LAM SUI WO v. LEUNG KAM TIN AND ANOTHER

1988, No. A8025

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This is an appeal by the defendants against a decision on Master Jennings ordering 'that the plaintiff's costs in the action be taxed on the High Court Scale.

2. On the 10th January 1986, the plaintiff while at work sustained a fractured heel. He was subsequently assessed by the Employee's Compensation Board as having a permanent incapacity resulting in a 2% loss of earning capacity.

3. On the 24th April 1986, he made a statement to the Legal Aid Department claiming a daily wage of $160. In respect of the application for compensation under the Employee's Compensation Ordinance, the defendants, through their solicitors, consented to a compensation figure of $29,441 based on an expressed daily earning of $220 over a 26 days working month, but without prejudice to any issue which might arise in any ensuing common law proceedings.

4. On the 10th October 1988, the plaintiff's solicitors were instructed by the Legal Aid Department to act on behalf of the plaintiff in a claim to recover damages for personal injury.  The solicitors received copies of the plaintiff's statement, the medical reports and the employee's compensation certificate of assessment. The plaintiff was interviewed by the solicitors on the 11th November 1988 and advised his monthly earning to be $3,000 - $4,000. He further instructed that he had been unable to work since the accident and was still in pain. The plaintiff's solicitors received medical report dated the 13th December 1988, stating that the fracture was well united with full range of movement of the ankle. The plaintiff was assessed by the doctor as having 2% permanent disability. As the action would have become statue-barred on the 10th January 1989, the plaintiff's solicitors on the 16th December 1988 issued a generally endorsed writ in the High Court.

5. There followed an exchange of correspondence between the plaintiff's solicitors and the defendants' solicitors. The plaintiff initially claimed for general and special damages $285,441 plus legal costs and disbursements, with allowance to be given for the employee's compensation award. The defendants contested the claim principally on the ground that the amount of wages that the plaintiff had been earning at the time of the accident was overstated as was the period for which loss of earnings was claimed. The defendants eventually offered in settlement $76,000 plus costs on the District Court Scale. The plaintiff 's solicitors did not agree with the offer in respect of the costs and the defendant therefore paid into Court $77,000.  The notice of payment in stated that this sum together with the employee's compensation payment was in satisfaction of the plaintiff's claim. The plaintiff accepted the payment in.

6. The plaintiff's solicitors then issued a summons requesting an order that the plaintiff be entitled to tax his costs on the High Court Scale. Master Jennings granted the order which is now appealled against.

7. Section 43(2) of the District court Ordinance, Cap. 336 provides :-

"Where any proceedings in which the Court has jurisdiction are brought in the High Court costs shall be recoverable on such scale and in such amount ,as would have been recoverable if the proceedings had been brought in the Court, unless the proceedings were so brought by leave of the High Court or unless the High Court otherwise orders."

8. It is not disputed by the plaintiff that the amount for which the claim was settled brought it within the ambit of section 43(2), but argues that this is a case where-the High Court ought to exercise its discretion to award costs on the High Court Scale, the plaintiff's solicitors having had before them documents which supported the original claim, on the basis of which they issued the writ in the High Court. As the correspondence with the defendants' solicitors developed, it must have become clear that the original amount claimed could not be supported due to the dispute over the quantum and period of wages lost. In the result the amount paid in was accepted in settlement.

9. It is the defendants' case that if due enquiry had been made by the plaintiff's solicitors before the issue of the writ, it would have been made clear to them that the amount claimed was very much inflated and that the amount likely to be recovered would be within the District Court jurisdiction of $120,000.

10. Section 26(1) of the Employee's Compensation Ordinance, Cap 282 provides :-

11. In selecting the forum in which to issue e proceedings it is therefore necessary for the plaintiff's solicitors to consider the total amount of damages which the plaintiff might recover before, and not after, the employees' compensation award is deducted.  If that gross figure is estimated to be over $120,000, the solicitors are duty bound to issue proceedings in the High Court. To do otherwise could result in their client having to forfeit any amount of damages which the claim is shown to justify over $120,000, the District Court jurisdiction being limited to this figure.

12. After taking into account the time constraints for the issue of proceedings which faced the plaintiff's solicitors, the information which came from the employee's compensation award certificate as to earnings and, in particular, the amount for which the claim was settled - a total only slightly over $10,000 below the District Court maximum jurisdiction, I do not consider that in applying the test stated by Glyn Jones J. in Hopkins v. Rees and Kirby (1959)2 All E. R. 452 that this is a case where it would have been clear to a reasonable man in the position of the plaintiff at the time of the issue of the writ that no judge would award more than the amount which could be awarded by the District Court.

13. The appeal is therefore dismissed with costs to the plaintiff.