ER v. LI KWOK CHANG, LAWRENCE

DCEO 10/2016

[2018] HKDC 146

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EQUAL OPPORTUNITIES ACTION NO 10 OF 2016

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DECISION

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1.  This is the respondent’s application for costs of the action.

2.  In equal opportunities proceedings (of which this action is one), [1] the normal rule in civil proceedings that costs follow the event does not apply.  Instead, the District Court Ordinance, Cap 336 (“DCO”) mandates each party to bear its own costs unless the proceedings were brought maliciously or frivolously or that there are special circumstances warranting an award of costs.[2]

3.  It is the respondent’s argument that he should be awarded costs because: (i) the proceedings were brought frivolously and/or (ii) there are special circumstances justifying a costs order in his favour.

4.  The application is opposed by the claimant, who argues that each party should bear its own costs.

A. Background

5.  The applicant is an HIV carrier. He has been treated by Dr John Simon since April 2013.

6.  The applicant is also diagnosed with mild obstructive sleep apnoea.  Between 15 August 2014 and 25 November 2014, he consulted the respondent who is a registered Specialist in Otorhinolaryngology (commonly known as “ENT Specialist”).

7.  After going through some tests and trying some more conservative treatments (such as CPAP therapy[3]), the respondent advised the claimant to consider surgical intervention (“the Surgery”) which was accepted by the claimant.  The respondent made a reservation at the Hong Kong Sanatorium & Hospital for 24 November 2014 for the Surgery and a backup booking for 26 November 2014 at the Canossa Hospital.

8.  As matters progressed, the respondent cancelled the two bookings and did not proceed with the Surgery. Instead, the claimant was referred to Professor Van Hasselt who performed the Surgery on 23 January 2015.

9.  It is the claimant’s case that the respondent had unlawfully discriminated against him (in contravention of ss 6 and 26 of the DDO) on the ground that he is HIV positive, by refusing to provide him with medical services in like terms, conditions or manner that the respondent would have provided to others.

10.  The claimant’s allegations (summarized in paragraph 26 of the Notice of Claim) are that:

(a) The respondent cancelled the Surgery scheduled for 24 and 26 November 2014 even though there were no outstanding matters and when Dr Simon had advised that the Surgery presented no or low risk and could continue as scheduled.

(b) The respondent required the claimant to indefinitely defer the Surgery.

(c) The respondent required the claimant to be subjected to a second opinion and to attend at another ENT Specialist’s office to confirm that his level of infectivity was sufficiently low.

(d) The respondent required the claimant to be subjected to further risk assessments that were not medically necessary, just because the respondent was not comfortable with treating an HIV positive patient.

(e) Upon the claimant’s insistence that the Surgery should go ahead, the respondent suggested the claimant to seek a referral to another ENT Specialist to perform the Surgery and had therefore sought to pass the claimant to another ENT Specialist.

(f) The respondent altered and revised his medical opinion whereby he recommended the claimant to revisit other forms of treatment alternative to surgery, such as CPAP therapy which had been tried and proved unsuitable and/or ineffective.

11.  The respondent denies any discrimination and avers that he had treated the claimant in the same way as he would treat his other patients.

12.  He elaborates in his Notice of Response that:

(a) Despite the enquiries made, the claimant had failed or omitted to reveal that he was HIV positive and had been receiving antiretroviral therapy.  Such information was only revealed to the respondent by Dr Simon (presumably upon the claimant’s instruction) on Saturday, 22 November 2014.  The revelation had necessitated reassessment, further investigation and procurement of advice before proceeding with the Surgery scheduled for the following Monday (ie 24 November 2014) and there was not much the respondent could have done during the intervening weekend.

(b) Dr Simon did not say that the Surgery could continue as scheduled and his intimation of “low” (as opposed to “no”) risk of infection did not dispense with the need for proper and thorough assessment and investigation and/or procurement of further advice.

(c) Between 24 and 26 November 2014, the respondent took steps to proceed with reassessment, further investigation and procurement of advice from more experienced and knowledgeable colleagues (such as Professor Michael Tong of the Department of Otorhinolaryngology, Head and Neck Surgery at The Chinese University of Hong Kong) which could not have been completed by 26 November 2014 and the cancellation and deferment of the Surgery scheduled for 26 November 2014 was therefore necessary and reasonable.

