BUSHRA BIBI AND NABELA QOSER the co-administrators of the estate of KHALID, MEHMOOD, the deceased v. METHOD BUILDING & ENGINEERING WORKS LTD (in liquidation) AND OTHERS

 HCPI 301/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 301 OF 2012

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(HEARD TOGETHER)

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D E C I S I O N

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1.  I called up case no. HCPI 301/2012 from the High Court Registry to case manage because it gives rise to 2 matters on which guidance from the court would be welcomed by personal injury practitioners – how to commence and carry on proceedings without letters of administration or grant of probate; and how proceedings should be commenced and conducted when persons claiming to have been dependent on the deceased are in conflict with each other. After hearing the parties, I adjourned the matter for further argument and called up 2 more cases from the High Court Registry, HCPI 764/2012 & HCPI 197/2013, where similar problems have occurred, to be heard together with HCPI 301/2012 on these matters.

Brief Background and Chronology of HCPI 262/2012 & HCPI 301/2012

2.  Mr. Khalid Mehmood (“the deceased”) married Madam Bushra Bibi on 24 September 1985.  They had four children born between 1986 and 1994.  All of them are adults.  Madam Bibi petitioned for divorce in FCMC 5718/1996 and, on 5 November 1996, she obtained an order that the deceased pay $4,000 per month by way of maintenance for her and the children.  On 3 August 2004, the deceased married Madam Cerina Shella Calinog.  The marriage certificate contained a statement that the deceased was divorced.  A child of this union was born on 29 May 2005.  The deceased died on 2 July 2009.

3.  Completing claims for employees’ compensation were filed by Madam Bibi in DCEC 1311/2009 and by Madam Calinog in DCEC 244/2010.  The employees’ compensation claims were settled with the settlement sum being apportioned as follows:  $73,829.21 to each child, $258,332.25 each to Madam Bibi and Madam Calinog, and $36,750 in respect of funeral expenses.  Madam Bibi and her four children received employees’ compensation in the total sum of $553,569 and Madam Calinog and her son received employees’ compensation in a total sum of $332,141.46.  There was a dispute between the lawyers of Madam Bibi and of Madam Calinog, both of whom were, and are, legally aided, regarding the commencement and conduct of common law proceedings.  In the end, Madam Calinog issued proceedings in HCPI 262/2012, claiming damages on behalf of the estate and dependants of the deceased under the Fatal Accidents Ordinance, Cap. 22 (“FAO”) and the Law Amendment and Reform (Consolidation) Ordinance, Cap. 23 (“LARCO”).  The title to the action specifically referred to the claim being “for herself and son, Shazad Khalid, and the estate and other “dependant” of the deceased.”  On 24 April 2012, Madam Bibi and her daughter jointly issued proceedings in HCPI 301/2012 as the “wife and daughter and intended administratrices of the estate of” the deceased.  It was stated in the indorsement of claim that the plaintiffs were the intended administratrices of the estate of the deceased, having applied for the administration of the estate, and that they claimed damages on behalf of the estate and the dependants of the deceased under the FAO and the LARCO, rising from the death of the deceased on 2 July 2009.

4.  On 17 January 2013, HCPI 262/2012 was stayed, with costs reserved, and an order was made in HCPI 301/2012 granting leave to Madam Calinog to intervene in the action, for herself and for her son, on the issue of the quantum of damages; and further leave was granted to her to file and serve a statement of damages on or before 28 February 2013.   At the hearing on 21 January 2014, I was informed that letters of the administration had been granted in favour of Madam Bibi and her daughter, that quantum had been agreed save for the claim for PSLA, but that liability was in dispute.  Apparently, Madam Bibi was able to secure a grant of letters of the administration in her favour because a decree absolute had not been made in the divorce proceedings that she had commenced against the deceased. For the same reason, the marriage of Madam Calinog to the deceased was not a valid marriage.

Brief Background and Chronology of HCPI 764/2012 & HCPI 197/2013

5.  HCPI 197 of 2013 began life in the District Court as DCPI 986 of 2012.  The proceedings were started by the issue of the writ in the District Court of 15 May 2012 by Madam Xue Jianjun, suing as the widow and dependant of Wong Wai Leung, the deceased, who died in an accident at work on 28 October 2009 when he was working at a construction site at Causeway Bay, Hong Kong.  It was pleaded in the statement of claim that he was struck by a falling cement tile which fell from a height, struck and broke his safety helmet, and caused head injuries from which he died on that day.  It was also pleaded in the statement of damages that the deceased was born on 1 December 1956 and was 52 years old at the time of his death.  It was further averred that he was earning approximately $16,900 per month at the time of his death, out of which he contributed $6,000 per month for the upkeep of Madam Xue. 

6.  HCPI 764 of 2012 was commenced in the High Court on 8 October 2012 and was an action brought by Madam Wong Choi Lam Jo, who was the daughter of the deceased.  She was granted letters of administration on 29 April 2010 and brought the proceedings on behalf of the estate of the deceased under the LARCO and on behalf of the dependants of the deceased under the FAO.  The particulars of dependants on whose behalf the action was brought included the plaintiff, Wong Pan Kit, the son of the deceased, Wong Pan Man, another daughter of the deceased, Lau Li Wah, the former wife of the deceased, and the estate of Luo Liafan, who was the mother of the deceased and who had died in September 2012, at the age of 92.  The children of the deceased are all adults and there are no infant dependants in this case.

