Civil Action2005

R.A. STEGEMANN v. WISE POWER FAR EAST LTD AND OTHERS

Related cases with same parties

HCA283/2005WISE POWER FAR EAST LTD AND ANOTHER v. R.A. STEGEMANN

Files (5)

55440-EN-2006-12-15

R A STEGEMANN v. TIME ENTERPRISES PUBLICATIONS LTD

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HCA 282/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 282 OF 2005

____________

BETWEEN

	R A STEGEMANN	Plaintiff
	and
	TIME ENTERPRISES PUBLICATIONS LIMITED	3^rd Defendant

____________

Before: Hon A Cheung J in Chambers

Date of Hearing: 29 November 2006

Date of Judgment: 15 December 2006

_________________

J U D G M E N T

_________________

Introduction

1. On 7 July 2006, after hearing a striking out summons, the Registrar dismissed all the claims made by the plaintiff against the 3^rd defendant. He also gave the 3^rd defendant its costs of the action in a gross sum to be assessed, in lieu of taxation, pursuant to Order 62, rule 9(4)(b), Rules of the High Court (Cap 4). The decision was affirmed on appeal by Burrell J, who also ordered the transfer of the plaintiff’s remaining claims against the 1^st and 2^nd defendants to the District Court.

2. On 29 September 2006, the Registrar assessed the 3^rd defendant’s costs in the gross sum of $8,710, which he ordered the plaintiff to pay to the 3^rd defendant.

3. From that decision, the 3^rd defendant appealed. It contended that the Registrar had under-assessed its costs.

4. In general, a judge in chambers will not allow an appeal from a master’s costs order unless the order was unreasonable or the master erred in law, failed to take into account proper matters or took into account matters that should not have been taken into account: Man Fong Hang v Man Ping Nam [2002] 4 HKC 538, 544, para 16; Hong Kong Civil Procedure 2006,Vol 1, para 58/1/6. But that principle, as I understand it, is usually directed at appeals going to the incidence of the liability for costs, rather than the amount assessed under a gross sum assessment.

5. In relation to an appeal over the amount assessed under a gross sum assessment, I am not aware of the application of such a principle. As both parties are unrepresented, they were unable to provide the Court with any assistance on this point, and I am therefore reluctant to make any definite decision in relation to it. All I would note is that in cases of taxation, a party could always ask a judge in chambers to review the taxing master’s certificate, if he is not satisfied with the decision of the taxing master at the review hearing before the taxing master himself: see the procedures laid down in Order 62, rules 33 to 35. Such a review by a judge in chambers is not hampered by any rule that the taxing master’s certificate should not be disturbed unless in the limited situations described above.

6. I would proceed on the basis that this is a normal appeal, and the hearing was a de novo one.

7. Nonetheless, I bear in mind a number of special features. First, assessment of gross sum costs by the court should be carried out on broad principles and should not be an exercise similar to taxation. Hong Kong Civil Procedure 2006,para 62/9/10.

8. Second, the Registrar has dealt with the present action as well as the related HCA 283/2005 since their transfer from the Labour Tribunal to the High Court in 2005, including the successful striking out application made by the 3^rd defendant already described. He was well familiar with the disputes between the parties and the steps taken in the proceedings. He was in a particularly privileged position to assess the costs of the 3^rd defendant on broad principles. The Registrar’s written decision on costs therefore remains a most valuable guide in this appeal.

9. Third, the Court is concerned with costs incurred by a litigant in person. The 3^rd defendant was at one stage, as was required by the rules, represented by solicitors who instructed counsel to appear for all the defendants at the initial striking out hearing (which was adjourned part-heard). Subsequently, it acted in person with the leave of the court, with Mr Ho, a director and co-defendant, acting on the company’s behalf. The Registrar adopted, rightly in my view, the usual rate of $200 per hour for the work done by Mr Ho on behalf of the 3^rddefendant: Hong Kong Civil Procedure 2006,para 62/App/56. The basis of assessment is one of party and party costs. In other words, only those costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the receiving party would be allowed: Order 62, rule 28(2), which applies to taxation. The same criterion must apply to a gross sum assessment.

10. However, adjustments are required in the assessment process because of the fact that it was a layman, instead of a trained lawyer, who has conducted the case. Thus, for instance, it would, understandably, take a layman more time to read and digest the contents of a letter coming either from the court or from the other side. A litigant in person who is not thoroughly conversant with the English language may require longer time to read a document or letter written in English than a trained lawyer. He may need to look up a dictionary for the meanings of words used in the document or letter. He may even need to ring up friends to find out the meaning of a document. What is trite to a trained lawyer may appear as a complete mystery to a layman. Appropriate adjustments should be made without violating the basic criterion that only necessary or proper costs should be allowed. To some extent, the longer time that a layman may require, for instance, to read and comprehend a document, would be compensated by the much lower hourly rate that would be allowed to him as compared with that applicable to a trained lawyer. Thus the usual rate of $200 per hour is over 10 to 20 times less than what would be allowed to a solicitor, depending on his experience and skill.

11. With all this in mind, I approach the items under challenge in this appeal.

Item B: lawyers’ charges

12. The Registrar dealt with these charges in paragraphs 8 to 13 of his written decision.

13. These charges related to the period when all three defendants in the present action as well as the two plaintiffs in HCA 283/2005 (i.e. the 1^stand 2^nd defendants in the present action as plaintiffs therein – with the plaintiff in the present action as defendant therein) were represented by the same firm of solicitors and counsel. A total sum of $30,000 was charged. A sum of $1,000 was for an amended pleading in HCA 283/2005, leaving the remainder ($29,000) attributable to the present action. The Registrar, for reasons set out in paragraphs 10 to 12 of his decision, apportioned one-fifth of the sum of $29,000 as the 3^rd defendant’s costs in the present action.

14. The Registrar took the view that so far as the 3^rd defendant was concerned, only one point was taken on its behalf by counsel (namely privity of contract). The rest of the lawyers’ efforts related to the other two defendants. Moreover, he took the view that the two actions were interrelated, so that efforts expended by the lawyers on behalf of the other two defendants in the present action also went to their claim in HCA 283/2005.

15. The 3^rd defendant argued on appeal that the apportionment was grossly unfair. He contended that credit (in the sum of $1,000) had already been given for the work done in relation to HCA 283/2005. The sum of $29,000 was wholly in relation to the present action. The 3^rd defendant was not a party to the other High Court action, which is a separate case. The documents in the other High Court action only went to about 30 pages, whereas documents relating to the present action went to over 4,000 pages. At the last hearing, which took place on 18 May 2006, only 30 minutes were spent on the other High Court action.

16. I have borne in mind all the points raised by the 3^rd defendant. The Registrar was fully aware of them as he was in charge of hearing the two actions ever since they were transferred from the Labour Tribunal. He was in the best position to judge what costs should be apportioned to which party under which action. Moreover, one is not concerned with a detailed taxation but an assessment on broad principles.

17. I do not agree that the Registrar has come to a wrong, unfair or unreasonable apportionment. I would maintain the one-fifth apportionment.

Item C: handing over materials

18. The 3^rd defendant claimed for costs and expenses associated with the handing over of documents by the former solicitors acting for the 3^rd defendant to Mr Ho.

19. The Registrar took the view that prima facie, the 3^rd defendant, a limited company, should be represented by solicitors. The plaintiff should not be held responsible for the costs of handing over the documents and materials in the present action, which were necessitated by the 3^rd defendant’s decision to terminate its solicitors’ retainer and act in person (albeit with the leave of the court). Those costs must be borne by the 3^rd defendant itself.

