Pak Sai Ming v. J V Fitness Ltd
Read the full judgment text of DCEC 494/2014 on BabelCite. This District Court judgment was delivered on 10 February 2017.
1. On 17 June 2016, I gave judgment in favour of the Applicant (“A”) by awarding him employee compensation pursuant to ss 9, 10 & 10A of the Employees’ Compensation Ordinance, Cap 282 in the total amount of $751,839.64, such amount was arrived at after giving credit to the advance payment of $557,045.54 already made by the Respondent (“R”). I also made an order nisi giving costs to A (with certificate of counsel), to be taxed if not agreed. The facts and the evidence of the case are as stated i
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DCEC 494/2014 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO 494 OF 2014 _________________________
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_________________________ RULING _________________________ INTRODUCTION 1.On 17 June 2016, I gave judgment in favour of the Applicant (“A”) by awarding him employee compensation pursuant to ss 9, 10 & 10A of the Employees’ Compensation Ordinance, Cap 282 in the total amount of $751,839.64, such amount was arrived at after giving credit to the advance payment of $557,045.54 already made by the Respondent (“R”). I also made an order nisi giving costs to A (with certificate of counsel), to be taxed if not agreed. The facts and the evidence of the case are as stated in the Judgment which I am not going to repeat. 2.By a summons filed on 15 July 2016, R makes two applications, which A opposes, for the following:-
3.I note that R is in the process of winding up with provisional liquidators already appointed and that leave has been granted by the High Court for the present proceedings to continue.[1] ISSUES 4.By the operation of O 42 r 5B(3), Rules of the District Court (Cap 336H) (RDC), the costs order nisi became absolute on 2 July 2016.[2] As such, the present applications of R raise the following issues:-
5.I have studied the affirmations of Mr Au (R’s solicitors) and Mr Mak (A’s solicitors) filed for the present purpose. I grateful for the helpful written submissions filed before the hearing and oral submissions from Mr Clough for A and Mr Maurice Chan for R made at the hearing, all of which I have carefully considered. Furthermore, I have also considered the further written submissions on the issue of functus officio submitted at the request of the court from Mr Chan and Mr Clough filed after the hearing. THE CHRONOLOGY 6.Before going to the issues, it would be convenient for me to set out the chronology of the relevant events as follows:-
CONSIDERATION As to (i): whether the court is functus officio 7.In Andayani v Chan Oi Ling,[6] the Court of Appeal held that once the judge’s order had been drawn up entered or otherwise perfected, the court would be functus officio and had no further jurisdiction over the case. The corollary of this is that it is within the power of the trial judge at any time before the judgment is entered and perfected to alter its terms. 8.In RTX Products Hong Kong Limited v Li Yiu Fai,[7] a case relied upon by both Mr Chan and Mr Clough, Anthony Chan J suggested that if a judgment is perfected before the order nisi becomes absolute, then it may be said that in such a case it is inherent in the judgment that the costs order has yet to become absolute and the door remains open to an affected party to make an application to have it varied, including an application for an extension of time to make the variation application. With respect, I agree with his lordship’s reasoning. 9.In the present case, the Judgment was formally perfected and entered on 20 July 2016. However, by which time R had already filed the summons seeking extension of time and variation. Applying RTX Products Hong Kong Limited v Li Yiu Fai to the present case, I am of the view that it is inherent in the Judgment so entered that R’s summons are yet to be dealt with. Therefore, as far as R’s summons is concerned, the court has not yet been functus officio. As to (ii): costs order nisi has turned absolute 10.As aforesaid, the costs order nisi has turned absolute by operation of law on 2 July 2016. It matters not that it was still described as a costs order nisi in the perfected Judgment: see RTX Products Hong Kong Limited v Li Yiu Fai, ante.[8] 11.Nevertheless, it has been held twice by the Court of Appeal that, by virtue of O 3 r 5, Rules of the High Court[9] and its inherent jurisdiction, even though a costs order nisi has thus become absolute, the court still retains the discretion to grant an extension of time for a party to make an application for variation. It is said that the fact that O 42 r 5B(6) provides for an eventual event, namely, the order nisi becoming absolute is not a basis for excluding the jurisdiction to extent time: see Ma Wan Farming v Chief Executive in Council & Anor;[10] applied in Tang Man Kit & Foo Tak Ching (suing as Managers of Wah Yan Mo Fan Heung) v Hip Hing Timber Company Ltd.