7.  At the instigation of the solicitors for the defendants, DCPI 986 of 2012 was transferred to the High Court, to be dealt together with HCPI 764 of 2012.  It was pleaded in the statement of damages in HCPI 764 of 2012 that the deceased earned $16,900 per month at the time of the accident.  It was also pleaded that, prior to his death, the deceased contributed $3,000 per month to his children, $3,000 per month to his former wife, and $3,000 per month to his mother, making a total contribution of $9,000 per month.  In addition, it was averred that the deceased saved $3,000 per month.  Whilst I do not anticipate any substantial contest on liability, it is obvious that, if he was only earning about $17,000 per month, it would not have been possible for him to contribute $6,000 to his wife, $9,000 to his children, mother and former wife, and also save $3,000 per month.

How to commence and carry on proceedings without letters of administration or grant of probate

8.  The following provisions of the FAO are relevant to the claims by the dependants of the deceased for damages for loss of dependency and the claims for damages for bereavement:

“5. Persons entitled to bring the action[1]

(1) An action under this Ordinance shall be brought by and in the name of the executor or administrator of the deceased [emphasis added].

(2) If –

(a) there is no executor or administrator of the deceased; or

(b) no action is brought within 6 months after the death by and in the name of an executor or administrator of the deceased,

the action may be brought by and in the name of all or any of the persons for whose benefit an executor or administrator could have brought it [emphasis added].

(3) Not more than one action shall lie for and in respect of the same subject-matter of complaint.

(4)   The plaintiff in the action shall be required to deliver to the defendant or his solicitor full particulars of the persons for whom and on whose behalf the action is brought and of the nature of the claim in respect of which damages are sought to be recovered.”

9.  The claim under the LARCO for loss of accumulation of wealth and for damages for pain suffering and loss of amenities are claims on behalf of the estate[2]. Order 15 r 6A(3) and (4) of the Rules of the High Court (“RHC”) apply to such claims, the material provisions being:

“(3) An action purporting to have been commenced by …. a person shall be treated, if he was dead at its commencement and the cause of action survives, as having been commenced by his estate … whether or not a grant of probate or administration was made before its commencement.

(4) In any such action as is referred to in paragraph … (3) –

(a) the plaintiff shall, … during the period of validity for service of the writ or originating summons, apply to the Court for an order appointing a person to represent the deceased's estate for the purpose of the proceedings or, if a grant of probate or administration has been made, for an order that the personal representative of the deceased be made a party of the proceedings, and in either case for an order that the proceedings be carried on by … the person so appointed or, as the case may be, by or against the personal representative, as if he had been substituted for the estate;

(b)   the Court may, at any stage of the proceedings and on such terms as it thinks just and either of its own motion or on application, make any such order as is mentioned in sub-paragraph (a) and allow such amendments (if any) to be made and make such other order as the Court thinks necessary in order to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated upon.”

10.  The relevant authority presently binding on first instance courts is Chung Yi Yuen v Lau Koon Shing [1999] 3 HKC 43.  In that case, the brother of the deceased, holding a power of attorney from the wife, mother, sons and daughter of the deceased, sued on behalf of the dependants and the estate of the deceased as “the intended administrator appointed by Order to represent the estate” of the deceased.  After referring to section 5 of the FAO, Godfrey JA held that:

“The brother is not an executor or administrator of the deceased (although we are told he has applied for a grant of administration to the estate of the deceased). Nor is the action brought by or in the name of all or any of the persons for whose benefit an executor or administrator could have brought it: the action is brought solely in the name of the brother.

In these circumstances, as it seems to me, the brother has failed to bring himself within section 5.”

After referring to Order 15 r 6A, Godfrey JA held that:

“… But the first question to be considered is whether the action is an action within sub-rule (3).

As it seems to me, this action clearly is not.  This action does not purport to have been commenced by the deceased.  It purports to have been commenced by the brother. Accordingly, sub-rule (3) does not apply, for the brother was not dead at the commencement of the action and no cause of action survives in him.  Only when a person dies, and after the date of his death an action is commenced in his name, do the provisions of sub-rule (3) come into operation.  This is not that case.”

11.  The procedure for commencing a fatal accident claim (before the grant of letters of administration or probate) is guided by section 5(2) of the FAO (for the claims under such ordinance) and Order 15 r 6A(3) of the RHC (for the claims under the LARCO) as explained in Chung Yi Yuen[3]. Pending the appointment of a person to represent the deceased’s estate, the plaintiffs should be described in the title of the action as follows:

and the proceedings commenced by the issue and filing of the writ of summons, along with a concise statement of the nature of the claim on its reverse[4].

12.  After the proceedings are so commenced, an application should be made to the Court under Order 15 r 6A(4), during the period of validity for service of the writ, for an order appointing a person to represent the deceased’s estate for the purpose of the proceedings, and for an order that the proceedings be carried on by the person so appointed as if he had been substituted for the estate.

13.  The writ of summons, not being a pleading, does not require a statement of truth under Order 41A.  Since a carry on order is required for the proper representation of the deceased’s estate before any further step can be taken in the proceedings, including service of the writ of summons[5], no issue should arise in relation to the statement of truth.  The statement of claim, supported by a statement of truth, should be filed after a carry on order is granted.

