YEUNG KIU YING v. FAIRWOOD FAST FOOD LTD t/a FAIRWOOD

DCPI 2016/2015

[2020] HKDC 715

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 2016 OF 2015

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BETWEEN

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DECISION

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A. BACKGROUND

1.  By a Judgment dated 23 January 2020 (the “Judgment”), I awarded damages to the plaintiff in the sum of HK$50,826 plus interest in the present personal injuries action.  I made the following costs order nisi in the Judgment:-

“The defendant do pay the plaintiff’s costs with certificate for counsel (including all costs reserved, if any) to be taxed if not agreed.”

2.  By a summons dated 5 February 2020, the defendant (amongst other things) applied to vary the costs order nisi to:-

“The defendant do pay the plaintiff’s costs (including all costs reserved, if any) up to 20 June 2016 on a party and party basis, to be taxed if not agreed, and the plaintiff do pay the defendant’s costs with certificate for counsel (including all costs reserved, if any) incurred thereafter on an indemnity basis with enhanced interest thereon at a rate not exceeding 10% above judgment rate should the Court deem fit.”

3.  By a decision dated 15 May 2020 (the “Decision”), I varied the costs order nisi to the following costs order absolute:-

(1) The defendant do pay the plaintiff’s costs with certificate for counsel (including all costs reserved, if any) up to 20 June 2016 on a party and party basis, to be taxed if not agreed.

(2) The plaintiff do pay the defendant’s costs with certificate for counsel (including all costs reserved, if any) incurred after 20 June 2016 on a party and party basis, to be taxed if not agreed.

(3) Upon the defendant undertaking to file and serve an affirmation within 35 days hereof, setting out evidence of the date and amount of costs paid by the defendant or its insurer, the plaintiff do pay the defendant enhanced interest at 1% above judgment rate on each payment of costs (incurred after 20 June 2016) from the date of payment by the defendant or its insurer up to the date of Judgment, and thereafter, at judgment rate until full payment of the same.

B. APPLICATION

4.  By summons dated 27 May 2020, the plaintiff applied for leave to appeal from the Decision.

C. LEGAL PRINCIPLES

5.  The legal principles for leave to appeal are trite law and not disputed by the parties.

6.  Under section 63A(2) of the District Court Ordinance (Cap 336):-

“Leave to appeal shall not be granted unless the judge … is satisfied that – (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard.”

7.  To meet the “reasonable prospect of success” test, an applicant is required to show more than just an arguable case, being an appeal that has merits and ought to be heard, although he does not have to demonstrate that the appeal will probably succeed[1].

8.  The question of costs is in the discretion of the court and the Court of Appeal “will not interfere with the exercise of a judge’s discretion in the award of costs unless it is shown that [the court] failed to exercise the discretion, or exercised it upon a false principle, or did not exercise it judicially[2].”

D. GROUNDS OF APPEAL

9.  The plaintiff relies on the following 2 proposed grounds of appeal:-

(1) The judge erred in law in finding that the Sanctioned Payment was valid and/or would attract the costs consequences under O.22 r.23.  Accordingly, the judge wrongly exercised the discretion on costs under O.22 r.23 instead of O.62 r.5 and such discretion was exercised upon a false principle.

(2) Even if the Sanctioned Payment were valid, the judge did not exercise the discretion on costs judicially because she failed to consider it unjust to make the orders that she made and failed to consider, sufficiently or at all, the circumstances that if the plaintiff accepted the Sanctioned Payment, the plaintiff would be treated as accepting the defendant’s offer as stated in the defendant’s solicitors’ letter dated 23 May 2016, which included a term that the plaintiff be deprived of her costs in the Employees Compensation action after 19 September 2014.

E. The sanctioned offer and sanctioned payment in question

10.  For easy reference, I repeat the relevant history of the settlement offers and payments made by the defendant and the plaintiff:-

(1) On 12 February 2014, the plaintiff commenced her employees’ compensation claim under DCEC 261/2014 (the “EC Action”).

(2) The defendant made a sanctioned payment of HK$22,000 in relation to the EC Action.  Under Order 22 rule 20(1) of the Rules of the District Court, the deadline for the acceptance of the sanctioned payment in the EC Action without leave was 18 September 2014.  The plaintiff did not accept the sanctioned payment.

