CHENG LAI KWAN v. NAN FUNG TEXTILES LTD

1996, No. PI-175

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(PERSONAL INJURIES)

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JUDGMENT ON COSTS

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1. On 9 December 1997, I gave judgment for the Plaintiff in the sum of $127,000 together with interests on general damages at 2% per annum from the date of the writ and on special damages at 5.84% from the date of the accident with a deduction of three years up to the date of judgment. The Defendant applied to set aside the order nisi for costs to the Plaintiff in the action herein on the ground that there were certain payments into Court in the course of this litigation which lasted for a number of years as stated in the aforesaid main Judgment.

2. Counsel for the Plaintiff, Mr Mak, had usefully set out a Schedule of Payments into Court and I would only add one item in between in italics as follows :

3. It is common ground between the parties that the total sum of judgment debt including interests come up to about $190,000. Mr Mak for the Plaintiff further pointed out that the parties negotiated for settlement after the payment-in of 19 October 1994 which no doubt had by then exceeded the total amount of the judgment debt even including interests up to trial. Eventually, there was an agreement reached to settle the matter at $880,000 as evidenced by the draft consent summons under the cover of the Defendant solicitors' letter dated 16 November 1995. However, the Plaintiff's solicitors did not sign on the consent summons. Instead the settlement was called off or withdrawn. I was told by Mr Mak that it was due to a change in circumstances, namely, the decision of Chan Pui Ki.

4. Thereafter on 22 March 1996 the Defendant filed the statement of Choung Cheuk Sin who was described in my main Judgment as an independent witness. He was a supervisor of Far East Cotton Industry Limited and he said the Plaintiff was gainfully employed on full-time basis as a cotton machine operator between 1 May 1990 to 14 January 1995, or to be exact : one month in 1990; about 2 1/2 months in 1991; but for a long period between 6 April 1992 to 14 January 1995¹. I would not go into detail of his evidence here. The long arm of the law was that the Plaintiff herself claimed employee's compensation during her time of employment with Far East on two occasions. It so happened that the insurers for the employee's compensation is the same insurers in the present action and the insurers then came to know that the Plaintiff had been involved in the other two accidents whilst she was under the employment of Far East. It was accepted by the Court that this clear evidence totally contradicted her version that she was mentally disordered, not capable of engaging in any employment and therefore had lost all her earning capacity.

5. Since the filing of Mr Choung's statement, the Defendant's solicitors then withdrew all the monies paid into Court with leave of the Court on 9 April 1996. However, as evident from the aforesaid Schedule, a sum of $100,000 was paid in on 14 August 1996 and another sum of the same amount was paid into Court on 4 September 1996. The then total amount of $200,000 well exceeded the amount of Judgment debt.

6. Mr Mak submitted that according to the case of Garner v. Cleggs [1983] 1 WLR 862, it was decided that "the payment into court was relevant to the issue of costs only in regard to those costs incurred between the date of payment-in and the date after which the defendants would have been likely to oppose successfully an application by the plaintiff to take the money out of court".

7. It was decided in Garner v. Cleggs that since the defendants had not sought any order limited to such costs in the Court below, it would be wrong for the Court of Appeal to interfere with the Judge's exercise of his discretion as to costs.

8. What happened in the Court below was that Judge Ward disregarded the short period of time of payment-in and withdrawal of the money paid into Court between September 1981 and 13 October 1981. Mr Mak submitted that the Plaintiff could not take out those money paid into Court from 22 March 1996, since the filing of Mr Choung's statements, the Defendant could successfully oppose to any application for leave for payment out to the Plaintiff. Further between the period of 9 April 1996 and 4 September 1996 there was either no money in Court or the same was insufficient after 14 August 1996 up to 4 September 1996, upon which the Plaintiff could "gamble", a word used by both Lawton LJ and Goff LJ in the case of Garner. Thus Mr Mak submitted that between 19 October 1994 and 22 March 1996, the Plaintiff was at risk as to costs but not thereafter until 4 September 1996. Since that date, Mr Mak said the Plaintiff cannot make any submission as to the costs incurred thereafter.