20. The 3^rd defendant contended on appeal that it terminated the solicitors’ service due to financial constraint. It also pointed out that paragraph 15 of the decision of the Registrar was wrong in so far as it stated that the 1^st defendant is an individual.

21. I agree with the Registrar. Furthermore, I do not think the lack of means of the 3^rd defendant should have the effect of rendering the plaintiff liable for the costs of the handing over process. The mistake in paragraph 15 of the Registrar’s decision is neither here nor there, as one is not concerned with the 1^st defendant’s costs in the assessment exercise.

Item E2: hearings

22. They were dealt with in paragraphs 19 and 20 of the Registrar’s decision and related to the costs of various hearings before the Labour Tribunal and the High Court when the defendants were acting in person. A sum of $780 was allowed.

23. The 3^rd defendant complained about the one-fifth apportionment. For reasons explained above, I reject this ground of appeal.

24. However, Mr Ho on behalf of the 3^rd defendant also pointed out that the Registrar has forgotten the hearing before the Labour Tribunal lasting 5 hours.

25. He was right.

26. The plaintiff argued that those 5 hours were not spent on matters relating to the 3^rd defendant.

27. Having looked at the record kept by the Tribunal, I think the 3^rd defendant was correct. At that hearing, Mr Ho, on the record, only represented the first two defendants. However, a substantial part of the hearing was concerned with the plaintiff’s application to join the 3^rddefendant as an additional defendant in the Labour Tribunal proceedings. Looking at it as a matter of substance, Mr Ho represented the two defendants already on record as well as the proposed defendant at the hearing, in opposing the joinder application.

28. In my view, the 3^rd defendant should get a substantial portion of the costs incurred at that hearing. The hearing lasted 5 hours. I would apportion 50% to the 3^rd defendant (as it contended during the appeal). At $200 per hour, it means $500.

Item F: perusal of documents

29. This was dealt with in paragraphs 21 and 22 of the Registrar’s decision.

30. The 3^rd defendant claimed 200 hours. The Registrar took the view that that was a grossly exaggerated and excessive figure. He allowed 15 hours for all defendants. The 3^rd defendant’s share was only one-fifth of the time.

31. As described, there were over 4,000 pages of documents. All parties, including the 3^rd defendant, were responsible for generating the voluminous documents. Some of them were repetitive in contents. Not many of them were found by the Registrar to be helpful. The Registrar also remarked that many of the documents simply set out the grounds or reasons for the claims submitted by the plaintiff at different stages. They were nothing more than “elaboration” of the same points “again and again”. He took the view that “one can easily recognize and consider them”.

32. The plaintiff also made the point that many of the documents authored by him were written in response to unfounded or unmeritorious allegations made by the defendants. The voluminous documents were “self-generated”.

33. In my view, one must not forget that one is concerned with laymen in litigation in the present case – after the defendants’ termination of the service of their lawyers. A layman like Mr Ho is not expected to be as quick as a trained lawyer in perusing documents and understanding their relevance or lack of it. On the other hand, a much lower hourly rate is allowed for the time spent.

34. As regards the plaintiff’s point that many of the documents written by him were written in response to the defendants’ documents and correspondence, it is true to some extent. On the other hand, as regards the question of causation, one must not lose sight of the primary fact that it was the plaintiff who chose to sue the 3^rd defendant in the first place.

35. Taking a broad view of the matter, I do not think the defendants should only be allowed 15 hours in reading the 4,000 odd pages of documents. More specifically, I do not think the 3^rd defendant should only be given 3 hours (one-fifth) for perusal.

36. I think a fair figure for the 3^rd defendant would be 10 hours, i.e. $2,000.

37. I have already borne in mind the fact that many of these documents had already come into existence before the defendants’ solicitors ceased to act. They had been perused by the defendants’ solicitors. For reasons explained above, the defendants, and the 3^rddefendant in particular, should not be allowed any costs for perusing the same documents again after the solicitors had come off the record.

Item G: preparation of documents

38. They were dealt with in paragraphs 23 and 24 of the Registrar’s decision. The Registrar found most of the documents, including letters to the court, a chronology of facts, a chart showing the three defendants’ relationship, an index of exhibits and a flowchart of the litigation, not necessary or helpful at all. He allowed 6 hours in total for the whole exercise.

39. The plaintiff echoed the Registrar’s view.

40. Again, I come back to my point that one cannot expect the same standard from a litigant in person as though he were a trained lawyer. The difference in quality and standard is, to a significant extent, reflected in the much lower hourly rate enjoyed by a litigant in person. The fact that the court does not, at the end of the day, find a particular document prepared for hearing purposes helpful is not a sufficient reason to deprive the successful party of the costs of preparing the document. The court does not take such a stringent approach towards work done by solicitors and counsel and their charges, save in exceptional circumstances.

41. For my part, having borne in mind all relevant factors and adopting a broad-brush approach, I would allow 5 hours for the 3^rddefendant. At $200 per hour, it amounts to $1,000.

Item H: perusal of correspondence

42. This was dealt with in paragraphs 25 and 26 of the Registrar’s decision.

43. The Registrar took the view that most of the letters were from the plaintiff or the court, which resulted from complaints made by the plaintiff that which had no relevance to the defence of the action. He only allowed 1 hour for all three defendants.

44. With respect, I disagree. The complaints came from the plaintiff. They related to the action in general. As a layman, the 3^rd defendant would not be in a position to tell easily whether they were relevant to its defence or not. And even if they were not relevant to its defence or the plaintiff’s claim, it does not mean that the 3^rd defendant need not read them. In fact, before the 3^rd defendant had read a document, it would not be able to say whether the document was relevant to anything in the action or not.

45. Furthermore, one must bear in mind that all the correspondence from the plaintiff was written in English. Grant that Mr Ho can read English, yet one cannot judge the time he spent on reading English documents by the standard of somebody like the plaintiff who has English as his first language or that of a trained lawyer.

46. I would give one hour for the 3^rd defendant, i.e. $200.

Item I: preparation for three hearings

47. This was dealt with in paragraphs 27 and 28 of the Registrar’s decision. The Registrar allowed 5 hours as preparation time for each hearing, instead of 40 hours as claimed, in respect of all three defendants’ costs.

48. I disagree. First, as the 3^rd defendant correctly pointed out, the three defendants claimed a total of 240 hours, not 120 hours. Second, I return to my earlier point that one is concerned with a layman in litigation. Whilst a lawyer may only require 5 hours for the preparation of a hearing, a layman would, understandably, require much more time. Again, the countervailing factor is that he is allowed a much lower rate. In the present case, Mr Ho had a valid point that the lawyers actually spent a substantial period of time in preparation for the relevant hearing. As I have already mentioned, it may be that at the end of the day, the court takes the view that many of the points raised by a layman are non-points. It does not mean that the time he has spent in preparation for the hearing should be disallowed. I do not think such an approach is taken against lawyers, save in special circumstances. Nor should it be taken against a party acting in person.

49. I would give the 3^rd defendant an average of 5 hours for each hearing, totalling 15 hours. Preparation costs are $3,000 in total.

Item L: Preparation of statement of costs

50. The Registrar allowed $400 for the preparation of the statement of costs for the purpose of the assessment in paragraph 33 of his decision. However, he forgot to include this item in his final calculations (paras 34 to 36).

