HUNG PUI MAN v. INTERCONTINENTAL LIMOUSINE COMPANY LTD

DCPI 4214/2022

[2025] HKDC 1721

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 4214 OF 2022

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DECISION ON COSTS

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1.  In my Reasons for Judgment handed down on 21 July 2025 ([2025] HKDC 1211), I gave directions for the filing of submissions on costs. Since then, parties have filed their respective written submissions and supporting affirmations. The Director of the Legal Aid decided not to file separate written submissions despite being given leave to do so.

2.  This is my decision on costs after considering the parties’ written submissions.

SANCTIONED PAYMENTS MADE BY THE DEFENDANT

3.  On 25 May 2023, the defendant put forward a sanctioned payment of HK$18,682.45 (inclusive of interest but on top of employees compensation of HK$738,481.76 received by the plaintiff) for full and final settlement of the plaintiff’s claim (“the 1^st SP”).

4.  On 11 October 2023, the defendant paid a further HK$31,317.55 into court to improve its sanctioned payment to HK$50,000.00 (“the 2^nd SP”).

5.  The plaintiff did not accept either sanctioned payments, but her claim was dismissed by me after trial.

6.  It is clear that Order 22 rule 23 of the Rules of the District Court (Cap 336H) is engaged in the present case, in that the plaintiff failed to obtain a judgment better than the defendant’s sanctioned payments. Order 22 rule 23(4)(a) and 23(5) provides that the defendant is entitled to its costs on indemnity basis after the last date on which the plaintiff could have accepted the defendant’s sanctioned payment (in this case, the 1^st SP) without requiring the leave of the court, unless the court considers it unjust to do so. The last date on which the plaintiff could have accepted the 1^st SP without leave fell on 22 June 2023.

THE DEFENDANT’S STANCE

7.  The defendant now asks for costs to be paid by the plaintiff on indemnity basis, and not just from 23 June 2023 onwards.

8.  Mr Leon Ho, counsel for the defendant, submits that the present case should never have been commenced. He points to Law Yin Pok Bosco, a minor by Lam Po Yee, his mother and next friend v Dr Chan Yee Shing also known as Dr Chan Yee Shing Alvin [2022] HKCFI 345 (Deputy Judge Winnie Tsui; 21 January 2022) for the principles guiding the court in considering whether indemnity costs should be ordered. In §8, the learned Judge summarized that, inter alia:-

8.1.  It is for the party seeking indemnity costs to show that the case has some “special or unusual feature”;

8.2.  It is now recognized that indemnity costs are no longer confined to cases where the paying party’s conduct lacks moral probity or deserves moral condemnation for which the court wishes to express disapproval. Conduct which falls short of that can be so unreasonable as to justify an order for indemnity costs; but such unreasonableness would need to be to a high degree;

8.3.  The pursuit of a weak claim will not usually, on its own, justify an order for indemnity costs. On the other hand, to maintain a claim that one knows, or ought to know, is doomed to fail on the facts and on the law, is conduct that is so unreasonable as to justify an order for indemnity costs.

9.  Mr Ho points to the following to say that it was so unreasonable for the plaintiff to commence the present case, such that indemnity costs are called for:-

9.1.  In the pre-action letter, the plaintiff referred the defendant to the Form 2 and the Application in the connected employees compensation claim as to the circumstances of the Accident. In those documents, it was stated that the plaintiff was injured when she was instructed to unload luggage at the airport. But, Mr Ho submits, there could be no fault on the defendant’s part to instruct the plaintiff to do what she had to do as a chauffeur;

9.2.  The defendant disclosed (i) the work injury report; and (ii) the written statement prepared by the loss adjusters (“the defendant’s documents”) by way of its List of Documents on 25 July 2023. By then, the plaintiff must have been reminded that she gave different versions as to how the Accident happened at different junctures of time;

9.3.  The quantum of the plaintiff’s claim, as assessed by this court, was less than 30% of the employees compensation already received by the plaintiff. She obviously inflated her claim when she claimed almost HK$3 million plus interest in the Revised Statement of Damages.

