CHENG LAI KWAN v. NAN FUNG TEXTILE LTD

1996, No. PI-175

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(PERSONAL INJURIES)

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JUDGMENT ON COSTS

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1. On 9 December 1997, I gave judgment for the Plaintiff in the sum of $127,000 together with interests on general damages at 2% per annum from the date of the writ and on special damages at 5.84% from the date of the accident with a deduction of three years up to the date of judgment. The Defendant applied to set aside the order nisi for costs to the Plaintiff in the action herein on the ground that there were certain payments into Court in the course of this litigation which lasted for a number of years as stated in the aforesaid main Judgment.

2. Counsel for the Plaintiff, Mr Mak, had usefully set out a Schedule of Payments into Court and I would only add one item in between in italics as follows :

3. It is common ground between the parties that the total sum of judgment debt including interests come up to about $190,000. Mr Mak for the Plaintiff further pointed out that the parties negotiated for settlement after the payment-in of 19 October 1994 which no doubt had by then exceeded the total amount of the judgment debt even including interests up to trial. Eventually, there was an agreement reached to settle the matter at $880,000 as evidenced by the draft consent summons under the cover of the Defendant solicitors' letter dated 16 November 1995. However, the Plaintiff's solicitors did not sign on the consent summons. Instead the settlement was called off or withdrawn. I was told by Mr Mak that it was due to a change in circumstances, namely, the decision of Chan Pui Ki.

4. Thereafter on 22 March 1996 the Defendant filed the statement of Choung Cheuk Sin who was described in my main Judgment as an independent witness. He was a supervisor of Far East Cotton Industry Limited and he said the Plaintiff was gainfully employed on full-time basis as a cotton machine operator between 1 May 1990 to 14 January 1995, or to be exact : one month in 1990; about 2 1/2 months in 1991; but for a long period between 6 April 1992 to 14 January 1995¹. I would not go into detail of his evidence here. The long arm of the law was that the Plaintiff herself claimed employee's compensation during her time of employment with Far East on two occasions. It so happened that the insurers for the employee's compensation is the same insurers in the present action and the insurers then came to know that the Plaintiff had been involved in the other two accidents whilst she was under the employment of Far East. It was accepted by the Court that this clear evidence totally contradicted her version that she was mentally disordered, not capable of engaging in any employment and therefore had lost all her earning capacity.

5. Since the filing of Mr Choung's statement, the Defendant's solicitors then withdrew all the monies paid into Court with leave of the Court on 9 April 1996. However, as evident from the aforesaid Schedule, a sum of $100,000 was paid in on 14 August 1996 and another sum of the same amount was paid into Court on 4 September 1996. The then total amount of $200,000 well exceeded the amount of Judgment debt.

6. Mr Mak submitted that according to the case of Garner v. Cleggs [1983] 1 WLR 862, it was decided that "the payment into court was relevant to the issue of costs only in regard to those costs incurred between the date of payment-in and the date after which the defendants would have been likely to oppose successfully an application by the plaintiff to take the money out of court".

7. It was decided in Garner v. Cleggs that since the defendants had not sought any order limited to such costs in the Court below, it would be wrong for the Court of Appeal to interfere with the Judge's exercise of his discretion as to costs.

8. What happened in the Court below was that Judge Ward disregarded the short period of time of payment-in and withdrawal of the money paid into Court between September 1981 and 13 October 1981. Mr Mak submitted that the Plaintiff could not take out those money paid into Court from 22 March 1996, since the filing of Mr Choung's statements, the Defendant could successfully oppose to any application for leave for payment out to the Plaintiff. Further between the period of 9 April 1996 and 4 September 1996 there was either no money in Court or the same was insufficient after 14 August 1996 up to 4 September 1996, upon which the Plaintiff could "gamble", a word used by both Lawton LJ and Goff LJ in the case of Garner. Thus Mr Mak submitted that between 19 October 1994 and 22 March 1996, the Plaintiff was at risk as to costs but not thereafter until 4 September 1996. Since that date, Mr Mak said the Plaintiff cannot make any submission as to the costs incurred thereafter.

9. Even for the earlier period between 19 October 1994 and 22 March 1996, counsel for the Plaintiff also submitted that the Plaintiff was actually examined by two doctors and they opined to the effect that she was a mental patient incapable of managing and administering her property and affairs. A next friend was then appointed on 12 May 1995. By November 1995, a settlement fell through owing to the case of Chan Pui Ki as aforesaid.

10. However, Mr Mak eventually accepted that when the Court found against the Plaintiff that she was not a mental patient, she was actually malingering and in fact during that period of time she was gainfully employed, it is in my view at best a self-imposed limit of the Plaintiff and the Defendant should not suffer by way of costs during that period of her dishonest malingering.