(3) On 11 September 2015, the plaintiff commenced the present personal injuries claim under DCPI 2016/2015 (the “PI Action”).

(4) On 23 May 2016, the defendant’s solicitors sent a letter (the “23 May 2016 Letter”) to the plaintiff’s solicitors.  The 23 May 2016 Letter was marked:

“By Hand

Sanctioned Offer

 Without Prejudice Save as to Costs”

A notice of sanctioned payment of the same date was attached to the 23 May 2016 Letter.  It is necessary to set out the content of the letter as the plaintiff disputes the validity of it as a sanctioned offer:-

“By way of service, we send you herewith a copy of Notice of Sanctioned Payment of even date. This letter should be read together with the said Notice. Pursuant to Order 22 rule 3 of the RDC, our client hereby makes a Sanctioned Offer accompanying the Notice of Sanctioned Payment.Kindly note that the Sanctioned Payment of HK$38,000 (inclusive of interest) is made on top of: -

1.advanced payments made in the total sum of HK$9,520; and

2. the Sanctioned Payment of HK$22,000 effected on 21 August 2014 under DCEC No 261 of 2014

plus

1.costs in DCEC No.261 of 2014 up to 18 September 2014, to be taxed if not agreed and there be no order as to costs thereafter; and

2.costs in these proceedings up to 20 June 2016, to be taxed if not agreed.

All our client’s rights are hereby fully reserved.” .

By the notice of sanctioned payment of the same date attached to the 23 May 2016 Letter, the defendant indicated that it had paid a sum under the PI Action of HK$38,000, net of HK$9,520 advanced payment and the HK$22,000 sanctioned payment made under the EC Action. In other words, the total amount paid into court was HK$60,000 (HK$38,000 + HK$22,000) plus advanced payment made to the plaintiff in the sum of HK$9,520. This the defendant says represents damages in the total sum of HK$69,520 (The “Sanctioned Payment”). The Sanctioned Payment is in settlement of the whole of the plaintiff’s claim and “it is part of a sanctioned offer set out in the letter from the Defendant’s Solicitors to the Plaintiff’s Solicitors dated 23 May 2016. If you give notice of acceptance of this sanctioned payment, you will be treated as also accepting the sanctioned offer.” The deadline for accepting the Sanctioned Payment in the PI Action without leave was 20 June 2016.

(5) On 23 June 2016, the plaintiff rejected the Sanctioned Payment and offered HK$80,000, inclusive of interest but net of advanced payments of HK$9,520 plus costs, as full and final settlement of the EC Action and the PI Action. This was not accepted by the defendant.

(6) On 28 March 2017, the defendant invited the plaintiff to accept the Sanctioned Payment out of time. This was not accepted by the plaintiff.

(7) On 16 November 2017, the plaintiff offered HK$70,000 inclusive of interests but net of advanced payments of HK$9,520 plus costs, as full and final settlement of the EC Action and the PI Action. This was not accepted by the defendant.

(8) On 16 August 2019, the plaintiff offered HK$190,000 inclusive of interest and costs in full and final settlement of the PI Action, provided that the defendant waived all adverse costs claims against the plaintiff. This was not accepted by the defendant.

(9) On 12 October 2019, the plaintiff made a sanctioned offer of HK$100,000 inclusive of interests and the sanctioned payment of HK$22,000 in the EC Action, but net of advanced payments of HK$9,520, plus costs in full and final settlement of her claim as a result of the accident. This was not accepted by the defendant.

F. Does the Sanctioned Payment Attract Costs Consequences under   Order 22

11.  Mr Wong, Counsel for the plaintiff argued that the 23 May 2016 Letter was invalid as a sanctioned offer under Order 22 for the following reasons:-

(1) Non-compliance with the mandatory requirement under Order 22 r.5.

(2) The 23 May 2016 Letter included a term as to costs which conflicts with the costs consequence prescribed by Order 22 r.20.  Mr Wong says that as the offer in the 23 May 2016 Letter contained a term that costs in the EC Action would only be paid up to 18 September 2014, it effectively meant that there would be no order as to costs between 19 September 2014 (the deadline for acceptance of the sanctioned payment in the EC Action) to 20 June 2016 (the deadline for accepting the Sanctioned Payment in the PI Action) in the EC Action.  This offer, Mr Wong says, is thus made on the basis of “no order as to costs” and is in conflict with Order 22 r.20(1).

