LI SUK YEE v. PARKnSHOP (HK) LTD

DCPI 3001/2019

[2023] HKDC 1670

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 3001 OF 2019

---------------------------

---------------------------

---------------------------------------------

DECISION

---------------------------------------------

INTRODUCTION

1.  This is an appeal brought by the defendant for a decision on costs made by a master. It is in the context of a plaintiff who had applied to accept the sanctioned payment made by the defendant out of time.

BACKGROUND

Background to the appeal

2.  The plaintiff was employed by the defendant as a part-time store assistant to work at ParknShop Superstore at Metro City Phase II (“the Supermarket”). The plaintiff alleged that she had fallen from a ladder (“the Ladder”) when working at the Supermarket on 28 September 2016 (“the Accident”) under the following circumstances as pleaded in the statement of claim filed on 27 July 2020 (“the SOC”):-

“On 28 September 2016, at or around 1:30 p.m., the Plaintiff was, in the course of employment, conveying and tidying goods on a shelf (the “Shelf”) in the ParknShop Superstore at Metro City Phase II (the “Scene”). When the Plaintiff was climbing down a ladder provided by the Defendant (the “Ladder”) to convey goods placed on the high levels of the Shelf, a shopping cart then controlled by a customer (the “Cart”) collided with the Ladder and/or the Plaintiff from behind. The Plaintiff then lost her balance and fell down on to the edge of the Cart and eventually landed on the ground with her buttocks. As a result, the Plaintiff sustained serious personal injuries in her back and buttocks (“the Accident”).”

3.  Almost a year before the filing of the SOC and about a month before the plaintiff issued the writ of summons in the present proceedings on 9 September 2019, the defendant’s insurer had produced the closed circuit television (“CCTV”) footage capturing the Accident to the plaintiff via her solicitors. That was on 5 August 2019. The CCTV footage shows that the plaintiff fell from the Ladder, not because she was hit by the shopping cart (“the Cart”) pushed by the customer but rather she had turned around her body when descending from the steps and her buttock hit the side of the Cart which happened to be passing through the aisle at the time.

4.  On 7 July 2022, the plaintiff took out a summons (“the Summons”) to seek leave to accept a sanctioned payment of HK$5,000 made by the defendant on 25 April 2022 (“the Sanctioned Payment”). The application was made out of time. In the Summons, the plaintiff also asked the court to order the defendant to pay the plaintiff “the costs of this action up to 28 days after the Sanctioned Payment was made (ie 23 May 2022)”.

5.  At the hearing of the Summons before the master (“the Master”) on 9 March 2023, the plaintiff’s counsel accepted that the Cart did not actually move forward and hit the plaintiff. Hence, the defendant argued that the plaintiff’s pleaded case was doomed to fail.

6.  At the end of the hearing, the Master gave leave to the plaintiff to accept the Sanctioned Payment out of time. However, the Master at the same time ordered that the plaintiff be entitled to the costs of the action “up to 25 November 2020”, which was the date when the CCTV footage was “disclosed to the plaintiff by way of list of documents”[1]. The Master further ordered that the plaintiff to pay the defendant’s costs of the action after that date, including the costs of and occasioned by the Summons, with certificate for counsel. The Master also ordered the plaintiff’s own costs to be taxed in accordance with the Legal Aid Regulations (“the Order”).

7.  The defendant now appeals against §2 of the Order, which was confined to the costs the Master ordered the defendant to pay to the plaintiff up to the date when the CCTV footage was formally disclosed under the defendant’s list of documents on 25 November 2020.

