Susan Mary Lauria v. Le Salon Orient (Hong Kong) Ltd and Another
Read the full judgment text of HCA 2609/1994 on BabelCite. This High Court CFI judgment was delivered on 17 January 1996.
1. This is an appeal from an order for security for costs made by Mr Registrar Betts on 5 December 1994. The Plaintiff was ordered to provide security for the 1st Defendant's costs in the sum of HK$170,000 against a bill of just over $200,000 up to trial. The 2nd Defendant took no part in that application and was not before me in this appeal.
Cited by 12 cases
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HCA002609/1994
IN THE SUPREME COURT OF HONG KONG HIGH COURT -----------------
----------------- Coram: Hon Mrs Justice Le Pichon in Chambers Date of hearing: 4 January 1996 Date of handing down decision: 17 January 1996 ----------------- DECISION ----------------- 1. This is an appeal from an order for security for costs made by Mr Registrar Betts on 5 December 1994. The Plaintiff was ordered to provide security for the 1st Defendant's costs in the sum of HK$170,000 against a bill of just over $200,000 up to trial. The 2nd Defendant took no part in that application and was not before me in this appeal. 2. The Plaintiff claims damages against the 1st and 2nd Defendants for personal injuries sustained in an accident which occurred on 19th September 1992 at the shopping mall of the Park Lane Radisson Hotel in Causeway Bay. The 1st Defendant carried on the business of a hair salon at Shops 124 and 125 at the hotel and the 2nd Defendant was the owner of those shops. 3. On the day in question, the Plaintiff went to the 1st Defendant's shop intending to purchase a bottle of shampoo. She walked straight through a glass panel which was part of the frontage of the shop premises and sustained severe injuries to her left hand. As that was her dominant hand, the injuries left her considerably incapacitated. She has undergone several operations. The accident has plainly affected the Plaintiff's earning capacity. The Plaintiff, whose husband had been sent by his company to work here, arrived to reside in Hong Kong some three weeks prior to the accident. Prior to her coming to Hong Kong, the Plaintiff was a self-employed fitness instructor. She found a job as an aerobics instructor in a fitness centre located diagonally opposite the hair salon where the accident occurred. 4. It is the Plaintiff's contention that the accident was caused, or alternatively contributed to, by the negligence or breach of statutory duty of the Defendants, both of whom were occupiers of the premises for the purposes of the Occupiers Liability Ordinance, Cap.314. 5. A year and a half after the accident, the Plaintiff's husband was relocated to California. As a result, their financial situation has deteriorated. Although when the action was commenced, the Plaintiff did not consider it necessary to apply for legal aid, she was forced to do so after they moved back to California. In support of her legal aid application, she filed a Means Investigation Report on 20 October 1994. They purchased the matrimonial home with a downpayment of US$50,000 and continue to make monthly mortgage repayments. Their monthly disposable income is modest. The security for costs order far exceed what the Plaintiff and her husband have by way of capital other than the matrimonial home which is encumbered. 6. The Plaintiff's application for legal aid was refused in November 1994. In the Plaintiff's affidavit dated 21 November 1994, it was stated that if she has to provide security for the 1st Defendant's costs, it would be extremely difficulty and might prove impossible for her to continue the proceedings because of financial constraints. 7. Since the matter came before the learned Registrar in December 1994, there has been a material development and that is the grant of legal aid under the Supplementary Legal Aid Scheme to the Plaintiff on 16 May 1995. The certificate covers all costs of this action incurred as from its date. The amount of untaxed costs incurred by the 1st Defendant prior to the issuance of the certificate is $79,000. 8. The Plaintiff contended that the learned Registrar's order was wrong in principle in that no order should have been made and in any event the amount was inordinately high. Mr Pirie, for the Plaintiff, contended that as a matter of principle, although a court has jurisdiction to make an order for security for costs under Order 23 against a non-resident person simply on the basis that if he or she loses the action, there is no way to make an effective order for costs against that person, it is rarely exercised against plaintiffs who suffer serious injuries as a result of an accident for otherwise they would be driven from the judgment seat. As they can always apply for interim payments, Mr Pirie submitted that they are normally only ordered to pay in a nominal amount or no amount at all. 9. Under O.23 r. 1(1), the court has a real discretion whether or not to order security for costs. It is no longer an inflexible or rigid rule that a plaintiff resident abroad should provide security for costs. The court may order security for costs "if, having regard to all the circumstances of a case, the court thinks it just to do so". But I can discern nothing in the rule that puts a plaintiff in a personal injuries action in a special category. In my judgment, the court has to assess the prospects of success of this Plaintiff as in any other action and exercise its discretion having regard to all the circumstances of the particular case. 10. In exercising the court's jurisdiction, a number of matters must be considered. In this case, the following are relevant. (a) Plaintiff's prospects of success 11. Mr