HUSSAIN GHALIB v. MAN'S BROTHERS CONSTRUCTION CO LTD AND ANOTHER

HCPI 294/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 294 OF 2007

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R U L I N G

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1. A clerk from the office of the Plaintiff’s solicitors mistakenly put forward a consent order settling this action which contained a provision that the Plaintiff’s costs were to be taxed on the District Court scale. This is an application to set aside this part of the order and to replace it with a provision that the scale for taxation of costs should be adjourned for argument.

2. Mr Burke, on the Plaintiff’s behalf, accepts that he can only succeed if he is able to show that the Defendants’ solicitors knew or ought to have known of the clerk’s mistake when putting forward the consent order which the Defendants’ solicitors were agreeable to and which has been entered into the record as the order of the court.

3. It is necessary to consider some of the background to all of this.

4. This is a personal injury action in which the Plaintiff was seeking damages for injuries allegedly sustained in the course of his employment.  On the pleadings, liability was denied by the Defendants with an alternative plea of contributory negligence.  In the connected Employees’ Compensation application, liability was also denied and that application was adjourned to await the outcome of this action.  The trial of the action was set down for 28 January this year and settled on 27 January by the consent order which is the subject of this application for its amendment.

5. At the heart of the application is the assessment of the Plaintiff’s case by those advising him that when they issued the writ they reasonably expected to be awarded damages in excess of the District Court limit of $1 million, excluding any reduction for contributory negligence.  See Hopkins v Rees & Kirby Ltd [1959] 2 All ER 352 approved by Seagroatt J in Lai Ki v B&B Construction Co. Ltd & Ors [24 June 2003/HCPI 63/2001, unreported]. 

6. Negotiation had taken place between the parties and at first the defendants contended for contributory negligence of 40%.  They offered $1,089,183 reduced by 40% to $635,510.  This was rejected and a second offer was made based on 20% contributory negligence in the amount of $948,866.25 reduced by 20% to $759,093 which was accepted.

7. How the mistake by the Plaintiff’s solicitors’ clerk came about is as follows.  The Plaintiff’s solicitors had prepared a consent summons on the basis that costs in the Plaintiff’s favour would be taxed on the High Court scale.  The Defendants’ solicitors were not prepared to pay on this scale but indicated that they would agree to a consent summons which stated that costs were to be taxed on the District Court scale or “costs to be agreed or argued”.  This was the subject of a telephone conversation between a Miss Leung, a trainee solicitor in the Defendant’s solicitors’ office, and the clerk in the Plaintiff’s solicitors’ office.  Miss Leung having said this to the clerk, he replied that he would speak to his superior and get back to her.  Having done so, he then telephoned back indicating that the Plaintiff’s solicitors would agree to “costs to be taxed if not agreed on the District Court scale” and this is what the clerk then forwarded to the Defendants’ solicitors as a result of which the court made its order in these terms.

8. The Defendants’ solicitors of course were not privy to what had passed between the clerk and Mr Burke his principal.  The two communicated by text messages.  This is what each “texted” to the other:

“SMS from Henry to Mr. Burke dated 27^th January 2010

[Deft Sol agreed 2 cs except costs in cl be on dc scale as no instruction to pay on hc scale and settle sum less than 1m. if it cannot be agreed now, deft propose to revise that clause without mentioned the scale. pls advise asap]

Reply SMS from Mr. Burke to Henry on 27^th January 2010

[Revise. Take out ref to costs]”

I have no doubt that what Mr Burke intended to convey in his text was that there should be no reference to the scale on which costs were to be taxed which would mean that the scale would have to be argued over on a subsequent occasion.  The clerk misunderstood that instruction and prepared a revision from costs on the High Court scale to costs on the District Court scale which is what the Defendants were prepared to agree to.

9. Mr Burke has sought to argue that given the background to the case and the course of negotiation, the Defendants’ solicitors must have realised that a mistake had occurred and the revised draft could not have reflected the Plaintiff’s solicitors’ intention.

10. I disagree.  The only sensible conclusion so far as the Defendants’ solicitors were concerned was that the Plaintiff’s solicitors had changed their mind and were now prepared to agree a District Court scale taxation.  The misunderstanding between Mr Burke and his clerk is something that must remain in the Plaintiff’s solicitors’ office.  It simply cannot be shown that the Defendants’ solicitors knew of or ought to be taken as having known of the misunderstanding between Mr Burke and his clerk.  This is the only basis for setting aside the court order as the cases of Smith v Hughes [1870-71] LR 6 QB 597 and Centrovincial Estates Plc v Merchant Investors Assurance Co. Ltd [1983] Com LR 158amply demonstrate.

11. Accordingly, the summons must stand dismissed with costs to the Defendants (taxed of course on the High Court scale).  Having heard provisional argument on the matter, the order for costs will be a final one.