LEE YUI KAI v. TD CO LTD AND OTHERS

DCEC 111/2015

[2018] HKDC 978

IN THE DSTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 111 OF 2015

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D E C I S I O N

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1.  By the present proceedings the Applicant (“A”) sued the first two respondents (“R1” and “R2”) for employees’ compensation under the Employees’ Compensation Ordinance, Cap 282 (“ECO”). Upon R2 admitting liability in the middle of the trial, the A immediately discontinued against R1. They could agree on many issues save and except who is to pay R1’s costs, and whether A is entitled to recover from R2 his costs of pursing after R1 by a Bullock or Sanderson order.

2.  My decision was reserved. On 31 May 2018 I handed down a written judgment, recording the parties’ agreement on liability, quantum and my adjudication on the question of costs which could not be agreed. As it was my final decision on costs, it was not made in the form of an order nisi.

3.  I do not intend to repeat the background and my reasoning here as the same have been fully set out in my said written decision. I considered neither a Bullock nor Sanderson order appropriate in the circumstances. I made the following orders:

i)  The A do pay R1’s costs of the proceedings, assessed summarily at the agreed amount of $6,000;

ii)  R2 is not liable for A’s costs in pursuing after R1; and

iii)  A’s own costs be taxed in accordance with the    Legal Aid Regulations.

4.  On 6 June 2018, the A took out a summons seeking to re-open, re-hear, re-consider and vary the said costs order under the purported inherent jurisdiction of the District Court. Para 42/1/19 of the Hong Kong Civil Procedure (2018) Vol. 1 was cited in the margin note.

5.  A sought the following orders[1] in substitution of my aforesaid orders:

i)  R2 do pay R1’s costs of the proceedings, assessed summarily in the amount of $6,000;

ii)  R2 do pay the A’s costs in pursuing R1, with     certificate for counsel;

iii)  R2 do pay the A’s costs of hearing on 15 September    2017 with certificate for counsel, inclusive of costs of further written submissions on the “proviso” to section    2(1)(b) of the ECO;

iv)  costs of this application be paid by R2 to the A with     certificate for counsel; and

v)  the A’s own costs be taxed in accordance with the Legal Aid Regulations.

6.  Obviously, Mr Lim on behalf of the A seeks to re-argue an issue which has been argued once and which this Court has ruled against him. It is Mr Lim’s submission that a party is entitled to re-open a case before the order was sealed or otherwise perfected, and on good reasons being shown. He relied on Noga v AG of Federal Republic of Nigeria[2], Stewart v Engel[3] and Sun Jianqiang v Trans-Island Limousine Service Ltd[4].

7.  It is necessary to first deal with the margin note which, presumably, stated the provisions which the A is relying on. Para 42/1/19 of the Hong Kong Civil Procedure (2018) Vol. 1 comprises a number of parts listed under Order 42 r.1 RHC, which concerns the form of judgment. Inthe said paragraph, the editor added a heading of “Mistakes in judgments or orders”. It is not sure which part of para 42/1/19 Mr Lim is relying on but presumably, he is not relying on the first part which deals with typo errors. The rest of para 42/1/19 is repeated below for the purpose of discussion:

“After a judgment or order is passed and entered, it cannot be corrected without an application under O.20 r.11, or otherwise (Blake v Harvey (1885) 29 Ch. D. 827; Armitage v Parsons [1908] 2 K.B. 410). So long as an order has not been sealed a judge or master on the application of a party or on his own initiative has the power to review it (Re Harrison’s Shares, etc, [1955] Ch. 260).

The Court has inherent jurisdiction to alter the record of its order, so as to make it confirm with the order actually pronounced (Ainsworth v Wilding [1896] 1 Ch. 673 at 677). A consent order which had been completed and acted upon was set aside in an action commenced for the purpose on the ground of common mistake Huddersfield Banking Co. v Lister [1895] 2 Ch. 273, CA).

If any party considers that an order not in    accordance with the order as pronounced, he should apply to the court to vary the order as soon as possible so as to    prevent the order from being passed and entered and made   final (Re Swire (1885) 30 Ch. D. 239).”

8.  Obviously Mr Lim is also not saying the orders set out in my said judgment not tallied with the Court’s record. Nor is he driving at any common mistake. The gist of Mr Lim’s submission is that this Court has got the costs order wrong when applying the established principles, and should correct it in order to avoid a costly appeal. In light of Mr Lim’s written submission, I consider the reference stated in the margin note of the summons totally irrelevant and unhelpful.  

9.  Mr Lim submitted that the Court has jurisdiction to reconsider its order before it has been perfected on ground of exceptional circumstances, such as when the mistake is too plain for argument that it would be better the error be corrected without imposing on the parties the need for an appeal. The present decision, he submitted, falls squarely within the ambit.