(d) It is incorrect for the claimant to say that the respondent was “not comfortable” with treating HIV positive patients.  The respondent had to proceed cautiously since the claimant was his first patient with a history or diagnosis of HIV positive.  He had doubts as to whether he could handle the Surgery and whether his clinic could handle the claimant’s post-operative care.  It was therefore medically necessary to undergo further risk assessment and his professional view was confirmed by Professor Tong.

(e) The respondent did not “indefinitely” defer the Surgery, as he referred the claimant to Professor Van Hasselt (who was the Chairman of the Department of Otorhinolaryngology, Head and Neck Surgery at The Chinese University of Hong Kong) and secured an early appointment for the claimant (on 15 December 2014).  Referral is one of the management options in treating patients and Professor Van Hasselt was very experienced in sleep apnoea operations and knowledgeable in this area.  As such, the referral (which the claimant agreed to) was in the best interest of the claimant.

(f) The advice that the claimant could consider trying the CPAP machine again was, in the respondent’s professional view, appropriate and, in the circumstances, justified.

(g) The claimant did not request the respondent to restore the Surgery.

13.  In his Reply, the claimant clarifies that:

(a) He is alleging direct discrimination.

(b) Neither the respondent nor his associates had at any time made specific inquiries as to whether he had been diagnosed with any infectious diseases, HIV or otherwise.

(c) He took the view that Dr Simon would be better placed to accurately relay his medical condition to the respondent.

(d) He did not request the respondent to restore the Surgery because he had lost all trust and confidence in the respondent.

14.  After the close of pleadings, the respondent applied for specific discovery of the medical records, notes and reports of Dr Simon and Professor Van Hasselt and from the hospital where the professor carried out the Surgery.  On 22 May 2017, I granted the application after hearing the parties.

15.  On 14 July 2017, the claimant filed a Notice of Discontinuance to wholly discontinue this action before compliance with my order for specific discovery.

B. The application

16.  The claimant is entitled, under rule 15(1) of the District Court Equal Opportunities Rules, Cap 336G (“EO Rules”), to discontinue this action without leave by filing a notice to that effect.

17.  Rule 15 also provides for the consequences of a discontinuance:

“(2) The respondent may, within 14 days after having been served with a copy of that notice, or within any extended period that the Court may on application allow, apply to the Court for an order for costs.

 (3) Subject to sections 73B(3), 73C(3), 73D(3) and 73E(3) of the [DCO], the Court may make any order for costs that it thinks fit.”

18.  The respondent took out his summons to seek costs on 25 August 2017, admittedly beyond the time period prescribed by rule 15(2).  He therefore seeks an extension of time as well.

19.  The respondent’s summons is supported by two affidavits sworn by an Associate of the respondent’s solicitors (Mr Chan). 

20.  On the claimant’s side, the claimant’s solicitor (Mr Vidler) and a paralegal (Ms Overbury) each filed an affirmation to oppose the application.  In Mr Vidler’s affirmation, he exhibited some documents to confirm that the claimant had been admitted to Mount Sinai West Hospital in New York between 6 and 15 February 2017 for psychosis.  There is also a letter from the claimant’s attending psychiatrist who confirmed that the claimant had been treated for severe anxiety, major depression, panic disorder, paranoia and post-traumatic stress disorder since 6 December 2016 and that the claimant had been unresponsive to treatment and had not been able to leave his apartment for months.  Mr Vidler emphasized in his affirmation that but for the claimant’s ill-health, the claimant would have pursued these proceedings vigorously.

C. The argument

C1. Preliminary objection to the respondent’s representation

21.  Ms Souza for the claimant took a preliminary point at the hearing.  She complains with reference to some New Zealand and local authorities that Mr Chan, who has sworn the two affidavits for the respondent, should not appear as advocate at the hearing.  I do not think there is any merit in her complaint. 

