Chan Choi Yin Janice v. Toppan Forms (Hong Kong) Ltd

DCEO 6/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EQUAL OPPORTUNITIES ACTION NO. 6 OF 2002

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BETWEEN

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Coram : Her Honour Judge H.C. Wong in Chambers

Date of Hearing : 9^th November 2006

Date of Handing Down Ruling : 17^th November 2006

RULING

Ruling

1.At the request of counsel, the matter as to costs has been reserved for further submissions after my judgment was handed down in this action.

2.The parties came before me and made their respective submissions on costs.  Mr. Leung, counsel for the Plaintiff, asked for costs against the Defendant under S. 73 B (3)(b) of the District Court Ordinance Cap. 336.  Mr. Lui representing the Defendant resisted the application.

3.S. 73B (3) District Court Ordinance provides:-

“	(3)	Each party to any proceedings in the Court in the exercise of its jurisdiction under the Sex Discrimination Ordinance (Cap. 480) shall bear its own costs unless the Court otherwise orders on the ground that-
		(a)	the proceedings were brought maliciously or frivolously; or
		(b)	there are special circumstances which warrant an award of costs.”

I have been shown a bundle of the pre-trial and post judgment correspondences between the parties’ legal representatives with reference to costs.

4.The Defendant’s legal representatives referred to a mutual understanding that the parties were to bear their own costs in the letter of 20 May 2006 relying on the normal practice under S. 73B (3) of the District Court in Sex Discrimination Ordinance (Cap. 480) (“SDO”) cases.  Mr. Herman Poon, Chief Legal Counsel of the EOC vigorously denied any mutual understanding in his reply letter of 25 May 2006 and affirmation of 26 July 2006.

5.Mr. Poon in his affirmation exhibited a number of ‘without prejudice saved as to costs’ correspondence exchanged prior to the trial in support of his assertion that there was no mutual understanding as to each party to bear its own costs in these proceedings.

6.There was also an allegation by the Defendant’s solicitors raised in their 1 June 2006 letter to the EOC of an attempt to settle a related employment action taken up by the Plaintiff against the Defendant together with the discrimination action proposed by the Plaintiff’s employment action legal representatives (Messrs. Baker and Mckenzie) in the 30 May 2006 letter.  I shall disregard any adverse allegations raised in these two letters for I consider such matters to be completely irrelevant to the present issue.

7.From the correspondence exhibited, it is apparent that the parties had been engaging in pre-trial attempts to settle the action.  It is equally apparent that the Defendant had anticipated costs may become an issue should the settlement proposed failed in which case these letters would be placed before the Court.  I find that the Plaintiff did not at any stage consider there was any mutual understanding as to ‘each party bearing its own costs’.  In fact, the matter as to costs was a live one from the time when the writ was issued because the Plaintiff had asked for costs in the prayer of the claim.  Consequently, whether there were any “special circumstances” under S. 73B (3)(b) at the end of the trial to warrant the Court making a cost order against any party are the determining factors as to whether the costs issue remained a live one.

8.I refer only to S. 73B (3)(b) because S. 73B (3)(a) clearly refers to costs against a plaintiff who had brought the proceedings maliciously and frivolously.  As I gave judgment to the Plaintiff in these proceedings, S. 73B (3)(a) does not apply and S. 73B (3)(b) is the relevant section in the present application for costs by the Plaintiff.

9.I am grateful to the very able and full submissions from counsel Mr. Leung and Mr. Lui, the contents of which I shall not repeat here.  The Court’s discretion on costs in the light of “special circumstances” under S. 73B (3)(b) should be assessed from the conduct of the party concerned at every stage of the proceedings.  As observed by my brother Judge Muttrie in L v. Equal Opportunities Commission & Ors. DCEO 1/99 and DCEO 6/99 (date of ruling 23 June 2003) at para. 7:-

“I accept that the conduct of the party concerned must be considered at every stage of the proceedings; it is quite possible that someone will start a hopeless case without knowing it is hopeless, but that later circumstances will arise which should make it clear to any reasonable person that it is hopeless; and to continue after that point will be frivolity.”

