Hse Fei Lun v. So Suk Yee

HCPI 606/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 606 OF 2012

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BETWEEN

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D E C I S I O N

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1.I have before me an application by the 1^st defendant in relation to a point of practice which is of some importance. This matter comes before me consequent upon the parties reaching settlement in this fatal accident action. The settlement was reached on the basis of a non-admission of liability whereby a certain sum was to be paid in full and final settlement of the plaintiff’s claims.

2.One of the terms of the summons before me was that the question of apportionment shall be dealt with by the court upon the plaintiff’s application within 14 days from the date of the order to be made on that summons. Other directions were also sought in relation to disposition of sanctioned payments, and so on.

3.Because the parties had effectively settled the entire proceedings, and there being no infant interests involved, I made an order in terms of that summons, which disposed of the action, except in relation to the apportionment.  I further directed that the question of apportionment should be dealt with by the personal injuries judge in chambers today; and the parties, therefore, have come before me today on this matter.

4.The stance taken by the 1^st defendant is that because the dependants in this case are both adults, the dependants being the widower of the deceased and the son of the deceased, it is not necessary for the court to make an apportionment.  If I may just summarise the submission I received, and this comes from §10 of the written submissions of the 1^st  defendant who said that:

“Since in this case there is no infant interest involved, nor apparent conflict of interest between different dependants, there is no necessity for the court to step into the apportionment process. The dependants, who are all adults, can be safely left to apportion the settlement sum solely by themselves. Any court intervention will not only be unnecessary but also benefit nobody except the plaintiff’s solicitors who can earn extra profit costs during the process.”

5.In further support of that submission, the 1^st defendant relies on the fact that Order 80 of the Rules of the High Court (“RHC”), bears the heading ‘Disability’, and, since the particular rule in question, rule 15, in relation to apportionment in a fatal accident action, appears in Order 80, that rule will only be involved, i.e. rule 15 will only be involved, if, and only if, a party involved in legal proceedings is an infant or a mentally incapacitated person.

6.The 1^st defendant also relies on a commentary in the Hong Kong Civil Procedure 2014 at page 1384, which refers to apportionment as between the widow and infant dependants, and on another passage in the same commentary referring to apparent conflicts of interest between the dependants or different groups of dependants, in support of the submission that Order 80 rule 15 is only engaged when some, or one, of the dependants is a minor or otherwise under a disability.

7.The 1^st defendant has also referred me to some of the authorities dealing with apportionment as between dependants, pointing out that there were infant interests involved in those cases, the cases being Bulmer v Bulmer [1883] 25 ChD 409, Cheung Wo and Others v Lee Voon-Sang trading as Wing Cheung Co. [1965] HKCU 72, and a case which is often cited in the courts, Ho Pang Lin & Anor (co-administrators of the estate of Wong Hup Yim, deceased) v Ho Shui On & Anor  [1994] 3 HKC 294.

8.Finally, the 1^st defendant makes the submission that the plaintiff had misread section 6(1) of the Fatal Accidents Ordinance, Cap. 22 (“FAO”), which states, under the heading, ‘Assessment of Damages’:

“In the action, such damages, other than damages for bereavement, may be awarded to dependants in such proportions as reflect their respective injuries as a result of the death.”

To understand this provision, it is also relevant to refer to subsection (2):

“Where damages are awarded under subsection (1), any costs not recovered from the defendant shall be deducted from those damages and thereafter those damages shall be divided among the dependants in such proportions as has been decided under that subsection.”

9.The submission of the 1^st defendant is that the words “in such proportions as reflect their respective injuries” refer to the financial losses actually suffered by the defendants and are not related to an apportionment of the damages awarded under the FAO.  As the claim was settled, all disputes regarding the financial losses have been fully and finally resolved and, therefore, there was no issue left which relates to Section 6(1) of this Ordinance.

10.I do not agree with these submissions. 

11.The plaintiff rightly pointed me to Section 18(3) of the Interpretation and General Clauses Ordinance, Cap. 1, which provides that:

“A marginal note or section heading to any provision of any Ordinance shall not have any legislative effect and shall not in any way vary, limit or extend the interpretation of any Ordinance.”

The plaintiff submits, for this reason, that Order 80, rule 15, is not restricted to actions concerning persons under disability.

