MEHMOOD KHALID v. MILLION HARVEST WHARVES & LOGISTICS LTD AND OTHERS

HCPI 401/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 401 OF 2006

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COSTS  DECISION

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1.  On 20 June 2007, I handed down Judgment in this matter in favour of Mr Khalid, against Millions Harvest.  I made a costs order nisi that Mr Khalid was entitled to his costs against Millions Harvest, and that Millions Harvest must pay Mr Yeung’s costs of the proceedings, including the contribution notice.

2.  Agreement has been reached between the parties that Millions Harvest will pay Mr Khalid’s costs of the action against Millions Harvest, and Mr Yeung, and Mr Khalid’s costs of the action against Millions Harvest Assets Investments Ltd, (Millions Harvest Assets), up to the discontinuance against that company.  There will be orders accordingly.

3.  There is no agreement on Mr Yeung’s own costs of defending Mr Khalid’s action, in which Mr Yeung was entirely successful.  There is no agreement on Millions Harvest Assets own costs of defending Mr Khalid’s action, in which Millions Harvest Assets succeeded, by virtue of a discontinuance, filed when Mr Khalid appreciated that they had no involvement in the matter.

4.  Mr Sakhrani says that Millions Harvest should pay both Mr Yeung’s own costs of defending the action, and Millions Harvest Assets’ own costs of defending the action; he asks for a Sanderson order.  Mr Kwok, for Millions Harvest says that Mr Yeung and Millions Harvest Assets should pay their own costs.  Mr Au, for Mr Yeung, says the order should be a Sanderson order.

5.  Millions Harvest Assets were unrepresented on the application, but counsel informed me that it took the position that its costs should be paid by Millions Harvest.

6.  A Sanderson order is appropriate where a plaintiff has properly, in the court’s view sued two defendants with its claim against them in the alternative, but succeeds against only one.

7.  Mr Sakhrani informs me that before the issue of the writ, on 17 February 2006, Mr Khalid’s solicitors wrote to the solicitors for Millions Harvest seeking confirmation of the party in charge of the loading and unloading of the goods.  Millions Harvest’s solicitors were warned that unless a reply was received within seven days, Mr Khalid’s solicitors would have no option but to join Millions Harvest Assets as they did not know the precise relationship between the various defendants at the time of the writ.

8.  Although on 3 March 2006, Millions Harvest’s solicitors indicated they were taking instructions there was no reply to the letter of 17 February 2006.

9.  It was not until after discovery as it became clear that Millions Harvest Assets was merely the registered owner of the barge, and could not have been liable.  As soon as the necessary documents were disclosed the discontinuance was filed.

10.  Mr Khalid’s solicitors followed the necessary directions to put their cards on the table early.  Millions Harvest’s solicitors did not do so, as a result of which, Millions Harvest Assets were properly joined in the proceedings.  Contrary to Mr Kwok’s submission, Mr Khalid did not know from the outset precisely who his employer was.  Mr Khalid acted perfectly properly circumstances in starting the action against Millions Harvest Assets.

11.  Millions Harvest sued the matter right to trial, contending for contributory negligence and issuing a contribution notice against Mr Yeung.  It is entirely proper in all the circumstances that they should bear the costs.

12.  Millions Harvest, having chose to run its business using the device which purported to create Mr Yeung as an independent contractor, when he was in fact a mere employee, must accept the consequences of the fact of employment.  They chose to take the matter right to trial, contending throughout the trial that the whole of the responsibility for the event ought to fall upon Mr Yeung.

13.  Mr Sakhrani is quite right when he says that if a party treats litigation like a game of poker and then loses, and in doing so fails to comply with the provisions and spirit of the Practice Direction, which requires openness, it cannot complain if the unnecessary costs that have been incurred must be borne by that party.

14.  Having heard counsel and considered the submissions I am satisfied that the Sanderson order was entirely appropriate.  There will be an order that Millions Harvest must pay Mr Yeung’s own costs of defending Mr Khalid’s action and Millions Harvest Assets’ own costs of defending the action up to discontinuance.