Haden, Francis William v. Leighton Contractors(Asia) Ltd

DCEO 16/2018

[2022] HKDC 423

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EQUAL OPPORTUNITIES ACTION NO. 16 OF 2018

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BETWEEN

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DECISION

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A. THE APPLICATION

1.By a Judgment dated 11 February 2022 (“the Judgment”), this court dismissed the claimant’s claim and made a costs order nisi that there be no order as to the costs of the action, which is the costs position by default pursuant to section 73E(3) of the District Court Ordinance (Cap.336) (“DCO”) which stipulates that:

“Each party to any proceedings in the Court in the exercise of its jurisdiction under the Race Discrimination Ordinance (Cap. 602) shall bear its own costs unless the Court otherwise orders on the ground that—

(a) the proceedings were brought maliciously or frivolously; or

(b) there are special circumstances which warrant an award of costs.”

2.By letter dated 25 February 2022, the respondent applied to vary the said costs order nisi.

3.By consent, this application is disposed of on papers.

4.Unless otherwise stated, I will adopt herein the abbreviations used in the Judgment.

B. LEGAL PRINCIPLES

5.The operation of section 73E(3) of the DCO and similar statutory provisions applicable to other kinds of discrimination cases (“Statutory Provisions on Costs”)[1] have been considered in a number of case authorities[2]. The applicable legal principles may be summarised as follows:

(1) The normal rule of “costs follow the event” does not automatically apply in discrimination claims.

(2) The rationale for the non-application of the said normal rule is that if the court makes an adverse costs order against unsuccessful claimants too readily, it may discourage those who may have legitimate grievance in enforcing their civil rights, and this would defeat the purpose of the discrimination legislations – This will not be conducive to the objectives of the legislations to eliminate discrimination and to change prejudicial attitudes that may exist in our society.

(3) However, on the other hand, over-leniency to unsuccessful claimants in discrimination cases would have a side-effect in that claimants may be encouraged to lodge discrimination claims even if those claims are unmeritorious. This obviously is not the intention of the legislature.

(4) In order to strike the right balance, the Statutory Provisions on Costs stipulate that the court has the power to make a costs order other than “no order as to costs” in discrimination proceedings if (a) the proceedings were brought maliciously or frivolously; or (b) there are special circumstances which warrant an award of costs.

(5) Proceedings are brought maliciously if the claimant commenced them not only out of spite or ill-will but also where there is improper motive.

(6) Proceedings are brought frivolously when:

(a) the claimant subjectively knew that there was no substance in his/her claim and that it was bound to fail; or

(b) objectively considered, the claim is so manifestly misconceived that it can have no prospect of success.

(7) The court is given a wide discretion under the “special circumstances” limb of the Statutory Provisions on Costs. The court should consider whether justice requires that an adverse costs order be made. In this regard, the court can take into account not only the litigation conduct of a party at every stage of the proceedings but also his/her pre-litigation conduct.

(8) In the past, the court had ruled that the presence of a party’s oppressive conduct before the commencement of proceedings, a party’s dilatory, obstructive or oppressive conduct in the course of the proceedings, a party’s oppressive tactics and where proceedings could have been avoided but for a party’s unreasonable conduct would amount to “special circumstances”. The list is not closed, and the court’s hands are not tied.

(9) The burden to show that costs should be awarded is on the party who asks for costs of the proceedings.

6.Insofar as the ground relied on by a respondent for costs is that the claim is so weak that it should not have been brought in the first place, I would further observe that the court has to guard against judging the merits of the claim with the benefit of hindsight. After all, an adverse costs order should not be made against a claimant simply because his/her claim is dismissed.

7.Further, the court should bear in mind that it may be difficult for a claimant in race discrimination cases to prove the claim, because such discrimination is usually not overt and thus the claimant would have to rely predominantly on the drawing of inferences. Hence, in such cases, the absence of direct evidence per se does not necessarily mean that the claim should not have been brought in the first place.

C. THE RESPONDENT’S GROUNDS

8.The respondent relies herein on both limbs under section 73E(3) of the DCO. It is alleged that:

(1) The claimant’s claim is unmeritorious;

(2) The claimant brought this action maliciously; and

(3) There are special circumstances which arise from the unreasonable and oppressive way in which the claimant and his legal team have conducted this action.