9. Even for the earlier period between 19 October 1994 and 22 March 1996, counsel for the Plaintiff also submitted that the Plaintiff was actually examined by two doctors and they opined to the effect that she was a mental patient incapable of managing and administering her property and affairs. A next friend was then appointed on 12 May 1995. By November 1995, a settlement fell through owing to the case of Chan Pui Ki as aforesaid.

10. However, Mr Mak eventually accepted that when the Court found against the Plaintiff that she was not a mental patient, she was actually malingering and in fact during that period of time she was gainfully employed, it is in my view at best a self-imposed limit of the Plaintiff and the Defendant should not suffer by way of costs during that period of her dishonest malingering.

11. That only disposed of the first period. The main consideration in this case is therefore whether costs should not be awarded in favour of the Defendant for the period between 22 March 1996 and 4 September 1996.

12. Mr Mak relied on the case of Garner v. Cleggs. He cited the passage of the judgment of Lawton LJ at p.870 D-F as follows :

" So I have come to the conclusion that if the judge meant, as I think he must be taken as meaning, that he had to disregard altogether the fact that the payment into court had been made he was wrong. What he should have done was to have paid regard to the fact that from the beginning of September 1981 until October 13, 1981, the plaintiff was taking a gamble, and during that period there may have been some costs incurred which he might have been ordered by the judge to pay, but only for that period, because after that period the plaintiff was not in a position to take a gamble at all, for the reasons I have stated."

He also relied on the passage of the judgment of Goff LJ at p.872 F-G as follows :

" However, the payment into court will, in such circumstances, ordinarily be relevant in respect of costs incurred during the period between the date of payment in and the date when the defendant's notice of payment in is withdrawn by leave of the court- or more accurately, in the circumstances of the present case, the date after which the defendants would have been likely to oppose, and to oppose successfully, an application by the plaintiff to take the money out of court. Of course if the money had been left in court and available to the plaintiff, and had been taken out by him with leave, in satisfaction of his claim, the plaintiff would ordinarily have had to bear the costs incurred by the defendant after the date of payment in."

13. However, to my mind, the case of Garner v. Cleggs is highly distinguishable with the case before me. In the case of Garner, the defendant, Cleggs, being a firm of solicitors, was sued for professional negligence when Garner intended to buy a proprietary club instead of a members' club. The former would entitle him to charge consumption of alcohol at the club premises whereas the latter could not. This was made known to the solicitors, but the junior solicitor who handled the conveyancing failed to note the difference and did not advise Garner accordingly.

14. In October 1981, the solicitors got to know one Mr Talty who had been the plaintiff's vendor, who claimed to be in a position to give them information about the transaction into which the plaintiff had entered. Eventually Mr Talty swore an affidavit to the effect that the plaintiff had known all along that he (Mr Talty) was proposing to sell a members' club. That was the reason why the money paid into Court was, on advice of leading counsel, withdrawn by Cleggs with leave. But on the 6th day of the trial, the defendants admitted their breach of duty to the plaintiff and they would contest only the damage which the plaintiff sustained had not been caused by that breach of duty. They succeeded to reduce the amount of damages to a sum below the amount of a later payment into Court.

15. Here in the case before me, Mr Choung, after his statement was filed on 22 March 1996, was called as a witness before me and his evidence was totally accepted by this Court. Thus, to my mind, the period between 22 March 1996 and 4 September 1996 should be ignored in considering costs. It is because by 19 October 1994, the money in Court was $320,000, which was more than enough for the judgment sum awarded to the Plaintiff. Should the Plaintiff have accepted that amount of money paid into Court, that would have been the end of the matter. Her failure to accept such sum of money would render her liable to all costs incurred by the Defendant thereafter.

16. Thus, even though between the period from 22 March 1996 where the Defendant would be successful in opposing any payment out up to the time of another payment-in on 4 September 1996, it is true that there was no or no sufficient money in Court for the Plaintiff to gamble on or she could not successfully apply for it, it is nonetheless a period of time which should not have occurred should the Plaintiff have accepted the money earlier in the first place.