Outcome

51. My assessment is:

Item Amount
B Lawyer’s charges $5,800
C Handing over materials Nil
D1 and D2 Application to act in person Nil
E1 Waiting time Nil
E2 Hearings $1,280
F Perusal of documents $2,000
G Preparation of documents $1,000
H Perusal of correspondence $200
I Preparation for three hearings $3,000
J Costs of appeal Nil
K Photocopying charges and postage $ 150
L Preparation of statement of costs $ 400
Costs of hearing before the Registrar $ 500

52. I arrive at a grand total of $14,330, which I round up to $14,400.

53. As mentioned at the outset, gross sum costs assessment should be conducted on broad principles. I think the total of $14,400 appears reasonable for the costs of the 3rd defendant in this litigation, which ended prematurely as a result of the successful striking out application. If the 3rd defendant had been represented by lawyers throughout, I am quite sure that the costs payable, whether after taxation or gross sum assessment, would have been much higher.

54. As the 3rd defendant is substantially successful in this appeal, it must have the costs of the appeal.

55. The hearing of the appeal lasted 3 hours, and I would allow an additional 10 hours for the preparation of the appeal. By preparation, I include all other incidental costs and expenses associated with lodging and prosecuting this appeal. It gives a sum of $2,600 – this is just equivalent to one hour’s work by a junior solicitor.

56. I therefore make the following order:

(1) the appeal be allowed and the order of the Registrar dated 29 September 2006 be set aside;

(2) the plaintiff do pay to the 3^rd defendant the costs of the action in the gross sum of $14,400;

(3) (order nisi) the plaintiff do pay to the 3^rd defendant the costs of this appeal in the gross sum of $2,600 – unless an application is made by either party to vary the costs order nisi within 14 days after this judgment is handed down, the same shall become absolute upon the expiry of the 14-day period.

(Andrew Cheung)
Judge of the Court of First Instance
High Court

The plaintiff, acting in person, present

The 3^rd defendant, represented by Mr Ho Chun Hung Lawrence, acting in person, present

55059-EN-2006-11-13

R.A. STEGEMANN v. WISE POWER FAR EAST LTD AND OTHERS

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HCA 282/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 282 OF 2005

______________________

BETWEEN

	R.A. STEGEMANN	Plaintiff
	And
	WISE POWER FAR EAST LTD.	1^st Defendant
	HO CHUN HUNG LAWRENCE trading as TIME ENTERPRISES COMPANY	2^nd Defendant
	TIME ENTERPRISES PUBLICATIONS LIMITED	3^rd Defendant

______________________

Coram : Before Mr. Registrar C. Chan in Chambers

Date of Hearing: 27 October 2006

Date of Decision: 13 November 2006

_______________

D E C I S I O N

_______________

1. This is an application by the Plaintiff for stay of enforcement the costs order made by Mr. Justice Burrell of $1,000 and also of the costs order made by me in favour of the 3^rd Defendant against the Plaintiff. On 31 August 2006 I assessed the costs in the sum of $8,710.00.

2. The 3^rd Defendant gave several reasons for the stay, one of which is that the Plaintiff’s claim against the other defendants are still in progress and he has a high chance of success. The other defendants are closely related to the 3^rd Defendant. The money, if recovered, is sufficient to pay the amount of costs he owed the 3^rd Defendant. He also alleges that the 1^st Defendant and 2^nd Defendant will be reorganized in such a way that even if he obtains judgment in his favour, it will be an empty judgment and he will not get any money out of it while he has to pay the costs now.

3. Rightly pointed out by Mr. Ho, the 2^nd Defendant is Mr. Ho himself, a person trading as a firm. It is my view that he is liable to meet his legal obligation as much as the Plaintiff in this action.

4. It cannot be denied that the 3^rd Defendant is controlled by Mr. Ho and represented by him in this action. The three defendants are very closely connected with each other. But, this does not alter the fact that legally the 3^rd Defendant is a separate entity.

5. As the Plaintiff’s claim against the 3^rd Defendant has been dismissed and the action against it struck out, the 3^rd Defendant has nothing more to do with the Plaintiff’s claims against the other defendants in the same action. It is only right that the 3^rd Defendant be paid whatever it is entitled.

6. The Plaintiff has tested his claim against the 3^rd Defendant at different levels of court since 2004 and the Plaintiff has now after all these proceedings decided to give up that claim. The 3^rd Defendant has been brought in and has been defending the claim for 2 years. It got its judgment. I find no reason that the 3^rd Defendant being a successful litigant should be deprived of the fruits of its litigation.

7. The Plaintiff claims that he is in financial difficulty and cannot pay it. I accept that everyone may have his difficult time. The 3^rd Defendant points out that the Plaintiff is an English teacher and can charge as high as $250 per hour. He can easily pay the sum of $8,710 assessed by me and the $1,000 by Burrell J. Mr. Stegemann has not disclosed much of his financial situation to me and I have no material to work on it. He offers no plan for payment and I cannot decide whether I should allow him to pay by instalments or any other method of payment.

8. For the above reasons, I dismiss the Plaintiff’s application for the stay of enforcement of the costs order made by me as well as that by Burrell J. I make an order nisi that the Plaintiff has to pay the costs of this application assessed by me in the sum of $350. Unless an application in writing to vary the costs order nisi is filed and served within 14 days after the date of this order, the order nisi will become absolute.

(Christopher C. Chan)
Registrar, High Court

Plaintiff appearing in person

3rd Defendant appearing in person

54404-EN-2006-09-29

R.A. STEGEMANN v. WISE POWER FAR EAST LTD AND OTHERS

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HCA 282/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 282 OF 2005

____________________

BETWEEN

	R.A. STEGEMANN	Plaintiff
	and
	WISE POWER FAR EAST LTD.	1^st Defendant
	HO CHUN HUNG LAWRENCE trading as TIME ENTERPRISE COMPANY	2^nd Defendant
	TIME ENTERPRISES PUBLICATIONS LIMITED	3^rd Defendant

____________________

Coram: Before Mr. Registrar C. Chan in Chambers

Date of Hearing: 31 August 2006

Date of Decision: 29 September 2006

_______________

D E C I S I O N

_______________

Background

On 7 July 2006 I made an order nisi in respect of the 3 applications before me which states as follows:

“(A) In HCA No. 282 of 2005

(1) The Plaintiff pays the costs of the 3rd Defendant for the whole action including the costs of the application to strike out and all costs reserved, if not agreed, to be assessed by me;

(2) The directions I give for the assessment mentioned in subparagraph (1) above are:

(a)     A date for hearing be fixed for assessment with 1 hour reserved;
(b)     The 3rd Defendant shall at least 21 days before hearing file and serve a Statement of Costs in the form annexed; and
(c)     The Plaintiff shall within 14 days thereafter file and serve a list of objections to the Statement.

(3) As between the Plaintiff and the other two defendants, each party pays its own costs in respect of the applications to strike out and for security for costs respectively.

(B) In HCA No. 283 of 2005 I make no order as to costs for the application to strike out.

(C) This order nisi will become absolute 14 days after the date of this judgment unless an application in writing to vary the order nisi is filed and served within the said 14 days.”

2. No application has been made by any party to vary the order nisi. The order nisi has become absolute. Unfortunate as it is, the 3^rd Defendant has not observed the direction I gave under Clause A(2)(b). It did not give a Statement of Costs until 3 days before the hearing. Inevitably the Plaintiff could not answer earlier except on the spot at the hearing. I do not intend to adjourn the hearing. I just accept such irregularities without raising any issue on it. This is an example how Mr. Ho Chun Hung, the representative of the 3^rd Defendant, has treated the court’s order.

