DAMAI SHYAM PARSAD v. PACIFIC CROWN SECURITY SERVICES LTD AND OTHERS

DCEC 2603/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2603 OF 2014

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DECISION ON COSTS

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INTRODUCTION

1.  The 1^st to 3^rd respondents (“the respondents”), by way of summons, apply to vary the costs order nisi granted in the judgment of this employees’ compensation application (“the Application”) which was handed down on 10 February 2017 (“the Judgment”).

THE JUDGMENT

2.  In the Judgment, the applicant alleged an accident had occurred on 31 July 2013 when he was working as a rigger in the course of employment with the respondents.  He claimed he had sustained serious injury when 4 gas cylinders (each of them weighed 80 kgs) had fallen onto his body.  The applicant’s evidence was incredible and was rejected.  I dismissed the Application and awarded costs on a nisi basis to the respondents with certificate for counsel, to be taxed if not agreed.

THE RESPONDENTS’ SUMMONS FILED ON 24 FEBRUARY 2017

3.  The respondents apply for an order to vary the costs order nisi in the Judgment to the extent that the costs of the Application be paid by the applicant to the respondents, to be taxed on an indemnity basis, with certificate for counsel.

4.  Mr Mcdaid, solicitor for the respondents, submitted an indemnity costs order is justified because the applicant’s evidence was rejected.  The court found the alleged accident on 31 July 2013 did not occur.  The respondents’ solicitors have duly raised the weakness of evidence of the Application to the applicant, including but not limiting to highlighting the inconsistencies in evidence prior to trial, the applicant should not have proceeded with the Application.

5.  Mr So, solicitor for the applicant opposed to the respondents’ summons.  He submitted the respondents’ case could not meet the requirement for an indemnity costs order.  The costs order in the Judgment should be undisturbed.

6.  Mr So complained the respondents had ambushed the applicant in applying for writ of subpoena to one of their witness, Thomas Chan, on the 1^st day of trial of this action.  For this reason, the applicant was incapable to be duly advised the strength of his Application in terms of evidence.

LEGAL PRINCIPLES

7.  Order 62 rule 28(3) of the Rules of District Court, Cap 336H conferred the court with the power to award costs be taxed on indemnity basis and yet it remains a discretion.

8.  The legal principles on the occasion where costs on indemnity be awarded are well settled.  In Kwan Chui Kwok Ying & Anor v Tai Wai Chun & Ors, HCMP 2996 of 1990, 30 May 2006, DHCJ To (as he then was) summarized in paragraphs 24 – 26 of the judgment,

“Applicable legal principles on indemnity costs

24.  A successful party may have his costs taxed on a party and party basis, common fund basis or indemnity basis. The principles governing award of indemnity costs is well settled. It is also a matter of discretion. Since the decision of Godfrey J (as he then was) in Overseas Trust Bank Ltd and Coopers & Lybrand (a firm) and Others and Peat, Marwick, Mitchell & Co (a firm) and Another [1991] 1 HKLR 177, it has been settled that a taxation of the successful party’s costs on an indemnity basis could be properly ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner, or prosecuted in circumstances as to constitute an affront to the court. But the power to order indemnity costs may only be exercised when the court feels a proper sense of indignation at the unsuccessful party’s conduct. In Sung Foo Kee Ltd v Pak Lik Co (a firm) [1996] 3 HKC 570, Godfrey JA (as he then was) further extended the court’s power to order taxation on an indemnity basis against litigants who conduct their cases in bad faith, or as a personal vendetta, or in an improper or oppressive manner, or who cause costs to be incurred irrationally or out of all proportion as to what is at stake. He also suggested that judges should not be slow to make such order in appropriate cases. In Choy Yee Chun v Bond Star Development Limited, CACV 225/1996, the Court of Appeal further extended this power to cases where the conduct of a party is of a more venal kind or where the conduct of the litigation has in some sense been wicked.

25.  The focal point is the conduct of the unsuccessful party. The court must not be slow in ordering indemnity costs but it may only do so if it feels a proper sense of indignation at the unsuccessful party’s conduct. The burden of proof rests on the successful party who seeks such an exceptional costs order.

26.  If the unsuccessful party institutes legal action or persists in defending one knowing that he has no reasonable ground to do so, it is some evidence of scandalous, vexatious, malicious and oppressive conduct.  Here, the burden is on the successful party to prove that the unsuccessful party knows he has no reasonable cause of action or defence.”

