FUNG CHUN MAN v. HOSPITAL AUTHORITY AND ANOTHER

HCMP 850/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 850 OF 2012

(ON AN INTENDED APPEAL FROM HCPI NO. 1113 OF 2006)

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BETWEEN

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J U D G M E N T

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Hon Fok JA (giving the Judgment of the Court):

1.  By summons dated 30 April 2012, the 2^nd defendant applies for leave to appeal against the decision of Bharwaney J dated 20 February 2012 declining to vary the costs order nisi made in his judgment dated 11 November 2011 assessing damages in favour of the plaintiff. If leave is granted, the 2^nd defendant also seeks a stay of execution of the costs order.

2.  The costs order nisi was that the 2^nd defendant should pay the costs of the action of the plaintiff and the costs of the 1^st defendant, to be taxed if not agreed.  The 2^nd defendant took issue with the part of the order requiring him to pay the costs of the 1^st defendant, which as the Judge observed is an order commonly known as a Sanderson order.  By his decision dated 20 February 2012, the Judge declined to vary the costs order nisi, which was thereby confirmed.

3.  Since the intended appeal by the 2^nd defendant relates only to costs left to the discretion of the Judge, leave to appeal is required by reason of s. 14(3)(e) of the High Court Ordinance, Cap. 4.

4.  The 2^nd defendant sought leave to appeal from the Judge at a hearing on 16 April 2012.  The Judge refused to grant leave and a copy of the transcript of the hearing including his ruling has been provided to us.

5.  It is well-established that the Court of Appeal will not interfere with a judge’s exercise of discretion in the award of costs unless it is shown he failed to exercise the discretion, or exercised it on a false principle, or did not exercise it judicially or the exercise of discretion was demonstrably flawed: see Hong Kong Civil Procedure 2012 Vol. 1 at para. 62/2/11 (p. 1097).

6.  The 2^nd defendant has provided a statement in support of the application for leave to appeal dated 30 April 2012 and the plaintiff has provided submissions in response dated 26 June 2012.  The 2^nd defendant submits (§44) that his application can be determined on the basis of the written materials and we are content to do so.

7.  The 2^nd defendant has provided draft grounds of appeal in a draft respondent’s notice of cross appeal, annexed to the summons for leave to appeal.  The proposed appeal takes this form because the plaintiff has instituted an appeal (under CACV 265/2011) against the Judge’s assessment of damages.  However, it is not suggested by the 2^nd defendant that this affects the requirement that leave be obtained for the proposed appeal.

8.  The first ground of the proposed appeal is that the Judge erred in principle in making a Sanderson order for the 2^nd defendant to pay the costs of the 1^st defendant.  The reasons in support of this contention are, in substance, the same as those advanced to the Judge at the hearing on 16 April 2012.

9.  We are not persuaded that this proposed ground gives rise to an appeal with a reasonable prospect of success.

10.  It is correct that the admitted negligence of the 2^nd defendant related to events in the period between 23 July 1990 and 15 March 1991, which was a different period to that giving rise to the claim against the 1^st defendant (namely October 1996 to 28 August 2002), and that strictly the claims against the 1^st defendant and the 2^nd defendant were separate causes of action.  Whilst this is therefore not a classic situation in which a Sanderson order may be made, we agree with the Judge that a Sanderson order is not precluded where the claim against the successful defendant was not made in the alternative to that against the unsuccessful defendant: see paragraphs 6 and 7 of the Judge’s decision dated 20 February 2012.

11.  Here, although the causes of action against the 1^st defendant and the 2^nd defendant were separate, a reason that must have contributed to the plaintiff’s decision to issue proceedings against the 2^nd defendant, having initially only named the 1^st defendant in the writ in HCPI 1113/2006, was that the 1^st defendant only assumed responsibility for the plaintiff’s medical treatment as from 19 December 1991, leaving the 2^nd defendant responsible for the prior period.  Given the communality of interest of the 1^st and 2^nd defendants in the running of public hospitals, albeit during different periods, we are not persuaded that the 2^nd defendant’s reliance on the separateness of the causes of action provides a sound basis for the argument that it was unreasonable for the plaintiff to institute and continue proceedings against the 1^st defendant.  This is particularly so when it was clearly open to the 2^nd defendant to make the admission of liability and causation that resulted in the discontinuance of the proceedings against the 1^st defendant much earlier than on the first day of trial.  Further, the 2^nd defendant did not pursue a defence of novus actus at the assessment.

12.  Moreover, for the reasons stated in paragraphs 7 to 11 of the Judge’s decision dated 20 February 2012, we consider that there was a proper basis for the Judge to conclude that it was reasonable for the plaintiff to institute and continue the proceedings against the 1^st defendant as well as the 2^nd defendant so that it was open to him, in the exercise of his discretion, to make a Sanderson order in respect of the 1^st defendant’s costs.

13.  Accordingly, we also do not consider that the second and third proposed grounds of appeal, which attack the Judge’s finding that it was reasonable for the plaintiff to proceed and to continue to proceed against the 1^st defendant, give rise to an appeal with a reasonable prospect of success.

14.  We would therefore dismiss the summons for leave to appeal and, since we consider that the application is totally without merit, we would make an order, pursuant to RHC O.59 r.2A(8), that no party may request this determination to be reconsidered at an oral hearing inter partes.  It follows that there will be no stay of execution of the costs order.

15.  As for the costs of this application, these should be borne by the 2^nd defendant. The plaintiff’s costs in respect of the application will be assessed on a gross sum basis and, to this end, we therefore direct the plaintiff’s solicitors to submit a bill of costs within seven days hereof and give leave to the 2^nd defendant to submit its response within seven days thereafter.  The plaintiff’s own costs are to be taxed in accordance with the Legal Aid Regulations.