14.  As and when letters of administration are granted, or a grant of probate is made, in a case where there is no conflict between the dependants, application should be made to the court for an order that the administrator or executor of the deceased’s estate be made a party to the proceedings, in place and stead of both the person appointed to represent the estate and the dependants of the deceased, and for an order that the proceedings be carried on by the administrator accordingly, in compliance with section 5(1) of the FAO that an action under that ordinance should be brought by and in the name of the executor or administrator of the estate of the deceased.

15.  The title to proceedings should be amended according to the above carry on orders, especially as such orders are usually sought ex parte, and, at least in respect of the initial carry on order, before the service of the writ of summons.

16.  Upon the grant of the first carry on order, the title of the action should be amended as follows:

Upon the grant of the second carry on order, the title of the action should be amended as follows:

17.  The above procedural steps must be subject to any case management directions of any judge or master dealing with the fatal accident action.

How proceedings should be commenced and conducted when persons claiming to have been dependent on the deceased are in conflict with each other

18.  The cases before me concern individuals claiming to be dependants who are in conflict with other individuals claiming to be dependants.  Many other such cases come before the courts from time to time, for example, cases where the parents of the deceased have brought proceedings and have refused to claim damages for the cohabitee[6] of the deceased and for their children[7]. How does one reconcile the right of access to the courts guaranteed under Article 35 of the Basic Law with section 5 of the FAO which stipulates that only one action may be brought and enables the administrator to bring that action, but who refuses to acknowledge the claim of another dependant and to include that dependant in the particulars required to be delivered to the defendant by section 5(4) of the FAO?

19.  The problem posed by the conflict between the restriction of one action only and the right of access to courts is illustrated by the decision of the Court of Appeal in Cachia v Faluyi [2001] 1 WLR 1966, where a widower issued a writ in 1991, just before expiry of the 3 year limitation period, for the deceased’s dependants, including her children, but never served it.  In 1997, a new firm of solicitors issued a new writ.  By then, the eldest daughter was already an adult but the claims of the 3 younger children were not yet time barred.  The question arose whether this second writ was barred by section 2(3) of the Fatal Accident Acts 1976[8]. It was held that, notwithstanding the well established interpretation that an action naturally began when the initiating process was issued rather than when it was served, it was possible to interpret the word “action” in section 2(3) to mean “served process”, pursuant to section 3(1) of the Human Rights Act 1998, having regard to the need to ensure that the children’s right of access to the courts under the European Human Rights Convention was not impeded. On that basis, as the protective writ had been issued but never served, the court held that the issue of a fresh claim on behalf of minor children was not precluded by section 2(3) of the Fatal Accident Acts 1976.  Brooke L.J. traced the history of section 2(3) and noted that the original objective of the legislation was to ensure that all dependants joined in a single action. However, the fortuitous effect of section 2(3), in a case where an earlier writ had never been served and a subsequent writ was issued within the relevant limitation period, had no legitimate aim. It was just a “procedural quirk, brought about by the chance that Parliament had never considered this particular problem, and because our traditional English methods of interpreting statutes could not right an obvious injustice”[9].

20.  The search for a working solution to this tricky problem must start with the decision in Pym v Great Northern Ry. Co. (1863) 4 B&S 397, in which it was held that the remedy given by the statute is to individuals, not to a class.  In Mead v. Clarke Chapman [1956] 1 WLR 76, the Court of Appeal increased the total amount awarded, on an appeal by one of the dependants, on the ground that her loss of dependency had been underestimated[10]. In Dodd v Dodd [1978] Q.B. 543, Balcolme J. also held that the remedy under the Fatal Accidents Acts was given to the dependants individually and not as a group; therefore, each dependant could be regarded as a separate plaintiff and, accordingly, the validity of the son’s claim was not affected by the fact that it was his mother, another dependant, who had been responsible for the death of the father.  In The Official Administrator v. The Attorney General [1981] HKLR 429, the Court of Appeal decided, on an interlocutory appeal on a point of law, that each dependant had a separate and distinct right of action and that, whilst the personal representative or the representative dependant might be the nominal plaintiff, each dependant was in a real sense a plaintiff. Accordingly, although the infant dependants’ claims could not be struck out for want of prosecution, the claim of the adult dependant could be struck out if he could not override the time limit under section 30 of the Limitations Ordinance, Cap. 347.

21.  Although he acknowledged that the remedy was given by the statute to individuals and not to a class, Lord McMillan in the House of Lords’ decision in Avery v London and North Eastern Rly [1938] AC 606 at 619, also stated:

“… but it still remains essential that one action only shall be brought and if any individual who has a claim is not either the plaintiff or mentioned in the particulars as a person on whose behalf the action is brought, so much for the worse for that individual; he cannot bring a second action against the wrongdoer.”