9.The respondent further submitted that not only the claimant should be ordered to pay costs, such costs should be taxed on indemnity basis.

10.I will consider these matters in turn below.

D. DISCUSSION

D1. Were these proceedings brought frivolously

11.As aforesaid, there are two alternative tests which the court may apply in deciding whether the proceedings had been brought frivolously – a subjective test and an objective test.

D1.1 The subjective test

12.As far as the subjective test is concerned, Mr Lui and Ms Cheng argued that the claimant knew his claim was hopeless because:

(1) There is no credible or objective evidence in this action to show that his dismissal was due to his race, he therefore must have known that his allegation was based on his suspicion; and

(2) Since the claimant had been legally represented and advised all along, he must have known that his allegation was based on his suspicion, and that it was not supported by direct evidence such that he had to resort to inferences.

13.As this court found in paragraph 208 of the Judgment, the fact that the claimant had raised about “racism” in the meeting held on 27 February 2017 (when he was first informed by Mr Torka that his employment would be terminated) shows that he really considered that there was racism in the Project. In such circumstances, I cannot accept that he subjectively knew that his claim was unmeritorious. Even if he had subsequently been advised that his claim had no merits, I tend to think that the claimant, given his high ego, would not have accepted that, and would have insisted that he had a valid complaint against the respondent.

14.I therefore hold the view that it is more likely than not that he subjectively believed that he had a chance to succeed and that his claim was not bound to fail.

D1.2 The objective test

15.The respondent’s counsel argued that since the claimant had failed on every factual or legal point contested at the trial, there is ample basis for the court to conclude that the claimant’s claim is without legal or evidential foundation and bound to fail, hence, these proceedings were objectively hopeless.

16.With respect, I do not think the court should simply look at the end result of the trial as such, because although the claim was dismissed, it might not be “so manifestly misconceived that it could have no prospect of success” if objectively assessed at the time when these proceedings were commenced.

17.In my view, under the objective test, the court should consider what evidence the claimant had in hand before he commenced these proceedings, and assess objectively whether he could succeed with such evidence. For this purpose, references can be made to his pleaded case, his witness statement and the documents which he had disclosed during the proceedings. I am prepared to infer that, unless there is evidence showing otherwise, matters contained in his witness statement were within his knowledge at the time when he commenced these proceedings, and that documents which were disclosed by him herein were all along available to him.

18.Adopting the aforesaid approach would mean that I would not take into account some of the arguments, factual matters and findings of this court relied upon by the respondent’s counsel. For example, even though this court accepts Mr Torka’s explanation in court as to why Mr Chris Leung preferred Chinese Blasting Engineers (which had nothing to do with race), since such an explanation was not available to the claimant beforehand, it would be unfair to the claimant if the court takes this explanation into account when considering objectively whether the claim was plainly without foundation and bound to fail, such that the claimant should not have commenced the action at all.

19.Be that as it may, I still come to the conclusion that, if one were to consider the facts and surrounding circumstances of this case objectively, one would come to the conclusion that this action should not have been commenced in the first place. I will explain why below.

20.Ms Herbert for the claimant submitted that the claim was not objectively frivolous as the claimant had provided extensive and detailed evidence in support. However, the mere fact that a claimant had put in “extensive and detailed evidence” in support of a discrimination claim per se is neither here nor there. The court has to consider the quality of such evidence.

21.For the sake of convenience, I set out the factual matters relied on by Ms Herbert in her written submissions and this court’s view on the claimant’s reliance on such matters in the table below:

