KAN MIU WAH, PAULINE v. AEROFLOT RUSSIAN INTERNATONAL AIRLINES

cacv 142/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 142 of 2006

(on appeal from HCPI NO. 313 of 1996 )

__________________________

REASONS FOR JUDGMENT

__________________________

Hon Le Pichon JA:

1.  This was an appeal by the plaintiff from the order of Suffiad J dated 28 March 2006 (1) giving the plaintiff leave to file an affidavit to raise the issue that she was forced into the settlement agreement (described below) so that she is no longer bound by it and (2) giving directions for the determination of the preliminary issue set out in (1) above and, if necessary, proceeding thereafter with the Order 80 application for the approval of the settlement.  At the conclusion of the appeal hearing, the appeal was dismissed with costs for reasons to be given later which we now do.

Background

2.  The plaintiff’s late husband Wong Wai Ming, David (“the deceased”) was a passenger on board the defendant’s aircraft when it crashed in Russia on 22 March 1994 killing, amongst others, the deceased.  The plaintiff as co-administratrix of the estate of the deceased brought this action against the defendant on behalf of herself, the dependants of the estate (consisting of the deceased’s son, Victor, who is a minor, the deceased’s father and mother) and the estate of the deceased.  The action commenced in March 1996.  The damages sought were of the order of HK$8.9 million.

3.  The plaintiff was legally aided until 10 September 2003 when the legal aid certificate was discharged and since 23 September 2003, the plaintiff has been acting in person although as early as May 2003 she had written to the defendant advising them that she had terminated the services of her solicitors.

4.  On 25 November 2002, the defendant’s solicitors wrote to the plaintiff’s solicitors making an offer on a “without prejudice” basis in the sum of HK$7.25 million “inclusive of all costs (notwithstanding any costs orders made in the past) and, if any, interest for full and final settlement of the dispute”.  The plaintiff’s solicitors replied on to January 2003 in the following terms:

“…we have now received instructions to accept the sum of Hong Kong $7.25 million (inclusive of or interest and costs) in full and final settlement of all claims in this matter.  For the avoidance of doubt, we confirm that each party will bear its own costs and will not be permitted to recover from the other party any costs previously awarded by the Court in this matter.”

This exchange of correspondence is referred to in this judgment as the “settlement agreement”.  It has been and remains the defendant’s position that the settlement agreement is valid and binding on the parties. 

5.  Following the settlement agreement, on 15 January 2003, the plaintiff’s solicitors took out a summons for approval of settlement (“the approval application”) which came before Master Kwan on 30 January 2003.  A memorandum was filed in support of that application.  At that hearing, the master gave directions that further information be put before the court including the costs and disbursements of the action, the charges of the Director of Legal Aid and counsel’s advice on quantum.      

6.  It would appear that counsel’s advice was obtained in about March 2003 from new counsel assigned by the Director, Mr. Hylas Chung.  Presumably the advice was obtained with a view to complying with the master’s directions.  At the hearing and also in her skeleton argument, the plaintiff appeared to suggest that the instructions given to counsel and consequently counsel’s advice was not quite what the master had directed.  Surprisingly, copies of the instructions and advice are not to be found in the mountain of papers lodged for this hearing.  The question, whether or not the advice obtained complied with the master’s directions, is a matter for the court and, with due respect, not a matter for the plaintiff.

7.  To resume the chronology, as noted above, the plaintiff informed the defendant on or about 16 May 2003 that she had terminated the services of her solicitors.  No steps having been taken by the plaintiff to restore the approval application for hearing for some 20 months, defendant obtained an appointment before the master to progress the matter.  This resulted in three hearings before the master and two before Suffiad J.

8.  At the first of the masters’ hearings on 4 October 2004, whilst appearing to accept that she had agreed to settle, the plaintiff was simultaneously alleging that she had been “threatened” and “forced” to enter into the settlement agreement.  She also questioned its fairness.  The same complaints were made at the subsequent hearings before the master.

