MOMIN LOK v. HOSPITAL AUTHORITY

CACV 236/2020

[2021] HKCA 1319

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 236 OF 2020

(ON APPEAL FROM HCPI NO 981 OF 2014)

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JUDGMENT ON COSTS

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Hon G Lam JA (giving the Judgment on Costs of the Court):

1.  By our Judgment handed down on 26 July 2021: [2021] HKCA 1075, we set aside the judge’s judgment on preliminary issue whereby it was adjudged that the writ was issued within 3 years from the date of the plaintiff’s knowledge as provided under section 27(4)  of the Limitation Ordinance (Cap 347). We held instead that the writ was issued more than 3 years from the date of such knowledge, but in exercise of the discretionary power under section 30 of the Ordinance we made an order that the provisions of section 27 shall not apply to the action.

2.  This is our judgment on costs based on the written submissions since received from the parties.

3.  In the court below, the judge ordered the defendant to pay the plaintiff the costs of the trial of the preliminary issue (except part of the costs of the hearing on 18 May 2018 which was to be paid by the plaintiff to the defendant)  and ordered the plaintiff to pay the defendant the costs of certain interlocutory matters, for the reasons given in his decision on costs dated 31 July 2020: [2020] HKCFI 1840.

4.  The plaintiff’s position is that the judge’s costs order should stand, and that the costs of the appeal should be awarded to the plaintiff.  It is submitted that to achieve the goal of defeating the plaintiff’s action, the defendant needed to succeed on both the date of knowledge issue and the discretion issue, and that this Court’s Judgment represents a complete failure for the defendant.  Reliance is placed on Estate of Mohammed Mossa v Wise [2017] 5 Costs LR 927, where based on a similar outcome Yip J of the English High Court affirmed the Master’s decision to award the claimant all the costs as the overall winner, taking the view that the date of knowledge issue could not be described as “truly discrete”.  The plaintiff submits that the evidence on the acquisition of knowledge was also relevant to understanding the reasons for the delay in bringing the claim, and that the two issues are inter-connected which renders the case inappropriate for an issue-based costs order.  Had the defendant appreciated that it would be eminently open to the court to exercise its discretion under section 30, it could have conceded the discretion issue and no preliminary contest on limitation would have been necessary.

5.  The defendant, in contrast, submits that the court should pursuant to Order 62 rule 5(1)(f)  of the Rules of the High Court (Cap 4A)  take into account the fact that the plaintiff has lost on the date of knowledge issue, and make an issue-based order as to costs.  The plaintiff ran the date of knowledge point as her primary case on limitation, with the discretionary ground as a fall-back.  Had she run only the discretion point, the legal argument on the authorities as to knowledge which caused a significant increase in the length and costs of the proceedings would have been unnecessary.  This is not a case in which the defendant could reasonably concede the discretion point given, inter alia, that the plaintiff had brought a claim in the District Court against the defendant in July 2011 and discontinued it in July 2013 and also had an extant action against her former solicitors in respect of their conduct of that action.

6.  The defendant accepts that much of the oral evidence at the hearing below as to the facts of the plaintiff’s delay was also relevant to the date of her knowledge, but submits that her date of knowledge raised a distinct legal issue which took up most of the time and written work of counsel and the courts.  It is submitted that the fair order would be for the defendant to pay one-third of the plaintiff’s costs on appeal and below and for the plaintiff to pay two-thirds of the defendant’s costs, with an order for set-off or a proportional order accordingly.  At least, the defendant should be relieved from paying the plaintiff’s costs on the date of knowledge issue. Reliance is placed on Pigot v The Environment Agency [2020] Costs LR 825 where the principles for making issue-based costs orders having regard to rule 44.2(4)(b)  of the (English)  Civil Procedure Rules were set out.

7.  In reply the plaintiff says that when her summons was first issued below on 24 March 2016 it contained only an application under section 30, and that at the directions hearing on 27 September 2016 the judge himself urged the plaintiff to plead that the limitation period had not expired because the plaintiff only acquired knowledge less than three years before the writ.  Consequently the plaintiff’s summons was amended on 20 June 2017 to seek in addition a finding that the writ was issued within three years of the plaintiff’s date of knowledge pursuant to section 27(4)(b).  Having succeeded on the date of knowledge issue below, it would be unrealistic to expect the plaintiff to concede that point in the Court of Appeal and rely only on the discretion issue.  It is also submitted that the hearings before the judge on 17-18 May 2018 and 26 September 2019 only dealt with evidence and facts rather than legal submissions.