Evidence relied on by the claimant	The court’s view
(1) As supported by an audio recording, the claimant raised the issue of racism in the meeting held on 27 February 2017. It was submitted that as he did not know about the real purpose of this meeting beforehand, this lends credence to the racism grievance he raised thereat.	This only relates to the claimant’s subjective belief in respect of which this court has duly taken into account when conducting the subjective test above. This is irrelevant as far as the objective test is concerned.
(2) The claimant was a very able person and good at his job as far as his technical ability was concerned.	While I agree that this is a matter which prima facie might support the claimant’s case, this fact must be considered in the light of the court’s finding that Mr Torka had talked to the claimant about the latter’s problems on 24, 25 and 26 January 2017 as well as 27 February 2017, and an improvement plan was agreed upon during the meeting on 27 February 2017. With the above in mind, viewed objectively, the fact that the claimant was a very able person must have become a much weaker point from the claimant’s perspective. For the present purpose, the claimant should be taken to have knowledge about Mr Torka’s view (as expressed in the meetings in January and February 2017) that he was not satisfied with the performance of the claimant.
(3) Mr Torka had informed the claimant previously about Mr Chris Leung’s preference on Chinese candidates in the selection of Blasting Engineers.	I am of the view that, objectively assessed (and without considering Mr Torka’s explanation given at the trial), such evidence was only very marginally relevant as far as the question of “whether the court can draw an inference that the claimant was dismissed by the respondent on the ground of race” (“the Question”) is concerned. Firstly, Mr Chris Leung was coming from China State. Secondly, the “Blasting Engineers” were employed for the Joint Venture, but not the respondent. It is difficult to link this with the reason of the claimant’s dismissal.
(4) The non-engagement problem (“a clear culture of non-engagement by employees of the other contractor towards me. There was certainly a feeling of there being separate ‘Leighton’ and ‘China State’ and I felt there was a general, underlying hostility towards non-Chinese employees”[3]) was to a certain extent echoed by Mr Torka.	Taking the claimant’s case to the highest, the non-engagement problem came from the employees of the other contractor, but not the respondent. Hence, it is an irrelevant matter to be taken into account in relation to the Question.
(5) The claimant had been excluded from certain communications and had not been able to get the information he needed to discharge his duty as Blasting Team Leader.	It must be apparent objectively that “race” was not the reason why the claimant did not receive Mr Leung’s 1st Email and Mr Leung’s 2nd Email[4]. This is a matter which could be ascertained before this action was started. On the other hand, I accept that the fact that the claimant had not been able to get the information he needed may be relevant to the Question.
(6) The China State staff did not show up at workshops or meetings.	Such evidence is irrelevant as far as the Question is concerned.
(7) Mr Torka and Mr Lai did not check the respondent’s server personally to confirm that the claimant had indeed not saved all the relevant documents relating to the blasting works thereat.	Given the claimant’s eventual acceptance that it was necessary to hold the meeting on 9 February 2017, it could not be said that the said meeting was held with the intention of excluding the participation of the claimant therein. I am of the view that, objectively assessed, it would not be difficult to reach the conclusion before this action was begun that the said meeting was necessary. In such circumstances, whether the claimant had or had not saved the relevant blasting documents (including the latest versions of CBARs and BMSs) in the respondent’s server is neither here nor there.
(8) No one had taken the initiative to report to the claimant as to what had happened in the meeting held on 9 February 2017.	Given the claimant’s eventual acceptance that it was necessary to hold the meeting on 9 February 2017, it could not be said that the said meeting was held with the intention of excluding the participation of the claimant therein. The objective assessment of merits should also have taken into account the fact that it was not the case that others had refused to inform the claimant what had happened in the meeting despite his request for such information. Furthermore, attention should be drawn to the emails referred to in paragraph 160 of the Judgment. The claimant plainly knew about those emails before this action was commenced.
(9) Mr Ngai had deliberately excluded the claimant in communications with no good reason.	Such evidence must be assessed objectively upon the following background which the claimant must be aware of at all material times: (1) He had a very bad relationship with Mr Ngai[5]; (2) Mr Ngai was from China State rather than the respondent; (3) Mr Ngai was a subordinate of the claimant.[6]
(10) No disciplinary action or otherwise was taken against the site formation team and the surface blasting team members for not communicating with the claimant.	I agree that this was one of the matters which might be considered favourable to the claimant.
(11) The word “gweilo” was said frequently during discussions between Chinese employees. While the court rejected the claimant’s case of racial hostility, it does not mean that the word can never, in a different context, be discriminatory.	In the Judgment, it was found that the incidents relied on by the claimant were all totally unhelpful in advancing his case[7]. They were either totally not related to the respondent (but related to the Project only), or they were not about race but linguistic ability. They could not be relevant to the Question. In my view, if the claimant’s evidence was objectively assessed before this action was commenced, the same conclusion would have been reached. The fact that the word “gweilo” can, in a different context, be discriminatory is totally beside the point, because we should only focus on the present case. In my view, objectively assessed, the claimant’s points on “gweilo” could not assist his claim at all.

