Darcy Grant Dmetrichuk v. Tung Wah Group of Hospitals Wong Fut Nam College

HCPI 416/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 416 OF 2005

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BETWEEN

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Before: Deputy High Court Judge Wright in Court

Date of Hearing: 14 June 2006

Date of Handing Down Reasons for Ruling: 22 June 2006

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REASONS  FOR  RULING

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1.This action related to a claim for compensation in respect of personal injuries which the plaintiff suffered during the course of his employment with the defendant.  The Statement of Damages was revised from time to time.  When the trial commenced on 15 May 2006 the claim amounted to $1,970,680.60 formulated thus:

Cost of future operation	$75,000.00
Special damages	$106,266.60
BUPA Insurance premiums in Canada	$110,214.00
Future Loss of Earnings	$739,200.00
PSLA	$250,000.00
Loss on sale of car and boat	$150,000.00
Future medical expenses	$540,000.00

2.It transpires that the defendant paid into court an amount of $250,000.00 on 24 April 2006.

3.On 18 May 2006, I found the defendant liable to compensate the plaintiff but only to 50% of the extent of the damages suffered by him.  I found those damages to amount to $428,269.20 and entered judgment in favour of the Plaintiff for payment of the sum, in aggregate, of $214,134.60 together with interest on special damages at half judgment rate from 30 April 2002 to date of judgment and on general damages at 2% per annum from date of writ to judgment.  I addition there was an order nisi that the defendant pay the plaintiff’s costs with liberty to restore for argument.

4.By inter partes summons dated 22 May 2006 the defendant sought a variation of the costs order together with an order that the moneys it had paid into court be retained in court as security for its costs, that its costs be paid from those moneys and that the plaintiff bear the costs of the application.  After hearing argument on 14 June 2006, I ordered, in summary, that the costs order be varied to the extent that the defendant pay the plaintiff’s costs up to and including 24 April 2006; the plaintiff pay the defendants costs thereafter; they be paid on the High Court scale; they be taxed if not agreed; the amount due to the plaintiff be paid out of court forthwith with the balance to be repaid to the defendant; the plaintiff pay the defendant’s costs of the application, but that there be no certificate for counsel.  These are my reasons for that order.

The effect of the payment in

5.There was no dispute that the plaintiff was entitled to his costs up to the date of the payment in, 24 April 2006.  It was the plaintiff’s contention that, thereafter, because he had succeeded on the issue of liability he should be entitled to such costs as related to liability whilst the defendant should receive general costs from the date of payment in. 

6.For this proposition the plaintiff relied upon the decision in Powell v Vickers, Sons and Maxim, Ltd [1907] 1 K.B. 71 C.A..  The decision in that matter, however, was based upon a rule laid down in Annual Practice, 1907, to that effect.  Its terms had been implemented in a number of matters referred to in the judgment, the court holding that it would be “... very undesirable to attempt to alter the practice on this point...”.

7.In Hultquist v. Universal Pattern and Precision Engineering Co. Ltd. [1960] 2 Q.B. 467 the defendant had paid into court before trial a sum exceeding the total damages awarded.  At the trial it admitted liability for breach of statutory duty but contested, unsuccessfully, the issue of contributory negligence.  The judge awarded the defendant its costs from the date of payment in, but granted the plaintiff leave to appeal from that order.  On appeal, Sellers, LJ, said:

“As the matter stood at the trial, judgment was entered so far as costs were concerned with costs to the respondents up to the date of the payment into court, the defendants to recover against the plaintiff their costs of defence from the date of payment into court, both to be taxed. 

In the course of the argument the judge said: “I think the proper course to follow here is the one I confess I was always brought up on - which is, that the plaintiff has his costs up to the time of payment in and the defendant has the costs thereafter.”  The appellant had asked for the costs of the issue of liability on which he had succeeded, and in this court it was submitted that he was entitled to these costs.  In my experience also it is very rarely that a plaintiff in such an action as this and in similar circumstances is awarded the costs of the issue of liability.”

8.The fundamental purpose of a payment into court is to place a defendant in a position where it is able to minimize its liability for costs by making a realistic and responsible payment which the plaintiff rejects and thereafter fails to exceed.

9.Costs are discretionary, but the order I made is that now most commonly made.  An order in these terms would thus meet the justice of the case in all but the exceptional circumstance: this matter is not such. 