22.  In Vector Gas Ltd v Bay of Plenty Energy Limited, [4] the Supreme Court of New Zealand observed that it was generally not desirable for practitioners who had been personally involved in the matters being litigated to appear as counsel (for fear of losing objectivity).  And the New Zealand Court of Appeal later confirmed in Evgeny Orlov v The National Standards Committee No 1 [5] that the courts did have jurisdiction to remove counsel in a cause in which counsel intended to give evidence or had sworn affidavit on a contentious aspect.

23.  In the local case of UES International (HK) Ltd v Maritima Maruba SA,[6] Anthony Chan J said in the same vein that it could not be the role of a professional legal advisor to give evidence on contentious matters in respect of which he might be subject to cross-examination.

24.  In my view, what distinguishes this case from those authorities is that Mr Chan did not depose to any contentious matters in his affidavits.  In the first affidavit, he recited the background and summarized the respective case of the parties.  He exhibited some pre-action correspondence as well as the transcripts of the audio recordings recorded by the claimant, based on which he articulated on the basis of the respondent’s application.  He also explained the lateness of the application.  In the second affidavit, he exhibited the witness statement of Professor Tong and some more recent inter-partes correspondence in reply to the affirmations filed by the claimant. The contents and exhibits in Mr Chan’s affidavits are within the knowledge and possession of the respondent’s solicitors.  Mr Chan, being an Associate of the respondent’s solicitors, would be a suitable person to place these materials before the court for the purpose of this argument. 

25.  Ms Souza argues that the explanations proffered by Mr Chan as to the delay may be contentious.  But the claimant is not challenging the factual basis of the explanation.  Rather, the court is being asked to evaluate the sufficiency of the explanation and Mr Chan’s credibility is not in issue. 

26.  As Mr Chan is not concerned with any contentious matters, there can be no objection to the respondent’s choice for him to appear as advocate.

C2. The time application

27.  It is common ground that the respondent was 28 days late in making the application.

28.  Ms Souza argues that the delay is significant and the respondent has given no good reason for it.  I agree.

29.  Essentially, Mr Chan explains that the respondent’s solicitors took time to (i) deal with the voluminous documents involved; (ii) assess the merits of the costs application; and (iii) seek instructions from their “real” client located overseas – the Medical Protection Society in the UK.  With respect, I do not think these explanations, whether considered separately or together, can justify the delay.

30.  It does not appear that this case is heavy on documentation.  The respondent has only exhibited a few inter-partes correspondence and a 20-odd pages’ transcript to Mr Chan’s affidavits. 

31.  The respondent’s solicitors should be familiar with the inter-partes correspondence and they were made aware of the audio recordings through the claimant’s list of documents dated 21 December 2016.  The respondent had threatened in the Notice of Response (at para 86) that he may seek costs against the claimant.  It is difficult to understand why it took so long for the respondent to take out the application after the discontinuance.  And the fact that the solicitors might need to take instructions from the UK does not advance the respondent’s cause given the availability of modern means of communication.

32.  In the course of his submissions, Mr Chan refers me to the recent Court of Appeal decision of Asgain Company Limited v Cheng Ka Yan[7] and observes that the Court of Appeal has condoned delay of as much as 2 months (see The Incorporated Owners of Freder Centre v Gringo Ltd[8] cited in paras 6-9 of Asgain).

33.  In my view, the authorities cited by Mr Chan dealt with very different scenario (delay on the part of an appellant in serving his notice of appeal after obtaining leave to appeal) and one may not legitimately draw any comparison.  The Court of Appeal emphasized that there had been clear evidence of an intention to pursue the appeal and the delay was merely an oversight.  In the present case, the respondent did nothing within the statutorily prescribed timeframe and there was nothing to indicate that he would seek costs against the claimant.  In my view, the claimant was entitled to think that these proceedings had finally come to an end following the filing of his Notice of Discontinuance. 

34.  The respondent has taken three times as much time to apply for costs.  No good reason has been proffered and I refuse to extend time for him to take out the application. 

35.  In deference to the submissions made, I shall continue to consider the substantive application.

C3. The costs application

36.  S 73C(3) of the DCO is the relevant provision and is in these terms:

“Each party to any proceedings in the Court in the exercise of its jurisdiction under the [DDO] shall bear its own costs unless the Court otherwise orders on the ground that–

(a) the proceedings were brought maliciously or frivolously; or

(b) there are special circumstances which warrant an award of costs.”

