YUEN YIU KWONG v. CHAN KWOK CHUEN AND OTHERS

HCPI 1356/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1356 OF 1999

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REASONS FOR DECISION ON COST

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1. On 20 December 2002, my decision on liability was handed down to the parties. In my decision, I held that the Defendants were liable to the Plaintiff but then the award of the damages should be discounted by 50% on account of the Plaintiff's contributory negligence. As to the quantum on full liability basis, I awarded the Plaintiff the amount of $200,000 as general damages for pain and suffering and loss of amenities, $100,000 for loss of earning capacity, $67,168 as damages for loss of pre-trial income and $90,830 as special damages. I also made an award of interest. I would not award any damages for loss of future earnings. It was not disputed that the award of damages should be discounted for contributory negligence if I should find that the Plaintiff was guilty of contributory negligence, and then the discounted amount should be further discounted by deducting from it the amount of employee's compensation awarded to the Plaintiff.

2. The total amount of my award including interest up to the date of judgment would work out to be $507,351.67, before any discount for contributory negligence and employee's compensation received. After taking into account the contributory negligence the amount would be reduced to $253,675.84, and after deducting the amount of employee's compensation received, the net amount which the Plaintiff would be entitled to receive from the Defendants as on the date of judgment was $22,474.84.

3. In the judgment handed down on 20 December 2002, I made an order nisi that the Plaintiff was entitled to the cost of the action. The application before me today was for that order nisi to be varied. At the end of the hearing today, 22 January 2003, I announced my decision on cost and I told the parties that I would give my reasons later and I do so now.

4. I was told and it was not in dispute that in fact on 7 May 2002, the Plaintiff paid the sum of $280,000 into court, and that on 23 July 2002, a further sum of $120,000 was paid into court. Thus there was a total amount of $400,000 in court since 23 July 2002. However from the figures set out above, it is clear that the net amount of the award to which the Plaintiff was entitled was only $22,474.84 which was less than the amount paid into court on 7 May 2002.

5. It was not in dispute that after 7 May 2002, the Defendants should be entitled to cost of the action. There is however a dispute between the parties as to what should be the correct scale for taxation for this period. The Plaintiff would contend that if I should award cost in favour of the Plaintiff for the pre-payment in period at District Court scale, then I should likewise award cost to the Defendants for the post-payment in period at the same scale. I do not think that such contention is right. The Plaintiff had opted to bring this action in the High Court, and I could not see any basis for awarding the Defendants cost on any lower scale in the event that the Defendants had succeeded in beating the payment in. Hence I have no hesitation in holding that the cost awarded to the Defendants after 7 May 2002, i.e. the date of the first payment in, should be on the High Court scale.

6. As to the cost for the period up to and including 7 May 2002, the Defendants would contend that (a) the cost should likewise be awarded to the Defendants, or alternatively (b) if the cost was to be awarded to the Plaintiff, it should only be on District Court scale. The Plaintiff on the other hand, would contend that the cost for this period should be awarded to him on High Court scale.

7. In support of his submission that the cost for the pre-payment in period should also be awarded to the Defendants, counsel for the Defendants drew my attention to the fact that in the revised statement of damages the Plaintiff in fact claimed the amount of $2,964,613.80 having taken into account the deduction of employee's compensation award already. Then by the commencement of the trial, in his opening counsel for the Plaintiff sought to claim the amount of $1,813,316 net of employee's compensation. In his final submission, Plaintiff's counsel submitted that the sum of $1,377,262 plus interest should be awarded. The point made by the Defendants' counsel is that plainly the Plaintiff fought this action not for a small award of some twenty-two thousand dollars. He further contended that as eventually the Plaintiff only succeeded in obtaining an award of $22,474.84, a fair view of the matter was that the Plaintiff should be considered as having lost his case and accordingly the court should award the cost of the whole action to the Defendants.

8. In support of his submission, the Defendants' counsel referred me to the decision of the English Court of Appeal in Alltrans Express Ltd. v CVA Holdings Ltd [1984] 1 WLR 394. The plaintiff in that case brought an action seeking￡82,500 damages for breach of warranty given by the defendant in an agreement for sale of a company's entire issued share capital. The plaintiff issued Order 14 proceedings and succeeded in getting judgment with damages to be assessed. Eventually the damages were assessed by the official referee at￡2 only. The official referee ordered the defendant to pay the cost on the grounds that the cost should follow the event and further that the defendant had failed to protect himself by a suitable payment in. The Court of Appeal reversed the decision on cost on the ground that the official referee had given too much weight to the absence of a payment into court of ￡2 and had also erred in considering that the plaintiff was successful because the plaintiff was awarded something nominal. Since it was plain that the award of ￡2 was not what the Plaintiff was aiming at, the plaintiff should be considered as having lost the action and should be liable to pay the cost.

9. In the present case, although the amount I awarded to the Plaintiff was far less than what the Plaintiff would expect, I cannot regard the net amount awarded being in excess of $22,000 should be regarded as nominal damages. Furthermore, the Defendants resisted the Plaintiff's claim both on liability and quantum. The Plaintiff must be entitled to bring this action to establish his right to damages against the Defendants. Accordingly I do not think that this is a case where I could regard the Defendants as being the successful party.

