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CACV000104/1987
| IN THE COURT OF APPEAL |
1987 No. 104 |
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(Civil) |
BETWEEN:
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DOMINGA ELIZABETH IBIRONKE LAKHAN
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AND
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WU WING TAT
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TANG YING CHOY
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Coram: Roberts, C .J., Hunter, J A. & Mayo, J.
Date of Hearing: 3 September 1987
Date of Judgment: 11 September 1987 (P.I.file)
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JUDGMENT
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Roberts, C. J. -
Preliminary
1. The plaintiff suffered severe injuries as a result of a motor car accident which occurred on 9th May, 1981.
2. On 29th June, 1987, Nazareth, J., after an eleven day trial, gave judgment for the plaintiff for $217,000 and £319,717.99. He adjourned the issues of interest and costs for further argument at a later date.
3. On 14th July, he ordered, in addition to other matters not in issue in the appeal, that -
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The costs of the action be paid by the Defendants to the Plaintiff on a party and party basis, to be taxed, if not agreed, with certificate for two Counsel including Mr. K.L. May as the Junior counsel." |
4. The Judge granted leave to appeal to the Court of Appeal on that part of his order.
5. On 15th July, the Judge was invited to review his decision of 14th July, by counsel for the appellant, who sought to put before him further argument not drawn to his attention on 14th July.
6. The Judge dismissed the application to review and awarded the costs of the hearing of 15th July to the defendants, with certificate for two counsel.
7. The appellant (the plaintiff in the action) sought an order that the Orders of 14th and 15th July be set aside and that -
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the plaintiff should be granted a certificate for three counsel, including Mr. K.L. May, junior counsel from England;
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costs be awarded to the plaintiff on a common fund basis. |
Certificate for counsel
8. The plaintiff was represented during the trial in Hong Kong by Queen's Counsel and a junior counsel from London(Mr.May) and a Hong Kong junior.
9. In addition to the evidence heard in Hong Kong, further evidence, of a substantial nature, lasting about eight hearing days, was taken in England on commission. The plaintiff was there represented by the London Queen's Counsel and Mr. May.
10. Nazareth, J. delivered his rulings orally on the 14th and 15th July, 1987 and did not subsequently record his reasons. We have therefore had to rely on a note of the Judge's observations taken at the time by a member of the Legal Aid Department, who acted as the plaintiff's solicitor.
11. This note is not in verbatim form, nor does it appear to have been corrected by the Judge. It has therefore been necessary to make some allowance for this.
12. The note of the Judge's reasons for granting a certificate "for two counsel, including Mr. K.L. May", reads as follows -
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I' m satisfied why Mr. Stewart:- hearing in UK take place. Sensible, proper, reasonable and necessary that Junior Counsel be there - particularly Plaintiff's mind. Accept Junior in U.K. made better sense at hearing in London than having Junior Counsel from H.K. Accept also - created degree of dependency by Plaintiff on Junior Counsel - Dr. Noble supported this Court certifies Mr. May as Jnr Counsel. As to 3rd Counsel Plaintiff submits 2nd Junior necessary to provide knowledge of local law. Do not think necessary to have local Counsel as back up sufficient to provide guidance.'' |
13. The inclusion in the certificate of leading counsel from London is not in issue. The question, therefore, is weather the judge was right to grant a certificate for only one junior counsel.
14. In relation to Mr. May, the judge exercised his discretion to Grant a certificate for him on the following grounds -
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a substantial amount of evidence was taken on commission in England;
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the plaintiff's injuries included a depressive illness, which made it important for her to continue to be represented on her return to Hong Kong by counsel in whom she had confidence;
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a medical report by a Dr. Noble, a London psychiatrist, who was of the opinion that it was "of considerable importance that she should be accompanied by a counsel in whom she now places considerable trust" (i. e Mr. May) "The alternative, even though the person were competent, might have a catastrophic effect on her peace of mind, her mental stability and her ability to do herself justice in the forthcoming trial." |
15. There were thus cogent reasons which gave support to the decision of the Judge to exercise his discretion and grant a certificate to include Mr. May and we see no grounds on which we could properly interfere with his decision in this respect.
16. There remains the question of whether he should also have allowed, in his certificate, for a third counsel, namely, the Hong Kong junior who had also represented the plaintiff throughout the trial in Hong Kong.
17. During argument on 14th July, the Judge's attention does not seem to have been drawn to various considerations which might have affected his decision and on which he refused to hear further argument on 15th July.
18. Rule 171(c) of the Hong Kong Bar Code of Conduct requires that -
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An overseas barrister admitted as aforesaid shall not accept any instructions or conduct any litigation in relation to the case or cases for which he is admitted unless a Hong Kong barrister has been instructed with him." |
19. Solicitors for the plaintiff, when enquiring as to whether the Hong Kong Bar Association would oppose their application for the admission of Mr. May for the purposes of the case, made it clear that a Hong Kong junior would also represent the plaintiff at the trial.
