HO WAI LEUNG v. WAN CHI KUEN

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO. 11 OF 2001

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J U D G M E N T

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1. This is a running down action in which the plaintiff claims damages for personal injury, loss of earnings and for the loss of his motorcycle which was written-off and for other minor items of special damage.

2. The incident which gives rise to the claim occurred on 2 November 1999 at Ma On Shan when the plaintiff's motorcycle was struck by a car driven by the defendant who made a right turn across the plaintiff's path, with the result that the plaintiff was injured and his motorcycle damaged beyond economic repair. As a result, the defendant was prosecuted and convicted of careless driving in the Magistrates' Court.

3. The plaintiff's injuries are related in a medical report dated 4 December 1999 by Doctor Leung of the Kwong Wah Hospital. On admission to hospital, the plaintiff was conscious, there were multiple superficial abrasions over his right lower limbs. He had no other injury.

4. He then went to solicitors who represent him to pursue this claim and in August and September 2000 they wrote three letters, one to the defendant copied to his insurers and two others to the insurers, all in the nature of letters before action requiring them to make proposals as to the satisfactory disposal of the plaintiff's claim and threatening proceedings if nothing was forthcoming. None of those letters was acknowledged and so on 23 September 2000 a writ and statement of claim were issued and served on the defendant.

5. The statement of damages claims a total of $61,450, the largest element of which is for $40,000 for personal injury. Whereas the defendant and his insurers had previously been unresponsive to the plaintiff's solicitor's letters, the insurers, who instructed Miss Corrina Kwan of Ip, Kwan & Company, then addressed the claim with expedition. No defence was filed but on 19 October, a payment into court of $30,000 was made and on 23 October, that amount was accepted by the plaintiff.

6. This brief narrative now brings me to the issue raised by the two summonses before me. The plaintiff wants his costs of the action under Order 62, Rule 3 of the Rules of the District Court. There is no provisional bill of costs at present but I am told by Mr Yu, the plaintiff's solicitor, that costs could well be in the region of $30,000.

7. Miss Kwan for the defendant, submits that this was always going to be a Small Claims Tribunal case whose jurisdiction had been raised to $50,000 by the time that the action was brought and that the plaintiff should have issued his claim in that tribunal. There was never any realistic prospect of damages exceeding $50,000, particularly having regard to the modest injuries sustained by the plaintiff. The $40,000 claimed under that head was never likely to be achieved and the plaintiff's advisors knew that, hence their quick acceptance of the money paid into court. In view of this, Miss Kwan submits that the plaintiff should now only be awarded costs on the Small Claims Tribunal scale rather than on the far more generous District Court scale, or some lesser proportion of his entire costs.

8. Against that, Mr Yu says that the plaintiff was perfectly entitled to sue in the District Court. Whilst there is an upper limit to this court's jurisdiction, there is no lower limit as that had gone by virtue of the repeal on 1 September last year of section 37A of the District Court Ordinance. His client was faced with a situation where three letters had gone unanswered by the defendant and his insurers. He was not to know what stance they would eventually take to this claim. This is a personal injury action and the District Court had by then been given an extended jurisdiction with a specialist personal injury list presided over by a nominated personal injury judge and the detailed procedures contained in the High Court Practice Directions and Rules of Court had been extended mutatis mutandis to the District Court. By 1 September 2000, therefore, the District Court had become the natural forum for personal injury claims up to $600,000.

9. He also submits that even if the claim was a marginal one, at that low level of claim it is never easy to accurately predict a judge's award for personal injury. It was perfectly reasonable to come to this court. He also draws attention to the fact that personal injury litigation, even at the bottom end, does not lend itself especially well to the informal procedures of the Small Claims Tribunal where, of course, representation by solicitors is not allowed. It may have been necessary to call Doctor Leung in the course of the trial. The plaintiff could not have made effective submissions on quantum when unrepresented.

10. Mr Yu even went as far as to suggest that the Small Claims Tribunal does not accept cases which require an assessment of compensation or damages, but he is mistaken about that. Clearly, personal injury actions, based as they are on tort, come within the schedule referred to in Part 3 of the Small Claims Tribunal Ordinance, but in the event that the tribunal operated a policy not to hear such claims, I have made my own enquiries of the principal adjudicator of the tribunal and I was told by her that personal injury claims are heard by the tribunal.

