TAI CHAU YUNG AND ANOTHER v. NG JIM AND ANOTHER

HCPI753/97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 753 OF 1997

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REASONS FOR RULING

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Background

1. This case arises from a fatal accident and the Plaintiff brings this action on behalf of herself, as the widow of the deceased, and on behalf of her two children, now aged 13 and 5 respectively, as well as on behalf of her own mother living in China, all of whom were dependants of the deceased before he met with the accident.

2. The deceased was killed instantly as a result of the traffic accident in 1994. However, the facts of the case are not relevant for present purposes. The claim having been brought by the Plaintiff, the Defendants paid into Court a sum of $450,000 in or around September 1998. As a result of that payment-in by the Defendants, the Plaintiff obtained advice from Counsel pursuant to which the Plaintiff decided to accept the payment-in of $450,000 (which is in addition to the sum of $327,832.80 already received by the Plaintiff in respect of employees compensation).

3. The matter came before me by way of summons issued by the Plaintiff, seeking the Court's approval for acceptance of the sum of $450,000 in satisfaction of the Plaintiff's claim since infant interests were involved and the apportionment of that sum to the dependants.

4. Having heard Mr Wright and after having read the Memorandum for Settlement as well as the two written opinions by Mr Wright in respect of liability, quantum and evidence in this matter, I gave my approval to the Plaintiff's acceptance of the monies paid into Court in full satisfaction of the Plaintiff's claim against the Defendants. I further approved of the apportionment of the sum of $450,000 as follows : firstly, $100,000 to the widow of the deceased; secondly, another $100,000 for the elder child; thirdly, $245,000 to the younger child, and finally, $5,000 to the mother-in-law of the deceased. I further made the usual order for the sums apportioned to the two infants to be invested by the Registrar of the High Court with periodic amounts of $4,000 per month to be paid to the Plaintiff in respect of each of the two infants, which sums would be used for their maintenance, education and advancement.

The Issue

5. The one matter in dispute between the parties relates to costs. The Plaintiff asked that costs on a common fund basis be awarded against the Defendants which was objected to by the Defendants. In this respect, I was referred to the 1985 Edition of the White Book at marginal note 80/12/16 (the 1985 Edition of the White Book was used because after 1986, the basis of taxation in England had changed, but not so in Hong Kong). The practice referred to there relates to costs between an infant or patient plaintiff and the defendant, and at paragraph (ii) it is stated thus :-

" If the claim is disposed of by compromise or settlement out of Court, the costs awarded to a successful infant or patient are almost invariably on a common fund basis. The reason for this practice is that it is difficult for the Court to judge on the adequacy of the settlement without knowing how much the plaintiff will receive net of costs. This can practically be achieved only by awarding costs on a common fund basis rather than as between party and party. Defendants are almost always willing to follow this practice except, perhaps, where the plaintiff or his advisers have added greatly to the costs by unreasonable conduct. In the last resort, the Court has the right to decide on whether party and party or common fund costs should be awarded without the consent of the parties (O.62, r.28(2))."

6. Mr Wright informs me that the Plaintiff is legally aided and, at the outset, was not required to make any contribution as to costs. She is legally aided under what is known as the Supplementary Legal Aid Scheme. I was told that under this scheme, the Plaintiff has agreed with the Director of Legal Aid that the Director has the right to a percentage - it seems 10% - of whatever damages the Plaintiff recovers. This is not subject to whatever costs order is made by the Court. However, Mr Wright also informs me that the Director of Legal Aid can, in his words, "claw back" any difference between the costs that has been incurred by the Director and the costs that the Director will recover ultimately from the Defendants after taxation.

7. Mr Shum, appearing for the Defendants, objects to costs being awarded to the Plaintiff on a common fund basis. First of all, he says that if the case had gone to trial and at the end of which damages have been awarded to the Plaintiff, the usual order for costs would be on a party and party basis even where infant interests are involved. Therefore, he says, there is no good reason why, as here, where the Defendants have paid money into Court and which money is accepted by the Plaintiff in settlement of her claim, there should be an award of costs on a basis different from that which would otherwise have been had there been a trial.