22.Apart from the above, Ms Herbert had also reminded this court that:

(1) The court had accepted the claimant’s argument that while Mr Lai did describe the claimant’s emails which were sent to him on 21 February 2017 as “extremely rude”, “abrasive” and “ridiculous” in his witness statement, he had toned down a lot when he was cross-examined in court, as he told the court that he did not find those emails rude and that he was not bothered by them. He also said there was nothing special with those emails[8];

(2) The court had doubted whether Mr Torka did give any warning to the claimant on 1 August 2016 when the latter joined the Project[9];

(3) The court had found that the claimant’s exclusion was partly caused by the different cultures of two different companies.

23.With respect, I find Ms Herbert’s reliance on the above matters totally misconceived. It must be borne in mind that the court is now considering whether, objectively assessed, the claimant should have started these proceedings at all. Hence, I do not think it is relevant for the claimant to argue that he did not totally fail at the trial.

24.All in all, taking into consideration all the matters which I consider relevant or favourable to the claimant referred to above, I hold the view that, objectively assessed, the claimant’s claim was plainly without foundation and bound to fail. I should also add that the main issue in the whole case is whether the claimant was dismissed by the respondent on the ground of race. In this regard, it was the claimant’s pleaded case that “the instruction to Mr Freeman to terminate the claimant’s employment came from Mr Lai and was in response to the claimant raising a grievance with the Project”[10]. With greatest respect to the claimant, he all along did not have any basis for making such an allegation. He had laid his claim only out of his suspicion, if not imagination. Indeed, as a matter of common sense, it is difficult to understand how one can say that the respondent’s joint venture partner would instruct the respondent to terminate the employment of one of its employee.

25.Hence, from the outset, if the claimant was willing to assess his case objectively, he would have recognised that there were simply inadequate materials in support of the inference that he wanted this court to draw. The claimant should not have commenced these proceedings at all.

26.I therefore come to the conclusion that these proceedings were brought by the claimant frivolously, and as a result, it is appropriate for an order to be made that the claimant shall bear the respondent’s costs of the action.

27.The respondent’s counsel submitted that the respondent’s costs should be taxed on indemnity basis. I will consider this submission under Section D4 below.

28.In the light of the above conclusion, strictly speaking, it is unnecessary to consider other arguments made by the respondent. However, for the sake of completeness, I will deal with those arguments briefly below.

D2. Were these proceedings brought maliciously

29.The basis of the respondent’s submissions that the claimant had brought this action maliciously is twofold:

(1) The claimant brought this action as a means to retaliate against the respondent for having dismissed him;

(2) The claimant’s intention of bringing this action was to make unwarranted financial gain not commensurate with his alleged loss and suffering.

30.Heavy reliance had been placed on the claimant’s rejection of two offers made by the respondent to “drop hands”, and his offer to settle the case at $1.8 million with no order as to costs.

31.I do not think there is sufficient ground for the court to find that the claimant had commenced these proceedings maliciously. As I pointed out in paragraph 208 of the Judgment, the fact that the claimant had raised about “racism” in the meeting held on 27 February 2017 when he unexpectedly learnt that he was going to be dismissed shows that it was not an after-thought that he considered there was racism in the Project. Indeed, because of this reason, I accepted in the earlier part of this Decision that the claimant did not subjectively consider his claim unmeritorious. Under such circumstances, he could not be said to have any improper motive in commencing this action. He might well be truly believing that he had a valid case against the respondent.

32.In these circumstances, it is not surprising that he refused the “drop hands” proposals made by the respondent.

33.As far as the $1.8 million offer is concerned, even though it was much more than the amount which this court found the claimant would have been entitled to should the respondent be held liable, it should be borne in mind that it was the first offer made by the claimant. It is not uncommon that after an “opening shot” (from the claimant), there would be a counter-offer coming from the other side, and from then on further negotiations would be conducted. Viewed in that light, I am not prepared to find on the basis of such an offer that the claimant was trying to make a financial gain “not commensurate with his alleged loss and suffering”.

