LEUNG HOI WAI v. PO LEUNG KUK

HCPI 999/2015

[2018] HKCFI 1620

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 999 OF 2015

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DECISION

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Introduction

1.  This court handed down a judgment dated 14 February 2018 after trial and dismissed the claim of the plaintiff, Madam Leung, with costs to the defendant, Po Leung Kuk (“PLK”).  This is an application by PLK by summons dated 28 February 2018 (“the Summons”) to vary the costs order nisi on account of a sanctioned payment made on 27 November 2015 (“the Sanctioned Payment”).

2.  The parties agree that there is only one controversial matter in the Summons and it should be dealt with by way of paper disposal. This court agrees to this course.

3.  It is still necessary to see what the parties have agreed on the Summons. Their agreement is contained in their joint letter dated 26 March 2018 and includes:

(a) Madam Leung do pay PLK’s costs of this action, including all costs reserved, on a party and party basis up to and including 28 December 2015, to be taxed if not agreed.

(b) Madam Leung do pay PLK’s costs of this action, including all costs reserved, on an indemnity basis from 29 December 2015, to be taxed if not agreed.

(c) The Sanctioned Payment be paid out of the court together with interest to PLK forthwith through its solicitors.

(d) Costs of the application be paid by Madam Leung to PLK on an indemnity basis at High Court scale, to be taxed if not agreed.

(e) Madam Leung’s own costs to be taxed in accordance with the Legal Aid Regulations.

4.  Given the agreement, this court shall make an order in the foregoing terms.

5.  The only controversy concerns the demand of PLK for enhanced interest on indemnity costs at a rate of 9% per annum from 29 December 2015 until 14 February 2018 (“the Period”). There is no dispute that in light of the judgment, the court’s discretion under O.22 r.23, Rules of the High Court, is triggered. Further, both Mr Ho, for PLK, and Mr Shum for Madam Leung, rely on Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273 for the guiding principles as to how this court’s discretion should be exercised in ordering enhanced interest.

6.  Mr Ho invites this court to fix the interest at 9% per annum whereas Mr Shum submits that the appropriate rate for enhanced interest should be 4.5% covering the Period.

7.  In the Golden Eagle case, after reviewing the English authorities, Johnson Lam J (as he then was) in his consideration of the enhanced interest had this to say (§§18-19),

“18. I propose to adopt a similar but modified approach here. There is no evidence of actual payment of costs by the Defendant. In principle the Plaintiff should pay the Defendant interest on the costs incurred after 1 February 2010 running from the date when the works were done respectively. However, it would be a complicated process if each item of work were to carry interest from a different date. To simplify the process, I shall borrow a well-established approach in working out interest for special damages in personal injuries litigation. I will order interest at half of the rate I would otherwise order on all the costs incurred after 1 February 2010 with interest starting to run from 1 February 2010 for all the items. I consider this approach to be appropriate bearing in mind that we are not talking about a substantial period. The relevant period is between 1 February 2010 and the date of this judgment on costs and interest when the judgment is finalized.

19. As regards the interest rate, the English authorities adopted 4% above the base rate as a generous assessment of the costs of money.  Mr Ng argued that since our rule 24(3)(b) referred to the judgment rate, the proper award should be 4% above judgment rate.  I cannot accept that submission.  The rule only sets the maxima.  Given the rationale for the exercise of the power and that it is not penal, I should ask what should be the appropriate rate in Hong Kong which can generously reflect the costs of money to the Defendant.  Based on the information from Mr Chan, 4% above prime in Hong Kong is 1% above judgment rate.  I shall adopt this (9%) as our generous assessment of costs of money.  Applying that to my simplified approach, I will order interest on costs incurred after 1 February to the date of this judgment be paid by the Plaintiff to the Defendant at 4.5% and such interest shall run from 1 February 2010.”

8.  Mr Ho and Mr Shum differ in their reading of the foregoing two paragraphs. I believe they are self-explanatory and do not call for any further elaboration. 9% is merely on the generous side for the purpose of assessing costs.

9.  In the present case, Madam Leung was the only witness of the accident. She should have all the information to assess the strength, or lack of it, of her claim when the Sanctioned Payment was made. Nevertheless, I cannot conclude that she fabricated the cause of the accident and made a false claim. The accident took place in a split second and she was in sharp pain thereafter. Her memory might have failed her in the circumstances.

10.  On the other hand, the amount of the Sanctioned Payment (HK$50,000) cannot be said to be a genuine compensation for the injury sustained by Madam Leung though it is not a nominal sum. My assessment of damages far exceeds the amount of the Sanctioned Payment. Madam Leung was literally asked to decide whether to accept that her claim could not possibly succeed.     

11.  In the premises, I believe I should simply adopt the current judgment rate (8%) as the starting point. There being no evidence as to when PLK actually paid the legal costs, I would adopt the approach in the Global Eagle case and order interest at half of 8%, i.e. 4% for the Period.   

12.  Mr Ho further asks this court to allow a refresher for 20 December 2017. He submits that on that day the court did not sit and counsel prepared their written closing submissions for the adjourned hearing on 21 December 2017. His brief also included the 4-day hearing from 18 to 21 December 2017. He submits that since PLK is entitled to indemnity costs, a refresher for 20 December 2017 in respect of one counsel should be allowed too.

13.  I do not agree. It is trite that refreshers cannot be charged for days the court does not sit: Hong Kong Civil Procedure 2018 Vol. I, §62/App/32. Counsel’s brief fee should also include the preparation of written closing submissions. In the present case, the written closing submissions did not significantly reduce the hearing time of the last day of the trial. I cannot accede to this application of Mr Ho albeit not included in the Summons.

Conclusion and order

14.  For the reasons given, I order that Madam Leung do pay PLK the enhanced interest on indemnity costs at a rate of 4% per annum from 29 December 2015 until 14 February 2018. I also make an order in terms with paragraphs 1(a), (b), 2, 3 and 4 of the Summons.

15.  Costs of this application is already taken care of and I make no separate order.

16.  Lastly, I thank counsel for their assistance.