The CCTV footage v the plaintiff’s pleaded case

8.  The CCTV footage captured how the plaintiff was injured. The exact circumstances which the plaintiff sustained injuries were explained in §7 of the affidavit of the defendant’s handling solicitor Mr Au Ying Yin Matthew (“Au’s Affidavit”). The plaintiff did not dispute this version of events at the hearing before the Master. They were set out in Au’s Affidavit as follows:-

(1)  At 13:22:24, the plaintiff opened the Ladder and placed it immediately next to the shelf. The steps of the Ladder were perpendicular to the shelf;

(2)  At 13:22:33, the plaintiff ascended the Ladder, her face and body facing the camera of the CCTV;

(3)  There were products stacking from the ground, the customer with the Cart, another person and the plaintiff at the aisle;

(4)  The customer pushed the Cart along the aisle from 13:22:35 – 13:22:38 without requesting the other person to move;

(5)  The plaintiff descended from the Ladder at 13:22:39. When she moved her left leg down the Ladder, her left leg could be seen at the left of the side rail of the Ladder (as shown by the red circle in the screenshot attached). The plaintiff probably rotated her body outwards and/or not faced the steps while descending; and

(6)  When the plaintiff was descending, her back / buttock hit the Cart and she fell down.

9.  As said, the CCTV footage was provided to the plaintiff’s solicitors by the defendant’s insurer on 5 August 2019, which was slightly over a month before the writ (with the general endorsement of claim) of this case was issued. However, the plaintiff’s pleaded case was not formulated until some 10 months later when the SOC was served on the defendant.

10.  The same CCTV footage was also provided to the joint medical experts (“the JME”), namely, Dr Ho Ching Lun Henry (appointed by the defendant) and Dr Chan Yu Sing (appointed by the plaintiff) for their viewing before the joint examination took place on 15 January 2021.

11.  Rather unusual for cases where JME are appointed, both experts managed to come to the same finding after viewing the CCTV footage, ie the Cart did not hit the ladder or the plaintiff. This is how they have described the Accident in the joint medical report dated 1 November 2021 (“the JMR”) after watching the CCTV footage:-

“Dr. Ho:

- It shows a person in black/dark cloths standing on a ladder.

- Another person pushing a shopping trolley walked pass the ladder.

- The trolley did not hit the ladder.

- The person in the black/dark clothes then fell when she missed a step while coming down after the trolley was already pushed passed her.

- The person in black/dark clothes then got up from the ground.

Dr. Chan:

CCTV dated on 28/9/2018 at 13:22 hrs

- There was person in black clothes suspected of Ms Li was climbing up the shelf with a ladder to pick up the goods.

- A lady in white clothes pushing a shopping trolley passed by. Although it is very close to the ladder, it can’t see the trolley hitting the ladder. When Ms Li got down from the ladder, her buttock hit the trolley and fell to the ground.

- After Ms Li stood up, the lady left.”

12.  Notwithstanding the fact that the plaintiff’s solicitors had been provided with the CCTV footage by the defendant’s insurer on 5 August 2019, the plaintiff pleaded in the SOC (about a year later) that the Cart “collided with the Ladder and/or the Plaintiff from behind”, and insisted in her witness statement filed for the purpose of the present proceedings (which was dated 22 January 2021 but was only filed and exchanged about 6 months later on 16 July 2021) that she fell from the Ladder because the Cart had either hit the Ladder and her:-

“9. 當本人從貨架上拿走兩枝沐浴露，並正從鋁梯的第3級(由下至上)走落第2級時突然有一位客人推著一架購物車從本人的後方撞到本人和該鋁梯，本人失平衡就由梯上跌下來，先跌坐在購物車前端的邊上，再跌到地上，臀部及腰部受傷。本人之後通知「大家姐」劉海榮(音譯)，然後本人就在貨倉內塗藥油及休息並將事件告知經理，但到1時45分左右本人未覺好轉，就通知「大家姐」要去看醫生。到二時我下班後就自行坐的士去將軍澳醫院急症室求醫。”

[emphasis added]

13.  Further, in the plaintiff’s affirmation filed on 5 October 2022 in support of leave to accept the Sanctioned Payment out of time, the plaintiff stated that:-

“3. In response to paragraphs 4 to 11 of the Affidavit of Au Ying Yin Matthew, I wish to point out that I do maintain that my case is meritorious as pleaded in the Statement of Claim.” [emphasis added]

14.  At the hearing before the Master, Mr Wong, the plaintiff’s assigned counsel (who also represented the plaintiff in the present appeal), accepted that the Cart did not hit the Ladder:-

“COURT: And if you are not accepting that she was not hit by the trolley, as recorded in the CCTV footage, then that’s a different matter because that’s not raised in your written submissions. You have not raised any arguments to dispute what happened as recorded in the CCTV footage.

