Chu Keung Fai and Another v. Success Insurance Limited and Others

HCA004517C/1981

Costs - plaintiffs succeeded against only 1 of several co-defendants - whether the plaintiffs or the unsuccessful defendant should pay the successful defendants costs - special Bullock and Sandorson orders - Court's general discretion as to costs limited by principles applicable to special orders sought by plaintiff - whether in third party proceedings 3rd defendant entitled to costs from third parties - Held:

1.The plaintiffs causes of action against the 2nd and 3rd defendants were separate and distinct being based on different sets of facts;

2.Accordingly not a proper case for Bullock or Sa erson orders;

3. Not a proper case for costs to be awarded in third party proceedings;

4. 2nd Defendant to pay plaintiffs costs; plaintiffs to pay 1st and 3rd defendants costs; no order as to third party proceedings costs - Civil Liability (Contribution) Ordinance, Cap. 377.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: Deputy High Court Judge Cruden

Date of hearing: 24th February 1987

Date of judgments: 13th March 1987(P.I. file)

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JUDGMENT

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1. In this action judgment for damages in favour of the plaintiffs was delivered on 4th December 1986. Liberty to apply was reserved in respect of costs. On 24th February 1987 I heard various applications for costs and reserved judgment. I now hand down judgment on costs, pursuant to Rules of the Supreme Court Order 42 Rule 5B.

2. In the substantive action for damages judgment was given for the plaintiffs against the 2nd defendant. The plaintiffs claim against the 1st defendant was abandoned. The plaintiffs claim against the 3rd defendant was dismissed. By consent, the issue of liability between the 3rd defendant and the 1st Third Party and 2nd Third party, was tried at the same time as the plaintiffs claim against the defendants. In those third party proceedings the 3rd defendant claimed an indemnity against the third parties. The third parties, in turn, counterclaimed for an indemnity against the 3rd defendant. In view of the plaintiffs claim against the 3rd defendant being dismissed, the question of an indemnity against the third parties did not arise. The third parties own counter claim against the 3rd defendant was dismissed.

3. I would record that when the action first came on for trial on 27th June 1986 the hearing, on the plaintiffs application, was vacated. The Court then ordered that the costs of that adjournment were to be paid by the plaintiffs, in any event, on a common fund basis. Any order I may now make for costs will, of course, be subject to that prior order of 27th June 1986.

4. Counsel for the plaintiffs sought the following order as to costs:

5. Counsel for the 1st and 2nd defendants agreed that the 2nd defendant should pay the plaintiffs costs but only those incurred against the 2nd defendant and accepted that the plaintiffs should pay the 1st defendant's costs. Counsel further submitted that the plaintiffs should pay the 3rd defendant's costs and that there should be no order as to costs in the third party proceedings. Counsel for the 3rd defendant submitted that its costs in the action should be paid by the plaintiffs and that the 2nd defendant should pay the costs of the third party proceedings.

6. I am satisfied, in accordance with the principle that costs should follow the event, that the plaintiffs are entitled to their costs inourred against the 2nd defendant. I am equally satisfied that the plaintiffs should pay the costs of the 1st defendant. The only difficulty in relation to costs, arises as a consequence of the plaintiffs claim again 2t the 3rd defendant being dismissed and the consequential issue of third party proceedings costs.

7. The Court has a discretion as to costs but that discretion must be exercised judicially in accordance with the appropriate principles. I listened to lengthy submissions by all Counsel, but with Lord Greene's injunction in Hong v A.& R. Brown Ltd. (1948) 1 All E R. 185, increasingly ringing in my ears:

"Everbody knows that discussions as to costs are discouraged, and rightly discouraged, by judges when they are convinced that they have all the materials before them and there is no arguable point of law. It happens everyday. If it did not, it would be a great misfortune, since costs, being in the discretion of the judge, are not matters which are susceptible to sustained argument unless some proposition of law is involved."

8. The submissions were largely based on and did not dispute, the general principles appearing in 1 ''The Supreme Court Practice 1985" 874 and in particular paragraph 62/2/46. However, I recognise that the issue as to costs was on this occasion more complex than is common and I was considerably assisted by Counsels industry.

9. Counsel for the plaintiff submitted that where it is reasonable for a plaintiff to sue two defendants, making his claim against them in the alternative, but succeeds only against one defendant, the Court has a discretion to order the unsuccessful defendant to pay the successful defendant's costs. It was submitted that on the facts known to the plaintiffs before trial, made the more complicated by death of both deceased, it was entirely reasonable to sue the 3rd defendant as well as the 2nd defendant. The pond, I was reminded, was within the apparent contractual area of the 3rd defendant and it was only during oral evidence that the delayed possession of the pond became clear. Equally it was only during oral evidence that the 3rd defendant's steps to avoid the accumulation of water, from its works into the pond, became known. Further, it was clear that the 3rd defendant had carried out repair work beyond its area on the road but it was only at the trial that the limited basis of that work was revealed to the plaintiffs.

