倪瑞武及另一人 v. 恒陞大樓業主立案法團及另一人

DCCJ 4651/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4651 OF 2005

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BETWEEN

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Coram:   Deputy District Judge R. Cheung in Chambers (open to public)

Date of Hearing:  15^th May 2007

Date of Handing down Decision:  25^th May 2007

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DECISION

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1.This is the 1st Defendant's application to vary the Order Nisi for costs that I made on 28 February 2007. The 1st and 2nd Plaintiffs were partially successful in their claims. I had made an Order Nisi that the 1st Defendant was to pay the 1st and 2nd Plaintiffs the costs of this action. The 1st Defendant was legally represented throughout. The 1st and 2nd Plaintiffs had acted in person all along.

The Law

2.On the question of costs, I am guided by what is commonly referred to as the Elgindata principles (as adumbrated by Nourse L.J. in In re Elgindata Ltd (No.2) (1992) 1 W.L.R. 1207), viz: "(i) Costs are in the discretion of the court. (ii) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made. (iii) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs. (iv) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party's costs.”

3.My attention was also drawn to Phonographic Performance Ltd. v. AEI Rediffusion Music Ltd., (1999) 2 All ER 299 in which Lord Woolf MR said the following: "The most significant change of emphasis of the new rules is to require courts to be more ready to make separate orders which reflect the outcome of different issues. In doing this the new rules are reflecting a change of practice which has already started. It is now clear that a too robust application of the 'follow the event principle' encourages litigants to increase the costs of litigation, since it discourages litigants from being selective as to the points they take. If you recover all your costs as long as you win, you are encouraged to leave no stone unturned in your effort to do so." The "new rules" that Lord Woolf MR referred to are of course the U.K. statutory provisions relating to costs which are substantially similar, though not identical to their Hong Kong equivalent. Later on, commenting on the Elgindata principles, the learned Judge said: "The 'well-established practice' on which Nourse LJ based his third principle is, as I have already indicated less generally followed than it has been in the past and it is no longer necessary for a party to have acted unreasonably or improperly to be deprived of his costs of a particular issue on which he has failed."

4.The Elgindata principles were applied in the local decision of La Chemise Lacoste SA v. Crocodile Garments Ltd. (2000) 4 HKC 317 in which Rogers VP said "The first point is that costs should generally follow the event. That rule does not cease to apply simply because a successful party has raised issues or made allegations which failed. However, if he has caused a significant increase in the length of the trial and, thereby, increased the costs of the proceedings he may be deprived of some or all of his costs and indeed if he has acted improperly he may be compelled to compensate the other side in costs."

5.There is the local authority of Ho Shu Kwong v. Chiang Chun Yuan, CACV 168/2002, 5 August 2002 in which the Hon Woo JA examined a number of decisions on the question of costs where there was a departure from the general rule that costs should follow the event and be assessed on a party and party basis. The exception had taken place when the employee in an employees' compensation case was awarded compensation just over the amount paid into court by the employer. The employee was found to have grossly inflated his claim and was guilty of a degree of mendacity which could be categorised as misconduct (as in the case of Wong Sing Fung v. Fung Ming Stainless Engineering Co. Ltd. (unrep., Civ App No. 76 of 1986)). It was also noted that a distinction should be drawn between depriving a successful plaintiff and depriving a successful defendant of costs (as in the English Court of Appeal case  of Ritter v. Godfrey). The following dictum in the case of Baylis Baxter Ltd. v. Sabath, (1958) 1 W.L.R. 529 was cited with approval: "……it seems to me, once it is conceded that the credibility of the witnesses and the conduct of the parties in regard to the case they allege and seek to prove is a relevant matter for a judge to take into account in dealing with the question of costs, any comparison to be made of the conduct or misconduct of the parties on each side is a matter for the judge, and he is entitled to weigh one against the other and if he finds that one party has behaved particularly badly, although in the end successful in his claim, that is a matter which he can take into account, even though the conduct of the other part might appear to be equally or almost equally culpable."

6.I would note in particular the following statutory provisions.

