Kwong Chi Wa v. Chan Kwong Cheung Jack t/a Wk Logistics Co and Others
Read the full judgment text of DCEC 1210/2018 on BabelCite. This District Court judgment was delivered on 27 September 2019.
1. This is a summons issued by the applicant for an order, inter alia , for leave to accept the sanctioned payments made by the 1 st respondent and to request the 1 st respondent to pay the 3 rd respondent’s costs of defending the applicant’s claim (“the Summons”).
Cited by 1 case · Cites 4 cases
|
DCEC 1210/2018 [2019] HKDC 1309 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO 1210 OF 2018 --------------------
-------------------------
-------------------- DECISION -------------------- INTRODUCTION 1.This is a summons issued by the applicant for an order, inter alia, for leave to accept the sanctioned payments made by the 1st respondent and to request the 1st respondent to pay the 3rd respondent’s costs of defending the applicant’s claim (“the Summons”). BACKGROUND 2.On or on about 5January 2017, the applicant sustained personal injury in an accident arising out of and in the course of his employment. 3.At all material times, the applicant claims that he was an employee employed by Chan Kwong Cheung Jack trading as WK Logistics Company (“the 1st respondent”) who in turn was the sub-contractor of May Fair Cosmetics Limited (“the 3rd respondent”), the principal contractor. 4.On 30 May 2018, an employees’ compensation application was made by the applicant against the 1st, 2nd and 3rd respondents (“the Application”). 5.On 27 July 2018, HH Judge Levy granted leave to the applicant to discontinue his claim against the 2nd respondent. 6.On 16 October 2018, the 1st respondent made a sanctioned payment of HK$65,000. On 12 November 2018, the 1st respondent made a further sanctioned payment of HK$8,000. The total sanctioned payment therefore stood at HK$73,000. 7.The applicant indicated to the respondents that he was minded to accept the sanctioned payments and discontinue the EC proceedings against the 3rd respondent. The 3rd respondent responded by saying that it would seek its costs in defending the matter but is neutral as to who should ultimately bear its costs. The 1st respondent indicated that it would not pay the 3rd respondent’s costs, as well as the applicant’s costs incurred by reason of joining the 3rd respondent. 8.The applicant submits that the 1st respondent should pay the 3rd respondent’s costs and that a Sanderson order should be made. The applicant relies on the fact that the 1st respondent has stated in his Form 2 and his declaration to the Labour Department that the 3rd respondent was his principal contractor. Further, he has failed to respond to the applicant’s pre-action letter. The 1st respondent only denies the 3rd respondent was his principal contractor when he filed the Answer after the Application was filed in this case. The applicant therefore submits it was reasonable for the applicant to commence the EC proceedings against the 3rd respondent in order to protect his own interest. DISCUSSION Issues to be determined 9.In the Summons, there are two questions which need to be determined by the court:-
(i) Whether it was reasonable for the applicant to proceed against the 3rd respondent? 10.Mr Richard Yip for the applicant submits that, where a plaintiff, upon payment made into court, discontinues the action against a non-paying-in defendant, the court has jurisdiction to make a Sanderson order for the paying-in defendant to bear the costs of the non-paying-in defendant(s), the question is whether or not it was reasonable for the plaintiff to sue the other defendant(s) who did not make payment into court: General Accident Insurance Asia Ltd v Hampton Winter & Glynn (a firm) & Others [1998] 4 HKC 398 at 415H-417E; Lau Foon Wing v Cheuk Lau Shek, unrep, 29 September 2008, DCEC 757/2007 at §60. 11.Further, the applicant submits that the court could order an unsuccessful defendant to pay a successful defendant’s costs where the unsuccessful defendant blames the successful defendant and caused the plaintiff to proceed against it: Fung Chun Man v Hospital Authority & Others [2012] 1 HKC 531. 12.In such situation, the court may make a Sanderson or Bullock order. Fok JA (as he then was), in Chong Ngan Seng v China Harbour Engineering Company Limited & Ors, unrep, 25 September 2013, CACV 54/2012, explained how the court should exercise its discretion at §§5-7:-
13.Mr Tasman Tam for the 1st respondent on the other hand submits that the applicant did not file a notice of acceptance of sanctioned payment pursuant to O22 rr15(1) and r18(2) of the Rules of the District Court (“RDC”) in this case. Therefore, the 1st respondent submits that the starting point is that O22 r18(4) RDC governs the present application, where the court has an unfettered discretion in relation to costs, instead of the default costs consequence under O22 r20(1) RDC: Kaur Paramjit v Li On Na t/a 新長發快餐& Others, unrep, 15 August 2019, DCEC 1479/2012, at §§16, 18. 14.Bharwaney J in, Li Kai Yin v Atta-Trans Ltd and Another, unrep, 18 July 2011, HCPI 196/2009, gave an obita as to the approach of a plaintiff wishing to accept sanctioned payment by one of the defendants and not wishing to pursue the claims against other defendants, at §14:-
15.Mr Tam therefore submits that, despite the cases referred to by the applicant’s counsel in his submissions, it has been accepted by HH Judge Levy in Kaur §§51-52, that in respect of costs of “discontinued” respondent, the general principle is that the applicant should pay such costs, unless the applicant can satisfy the court that there are circumstances that clearly justify a departure from this general principle (adopting §15 of Li Kai Yin). 16.There appears, as submitted by Mr Tam, a judicial trend that reasonableness is no longer the determining factor, at least in relation to “discontinued” respondent (vs that of “successful” respondent in Fung Chun Man v Hospital Authority & Others [2012] 1 HKC 531). Consistent with this proposition is what Mrs Justice Jefford stated in BAE Systems Pension Funds Trustees Limited v Bowmer & Kirkland Limited & Ors [2018] EWHC 1222 (TCC) at §6 & §32. 17.In other words, the 1st respondent submits that, in exercising its unfettered discretion, the court is entitled to look beyond the sole factor of reasonableness in instituting a claim against the discontinued respondent (ie the 3rd respondent). The burden is on the applicant to satisfy the court that in all circumstances it is justified for a departure from the said general principle. 18.To that extent that the applicant relies on §6 of Fung Chun Man, the 1st respondent submits that it must be read in light of what Bharwaney J had referred to in the paragraph immediately preceding:-