37.  Mr Chan and Ms Souza have both referred me to some local authorities,[9] from which I discern the following principles:

(a) The special costs arrangement for equal opportunities proceedings must be understood in the context of the court exercising jurisdiction under legislations that seek to eliminate discrimination and to change the prejudicial attitudes that may exist in society.  If costs are readily ordered against unsuccessful claimants, those aggrieved by discrimination and related conduct may be deterred from seeking legal redress and the policy of the legislations would be frustrated.  On the other hand, the court should be able to protect respondents from unmeritorious claims.  In an attempt to strike a balance, the legislature has decided that there should generally be no order as to costs but the court retains the power to make an order in two exceptional circumstances, namely, when the proceedings were brought maliciously or frivolously, and when there are special circumstances that warrant an award. 

(b) Proceedings were brought frivolously when the claimant subjectively knew that there was no substance in his or her claim and that it was bound to fail.  A claim is also frivolous if, objectively considered, it is so manifestly misconceived that it can have no prospect of success. 

(c) The court is given a wide discretion under the “special circumstances” limb to do justice.  Whilst it is impossible to list out all the circumstances in which costs may be awarded, the court would bear the rationale behind the costs arrangement in mind when determining this issue. 

38.  What divides Mr Chan and Ms Souza is their interpretation of the decision of D v S in relation to the “special circumstances” limb.  This will be discussed below.

C3a. Were the proceedings brought frivolously?

39.  According to Mr Chan, the claimant should have known before commencing this action that his claim was lacking in merits:

(a) In the letter dated 29 April 2015 in reply to the claimant’s letter before action, the respondent has made it clear that the appointments for the Surgery were cancelled due to medical and professional reasons and not because of any discrimination. 

(b) In another letter dated 24 December 2015, the respondent further explained (with reference to hospital guidelines) how the claimant’s allegations were illogical and flawed.

(c) All along, the claimant was in possession of the audio recordings he covertly recorded of his conversations with the respondent.  It is apparent from the recordings that the respondent had clearly explained the reasons behind the cancellations and that there had been no discrimination.  It would have posed unjustifiable hardship on the respondent had the claimant insisted on proceeding with the Surgery.

40.  In the premises, it should have been apparent to the claimant (so argues Mr Chan) that the respondent had not treated him less favourably because of his HIV status. Despite the explanations and the audio recordings, the claimant chose to commence a hopeless action and that is why the respondent says the proceedings were brought frivolously.

41.  Ms Souza, on the other hand, submits that this is a clear case of direct discrimination.  She says that the claimant had been subjected to less favourable treatment because medical treatment which he had been advised to undergo was deferred and/or cancelled.  Even if the respondent had indeed deferred the Surgery for the reasons he alleged, the respondent had made such a decision because of the claimant’s HIV status.  Under s 3 of the DDO, if an act is done for 2 or more reasons, one of which is disability, then the act is deemed to be done because of the disability for the purposes of the DDO.

42.  She refers to the opinion of Dr Ivan Hung of The University of Hong Kong and submits that there was no objective need for the respondent to defer the Surgery.[10]

43.  She even doubted the respondent’s credibility, in terms of the matters deposed to in paras 11-13 of Ms Overbury’s affirmation.

44.  She argues that it is within the claimant’s rights to consider that the respondent’s alleged reasons are not relevant or genuine concerns, and that the effects of his actions are discriminatory.  The fact that the respondent subjectively viewed his actions as necessary, or that he might have so informed the claimant does not mean that his actions cannot be considered in law to be unlawfully discriminatory for the purposes of the DDO.  There is therefore no basis for the court to find prior to hearing the evidence that the present claim was brought frivolously.

45.  In reply, Mr Chan argues that Dr Hung is only a Specialist in Infectious Diseases but not a surgeon or an ENT Specialist and so is incapable of rendering an opinion about whether an operation could or should proceed from a surgeon’s (or an ENT Specialist’s) point of view.

46.  It seems to me that the diametrically opposite stance taken by the parties is due to their (very different) choice of the appropriate comparator.

