MA KAM SING v. LAU SUI KEUNG t/a LAI CHING LIGHTING & ELECTRICAL CO

DCEC1022/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1022 OF 2010

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D E C I S I O N

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1. The respondent applies for a variation of the costs order nisi for counsel’s certificate to be awarded on the basis that the issues of this case required counsel’s attention.

2. I have no doubt the issues and facts at trial of this case are comparatively more complex than the ordinary ECC claims, that retaining counsel for the trial was of assistance to the respondent and also to the court at the hearing.

3. On the other hand, I have also considered that the defence raised included the issue that the respondent was not liable to the applicant because the respondent was not the applicant’s employer, claiming the employer was an independent contractor.

4. This defence, if true, means that the respondent would not be responsible for any statutory duty under the Employment Ordinance and, more importantly, he would not be required to take out workmen compensation insurance for his employees, including the applicant.

5. On the basis of my finding that the applicant was the respondent’s employee at paragraphs 15 to 23 of my judgment - and the applicant had produced documentary evidence showing he was indeed an employee of the respondent and not an independent contractor - the respondent failed in that part of his defence on liability.

6. The respondent did succeed in denying liability because I found the applicant had suffered a stroke and it was not caused by the strenuous nature of the work or rice cookers falling on his head. 

7. The case cited by Miss Chan for the respondent, Wu Leung Kui v Leung Ming Yun & Ors, CACV175/2011, referred to the principles stated in the case of re Elgindata Limited (no.2) [1992] 1 WLR 1027 at 1214 A to C as follows:

“The principles are these: (i) Costs are in the discretion of the court. (ii) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made. (iii) The general rule does not cease to apply simply because a successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or part of his costs. (iv) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs, but may order him to pay the whole or a part of the unsuccessful party’s costs. Of these principles, the first, second and fourth are expressly recognised or provided for by rules 2(4), 3(3) and 10 respectively. The third depends on well-established practice. Moreover, the fourth implies that a successful party who neither improperly nor unreasonably raises issues or makes allegations on which fails ought not to be ordered to pay any part of the unsuccessful party’s costs.”

8. Miss Chan also referred to Order 62, rule 5(1) of the White Book, specifically rule 5(1)(f):  

“whether a party has succeeded on part of his case, even if he has not been wholly successful”.

9. Rule 5(1) of the White Book states:

“The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account -

(aa) the underlying objectives set out in Order 1A, rule 1;

(e) the conduct of all the parties; and

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

10. This is the case here.  The principle refers to whether the successful party, if only partly successful, should have his costs, as explained in the case of Wu Leung Kui.

11. Mr Hung relied on paragraph 12 of that case, it referred to AEI Rediffusion Music Limited and Phonographic Performance Limited, where Lord Woolf MR (as he then was) warned that:

“too robust an application of ‘following the event’ principle encourages litigants to increase the cost of litigation . . . If you recover all your costs as long as you win, you are encouraged to leave no stone unturned in your effort to do so.”

12. It is a warning to lawyers that there would be consequences if you leave no stone unturned and increased the costs of litigation in the process. It is clear, costs would be increased if all available defences are used in the defence of a claim against a defendant, thus increasing the costs.

13. In the present case, costs had been wasted in raising the defence denying the applicant was the respondent’s employee, which I found to be untrue.

14. On the aforesaid basis, because part of the time spent at the trial was wasted on the unsuccessful part of the defence, that the preparation of the trial and the trial itself would have been shortened had that defence not been run, I would, therefore, allow the respondent to recover two-third of the costs with certificate for counsel.

15. Today’s costs will follow the same costs orders of a two-third costs for taxation purposes.