8.  Having read the transcript of the directions hearing on 27 September 2016, when the court simply had before it the plaintiff’s summons taken out under section 30 and some affidavit evidence, it appears to us that the judge was simply, at a very early stage of the proceedings, asking that the parties put their case in pleadings so that the court did not have to rule on limitation in a vacuum.  The judge made clear that he was not telling the plaintiff what she should plead, and specifically said to the plaintiff’s solicitor: “I’m not asking you to do it that way.  If your case and your instructions are she did have knowledge, you cannot plead that she had no knowledge”.[1]  The direction as drawn up was that plaintiff do serve a statement of claim pleading “if so advised” that the limitation period did not apply as the plaintiff did not have knowledge and/or to seek relief under section 30, setting out or facts and matters relied upon.  It seems to us that the plaintiff must take responsibility for the conduct of her own case.

9.  That said, the plaintiff cannot in our view be said to have acted unreasonably or improperly in raising the date of knowledge issue.  After all she prevailed on that issue before the judge.  That however is not the end of the inquiry.  As pointed out in Zhuhai International Container Terminals (Jiuzhou)  Ltd v Lo Tong Hoi & another (CACV 181/2011, 31 July 2012)  at §33, it is not necessary to establish that a successful party has acted unreasonably or improperly in raising an issue for it to be deprived of the whole or part of its costs.  It is sufficient if a failed issue raised by the successful party has caused a significant increase in the length or costs of the proceedings. That approach provides an “incentive to conduct litigation in a responsible way and be selective as to the issues raised”.

10.  On the other hand, we bear in mind that an issue-based costs order must not be so readily made as to undermine the utility of the general rule that costs follow the event and to lead to the proliferation of unwarranted costs disputes.  The question of costs is one that ultimately depends heavily on the facts and circumstances of each case.  As Bokhary PJ, giving the judgment on costs of the Court of Final Appeal in Commissioner of Inland Revenue v Hongkong International Terminals Ltd [2014] 4 HKLRD 412, stated:

“ There is a discretion in the court to deprive a successful party of the whole or part of his costs because he had caused a significant increase in the length or costs of the proceedings by raising issues on which he did not succeed. That can be done even if it was not unreasonable to have raised those issues. Whether or not it should be done depends on all the circumstances. This discretion exists for the purpose of avoiding the rigour of too inflexible an application of the rule that costs generally follow the event. It is to be approached with due circumspection so as not to undermine the utility of that general rule.”

11.  In the present case, the date of knowledge issue is in our view a discrete issue.  The legal and factual arguments on that issue are quite different and separate from those on the discretion issue.  They are conceptually wholly distinct.  The resultant orders are also different, as can be seen from the fact that we set aside the judge’s adjudication that the writ was issued within 3 years from the date of the plaintiff’s knowledge and substituted an order that the provisions of section 27 shall not apply to the action, although both orders would have the effect of allowing the action to continue.

12.  Whilst, as accepted by the defendant, much of the evidence on the date of the plaintiff’s knowledge was also relevant to the facts relating to the delay, we are satisfied that the date of knowledge issue had led to a significant increase in the costs of the proceedings.  It would be just to reflect the failure of the plaintiff on that issue by depriving her of part of her costs.  Fixing the proportion in these circumstances is necessarily to be done by a very broad brush.  We do not agree with the defendant’s suggestion that the relative length of the relevant parts of the judgments can serve as a proxy for the time and costs spent by the parties.  Doing the best we can and looking at the matter in the round, it seems to us to be a fair order to require the defendant to pay 75% of the plaintiff’s costs here and below. 

13.  For the avoidance of doubt, this means, as regards the costs below, that paragraph 1 of the judge’s costs order dated 31 July 2020 is varied to:

“ The defendant do pay to the plaintiff 75% of the costs of the trial of the preliminary issue, including the costs of the limitation summons, including the reserved costs of the 16 and 19 May 2017, the 17 and 18 May 2018 and the costs of the 18 March 2019, SAVE THAT the costs of the hearing on the 18 May 2018 from 2:30pm to 3:56pm be paid by the plaintiff to the defendant, all to be taxed if not agreed.”

and that the other paragraphs of that order are not affected.

14.  The costs of the submissions on costs are to be treated as part of the costs of the appeal.  The plaintiff’s own costs be taxed pursuant to the Legal Aid Regulations (Cap 91A).