CHEUNG YU TIN ALVIN v. HO HON KA

CACV 255/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 255 OF 2005

(ON APPEAL FROM DCPI NO. 853 OF 2004)

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J U D G M E N T

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Hon Woo VP:

Introduction

1. This is an appeal against an order for costs, leave having been granted by me on 15 August 2005.

2. By this action, commenced in August 2004 in the District Court, the plaintiff claimed against the defendant for personal injuries arising out of an accident that occurred on 4 March 2003, involving a taxi driven by the defendant and a bus on which the plaintiff was a passenger.  The writ with the Statement of Claim dated 30 August 2004 indorsed was served on the defendant on 2 September 2004.  In his Defence dated 18 October 2004, the defendant admitted liability (negligence) but disputed the quantum of the damages.  On a checklist review on 28 January 2005, a judge entered judgment against the defendant for damages to be assessed.  The assessment of damages took place on 6 June 2005 before Deputy Judge W Lam who handed down judgment on 9 June 2005, giving judgment for the plaintiff in the sum of $27,260 with interest.  The judge also made an order nisi that the plaintiff have his costs, to be taxed if not agreed.

3. The defendant applied to the judge to vary the costs order nisi, as a result of which the judge made the following orders on 29 June 2005, namely, costs to the plaintiff up to and including 5 June 2005 on the District Court scale, to be taxed if not agreed, and there be no order as to costs as from 6 June 2005 (the trial itself).  On 1 August 2005, the judge refused to grant leave to appeal against his costs orders of 29 June 2005.  As a result, the defendant applied to a single judge of this Court, and I granted leave on 15 August 2005.

The Calderbank letters

4. One of the bases for the defendant to apply to the judge to vary his order nisi as to costs was that offers had been made by solicitors acting on behalf of the defendant to settle the plaintiff claim, principally by two Calderbank letters respectively of 21 September 2004 and 13 October 2004 making offers, which were not accepted by the plaintiff.  The relevant part of 21September 2004 letter reads:

“	21st September 2004	WITHOUT PREJUDICE
		SAVE AS TO COSTS
	…
	Having perused the Statement of Damages and the Medical Reports filed and served with the Plaintiff’s List of Medical Reports, it is our considered opinion that the present action should not have been filed in the present Court as it is well within the jurisdiction of Small Claims Tribunal.
	We have advised our clients [insurer and defendant] accordingly and have their instructions to offer to your client a sum of HK$35,000 all inclusive.
	Please take your client’s instructions whether the aforesaid offer is acceptable to your client within the next seven days.
	…”

5. The 13 October 2004 offer was again “without prejudice save as to costs”.  The offer was increased to $45,000 all inclusive in full and final settlement of the plaintiff’s claim.

6. By a subsequent “without prejudice save as to costs” letter dated respectively 12 November 2004 of the defendant’s solicitors, the offer of $45,000 was still kept open.

7. It was contended that as the plaintiff failed to accept these offers, the defendant was compelled to resist the plaintiff’s claim so that the trial on 6 June 2005 could not be avoided.  The offers exceeded the judge’s award of $27,260 in the plaintiff’s favour. 

The grounds of appeal

8. Part of the factual basis of the grounds of appeal is also the Calderbank offers.  The defendant seeks to have the judge’s order set aside and substituted by an order that the plaintiff be entitled to costs up to 21 September 2004 on a scale similar to the Small Claims Tribunal scale (as advised in the judgment of this Court in M Beraha & Co Ltd v Ng Wai Lun, CACV 256/2003 (18 June 2004, unreported), paras 32 and 33) and that costs thereafter be to the defendant on the District Court scale.

9. The grounds contend that the judge was wrong, acting against principle, or not exercising his discretion judicially, to have made the order for costs on 29 June 2005.  Apart from the Calderbank letters, the plaintiff relies on the evidence relating to the quantum of the damages that was available when the plaintiff commenced this action to contend that it was unreasonable for the plaintiff to have commenced proceedings in the District Court.  It is contended that the judge was wrong in failing to take into account the evidence in the exercise of his discretion on costs, and that even if the Calderbank letters are disregarded, the judge in the proper exercise of his discretion on costs should have ordered costs to the plaintiff to be taxed on a scale similar to that of the Tribunal.