9.  A pre-trial review took place before Suffiad J on 20 February 2006.  The plaintiff reiterated her complaints and asserted that there had not been “true consent”.  The judge rightly observed that there appeared to be a conflict of interest between the plaintiff and the infant and considered inviting either the Official Solicitor or an amicus curiae to represent the infant interest.  Although at the first of the two hearings before Suffiad J, the plaintiff initially appeared to be alleging that not only the Director, her former solicitors and the defendant’s solicitors but also the court had joined forces to make her settle the proceedings, it seemed that subsequently the complaints were directed only at the Director and her former solicitors.  See the transcript of the 20 February 2006 hearing at 19B-C and 30R-S.

10.  At the second of the hearings before Suffiad J on 28 March 2006, the plaintiff was absent.  Suffiad J then made the order that is the subject matter of the present appeal.

The appeal

11.  As a preliminary matter, I would observe that the order appealed from is a matter of case management.  It would be rare indeed for appeals from orders of this nature to succeed.  The party appealing would have to show that the judge erred in principle or the order was irrational having regard to the issues that had to be resolved.  The judge, correctly in my view, decided that the preliminary issue must first be resolved.  For if the settlement agreement is for some reason not binding on the plaintiff, necessarily, the approval application cannot proceed.  In my view, no exception can be taken to the directions that the judge gave.  If anything, he was bending over backwards to give the plaintiff every opportunity to put forward evidence to show why the settlement agreement is not binding on her.  I regret to say that this appeal was totally misconceived and misguided and should never have been brought. 

12.  I would also add that any impression the plaintiff may have gained that the settlement was somehow “unfair” might have arisen from her misunderstanding of what Master Kwan meant by “counsel’s opinion on quantum”.  It is evident from the transcript of that hearing that the master had already seen the advice of Mr Charles Haddon-Cave on the merits of the settlement.  What the master was concerned with was the “calculations under the [Fatal Accidents] law and under LARCO”.  She was concerned with the “individual apportionments” given that the plaintiff was representing various parties including a minor who had an interest in the proceedings.  The overall “fairness” of the settlement itself or merits did not appear to be something that was troubling the master.

13.  At the appeal hearing, as the plaintiff was acting in person, this court went to considerable lengths to explain to the plaintiff on numerous occasions the reason why the court needed to know her stance as to whether the settlement was binding on her.  If the plaintiff were to accept that it is binding on her, the matter could then progress to the next stage, ie the approval of the settlement by the court below with the Official Solicitor representing the interests of the minor. 

14.  If, however, the plaintiff were to maintain the complaints of compulsion/coercion, then she would have to be given another opportunity to file evidence on this preliminary issue which must first be determined.  The consequences of an unsuccessful challenge to the binding nature of the settlement agreement were also explained.  It was also made plain that the decision was hers and hers alone and not anyone else’s.  Further, if the plaintiff were to decide not to avail herself of the opportunity to file evidence, the preliminary issue would still have to be resolved, albeit without the benefit of any evidence from her.  One way or another, there was no getting away from having the preliminary issue determined.

15.  At the plaintiff’s request, a short adjournment was granted to enable her to consider the position.

16.  After the adjournment, the plaintiff initially sought to avoid giving the court a “yes” or “no” answer to the question whether the terms of the settlement were acceptable and binding on her.  Suffice it to say that, eventually, she gave an affirmative answer, stating her acceptance of the terms of the settlement.  It necessarily followed that she no longer sought to challenge the validity of the settlement agreement.  That, effectively, disposed of the preliminary issue.  As Suffiad J’s directions given on 28 March 2006 are no longer necessary, they are set aside.

17.  Accordingly, the appeal was dismissed and the matter remitted to the court below for directions for the hearing of the Order 80 summons for the approval of the settlement on behalf of the minor.

Hon Yeung JA :

18.  I agree.