34.In my view, if the claimant really considered it subjectively that he had no case against the respondent, he would have substantially reduced the amount at which he was willing to settle after he received no favourable reply from the respondent on his $1.8 million offer, because he would at least be liable to pay for the costs of his legal team in relation to the trial if he insisted to proceed with the case. However, the claimant did not take such a step. This supports the view that he subjectively considered that he had a valid claim against the respondent.

35.I therefore do not accept that the claimant had commenced these proceedings against the respondent maliciously.

D3. Special circumstances

36.The respondent argued that the following matters amount to “special circumstances” which warrant the making of an adverse costs order against the claimant:

(1) The claimant’s unreasonable conduct during without prejudice negotiation;

(2) The oppressive and unreasonable conduct of the claimant and his legal representatives throughout the course of the action (at both the interlocutory stage and the trial).

D3.1 The claimant’s conduct during without prejudice negotiation

37.The respondent’s counsel, relying on their submissions made in relation to the without prejudice negotiation referred to above, argued that the court should consider whether the litigation could have been avoided but for the claimant’s unreasonable conduct.

38.The first offer of the respondent was made on 23 April 2019 (“the Offer”), pursuant to which the claimant was invited to withdraw or discontinue his claim with no order as to costs. The offer was not accepted by the claimant.

39.Pausing here, I should refer to some statutory provisions at this point:

(1) Pursuant to rule 4 of the District Court Equal Opportunities Rules (Cap.336G) (“the EO Rules”), the Rules of the District Court (Cap.336H) (“RDC”) shall apply to these proceedings with necessary modifications, to the extent of any matter for which no provision is made by Part 2 of the EO Rules;

(2) Order 22 rule 2(4) of the RDC has expressly preserved the right of a party to make an offer to settle in any way he chooses (including by way of a Calderbank letter);

(3) Order 62 rule 2(1) of the RDC provides that the said Order shall apply to all proceedings in the District Court;

(4) Order 62 rule 5(1)(d) of the RDC provides that the court may take into account any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings, but the Court may not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22 of the RDC.

40.As the respondent’s proposal to settle contained in the letter dated 23 April 2019 carried with it a condition of “no order as to costs”, this proposal could not have been made by way of a sanctioned offer in view of the effect of Order 22 rule 20(1) of the RDC: Leung Lai Kwan v Lo Kai Wing (HCMP 1554/2015, unreported, 20 August 2015) at paragraph 7 per Lam VP (as Lam PJ then was) and Ho Kwok Kei v AS Watson & Co Ltd (No.2) [2020] 1 HKLRD 568 at paragraphs 3 – 4.

41.This court may therefore take this proposal into account when exercising its discretion on costs.

42.I have borne in mind the rationale of the Statutory Provisions on Costs. However, I do not think there is any conflict between such rationale and the spirit of the CJR in encouraging parties to settle. While individuals who may have legitimate grievance should not be discouraged to enforce their civil rights by bringing discrimination claims in court, they at the same time should also bear in mind the underlying objectives of the RDC. They should consider offers made by the other side seriously and realistically, bearing in mind the merits of their claims.

43.I have expressed my view on the objective assessment of the merits of the claimant’s claim in the earlier part of this Decision. By the time of the Offer, the respondent had filed its Notice of Response, lists of documents had been exchanged, and the claimant’s requests for specific discovery had been satisfied[11]. In my view, objectively assessed, there were adequate reasons for the claimant to accept the Offer in April 2019. However, the claimant had turned it down unreasonably. However, he could not achieve anything more than the Offer after trial. In such circumstances, there is no reason why the claimant should not bear the respondent’s costs incurred from the date after the making of the Offer. In my view, this would amount to “special circumstances” under section 73E(3)(b) of the DCO.

D3.2 The claimant’s conduct at the trial

44.The respondent’s counsel relied on the following matters in support of their submissions that there were “special circumstances” which warrant the making of an adverse costs order against the claimant:

(1) The claimant’s reliance of various matters which were not pleaded or mentioned in witness statement/opening submissions;

(2) The claimant’s attempt to identify Mr Ngai as actual comparator only for the first time in his counsel’s closing submissions;

(3) The claimant’s initial reliance on a point concerning “grievance resolution process” which, it was said, was a point invented by his lawyers.

45.I agree that it was undesirable for the claimant to rely on matters which were not properly pleaded. The claimant should also have made it clear much earlier of his intention to use Mr Ngai as an actual comparator in his claim. Having said that, I do not think these would amount to “special circumstances”.

