WONG KWEI PIU v. CHOW CHI CHEUNG t/a SUN LEE CO

DCEC 1082/2017 & DCPI 2318/2017

(Heard Together)

[2023] HKDC 1253

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1082 OF 2017

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 2318 OF 2017

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DECISION

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A.  An Overview

1.  In these related employees’ compensation and personal injuries proceedings (respectively the “EC Action” and the “PI Action”), the employee (“Piu”) is the applicant/‌plaintiff; and the employer, Sun Lee Company (“Employer”), is the respondent/‌defendant.

2.  Piu was granted legal aid on nil contribution. His first Legal-aid assigned solicitor was Mr Burke (“Mr Burke”) of Messrs Burke & Co. On 7 March 2019,[1] Mr Tam Kam Tong (“Mr Tam”) was assigned by the Director of Legal Aid to replace Mr Burke. It is now known that Mr Tam has been Piu’s assigned solicitor throughout since he replaced Mr Burke despite his multiple changes of firms from Huen & Partners (“Huen”), Ellen Au & Co (“Ellen Au”), H Y Leung & Co LLP (“HY Leung”) to Chan & Associates. He is now with Yu Sun Yau Mak & Lawyers (“YSYM”).

3.  On 11 July 2017, about 2 months after the EC Action was commenced, the Employer made a sanctioned payment of $306,841.38 into court (“EC Sanctioned Payment”). The EC Sanctioned Payment expressly took into account the advance payment of $193,158.62 Piu had already received. This expressed advance payment of $193,158.62 is slightly less than the amount of $193,500 agreed by the parties at the trial, which latter sum was agreed to be continued to be adopted. For consistency, this court adopts this agreed amount of $193,500 as the advance payment (“Advance Payment”). Thus, an aggregate amount of $500,000 ($306,841.38 + $193,158.62) (“EC Aggregate”) had been paid by the Employer.

4.  On 24 August 2017, interlocutory judgment was entered by consent for the EC Action.

5.  On 19 October 2017, Piu issued the writ for the PI Action, and on 28 November 2017, interlocutory judgment was entered by consent.

6.  On 3 November 2020, a sum of $100,000 (“Interim Payment”) was agreed to be paid out from the EC Sanctioned Payment as an interim payment to Piu.

7.  On 27 January 2021, by a Notice of Sanctioned Payment filed in the PI Action, the Employer paid an amount of $150,000 into court (“PI Sanctioned Payment”). In the said notice, the Employer expressly stated that the PI Sanctioned Payment “takes into account” the Interim Payment, the EC Sanctioned Payment and the advance payment of $193,158.62, the aggregate of which is therefore $650,000 ($193,158.62 + $306,841.38 + $150,000) (“Total Aggregate”).

8.  Piu did not accept either of the Sanctioned Payments.

9.  At the trial for the assessment of compensation and damages on 7, 13 and 14 December 2021, Piu was represented by his assigned counsel Mr Tim Wong (“Mr Wong”), and the Employer by counsel Mr Maurice Chan (“Mr Chan”) who appeared together with Mr Leon Ho (“Mr Ho”).

10.  On 31 May 2022, this court handed down the judgment[2] (“Judgment”). In §203 of the Judgment, this court awarded Piu damages in the total sum of $865,190 (“PI Award”), and in §250, interest on the amount of PSLA of $400,000 at 2% from the date of the writ to the date of judgment; and on the amount of the pre-trial loss of earnings of $428,400 and special damages of $36,790 at half judgment rate from the date of the accident (18 February 2016) to the date of judgment.

11.  For the EC Action, Piu was awarded compensation in the amount of $192,476 (“EC Award”).

12.  By a Corrigendum issued on 20 June 2022 (“Corrigendum”), the amount of the PI Award was amended to $671,690 (“Amended PI Award”) and the amount of the EC Award was amended to $191,976 (“Amended EC Award”).

13.  As for costs, this court granted costs orders nisi ordering the Employer to pay Piu:-

(i)  For the EC Action (§§244 and 247 of the Judgment): (at the time, this court only knew that a sanctioned payment was paid without any further details) the costs of the assessment up till 28 days from the date of the last sanctioned payment, and thereafter there shall be no order as to costs.

(ii)  For the PI Action (§251 of the Judgment): the costs of the proceedings with certificate for counsel, except there shall be no counsel’s certificate for the Checklist Review hearing.

14.  The nomenclature in the Judgment, unless expressly stated otherwise, will be adopted in this Decision.

B.  The Variation Applications

B.1  The EC Action

15.  Piu did not accept the EC Sanctioned Payment in accordance with O 22, r 15 of the Rules of the District Court[3] within 28 days, i.e. by 8 August 2017 (“Deadline Date”). As the Amended EC Award is less than the EC Sanctioned Payment, Piu is therefore regarded as having failed to do better than the EC Sanctioned Payment. The consequences stipulated in O 22, r 23 are therefore engaged (see Section I) unless Piu could show that it would be “unjust” to make him pay costs to the Employer on an indemnity basis together with enhanced interest after the Deadline Date.[4]

16.  On 14 June 2022, the Employer issued a variation summons (“EC Summons”), and in §2 applied to vary the costs orders nisi in §§244 and 247 of the Judgment (see §13(i) above) for an order that:-

(1)  The Employer do pay Piu’s costs of the action (including all costs reserved) on a party and party basis up to and including 8 August 2017; and

(2)  After 8 August 2017, the costs be paid by Piu (including all costs reserved):-

(i)  on an indemnity basis, with certificate for counsel; and

(ii)  with enhanced interest on costs at judgment rate plus 5% per annum.

B.2  The PI Action

17.  In Maxwell v Keliston Marine (Far East) Ltd (In Liq) & Anor[5] at §23, the court stated that when “exercising its discretion as to costs in the common law proceedings”, it should “have regard to the fact and amount of any payment made into court in the employees’ compensation proceedings”. Hence, Piu is regarded as having done better within the meaning of O 22 in the PI Action as the Amended PI Award exceeds the Total Aggregate of $650,000.

18.  However, the Employer, relying on Piu’s failure to beat the EC Sanctioned Payment and the latter’s conduct, issued a variation summons (“PI Summons”) on the same date as the EC Summons to apply for an amendment/‌variation of the interest awarded in §250 of the Judgment (see Section J below) and for a variation of §251 of the Judgment (see §13(ii) above) by replacing it with an order of no order as to costs.

B.3  Evidence and representations

19.  After the above variation summonses were issued, and upon the court issuing the Corrigendum, §1 of each of the variation summonses is no longer necessary.

20.  The EC Summons and the PI Summons were each supported by an affirmation (“Au’s Affirmation”) of Au Siu Yan (“Mr Au”), the Employer’s handling solicitor, of Au & Associates. Piu opposed both summonses by the filing of an identical affirmation (“Tam’s 1^st”) of Mr Tam on 10 October 2022 in each of the summonses.

21.  After the trial, Piu was assigned a new counsel, Mr Nicholas Pirie (“Mr Pirie”) to replace Mr Wong. As for the Employer, only Mr Ho remained as his counsel.

C.  Piu’s applications for additional evidence in opposition to the variation summonses

22.  One day before the substantive hearing of the variation summonses on 8 March 2023, Piu, on 7 March 2023, issued summonses in each of the EC and PI Actions (collectively “Leave Summonses”) to seek leave to adduce three additional affirmations (“Additional Affirmations”) in opposition to the above-mentioned variation summonses. They are the affirmations of (i) Wu Pak Hin (“Wu”) dated 27 January 2023 (“Wu’s Affirmations”); (ii) Piu dated 4 March 2023 (“Piu’s Affirmations”); and (iii) Mr Tam dated 6 March 2023 (“Tam’s 2^nd”). Each of the three deponents’ affirmations were made in identical form in each of the EC and PI Actions. Hence, in the discussion below, singular and plural designations will be used interchangeably.

23.  At the hearing on 8 March 2023, the arguments of the Leave Summonses were superposed on the said variation summonses. By the end of the hearing, Mr Pirie had not yet completed his submissions. This court therefore adjourned the hearing to 9 May 2023 with directions given to the parties to lodge written submissions.