8. The second point taken by Mr Shum is that since the Plaintiff is not required to make contribution as to costs, there should be no difficulty as to the adequacy of the settlement in the present case. Therefore, the very basis for which common fund costs are ordered does not exist. I was referred to O.62, r.28 and r.30 extensively by Mr Shum in support of his arguments. Mr Shum further suggests that the costs of this summons and this hearing should be to the Defendants as it was unnecessary for the Defendants to have been present in Court, but for the fact that the Plaintiff was asking for costs on a common fund basis.

My Decision

9. In coming to a decision on the question of costs, first of all, I note that the award of costs is always a matter left to the discretion of the Court. Secondly, it has been a long standing practice at least in England if not in Hong Kong for costs to be awarded on a common fund basis to a successful infant plaintiff where the matter is compromised or settled, so that the Court can be reasonably sure of the adequacy of the settlement to the infant. If this practice is not one which has been prevalent in Hong Kong hitherto, the time has come for those advising in such cases where infant interest or patients are involved to take note of this long adopted practice in England which, in the views of judges dealing with the P.I. List, should be applied with much more regularity in Hong Kong, where appropriate, than has been the case. Especially taking into account the fact that costs in Hong Kong greatly exceed that in England where litigation is concerned, such that a successful infant or patient, where a case is settled or compromised, is often left with much less than the amount upon which the case was compromised for. Thirdly, in the present case, there has not been the slightest suggestion of unreasonable conduct by the Plaintiff which has greatly added to the costs of this action. Fourthly, in the present case, over 75% of the amount paid into Court and accepted by the Plaintiff, have been apportioned for the benefit of the two infant dependants. Lastly, the fact that the Plaintiff was not asked for contribution at the outset when legal aid was granted her, does not mean that she would not have to make contribution as to the difference between the costs incurred by the Director of Legal Aid and those that the Director can recover from the Defendants on a party and party basis. This view that I have taken, based on what Mr Wright told me, is clearly supported by s.32 of the Legal Aid Ordinance, Cap.91. That section is to the effect that a legally aided person under the Supplementary Legal Aids Scheme will have to make a contribution to the Supplementary Legal Aid Fund if he is successful in an amount equivalent to (a) the sums paid or payable on his account out of the fund; (b) the costs incurred on his behalf; and (c) such percentage as may be prescribed of value of any property recovered or preserved for the aided person in such proceedings, whether on his own behalf, or on behalf of another; and there shall be deducted from the amount of the contribution, any sums recovered under an order or agreement for costs and such other sums as may be prescribed.

10. In all the circumstances of this case, and exercising my discretion, primarily on the basis to ensure that the Plaintiff, particularly the two infants, are adequately compensated for, I came to the view that costs should be awarded on a common fund basis. Furthermore, I take the view that the application before me today was inevitable, if for nothing else it would have been incumbent upon the Plaintiff to make an application to the Court for the Court's approval of the acceptance of the money paid into Court in view of the fact that infant interests were involved in this case.

11. Accordingly, I made the Order that the 1st and 2nd Defendants do pay the Plaintiff's costs of this action including the costs of the hearing before me, to be taxed if not agreed, on a common fund basis.

12. In making this order for costs, it was not intended in any way to be punitive but upon the reasons given above.

Postscript

13. As a postscript, it is interesting to note that the Legal Aid Department is funded by Government and that the 2nd Defendant is a Government department. If I had acceded to the Defendant's objection to a higher basis of taxation, the effect of that would have been the Legal Aid Department recovering a lesser amount by way of costs from another Government department, with the difference thus falling upon the Plaintiff. The aim of the present order is for one Government department to recoup a higher sum by way of costs from another Government department thereby hopefully alleviating or reducing the Plaintiff's burden in that respect.