WONG CHI KEUNG v. FARSPEED INTERNATIONAL LTD AND OTHERS

CACV 412/2005

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 412 OF 2005

(On appeal from High Court Personal Injuries Action No. 262 of 2003)

______________________

______________________

J U D G M E N T

______________________

Hon Le Pichon JA :

1. I agree with the judgment of Cheung JA and the order he proposes.

Hon Cheung JA :

The background

2. The plaintiff was injured in an industrial incident on 1 April 2000.  He claimed damages against the 1^st defendant (the employer), 2^nd defendant (the principal contractor) and 3^rd defendant (the sub-contractor).  He was represented by Ms Phyllis K. Y. Kwong of Phyllis K. Y. Kwong & Associates (‘Kwong & Associates’) on the instructions of the Director of Legal Aid.  The 1^st defendant was represented by Ford Kwan & Co. (‘Ford Kwan’).  The solicitor in charge was Ms Pauline Chew.  The 2^nd and 3^rd defendants were represented by Masons (‘Masons’).

The order of 5 January 2004

3. On 5 January 2004, Master B. Kwan on a checklist hearing of the case made various orders, three of which are relevant for this appeal :

'2. The plaintiff and the defendants are to serve and exchange the witness statements of the named witnesses within 21 days thereafter, i.e. by 9^th February 2004.

3. The plaintiff and the 1^st defendant shall arrange for joint orthopaedic and joint psychiatric reports by their respective experts namely Dr. Danny Tsoi for the plaintiff and Dr. Lam Kwong Chin for the defendants and Dr. Chung See-yuen for the plaintiff and Dr. Benjamin Lai for the defendants.

4. Parties to write joint letter to PI Master when the joint orthopaedic and the joint psychiatric reports are ready, in any event by 3^rd May 2004.'

The summons of 28 December 2004

4. These three orders were not observed by the parties and nearly one year after the order of 5 January 2004, Kwong & Associates on 28 December 2004 issued a summons seeking the following orders :

'(1) Unless the defendants do serve and exchange the witnesses statements of the named witnesses in compliance with paragraph 2 of the Order on Check List Review dated 5^th January 2004 within 21 days from the date of the Order to be made herein, the defendants be debarred from calling witnesses at the trial;

(2) The 1^st defendant do arrange for joint orthopaedic and joint psychiatric reports namely Dr. Lam Kwong Chin and Dr. Benjamin Lai in compliance with paragraph 3 of the Order on Check List Review dated 5^th January 2004 within 21 days from the date of the Order to be made herein;

(3) Costs of and incidental to this application be to the plaintiff in any event; and

(4) The Plaintiff’s own costs be taxed in accordance with Legal Aid Regulations.'

The first hearing

5. This summons was listed for hearing before Registrar Chan on 4 January 2005.  On that date the summons was adjourned for argument at the request of Ford Kwan.  Masons and Kwong & Associates had by then agreed to exchange witness statements within 21 days of 4 January 2005 with no order as to costs. 

The second hearing

6. The summons was then heard by Master B. Kwan on 23 February 2005.  Prior to that date Kwong & Associates and Ford Kwan had agreed on the exchange of witnesses statements.  The order that the master made was for the joint medical examinations and joint medical reports of the plaintiff.  She reserved the costs.

The third hearing

7. Costs was then argued before the master on 24 October 2005.  She ordered that :

'(1) Costs of the Plaintiff’s Summons to the 1^st Defendant including hearings on 4^th January 2005, 23^rd February 2005 and 24^th October 2005 be assessed in the grosssum at HK$29,000.00 payable by the Plaintiff to the 1^st Defendant in any event;

(2) There be no order as to costs of the reports of Dr. Danny Tsoi dated 15^thMarch 2004 and Dr. Chung See-yuen dated 18^th March 2004; and

(3) There be no order for Legal Aid taxation of the Plaintiff’s own costs for today’s hearing.'

Appeal to the judge

8. The plaintiff was dissatisfied with the costs order and appealed to Deputy High Court Judge Gill who allowed the appeal and ordered that the costs of the plaintiff’s summons dated 28^th December 2004 including the costs of the three hearings be costs in the cause, to be taxed if not agreed.  The plaintiff was also awarded costs of the appeal.