The respondent’s notice

10. On the other hand, the plaintiff has filed a respondent’s notice to seek an order that the plaintiff have his costs of the action, up to the judgment, on the District Court scale, to be taxed if not agreed.  This is in effect a cross-appeal.  The grounds in support are that the plaintiff was entitled as of right to his costs up to judgment as there had been no payment into court, pursuant to s 53 of the District Court Ordinance, and Order 62, rules 5, 10(2) and (5) of the Rules of the District Court (“RDC”).  It is contended that the Calderbank offers were not appropriate as payment into court could have been made and should have been made, but in fact not made.  Moreover, the Calderbank offers did not deal with the plaintiff’s costs and did not take into account the plaintiff’s right to instituting the action.  Alternatively, the respondent’s notice seeks to support the judge’s costs orders.

The issues before this court

11. The crucial issue before this Court is simply reduced into the following questions:

(1)	What should be the proper effect the Calderbank offers on the costs order made by the judge in the circumstances of this case?
(2)	If they have no effect, what should be the proper order for costs?

The judge’s reasons

12. In his Ruling of 29 June 2005, the judge acknowledged the effect of the Calderbank offers.  He said:

“	2.	…  Pre-trial offers and payment into court are factors to be considered: see DCR O. 62, r. 5 especially sub-rule (c).  I will divide this question into 2 stages, i.e. pre-trial and the trial itself.  I should immediately say that this was not a liquidated claim so that the quantum was obvious.  As to the pre-trial stages, I refer to Hopkins v Rees & Kirby Ltd [1959] 2 All ER 352, and I am unable to say that ‘it had been quite clear to the Plaintiff’ his award would not be more than $50,000 especially when the watershed figure was only $5,001 or 11% more than what the Defendant himself had seen fit to offer on the 13th October 2004.  In my view it is only appropriate to award costs to the Plaintiff, on the District Court scale, for up to and including the day before trial, i.e. 5th June 2005.
	3.	As to the trial itself, it is correct to say that if a plaintiff refuses an offer which is higher than his ultimate award, he should pay a ‘penalty’ for insisting on going to trial.  I note the offers made in this matter were Calderbank offers and not a ‘payment into court’.  But in any event, if I do not take the Calderbank offers into account I would be making a mockery of the existence of such offers as well as of DCR O. 62 r. 5.  As to the extent a plaintiff should pay this ‘penalty’, I note that some overseas jurisdiction can be harsher than Hong Kong.  For example, in the South Australian District Court Act (1991) s. 42 and as illustrated by cases like Necia Joy Moccatta v Joachim Dehousa Leal [1994] SASC 4537 (South Australia), courts pronouncing ‘order as to costs’ is common, i.e. if the plaintiff obtains an award under the offer, he does not obtain his costs for any stage of the action although the courts have a discretion, and in this latter aspect they are similar to here.  Of course the term ‘no order as to costs’ also means the Defendant will not be awarded his costs.  I therefore take the view that to order our present Plaintiff to pay costs of the trial to the Defendant would be too harsh, and would also go against the practice that the ‘winning party’ should be awarded his costs.  We must not lose sight of the fact that, although in the end the Plaintiff was awarded less than what had been offered to him before trial, he nevertheless ‘won the action’, hence to make him pay the ‘losing side’ is unjust and inappropriate in our case.  In all the circumstances, for the trial itself, I will make no order as to costs.  The Plaintiff’s ‘penalty’ is that he must now pay his own legal costs of the trial out of the judgment award.”  (Emphasis added)

Analysis

13. The plaintiff’s contention is that the defendant should have made a payment into court, instead of making a Calderbank offer, in order to obtain the benefit of O 62, r 5(b) of the RDC (wrongly cited as r 5(c) in the Ruling) that all the costs before the proper date for acceptance of the payment-in be to the plaintiff and all the costs thereafter be to the defendant, if the payment exceeded the sum awarded by the judgment to the plaintiff.  However, the defendant did not make a payment into court, and therefore he should not have the benefit of O 62, r 5(b).

14. On the other hand, the defendant contends that he could not have made any payment into court, because he took the stance, which he has steadfastly taken since 21 September 2004, the date of the first Calderbank offer, that the plaintiff acted wrongly to have taken out a writ in the District Court, instead of bringing his claim in the Small Claims Tribunal. 

15. The defendant relies on what was said by Keith JA in Cho Ho Kuen v Yu Kwok Wah & Ors, CACV 480/2000 (29 May 2001, unreported), to justify the Calderbank offers instead of paying a sum into court.  The reasoning is that the defendant was and had steadfastly been of the view that the claim should not have been brought in the District Court, and that he should not justly pay the plaintiff’s costs on the District Court scale.  In Cho Ho Kuen, Keith JA said:

“

7.