11. That only disposed of the first period. The main consideration in this case is therefore whether costs should not be awarded in favour of the Defendant for the period between 22 March 1996 and 4 September 1996.

12. Mr Mak relied on the case of Garner v. Cleggs. He cited the passage of the judgment of Lawton LJ at p.870 D-F as follows :

" So I have come to the conclusion that if the judge meant, as I think he must be taken as meaning, that he had to disregard altogether the fact that the payment into court had been made he was wrong. What he should have done was to have paid regard to the fact that from the beginning of September 1981 until October 13, 1981, the plaintiff was taking a gamble, and during that period there may have been some costs incurred which he might have been ordered by the judge to pay, but only for that period, because after that period the plaintiff was not in a position to take a gamble at all, for the reasons I have stated."

He also relied on the passage of the judgment of Goff LJ at p.872 F-G as follows :

" However, the payment into court will, in such circumstances, ordinarily be relevant in respect of costs incurred during the period between the date of payment in and the date when the defendant's notice of payment in is withdrawn by leave of the court- or more accurately, in the circumstances of the present case, the date after which the defendants would have been likely to oppose, and to oppose successfully, an application by the plaintiff to take the money out of court. Of course if the money had been left in court and available to the plaintiff, and had been taken out by him with leave, in satisfaction of his claim, the plaintiff would ordinarily have had to bear the costs incurred by the defendant after the date of payment in."

13. However, to my mind, the case of Garner v. Cleggs is highly distinguishable with the case before me. In the case of Garner, the defendant, Cleggs, being a firm of solicitors, was sued for professional negligence when Garner intended to buy a proprietary club instead of a members' club. The former would entitle him to charge consumption of alcohol at the club premises whereas the latter could not. This was made known to the solicitors, but the junior solicitor who handled the conveyancing failed to note the difference and did not advise Garner accordingly.

14. In October 1981, the solicitors got to know one Mr Talty who had been the plaintiff's vendor, who claimed to be in a position to give them information about the transaction into which the plaintiff had entered. Eventually Mr Talty swore an affidavit to the effect that the plaintiff had known all along that he (Mr Talty) was proposing to sell a members' club. That was the reason why the money paid into Court was, on advice of leading counsel, withdrawn by Cleggs with leave. But on the 6th day of the trial, the defendants admitted their breach of duty to the plaintiff and they would contest only the damage which the plaintiff sustained had not been caused by that breach of duty. They succeeded to reduce the amount of damages to a sum below the amount of a later payment into Court.

15. Here in the case before me, Mr Choung, after his statement was filed on 22 March 1996, was called as a witness before me and his evidence was totally accepted by this Court. Thus, to my mind, the period between 22 March 1996 and 4 September 1996 should be ignored in considering costs. It is because by 19 October 1994, the money in Court was $320,000, which was more than enough for the judgment sum awarded to the Plaintiff. Should the Plaintiff have accepted that amount of money paid into Court, that would have been the end of the matter. Her failure to accept such sum of money would render her liable to all costs incurred by the Defendant thereafter.

16. Thus, even though between the period from 22 March 1996 where the Defendant would be successful in opposing any payment out up to the time of another payment-in on 4 September 1996, it is true that there was no or no sufficient money in Court for the Plaintiff to gamble on or she could not successfully apply for it, it is nonetheless a period of time which should not have occurred should the Plaintiff have accepted the money earlier in the first place.

17. Accordingly my earlier Order nisi on costs for the Plaintiff in the action is set aside. There shall be an order for costs in the action for the Plaintiff only up to 19 October 1994 and thereafter Defendant shall be entitled to costs against the Plaintiff. The Plaintiff's own costs shall be taxed according to the Legal Aid Regulation. Ms Chang for the Defendant wanted to apply for payment out after deduction of any sum due to the Plaintiff subject to the first charge of the DLA. But she was not sure whether there would be any money due to the Plaintiff or the DLA at all after my order of costs herein. Eventually both parties agreed to deal with it by a consent summons if they could agree. If not, they would have to apply to me again.

18. From the limited evidence before me, I think it is also appropriate to consider whether the Plaintiff's solicitors should be ordered to show cause why they should not pay costs personally or any part thereof. This matter is adjourned to a date to be fixed. I am grateful to the assistance of Mr Mak in this case. In particular he has gratuitously accepted the unenviable task to report this matter to the DLA since he cannot represent the Plaintiff anymore in the adjourned hearing. This hearing will only be heard between the Plaintiff herself and her own solicitors who are Mr Mak's instructing solicitors. Each one of them will have to be separately represented. But Mr Mak would be the most appropriate person to report this matter to the DLA. For that I am very grateful.