11. And so, this is a case that could have been initiated in the Small Claims Tribunal. Should I, therefore, in those circumstances do as Miss Kwan invites me to do?

12. She relies, in particular, on a decision of Judge Z.E. Li in Civil Action 12513 of 2000, Ho v Chung & Another, where he was invited to rule on an identical application in which Miss Kwan also appeared for the defendants. Judge Li directed that the plaintiffs should have gone to the Small Claims Tribunal and he decided to award the plaintiff one-third of his taxed costs on the District Court scale. His approach was to award costs by expressing the order for costs as a reflection of the proportion of quantum recovered to the quantum claimed. The claim was for approximately $60,000 and the plaintiff received $20,000, hence one-third of taxed costs.

13. I apprehend that had the learned judge been seised of this matter, applying the same reasoning, the award of costs would be half costs, the plaintiff having accepted half of what he had claimed.

14. In his judgment, the learned judge considered, amongst other things, the relationship between Order 62, Rule 10(2) and Order 62, Rule 10(5) of the Rules of the District Court which are in these terms:

"Where a plaintiff, by notice in writing and in accordance with Order 22, Rule 3(1), accepts money paid into court in satisfaction of the cause of action or of all the causes of action in respect of which he claims or accepts money paid in satisfaction of one or more specified causes of action and gives notice that he abandons the others, he shall be entitled to his costs of the action incurred up to the time of giving notice of acceptance."

15. And then Order 62, Rule 10(5):

"In each of the circumstances mentioned in this rule, an order for costs shall be deemed to have been made to the effect respectively described and for the purposes of section 50 of the Ordinance, the order shall be deemed to have been entered up on the date on which the event which gave rise to the entitlement to costs occurred."

16. Having considered the relationship of those orders together with section 53 of the District Court Ordinance which is in these terms:

(1) "The costs of and incidental to all proceedings in the court, including the administration of estates and trusts are in the discretion of the court and the court has full power to determine by whom and to what extent the costs are to be paid.

(2) Subject to specific provision made in this or any other ordinance, other than subsidiary legislation made under this or any other ordinance, subsection (1) does not authorise an award of costs against a person who is not a party to the relevant proceedings."

he concluded that Order 62, Rule 10(5) was objectionable (to use his description) because it purported to limit the discretion of the court in costs, which is referred to in section 53 of the Ordinance.

17. For reasons which will become clear presently, this is not an analysis that I need to embark upon. The real question, as I see it, is whether it was reasonable for the plaintiff to issue his proceedings in this court. I am in no doubt that it was entirely reasonable for him to take that course. The claim itself, although ambitious in its assessment of quantum for personal injury, cannot be described as so wide of the mark that one can condemn it as entirely devoid of merit.

18. I also consider that the nature of the action is one that is more appropriately brought before a tribunal which allows legal representation. As I have already observed, at that initial stage three letters before action had been ignored by the defendant and by his insurers. The plaintiff had no way of knowing that the defendant would react by making a sensible payment in which was acceptable to him. One wonders whether a claim in the Small Claims Tribunal which perhaps carries less gravitas or clout, if I may use that expression, would have been taken as seriously by the insurers. All the plaintiff has done is to come to the natural forum for these sort of smaller personal injury actions. It has resulted in early settlement.

19. As to costs, therefore, I see no reason to depart from the usual order for costs in such situations as reflected in Order 62, Rule 3 and Order 62, Rule 10(2). That is an order that I would have made in any event in the exercise of my discretion (see section 53 of the District Court Ordinance).

20. This case demonstrates that it behoves defendants to respond quickly to pre-trial correspondence. Had these insurers merely acknowledged even one of these three letters, they may well have drawn the plaintiff's solicitors into a process of negotiation with the result that a settlement may have been achieved without the need to issue any proceedings. They can hardly complain in the circumstances.

21. Accordingly, I dismiss the defendant's summons with costs. The plaintiff must have his costs of the action, including the costs of this summons.

22. But before I leave this matter I should also observe that this situation is now less likely to occur since the coming into force on 19 February this year of the latest Personal Injuries Practice Direction which requires a clear adherence to the pre-writ letter before action protocol which enables the defendants, and indeed requires them, to consider the worth of a plaintiff's claim which will be supported by, amongst other documents, the relevant medical reports.