I do not think that a plaintiff’s entitlement to taxed costs on the acceptance of a payment into court necessarily results in injustice to a defendant.  I appreciate that there may be cases, of which this is one, in which the defendant may not want to make a payment into court if the acceptance of the payment will automatically result in the plaintiff being entitled to his taxed costs.  But the way to avoid that is by the defendant making his offer to settle the case in the form of a Calderbank letter, i.e. a letter marked ‘without prejudice’ save as to costs’.  I appreciate that a Calderbank letter will not usually be appropriate when the claim is simply for a sum of money: see Ord. 62 r. 5(d).  But I do not see how the limitation on the circumstances in which a Calderbank letter may be used can apply to a case in which the defendant wishes to dispute what would automatically follow in terms of costs from the acceptance of money paid into court.  If a defendant elects to make his offer to settle the case in the form of a payment into court, he has to accept that the plaintiff’s entitlement to costs is to taxed costs.”

The effect of the Calderbank letters

16. Should the Calderbank letters affect the plaintiff’s entitlement to costs?  The use of a Calderbank letter has been adopted by the rules of court.  Order 22, rule 14 of the RDC (identicalto the RHC) provides:

“	(1)	A party to proceedings may at any time make a written offer to any other party to those proceedings which is expressed to be ‘without prejudice save as to costs’ and which relates to any issue in the proceedings.
	(2)	…
		Provided that the Court shall not take such offer into account if, at the time it is made, the party making it could have protected his positionas to costs by means of a payment into court under O. 22.”

17. Provisions corresponding to the proviso to O 22, r 14 are made in Order 62, rule 5(d) of the RDC (again identical to the RHC) regarding the exercise of the discretion of the court.  The relevant parts of O 62, r 5 read:

“	The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account –
	(a)	any such offer of contribution ….;
	(b)	any payment of money into court and the amount of such payment;
	(c)	any written offer made under Order 33, rule 4A(2) [ie, an offer accepting liability]; and
	(d)	any written offer made under Order 22, rule 14, provided that the Court shall not take such an offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a payment into court under Order 22.”

18. Thus, a Calderbank letter is treated quite differently from a payment into court under Order 22, and it is not regarded as having the same effect or consequence of a payment into court.  In Cutts v Head [1984] 1 Ch 290, Oliver LJ sounded a warning:

“I would add one word of caution.  The qualification imposed on the without prejudice nature of the Calderbank letter is, as I have held, sufficient to enable it to be taken into account on the question of costs; but it should not be thought that this involves the consequence that such a letter can now be used as a substitute for a payment into court, where a payment into court is appropriate.  In the case of the simple money claim, a defendant who wishes to avail himself of the protection afforded by an offer must, in the ordinary way, back his offer with cash by making a payment in and, speaking for myself, I should not, as at present advised, be disposed in such a case to treat a Calderbank offer as carrying the same consequencesas payment in.”

19. In Singh v Parkfield Group PLC (1996) PIQR Q110, Stuart-Smith LJ said:

“In the ordinary way where a defendant was facing a monetary claim, he should make a payment into court in sufficient time for the plaintiff to consider it.”

20. The above passages in Cutts v Head and Singh v Parkfield were followed by this Court in The Hong Kong & Shanghai Hotels Ltd v Choi Bing Wing [1999] 1 HKLR 472, where it was held that the defendant could have protected his position as to costs by payment into court.  As a result, the defendant’s Calderbank letter should be disregarded in the court’s exercise of its discretion on costs.  Godfrey JA put the point succinctly at p 479I:

“…  As it seems to me, the only way in which a defendant in the position of the defendant here can protect his position is by means of an open as distinct from a without prejudice offer.  The machinery provided by O.22 r.4 is simply not available where the party making a without prejudice offer can protect his position by means of a payment into court as the defendant could have done here.”

21. In the case before us, the defendant did not adopt the solution provided by Godfrey JA but made the Calderbank offers pursuant to the avenue suggested by Keith JA in Cho Ho Kuen.