46.Furthermore, I do not accept that the extra time and costs spent on those matters were to such an extent that the court should depart from the usual default position on costs in discrimination cases.

47.In relation to the point about “grievance resolution process”, I appreciate that:

(1) In the claimant’s Notice of Claim, he claimed that he had:

“[raised] a grievance with Mr Lai on 21 February 2017 regarding serious procedural concerns for which he was ultimately responsible, the respondent did not invoke any formal or informal grievance resolution process”[12]; (emphasis added)

(2) In paragraph 67 of the claimant’s witness statement, he stated that:

“Leighton admits that it did not invoke any resolution process to resolve the grievance I raised with Mr Lai on 21 February 2017 (being tacit acknowledgement that I did in fact raise a grievance)”; (emphasis added)

(3) In paragraph 10 of the claimant’s opening submissions, the “grievance” was said to have been raised by the claimant in the meeting held with Mr Jorka on 27 February 2017. There was no further mention of the claimant having raised any grievance with Mr Lai on 21 February 2017.

48.I am also aware that on as early as 13 March 2017, in reply to the claimant’s email dated 10 March 2017 (by which the claimant made various demands in light of the alleged race discrimination), Mr McGrory did state in his email[13] that:

“Francis,

As you are aware, we have both an Anti Bullying, Harassment and Discrimination Policy, as well as a Diversity and Inclusion Policy, and all claims of behaviour that is in contradiction of these policies are taken seriously.

Accordingly, we will need to investigate these claims before any discussion relating to your requested settlement is possible.

Cheers,

Craig”

49.In reply, the claimant made the following request by email on 17 March 2017:

“Dear Craig,

Please would you provide me with a copy of Leighton’s anti-discrimination and harassment policy and any internal policy, guideline or commitment document that confirms what the investigation referred to in your email below[14] will comprise, when it will take place and Leighton’s interim duties towards me.

Thanks,

Francis”

50.I have no doubt that the claimant would have provided his solicitors with the above emails. I do not think it is fair to say that the claimant’s solicitors had “invented” the points, even though this argument on “grievance resolution process” was abandoned eventually.

51.To conclude, I do not accept that the court should make any adverse costs order against the claimant by reason of the way he or his legal team conducted his case during the trial.

D3.3 Conduct of the claimant’s team concerning interlocutory matters

52.The respondent relied on the way the claimant and his lawyers handled four interlocutory matters in support of its arguments that an adverse costs order should be made.

53.Firstly, the respondent stated that the claimant had been late for 3 days when he took out a summons for specific discovery on 14 February 2019, which was in breach of HH Judge Winnie Tsui’s order dated 8 November 2018. It was further alleged that when the claimant’s solicitor, Mr Adam Scott Hugill, tried to justify such lateness, he gave a misleading account by which he accused the respondent’s solicitors of not promptly replying to the claimant’s requests for discovery.

54.It cannot be emphasised enough that case management timetables set by the court are meant to be complied with and that parties are not at liberty to decide whether they should follow the deadlines imposed therein or not. Having said that, I do not think the delay of 3 days per se should be an adequate reason for the court to depart from the default costs position imposed by the Statutory Provisions on Costs in relation to the whole action.

55.In respect of the way the claimant’s solicitors handled his requests for specific discovery, I have the following observations to make:

(1) First of all, given Her Honour’s directions had already been given on 8 November 2018, there was no reason why the claimant’s solicitors should wait until 4 February 2019 to make their requests by letter for 31 items of documents. It was not disputed that the requests for specific discovery dated 4 February 2019 was only faxed over to the respondent’s solicitors at 4:13pm on that day, which was the last day before the lunar new year day on 5 February 2019. 5 – 7 February 2019 were public holidays. 9 February 2019 and 10 February 2019 were Saturday and Sunday respectively. Hence, that means there was only 1 working day left (8 February 2019) before the deadline on 11 February 2019 arrived. With the above background, making the above requests on as late as 4 February 2019 is totally unacceptable;

