So Sin Ying v. J. v. Fitness Ltd
Read the full judgment text of HCPI 1023/2014 on BabelCite. This High Court CFI judgment was delivered on 27 December 2023.
1. After trial, this court handed down judgment on 7 July 2023 (“the Judgment”) assessing the damages payable by the defendant (“JV”) to the plaintiff (“So”) in the sum of HK$14,137,638 (“the Judgment Sum”) together with interest but subject to credit to be given to the employees’ compensation received. This court made a nisi order that JV shall pay So her costs of the assessment, including any costs reserved, to be taxed, if not agreed, and her own costs shall be taxed in accordance with legal
Cited by 6 cases · Cites 10 cases
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HCPI 1023/2014 [2023] HKCFI 3352 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE PERSONAL INJURIES ACTION NO 1023 OF 2014 ________________________
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___________________ D E C I S I O N ___________________ 1.After trial, this court handed down judgment on 7 July 2023 (“the Judgment”) assessing the damages payable by the defendant (“JV”) to the plaintiff (“So”) in the sum of HK$14,137,638 (“the Judgment Sum”) together with interest but subject to credit to be given to the employees’ compensation received. This court made a nisi order that JV shall pay So her costs of the assessment, including any costs reserved, to be taxed, if not agreed, and her own costs shall be taxed in accordance with legal aid regulations. In the absence of application to vary within 14 days, this nisi costs order shall become absolute without further order. 2.By summons filed on 21 July 2023 (“the Variation Summons”), So applies for the variations set out in the following two paragraphs. 3.In respect of interest on the Judgment Sum:
4.In respect of costs:
5.By the Variation Summons, So also applies for the payment out to her of the amount paid into court by JV in the sum of HK$100,000 on 31 October 2016 with accrued interest in partial satisfaction of the Judgment. 6.The Judgment was sealed on 3 August 2023. 7.By another summons filed on 22 September 2023 (“the Correction Summons”), So applies to replace the Judgment Sum by the lesser sum of HK$13,562,934.50 on account of error in the calculation of the mandatory provident fund (“MPF”) in failing to apply the maximum monthly MPF contribution capped at HK$1,250 until 31 May 2014 and HK$1,500 from 1 June 2014 onwards. O22 8.For the following purpose, I set out both rr23 and 24 of O22 below:
THE VARIATION SUMMONS 9.JV made its sanctioned payment in the sum of HK$100,000 back on 31 October 2016. This was rejected by So who instead made her sanctioned offer on 19 November 2019 to settle the assessment at the sum of HK$8,500,000 (inclusive of interest, advanced payment and the sanctioned payment). JV did not respond to the offer. So managed to obtain judgment better in terms than the offer. 10.The Variation Summons was taken out pursuant to O22, r24(2) in respect of interest on the Judgment Sum and r24(3) in respect of costs. Pursuant to r24(4), the court shall make the orders under these sub-rules unless it is unjust to do so. In considering the issue of injustice, the court takes into account the circumstances of the case including those set out in r24(5). The onus is on JV as the defendant to show that it is unjust to make the orders under r24(2)-(3): see Chan Wai Chung v China Travel Service (Hong Kong) Ltd [2023] HKCFI 1442 at §31. 11.JV does not oppose to the payment of enhanced interest on the Judgment Sum (subject to the correct amount) and enhanced interest on So’s costs. As summarised by its counsel, JV’s objection is limited to the follows:
Jurisdiction 12.Counsel for So brought up the issue of jurisdiction with reference to the decision in Yeung Lai Ping v Secretary for Justice [2023] HKCFI 2396 (HCPI 833/2002), which was handed down 3 days prior to the present hearing. He did so entirely out of prudence, which is commended. 13.In Yeung Lai Ping, judgment after trial was handed down on 1 April 2019 entering judgment in favour of the plaintiff, and the order given under the judgment was sealed on 3 May 2019. The order expressly provided that the award was not final with liberty to apply to vary. Pursuant to that, the judgment sum was subsequently varied on 16 October 2019 with interest to be calculated. Subsequently, the nisi period of the costs order and the time for finalising the calculation of interest was also extended until after the determination of the then pending appeal against the judgment on both liability and quantum. 14.The plaintiff in Yeung Lai Ping took out an application for variation of the order of the court pursuant to O22, r24 on the basis that the defendant failed to obtain a result better than the plaintiff’s sanctioned offer made back in November 2016. She therefore sought enhanced interest on the judgment sum and indemnity costs similar to what is now sought before this court. The application was heard before another court than the trial judge. 15.Counsel for the defendant in Yeung Lai Ping took the jurisdiction issue in respect of the application for enhanced interest on the judgment sum. He argued that the court has become functus officio when the trial judge’s order did not provide for liberty to apply in respect of interest on judgment or alternatively order such aspect on a nisi basis. Given the judgment was sealed and perfected, the defendant argued that the court had no jurisdiction to reopen the issue of interest on judgment. 