Indah, Veby Mega v. Owt Asia Limited

DCEC 1264/2020

[2021] HKDC 617

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1264 OF 2020

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IN THE MATTER OF AN APPLICATION BETWEEN

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Before:  Her Honour Judge Levy in Chambers (Open to Public)

Date of Hearing:  27 January 2021

Date of Applicant’s Supplemental Written Submissions:  17 February 2021

Date of Respondent’s Supplemental Submissions:  3 March 2021

Date of Applicant’s Note of Reply to the Respondent’s Supplemental Submissions dated 3 March 2021:  4 March 2021

Date of Decision:  28 May 2021

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DECISION

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A.  Background facts

1.On 8 July 2020, the Applicant, through her Legal-Aid assigned solicitors, Messrs Ip, Kwan & Co (“IKC”), filed these employees’ compensation proceedings against the Respondent pursuant to the Employees’ Compensation Ordinance[1].

2.On 28 July 2020, the Respondent, through its solicitors, Messrs Boase Cohen & Collins (“BCC”), filed an admission in the prescribed Form No 16C in accordance with O 13A, r 6(2) of the Rules of the District Court[2], admitting liability for the whole claim but wanting the court to decide the amount of compensation payable.

3.On 24 September 2020, the Applicant obtained an interlocutory judgment (“IJ”) upon her request for judgment, with costs fixed at “$6,500 on liability issue” (“Fixed Costs”).  On the same day, she also issued a summons for interim payment (“IP Summons”), which was fixed to be heard on 11 December 2020.

4.On 13 November 2020, before the hearing of the IP Summons, the Applicant filed a consent summons (“Consent Summons”) by which the total amount of compensation was agreed at $1,246,549.79 (“Agreed Compensation”), which was in fact the amount the Applicant offered in her sanctioned offer (“Sanctioned Offer”) made on 9 October 2020 pursuant to O 22.  The Sanctioned Offer was accepted by letter on 28 October 2020 (“Acceptance”).

5.The Agreed Compensation, according to §2 of the Consent Summons, was made up of (i) an advance payment of $176,549.79 (“Advance Payment”) already received by the Applicant; (ii) the interim payment of $200,000 (“Interim Payment”) which the Respondent made to the Applicant on 6 November 2020; and (iii) the sanctioned payment in the sum of $870,000 (“Sanctioned Payment”) which the Respondent paid into court on 4 September 2020.

6.With the settlement of the entire proceedings, the IP Summons was agreed to be withdrawn with costs to be paid by the Respondent. However, the Respondent objected to the Applicant’s application for indemnity costs.

7.The second remaining dispute concerns the costs of the proceedings which the Applicant sought.  The Respondent contends that since the Fixed Costs were already granted for the costs on liability, the Applicant should not be entitled to the costs of the proceedings when the remaining issue on quantum was settled by the Respondent’s Acceptance of the Sanctioned Offer.

8.The parties are at loggerheads over these two costs disputes despite the court’s directions urging the parties to make endeavours to settle the matter.

B.  Affidavit Evidence

9.Altogether there was one affidavit and three affirmations filed in relation to the costs disputes.  Mr Teddy Lam of BCC had prepared one affirmation dated 26 November 2020 (“Lam’s Affirmation”).

10.For the Applicant, there are the:-

(i)  Affirmation of Kwan Long Yee Corrina (“Ms Kwan”) of IKC filed on 24 September 2020 in support of the IP Summons (“Kwan’s 1^st Affirmation”);

(ii)  Affidavit of the Applicant filed on 2 November 2020 in support of her application for indemnity costs against the Respondent; and

(iii)  Second Affirmation of Ms Kwan (“Kwan’s 2^nd Affirmation) filed on 31 December 2020 in reply to Lam’s Affirmation.  This is a bulky document, running to 31 pages with a 334-page exhibit, “KLYC-10”.

C.  Whether the Applicant should get indemnity costs for the withdrawn IP Summons?

C.1  Circumstances leading to the issuance of the IP Summons

11.There is no dispute that the Respondent paid periodical payments until 7 August 2020.  After the Respondent had paid the Sanctioned Payment on 4 September 2020, it stopped paying the Applicant periodical payments.