24.  At the end of the adjourned hearing on 9 May 2023, I made the following orders in respect of the:-

EC Summons

Leave was granted to file Tam’s 2^nd. Leave was refused for the Affirmations of Piu and Wu.

PI Summons

Leave was granted to file Tam’s 2^nd and Piu’s Affirmations. Leave was refused for Wu’s Affirmation.

25.  This court indicated that the reasons for my decision will be handed down together with the Decision for the EC and PI Summonses due to the substantial overlap of the background facts. Before discussing the contents of the Additional Affirmations in Section E below, it would be necessary to firstly discuss the grounds of opposition to the said variation summonses set out in Tam’s 1^st, which are pertinent to the determination of the Leave Summonses.

D.  The Grounds of Opposition to the Variation Summonses set out in Tam’s 1^st

26.  The grounds of opposition for both the EC and PI Summonses overlap, and can be briefly summarized as follows.

D.1  The EC Summons

(1)  The Notice of the EC Sanctioned Payment was defective as it did not deal with the ss 9 [6] and 10 [7] (sic) compensation.[8]

(2)  When the EC Sanctioned Payment was made, Piu’s entitlement to sick leave was still continuing.[9]

(3)  The PI Sanctioned Payment rendered the EC Sanctioned Payment irrelevant.[10]

(4)  Any adverse costs order to be made against Piu would have the effect of substantially diminishing or even wiping out the damages he has been awarded. This would be contrary to the legislative intention of the Employees’ Compensation Ordinance (“ECO”).[11]

D.2  The PI Summons

27.  Since the Amended PI Award exceeds the Total Aggregate, it is averred that Piu has beaten the PI Sanctioned Payment. It is therefore not justifiable to deprive Piu’s interest and costs.

E.  The contents of the Additional Affirmations

E.1  Wu’s Affirmations

28.  Wu deposed that he worked as Mr Wong’s secretary and assistant at the time of the trial of these proceedings. It was alleged that before the last day of trial on 14 December 2021, Mr Wong had instructed Wu to prepare 3 copies of an unsigned summons together with a draft ASOD, which were later submitted by Mr Wong to the court for his application to amend the Re‑Revised Statement of Damages. After the court granted Mr Wong’s application, Wu was allegedly asked by Mr Wong to file the amendment summons. However, as the amendment summons was not endorsed by solicitors, Wu therefore allegedly went to Mr Tam for him to endorse the amendment summons by appending his signature to the execution page of the summons. After the amendment summons was endorsed, Wu asked Mr Wong’s clerk to file it at the District Court registry.

E.2  Piu’s Affirmations

29.  Piu’s Affirmation contains legal advice privilege in relation to the legal advice that he had allegedly been given, which privilege was confirmed to have been expressly waived by Piu. It was averred that Piu was advised by Mr Burke, Mr Tam and Mr Wong that his claim was allegedly worth more than the EC and the PI Sanctioned Payments, and he therefore did not accept either of the Sanctioned Payments.

30.  It was further alleged against Mr Wong that he:-

(i)  without Piu’s instructions or knowledge, abandoned the earlier pleaded pain and disabilities caused by the injuries to Piu’s neck and shoulder;

(ii)  had failed to adduce the evidence of the Government Census and Statistics for drivers in support of Piu’s case for pre- and post-accident loss of earnings; and

(iii)  had necessitated Piu’s need to issue the Leave Summonses as a result of Mr Wong’s delay in returning the papers to Mr Tam after the reassignment of Mr Pirie to replace him.

E.3  Tam’s 2^nd

31.  Tam’s 2^nd substantially repeats similar allegations made by Wu and Piu against Mr Wong. The single most important evidence is an exhibit of a 100-page bundle of without prejudice (“WP”) correspondence exchanged between the parties before trial.

F.  Parties’ arguments of the Leave Summonses

F.1  Mr Pirie’s submissions

32.  On behalf of Piu, Mr Pirie submitted that the evidence of the Additional Affirmations was important as it would support Piu’s allegations of misconduct against Mr Wong, who had negligently run a false case by inflating Piu’s claim.

33.  In his written submissions dated 6 March 2023 (“Pirie March Submissions”),[12] Mr Pirie also faulted the Employer’s trial counsel, Mr Chan and Mr Ho, for having failed to refer at the trial to the provisions of s 11 (1A) and (1B),[13] ECO. He also criticised Mr Au for having breached “Practice Direction 18.1” in having allegedly refused to produce comparable wages of workers as well as having wrongly failed to deal with legal aid taxation when Au & Associates sent a WP offer to Mr Tam on 23 November 2021 (see §148 below).

34.  Mr Pirie asked this court at the hearing to exercise its “equitable jurisdiction” to grant leave to Piu to adduce the Additional Affirmations so as to “discipline the dishonest counsel of both parties”.

F.2  The Employer’s submissions

35.  In the written submissions dated 25 April 2023 (“Chan Ho Submissions”) of Mr Chan and Mr Ho lodged on behalf of the Employer in opposition to the Leave Summonses, the Employer relied on the three so‑called Ladd v Marshall[14] conditions for the adducing of new evidence as discussed in Falcon Insurance Co (Hong Kong) Ltd v ISP Holdings Ltd (formerly known as Synergis Holdings Ltd) & Anor.[15]

36.  First, it was contended that Piu had failed to satisfy the first condition that the evidence of the Additional Affirmations could “not have been obtained before with reasonable diligence”. It was suggested that when Piu filed on 10 October 2022 Tam’s 1^st in opposition to the EC and PI Summonses, all the evidence presently contained in the Additional Affirmations must have been available to him (through Mr Tam). More importantly, since Mr Tam was the assigned solicitor for all the proceedings after Mr Burke’s replacement, it was suggested that not only would Mr Tam have had knowledge of the factual background, he would have had all the papers. It was contended that it was only a lame excuse to have blamed Mr Wong for the delay. Further, Mr Ho stated that there was also no explanation as to why Wu’s evidence could not have been available when Tam’s 1^st was filed.

37.  Mr Ho also contended that since the contents of the Additional Affirmations were mostly accusations against a third party – Mr Wong, the Employer’s solicitors and counsel – such evidence would not have been relevant to the EC and PI Summonses. The accusations may be more relevant to an application against non‑parties or for personal costs orders against Mr Wong. It was therefore submitted that the Ladd v Marshall condition 2[16] is also not satisfied. Mr Ho made no submissions on condition 3.[17]

G.  Reasons for Decision of the Leave Summonses

38.  After having read the Additional Affirmations de bene esse, I find they contain lots of disturbing allegations. The allegations against Mr Wong are more than allegations of negligence, but verge on allegations of professional misconduct. Were these allegations indeed true, the alleged unusual arrangement between Mr Tam and Mr Wong that the former had totally left Mr Wong to have undertaken the duty of a solicitor (see §28 above), in my view, may warrant further investigations by the Director of Legal Aid, and if necessary, be referred to the respective professional bodies.

39.  For the present purposes, my focus is confined to the issue as to whether I should exercise my discretion to admit the Additional Affirmations.

G.1  Wu’s Affirmations

40.  The allegations Wu made against Mr Wong are serious and abhorrent. It is most unusual for a trial counsel to have allegedly undertaken entirely the duty of his instructing solicitor in filing court documents – the amendment summons and the ASOD.

41.  Without deciding on the veracity of these allegations, I am firmly of the view that they are wholly irrelevant to the EC and PI Summonses. Mr Tam was present during the trial together with Mr Wong. Hence, it is reasonable to believe that Mr Tam would have known those matters contained in Wu’s Affirmations. Hence, I find that such evidence fails to satisfy the conditions laid down in Ladd v Marshall stated above.

42.  Even if the abandonment of the neck and shoulders complaints had indeed been made without Piu’s instructions and approval as Piu alleged, I do not think that any alleged negligence or improper conduct of the trial counsel is a relevant consideration to the issues of the variation summonses.

43.  Hence, leave was declined.

G.2  Piu’s Affirmations

44.  Piu’s Affirmation covers wide-ranging matters from the disclosure of legal advice allegedly provided by Mr Burke and Mr Tam as well as Mr Wong, to the various allegations of negligence and misconduct against Mr Wong.