16.Of the arguments advanced by Leading Counsel for the plaintiff in Yeung Lai Ping in response to the challenge on the jurisdiction of the court, the major one was that the nisi order made by the trial judge contemplated the variation of both interest and costs consequential upon the operation of the non-acceptance of the plaintiff’s sanctioned offer. The court hearing the application distilled the sophistication of Leading Counsel’s argument down to what he considered as the critical consideration, namely whether the court has jurisdiction to vary an award of interest on the judgment where such order was not given on nisi basis. The court answered the question so framed above in the negative. 17.What the defendant in Yeung Lai Ping argued in respect of the order there, and agreed to by the court there, as mentioned in the preceding paragraph may well be said about the situation faced with by this court in the present case. However, counsel for JV confirmed his awareness of the decision in Yeung Lai Ping, but obviously had no intention of taking similar jurisdiction issue on the force of that. He only made some observations in his oral submissions with a view to assisting the court. 18.Insofar as whether JV expects this court to follow the decision in Yeung Lai Ping, the informed stance consciously taken by JV is telling. I think this is not without reason. 19.The major reasons for the decision of the court in Yeung Lai Ping are first, the principles explained in Kung Kwok Wai David v Commissioner of Estate Duty [2022] 1 HKLRD 965; and second, the wordings of the order made by the trial judge. 20.In Kung Kwok Wai David, the appellate court was faced with a situation where the costs order sought to be varied was not expressed to be nisi. That, the court found, meant it was an absolute order, which the court had no jurisdiction to vary. The appellate court nevertheless was prepared to entertain the application on the basis that the order was by then yet to be sealed. The court in Yeung Lai Ping considered that the same should apply to the order in respect of interest on judgment before him, the effect of which was reinforced by its wordings. 21.I have no quarrel insofar as the court is functus officio upon its pronouncement of judgment and the making of an (absolute) order under the judgment. However, the jurisdiction of the court to revisit its order in respect of interest and costs made upon judgment pursuant to O22, rr23 and 24 is statutory, which was introduced to be invoked only after the pronouncement of the judgment and the order. The court is not functus officio insofar as such post-judgment statutory jurisdiction is concerned. 22.O22, rr23 and 24 expressly provide for the costs consequences where the plaintiff fails to do, or alternatively does, better than sanctioned offer or sanctioned payment. Sub-rule (1) in both cases invariably provides that the respective rule applies with reference to the judgment obtained as compared with the sanctioned offer or payment. R25 restricts the disclosure of sanctioned offer or payment to the court until all the questions of liability and quantum have been decided. There is virtually no way the court is in a position to invoke the statutory jurisdiction under O22, rr23 or 24 until after the judgment and order have been pronounced. 23.The appellate court in Kung Kwok Wai David also pointed the effect of a costs order not expressed to be nisi. However, what brought about the appellate court’s consideration in that case was O42, r5B which prescribes the manner in which reserved judgment should be handed down. Amongst other things, sub-rule (6) provides for the court’s discretion to make a nisi order as to costs, which is now the norm whenever the court has not heard the parties on the issue of costs for the very reason that judgment or decision is being reserved. This prevents the court from becoming functus officio if and when it has to hear argument on costs, which is ordered to be nisi. At the same time, the nisi costs order also serves to dispense with the argument on costs if there is no application in 14 days to argue it. That formed the context of the appellate court’s discussion and decision, but no further or other. 24.The question that follows is whether a nisi order in respect of interest and/or costs is nevertheless a pre-requisite to the jurisdiction of the court to revisit the order under O22, rr23 or 24. Apparently, the court in Yeung Lai Ping considered that it is. With respect, I hold a different view. 25.As mentioned, this is not about the preservation or not of the court’s jurisdiction in adjudicating the issues of interest and costs as part of the judgment, but the invoking of the statutory jurisdiction in respect of interest and costs expressed to be available only after judgment and order, even including that in those respects, have been pronounced. O22, r23(7) and r24(6), as the case may be, also make clear that such statutory powers of the court are in addition to any other power it may have to award (or disallow) interest. 26.Further, where O22, rr23 or 24 applies, the court shall make such orders in respect of interest and/or costs unless it considers it unjust to do so in the circumstances of the case including those various factors expressly set out in the rules. Whilst the outcome still depends on the circumstances of the case, the exercise of the jurisdiction is mandatory. The perceived need to expressly make any order in respect of interest and costs upon pronouncement of judgment on a nisi basis as pre-requisite to the exercise of such statutory jurisdiction to revisit such order, in my judgment, does not align with the express mandatory nature of the jurisdiction after the pronouncement of the judgment. 