12.After several exchanges of correspondence between the solicitors, the parties were able to agree to an interim payment of $200,000 being paid out from the Sanctioned Payment as well as 3 of the 4 conditions BCC stated in their letter of 22 September 2020.  IKC agreed to conditions 1, 2 and 4 respectively about deduction of the interim payment from the compensation; taking the interim payment into account for the calculation of interest; and repayment of the interim payment or any part thereof in excess of the total compensation awarded.

13.IKC could not agree to condition 3 (“Condition 3”) by which the Respondent wanted to have the amount of the Sanctioned Payment remaining unchanged after the payment of the $200,000 interim payment from it. IKC took the view that the amount of the Sanctioned Payment should be reduced by the amount of the interim payment of $200,000.

14.As the differences could not be resolved despite correspondence and telephone exchanges, the IP Summons was issued.

15.As stated above, the IP Summons was overtaken by the Consent Summons after the Respondent accepted the Sanctioned Offer and paid the Interim Payment before its scheduled hearing on 11 December 2020.

C.2  Discussion

16.It is not disputed that indemnity costs will only be awarded against a party where the conduct of a party to proceedings is scandalous or vexatious, or where the party had initiated or prosecuted proceedings maliciously, or for an ulterior motive, or in an oppressive manner: Hong Kong Civil Procedure 2021 (“HKCP”), Vol 1,at §62/App/12.

17.The Applicant argued that the Respondent was clearly in breach of its obligation under s 10 in having failed to pay her periodical payments.  Ms Kwan stated (in Kwan’s 2^nd Affirmation) that when the Applicant eventually received the Interim Payment, the Applicant had effectively not been paid for an interval of 3 months between the last periodical payment on 7 August 2020 and the receipt of the Interim Payment on 6 November 2020.

18.Ms Kwan therefore submitted that the IP Summons could have been avoided if the Respondent had continued paying periodical payments.  By imposing the four conditions, and in insisting on Condition 3, Ms Kwan stated that the Respondent conducted the proceedings oppressively and with ulterior motive when it imposed the four conditions with a view to gain tactical advantage by pressuring the Applicant “to accept the ‘underpaid’ Sanctioned Payment”: Kwan’s 2^nd Affirmation at §63.

19.Ms Kwan believed that the Respondent had only consented to pay the Interim Payment and to accept the Sanctioned Offer after the Applicant lodged a complaint to the Labour Department against the Respondent for having failed to pay her periodical payments.

20.Mr Lam denied the above allegations, and maintained that the Respondent had acted reasonably throughout, intent in settling the disputes amicably.

21.Mr Lam stated that BCC had already, before the commencement of these proceedings, as early as 17 April 2020, requested IKC to provide the Applicant’s medical records and notes.  IKC challenged the basis of these requests and refused disclosure.  It was only when Ms Kwan exhibited the Applicant’s two medical reports prepared by the Department of Ophthalmology and the Department of Psychiatry of Pamela Youde Nethersole Eastern Hospital respectively dated 19 March and 6 March 2020 to Kwan’s 1^st Affirmation as “KLYC-1” and “KLYC-2” did it become apparent to BCC that the Applicant was already in possession of these reports 4 months before the commencement of these proceedings.

22.Mr Lam stated that despite the Applicant’s failure to disclose her medical records, the Respondent nonetheless made the Sanctioned Payment at a very early stage after filing its O 13A admission.

23.It was suggested that the Applicant’s refusal to disclose her medical records entitled the Respondent to stop paying the Applicant periodical payments after the Sanctioned Payment was made.  This was because the Sanctioned Payment was expressly stated to be in settlement of whole of the Applicant’s claim (inclusive of interest), and also after having taken into account the Advance Payment the Applicant had already received.  Hence, the payment of the Sanctioned Payment would have included all the compensation for her claim, including periodical payments.

24.It was submitted that the Respondent’s reasonable conduct could clearly be evidenced by BCC having taken the initiative on 15 September 2020 in suggesting that the interim payment be paid out of the Sanctioned Payment.  The Respondent also later agreed on 22 September 2020 to have the $200,000 interim payment paid out from the Sanctioned Payment.

25.As for the disputed Condition 3 imposed by the Respondent, Mr Lam submitted that the Respondent acted reasonably in insisting on this condition as the Court of Appeal in Kan Wai Ming v Hong Kong Airport Services Ltd[3]had authoritatively held (at §32) that an employee’s compensation for temporary incapacity under s 10 cannot be set off against his compensation under s 9 (for permanent incapacity).