The Plaintiff’s Argument

3. Mr. Stegemann, the Plaintiff, concedes that he accepts the consequence and responsibility for bringing in the 3^rd Defendant as a party in the High Court. He gives many excuses and reasons to minimize his responsibility. One of which is the learned adjudicator in the Labour Tribunal did not tell him the reason for dismissing his claim against the 3^rd Defendant so he tried again in High Court. I must say that it is not for the court to give legal advice.

4. He also elaborates how he got confused by the correspondence, e-mail, receipts etc. This is no longer relevant. I have decided he has to bear the costs. The order for costs has been made absolute. Further, he has appealed and his appeal is not successful: he is also ordered to pay the costs of $1,000 for the appeal.

Assessment

5. Mr. Ho of the 3^rd Defendant gave very detail explanation to justify each item he claims. I must make a distinction between assessment and taxation. For taxation, I have to consider item by item in a bill of costs that easily runs into 30 or 40 pages. For assessment, the individual items are grouped together under one main item. I assess the main items to see whether the claims are justified.

Item D1 and D2: Application to act in person

6. Since the assessment is on party and party basis, the criteria can be found in Order 62 rule 28(2) i.e. I will allow “all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party”. Applying the criteria, any costs attributable to the holding of directors’ meetings and applications to court authorizing Mr. Ho to act on behalf of the company will not be allowed. These things are matters which a company must do in their normal course of business. They can be regarded as administrative or overhead costs for running a business. A company is expected to be represented by a lawyer. Mr. Ho may argue that a lawyer will cost more. It has saved Mr. Stegemann money by acting in person. Such argument is not acceptable in respect of costs. The application to act in person is regarded as unnecessary and unusual. Because the 3^rd Defendant wants to take advantage of being a limited company, they should observe the law and engage lawyer. Holding directors’ meeting when circumstances arise is part and parcel of its normal course of business. I accept the directors’ time has been used but the directors are not entitled to the costs: it is the 3^rd Defendant I have awarded costs.

7. I do not allow items D1 and D2.

Item B: Lawyers’ Charges

8. This is an item relating to Solicitor and Counsel fee engaged by all 3 Defendants for the period from 12 May to 8 December 2005. I understand from the documents produced: counsel charged $18,000 (i.e. $10,000 + $8,000) and solicitor’s fee is $32,750 ($5,000 + $27,750). The two sums together with other disbursements come up to $52,432.00 as shown in the bill.

9. I have not certified that this is a case fit for counsel. I will not allow it. From the correspondence, I note that the solicitor firm accept $30,000 in full settlement of the bill for the services rendered during the period. The three defendants have paid the said sum of $30,000. The 3^rd Defendant claims the costs on the basis of $29,000 because $1,000 has been used in respect of amending the Statement of Claim in HCA 283/2005 which does not concern the 3^rd Defendant.

10. I have to consider how much of this $29,000 is used for defending the 3^rd Defendant. The easiest way is to divide it by three as there are 3 defendants. But, such division is not fair and does not really represent the amount of effort and time used attributable to the 3^rd Defendant.

11. Ms. Kitty Tsang, counsel for all the defendants prepared its case for the 3^rd Defendant on only one point: no privity of contract. She might have to examine the evidence produced by the Plaintiff and this could have been done in the course of preparation. I would consider the proportion of 1/5 of the total amount of time and effort spent for the 3^rd Defendant in respect in action HCA 283/2005 is the right share.

12. Another factor that affects my decision on item B is that the solicitors were asked to handle two cases together. The facts relied on were the same set of facts. It is difficult to say which part is attributable to HCA 282/2005 and which to HCA 283/2005. It cannot be denied that the main purpose of the whole process from the Defendants’ point is to defend the claim by the Plaintiff in HCA 282/2005. The Defendant’s claim in HCA 283/2005 can be regarded as a counterclaim and is ancillary to HCA 282/2005.

13. Taking all these factors together I would consider 1/5 of the total time and work should be allocated to the 3^rd Defendant. I allow a sum of $5,800, i.e. 1/5 x $29,000.00.

Item C: Handing over materials

14. I have great hesitation in allowing this item relating to the process of hand-over of documents and materials to Mr. Ho for the 3^rd Defendant. The same argument I have given relating to items D1 and D2 applies. Had the solicitors continued to act for the 3^rd Defendant this would not have happened.

15. The 1^st and 2^nd Defendants are individuals. They are free to decide whether to be represented by lawyers or not. This is a matter of their own choice. The process of handing over the materials by the solicitors when they cease to act is not something necessary in the defending the case.

16. I do not allow this item.

Item E1: Waiting Time

17. All the waiting time has been billed by the solicitors in Item B. The 3^rd Defendant cannot separately charge for it.

18. I do not allow item E1.

Item E2: Hearings

19. It composes of two points: (a) hearing in Labour Tribunal and (b) hearing at High Court when the Defendants acting in person. The total time spent is 19.5 hours. I consider 1/5 of the total time spent as the right proportion.

20. I allow 3.9 hours for the 3^rd Defendant. For those acting in person, the usual rate is $200 per hour. I allow a sum of $780.00.

Item F: Perusal of Documents

21. I agree that many documents have been filed with court. I have not counted the number but many of them are the same documents being filed more than once. The rest are the grounds or reasons for claims submitted by the Plaintiff at different time. They are nothing more than elaboration of the same points again and again. One can easily recognize and consider them. The claim of 200 hours is grossly exaggerated and excessive. I allow 15 hours. The 3^rd Defendant is entitled to only 1/5 of the time.

22. For Item F, I allow 3 hours i.e. $600.00.

Item G: Preparation of Documents

23. It consists of letters to the Court, Chronology of facts, Chart of 3 Defendants’ relationship, Index of exhibits and “Flow of suing respective companies and abusing different claims”. They are not pleadings or any part of them. I find most of them are not necessary or helpful at all. I allow 6 hours in total for the whole exercise.

24. As the proportion I have decided for the 3^rd Defendant is 1/5, the time and costs allowed for the 3^rd Defendant is 1.2 hours i.e. $240.00.

Item H: Perusal of Correspondence

25. Most of the letters are from Court and the Plaintiff resulting from complaints which have no relevance to the defence of the action. I allow 1 hour in total.

26. I apply the formula of 1/5. I allow 0.2 hour i.e. $40.00.

Item I: Preparation for 3 hearings

27. I allow 5 hours as preparation for each hearing as appropriate instead of 40 hours (i.e. 120 hours/3) as claimed.

28. I apply the same 1/5 ratio. I allow 3 hours (5 hours x 3 hearings ¸ 5) i.e. $600.

Item J: Costs of Appeal

29. Costs of Appeal has been awarded by the Mr. Justice Burrell. The costs for enforcing it is not something I have power to deal with in this hearing. I disallow it.

Item K: Photocopying charges and postage

30. The Defendants claim $2,000 for photocopying charges at 50 cents per page i.e. 4,000 pages. I do not find so many photocopies have been made for Court and the Plaintiff. My estimate is 1,500 pages for the two. I allow $750 in total.