Pirie submitted that the Plaintiff was bound to succeed against one or other of the two Defendants. The shop front to the hair salon consisted of several panes of glass from floor to ceiling, separated by strips of wood at intervals of about five feet. Photographs of the place of the accident were taken by the 2nd Defendant's insurers' loss adjusters on the day of the accident and by the Plaintiff's husband three days afterwards. These photographs show very clearly that the entrance to the salon is by a glass door on either side of which were floor to ceiling glass panels. The frontage of the salon is quite extensive along the shopping mall of the hotel and from the photographs, it would appear that it consisted almost entirely of glass except for the wooden strips. Five panels including the entrance door situated in the middle are visible from the photographs. 12. The vestibule or reception area of the salon is situated immediately on the other side of the middle three sections of glass including the entrance door. There was no window display behind the glass panels on either side of the door so that they could easily be mistaken for the door when approaching the salon, whereas window displays are visible behind the remaining glass panels situated furthest from the entrance on either side. There is a conflict of evidence as to whether the door, which contained a prominent handle, was closed or open at the relevant time. 13. The Plaintiff's case is that the glass used in the panel in question (situated to the left of the door when entering the salon) was not appropriate or suitable : it was of a type that created a hazard. It therefore constituted a latent danger for which an occupier is strictly liable. Upon impact, the glass panel broke into very large shards : it was not shatter-proof. 14. There is evidence from three independent witnesses that a similar accident happened some eight or nine months earlier and that the same glass panel had to be replaced. Further, there is also independent evidence that a pot which had always been placed outside the glass panel and a cupboard or shelf which had been placed on the other side of the glass panel inside the salon had been removed and were not in place on the day of the accident. The presence of the pot and/or the shelf or cupboard would have made it clear that the glass panel was not a door. 15. The 1st Defendant submitted that the Plaintiff was familiar with the geography of the mall and the salon, working as she did diagonally opposite the salon. She had gone into the salon earlier that afternoon and therefore knew where the entrance was. Moreover the glass panel was marked in that the bottom right hand corner of the panel contained credit card logos. Therefore the accident must have been caused by her own negligence. 16. The Plaintiff submitted that the marking of the panel by credit card logos was irrelevant: first, they were not at eye but floor level; second, if the type of glass used was a hazard, the existence of the logos would not absolve the occupiers from liability. 17. I understand that at the hearing before the learned Master, he expressed the view that the Plaintiff's prospects were no more than fifty-fifty. Having reviewed the pleadings and the evidence that has had so far been filed in this case, and without coming to any conclusive view on the matter since that must be a matter for trial, I take a different view. I regard the Plaintiff's prospects of success against one or other of the Defendants as good. Even if the plaintiff may be found to have been contributorily negligent, I find it inconceivable that she would be held wholly to blame for the accident. 18. There is another relevant factor: there are two Defendants to this action. As noted above the 2nd Defendant took no part in the application before me. The Plaintiff submitted, and I agree, that if the 1st Defendant were to succeed in its defence but not the 2nd Defendant, the 1st Defendant would have no exposure as to the pre-legal aid costs of $79,000. The 1st Defendant's costs will either be recoverable under a Bullock order or they would be included in the Plaintiff's bill of costs against the unsuccessful 2nd Defendant. (b) Plaintiff's impecuniosity 19. It is not disputed that the Plaintiff's earning capacity has been significantly affected by the accident: she was unable to work for a period of time and could not go back to her old job. She continues to suffer from disability. Her current earnings are about US$50 to $60 a week or US$3,000 per annum, considerably less then what she was earning at the time of the accident. She has also had to expend considerable sums in legal fees and medical expenses as a result of the accident. 20. In Thune v. London Properties Limited [1991] WLR 562 at 573, Bingham LJ said :
This statement encapsulates the principle enunciated in earlier cases such as Porzelack KG v. Porzelack (U.K. Limited) [1987]1 WLR 420 at 422H and De Bry v. Fitzgerald, [1990]1 WLR 552 at 559A. These cases were referred to in The Owners of Fishing Vessel "Nan AO 33066" v. The Owners and all Demise Charterers of the Ship or Vessel "Silver Dawn" (Panamanian Flag), Civil Appeal No.171 of 1992, where the Court of Appeal held that in the exercise of the court's discretion under O.23, r.1, the fact that the defendant caused the plaintiff's impecuniosity is a very relevant circumstance. 21. The 1st Defendant's submissions were directed at the evidence filed establishing impecuniosity rather than the statement of principle set out above. It submitted that the onus of establishing impecuniosity was on the Plaintiff; that the Plaintiff must prove by evidence impossibility to provide or procure the sum of security that would otherwise be ordered; that the court is entitled to up-to-date and comprehensive evidence of the Plaintiff's present financial condition and that it is not sufficient for a general claim to be made through a solicitor that financial circumstances had not changed significantly. Because of the lack of up-to-date evidence, the 1st Defendant submitted that the court was not in a position to decide whether it was possible for the Plaintiff to provide or procure the requested sums. The 1st Defendant approached the matter on the footing that it would be appropriate for an order to be made. But that is precisely the question that has to be determined, "having regard to all the circumstances." 22. The Means Investigation Report was dated 20 October 1994. There is an affidavit from the Plaintiff's solicitor Mr Munro dated 29 December 1995 in which he said :
