LO CHUEN CHUNG v. WONG CHUN SING

HCPI 428/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 428 OF 2005

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R U L I N G

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1.  The parties have settled this personal injuries action by consent, for damages of $620,000 which had been paid into court.  However, they could not agree the costs.  By the consent summons dated 21 April 2006, which settled the other issues, costs on liability and quantum were reserved for argument before a judge.

2.  The parties had agreed a figure of 20% for contributory negligence on the part of the plaintiff; interlocutory judgment was entered by consent on 28 February 2006.  The settlement figure is within the District Court jurisdiction, and indeed would have been within it even if it had been reached on the basis of 100% liability.  Nevertheless, the plaintiff seeks costs on the High Court scale on both liability and quantum up to the date of the final payment into court, i.e. 29 March 2006, though he concedes that the defendant should have costs after that date, except of course for the costs of the hearing before me.

3.  The defendant, for his part, argues that the plaintiff’s costs should be on the District Court scale, but that in any event the defendant should have costs on the High Court scale in respect of liability from 20 May 2005 which is the date of filing of the Statement of Claim as well as costs after 29 March 2006.

Principles

4.  So far as the scale of costs to be awarded is concerned, it is not in dispute that the general rule is that where the claim is settled or adjudicated upon in a sum within the jurisdiction of the District Court, the usual order is that costs be on the District Court scale, unless the High Court was, in the exercise of its discretion, persuaded that there was a reasonable prospect that the plaintiff would obtain an award in excess of the District Court jurisdiction.  See Lai Ki v B+B Construction Co. Ltd & Ors, [2003] 3 HKC 322, Seagroatt J.

5.  As to the costs on liability, the defendant on 13 May 2005, after the issue of the Writ but before the issue of the Statement of Claim, made a Calderbank offer to agree liability in the proportions of 80% to 20%.  Such an offer may be taken into account by the court in exercising its discretion as to costs, unless at the time it was made, the party making it could have protected his position by making a payment into court.  See Order 62 Rule 5(d) of the Rules of the High Court.

The accident

6.  On 23 May 2002, the plaintiff, then aged 24 years, was the front seat passenger in the defendant’s car, which the defendant himself was driving, when it ran into the back of another vehicle.  The defendant was subsequently convicted of careless driving and driving with alcohol concentration above the prescribed limit.  The plaintiff knew that the defendant had been drinking, because they had been drinking together for about three hours.  The plaintiff did not know how much they had drunk, although he says that he did not think the defendant, who could take a lot before he got drunk, was affected by the drink he had taken. 

The plaintiff’s injuries

7.  The plaintiff suffered multiple injuries to the face, nose and right eye, including rupture of the right eyeball and extrusion of the crystalline lens.  He underwent three operations between the date of the accident and 1 March 2004 when he the final operation was performed for post-traumatic aphakia and aniridia involving scleral fixation of an intra-ocular lens with artificial iris.

The claim

8.  The Writ was issued on 4 May 2005.  The Statement of Claim, Statement of Damages and medical reports relied on were filed on 20 May 2005.  The total claim was put at about $1.75 million.  General damages were estimated at $500,000.

9.  A major part of the claim was for loss of earnings.  The plaintiff’s expert ophthalmic surgeon, Dr John K H Chua had given his opinion that the plaintiff was unable to return to his pre-accident employment as a driver.  It was pleaded that the plaintiff had been earning $8,500 per month, and that from 1 April 2003 his salary was reduced from $8,500 to $4,500.  The pre-trial loss of earnings was calculated at $152,000 and the post-trial loss, applying a multiplier of 17 was calculated at $816,000.  There were also claims for loss of earning capacity, loss of Mandatory Provident Fund, and future medical expenses.

Medical evidence

10.  According to Dr Chua, who saw him on 18 October 2004, the plaintiff’s vision in his right eye was poor.  The best-corrected distant visual acuity was 0.3 for the right eye as against the 1.0 for the left eye.  For both eyes together, it was 1.0.  The plaintiff was unable to tolerate optical correction due to anisometropia (the discrepancy between the optical corrections).  He also lost stereopsis for the judgment of distance and depth.

11.  The disability was permanent.  Dr Chua estimate a permanent impairment of visual function, according to the AMA guide, of 29%.

12.  Dr Chua said that the plaintiff was not advised to return to his pre-accident job as a driver, and that jobs which did not require the ability to judge distance and depth were more suitable.  As to future treatment, Dr Chua said that follow-up treatment would be necessary for 12 months at a cost of $5,000.  If future operation for further retinal detachment were necessary, this would cost $60,000, and if operation for post-traumatic glaucoma were required, it would cost $40,000.  The estimates were based on private sector costs.