31. Applying the 1/5 formula, I allow $150.

32. Postage is regarded as the overhead and the operation costs of a company and it is not claimable.

Item L: Preparation of the Statement of Costs

33. I do not consider using 8 hours to prepare the Statement is proper or necessary. I allow 2 hours i.e. $400.

Summary

34. My assessment of the costs of the 3^rd Defendant in respect of the whole proceeding including the strike out application is $8,210.00 made up as follows:

B: Lawyers’ Charges (paras. 8 to 13) $5,800.00
C: Handing over materials (paras. 14 to 16) NIL
D1 & D2: Application to act in person (paras. 6 to 7) NIL
E1: Waiting time (paras. 17 to 18) NIL
E2: Hearings (paras. 19 to 20) $780.00
F: Perusal of Documents (paras. 21 to 22) $600.00
G: Preparation of Documents (paras. 23 to 24) $240.00
H: Perusal of Correspondence (paras. 25 to 26) $40.00
I: Preparation for 3 hearings (paras. 27 to 28) $600.00
J: Costs of Appeal (para. 29) NIL
K: Photocopying charges and postage (paras. 30 to 32) $150.00

Order

35. I must not forget the costs of the hearing of the assessment which has lasted for 2½ hours. There is no reason for me to depart from the general principle that costs follow the event. I should allow the full costs for it i.e. 2½ hours x $200 = $500.00.

36. I order that the Plaintiff i.e. Mr. R.A. Stegemann pay the 3^rd Defendant a sum of $8,710.00, being the 3^rd Defendant’s costs of this action.

(Christopher C. Chan)
Registrar

Plaintiff appearing in person

3^rd Defendant appearing in person

53569-EN-2006-08-03

R.A. STEGEMANN v. WISE POWER FAR EAST LTD AND OTHERS

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HCA282 & 283/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 282 OF 2005

----------------------------

BETWEEN

	R.A. STEGEMANN	Plaintiff
	and
	WISE POWER FAR EAST LTD	1^st Defendant
	HO CHUN HUNG LAWRENCE trading as TIME ENTERPRISE COMPANY	2^nd Defendant
	TIME ENTERPRISES PUBLICATIONS LIMITED	3^rd Defendant

----------------------------

AND

ACTION NO. 283 OF 2005

----------------------------

BETWEEN

	WISE POWER FAR EAST LTD	1^st Plaintiff
	HO CHUN HUNG LAWRENCE trading as TIME ENTERPRISES COMPANY	2^nd Plaintiff
	and
	R.A. STEGEMANN	Defendant

----------------------------

(HEARD TOGETHER)

Before : Hon Burrell J in Chambers

Date of Hearing : 3 August 2006

Date of Decision : 3 August 2006

----------------------

DECISION

----------------------

1. On 7 July Mr Registrar Chan handed down a decision in relation to applications made in HCA282/2005 and HCA283/2005.

2. In HCA282/2005, Mr Stegemann was the plaintiff and Mr Ho who appeared in court today, the 2^nd defendant. In HCA283/2005, Mr Ho is the 2^nd plaintiff suing Mr Stegemann as the defendant.

3. A number of issues were before the learned Registrar but on analysis there are only two issues to be decided in this appeal this morning.

4. The first is in relation to the Registrar’s decision to strike out Claims D and E of Mr Stegemann’s claim in HCA282/2005. The reasons he struck them out were because, in his judgment, they were claims for costs and not damages. I am satisfied that Mr Stegemann now fully appreciates the difference between costs and damages and, in my view, the Registrar was quite correct in classifying Claims D and E as substantially claims for costs rather than damages and was right to strike them out and I think Mr Stegemann now understands the reasoning behind that. If he still believes (may be after taking legal advice) that he has outstanding claims which are correctly described as “damages” as opposed to costs in Claims D and E, it is open to him to apply to the court to amend his Statement of Claim to include such heads of damages.

5. I therefore dismiss the appeal as far as the Registrar’s decision in relation to striking out Claims D and E are concerned.

6. The other matter concerns the Registrar’s decision to strike out the plaintiff’s claims in HCA282/2005 against the 3^rd defendant.

7. Mr Stegemann has been candid with the court today and has explained that his key reason for wanting the 3^rd defendant included was because that would enforce any order for costs in his favour that he may get in the future. That on its own is no ground upon which it is proper to include a party in litigation. There must be some evidence of a contract between the plaintiff and the 3^rddefendant. The Registrar came to the conclusion that there was none and indeed Mr Stegemann realistically concedes that previous rulings in that regard are against him which is why he sensibly, in my view, says in his Notice of Appeal that :

“As two Hong Kong judiciaries have now determined that my claim against the 3^rd defendant is inappropriate, the plaintiff only objects to the method of dismissal — not the dismissal itself.”

8. However, the question of costs relating to that part of the striking-out remains alive. Mr Registrar Chan made specific directions as to the costs in that regard at paragraph 54 in his Decision. He set down directions for the assessment of costs and ordered that the costs were a nisi order. It was not to become absolute until the passage of 14 days. Mr Stegemann has not, as I understand it, fully complied with the directions as yet and so that matter is ongoing. It is of course open to him to ask for the nisi order to be extended to enable him to comply with the other directions. But as the matter of costs is still in the hands of the Registrar, I make no decision in that regard in this hearing. It should be noted however that all he did was to make the usual order of “costs following the event”, namely that the plaintiff should pay the costs of the 3^rddefendant because the plaintiff was unsuccessful in front of the Registrar in keeping the 3^rd defendant in the litigation. It is up to the parties to take what steps they consider appropriate within paragraph 54 of the Registrar’s Decision.

9. To summarise, the two issues which remained for this court to determine have now been decided and no alterations or amendments will be made to Mr Registrar Chan’s decision. To that extent, the appeal which I have attempted to keep within a narrow focus has not succeeded and is dismissed.

[Discussions on Costs]

10. Before I decide on costs, as I said at the outset and I make an order under section 43 of the District Court Ordinance to transfer this matter to the District Court. The total damages being at the lower end of the District Court scale and in the absence of any unusual features, it is inappropriate for this court to be seized of the matter.

11. As far as today’s appeal is concerned, costs should follow the event and I order the plaintiff to pay the costs of the defendants in the fixed sum of $1,000 in any event.

(M.P. Burrell)
Judge of the Court of First Instance
High Court

Plaintiff of HCA282/2005 and Defendant of HCA283/2005, appearing in person.

Defendants of HCA282/2005 and Plaintiffs of HCA283/2005, appearing in person.

53198-EN-2006-07-07

R.A. STEGEMANN v. WISE POWER FAR EAST LTD AND OTHERS

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HCA 282/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 282 OF 2005

____________________

BETWEEN

	R.A. STEGEMANN	Plaintiff
	and
	WISE POWER FAR EAST LTD.	1^st Defendant
	HO CHUN HUNG LAWRENCE trading as TIME ENTERPRISE COMPANY	2^nd Defendant

	TIME ENTERPRISES PUBLICATIONS LIMITED	^3rd Defendant

____________________

HCA 283/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 283 OF 2005

____________________

BETWEEN

	WISE POWER FAR EAST LTD.	1^st Plaintiff
	HO CHUN HUNG LAWRENCE trading as TIME ENTERPRISES COMPANY	2^nd Plaintiff
	and
	R.A. STEGEMANN	Defendant

____________________

Coram : Before Mr. Registrar C. Chan in Chambers

Date of Hearing : 8 December 2005, 25 January 2006, 23 March 2006 and 18 May 2006

Date of Judgment : 7 July 2006

_______________

J U D G M E N T

_______________

1. Before me there are 3 applications in the above two actions. They are related to the same set of facts and the claims are closely related. The parties had no objection that I heard the 3 applications one after another at the same hearing.

2. In HCA 282/2005, the defendants have taken out 2 applications:

(a) Application to strike out the claims of the Plaintiff i.e. Mr. Stegemann under Order 18 rule 19 of the Rules of High Court;

and (b) Application for security of costs in respect of the action up to the stage of exchange of witness statement under Order 23 rule 1(1)(a).