10.  In Noga (supra), the applicant company, a losing party, claimed that the judge had, in his reserved judgment, misapplied certain rules of evidence and disregarded certain authorities. It asked the judge to reconsider, and basically, to reverse the judgment.

11.  In my view, there is no doubt that the court has jurisdiction, in the interest of justice and upon exceptional circumstances being shown, to re-open an issue which has already been adjudicated on or before the order is sealed. On a fair reading of the submission of Mr Li for R2, he is not seeking to argue otherwise. His challenge is that this Court got the answer correct, and exceptional circumstance has not been shown. If the A would like to challenge it, he should take it to an appeal.

12.  In Noga (supra), Rix LJ explained at [42] the rationale for reconsideration:

“… On the one hand the court is concerned with finality, and the very proper consideration that too wide a discretion would open the floodgates to attempts to ask the court to reconsider its decision in a large number and variety of cases, rather than to take the course of appealing to a higher court. On the other hand, there is a proper concern that courts should not be held by their own decisions in a straitjacket pending the formality of the drawing up an order. … it would be unfortunate if once the words of a judgment were pronounced there were no locus poenitentiae”

13.  However, the learned Judge cautioned that such jurisdiction should only be exercised under exceptional circumstances or when there was strong reason otherwise the appeal system would be destroyed. He stated in [43] of Noga (supra):

“… Clearly, it cannot be in every case that a litigant should be entitled to ask the judge to think again. Therefore, on one ground or another, the case must raise considerations, in the interests of justice, which are out of the ordinary, extraordinary, or exceptional. An exceptional case does not have to be uniquely special. ‘Strong reasons’ is perhaps an acceptable alternative to ‘exceptional circumstances’. It will necessarily be in an exceptional case that strong reasons are shown for reconsideration.”

(Emphasis added)

14.  The learned judge illustrated what was meant by “out of the ordinary, extraordinary, exceptional or strong reason” by referring to certain decisions which he approved in [44] and [45] of Noga (supra). His approach sheds light on how the reconsideration jurisdiction should be exercised:

“[44] ... In every case where an appeal is allowed, the court below has, by definition, got it wrong. The solution is to appeal. What is special, what is exceptional about this case? What are the strong reasons? It is not a case of an ex tempore oral judgment. The judgment here, whatever its defects, has been reserved and is the product of substantial reflection. It is not a case where a new binding precedent has immediately reversed the previous law so as to make a judgment simply unsustainable, …. It is not a case where a judge has of his own motion immediately come to the conclusion that he is wrong, as in … [name of a case], where Jessel MR realised, after giving an oral judgment, that he had not had his attention directed to the crucial article in the company’s articles of incorporation. It is not a case where, even before judgment, a court has realized that it has not had its attention drawn to the critical section in a statute, …, and has itself required a renewed hearing. It is not a case of new evidence, or of amendment. It is not a case of new thoughts. Nor is it a case such as occurred recently in …. There, following the handing down of a judgment on quantum, Arden J received a submission that permission to appeal should be granted because her judgment was inconsistent with a concession of fact that had been made. … In the event, therefore, she was obliged to reconsider her judgment in the light of the concession which had been overlooked. …

[45] If this case is like none of those, what is it then? It is a case where it is said that the judge has got it wrong, on     points which have been argued. The very issue for     reconsideration is in dispute. On behalf of [opposite    party] … submits that I have got it right. I am satisfied that    I have considered Noga’s case and its submissions. …. Mr     Gee complains that I should have mentioned cl 2 as well,     but I am not impressed by that submission. I am also satisfied that I had in mind the leading authorities…. As for     Mr Gee’s analysis, it seems to me that I had it sufficiently   in mind at para…”

(Emphasis added)

15.  Rix LJ considered the reconsideration jurisdiction should only be confined to its very limited scope. In [47], the learned judge had this to say:

“[47] … However, it is in the nature of the legal process that, once judgment has been rendered, analysis thereafter becomes clarified and refined, and citation of authority is applied to the findings made at first instance so as to illustrate that clarification and refinement of analysis of which I speak. But that is the function of the appeal process. In my judgment, to grant this application that I reconsider my judgment would subvert the appeal process itself. In doing so, it would not answer the interest of justice, but would be the antithesis of justice according to law. There are of course cases where an error of fact or law may be too clear for argument. The best test of that is perhaps – but not necessarily – where the judge himself identifies the error which concerns him. In such a case, it is better that the error is corrected without imposing on the parties the need for an appeal. But no parallel to Noga’s application has been cited to me. It is in my judgment wrong for a judge to be treated to an exposition such as would be presented to a court of appeal. If in such circumstances a judge should be tempted to open up reconsideration of his judgment, an appeal would not be avoided, it would be made inevitable. Every case would become subject to an unending process of reconsideration, follows by appeal, both on the issue of reconsideration and on the merits.”

