CHAK WING KEUNG AND OTHERS v. B.S.C. HOME IMPROVEMENT CENTRES LTD

HCPI 880/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.880 OF 2002

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R U L I N G

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Ruling on Costs

1. This is the plaintiffs’ application by Summons to determine the scale of costs payable by the defendant in this matter which was settled between the parties by the plaintiffs’ accepting the payments into court made by the defendant in respect of the claims by all three plaintiffs.

2. This action was commenced in October 2002.  The three plaintiffs are a family.  The 1^st plaintiff being the husband, the 2^nd plaintiff the wife and the 3^rd plaintiff their daughter, aged four at the time of the accident on 7 October 1999.

3. The accident occurred when the 2^nd and 3^rd plaintiffs were taking a bath together in the bathroom at their home when the glass sliding door of the shower cabinet suddenly came loose, fell onto both of them and shattered into numerous glass fragments thereby injuring both of them.  As a result of their cries and shouts when the accident happened, the 1^st plaintiff ran into the bathroom and saw his wife and daughter injured and bleeding, thereby suffering nervous shock himself.

4. The claim was brought by the three plaintiffs against the defendant being the seller and installer of the shower cabinet with the glass sliding door, which fell down.

5. The trial of this matter was scheduled to be heard on 9 May 2005.

6. On 28 April 2005 the 1^st and 2^nd plaintiffs accepted the total payment into court of $570,000 and $130,000 respectively in full and final settlement of their respective claims against the defendant.

7. On 5 May 2005 approval was sought and was given by the court for the 3^rd plaintiff, being a minor, to accept the sum of $130,000 in respect of the 3^rd plaintiff’s claim against the defendant in this matter.

8. The only dispute between the parties now relates to the scale of costs payable by the defendant in respect of the action herein by all the three plaintiffs.

9. The stance taken by all three plaintiffs is that they should be entitled to have their costs of the action taxed on the High Court scale.

10. On the other hand, it is the defendant’s position that the case should have been transferred to the District Court within a reasonable time after the District Court jurisdiction was increased to $1 million on 1 December 2003.

11. It is accepted by the defendant that it was reasonable in this case for all the three plaintiff’s to have brought their claim jointly in one action.  The focus therefore is only on the 1^st plaintiff’s claim in order to determine the scale of costs to be adopted for taxation; in other words, whether the 1^st plaintiff had a reasonable prospect of obtaining an award in excess of the District Court jurisdiction after its jurisdiction was increased to $1 million on 1 December 2003.

12. The major part of the 1^st plaintiff’s claim is for loss of profits both pre-trial and future.  The pleaded claim for pre-trial loss of profits was quantified at an amount of some $2.8 million while the claim for future loss of profits was quantified at just over $6 million by the 1^st plaintiff.

13. The basis of such claim was that because of the nervous shock suffered by him, he was unable to properly attend to the small house line of business in a company called Golden Dragon Brass Ltd (“Golden Dragon”) in which he had a 25% share and as a result that line of business suffered and in February 2000 an exclusive agency given to Golden Dragon by a Japanese agent relating to the small house line of business was withdrawn.

14. The 1^st plaintiff was able to show from accounts of Golden Dragon that for the two financial years 1997/98 and 1998/99 the net profit generated for this line of small house business was HK$1.9 odd million and HK$1.7 odd million respectively, but that for the financial year 1999/00 this line of small house business suffered a net loss of over HK$200,000 and for the following financial year the net loss rose to well over HK$600,000.

15. However as pointed out by counsel for the defendant, when these accounts are scrutinized more thoroughly, it can be seen that even for the six months preceding the accident, sales had dropped considerably when compared to the two previous financial years and it was not the case that drop in sales only occurred after the accident.

16. Moreover, I take the point submitted by defence counsel that in cases of nervous shock, a claimant is to be looked at as a man of ordinary phlegm (McLoughlin v. O’Brien [1982] 2 All ER 298).

17. Looking at the matter in the round in this case, the injuries to the 2^nd and 3^rd plaintiff were not of a severe nature and certainly could not be described as life-threatening.  Even if the 1^st plaintiff was momentarily shocked by its occurrence, that should not become a mental state of any serious or lasting consequence.

18. Finally when the nature of his adjustment disorder (accepted by both experts who differs only in the degree of that disorder) is viewed against the accounts produced by the 1^st plaintiff relating to his claim for lost profits, very likely a trial judge would have concluded that the withdrawal of the exclusive agency agreement from Golden Dragon arose from the dropped sales in the six months preceding the accident rather than as a consequence of the mental state of the 1^st plaintiff resulting from the accident.

19. When the whole picture is looked at fully and taking into account that the 1^st plaintiff accepted the total amount of payment in of  $570,000 in full satisfaction of his claim (despite his pleaded claim being for well in excess of $8 million), the only conclusion that I can come to is that the 1^st plaintiff’s claim when it was pleaded was grossly exaggerated.  Moreover, I do not accept that he had accepted the payment in because of the exigencies of litigation whereby he was apprehensive of the risk of losing the case because of the issue of causation being an issue of liability in dispute between the two liability experts.

20. No question of contributory negligence arises in respect of the 1^st plaintiff since none had been pleaded against him (contributory negligence was only pleaded as against the 2^nd defendant) by the defendant in its Defence.

21. For the above reasons, I conclude that there was no reasonable prospect of the 1^st plaintiff obtaining an award in excess of $1 million had this matter gone to trial.

22. It follows therefore that when the jurisdiction of the District Court was increased to $1 million on 1 December 2003, this case ought reasonably to have been transferred to the District Court.

23. Looking at the chronology of what had happened in this case, two months after 1 December 2003 would have been a reasonable and sufficient time for this matter to have been transferred to the District Court.

24. Accordingly, the order as regards the scale of costs to be applied in this case will be as follows :

25. In respect of the 1^st and 2^nd plaintiff, the respective costs of their action to be paid by the defendant if not agreed, are to be taxed on the High Court scale for all costs incurred on or before 1 February 2004 and thereafter to be taxed on the District Court scale.

26. In respect of the 3^rd plaintiff, being under disability as a minor, in addition to the above costs order in respect of the 1^st and 2^nd plaintiff, there will be the further order that her costs will be taxed on the common fund basis, both for the High Court scale and District Court scale.

27. As for the costs of this hearing, there will be a costs order nisi that the plaintiffs pay the costs of this application and hearing to the defendant.