12.  As noted in §9 of the Judgment, there was no dispute that the 23 May 2016 Letter did not comply with the mandatory requirements and is an invalid sanctioned offer because it:-

(1) did not state whether it related to the whole claim or to part of it or to an issue arising from it and if so to which part or issue; and

(2) did not provide that after the expiry of 28 days the plaintiff could only accept if parties agree on costs or the if the court grants leave to accept it.

Likewise, Ms Loh, counsel for the defendant did not dispute this in the present application.

13.  Mr Wong argued that on this ground alone, the 23 May 2016 Letter was an invalid sanctioned offer.  Since the Sanctioned Payment was part of the terms of the sanctioned offer in the 23 May 2016 Letter, one cannot accept one whilst declining another.  Since the sanctioned offer was held to be invalid, it is irrelevant that the sanctioned payment on its own was valid.  For this Mr Wong now relies on the decision of HH Judge Kot in Yim Wai Ling & Anor v Yuen Chik Wah & Anor[3] (which, for reasons not explained, was not cited nor relied upon during the original application to vary costs and prior to the present application for leave to appeal). 

14.  In that case, there was a provision for “no order as to costs” in the sanctioned offer in question.  The learned Judge held[4] that:-

“With the Sanctioned Offer, the plaintiffs cannot accept the Sanctioned Payment and take advantage of the costs consequences of O.22 r20(1) but instead had to accept the terms in the Sanctioned Offer as well which deprived them of the said benefit. Even though the Notice of Sanctioned Payment was made in line with O.22 r.8, this cannot be considered out of the context and ignored the terms in the Sanctioned Offer as well since the defendants had specifically mentioned that the Sanctioned Payment is part of the terms of the Sanctioned Offer….

The Sanctioned Payment made, being tied with the Sanctioned Offer which included a term as to costs had deprived the plaintiffs the benefit they should enjoy under O22.  This is clearly against the spirit of O.22 and the defendants could not have protected their position by means of the Sanctioned Payment.”

15.  Ms Loh distinguished the Yim Wai Ling case as she said in that case there was a “no order as to costs term”, whereas she disputed that the 23 May 2016 Letter contained such a term.  Ms Loh submitted that it was wrong to suggest that a valid sanctioned offer can never include a term as to costs as such.  It is only so if the term as to costs conflicts with the costs consequences prescribed by order 22 r.20.  She drew support from The Owners and/or Demise Charterers of the Ship or Vessel “MCC Jakarta” v The Owners and/or Demise Charterers of the Ship or Vessel “Xin Nan Tai 77”[5], Ng J., after considering Wong Yim Man Anthea v Wong Ho Ming Felix observed, in §28-29:-

“In this court’s view, Wong Yim Man Anthea v Wong Ho Ming Felix is not authority for the proposition that a valid sanctioned offer can never include a term as to costs as such. As can be seen from paragraphs 18 and 39 of DHCJ Kent Yee’s judgment quoted above, it is only if the term as to costs conflicts with the costs consequence prescribed by RHC O 22 r 20 (or some other rules in RHC O 22) that the sanctioned offer will be rendered invalid.

The matter can be tested in this way. Suppose a defendant’s sanctioned offer to settle the whole of a plaintiff’s claim includes a term as to costs, but that term is identical to what is stated in RHC O 22 r 20(1) ie the plaintiff is entitled to his costs of the proceedings up to the date of service of the notice of acceptance. Unless the offer falls foul of other specific rules in RHC O 22, for instance, r 5 (concerning form and content), it does come squarely within the definition of “sanctioned offer” in RHC O 22 r 1 in that it is “an offer made in accordance with this Order” even though it includes a term as to costs. In those circumstances, there is no reason or logic to regard the offer as an invalid sanctioned offer.”

16.  Ms Loh said the 23 May 2016 Letter provided for costs of the EC Action up to 18 September 2014.  There was no evidence indicating what costs would the plaintiff be entitled to in the EC Action at the time when and if the plaintiff accepted the Sanctioned Payment in the PI Action.  Hence, Ms Loh said that when considering the validity of the Sanctioned Payment in the PI Action, it could not be said that the provision for costs up to a certain date in the EC Action fell foul of Order 22 r.20(1).

