ATIQ UR REHMAN on his own behalf and on behalf of the dependants of SAIF UR REHMAN otherwise known as MOHAMMAD SHEHZAD, deceased v. PAUL Y. - SELI JOINT VENTURE

DCEC 30/2001

[2020] HKDC 987

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 30 OF 2001

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DECISION

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A. Application for variation of a nisi order

1.  This is an application by the Applicant to vary a nisi order this court made on 8 April 2020 (Nisi Order) in relation to a summons (Summons) the Director of Legal Aid (Director) filed on 5 July 2019.

2.  After the Applicant was served with the Nisi Order on 28 April 2020, the Applicant, one day before the 14-day’s deadline this court stipulated for the filing of an application for variation, filed on 11 May 2020, a document entitled “Opposition against the decision” with a number of attachments.  As the Director had not been served with these documents, he only knew about them on 20 May 2020, when this court gave directions to the parties.  Since the Director later obtained a copy of the document and its attachments, and had also been granted the right to reply to them, I believe that there is no prejudice caused to the Director by this court treating the said document as the Applicant’s application for variation, and the attachments as documents in support of the application, and I so order.  (For convenience, the said document together with its attachments will be referred to as the Applicant’s “Variation Application”).

3.  The Senior Legal Aid Counsel for the Director, Ms Fanny Lo, altogether filed three affirmations: a supporting affirmation (Supporting Affirmation) filed together with the Summons, a supplemental affirmation filed on 21 January 2020 (Supplemental Affirmation), and a third affirmation filed on 29 May 2020 (Third Affirmation) in opposition to the Variation Application.

4.  The Applicant on 12 June 2020, filed a further document entitled “Replication on behalf of Applicant ATIQ-UR-REHMAN in response to the reply dated 29.05.2020 by Lo Choi Lin Fanny” in reply to the Third Affirmation.

5.  Since the Applicant is currently residing in Pakistan and is unable to come to Hong Kong to attend a hearing, I directed paper disposal of the Variation Application.

B. The Summons

6.  Pursuant to O 22A, r 1 and 2[1] of the Rules of the District Court (Cap 336H)[2], the Director applies for “payment out of all compensation and interest held in Court according to the Order dated 13 November 2008 (amended on 17 September 2010) to the Director under the Director’s First Charge”.

7.  Until the discharge of the Legal Aid Certificates on 24 January 2019, the Applicant was granted Legal Aid with nil contribution in these proceedings, and in a subsequent appeal, CACV 52/2007 (CACV 52/2007), by Parveen Tahira (Unsuccessful Claimant) in a parallel employees’ compensation claim (DCEC 493/2000) (Unsuccessful Claim).

8.  The “compensation and interest held in Court” stated in the Summons was (as will be further discussed in Section C below) paid by the Respondent, and, as at 20 May 2019, was in the sum of $2,254,102.00 (Money Held In Court)^[3].  The amount of unpaid taxed costs against the Applicant’s legal-aid account, on the date of the Supporting Affirmation, was in the sum of $2,289,895.84 (Unpaid Costs).

9.  The “Director’s First Charge” stated in the Summons refers to the Money Held In Court.  Based on s 18A(1)(b) of the Legal Aid Ordinance (Cap 91)^[4], which provides for a charge on property recovered on an aided person’s account for a sum equal to the deficiency of any unpaid net liability of the Director, the Money Held In Court is therefore property recovered in these proceedings, and is subject to “a first charge for the benefit of the Director”^[5].

10.  It cannot be disputed that the Money Held In Court is “Money remaining in court” within the meaning of O 22A.  Since the Applicant was an aided person within the meaning of O 22A r 2(1), any payment of the Money Held In Court, according to O 22A r 2(1) “shall be made only to the Director of Legal Aid without the need for any authority from the party”.

