LEUNG KAM v. MAX WEALTH ENGINEERING LTD AND ANOTHER

HCPI 90/2021

[2025] HKCFI 2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 90 OF 2021

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BETWEEN

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DECISION ON COSTS

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1.  By the judgment after trial handed down on 27 November 2024 (“the Judgment”), this court found for the plaintiff (“Leung”) and awarded him damages in the sum of HK$1,142,710 (on top of employees’ compensation) with interest. Upon that event, this court also made a nisi order that the defendants shall pay Leung’s costs (“the Nisi Costs Order”). Leung has since taken out application to vary the interest rate and the Nisi Costs Order. This has subsequently been resolved by agreement except for the scale of taxation of the costs payable by the defendants. As directed, the parties have lodged their respective submissions[1], and this is decision on paper without oral hearing.

The applications

2.  Whilst the damages net of the employees’ compensation awarded under the Judgment was barely 10% of the amount claimed by Leung, Leung seeks variation of the interest payable on the judgment sum and costs as well as the Nisi Costs Order in his favour. Essentially, the basis is that the Judgment nevertheless is better in terms than his sanctioned offer, which the defendants have rejected, and the sanctioned payment made by the defendants. Leung filed his summons on 10 December 2024 (“P’s Summons”) for such purpose.

3.  Eventually the parties managed to come to terms in respect of the rate of interest on damages and costs as well as the incidence of costs liability and their applicable periods. The outstanding issue, of which the defendants have taken since the filing of P’s Summons, was the scale of taxation of his costs. The defendants contend that such costs of Leung should be taxed on the District Court scale. Leung disagrees.

4.  The parties informed this court of their consensus and disagreement mentioned above by their joint letter dated 8 January 2025. Hence the order of this court on 10 January 2025 together with directions for the determination of the outstanding issue of the scale of taxation of Leung’s costs on paper without oral hearing.

5.  By way of his written submission, counsel for Leung raises a preliminary argument. He questions whether the defendants are entitled to argue the scale of taxation of his client’s costs, when they have not actually sought to do so by way of formal application before the Nisi Costs Order has become absolute after 14 days of its making.

6.  The fact is that the Nisi Costs Order did not become absolute for the parties as Leung has filed P’s Summons within time. In the circumstances of this case, it is not realistic to argue that the defendants are hitch-hiking on P’s Summons for the variation of the Nisi Costs Order which they, but not Leung, are seeking.

7.  First, by letter dated as early as 17 December 2024, the defendants already put on record to those acting for Leung the former’s stance that Leung should be entitled to his costs on the District Court instead of the High Court scale. That continued to be an issue of debate in the subsequent correspondence between the parties.

8.  Second, those acting for parties then negotiated the proposed directions for the disposal of P’s Summons. At one stage, it was those acting for Leung which proposed that his costs shall be taxed on the High Court scale unless otherwise ordered by the court. The further negotiation between the parties indeed focused on proposing directions to the court to resolve their disagreement in this respect. This ended in their joint letter to this court dated 8 January 2025 mentioned above. The scale of taxation of Leung’s costs is consciously and expressly a live issue to be determined by the court as the court thinks fit.

9.  Third, in view of the preliminary argument raised in the submission of counsel for Leung notwithstanding the above background, the defendants in any event act on caution by taking out their summons on 28 January 2025 for formally taking issue of the scale of taxation of Leung’s costs and for that, extension of time for so varying the Nisi Costs Order (“Ds’ Summons”).

10.  Against the above background, it is not quite expected that those acting for Leung see fit to advance the preliminary argument in respect of the defendants’ entitlement to be heard on the scale of taxation of his costs, and now whether extension of time should be granted for the Ds’ Summons to be entertained. No material prejudice occasioned by the stance taken and made known by the defendants and now the Ds’ Summons may be suggested. Insofar as this is strictly necessary, extension of time sought by the Ds’ Summons is granted.

11.  Clearing the preliminary argument, I proceed to discuss the issue which the parties do ask me to determine.

Discussion

12.  Both counsel refer to Wong Chim Hing v Discovery Bay Transit Services Ltd, HCPI 254/2011 (7 November 2014), which was a case concerning costs consequence under O22, Rules of the High Court, Cap 4A. Specifically, the context of the case entails the application of the so-called “otherwise proviso” whereby the court may depart from the default or prima facie position of costs on the High Court scale, and order costs to be taxed on the District Court scale instead, on the ground that the sanctioned payment in a sum within the District Court jurisdiction is accepted in settlement of the action commenced in the High Court.