17.  Mr Wong accepted that there was no evidence on what the plaintiff would have obtained by way of costs in the EC Action post 18 September 2014.  However he argued that the defendant bore the burden to show that the Sanctioned Payment was valid.  As there was no evidence on the issue, the defendant had failed to show that the Sanctioned Payment complied with Order 22 r.20(1). 

18.  Ms Loh disagreed and said that the plaintiff bore the burden to show that the 23 May 2016 Letter was invalid by reason of the costs provision in the EC Action and as there was no evidence, the plaintiff had failed to show that the 23 May 2016 Letter was invalid on that ground.

19.  For the purposes of the present application for leave to appeal, these arguments on the burden of proof may be academic in view of the fact that there was no dispute that the 23 May 2016 Letter did not fulfill all the requirements under Order 22 r.5 and was held by me to be invalid as a sanctioned offer attracting costs consequences under Order 22. 

20.  Whilst I would distinguish the case of Yim Wai Ling on the basis that unlike Yim Wai Ling, nothing in the 23 May 2016 Letter contradicts the notice of sanctioned payment nor is anything unclear or ambiguous; I agree, in light of the decision of HH Judge Kot in Yim Wai Ling, Mr Wong’s argument that so long as the sanctioned offer is invalid (for whatever reason), any accompanying sanctioned payment would be invalid, has a reasonable prospect of success.

21.  I will thus grant leave on the proposed ground of appeal (1).

G. Was it unjust to impose the costs consequences under Order 22 in light of the costs provision for the EC Action?

22.  Mr Wong submitted that as the EC Action was only stayed on 5 March 2019, the plaintiff must have incurred not insubstantial costs between 19 September 2014 (the deadline for acceptance of the sanctioned payment in the EC Action) to 20 June 2016 (the deadline for accepting the Sanctioned Payment in the PI Action) in the EC Action.  He further submitted that unless the defendant demonstrates that the plaintiff would not be entitled to costs in the EC Action after 19 September 2014, the plaintiff’s refusal to accept the sanctioned payment remained reasonable.

23.  This is misconceived.  The plaintiff bore the burden to show that the costs provision for the EC Action was unjust.  It is inappropriate and without any evidential basis for the plaintiff to suggest a hypothetical scenario on what a “reasonable” award would be under the EC Action and the likelihood of her obtaining a judgment more than the sanctioned payment of HK$22,000 under the EC Action.  There is simply no evidence as the basis for such submissions.  I repeat paragraph 17(6) of the Judgment.

24.  I do not consider there to be any reasonable prospect of success for the proposed ground of appeal (2).

H. The Interest of Justice

25.  Given that I have already granted leave to appeal on the proposed ground of appeal (1), it is unnecessary to consider the “in the interest of justice” argument.

I. Order

26.  I thus grant leave for the plaintiff to appeal against the costs order based on the proposed ground of appeal (1).  The application for leave to appeal on the proposed ground of appeal (2) is dismissed.

27.  I make a costs order nisi that:

(1) costs of and occasioned by the proposed ground of appeal (1) be in the cause of the appeal, with certificate for Counsel, to be taxed if not agreed; and

(2) costs of and occasioned by the proposed ground of appeal (2) be paid by the plaintiff to the defendant, with certificate for Counsel, to be taxed if not agreed.

28.  To assist taxation, I will apportion 60% of the costs for the proposed ground of appeal (1) and 40% of the costs for the proposed ground of appeal (2).

Mr Simon Wong, instructed by Messrs Kenneth W. Leung & Co., for the plaintiff

Ms Phillis Loh, instructed by Messrs WMC Partners, for the defendant

DCPI 2016/2015

[2020] HKDC 293

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 2016 OF 2015

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D E C I S I O N

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Variation of Costs

1.  By a Judgment dated 23 January 2020 (the “Judgment”), I awarded damages to the Plaintiff in the sum of HK$50,826 plus interest.  I made the following costs order nisi in the Judgment:-

“The defendant do pay the plaintiff’s costs with certificate for counsel (including all costs reserved, if any) to be taxed if not agreed.”