9.  In turn, Mr Mcdaid relied on Lee Sau Fat v F H Security Services Company Limited, HH Judge Anthea Pang (as she then was), DCPI 1471 of 2008 (heard together with DCEC 120 of 2007), 21 December 2010.  In this decision, the learned judge awarded the successful party an indemnity costs order.  The facts in Lee Sau Fat are similar. The application was dismissed for reason that the accident did not happen as alleged.  The learned judge found in paragraphs 7 and 9:-

“7.  Clearly, all the above pointed to the fact that the 3^rd accident did not happen at all and Madam Lee should know very well what the truth was. However, she came to court to test her luck and hope that she would succeed in making out her claims. When giving evidence, Madam Lee did not only exaggerate matters, she indeed fabricated new injuries which she had never mentioned in any of her previous statements.

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9.  It is clear from the above that Madam Lee’s claims were unmeritorious and misconceived at the outset.  It was oppressive for Madam Lee to have instituted these two sets of proceedings against her employer FH when no accident had happened as alleged.”

DISCUSSION

Thomas Chan’s evidence

10.  Mr So complained the respondents’ conduct was unreasonable and had taken the applicant by surprise. At all times, the respondents had only adduced witness statement of Khadka Bed Bahadur, a director of the 1^st respondent, whom has been called as the defence witness.  On the 1^st day of trial, the respondents applied for a writ of subpoena to be served on Thomas Chan, an employee of the 2^nd respondent. Thomas Chan attended trial on the 2^nd day and had given evidence on the 3^rd day.  By this gesture, the applicant is being deprived of an opportunity to be properly advised on the evidence of the Application.  Albeit the respondents are the successful parties, the usual costs order awarded in the Judgement shall remain undisturbed.

11.  I do not accept the situation was what Mr So has submitted. The applicant was duly represented by counsel at trial.  The respondents made an application for issuing the writ of subpoena to call Thomas Chan as their witness on the 1^st day of trial, be it an ex parte application, the counsel for the respondents did it in open court.  The counsel for the applicant raised no objection to the respondents’ application.  Upon clarification by the counsel for the respondents that trial dates would not be derailed, leave was granted to issue the writ of subpoena.  When Thomas Chan arrived in court on the 2^nd day of trial, the counsel for the applicant agreed Thomas Chan to be called as a defence witness.  After having heard the evidence of Thomas Chan, the counsel for the applicant made no application to stand down trial to further advise the applicant on evidence, she proceeded to cross examine Thomas Chan.

12.  The applicant was duly represented by counsel during trial, the applicant’s stance, as conveyed to court by his counsel, for calling Thomas Chan at trial was no opposed in the outset.  I disagree with Mr So that the applicant can now rely on the conduct of the respondents in this application.

THE FINDINGS IN THE JUDGMENT

13.  The gist of the factual findings in the Judgment are mainly, (i) the alleged accident on 31 July 2013 did not occur; (ii) the applicant had worked as usual on 1 August 2013; (iii) the applicant was being notified of the termination of employment contract by the 1^st respondent in early evening of 1 August 2013; (iv) the applicant went to Pok Oi Hospital at late evening on 1 August 2013 for treatment and (v) the applicant went to the office of the 1^st respondent in Tuen Mun to submit sick leave certificate and had claimed he was injured at work on 31 July 2013.  The medical evidence of the applicant did not support his case.  The factual findings themselves reflected not only the evidence of the applicant was incredible, in a way similar to Lee Sau Fat, the applicant had commenced the Application because of bad faith, or as a personal vendetta, or in an improper or oppressive manner against the respondents because his employment was terminated by the 1^st respondent.

CONCLUSION

14.  Having considered the parties’ submissions and relevant legal authorities, I conclude the application in respondents’ summons is justified.  I therefore exercise discretion that the costs order nisi be varied.

15.  I make the following order:

(i) The costs order nisi awarded in the Judgment dated 10 February 2017 be varied as “the costs of the Application to be paid by the applicant to the respondents on an indemnity basis, with certificate for counsel, to be taxed if not agreed”.

(ii) The costs of the respondents’ summons filed on 24 February 2017 be paid by the applicant to the respondents on a party to party basis, to be taxed if not agreed.

(iii) The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.