Lee Sau Yan Benson v. Kwok Chi Kwan

DCPI762/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO. 1762/2007

__________________

BETWEEN

__________________

Coram: Deputy District Judge Frederick HF Chan (Open to public)

Date of hearing: 11^th September 2008

Date of ruling: 12^th September 2008

RULING

The traffic accident

1.In the evening of 15^th January 2005, the Plaintiff (Mr. Benson Lee Sau Yan who was a hair stylist) boarded the back-seats of a taxi (with registration no. KC9645) and fastened his seat-belt. He then gave instructions to the driver on the desired destination. At the material time, the man behind the driving-wheel was the Defendant (Mr. Kwok Chi Kwan).

1.     The taxi travelled on the 3^rd lane of Kwun Tong Road and sped towards Kwun Tong. When it approached the junction with Hong Ning Road, it collided with another taxi with registration no. KL1675 which, in turn, piled up with two other taxis in front.

2.As a result of the traffic accident, the Plaintiff was injured and sent to the United Hospital for treatment. Subsequently, the Defendant was convicted of careless driving in KCS7997/2005.

The Plaintiff’s claims in tort

3.On 27^th September 2006 and by way of HCPI837/2006, the Plaintiff (through Messrs. Chan & Tsu) issued a Writ of Summons against the Defendant to claim for damages for personal injury in the Court of First Instance.

4.The Plaintiff alleged that it was the Defendant’s negligent driving which caused him to suffer personal injuries. The Statement of Damages filed on 27^th September 2006 computed the damages to be in the region of HK$3.6 million which fell squarely within the unlimited monetary jurisdiction of the Court of First Instance but way beyond the HK$1 million jurisdiction of the District Court.

The proceduralmanoeuvres

5.On 31^st October 2006, the Plaintiff obtained an interlocutory judgment against the Defendant which reads  (“the Default Judgment”):

“… It is … adjudged that the Defendant do pay the Plaintiff damages to be assessed and costs”.

6.On 27^th March 2007, the Defendant filed a list of documents which included a video tape on the surveillance of the Plaintiff.

7.According to the Plaintiff’s solicitors, they conducted a “preliminary assessment on the quantum of damages” and as a result of which they advised the Plaintiff that the quantum of damages recoverable under the Default Judgment would be well within the jurisdiction of the District Court. Thus, the parties’ solicitors submitted a consent summons which was signed by the Defendant’s solicitors and asked the Court of First Instance to transfer the Plaintiff’s case to the District Court with no order as to costs.

8.On 10^th April 2007, the Plaintiff  obtained a consent order from the High Court Master B. Kwan for a transfer of the HCPI837/2007 to the District Court.

9.Once landed in the District Court, the case was put under the tutelage of the District Court Master K. Lo who made detailed directions on the now DCPI762/2007. The learned Master K. Lo imposed a set of directions on the service of a joint medical report, filing of revised statement of damages and service of the Plaintiff’s witness statement.

10.Indeed, on 22^nd May 2008, the learned Master K. Lo (who was in charge of the personal injuries cases in the District Court) gave directions to put the DCPI1762/2007 on the Running List with 1 day reserved for the assessment of damages. It is worth noting that the court file reveals that the DCPI762 is now on the running list pending resolution by a District Judge on a date after 16^th September 2008.

11.In late May 2008, the Plaintiff’s solicitors engaged Mr. Wallace Cheung of counsel to render written advice on evidence and quantum of damages. I understand from Mr. Chan that Mr. Wallace Cheung did so accordingly in about June 2008.

12.On 13^th June 2008, the Plaintiff filed the Revised Statement of Damages and revised the quantum of damages to about HK$1.7 million. The Revised Statement of Damages was settled by Mr. Wallace Cheung of counsel.

13.Obviously, Mr. Wallace Cheung’s professional opinion on the quantum of damages recoverable under the Default Judgment was greatly at odds with Messrs. Chan & Tsu’s earlier advice to the Plaintiff to the effect that the assessment of damages should be ventilated in the District Court.

The U-turn

14.On 9^th July 2008, the Defendant’s solicitors (Messrs. Simon Yung) retorted by filing the Answer to Revised Statement of Damages. The Defendant argued that the appropriate quantum of damages should only be HK$291,920. In terms of quantum, the gap between the Plaintiff and the Defendant was about HK$1.4 million.

15.By a letter dated 27^th August 2008, the Plaintiff’s solicitors invited the Defendant’s solicitors to agree to an application to transfer the DCPI762/2007 back to the Court of First Instance. The Defendant flatly rejected this request. Lengthy correspondence ensued.