Lord Atkins in Avery v London and North Eastern Rly stated at p. 613:

“There is no room for consideration of a dependant not named and therefore not before the jury. The quantum of damages in such a case is not a proportion of a limited sum. It would not be different though one or more injured persons had not claimed. One action alone can be brought, and the persons who stand out stand out for ever. If they have been improperly excluded from the action by the representative plaintiffs they may, no doubt, before the verdict of the jury, apply to be named as parties to benefit; or, possibly, they may have some legal or equitable remedy against the representative plaintiffs. But after verdict they have no possible claim against the defendant. Nor can the defendant assert their existence to influence the jury's decision as to damages. [emphasis added]”

Liu Bing & Ors v Yeung Kwok Keung & Anor [1988] HKC 819, is an example of such a case where a claim for the cost of care and attention of a dependent child was rejected because the dependency claims had earlier been settled.  The Court of Appeal in McDermott International Inc v Hardy (1995) Times Law Reports, 28 December 1995, held that in the case before them, where not all the dependants had been included, it would not approve a proposed settlement of a fatal accidents claim involving infant dependants as “… any settlement of the proceedings would accordingly … bar an action by any other dependants seeking Fatal Accidents Act damages…”

22.  Cooper v. Williams [1963] 2 QB 567 was a case where an infant had already obtained approval to settle his dependency claim by way of a stay of proceedings.  In that case, the deceased was survived by a widow and an illegitimate daughter who sued by her mother and next friend.  A writ was issued but a statement of claim was not served and no particulars of dependants were given. This claim was compromised and a stay by way of a Tomlin order was approved and granted by the district registrar.  Subsequently, the widow brought an action and, when met with the defence that only one action lay, she did not pursue that action but applied to intervene in the infant’s action. She applied to be added as a plaintiff or, at least, to be named as one of the dependants for whose benefit the action was brought, and she also applied to lift the stay.

23.  Lord Denning MR in Cooper v. Williams was more emphatic than Lord Atkins in Avery v London and North Eastern Rly when he stated at p. 581:

“I am satisfied that if one of the dependants brings an action under the Fatal Accidents Acts (which is the only action that can be brought) it is the duty of that person (just as it is clearly the duty of an executor or administrator) to take all reasonable steps to see that all those dependants of the deceased person who desire to claim for their loss are informed of the action and named as persons on whose behalf it is brought.”

24.  Such a duty can be enforced by the excluded dependant by an application to join in the proceedings as an intervener.  The Court of Appeal in Cooper v. Williams was satisfied that sufficient grounds had been shown for the stay to be lifted and they upheld the order of Megaw J. who granted leave to the widow to intervene upon terms that such intervention would not prejudice the infant plaintiff.  I have not been able to locate the decision of and order made by Megaw J. However, it would appear from the judgment of Danckwerts LJ that the joinder of the widow was by way of being named as dependant, with the action being continued by the infant plaintiff.  Danckwerts LJ said at p. 583:

“The result of that is that the action will continue, and I would like to hear any views which may be expressed by counsel in this respect, because it seems to me that the effect of Megaw J.'s order and the effect of the removal of the stay and the leave to amend, which purports to give the widow leave to intervene, means that the action continues by the infant plaintiff. I am not quite sure in what way the widow intervenes, except I suppose that she obtains an order in continuation of the proceedings so that her claim is kept alive in the action in the representative capacity.”

This is a recognition that the proceedings that are brought pursuant to the provisions of the FAO are a form of representative proceedings and that the “intervention” by the widow is not as an additional party but as a person ‘represented” by the plaintiff and, in the above case, by the infant plaintiff.  This begs the question whether alleged dependants in conflict with each other can be said to have the same or common interest which is a prerequisite of representative actions.

25.  In Pounder v London Underground Ltd [1995] PIQR P217, a claim had been brought under the Fatal Accidents Act 1976 by the deceased’s mother on behalf of herself and five other dependants. It was not brought by the plaintiff on behalf of Ms Cheryl Beaton who claimed to be a dependant on the basis that she had cohabited with the deceased as husband and wife in the same household for two years before his death.  Indeed, the plaintiff denied her claims. The master ordered that the writ and statement of claim be amended by adding the name of Cheryl Beaton and that whether she was a dependant of the deceased be decided as a preliminary issue.  On the hearing of that preliminary issue, the court found in favour of Ms Beaton and gave leave for her to be joined as a plaintiff in the action. Sir Michael Davies said[11] at p. P218:

“If the answer to the question of dependency is yes, Cheryl Beaton will be included in the dependency. She would be represented by a firm of solicitors and by the same counsel who have in this case sought to destroy her claim that she is a dependant; that would be an embarrassing situation. If she is a dependant, justice can only be done in the trial of the main action if she were separately represented, preferably by her present solicitors and counsel, Miss Warren, who has heard and debated all the evidence in this case. I hope that this can be satisfactorily resolved but I shall give liberty to apply for Ms Beaton to be added as plaintiff in the main action.”

Mr. Michael Yelton commented in Fatal Accidents: A Practical Guide to Compensation 1998, at p.39, that, although the judge in that case recognised the potential embarrassment which would result from Ms Beaton being represented in the main action by the same solicitors and counsel who had opposed her application to join in, and indicated that justice would only be seen to be done if she were separately represented, it was difficult to see how that could be done within the present structure of the rules.  The author also pointed out the commentary in the 1997 Supreme Court Practice at 18/12/16 that[12]:

“In cases where an action has been brought under the Fatal Accidents Act, and an application is made on behalf of other persons, claiming to be dependants, to have their names added to the statutory particulars of those persons on whose behalf the action is brought, and there is a conflict between them and the existing plaintiff as to whether they are dependants, there is no course available except to adjourn the application to be heard by the trial judge, for there is a conflict of interest between the claimants and only one action can be brought, and it is not possible to give to more than one firm of solicitors the conduct of the action on behalf of the plaintiff (per Blain J. in chambers, Bogle v. Hall Bros. Steamship Co., unreported, 1966).”