47.  S 8 of the DDO requires that:

“A comparison of the cases of persons with or without a disability under section 6 shall be such that the relevant circumstances in the one case are the same, or not materially different, in the other.”

48.  The claimant has proposed that “a hypothetical man, without any disability, who suffered from mild obstructive sleep apnoea and who was assessed by the respondent to require the Surgery” would be an appropriate comparator: see para 27 of the Notice of Application. 

49.  For the respondent, the relevant comparator is “a patient in respect of whom further medical information has come to light prior to a scheduled operation which in the professional judgment of the respondent requires further assessment, investigation or advice”: see para 72 of the Notice of Response. 

50.  So who is right?  The claimant’s contention seems to be consistent with the recent decision of Law Chi Yuen v Secretary for Education.  In that case, Thomas Au J ruled, as a matter of construction, that the words “a person without disability” in s 6(a) of the DDO mean a person without any disability.[11]  Hence, the claimant’s submission that the appropriate comparator should be someone “without any disability”.

51.  However in an earlier case (M v Secretary for Justice[12]), the Court of Appeal approved the majority view of the Australian High Court in Purvis v State of New South Wales[13] that in considering the circumstances of the suitable comparator, it would be artificial to exclude from consideration some of the circumstances that result from the disability.

52.  The following observations from the Australian High Court are pertinent for present purposes:

“222. … It does not follow, however, that the ‘circumstances’ to be considered are to be identified in the way the appellant contended. Indeed, to strip out of those circumstances any and every feature which presents difficulty to a disabled person would truly frustrate the purposes of the Act. Section 5(2) [similar to s 8 of the DDO] provides that the relevant circumstances are not shown to be materially different by showing that the disabled person has special needs. The appellant’s contention, however, went further than that. It sought to refer to a set of circumstances that were wholly hypothetical – circumstances in which no aspect of the disability intrudes. That is not what the Act requires.

223. In requiring a comparison between the treatment offered to a disabled person and the treatment that would be given to a person without the disability, s 5(1) [similar to s 6(a) of the DDO] requires that the circumstances attending the treatment given (or to be given) to the disabled person must be identified. What must then be examined is what would have been done in those circumstances if the person concerned was not disabled. The appellant’s argument depended upon an inversion of that order of examination. Instead of directing attention first to the actual circumstances in which a disabled person was, or would be, treated disadvantageously, it sought to direct attention to a wholly hypothetical set of circumstances defined by excluding all features of the disability.

224. The circumstances referred to in s 5(1) are all of the objective features which surround the actual or intended treatment of the disabled person by the person referred to in the provision as the ‘discriminator’.  It would be artificial to exclude (and there is no basis in the text of the provision for excluding) from consideration some of these circumstances because they are identified as being connected with that person’s disability.  There may be cases in which identifying the circumstances of intended treatment is not easy.  But where it is alleged that a disabled person has been treated disadvantageously, those difficulties do not intrude.  All of the circumstances of the impugned conduct can be identified and that is what s 5(1) requires.  Once the circumstances of the treatment or intended treatment have been identified, a comparison must be made with the treatment that would have been given to a person without the disability in circumstances that were the same or were not materially different.”

53.  The respondent’s contention seems to be supported by the above authorities, as he proposes that the appropriate comparator should be a patient who is not HIV positive but “in respect of whom further medical information has come to light prior to a scheduled operation which … requires further assessment, investigation or advice”.

54.  Unfortunately, neither party has seen fit to address me on the circumstances of the appropriate comparator and the above authorities were not referred to in argument.  It would not be right for me to resolve this conundrum on my own without argument. 

55.  Furthermore, the challenge on the respondent’s credibility and the dispute over the expertise of Dr Hung can only be resolved at trial.

56.  At this stage, I am not convinced that the claimant’s claim is manifestly misconceived or that it has no prospect of success.  The respondent’s application on the ground of frivolousness fails.

C3b. Are there special circumstances that warrant an award of costs?

57.  Mr Chan complains that the claimant’s late disclosure of his HIV condition to the respondent has not only brought about these proceedings but put the respondent and his staff at risk and jeopardised the claimant’s own welfare.  He submits that this constitutes “special circumstances” justifying a costs order against the claimant in line with D v S.