2.  By a summons dated 5 February 2020, the defendant applied to vary the costs order nisi to:-

“The defendant do pay the plaintiff’s costs (including all costs reserved, if any) up to 20 June 2016 on a party and party basis, to be taxed if not agreed, and the plaintiff do pay the defendant’s costs with certificate for counsel (including all costs reserved, if any) incurred thereafter on an indemnity basis with enhanced interest thereon at a rate not exceeding 10% above judgment rate should the Court deem fit.”

3.  The defendant also applied by the same summons to vary the interest awarded. In the Judgment, I awarded:-

“… interest at 2% p.a. on the award for PSLA from the date of the service of the writ until the date of judgment and interest on pre-trial loss of earnings and other special damages at half the judgment rate from the date of the Accident to the date of judgment.

4.  The defendant applied to vary the award of interest to:-

“… with interest at 2% p.a. on the award for PSLA from the date of the service of the writ until the latest date on which the defendant’s sanctioned payment and sanctioned offer both made on 23 May 2016 could have been accepted without leave, i.e. 20 June 2016, and interest on pre-trial loss of earnings and other special damages at half the judgment rate from the date of the Accident to 20 June 2016.”

Grounds for Variation

5.  The defendant primarily relies upon the settlement offers made by it to argue that the plaintiff failed to obtain a judgment better than the offer.  The history of the settlement offers and payments made by the defendant and the plaintiff are as follows:-

(1)  On 12 February 2014, the plaintiff commenced her employees’ compensation claim under DCEC 261/2014 (the “EC Claim”).

(2)  The defendant made a sanctioned payment of HK$22,000 in relation to the EC Claim. Under Order 22 rule 20(1) of the Rules of the District Court, the deadline for the acceptance of the sanctioned payment in the EC Claim without leave was 18 September 2014.  The plaintiff did not accept the sanctioned payment.

(3)  On 11 September 2015, the defendant commenced the present personal injuries claim under DCPI 2016/2015 (the “PI Claim”).

(4)  On 23 May 2016, the defendant’s solicitors sent a letter (the “23 May 2016 Letter”) to the plaintiff’s solicitors.  The 23 May 2016 Letter was marked:

“By Hand

Sanctioned Offer

Without Prejudice Save as to Costs”

A notice of sanctioned payment of the same date was attached to the 23 May 2016 Letter.  It is necessary to set out the content of the letter as the plaintiff disputes the validity of it as a sanctioned offer:

“By way of service, we send you herewith a copy of Notice of Sanctioned Payment of even date. This letter should be read together with the said Notice. Pursuant to Order 22 rule 3 of the RDC, our client hereby makes a Sanctioned Offer accompanying the Notice of Sanctioned Payment.Kindly note that the Sanctioned Payment of HK$38,000 (inclusive of interest) is made on top of: -

1.  advanced payments made in the total sum of HK$9,520; and

2.  the Sanctioned Payment of HK$22,000 effected on 21 August 2014 under DCEC No 261 of 2014

plus

1.  costs in DCEC No.261 of 2014 up to 18 September 2014, to be taxed if not agreed and there be no order as to costs thereafter; and

2.  costs in these proceedings up to 20 June 2016, to be taxed if not agreed.

All our client’s rights are hereby fully reserved.” .

By the notice of sanctioned payment of the same date attached to the 23 May 2016 Letter, the defendant indicated that it had paid a sum under the PI Claim of HK$38,000, net of HK$9,520 advanced payment and the HK$22,000 sanctioned payment made under the EC Claim. In other words, the total amount paid into court was HK$60,000 (HK$38,000 + HK$22,000) plus advanced payment made to the plaintiff in the sum of HK$9,520. This the defendant says represents damages in the total sum of HK$69,520 (The “Defendant’s Offer for Settlement”). The sanctioned payment is in settlement of the whole of the plaintiff’s claim and that “it is part of a sanctioned offer set out in the letter from the Defendant’s Solicitors to the Plaintiff’s Solicitors dated 23 May 2016. If you give notice of acceptance of this sanctioned payment, you will be treated as also accepting the sanctioned offer.” The deadline for accepting the sanctioned payment in the PI Claim without leave was 20 June 2016.

(5) On 23 June 2016, the plaintiff rejected the Defendant’s Offer for Settlement and offered HK$80,000, inclusive of interest but net of advanced payments of HK$9,520 plus costs, as full and final settlement of the EC Claim and the PI Claim. This was not accepted by the defendant.