22. As I see it, this method does not fully consider the plaintiff’s position vis-à-vis the offer, and may subject the defendant to the risk of the court subsequently holding that it is reasonable for the plaintiff to have rejected the offer.  To put it simpler, the method may work an injustice to the plaintiff if effect is given to the Calderbank letter.  In order to avoid the injustice, it may result in a disadvantage to the defendant.  The present case is a clear demonstration of such a situation.  Here the Calderbank offers, even the highest one of $45,000 all inclusive, did not allude to the reasonable disbursements, let alone costs, that the plaintiff had already incurred.  According to what the plaintiff’s solicitor told the judge, which is not denied by Mr Sakhrani (for the defendant), the plaintiff had by 21 September 2004 incurred costs and disbursements of not less than $40,000.  The disbursements alone came to $14,361.50, including the fee of $11,400 for the medical report of Dr Lee Po Chin, a specialist in orthopaedics and traumatology, police fee of $16.50, transcript (of the proceedings relating to the charge of driving offence against the defendant) of $97, fees for company searches (of the owners of the involved vehicles) of $355, hospital report fees of $1,863 and court fees of $630.  Such disbursements appear reasonable and even if the case had been brought before the Small Claims Tribunal, I have little doubt that they would be allowed as reasonable expenses under s 24 of the Small Claims Tribunal Ordinance, Cap 338.  The plaintiff was put into an invidious position in deciding whether to accept the offer, without knowing what part of the offer of $45,000 was for his damages and how much was for his disbursements and costs.  Had the offer been separated to include a specific sum for his damages and another sum for his costs and disbursements, albeit on the Tribunal scale, the plaintiff would reasonably be required to consider, and the court having to deal with the matter would be in a better position to decide if it was unreasonable or otherwise for the plaintiff to reject the offer.    

23. The judge took into account that the plaintiff’s claim was not a liquidated claim such that the quantum was obvious.  That is correct and lends support to the reasonableness on the part of the plaintiff to reject the Calderbank offer.  Considering all the circumstances of this case, especially the disbursements already incurred having amounted to over $14,000, I am of the view that the plaintiff did not act unreasonably to reject the Calderbank offer of $45,000 all inclusive. 

24. As the claim is one for a sum of money, the usual and normal course is for the defendant to make a payment into court, although with the consequence of his having to bear the costs up to the time of acceptance automatically on the District Court scale: see Cho Ho Kuen.  The only obstacle to a payment in was the defendant’s insistence that the action should have been brought in the Tribunal.  As I find that the plaintiff was acting reasonably to reject the Calderbank offer, this obstacle should not be considered as a reasonable excuse for the defendant’s not making a payment into court.  In the circumstances, I consider that the obstacle to a payment into court was unreasonably self-created and that defendant “could have protected his position as to costs by means of a payment into court under Order 22” which he failed to do.  In my judgment, therefore, in the exercise of hisdiscretion on costs, the judge was acting contrary to the decision of this Court in The Hong Kong & Shanghai Hotels Ltd v Choi Bing Wing and was wrong in taking into account the Calderbank letters, which he expressly stated in the first few sentences of paragraph 3 of his Ruling to have done.  He should have acted in compliance with the proviso to O 22, r 14 and to O 62, r 5(b) of the RDC, paying no regard to the Calderbank offers when exercising his discretion on costs.

25. The judge made no order as to costs of the trial before him on 6 June 2005, and that was clearly based on his giving partial effect to the Calderbank letters which, by the reasons I have given above, must be disregarded.  This order should therefore be set aside.

The costs of the action

26. Even though I consider that the judge should not take into account the Calderbank letters, it does not necessarily follow that he must award the costs of the proceedings to the plaintiff, on the District Court scale.  One has to examine the circumstances when the action was commenced in order to deciding on its reasonableness. 

27. This is similar to the question posed by Glynn-Jones J in Hopkins v Rees and Kirby Ltd [1959] 1 WLR 740, the principle of which was accepted by Seagroatt J in Lai Ki v B+B Construction Co Ltd & Ors, HCPI 63/2001 (24 June 2003, unreported):

“I think that the only question for me is: putting myself, as far as I can, in the position of the plaintiff at the time when he issued the writ, am I satisfied it was then obvious that this was a county court action or was it an action which, when tried by one judge rather than another, might have resulted in an award of £400 [the ceiling of the County Court monetary jurisdiction]?”

