KWAN SIU WA BECKY v. CATHAY PACIFIC AIRWAYS LTD

CACV 92/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 92 OF 2010

(ON APPEAL FROM HCLA NOS. 3, 4, 5, 7, 8 & 9 OF 2009)

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DECISION

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Hon Tang Ag CJHC:

1.  The details can be found in our judgment of 17 March 2011 and I will not repeat them.

2.  In the Labour Tribunal, the appellant succeeded in relation to “Line Duty Allowance” (“LDA”), “Ground Duty Allowance” (“GDA”) and “Duty Free Sales Commission” (“DFSC”) but failed on “Outport Allowance” (“OA”).  The Deputy Presiding Officer also held in favour of Ms Jenny Ho that she had not received any holiday pay at all.

3.  On appeal and cross-appeal to Stone J, the learned judge found in favour of Cathay Pacific Airways Limited (“CPA”) and against the appellants on every issue.  There were two days of hearing.

4.  On appeal to us, essentially, we have restored the decision of the Labour Tribunal.  The appeal had only taken one day.  We have also made an order nisi that the appellants should have 60% of the costs of the appeal and at first instance.

5.  CPA applies to vary the order nisi.  Mr Coleman SC, for CPA submits that there should be no order as to costs both here and below.  He makes the point, correctly in my view, that more time was spent at the hearing on OA than on the other issues.

6.  What Nourse LJ said at page 1214 in Re Elgindata Ltd (No 2) [1992] 1 WLR 1207, in the English Court of Appeal, is often cited in the present circumstances.

7.  Nourse LJ said:

“The principles are these (i) Costs are in the discretion of the court. (ii) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made. (iii) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs. (iv) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party’s costs.”

8.  That is also the approach of this Court.  See La Chemise Lacoste SA v Crocodile Garments Ltd [2000] 4 HKC 317.  But even so, as Rogers VP explained (at 327E):

“The questions relating to costs are very much matters of discretion in the hands of the judge making the order. …”

9.  I also note what Lam J said in Hong Kong Kam Lan Koon Ltd v. Realray Investment Ltd (No 4) [2005] 4 HKC 162 at 166:

“13. I also bear in mind what was said at para.24 of the judgment of Lord Carswell in Seepersad v Persad [2004] UKPC 19,

‘The general rule which should be observed unless there is sufficient reason to the contrary is that costs will follow the event. Where the party who has been successful overall has failed on one or more issues, particularly where consideration of those issues has occupied a material amount of hearing time or otherwise led to the incurring of significant expense, the court may in its discretion order a reduction in the award of costs to him, either by a separate assessment of costs attributable to that issue or, as is now preferred, making a percentage reduction in the award of costs … The Court of Appeal’s order was predicated upon the proposition that the assessment of damages for pain and suffering and loss of amenity was a separate issue from the assessment of the other heads of damage. This was an incorrect assumption. An issue for these purposes must be something so distinct and separate in itself that the decision of it constitutes as (sic) “event”. The “event” was the quantum of damages to which the appellant was entitled and he succeeded on his appeal in obtaining a higher award than the judge had given … Their Lordships accordingly consider that the Court of Appeal had insufficient ground for reducing the award of costs made to the appellant and that he should have been awarded full costs in that court …’ (my emphasis)

14. One therefore starts with the premise that a successful party is prima facie entitled to the full costs of the action. The burden is on the losing party to show that there is good reason to depart from the general rule. The exercise is a matter of discretion. It would be wrong to read Elgindata as laying down that as a rule, the court must (instead of may) deprive a successful litigant of costs for his failure on a discrete issue which caused a significant increase in costs. The court has to exercise its discretion to achieve a just result having regard to the circumstances of the case.”

10.  It is unnecessary for me to say whether OA should be regarded as a distinct “event” for the present purpose.

11.  The court is entitled to take a global view of the matter.  We can also take into account how counsel’s fees are normally structured.  If the appeal had been confined to the issues on which the appellants have succeeded, it is doubtful whether it would have made any or any substantial difference to counsel’s fees.

12.  So far as solicitor’s fees are concerned, since they are time-based, it should not be difficult to segregate the fees attributable to OA.

13.  In two recent appeals, Oriental Daily Publisher Ltd and Anor v. Ming Pao Holdings Ltd and Ors, CACV 139/2010 (unreported, 15 April 2011, Tang Ag CJHC, Le Pichon and Cheung JJA); Ansar Mohammad v. Global Legend Transportation Ltd, CACV 162/2010 (unreported, 24 March 2011, Tang Ag. CJHC, Le Pichon and Cheung JJA), where the appellants succeeded on quantum but failed on liability this Court made orders nisi that the appellants should have the costs of the appeal.  They were, of course, only orders nisi and are liable to be changed on application, however, they illustrate that costs are very much in the discretion of the court.  Also, that very often it is the bottom line which is the critical event on appeal.

14.  In this case, I believe an order that CPA should pay 60% of costs of the appellant both here and below is right, although the appellants might well think that they should be given all their costs.  In all the circumstances, that is the fair order to make in this case.

15.  I would therefore make the cost order nisi absolute.

Hon Le Pichon JA:

16.  I agree with the judgment of Tang Ag CJHC.

Hon Cheung JA:

17.  I agree.

Hon Tang Ag CJHC:

18.  The costs order is made absolute.  The appellants to have the costs of this application.