Appeal to this Court

9. The 1^st defendant obtained leave from the judge to appeal against the costs order.  The appeal came before us.

Conduct of solicitors

10. I must at the outset express my dismay at the hostility between the two solicitors in Kwong & Associates and Ford Kwan in their conduct of this case which clearly had clouded their sense of proportion.  What was at issue at the end of 2004 was essentially an extension of time to comply with the earlier order.  Had this been resolved at the first hearing of the summons, the solicitor’s costs of attendance would, according to the evidence, be only $800.  Instead the case was blown out of proportion : three hearings were conducted, numerous letters were exchanged (many of which were argumentative in nature) and a number of affirmations were filed.  Two rounds of appeal had occurred.  Unnecessary work and costs had been generated.  This is a bad example of satellite litigation that went out of control.

11. It was said that Ford Kwan was merely responding to the steps taken by Kwong & Associates.  I can only say that ultimately the matter boils down to common sense and a recognition of what is the real issue at stake.  I only hope this case is not representative of the way the two solicitors handle their cases and their judgments in this particular occasion might perhaps be clouded by some personal animosity between them.  They should seriously reflect whether by their actions they have done not only their clients but also themselves a disservice.

12. I further repeat the call I have made in the past that solicitors who take up legal aid personal injury work must devote their whole attention to it.  There was delay in this case both before and after the writ was issued.  The legal aid assignment to Kwong & Associates was given in February 2002.  The writ with a general endorsement was filed one year later in March 2003.  The Statement of Claim was served five months later in August 2003.  The medical reports that were served together with the Statement of Claim all predated the legal aid assignment.  This suggested that the case had been unattended for a substantial period.  After the checklist hearing in January 2004, Kwong & Associates had taken no further steps apart from obtaining two separate medical reports.  The only relief is that at least the case has been set down for hearing in September this year.  The Director of Legal Aid clearly has a duty to monitor the progress of case by the assigned solicitors.

The real situation

13. Turning to the appeal itself, the issue is a simple one.  The situation that had occurred was that the parties had not complied with a court order on exchange of witness statements and joint medical reports.  This order needed to be complied with by both parties.  The plaintiff in order to proceed with his claim issued a summons seeking further orders from the court on these two matters.  While the order sought in respect of the witness statement was unnecessarily made in the rather draconian form of an unless order, the parties did eventually agree on this issue by simply exchanging witness statement without imposing terms.  If, for the purpose of argument, the relief sought in the summons was only for an unless order which was not granted but an order for exchange of witness statement was made instead, should the plaintiff be deprived not only of the costs of the summons but be ordered to pay the 1^st defendant the costs relating to the summons?  I would think not unless he had insisted on an unless order to be granted.  This was not the case here.

14. Taking the matter one step further, if the summons further sought an order on joint medical examination and report of the plaintiff which was in fact granted, should the plaintiff be ordered to pay the 1^st defendant’s costs?

15. In my view it would take a strong case to justify such an order.  At the highest, the plaintiff might be deprived of the costs if his conduct required such an order to be made.  But in the absence of strong grounds, it will be a most unusual order for him to be responsible for the other party’s costs as well.  The case simply needed to be brought forward and the court had made an order bringing forward the progress of the case.  The order needed to be complied with by both parties.  The 1^st defendant asked for the dismissal of the summons and it had failed.

The summons as ‘an affront to the Court?’

16. What then were the grounds that justified such an order?  Kwong & Associates had delayed by nearly a year in seeking compliance with the order, but that by itself would not justify an order that the successful party pay the other party’s costs.  Ford Kwan had characterized the summons as ‘an affront to the Court’ in its letter of 30 December 2004.  Strong words, but they were not justified. 

Pre-summons correspondence

17. Prior to the issue of the summons Kwong & Associates had on 16 December 2004 written to Ford Kwan.  After referring to the order of 5 January 2004, it inquired whether the 1^st defendant had reports for exchange and for the joint reports to be prepared.  It also inquired whether 1^st defendant was ready to exchange witness statement.  A deadline of seven days was set for response.

18. Instead of giving a simple response that a new time frame was required to comply with the previous order as the 1^st defendant itself also wished to exchange witness statement and to have a joint medical report, a three page letter dated 21 December 2004 was sent by Ford Kwan containing many other matters which were not really germane to bringing the matter forward.  The letter concluded with a threat that if the plaintiff should make ‘applications without merit and under misconception’, the 1^st defendant shall take out ‘cross applications to the Court and seek costs against the plaintiff, together with an appropriate Court Order’.  This threat set the scene for the acrimonious exchange of correspondence that had plagued this litigation.