17. Accordingly my earlier Order nisi on costs for the Plaintiff in the action is set aside. There shall be an order for costs in the action for the Plaintiff only up to 19 October 1994 and thereafter Defendant shall be entitled to costs against the Plaintiff. The Plaintiff's own costs shall be taxed according to the Legal Aid Regulation. Ms Chang for the Defendant wanted to apply for payment out after deduction of any sum due to the Plaintiff subject to the first charge of the DLA. But she was not sure whether there would be any money due to the Plaintiff or the DLA at all after my order of costs herein. Eventually both parties agreed to deal with it by a consent summons if they could agree. If not, they would have to apply to me again.

18. From the limited evidence before me, I think it is also appropriate to consider whether the Plaintiff's solicitors should be ordered to show cause why they should not pay costs personally or any part thereof. This matter is adjourned to a date to be fixed. I am grateful to the assistance of Mr Mak in this case. In particular he has gratuitously accepted the unenviable task to report this matter to the DLA since he cannot represent the Plaintiff anymore in the adjourned hearing. This hearing will only be heard between the Plaintiff herself and her own solicitors who are Mr Mak's instructing solicitors. Each one of them will have to be separately represented. But Mr Mak would be the most appropriate person to report this matter to the DLA. For that I am very grateful.

Representation:

Mr Bernard Mak, inst'd by M/s Chan & Chuk, for the Plaintiff

Ms Eliza Chang of M/s Cheng, Yeung & Co., for the Defendant (with leave of Court)

1 See pages 4 and 5 of the main Judgment.

1996, No.PI 175

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(PERSONAL INJURIES)

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J U D G M E N T

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1. This is a claim by the Plaintiff for damages sustained in an accident at work on 8 January 1989.

The Accident

2. The Plaintiff contended that on the day of the accident she was on duty at the Defendant's factory. One of the machines caught fire which spreaded to other machines and the surrounding area. She was assisting in putting out the fire when she tripped over a machine iron bar and hit a metal machine roller. She sustained injuries.

3. The Plaintiff gave a number of different versions of how she helped in putting out the fire and how she had fainted after her fall and was unconscious even at the hospital.

Liability

4. The Plaintiff's credibility on a number of issues as will be apparent later on, is in doubt. However, admittedly a fire broke out that morning and the Plaintiff had sustained certain injuries as a result thereof. As far as liability is concerned, it is quite clear that the said accident was caused by the breach of contract of employment in the Defendant's failure to provide and maintain safe plant and equipment, safe place of work and a safe system of work for the Plaintiff. Further, it was caused by the negligence and/or breach of common duty of care on the part of the Defendant and I find that those particulars (1) to (10) in paragraph 6 of the Statement of Claim are proved.

5. In respect of quantum, the Defendant disputed the following points, namely :

1) the extent of the Plaintiff's injuries;

2) the Plaintiff's loss of earning capacity.

The Injuries

6. The Plaintiff said that as a result of the fall she bumped her head against a big machine. She broke her nasal bridge, the right part of her head was injured to the extent that her head was swollen as big as a cow's head. She was four months' pregnant at the time and had a spontaneous abortion as she passed a tissue mass in the factory after she feel. She fainted and was unconscious in the hospital. She fractured her right shoulder and she had 19 stitches to her private parts and was hospitalised for 10 days.

7. However, none of the aforesaid allegations can be substantiated by contemporaneous medical evidence. Dr H.Y. Tse of the Princess Margaret Hospital gave a report on 28^th February 1991. It was said that there was no loss of consciousness on the part of the Plaintiff but she had dizziness afterwards. According to the report, the Plaintiff gave her last menstrual period as 22^nd December 1988. Further the report stated as follows :

"2. On examination, the patient was conscious and alert. Examination of the cardiovascular system and respiratory system did not reveal abnormality. The abdomen was soft and non-tender. There was no pain elicited on compressing the pelvis. On pelvic examination, there was no laceration over the perineum and vagina. The uterus was of normal size and the cervix was healthy. Bleeding through the cervical os was noted, and the vulva and vagina were blood-stained.