[11] 12.I am alive to the submission of Mr Clough that the recent judgment of the Court of Appeal in Poon Ching Man v Lam Hoi Pun[12] seems to have casted some doubt to the correctness of Ma Wan and Tang Man Kit. It was noted that it is not clear from the judgments in Ma Wan and in Tang Man Kit whether the costs order absolute had been perfected. It was also noted that there was no discussion in Ma Wan and the majority’s decision in Tang Man Kit on the implication of the court being functus officio after sealing of the order (if the costs order absolute had been sealed) though Chung J (who would have decided differently in Tang Man Kit but for Ma Wan) adverted to it.[13] 13.However, the present case is factually different from the situation in Poon Ching Man where the costs order nisi in that case had not only become absolute, but had also been perfected and sealed. In the present case the Judgment had not yet been perfected and therefore this court had not yet been functus officio at the time R’s summons for extension of time and variation was filed. Therefore, I consider myself to be bound by Ma Wan and Tang Man Kit so that in the present case this court still have the discretion to grant an extension of time even after the costs order nisi has become absolute. As to (iii): whether extension should be granted 14.In order to succeed on the application for extension of time, R has to show, among other things, that there are justifiable reasons for not making the application within time and that there are merits in changing the order.[14] Besides, the court also needs to consider whether the extension would cause any prejudice to A.[15] Furthermore, as suggested in Poon Ching Man,[16] the extension would involve the setting aside of the order absolute. Viewing in that light, it is at least arguable that the considerations in O 2 r 5, RDC should also be relevant. 15.I have not lost sight of the fact that R’s application for extension of time was about 2 weeks out of time and the delay is not insubstantial. I am alive to the public interest of having finality of the matter. I also take into account that R’s rights were subrogated to Falcon Insurance Company (Hong Kong) Limited (R’s insurer), so that the defence and the present applications are in reality conducted by Falcon in the name of R. I note also that costs are a financial matter within purview of Falcon, so that theoretically speaking it could have decided to make the present applications without consulting R. On the other hand, I take into account the explanation given in the 4th and the 5th affirmations of Mr Au that the issue of costs may have a bearing on the premium of the insurance policy in case of renewal and therefore in term of commercial reality there was a need for Falcon to confer with R before taking out the present applications. Besides, I note that R was in obvious financial difficulties around the time when the Judgment was handed down and some of the responsible persons were then no longer in its employ. There is a ready and reasonable inference, which I draw, that R was not operating its business normally, resulting in difficulties for Falcon to discuss with R about taking out the present applications. 16.I take into account that the provisional liquidators were appointed on 13 July 2016, resulting in an automatic stay after that. This, of course, cannot be used as an excuse for the delay already existed prior to the appointment. However, even if the application for variation had been made within time, realistic speaking the hearing of the present applications would probably not have taken place before the appointment of provisional liquidators. After the appointment, the applications could not be dealt with without leave of the High Court. Therefore, the delay had not caused to real prejudice to A. This is not to say that delay would be condoned whenever there was no prejudice to the receiving party. However, the absence of prejudice is a factor which the court is entitled to take into consideration in the exercise of its discretion. 17.As regards the merits of the application for variation, I note that at the trial there was an appeal by R under s 18 of the Employees Compensation Ordinance against the Certificate of Assessment issued by the Employee’s Compensation (Ordinary Assessment) Board.[17] In the relevant Form 7, A was certified to have suffered a 5% loss of earning capacity and sick leave of 627 days in total. R’s appeal was partly successful in that this court only allowed the certified sick leave between 25 May 2013 and 31 August 2014 (464 days) and disallowed his certified sick leave from 1 September 2014 onwards. [18] Viewing in that light, R had successfully resisted part of the claims of A. As such, there are at least some merits in R’s application for variation. 18.Taking everything into account, I am satisfied that this is a suitable case to grant an extension of time for R to seek a variation of the costs order nisi. As to (iv): whether there should be any variation 19.It is held in Hung Fung Enterprises Holdings Ltd v Agricultural Bank of China,[19]that following Civil Justice Reform, the correct approach was to regard the proposition that costs should follow the event not as a general rule but only to operate in shifting to the unsuccessful party the burden of showing why some different approach should be adopted on the particular facts, the rationale being that a mechanistic adoption of the principle might result in parties incurring unnecessary costs. 