26.  The author was, of course, referring to the prohibition against different plaintiffs being separately represented in the same action by different solicitors and counsel: see Lewis v. Daily Telegraph (No.2) [1964] 2 QB 601.  This is the main bar to consolidation of personal injury cases involving many persons injured in one accident.  Even so, partial consolidation is possible in such cases with consolidation up to the point of determination of liability, giving the conduct of the action, up to that point, to one plaintiff’s solicitors and then de-consolidating the actions for the assessment of damages[13].   Order 15, r 17 of the RHC, which enables the court to give the conduct of any action to such person as it thinks fit, is a rule of general application applying not only to representative actions but to all actions.

27.  In Pounder v London Underground Ltd. the master ordered the question, whether Ms Beaton was a dependant of the deceased, to be decided as a preliminary issue. Another approach is made available by Order 80 r 15:

“Proceedings under Fatal Accidents Ordinance: apportionment by Court

(1) Where a single sum of money is paid into court under Order 22, in satisfaction of a cause of action under the Fatal Accidents Ordinance (Cap 22) and a cause of action under Part IV or IVA of the Law Amendment and Reform (Consolidation) Ordinance (Cap 23), and that sum is accepted, the money shall be apportioned between the different causes of action by the Court either when giving directions for dealing with it under rule 12 (if that rule applies) or when authorizing its payment out of court.

(2) Where, in an action in which a claim under the Fatal Accidents Ordinance (Cap 22) is made by or on behalf of more than one person, a sum in respect of damages is adjudged or ordered or agreed to be paid in satisfaction of the claim, or a sum of money paid into court under Order 22, is accepted in satisfaction of the cause of action under the said Ordinance, then, unless the sum has been apportioned between the persons entitled thereto by a jury, it shall be apportioned between those persons by the Court.

The reference in this paragraph to a sum of money paid into court shall be construed as including a reference to part of a sum so paid, being the part apportioned by the Court under paragraph  (1) to the cause of action under the said Ordinances.”

The commentary in Hong Kong Civil Procedure 2014 to this rule states, at 18/15/3:

“Moreover, if it should appear to the court there is or may be a conflict of interest between the dependents or different groups of dependents of the deceased, e.g. between the widow and the children of the marriage, or between her and her children and the children of a former marriage, or between any dependent children of the deceased, it would be open to the court to direct that the question of the apportionment of the damages awarded or recovered be tried as between the dependents or groups of dependents as a separate question or issue under O.33, r.3. For this purpose, the court may add as parties to the action, the dependents not already parties and may give directions as to which of them should be plaintiffs and which defendants on such question or issue. The court may further direct that the infant dependents shall be separately represented, if necessary by the Official Solicitor on the question of the apportionment of the damages.”

I would not agree with the suggestion that parties can be added at this late stage, but the proposal that the conflict be resolved between the dependants in conflict during the apportionment exercise is attractive.   However, it may be difficult to delay the resolution of the conflict until that late stage.

28.  The suggestion that damages may be assessed and awarded, or agreed, before the conflict between the dependants is resolved is consistent with the modern practice of assessing loss of dependency as a percentage of the notional loss of earnings of the deceased.  In Fung Suen Sim, the personal representative and administratrix of the estate of Lung Kai Hon, deceased v. Liu Chun Pong & Anor., HCPI 896/2007, 23 December 2011, I concluded that:

“42. In cases such as the present where the most important factor in the calculation of the award is the earnings of the deceased, as opposed to income from other sources, a practice has developed of expressing the annual dependency as a percentage of the annual earnings of the deceased. Percentages have become conventional in cases where the surviving widow had been wholly dependent on her husband and did not use her own income, if any, to support the common household expenditure. This practice was explained and supported by O’Connor L.J. in Harris v Empress Motors [1984] 1 WLR 212 at p.216-217:

“In the course of time, the courts have worked out a simple solution to the … problem of calculating the net dependency under the Fatal Accident Acts in cases where the dependants are wife and children.  In times past, the calculation called for a tedious enquiry into how much housekeeping money was paid to the wife, who paid how much for the children’s shoes etc.  This has all been struck away and the modern practice is to deduct the percentage from the net income figure to represent what the deceased would have spent exclusively on himself.  The percentages have become conventional in the sense that they are used unless there is striking evidence to make the conventional figure inappropriate because there is no departure from the principle that each case must be decided on its own facts.  Where the family unit was husband and wife, the conventional figure is 33% and the rationale of this is that broadly speaking, the net income was spent as to one-third for the benefit of each and one-third for the joint benefit … Where there are children, the deduction falls to 25%.”

The reason for the smaller deduction in the latter case is that earnings are presumed to be split four ways in the latter case, rather than three ways, namely, one-quarter for the deceased, one-quarter for the wife, one-quarter for the children, and one-quarter for joint use. Thus, the conventional figures adopted 66.6% of earnings, to assess the dependency of a widow alone, and 75% of earnings, to assess the dependency of a widow and children.

43. It is appropriate to adopt these percentages in the present case to reflect, not only the financial contribution made by the deceased to his wife, but also the value of the dependency represented by the savings he would have accumulated for the benefit of his dependants.”

Although each dependant has his or her individual claim for loss of dependency, it has long been acknowledged that “separate calculation of the award to each of the dependants is every bit as permissible a method of arriving at the total award of damages as is the ascertainment of a lump sum and its apportionment between those dependants” and that the court should choose the “method which will do justice both to the defendants and to each dependant.”[14] Where the total loss of dependency is assessed as a lump sum and then apportioned between the dependants, it has been held by the Court of Appeal in Eifert v. Holt’s Transport Co. [1951] W.N. 467[15] that, if the total award is proper[16], the defendant is not concerned in the apportionment and cannot attack the award made to a particular dependant.