3. Surgical opinion consulted because of history of head injury. There was no abnormality detected except bruise over left forehead. Orthopaedic opinion also consulted because of complain of pain over left upper and lower limbs. Examination revealed tenderness over the left shoulder and decrease in the range of movement; and decreased power of the left lower limb. No fracture was noted.

4. Investigations including pelvic ultrasonography, complete blood picture and x-Rays of skull, chest, pelvis, left humerus and left femur were normal. Analgesic was given for pain relief. The patient was discharged on 10.1.1989.

5. Madam Cheng had follow-up visit in South Kwai Chung Gynaecology clinic on 20.3.1989, and she gave a history of a positive pregnancy test on 20.12.1988 and the date of last menstrual period was actually 21.9.1988. She claimed that she had passed a piece of tissue mass during the fall on 8.1.1989. There was no abnormality detected on examination in the clinic. She defaulted further follow-up."

This medical report is conclusive evidence that the Plaintiff suffered only a minor bruise to her left forehead during the accident. None of her other alleged injuries is supported by medical findings.

8. The Plaintiff was given sick leave certificates in the period from 8th January to 31^st May 1989. The causes for which she was given sick leave included left chest pain due to trauma, bone pain, back and left forearm injury, pain in left side of chest, pelvic pain, contusion of the chest and neck and back pain. There was no mention of any dizziness, headache or head injury at all.

9. The first intimation of an allegation of head injury appeared on the sick leave in late January 1995. They were related to treatment for head injury and dizziness. However, the Plaintiff had another two industrial accidents in between. There was no proof of any connection with such medical condition with the 1989 accident.

Post-accident Employment

10. It is now not disputed that the Plaintiff had actually worked for Far East Cotton Industry Limited in the following period :

1) 1^st May 1990 - 1^st June 1990

2) 1^st April 1991 - 10^th June 1991

3) 6^th April 1992 - 14^th January 1995

According to Choung Cheuk Sin, a supervisor of Far East, the Plaintiff was employed as a cotton machine operator and her scope of duties included supplementing the cotton machine with materials and cotton and cleaning the cotton machine. In early March 1991, Mr Choung had the opportunity of observing the Plaintiff several times and he commented on her record on 4^th March 1991 that her performance was : "diligence record - fair". Mr Choung said during the said period of employment the work performance of the Plaintiff was quite good and she could handle her work quite efficiently. Her behaviour appeared very normal and she did not appear to have suffered from any psychiatric or mental problems. She could get along with her colleagues quite well.

11. The Plaintiff claimed that she was introduced to Far East by a caretaker Ng Choi. She said Ng Choi was sympathetic on her and did not require her to perform any duties as a cotton machine operator. All the time Ng Choi only required her to perform very light duties, like a cleaner, and he covered her up for all these years.

12. Mr Choung said the Plaintiff's contention was entirely impossible as she was under his observation all the time. He also said that the Plaintiff's allegation that Ng Choi was dismissed for covering the Plaintiff up is also untrue since Ng Choi left Far East on retirement only.

13. Mr Choung is an independent witness and he is not a party to these proceedings. I accept his evidence in total. The Plaintiff had covered up her employment with Far East. During her time with Far East she had two accidents - on 5^th April 1994 and 14^th January 1995. She claimed employees' compensation. It so happened that the insurers for the employees' compensation is the same insurers in the present action and the insurers then came to know that the Plaintiff had been involved in the two accidents whilst under the employment of Far East.

14. I find that the Plaintiff's deliberate covering up of her employment since the 1989 accident is a clear indication that she is trying to put forward a case that she has lost all her earning capacity. Her claim of her mental suffering as a result of the 1989 accident is also incredible. In fact she was working continuously between 6^th April 1992 to 14^th January 1995 for nearly 30 months. This is clear indication that she must have already made a full recovery from the 1989 accident.

Allegation of mental disorder

15. The Plaintiff relies on the expert evidence of Dr Sylvia Chen to prove that as a result of the alleged accident, she is now suffering from mental illness resulting in a 25% permanent impairment of her whole person and a 100% loss of earning capacity. However, Dr Chen's evidence was misled by the Plaintiff and her children in the following respect.