13.  On 7 July 2005, the defendant’s expert, Dr Paul M K Cheung examined the plaintiff.  He found a best corrected visual acuity of 20/50 for the right eye as against 20/20 for the left eye.  For both eyes together, it was 20/20.  He put the impairment of the whole visual system at 17%.

14.  So far as employment was concerned, Dr Cheung referred to the legal standards for Hong Kong, the UK, Canada and Australia.  He said that in Hong Kong, a person with the plaintiff’s visual ability would be allowed to drive private cars and goods vehicles, but not large goods vehicles or passenger carrying vehicles with more than 16 seats.  He said that the plaintiff should be able to return to his pre-accident job as a light goods vehicle driver, though he could not drive heavy goods vehicles, articulated vehicles or buses.  He said that because of photophobia in the right eye, the plaintiff might have to wear sunglasses, even when the sunlight was not very strong, and his eye may become tired if he had to drive for long hours under the sun.

15.  As to future treatment, Dr Cheung said that the plaintiff had suffered from glaucoma but this had been successfully treated with eye drops.  Follow-up would be required for this for about 7 years, involving about 15 check-ups at $40 each in the public sector or $1,000 each in the private sector.  The chance of the plaintiff needing further operative treatment for retinal detachment was very low, less than 10%.  The chance of his needing glaucoma surgery was also very low.

16.  In commenting on Dr Chua’s report, Dr Cheung took the view that the plaintiff’s astigmatism had significantly reduced, so there was no anisometropia, and hence the plaintiff would have no problem in wearing glasses in the future.  He also said that the best corrected visual acuity was much improved to 20/50 and so there should not be any problem in stereopsis and judgment of distance.

17.  Dr Chua was asked to comment, which he did, without seeing the plaintiff again.  He noted that there would still be anisometropia, lack of accommodation (the ability to auto-focus for distant and near objects) and stereopsis for the judgment of distance and depth.  He agreed with the citation of the legal standards but maintained his view that, judged as an individual patient, the plaintiff should not go back to working as a commercial driver, because of his permanent disabilities.  He also said that the chance of future surgery being needed was “not very low”, and he maintained his earlier estimates of the cost of treatment.

Evidence of earnings

18.  It appears from the employer’s tax returns that the plaintiff earned $102,000, i.e. $8,500 per month, in the year from 1 April 2002 to 31 March 2003, and $54,000, i.e. $4,500 per month, in the subsequent tax year.  His own evidence, as appears in his witness statement is that he has lost the ability to judge distance and depth, so he can no longer be a driver.  He can only work as an office assistant, at $4,500 per month.

19.  It is not clear when the plaintiff returned to work, or when he started work as an office assistant, though he does seem to have been paid his full salary whilst off work after the accident.

Correspondence

20.  On 21 March 2005, the defendant’s solicitors, Yip and Partners (“YP”), wrote to the plaintiff’s solicitors, Chiu, Szeto & Cheung (“CSC”) to the effect that the plaintiff knew that the defendant had taken beers shortly before driving.  They asked CSC to advise the percentage of contributory negligence which the plaintiff would admit, with a view to saving costs, and they requested CSC to issue the endorsement of claim first, instead of wasting the costs of drafting a Statement of Claim if they wished to proceed.  YP noted that any costs incurred prematurely would be contested.

21.  CSC did not respond to this letter.  After the issue of the Writ on 4 May 2005, YP on 13 May 2005 wrote to CSC to the effect that the plaintiff had put himself at risk by travelling in the defendant’s vehicle, knowing that the defendant had been drinking.  They made a Calderbank offer of settlement on liability with the plaintiff accepting 20% liability for contributory negligence, which they stated to be open for a period of 7 days from receipt of the letter.

22.  CSC again did not respond.  Indeed a “without prejudice” letter written by them on 30 May 2005, to the effect that the plaintiff was “open to negotiation and acceptance of any reasonable offer” suggests that the author had not read either of the letters mentioned above.  On 20 May 2005 they filed the plaintiff’s Statement of Claim, Statement of Damages and the medical reports relied on, in particular that of Dr Chua.

Payments into court

23.  The defendant paid in $550,000 on 31 December 2005.  It was after this that the plaintiff agreed to settle liability on the basis of 8%/20% put forward by YP on 13 May 2005.  A further $70,000 was paid in on 29 March 2006.

Issues

24.  So far as the costs on liability are concerned, the issue is whether the plaintiff should have accepted the proposed 80%/20% settlement when it was offered in May 2005, and if so, whether I should take that into account in deciding whether to allow costs on liability after the date of issue of the Statement of Claim.