20.In Poon Ching Man v Lam Hoi Pun, Lam VP,[20] giving the judgment of the Court of Appeal, stressed that Re Elgindata Ltd (No 2)[21]does not establish that as a matter of law there should be deprivation of costs or separate costs orders for different issues whenever a successful party fails on some issues. It is still a matter of discretion to be exercised by reference to the facts and circumstances of the case in question. 21.As to how a court should exercise its discretion in relation to costs, there are ample case authorities for the proposition that the court is entitled to take into account the fact that the claimant had deliberately exaggerated his claim and the effect of that deliberate exaggeration on the proceedings: see Summers v Fairclough Homes Ltd,[22] cited with approval in Li Ming Tak v Hong Kong Airport Services Ltd.[23] Moreover, the fact that the claimant is able to beat the payment into court by the other side is not conclusive and may not necessarily prevent the court from penalizing the claimant on costs on the ground of his deliberate exaggeration: see Molly v Shell UK Limited;[24] and Painting v University of Oxford.[25] 22.In the present, notwithstanding that A was able to do better than the sanctioned payments made by R,[26] I am satisfied that this is still a proper case to exercise the court’s discretion to reduce A’s awards for costs. In this regard, I note that the trial was heard on 6 August 2015 and 23 to 26 November 2015. No evidence was heard on the first day because of a disclosure issued and then the matter was adjourned by consent. The trial actually commenced on 23 November 2015. There was only one witness from each side – A and Ms Tam (for R). Although A’s examination-in-chief only lasted for about 20 minutes, he remained in the witness box for cross-examination for a total of about two and a half days. On the other hand, Ms Tam’s oral testimony only lasted for about half a day and it was mainly about A’s job duty as a Fitness Manager. 23.In my assessment, had it not been A’s exaggeration, much of court’s time could have been saved. This is because:-
As to (v): Extent of variation 24.Both sides agree that it would not be right for the court to undertake an arithmetic exercise by just looking at how much of the court’s time had been utilized in A’s cross-examination for exposing the exaggeration of his disability and symptoms. 25.It is Mr Chan’s position that A’s award of the costs of the trial should be reduced by 50%. 26.With respect, whilst I agree that A’s award for costs of the trial should be reduced, I do not agree that it should be as much as 50%. After all, he was successful in his claim for loss of earning capacity, most of his claim for medical expenses and part of his claim for sick leave. Moreover, R’s contention that A’s job as Fitness Manager did not involve any physical exertion was not accepted by the court.[28] 27.Looking at the matter in the round, in my ruling the costs awarded to A for the trial (with certificate of counsel) should be reduced by 30%, to be taxed if not agreed. Costs of the present applications 28.In view of the terms of R’s summons, there is no dispute that A should have the costs of the application for extension of time. As regards the application for variation of the costs order nisi, R is successful to a limited extent as stated above. 29.As agreed by counsel, in order to save costs and time the question about the costs of the present applications shall be dealt with on paper. To that end, I direct that both sides are to file written submissions with 14 days from the date of this Judgment.
Mr Neal Clough, instructed by B Mak & Co, for the applicant Mr Maurice Chan and Mr Leon Ho, instructed by Au & Associates, for the respondent [1] See the order made by Harris J on 25.10.2016 in HCCW 209/2016. [2] That was because 1 July 2016 was a public holiday. [3] The Companies (Winging Up and Miscellaneous Provisions) Ordinance, Cap 32, s 186 provides that:
[4] The Summons was taken out during the automatic stay. [5] Although the costs order had turned absolute, it was still described as a “costs order nisi” in the perfected judgment. [6] [2004] 4 HKC 233 [7] HCA 1777/2009 (12.11.2014), at §9. [8] ibid, at §§7-8. [9] Which, for the present purpose, is identical to O 3 r 5, RDC [10] [1998] 2 HKLRD 314, at 316I-J, 317L [11] CACV 137/2002 (8.6.2006), at §§6-11 (per Cheung JA) & §17 (per Yeung JA). [12] [2016] 3 HKLRD 815, at §44 [13] At §28 of that judgment, ante. [14] Tang Man Kit, ante, at §12 [15] Ma Wan, ante, at 317C, where it was said “Whatever consequences [flow] from an extension are consideration for the exercise of discretion.” [16] At §42(g), ante [17] Form 7, dated 12 March 2015 [18] It was also a finding by this court that the statement in Form 7 that A’s prolapsed intervertebral disc was the result of his accidental fall was contrary to the common opinion of the experts and was incorrect: see §34 of the Judgment. [19] [2012] 3 HKLRD 679, at §§100-103 [20] Ante, at §37 [21] [1992] 1 WLR 1207 [22] [2012] 1 WLR 2004 [23] HCPI 860/2009 [24] [2002] PIQR P7, at §18. [25] [2005] 3 Costs LR 394, at §§21 & 22. [26] Mr Clough informed that R had made two sanctioned payments: (a) $102,954.96 on 6.3.2014; and (b) a further $140,000 on 11.12.2014. [27] See for examples §§26, 27, 29, 40, 45, 47, 48, 52, 53, 59, 62 , 65, 74 & 75 of the Judgment [28] See §21 of the Judgment. | |||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under DCEC 494/2014