(2) Despite the very limited time given, the respondent’s solicitors managed to give a reply on 11 February 2019 at 2:58pm, by which they gave the respondent’s preliminary responses to the claimant’s requests. However, as the respondent’s solicitors still needed time to seek further instructions from the respondent, they asked the claimant’s solicitors to withhold taking out a formal application for specific discovery. Then Mr Hugill sent an email to the respondent’s solicitors at 3:17pm, and asked for a confirmation by 3:30pm that the respondent would not take issue with any specific discovery application being made out of time if the claimant indeed withheld action as requested. Although I doubt whether such a confirmation was really necessary given it was the respondent’s request for the claimant to withhold action in the first place, I do not consider it reasonable for Mr Hugill to demand a reply within 13 minutes;

(3) According to the affirmation of Lee Cheuk, Legal Counsel of the respondent, the claimant’s solicitors repeatedly called up the respondent’s solicitors afterwards and demanded a confirmation that the respondent would give its consent within 10 minutes, and threatened that the claimant would take out a formal application. Again, reasonable time should have been given to the other side to consider the request. The setting of such tight timeframe is totally unhelpful;

(4) While the respondent’s counsel alleged that it was misleading for Mr Hugill to affirm that the respondent’s solicitors did not reply to his letter dated 13 February 2019 when the fact was that the respondent’s solicitors did reply on 14 February 2019, I note that Mr Hugill’s affirmation was filed on 14 February 2019, therefore it is possible that he had not yet received the respondent’s reply by the time when he affirmed his affirmation.

56.I must say that I am totally unimpressed by the way the claimant’s solicitors handled the requests for specific discovery by reason of the matters referred to under sub-paragraphs (1) to (3) above.

57.Secondly, the respondent stated that the claimant’s solicitor, Mr Hugill, had changed his stance on the disclosure of certain information.

58.What happened was that on 25 February 2019, HH Judge Winnie Tsui ordered, among other things, that, within 7 days:

“Claimant do confirm to Respondent by letter the dates of the emails to which the documents referred to in item no.3 and 4 of the Letter [dated 31 January 2019 sent by the Respondent’s solicitors] were attached.”

59.According to the Affirmation of Lee Cheuk, the period of “7 days” was proposed by Mr Hugill in the hearing held on 25 February 2019.

60.By letter dated 4 March 2019, the claimant’s solicitors wrote:

“We will revert regarding the request for further information regarding Item II, 3 and 4 of your letter dated 31 January 2019 separately and ask your indulgence to do so within this week.”

61.However, it seems that the claimant’s solicitors did not comply with the order within that week or at all.

62.Mr Hugill then argued in the Case Management Conference which took place on 25 November 2019 that those covering emails were privileged documents.

63.No matter whether Her Honour’s order was made by consent or not, it seems odd to me for Mr Hugill to make this point on “privilege” in the hearing on 25 November 2019. A court order had been made on 25 February 2019 and there was no appeal against such an order. It was simply not open to Mr Hugill to argue on whether he should or should not comply with the said order.

64.Having said that, there is no evidence before this court as to how the learned Judge responded to Mr Hugill’s submissions. Neither could I get any clue from the directions/orders made by Her Honour on that day. I can only assume it that the court considered that no follow up action had to be taken despite the non-compliance of the order dated 25 February 2019, and despite the respondent’s proposal made in its Equal Opportunities Questionnaire dated 19 November 2019 that the following order be made:

“The Claimant to within 7 days either comply with paragraph 7(b) of the Order dated 25 February 2019 or to file an affirmation explaining the circumstances and reasons for his failure to comply.”

65.The respondent’s counsel informed this court that their lay client eventually decided not to press for discovery. Perhaps that was the reason why the court did not make further order on the matter at the time.

66.Thirdly, the respondent complained about Mr Hugill’s conduct in relation to the respondent’s request for specific discovery of certain diary notes of the claimant.

67.On 25 November 2019, HH Judge Winnie Tsui enquired with Mr Hugill whether the claimant would contest the respondent’s request for specific discovery of the claimant’s “diary notes”, and indicated that it would be inappropriate to set the matter down for trial if the claimant would object against the request. Mr Hugill informed the court that the matter would be uncontroversial. As a result, the learned Judge gave leave to set the matter down for trial, and directed the respondent to take out a summons for specific discovery of the diary notes of the claimant within 21 days.

68.However, despite the aforesaid indication, Mr Hugill took the stance subsequently that the “diary notes” referred to in the said order only related to the page of the date of 1 August 2016 but not any other page of the claimant’s diary.