10. Counsel for the plaintiff recognised that the order he sought, sometimes called a Bullock order but in the direct form sought, more accurately called a Sanderson order, is not made where the causes of action are separate and distinct or the claims are in the alternative or are based on a different set of facts. It was his submission that the causes of action against both remaining defendants were founded in tort and that the particulars of negligence were directly related to each other. The facts, it was submitted, arose from the same incident, and were similarly interrelated.

11. Counsel for the 2nd defendant reminded the Court that although it might have been reasonable to sue both defendants, it did not automatically follow that the plaintiff was entitled to a Bullock or Sanderson order. The making of such orders was a matter of discretion to be exercised in accordance well settled principles governing the exercise of that discretion. Counsel referred to Hong v A.& R. Brown Ltd., Salsbury v Woodland (1969) 3 All E.R. 215, MuIready v J.H. & W. Bell (1953) 2 All E.R. 215, Dryden v Surrey County Council (1936) 2 All E.R. 535, Donovan v. Gammoll Laird & Co (1949) 2 All E.R. 82, Kelly's Directories Ltd. v Gavin (1901) 2 Ch 763 and Poulton v. Moore (1913) W.N. 349.

12. Counsel for the 2nd defendant submitted that the cases show that where the plaintiff was not in a dilemna, as to who to sue, the Court would not make a Bullock order even if the election to sue both was reasonable. Nor would an order be made where the causes of action were separate and distinct. In the present case, it was submitted the plaintiff was not in a dilemna and the facts were similar to those in Salsbury v. Woodland where it was held that no dilemna existed. Further, the causes of action, although within the very broad tort of negligence, were quite distinct. The claim against the 2nd defendant was based on an allegation of negligent driving. The two fold claim against the 3rd defendant was based on occupiers liability and the creation of a hazard. It was submitted that the causes of action were also no more connected than those in Mulready v J.H. & W. Bell. Further, that in the instant case the Court had not gone so far as to hold that the 3rd defendant as occupier was not liable, but had merely found that it had not been established that the 3rd defendant was the occupier. This was a case where the plaintiff had, so far as occupier's liability was concerned, mistakenly sued a non-occupier. The position may have been different if the actual occupier had been sued.

13. Counsel for the 3rd defendant submitted that the crucial factor which the plaintiffs were unable to overcome, was that before a Bullock order could be made, the claims must be in the alternative. The plaintiff had never claimed in the alternative but up to the end of the trial had claimed that both defendants were liable. Further, it was submitted that the causes of action were separate and based on different facts. In the 3rd defendant's view, the fact that it was not  the occupier, was clear from the documentary evidence available to the plaintiffs well before trial. Accordingly, in the 3rd defendant's submission, the plaintiff and not the 2nd defendant, should be ordered to pay the 3rd defendant's costs.

14. In reply Mr. Pritchard submitted that the occupation issue was irrelevant, for the 3rd defendant was in any event potentially liable as a creator of the hazard quite independently of occupation. It was also submitted that alternative causes of action were not limited to where one was exclusive of the other, for the question of apportionment might arise. Here, it was submitted, there were truly alternative causes of action. In that event the Court had a discretion to make a Bullock or Sanderson order and on the facts such orders were reasonable.

15. Against the background of those submissions, I would record that as a matter of law, the Court has a discretion as to costs. However, in the case of Bullock or Sanderson orders, I accept that judicial discretion must be exercised in accordance with well established common law principles. One of those principles is that an order should not be made, where the doubt giving rise to the plaintiff suing several defendants, is limited to a matter of law. Examples of the application of that principle from the cases cited were Donovan v Cammell Laird & Co, Kelly's Directories Ltd. v Gavin and Poulton v Moore. In this action no doubt existed as to the law so, to that extent, the Court's discretion remains untrammeled.

16. As to the facts, I am satisfied that the unclear pro-trial position made it entirely reasonable for the plaintiffs to sue both defendants. However, that right does not necessarily entitle a plaintiff, successful against one only of such defendants, to the orders now sought. Hong v A. & R. Brown Ltd. is clear authority for that proposition. There are also a number of cases where, even though the facts giving rise to the injuries for which damages were claimed, arose out of the same incident, the Court held that the causes of action more separate and distinct.

17. In Salsbury v. Woodland the plaintiff suffered personal injuries and sued several defendants. The plaintiff while removing some fallen telephone lines from the road, had been injured when avoiding an oncoming car. The wires had been fouled by the second defendant negligently falling a tree. The second defendant was employed as an independent contractor to fell the tree, by the occupier of the land, who was the first defendant. The plaintiff succeeded against the second defendant but the action against the first defendant was dismissed. The Court of Appeal held that no dilemma existed which would have justified a Bullock order.