10.  Mr Kelvin Wong[1], counsel for the plaintiff, submits that indemnity costs should not be ordered at all, because:-

10.1.  The 1^st SP and the 2^nd SP were made in the early stage of the present case. The plaintiff should not be seen as unreasonable for taking a cautious approach in considering whether to accept them;

10.2.  In the Defence, the defendant did not seriously dispute the mode and place of the Accident. Instead, the defendant averred that it had provided training to the plaintiff as to the posture of offloading luggage;

10.3.  If the court accepted the plaintiff’s case as to the existence of the Accident, then there would be issues as to whether the training provided by the defendant was sufficient. It could not be said that the plaintiff’s claim was entirely unmeritorious; and

10.4.  The plaintiff’s case on quantum was not inflated as alleged by the defendant.

11.  In my judgment, Mr Wong’s submissions must be rejected outright:-

11.1.  The plaintiff knows best as to whether the Accident happened at all; and if so, how it happened. She also has the best idea as to the extent of her injuries. Commencing a claim in our courts is no casual matter. She has the primary responsibility to ensure that she has a sustainable claim against whoever she intends to sue. It lies ill in her mouth to say that her claim is less unmeritorious because the defendant decided to defend it in a particular manner;

11.2.  The defendant cannot be said to have not seriously disputed the existence and circumstances of the Accident. It did not admit to the Accident in the Defence. Given it did not have any eyewitness who could speak of the truthfulness and accuracy of the plaintiff’s claim regarding the existence and circumstances of the Accident as pleaded, it naturally could not put forward a positive defence in that respect. The defendant’s non-admission, in the present case, cannot be said to be a half-hearted defence to the Accident itself. In fact, §4(d) of the Defence referred to the work injury report in raising an issue on the course of the Accident as pleaded;

11.3.  The mechanism of sanctioned offers and payments is intended to encourage settlement and reduce costs as much as possible. It is plainly against the spirit of the Civil Justice Reform (which revamped Order 22) to allow a plaintiff to adopt a “wait-and-see” approach for settlement offers which turns out to be reasonable: cf Or Siu Lung v Fu Hong Home for the Elderly Co Ltd [2018] 1 HKLRD 872 at §§21-26.

12.  I find that the plaintiff has failed to show that it would be unjust to order indemnity costs as per Order 22 rule 23(4)(a).

13.  I further agree with Mr Ho that this is a suitable case to order the entire costs of the action to be paid by the plaintiff on indemnity basis. In §3 of the Affirmation of Lam Yat Wah dated 5 August 2025, it is confirmed that the plaintiff’s solicitors obtained the defendant’s documents prior to the commencement of the present case[2]. It ought to have been apparent to the plaintiff (and those advising her) that she had to plead the circumstances of the Accident with particular accuracy, because of apparent conflict amongst different documents in which she described how the Accident happened. In my judgment, the plaintiff has clearly failed to properly consider how her claim should be framed and managed. She came up with a version of events which was inconsistent with those documents, with no attempt to explain how the inconsistency arose[3]; I have no hesitation to conclude that she was highly unreasonable in putting forward her claim as pleaded despite having sight of the defendant’s documents.

14.  Mr Wong has no dispute with the ancillary order sought by the defendant regarding the payment out of the sanctioned payments.

RATE OF ENHANCED INTEREST

15.  Order 22 rule 23(4)(b) provides that the court may order interest on the indemnity costs at a rate not exceeding 10% above judgment rate. In So Sin Ying v JV Fitness Ltd [2024] 2 HKC 596 at §37, the court held that, in the context of personal injuries litigation, judgment rate plus 2% should be sufficient as enhanced interest where there was no suggestion of abuse of process, or that entirely misconceived or bad points were taken in the absence of evidence.

16.  Mr Ho submits that interest at judgment rate plus 5% is appropriate given the unreasonableness of the plaintiff’s claim. I agree.

17.  There is no dispute that interest should be computed by making separate calculation for each item of costs, from the actual date of payment to the date of judgment.