26.Given that the Applicant’s monthly periodical payment at the material time was $14,500, and further that the Applicant had not yet disclosed any medical reports before the filing of Kwan’s 1^st Affirmation, the agreed sum of $200,000 was not only substantial, it was in fact periodical payments made in advance.  Mr Lam disagreed with Ms Kwan’s allegation made in her submission (at §55) that the Respondent had “cornered” the Applicant into accepting the 4 conditions.

27.Mr Lam further submitted that the Respondent’s Condition 3 would not have prejudiced the Applicant.  This is because it is established that a court, when deciding whether an award was beaten by a sanctioned payment, would take into account any amount of interim payment having been paid out from it: see Lam Po Yee & Anor v Dr Chan Yee Shing aka Dr Chan Yee Shing Alvin[4], in which IKC were coincidentally the plaintiffs’  solicitors.

28.Having considered the circumstances giving rise to the issuance of the IP Summons, I do not agree with the Applicant’s allegations that the Respondent had acted unreasonably or oppressively.

29.The basis of the Applicant’s complaint of unreasonable conduct against the Respondent was its ceasing to pay her periodical payments after the Sanctioned Payment was made.  To underline the alleged seriousness of the Respondent’s stopping of paying periodical payments, Ms Kwan in her submissions referred to a large volume of materials in relation to the legislative intent of s 10.

30.With respect to Ms Kwan, I do not think that the references to such massive materials such as documents on the legislative processes of the Employees’ Compensation (Amendment) Bill as well as the related authorities[5] are helpful to this court to resolve the matter in dispute.

31.Since it is not in dispute that the Respondent stopped paying periodical payments in the month following the making of the Sanctioned Payment, I believe that it is necessary to examine the Respondent’s reason for having stopped the payments.  Pertinently, I find the fact of the Sanctioned Payment, and the Applicant’s refusal to disclose the said medical reports exhibited to Kwan’s 1^st Affirmation before the issuance of the IP Summons, is significant. Apart from IKC’s challenge in their letter[6] to the requests for medical reports, IKC had not explained why the said reports were only disclosed when issuing the IP Summons, but not before.

32.The Applicant in fact relied on these medical reports to support her application for interim payment, and they are therefore highly relevant.  The 19 March report gave information concerning the Applicant’s eye injury while the 6 March report gave information concerning the Applicant’s psychiatric conditions.

33.Since the Respondent was not provided with these important medical reports before the IP Summons, the Respondent, in my view, was justified to have been concerned with the possible injustice of an overpayment of periodical payments (see Kan Wai Ming, supra).  The amount of $200,000 the Respondent agreed to pay as interim payment in fact amounted to roughly one year of periodical payments to the Applicant.  Mr Lam was correct in stating that the amount represented an advance payment already. Seen in this way, I am of the view that the Respondent had provided a wholly reasonable excuse for stopping periodical payments after the Sanctioned Payment had been made, which Sanctioned Payment was clearly made to try to settle the whole claim, including periodical payments.

34.Contrary to Ms Kwan’s allegation that the Respondent was acting oppressively, I find that the Respondent had indeed been the more reasonable party in this matter, which is evidenced by the suggestion of payment of interim payment from the Sanctioned Payment out of BCC’s own volition on 15 September 2020, and its agreement on 22 September 2020 to the amount of $200,000 as IKC suggested.

35.I do not think that the four conditions BCC imposed were unreasonable conditions, three of which IKC in fact accepted without demur.  As for the contentious Condition 3, the stumbling block to the parties’ reaching of an agreement in relation to the logistics of the payment of interim payment, Lam Po Yee (supra) clearly shows that the disputes are otiose.  Since the amount of the payment out from the Sanctioned Payment would have to be taken into consideration when considering the costs consequence under O 22, Ms Kwan’s insistence that the amount of the Sanctioned Payment should have been expressly stated to have been diminished by the amount of the interim payment clearly serves no useful purpose.