16.By a letter dated 1^st September 2008, the Plaintiff’s solicitors justified the request to have the case be re-transferred to the Court of First Instance by saying that:

“We, as solicitors for our client has (sic.) a duty to put forward our client’s best arguable case and it is Counsel’s advice that our client’s best arguable case would be in the total sum of $1,742,935, hence, we are obliged to apply for the case be transferred back to the High Court”.

17.That statement summed up the Plaintiff’s subsequent application for leave to transfer the case back to the Court of First Instance. By an inter parte summons filed on 4^th September 2008, the Plaintiff (through Messrs. Chan & Tsu) asked the Court for leave to re-transfer the DCPI762/2007 to the Court of First Instance for assessment of damages (“the Re-transfer Application”).

18.The Plaintiff, however, suggested that the costs order should be “costs of and occasioned by this application be costs in the cause”. The summons was said to be taken out pursuant to Order 42 rule 5A Rules of the District Court (Cap. 336, Sub. Leg.) (“RDC”) which deals with consent orders and judgments.

19.On 10^th September 2008, the Defendant’s solicitors filed a hearing bundle (with 104 pages) where it strenuously objected to the Re-transfer Application. The Defendant argued that the Court, in the exercise of its discretion, should dismiss the Re-transfer Application in its entirety with costs be awarded against the Plaintiff on an indemnity basis given that the Re-transfer Application was so devoid of merits and constituted an abuse of the Court’s process.

20.It is clear that absent the parties’ mutual consent, the Court cannot deal with the Re-transfer Application by putting reliance on O. 42 r. 5A RDC. In my view, the correct provisions which are relevant to the determination of the Re-transfer Application should be:

(a)  Section 41 of the District Court Ordinance (Cap. 336) (“DCO”) which provides that:

“(1)    The [District] Court shall, either of its own motion or on the application of any   party, order that an action or proceeding be transferred to the Court of First Instance where an action or proceeding commenced in the Court … is outside the jurisdiction of the Court but is within the jurisdiction of the Court of First Instance”;

(b) Section 44A of the DCO which stipulates that:

“(1)    This section applies to an action or proceeding transferred –

(a)    …

(b)    From the Court to the Court of First Instance.

(2)    The court that orders the transfer may make an order for costs prior to the  transfer and of the transfer of the proceedings”.

The key issues

21.In the circumstances, the battle-lines between the parties were drawn thus:

(a)  Whether the Court should grant the Re-transfer Application? (“Issue A”)

(b) If so, whether the costs of and occasioned by the Re-transfer Application (including the inter parte summons and the hearing on 11^th September 2008) should be paid by the Plaintiff to the Defendant and if so, whether such costs should be taxed on a higher basis than the usual party-and-party basis? (“Issue B”)

22.As I mentioned earlier, as matters stand, the Plaintiff’s case on damages is now in the mantra of DCPI762/2007 and the trial hearing for the assessment of damages will come up very soon after the Mid-Autumn Festival, to wit, 16^th September 2008. Hence, I am of the view that the Re-transfer Application should be determined by the Court without any further delay.

23.On the Plaintiff’s side, heavy reliance was placed on the views expressed by his counsel through the Revised Statement of Damages. The Plaintiff submitted that I should attach full weight to the professional assessment of Mr. Wallace Cheung when he concluded that the Plaintiff could have recovered damages in the region of HK$1.7 million. I read the Revised Statement of Damages with care and noted that the bulk of the Plaintiff’s claim for damages rested on:

(a)  Pain, suffering and loss of amenities (“PSLA”) (HK$400,000);

(b) Pre-trial loss of earnings (HK$433,100);

(c)  Future loss of earnings (HK$691,200).

24.Mr. Chan for the Plaintiff submitted that this Court should not conduct a “mini-trial” on the quantum of damages, here and now. He repeated that the Re-transfer Application was triggered and solely motivated by Mr. Wallace Cheung’s advice. He said his firm should not be blamed for reaching a mistaken (or neutrally put, different) preliminary assessment of the damages when the case was still pending before the Court of First Instance.

25.He conceded that when the case was before the Court of First Instance, a decision whether to transfer it to the District Court could have been made by the Plaintiff at any time before the setting down of the hearing date for the assessment of damages. He submitted that the Court should grant the Re-transfer Application.