45.  As stated in §15, the issue the court needs to decide for the EC Summons is whether it is “unjust” to make the orders sought by the Employer. Allegations of misconduct or negligence against Piu’s legal advisers and counsel, in my view, are not relevant to this issue. Hence, leave was refused for the EC Summons.

46.  As for the PI Summons, the consideration of the application will require this court to consider the parties’ conduct and all the circumstances of the case (see Section J below). It is therefore important that Piu should be allowed to put in as much evidence as possible so that the court will be able to have a more comprehensive evaluation of all the circumstances. Presently, the evidence contained in Tam’s 1^st as summarized in Section D above is scanty. Greater latitude should be given in my discretion. For this reason, together with the reason I give below in relation to the explanation for the delay, I granted leave for the PI Summons.

G.3  Tam’s 2^nd

47.  Notably, Tam’s 2^nd contains an explanation as to why Additional Affirmations were available late and it is important. Despite my misgivings about the reason Mr Tam gave for the delay for the filing of the Additional Affirmations, I do not think that Piu should be prejudiced by the falling-out between Mr Tam and Mr Wong. I consider it right to excuse Piu for the delay.

48.  Since Mr Tam has been Piu’s assigned solicitor since 7 March 2019, the evidence in Tam’s 2^nd should provide more information on the important matters of the proceedings including the advice Mr Tam gave to Piu on the PI Sanctioned Payment and the WP correspondence exchanged between the parties. Without the evidence of Tam’s 2^nd, the court will not have complete evidence in its consideration of both summonses. Leave was therefore granted to Piu to adduce Tam’s 2^nd in the EC and PI Summonses.

H.  Costs of the Leave Summonses

49.  Pursuant to this court’s direction for paper disposal, the parties have lodged their written submissions in relation to costs. After Mr Pirie had lodged his written submissions dated 23 May 2023, and Mr Ho’s skeleton arguments dated 6 June 2023, Mr Pirie, without any leave of the court, lodged another submissions dated 18 June 2023 in response. As no leave had been given, Mr Pirie’s response submissions were therefore disregarded.

H.1  Mr Pirie’s Submissions

50.  Mr Pirie submitted that although Piu did not get leave to file Wu’s Affirmations and Piu’s Affirmation for the EC Summons, he should nonetheless be awarded the costs of the entire Leave Summonses without any proportionate deduction. It was submitted that such costs order was justified due to Mr Au’s “contumelious conduct” in suppressing the WP correspondence: §§3 & 4 of Mr Pirie’s submissions.

H.2  The Employer’s stance

51.  The Employer’s starting position is that since the Leave Summonses were last-minute applications, Piu should therefore be ordered to pay for the costs of the indulgence, including the costs of the hearing on 8 March 2023, with certificate for counsel and certificate for two counsel for the Chan Ho Submissions (see §35 above). It was further submitted that the costs for the hearing on 8 March 2023 and the Chan Ho Submissions should be taxed on an indemnity basis.

52.  The ground for the Employer’s seeking indemnity costs is based on Mr Pirie’s allegations against Mr Chan and Mr Ho in the Pirie March Submissions and at the hearing on 8 March 2023. Mr Ho submitted that as the allegations were very serious, the Employer was justified in instructing Mr Chan to settle the Chan Ho Submissions in response.

H.3  Discussion

H.3.1  Starting position

53.  It is trite that costs are at the discretion of a court, which discretion should be exercised judicially and justly.

54.  The Leave Summonses are interlocutory applications. It is therefore instructive to refer to a passage in the editorial introduction on O 62 in the Hong Kong Civil Procedure 2023, Vol 1 (“HKCP”), at §62/0/2 on p 1301 setting out the general approach to inter-party costs. Relevantly, it states:-

“(a) in relation to interlocutory applications, the principle that the costs should normally follow the event is no longer the prescribed usual order but just an option; and

(b) the Court shall take into account the underlying objectives of the Rules of the High Court and several additional matters in exercising its discretion as to costs, including

(i) the conduct of all parties;

(ii) whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(iii) ...”

55.  The above general principles are equally applicable to the District Court. Notwithstanding that neither party has referred to the above passage, I do not think that there should be any dispute as to their applicability.

56.  Broadly, Piu, as the party seeking indulgence from the court, should normally be ordered to pay the costs. However, this starting position is countervailed by the Employer’s partial failure in his vigorous contesting of the Leave Summonses. In the circumstances, an appropriate costs order should be an order that properly reflects the nature and ultimate result of the Leave Summonses as well the conduct of the parties.

57.  Having considered the outcome of the Leave Summonses and the conduct of the parties, subject to the costs of the hearing on 8 March 2023, and the question of indemnity costs and certificate for two counsel which are to be separately discussed below, I grant the following costs orders:-

(1)  For the costs of Wu’s Affirmations, since leave was refused, Piu shall pay the costs of the Employer.

(2)  As for the costs of Piu’s Affirmations, Piu failed in the EC Summons but succeeded in the PI Summons. Hence, the different outcomes should cancel each other out. Thus, for simplicity, I order that there should be no order as to costs.

(3)  As for Tam’s 2^nd, Piu had a complete success. The Employer should pay the costs.

H.3.2  Conduct

58.  Before the hearing on 8 March 2023, Piu lodged the Pirie March Submissions for the Leave Summonses. The contents of the submissions, with the greatest respect to Mr Pirie, are full of multiple errors. Some of them are incomprehensible while most of them are irrelevant. By way of example:-

(i)  Piu was mis-spelled as “Pui”. The reference to the fact that Piu “is on a nil contribution” in §I is also irrelevant.

(ii)  Wu “resists the application for costs against him, because he is a non-party and has not been joined formally by the Defendant” at §II. This reference is incomprehensible.

(iii)  Mr Leon Ho was mistakenly referred to as “Mr Leo Wong” throughout.

(iv)  When alleging obstructive behaviour and incompetence of the Employer’s solicitors and “Mr Leo Wong (sic)” in Section III §1, Mr Pirie’s reference to “practice Direction Para 67” without any further specification makes it difficult to follow.

59.  In addition to the problems above, Mr Pirie also launched attacks against both the Employer’s trial counsel and the handling solicitor in the Pirie March Submissions. It may be more convenient to set them out below as taken from Mr Ho’s submissions:-

(1)  “Mr Leo Wong (sic)” did not produce the brief (Section I §1);

(2)  “Mr Au has not been candid with the court” (Section I §4);

(3)  “…we will ask for Indemnity Costs against Leo Wong (sic) and Mr Au personally for misleading the court” (Section I §6);

(4)  “Obstructive Behaviour and/or Incompetence of the Respondent’s solicitor, and Mr Leo Wong (sic)” (Section III); and

(5)  “...the Respondent’s solicitors have been less than helpful...their counsel [did not] bring to the Court’s attention [s 11(1A) & (1B)] when challenging d.o.a. earnings, and misled the Court in this respect” (Section III §3).

60.  At the hearing on 8 March 2023, not only did Mr Pirie continue to repeat the allegations and the criticisms against Mr Wong he had made in the Pirie March Submissions, there was no letting up in his attacks against Mr Au, Mr Chan and Mr Ho.

61.  Mr Pirie repeatedly alleged that “Mr Leo Wong (sic)” had failed to produce his brief, accusing the trial counsel and Mr Au of having been dishonest. It was alleged that the Employer’s legal team did not come with clean hands when they had failed to produce the comparable wages before trial and the WP correspondence that was only disclosed in Tam’s 2^nd. Mr Pirie suggested that this court should discipline Mr Au and Mr Ho by making them pay costs personally.

62.  The tirade of accusations against the Employer’s trial counsel and Mr Au, in my view, was wholly baseless. Not only do I agree with Mr Ho that they were unjustified allegations, I also think that they are not relevant to the Leave Summonses. Matters concerning counsel’s brief, and the absence of the evidence of comparable wages at the trial, are all irrelevant. The unjustified criticisms and the time wasted for the wholly irrelevant submissions should be properly reflected by an appropriate costs order, and I therefore consider it just to order Piu to pay the Employer’s costs of the hearing on 8 March 2023.