The Court’s findings 19.I accept that Mr Tam’s submission that the general rule in cases like our present one is that the applicant should pay the costs of the discontinued respondent upon discontinuance of the proceedings unless he can satisfy the court that there are circumstances that clearly justify the departure from the general principles: see §52 of Kaur. In each case, the question is whether it was reasonable for the plaintiff to proceed against the successful defendant. If it was, then the unsuccessful defendant may be ordered to pay the successful defendants’ costs. As in any other cases dealing with costs, the court has an unfettered discretion in such matters, provided such discretion is exercised judicially with good reasons. In this regard, I do not consider the English case of BAE System, supra has added anything to the above trite principles. 20.In my judgment, there are circumstances in this case which clearly justify a departure from the above general principles. 21.First, it was the 1st respondent who had positively misled the applicant into believing that the 3rd respondent was his main contractor. 22.In the Form 2 filed by the 1st respondent on 28 November 2017, the 3rd respondent was identified as the “principal contractor” by the 1st respondent. 23.In the declaration made by the 1st respondent to the Labour Department on 26 March 2018, the 1st respondent made the following assertions to confirm that the 3rd respondent was his principal contractor:
24.Secondly, the applicant had issued a pre-action letter to the 1st respondent on 8 August 2017. In the letter, the applicant alleges that he worked for the 1st respondent. He also sought discovery of documents from the 1st respondent to verify the contractual relationship between the 1st and 3rd respondents. 25.It is significant to note that the 1st respondent had not replied to the pre-action letter at all. In other words, he had not disputed the relationship between him and the 3rd respondent before the Application was made. 26.I noted that the Application in the present proceedings dated 30 May 2018 was only filed after the occurrence of the above events. 27.Given the above information and the clear admissions/assertions by the 1st respondent, I am of the view that it was perfectly reasonable for the applicant to join the 3rd respondent as the alleged principal contractor in the Application. To the contrary, armed with those information and clear admissions/assertions by the 1st respondent, it would in my judgment be irresponsible for the applicant or his legal representatives not to join the 3rd respondent as the alleged principal contractor in the case. 28.The 1st respondent in his affirmation filed for the purpose of opposing the Summons stated that being a layman who is not well educated, he did not know the legal meaning of “principal contractor” (「總承判商」). Hence, he put that down in both the Form 2 and his declaration to the Labour Department. 29.I have no hesitation to reject such absurd allegation. In my view, it has nothing to do with whether he is a layman or the level of education he received. It is not difficult for a person who has experience in the logistic trade, as the 1st respondent clearly has in this case, to know who is or is not his principal contractor. I find that at the time of making those assertions, the 1st respondent must have good reasons to believe that the 3rd respondent was his principal contractor, whether in law that is correct or not. If he did not believe in it at the time but had only wanted to get the 3rd respondent involved for tactical or financial reason, he cannot later blame it on the applicant to rely on this as basis to commence proceedings against the 3rd respondent. If the applicant chose to rely on his admissions/assertions and his lack of response to the pre-action letter, the 1st respondent only has himself to blame. 30.I therefore find that in the circumstances of this case it was reasonable for the applicant to proceed against the 3rd respondent. (ii) Should the unsuccessful defendant, ie the 1st respondent, be ordered to pay the 3rd respondent’s costs, directly, via a Sanderson order, or indirectly, via a Bullock order? 31.I agree with Mr Yip’s submission that the court has a broad discretion in deciding whether to make a Sanderson order or Bullock order. In deciding this matter, the court would take into account of the practical consequences of the costs order. 32.In Chong Ngan Seng, supra, the Court of Appeal ordered a Sanderson order instead of a Bullock order based on the following reasons:
33.In my view, similar considerations should apply in our case. 34.First, the 1st respondent is an individual with no employees’ compensation insurance cover and whose financial status is unknown to the applicant. Therefore, there is a risk that he might be insolvent when faced with a costs order. 35.Second, the amount of compensation at HK$73,000 will most likely be significantly if not totally eroded if the applicant were to be liable for the 3rd respondent’s costs. 36.Lastly, the applicant is on legal aid and I do not think it is right that the legal aid fund should be placed at risk of paying the costs of the 3rd respondent if the same cannot be recovered from the 1st respondent. 37.In the aforesaid premises, I think a Sanderson order is more appropriate in this case. I so order. Order 38.In the aforestated premises, I make the following Order in this case:-
39.Lastly, I would like to thank counsel on both sides for their helpful assistance.
Mr Richard Yip, instructed by Joseph Leung & Associates, assigned by the Director of Legal Aid, for the applicant Mr Tasman Tam, instructed by Chan, Wong & Lam, for the 1st respondent Mr S F Lau of Foo & Li, for the 3rd respondent | |||||||||||||||||||||||||||||||||||||||||||||||||
The proper way is—do not join any defendant unreasonably; if the facts are such that it is reasonable to join them both and reasonable to be in a state of uncertainty as to which of the two is the really guilty one, then it is part of the reasonable costs of the action that the costs of the action which you have launched against one of those defendants, and who has succeeded in defending himself, should be borne by the man who is to blame.’…” (emphasis added)Cases cited in this judgment
Other judgments that cite this case