LEE CHIU YEE BETTINA v. WONG CHUNG SUM

DCCJ24/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 24 OF 2015

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REASONS FOR DECISION

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1.  Both the plaintiff and the defendant by the respective Summons dated 25 August and 26 August 2016, seek to vary the costs order nisi made on 12 August 2016.

2.  At the end of the hearing, I dismissed both applications with no order as to costs. I have reserved reasons for decision which I now give.

The variation sought

3.  Judgment is entered in favor of the plaintiff after trial for the sum of HK$92,776.75 with post-judgment interest only.I made a costs order nisi that the defendant do pay the plaintiff’s costs of the action with certificate for counsel, to be taxed if not agreed.

4.  The plaintiff now seeks to vary the nisi order that the plaintiff’s costs after 1 September 2015 (the day following her sanctioned offer ) should be awarded on an indemnity basis.

5.  The variation sought by the defendant is that he should only be responsible for part of the plaintiff’s costs, say for 50% or a percentage which the Court deems just.

Without prejudice offer

6.  Parties agree that among their various without-prejudice communications and offers before and after the commencement of proceedings, only the plaintiff’s sanctioned offer made on 31 August 2015 (“the Sanctioned Offer”) is of significance and real concern to the present applications.

7.  By the Sanctioned Offer, the plaintiff offered to accept HK$100,000 in full and final settlement of her claim, together with costs of the action to be taxed if not agreed.

8.  The defendant did not respond. Eventually he was held liable for HK$92,776.75 which is less than the Sanctioned Offer by HK$7,223.25.

The plaintiff’s argument

7.                                   The argument advanced by Mr Leung for the plaintiff is two-fold. Firstly, it is submitted that although the plaintiff has not done as good as the Sanctioned Offer, the de minimis rule ought to apply. Mr Leung boldly asserted that while the sum of HK$7,223.25 represents only 7% of the judgment award, it is so minimal and trivial that the Court need not regard or give effect to; and the defendant should still bear the consequence under O 22 r 24 of RDC of having to pay costs on an indemnity basis.

8.                                    This argument is fallacious. Looking at the substance of the matter under the regime of sanctioned offers, the difference between the award and the Sanctioned Offer is crucial and significant. It is absolutely not of trivial trifling or negligible nature as discussed in the distinguishable case of Margaronis Navigation Agency Ltd v Henry W. Peabody & Co. of London Ltd [1965] 2 Q.B. 430.

9.  The wording of O 22 r 24(1)(a) of RDC is clear and direct; one can either succeed or fail in beating the offer.

“(1) This rule applies where –

(a) a defendant is held liable for more than the proposals contained in a plaintiff’s sanctioned offer; or

…….”(emphasis added)

10.  Imagine the situations in which the de minimis rule can apply to the Order 22 regime, arguments on how much of the difference is minimal or trivial will be without ends. As such, the underlying objectives of Order 22 will vanish.

11.  Secondly, Mr Leung asks the Court to take into account the unreasonable conduct of the defendant before and during the proceedings, and to exercise its discretion to grant costs on an indemnity basis.

12.  It is asserted that the defendant never made any gesture or had any intention to settle. Due to his uncooperative behavior, all the attempts to reach an amicable settlement including without prejudice meeting, mediation and written offers ended up in vain. Further, the defendant acted unreasonably at trial; he lied and his evidence was regarded as incredible and unreliable.

13.  I realize the plaintiff has always regarded the defendant as insufferably arrogant and is upset by his attitude which she finds overbearing. Be that as it may, it is still unfair to say the defendant never made any gesture or had any intention to settle. This accusation simply goes against the facts.

14.  It was the defendant who initiated the without-prejudice meeting. It turned out unfruitful, but the defendant did subsequently participate in the mediation. After mediation failed, it was the defendant who first came up with a without-prejudice offer by the letter dated 15 July 2015. It is noteworthy that by her solicitors’ letter dated 20 July 2015, the plaintiff has acknowledged the said without-prejudice offer to be a good gesture on the part of the defendant.

15.  It takes two to untangle; the defendant ought not be blamed for the parties’ failure to reach a settlement.

16.  Further, the mere fact that I rejected the defendant’s evidence does not warrant a penalty of indemnity costs against him.

The defendant’s argument

17.  While the plaintiff’s claim is premised on strict liability under the scienter rule and/or negligence, she only succeeded on establishing negligence. Mr Lai for the defendant submitted that substantial time is wasted on evidence regarding aprevious attack by the defendant’s dog which is only relevant to the failed claim. Further, the plaintiff failed in some items of claim, namely costs of purchasing the dogs and loss of earning.

18.  I disagree that evidence regarding the previous attack is only relevant to the failed claim; not only that it applies to the successful claim, it actually provides the factual basis for my finding of negligence. Further, the issue of scienter is not separate or distinct in itself; and it is not unreasonable for the plaintiff to raise it as a further or alternative claim based on the same set of facts.

19.  As regards evidence on costs of purchasing the dogs and loss of earning, it has not caused any significant increase in the length and costs of the proceedings.

20.  Therefore, the plaintiff as the winning party is entitled to bulk of the costs notwithstanding that she has not succeeded in full. See: Ma Wah Yan & Anor v Dharma Realm Buddhist Association, Inc. & Ors [2016] HCA 1192/2007 (6 October 2016); Commissioner of Inland Revenue v HIT Finance Ltd [2014] 4 HKLRD 412.

Conclusion

21.  For the reasons above, I have dismissed both applications.