CHAN KWOK KUEN v. ACTIONSPORTS HK LTD formerly known as ACTIONSPORTS INTERNATIONAL LTD

DCEC 183/2013

[2024] HKDC 421

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 183 OF 2013

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DECISION

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1.  The applicant in this case met an accident in the course of his employment on 26 March 2012. With the assistance of the Legal Aid Department, the applicant commenced the EC proceedings on 28 January 2013, represented by assigned solicitors, Messrs B Mak & Co.

2.  In the same year after the EC Application was commenced, the applicant, equally with the assistance of the assigned solicitors of the Legal Aid Department, commenced a parallel PI action on 24 September 2013 under the case number of DCPI 1985/2013.

3.  On 29 January 2014 and 5 September 2014, some forms of without prejudice negotiations conducted yielded no result.  It was not until 15 August 2016, the applicant’s solicitors sent a sanctioned offer to the respondent’s solicitors (pursuant to Order 22, rule 24) offering a sum of $120,000 on top of the advance payment which the applicant has already received, including interest plus costs and disbursement.

4.  The amount of the advance payment that the applicant had received by that stage was in the sum of $24,455.70.  In other words, on the date when the sanctioned offer was made by Messrs B Mak & Co, the total amount that was being offered to the respondent would have been in the sum of $144,455.70.  There was no response from the respondent’s solicitors.

5.  The way this EC case was conducted resulted in the PI proceedings progressed in a much more advanced stage. Hence, this court on 6 March 2018 stayed the EC proceedings pending the determination of the corresponding PI action.

6.  The corresponding PI action proceeded to a fully contested trial when the defendant was still represented by solicitors.  After the trial, the judge on 30 April 2019 handed down a judgment in favour of the plaintiff (the applicant in this case) awarded him damages in a total sum of $462,200.30.  The defendant (the respondent in this case) was found 100% liable to the plaintiff (applicant).

7.  After the judgment award was made by the court, later on 16 September 2019, the judge ordered the defendant (the respondent in this case) to pay costs on an indemnity basis.

8.  After the conclusion of the corresponding PI action, this court on 4 November 2020 granted an award in favour of the applicant by the operation of the doctrine of issue estoppel.  At the time of the hearing, the respondent was not represented and did not appear.

9.  By my order made at the hearing, interlocutory judgment on liability was entered in favour of the applicant and the court went on to assess compensation, granting the applicant compensation in the sum of $125,487.03 together with interest at half judgment rate from 26 March 2012 to the date of the judgment and thereafter at judgment rate until payment.  The court further made a costs order nisi that the costs of the proceedings be paid by the respondent to the applicant, to be taxed if not agreed.

10.  After the making of the award, the applicant’s solicitors applied to vary the costs order by summons on 9 March 2021.  Subsequently, the summons was amended. By the amended summons, the applicant applied to vary paragraph 2 of the judgment order dated 4 November 2020 pursuant to Order 22, rule 24 of the Rules of the District Court, asking this court to order the respondent to pay costs on indemnity basis plus enhanced interest after the expiry of the 28 days of the making of the sanctioned offer on 15 August 2016 that I referred to above.  The trigger date would have been 12 September 2016.

11.  In support of the amended summons, the applicant has filed a number of affirmations.  Some of them are not related to the merits of the application but concerned with a problem arose from the change of the legal status of the respondent.  In a gist, the grounds of the application the applicant relies on are mainly two.  One is the wholly unreasonable conduct of the respondent, and the respondent’s mounting of a false claim against the applicant, the detail of which was already set out in the judgment of the corresponding PI action. The applicant had also detailed some of the respondent’s conduct in the supporting affirmation.

12.  The unreasonable conduct of the respondent was summarized in paragraph 6(iii) of the applicant’s submissions lodged with this court on 5 December 2023: the conduct of the director of the respondent; the various correspondence exchanges between the respondent and the Labour Department; the attacks on the applicant’s character in the respondent’s witness statements; the unreasonable settlement offers; the allegations of abuse of subcontractors; limping, and so on and so forth.  A very detailed narration was also set out in the supporting affirmation.  It is not necessary to repeat them.

13.  The other ground that the applicant relies on in support of the variation application is the sanctioned offer dated 15 August 2016 that I referred to above.

14.  After having considered the evidence being relied on by the applicant in support of the application; and having regard to Order 22, rule 24, I agree with Ms Wong’s submission that this is a case that justifies ordering of indemnity costs against the respondent. The rules and the case law have stated the principle clearly that unless it is unjust to make such an order, indemnity costs should be ordered. The respondent had been given a lot of chances to oppose this application.  However, the respondent totally ignored this application: it filed no evidence in opposition and was absent from all the hearings despite having been served with the application.

15.  In the circumstances, I order costs on indemnity basis in terms of paragraph 1(a) of the amended summons.

16.  Insofar as paragraph 1(b) of the amended summons (which deals with enhanced interest) is concerned, from the case law that Ms Wong has referred to the court at the hearing today: Ng Yuek Lang Sophia v Chiu King Wa [2019] HKDC 1088 (the decision of His Honour Judge Edmond Lee in Chambers dated 13 August 2019), I think it is undisputed (and Ms Wong does not seek to argue the otherwise) that if there is a small margin between the sanctioned offer and the outcome of the judgment, the court should take that factor into account.

17.  Now, this is a case which I believe, is what I call a small-margin case.  The total amount that was offered by the applicant, taken into account the advance payment having been received by the applicant, was $144,455.70.  The court granted an EC award in the sum of $125,487.03 with interest. As set out in Hearing Bundle B, page 1, the judgment sum together with the interest calculated up to the date when the sanctioned offer would have expired (13 September 2016) would have been $147,882.69.

18.  The difference between the judgment award and the amount calculated up to the date when the sanctioned offer could have been accepted was only about $3,000.  The margin is truly very small.

19.  In the circumstances, I would exercise my discretion not to allow the enhanced interest at the rate that was asked for by the applicant, i.e. 10% per annum.  Having regard to such a small margin, I would only allow interest at 1% above the judgment rate.

20.  I therefore order that:-

(1)  Paragraph 2 of the costs order made by this court dated 4 November 2020 be varied to the extent that:-

(a)  On the ground that the respondent has failed to beat the sanctioned offer made by the applicant dated 15 August 2016, the respondent do pay the applicant costs of these proceedings, including all costs reserved, on a party and party basis from 28 January 2013 (the date of the Application) up to 12 September 2016; and thereafter on an indemnity basis to be taxed, if not agreed; and

(b)  The respondent do pay enhanced interest at 1% above judgment rate per annum on the applicant’s costs after 12 September 2016 instead of judgment rate.

(2)  Except costs that have been reserved or disallowed, costs of this application be to the applicant on an indemnity basis; and

(3)  The applicant’s own costs are to be taxed in accordance with the Legal Aid Regulations.