MR WONG: Now, Master ...

COURT: Neither did your lay client raise it in the affirmation in support of the application.

MR WONG: Master, may I put my case as follows? Okay, even though the trolley did not actually push forward to hit the plaintiff, but then because of the narrowing of the passageway, as agreed and pleaded by the defendant ...”[2]

[emphasis added]

15.  It should be noted here that narrowing of the passageway had not been agreed nor pleaded by the defendant in its defence. Nor had this issue ever been pleaded by the plaintiff in the SOC as one of the reasons or causes of why she had met with the Accident. It was only raised by the plaintiff’s counsel for the first time during the hearing before the Master.

16.  The defendant made the Sanctioned Payment on 25 April 2022. In the letter accompanying the notice, the defendant had specifically informed the plaintiff that her claim was doomed to fail “in light of the CCTV footage showing that the shopping cart did not collide with the ladder or your client as alleged”.

17.  The plaintiff rejected the Sanctioned Payment by letter on the next day, but at the same time was willing, on a without prejudice save as to costs basis, to accept the HK$5,000, provided that the defendant pays “the costs of the entire proceedings”.

18.  The defendant did not respond to the plaintiff’s “offer” above.

19.  About 2½ months later, on 7 July 2022, without any prior notice or explanation, the plaintiff issued the Summons to seek leave to accept the Sanctioned Payment out of time.

Reasoning of the Master

20.  Reading from the transcript, it is obvious that the following matters had been taken into account and accepted by the Master before the decision on costs was reached:-

(1)  The Master found that as the plaintiff sought leave to accept the Sanctioned Payment out of time, O 22 r 15(3) of the Rules of the District Court (“the RDC”) would apply;[3]

(2)  The Master took into account of the fact that the plaintiff’s pleaded case lacked merits:-

“It is not in dispute that, according to the CCTV footage, the accident did not occur as pleaded by the plaintiff. The plaintiff has not attempted to suggest otherwise. Counsel for the plaintiff accepted at the hearing that the trolley did not hit the ladder and/or the plaintiff, as pleaded in the statement of claim.

…

No mini trial is conducted nor is it necessary, as the plaintiff does not challenge the CCTV footage nor does she dispute the fact that the accident did not occur as pleaded. The CCTV footage, which lasted for less than 30 seconds, shows a clear picture of what in fact occurred. Looking at the CCTV footage, I am of the view that the plaintiff’s claim, as pleaded, lacks merit.”[4]

(3)  The Master rejected the plaintiff’s alternative case that she had landed on the side of the Cart when descending the Ladder due to the narrowness of the aisle. The Master considered that as an afterthought which the plaintiff’s counsel raised for the purpose of argument for the hearing only[5];

(4)  The Master inferred that the plaintiff accepted the Sanctioned Payment of HK$5,000 while claiming over HK$2.05 million because the plaintiff knew that her claim lacked merits[6];

(5)  The Master found that the plaintiff should have accepted the Sanctioned Payment as soon as it was presented, and the plaintiff was not reasonable in not accepting the Sanctioned Payment within time;[7]

(6)  The Master concluded that:-

“Given the foregoing analysis, bearing in mind the court needs to assess the fairness of the instant case and also the objectives of the Order 22 regime, which is to promote settlement and to avoid unnecessary litigation, I am of the view that the plaintiff should be allowed to accept the sanctioned payment out of time and the defendant should bear the costs of the action up till the time where the CCTV footage was disclosed to the plaintiff by way of list of documents, ie 25 November 2020, and the plaintiff should bear the costs of the action thereafter.”[8]

[emphasis added]

21.  As said, the plaintiff’s alternative case at the hearing before the Master was that the aisle was partially occupied by the stacked up goods which had significantly narrowed the passageway. As a result, the plaintiff hit her buttock on the Cart while descending from the Ladder. In my view, the Master has rightly rejected this as a completely new argument made up by the plaintiff for the purpose of the hearing only.