36.From the contents of the correspondence exchanged, and Ms Kwan’s submissions, I was under the impression that the Applicant / Ms Kwan had on the whole been very combative when dealing with the Respondent / BCC.  Such conduct probably unfortunately created a lot of unnecessary disputes.  The lodging of a complaint against the Respondent for its non-payment of the periodical payments by IKC’s letter on 30 September 2020[7] to the Labour Department, alleging the Respondent of the breach of s 10(10) is a good illustration.

37.In the letter to the Labour Department (which I believe was probably drafted by Ms Kwan), IKC seem to have omitted a lot of background facts.  No disclosure was made about the fact that the Respondent had made the Sanctioned Payment to settle the whole claim when the periodical payments were stopped.  Pertinently, the Labour Department was not informed that the IP Summons in relation to the non-payment of the periodical payments had been issued and that the hearing date had been fixed for December 2020.

38.In my view, IKC had clearly presented to the Labour Department a biased and misleading version of events.  As expected, the Labour Department, after having received the response / explanation from BCC, concluded that no action would be taken and had, rightly in my view, deferred the disputes to the court’s adjudication.

39.I find it astonishing for Ms Kwan to have accused BCC of having misled the Labour Department when BCC only told the latter the truth about the pending hearing of the IP Summons.  There is no basis, in my view, to support Ms Kwan’s allegation that the Labour Department had been deterred from pursuing the investigation as a result of BCC’s response.  I’m more inclined to the view that the lodging of the complaint to the Labour Department was probably motivated by spite.  It might have also been used as a means of exerting pressure on the Respondent to accept the Sanctioned Offer which the Applicant might have been thinking of making.

40.In the circumstances, I am unable to find any conduct that justifies my exercise of discretion in making an indemnity costs order.  I therefore decline to do so and order costs payable to the Applicant on the usual party and party basis.

41.Since the Applicant failed to obtain an indemnity costs order in her favour, I consider that it is just to order her to pay the Respondent’s costs of and occasioned by the arguments relating to the indemnity costs issue.

D.  Whether the Applicant is entitled to the costs of the proceedings?

D.1  The parties’ positions

42.In the Sanctioned Offer, the Applicant expressly stated that it was made pursuant to O 22.  When accepting the Sanctioned Offer, the Respondent had not stated in its Acceptance that the acceptance was not within O 22.  In the circumstances, I consider that it is beyond argument that the Sanctioned Offer and the Acceptance were made and accepted within the O 22 regime.  Since the Sanctioned Offer was made by the Applicant, the governing rule for the costs consequences should therefore be r 21(1): “Costs consequences of acceptance of plaintiff’s sanctioned offer”, which provides:-

“Where a plaintiff’s sanctioned offer to settle the whole claim is accepted without requiring the leave of the Court, the plaintiff is entitled to his costs of the proceedings up to the date upon which the defendant serves notice of acceptance, unless the Court otherwise orders.” (Emphasis is added)

43.The words that I have underlined underscore the parties’ disputes in the following ways.

44.For the Applicant, it was submitted that pursuant to r 21(1), “costs of the proceedings” is the usual costs consequence “unless the Court otherwise orders” (“Otherwise Proviso”).  The Applicant therefore stated that in the absence of any circumstances that justified a departure from the usual costs order of “costs of the proceedings”, the Applicant should be entitled to the costs of these proceedings consequent on the Respondent’s Acceptance of the Sanctioned Offer.

45.On the other hand, the Respondent contended that since the issue of liability was already disposed of by the IJ and the Fixed Costs, the costs should be expressly stated to be confined to quantum, which costs order would better reflect the real outstanding costs.  Thus, the Respondent only agrees to pay the Applicant’s costs (limited to quantum), including the costs of the Consent Summons, up to 30 October 2020, on which date BCC amended IKC’s draft costs order of “the Respondent do pay the Applicant the costs of these proceedings” stated in the latter’s draft consent summons to “the Respondent do pay the Applicant the costs on the issue of quantum” (“Amended Draft”).

D.2  The Applicant’s arguments

46.The main authority in support of the Applicant’s arguments, is Etratech Asia-Pacific Ltd v Leader Printed Circuit Boards Ltd[8], which was later followed by RBA Far East Ltd v Yuen Chak Hang Edward & Ors[9].