11.  According to these undisputed facts and law, I therefore granted, by way of the Nisi Order, an order in terms of the Summons when the adjourned hearing on 31 March 2020 could not be held due to the Covid-19 pandemic.

C. Unpaid Costs

C.1 Costs of the Unsuccessful Claim

12.  The genesis of the Unpaid Costs originates from the commencement of these proceedings on 11 January 2001 by the Applicant (through the Legal Aid assigned solicitors the Applicant nominated, Messrs Ng, Lie, Lai & Chan) to claim employees’ compensation on his own behalf and on behalf of the dependents of the Applicant’s brother, Saif-Ur-Rehman otherwise known as Mohammad Shehzad (“Deceased”), who met a fatal accident on 13 December 1999.

13.  These proceedings however were adversely complicated by the Unsuccessful Claim originally instituted on 3 June 2000 by Mohammad Hanif, the alleged father of the Deceased.  Mohammad Hanif was later substituted by the Unsuccessful Claimant, his alleged daughter.

14.  After the trial of these proceedings and the Unsuccessful Claim, a Deputy Judge, on 5 July 2006, dismissed the Unsuccessful Claim and made an indemnity costs order against the Unsuccessful Claimant in favour of the Applicant.

15.  Pursuant to an Allocatur dated 13 February 2012, the taxed costs of the Applicant against the Unsuccessful Claimant was in the sum of $1,991,448.16 and the common fund costs were in the sum of $75,398.00.  The Director had paid these costs to the Applicant’s assigned Legal Aid solicitors, Messrs Burke & Co (Burke) under the said Allocatur.

16.  The Unsuccessful Claimant is liable to pay the two sums of costs stated in the preceding paragraph, but so far no payment has been made.  According to the inquiries made by Burke, the Unsuccessful Claimant had left Hong Kong before July 2006 with no known asset.  As a result, no enforcement action has been taken.

17.  In addition to the two sums of unpaid costs stated in §15 above, there were two further sums of unpaid costs as costs lost to the Respondent, namely $49,600 and $700.^[6]  The Director has paid these costs on behalf of the Applicant.  Thus, the total amount of unpaid costs the Director has paid on behalf of the Applicant in these proceedings is therefore $2,117,146.16.

18.  The Applicant was awarded compensation in the total sum of $1,528,800.  On 3 August 2006, the Respondent paid into Court a sum of $2,000,907, representing the compensation and interest.  The Applicant’s party and party costs and disbursements against the Respondent were agreed in lieu of taxation.

C.2 Costs of CACV 52/2007

19.  Legal Aid was granted to the Applicant to oppose the appeal instituted by the Unsuccessful Claimant.  On 22 February 2008, the Unsuccessful Claimant’s application for leave to appeal to the Court of Final Appeal was dismissed with costs to the Applicant.

20.  The net amount of costs paid by the Director in CACV 52/2007 on behalf of the Applicant is $272,744.68 with the breakdown as follows:-

(a)	Applicant’s party and party taxed costs	$392,489.68
(b)	Applicant’s taxed common fund costs[7]	$10,561.00
(c)	Costs for applying payment out of security of costs	$10,495.00
(d)	Refund of taxing fee	(-) $15,801.00
(e)	Receipt of security for costs ordered to be paid by the Unsuccessful Claimant from High Court	(-) $125,000.00
	The net amount of costs paid by the Director:-	$272,744.68

21.  For the same reason as stated in §16 above, the Applicant has failed to recover these costs from the Unsuccessful Claimant.

C.3 The net liability

22.  On 13 November 2008, an order of apportionment of the compensation among the dependents of these proceedings was made.  The court apportioned the employees’ compensation among 7 dependents of the Deceased in equal shares.  Apart from a sum of $99,995 (i.e. $14,285 x 7 = $99,995) the court ordered to be paid out from the share of each of the dependents through the Director, the balances of the shares of the compensation in favour of 5 dependents were ordered to remain in court until further order, and those of the 2 minor dependents were ordered to be invested by the Registrar.  The minor dependents are now of full age.