Mr Munro's affidavit then dealt with the Plaintiff's current employment and her earnings. He also gave information regarding medical expenses that had been incurred. Whilst I agree that it would have been preferable had the evidence been an affidavit from the Plaintiff rather than from her solicitors on instructions regarding these matters, it cannot be said that the evidence filed did not provide any update to the financial information contained in the Means Investigation Report. 23. Mr Whitehead for the 1st Defendant relied on the decision of Yorke Motors v. Edwards [1982]1 WLR 444, a case concerning conditional leave to defend an O.14 proceedings. In his speech, Lord Diplock quoted this passage from the judgment of Brandon LJ in the court below :
It was submitted that the Plaintiff's evidence was wholly silent on these matters. The passage quoted was considered by the Court of Appeal in Silver Dawn case. It is clear from the judgment of Litton JA that where it is shown that the plaintiff is impecunious, and from all the circumstances is unlikely to have the ability to raise large sums, he does not have the additional onus of showing that his friends, relatives and neighbours will not dig into their pockets to support him. I respectfully agree: the onus on the Plaintiff is to establish impecuniosity if that is a ground relied on; but that does not necessarily require the Plaintiff to establish that she is unable to borrow from friends and relations. 24. The Registrar's order would in all probability have stifled the Plaintiff's claim. On the evidence before him, the order for security of costs in the sum of $170,000 was therefore wholly inappropriate and ought not to have been made. (c) Legal aid 25. The grant of legal aid to the Plaintiff is a new development which is material. In practical terms, if the 1st Defendant were to succeed, it would be able to have its costs taxed and paid out of the legal aid fund under s.19 of the Legal Aid Ordinance. It is therefore in a position of being protected as to costs incurred as from the date of the certificate. 26. Section 18B of the Legal Aid Ordinance, Cap.91 provides as follows :
Section 18B clearly contemplates that an order for security for costs may be made against an aided person. Where the defendant concerned has no exposure as regards costs against an unsuccessful plaintiff, that must be a relevant consideration against making any order for security for costs. 27. As appears from the judgment of Sir Nicholas Brown-Wilkinson VC, in Porzelack KG v. Porzelack (U.K. Limited) [1987]1 WLR at 422H :
In legally-aided cases, it would rarely be just in all the circumstances for an order for security for costs to be made if the only costs are those covered by the certificate since if the Plaintiff were unsuccessful, those costs would be met out of the Fund. This may explain the apparent lack of Hong Kong cases on the subject. 28. As the English Legal Aid regulations are different from the Hong Kong provisions (for example, a successful defendant is usually unable to recover his costs), English authorities on orders for security for costs against aided plaintiffs are of limited assistance. Nevertheless, it seems that in such cases, the amount ordered may be smaller than usual. See the Supreme Court Practice at 23/1 - 3/23. 29. In the present case, the 1st Defendant's potential exposure is limited to costs incurred prior to the grant of a certificate in the sum of $79,000. For the purposes of this appeal, it is this amount rather than the bill of over $200,000 that was before the learned Registrar that is relevant. Should security be ordered? 30. For the reasons explained above, the 1st Defendant's potential exposure on costs is $79,000. Regardless of that change in circumstances, as stated above, the existing order for $170,000 which would have stifled the Plaintiff's claim was plainly wrong. The question now before me is having regard to the revised potential exposure, should security nevertheless be ordered? 31. Having considered the totality of the evidence, in particular having regard to the Plaintiff's prospects of success against one or other of the Defendants and the fact that the 1st Defendant would be protected as to costs in the event of its being successful but the 2nd Defendant being held liable, I do not consider it appropriate that my discretion under O.23 should be exercised in favour of the 1st Defendant. The Plaintiff's impecuniosity brought about by the accident is not the determinative factor in this case. 32. Accordingly, the appeal is allowed and I order that the Plaintiff's own costs be taxed in accordance with the Legal Aid Regulations.
Representation: Mr Nicholas Pirie, inst'd by M/s Munro Claypole, for Plaintiff. Mr Robert Whitehead, inst'd by M/s Deacons, Graham & James, for 1st defendant |
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