12.It is necessary to have regard to the history of Order 80, rule 15 to understand why I come to the conclusion that Order 80, rule 15 applies to all cases where there are claims under the FAO and the Law Amendment and Reform (Consolidation) Ordinance, Cap. 23 (“LARCO”), and where there is more than one dependant.  The genesis of rule 15 is better understood if one refers to an older edition of the UK Supreme Court Practice, and the one I refer to is the Supreme Court Practice 1999; that being the last edition of the White Book before the Civil Procedure Rules were enacted in England.  The reference I make is to the amendment of Order 22, rule 1 of the Rules of the Supreme Court (“RSC”), which was the then existing order dealing with payments into court. After the amendment had been effected, Order 22, rule 1(6) stated:

“Where a cause of action under the Fatal Accidents Act 1976 and a cause of action under the Law Reform (Miscellaneous Provisions) Act 1934…”

which are the UK equivalents of our FAO and LARCO,

“… are joined in an action, with or without any other cause of action, the causes of action under the said Acts shall, for the purpose of paragraph (5), be treated as one cause of action.”

13.The introduction of this rule permitted defendants to pay one sum of money into court, rather than having to follow rule 1(5) and to specify, and to apportion, that payment between the claims under the FAO and the claims under the LARCO.

14.For completeness, let me also recite Order 22, rule 1(5) which stated:

“Where a single sum of money is paid into Court under this rule in respect of two or more causes of action, then, if it appears to the Court that the plaintiff is embarrassed by the payment, the court may, subject to paragraph (6) order the defendant to amend the notice of payment so as to specify the sum paid in respect of each cause of action.”

15.I have already referred to 1(6).  This sub-rule, in effect, enabled the defendant to make one payment for both claims under the FAO and the LARCO.  Because of that provision, it was explained, in the commentary in the 1999 Supreme Court Practice, under Order 80, rule 15 of the RSC, at marginal note 80/15/3, that:

“Apportionment as between the Fatal Accidents Act 1976 and the Law Reform (Miscellaneous Provisions) Act 1934. This is now required by rule 15(1) which was new, and which became necessary because of the change made in Order 22, rule 1, which enables one sum to be paid into court in satisfaction of two or more causes of action. Where, therefore, claims are made in one action both under the Fatal Accidents Act 1976, and under the Law Reform (Miscellaneous Provisions) Act 1934, the defendant may, and now usually will, pay one sum into court in satisfaction of both claims, and in such event the court must apportion this sum between these two claims.”

16.I also set out in full the passage which was referred to me and which appears in our Hong Kong Civil Procedure 2014 under Order 80, at marginal note 80/15/3.  The same commentary appears in the 1999 Supreme Court Practice on page 1526 at marginal note 80/15/4.  It states:

“ Apportionment as between dependents under the F.A. Act 1976 — By s.3(1) of the Fatal Accidents Act 1976, the damages under the Act may be awarded as are proportioned to the dependents respectively, and the amount so recovered, after deducting the costs not recovered from the defendant, must be divided among the dependents in such shares as may be directed. It has, however, always been the practice for such apportionment to be made at the trial by the Judge and before trial by the Master (see Bulmer v. Bulmer (1883) 25 Ch.D. 409). This rule now formally adopts and enacts this practice.

…

Moreover, if it should appear to the Court there is or may be a conflict of interest between the dependents or different groups of dependents of the deceased, e.g. between the widow and the children of the marriage, or between her and her children and the children of a former marriage or between any dependant children of the deceased, it would be open to the Court to direct that the question of the apportionment of the damages awarded or recovered be tried as between the dependents or groups of dependents as a separate question or issue under O.33, r.3. For this purpose, the Court may add as parties to the action, the dependents not already parties and may give directions as to which of them should be plaintiffs and which defendants on such question or issue. The Court may further direct that the infant dependents shall be separately represented, if necessary by the Official Solicitor, on the question of the apportionment of the damages.

… ”

17.The current regime of sanctioned payments has not changed the underlying right of a defendant to make one sanctioned payment in respect of all claims.  In this regard I refer to Order 22, rule 1(2) of the RHC, which provides:

“Where in an action the plaintiff makes more than one claim, a reference in this Order to –

(a) the whole claim is to be construed as a reference to all the claims in their entirety;

(b) a part of the claim is to be construed as a reference to any one or more of the claims or a part of any one or more of the claims; and

(c) an issue arising from a claim is to be construed as a reference to an issue arising from one or more of the claims.”

I also refer to Order 22, rule 2(1) of the RHC which states:

“A party to an action containing a money claim or a non-money claim or both arising from any cause or causes of action may make an offer to settle the whole claim, a part of it or any issue arising from it in accordance with this Order.”