(Emphasis added)  

16.  Stewart (supra) stated that the court has power to reconsider its conclusion on exceptional circumstances being shown. Sun Jianqiang (supra) basically applied Noga (supra). They are basically referring to the same principles. It is therefore not necessary for this Court to go into their details relied on by Mr Lim.

17.  Having the above guiding principles in mind, and after reading the A’s further affirmation and counsel’s submission, I have no hesitation coming to the conclusion what Mr Lim is trying to do here is exactly the same as what the applicant in Noga (supra) had done, and should be rejected. He is simply trying to re-argue the matter, and I do not consider I should reconsider the matter. Neither do I consider there is an obvious mistake made in the decision.

18.  Here, the only issue is whether R2 should bear A’s costs of pursuing after R1. This Court invited written submission to be made, and R1 and counsel of R2 do lodge their respective submissions. An issue was raised on the proviso to section 2 of the ECO which might have an impact on costs. Mr Lim did lodge further submission to assist the Court to whom this Court is most grateful. This Court reserved its decision and handed down the same on 31 May 2018 after consideration. The parties’ argument has been canvassed. Basically this Court considered as a matter of fact, had the employment relation, which was disputed by both R1 and R2 from the outset, been more carefully and thoroughly investigated, they should have found out R1 unlikely to be A’s employer.

19.  It is this Court’s view that R2 had not done any finger pointing against R1. Mr Lim referred this Court to a letter dated 7 March 2017 from R2’s solicitors to the A’s solicitors headed “without prejudice save as to costs” and suggested otherwise. It was only disclosed for the first time in this application. It was noted that R2 was then asserting he merely referring the A to R1 for direct instruction and/or for employment. I accept Mr Li’s submission that on a fair reading, R2 was only stressing his understanding of his role played in the entire matter. Whether the A had become R1’s employee would be entirely a matter between R1 and A. There is no suggestion by R2 that R1 was the employer of A.

20.  As regards the question of law, in light of the proviso to s.2 of the ECO and its s.3, I take the view that the A (or his legal adviser) should have realized R1 unlikely to be A’s employer. It is noted that when Mr Lim lodged his opening submission for trial, he also point out that A cannot be an employee within the meaning of the ECO by reason of the said proviso[5]. That was a question which the A (or his legal advisor) ought to have addressed their mind to prior to or at the early stage of the proceedings. Yet it seems that the matter has escaped their attention.

21.  There is no evidence suggesting the A was put to a difficult election at the time of suing. Nor is there any evidence suggesting the A (or his solicitors) had in fact made enquiry with the respondents as to who should be A’s employer. A’s position, all along, was that both (my emphasis) were his employers. This position was maintained even after A was represented by his present firm of solicitors until after the commencement of trial. Presumably, the A (or his legal adviser) should have got the evidence and has satisfied himself (or themselves) such evidence could substantiate his claim of both being his employers.

22.  This Court applied the well-established principles set out in Besterman v British Motor Cab Co Ltd [1914] 3 KB 181, applied in Fung Chun Man v Hospital Authority [2012] 1 HKC 531 and approved by the Court of Appeal in Chong Ngan Seng v China Harbour Engineering Company Limited & Ors (Unreported) CACV54/2012, 25 September 2013 and came to a decision.

23.  None of the situation referred to in [44] of Noga (supra)[6] was present in this case. In particular, there is no common mistake or any mistake/omission which this court is aware of. The application for reconsideration of the case should be rejected.

24.  Mr Lim’s argument has basically been ventilated once, and the Court was not with him on that occasion. Even if this Court were wrong in coming to its conclusion, in the interest of justice and according to Noga (supra)[7], it is inappropriate for this Court to re-open the decision. The matter should be left to the appeal court.

Disposition

25.  By reason of the above, the A’s said summons is dismissed. Costs of the summons be paid by the A to the R2 on District Court scale, with certificate for counsel, to be taxed if not agreed, and the A’s own costs be taxed in accordance with the Legal Aid Regulations. The aforesaid costs order is an order nisi, which will become absolute if no application to have it varied in 14 days.

26.  In the course of the hearing it was suggested that my costs order as stated in my decision of 31 May 2018 may not be clear enough to cover costs of the hearing on 15 September 2017 and the further written submissions on the “proviso to section 2(1)(b) of the ECO”. In my judgment, the costs incurred after 17 August 2017, i.e. the date where the parties agreed on everything save and except the costs issue in question, are basically incurred for determining whether R2 should pay A’s costs in pursuing R1 and R1’s costs. Since A was unsuccessful, A is not entitled to such costs. Following the usual rule of cost is to follow the event, A should bear R2’s costs for this period. Necessarily, that covers the costs of the hearing on 15 September 2017, and I now so make such order, with A’s own costs to be taxed in accordance with the Legal Aid Regulations.