69.Because of the said stance of Mr Hugill, the respondent had to take out a summons rather than dealing with the matter by consent. The summons was heard by Her Honour on 23 December 2019. Ms Herbert did not dispute that Mr Hugill was severely criticised by the learned Judge at the hearing because as a matter of fact the diary of 1 August 2016 had already been disclosed by the claimant before 25 November 2019. Therefore, the court’s directions made on that day must be in relation to other pages of the diary. The diary notes were subsequently disclosed by the claimant by consent.

70.Fourthly, the respondent’s counsel referred this court to the claimant’s objection against the respondent’s application to file and serve supplemental witness statements of two of its witnesses and an additional witness statement, which attracted the following comments made by HH Judge Leung who dealt with the respondent’s application:

“In my view, persistence in unmeritorious opposition on behalf of Haden in the circumstances of the present case was not conducive to the proper progress and fair resolution of the dispute.”

71.In the end, the court ordered the claimant to bear part of the respondent’s costs of the application despite the court’s view that the claimant should have his costs of the application.

72.I have carefully considered all the incidents above. Even though I agree that the way certain matters were handled by the claimant’s solicitors (especially Mr Hugill) deserved criticism, I do not consider that such conduct, even if we look at all the matters together, would amount to “special circumstances”.

D4. Indemnity costs

73.Not only did the respondent ask for its costs of the action, it was further submitted on its behalf that such costs should be taxed on indemnity basis. It was argued that:

“42. As to the request for an award of costs against Haden on indemnity basis, the Court is respectfully referred to similar orders granted on previous occasions under DCO s.73E(3): FD v Shek Kwok Ngai at §§19, 28; Tsang Lai Man at §4.

43. It is submitted that a conscientious consideration of the grounds of this application, including not only the hopelessness of Haden’s claim but also his improper motives and his team’s deliberately obstructive and unreasonable behaviour in their conduct of this action, an award of costs against him on indemnity basis is fully justified.”

74.With respect, I do not agree that the circumstances of the present case were so bad that warrant the making of an indemnity costs order. The factual circumstances in the case of FD v Shek Kwok Ngai (supra) and Tsang Lai Man v Wong Lung Shan (supra) were simply not comparable to those in the present case. Although I agree with the respondent that the case of the claimant was so weak that he should not have commenced these proceedings at all, I believe that he, perhaps stubbornly, considered that he had a valid claim against the respondent. As I pointed out in paragraph 265 of the Judgment, I considered that the claimant was a man with very high ego. He probably simply refused to accept that his employment had been terminated by reason of his performance (in the sense that he could not maintain a good working relationship with others). He might also have been too sensitive. Having said that, I do not think he had at any time had any improper motive as such. I tend to think that he all along believed that he was entitled to be compensated, even though, objectively assessed, such a belief was totally unfounded.

75.I therefore conclude that this is not a case in which indemnity costs should be ordered.

E. ORDER

76.I therefore vary the costs order nisi made in the Judgment. The claimant is hereby ordered to bear the respondent’s costs of the action (including all costs reserved), with certificate for counsel (Mr Lui), to be taxed on party and party basis if not agreed.

F. COSTS

77.Although I have not accepted all the arguments advanced on behalf of the respondent, it is clear that the respondent is the successful party in the variation of costs order nisi application. I take the preliminary view that costs shall follow the event. I therefore make a costs order nisi that the claimant should bear the respondent’s costs of this variation of costs order nisi application, to be taxed on party and party basis if not agreed. For the avoidance of doubt, I grant certificate for counsel in relation to the engagement of Mr Lui.

78.If any party wishes to vary the costs order nisi:

(1) Such a party shall lodge and serve written submissions within 14 days hereof;

(2) The other party shall lodge and serve written submissions within 14 days thereafter;

(3) The applying party shall lodge and serve written submissions in reply within 7 days thereafter;

(4) The application shall then be disposed of on papers.

79.The above order nisi shall become absolute in the absence of application to vary within the first 14-day period mentioned above.

Ms Elizabeth Herbert, instructed by Hugill & Ip, for the claimant

Mr Mike Lui and Ms Kelly Cheng, instructed by MinterEllison LLP, for the respondent