29.  But there may be other cases where the conflict between dependants spills over to engulf the defendant and must be resolved with his participation.  For example, the defendant may assert that the deceased was earning $8,000.  If the widow claims that the deceased gave her $5,000 for her support and the support of her children and the cohabitee claims he gave her $6,000 for her support and the support of her children, then, if the widow and the cohabitee are both believed, the earnings of the deceased must be greater than that asserted by the defendant.  Indeed, the total of the dependency claims and the alleged savings of the deceased in HCPI 764/2012 & HCPI 197/2013 exceed his alleged earnings.

30.  My review of the authorities touching upon this problem would not be complete without a mention of M’Cabe v Great Northern Rly Co of Ireland [1899] 2 IR 123.  In that case, the deceased left as dependants, 2 sons, Owen and Michael, who each brought proceedings to claim loss of dependency.  Owen commenced an action, before letters of administration had been granted, claiming damages for his loss of dependency.  Letters of administration were later granted to Michael and, after the grant, he sued as administrator.  Faced with the defence that a second action could not be brought, he applied for an order to stay the first action or an order that the 2 actions should be consolidated. Boyd J. and Kenny J. decided that the first action had been properly brought, as the Act permitted a dependant to bring proceedings before a grant, and that they would not, in the absence of bad faith, make an order staying the first action in order to permit the administrator to proceed with his action.  I have misgivings about this decision as it had the effect of denying the administrator the right of access to court to claim his own loss of dependency.  In such a case, it appears to me that the proper order to make would be to stay the first action, permit the action brought by the administrator to proceed, in compliance with section 5(1) of the FAO, amend the particulars of dependants in the administrator’s action to include the plaintiff in the first action, and give further directions, as proposed below, to resolve any conflict between the claiming dependants.

The Way Ahead

31.  How can one ensure access to the court for all dependants if the FAO only allows one action to be brought?  This is my solution to the “procedural quirk” contained in section 5 of the FAO, a solution which complies with the statutory requirement that there be only one action but which allows access to the courts to all claiming dependants.  The approach to each case must be fact sensitive.  Different roads can be taken to reach the same destination.  The decision that has to be made in each case is one that has to be arrived at by the exercise of the court’s case management powers.

32.  Before the grant of letters of administration[17] any dependant can bring action for himself and on behalf of any other dependant.    If the intended administrator[18] commences action first, the “excluded” dependants can apply to be added as dependants on whose behalf the plaintiff brings action, but without prejudice to any dispute between the dependants regarding their respective claims for loss of dependency.  If the first action was commenced by other dependants, the intended administrator can apply to be substituted as plaintiff in the action on the basis that he will sue, not only on behalf of himself and the other dependants he represents, but also on behalf of the dependants who brought the action originally, but without prejudice to any dispute between the dependants regarding their respective claims for loss of dependency.  If, before the grant of letters of administration, 2 actions were commenced by 2 dependants or 2 groups of dependants without knowledge of the other action, then, when this fact becomes known, the intended administrator should apply to stay the action of the other dependant(s), save as to costs, on the basis that he will sue, not only on behalf of himself and the other dependants he represents, but also on behalf of the dependants who brought the other action, but without prejudice to any dispute between the dependants regarding their respective claims for loss of dependency. 

33.  The application to be added as dependants, to be substituted as plaintiff, or for a stay, must be supported by an affidavit verifying the fact of dependency and providing particulars of loss of dependency that one would expect to see in a statement of damages. 

34.  At the time when it considers any of the above applications, the court must also consider whether the conflict between the dependants can best be resolved at the stage of the apportionment of the award, in the absence of the defendant, or whether the rival contentions need to be considered at the time of the assessment of the loss of dependency, or at an earlier time.

Trial on the preliminary issue of quantum and apportionment

35.  I am almost driven to the conclusion that it may be necessary, in most cases, to order a trial of a preliminary issue, namely, the determination of the dispute between the dependants and an assessment of damages, and the apportionment thereof, immediately following that determination, before the trial on liability.  Each rival group of dependants may be separately represented by their own legal representatives at the preliminary trial.  The defendant must also appear and, if so advised, participate, so that binding decisions could be made on the competing claims of the dependants and, equally, if not more importantly, on the earnings of the deceased and the loss suffered by the persons found to have been dependant on him[19].  The costs of the preliminary trial would have to be determined, either at that stage or at the conclusion of the trial on liability, and may be apportioned to be borne by parties whose contentions have failed[20]. Although this approach has the appearance of putting the cart before the horse, in that the defendant may eventually be absolved from liability, there appears to be no better way of resolving that conflict.  If the defendant is subsequently absolved from liability, he will get an order of costs in his favour, including the costs of the preliminary issue.

36.  It was submitted that preliminary trials designed to save costs ought to be avoided as experience has shown that they result in more costs being expended, not to mention the extra costs of an appeal from the preliminary trial.  These submissions, well founded though they may be for other types of cases, do not cause me concern in personal injury cases where spilt trials on liability and quantum are common and appeals from assessments of damages are not common.  The novelty of my proposition is that the “split trial on quantum” should take place before the trial on liability.       