63.  Despite the unjustified accusations Mr Pirie made against the Employer’s trial counsel and his solicitors, I do not believe that Mr Pirie did so with malice. Mr Pirie was the newly-assigned counsel, and it would have taken him a lot of time to familiarize himself with the case. It appears that the falling-out between Mr Wong and Mr Tam would have likely compounded the difficulty Mr Pirie faced. The number of errors in the Pirie March Submissions (that I have highlighted above) was probably partly caused by such difficulty and partly by Mr Pirie’s own carelessness. All in all, I am satisfied that there was no malice on the part of Mr Pirie, and do not think I should order indemnity costs.

64.  While I have found that the allegations against the Employer’s legal team are clearly unfounded, I do not think that they were directed at Mr Chan personally. The allegations are clearly sweeping and irrelevant, and could have been ignored. For example, the remark as to the alleged unreasonably large fees Mr Chan charged for his brief, was clearly irrelevant. There was no need to call upon Mr Chan to address such an irrelevant matter. In any event, I also find that a large part of the Chan Ho Submissions in fact did not deal with Mr Chan’s response to the allegations. In the circumstances, I do not think that it is justified to allow certificate for two counsel as Mr Ho requested.

H.4  Conclusion and Orders

65.  Save and except for the costs for the hearing on 8 March 2023, which shall be paid by Piu to the Employer, with certificate for counsel, to be taxed if not agreed, I order that:-

(1)  For Wu’s Affirmations, Piu shall pay the costs of the Employer;

(2)  For Piu’s Affirmations, there shall be no order as to costs; and

(3)  For Tam’s 2^nd, the Employer shall pay Piu’s costs.

66.  For the costs ordered above, I further order that there shall be certificate for counsel and that the costs are to be taxed if not agreed. Piu’s own costs are to be taxed in accordance with the Legal Aid Regulations.

I.  The EC Summons

I.1  O 22, r 23 costs consequences

67.  Order 22, r 23 provides that:-

“(1) …

(2) The Court may by order disallow all or part of any interest otherwise payable under section 49 of the Ordinance on the whole or part of any sum of money awarded to the plaintiff for some or all of the period after the latest date on which the payment or offer could have been accepted without requiring the leave of the Court.

(3) The Court may order the plaintiff to pay any costs incurred by the defendant after the latest date on which the payment or offer could have been accepted without requiring the leave of the Court.

(4) The Court may also order that the defendant is entitled to—

(a) his costs on the indemnity basis after the latest date on which the plaintiff could have accepted the payment or offer without requiring the leave of the Court; and

(b) interest on the costs referred to in paragraph (3) or subparagraph (a) at a rate not exceeding 10% above judgment rate.

(5) where this rule applies, the Court shall make the orders referred to in paragraphs (2), (3) and (4) unless it considers it unjust to do so.

(6) In considering whether it would be unjust to make the orders referred to in paragraphs (2), (3) and (4), the Court shall take into account all the circumstances of the case including—

(a) the terms of any sanctioned payment or sanctioned offer;

(b) the stage in the proceedings at which any sanctioned payment or sanctioned offer was made;

(c) the information available to the parties at the time when the sanctioned payment or sanctioned offer was made; and

(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the payment or offer to be made or evaluated.

(7) …”

68.  By virtue of the above provisions, Piu shall be required to show that it is unjust to make the orders sought in §2 of the EC Summons.

I.2  Grounds put forward by Piu

69.  Piu’s objections stated in Tam’s 1^st, and in the submission set out in several of Mr Pirie’s repetitive written submissions (some of which were lodged without the leave of the court) can be summarized as follows.

I.2.1  The EC Sanctioned Payment was not properly made

70.  Piu made 3 attacks against the propriety of the EC Sanctioned Payment.

71.  First, it was suggested that the EC Sanctioned Payment was defective. In Tam’s 1^st at §6, it was averred that the Notice of [the EC] Sanctioned Payment failed to separately state the amounts of the ss 9, 10 and 10A payments. As Piu was still entitled to be paid a s 10 payment (“sick leave payment”, a misnomer Mr Tam used), it was suggested that the Notice was “probably defective”.

72.  Secondly, the EC Sanctioned Payment was made prematurely. This objection was only made at the substantive hearing on 26 June 2023. Mr Pirie contended that when the EC Sanctioned Payment was made, the MAB of the Labour Department had not yet carried out an assessment on Piu and further that the first medical expert evidence, i.e. the JOR, was also not available. It was therefore suggested that it was reasonable for Piu to reject the EC Sanctioned Payment, and continue to proceed with the PI Action.

73.  Thirdly, the EC Sanctioned Payment was abandoned by a “combined notice” of the PI Sanctioned Payment. In Tam’s 1^st (§6 and exh “TKT‑1”), it was suggested that by the operation of O 22, r 8(2)(c), the EC Sanctioned Payment notice was abandoned by the notice of the PI Sanctioned Payment.

I.2.2  Third Party’s fault

I.2.2.1  Mr Burke’s advice to reject

74.  At the time when the EC Sanctioned Payment was made, Mr Burke was Piu’s assigned solicitor. Piu was allegedly advised by Mr Burke that “his claim was worth then about $1 million”, and he should reject the EC Sanctioned Payment.[18]

I.2.2.2  Errors by Mr Wong

75.  In his submissions dated 28 December 2022 and 28 February 2023, Mr Pirie alleged that Mr Wong made a blunder in relation to Piu’s pre-accident wages, the medical expenses, the unauthorized abandonment of Piu’s disabilities caused by shoulder and neck and “the case for continuing Section 10 payments”.[19] It was suggested that had these errors not been made, Piu would have been awarded “an additional 13 months x 4/5 x [$]18,000 = $187,200 plus interest”.[20]

I.2.2.3  Failure to provide to the court up to date wages

76.  In Tam’s 2^nd at §5, it was alleged that the Employer had failed to comply with s 11 (1A) and (1B), ECO, by disclosing the earnings of two comparable workers for the 12 months before Piu’s accident and by failing to agree with the figures of the Consumer Price Index in accordance with s 11 (1C). As no such comparable earnings were adduced at the trial, Mr Pirie[21] stated that the Employer was “at fault and caused considerable time wasting as they had not complied with Practice Direction 18.2 Para 67”.[22] It was contended that had the comparable earnings been made available, Piu’s notional pre-trial wages should have likely increased by 15%, yielding to a much higher award for both the EC and PI Actions.

77.  In the same written submissions, Mr Pirie also blamed counsel for both parties for having failed to produce the materials of the up to date statistics on wages.

I.2.3  The requirement of statutory set-off

78.  Despite references having been made by Mr Tam[23] in relation to ss 25(1) and 26(1), ECO, it is not clear what point he wanted to advance for Piu. Mr Pirie also repeatedly referred to these two provisions in his various written submissions and at the hearing. I believe Mr Pirie’s arguments run like this. By virtue of the words of “shall be reduced” found in s 26(1), the Employer has the benefit of setting off the Amended EC Award against the Amended PI Award. Therefore, the Employer shall be required to take into account the compensation of the EC Action when making the PI Sanctioned Payment later.

79.  Mr Pirie’s reliance on these two provisions are understood to be in relation to his contentions that there is a requirement of set-off under O 22, r 8. It was suggested that since the EC and PI Actions “have been combined and heard together”,[24] Mr Pirie contended that the final judgment awarded in the “combined judgment” of the EC and PI Actions exceeds the PI Sanctioned Payment.[25] He urged this court to consider the totality of the amounts of the two Sanctioned Payments in the context of the “combined” proceedings. Mr Tam even went as far as to suggest that by the operation of O 22, r 8, the total amount of the Amended PI Award and the Amended EC Award exceeded the Total Aggregate by “$210,000 odd”,[26] therefore impliedly Piu had done much better.

