LAW YIN POK BOSCO, a minor by LAM PO YEE, his mother and next friend v. DR. CHAN YEE SHING also known as DR. CHAN YEE SHING ALVIN

HCMP 2256/2012

[2021] HKCFI 3058

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2256 OF 2012

(ON AN INTENDED APPEAL FROM HCPI NOS. 369 OF 2010 AND 62 OF 2011 (CONSOLIDATED))

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HCPI 369/2010

HCPI 62/2011

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DECISION

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Introduction

1.  This is an appeal from the order made by Master Martin Wong on 24 November 2020 on the defendant’s summons filed on 4 September 2020.  (The order, as sealed, is dated 30 November 2020.  However, the substantive order was made by the master on 24 November 2020.)  By that summons, the defendant applied for retrospective leave to commence taxation of his bill of costs dated 17 April 2020 (“the Bill”) out of time pursuant to Order 62, rule 16 of the Rules of the High Court.

2.  The Bill covers the costs awarded to the defendant by the Court of Appeal on 31 October 2012 against the plaintiffs in these HCMP proceedings (“the Costs Order”).  Under the Bill, the defendant claims a sum of $170,671.33.   The costs were incurred from 12 to 31 October 2012.  In this appeal, we are only concerned with the costs incurred from 22 to 31 October 2012 (“the relevant period”), which amount to about $155,000.

3.  By virtue of Order 62, rule 22(7), the defendant was entitled as of right to commence taxation proceedings in respect of the Bill within two years after the Costs Order was made.  The deadline therefore fell on 30 October 2014. However, the Bill was only served on the plaintiffs on 17 April 2020 and filed with the court on 25 May 2020.  The defendant was therefore more than 5½ years out of time when he sought to commence the taxation proceedings. 

4.  The master granted retrospective leave but the leave was confined to items of work carried out during the relevant period only.

5.  There are three plaintiffs in these HCMP proceedings.  The plaintiffs sought leave to appeal from the Court of Appeal against an interlocutory order made in two underlying personal injuries actions, which were consolidated at the time.  I shall refer to the plaintiff in HCPI 369/2010 as “the child” and the 1^st and 2^nd plaintiffs in HCPI 62/2011 as “the parents”.

6.  Even though the notice of appeal is stated to be taken out by “the Plaintiffs” on its face, it was made clear by counsel at the hearing that the appeal is brought by the parents only.  There is no appeal brought by the child.

7.  In other words, if I allow the parents’ appeal, the prima facie position is that the defendant will still have leave to proceed with the taxation of the Bill as against the child, even though he cannot pursue against the parents. This is a special feature in this appeal.

8.  The appeal first came before me on 23 March 2021.  At the end of that hearing, I adjourned the appeal for parties to make further submissions on issues arising out of the special feature.  I also sought the views of the Director of Legal Aid (“the Director”), who represents the child, and gave liberty to him to attend the adjourned hearing if he so wished.  The adjourned hearing took place on 10 May 2021.  Mr Felix Chiu, Senior Legal Aid Counsel, made written submissions on behalf of the Director.  The Director elected not to attend the adjourned hearing and agreed to be bound by any order made on the appeal if he is affected.

9.  In this appeal, the parents were represented by Messrs Ip, Kwan & Co (“Ip Kwan”) and Mr Vincent Chiu, counsel.  The defendant was represented by Messrs Howse Williams and (at the adjourned hearing only) Mr Nick Luxton, counsel.

Procedural history

10.  This case has a long and unhappy history.  It is not necessary for me to recite it in full here save to state the following.

11.  In August 2009, the child, who was then 14 months old, met with an accident.  He sustained a significant laceration to his right ring finger as a result.  He was treated by the defendant, a doctor in private practice.  As a result of the latter’s negligent medical treatment, part of the finger had to be amputated.  The child, by his mother and next friend, brought an action against the defendant for medical negligence in HCPI 369/2010.  Separately, in HCPI 62/2011, the parents sued the defendant for nervous shock resulting from that medical negligence.

