LEE KIN HUNG v. LAO PAK CHON t/a LUNG KONG ELECTRIC ENGINEERING AND OTHERS

HCPI 705/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 705 OF 2010

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REASON FOR DECISION

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1.  At the taxation hearing, a preliminary application was raised by the Director of Legal Aid (“the Director”), for the Plaintiff and the paying party, objecting to paying the costs of the third party in the manner as ordered by Deputy High Court Judge Lok.

2.  I have made the following order:

i)   Plaintiff’s application be dismissed with written reason to be handed down later;

ii)   Costs of and occasioned by the application be to the 1^st defendant and the third party with certificate for counsel;

iii)   If there is no agreement on costs, there shall be leave for the 1^st defendant and third party to lodge and serve their respective statement of costs for summary assessment on or before 11 January 2017 and leave for the plaintiff to lodge and serve a list of objections on or before 25 January 2017.  The costs shall then be assessed on paper.

3.  I shall now provide the reason for my decision.

BACKGROUND

4.  On 23 March 2015, Deputy High Court Judge Lok gave the following order nisi as to costs:

“i. The costs of the 1^st, 2^nd and 3^rd defendants in defending the plaintiff’s claim be paid by the plaintiff;

ii. Save that there be no order as to costs as to the proceedings vis‑à‑vis the 2^nd defendant and the third party, the costs of various third party proceedings, contribution and indemnity proceedings be paid by the party who commenced the relevant proceedings;

iii. The costs of the paying parties in the proceedings mentioned in the preceding sub‑paragraph and the costs ordered to be paid by the paying parties in the preceding sub-paragraph be paid and indemnified by the plaintiff; and

iv. The plaintiff’s own costs be taxed in accordance with Legal Aid Regulations.”

5.  The plaintiff did not make any application to vary the costs order nor appeal against the order.  The costs order became absolute on 13 April 2015.

6.  The third party commenced taxation proceedings on 13 May 2016.  The current objections were raised by the Director in his List of Objections.

THE PARTIES’ CASES

7.  The Director relied on Section 16C(1)(b) of the Legal Aid Ordinance, Cap. 91 (which, in short, lists out the parties whose costs shall be paid by the Director) and argued that “the third party” is not a defendant nor any parties mentioned with this section.

8.  Mrs. Hadiwibawa, Counsel for the Director, submitted that this section limited the power of the Court to award costs in that either the Court could not order the Director to pay for any third party costs, or that any such order should not be enforcible against the Director.

9.  Mrs. Hadiwibawa submitted that the third party proceedings was “proceedings arising out of but separate from and independent of the main proceedings”.  She told the Court that, for example, the plaintiff did not, all along, regard the third party to be liable and did not initiate the third party proceedings etc..

10.  I am of the view that such submissions are inappropriate in a taxation hearing as we are not now looking at the substance of the case or the merit of Deputy High Court Judge Lok’s decision: the honourable judge has considered the case, made the costs order and there was no appeal against that.

11.  In any case, the “form or substance” of the third party proceedings is irrelevant given that Mrs. Hadiwibawa’s position is that Section 16C(1)(b) of the Legal Aid Ordinance, Cap. 91, in essence, provided that the Director should not be liable for any third party costs under any circumstances.

12.  I question whether that this is the intention of the section, given that it is trite law that the court has “full and ample power to make such orders as to costs as between plaintiffs, defendants and third and subsequent parties as the justice of the case may required.” (Edginton v. Clarke and Anor [1964] 1 QB 367)

13.  Nevertheless, this is a question I need not answer in the present case.  I agree with Mr. Lai, Counsel for the Third Party, that Deputy High Court Judge Lok did not make a cost order for the plaintiff to pay for the third party proceedings directly: paragraph (ii) orders the 1^st Defendant to pay for the third party costs and paragraph (iii) orders the plaintiff to indemnify the 1^st defendant for such costs.

14.  In effect, the two paragraphs operated together to make the third party costs to become the costs of the 1^st defendant and then for the plaintiff to pay the costs of the 1^st defendant. Of course, section 16C(1) provided that:-

“(b) where a court… makes an order for costs against an aided person…in favour of a person not receiving legal aid-

In any case in which the party not receiving legal aid is a defendant…such costs shall be paid by the Director.”

15.  As such, I have made the order to dismiss the plaintiff’s application in the manner stated in paragraph 2 above.