The conduct of the trial on liability

37.  Once a determination on quantum is made, that determination creates an issue estoppel binding on the parties.  After the determination, the court can make the joinder, or stay, orders sought and consider who should be granted the conduct of the proceedings on liability.  The court must consider all the circumstances of the case before determining which group of dependants ought to be granted the conduct of the proceedings on liability. The default position must be that the administrator has conduct.

38.  There may be cases where the administrator’s claim on behalf of the estate for loss of accumulation of wealth[21] has been assessed in a small sum and where the administrator, for example, the elderly parent of the deceased, by reason of the receipt of employees’ compensation, has been found to be entitled to only a small additional award of damages for loss of dependency; whereas the cohabitee, with young children, has been adjudged to receive the bulk of the award under the FAO for loss of dependency.   If we assume that quantum has been assessed in the gross sum of $100, with $10 apportioned in favour of the administrator and $90 in favour of the cohabitee and her children and if, in such a case, we make the further assumption that the administrator is willing settle liability on the basis of 30% contributory negligence but the cohabitee is unwilling to any concede any contributory negligence, then giving of the conduct of the action to the administrator, who settles liability on the basis of 30% contributory negligence, would cause the cohabitee to lose $30.  If we reverse the situation, that is to say, the cohabitee is willing settle liability on the basis of 30% contributory negligence but the administrator is unwilling to any concede any contributory negligence, then giving of the conduct of the action to the cohabitee, who settles on the basis of 30% contributory negligence, would cause the administrator to lose $3.   Giving the conduct of the proceedings to the majority stakeholder is one way to prevent, or at least reduce the risk of, satellite litigation.

39.  The financial resources of the rival groups may also be a relevant consideration if the dependants are not legally aided.  In such a case, the court may consider granting conduct of the trial on liability to the group with the greater resources to bring the proceedings to a successful conclusion. 

40.  In cases where there is no claim by an intended administrator, or where letters of administration are unlikely to be granted, the court may, after determining the conflict between the rival group of dependants, give the conduct of the proceedings to the dependant who will receive the greater part of the damages awarded, pursuant to Order 15 r 17[22].  Even in cases where there is an intended administrator or actual administrator[23] to continue the proceedings on liability in compliance with section 5 of the FAO, the conduct of those proceedings may be given to the dependant who will receive the greater part of the damages awarded, pursuant to Order 15  r 17, notwithstanding that the administrator remains on record as the nominal plaintiff[24].

41.  The decision on the question of who should be given the conduct of the proceedings must be fact sensitive.  In cases where the gross assessment of damages is apportioned equally or almost equally in favour of each rival group of dependants, the default position prevails and the administrator should have the conduct of the proceedings on liability.   The court should ascertain, and critically assess, the views of the different groups on the basis of liability and on the issue of contributory negligence, before removing the conduct of the proceedings from the administrator and granting the conduct to the other dependant who has the major stake in the eventual award. An important factor to consider, before granting conduct to the majority stakeholder, is whether or not he or she has made a realistic assessment of the merits of the claim and whether or not he or she has realistic expectations from the litigation.  It is also important that the views, on these matters, of the minority stakeholder who will not be given the conduct of the proceedings are considered by the court and make known to the majority stakeholder.

42.  The grant of the conduct to one group of dependants does not prevent the other group from participating in the proceedings by offering advice on how the trial on liability should be conducted.  If the defendant is eventually adjudged liable, the costs awarded to the plaintiffs must include all necessary or proper costs incurred to prosecute the claim on liability, even if they were incurred by 2 firms of solicitors, provided, of course, that there was no duplication of the work by the 2 firms of solicitors.    HCPI 262/2012 & HCPI 301/2012 are cases in point in which, although Messrs Massie & Clement had the conduct of the trial on liability, specific discovery applications made by Messrs Burke & Co. resulted in the production of very relevant documents on the issue of liability.  However, in the absence of very good reason shown, the defendant should not be faced with the cost of the attendance of 2 different solicitors on the trial of liability.  The rival dependant who does not have the right to conduct the trial on liability may instruct his solicitor to attend the trial on liability on a watching brief but, in the absence of very good reason shown, he may not recover those costs from the unsuccessful defendant: the right of access to court does not include a right to be paid one’s legal costs incurred in the exercise of that right of access.

Trial on liability before assessment of damages     

43.  A preliminary trial on quantum, before a liability trial takes place, may be avoided if the rival groups of dependants agree that liability should be determined first and also agree, whether or not a grant of letters of administration has been made, who should have the conduct of those proceedings.  After such an agreement has been reached, the court can make the joinder, or stay orders, sought, make an order for a split trial, and give the conduct of the liability proceedings to the dependant concerned. After a successful conclusion of the trial on liability, the assessment of damages must be carried out by way of exception to the rule of common representation set out in Lewis v. Daily Telegraph (No.2),with each rival group of dependants represented by their own lawyers.  In such a case, the rule set out in Lewis v. Daily Telegraph (No.2) must give way to the Basic Law, which entitles each dependant to have access to the courts, and leave must be granted for the rival groups of dependants to be separately represented in order to avoid an injustice[25]. Directions would need to be given for the conduct of the assessment in which the rival groups of dependants and the defendants would be separately represented. Such directions would include directions for the service of opening statements and directions on the order of cross examination of the rival groups of dependants by the other group and by the defendant.  The extra burden of costs on the defendant may be ameliorated as follows.  If the defendant does not dispute the loss of dependency of the rival groups but only the quantum of such loss, any additional costs incurred by the losing dependant disputing the dependency of the rival group, should be ordered to be borne by him, in order to lessen the costs liability of the defendant facing two sets of legal costs.