23.  As discussed above, the total amount of costs the Director had paid (without taking into account the Applicant’s liability for costs paid to the Secretary of Justice in the sum of $9,330[8]) in these proceedings and CACV 52/2007 at the date of the Supporting Affirmation is $2,289,895.84 (i.e. $2,117,146.16 + $272,744.68 - $99,995 being compensation received from District Court). 

24.  Since the Money Held In Court was $2,254,102.00 (see §8 above), less than the Unpaid Costs of $2,289,895.84 (see §8 and §23 above), there is a deficiency on the aided Applicant’s account.  The Money Held In Court is subject to the Director’s first charge.

D. Discussion

25.  The reasons for the Variation Application are mainly:

26.  Firstly, the conduct of his assigned solicitors, Burke.  It is alleged that Burke had “deliberately and purposefully did not recover the costs from the Respondents as ordered by [the] Court and to take easy meal they have filed the applications along with the bogus professional charges, tailor-made certificates specifically prepared by the law firm of the wife of [Burke] which is not only unjust but the same is illegal and against the norms of fairness and impartiality”^[9].

27.  Since the Respondent had satisfied the costs of the proceedings, I believe that the “Respondents” the Applicant referred to in the above quoted passage was meant to be the Unsuccessful Claimant.

28.  Secondly, it is alleged that the Applicant and the Deceased’s dependents to whom compensation was awarded suffer financial hardship.  The Applicant stated that due to the long period of time the proceedings have taken to recover compensation, not only has his health and financial condition been adversely affected, but also the Deceased’s dependents were forced “to lead a below average life-style”^[10].

29.  Thirdly, the Director, acting through Ms Lo, has allegedly connived with Burke to charge the latter’s costs on the Applicant’s account.  The Applicant alleged that the amount of the Director’s First Charge of $2,289,895.84 was “purposefully worked out” to exceed the amount of the Money Held In Court.  The Applicant therefore submitted that were the Summons allowed, the Applicant and the dependents would receive nil compensation, and be made to further pay the remaining fees to the Director out of their own pockets.

30.  Fourthly, the Director failed to make material disclosure including the failure to make an effort to recover the costs from the Unsuccessful Claimant.  It was suggested that the master-mind behind the Unsuccessful Claim was a Mr Tariq (the brother of the Unsuccessful Claimant) who is still living in Hong Kong.  The Applicant referred to an email from the previous assigned solicitor, Mr Carey dated 14 January 2011^[11], in which he suggested that the Unsuccessful Claim might have been financed by, apart from Mr Tariq , also Messrs Quan & Co and their clerk, a Mr Butt.  The Applicant stated that these parties were present in Hong Kong but the Director made no effort to recover the outstanding costs owed by the Unsuccessful Claimant.

31.  The Applicant therefore submitted that the Nisi Order was obtained by fraud and misrepresentation and it should be set aside, and that the compensation kept in court should not be released to the Director.  The Applicant further asked this court to direct the Director to recover the costs from the Unsuccessful Claimant.

32.  I have carefully considered the Applicant’s supporting reasons, and have great sympathy for the plight the Applicant and the Deceased’s dependents are subject to.  It is trite however that the Money Held In Court is subject to the Director’s first charge.  This court is statutorily obliged by O 22A to direct the payment of the Money Held In Court to the Director.  The Applicant will need to, once the payment out of the Money Held In Court is made, apply to the Director for the recovery of the Money Held In Court, and to, if necessary, instruct the Director to recover the portion of unpaid costs the Unsuccessful Claimant is liable to pay to the Applicant (through the Director).

33.  For these reasons, the Variation Application is dismissed with no order as to costs (as agreed by Ms Lo).

34.  I direct the Director to serve a copy of this Decision on the Applicant on the same date of the handing down of this Decision by email, the same mode this court has ordered.