22.  In the appeal, the defendant does not dispute §1 of the Order in which the court gave leave to the plaintiff to accept the Sanctioned Payment made by the defendant on 25 April 2022 out of time. The defendant only disputes §2 of the Order where the Master made the “cut-off date” for the defendant to bear the costs of the action up to 25 November 2020, the date when the CCTV footage was formally disclosed by the defendant.

General principles on appeal on costs

23.  The relevant legal principles for appeal from a master to a judge in chambers are set out at §§58/1/2 to 58/1/6 of Vol 1 of Hong Kong Civil Procedures 2023 (“the HKCP”).

24.  Order 58/1/6 of the RDC states that:-

“Appeals as to costs – In general, a judge in chambers will not allow an appeal from a master’s costs order unless it is unreasonable or the master erred in law”.

25.  The following cases have been cited by the plaintiff’s counsel in his written submissions.

26.  In Hoddle v CCF Construction Ltd [1992] 2 All ER 550, at 550h – 551b, Morland J set out the approach that should be adopted by a judge in chambers on an appeal limited to an order for costs made by a master who had, effectively, the conduct of the litigation before him:-

“In my judgment it would be highly undesirable as a matter of general principal that a judge in the position that I am in today should intervene and make different orders as to costs from that made by a master, unless it can be shown by the appellant that the master demonstrably erred in the exercise of his discretion in the order that he made. If it can be shown that the master took into account matters that he should not have taken into account or failed to take into account matters that he should have taken into account, in those circumstances that judge in chambers would be entitled to vary the order made by the master, but in my judgment it would not in the interests of justice if judges in chambers entered into detailed examination of all the matters that were before the master in order to decide whether they would have come to the same decision as the master. Generally speaking, in my judgment, judges in chambers should not allow appeals against costs orders by masters, unless it can be shown that the order made was unreasonable or erred in law, or, as I have indicated, either failed to take into account proper matters or took into account matters that should not have been taken into account.” [emphasis added]

27.  Mr Wong submits that this approach has been followed by the courts in Hong Kong:-

(a)  Paul Y-ITC Construction Ltd v Kin Shing Co. Ltd. [1999] 1 HKC 511, per Sakhrani J:

“As this is an appeal as to costs only from the discretion of the master, such application should not be allowed unless it can be shown that the order made by the master was unreasonable or erred in law ie., if he either failed to make into account proper matters or took into account matters that should not have been taken into account. … The Court of Appeal in China Venturetechnco International Co Ltd v New Century Chain Development Co Ltd (CA 20/96) in their judgment dated 3 July 1996 considered that this was the correct test.” [emphasis added]

(b)  Gee Fung Yin v Gee Fung Kuen and Anor, HCA 1940/2015 (unrep, 28 April 2017), per Wilson Chan J:

“In this appeal, the plaintiff has failed to point out any error of law or unreasonableness in Master Chow’s decision on costs. I agree that the plaintiff’s submissions are basically a re-run of her arguments before the master, and this is not the correct approach on an appeal on costs.”

(c)  Chan Ningning v King & Wood (a firm) [2020] HKCFI 602, after quoting Lam V-P in Chan Shun Kei v Hong Kong Construction (Hong Kong) Ltd, CACV (unrep, 7 March 2016) at §22, said that, K Yeung J stated that:

“While Chan Shun Kei was an appeal against a costs order made by a judge after trial, the circumspection explained by the Court of Appeal is in my view equally applicable to the present appeal where the Master has undertaken the Trial of the Preliminary Issues, which for all practical purposes resembles a trial.”

The defendant’s grounds of appeal

28.  Mr Ho for the defendant has made it clear in his submissions that the defendant’s appeal is only confined to the Master’s ruling that the defendant should pay the plaintiff’s costs of this action up to 25 November 2020.