18. In Mulready v J H & W Bell Ltd the second defendant contracted with the first defendants to carry out construction work on the latter's factory. A workmen employed by a sub-contractor was injured. The plaintiff's action was founded on alleged breaches of two different statutory duties by the defendants. The first defendant was alleged to be in breach of a duty under the Factories Act 1937. The second defendant was alleged to be in breach of a duty under the Building (Safety, Health and Welfare) Regulations 1948. Damages were awarded against the second defendant but the claim against the first defendant was dismissed. The Court of Appeal held that a Bullock order was not appropriates, Lord Goddard C .J., stating:

"It does not appear to us that it is an appropriate order to make where a plaintiff is alleging perfectly independent causes of action against two defendants where the breaches of duty alleged are in no way connected one with the other."

19. In Hong v A.C. R. Brown Ltd, the Court of Appeal emphasised that a Bullock order is a special order. The plaintiffs allegations in that case were expressly made both jointly and in the alternative. The plaintiffs were employed as workmen by the first defendants to carry out repairs on a ship, which was under the management of the second defendants. The action was dismissed against the first defendant and damages were awarded against the second defendants. The trial judge held that it was reasonable for the plaintiffs to sue both defendants but not reasonable for the second defendant's also to pay the first defendant's costs. The Court of Appeal, in upholding the judge's refusal to make a Bullock Order, only went se far as to say that the matter was for the judge's discretion which he had properly exercised.

20. Another case here a trial Judge declined to make a Bullock order, was Dryden v. Surrey County Council, where in a medical negligence case the plaintiff succeeded against the doctor but failed against the hospital owning Council. On the question of costs, Finlay J. declared:

"Entirely different negligence was alleged against the hospital and against the doctor, although they arose out of the same matter. The acts of negligence were quite different and while I regret it, I must remember that the plaintiff has brought an action against the Surrey County Council and in my opinion failed on the facts and the law. In these circumstances I am of the opinion I should be doing injustice if I were to order the defendant doctor to pay the costs of the successful county council, those costs relating to issues different from those in which he was interested and raising points which did not arise in his case."

21. While I share some of the regret expressed by Finlay J., the factors he mentions, seem to me to be very similar to the facts in this case which, on similar reasoning, would lead to my discretion being exercised against making the orders the plaintiff seeks. Before arriving at this conclusion I have also taken into account that in this action, the 2nd defendant expressly pleaded in its Re-Amended Defence, that the matters complained of by the plaintiffs were caused or contributed by the negligence of the 3rd defendant. On that issue there are dicta in some of the cases that a factor against making a Ballock Order, is that the unsuccessful defendant did not make any allegations against the successful defendant. For example in Mulready v J.H. & W. Bell Ltd. Lord Goddard included among the reasons for not making a Bullock order the following:

"That the first defendants denied that they were responsible for the breach of reg. 31 was in effect putting the blame on Keating, but not on the second defendants, and we can see no ground on which the order should have been made..."

22. However, such dicta do not reduce the force of the fundamental principle that a Bullock order is not appropriate where, as in this action, the causes of action are separate and distinct. Having arrived at this conclusion, it is unnecessary to go on to determine whether the claims were brought in the alternative. I merely record that the claims were not expressly pleaded in the alternative.

23. The remaining costs issue between the parties to the action concerns the third party proceedings. The 3rd defendant asks for costs against the 2nd defendant. Counsel for the 2nd defendant submitted that there should be no order as to costs on the third party proceedings. I was also reminded of a co-defendant's entitlement, without issuing third party proceedings, to contribution under the Civil Liability (Contribution) Ordinance, Cap. 377. I have considered the provisions of that Ordinance and the reference to the similar English legislation in 1 'The Supreme Court Practice 1985' 240 at 16/8/2. Notwithstanding those helpful statutory provisions, I appreciate that it will still often be reasonable for a defendant to issue third party proceedings. In particular he will need to do so if he wishes to ask for discovery or leave to administer interrogatories to a co-defendant. In fact the pleadings do not disclose that the 3rd defendant took either of these or any other third party interlocutory steps. When I review all the circumstances relevant to the exercise of my discretion in the third party proceedings, I consider the proper course is not to make any order as to costs.

24. Accordingly I make the following orders:

25. Finally, I confirm that the plaintiffs adjourned application against their former solicitors, for an indemnity in respect of the costs ordered to be paid by them on 27th June 1986, will be heard on 8th June 1987.

Representation:

Mr. Rodney Pritchard instructed by Director of Legal Aid for 1st and 2nd plaintiffs

Mr. Mohan Bharwaney instructed by Robert W.H. Wang & Cc for 1st and 2nd defendents

Mr. Adrian Bell instructed by Denton Hall Burgins & Warren for 3rd defendant