CHAN KI and Another v. TRAVEL TRADE COMMUNICATION NETWORK AND MARKETING SERVICES LTD.

Case No. PI 343 of 1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES LIST

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Ruling on Costs

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1. In my award of damages of llth March, l998, I made a costs order nisi that the defendants do pay the plaintiff's costs with certificate for counsel. On 20th May, l998, the defendants' filed an affidavit, seeking an order that the plaintiffs be awarded their costs to l6th May, l996, with costs thereafter to be awarded to the defendants. The plaintiffs opposed the defendants' application.

Assessment

2. At the assessment two items of damages were agreed, being damages for bereavement in the sum of $70,000 and funeral expenses in the sum of $7,758. Four items of damages were in dispute, being -

l. Loss of accumulation of wealth. I found that there was no sustainable claim under this head.

2. Loss of personal attention and maternal affection. I made an award of $50,000 under this head.

3. Loss of services. I found the claim by the children under this head to be sustainable, and awarded the agreed sum of $28,000.

4. I awarded interest on the award for bereavement at the prevailing rate of interest payable on suitors' funds from the date of deceased's death, with interest on funeral expenses, loss of services and loss of personal attention and maternal affection at half the judgment rate from the date of the accident.

5. The total award was $l55,758, excluding interest.

Payments into court and Calderbank letter

3. Three payments into court, totalling $l60,000, were made - on 5th October, l995 ($l00,000); on l6th May, l996 ($30,000); on 23rd October, l997 ($30,000). By Calderbank letter dated 10th January, l998, the defendants made a final offer of $260,000 inclusive of interest plus costs, which was rejected on the same day.

4. It is the defendants' case that they are entitled to their costs from either the date of the second payment in or the date of the third payment in or the date of the Calderbank letter or at such percentage as I may find to be just since the plaintiffs failed on the issue of loss of accumulation of wealth, being the only substantial issue before the court at the assessment, and that I should consider a fair apportionment to reflect the reasonableness of the conduct of the respective parties.

5. At the time of the payment into court on l6th May, l996, the sum of $l30,000 exceeded the plaintiffs' claims disclosed to the defendants at that time. At paragraph 26 of the defendants affidavit dated l9th May, l998, there is a calculation including the interest to l6th May, l996, which shows the total amount of the claims to be $ll9,848.89.

6. The plaintiffs submitted that the payments in are only a factor to be taken into account in exercising my discretion as to costs. The plaintiffs pointed out that the award, inclusive of interest, totalled $l95,7l7.40, for bereavement, funeral expenses, loss of service, loss of personal attention and maternal affection, which exceeds the defendants' three payments in of $l60,000.

7. The defendants referred to the correspondence from May l995 until the hearing of the assessment, which demonstrates that they made every reasonable effort to settle the case amicably. The plaintiffs acted unreasonably in rejecting the offers, with the defendants incurring substantial legal costs in defending the proceedings and in making payments into court to protect their interests.

8. The plaintiffs referred to their three letters dated 25th May, l995, 25th October, l996, and l0th May, l997, which show that the plaintiffs kept the defendants informed as to the developments in obtaining the expert report in this case. This case involved the issue of whether voluntary contributions could be equated to earnings from employment or income from a business, and there was no settled case law on the point. It was not unreasonable for the plaintiffs not to accept the defendants' view of the law on this issue. The offers could only be considered reasonable ex post facto once the claim for loss of accumulation of wealth was disallowed. Mr. Robinson was the only expert at the assessment, his evidence stood alone, and he was accepted as a witness of truth. The Calderbank offer should not influence the exercise of my discretion, since the defendants could have protected their position by making a payment into court.

Claim for personal attention and maternal affection

9. The defendants submitted that the plaintiffs did not act reasonably in failing to amend their statement of claim and statement of damages to include the claim for loss of personal attention and maternal affection. It was not until the day before the hearing of the assessment - and without leave of the court - that the plaintiffs served a revised statement of damages raising the claim for loss of maternal or personal affection for the first time. The payments in were frustrated because the plaintiffs waited until the last moment to inflate their claims by raising this new claim, and the defendants had no time to consider an adjustment of the payments in. The defendants are the innocent victims in this case.