16. Dr Chen accepted from the Plaintiff that she was receiving psychiatric treatment in early 1989, shortly after the accident. However, from the sick leave certificates and medical treatment cards from 1989 to 1997, there was no certificate or treatment card which showed that she was receiving any psychiatric treatment apart from the one from Tuen Mun Psychiatric Day Centre. However, the first day of appointment was 5^th February 1997.

17. Here, Dr Singer called by the Defendant contended that even if one were to accept that the Plaintiff did receive psychiatric treatment as alleged, the attendance for treatment alone cannot prove conclusively that she was indeed mentally ill. Such attendance could be due to disorder such as headache, dizziness, sleep disturbance, etc. The mere fact of attending psychiatric clinic does not label her as having psychiatric illness.

18. Dr Chen accepted the statements of the Plaintiff's daughter and son as good corroborative evidence for the Plaintiff's symptoms. However the daughter and son were unreliable sources of information in that they had both hidden the material fact of their mother's employment with Far East. The son had categorically said in Dr Chen's report of July 1994 that the Plaintiff had never worked in a factory after the accident.

19. Dr Chen also relied on the Plaintiff's claim of her husband's desertion as further corroborative evidence of her mental illness. The husband did not give evidence and one simply does not know the reason why the couple broke up. There are quite a number of reasons therefore, apart from the fact that the Plaintiff was suffering from mental illness.

20. Dr Chen found the Plaintiff to be consistent throughout the years, giving essentially nothing new except more examples of her forgetfulness. Dr Chen suggested that people who repeated the same thing could be suffering from brain damage. However, the medical report from Dr Tse has ruled out the possibility of brain damage and Dr Chen did not seriously dispute that. The Plaintiff's continuous employment and her persisting claim that she only went back to sit or do light work was disproved by Far East's supervisor Mr Choung. Her employment for the continuous period of nearly 30 months is also indicative of the fact that she was not suffering from any brain damage. In January 1995, after she suffered the second accident during the employment with Far East, a psychiatrist was actually consulted but no conclusion was given by him. There was no report that the psychiatrist actually consulted her psychiatric medical history and presumably there was none.

21. Dr Singer contended that where a person had suffered no loss of occupational function and no loss of social function, she cannot be suffering from debilitating mental illness. The fact that she could work continuously and that she could get along well with her colleague as deposed to by Mr Choung is cogent evidence that her mental function is intact.

22. In fact Dr Singer found the Plaintiff to be above average in her intellectual function and she was quick in her response. He found many inconsistencies in her accounts of events and behaviour, so much so that he came to the conclusion that she must be voluntarily producing those symptoms to impress him. Examples that Dr Singer cited included her account of the abortion after the accident, her spontaneous wrong answer to simple arithmetic, her coherent recall of things which she was supposed to have forgotten to impress him that she had indeed forgotten about them, her constant claim that she was insane, her claimed suicide attempt, her auditory and very vivid visual hallucinations and her apparent deficits in cognition, muscle power and sensation.

23. According to Dr Singer, the Plaintiff presented a mixture of symptoms not particular to any one psychiatric illness and that is highly suggestive of voluntary production and possibly faking of symptoms. Dr Singer, giving her the benefit of the doubt in that she had suffered a transient loss of consciousness and accepting that she did suffer some minor headaches and dizziness since the accident, found that she probably suffered post-concussional syndrome as a direct result of the 1989 accident. He assessed that the syndrome is likely to be permanent and treatment is symptomatic. Analgesic would be good enough and there is no need for her to see a doctor for management of this condition. He gave her a 2% impairment of the whole person and a loss of earning capacity of 2%.

24. I accept Dr Singer's evidence. I find the Plaintiff incredible in her account of her suffering. In fact during this period of time she had managed to deceive her legal advisors, her doctors, the official solicitor and private investigators appointed by the Defendant to observe her. (The private investigators found that although she was normal in every respect, she was not working. It escaped them that she was actually working night shift.)