I.2.4  The effect of any adverse costs order on Piu

80.  Since Piu paid nil contribution when he was granted legal aid, it was suggested that the Director of Legal Aid will need to deduct from the damages Piu was awarded and any amount of costs adversely made against Piu. It was stated that any adverse costs order effectively “would wipe out any net claim which was payable to [Piu] in the combined actions”.[27] It was submitted that since the employees’ compensation regime is a “remedial statute” requiring “a fair and liberal interpretation” in favour of an employee, depriving Piu of the fruit of the litigation is not fair.[28]

I.3  Discussion

81.  I have not separately set out Mr Ho’s submissions, but will refer to them in the appropriate parts of my discussion. Broadly stated, Mr Ho submitted that Piu’s grounds of objections are either irrelevant, incomprehensible or erroneous.

82.  Overall, I find the grounds advanced by Piu to resist the costs consequences of O 22, r 23 are mostly unsound, and at times, very strained.

83.  First and foremost, I reject the contention that the EC Sanctioned Payment was defective. Mr Tam’s assertion that it was “probably defective” is, in my view, clearly a try-on, and is devoid of any merits. I accept Mr Ho’s submission that there is no requirement that a Notice of Sanctioned Payment has to provide breakdowns.[29]

84.  In fact, I find that the Notice of the EC Sanctioned Payment (see §3 above)[30] has satisfied the various requirements set out in O 22, r 8(2) by including in it “the amount of the payment” (sub-r(a)); a reference that the payment was in settlement of “the whole claim” (sub-r(b)); and also a reference that it took into account the advance payment of $193,158.62 (sub-rr(c) & (d)). I believe that upon receipt of this Notice of EC Sanctioned Payment, Piu and Mr Burke would not have been in any doubt that the Employer had intended to dispose of the EC Action (without admitting any liability as interlocutory judgment had not yet been entered at that stage) as early as possible.

85.  I do not find any merits in the argument that the EC Sanctioned Payment was made prematurely. Independently, r 20 of the Employees’ Compensation (Rules of Court) Rules (“ECC Rules”) also provides for a similar O 22 sanctioned payment regime. Rule 20(2)[31] of the ECC Rules stipulates in plain language for the right of a respondent to make a payment into court, and the adverse costs consequence of an employee being awarded compensation less than the sum of money paid into court by a respondent. The combined effect of the statutory ECC Rules and the O 22, r 23 regime are clearly meant to enable a defendant/‌respondent to make payment into court as soon as he was served with the proceedings so that:-

“…He can therefore protect himself as to costs by this device from the earliest possible moment, even if he is prepared to allow a judgment in default of acknowledgment of service to be entered against him for damages to be assessed. It has been held that there is no scope in the wording of the order to imply that a plaintiff should be given a reasonable amount of time to investigate the merits of his own case before an offer can be made; a defendant is entitled to make an offer at any time; ... If a party intends to make a sanctioned payment, the sooner it is made the better, because costs may be running up.”[32]

86.  The above passage clearly undermines Piu’s excuse for not accepting the EC Sanctioned Payment. I also find the argument that the EC Sanctioned Payment was abandoned by the making of the PI Sanctioned Payment misconceived. As Mr Ho submitted,[33] the statutory regime under O 22 only has provisions for withdrawal or diminution of sanctioned payments. There is no provision for “abandoning” a sanctioned payment.

87.  In advancing the argument that the Amended PI Award has exceeded the Total Aggregate, Mr Tam and Mr Pirie have repeatedly alluded to the statutory set off provisions in s 26, ECO (together with the irrelevant s 25), and the EC and the PI Actions having been “combined” (see §§79 and 80 above). These repetitive contentions, in my view, seem to have stemmed from a misconception that quantum assessment for both Actions was tried together. I have clearly stated in the Judgment that the reason that the two Actions were tried together was because Piu’s legal advisers had allowed the EC and PI Actions to have proceeded in tandem without regard to the spirit of saving costs for parallel proceedings.[34] Ultimately, quantum assessments were separately carried out for the EC and PI Actions at trial, and separate awards were made. These submissions are simply unmeritorious.

88.  I am also not impressed by Piu’s blaming Mr Burke and Mr Wong in justifying his refusal to accept the EC Sanctioned Payment. I’m more inclined to believe that this unmeritorious argument is more a manifestation of Piu’s desperate attempt to salvage the adverse consequences he is currently facing. The alleged wrong legal advice is not a relevant consideration for the EC Summons.

89.  Equally unmeritorious is the faulting of the Employer for having failed to provide updated pre-accident wages. According to the two letters respectively dated 26 March and 14 May 2020 exhibited as “TKT‑5” to Tam’s 2^nd, Mr Tam (of Huen at the time) sent a written demand to the Employer’s former solicitors, Cheung & Yeung, for specific discovery in relation to detailed particulars on wage-related matters. The Employer duly made discovery. Had discovery been incomplete, it would have been incumbent on Mr Tam to take out an application for specific discovery. From the materials before me, I find no such application. Hence, the present complaint made by Mr Tam is irresponsible and likely an after-thought. In any event, the issue is clearly water under the bridge. In any event, Mr Pirie’s submissions on the 15% increase (see §76 above) are baseless and incomprehensible.

90.  It is even more puzzling for Mr Tam and Mr Pirie to have made reference to Piu’s zero contribution to his legal aid and the application of a liberal interpretation to the ECO in favour of Piu. Mr Ho is justified to have been so critical of this argument that it “is wrong on multiple aspects”.[35] The legislative intention of the ECO is to provide fast and quick financial relief to an injured worker. Mr Pirie also has not elaborated further as to how the ECO should be properly interpreted in relation to the sanctioned payment regime under discussion.

91.  I also do not find that the fact of Piu’s nil contribution carries much weight. The fact of zero contribution in fact would have required the assigned solicitors and counsel to exercise greater vigilance to safeguard costs and refrain from pursuing unrealistic and exaggerated claims so as to protect public funds.[36]

92.  Contrary to Mr Pirie’s submission (see §72 above), when the EC Sanctioned Payment was made, the Form 9 had already been issued (on 16 June 2017). After the EC Sanctioned Payment was made, the EC Aggregate was already in the total amount of $500,000. Piu and his legal advisers should already have had reasonably sufficient information to make a broad assessment as to the amount of the compensation Piu would likely obtain. Instead of accepting the EC Sanctioned Payment, the proceedings were dragged on for a long time, causing Piu to have “suffered from the long and distressing effects of litigation” as found by Dr CK Wong, Piu’s appointed psychiatric expert. Eventually, psychiatric illness inflicted on Piu around June 2019.[37]

93.  The history of these proceedings as gleaned from the court file together with the WP correspondence exhibited to Tam’s 2^nd reveal a lot of unsatisfactory handling by Mr Tam. Apart from holding a totally misguided view that the EC and PI Actions were “combined” actions, Mr Tam has failed in his duty as the legal representative of Piu to assist the court to further the underlying objectives set out in O 1A. Neither did he have any insight as to the proper conduct for the EC Action with regard to the legislative objective of the employees’ compensation regime of providing fast financial relief to an injured employee, Piu, in this case. The protracted litigation has not only affected Piu’s mental health, but has also severely exposed Piu to risk as to costs as the discussion below clearly demonstrates.

94.  After the entry of interlocutory judgment on 24 August 2017, Mr Tam has effectively allowed the EC Action to go stale. The court was only alerted to the inaction when Cheung & Yeung wrote to the court on 4 June 2020,[38] asking the court to set the EC Action down for trial. This resulted in a directions hearing before this court for the first time on 21 August 2020. Due to the slow progress of the proceedings, this court directed that all future case management directions for both the EC and PI Actions were to be dealt with together.

95.  At the hearing on 12 October 2020 for both Actions, this court had raised concern about the way Piu’s legal advisers conducted the EC Action, and urged Mr Wong attending the hearing to seriously consider settling the EC Action as expeditiously as possible.

96.  Not long after the above October hearing, the Employer then made the PI Sanctioned Payment, which Payment immediately prompted the sending out by Mr Tam, who was by that time with Ellen Au, 10 successive WP letters dated 27 January 2021 (the same date as the PI Sanctioned Payment was made), 1, 2, 3, 4, 5, 8, 9, 10 and 11 February 2021 to Cheung & Yeung, demanding the latter to propose a settlement for the EC Action.