3. In HCA 283/2005 where Mr. Stegemann is the defendant, he seeks to strike out the claim of the plaintiffs therein i.e. Wise Power East Limited, the 1^st Plaintiff (“Wise Power”) and Mr. Ho Chun Hung Lawrence trading as Time Enterprises Company (“Mr. Ho”), the 2^nd Plaintiff. Incidentally, Wise Power is the 1^st Defendant in HCA 282/2005 and Mr. Ho, the 2^nd Defendant therein.

4. These two cases have been with the Labour Tribunal for several months; after some hearings and decisions they are transferred to High Court. The decisions are more on procedural matters rather than making any finding of facts or ruling on any substantive issues. The evidence before the Tribunal has not been fully examined and tested. I take the transcripts nothing more than statements made by the parties.

Background

5. On 14 April 2004 Mr. Stegemann applied to Mr. Ho for a part time post of English Teacher. According to the application Mr. Stegemann was a highly qualified person: he obtained BA degree in University of Michigan and two MA degrees in University of Oklahoma and University of Washington respectively. He has taught in Saitama Daigaku University in Tokyo and also in the Chinese University of Hong Kong for some time. His native language is English and could manage to write some Chinese.

6. On 16 April 2004, Mr. Stegemann, the Plaintiff and Wise Power, the 1^st Defendant in HCA 282/2005 entered into an agreement that Mr. Stegemann would carry out teaching duties as English Course Instructor at such time and place as designated by Wise Power with tuition fee at the rate of HK$200 per hour. Mr. Stegemann was required to follow the rules and regulations of the designated school and he also had to comply with certain conditions as set out in the Requirement for English Course Instructor for Teaching Project agreed by Mr. Stegemann.

7. Pursuant to such agreement, four teaching project assignments were completed:

Name of Schools Periods
(i) Weaving Mills Association Primary School 24 April – 10 July 2004
(ii) Yuen Long Merchant Secondary School 27 May – 31 May 2004
(iii) Lei Muk Shue Catholic Primary School 5 June – 19 June 2004
(iv) Belilios Public School (“Belilios”) 21 July – 13 August 2004

Because they were part time works the periods in the first three projects overlapped with each other.

8. On 8 June 2004 together with the last project relating to Belilios, Mr. Stegemann had also separately accepted an offer made by Wise Power to take up a teaching post at Chinese Women’s Club College for 8 days commencing on 16 August 2004 (“the 1^st Contract”).

9. According to the Requirement agreed by Mr. Stegemann he had to attend the office of Wise Power or that of Mr. Ho, which had the same address, “for drilling the course materials”. For some reason which I shall elaborate later, the project was taken away from Mr. Stegemann.

10. Mr. Stegemann’s relationship with Wise Power or Mr. Ho did not end there. There was another project committed earlier on 28 July 2004 when Mr. Ho and Mr. Stegemann entered into an agreement for teaching at Buddhist Lim Bing Yim Memorial School (“the Buddhist Memorial School”) for a period of 10 months from 1 September 2004 to 30 June 2005. He would be paid on monthly basis of $12,000 per month instead of hourly basis as in the previous projects (“the 2^nd Contract”).

11. The agreement was terminated on 22 September 2004 because the Buddhist Memorial School did not allow Mr. Stegemann to teach at its school. It was alleged that Mr. Stegemann was found touching “the bottoms of several female students repeatedly”. The principal considered that this amounted to sexual harassment. Accordingly, Mr. Ho, the 2^nd Defendant, terminated the 2^nd contract with Mr. Stegemann.

LBTC 6462/2004

12. Mr. Stegemann lodged a claim with the Labour Tribunal under LBTC 6462/2004 with the following claims:

(A) a sum of $9,142.85 being his wages for teaching at the Buddhist Memorial School for the period from 1 September 2004 to 22 September 2004 under the 2^nd Contract;

(B) another sum of $110,857.14 being the “unearned expected wages” for the period from 23 September 2004 to 30 June 2005 under the 2^nd Contract;

(C) a further sum of $6,000 being damages for breach of the 1^st Contract;

(D) “Collateral Damages” in a sum of $37,105.00; and

(E) “Additional Collateral Damages after 28 December 2004” to be assessed.

13. As stated above, the case was transferred to High Court as High Court Action No. 282 of 2005. On 23 March 2005 I ordered that the Statement of Claim be filed and served. Instead of filing and serving any formal pleading, Mr. Stegemann filed and served a bundle of documents of 45 pages consisting of a background paper and several appendixes. He expressly stated in the Reply to Defence filed herein on 30 May 2005 that the background paper was not meant to be the Statement of Claim. He adopted the claim lodged with the Labour Tribunal as the Statement of Claim.

14. In April 2005 he applied to join Time Enterprises Publications Ltd as the 3^rd Defendant in the action. I granted leave on the ground of expedience as I understood from the solicitor for the defendants at that time that Wise Power and Mr. Ho were contemplating to strike out Mr. Stegemann’s claims in any event. The matter could be dealt with at the time of striking out.

The 1^st Ground

15. As anticipated, on 14 July 2005 the 3 defendants in High Court Action No. 282 of 2005 applied to strike out Mr. Stegemann’s claim. The 1^st ground is that no real statement of claim has been filed. I consider that the purpose of pleading is to identify the facts and issues in dispute and for the parties to state their cases. I accept that the papers filed by Mr. Stegemann are many and very confusing as well. To say the least, it is not easy to understand. Their contents give detail accounts of Mr. Stegemann’s squabbling arguments rather than pleading the material facts.

16. Notwithstanding the above shortcomings, I cannot say that the defendants are unable to identify the issues or to understand the plaintiff’s case. I accept that they have some difficulties in pleading. However, as the record shows, the 3 defendants on 18 May 2005 filed 3 separate defences setting out the areas of dispute and clearly pleaded their own cases in answer to the plaintiff’s claims.

17. Having read Mr. Stegemann’s papers and heard his submission, no one will dispute it, if I describe him as quarrelsome as he tends to argue every minute point raised. Even though it is so, I must allow a litigant acting in person some latitude. As he has adopted the claims set out in Form 2 filed with the Labour Tribunal under LBTC 6462/2004 as his Statement of Claim and I have summarized them in paragraph 12 above, I find no difficulty in pursuing or defending the action. I refuse to strike out his claim on the ground that no real statement has been filed.

Claim against the 3^rd Defendant

18. The main argument to bring the 3^rd Defendant into this action, if I understand Mr. Stegemann correctly, is that the various papers and correspondences showed different legal entities including the 3^rd Defendant having transactions with him. He considered that the 3^rd Defendant was also involved in the arrangement of the different projects. He showed me the logo, the web-page, the documents with the Inland Revenue Department, the internet domain, the facsimile messages, the defendant’s business card and the contractual documents, etc.

19. I have examined those documents: they are nothing but peripheral evidence in bits and pieces without any direct bearing on the issues. The evidence does not implicate the 3^rd Defendant at all; I find nothing, upon which I can conclude that a contractual relationship had been established between Mr. Stegemann and the 3^rd Defendant. Had I had the chance of studying the documents in detail, I would have not allowed Time Enterprises Publications Ltd to be joined as a party.

20. I share the view of Ms. Tsang, counsel originally acting for the Defendants, that there is no privy of contract between Mr. Stegemann and the 3^rd Defendant. There is no cause of action against the 3^rd Defendant. Mr. Stegemann never denied that he was contracting with either Wise Power or Mr. Ho in the subject transactions. I accept that the 3^rd Defendant was brought for the sake of harassment. It is an abuse of the court procedure. I dismiss all his claims against the 3^rd Defendant in HCA No. 282 of 2005.