26.Mr. Chan also provided me with a copy of the Plaintiff’s witness statement to consider. I noted there-from that the Plaintiff is alleging that the injuries which he had suffered in the accident and the residual disabilities had a severe impact on his job as a hair-stylist. In short, he said that he could not resume working as a hair-stylist.

27.On the strength of the hearing bundle which was helpfully lodged with the Court on 10^th September 2008, Mr. Shum for the Defendant argued that the putative award of damages will be no more than HK$291,192:

(a)  PSLA (HK$200,000);

(b) Pre-trial loss of earnings (HK$50,900);

(c)  Future loss of earnings (HK$0).

28.He argued that the Plaintiff should not have commenced the proceedings in the Court of First Instance. The Defendant also included a number of medical reports in the hearing bundle and at the hearing before me on 11^th September 2008 hammered the point that the injuries suffered by the Plaintiff were not very serious and the residual disabilities are not severe. The Defendant complained that the Plaintiff’s claim for damages was exaggerated.

29.Whilst I am indebted to the detailed submissions paraded by the parties’ solicitors before me at the 11^th September 2008 hearing, I must firmly remind myself that I am not the presiding judge for the determination of the assessment of damages.

30.It sounds trite but it is an inexorable fact that at the hearing proper of the assessment of damages under the Default Judgment, the Plaintiff would have to give oral testimonies and be examined. Further, the Court would expect the parties’ representatives to make detailed submissions on the various heads of damages within the boundaries respectively set by the Revised Statement of Damages from the Plaintiff and the Answer to the Revised Statement of Damages prepared by the Defendant. At the assessment of damages hearing, the Defendant may ask the Court to view the surveillance tape in open court.

31.Unlike the trial judge who is going to determine the assessment of damages under the Default Judgment in due course, I am not equipped to do so. All I have is, on the basis of the documents before me, a blinkered view of the possible outcomes of the assessment of damages in monetary terms. I, therefore, can only form a tentative and sketchy understanding of the parties’ competing submissions on the quantum of damages. On the basis of the materials before me, I cannot discount the views expressed by Mr. Wallace Cheung in the Revised Statement of Damages.

32.In the exercise of my discretion under s. 41 DCO and after carrying out a weighing process, I am of the view that the Re-transfer Application should be allowed.

33.Needless to say, in reaching that decision, I have taken all the matters of the present case into consideration but I will seek to highlight the following matters:

(a)  The Revised Statement of Damages were vouchsafed by Mr. Wallace Cheung of counsel who has experience in personal injury cases both in the District Court and the Court of First Instance;

(b) According to the Plaintiff’s solicitors, Mr. Wallace Cheung has seen fit to prepare an Advice on Quantum and Evidence to support his assessment;

(c)  To allow the Re-transfer Application now will not cause any prejudice to the fair determination of the assessment of damages; the parties are actively preparing the hearing documents which could all be utilized before a High Court Master or a High Court judge for final adjudication;

(d) If the DCPI762/2007 were to be transferred to the Court of First Instance for determination, the Defendant (through counsel) would still be entitled to dispute the entitlement of the Plaintiff to recover the damages as per the Revised Statement of Damages;

(e)  in the final analysis, therefore, one can readily see that the right of the Defendant to a fair determination on the quantum of damages would not be impaired or prejudiced;

(f)   I also bear in mind the provisions of s. 44A of the DCO:

“(3)     The costs of the whole proceedings both before and after the transfer are in the discretion of the court to which the proceedings are transferred subject to any order made by the court … which ordered the transfer”;

(g)  Thus, if at the end of the day, the quantum of damages recovered by the Plaintiff in an assessment of damages before the Court of First Instance were to fall below the HK$1 million bench-mark set by s. 32(1) DCO, the Defendant can always make formidable submissions to the Court of First Instance that the costs of the Plaintiff should be on the District Court scale as opposed to the High Court scale (see: Centaline Property Agency Limited v. Lai Yuk Chun, CACV15/2002, unreported, 31^st December 2002, Yuen JA, Chung and Kwan JJ.)[1];

(h)  Mr. Chan candidly informed me that he is aware of the recent spate of cases where the plaintiffs recovered damages which were less than the HK$1 million and costs were, at times, awarded by the Court of First Instance, on the District Court scale;

(i)    Such a risk on the scale of costs, according to Mr. Chan, has already been taken into account by the Plaintiff.

34.Therefore, on the Issue A, I will hold that the Court should allow the Re-transfer Application.