97.  Strangely, there was a brief hiatus of about 3 months after the above WP correspondence. Mr Tam, who had by then changed to the firm of HY Leung, sent 7 WP letters[39] of the same contents to the Employer’s solicitors. In these letters, Mr Tam proposed that Piu would accept the EC Sanctioned Payment provided that the Employer would pay Piu his costs up to the date of the acceptance. The Employer rejected the offer[40] and only agreed to pay the costs up to the Deadline Date.

98.  The WP correspondence above clearly shows that the issue of costs has impeded the achievement of a settlement. Such costs predicament was chiefly caused by Piu’s failure to accept the EC Sanctioned Payment before the Deadline Date. By virtue of the statutory set-off requirement of employees’ compensation in s 26 of the ECO, to which provisions Mr Tam and Mr Pirie have repeatedly referred (see Section I.2.3), Piu should have, at the latest, applied for leave to accept the EC Sanctioned Payment after the interlocutory judgment was entered in the PI Action on 28 November 2017. There is absolutely no basis for Piu (through Mr Tam) in having continued the EC Action all the way to trial with no additional financial benefit to Piu himself.

I.4  Conclusion and rate of interest

99.  For the reasons stated above, I do not find that it is unjust to impose the consequences stipulated in O 22, r 23(3) and (4) by ordering Piu to pay the Employer’s costs of the EC Action on an indemnity basis together with enhanced interest from the Deadline Date, i.e. 8 August 2017, with certificate for counsel.

100.  As for the rate of enhanced interest, the Employer asked this court to award interest at 5% above judgment rate, relying on Ki Tak Yan v The Incorporated Owners of Kam Yuen Building, Boundary Street & Anor[41] and Tse Lai Sing (supra). Piu made no submissions in relation to this proposed rate of enhanced interest.

101.  The Employer produced copies of payment records[42] in the total sum of $747,206 that the Employer’s insurer, Falcon Insurance Company (Hong Kong) Limited, had paid for the disbursements and legal costs during the period from the Deadline Date to the date of judgment. Relying on Tse Lai Sing (at §13), Mr Ho suggested that this court should adopt the simplified approach by applying the Employer’s proposed interest rate as the enhanced interest for the said period of about 4.5 years.

102.  In Tse Lai Sing referred to by Mr Ho, the enhanced interest the District Judge adopted was in fact based on Yeung Ho Man (see f/n 36) and Shih Pik Nog v G2000 (Apparel) Ltd[43] which were the decisions of Bharwaney J. In Yeung Ho Man, his Lordship also considered his previous decision of Lai Sin Yan Elsie when determining the rate of enhanced interest. Before deciding the appropriate rate of enhanced interest, it will be useful to distill from these three authorities of Bharwaney J the court’s approach to enhanced interest as follows.

(1)  No order for interest or enhanced interest on costs should be allowed if the receiving party has not made any payment of costs and disbursements incurred and has not made any advance payment on account of fees: Shih Pik Nog at §21.

(2)  If the receiving party has made payments, there are two different methods to calculate enhanced interest:-

(i)  An approach modified by Lam J (as he then was) in Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd.[44] By this modified method, interest is calculated by enhancing the normal commercial rate of interest (prime rate plus 1%) by 3%. In other words, after adding 4% interest above prime (“Full Enhanced Rate”), the total is then halved when applying to the costs incurred for the whole period after the last date of acceptance without requiring leave of the court to the date of judgment on interest and costs. This method is more suitable for cases where there have been multiple payments spanning a long period of time: Shih Pik Nog at §18.

(ii)  Alternatively, by applying the Full Enhanced Rate of interest to the actual dates of payment when the receiving party had put up funds on account of costs and from which interest would run to the date of the judgment on interest and costs: Shih Pik Nog at §15. This approach is suitable for cases where there have only been a few payments: Shih Pik Nog at §18.

(3)  The above Full Enhanced Rate is usually applicable to the run-of-the-mill case where the only failure of the plaintiff was a failure to accept the successful sanctioned payment. The court can “set the rate of interest that is greater than purely compensatory in order to mark the court’s disapproval of improper conduct” (10% above judgment rate for each payment of costs): Yeung Ho Man at §23.

103.  The Employer has provided evidence that the insurer has paid 8 payments (“8 Payments”) for disbursements and legal costs in the total sum of $747,206 during the relevant period (29 August 2017 to 4 February 2022).[45] According to the approaches summarized above, I should adopt the approach set out either in §102(2)(i) or §102(2)(ii).

104.  As there is only evidence showing the 8 Payments for specific disbursements and legal costs and no evidence that the Employer or the insurer has paid solicitors costs on account, I do not think it is suitable to make a general award of interest including costs that have not yet been paid otherwise it would produce an unjust windfall for the insurer or the Employer: Shih Pik Nog at §17. After careful consideration, I believe that the proper approach should be the approach set out in §102(2)(ii) above, and I so order.

105.  The costs orders nisi in §244 and §247 of the Judgment are varied as follows:-

(1)  The respondent do pay the applicant’s costs of the action (including all costs reserved) on a party and party basis up to and including 8 August 2017;

(2)  After 8 August 2017, the applicant do pay the respondent’s costs (including all costs reserved)

(i)  on an indemnity basis with certificate for counsel, to be taxed if not agreed; and

(ii)  with enhanced interest on the 8 Payments costs at the Full Enhanced Rate set out in §102(2)(ii), i.e. prime rate plus 4%, in relation to each of the 8 Payments of costs from the date of each payment until full payment.

106.  As to §3 of the EC Summons on the Employer’s application to pay out the monies in court, I will withhold making any order until the matter of costs between the parties are settled. I grant the parties liberty to apply.

107.  Costs of the EC Summons will be discussed in Section K below.

J.  The PI Summons

J.1  Variation of interest

J.1.1  The basis of the application

108.  As a result of the discussion between this court and Mr Ho at the hearing on 26 June 2023, Mr Ho was granted leave to amend §2 of the PI Summons by including the calculation of interest in the Amended EC Award when setting off against the various damages awarded in the PI Action. Thus, after §2 has been amended, Mr Au’s calculations set out in Au’s Affirmation in support are no longer correct, and therefore cannot be relied on.

109.  According to Mr Ho’s submissions in support of the amended §2, the variation sought consists of two parts.

110.  Part one concerns the amount of $400,000 this court awarded for PSLA (see §10 above). According to the amended §2, the only amendment the Employer made is by amending the amount of $400,000 for PSLA to $364,868.62. No amendment was made to the interest of 2% awarded from the date of the writ to the date of judgment. According to the calculations Mr Ho submitted to this court, which I set out below, the said amended amount of $364,868.62 was arrived at as follows:

$865,190 - $193,500 - $306,841.38 = $364,868.62

111.  I think there was error in Mr Ho’s calculation. The correct sum should be $364,848.62 (emphasis added), instead of $364,868.62. Hence, I will correct the amount stated in the amended §2 by amending it to $364,848.62.

112.  As to how this amended amount was arrived at, I understand that the sum of $865,190 is the PI Award; $193,500 is the amount of the Advance Payment; and $306,841.38 is the amount of the EC Sanctioned Payment. In the Corrigendum, this court amended the PI Award by deducting the Advanced Payment from it, resulting in the sum of $671,690 as the Amended PI Award. By deducting the amount of the Advance Payment from the PI Award, the same result is yielded. Hence, for simplicity, I will use the Amended PI Award for the following discussion.

113.  It was the Employer’s argument that had Piu accepted the EC Sanctioned Payment of $306,841.38 within time, the said amount should have been applied towards the reduction of the amount of the Amended PI Award of $671,690, leaving a balance of $364,848.62[46] ($671,690 - $306,841.38). Hence, Mr Ho suggested that the 2% awarded by this court for the sum of $400,000 for PSLA should be reduced to $364,848.62.

114.  Part two concerns the sums of $428,400 and $36,790 this court respectively awarded for pre-trial loss of earnings and special damages. Based on the same argument in relation to Piu’s failure to accept the EC Sanctioned Payment, Mr Ho submitted that Piu’s entitlement to interest for these two special damages ordered to run to the date of judgment should be shortened to end on the Deadline Date, i.e. 8 August 2017.

