YU KWUN HANG v. WAH PO CARGO & TRANSPORTATION CO LTD

DCEC867/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 867 OF 2010

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D E C I S I O N

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1. The issue of dispute in this matter is the costs of the Applicant due to the Respondent’s granting consent out of time to the Applicant to accept the sanctioned payment.

2. The background to the issue is:

(i)  The Respondent made a sanctioned payment on 24 June 2011, but the Applicant failed to accept the sanctioned payment on time;

(ii)  On 6 December 2011, the Respondent made a new sanctioned offer to the Applicant that there be a global settlement of both the Employees’ Compensation action and the High Court PI Action.  The Applicant replied on 13 December 2011 with a counter offer.  The Respondent rejected the Applicant’s counter offer and re-iterated the previous global settlement offer on 20 December 2011;

(iii)  The Respondent proposed mediation to settle the ECC and High Court common law claim on 6 January 2012.  The Applicant responded on the mediation proposal on 20 January 2012.  The Respondent then drafted a joint letter to court to remove the ECC case from the warned list due to be warned on 17 March 2012 on 2 March 2012;

(iv)  The Applicant indicated to the Respondent that it would accept the Respondent’s sanctioned payment in the ECC Action on 5 March 2012.  The Respondent failed to reply to this letter.  The Applicant wrote again to the Respondent on 13 March 2012.  The Respondent replied on 14 March 2012 re-iterating the global settlement to include the High Court PI Action.  The Respondent proposed mediation again;

(v)  On 15 March 2012 the next day, the Applicant wrote to the Respondent informing the Respondent that it should withdraw the sanctioned payment and apply to court for directions before 16 March 2012.  The Applicant under separate cover informed the Respondent that the joint letter proposal to court is no longer applicable and the Applicant took out the inter-parte summons on 16 March 2012;

(vi)  On 26 March 2012, the Respondent decided to consent to the Applicant’s acceptance of the sanctioned payment out of time in order to settle the ECC case to save further costs.

3. From the chronology of events and correspondences placed before me, it is clear that both parties have been dragging their feet in spite of Judge Leung’s order of direction on 8 December 2011, ordering the case to be set down on or before 17 February 2012 and the case to be warned on 17 March 2012.

4. Nevertheless, the Respondent by its refusal to consent to the Applicant’s acceptance of the sanctioned payment has benefited in costs in a way, even though the parties both attempted mediation to settle both the ECC and High Court claim.  For this reason, the Applicant has agreed that the Respondent should have its costs up to 13 March 2012.  The Applicant is asking for costs after 13 March 2012 because it was clear to the Respondent that the Applicant wanted to take the sanctioned payment to settle the ECC Action and the case should not go to trial because it was a week or so before the case was to be warned on 17 March 2012.

5. I agree the Applicant’s proposal is sensible on the basis that if the parties intended to go to mediation or negotiate settlement in any form it should be done at an early stage.  It should not be proposed in the same month the case was to be warned for trial. 

6. This is leaving it too late particularly when there is a sanctioned payment since 24 May 2011.  The Applicant was acting correctly in writing to the Respondent in early March 2012, offering to accept the payment in order to settle.

7. Unfortunately it was not responded to with the same urgency in mind by the Respondent.  As a result, the parties that had delayed in responding seemed to have benefited from it because there was a sanctioned payment it had paid into court since last May.

8. The Respondent would stand to benefit because it has a sanctioned payment in court when it proposed a global settlement, by doing to, it changed the terms of acceptance of the sanctioned payment and at the same time refused to give consent to the Applicant to accept the payment just on the ECC claim alone.  The benefit seems to be completely to the Respondent.  I do not think that is fair.  If this is allowed, the court seems to be condoning the action of the party who is dragging its feet.

9. For the aforesaid reason, I allow the Applicant’s proposal under paragraph 5 and 6 of the inter-parte summons that costs after 13 March 2012 should be borne by the Respondent including the costs of today.  I grant order in terms of the summons.

Order

10. The case will be removed from the warned list.