10. The plaintiffs submitted that, although the claim for loss of personal attention and maternal affection was not pleaded, the defendants should have foreseen that such a claim would be made, given the circumstances of the case (a housewife residing with her husband and children, responsible for the household chores). The legal basis of an award was known or presumed to be known. Had the claim been raised earlier, in all probability the defendants would have opposed it, at least as to recoverability, if not quantum as well, in the same way as they opposed the recoverability of the claim for loss of services. The children were cross examined on this issue at the assessment. The defendants did not clearly and unequivocally state that they would not have disputed the claim and would have increased the payment into court if the claim had been made earlier.

11. The defendants did not seek an adjournment, did not complain of prejudice, and did not agree the claim either as to its recoverability or quantum. The defendants could have adjusted their payment into court after the assessment had begun. Since the defendants would not have acted any differently, the plaintiffs would still have had to spend time and costs in establishing their claim, which they suceeded in doing. The defendants only admitted liability on 3rd June, l996, after the payment in of the l6th May, l996.

Claim for loss of accumulation of wealth

12. The defendants complain that the plaintiffs pursued an inflated claim for loss of accumulation of wealth. This was initially set at $2 million in March l996 (see EC 3), reduced to under $800,000 in December l997 (see EC l0), and put at about $l million in the revised schedule of damages ($768,786 pre trial and $3l7,520 post trial). The hearing of the assessment of damages was substantially taken up by the evidence on the loss of accumulation of wealth, which failed.

13. The plaintiffs, in accepting that the claim for loss of accumulation of wealth did take up most of the hearing of the assessment, they succeeded on the other three items which were not agreed and 'beat' the payments in, and no apportionment of the costs should be made. The plaintiffs revised their claim under this head from $2,026,558 to $l,226,559 in an attempt to settle the damages.

Ruling on costs

14. There is no dispute that the evidence relating to the loss of accumulation of wealth did occupy most of the hearing of the assessment. I concur in the plaintiffs' submission that the issue of whether the voluntary contributions made by family members could be equated to earnings of the deceased had not been considered by the courts before, and it was reasonable for the plaintiffs to seek to have the issue adjudicated on by the court.

15. The defendants made payments in totalling $l60,000 as at 23rd October, l997, and a Calderbank offer of $260,000 as at l0th January, l998. Accepting as I do that the claim for loss of accumulation of wealth was a reasonable one for the plaintiff to pursue, it follows that it was not unreasonable for the plaintiffs to refuse to accept these sums in settlement of the claims.

16. While I do not accept the plaintiffs submission that the defendant should have foreseen the claim for loss of personal attention and maternal affection without amendment of the pleadings, I concur with the plaintiffs when they say that the defendants did not agree the award either on recoverability or quantum at the assessment. The claim remained in issue regardless of the state of the pleadings and the plaintiffs were put to the proof of their claim at the assessment.

17. The damages awarded were $l55,758 which, together with interest of $39,959.40, makes a total of $l95,7l7.40. The payments in amounted to $l60,000. While efforts were made by the defendants to settle, they were not successful. Having given consideration to the defendants' stance that had the claim for personal attention and maternal affection been known sooner, they would have had an opportunity to consider a further payment in, I do not find this to be persuasive.

18. As to the Calderbank letter of l0th January, l998, I refer to the provisions of 0.62 r.5. I am satisfied that this offer should not be taken into account because the defendants could have protected their position by making a payment into court.

19. Having considered the written and oral submissions of the parties, as summarised here, I am satisfied that the costs order nisi that the plaintiffs costs be paid by the defendants should be made absolute, with the costs of this application to be to the plaintiffs with a certificate for counsel, and I so order.

(L. Cannon)

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