10. The Defendants' counsel's alternative argument was that since the amount of damages to which the Plaintiff was held to be entitled would fall within the District Court jurisdiction, the Plaintiff should have commenced this action in the District Court and hence even if the Plaintiff was eventually successful in obtaining $22,474.84 as damages, I should only award cost to the Plaintiff for the pre-payment in period at District Court scale.

11. On the other hand, the Plaintiff's solicitor contended that cost should be awarded at the High Court scale. She referred me to the decision of Ryan J. in Lam Sui Wo v Leung Kam Tin [1990] 1 HKC 456. Lam Sui Wo case was also a case on personal injuries. The defendant paid a sum of $77,000 into court and in the notice of payment in it was stated that this sum together with the employee's compensation payment was in satisfaction of the plaintiff's claim. The plaintiff accepted the payment in and the question was whether the plaintiff should get his cost on High Court scale or District Court scale bearing in mind that the amount of $77,000 was below District Court jurisdiction of $120,000. Ryan J held that the relevant scale should be the High Court scale. In holding that it would be reasonable for the plaintiff to institute proceedings in the High Court in the case before him, Ryan J referred to section 26(1) the Employees' Compensation Ordinance and in particular the provision that the award of damages in common law should be reduced by the amount of compensation paid or payable under the Employees' Compensation Ordinance. He further said: (at page 459)

"In selecting the forum in which to issue proceedings, it is therefore necessary for the plaintiff's solicitors to consider the total amount of damages which the plaintiff might recover before and not after the employee's compensation award is deducted. If that gross figure is estimated to be over $120,000, the solicitors are duty bound to issue proceedings in the High Court. To do otherwise could result in their client having to forfeit any amount of damages which the claim is shown to justify over $120,000, the District Court jurisdiction being limited to this figure.

After taking into account the time constraints for the issue of proceedings which faced the plaintiff's solicitors, the information which came from the employee's compensation award certificate as to earnings and, in particular, the amount for which the claim was settled - a total only slightly over $10,000 below the District Court maximum jurisdiction, I do not consider that in applying the test stated by Glyn Jones J in Hopkins v Rees & Kirby Ltd [1959] 2 All E.R. 352, that this is a case where it would have been clear to a reasonable man in the position of the plaintiff at the time of the issue of the writ that no judge would award more than the amount which could be awarded by the District Court.".

12. It was argued that (a) at the time when the writ was issued, the limit of the District Court jurisdiction was only $120,000, and (b) if one should ignore the employee's compensation paid to the Plaintiff, the amount of the award would be $253,675.84 which would be far in excess of the then District Court jurisdiction. Hence the Plaintiff's solicitor argued that following the decision of Ryan J, since for the purpose of deciding which forum to commence proceeding, one should ignore the amount of employee's compensation it would be perfectly correct for the Plaintiff to commence the present action in the High Court. Furthermore, it was argued that in any event the Plaintiff was justified in issuing proceedings in the High Court because the amount of damages claimed was as advised by counsel and the amount paid into court by the Defendants was in excess of the jurisdiction of the District Court.

13. I must say that I find that the reasoning of Ryan J that one should ignore the amount of employee's compensation in selecting the forum to issue proceedings difficult to follow. Since the Employees' Compensation Ordinance has made it clear that any award of damages in common law should be reduced by the amount of employee's compensation paid or payable under that Ordinance, surely the District Court would be entitled to award to the plaintiff any sum within its jurisdiction limit and this sum would have been the amount after the deduction of the employee's compensation award. In short I am not convinced that I should follow the observation of Ryan J, and I do not consider that those words were the ratio of his decision. It may well be the case that if at the time when proceedings for damages is issued, the plaintiff does not know the amount of employee's compensation he may be entitled, it would be proper to ignore the possibility of any award under the Employees' Compensation Ordinance. However in the present case, the amount of compensation under the Employees' Compensation Ordinance was known approximately one month before the issue of the writ. In the circumstances, I am of the view that in selecting the forum, the Plaintiff or his legal advisers should take into account that the amount awarded would be subject to employee's compensation deduction.

14. I do not agree that the fact that the statement of damages was settled by counsel or that the amount paid into court by the Defendants was already in excess of the jurisdiction of the District Court are good reasons for commencing proceedings in the High Court in this case. In any event the payment in did not take place until well over a year after the commencement of the proceedings.

15. In the end, I am of the view that properly advised the Plaintiff should have commenced proceedings in the District Court, and accordingly I order that the Plaintiff should be entitled to his cost up to and including 7 May 2002 on District Court scale only.

16. As to the cost of this application for variation of the order nisi, I am of the view that the Defendants would have to make this application to vary the cost nisi order. Accordingly I am of the view that the cost of this application should be considered as part of the post payment in cost and I therefore hold that the cost of this application should be to the Defendants and I am also of the view that this application is fit for counsel.