Claims D and E

21. According to the Labour Tribunal record, Claims D and E were withdrawn pursuant to an order made on 24 January 2005 at the request of Mr. Stegemann. He said that he wanted to settle the case with Mr. Ho as soon as possible and withdrew them to facilitate the settlement.

22. It is quite clear that the order was made without hearing the merits of these two claims. I find that it is legitimate for Mr. Stegemann to restore the two claims in High Court. So, I refuse to strike out claims D and E on the ground that they have been withdrawn.

23. The particulars of Claim D are set out in detail in Appendix E filed with the background paper amounting to $37,105. I have examined them. Appendix E sets out the costs of the time Mr. Stegemann had spent in various activities like contacting with the Buddhist Memorial School after 22 September 2004, trying to seek for legal advice, pursuing claims in the Labour Tribunal, resisting claims in Small Claims Tribunal, making searches in the Companies Registry and the Inland Revenue Department, moving home, losing friendship and family relationship and preparing the case for court etc.

24. These are the consequences one has to accept in instituting legal proceedings. Some of the items can be included in the claim for costs of the action, which is a matter for taxation. They cannot be treated as damages, collateral or otherwise; I see no merits in this claim. Accordingly, I dismiss Claim D.

Claim E

25. As to Claim E, Mr. Stegemann described it as “Additional Collateral Damages after 28/12/2004”. Appendix E referred to in paragraph 23 above covered a period up to 27 December 2004. It was his intention to continue with the claim from 28 December 2004 onward. As I have disallowed such claim of the same nature in Claim D, for the same reason stated above I dismiss Claim E.

Claim C

26. Mr. Stegemann claimed damages for breach of the 1^st Contract by Wise Power and/or Mr. Ho. It is not clearly pleaded whether he is claiming against Wise Power or Mr. Ho in the name of Time Enterprises Company. It is not denied that the 1^st Defendant entered into agreement with Mr. Stegemann on 16 April 2004 i.e. the general agreement. Wise Power also made an offer, which was accepted by Mr. Stegemann, to teach at the Chinese Women Club College. I have no doubt in my mind that the right party, against which Mr. Stegemann should claim, is Wise Power and not Mr. Ho or Time Enterprises Company.

27. The basis of the claim, as I understand, is that an agreement had been reached between Mr. Stegemann and Wise Power on 8 June 2004 at the time when the offer was accepted by him. For no reason at all, Wise Power should take the job away from him and assigned it to another person. Wise Power is in breach of the contract, so Mr. Stegemann alleges.

28. Wise Power or Mr. Ho tried to justify not giving the work to Mr. Stegemann for various reasons, among which are the following:

(a) The general agreement dated 16 April 2004 (described in paragraph 6 above) as well as all other agreements should be construed as contract for service, not contract of service. Wise Power has the discretion to assign or remove him from the job at any time.

(b) The general agreement still subsisted after removing Mr. Stegemann from the work: there was no breach of contract.

(c) Wise Power or Mr. Ho was justified in not giving the work to Mr. Stegemann and in assigning it to another person because he had failed to go to the defendants’ office to collect the teaching materials and to attend the drilling session as stipulated in the Requirement for English Course Instructor as agreed by Mr. Stegemann as a condition of the contract; and

(d) Mr. Stegemann had not done anything for that school and he is not entitled to payment.

29. Mr. Stegemann considered that the other side was in breach of the agreement (the 1^st Contract) reached on 8 June 2004 and he lost the opportunity to earn the sum of $6,000, the amount he would have earned under the 1^st Contract.

30. The main issues are whether the practice of collecting materials at the defendant’s office had been changed by past conduct, whether any drilling session had ever been attended by Mr. Stegemann, and whether the condition as set out in the Requirement which formed part of the 1^st Contract had been waived or the breach of which had been acquiesced etc. These are the issues that cannot be resolved without hearing evidence.

31. I find the parties have different arguments and have raised different issues on facts. It is not possible to resolve them without trial. For this reason, I refuse to strike out Claim C.

Claim A

32. Claim A is a straightforward one. Mr. Stegemann claimed for the remuneration in respect of the work he had done at the Buddhist Memorial School during the period from 1 September 2004 to 22 September 2004 under the 2^nd Contract.

33. The only reason that the defendants have advanced is that Mr. Stegemann had committed certain misconduct i.e. touching the buttocks of the students. So, he had committed certain wrong and the defendants had suffered damage in reputation and loss of profits because of his mistake.

34. Mr. Stegemann did not deny he patted the students but argued that he had no intention of committing any act of indecency. It was a way to help to “overcome important psychological and physical linguistic barriers developed over the years …”. It was a sign of encouragement.

35. Whether it was right for Mr. Stegemann to perform such act, whether it amounted to an act of indecency, whether the Buddhist Memorial School was entitled to remove Mr. Stegemann from the teaching post and whether the defendants were entitled to terminate their 2^nd Contract, these are questions of facts that ought to be decided at trial.

36. I do not find the two defendants can strike out Claim A for the unpaid remuneration. I ask a simple question: why has Mr. Stegemann not been paid as he has performed his duties as an English instructor during the period of the said 22 days? From the documents produced, the defendants were paid by the Buddhist Memorial School.

Claim B

37. Mr. Stegemann claims for unearned expected wages in the sum of $110,857.14. In effect, he is claiming for damages in breach of contract. The main argument as advanced by the two defendants, apart from the argument that had been given in respect of Claim A, is that Mr. Stegemann has not earned the money. Ms. Tsang, counsel for the defendants, in her written submission states: “There is no forced labour or forced acceptance of personal service by recipient”. I take it to mean that Mr. Stegemann cannot force the defendants or the Buddhist Memorial School to continue to retain him. This must be right. The main issue is whether there has been any wrongful repudiation of the contract. This cannot be resolved without hearing evidence.

38. If the defendants are found to have wrongfully repudiated the 2^nd Contract, the way to assess damages is by considering the amount Mr. Stegemann would have earned under the contract for the period until it expired i.e. 30 June 2005 (i.e. $110,857.14), less the amount he could reasonably be expected to earn by taking up other work during the period.

39. For this reason, I could not find that Claim B is lack of merit. I refuse to dismiss Claim B.

HCA No. 283 of 2005

40. This is an action commenced by Wise Power and Mr. Ho against Mr. Stegemann. They clearly pleaded their case in the Amended Statement of Claim. In essence, it is a claim for loss of income because of “the indecent misbehaviour” committed by Mr. Stegemann. Mr. Stegemann sought to strike out the claim.

41. I see no merit in the application as the whole case depends upon the answers to the questions I have raised in paragraph 35. They cannot be decided without trial. I refuse to strike out the claim by the 2^nd Plaintiff.

42. I have carefully considered the Amended Statement of Claim filed herein on 30 June 2005. I try to find out the involvement of the 1^st Plaintiff as pleaded but I can hardly find any. As there is no claim by the 1^st Plaintiff, Wise Power Far East Limited, there is nothing for me to strike out. I am tempted to strike out the action taken by the 1^st Plaintiff but as I have not raised this point before and the parties have not addressed me thereon, I take no action in that regard.

Application for security for costs

43. The 3 defendants in HCA No. 282 of 2005 applied for an order that the Plaintiff, Mr. Stegemann, be required to give security for the defendants’ costs of the action pursuant to Order 23 rule 1.

44. The defendants raised two grounds:

(a) That the plaintiff is ordinarily resident out of jurisdiction; and

(b) That the plaintiff does not have any means to satisfy any award if granted in the defendants’ favour.