(6) On 28 March 2017, the defendant invited the plaintiff to accept the Defendant’s Offer for Settlement out of time. This was not accepted by the plaintiff.

(7) On 16 November 2017, the plaintiff offered HK$70,000 inclusive of interests but net of advanced payments of HK$9,520 plus costs, as full and final settlement of the EC Claim and the PI Claim. This was not accepted by the defendant.

(8) On 16 August 2019, the plaintiff offered HK$190,000 inclusive of interest and costs in full and final settlement of the PI Claim, provided that the defendant waived all adverse costs claims against the plaintiff. This was not accepted by the defendant.

(9) On 12 October 2019, the plaintiff made a sanctioned offer of HK$100,000 inclusive of interests and the sanctioned payment of HK$22,000 in the EC Claim, but net of advanced payments of HK$9,520, plus costs in full and final settlement of her claim as a result of the accident. This was not accepted by the defendant.

6.  Failing settlement, the PI Claim proceeded to trial. HH Levy J. ordered on 5 March 2019 that the EC Claim be stayed pending the determination of the PI Claim, and on 26 March 2019 further ordered that parties are bound by the evidence in the findings made in the trial of the PI Claim.

7.  The defendant says the plaintiff failed to obtain a judgment better than the sanctioned payment as it had offered a total of HK$69,520 and the court only awarded HK$50,826 in damages.  This approach of taking into account payments made in employees compensation proceedings when exercising the court’s discretion as to costs in the common law proceedings was endorsed by Bharwaney J in the case of Andrew William Maxwell v Keliston Marine (Far East) Limited (Now in liquidation)[1]:-

“I agree with the submission that it is appropriate for the court, exercising its discretion as to costs in the common law proceedings, to have regard to the fact and amount of any payment made into court in the employees’ compensation proceedings.”

8.  The plaintiff on the other hand says the Defendant’s Offer for Settlement (be it by way of the 23 May 2016 Letter or the sanctioned payment) was invalid and does not attract the costs consequences as set out in Order 22 Rule 23.  Instead, the plaintiff says Order 62 Rule 5 applies.

Does the Defendant’s Offer for Settlement Attract Costs Consequences under Order 22 Rule 23?

9.  Mr Wong, counsel for the plaintiff says in accordance with the principles set down in Montrio Limited v Tse Ping Shun David[2], for a sanctioned offer to be valid, strict compliance with the mandatory requirements under Order 22 Rule 5 is required.  The plaintiff says (and it is not seriously disputed by the defendant) that the 23 May 2016 Letter is an invalid sanctioned offer because it:-

(1)  did not state whether it related to the whole claim or to part of it or to an issue arising from it and if so to which part or issue; and

(2)  did not provide that after the expiry of 28 days the plaintiff could only accept if parties agree on costs or the if the court grants leave to accept it.

10.  Mr Wong further submits that as the sanctioned offer was not valid, the sanctioned payment which was part of the sanctioned offer was not valid.

11.  Mr Cao, counsel for the defendant, does not seem to dispute that certain requirements for a sanctioned offer had not been complied with in the 23 May 2016 Letter.  Instead, Mr Cao says the principles laid down in the case of Montrio does not apply to the present case, as there was no sanctioned payment accompanying the sanctioned offer in Montrio; whereas the defendant’s sanctioned offer in the present case was accompanied by a sanctioned payment.  As the notice of sanctioned payment dated 23 May 2016 complied with the requirements under Order 22 Rule 8, it was valid and the defendant is entitled to rely on it and benefit from the costs consequences under Order 22 Rule 23.

12.  I am of the view that despite the fact that the 23 May 2016 Letter did not qualify as a sanctioned offer under Order 22 Rule 5, the sanctioned payment under the PI Claim made by the defendant is valid and attracts the costs consequences under Order 22 Rule 23 for the following reasons:-

(1)  There is no allegation by the plaintiff that the notice of sanctioned payment dated 23 May 2016 did not comply with the requirements under Order 22 Rule 8.  As such, it is a valid sanctioned payment on its own.

