Rukhsar Begum v. Native English Center Ltd t/a The Green Lounge
Read the full judgment text of DCEC 867/2015 on BabelCite. This District Court judgment was delivered on 20 July 2017.
1. On 3 April 2017, I handed down a judgment (“ Judgment ”) of these parallel proceedings that were abbreviated as the EC and the PI Actions. By the Judgment, I awarded in favour of Ms Begum compensation and damages that I respectively assessed under the EC and the PI Actions. I further, at paras 127 and 130 of the Judgment, made the following costs orders nisi respectively for the EC Action and the PI Action, and directed at para 131 taxation of these costs and for Ms Begum’s own costs be taxed
Cited by 5 cases · Cites 1 case
|
DCEC 867/2015 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO 867 OF 2015 -------------------------
------------------------- DCPI 2243/2015 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION PERSONAL INJURIES ACTION NO 2243 OF 2015 -------------------------
-------------------------
------------------------- D E C I S I O N ------------------------- A. INTRODUCTION 1.On 3 April 2017, I handed down a judgment (“Judgment”) of these parallel proceedings that were abbreviated as the EC and the PI Actions. By the Judgment, I awarded in favour of Ms Begum compensation and damages that I respectively assessed under the EC and the PI Actions. I further, at paras 127 and 130 of the Judgment, made the following costs orders nisi respectively for the EC Action and the PI Action, and directed at para 131 taxation of these costs and for Ms Begum’s own costs be taxed in accordance with the Legal Aid Regulations.
2.By summons filed on 24 May 2017, Ms Begum applied for variation of these costs orders nisi in relation to paras 127(1) and 130(1) of the Judgment, and for an order for the payment of costs under the EC Action for:
3.It was not immediately clear from the aforesaid contents of the summons as to the aspect and the extent of Ms Begum’s variation application. Mr Burke, the same legally-aided assigned solicitor who has represented Ms Begum throughout the proceedings, informed me at the hearing that the variation sought was only for the setting aside of the orders directing the 50 percent split of the costs between the EC and PI Actions in paras 127(1) and 130(1) of the Judgment but was not concerned with the remaining parts of the orders under para 127 (sub-paras (2) and (3)) and para 130 (sub-paras (2), (3) and (4)). 4.The costs orders that are subject to the 50 percent split in para 127(1) and para 130(1) are concerned with three duplicated items of costs for both Actions, and they essentially form the substantial parts of the costs of the entire proceedings. These three items of costs are: -
5.For convenience, I will refer to the relevant parts of the costs orders in para 127(1) and para 130(1) that are the subject matter of this application for variation as “split costs orders”. 6.In this decision, I shall, unless otherwise stated, adopt the same nomenclature used in the Judgment. B. APPLICABLE LEGAL PRINCIPLES 7.The legal principles governing a court’s exercise of discretion on costs are trite. It may be convenient to set them out below by quoting from a judgment[1] by a Deputy District Judge also involving parallel personal injuries and employees’ compensation proceedings on an application for variation of a costs order nisi which Mr Burke referred to in his affidavit in support of the summons as follows:
C. GROUNDS OF THE APPLICATION 8.In support of the summons for variation, Mr Burke, on behalf of Ms Begum, advanced three grounds in his supporting affidavit. C.1 The split costs orders will be financially detrimental to Ms Begum 9.The first and the main ground is that the split costs orders will likely have a detrimental effect on the amount of compensation and damages Ms Begum may receive. Ms Begum, Mr Burke stated, as an aided person pursuant to two Legal Aid Certificates issued to her for pursuing the PI and EC Actions with “Nil” contribution, would potentially be subject to the first charge of the Director of Legal Aid (“Director”) under s.18A(1) of the Legal Aid Ordinance (Cap. 91) (“LAO”) for any common fund costs which the latter may deduct from the amount of compensation/damages Ms Begum may recover. 10.It is understood that the alleged detriment is dependent upon the happening of two sequential eventualities: -