115.  Relying on the case of Chiu Sui Ching, the administrator of the estate of Leung Ho Tin, deceased v Cheng Kwai Hung t/a Hang Nagi Works & Ors[47] as the authority he submitted at the hearing, Mr Ho stated that the computation of interest for the various common law awards should only be from the date of the accident to the date of the payment of the employees’ compensation.

J.1.2  Piu’s Stance

116.  Piu did not take any issue as to the jurisdiction of the court to amend/vary interest already awarded in the Judgment. Mr Pirie made two points in submitting that there was no basis for the Employer to vary interest.

117.  First, the set off of any employees’ compensation award and its interest should only be made on the date of judgment.

118.  Second, any set off should be done “type by type”. For example, the amount awarded for s 10 (in the EC Action) should be set off against the award for loss of earnings (in the PI Action); and the amount awarded for s 9 (in the EC Action) should be set off against the general damages awarded in the PI Action.

119.  Since the amendment to §2 was only dealt with almost at the end of the substantive arguments, Mr Pirie had not had the opportunity to submit authorities to support the above two arguments that he advanced at the hearing. I therefore granted leave to Mr Pirie to lodge authorities within 14 days in relation to the amended §2 of the PI Summons (emphasis added).

J.1.3  Mr Pirie’s further submissions and authorities after the hearing

120.  After the hearing, this court received additional authorities and submissions of Mr Pirie lodged by YSYM, Mr Tam’s latest firm, under 3 cover letters dated 27 and 30 June and 11 July 2023.

121.  Enclosed with the 1^st letter is a 5‑page written submissions dated 27 June 2023, and with the 2^nd letter is another 3‑page written submissions dated 28 June 2023 together with 7 authorities.

122.  Since there is no information from the 1^st and 2^nd letters that they had been copied to the Employer’s solicitors, I directed Mr Tam to do so.

123.  In response, Au & Associates stated in their letters dated 10 and 12 July 2023 that the 7 authorities referred to by Mr Pirie, with the exception of one of having marginal relevance, were all beyond the scope of the amended §2 of the PI Summons. They also suggested that this court should ignore all the written submissions as this court had not granted leave for further submissions.

124.  Given the fact that the amendment to §2 was made late at the substantive hearing, I am prepared to take a more lax approach concerning submissions. As the further submissions and authorities were already before this court, I would allow Piu to rely on them.

125.  The contents of the two written submissions attached to the 1^st and the 2^nd letters are identical save that the later written submissions dated 28 June 2023 contain two additional paragraphs §§1.01 IV and 2.02 (vii). It is therefore only necessary to consider the later submissions.

126.  After having considered the submissions and the 7 authorities, I agree with the Employer’s solicitors that the submissions and the authorities are not relevant to the issues of the amended §2.

127.  As a matter of fact, most of the further submissions are no more than a repetition of the submissions Mr Pirie made at the hearing. He repeated that:

(1)  by the operation of ss 25(1) and 26(1), ECO, the liability to pay compensation and common law damages merge on the date of the judgment of the common law action: Mr Pirie’s submissions dated 28 June 2023, §2.02 (i).

(2)  The interest calculations in the amended §2 are illogical as the Amended PI Award was “$206,000” more than the Total Aggregate.

128.  The other part of the submissions concerns adverse costs, and is irrelevant.

129.  Of the 7 authorities Mr Pirie submitted, 4 [48] of them, in my view, bear no relevance to the amended §2. As for the remaining 3 [49] authorities, though they relate to employees’ compensation proceedings and common law actions, they have no direct relevance to the amended §2.

130.  All in all, Mr Pirie advanced no new ground to support his submissions concerning the amended §2.

J.1.4  Discussion

131.  It is trite that the award of interest is discretionary: see Bristow v Judd [1933] PIQR Q117 referred to in Chiu Sui Ching (supra) at §12. In exercising my discretion, I should consider the circumstances surrounding Piu’s failure to accept the EC Sanctioned Payment and Piu’s overall conduct (which will be further elaborated upon in Section J.2 below).

132.  On this issue, I find neither party had provided much assistance to this court. Mr Ho has only submitted one authority in support and Mr Pirie’s authorities and submissions are not helpful.

133.  Since the Employer is the applying party, he would have been required to make good his arguments. Nonetheless, I am not impressed by the Employer’s reason for the application. The case of Chiu Sui Ching (supra) Mr Ho cited in support of the application does not concern the question under discussion as to whether interest for the damages awarded for personal injuries should be reduced owing to a plaintiff’s failure to beat a sanctioned payment. In Chiu Sui Ching, the court, after an assessment of damages of a fatal accident case, was required to decide whether interest for the award on bereavement should be calculated up to the date of the payment of the award for the plaintiff’s employees’ compensation or to the date of the interim payment paid to the plaintiff. It does not relate to the issue under consideration as to whether a court should vary interest for reason of non-acceptance of a sanctioned payment in employees’ compensation proceedings and/or a plaintiff’s conduct in having exaggerated his claim.

134.  Further, it is noted that among the 4 rules the Employer cited in the margin note of the amended PI Summons – O 20, r 11;[50] O 22A, r 1;[51] O 42, r 5B(6)[52] and O 62, r 5 [53] – none concerns variation of interest. In the circumstances, I am not persuaded that the Employer has put forward any reasonable grounds or sound arguments that could lead this court to vary my discretion on interest on account of Piu’s failure to accept the EC Sanctioned Payment and his conduct.

J.2  Variation of costs: §4

135.  The Employer relies on O 62, r 5, Piu’s “dishonest” conduct to support his application to vary the nisi costs order granted by this court in the Judgment. Mr Ho submitted that irrespective of the undisputed fact that Piu had succeeded in beating the PI Sanctioned Payment, the court should still consider whether costs should be varied on account of Piu’s dishonest conduct. In §5(4) of his November 2022 submissions, Mr Ho set out some of the findings by this court that “Piu exaggerated his injuries or that his evidence was unreliable”. Later in the submissions (§19), Mr Ho further submitted that:-

“Piu exaggerated his symptoms and lied to the doctors and also at the Assessment of Damages to inflate his claim. Piu was plainly dishonest, and a lot of time was spent on dealing with Piu’s untrue allegations. In the end, the damages awarded was substantially less than the amount claimed.”

136.  Such conduct, Mr Ho submitted, should be reflected by an appropriate costs order by an order of disallowing Piu’s costs, citing Pak Siu Hin Simon v JV Fitness Limited,[54] Painting v University of Oxford,[55] Yau Wang Ngai v Win Elite International Limited,[56] Pak Sai Ming v JV Fitness Limited[57] and Singh Bal Winder v IWS Waste Management Company Limited formerly known as Fook Woo Waste Paper Company Limited.[58]

137.  Apart from placing much greater emphasis on his allegations against Mr Wong, Piu’s objections and Mr Pirie’s submissions in relation to the costs variation largely overlap with those they have put forward in the EC Summons, which I have already set out in Section I.2 above. They will not be repeated here.

138.  Repeatedly, Piu stressed the fact of him having beaten the PI Sanctioned Payment (on account of the amount of the Total Aggregate). Thus in Tam’s 1^st and 2^nd, Mr Tam kept harping on this point and disclosed the fact that he was right to have advised Piu not to accept the PI Sanctioned Payment because he believed that “the Court would look at the payments in the combined actions as the Employer ... had sought the benefit of a set off provision in the [ECO] and did not have to make 2 payments as one would be set off against the other”: Tam’s 2^nd: §4. He advised Piu not to accept the PI Sanctioned Payment.

139.  Further elaboration was made by Mr Pirie in stating that had Mr Wong not wrongly abandoned Piu’s disabilities in relation to neck and shoulders, the final award would have likely been much higher. It was stated that Piu’s neck and shoulders complaints together with the issue of whether Piu could return to his pre-accident job warranted a trial. Hence, the court should not punish Piu for having chosen to go through a normal judicial process. It was suggested that if one were to look at the matter in the round, that Piu had in fact beaten the Total Aggregate by 1/3. This, Mr Pirie submitted, showed that Piu had not acted unreasonably.

