Poon Yat Lam Ilum v. Chan Chi Wai

HCPI 462/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 462 OF 2003

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BETWEEN

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Before: Deputy High Court Judge Saunders in Chambers

Date of Hearing: 12 September 2006

Date of Ruling: 12 September 2006

Date of Reasons for Ruling on Costs: 15 September 2006

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REASONS  FOR  RULING  ON  COSTS

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1.This personal injury action was set down in July 2006 in the warned list.  On 11 September 2006, the parties were notified that the action would be heard before me over two days commencing on 12 September 2006.  At the door of the court the plaintiff accepted a payment in.  The defendant now seeks costs.  I ruled that the defendant was entitled to costs, and now give my reasons for that ruling.

2.Over the course of the interlocutory proceedings a number of payments in had been made by the defendant, with the last payment in bringing the total sum paid in to $790,000, having been made on 30 June 2005.

3.Under O 22 r 3(1), if a payment in is accepted within 14 days after receipt of the notice of payment the plaintiff may accept the sum in satisfaction of the cause of action.  If he does so then pursuant to O 62 r 2 he is entitled to his costs of the action incurred to the time of giving notice of acceptance.

4.As at 11 September 2006, no trial bundle had been prepared.  It is not disputed that at approximately 6:30 p.m. on Tuesday 11 September 2006, the solicitor for the plaintiff telephoned the solicitors for the defendant to inform them that the plaintiff intended to accept the payment in.  At that time the solicitor dealing with the matter for the defendant had left the office for the evening, and the message was received by another person in that office.  On the same evening, a letter was written by the plaintiff’s solicitors, confirming the telephone conversation.  That letter records that it was to be sent by fax and by post, but it has not been disputed that it was not received through the fax machine by the defendant’s solicitors until 11 a.m. on 12 September 2006.

5.A trial bundle was delivered to the court late in the afternoon of 11 September 2006, and I am informed that it was delivered to counsel for the defendant at about 6 p.m. on that evening.

6.The notice of acceptance, signed by the solicitors for the plaintiff and dated 11 September 2006, was sent by fax to the solicitors for the plaintiff, and was received by them at 9:24 a.m. on 12 September 2006, 36 minutes before the trial was due to start.

7.The defendant now seeks an order for costs to the period from 14 days after the filing of the last notice of payment in, (7 July 2005), to the date of trial.  The plaintiff resists that order.

8.It is absolutely clear that a plaintiff in an action where there has been a payment in must be prompt in making the decision as to whether or not to accept the money paid in, in order to avoid further costs.  That advice is plainly given in Hong Kong Civil Procedure, para 22/3/3.

9.The costs consequences of a failure to accept payment in within the required time, only to accept the payment at the door of the court, are such that I would have thought that a prudent solicitor would record in writing to their client the advice as to those consequences.  If that advice is not given, and the client is left to believe that they have the security of a payment in which may be accepted at any time, only to find upon late acceptance that there are adverse costs consequences, then the client would have every right to look to the solicitors for their failure to give advice.  If the advice was not given I would have thought that it would be difficult for the solicitors to resist a demand that they themselves should meet the costs.

10.Following a checklist review hearing on 28 May 2004, the Master made an order that:

“Upon compliance with the directions given, the Plaintiff have leave to set down for trial in the running list by 8 November 2004, not to be warned before 6 December 2004, with an estimated trial length of two days.” 

The directions were the usual directions and there was nothing needed to be done that could not have been done, had the solicitors not acted promptly, prior to 8 November 2004. 

11.There is no complaint from the plaintiff’s solicitors that setting down was delayed by default on the part of the defendant’s solicitors.  In fact, it is plain that the delays were on the part of the plaintiff’s solicitors, because by letter dated 24 June 2006, the defendant’s solicitors applied to have the matter set down, and were awarded costs in the sum of $3,500, payable forthwith, on their application to set the matter down.

12.The rules are clear.  If a plaintiff does not accept payment in within 14 days, he runs the risk of costs in the interim if he accepts the payment later on.  If he chooses not to accept the payment within 14 days, and endeavours to continue to negotiate with the defendant, he takes a commercial risk that he will be able to settle the action before trial and will not need to accept the payment in.  The commercial risk that he takes is that if he is forced to accept the payment in, on the matter being set down for trial, or at the door of the court, he will have to pay costs.  That is a risk of which he ought to be warned by his solicitors in making the decision not to take the payment in promptly.

13.I have listened carefully to everything that Ms Chan has said.  She is quite right that the costs for the period between 7 July 2005, and 12 September 2006 are in the discretion of the court.  She has been quite unable to persuade me that I should not exercise that discretion in favour of the defendant. 

14.It is right that the plaintiff had to pay costs on the defendant’s application to set down, but that was a specific matter and has no regard to the fact that with no settlement, and with no acceptance of the payment in, the defendant was obliged to prepare for trial.  The very late notification of the acceptance meant that the defendant was left with no option at all but to deliver the brief to counsel.  While I understand the effort that was made by the plaintiff’s solicitors to discourage counsel from appearing on 12 September 2006, in the chambers argument on costs, the reality was that that appearance did not incur any additional costs as the brief had already been delivered.

15.Mr Wright submitted that the case was an appropriate case for an order under O 62 r 8 that the plaintiff’s solicitors personally should pay the costs.  Before such an order could be made it would be necessary to permit the plaintiff’s solicitors to file affidavits and to instruct Counsel, in order that they may show cause why such an order should not be made.  That course would only add to already unnecessary costs.  I have made the position clear in this ruling.  If the plaintiff was not advised of the consequences of failing to accept the payment in promptly, then in my view the solicitors ought to pay the costs and not impose the burden on their client.  If the plaintiff was given proper advice, then she must accept the consequences of any decision that she has made upon that advice.

16.In the course of the hearing I suggested to Mr Wright that rather than add to the costs with a taxation, the matter of the defendant’s costs should be one suitable for gross sum costs.  I have received the plaintiff’s solicitors draft costs for gross sum assessment.  A copy has been sent to the plaintiff’s solicitors who may in writing, seven days after receipt, comment on the extent of the costs.  The defendant’s solicitors may reply to those comments seven days thereafter.

17.I will consider the letters and fix gross sum costs when I return from leave.

Ms Chan Ching, of Messrs Chong, So & Co., for the Plaintiff

Mr John Wright, instructed by Messrs Yip & Partners, for the Defendant