WASTED COSTS ORDER

18.  Mr Wong submits that I should not ask the plaintiff’s solicitors to bear costs personally. He argues that:-

18.1.  The plaintiff’s solicitors discharged their duties properly in commencing the plaintiff’s claim with the version of events pleaded in the Statement of Claim, because the plea was consistent with the course of the Accident described in the Form 2, and with the particulars of the Accident as stated in the connected employees compensation claim;

18.2.  The inconsistency between the plaintiff’s pleaded claim with the defendant’s documents was not an oversight by the plaintiff’s solicitors. After the plaintiff rejected the 2^nd SP, counsel was instructed to advise on liability, quantum and evidence; the advice was rendered on 29 February 2024. I note that legal aid was discharged shortly afterwards on 6 June 2024;

18.3.  It would be a matter of hindsight to say that the plaintiff’s solicitors could have done something more to mitigate the inconsistency between the pleadings and the defendant’s documents.

19.  In §4 of the Affirmation of Lam Yat Wah, the plaintiff’s handling solicitor stated that the defendant’s documents were provided to the Director of Legal Aid when the plaintiff applied for legal aid. In response to the queries raised by the Director on those documents, the plaintiff replied on 21 December 2020 that the witness statement prepared by the loss adjusters did not completely record what she said during the meeting with them. Subsequently, legal aid was granted to the plaintiff for both the present case and the connected employees compensation claim.

20.  Since the plaintiff was on legal aid up to 6 June 2024, any order not allowing legal aid taxation of the plaintiff’s own costs will have the same effect as a wasted costs order against the plaintiff’s solicitors: Cheung Shui Han v Luk Ka Ling [2012] 4 HKLRD 536. The approach that should be taken by the court in considering whether wasted costs ought to be ordered was exhaustively discussed in Chung Ho Ming v Chan Wai Yip and Kowloon Motor Bus Co (1933) Ltd (No 2) [2024] 1 HKLRD 1382. It is not suggested that the court’s consideration should be any different when considering whether legal aid taxation should be disallowed. I bear in mind the principles enunciated in Chung Ho Ming (No 2), in particular that the court should proceed carefully and give the solicitor the benefit of the doubt if privilege is not waived to allow the solicitor to give a full account of events.

21.  I do not think Mr Wong’s submissions have addressed the proper issue; the plaintiff’s reply to the Director of Legal Aid is also not a complete answer showing the innocence of the plaintiff’s solicitors. Putting forward a plea in the same form as the Form 2 and the Application did not resolve the inconsistency with the defendant’s documents; even though the plaintiff disputed the propensity of the witness statement prepared by the loss adjusters as early as 2020, little was done to properly explore this dispute in the present case for her benefit. The crux of the matter remains, given the availability of the defendant’s documents, and what the plaintiff knew as to how the Accident happened, was the preparation and management of her claim by her solicitors so bad that it amounted to an abuse of process, such that they should be personally liable for the defendant’s costs?

22.  Whilst I have some suspicion on the professed innocence of the plaintiff’s solicitors, I have ultimately reached the conclusion that legal aid taxation should not be disallowed, and wasted costs order should not be ordered for the period consequent to the discharge of the plaintiff’s legal aid. At the moment, evidence is scant on what the plaintiff’s instructions actually were in commencing the present case, and in pitching her case as she did in the Statement of Claim; little is known as to what transpired during the preparation of her witness statement. It is a matter for the plaintiff not to put more information before the court. In my judgment, it is not possible to conclude that the plaintiff’s solicitors connived in putting forward the plaintiff’s pleaded claim as to how the Accident happened. There was also no abuse of process in the form of blindly helping the plaintiff to pursue a hopeless claim, as counsel advice was obtained. Whilst the competence and/or conscientiousness of the plaintiff’s solicitors are, in my view, in grave doubt, this is not a case in which they should be asked to be personally responsible for the costs of the present case.

CONCLUSION

23.  I grant the following order on costs:-

23.1.  The plaintiff do pay costs to the defendant (including all costs reserved), on indemnity basis with certificate for counsel, to be taxed if not agreed;

23.2.  The plaintiff do pay interest on the defendant’s costs at judgment rate plus 5% from 22 June 2023 to 19 March 2025; and at judgment rate thereafter until full payment;

23.3.  The sum of HK$50,000.00, being the total of the sanctioned payments made by the defendant on 25 May 2023 and 11 October 2023 respectively, together with the interest accrued thereon (if any), be paid out to the defendant forthwith through its solicitors, Messrs Zhong Lun Law Firm LLP;

23.4.  The plaintiff’s own costs up to and including 6 June 2024 be taxed in accordance with the Legal Aid regulations.