12.  Liability was admitted very early on in the two actions.

13.  On 13 July 2011, Master Roy Yu ordered that the two actions be consolidated and that save as otherwise directed, all pleadings already filed in the two actions do stand.   What happened from then on was that the two actions were simply heard together.  There was no consolidation in the strict sense that the two actions were turned into one single action with the parties re-designated and with their respective cases set out in one consolidated set of pleadings. 

14.  On 11 October 2012, Deputy High Court Judge Seagroatt refused the plaintiffs’ application to adjourn the trial of the two actions which was scheduled to commence in less than a month’s time.  On the following day, the plaintiffs commenced these HCMP proceedings, seeking leave to appeal against that decision from the Court of Appeal.  The hearing took place on 31 October 2012.  At the end of the hearing, the Court of Appeal dismissed the application and ordered that the plaintiffs pay the defendant the costs of the application, to be taxed if not agreed, ie the Costs Order: see para 27 of the decision.  It is this costs order for which the Bill was issued.  I should add here that the trial then took place as scheduled.  But only the child’s claim was tried.  The judge remarked (at para 51 of the judgment dated 20 November 2012) that he had in effect “de-consolidated” the two actions.

15.  In these HCMP proceedings, legal aid was granted to the plaintiffs only on 22 October 2012.  Ip Kwan was the solicitor assigned by the Director to represent them.

16.  Eventually, after trials and a number of appeals, the final outcome was that the child and the parents were awarded damages at just under $700,000 and about $1.2 million respectively. 

17.  In April 2019, Bharwaney J approved a settlement reached by the parties on certain outstanding costs issues: see [2019] HKCFI 1025.  Mr Chiu referred to the settlement as the “global compromise”.  However, the Bill was not issued then.  It would also appear that the Costs Order was not drawn to the judge’s attention when he approved the settlement.

18.  It is important to note that the parties had reached the settlement on the common understanding that adverse costs orders made against the child would not reduce the damages that he was awarded in his action. 

19.  In the present application, if leave is granted to the defendant to tax the Bill out of time, it is accepted by the Director that he would bear the defendant’s costs incurred during the relevant period (ie from 22 October 2012 when legal aid was granted) which is payable by the child.  On the contrary, the parents would have to bear their part of the defendant’s costs which will be deducted from the damages awarded to them in their action.  This explains why the interests of the parents and the child under the summons are not aligned.

20.  On 17 April 2020, the defendant served the Bill on Ip Kwan and the Director.

The master’s decision

21.  Master granted retrospective leave to the defendant to commence taxation of the Bill out of time but the leave was confined to costs incurred during the relevant period only.  The practical effect of the order is that the costs as taxed and payable by the child would be borne by the Director and the damages awarded to the child would therefore not be reduced as a result.  On the other hand, the taxed costs payable by the parents would have to come out from their damages.

22.  At the hearing before the master, insofar as the relevant period was concerned, the parents, represented by Ip Kwan, opposed the summons.  The stance then adopted by the Director, who represented the child, was not as straightforward and is a subject of some dispute at the appeal before me. 

23.  Having reviewed the relevant materials, including the transcript of the master’s decision, it would appear that the Director had in substance consented to the defendant’s summons, even though no consent summons had been signed.  At the hearing, the Legal Aid Counsel explained to master as follows:

“Master, the reason we consented is because of … the principle of proportionality and the governing principle [concerning] the legal aid period. … Master agree with us that actually leave should be allowed but leaving the penalty for a taxing master to be determined.”

24.  Furthermore, it would appear from the transcript that the master was proceeding on the basis that the parents and the child would be responsible for 2/3 and 1/3, respectively, of the costs as taxed. 

25.  The present appeal is brought by the parents only.

Legal principles

26.  The following provisions in Order 62, rule 22 are relevant:

“(5) On the taxation of a bill of costs, whether or not an order has been made under paragraph (3), the taxing master, if he is satisfied that there has been undue delay in commencing taxation proceedings or in proceeding with the taxation –

(a) may make such order as he thinks fit as to the costs of any application or as to the costs of the taxation;

(b) may disallow any part of the costs to be taxed pursuant to the costs order; and

(c) may, in relation to the taxed costs or any part of those costs, disallow interest or reduce the period for which interest is payable or the rate at which interest is payable.

