WONG MEI NA v. GENRYOKU SUSHI CO LTD

CACV 82/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 82 OF 2003

(ON APPEAL FROM DCEC NO. 892 OF 2000)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1. I agree with the judgment of Le Pichon JA.

Hon Le Pichon JA:

2. This is an appeal from the order of Deputy District Judge Monica Chow dated 14 February 2003, varying part of her earlier order dated 29 January 2003 relating to post-payment in costs. The deputy district judge ordered that such costs fell to be borne by the applicant save for the costs of the hearing on 16 October 2002. At the hearing of this appeal, the appeal was dismissed for reasons to be given in writing later which we now do.

Background

3. The applicant was an employee of the respondent. She was injured at work and filed a claim under the Employees' Compensation Ordinance ("the Ordinance") on 13 October 2000. On 1 November 2000, the Employees' Compensation (Ordinary Assessment) Board issued a certificate of assessment assessing 5% loss of earning capacity. On review in January 2001, the loss of earning capacity was adjusted to 6%. The applicant's own expert, Dr Paul Cheung, issued a medical report on 19 September 2001, assessing loss of earning capacity at 35%.

4. As early as 18 January 2001, the respondent had made a payment into court. The respondent topped up the payment on 13 August 2002. Meanwhile, the respondent requested the applicant to attend an examination by its doctor i.e. Dr Cheung Sek Hong. The applicant was examined by Dr Cheung Sek Hong on 8 August 2002. He arranged for her to have a Hess chart investigation at the Hong Kong Polytechnic University. This examination was carried out on 29 August 2003.

5. On 10 September 2002, and before receiving Dr Cheung Sek Hong's report, the respondent made another payment in, bringing the total to $125,000. It was rejected by the applicant the following day, on the ground that "$125,000 is still far too low for acceptance". The applicant made a request for sight of Dr Cheung Sek Hong's report.

6. Dr Cheung Sek Kong's report dated 13 September 2002 was supplied to the applicant on 14 September 2003. On 23 September 2002, the applicant requested the respondent to disclose the medical notes it had obtained from the Hospital Authority through a court order made on 15 October 2001 as well as the Hess chart. The respondent's solicitors did not receive the Hess chart until 27 September. This together with the medical notes were forwarded to the applicant on 28 September, reaching the applicant on 30 September 2002.

7. On 8 October 2002, the applicant accepted the payment into court and for that purpose, sent a draft consent summons to the respondent which provided for the payment of the applicant's costs incurred after 10 September 2002 and for judgment on liability to be entered for the applicant against the respondent. The respondent objected to these terms. On 10 October, the applicant took out the summons for leave to accept the payment into court.

8. The first hearing of the summons on 16 October 2002 was adjourned because the respondent opposed the application for payment out. The adjourned hearing took place on 14 November when the respondent agreed the payment out and argument continued solely on the question of costs. The order as to costs made when judgment was handed down on 29 January 2003 was varied on 14 February 2003. As varied, the applicant has to bear the costs incurred after the date of payment in including the costs of the summons but not of the costs incurred on 16 October.

This appeal

9. The appeal was based on two grounds. Counsel for the applicant submitted that the deputy district judge had exercised her discretion wrongly in that she had disregarded two fundamental principles when exercising her discretion and, secondly, that rule 20(2) of the Employees' Compensation Rules upon which the deputy district judge had relied for her costs order, had not been triggered. As will become apparent, neither point has any merit. As the second point (which the applicant's counsel considered to be a subsidiary point,) can be disposed of very shortly, I propose to deal with that first.

Rule 20(2)

10. Rule 20 of the Employees' Compensation Rules provides as follows:

" (1) A respondent from whom compensation is claimed may pay into court a sum which is considered by him to be sufficient to cover his liability.

(2) If no greater compensation be awarded than the sum of money which the respondent has paid into court, the court may order that any costs incurred by such respondent, after payment by him into court of the said sum of money, shall be paid by the applicant."

As pointed out by the deputy district judge, unlike Rule 22 of the Rules of the District Court, Cap. 336, there is no 14-day time limit for acceptance.

11. Mr Chang submitted that "compensation awarded" within rule 20(2) must mean an award made after a trial or an award by way of a consent order and since "compensation" is defined as compensation under specific provisions of the Ordinance, the discretion under rule 20(2) can only arise if at the time the award is made there is a finding on liability. I do not agree. First, the whole purpose of provisions for payment in is to dispose of the claim without having to go to trial. To construe rule 20(2) as applying only after there has been a trial would defeat the purpose of such a provision. As to the suggestion that an award of compensation can only be made after there had been a finding on liability, this overlooks the very important fact that liability under the Ordinance is not fault-based. Compensation is payable so long as the person injured was an employee and the accident happened in the course of his employment. The fault of the employer is not an issue or precondition for liability. In my view, rule 20(2) is triggered by payment out pursuant to a consent summons or other order of the court.

Exercise of discretion

12. Mr Chang submitted that the deputy district judge had exercised her discretion wrongly because in so doing she had disregarded two fundamental principles. It was said that as the deputy district judge was dealing with an employees' compensation claim, she ought to have realised that the proceedings were not purely adversarial and given the terms of section 18A of the Ordinance, the court has a supervisory function in the settlement process and, so the argument went, in order for that supervisory function to be exercised, matters relevant to the decision concerning acceptance of payment in must be available to the applicant. Section 18A of the Ordinance reads as follows:

" (1) Except where otherwise provided under this Ordinance, all claims for compensation, except to the extent that such claims are determined -

...

and any matter arising out of proceedings in respect of such claims shall be determined by the District Court, whatever may be the amount involved, and the Court may, for that purpose, call upon any person to give evidence, if the Court is of the opinion that such person is, by virtue of his expert knowledge, able to assist the Court."