13.  The context here however is whether or not Leung’s costs should be taxed other than on the High Court scale when he is awarded damages falling short of the jurisdiction of this level of court. Both counsel agree that the question is one of justification for commencing the action in the High Court, which depends on whether or not Leung had a reasonable prospect of recovering a sum in excess of the District Court jurisdiction.

14.  The above question should be answered with reference to the facts and the evidence available for an informed assessment by the plaintiff before commencing the action. The timing is of particular relevance when the question is asked after trial such as what happened in the present case. It is not answered with reference to the evidence heard at the trial, much less the findings eventually made by the court unless specifically in respect of the justifiability of any aspect of the claim that should be obvious from the outset.

15.  The quantum assessed by this court represents the compensation for the damage suffered by Leung which was in fact attributable to the accident in question. This came about after very substantial deduction on account of the pre-existing degeneration contributing towards Leung’s post-accident condition and disabilities. It came to just over HK$2 million and, after giving credit to the employees’ compensation received, the award in the sum of just over HK$1.1 million. But for the finding in respect of pre-existing degeneration and its extent, the quantum as assessed would have fallen well within the monetary jurisdiction of this level of court.

16.  The relevance of pre-existing degeneration to the causation of Leung’s post-accident condition and disabilities was known from the first joint orthopaedic expert report, which was available to the parties even before the commencement of the action. The major argument for the present purpose largely surrounds the assessment reasonably expected of Leung and those acting for him at the time of deciding whether to commence the action on this level of court.

17.  The opinion of the parties’ respective experts, Dr Miu and Dr Ko, as stated in their first joint report was set out in detail in the Judgment, which I would not repeat. Both experts did consider the factor of pre-existing degeneration and the condition of Leung both before and after the accident. Both considered the categorisation of his case with reference to Chan Kam Hoi v Dragages et Travaux Publics [1998] 2 HKLRD 958. They came to different views in respect of causation of his post-accident condition and disabilities.

18.  Counsel for the defendants argues that Dr Miu did not address in the report various observations and opinion made by Dr Ko in support of the latter’s opinion on the likely substantial contribution of Leung’s pre-existing degeneration towards Leung’s post-accident condition. However, as Dr Miu was not silent on the possible contribution of pre-existing degeneration in Leung’s case, what is being suggested now is that the informed assessment on the part of Leung at the time should have been that there was no reasonable prospect for Dr Miu’s opinion to be preferred or that there was all the likelihood that Dr Ko’s opinion would be preferred.

19.  I refrain from coming to such view of the matter suggested by the defendants. Further, even assuming that a reasonable prospect of the court finding contribution of pre-existing degeneration in Leung’s case should be known before the commencement of action, there would still have been the assessment of its extent. As mentioned, the quantum eventually assessed was the result of the substantial discount (80%) found and applied by this court. That percentage suggested by Dr Ko was accepted after this court has considered the evidence, including the further joint expert report and the oral evidence of the experts. I refrain from concluding that the informed assessment on Leung’s part before the commencement of action ought to have expected no reasonable prospect of any lesser extent of such discount on account of pre-existing degeneration which might have brought the claim within the monetary jurisdiction of this level of court.

20.  This court notes that in as early as September 2022, those acting for Leung already extended the sanctioned offer of HK$1 million (inclusive of interest but on top of the employees’ compensation) to settle the claim. That was still way before the further instruction to the orthopaedic experts for their further opinion, which happened only in early 2024. However, I refrain from reading too much into that as this would not be quite the right approach in line with the principle as discussed. Whilst the offer reflects the readiness to settle instead of taking the litigation risk, it may not necessarily be fair to read further from that his concession in the respect as his predominant reason.

Conclusion and order

21.  In respect of the Ds’ Summons, as mentioned, extension of time for the application is granted. However, regarding both the P’s Summons and the Ds’ Summons in respect of the scale of taxation of Leung’s costs payable by the defendants under the Nisi Costs Order as subsequently varied by consent of the parties, I rule that such costs shall be taxed on the High Court scale.

22.  Following the event, I make a nisi order that the two defendants shall jointly and severally pay Leung’s costs of and occasioned by both applications to be taxed on the High Court scale, if not agreed. Amongst others, the parties agree that the defendants shall pay Leung’s costs from the last date by which his sanctioned offer could have been accepted on an indemnity basis. In line with that, the further costs of and occasioned by the present applications shall be taxed on the same basis, with certificate for counsel. Leung’s own costs shall be taxed in accordance with legal aid regulations. In the absence of application in 14 days to vary, the nisi costs order shall become absolute without further order.