Ip Siu Chi v. Kwan Wing Hang t/a Fai Hung Construction Company and Others

HCPI 1200/2018

[2024] HKCFI 1622

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 1200 OF 2018

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DECISION

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BACKGROUNDS

1.On 6 May 2024, I handed down judgment in HCPI 1200/2018 (the “Judgment”). In the Judgment, I awarded $1,509,202 as quantum for the plaintiff’s personal injuries claim.

2.I also granted a costs order nisi that the defendants do pay the plaintiff her costs of this action to be taxed if not agreed. The plaintiff’s own costs shall be taxed in accordance with the Legal Aid Regulations.

3.By a letter dated 14 May 2024, solicitors for the 1^st and 2^nd defendants sought clarification on the applicable scale of costs as the quantum of damages falls within the threshold of the District Court jurisdiction.

4.Directions were given for parties to lodge written submissions on the issue of the applicable scale of costs.

PLAINTIFF’S STANCE

5.Mr Erik Shum, counsel for the plaintiff, submitted that on the following bases, costs on the High Court Scale should be awarded, although the quantum of damages awarded is below HK$3,000,000:

(1)  The proper test for the scale of costs is “whether it was reasonable for the plaintiff to commence action in the High Court at the time when the Writ was issued”[1].

(2)  The Writ was issued on 15 November 2018, shortly before the increase of the District Court jurisdiction from HK$1 million to HK$3 million. Hence, at the time the Writ was issued, objectively it was at that time reasonable for the plaintiff to have commenced the action in the High Court.

(3)  “In selecting the forum, the plaintiff should take into account that the net amount awarded would be subject to employees’ compensation deduction which was already known one month before commencement of the personal injury action in the High Court. Where the net award fell within the jurisdiction of the District Court, the plaintiff was entitled to costs on the District Court scale and not the High Court scale[2]”. However, the award for Employees’ Compensation (“EC”) was granted on 25 January 2021, after the Writ was issued.

(4)  With interest, total damages together with the award for EC amount to HK$2,807,302.26, which is very close to the new jurisdictional limit of HK$3 million.

(5)  The defendant has never requested for the case to be transferred to the District Court, indicating that they were content to have the case proceed at the High Court.

(6)  The plaintiff’s claim is much more than HK$3 million. The amount of damages were substantially discounted due to the plaintiff’s pre-existing condition and the rejection of the claimed pre-accident income. It was not reasonable for the plaintiff to have commenced the case in the High Court in those circumstances.

1^ST AND 2^ND DEFENDANTS’ STANCE

6.Mr Tony Ko and Mr Hung Kin, counsel for the 1^st and 2^nd defendants submitted that:

(1)  The plaintiff’s two largest heads of claim were pre-trial and post-trial loss of earnings. The only piece of evidence in support of the plaintiff’s contention that the monthly income pre-accident was around HK$50,000 was Kon Kee’s letter indicating three months’ salary paid to the plaintiff. Against such contention were overwhelming evidence to the contrary, including the Inland Revenue Department records and the plaintiff’s bank account statements. The plaintiff’s pre-existing psychiatric condition should also have been apparent at least from the stage of discovery. An application to transfer the case should have been made at the latest at that stage.

(2)  There had been ample time for the plaintiff to have transferred the case to the District Court before trial.

(3)  There is no complexity that justifies continuing the case at High Court level.

DETERMINATION

7.Having considered the submissions from parties, I am of the view that the plaintiff ought to have applied for the case to be transferred to the District Court after the award has been made for the EC claim, or discovery, whichever is later:

(1)  I agree that at the time the Writ was issued, it was reasonable and the plaintiff was entitled to commence the case in the High Court. However, after the increase of the District Court jurisdiction, discovery or the award of the EC claim (whichever is later), the plaintiff should have been updated in the advice on the merits of her claim and the quantum of damages sought in light of the new circumstances.

(2)  As found by me, the available evidence does not support the plaintiff’s contention that her monthly salary was consistently at HK$50,000. The plaintiff ought also to have been aware of her pre-existing psychiatric condition (which was not disputed), which would lead to a possible reduction in the ultimate amount of damages awarded.

(3)  Although I agree that a defendant would under normal circumstances also be expected to raise the issue of whether a case should be transferred to the District Court; in this particular case, where the plaintiff’s claim was over HK$17 million, it would have been unrealistic for a defendant to suggest that the case be transferred to the District Court, when the plaintiff has shown no indication that her claim would have been adjusted substantially downwards.

(4)  I am not shown any authority in support of Mr Shum’s contention that the amount of interest ultimately awarded and the award for EC should be taken into account when assessing if a case should be within the District Court jurisdiction.

8.I am therefore of the view that the costs awarded should be on the High Court scale from the date when the Writ was issued, to the date when the award for EC was issued or when discovery has taken place and after documents had been produced (whichever is later). Thereafter, costs awarded should be on the District Court scale.

9.Costs of this clarification be to the 1^st and 2^nd defendants, to be taxed if not agreed, with certificate for one counsel. The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.

Mr Erik Shum, instructed by Lau & Chan, assigned by Director of Legal Aid, for the plaintiff

Mr Tony Ko and Mr Hung Kin, instructed by W.H. Chik & Co., for the 1^st and 2^nd defendants