28. Mr Pirie relied on Ho Wai-leung v Wan Chi-kuen, DCPI 11/2001 (29 March 2001, unreported), where when dealing with a personal injuries action before him where money paid into court by the defendant had been accepted by the plaintiff,Judge Carlson had this to say:

“	17.	… The real question, as I see it, is whether it was reasonable for the plaintiff to issue his proceedings in this court.  I am in no doubt that it was entirely reasonable for him to take that course.  The claim itself, although ambitious in its assessment of quantum for personal injury, cannot be described as so wide off the mark that one can condemn it as entirely devoid of merit.
	18.	I also consider that the nature of the action is one that is more appropriately brought before a tribunal which allows legal representation.  As I have already observed, at that initial stage three letters before action had been ignored by the defendant and by his insurers.  The plaintiff had no way of knowing that the defendant would react by making a sensible payment in which was acceptable to him.  One wonders whether a claim in the Small Claims Tribunal which perhaps carries less gravitas or clout, if I may use that expression, would have been taken as seriously by the insurers.  All the plaintiff has done is to come to the natural forum for these sort of small personal injury actions.  It has resulted in early settlement.”

29. In the case before us, the accident took place on 3 March 2003.  The letters before action addressed to the defendant as the driver of the taxi that caused the accident and the owner of the taxi were both dated 27 June 2003, while the plaintiff had already obtained medical reports from the Queen Mary Hospital and Dr Lee.  The letters before action attracted no response.  Theis writ of the action was issued in late August 2004 and the medical report fees as well as the disbursements totalling about $14,000 had already been incurred.  While Mr Pirie heavily relied on the fact that there was no response to the letters before action to justify the plaintiff in bringing his claim in the District Court, I do not consider that this fact by itself has that effect. 

30. Mr Sakhrani drew our attention to a number of salient facts in support of his submission that the plaintiff did not act reasonably to commence this action in the District Court.  The medical reports, including that by Dr Lee, indicated that the injuries suffered by the plaintiff were minor.  The plaintiff did not attend hospital straightaway after the accident; he returned to his office to work.  He suffered no loss of earnings and there was no prospect of any loss of future earnings.  He did not require any further treatment and was advised to do exercise to help recover from his residual back pain, but he had not acted on the advice even at the time of the trial on 6 June 2005.  The recovery time was described by Dr Lee as between 2 weeks and 2 months.  A reasonable assessment of the pain and suffering and loss of amenities would not be anything near the ceiling of the monetary jurisdiction of the Small Claims Tribunal.  All these were accepted by the judge and evidenced by his award of $27,260 in favour of the plaintiff. 

31. While appreciating that a certain leeway must be given to the assessment of the quantum of the damages, the award made by the judge clearly demonstrates that had an assessment been reasonably or properly made, the plaintiff would not recover anything close to $50,000.  In the circumstances, I consider that it was unreasonable for the plaintiff to have commenced this action in the District Court, which would unjustifiably put the burden of footing the legal costs bill on to the defendant. 

32. In view of this the conclusion I have come to that the plaintiff did not act reasonably in having his claim brought in the District Court, I consider that the judge was wrong in awarding costs to the plaintiff on the District Court scale. 

33. In my judgment, the proper scale of costs of the action including the hearing for assessing the quantum of damages should be that similar to that of the Tribunal, which will fairly reflect the amount of damages awarded and have the desirable effect of discouraging litigants from unreasonably selecting the District Court as the forum for a claim of damages that are well under the Tribunal’s jurisdictional limit.

Conclusion

35. For the above reasons, I would allow the appeal and dismiss the cross-appeal.  I would set aside the judge’s orders for costs and make an order that the plaintiff have the costs of the entire action, to be taxed on a scale similar to that of the Small Claims Tribunal.  For the avoidance of doubt, the disbursements, including Dr Lee’s fees, should all be allowed as reasonable and necessary expenses.

Costs of the appeal

36. Since the defendant has failed in sustaining the Calderbank letters before us, and no less than half of the time before us was used to deal with their effect, with no less than the same importance being placed by the parties on them in their skeleton submissions, I would also make with an order nisi that the defendant have half of the costs of this appeal, including the costs of the respondent’s notice.

Hon Cheung JA:

Purpose of the Calderbank letters

37. The Calderbank letters issued by the defendant in effect sought to achieve two purposes:

(1)	To stop the costs from being continued in the plaintiff’s favour after the time imposed for acceptance of the offer had expired.
(2)	To have the costs of the action assessed similar to the award of costs in the Small Claims Tribunal instead of the District Court scale.

The first purpose

38. The first purpose could, of course, be achieved by means of payment into court.  To this extent, Order 62 Rule 5(d) of The Rules of District Court (‘the Rules’) would be engaged because the defendant could have protected himself by payment into court and on this basis the Court should not take the Calderbank offer into account when considering the question of costs.