140.  Mr Pirie further contended that O 62, r 5 is not written in stone. The court should look at all the circumstances when considering the conduct, including whether Piu had deceived the court, and whether he had really over-exaggerated the claim. It was stated that whether Piu is the “winning party” can simply be determined by looking at the total amount of the damages he was awarded in the PI Action. The fact that Piu “won some and lost some” should not be a basis for faulting his conduct. He cited the case of Singh Bal Winder v IWS Waste Management Company Limited formerly known as Fook Woo Waste Paper Company Limited,[59] and submitted that Piu in fact did much better than the plaintiff (Winder) in that case. The plaintiff in Singh Bal Winder was only awarded 10% of his pleaded claim for damages. In the case for Piu, the Amended PI Award was almost 50% of the amount ($2,146,153) pleaded in the Statement of Damages before it was revised; and was 30% of the amount ($2,798,443.43) pleaded in the ASOD. Mr Pirie suggested that when Piu’s claim was compared to that of Singh Bal Winder, there was no inflation of the claim. No adverse costs orders should be made against Piu. The court should only punish the behavior of serious malingering and gross exaggeration. The present case is not that type.

141.  Mr Pirie repeated his criticisms of the conduct of the Employer’s solicitors for having allegedly suppressed the pre-trial WP correspondence. It was suggested that the Employer and/or his legal advisers have not come to court with clean hands. The PI Summons was a satellite application, and unnecessary. Thus, the court should consider the conduct of both parties, not only Piu’s conduct alone.

J.2.1  Discussion

J.2.1.1  Legal Principles on court’s discretion on costs

142.  The legal principles governing the court’s exercise of discretion on costs under O 62, r 5(1) set out in the authorities of Mr Ho are not in dispute, and I summarize them below. A court in exercising its discretion as to costs may take into account, among other considerations:-

(1)  any payment of money into court.[60] The fact that a party cannot beat the claim by the sanctioned payment is a factor, but it is not a conclusive factor;[61] and

(2)  the conduct of all the parties,[62] which includes

(a)  whether the successful claimant exaggerated his claim. A dishonest plaintiff who made up personal injuries claim should be penalized by costs on indemnity basis;[63] an intentional and fraudulent exaggeration is an important element;[64] and

(b)  conduct before, as well as during, the proceeding.[65]

J.2.1.2  The Sanctioned Payment and Piu’s conduct

143.  As Piu is a clear winner in the PI Action, this court when deciding its discretion on costs should consider all aspects of conduct, including conduct of negotiations between the parties before trial, and Piu’s conduct at trial.

144.  The WP correspondence exhibited to Tam’s 2^nd, some of which has been discussed in Section I.3 above in relation to the EC Summons, will throw some light on the parties’ conduct in the negotiations.

145.  The analysis of the WP correspondence by this court was done with much difficulty. This is because it was chaotically arranged without proper pagination, and some of the documents in the bundle were incomplete or duplicative. Despite leave having been granted to Piu to adduce Piu’s Affirmation and Tam’s 2^nd, very little of such affirmations has been referred to by Mr Pirie.

146.  After having gone through the bundle of the WP correspondence, I believe that the Employer made the PI Sanctioned Payment with the intention of avoiding further costs being spent on the psychiatric expert evidence. This was because when the PI Sanctioned Payment was made, the court had not yet at that stage granted leave for the adducing of joint psychiatric expert evidence. The parties were still locked in discussions on the indication by Piu of his desire to engage Dr CK Wong as his expert.

147.  According to the WP correspondence set out in §97 above in relation to the EC Summons, Mr Tam’s offer to settle the EC Action was rejected. On 14 September 2021, this court had set down the EC and PI Actions for trial. The parties apparently engaged in mediation on 22 November 2021 but the mediation failed.

148.  After the failed mediation, Au & Associates sent a WP letter dated 23 November 2021 [66] to Mr Tam of HY Leung, offering an extra sum of $300,000 on top of the EC and PI Sanctioned Payments inclusive of costs in full and final settlement of both the EC and PI Actions. (emphasis added).

149.  In a reply letter of 24 November 2021, Mr Tam demanded Au and Associates to “give an explanation on (sic) the sudden and unjustified departure from the last WP offer made by Au & Associates at the conclusion of the mediation conducted on 22.11.2021...”. This appears to be the last WP correspondence before trial.

150.  From the WP correspondence discussed above, it is abundantly clear that costs had been the root cause preventing a settlement. As Piu had not accepted the EC Sanctioned Payment, Piu’s exposure to the costs-risk increased the more time passed. Piu would have likely incurred substantial costs by the time when Mr Tam made the numerous last-minute desperate attempts to settle the EC Action. As a result of Piu’s failure to accept the EC Sanctioned Payment, he is now facing adverse consequences by virtue of the orders that I made on the EC Summons. By acceding to the PI Summons for the same reason on account of Piu’s failure to accept the EC Sanctioned Payment would equate, in my view, to punishing Piu twice. That would not seem to be just.

151.  As for Piu’s conduct, it is important to consider the court’s findings in context. In the Judgment, the evaluation of the evidence of Piu is mixed. While this court was not convinced by certain aspects of Piu’s evidence, there was no finding of dishonesty: Judgment §54. In fact, this court had found that some of Piu’s conflicting evidence might have been likely to have been caused by the conflation of his multiple discomforts and injuries, some of which were accident-related, and some of which were not. As a matter of fact, this court rejected the Employer’s suggestion of Piu’s exaggeration of symptoms (Judgment §81 and §85 in relation to the cardiothoracic complaints Piu made to Dr Cheung), and also found Piu to have not committed any “conscious exaggeration or malingering” in relation to his mental disability: Judgment §116 and §118.

152.  When exercising my discretion, I consider that I should give weight to the fact that Piu had done better in the PI Action. After having taken into account the matters discussed above, I’m not inclined to the view that Piu’s non-acceptance of the EC Sanctioned Payment and his conduct should be weighed against Piu in depriving him of costs.

153.  I therefore reject §4 of the PI Summons.

J.3  Conclusion

154.  For the reasons stated above, §§2 and 4 of the amended PI Summons are dismissed. I grant orders in term of §3 in relation to the payment out of the PI Sanctioned Payment.

K.  Costs of the EC and PI Summonses

155.  From the discussion above, it appears that neither party is a complete winner in the sense that Piu failed in the EC Summons while the Employer failed in the PI Summons. To simplify the matter, I’m inclined to adopt the approach of setting off the costs of these two summonses against each other. Hence, I make an order that there be no order as to costs for each of the summonses save that Piu’s own costs be taxed in accordance with the Legal Aid Regulations.

156.  As statutorily required, I further order that the above costs orders be made on a nisi basis. Any application for variation of the nisi costs orders shall be made within 21 days from the date of the handing down of this Decision instead of the usual 14 days. The orders this court made in the EC Summons would likely impact upon the costs liability of the Director of Legal Aid. Having considered the evidence adduced before this court against the conduct of Mr Wong and the comments I made in various places in this Decision concerning Mr Tam’s conduct and his handling of this case, I grant leave to the Director to apply within 21 days from the date of the handing down of this Decision for wasted costs orders against Mr Wong and Mr Tam. If and when the court receives such an application, it would give directions to enable affected parties to be heard.

157.  I will also ask my clerk to furnish a copy of this Decision to the Director of Legal Aid. In view of the comments that I made about Piu’s assigned solicitor and counsel in this Decision, I request the legal aid counsel to interpret this Decision to Piu personally.

Postscript

158.  From the materials presented to this court in these proceedings, I have grave reservations as to whether the aided person has received proper and competent representation. If the legal team of the aided person – the assigned solicitor, mostly Mr Tam, and counsel, Mr Wong and Mr Pirie – had been nominated by the aided person rather than assigned by the Director of Legal Aid on merit, it certainly epitomizes the grave pitfalls of the existing nomination system. Given the very limited knowledge a lay person has as to the quality of the panel solicitors and barristers, the existing nomination system in allowing an aided person to nominate solicitors and barristers is likely open to abuse by some solicitors and barristers on the Legal Aid panel. The mechanism of nomination should be constantly reviewed.