19. This letter was said to be sent by fax and by post to Kwong & Associates on the same day.  Kwong & Associates denied that it had received the fax and claimed that it only received the letter on 28 December 2004.  The letter had a post mark of 24 December 2004.  By then the summons had been issued. 

Court’s intervention needed

20. The master chose not to make any finding on credibility on this issue.  Looking at the matter objectively, even if, for the purpose of argument, Kwong & Associates had before issuing the summons received the letter of 21 December 2004 but had overlooked it (this being the stand taken by Ford Kwan before the master) one may ask was it likely that the matter could be resolved without the plaintiff seeking the court’s intervention?  In my view it was most unlikely.  Apart from the letter of 21 December 2004, a further letter of 30 December 2004 from Ford Kwan stated that :

‘ .... by inference from the rationale and logic behind your argument, kindly confirm in writing whether you shall withdraw the Plaintiff’s claim on his alleged orthopaedic conditions and psychiatric conditions, or alternatively, whether you would agree that the Plaintiff shall be examined by our client’s medical experts only.  Please let us have your written confirmation prior to the hearing on 4^th January 2004, so that we can seek appropriate directions at the hearing to that effect.’

21. This was in response to paragraph 2 of the letter of Kwong & Associates of 29 December 2004 where it was stated that it was the 1^st defendant who had asked for joint medical examination of the plaintiff and it was incumbent for the 1^st defendant to comply with the direction.

22. The suggestion from Ford Kwan made no sense at all.   The master said Ford Kwan made this statement in sarcasm.  I have great doubt it was so considering the background of this case. 

23. Ford Kwan not only wished to oppose the summons but also wished as shown in its letter of 16 February 2005 to Kwong & Associates to dispense with the joint reports and to have the plaintiff examined alone by the 1^st defendant.  It sought an order on these terms from the master on 23 February 2005.  Again it had failed on this application.  With this attitude by Ford Kwan, the issue on the joint medical reports was most unlikely to be resolved without a decision from the court.

24. It was said that this application was made in response to the unilateral action taken by Kwong & Associates in obtaining separate medical reports.  Kwong & Associates disclosed these reports on 4 January 2004.  It was indeed puzzling for Kwong & Associates to have obtained separate reports when the order provided for joint reports but the fact remained that it had maintained the need for joint reports.  As the master rightly observed, if Kwong & Associates obtained separate reports it had to be solely responsible for their costs, but as far as the court was concerned a joint report was required. 

25. In respect of the separate reports of the plaintiff dated 15 March 2004 and 18 March 2004 respectively, the master had rightly disallowed their costs on a party to party basis.  Kwong & Associates had further agreed at the appeal before us that it would be personally responsible for the costs of obtaining these two reports. 

Wrong exercise of discretion

26. From the above analysis I see no justifiable ground in ordering the plaintiff to pay the 1^st defendant’s costs.  It was wrong in principle to make an order in favour of the 1^st defendant.  As the judge had rightly observed the master had focused on the conduct of Kwong & Associates after the order of 5 January 2004 instead of the steps that the plaintiff needed to address in order to ensure compliance with the order of 5January 2004.  In the words of the judge, ‘the summons was a platform which took the action further towards readiness for trial’.  The exercise of discretion by the master was based on erroneous grounds which justified the judge in exercising it afresh.

27. It is said that the summons sought to obtain relief which was not granted by the master.  In my view one must look at the substance of the relief sought and the order that was eventually made on the joint medical examinations and reports.  In this case they were the same.

Costs in the cause

28. While the judge was entitled to exercise the discretion on costs afresh was the order he made the correct one?  Again unless it can be demonstrated that it was exercised on wrong principles this court should not interfere with the decision.  He has decided that the costs should depend on who will ultimately succeed in the action.  I cannot see how this can be faulted when it was not shown that the 1^st defendant was clearly entitled to those costs.  The plaintiff has very sensibly not insisted on a different order.

Conclusion

29. The appeal is accordingly dismissed with costs nisi to the plaintiff.  The plaintiff’s own costs to be taxed in accordance with Legal Aid Regulations.