35.On the Issue B vis-à-vis the costs of the Re-transfer Application and today’s hearing, Mr. Shum for the Defendant argued that the Plaintiff should bear costs on an indemnity basis as the Plaintiff is carrying the subject matter of the Default Judgment up and down the two tiers of the District Court and Court of First Instance like a Yo-Yo.

36.In reply, Mr. Chan for the Plaintiff meekly submitted that the most appropriate costs order should be the costs of and occasioned by the Re-transfer Application “in the cause” and that he who prevails in the assessment of damages before the Court of First Instance shall have the said costs. At most, Mr. Chan submitted, the Defendant can have the costs of the summons because the Defendant could have consented to the Re-transfer Application.

37.I disagree. The circumstances of the present case as outlined above which I shan’t repeat do warrant a costs order against the Plaintiff to the effect that the Plaintiff shall pay to the Defendant forthwith, to be taxed if not agreed, the costs of and occasioned by the Re-transfer Application through the inter parte summons filed on 4^th September 2008. Any argument to the contrary is, frankly speaking, unarguable.

38.Mincing no words, it seems to me that the Plaintiff or those advising him should have considered more prudently and comprehensively on the quantum of damages before making the decision to transfer the case from the Court of First Instance. Factually speaking, they had ample time and chance to do so.

39.Instead, a decision was made by the Plaintiff to ask the Court of First Instance to transfer the HCPI 837/2006 to this Court when the Plaintiff did not have counsel’s advice. Whilst I appreciate Mr. Chan’s submission that as solicitors for plaintiffs, his firm should not engage the services of counsel prematurely and unnecessarily. But I venture to suggest that each case must depend on its own facts. The Statement of Damages filed in HCPI837/2006 stated the damages to be about HK$3.6 million which was not unsubstantial. With the benefits of hindsight, the Plaintiff should have thought long and hard on the quantum of damages.

40.Moreover, a costs order as alluded above in paragraph 38 will serve to compensate the costs incurred by the Defendant in respect of the Re-transfer Application. I so ordered.

41.The legal principles governing the award of indemnity costs or costs on a common fund basis are not disputed by the parties. I need to go no further than the following passages from the Hong Kong Civil Procedure, Volume 1, paragraphs 62/App/9 and 12, pp. 997-998 where the learned editors said :

“When to order common fund costs

To justify an order for costs on the common fund basis, the case has to have some special or unusual feature …

When to order indemnity costs …

… where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive or in an oppressive manner”.

42.It is well established law that costs are always in the discretion of the Court and all the more so in the context of interlocutory and case management decisions made by the Court.

Conclusion

43.That said, in the circumstances of the present case and looking at the various matters most carefully in the round, I am of the view that the appropriate way of taxing the costs of and occasioned by the Re-transfer Application should be on a party-and-party basis.

44.Whilst I must say that I have some sympathy on the predicaments of the Defendant when the Plaintiff conducted a volte-face in relation to the proper forum to determine the quantum of damages, I do bear in mind the fact that the decision which triggered the Re-transfer Application was the legal opinion of Mr. Wallace Cheung.

Order

45.Before departing from this case, I again underline the crucial fact that the exact quantum of damages recoverable under the Default Judgment is yet to be determined. Therefore, the order of the Court is:

(a)  Leave be granted to the Plaintiff to transfer the DCPI 762/2007 to the Court of First Instance for the assessment of damages and any subsequent proceedings;

(b) The DCPI762/2007 be vacated from the District Court Running List forthwith;

(c)  Costs of and occasioned by the Plaintiff’s inter parte summons filed on 4^th September 2008 and the hearing of 11^th September 2008 be paid by the Plaintiff to the Defendant forthwith, to be taxed if not agreed and on a party-and-party basis;

(d) The costs order in (c) is order nisi.

46.I thank both parties’ solicitors for their assistance.

Representations:

Mr. Joseph W. K. Chan of Messrs. Chan & Tsu, solicitors for the Plaintiff.

Mr. Shum Yuk Lun of Messrs. Simon C.W. Yung & Co., solicitors for the Defendant.

[1]  There, the plaintiff sued the defendant in the District Court for commissions in respect of a property transaction involving the defendant. The defendant mounted a counterclaim totaled HK$11.48 million. The case was transferred to the Court of First Instance as HCA18639/1999. The defendant only managed to obtain nominal damages after a contested trial. Deputy High Court Judge A. To awarded costs on the District Court scale to the defendant pursuant to s. 44A DCO. The defendant’s appeal against the costs order was unanimously dismissed by the Court of Appeal. The Court of Appeal held that the first instance judge has complete discretion on costs under s. 44A DCO.