…

(7) A party is not entitled to commence taxation proceedings under rule 21 —

(a) after the expiry of 2 years from the completion date; or

(b) where the Court has extended the period specified in sub-paragraph (a), after the expiry of the period as extended,

whichever is later.”

27.  See also Order 62, rule 16:

“(1) A taxing master may – (a) extend the period within which a party is required by or under this Order to begin proceedings for taxation or to do anything in or in connection with proceedings before that master; …

…

(3)   A taxing master may extend any such period as is referred to in the foregoing provisions of this rule although the application for extension is not made until after the expiration of that period.”

28.  When considering whether to exercise its discretion to extend time under Order 62, rule 16, the court must take into account all relevant circumstances of the case.  The circumstances would include the length of the delay, whether there is a good explanation for the default and whether the delay has caused any prejudice to the paying party. 

29.  The court should bear in mind that there is flexibility given to the taxing master under Order 62, rule 22(5) to impose ‘penalty’ that the master may consider to be appropriate in the circumstances of the case.  Such power includes depriving the receiving party a portion of the costs to be taxed, or to deprive him of all or part of the interest.  In light of the built-in mechanism, the court should consider whether a refusal to grant leave altogether would be a disproportionate penalty in that the paying party would get a windfall in not having to pay anything notwithstanding that an adverse costs order has been made against it. 

30.  Ultimately, the court is not bound by any straitjacket.  It should weigh all the relevant factors and strive to achieve a just result.  See Wing Ming Garment Factory Ltd v Incorporated Owners of Wing Ming Industrial Centre [2012] 1 HKC 290 at paras 34, 48-50. 

Discussion

31.  In this appeal, as between the parents and the defendant, I am of the view that leave should not be given for the late taxation of the Bill.  (I shall return to the position as between the child and the defendant and consider whether that should have a bearing on the view which I have reached.  See the section entitled “The special feature” below.)  I consider that the following matters are material factors which I should take into account.

Discretion as between the parents and the defendant

32.  First, the delay in issuing the Bill is extraordinarily long.  The Costs Order was made on 31 October 2012.  The Bill was served on the plaintiffs about 7½ years later on 17 April 2020.  For time extension purposes, it was out of time for 5½ years.  By any measure, the delay is undeniably substantial.  It is a very strong factor against the defendant.

33.  Secondly, there is no good reason put forward by the defendant to explain the extraordinary delay. 

34.  Notwithstanding that the defendant is seeking indulgence from the court to extend time, there is no affidavit filed in support of the application to explain the delay.  The defendant’s position is that an affidavit would add nothing but would further contribute to the costs already incurred.  

35.  Shortly after the summons was issued, by letter to the court, Howse Williams explained that they did not commence taxation within the 2-year period as they wished to abide by the “one taxation per party per action” principle. In this appeal, the defendant concedes that the principle has no application to the present case.  In fact, at the hearing before master, the solicitors told the court that the main reason for the delay was oversight.   It is now submitted by the defendant that the proceedings in these personal injury actions have been complicated and eventful.  Since the making of the Costs Order, numerous events took place on an annual basis, including the trials of the claims of the parents and the child, the child’s appeal and applications to vary costs orders nisi in both actions.  All these events, the defendant submits, contributed to the oversight of the deadline for taxing the Bill.

36.  In my view, the defendant ought to have filed affidavit evidence to give a full explanation to the plaintiffs and the court why the Bill was taken out so late.  It is of course true that the preparation of such evidence would entail costs.  However, given the extraordinarily lengthy delay, it is squarely incumbent upon the defendant to fully and properly explain the delay. 

37.  This is particularly so when the reason (ultimately) given is oversight on the part of the defendant’s solicitors.  In such a case, I would expect them to explain, as a minimum, when they discovered the mistake and what prompt steps (if any) they then took to try to rectify it.  All these would be relevant considerations which the court would take into account when considering whether to extend time or not. 

38.  The filing of affidavit evidence should not be taken as a mere formality.  It serves the important function of setting out factual matters which would go into the weighing exercise to be conducted by the court.  In the present case, the costs for preparing the requisite affidavit would be fairly modest.  The defendant’s (apparently) conscious decision not to have one done is simply not understood. 

39.  Even if I am prepared to take the defendant’s submissions as evidence and proceed on the basis that the delay was due to oversight of the defendant’s solicitors.  This is not a good reason for the delay and is a factor against the defendant’s application.