7.Section 53 (1) of the District Court Ordinance provides: "The costs of and incidental to all proceedings in the Court, including the administration of estates and trusts, are in the discretion of the Court, and the Court has full power to determine by whom and to what extent the costs are to be paid."

8.Order 62, Rule 2(4) of the Rules of District Court provides: "The powers and discretion of the Court as to costs under section 53 of the Ordinance………shall be exercised subject to and in accordance with this Order."

9.Order 62, Rule 3(2) of the Rules of District Court provides: "If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings, the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs."

10.Order 62, Rule 7(1) of the Rules of District Court provides: "Where in any cause or matter any thing is done or omission is made improperly or unnecessarily by or on behalf of a party, the Court may direct that any costs to that party in respect of it shall not be allowed to him and that any costs occasioned by it to other parties shall be paid by him to them."

11.Order 62, Rule 7(2) of the Rules of District Court provides: "Without prejudice to the generality of paragraph (1), the Court shall for the purpose of that paragraph have regard in particular to the following matters, that is to say - (a) the omission to do any thing the doing of which would have been calculated to save costs; (b) the doing of any thing calculated to occasion, or in a manner or at a time calculated to occasion, unnecessary costs; (c) any unnecessary delay in the proceedings."

Discussion: 1st Plaintiff

12.I would now turn to the case before me. I would note the more salient matters in considering the question of costs, as follows.

13.The homemade pleadings of the 1st and 2nd Plaintiffs were inadequate. Had the 1st Defendant insisted on strict application of the law and rules relating to pleadings, the trial would have been shorter. The 1st Defendant chose to act with unusual magnanimity and did not insist on pinning down the 1st and 2nd Plaintiffs to their pleadings. That is commendable. However, when after that the 1st Defendant asks for the costs of the action, I think that is something that I am entitled to take into account.

14.The need to frame issues for the parties at the start of the trial did take up some time. It was largely the fault of the 1st and 2nd Plaintiffs which made this necessary.

15.The 1st Defendant was not entirely without fault, the trial bundle prepared by the 1st Defendant was in a dismal state that was prone to cause confusion.

16.The 1st Plaintiff had made a claim for general damages in respect of what he loosely described as the discomfort, nuisance and irritation that he had suffered by reason of the prolonged falling down of sewage water from above which had affected the subject premises in which he then resided ("the irritation damages"). He claimed that the amount of such damages should be over $350,000.00. The 1st Plaintiff had given scant evidence of his such suffering during the trial. I did not believe his evidence. His claim for the irritation damages had failed. His evidence was bizarre in that he said he subsequently got so used to the noise of the falling sewage water that he could not bear its cessation. But what if his evidence were believed? I still do not think that he would be entitled to damages anywhere close to $350,000.00. I am satisfied that he had grossly inflated his claim for the irritation damages.

17.I agree with the 1st Defendant's suggestion that the 1st Plaintiff's claim should not be considered as substantially successful. The 1st Plaintiff was awarded damages in the sum of $1,000.00 for the rusting of the split type air conditioner and its supporting frame owing to the falling down of sewage water from about Mid-January 2001 to December 2001. The 1st Plaintiff was awarded damages in the sum of $200.00 jointly with the 2nd Plaintiff for the rusting of the aluminium windows of the master bedroom and toilet owing to the falling down of sewage water during the period from about Mid-January 2001 to May 2003, as well as for the rusting of the windows of the master bedroom owing to the splashing of sewage water during the period from Mid-January 2001 to December 2001. Nonetheless, apart from the claim of irritation damages, I am not prepared to say that the 1st Plaintiff had grossly inflated his claim on the other heads of damages. It is a matter of degree. Further, the amount of damages awarded had to take account of attributing the overall damage to a particular period of time in which the 1st Defendant was found to be liable so as to disregard the damage that occurred outside that period, and also to take account of the cause of damage which the 1st Defendant was found to be liable so as to disregard the damage that resulted from other causes. All these call for detailed investigation. I do not consider that the 1st Plaintiff should be faulted for attributing the entire or a greater portion of such damage to the 1st Defendant even though in the end he failed to prove that. I say that with full awareness that the 1st Plaintiff had in his evidence exaggerated to an extent the severity of the situation of the falling down of sewage water as well as the amount of the repair costs.

