WONG BIK FAI v. DRAGAGES HONG KONG LTD AND OTHERS

HCPI 564/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 564 OF 2015

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REASONS FOR DECISION

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Judgment handed down on 14 October 2016

1.  On 14 October 2016, judgment in favour of the plaintiff for $196,232.09, with interest at 2% per annum on general damages from the date of writ (26 May 2015) to the date of judgment and interest on special damages at 4% per annum from the date of the accident (18 June 2013) to the date of judgment was handed down.

Order nisi on costs

2.  I made an order nisi under Order 42, rule 5B(6) of the Rules of the High Court, Cap 4A, that the plaintiff’s costs on quantum be taxed and paid by the defendant.

Defendant’s application to vary the order nisi on costs

3.  On 20 October 2016, the defendant issued a summons (“the defendant’s summons”) to vary the order nisi on costs on the ground that the plaintiff failed to do better than the sanctioned payment of $450,000.

4.  On 24 October 2016, the Director of Legal Aid gave notice that the plaintiff has applied for legal aid to prosecute an appeal against the judgment dated 14 October 2016.

5.  On 24 October 2016, the parties issued a consent summons to vary the order nisi on costs “subject to the Plaintiff’s appeal (if any)”.

6.  It is not appropriate for a costs order to be made expressly subject to appeal and the parties were informed accordingly by letter dated 25 October 2016.

7.  By letter dated 25 October 2016, Messrs Sam Fu & Co. sought to adjourn the defendant’s summons sine die with liberty to restore.

Lifting the legal aid stay

8.  The defendant’s summons came before me on 26 October 2016.  Mr Cao applied to lift the legal aid stay.

9.  Section 15 of the Legal Aid Ordinance, Cap 91, provides that:

“ (2) Where an action has been commenced or where an appeal has been lodged in respect of any proceedings and any party, or any person who wishes to be joined as a party, makes an application for legal aid, the Director shall, as soon as practicable after the application is made, notify the other party or each of the other parties, and file in the court in which the action is commenced or in the court in which the appeal is lodged, as the case may be, a memorandum of such notification.”

“ (4) Where any memorandum is so filed, then, unless otherwise ordered by the court in which the memorandum is filed, all proceedings in the action or in the appeal or in both the action and the appeal shall, by virtue of this section, be stayed for such period, being not less than 14 days, as may be prescribed, and during such period (unless otherwise ordered by any such court)time fixed by or under any law or otherwise for the doing of any act or the taking of any step in the proceedings shall not run.”

10.  Regulation 7A of the Legal Aid Regulations, Cap 91A provides that:

“The period during which any proceedings are stayed by section 15 of the Ordinance shall be 42 days.”

11.  Sitting as a recorder, I said in Bank of China (Hong Kong) Limited v Fu Ming Kong and another, unreported, HCA 7769/2000, 24 June 2005 at §27 that “the statutory stay is an aid in, not an obstacle to, the administration of justice.”

12.  If the plaintiff should succeed in his intended appeal and do better than the sanctioned payment, my judgment and the costs orders will be set aside or varied by the Court of Appeal accordingly.  The plaintiff suffers no prejudice in having the defendant’s summons dealt with today.  There is no reason why the parties should waste costs on an adjourned hearing of the defendant’s summons.  Mr Fu advanced no argument against lifting the statutory stay.

13.  I was satisfied that this was a case where justice required the exercise of my discretion to lift the statutory stay and I granted the defendant’s application to lift the stay.

Order 22, rule 23

14.  The applicable parts of Order 22, rule 23 of The Rules of the High Court, Cap 4A, provide as follows:

“23.Costsconsequences where plaintiff
fails to do better than sanctioned
offer or sanctioned payment
(O. 22, r. 23)

(1) This rule applies where a plaintiff–

(a) fails to obtain a judgment better than the sanctioned payment; or

(b) fails to obtain a judgment that is more advantageous than a defendant’s sanctioned offer.

(2) ...

(3) The Court may order the plaintiff to pay any costs incurred by the defendant after the latest date on which the payment or offer could have been accepted without requiring the leave of the Court.

(4) The Court may also order that the defendant is entitled to–

(a) his costs on the indemnity basis after the latest date on which the plaintiff could have accepted the payment or offer without requiring the leave of the Court; and

(b) interest on the costs referred to in paragraph (3) or sub-paragraph (a) at a rate not exceeding 10% above judgment rate.

(5) Where this rule applies, the Court shall make the orders referred to in paragraphs (2), (3) and (4) unless it considers it unjust to do so.

(6) In considering whether it would be unjust to make the orders referred to in paragraphs (2), (3) and (4), the Court shall take into account all the circumstances of the case including–

(a) the terms of any sanctioned payment or sanctioned offer;

(b) the stage in the proceedings at which any sanctionedpayment or sanctioned offer was made;

(c) the information available to the parties at the time when the sanctioned payment or sanctioned offer was made; and

(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the payment or offer to be made or evaluated.

(7) The power of the Court under this rule is in addition to any other power it may have to award or disallow interest.”

15.  On 5 September 2013, the Court of Appeal handed down its “Judgment on Application for Variation of Costs Order Nisi” in Wong Tang Keung v Lee Wai Engineering Company Limited and another [2014] 1 HKLRD 409.  A copy of the original judgment in Chinese and a copy of the English translation were given to Mr Fu and Mr Cao before the hearing on 26 October 2016.

16.  In that case, the offered sum for settlement was $21,973.66 more than the judgment sum of $128,026.34 (minus the employee’s compensation) allowed by the court.  The Court of Appeal considered that the difference could not be regarded as insignificant, see §12 of the Court of Appeal judgment.

17.  In this case, the offered sum for settlement ($450,000.00) was $253,767.91 more than the judgment sum of $196,232.09 (minus the employee’s compensation) allowed by the court.  The difference was more than twice the judgment sum and was plainly significant.

18.  Furthermore, in the present application, the plaintiff did not point to any particular reasons to illustrate that it was unjust to make orders in accordance with rule 23(3) and (4) of Order 22.

19.  Having considered all the circumstances of this case, I was of the view that there were no grounds not to make such orders as mentioned in rule 23(3) and (4).

20.  I made the following orders:

(1) Legal aid stay is lifted.

(2) Costs order nisi is varied to:

(i) The plaintiff’s costs attributable to quantum up to 4 August 2016 be taxed on party and party basis and be paid by the defendant;

(ii) The defendant’s costs attributable to quantum from 5 August 2016 be taxed on indemnity basis and be paid by the plaintiff; and

(iii) The plaintiff do pay the defendant interest on costs as mentioned in sub‑paragraph (ii) above at 4.5% per annum running from 5 August 2016.

(3) The defendant’s costs of its summons dated 20 October 2016 and of today be taxed on party and party basis and be paid by the plaintiff.