Apportionment between dependants in conflict in the absence of the defendant

44.  In cases such as HCPI 262/2012 & HCPI 301/2012 where quantum has been agreed, subject to the issue of apportionment, the conflict between the dependants can be resolved at the apportionment hearing in the absence of the defendant.   There may be other cases where a determination of the earnings of the deceased and of his notional working life expectancy would resolve all issues on quantum.  In such cases, the conflict between the dependants may also be resolved at the apportionment hearing in the absence of the defendants.   

Sanctioned payments and offers

45.  The defendant can utilise the provisions of Order 22, RHC, at the time that the court gives a direction to hold a preliminary trial on quantum or makes an order to add dependants, or to substitute the plaintiff, or to stay one of the actions[26]. The defendant can make a sanctioned offer on liability limited to accepting liability up to a specified proportion[27]. The defendant can also make a sanctioned payment into court without specifying how much of it is in respect of which cause of action and without specifying how much of it is in favour of which dependant[28]. On acceptance, the sum paid in must be apportioned by the court between the two causes of action and the amount apportioned in respect of the claim under the FAO must be further apportioned between the dependants, pursuant to Order 80, r.15 of the RHC, which applies in all such cases and also applies notwithstanding that there may be no infant interests involved[29].  Where the defendant disputes liability, he can make a sanctioned offer, subject to liability, at any time before the preliminary trial on quantum referred to in paragraph 35 above.  Where a direction is given for such a preliminary trial on quantum before liability, Order 22, r. 3(2) is not engaged as the sanctioned offer, for the purposes of the preliminary trial on quantum before liability, does not involve payment of money.   

46.  The dependant who has been given the conduct of the trial on liability can make a sanctioned offer on liability which, if accepted, would bind all dependants.  Even before the court entrusts the conduct of the proceedings on liability to any particular dependant, the rival groups of dependants can, at any time, make a joint sanctioned offer to the defendant on liability, or on quantum, or both.  However, I consider that the rival groups of dependants cannot, at any time in the proceedings, make separate and different sanctioned offers to the defendant on liability.  These separate offers cannot qualify as a valid sanctioned offer under Order 22 as the acceptance of any one such offer would not bring the proceedings on liability to an end[30].

47.  The effect of the direction for the trial of a preliminary issue on quantum has the effect of making the rival groups of dependants parties to the proceedings, notwithstanding that they are not named as plaintiffs or dependants on whose behalf the proceedings are brought. Likewise, the direction, after a successful conclusion of the trial on liability, that the assessment of damages be carried out by way of exception to the rule of common representation set out in Lewis v. Daily Telegraph (No.2),with each rival group of dependants represented by their own lawyers[31], has the effect of making the rival groups of dependants parties to the proceedings.  These rival groups of dependants can always make a joint sanctioned offer on quantum to the defendant.  However, I would wish to receive further submissions before making a decision on whether or not these rival groups of dependants can make sanctioned offers to the other group of dependants, and separate sanctioned offers to the defendant, on quantum.  

The need for a realistic assessment of the objective facts

48.  A dependant must think long and hard before challenging the claims of other dependants and risking an adverse order as to costs which may substantially reduce, or even extinguish, the award of loss of dependency apportioned in his favour.  A realistic assessment of the objective facts must be made before a challenge is made to the claims of other dependants.  If the dependant is legally aided, the Director of Legal Aid must make a realistic assessment of the prospects of success before extending legal aid to make such challenge.  It has been brought to my notice that where both rival groups of dependants are legally aided, section 16C(c) of the Legal Aid Ordinance, Cap. 91, provides as follows:

“(c) where a court or the Court of Final Appeal makes an order for costs against an aided person, or an agreement is entered into for the payment of costs against an aided person, in favour of a person who is also receiving legal aid, neither such person shall be liable for such costs in excess of his contribution and the contribution of the party who is liable for the payment of costs under such order or agreement shall be charged first with the costs of both parties and thereafter the contribution of the other party shall be charged to the extent of his own costs in so far as such costs are not recovered from the contribution of the party liable to pay costs [emphasis added].”

Although the charge is only on the contribution payable by the successful dependant, and not on the award of damages made in favour of the successful dependant, in cases where the challenge by the rival legally aided dependant is quite unmeritorious, the Director ought to consider waiving the charge on the contribution payable by the successful dependant.

Further Directions

49.  I have reserved the costs of the hearing on 21 January, 28 January and 26 March 2014.  They remain reserved and will be dealt with after the conclusion of the proceedings in HCPI 262/2012 & HCPI 301/2012.  I will also fix a Check List Review hearing before me of the proceedings in HCPI 764/2012 & HCPI 197/2013 after the conclusion of the proceedings in HCPI 262/2012 & HCPI 301/2012.

50.  I intend to case manage all outstanding current cases involving dependants in conflict until a pattern has become established which the Personal Injury Masters in the High Court Registry could follow. 

51.  I cannot conclude without thanking the legal representatives of the parties for the assistance they have provided to me, particularly Mr Neal Clough, Mr Patrick Burke and Ms Szwina Pang.