10.I agree with Mr. Leung’s submission that relevant factors giving rise to “special circumstances” are not limited to consider only decisions in previous court cases brought under the three anti-discrimination legislation.  Oppressive conduct such as those in Ma Bik Yung v. Ko Chuen [1999] 2 HKLRD 263; or where litigation could have been avoided but failed or refused in K & Ors v. Secretary for Justice [2000] 3 HKLRD 777 and where the party had been delatory, obstructive and oppressive during the course of litigation, (L v. EOC; Yeung Chung Wai v. St. Paul’s Hospital DECO 7 of 2003 (ruling date 25 October 2005)) are examples where the Court had awarded costs.  In Yuen Sha Sha v. Tse Chi-pang [1999] 2 HKLRD 28 where the Defendant’s actions were pre-meditated and his girlfriend had issued civil proceedings against the plaintiff and put pressure on the plaintiff by repeatedly telephoning her pressing her to drop her claim against the defendant.  Such oppressive tactics formed the basis of the “special circumstances” in that case under S. 73B (3)(b).

11.I turn to the present proceedings, the correspondence exhibited demonstrated fully the Plaintiff had engaged in negotiation for settlement when she counter proposed a full and final settlement sum of $572,911 on 8 November 2004.  Compared to the judgment sum of $544,156 plus interests awarded by this Court, the offer from the Plaintiff on 8 November 2004 was not an unreasonable one.  It, of course, far exceeds the Defendant’s 5 November 2004 offer of $180,000.

12.As can be seen from my judgment, the award I made was based on loss of earnings and injury to feelings.  These are not difficult to work out and Mr. Poon of the EOC representing the Plaintiff had set out the calculations in his offer letter of 18 November 2004.  It is clear to me that the Plaintiff’s conduct in these proceedings was perfectly proper.

13.As to the Defendant’s conduct in these proceedings, Mr. Lui submitted the Defendant had been reasonable throughout.  The Defendant’s case was not hopeless and the Defendant was behaving like any litigant in a civil action.  He submitted that unless there were “exceptional circumstances”, each party should bear its own costs.  He referred to Hansard, recording the submissions made in the Legislative Council on 28 June 1995 when the Council debated the Sex Discrimination Bill.

14.I agree with Mr. Leung, the Court should not go behind the Ordinance and consider submissions made by legislators during the debate before the bill was passed unless the wordings in the Ordinance are unclear or ambiguous.  In this case, the wordings in the legislation is very clear, it is for the Court to assess what are the special circumstances that warrant an award of costs in each case.

15.The term used in S. 73B (3)(b) is “special circumstances”, not “exceptional circumstances” referred to by Mr. Lui in his submission.

16.I do not accept that “special circumstances” under S. 73B (3)(b) should be pleaded in the Statement of Claim in every case nor do I accept that the Plaintiff is required to alert the Defendant beforehand that a submission on costs under S. 73B (3)(b) should be made prior to the trial.  The correspondence exchanged are ample evidence that the Defendant is aware of the S. 73B (3) requirements and that it was ready to take the issue of costs up should the occasion arise.  Based on the correspondence exchanged, I am not persuaded that the Defendant was not aware that costs may be awarded against a party who had resisted the claim and conducted the defence aggressively as if with impunity.

17.S. 73B (3) states that as a general rule there should be no orders as to costs provided the parties had conducted the litigation fairly and properly in a timely-fashion without wasting the Court’s or the other party’s time.

18.Mr. Leung criticised the Defendant’s conduct in these proceedings by fighting every point and calling a large number of witnesses which had unnecessarily prolonged the trial to be oppressive.  That the Defence ought to have known that it had a hopeless case by the time witness statements were prepared or at the commencement of the trial at the latest.  Such an approach had the result of wasting the Court’s time and escalating the legal costs of the Plaintiff.

19.While the Defence is entitled to its day in Court in an evenly balanced case where the dispute is factual in nature.  The factual findings in this case set out in my judgment do show that some of the Defendant’s employees in supervisory positions have behaved appallingly to the Plaintiff.  Actions such as requiring the Plaintiff who was pregnant to work late hours unnecessarily, cancelling her leave without notice, transferring her out of a team where she had been performing well etc. could only be interpreted as oppressive conduct failing reasonable explanations.    

20.After careful assessment of the circumstances and the background of these proceedings, I am satisfied that there are sufficient special circumstances to warrant an award of costs to the Plaintiff.  Had the defence acted sensibly and reduced the number of witnesses by agreeing the undisputed part of some of the witnesses’ evidence, the trial could have taken much less than 10 days.  The Plaintiff and EOC would not have to bear the costs for a full 10 day trial.  For this reason, I shall award to the Plaintiff 50% of the costs of the action to be borne by the Defendant, to be taxed if not agreed with certificate for counsel.

Mr. Raymond Leung instructed by Messrs. Equal Opportunities Commission for the Plaintiff.

Mr. Simon Lui instructed by Messrs. Fairbairn Catley Low and Kong for the Defendant.