Damages

25. The Defendant submitted that the Plaintiff only suffered some minor physical injuries from which she has since recovered and her pain and suffering and loss of amenities should not exceed $150,000. Miss Lee, Counsel for the Defendant relied on the following three cases :-

1. Lee Chung [1985] HKCL K54

2. Wong Hok Chuen [1986] HKCL H64

3. Kung Kit Shing [1987] HKCL D57.

26. The Plaintiff was earning $6,218.7 a month at the time of the accident. The evidence from Far East is that for the three years' period from April 1992 to March 1995, the average rate of earnings increase achieved by the Plaintiff was only 3% per annum. Whilst this appears to be on the low side, the economic transformation of Hong Kong and the disappearance of cotton mills from Hong Kong is indicative that the demand for cotton mill workers dropped so too would their ability to command large wage increases. Using the 3% annual increase, the Plaintiff would have been able to earn $7,877.67 a month now had she not met the accident. The median during the pre-trial period would then be $7,048.19.

27. The Plaintiff was only given sick leave until the end of May 1989, thereafter she could not produce any sick leave certificate. She worked for a month in May 1990, no reason has been given as to why she could not work in between May 1989 and May 1990. The Defendant submitted that she should have started work latest by 8^th September 1989, slightly more than three months after the end of her sick leave. I accept the Defendant's submission. I consider it to be very reasonable in the circumstances of this case.

28. Accordingly, her loss of earnings during the period from 8^th January 1989 to 8^th September 1989 would be $7,048.19 x 8 months = $56,385.52.

29. Further the Defendant submitted that assuming because of the Plaintiff's injuries she was not able to work full-time until 6^th April 1992, she should have at least worked part-time. Assuming from 8^th September 1989 to 6^th April 1992, she was working part-time and earned half of what she should have been able to earn, her loss of earnings during the period would then be $7,048.19 ( 2 x 31 months = $109,246.94.

30. I also accept the Defendant's submission that from the time she took up her continuous employment with Far East, she cannot be said to be suffering from any loss of earnings. She was back in the same industry doing the same work. If her earnings were lower than they might have been, it was due to changes within the industry and not her injuries. Thus, there should be no allowance for any future loss of earnings.

31. Special damages have been agreed at $20,300. Accordingly, the total value of the Plaintiff's claim is as follows :-

1. Pain and suffering and loss of amenities	$150,000.00
2. Pre-trial loss of earnings	$165,632.62
3. Special damages	$20,300.00
Total :	$335,932.62
Less credit to be given for compensation previously paid under Employees' Compensation Ordinance	$209,000.00
	$126,932.62
Net Total Say :	$127,000.00
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The Defendant agreed that interests on general damages should be 2% from the date of the writ, i.e. 4^th December 1991 and special damages at half judgment rate of 5.84% from the date of the accident.

Interests

32. Lastly, the Defendant disputes that interests should be paid for the entire post-accident period. The action actually came to a halt in December 1994 when the Plaintiff was certified to be a patient and arrangements were made to appoint the Official Solicitor as the next friend. However, this was entirely the Plaintiff's own doing as she was really working full-time and was perfectly normal and capable of handling her own affairs at the time. Her claim of incapacity has led to the delay in the proceedings. She refused to file any witness statements by reason of disability and the case just came to a halt.

33. In March 1996, the Defendant came into possession of the information from Far East as aforesaid and filed the hearsay notice exhibiting all the documents on which it sought to rely. The Official Solicitor was discharged in April 1997 and still nothing was done by the Plaintiff. Finally it was the Defendant who set the case down for a pre-trial review to compel the Plaintiff to prosecute this case. In the premises, I accept the Defendant's submission that 3-years' interest should be deducted from the pre-trial period of 8.5 years.

Conclusion

34. Accordingly, there shall be judgment for the Plaintiff in the sum of $127,000 together with interests on general damages at 2% per annum from the date of the writ and on special damages at 5.84% from the date of the accident with a deduction of three years up to the date of judgment.

35. There shall also be an Order Nisi for costs to the Plaintiff to be taxed if not agreed and the Plaintiff's own costs be taxed according to the Legal Aid Regulations.

Representation:

Mr B. Mak, inst'd by M/s Chan & Chuk, for the Plaintiff

Miss Christina Lee, inst'd by M/s Cheng, Yeung & Co., for the Defendant