YAU WANG NGAI v. WIN ELITE INTERNATIONAL LTD

DCEC 1536/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1536 OF 2013

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DECISION

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1.  The parties have filed and served written submissions on costs of this action pursuant to the court’s direction.

2.  The background of this case are set out in the Judgment dated 15 March 2017 (“the Judgment”).  The respondent admitted liability three days before the trial.  The trial proceeded on the issues of quantum, including the respondent’s appeal against the two assessments issued by Employees’ Compensation (Ordinary Assessment) Board on 9 December 2013 and 12 August 2014 respectively (“the Assessments”).  The total amount claimed by the applicant is HK$1,164,646.04. 

3.  The major issues in dispute at the trial are (a) the applicant’s monthly earnings; (b) his loss of earning capacity and (c) the appropriate length of sick leave. 

4.  After a 4 days hearing, this court allowed the appeal on the Assessments, ruled against the applicant on the 3 issues above and awarded a compensation of HK$97,320.73. 

5.  This court was informed, through the parties’ written submissions on costs, that the respondent has made a sanctioned payment of HK$82,922.37 into court on 4 October 2013.

Legal Principles on Costs

6.  The usual starting point in the award of costs is costs follow the event.  (Order 62 rule 3 of the Rules of District Court; Re Elgindata Ltd (No. 2) [1992] 1 WLR 1207) This proposition operates to shift to the unsuccessful party the burden of showing why some different approach should be adopted on the facts of a particular case. (Hung Fung Enterprises Holdings Ltd v Agricultural bank of China [2012] 3 HKLRD 679; Mariner International Hotels Ltd v Atlas Ltd (No. 2) (2007) 10 HKCFAR 246)

7.  In exercising the discretion as to costs, the court shall take into the following factors:

(a) the underlying objectives set out in Order 1A rule 1 of the Rules of the District Court;

(b) any written offer to settle the claim;

(c) any payment into court;

(d) the conduct of all the parties;

(e) whether a party has succeeded on part of his case, even if he has not been wholly successful.

(Order 62 rule 7(1) of the Rules of the District Court)

8.  The conduct of the parties shall include:

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.

(Order 62 rule 7(2) of the Rules of the District Court)

9.  The court will order costs sanction against claimant who raised a dishonest or exaggerated claim. This serves as a deterrence to dishonest and inflated claims.  (Summers v Fairclough Homes Ltd [2012] 1 WLR 2004; cited with approval in Li Ming Tak v Hong Kong Airport Services Ltd, unreported HCPI 860 of 2009, 19 November 2014; Booth v Britannia Hotels Ltd [2003] 1 Costs LR 43; Molloy v Shell UK Limited  [2002] PIQR P7; Painting v University of Oxford [2005] 3 Costs LR 394)

10.  The fact that a party cannot beat the claim by the sanction payment is a factor to be considered in the determination of costs, but it is not a conclusive factor.

Decision on costs

11.  The respondent has admitted liability but succeeded in the dispute on quantum.  Incidentally, the respondent also succeeded in its appeal against the Assessments. Insofar as the issue on quantum is concerned, the respondent shall be treated as the successful party.

12.  Due to the respondent’s admission on liability, the trial was only necessary for the determination of quantum.

13.  I have found in the Judgment that the applicant has clearly exaggerated his disabilities resulted from the Accident.  The surveillance video in late February and March 2012 revealed a marked difference from the condition that the applicant has told the court. There are a number of inconsistencies between the applicant’s evidence in court and the conditions he told the medical experts.  Two medical experts took the view that the applicant was exaggerating his symptoms physically and mentally. This court also found that the applicant was not honest in his evidence on his condition, has exaggerated his injury resulted from the Accident, and has a pattern of sick leave shopping.

14.  The applicant and his legal advisers have the medical reports and the surveillance video record before the trial.  The applicant has deliberately exaggerated his disability and inflated his claim, costs sanction should be made against the applicant.  Although the applicant was legally-aided and public fund is involved, this should not immune the applicant from an appropriate adverse costs order. (Shih Pik Nog v G2000 (Apparel) Ltd [2011] 4 HKLRD 121)   Otherwise, it will serve as an encouragement to legally-aided party to pursue unrealistic and even exaggerated claims, which will in turn be an unnecessary and unjustified strain on the public funds.

15.  The sanctioned payment made by the respondent was around HK$14,400 short from the damages awarded.   The admission of liability came only three days before the trial.  If the respondent made the admission earlier, much of the costs could be saved.

16.  Balancing all the factors, I consider that a fair order on costs shall be (1) the respondent shall pay the applicant costs of and incidental to the issue of liability; and (2) the applicant shall pay the respondent costs of and incidental to the issue of quantum with certificate for counsel.  The above costs shall be on party and party basis, to be taxed if not agreed.