58.  Ms Souza says that the claimant has good reason to discontinue the proceedings and has conducted the proceedings reasonably up to that point.  She argues that the complaint impinges upon the claimant’s right to privacy and insists that the conduct complained of should not be taken into account.

59.  I do not think D v S supports the respondent’s contention.  In that case, the claimant was employed by the respondents (husband and wife) as a live-in domestic helper.  She complained that the husband had on 6 occasions exposed his private parts behind her when she was working at the respondents’ premises.  She was very frightened and was afraid that she would be sexually assaulted.  She brought proceedings under the Sex Discrimination Ordinance alleging sexual assault, sexual harassment and discrimination by way of victimisation.  The court was asked to deal with the issue of costs after the parties had come to a settlement on both liability and quantum.

60.  Judge KW Wong accepted, after hearing the parties, that there were “special circumstances” justifying an award of costs and ordered the respondents to pay the claimant’s costs on an indemnity basis.

61.  The learned Judge reasoned (at para 27 of the judgment) that:

“In the Court’s judgment, the overall circumstances, including the nature of the conduct being complained of, the pre- and post-proceedings conducts should be taken into account for the purpose of assessing the ‘special circumstances’.”

62.  He took into account: (i) the nature of the husband’s conduct, which the Judge regarded as clearly amounting to discriminatory or unwelcomed advances or harassment (para 23); (ii) the over-whelming evidence that proved the husband’s wrongdoings, including the video kept by the claimant of the 6^th occasion when the husband exposed himself (paras 23 & 6); (iii) notwithstanding their acknowledgement that what the husband had done was wrong, the respondents exploited the claimant’s vulnerability and put pressure on her to delete the video, to resign and to leave Hong Kong (para 24); (iv)  when the claimant moved out of their premises, the respondents refused to let her leave with her belongings (para 24); (v) the claimant was forced to initiate proceedings because the respondents had refused to settle (for fear that any compromise would adversely affect the ongoing criminal proceedings against the husband) (para 25); (vi) the respondents deliberately prolonged the litigation by filing a defence that was devoid of merits (para 26); (vii) the respondents mounted a preliminary challenge, causing the claimant to expend further costs into commencing another action for her common law claim (para 26); and (viii) after the husband had been convicted and sentenced to a term of imprisonment, the respondents (instead of settling) saw fit to amend their defence, thus forcing the claimant to incur further costs and expenses (para 26). 

63.  In his overall assessment, “[t]he proceedings should have been avoided totally” (para 26) and the claimant was forced to incur “unnecessary or added costs and time” (para 25).  Thus, the learned Judge evaluated in terms of the costs of the proceedings.

64.  In the present case, the conduct complained of (that the claimant should have informed the respondent earlier of his HIV condition) has no bearing on the costs of the subsequent proceedings.  Rather, the respondent wants the court to express its disapproval at such conduct by ordering costs against the claimant. 

65.  To start with, the objectionability of the claimant’s conduct is a matter of controversy between the parties and remains unsettled at this stage.  The respondent’s expert (Professor Tong) takes the view that the revelation of the claimant’s HIV condition would entail more vigorous assessments, whereas the claimant’s expert (Dr Ivan Hung) opines that no other risk assessment would be necessary.

66.  More importantly, the respondent’s contention is contrary to the indemnity principle.  In Harold v Smith, Bramwell B explained that:[14]

“Costs as between party and party are given by the law as an indemnity to the person entitled to them; they are not imposed as a punishment on the party who pays them, nor given as a bonus to the party who receives them.”

67.  I do not think there are “special circumstances” in this case justifying an award of costs.

D. Disposition

68.  For the above reasons, there is no good reason for me to extend the time for the respondent to apply for costs under rule 15 and such an application would be futile in any event. The respondent’s summons is therefore dismissed.

69.  The parties have agreed that costs of this application should follow the event.  I order the respondent to pay the claimant the costs of this application to be taxed if not agreed.  The claimant’s own costs be taxed in accordance with Legal Aid Regulations.