47.Etratech Asia-Pacific Ltd was concerned with the costs consequence of the acceptance of a defendant’s / respondent’s sanctioned offer or sanctioned payment under O 22, r 20(1) of the Rules of the High Court (which rule is identical to O 22, r 20(1)).  Ms Kwan stated that the ratio stated in that case could be applied mutatis mutandis to O 22, r 21(1) as the key wording that where a defendant’s sanctioned offer or sanctioned payment “to settle the whole claim is accepted without requiring the leave of the Court, the plaintiff is entitled to his costs of the proceedings up to the date of serving notice of acceptance, unless the Court otherwise orders” is identical in both r 20(1) and r 21(1).

48.In Etratech Asia-Pacific Ltd, Poon J (as he then was) stated:-

“[18] In my view, O.22 r.20(1) plainly envisages that upon acceptance of the sanctioned payment or sanctioned offer, the plaintiff is, as a prima facie rule, entitled to his costs of the proceedings up to the date of serving notice of acceptance. The prima facie rule may, however, be displaced when the court orders otherwise by applying the Otherwise Proviso.

[19] …

[20] By virtue of the Otherwise Proviso, the court retains the discretion to depart from the prima facie rule where necessary. But the discretion should only be exercised in exceptional circumstances that clearly warrant a different costs order. Otherwise, the certainty as to costs consequences created by the prima facie rule, one of the very important features underpinning the effectiveness of sanctioned payments and sanctioned offers, will be greatly diminished.

[21] While it is impossible and indeed imprudent to exhaustively state the exceptional circumstances that justify the departure from the prima facie rule, which by definition must be rare, the burden rests squarely on the party seeking to invoke the Otherwise Proviso to establish such circumstances.  The court will not lightly displace the prima facie rule until and unless the applicant has discharged the burden to its satisfaction.”

49.Later in RBA Far East Ltd, Bharwaney J, when deciding whether the Otherwise Proviso under O 22, r 21(1) of the Rules of the High Court should be applied so as to deny the plaintiff’s costs up to the acceptance of the defendant’s sanctioned offer, agreed that the approach stated in Etratech Asia-Pacific Ltd was the proper approach, stating that:-

“[19] I agree with the recent of observations of Poon J on the proper approach to follow when faced with an application to apply the ‘Otherwise Proviso’ … Under r 21(1), where a plaintiff’s sanctioned offer to settle the whole claim as accepted without requiring the leave of the Court, the plaintiff is entitled to his costs of the proceedings up to the date on which the defendant served notice of acceptance. These prima facie costs consequences follow upon the stated event ‘unless the court otherwise orders’ (the Otherwise Proviso). In his judgment in Etratech Asia-Pacific Ltd v Leader Printed Circuit Boards Ltd [2013] 4 HKC 282, Poon J analysed the legal position and concluded that the prima facie rule in O 22 r 20(1) should apply unless (1) the defendant discharges the burden of showing exceptional circumstances that justify a departure; and (2) he has given a prior warning to the plaintiff that he will apply to invoke the Otherwise Proviso upon acceptance of the sanctioned payment or sanctioned offer. In my judgment, the same applies with regard to r 21(1) under which the defendant has to give a prior warning to the plaintiff that he would apply to invoke the Otherwise Proviso when he serves his notice of acceptance of the plaintiff’s sanctioned offer.”

50.Based on the principles stated in the above-mentioned authorities, Ms Kwan suggested that the Respondent would first be required to give prior warning to the Applicant that it would invoke the Otherwise Proviso when the Acceptance was given.  All the Respondent stated however in the Acceptance was that the Respondent would pay “costs to be taxed if not agreed”.

51.Not only had the Respondent failed to give the prior warning as required, Ms Kwan also submitted that the Respondent has not put forth any exceptional circumstances in justifying a departure from the prima facie costs provision provided in r 21(1).

52.In any event, pursuant to O 62, r 10(5)[10], an order for the costs of the proceedings, Ms Kwan submitted, shall be deemed to have automatically been made upon the Acceptance on 28 October 2020 in settling the whole claim.

D.3  The Respondent’s arguments

53.In Mr Lam’s lengthy submissions in both his Skeleton and Further Submissions, he made a number of points.  He submitted that the costs consequences of r 21(1) only apply to a situation where a plaintiff’s / applicant’s sanctioned offer is made to settle “the whole claim”.  The “whole claim”, according to O 22, r 1(2)(a)[11] must have meant liability and quantum: see Mr Lam’s “Supplemental Skeleton Submission”.

