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Man Hin Fung v Skh Chan Young Secondary School

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date15 June 2018
Neutral Citation[2018] HKDC 694
Year2018
Judgement NumberDCPI2725/2015
Subject MatterPersonal Injuries Action
CourtDistrict Court (Hong Kong)
DCPI2725A/2015 MAN HIN FUNG v. SKH CHAN YOUNG SECONDARY SCHOOL

DCPI 2725/2015

[2018] HKDC 694

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 2725 OF 2015

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BETWEEN
MAN HIN FUNG（文顯峰） Plaintiff
and
SKH CHAN YOUNG SECONDARY SCHOOL
（聖公會陳融中學）		 Defendant

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Before: His Honour Judge Andrew Li in Chambers (Open to Public)

Date of Hearing: 14 May 2018

Date of Decision: 15 June 2018

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DECISION

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1. There are two summonses before the court following the judgment I handed down on 23 March 2018 in the above case (“the Judgment”). They are:-

(i) a summons issued by the defendant dated 27 March 2018 seeking to vary the costs order made in the Judgment (“the Variation of Costs Summons”);

(ii) a summons issued by the plaintiff dated 19 April 2018 seeking leave to appeal against the Judgment (“the Leave to Appeal Summons”).

2. I shall deal with the summonses according to the date of their issue.

(A) Variation of Costs Summons

3. In the Judgment, I ordered the plaintiff’s claim be dismissed with costs to the defendant with certificate for counsel. I also ordered the plaintiff’s own costs to be taxed in accordance with the Legal Aid Regulations (“the Costs Order”).

4. In the Variation of Costs Summons, the defendant is seeking that the Costs Order be varied to the extent that:-

(i) the costs of this action will be paid by the plaintiff to the defendant on an indemnity basis to be taxed if not agreed;

(ii) the plaintiff shall pay the defendant enhanced interest on the costs at the rate of 10% per annum above judgment rate;

(iii) the sanctioned payment in the sum of HK$50,000 previously paid into court by the defendant together with interest accrued thereon be paid to the defendant through his solicitors;

(iv) costs of and occasioned by the application be paid by the plaintiff to the defendant on an indemnity basis to be taxed if not agreed; and

(v) the plaintiff’s own costs to be taxed in accordance with the Legal Aid Regulations.

5. At the hearing, Mr Kumar Ramanathan SC, counsel for the defendant, has narrowed down what the defendant is seeking for under the Variation of Costs Summons as follows:-

(i) that the plaintiff pay the defendant costs on a party and party basis from the date of issue of the writ on 15 December 2015 until 15 September 2016, ie the last date on which the plaintiff could have accepted the sanctioned payment made by the defendant on 18 August 2016;

(ii) that the plaintiff pay the defendant costs on an indemnity basis from 16 September 2016 until judgment or payment, as the court deems proper;

(iii) enhanced interest on the costs under (ii) above at a rate not exceeding 10% of the judgment rate from 16 September 2016 until judgment or payment as the court deems proper.

The plaintiff’s contentions

6. In the plaintiff’s written submissions for the Variation of Costs Summons, it has been accepted that the sanctioned payment of $50,000 was made on 18 August 2016 pursuant to Order 22 of the Rules of the District Court (“RDC”) and the plaintiff could have accepted the sanctioned payment without leave on or before 15 September 2016. It has been further accepted that, since the plaintiff’s claim is dismissed, the sanction under Order 22, rule 23(4) is engaged when the defendant would be entitled to have indemnity costs and enhanced interest thereof from 16 September 2016, unless it is shown to be unjust to do so, having regard to all circumstances of the case, including the matters set out in rule 23(5).

7. In the light of the plaintiff’s above concessions, there seems to be little doubt that the defendant is entitled to indemnity costs in the case. Nevertheless, the plaintiff seeks to argue that it is “unjust” to do so, having regard to all the circumstances of the present case. In particular, the plaintiff relies on the following grounds:-

(i) The sanctioned payment is of a relatively small sum of $50,000 when compared with the agreed damages at $800,000. While it is not the plaintiff’s contention that the small amount of sanctioned payment per se would make it unjust to award indemnity costs or enhanced interest, it is submitted that this is one of the factors the court should take into account;

(ii) Having refused to accept the sanctioned payment made by the defendant, the plaintiff continued to make reasonable efforts to negotiate with the defendant to settle the matter, whether it was in whole or in part. Knowing that the offers were not going to be accepted by the defendant, it is claimed that the plaintiff had sensibly accepted the defendant’s offer to agree the quantum at $800,000, subject to establishing of liability.

Costs on indemnity basis

8. It is a well-established rule that just because a sanctioned payment made is nominal, it does not fall out of the purview of the rule: See CEP Ltd v Wuxi Jiacheng Solar Energy Technology Co Ltd [2014] 4 HKLRD 44, §§9-14; and HK Civil Procedure 2018 §22/24/1 at §5 on p 568-9. Therefore, I see no merit in the suggestion that just because the sanctioned payment was small in relation to the subsequent agreed amount of quantum, that the usual rule should not apply. Further, I do not see why the continuous efforts to negotiate for an agreement on the issue of quantum, subject to establishing of liability, should justify a departure from the rule.

9. The plaintiff also suggests that since the witness statement were exchanged shortly after the sanctioned payment and one of the witness statements made by Coash Yuen suggested that he had difficulty to looking after the students after Mr Liu had left with another group of students earlier, therefore Coach Yuen’s witness statement reinforced the plaintiff’s view that the claim was meritorious. It follows therefore that it was not unreasonable for the plaintiff to refuse to accept the sanctioned payment of such a small amount.

10. With respect, I find no merit in such argument. The mechanism of sanctioned payment is to encourage parties to resolve their disputes without going to trial. If a defendant considers that the claim brought by a plaintiff consists of no merit but nevertheless is willing to dispose of the matter by paying a small amount of damages (plus costs) through the mechanism of sanctioned payment, it is then up to the plaintiff to make a judgement call of whether to accept or decline such an offer. If he chooses to decline such an offer, albeit at a small amount compared with what he might able to achieve should he be able to succeed at the end of the day, he runs a risk that he may have to pay the costs on an indemnity basis in the event that he is not able to beat the offer at the end of the trial.

11. In determining whether it is “unjust” to do so, the court will take into account all the circumstances of the case, including the matters contained in Order 22, rule 24(5) of the RDC. This will, as the court has stated in Ford v GKR Construction Limited (Practice Note) [2000] 1 WLR 1397; [2000] 1 All ER 802, include whether the parties had all the information to make an informed decision as to whether to accept an offer or payment.

12. In my judgment, there is nothing in this case which suggests that the plaintiff was deprived of any materials, whether legal or factual, to make an informed decision. The relevant legal principles and the primary facts of this case are largely not in dispute. It is really a matter of how the court will apply those principles to the evidence transpired during the trial that matters. Therefore, in my view, the plaintiff was fully aware of the risks involved when decided to reject the defendant’s sanctioned payment. In my view, just because another...

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