29.  Reading from the decision, the only reason that the Master gave when fixing the “cut-off date” on 25 November 2020 was based on the fact that the CCTV footage was formally disclosed to the plaintiff under the defendant’s list of documents on that day. No other reason was given or other factor had been taken into account by the Master in this regard.

30.  Mr Ho submits that the Master was plainly wrong in fixing the “cut-off date” on 25 November 2020 for the following reasons:-

(1)  The Master was informed, and also said during the hearing on multiple times that the CCTV footage was provided to the plaintiff on 5 August 2019, long before the defendant’s list of documents was filed[9]. The Master plainly failed to take into account the important fact of when the CCTV footage was actually provided to the plaintiff in his reasoning; and

(2)  The plaintiff can consider information available to her at pre-action stage before deciding whether to proceed with her claim: see for example of Chan Fung Yu Anji v Hong Kong Sheng Kung Hui Welfare Council Ltd [2023] 5 HKC 519 at 524, §24. As a matter of principle, parties should be encouraged to exchange relevant information at pre-action stage, because exchange of information and sensible decision making can reduce unnecessary litigation. Such conduct is consistent with the underlying objectives of the Civil Justice Reform (“the CJR”), highlighted in O 1A r 1(b), (c), (e), (f) of the RDC.

31.  Mr Ho also raised the point that the plaintiff has unilaterally included 4 letters issued by her solicitors to the defendant’s insurer in the appeal bundle (“the Non-Agreed Letters”)[10]. The Non-Agreed Letters were not presented in the hearing before the Master. The defendant’s solicitors have drawn the attention of the plaintiff to O 58 r 1(4) of the RDC, reminding the plaintiff that it would be inappropriate for her to adduce further evidence in the present appeal.

32.  The defendant relies on §58/1/3 of HKCP by stating that the no further evidence, other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made, may be received at the hearing of an appeal under O 58 of the RDC, except on “special ground”. The threshold to adduce further evidence in this context is the same as that under O 9 r 10(2) of the RDC, namely that the conditions under Ladd v Marshall conditions:-

“(a) that the evidence could not have been obtained with reasonable diligence for use at the hearing below;

(b) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and

(c) the evidence must be such as is presumably to be believed.” [emphasis added]

33.  I agree with Mr Ho that the Non-Agreed Letters clearly do not satisfy conditions (a) and (b) of the Ladd v Marshall test as:-

(1)  The Non-Agreed Letters are letters issued by the plaintiff’s solicitors. Thus, the plaintiff must have the Non-Agreed Letters at all material times; and

(2)  The Non-Agreed Letters cannot affect the conclusion that the plaintiff’s pleaded case lacks merits as found by the Master.

34.  Hence, I rule that the Non-Agreed Letters should not be taken into account for the purpose of the appeal eventhough this appeal is by way of a hearing de novo.

Findings of the Court

35.  Generally speaking and as a matter of principle, I would be most reluctant to disturb a master’s decision on costs, as it is an exercise of discretion on his/her part. However, as the authorities cited by the parties have suggested, if a master has taken into account of matters he or she ought not to have taken or failed to take into account of matters he or she ought to take into account, then it may justify the judge on appeal to intervene. In other words, when making a decision on costs, a master has to decide the matter judicially and reasonably.

36.  In this case, it is clear from reading the decision that the Master was fully aware that the defendant’s insurer had provided the plaintiff with the CCTV footage under the cover of a letter on 5 August 2019, which was well before the issue of the writ (and general endorsement of claim) by the plaintiff on 9 September 2019.

37.  The plaintiff had never complained at the hearing before the Master that the quality of the CCTV footage was so low that her solicitors or assigned counsel could not work out what actually took place during the Accident by watching it.

38.  The JME certainly had no difficulty in reaching the same conclusion that the Cart did not hit the Ladder after watching the CCTV footage when they prepared the JMR.