18.I now turn to the marginal note at 22/1/15:

“Lump sum for claim under the Fatal Accidents Ordinance, (Cap. 22) and ss.20 to 25 of the Law Amendment and Reform (Consolidation) Ordinance (Cap. 23) - The provision in r.2 under which the joinder of a cause of action under FAO (Cap. 22), and a cause of action under LARCO (Cap 23) has the effect of reversing the English case of Gears v Braley [1940] 2 K.B. 442 (sic). Where one lump sum is paid into court in satisfaction of claims under these two Ordinances, the plaintiff cannot apply to compel the defendant to amend his notice of payment in and to apportion the lump sum in respect of each cause of action, r.14(4).”

19.In rule 14(4) we find the same provision that we saw under the old rules in relation to payments into court.  Order 22, rule 14(4) of the RHC states:

“Where a cause of action under the Fatal Accidents Ordinance, (Cap. 22) and a cause of action under Part IV or IVA of the Law Amendment and Reform (Consolidation) Ordinance (Cap. 23) are joined in an action, with or without any other cause of action, the plaintiff is not entitled under paragraph (1) to request the defendant to make an apportionment of the sanctioned payment between the causes of action under those Ordinances.”

And for completeness, let me also refer to Order 22, rule 14(1), which states:

“The offeree may, within 7 days of a sanctioned offer or a sanctioned payment being made, request the offeror to clarify the offer or payment notice.”

20.It is trite law that the cause of action that is conferred on the dependants of the deceased under the FAO is a cause of action that is conferred to each of them individually. Each of the defendants has a cause of action to recover his or her own loss of dependency.  It is their right not only to advance their claims; it is also their right to have the award of damages apportioned so that each of their claims can be ascertained and awarded and apportioned in favour of each of them.

21.This is borne out by sub-sections 6(1) and 6(2) of the FAO which I have referred to above.  I do not accept the submissions of the 1^st defendant to the effect that, if once a settlement is reached, there is no longer any need to have regard to these provisions. Section 6(1) clearly creates an obligation on the court to award to the dependents, in such proportions as reflect their respective injuries as a result of the death, the damages awarded under this Ordinance; and that is reinforced by subsection 6(2) which requires the court to divide those damages among the dependants in such proportions as has been decided under subsection (1).

22.It is, therefore, right that the editors of the Hong Kong Civil Procedure 2014 have stated under Order 22 at marginal note 22/4/2 that:

“Claims under F.A.O. (Cap. 22) and L.A.R.(C.)O. (Cap. 23) – In addition to the power of the court under O.80, rr.12 and 13, to control moneys recovered by or on behalf of an infant or patient or the widow claiming with infant dependants under the F.A.O. (Cap. 22), an order of the court is necessary in all causes in which a claim is made under the F.A.O. (Cap. 22) and L.A.R.(C.)O. (Cap. 23), or a claim is made under the F.A.O. (Cap. 22) by or on behalf of more than one person. The reason is that in such cases, the Court must apportion the money accepted as between the claims under the F.A.O. (Cap. 22) and L.A.R.(C.)O. (Cap. 23) and/or as between the claims of the persons entitled to cover under the F.A.O. (Cap. 22). The application is made by summons to the master or to the judge at the trial, and in either case the apportionment will be then dealt with and the costs provided for.”

23.In conclusion, Order 80, rule 15 applies not only to cases involving persons under a disability, it applies to all cases where more than one dependant claims damages for loss of dependency under the FAO and it also applies to all cases where there are claims both under the FAO for loss of dependency and claims under the LARCO for loss and damage to the estate, such as, for example, a claim for loss of accumulation of wealth.

24.More often than not, the apportionment exercise, where the dependants are not in conflict, would be fairly straightforward and all that is needed is a memorandum of apportionment to be sent to the relevant tribunal.  If the judge or master dealing with the matter agrees with the memorandum, he will dispose of the apportionment application on paper without the need for the parties to appear before him. Where, however, the judge or master does not agree with the proposed apportionment, he can call the dependants to appear before him for a short hearing to deal with the matter.  In either case, the matter ought not to be very contentious or costly; so, to that extent, I think the concerns of the 1^st defendant to have to pay for this exercise can be allayed.

25.Of course, there may be other cases involving conflicts between different groups of dependants, which have been referred to and identified in the penultimate paragraph of the commentary at marginal note 80/15/4 (see §16 above).  In such cases, where the apportionment exercise is contested by the dependants in conflict, the cost of resolving that conflict ought to be borne, in most such cases, by the group of dependants whose contentions have failed, and not be borne by the defendant.

Mr Charlton Lin, of Szwina Pang, Edward Li & Co, for the plaintiff

Ms Irene Chow, of So Lung & Associates, for the 1^st and 2^nd defendants