45. From the papers before me I understand that Mr. Stegemann is a foreigner: he requires a sponsor and a visa to stay and work in Hong Kong. For the time being he works in Hong Kong and stays here. But, if job opportunity opens to him elsewhere, I am sure he will leave. I cannot regard him as an ordinary resident in Hong Kong.

46. It is not an inflexible rule that a plaintiff resident abroad will be ordered to give security for costs. We have to consider all circumstances of the case. As rightly pointed out by the learned editor of Hong Kong Civil Procedure 2006 in paragraph 1 of Section 23/3/3 making reference to the case of Dragages et Travaux Public v Hong Kong Chinese Insurance Co. Ltd & Another, he comments:

“The Court has to strike the balance between what would be oppressive to the plaintiff and what would give the defendant a measure of security, and will take into account the bona fide nature of the claim and any element of overlap between the claim and the counterclaim.”

47. In case of impecunious plaintiff, one has to consider whether the plaintiff’s claim is a genuine one. It is not the intention of the law to stifle any genuine claim. In this case I have struck out those parts that are not sustainable leaving behind those that are at least arguable. Claim A for unpaid remuneration is particularly a strong one.

48. There are two defendants left to defend after I have struck out the action against the 3^rd Defendant. The two defendants as plaintiffs have instituted the other action No. 283 of 2005 relating to the 2^nd Contract arising out of the same facts. It can be treated as a counterclaim in HCA 282 of 2005.

49. I accept the general proposition that a counterclaim should not be regarded as an impediment to ordering security for costs. However, in this case, in view of the special circumstances I do not follow that proposition. I have expressed my reservation about the lack of involvement by the 1^st Plaintiff in HCA 283 of 2005. I have expressed my view in respect of Claim A.

50. I have to balance between the claims of both sides and also to consider the interests of the parties I need to protect. I decline to make any order for security for the defendants’ costs.

51. If I were wrong, the amount of security will not be as substantial as claimed by the defendants as set out in exhibit “H-7” referred to in the 3^rd affirmation of Ho Chun Hung Lawrence affirmed on 19 July 2005. Since the affirmation, circumstances have changed. The defendants have been acting in person. I will not allow that part of costs projected to be charged by their legal advisers. Neither will I grant any costs order to the remaining two defendants for their partial success in their application to strike out. Having taken into consideration the above factors, I would have allowed a sum of $30,000 to be paid in court if an order were to be made.

The Orders

52. In conclusion, I make the following orders in High Court Action No. 282 of 2005:

(a) All claims against the 3^rd Defendant, Time Enterprises Publications Limited, are dismissed;

(b) Claims D and E against the 1^st Defendant, Wise Power Far East Limited, and Ho Chun Hung Lawrence trading as Time Enterprises Company are dismissed; and

(c) The application for security for defendants’ costs is dismissed.

53. I dismiss the application by the Defendant, Mr. Stegemann, to strike out the Plaintiffs’ claim in HCA No. 283 of 2005.

54. I make the following order nisi in respect of costs pursuant to Order 42 rule 5B(6) of the Rules of High Court:

(A) In HCA No. 282 of 2005

(1) The Plaintiff pays the costs of the 3^rd Defendant for the whole action including the costs of the application to strike out and all costs reserved, if not agreed, to be assessed by me;

(2) The directions I give for the assessment mentioned in subparagraph (1) above are:

(a) A date for hearing be fixed for assessment with 1 hour reserved;

(b) The 3^rd Defendant shall at least 21 days before hearing file and serve a Statement of Costs in the form annexed; and

(c) The Plaintiff shall within 14 days thereafter file and serve a list of objections to the Statement.

(3) As between the Plaintiff and the other two defendants, each party pays its own costs in respect of the applications to strike out and for security for costs respectively.

(B) In HCA No. 283 of 2005 I make no order as to costs for the application to strike out.

(C) This order nisi will become absolute 14 days after the date of this judgment unless an application in writing to vary the order nisi is filed and served within the said 14 days.

Observation

55. I note the claims remaining in the two actions do not exceed a sum of $1 million in each case. Parties should seriously consider to transfer the two cases to the District Court for further proceeding.

(Christopher C. Chan)
Registrar

Plaintiff of HCA 282/2005 and Defendant of HCA 283/2005 appearing in person.

Defendants of HCA 282/2005 and Plaintiffs of HCA 283/2005 appearing in person.

Appendix

Statement of Costs for Gross Sum Assessment
under Order 62 rule 9(4)(b)

Case No.: _______________

A.
General Information
A1
Order dated the day of 200
A2
Type of Proceedings:
A3
Fee Earners’ Rates of Charges per hour:
Solicitor:
Year of admission:
Trainee Solicitor:
1^st / 2^nd Year
Litigant acting in person:
$200
B.
Communication including conferences, telephone calls and letters with client, the other
side, counsel, court witnesses and others
No. of hours:
Sub-total:
$
C.
Work done
C1
Preparation of Documents:
hours
$
C2
Perusal of Documents:
hours
$
C3
Preparation for hearing:
hours
$
C4
Hearing including call-over:
hours
$
Sub-total:
$

D.
Counsel Fee, if any
$
E.
Other disbursements

Photocopying charges
$

Total
$
Dated the day of 200

Signed by

Applicant/Solicitors for Applicant

Item		Amount
B	Lawyer’s charges	$5,800
C	Handing over materials	Nil
D1 and D2	Application to act in person	Nil
E1	Waiting time	Nil
E2	Hearings	$1,280
F	Perusal of documents	$2,000
G	Preparation of documents	$1,000
H	Perusal of correspondence	$200
I	Preparation for three hearings	$3,000
J	Costs of appeal	Nil
K	Photocopying charges and postage	$ 150
L	Preparation of statement of costs	$ 400
	Costs of hearing before the Registrar	$ 500

B:	Lawyers’ Charges (paras. 8 to 13)	$5,800.00
C:	Handing over materials (paras. 14 to 16)	NIL
D1 & D2:	Application to act in person (paras. 6 to 7)	NIL
E1:	Waiting time (paras. 17 to 18)	NIL
E2:	Hearings (paras. 19 to 20)	$780.00
F:	Perusal of Documents (paras. 21 to 22)	$600.00
G:	Preparation of Documents (paras. 23 to 24)	$240.00
H:	Perusal of Correspondence (paras. 25 to 26)	$40.00
I:	Preparation for 3 hearings (paras. 27 to 28)	$600.00
J:	Costs of Appeal (para. 29)	NIL
K:	Photocopying charges and postage (paras. 30 to 32)	$150.00

	Name of Schools	Periods
(i)	Weaving Mills Association Primary School	24 April – 10 July 2004
(ii)	Yuen Long Merchant Secondary School	27 May – 31 May 2004
(iii)	Lei Muk Shue Catholic Primary School	5 June – 19 June 2004
(iv)	Belilios Public School (“Belilios”)	21 July – 13 August 2004

A.	General Information
	A1	Order dated the day of 200
	A2	Type of Proceedings:
	A3	Fee Earners’ Rates of Charges per hour:
		Solicitor:	Year of admission:
		Trainee Solicitor:	1^st / 2^nd Year
		Litigant acting in person:	$200

B.	Communication including conferences, telephone calls and letters with client, the other side, counsel, court witnesses and others
	No. of hours:		Sub-total:	$

C.	Work done
	C1	Preparation of Documents:	hours	$
	C2	Perusal of Documents:	hours	$
	C3	Preparation for hearing:	hours	$
	C4	Hearing including call-over:	hours	$
			Sub-total:	$

D.	Counsel Fee, if any			$

E.	Other disbursements
	Photocopying charges			$
	Total			$