54.In the present case, the Sanctioned Offer was made not to settle the “whole claim”, but to settle the remaining part of the claim, i.e. quantum only.  Hence, the Applicant should not be entitled to “the costs of the proceedings”, but only to the costs relating to quantum.

D.4  Analysis

55.After an interlocutory judgment is entered against a defendant for damages to be assessed, the form of the order for the final award for damages can be found in the prescribed court form - Appendix A to the HKCP, Court Forms, Form No 43.  Mr Lam’s proposed costs order in the Respondent’s Acceptance for “costs to be taxed” seems to have followed this Court Form.

56.Obviously, the above costs order specified in Form No 43 is an order a court gives after an assessment hearing, which is not the situation here.  In the present situation, the remaining quantum is disposed of through the O 22 procedure.  It is therefore necessary to have regard to the characteristics of this statutory procedure.

57.It is now established that the O 22 regime provides a self-contained statutory procedure for settlement which is complete in its own right and without the need to have recourse to other measures.  One of the characteristics of a sanctioned offer (and a sanctioned payment) under O 22 is that it is wholly procedural in nature.  Hence, the procedural requirements (including any costs consequences) embodied in O 22 must be strictly complied with: see HKCP, Vol 1, §§22/1/A, 22/1/B and 22/5/A.

58.As the present claim has been disposed of by the procedure set out in O 22, r 21(1), the express costs consequences stated in the said rule should be strictly complied with and should override either of the costs orders proposed by the Respondent for “costs to be taxed” stated in the Acceptance or for “costs on the issue of quantum” as stated in the Amended Draft.

59.Hence, when the Sanctioned Offer was accepted, the costs consequences of “costs of the proceedings” provided in O 22, r 21(1) were immediately engaged unless displaced by the Otherwise Proviso.

60.Mr Lam’s argument that the O 22, r 21(1)’s “costs of the proceedings” is only applicable to situations where both liability and quantum are still at issue at the time when a sanctioned payment / offer was made by one party and accepted by the other within the prescribed time fails to have regard to the r 21(1)’s express costs consequences.  His stated reason for the purpose of clarity plainly does not fall within the Otherwise Proviso to justify a departure from the prevailing costs consequences.

61.I further reject Mr Lam’s submissions that the Sanctioned Offer was not made to settle the whole claim on the ground that quantum was the only remaining issue.  In my view, Mr Lam has confused a claim with an issue in a claim.  For the present proceedings, the only claim that the Applicant made was a claim for employees’ compensation.  A claim however will usually comprise various issues and sub-issues.  The present case consisted of issues of liability and quantum, but the whole claim was a claim for compensation.

62.From IKC’s immediate response to the amendment BCC made in the Amended Draft, I can understand the Respondent’s anxiety as to why it insisted on its costs position. IKC responded as follows:-

“There is no order on costs in relation to issue of liability having been made. The fixed costs awarded on the interlocutory judgment does not refer to costs of liability at all. The scope of the said costs will be a matter for taxation. Your limiting our costs entitlement to the issue of quantum is red-herring.”

63.In view of the Fixed Costs set out in the IJ, IKC’s above averment that no costs on liability had been made is plainly wrong.  I believe the said stance IKC adopted has been the root cause of the ensuing disputes.  Notwithstanding their subsequent acknowledgement of the Fixed Costs in the IJ, IKC however continued to allude to costs not covered by the Fixed Costs.

“Our position has all along been that for whatever has been covered by way of fixed costs in the interlocutory judgment, it should be a matter for taxation and the Taxing Master will tax thee (sic) costs of proceedings having regard to the scope of the interlocutory costs orders already made”[12]

64.In light of these comments made by IKC, the Respondent, in my view, was justified in expressing its concern that the Applicant might get around the Fixed Costs in seeking costs on liability if she were to be allowed “costs of the proceedings”.

65.Despite her later recognition of the existence of the Fixed Costs, Ms Kwan continued making suggestions that the Applicant was entitled to more costs.

66.For example, in her “Supplemental Submissions” (at §§29 & 30), Ms Kwan maintained that the Applicant would be entitled to various items of costs not covered by liability or quantum such as (a) court fees in issuing the present Employees’ Compensation proceedings; (b) costs of “General Care and Conduct”; and (c) “costs incurred in handling and attending other background issues in conducting the proceedings”.