11.In the event of Eventuality (B), Ms Begum however would not, Mr Burke added, be paid her costs of the PI Action by the Fund Board due to a statutory provision (s.20B(3)[2]) in ECAO that expressly excludes payment for costs arising from, among other things, personal injuries proceedings. 12.In those circumstances, Ms Begum’s unpaid costs of the PI Action would be debited as her common fund costs, and be deducted by the Director from the amount of compensation/damages she obtained. 13.Mr Burke further deposed in his supporting affidavit that given that fact that the Employer did not seem to have any assets and that there was no valid insurance, there is high chance of Eventuality (A) happening. Eventuality (B) will next need to be engaged. In such case, it is likely that the costs of the PI Action that comprise substantially the 50 percent duplicated costs of the entire related proceedings will become unsatisfied. Thus, the amount of Ms Begum’s compensation/damages will be diminished by the amount the Director may deduct for payment of the first charge. C.2 Setting aside the split costs orders will not result in the “Duplication of claims” 14.By contrast, Mr Burke stated in the second ground for the setting aside of the split costs orders that the Employer’s total costs liability will not be affected by setting aside the split costs orders so long as the Employer would not be liable for any duplicate costs of the proceedings. This, Mr Burke submitted, can be achieved by an express court order to be made in the costs for the PI Action disallowing any costs that were to be allowed in the EC Action. C.3 Conduct of parties 15.Lastly, Mr Burke urged this court, to also take into account the conduct of the Employer in three aspects: that it had (i) no employees’ insurance; (ii) ignored the proceedings; and (iii) did not attend the mediation arranged by the Fund Board. 16.The Fund Board’s conduct, submitted Mr Burke, is also a relevant consideration. The Fund Board, Mr Burke alleged, insisted on Ms Begum in obtaining a judgment in each of the Actions as a condition of settlement with Ms Begum. 17.As for Ms Begum, it was submitted, she was an innocent party who had throughout acted reasonably in following the directions of the court in pursuing her claims against the Employer. D. DISCUSSION 18.In the normal course of event, the split costs orders are fair to both parties. It is, on the one hand, fair to the Employer as they will safeguard the Employer from paying any duplication of costs of these related parallel proceedings. 19.On the other hand, despite the splitting of the costs for the duplicated costs, the split costs orders will still enable Ms Begum to recover the entire costs of these proceedings that were properly and necessarily incurred on a party-and-party taxation. Thus, no injustice will be caused to Ms Begum. 20.Unfortunately, due to a statutory anomaly created by ECAO between employees’ compensation and common law proceedings in relation to the payment of costs by the Fund Board, that only provides for payment for the costs of the former proceedings (under s.23[3] ) but not the latter (by virtue of s.20B(3), see footnote 2), Ms Begum’s costs for the PI Action, in the event of Eventuality (B) (that she obtained payment from the Fund Board for the compensation pursuant to s.16[4] and damages under s.20A[5] of ECAO), will be left unpaid. 21.Any unpaid costs of the PI Action will ultimately have to be paid by the Director having been incurred for Ms Begum (an aided person), which costs are to be taxed, pursuant to s.20A[6] of the LAO, on the common fund basis. These costs, according to my understanding of Mr Burke’s submission, would be treated as common fund costs (see para 9 above). In the result, all the costs under the PI Action that Ms Begum cannot obtain payment for from the Fund Board will result in a deficit on Ms Begum’s account with the Director. 22.The Director is empowered by s.18A[7] of the LAO to have a charge on any property recovered in these proceedings, which would include the award of damages made in the PI Action (but not against the award under the EC Action due to s.18A(5)(e) (see footnote 7)). Thus, I agree with Mr Burke that in the event of Eventuality (B), the actual amount of the damages Ms Begum will ultimately obtain (from the Fund Board) will be diminished by the common fund costs deducted by the Director. 23.On the evidence that Mr Burke put forward, I accept that the likelihood of Eventuality (B) happening is high. Hence, the prospect of the costs of the PI Action being satisfied does not look good. Since the 50 percent of the duplicated costs under the PI Action are essentially substantial parts of the entire PI Action (see para 4 above), the amount of damages that are likely to be diminished by the deduction by the Director for the payment of the common fund costs will be substantial. 24.Thus analyzed, so long as there is put in place a safeguard against duplication of costs as Mr Burke proposed, I consider that justice can be achieved by doing away with the splitting of the costs between the EC and PI Actions. Whilst this would allow the 50 percent of the duplicated costs of the PI Action to be recovered under the EC Action, the paying party, being the Employer, as Mr Burke rightly stated in para 14 above, will not be prejudiced. 