Attorney General v. Lee Ching Chuen

HCSA000006/1983

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

SMALL CLAIMS APPEAL

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BETWEEN

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Coram: The Hon. Mr. Justice Hunter.

Date: 3rd June 1983.

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JUDGMENT

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1. This is an appeal brought by the Attorney General against the decision of Mrs. M. Chui as adjudicator in the Small Claims Tribunal given on the 7th December 1982. Her decision was that the claimant, Mr. Lee Ching Chuen was entitled to recover from the Attorney, or more strictly, the Director of Legal Aid, the sum of $3,260 which had been deducted by the Director. Only part of that decision is under appeal since subsequent to that date, $1,097.20 has been released by the Director to the applicant. The sum in issue is now the balance of $2,162.

2. The point at issue is the true construction of the Legal Aid Ordinance Cap. 91. It arises in this way. In 1980 the applicant was in dispute with his tenant of some property, the tenant's name being Kwok. The applicant was claiming that Mr. Kwok was not paying his rent. Mr. Kwok was claiming that he paid too much by way of rent. The applicant then applied for legal aid to enable him to take proceedings for possession. A legal aid certificate was granted to him on the 27th September 1980, in terms to which I will return presently, specifically to recover possession. The applicant had already Launched proceedings against his tenant to recover rent. He tells me that nonpayment of rent was one of the grounds relied upon to recover possession. It followed that the two claims, possession and rental were inseparable. No doubt for this reason on the 19th of January 1981 the original certificate was extended to cover the other action already started by the applicant.

3. The matter came before the District Court Judge on 22nd July 1981. He entered judgment for the parties in two different sums. He gave judgment for the plaintiff, the present applicant in the sum of $4,050. He gave judgment for the defendant against the applicant for $1,887.20 for over-payment of rent. Those two sums being set off the one against the other in the action the applicant recovered net, the sum of $2,162. This is why it is that sum which is in dispute. The costs incurred by the applicant in the conduct of that action in fact exceeded that sum. It is for that reason that the Director has claimed to recover that sum from the claimant by way of deduction.

4. The position is simply this. $2,162 having been recovered from the defendant in that action and more than that having been expended on the plaintiff's costs in that action, can the Director retain that sum by way of deduction?

5. The Adjudicator in the Court below has founded her decision principally upon the terms of the legal aid certificate. Perhaps more strictly matters should be governed by the terms of the Ordinance, but I will follow her approach for the moment. Now the terms of the certificate show first that it was to recover possession of certain property. As I have indicated that was later extended to cover the whole of the action including the rental claim. In paragraph 2 of the certificate it goes on to say that: "The Director has determined my maximum contribution is dollars nil".  Paragraph 3 of the condition is then struct out. That relates to the certificate holder's actual contribution. I pass over paragraph 4 which relates to a potential increase of means and does not apply. The two paragraphs which are significant are upon which the adjudicator founded her decision are 5 and 6. Paragraph 5 says this: "If my costs of the proceedings to which my legal aid certificate relates are or are likely to be greater than the contribution mentioned in condition 3 above (I interpolate by pointing out that condition 3 relates to actual not maximum contribution). I will pay such further sum as the Director may be require but so that in all (including the sum mentioned in condition 3 above) I shall not, unless I have recovered damages or property, have to pay more than any maximum contribution".

6. This condition seems to me clearly to be distinguishing between two different things; payment which the certificate holder has to make to the Director in any event win, lose or draw the action and secondly what he has to do if he recovers damages or property. Now as far as payment is concerned what the condition is saying, in my judgment is this. The Director has determined or has to determine first of all the maximum contribution and secondly the actual contribution. The maximum contribution is to be set out in condition 2, the actual con-tribution in three.  The position can readily be tested and explained by putting in specimen figures. Let us assume that the Director determines an applicant's maximum contribution at a $1,000 and then decides that the nature of the proceedings as such that he need only be asked to pay $500 for the time being. Then test the matter against the cost of proceedings exceeding the sum in condition 3, i.e. the $500. Now if the costs come out at $75O, that figure exceeds $500, the figure in condition 3, but it is less than the figure in condition 2. There fore the certificate holder has to pay $750. But if the costs come out at $1,250 that exceeds both figures and is at that point that the maximum comes into play and the holder has to pay $1,000 not $1,250.   That is unless he has recovered damages or property. In other words that is the maximum sum the holder has to pay out of his own pocket. The sum that he has to pay in any event win, lose or draw.