27.The court in Yeung Lai Ping also considered whether or not the judgment or order has been sealed and thus perfected would have bearing on the existence of the court’s jurisdiction under O22, rr23 and 24. That the order as to costs was yet to be sealed and perfected in Kung Kwok Wai David put the mind of the appellate court at ease to revisit the albeit absolute order. However, I am not impressed that this, in the context of that case as mentioned, should be read to stand as authority for the proposition that the court is deprived of its statutory jurisdiction under O22, rr23 and 24 to revisit the order in respect of interest and costs if it has been sealed and thus perfected. 28.First, it should be noted that a nisi order takes effect from the day of its date. A nisi order in respect of costs per se may well have been sealed by the time when an application to vary it is heard. It was however not suggested in either Kung Kwok Wai David or Yeung Lai Ping that that should stand in the way of the court’s exercise of jurisdiction to revisit the nisi order as to costs. 29.Second, nisi or absolute, an order required to be drawn up must be drawn up by the applying party within 7 days after it is made, or else any other party to the proceedings has the liberty to do so pursuant to O42, r5(5). If sealing of the order has the effect of preventing the party from invoking of the statutory jurisdiction under O22, rr23 or 24, that would mean a party may still achieve that by proceeding to seal the judgment/order while the other party who seeks to invoke such statutory jurisdiction refrains from doing so. 30.Third, O59, r4(1)(c) prescribes the time for appealing against a judgment or order by serving the notice of appeal within 28 days from the date of the judgement or order. In the present case, this would be on or before 4 August 2023. O59, r5(1) provides that appellant must lodge, amongst other documents, a copy of the sealed judgment or order within 7 days of service of the notice of appeal pursuant to r4(1)(c). That, I am given to understand, explains why So took out her application by the Variation Summons on 21 July 2023 without sealing the Judgment, but proceeded to do so only on 3 August 2023 in view of JV’s appeal. As mentioned, JV would have been in a position to do so in any event pursuant to O42, r5(5) for the purpose of lodging its appeal against the Judgment in compliance with O59. 31.If sealing of the judgment or order in respect of interest and costs, be it nisi or absolute, has the effect of depriving the court of its statutory jurisdiction to revisit the order pursuant to O22, r23 or 24, that would mean the operation of such statutory jurisdiction could be defeated by the compliance with the other rules governing the sealing of judgment for the purpose of appeal. In my judgment, this also does not align with the purposive approach to construing the co-existent parts of the same statutory framework. 32.All matters considered, I am of the view that the court does have statutory jurisdiction under O22, rr23-24 to revisit the order in respect of interest and costs made upon the pronouncement of judgment whether or not it has been sealed by the time of exercise of the jurisdiction. 33.Until there comes the opportunity for the now conflicting decisions in respect of the jurisdiction of the court under O22, rr23-24 to be resolved on the appellate level, it remains a matter for the individual court, if again called upon to consider the same jurisdiction issue, to come to its own view. What I note is that different from nisi costs order, which is the norm pursuant to the operation of O42, r5B(6) when judgment or decision is reserved, there may be practical difficulty for the parties to seek to preserve the position by requesting the court to reserve the issue of interest or to make a nisi order in respect of interest without hinting the possibility of argument on the basis of O22 which is impermissible because of r25(2) as mentioned. Enhanced interest 34.In Chan Wai Chung, the court referred to Qvist Henrik v Clatronic Far East Ltd [2020] 1 HKLRD 703, which in turn referred to the discussion in OMV Petrom SA v Glencore International AG [2017] 1 WLR 3465:
35.As mentioned, JV does not oppose the imposition of enhanced interest on the Judgment Sum, but its rate. 36.In the present case, So was injured at work on 7 August 2012. Though interlocutory judgment on liability in the present case has been entered against JV in December 2014, So has so far received HK$114,911.49 as advanced payment. As mentioned, the Sanctioned Offer made in November 2019 was not responded to by JV. JV persisted in its dispute in respect of quantum of damages on the basis of malingering on the part of So. As discussed in the Judgment, malingering is a positively adverse contention against So than symptom exaggeration. At the end, this does not materially differ from any given case where a litigant took the risk of persisting in his contention, notwithstanding a not unreasonable O22 offer or payment. Legally assisted, JV took its calculated risk which entailed the incurring of substantial costs since December 2019 and the end result against it. The policy reason behind the rule should be given effect to by imposing an enhanced interest rate. This is not merely compensatory but reminiscent of consequence to JV for having consciously taken a risk at the expense of its opponent. 