18.I bear in mind that at the trial the time that had been taken up exclusively for the claim for the irritation damages was only minimal. The greater part of the trial was taken up for establishing the 1st Defendant's liability in relation to the falling down of the sewage water.

19.Apart from the claim for irritation damages, the 1st Plaintiff's claims for other heads of damages might have been within the exclusive jurisdiction of the Small Claims Tribunal. I say "might" because the 1st Plaintiff's case was not that clearly expressed. The focus then was not on whether apart from the claim for the irritation damages, the other claims of the 1st Plaintiff would be within the exclusive jurisdiction of the Small Claims Tribunal. For the purpose of this discussion, I would assume that indeed they were. The 1st Defendant is saying that had the 1st Plaintiff not inflated his claim for the irritation damages, the matter would have been resolved at the Small Claims Tribunal. Since the claims were in fact tried at the District Court, the 1st Defendant had engaged legal representation and hence it had incurred legal costs which it would not have incurred had the claims been resolved in the Small Claims Tribunal. The 1st Defendant said that in the circumstances, it should be entitled to costs. I have some reservations about the validity of this argument. First, even at the District Court, the 1st Defendant is not bound to engage legal representation. Second, had the 1st Plaintiff dropped his claim for the irritation damages and prosecuted his claims in the Small Claims Tribunal, it would appear to be likely that he would have succeeded in his claims and be awarded his costs, albeit the amount of such costs would be pitched at the normal level of costs in the Small Claims Tribunal rather than at the scale of District Court costs.

20.The 1st Plaintiff had alleged that from about January 2001 to the middle of 2005, the main gate at the ground floor of the building in question was often inappropriately left open for long periods of time and he claimed general damages on the ground that the 1st Defendant's breach of duty had caused him discomfort and to fear about his security ("the insecurity damages"). The 1st Defendant conceded that the 1st Plaintiff's claim was maintainable at law in the sense that it is not a situation where even if the 1st Plaintiff's evidence were believed, the facts would nonetheless fail to establish his claim at law. This being so, I would approach the question of costs on this basis. I am not prepared to say that the 1st Plaintiff had brought his claim for insecurity damages unnecessarily or improperly. In any event, only a small amount of time was taken up at the trial on matters exclusively referable to the claim for insecurity damages.

21.All in all, I am not prepared to say that the 1st Plaintiff had unnecessarily or improperly brought and prosecuted his claims except for his claim for the irritation damages.

Order Absolute for the Action: 1st Plaintiff

22.I do not consider that the 1st Defendant should be entitled to the costs of this action against the 1st Plaintiff. I would vary the previous Order Nisi. It would be fair to make no Order as to costs as between the 1st Plaintiff and the 1st Defendant in respect of the costs of this action and I make this Order accordingly.

Discussion: 2nd Plaintiff

23.The reasons given for the variation of the previous Order Nisi for costs as between the 1st Defendant and the 1st Plaintiff will also apply, mutatis mutandis, to the 2nd Plaintiff.

24.The claim for irritation damages solely relates to the 1st Plaintiff. The 2nd Plaintiff did not make such a claim. The 2nd Plaintiff was awarded the $200 damages jointly with the 1st Plaintiff as abovementioned. That was all she got. All her other claims have failed.

25.The 2nd Plaintiff was the wife of the 1st Plaintiff. They are now separated. She had assumed a rather passive role in the proceedings and appeared to have meekly gone along with the 1st Plaintiff's suggestions. I am not too sure if this is a relevant consideration to be taken into account on the question of costs. None of the authorities before me say that this is a relevant consideration. I have decided not to take this into account.

26.At an early stage of the trial, it was noted that there might be a jurisdiction problem with the amount of the 2nd Plaintiff's claim. It would have been a rather undesirable situation to have the 1st Plaintiff's claims falling within the jurisdiction of the District Court while the 2nd Plaintiff's claims should fall within the exclusive jurisdiction of the Small Claims Tribunal. They were joint owners of the flat affected by the falling sewage water and both of them should be present before the Court. The problem was explained to the parties and the 2nd Plaintiff agreed that her claim for the insecurity damages taken together with her other claims for damages would be over $50,000.00. She was to be commended for having acted reasonably. Although I am not aware of any authority on all fours with this situation, I am prepared to take this into account on the question of costs. I would be reluctant to make an Order for costs against the 2nd Plaintiff in respect of the costs for the action.