25.  So far as the scale is concerned, the issue is whether the plaintiff ever had a reasonable prospect of recovering over $1 million, on full liability.

Costs on liability

26.  The plaintiff knew, since at least March 2005, that contributory negligence was a live issue.  In their letter of 13 May, YP cited the case of Chan Ah Kau, next friend for  Chau Tai v Ng Tin Hai, HCPI 33 of 2000.  In that case, Suffiad J found the plaintiff passenger, who had been drinking with the defendant driver liable for 20% contributory negligence, on the basis that he knew, or but for his state of intoxication, ought to have known that the defendant was not in a fit state to drive and ought to have known that he was putting himself at risk in allowing himself to be driven.  The situation is very similar to that of the plaintiff here, though in that case the parties had been drinking for seven hours against the plaintiff’s three.  In that case, the defendant was three times over the prescribed limit; in the instant case, it appears he was at about twice the limit, so he must have taken a good drink, and no doubt the plaintiff took a good drink along with him.  Nevertheless, CSC seem to have simply ignored the Calderbank offer.

27.  The defendant was not, at that stage, in a position to protect himself by making a payment into court.  The claim had not yet been itemised; the Statement of Damages was not yet filed.  Even when it was filed, the defendant was not in a position to know what level of payment to make, for he had not yet obtained his own expert medical opinion.

28.  It seems to me, therefore that the Calderbank offer should be taken into consideration, and the defendant should have the costs on liability after 20 May 2005.  Having said that, I expect that those costs will not be great.  I have not been shown any correspondence about costs between then and the date of the interlocutory judgment, but I do not suppose that anything much needed investigation.  Either the defendant had taken a good drink before driving, or he had not; he had been drinking in the plaintiff’s presence, and the plaintiff should know that; it would simply be a matter of asking him.

Scale of costs

29.  Mr Wong, counsel for the plaintiff, argues that on the basis of the information available to CSC in the form of the medical reports, and in particular the expert’s report, as well as the employer’s returns of salary paid, the plaintiff had a reasonable prospect of recovering more than $1 million.  He was therefore justified in bringing and continuing the action in the High Court.

30.  Mr Wright, for the defendant, refers to the opinion of Dr Cheung that the plaintiff could return to work as a driver.  He refers to the fact that the last sick leave certificate expired on 25 February 2003.  Only in the following tax year did the income drop to $4,500 per month; and he says that whatever the cause of this drop was, it would not appear to be the accident.

31.  Mr Wright says that the PSLA figure should not be more than $350,000.  The likelihood of future medical expenses is low.  Even if the plaintiff were allowed pre-trial loss of earnings and MPF for three years, as well as special damages, the full liability claim would still be below $1 million.

32.  Reference is also made to the Answer to the Revised Statement of Damages in which the defendant pleads the average earnings of an office assistant in a forwarding company (such as the plaintiff’s employer) of $7,993 per month according to Government statistics.  There is no evidence of this at present, but no doubt such evidence would have been produced at trial.

33.  This is not the kind of case where an eventual award of contributory negligence, or the taking into consideration of an employee’s compensation payment, might have reduced the original figure claimed to below $1 million.  The major difference between the parties, as now appears from the medical evidence, is on the question of whether the plaintiff can resume work as a driver.

34.  The plaintiff did not, at the time he issued the Writ or filed the Statement of Claim, know of any opinion contrary to that of Dr Chua.  The relevant time for consideration is the time when the Writ is issued; see Wong Choi Fung v Fung Kai Public School, HCPI 534 of 2004, per Suffiad J at paragraph 42, there citing with approval a passage from Wong Chi Ho Jacky v Poon Yuk Shan, HCPI 910 of 2002, Deputy Judge Jat.

35.  On the basis of the evidence which the plaintiff had when he issued the Writ, it seems to me that he was justified in proceeding in the High Court.  He should therefore have his costs on the High Court scale. 

Result

36.  The plaintiff will have costs in respect of liability up to 20 May 2005.  Thereafter the costs on liability will be to the defendant.  In respect of quantum the plaintiff will have costs up to 29 March 2006 and thereafter the costs on quantum will be to the defendant.

Costs of the outstanding issue

37.  As I have indicated, I do not think the costs on liability after 20 May 2005 should amount to much.  The major costs relate to quantum.  This means that the plaintiff has largely succeeded and should therefore, in my view, have the costs of dealing with the outstanding issue, after the consent order made on 24 April 2006.

38.  Since this ruling is to be handed down, this last costs order is nisi.