39.  In my view, it is obvious that the CCTV footage was provided by the defendant’s insurer to the plaintiff’s solicitors with the purpose for them to decide whether their client’s allegations about the Accident could be true or not. This was done as part of the pre-action protocol specified under §§14-23 of Practice Direction 18.1 (“PD 18.1”). Those rules, inter alia, require the parties to engage in 3 months of constructive communication and mutual disclosure of information and documents with respect to issues of liability and quantum after initial exchange of letters: see §19 of PD 18.1.

40.  In my judgment, this was exactly what the defendant had tried to do in this case. The pre-action protocol encouraged parties to disclose such documents in order to encourage early settlement or disposal of action without the plaintiff issuing proceedings or parties going to trial in appropriate cases. This is in line with the underlying objectives of the CJR. In my view, had the plaintiff or her legal aid assigned solicitor and counsel bothered to study the contents of the CCTV footage carefully, I have no doubt that they would have come to the same conclusions as the JME did.

41.  Although the pre-action protocol has no statutory effects, it will have costs consequences if the parties do not adhere to them. I find this important part (ie Part B) of PD 18.1 has often been neglected (and sometimes totally ignored) by practitioners, particularly in personal injuries claims in the District Court. In quite a lot of cases I have come across in the past few years, I often found the parties not adhering to the pre-action protocol or only paying lip service to it. Often no constructive reply was given by the proposed defendant after the letter of demand was issued by the proposed plaintiff. Sometimes when a constructive reply was given and request for information and documents was made by the proposed defendant, the proposed plaintiff would simply ignore them. Worse still, when discovery in relation to issues of liability or quantum was made by a defendant, for example like a CCTV footage which indisputably shows how the accident occurred, they are simply ignored and the proposed plaintiff would simply go ahead with issuing the proceedings, ignoring the possible dire consequences on costs.

42.  Putting the above rules in the context of this case, in my view, it is crucial for the plaintiff and her legal advisers to make an early decision after viewing the CCTV footage of whether to issue the proceedings in this case or not. In my judgment, it lies ill in their mouth to say that they had only known about how the Accident occurred when the CCTV footage was disclosed to them “formally” under the defendant’s list of documents. This ignored the crucial step taken by the defendant during the pre-action protocol stage when they disclosed the same CCTV footage to the plaintiff through its insurer.

43.  In my view, once the Master accepted that the CCTV footage played a vital role in whether the plaintiff was able to prove her pleaded case or not, then the crucial date must be when it was first disclosed to the plaintiff and not when it was formally discovered under the list of documents.

44.  Hence, the “cut-off date” in this case in my view should have been when the CCTV footage was first disclosed to the plaintiff by the defendant’s insurer on 5 August 2019 and not when it was formally discovered under the defendant’s list of documents on 22 November 2021. Of course, reasonable time (say a few weeks) should be given to the plaintiff’s solicitors to study the footage as well as to take instructions both from the legally aided plaintiff and the Director of Legal Aid before they make a final decision of whether they should proceed with the intended common law action or not. Had they done that in this case, I have scant doubt that the writ would not be issued and the case would not be proceeded with – at least not based on the pleaded case of the plaintiff as stated in the SOC which the Master in my view has rightly found to have no merits at all.

45.  In the aforestated premises, regrettably, I find myself in disagreement with the Master on this matter. I find that the Master had failed to take into account of the very important fact that the same CCTV footage had been disclosed to the plaintiff over a month before the issue of the writ and this should be the “cut-off date” in which the plaintiff should bear the costs of the defendant in this action.

CONCLUSION

46.  Based on the above, I would allow the defendant’s appeal.

47.  I would therefore set aside §2 of the Order and substitute that with the following:-

“The Plaintiff do pay the costs of the action on or before 25 November 2020 to be taxed if not agreed;”

48.  There will be no change to the rest of the Order.

49.  For the present appeal, I order the costs to be borne by the plaintiff with certificate for counsel, such costs to be taxed if not agreed. The plaintiff’s own costs to be taxed in accordance with the Legal Aid Regulations.