27.The 2nd Plaintiff had chosen not to testify and there was no evidence from her to support her alleged fear for her security in relation to the insecurity damages. I take this into account.

Order Absolute for the Action: 2nd Plaintiff

28.In all the circumstances, I also consider that there should be no Order as to costs as between the 2nd Plaintiff and the 1st Defendant in respect of the costs of this action. I would make the Order accordingly. The previous Order Nisi is thus varied.

Order Nisi for the 1st Defendant's present application

29.As to the costs of the 1st Defendant's application to vary the previous Order Nisi for the costs of this action, I see nothing to detract me from ordering costs to follow the event. I have warned the 1st and 2nd Plaintiffs of the costs consequence at the start of the hearing on 15 May 2007. They decided to contest the 1st Defendant's present application. The 1st Defendant is successful in its present application.

30.However, the hearing scheduled on 13 April 2007 for the hearing of the 1st Defendant's present application was not proceeded with because of the absence of the 1st Plaintiff. The 2nd Plaintiff was present on that occasion. No Affirmation of Service was filed then to prove that the summons returnable on 13 April 2007 was duly served on the 1st Plaintiff. At the hearing on 15 May 2007 when both the 1st and 2nd Plaintiffs appeared before me, the 1st Plaintiff told me that he had not received the papers for the hearing on 13 April 2007 and that was why he did not attend Court on the previous occasion. The 1st Plaintiff said that he did receive the summons returnable on 15 May 2007. The 1st Defendant had caused to be placed before me during the hearing on 15 May 2007 a copy of an Affirmation of Service of Lam She Ming, a clerk of the firm of solicitors acting for the 1st Defendant, which contains statements to the effect that the summons herein returnable on 13 April 2007 was duly served on the 1st Plaintiff by ordinary post, whereas the summons returnable on 15 May 2007 was served on the 1st Plaintiff by registered post. The copy Affirmation of Service of Lam She Ming was marked as filed on 9 May 2007 on its backsheet. However, the original of that copy Affirmation is not on the Court's file nor does the Court's computer system show that it has been filed. Under such circumstances, I am not prepared to accept that the 1st Defendant had in fact served the summons returnable on 13 April 2007 on the 1st Plaintiff. This should be reflected in the Order Nisi for costs that I make here.

31.Although I am indebted to Counsel for the 1st Defendant for his drawing my attention to a number of important authorities on the question of costs which I find helpful, a more experienced District Judge will no doubt be familiar with these decisions and find the matter uncomplicated. In the circumstances, I consider that the attendance of Counsel to be unnecessary for the present application. I would not grant the Certificate for Counsel.

32.I would make the following Order Nisi for costs in relation to the 1st Plaintiff: the 1st Plaintiff do pay the 1st Defendant the costs of and incidental to the 1st Defendant's present application save for the hearing on 13 April 2007, for which there shall be no order as to costs. By way of gross sum assessment, I would specify such costs to be $600.00. Unless there is an application to vary this Order Nisi for costs, it will become absolute in 14 days.

33.I would make the following Order Nisi in relation to the 2nd Plaintiff: the 2nd Plaintiff do pay the 1st Defendant the costs of and incidental to the 1st Defendant's present application save as to the costs of the hearing on 13 April 2007. By way of gross sum assessment, I would specify such costs to be $600.00. As for the costs of the hearing on 13 April 2007, I would order the 1st Defendant to pay the 2nd Plaintiff's costs. By way of gross sum assessment, I would specify such costs to be $100.00. Unless there is an application to vary this Order Nisi for costs, it will become absolute in 14 days.

Representation:

The 1^st Plaintiff:  appearing in person

The 2^nd Plaintiff:  appearing in person

Mr. Dick Lee, instructed by Messrs. N.K. Tsang & Co., for the 1^st Defendant