20. The Code of Conduct is one which regulates the profession and is not per se, binding on the Courts. However, it is clear from an examination of Hong Kong cases on the admission of overseas counsel, that it has received judicial approval.
21. In Re Charles Gray (1) , Sir Alan Huggins, V.P. granted an application for the ad hoc admission of an English junior, on condition that a Hong Kong junior should also appear. For some years, whenever overseas counsel are admitted ad hoc, it has been the custom of the profession and the requirement of the Chief Justice, that a local junior counsel be briefed also, to provide the detailed knowledge of Hong Kong law which cannot be expected of overseas counsel.
22. It can therefore be properly said that it is judicial policy, as determined by the public interest, that English counsel will not appear ad hoc in a Hong Kong court without a local junior. It is on this basis that overseas Queen' s Counsel are admitted and it was on this basis that the plaintiff's solicitors applied for the admission of Mr. May.
23. We have no doubt that, if these considerations had been put before the Judge on 14th July, he would have granted a certificate for three counsel and that, in refusing to do so, he was plainly wrong. To that extent, therefore, the appeal succeeds.
Taxation of costs
24. The other aspect of the Judge's order which is challenged by the appellant is his award of costs to the plaintiff oh the normal basis, that is to say, party and party, rather than on the more generous common fund basis.
25. By Order 62 r.28(2), costs are to be taxed on a party and party basis, on which are allowed "all such costs as were necessary or proper" etc.
26. By Order 62 r.28(4), on taxation on a common fund basis, which is more generous than the party and party basis, there shall be allowed "a reasonable amount in respect of all costs reasonably incurred".
27. It is to be noted that the less generous party and party measure of costs was abolished in England in April 1986, leaving costs to be assessed either on the previous common fund basis or on the indemnity basis (known also as solicitor and own client basis) - as is provided for in Order 62 r.29(1).
28. It was submitted to us that we should have regard to this, not because the change to the previous practice applies in Hong Kong , but because the change implied a recognition that party and party costs may often be unjust to the successful party.
29. In one sense, this is undoubtedly so. In most cases of a substantial nature, the amount of costs recoverable by a successful party will be significantly less if costs are awarded on a party and party basis than on a common fund basis.
30. This is a powerful argument for a change in the law, which indeed we support. But it does not excuse us from applying the law as we now find it, even though we are of the view that it causes unfairness in many cases.
we must take as our starting point the principle that the award of costs is a matter which lies within the discretion of the trial judge.
31. In Lever Bros. v. Masbro' Equitable (2), the Court of Appeal, where leave had been given to appeal against the order of a trial judge who made no order as to costs, Cozens-Hardy, M.R. commented -
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The principle was that if the Court of Appeal was satisfied that the Judge had not applied some rule which in fact excluded his discretion, it was necessary to show that there had been no proper exercise of his discretion." |
32. The cautious approach which an appellate court should adopt to an appeal on costs was emphasized by Stephenson, L.J. in Alltrans Express Ltd. v. CVA Holdings Ltd.(3) -
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We must be very careful not to interfere with the judge's exercise of the discretion which has been entrusted to him. We can only do so if he has erred in law or in principle, or if he has taken into account some matter which he should not have taken into account or has left out of account some matter which he should have taken into account; or-and this is an extension of the law which is now I think well recognised- if the Court of Appeal is of opinion that his decision is plainly wrong and therefore must have been reached by a faulty assessment of the weights of the different factors which he has had to take into account." |
33. In Eagil Trust Co. Ltd. v. Pigott-Brown ( 4), Griffiths, L.J. observed -
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Sometimes it is also said that the judge's discretion can be attacked if it is clearly wholly wrongly exercised. But, in my view, the greatest caution should be adopted in that approach because it comes perilously close to a means of substituting this court's discretion for that of the High Court judge; and that is not permissible." |
34. Can it be said that the Judge's discretion as to costs was clearly wrongly exercised, to adopt the test referred to by Griffiths, L.J., or that "the judge plainly got the wrong answer", the phrase used by Cumming-Bruce, L.J. in Clarke-Hunt v. Newcombe (5) (quoted by Lord Frazer in G. v. G..(6)).
35. It is not disputed that the usual order for costs is on a part and party basis and that a mere order that a party shall have costs will mean that they will be so assessed. In what circumstances should the Judge exercise his discretion to award costs on a common fund basis?
36. The question was considered by the Court of Appeal in Preston v. Preston(7). Brandon, L.J., at p.38, said -
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The practice of awarding costs in certain cases on the more generous common fund basis originated in the High Court of Chancery: see Andrews v. Barnes [1888 39 Ch. D. 133]. It appears that in earlier days the practice was limited to particular classes of cases and that its application was fettered to that extent. The words of R.S.C., Ord.62 r.28(3), however, give the court what appears to be an entirely unfettered discretion to order taxation on a common fund basis 'in any case in which it thinks fit to do so.'