The appropriate tariff

10.The defendant contends that because the pre-apportionment award fell below the limit of the jurisdiction of the District Court the plaintiff should be entitled only to costs on the district court scale:  conversely, it should be entitled to costs on the High Court scale due to the fact that the plaintiff elected to bring the action in the High Court and further declined a written invitation, dated 27 September 2005, to transfer this matter to the District Court.

11.Although in this matter both fall well within the jurisdiction of the District Court, the relevant figure is the quantum of the damages found to have been sustained by the plaintiff, $428,269.20, and not the amount payable after apportionment, $214,134.60.  See LAI Ki v B+B Construction Company Ltd and Others HCPI63/2001.

12.I adopt the test referred to by Ryan, J., in LAM Sui Wo v LEUNG Kam Tin  [1990] 1 HKC 456 as expressed by Glyn-Jones, J., in Hopkins vs  Rees and Kirby Ltd [1959] 2 All ER 352 to be:

“I think that the only question for me is: putting myself, as far as I can, in the position of the plaintiff at the time when he issued the writ, am I satisfied it was then obvious that this was a county court action or was it an action which, when tried by one judge rather than another, might have resulted in an award [exceeding the jurisdiction of the county court].”

13.In this matter, it is immediately possible to rule out the plaintiff having had any prospects of success on two of the heads of damage, namely BUPA Insurance premiums in Canada of $110,214.00 and loss on sale of car and boat of $150,000.00.  I gave detailed reasons in my judgment as to why each of these claims failed.  In summary: the former was purely speculative, even the plaintiff’s own counsel having difficulty articulating the basis upon which that claim purported to rest; the latter was misconceived on a factual basis.

14.In regard to the claim for future loss of earnings of $739,200.00 it was the plaintiff’s evidence that he had been offered continued employment with the defendant, had declined it and had moved on to new employment with no financial disadvantage.  However, there was some suggestion based upon the medical reports that the plaintiff might be obliged to take early retirement, thus limiting his income.  In the event, he was unable to establish that at trial, but at the time when the writ was issued, there would have been a prospect of some award being made under this head.

15.The claim for PSLA was reduced only in the plaintiff’s opening on the day of trial by which time events, and the plaintiff’s condition, had moved on.  It is relevant to note that the plaintiff’s original claim for PSLA as set out in his various Statements of Damages was $375,000.00 which, added to the remaining heads, left a claim of $1,096,266.60 - excluding any possible loss of earnings award.  It is self-evident that that is extremely close to the limit of the District Court’s jurisdiction.

16.Looking at this matter in the round, whilst there was a prospect that any pre-apportionment award may fall within the jurisdiction of the District Court I am unable to say that it was “obvious” that it would do.  To express it otherwise, the Plaintiff had a reasonable prospect, on the information available to him at that stage, of securing an award in excess of the District Court’s jurisdiction.  Although it was indeed a marginal decision that had to be made, in my judgment the plaintiff cannot be fairly criticised, nor should he be penalised, for the decision that was made to proceed in the High Court.

17.I conclude that this is a matter in which each party is properly entitled to his or its costs on the High Court scale.

Retention of the moneys for security

18.The defendant sought an order that the moneys that it had paid into court to be retained until such time as the costs due to it had been taxed and that such costs be paid from those moneys - effectively a form of security for costs.  As authority for that proposition the defendant, in its skeletal (sic) submission, referred to the decision in Cook v Swinfen [1967] 1 W.L.R.457.

19.The facts in Cook related peculiarly to a legally aided plaintiff who plainly was indigent.  The plaintiff in this matter is not legally aided nor is there any suggestion that he would be unable to pay the costs due to the defendant.  I do not regard Cook as any authority for the proposition that a defendant is entitled to the relief sought here.

20.This was an issue which was also considered in Powell (supra) in which it was made clear that an order of this nature is exceptional and should only be granted where a defendant is able to discharge an onus to give some good reason why the money should remain in court.

21.Consequently, there is no justification for granting the relief sought.

Costs of the application

22.The defendant was obliged to bring this application in order to vary the rule nisi and was materially successful in doing so.  It is appropriate therefore that it receives its costs.  However, in my judgment this is a matter which was straightforward and which justified being attended to by the parties solicitors, not counsel.  There will be no certificate for counsel.

Mr Stephen Finley, instructed by Messrs Finley & Co., for the Plaintiff

Ms Julia Lau, instructed by Messrs Deacons, for the Defendant