37.That said, this case does not impress me as being the worst kind of case such as where entirely misconceived or bad points were taken in the absence of evidence in support, so that such abuse would have attracted the top end of the enhanced rate. It was the interpretation and preference of the evidence at the trial, which turned out to lie in favour of So. In the personal injury context, pre-judgment interests on general and special damages are usually ordered at 2% and half of the judgment rate respectively. All matters considered, 2% per annum above the judgment rate on the Judgment Sum should be sufficiently enhanced in the circumstances. 38.In respect of the appropriate enhanced interest rate on costs, the court in Chan Wai Chung explained that where a successful legally-aided party seeks enhanced interest on costs and does not place information as to whether and if so when the costs and disbursements incurred after the expiry of the deadline for the unsuccessful party to accept his sanctioned offer, the “modified” approach under Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273 should be followed, especially when there have been work done over a long period of time. The level of enhanced interest awarded must be proportionate to the circumstances of the case, bearing in mind that the maximum of 10% per annum above the judgment rate must be reserved for the worst kind of cases. In line with the above, the court in Chan Wai Chung considered that the appropriate full enhanced rate of interest should be 3% per annum above the judgment rate. Applying the “modified” approach, half of the full enhanced rate was awarded from the last date on which the sanctioned offer could have been accepted without leave of the court up to the date of judgment. 39.Counsel for JV submits that the modified approach mentioned above is appropriate in the circumstances of the present case. In view of the materials available, I agree. So does counsel for So. It will be half of 2% per annum above the judgment rate on costs incurred since 18 December 2019. Other terms 40.Contrary to what So seeks, the enhanced interest on the Judgement Sum (in the lesser sum as now conceded by her) and her costs incurred since 18 December 2019 shall run until the date of the Judgment instead of full payment: see Lo Yuk Sui v Fubon Bank (Hong Kong) Ltd [2017] 2 HKLRD 477. This, as far as I observe, is what the court has been doing in previous cases at least in the personal injury context. 41.As to payment of the interest on costs to the Director of Legal Aid instead of So, her counsel has no strong view. I agree that this is right: see Shih Pik Nog v G2000 (Apparel) Ltd [2011] 4 HKLRD 121. THE CORRECTION SUMMONS 42.This court must acknowledge the failure to factor in the statutory maximums of MPF contributions of the relevant periods in the assessment so that the computation across the board at 5% of So’s notional monthly earnings must be wrong. On the basis of the notional monthly earnings of So as found, the loss of MPF benefits should be HK$150,212.50 instead of HK$724,916, and hence the reduction of the total quantum. Subject to the pending appeal, counsel for JV does not argue otherwise for the present purpose. 43.What counsel for JV argues is that the court is functus officio. Where the error is not of the clerical or accidental kind, it is not correctable by the court pursuant to the slip rule under O20, r11. I can see the force of that in the circumstances of this case. Yet arguments in respect of jurisdiction aside, the necessity for an application for the purpose of correcting such part of the quantum in this manner has in fact been overtaken by events. As mentioned, JV has already lodged an appeal against the Judgment including this aspect of the quantum. For So’s purpose, it only requires her to concede on this aspect, which is also her stance on record now. The same will become common ground and cease to be an issue on appeal. The correction should follow pending the outcome of the other issues of quantum on appeal. 44.In view of the above, no order is made in respect of the Correction Summons. COSTS OF THE APPLICATIONS 45.So should be entitled to the costs of the Variation Summons. 46.Whether or not the Correction Summons is necessary and allowed, this is occasioned by So and therefore JV should be entitled to the costs of it. CONCLUSION AND ORDER 47.I make the following orders in respect of the Variation Summons. 48.The order in respect of interest made under the Judgment be varied as follows:
49.The nisi costs order made under the Judgment be varied as follows:
50.I also order that the amount paid into court by JV in the sum of HK$100,000 on 31 October 2016 shall be paid out with accrued interest to So through the Director of Legal Aid in partial satisfaction of the Judgment. 51.No order is made in respect of the Correction Summons. 52.I make an order that (i) costs of the Variation Summons be to So to be taxed, if not agreed; and (ii) costs of the Correction Summons be to JV to be taxed, if not agreed (for the avoidance of doubt, with certificate for counsel). So’s own costs shall be taxed in accordance with legal aid regulations. This costs order is nisi and shall, in the absence of application in 14 days to vary, become absolute without further order.
Mr Kenny Lin, instructed by Cedric & Co, assigned by the Director of Legal Aid, for the plaintiff Mr Leon Ho, instructed by Au & Associates, for the defendant [1] with whom Kitchin LJ (as he then was) and Floyd LJ agreed [2] [2019] HKCFI 91, [2019] HKEC 1023 (10 January 2019) at [12(1)] | ||||||||||||||||||||
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