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On the true construction of paragraphs (2) and (3) of rule 28 taken together, hoeever, I do not consider that the power to order costs to be taxed on a common fund basis is intended to be exercised arbitrarily or whimsically. On the contrary, it appears to me that it is necessary, before the court departs from the general basis of taxation laid down in paragraph (2) and directs taxation on the more generous basis authorised by paragraph (3), that there should be some special or unusual feature in the case to justify the court in exercising its discretion in that way. That appears to have been the approach adopted by Paull, J. in Layzell v. British Portland Cement Manufacturers Ltd. [1961] 1 W. L. R. 557, and more recently by Brightman, J. in Marx v. Estates and General Investments Ltd. [1976] 1 W.L.R. 380. In the former case the ground on which Paull, J. awarded costs on a common fund basis was that the action was one for damages for serious personal injuries brought by a minor through his next friend, and the judge considered that, the action having succeeded, the next friend should not, so far as possible, to left out of pocket in respect of the costs which he had incurred. In the latter case Brightman, J. considered that the plaintiffs had done a great service to the members of the defendant company because they had prevented a purchase taken place which,in accordance with the judge's decision, was against the will of the majority of those members voting upon it. On that ground he thought is right to exercise his discretion by ordering that the plaintiffs should have their costs taxed on a common fund, rather than a party and party basis.
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In the present case the judge exercised his discretion to award the wife her costs on a common fund basis on the ground that the husband's solicitors had, by their extreme dilatoriness and lack of proper co-operation in conducting the proceedings, enormously increased the costs incurred by the wife, with the result that, if the wife only got her costs on a party and party basis, she would have to bear an unusually heavy loss in unrecovered costs.
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In my judgment the judge was entitled to regard that feature of the case as something special or unusual which justified him in exercising his discretion with regard to the basis of taxation of the wife's costs in the way that he did. It follows that I see no good reason why this court should interfere with his decision on the matter." |
37. It was conceded by the appellant that common fund costs should be awarded only if it is shown that there were special and unusual features in the case.
38. It was, however, argued that there were such features, by reason of the international aspects of the case, the conduct of the defendants, the injuries to the plaintiff which caused depression and added greatly to the costs and the large sum of costs which the plaintiff would have to meet out of her damages if the lower measure of costs were applied.
39. All these factors were considered by the Judge when reaching his decision. We are not prepared to say that that decision was plainly wrong, so that we should interfere with it.
40. It was argued that, reluctant though we might be to interfere with the discretion if the Judge had properly directed himself, the notes of his oral judgment could be interpreted to suggest that he had not. This argument was based on the following paragraph -
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Do not find special or unusual in costs or international dimension. Taxing Master will consider them. Will consider on basis of reasonableness rather than necessity." |
41. This passage, the argument runs, must mean that the Judge, by his reference to "reasonableness" was confused as to the difference between party and party and common fund costs since the test of reasonableness is applicable to common fund and not to party and party.
42. This passage, even if accurate, must not be considered in isolation. Later 'in the note, the Judge is recorded as saying, having referred to Preston v. Preston (7) that the substantial costs involved were "not so unusual or special".
43. He later observed that, from his observation of the plaintiff in the witness box, he did not think that her intellectual deficiency was an "unusual feature that would justify awarding Common Fund costs". He added -
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Not accept that looking at case in the round that there is any special or unusual features or that cumulative effect of all these features entitles me to depart from normal rule". |
44. It is thus abundantly clear that the Judge-
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was fully aware of the difference between common fund and party and party costs; |
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realized that he had a discretion as to which to award; |
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knew that party and party costs were usual; |
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applied the correct test which should be satisfied before common fund costs are granted. |
45. In such circumstances, it would be wrong for an appellate court to substitute its discretion for that of the trial judge, unless satisfied that he was plainly wrong. This we are not prepared to do, since it was clearly open to him, having given careful consideration to all the relevant factors, as he did, to exercise his discretion and award the usual scale.
46. The appeal against the Judge's order, insofar as it relates to the award of costs on a party and party basis must be dismissed.
(1) [1984] H. K. L. R. 367
(2) [1912] 28 T. L. R. 294
(3) [1984] 1 W.L. R. 394,400
(4) [1985] 3 A11 E. R. 119, 121
(5) [1982] 4 F.L.R. 482, 488
(6) [1985] 2 A11 E. R. 225, 228
(7) [1982] Fam. 17.
Representation:
Mr. R.M. Stewart, Q.C. with Mr. D. Law (D.L.A.) for Appellant/Plaintiff
Mr. M. Wright, Q.C. with Mr. M. Ozorto (Hoosenally & Neo) for Respondents
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