The second purpose

39. However, the second purpose of the offer could not be achieved by payment into court because under the Rules, if there was payment in, the plaintiff was entitled to have his costs taxed upon acceptance and the defendant was not entitled to argue on the scale of costs because no judgment would be entered on acceptance of payment in.  In such an event, in my view, the Calderbank offer was the only means the defendant might rely upon to protect his position.  On this basis the Court was entitled to consider the Calderbank offer. 

40. I do not need to address the question whether an ‘open offer’ as distinct from a Calderbank offer i.e. an offer ‘which is without prejudice save as to costs’ may overcome the technical hurdle of Order 62 Rule 5(d).  I only need to say that ultimately one must look at the substance of the offer itself.

Purpose not achieved

41. In this case the Calderbank offer of $35,000 which was later increased to $45,000 was said to be inclusive of costs.  It did not separate damages and costs.  It certainly did not say the costs should be taxed on the Small Claims Tribunal basis.

42. In my view it is not unreasonable for a person injured in an accident to seek legal advice and to gather evidence for the purpose of commencing proceedings.  These are steps that are taken before a decision can be made as to which court the action should commence.  Costs will be incurred for this purpose. 

43. This is what had happened in this case.  The plaintiff said $40,000 legal costs had been incurred in September 2004 of which $14,000 was in the form of disbursements.  Even disregarding the profit costs of $26,000 which were excessive in the light of what had been done so far, one cannot ignore the disbursements that had been incurred. 

44. In my view, even if the action was to be tried in the Small Claims Tribunal, I do not regard the plaintiff must necessarily be barred from recovering the disbursements under the costs provision of section 24 of the Small Claims Tribunal Ordinance (Cap. 338).  Pre-hearing costs which are necessary for the purpose of the hearing and reasonable in amount should be recoverable.

45. In the circumstances, I cannot say the plaintiff was unreasonable in not accepting the offer.  Hence in considering costs, the Calderbank offer was not a factor that would invariably require the judge to order costs in a manner similar to those made in the Small Claims Tribunal.

Small Claims Tribunal jurisdiction

46. However, even if the Calderbank offer was to be ignored, that was still not the end of the matter because the plaintiff eventually obtained a judgment the amount of which was within the jurisdiction of the Small Claims Tribunal.  In the absence of special considerations the plaintiff must be, first of all, entitled to the costs of his action up to and including the judgment on damages.  The real issue is whether costs on District Court scale should be awarded.

The question

47. Ultimately the question is whether it was reasonable to commence the action in the District Court.  I fully recognize the expertise of District Court judges in dealing with personal injury cases but I do not agree that these claims should only be initiated in the District Court on account of this expertise even if the monetary claim comes within the Small Claims Tribunal jurisdiction.  To do so will be contrary to the provision of section 5(1) and the schedule of the Small Claims Tribunal Ordinance which expressly confer jurisdiction on the Small Claims Tribunal on claims in tort of not more than $50,000.  This type of cases are in fact heard there as shown in the case of Ho Wai Leung v. Wan Chi Kuen, DCPI No. 11 of 2001.

The only relevant consideration

48. The only relevant consideration is whether at the commencement of the action, in view of the nature of the injury of the plaintiff, it was reasonable to say that he would recover more than $50,000.  I recognize fully that assessment of damages is not an easy task but at the same time any lawyer who practises in this area must be able to tell whether the plaintiff has a serious injury or not and whether his injury has any impact on his earning.  In this case from the available evidence one can see that the plaintiff’s injury was extremely minor in nature and could not possibly have affected his earning.  He could not possibly have recovered more than $50,000.  The sum of $27,260 assessed by the judge was the best indication of the value of the claim.  The lawyer was duty bound to advise the plaintiff of the costs implications of suing in the District Court. 

49. In the circumstances, it was unreasonable for the plaintiff to persist in pursuing the matter in the District Court, particularly, when the defendant had drawn his attention to the fact that the matter should be dealt with in the Small Claims Tribunal.  The only proper way of exercising the discretion was to award costs to be assessed in a manner similar to the costs allowed in the Small Claims Tribunal.

Conclusion

50. I will also allow the appeal and dismiss the cross-appeal.  I agree with the orders proposed by Woo VP.

Hon Suffiad J:

51. Having had the advantage of reading in draft both the judgments of Woo VP and Cheung JA, I am in full agreement with what they have said and have nothing further to add.