13. Mr Chang acknowledged that there was no direct authority on the point but said he derived assistance from the decision of Yeung Hung v Yee Fat Transportation Company [1962] HKDCLR 67 where Judge Pickering observed that

"[t]he general tenor of the ordinance is one of extreme jealousy for the rights of the workmen ..."

There the court held that it had no power to approve a settlement on behalf of a totally incapacitated workman for a sum less than that specified in section 7 of the Workmen's Compensation Ordinance, the terms of which appeared to be mandatory. It is not apparent how that decision is remotely relevant. It is certainly not authority for the proposition that the court, in approving a settlement under the Ordinance, is under some positive duty to vet the appropriateness of the settlement.

14. Whilst an application to the court is necessary for the acceptance of any payment in ECC proceedings, that is usually done by way of a consent summons. Such approval to the consent summons is a determination under section 18A. See Lee Kwok Shing v Law Ka Fu DCEC 654 of 2000 and Chan Lai Heung v Po Leung Kuk DCEC No. 172 of 2001 at paragraph 10. But I see no basis for the view that the court is required to exercise any supervisory function where the parties are sui juris and not under any disability.

15. The point sought to be made by Mr Chang was that the deputy district judge ought to have taken into account the fact that the applicant should be given relevant discovery as well as a reasonable opportunity after payment in before making a decision whether or not to accept it and that during this period, the applicant should not have to shoulder the costs. For my part, I do not see how this can be inferred from either section 18A of the Ordinance and/or rule 20(2).

16. The other fundamental principle which it was suggested the deputy district judge had disregarded was the alleged failure to direct her mind to Order 62, r. 7(1) and (2) i.e. the conduct of the parties. The complaint appears to be that there had been some misconduct on the part of the respondent or, at any rate, undue delay in disclosing medical evidence which was relevant to the applicant's decision to accept the payment in. It is necessary, in this context, to refer to the relevant facts in more detail.

17. In August 2001, the respondent had requested the applicant to attend a proposed medical examination by Dr Paul Cheung and to provide discovery of her medical records by completing the Data Access Request form and authorisation of letter to the Hospital Authority. The respondent's intention was to treat the examination by Dr Paul Cheung as a joint examination. However, because the applicant declined to authorise access to her medical records, the respondent had to take out a summons against the Hospital Authority for discovery on the ground that it was necessary for Dr Paul Cheung to review them when compiling an assessment on the injury sustained by the applicant. Apparently, Dr Paul Cheung who then came to be retained by the applicant's former solicitors, was able to make an assessment without the benefit of the medical records sought by the respondent from the Hospital Authority. It is to be noted that the respondent obtained an order for discovery in October 2001. No request for these records were ever made by the applicant until 23 September 2002, about two weeks after the final payment in.

18. So far as Dr Cheung Sek Hong's report and the Hess chart are concerned, the relevant events have been sufficiently stated in paragraphs 4 to 6 above and I do not propose to repeat them here. In my view, given the facts summarized above, no criticism can legitimately be levelled at the respondent with regard to discovery. The point taken by the applicant is thoroughly bad.

19. It is the nub of the applicant's submissions that not only should she have been given a reasonable time within which to accept the payment in, she should also have been provided with discovery to enable her to make that decision without any exposure as to costs. In practical terms, her complaint boiled down to this: that she was entitled to see the Hess chart before making a decision. It will be noted that the Hess chart undermined the opinion of the applicant's own expert. It was equally open to the applicant's expert to arrange for a Hess chart at any time had he considered it necessary. That was not done. As Mr Lim pointed out in his written submissions, to hold that the applicant was entitled to this discovery before making a decision would be tantamount to requiring the respondent to pay for post-payment in costs in order to enable the applicant to find out that her own expert's view might be wrong. That cannot be right. Moreover, rule 20(2) is quite clear: as noted above, there is no scope for reading a reasonable time for acceptance into the rule nor for implying a right to discovery before acceptance.

Costs

20. At the hearing, this court expressed the view that this appeal should never have been brought. The costs which were in issue at the time the summons of 10 October was issued were de minimis. In the month intervening between the last payment in and the issuance of the summons, the only activity on the part of the applicant's solicitors was limited correspondence for discovery - the medical records, Dr Cheung Sek Hong's report and the Hess chart. The costs involved could not have amounted to much. Nor would the costs have been much augmented by any consent summons required for the disposal of the claim. In any event, the amount at stake could not have justified litigation, much less an appeal. It would appear that costs of some $10,000 to $20,000 incurred below by the applicant have been run up to argue about post-payment in costs and, in all probability, the costs incurred far exceeded what could have been at stake.

21. So far as the applicant's own costs for this appeal has concerned, both her solicitors and counsel have indicated to this court that they will be waiving their fees.

22. So far as the respondent's costs of this appeal are concerned, these must follow the event. Since the applicant is legally aided, it would mean that those costs would fall to be deducted from the $125,000 and may well mean that the applicant will end up receiving nothing. The court was given to understand that when legal aid was granted, the applicant was seen by the Director and signed a consent form for such a deduction to be made in the event of her appeal being unsuccessful. Quite what explanation was given and what the applicant understood when she signed the consent form are matters of pure speculation at this stage. The court was also given to understand that the Director considered that questions of principle were involved which the Director wished to have clarified because of a number of similar cases. As already stated, this court is of the view that this appeal should never have been brought. If there were matters of principle that needed clarification, these should not have been clarified at the applicant's expense. For these reasons, an order was made at the hearing to the effect that the respondent's costs are not to be deducted from the award unless an application is made by the Director of Legal Aid to this court with notice to the applicant.