40.  Thirdly, in April 2019, when Bharwaney J approved the settlement of the outstanding costs, it would appear that the Costs Order was not even drawn to his lordship’s attention.  If leave is granted to the defendant to tax the Bill as against the parents now, a portion of the damages awarded to the parents which are still retained by the Director will remain to be kept pending the conclusion of the taxation proceedings.  The parents would hence suffer prejudice from the further delay.

41.  Fourthly, the defendant submits that if he is barred from proceeding with the taxation of the Bill altogether, it would amount to a disproportionate penalty and would give the parents an unwarranted windfall.  It should be left to the taxing master to impose a suitable sanction which is commensurate with the delay at the taxation hearing.  That would include, for example, depriving the defendant a portion of the taxed costs.

42.  I do not accept that submission.  As a starting point, the costs incurred during the relevant period, which (before taxation) amount to about $155,000, are of a relatively limited amount, when compared with the overall costs incurred by the parties in these two actions over the past 10 years or so.  In other words, even if the parents can be said to be receiving a windfall, the windfall is of a very modest amount.  If the Bill is allowed to go to taxation, the taxing master is expected to apply a hefty discount to reflect the extraordinary delay in any event.   Overall speaking, in the circumstances, it is not a disproportionate outcome if the defendant is disallowed to tax the Bill out of time.

43.  In sum, before me is a case where the defendant, for no good reason, failed to tax the Bill within the prescribed 2-year period.  Worse still, he failed to raise the issue of the Bill when the parties were apparently trying to resolve the outstanding costs issues on a global basis in these long-running actions in 2019.  When it finally occurred to the defendant in 2020 that the Costs Order has remained outstanding, the solicitors did not take steps to put together a proper time extension application explaining the default.  If leave is granted now, the parents will suffer further delay.  There ought to be closure for the parents in their action.  Refusing leave to tax out of time is plainly not a disproportionate measure to take in the circumstances.  I take the view that it is a just result for the parties.

44.  The above sets out the strict position as between the parents and the defendant.  I now return to the special feature as identified at the outset.

The special feature

45.  It should follow from my conclusion above that I should allow the parents’ appeal against the master’s decision.  However, before the master, the Director, representing the child, consented to the late taxation.  We are therefore potentially dealing with a situation where the defendant is allowed to tax the Bill as against the child only but not against the parents. 

46.  In light of this prospect, I directed parties and the Director to make submissions on the following issues:

(1)  Whether the plaintiffs’ liability to pay costs under the Costs Order are joint and several or several;

(2)  If several, in what proportions the plaintiffs are liable;

(3)  If joint and several, whether it is open to the court to grant leave to the defendant to proceed with taxation as against the child only but not against the parents;

(4)  If so, whether the defendant may have the entire Bill taxed as against the child or only a portion; and if the latter, what portion; and

(5)  If the answer to (3) above is no, and in the event that the defendant is refused leave to proceed with taxation at all, whether the Director would revisit the costs order made at the hearing before the master.

47.  In respect of question (1), it would be recalled that at the time these HCMP proceedings were brought before the Court of Appeal, the two personal injury actions were consolidated (or, more precisely, heard together).  The three plaintiffs together sought leave to appeal against the first instance judge’s decision to refuse to adjourn the upcoming trial of the claims of both the child and the parents.  The Court of Appeal refused leave and made the Costs Order. 

48.  It is plain that the Costs Order was made against the three plaintiffs. In such circumstances, the plaintiffs’ liability to pay the costs are joint and several.  Each is liable for the full amount of the defendant’s costs, although the total amount recoverable by the defendant is limited to the costs, as agreed or taxed: see, eg, Robert Bruce Chaiko v Germain Electronic Ltd HCSD 5/2009, 7 January 2010, para 25; Wong Yuk Tung v Wong Po Ling [2019] HKCFI 1947, para 32; Hebei Enterprises Ltd v Livasiri & Co HCA 20094/1998, 7 July 2006, para 25.