7. Now the position if he wins, if he recovers damages or property, is governed by condition 6. Condition 6 says this: "If I recover damages or property or preserve any property and the Director pays out a sum in excess of any costs recovered from the other side and the contribution I have paid then I understand that he will charge any such excess against any damages or property recovered or preserved". Again the intent of this and how it works out in practice is I think quite clear. It requires a balance to be drawn of the Directors receipts and expenditure. On one side of that balance you have to put in what he pays out, that is the cost of the certificate holders legal representation. On the other side you have to bring into account the costs, if any, that he recovers from the other side and the contribution, if any, that he recovers from the holder of the certificate. I have added the words "if any" because they have to be read in to this condition. If the resulting balance is in debit the winnings are charged with this sum. If he recovers no costs from the other side then there is nothing to be brought into account. If he recovers no contribution from the certificate holder, likewise nothing is to be brought in e.g. if the holder's maximum contribution is nil. It follows that the holder of the nil certificate, the holder of the certificate with a maximum contribution of nil, is liable to contribute by deduction from the damages or property which are recovered for him in the action, up to the extent of the total cost. If it was otherwise the holder of a nil contribution would get totally free legal aid and would not have to contribute anything out of his winnings if he succeeds. This is plainly not the effect of conditions 5 and 6 of this certificate.

8. But this is what the adjudicator in the Court below has in effect concluded. What she has held (I am reading from page 16 of the documents before me) is that because the claimant did not have to pay any sum by way of contribution, he did not have to pay any further sum at all. She has in effect failed to give any effect to the qualification "unless I have recovered damages or property" in condition 5, and any effect at all to condition 6 where there is a nil contribution. Her conclusion in substance denies the existence of any charge in favour of the Director whenever the maximum contribution in a certificate is nil.

9. In my judgment that is plainly wrong as a matter of construction of the conditions of the certificate. I must then return to the Ordinance and see whether the certificate conditions accurately reflect the Ordinance or not. Here there has been a change in the wording of the Ordinance. At the time the certificate was granted the Ordinance in force was in the old form which in the then section 18(2) said this: (and I am reading only the operative words) " .... if the contribution is less than the net liability of the Director on account of the aided person, a sum equal to the deficiency shall be at first charge for the benefit of the Director on any property which is recovered or preserved for the aided person in the proceedings".

10. This section seem to me to deal with two things. First of all it deals with the amount of "such contribution", that is the contribution made by the aided person, then it deals with the amount of the deficiency, if the contribution is less than the net liability which "shall be a first charge". These words seem to me to make it clear that my construction of the conditions on the certificate is right and that with respect to her the adjudicator is wrong. I say that because this sub-section does these two things separately. If there is no contribution, it does not effect the existence of a net liability or a net deficiency.

11. That section was replaced two days after the judgment by the amended section which is now to be found in the combination of sections 18A and 19A. It may well be that these amended sections govern because they were in force when the moneys were in fact recovered. But it is unnecessary to decide this, because there is no difference in substance between the two enactments. Both require the same balance to be struck between the Director's receipts and expenditure. What the amended Ordinance does is to spell out more exactly what has to be brought into account on each side of the account before such balance is struck. In my judgment therefore whether one looks at the terms of the particular certificate or the terms of the Ordinance original or amended, there is no substance in the reasoning behind the adjudicator's judgment, namely that no charge arises against a certificate holder with a nil contribution.

12. In my judgment therefore this appeal must be allowed, because the Director is in fact entitled to retain the sum of $2,162. This appeal has been brought by the Attorney General on behalf of the Director because it involves a point of principle. Counsel made it clear in argument that the Director, very properly in such circumstances, is not seeking any order for costs, so that the appeal will be allowed to the extent of the sum of $2,162 with no order as to costs.

Representation:

Mr. Strawbridge, Crown Counsel (A.G.) for Applicant.

Respondent in person.