25.In the event of Eventuality (B), the Fund Board may become the ultimate paying party for the duplicated costs of the proceedings that will now become part of the costs of the EC Action, which were hitherto costs of the PI Action (under para 130(1) of the Judgment) that it was otherwise not obliged to pay under s.20B (3) of ECAO. I nonetheless do not regard that as being unfair bearing in mind that the Fund Board, apart from it being a non-party in these proceedings, would have been liable for any duplicated costs of the PI Action as part of the EC costs had these proceedings not been heard together but as separate proceedings. 26.For the reasons above, I accede to Ms Begum’s application for the variation of the split costs orders. E. COSTS ORDER ABSOLUTE E.1 The EC Action 27.The costs order nisi under para 127 of the Judgment be varied. There be a costs order absolute that the respondent do pay the applicant the costs of these proceedings, with the following exceptions: -
E.2 The PI Action 28.The costs order nisi under para 130 of the Judgment be varied. There be a costs order absolute that the defendant do pay the plaintiff the costs of these proceedings, with the following exceptions:
F. COSTS OF THE VARIATION APPLICATION 29.Since Ms Begum succeeds in the application for the variation of the costs orders nisi, I further grant a costs order nisi that Ms Begum shall have the costs of the summons, and that her costs be taxed in accordance with the Legal Aid Regulations.
POSTSCRIPT In light of the statutory anomaly in the ECAO that I have highlighted and its ensuing unsatisfactory outcome as set out in this decision, legislative changes may be needed to address this anomaly in relation to the payment by the Fund Board of costs arising from employees’ compensation proceedings and common law proceedings. Hence, I direct that a copy of this decision be also served on the Fund Board. Mr Patrick Burke, of Burke & Company, assigned by the Director of Legal Aid, for the applicant/plaintiff The respondent/defendant was not represented and did not appear [1] Jiang Zhong v Up Cheer Limited & 3 Ors, unreported, DCPI 2047/2011 & DCEC 1267/2010 (heard together), Deputy District Judge Elaine Liu, 18 April 2016. [2] Section 20B. Amount of relief payment
[3] Section 23. Costs: Payment in favour of employees “(1) Where the Board has determined an application under section 16 in favour of an applicant then in addition to any amounts of compensation to be paid from the Fund the Board shall, subject to this section, agree to pay from the Fund - (a) the costs incurred by the applicant in making the application; and (b) an amount equal to any costs payable to the applicant pursuant to an order of a court for costs against the employer or the employer’s insurer in proceedings claiming the compensation.” [4]Section 16: “Application by employee etc. for payment from the Fund in relation to unpaid compensation (1) A person who is unable to recover from an employer payment of an amount of compensation for which the employer is liable may apply for payment of that amount from the Fund. (2) For the purpose of this section an employer is not to be regarded as liable for the payment of an amount of compensation unless - (a) the amount is payable -
…” [5]Section 20A. “Application by employee etc. for relief payment from the Fund in relation to unpaid damages (1) An eligible person who is unable to recover from an employer payment of an amount of damages for which the employer is liable may apply for a relief payment of that amount from the Fund. (2) For the purposes of this section, an employer is not to be regarded as liable for the payment of an amount of damages unless the amount is payable pursuant to a judgment or order of a court of competent jurisdiction in Hong Kong.” [6] Section 20A “Taxation of costs”: “(1) On the taxation of costs in proceedings to which an aided person is a party, costs shall be taxed for the purposes of this Ordinance according to the ordinary rules applicable on a taxation as between solicitor and client where the costs are to be paid out of a common fund in which the client and others are interested.” [7] Section 18A “Charge on Property recovered”: “(1) Subject to this section-
shall be a first charge for the benefit of the Director on any property, whether situated in Hong Kong or otherwise, which is recovered or preserved for the aided person in the proceedings or in any other proceedings in respect of which the person was aided and which, in the opinion of the Director, were substantially related to or connected with the proceedings in which property was recovered or preserved ……. (5) The charge on property under subsection (1) does not apply to-
| |||||||||||||||||||||||||||||
Cases cited in this judgment
Other judgments that cite this case
Further hearings and rulings under DCEC 867/2015