxation should apply.

35. In coming to a decision on this issue, I note firstly that there was very little dispute between the parties as to the injuries and the disabilities suffered by the plaintiff from the accident.

36. If it was thought by the plaintiff’s solicitors that there was any likelihood of recovering damages above the District Court jurisdiction level, that could only have been due to the fact that the plaintiff had exaggerated his pre-accident earnings and also played down his post accident income to such an extent that the amount of damages initially pleaded by the plaintiff in the Revised Statement of Damages came to over $5 million.

37. Moreover, the ultimate amount of damages awarded to the plaintiff was on the basis of full liability of the defendant since I did not find any contributory negligence on the part of the plaintiff.  Therefore the question of contributory negligence had no part to play in assessing damages in this case.

38. Given all the circumstances of this case, I am of the view that had the plaintiff not embellished those factual matters relating to his pre-accident earnings as well as his actual earnings during the pre-trial period, it would have been quite clear to his solicitors that this matter ought to have been a District Court matter given the amount of damages ultimately assessed.

39. In short had the plaintiff been forthright when giving his instructions to his solicitors, this matter would not have been commenced in the High Court since there could have been no reasonable prospect for the plaintiff to have recovered damages beyond the jurisdiction of the District Court.

40. Accordingly, I am prepared to accede to the defendant’s suggestion that the scale of taxation for the costs of this action recovered by the plaintiff be on the District Court scale instead of the High Court scale.

41. For the sake of clarity, I should state that those costs awarded to the defendant ought to be taxed on the High Court scale if not agreed since it was the plaintiff who chose the forum of the High Court.

The costs order

42. For the reasons given above, there will accordingly be the following costs order :

(1) costs of and incidental to the adjournment of the trial on 26 March 2009 be to the defendant to be taxed on the High Court scale if not agreed;

(2) costs of the action (save and except those costs ordered in (1) above) be paid by the defendant to the plaintiff to be taxed on District Court scale if not agreed.

Costs of this application to vary the costs order nisi

43. Neither party has been wholly successful on this application since they have each succeeded partly only in their submissions.

44. Accordingly, I make no order as to costs on this application and each party is to bear its own costs of this application.