49.  On behalf of the parents, Mr Chiu submitted that as a matter of construction, the liability of the child and the parents to pay costs under the Costs Order are not joint and several.  Instead, the child and the parents should each bear 50% of the costs severally.  His main reasoning was as follows.  First, the language of the order is clear.  It did not specify that the child and the parents should be jointly and severally liable for the costs.  Secondly, the Court of Appeal could not have contemplated that the child, as a minor, should be jointly and severally liable in costs with the parents. The child’s interests must have been at the forefront of the court’s concern and the court could not have contemplated that the child might be liable to pay for costs incurred by the parents. 

50.  I do not agree with the submission.  The leave application was made jointly by the three plaintiffs.  They were represented by the same legal team.  The application was dismissed, and an adverse costs order was made, as against all of them.  Against this context, it is clear that the intention of the court was for all three plaintiffs to bear the costs jointly and severally.  If the court had intended the liability to be several, it would have stated so expressly and, further, spelt out the respective proportions. 

51.  In light of the answer to question (1), question (2) becomes irrelevant.

52.  As regards questions (3) and (4), as is made clear in the authorities, where the liability to pay costs is joint and several, the receiving party may go after any one of the paying parties for the full amount of the costs. If any one of them satisfies such costs liability, he should be entitled to apply to the court making the costs order for an apportionment of such costs liability among the paying parties: The Incorporated Owners of Hing Wong Mansion v Lee Leng Kong DCCJ 4633/2006, 15 July 2008, para 3.  But any such apportionment application would be an “internal” matter among the paying parties.

53.  It follows that in the present case, the defendant may seek the full costs from any of the plaintiffs.  If he had commenced taxation within time, he could have had the entire Bill taxed against any of them without leave of the court. As it is now the case, the defendant is out of time and requires leave to commence taxation.  But that should not alter his substantive right under the Costs Order.  He may choose to seek leave and claim the full costs from any one of the plaintiffs. 

54.  For these reasons, as a matter of jurisdiction, I am of the view that it is open to the court to grant leave for taxation of the entire Bill (concerning the relevant period) against the child only, but not against the parents.  This is because the fact remains that the child is one of the three paying parties on a joint and several basis under the Costs Order.

55.  The next question is whether in this appeal I should allow that to happen, as a matter of discretion. 

56.  The Director’s position is that my decision on the parents’ appeal should equally apply to the child as they have the same interest and their costs liability is joint and several.  I have to say that that ought to be correct as a matter of logic.  One may go on to say that if the parents’ appeal is allowed, the leave granted against the child should be overturned too. 

57.  However, the difficulty with that is that the Director has not lodged any appeal against the master’s decision as concerning the child.  As things presently stand, there is no appeal before me as regards that decision as far as the child is concerned.  Technically speaking, in this appeal, I am not in a position to disturb that part of the master’s decision.  Furthermore, in the absence of an appeal, as a matter of procedural justice, it would be unfair to the defendant if I were to do so.  I therefore would not take up that course of action, due to the stance of the Director.

58.  I have reached the conclusion that as between the parents and the defendant, the latter ought not to be allowed to tax the Bill out of time.   I would therefore allow the parents’ appeal.  As the leave granted by the master as against the child remains “intact”, the practical outcome of my decision is that the defendant will still be able to pursue the Director for the costs incurred during the relevant period.  (I should just add here that on a correct analysis of the nature of the plaintiffs’ liability under the Costs Order, the contention put forward by the defendant concerning proportionality in para 41 above is rendered academic, as he will be able to pursue the whole Bill as against the Director.)

59.  In light of my answers to questions (3) to (4), question (5) becomes irrelevant.

Conclusion

60.  For the above reasons, I allow the parents’ appeal by varying the master’s order made on 24 November 2020 as follows: (a) adding the words “and as against the Child only” at the end of para 1, and (b) crossing out the words “one third of” in para 2.  The rest of the order do stand.

61.  I make the following costs order nisi. 

62.  The defendant do pay (a) the parents’ costs of the appeal, and (b) the Director’s costs on the preparation of the written submissions.  The Director’s costs were incurred by reason of the appeal, which the defendant has lost.  There be summary assessment by paper disposal.  The parents and the Director do lodge and serve their statements of costs within 14 days of the handing down of this decision.  The defendant do lodge a list of objections for each statement, if any, within 14 days after that.