67.Based on the authority of Etratech Asia-Pacific Ltd, which was later applied in RBA Far East Ltd concerning r 21(1), I am in agreement with Ms Kwan’s submissions that the usual prima facie costs order of “costs of the proceedings” should apply in the present situation.  Despite my sympathy for the Respondent’s reason as to why it had wanted to limit costs to quantum, I am not persuaded by the Respondent’s reason of “clarity” as sufficient in constituting exceptional circumstances in displacing the prima facie position.  The Otherwise Proviso cannot be applied here.

68.For these reasons, I conclude that the Applicant’s arguments are correct.  I order that the Respondent do pay the Applicant’s costs of these proceedings until 30 October 2020, including the costs of the drafting of the Consent Summons (as per the Respondent’s agreement).

D.5  Costs after 30 October 2020

69.Both parties ask for costs after 30 October 2020.

70.The order at §68 means that the Applicant is to be regarded as a winning party.  There is therefore no justification in my view for the Respondent to have its costs after 30 October 2020.

71.I’d however be disinclined to award costs to the Applicant despite the court having ruled in her favour.  As I have stated above in §§62, 63 & 66, the costs disputes were substantially due to the Applicant’s insistence on her entitlement to costs beyond the Fixed Costs.  Instead of allaying the Respondent’s wholly justified concern, the Applicant kept stating that her costs entitlement was not bound by the Fixed Costs.  For these reasons, I do not think it is just for this court to award costs to the Applicant after 30 October 2020.

72.Hence, I make a costs order that there shall be no order as to costs after 30 October 2020, including all costs reserved.

73.Having regard to the circumstances giving rise to the present costs arguments, I do not think that this is a suitable case in giving the usual direction for Legal Aid taxation.  I therefore further direct that the Applicant’s own costs in relating to the “costs of the proceedings” arguments after 30 October 2020 shall not be taxed in accordance with the Legal Aid Regulations.

E.  Orders

(1)  The Respondent do pay the Applicant’s costs of the proceedings up to 30 October 2020 (including the Consent Summons) on a party and party basis, to be taxed if not agreed;

(2)  The Respondent do pay the Applicant’s costs of the Interim Payment Summons on a party and party basis, to be taxed if not agreed;

(3)  The Applicant do pay the Respondent’s costs in relation to the arguments on the indemnity costs issue, to be taxed if not agreed;

(4)  There shall be no order as to costs after 30 October 2020 in relation to the O 22, r 21(1) issue; and

(5)  The Applicant’s own costs, save and except the costs incurred by the Applicant after 30 October 2020 in relation to the O 22, r 21(1) issue, shall be taxed in accordance with the Legal Aid Regulations.

74.Since these costs orders concern the Applicant’s own costs with the Director of Legal Aid, I will ask my clerk to also serve a copy of this Decision on the Director.

75.Lastly, I’d like to remark on the voluminous submissions Ms Kwan had placed before this court.  Ms Kwan had altogether lodged four written submissions:-

(i)  On 20 January 2021, a 16-page “Submissions for the hearing on 27 January 2021”, together with a 10-page chronology of relevant events and 17 items of authorities attached to the “List of Authorities”.

(ii)  On 26 January 2021, a 5-page “Notes in Reply to R’s Submissions”, and 3 items of authorities were attached to the “Supplemental List of Authorities”.

(iii)  On 17 February 2021, a 14-page “Supplemental Submissions” and 14 cases were attached to the “2^nd Supplemental List of Authorities”.

(iv)  On 4 March 2021, a one-page letter, commenting on the Respondent’s Supplemental Submissions dated 3 March 2021.

76.As it is apparent from the discussions above, the contentions between the parties are confined to narrow issues.  These voluminous submissions are excessive in the circumstances.  I also note that most of the case authorities in the Lists of Authorities were irrelevant in assisting this court to resolve the issues in dispute.  This style of submissions is certainly out of step with the requirements of succinctness and proportionality under the Civil Justice Reform.

Ms Corrina Kwan, of Ip, Kwan & Co, assigned by the Director of Legal Aid, for the applicant

Mr Teddy Lam, of Boase, Cohen & Collins, for the respondent