(2)  Under the Order 22 regime, there is no requirement that a sanctioned payment must be accompanied by a sanctioned offer.  I draw support from the wording of Order 22 Rule 3: “An offer by a defendant to settle the whole or part of a claim or an issue arising from the claim does not have the consequences specified in this Order unless it is made by way of a sanctioned offer or a sanctioned paymentor both.” (emphasis added).  Thus it is envisaged that under the Order 22 regime, in some circumstances a defendant can make a sanctioned payment on its own without a sanctioned offer, and it will still attract the same costs consequences.

(3)  Order 22 Rule 23(1) provides that costs consequences follow if the plaintiff:

“a) fails to obtain a judgment better than the sanctioned payment or

b) fails to obtain a judgment that is more advantageous than a defendant’s sanctioned offer.”

(emphasis added)

This again supports the contention that either a sanctioned payment or a sanctioned offer will attract costs consequences under Order 22 if the plaintiff fails to obtain a better or more advantageous judgment.

(4)  This was also made clear in Montrio where Poon J (as he then was) said: “A party who wishes to invoke the costs saving mechanism in Order 22 must either make a sanctioned offer or sanctioned payment as mandated by the relevant provisions.  When a valid sanctioned offer or sanctioned payment has been made, the court will apply Order 22 in exercising its discretion as to costs” (emphasis added)

(5)  There can be little dispute that the 23 May 2016 Letter, although not qualifying as a sanctioned offer under Order 22, is nonetheless a settlement offer made on a “without prejudice save as to costs” basis, ie a Calderbank offer.  For the avoidance of doubt, I am conscious of the fact that a Calderbank offer should not be taken into account pursuant to Order 62 Rule 5(1)(d) if the party could have protected his position by means of a sanctioned offer or sanctioned payment under Order 22.  I am not relying on the Calderbank offer when exercising my discretion.  I am only pointing out that although the offer from the defendant does not qualify as a sanctioned offer, it is not something that would invalidate an otherwise valid sanctioned payment.

(6)  Nothing in the 23 May 2016 Letter contradicts the notice of sanctioned payment such that it becomes unclear or ambiguous, and thus, invalid.

13.  I thus reject Mr Wong’s argument that once the sanctioned offer was not valid, the accompanying sanctioned payment automatically becomes invalid.

Unjust to apply indemnity costs or enhanced interest?

14.  Given my view that the notice of sanctioned payment dated 23 May 2016 was valid, and that the court ought to apply Order 22 in exercising its discretion as to costs, the onus is on the plaintiff to show that the orders sought by the defendant are unjust under Order 22 Rule 23(5).

15.  The plaintiff, in an affirmation sworn by her solicitors and Mr Wong’s written submissions put forward the following matters in support:-

(1)  under the Rules of the District Court, the plaintiff should be entitled to costs of both the PI Claim and the EC Claim up to the date of the plaintiff serving the notice of acceptance.  The Defendant’s Offer for Settlement only offered costs in the EC Claim up to 18 September 2014, and is thus in conflict with the Rules of the District Court.

(2)  The plaintiff says when the defendant served the notice of sanctioned payment on 23 May 2016, she did not have the benefit of the expert opinion regarding the issue of apportionment of her injuries (to what extent the injuries were caused by her  pre-existing condition or the accident).  She was thus not in a position to consider if she should accept the sanctioned payment. 

(3)  The plaintiff says she was successful on part of her case.  The failure of the defendant to concede liability had led to substantial costs, time and delay in the PI Claim because:

(a)  Most of the plaintiff’s evidence was on liability, the entirety of the evidence of Miss Wong, the only defence witness, was on liability only.  The majority of time spent at trial and cross-examination was on liability.  If liability was conceded earlier, the case could have been heard by Master for assessment of damages instead of a full blown trial.

(b)  Miss Wong was found to be an unreliable witness.  The Court found that Ms Wong should have knowledge of the accident. In those circumstances, it was unreasonable for the defendant to have denied the accident having happened at all.

(c)  The defendant alleged contributory negligence on the plaintiff’s part and only withdrew by way of closing submissions.

(d)  Before the commencement of the EC Claim and the PI claim, the defendant had submitted inaccurate information of how the accident happened and the monthly earnings of the plaintiff, thereby compromising the plaintiff’s interest.

(4)  It is not yet known if the sanctioned payment made in the EC Claim in the sum of HK$22,000 was reasonable.  The defendant has not shown that the plaintiff will fail to obtain a better award in the EC Claim.

16.  Mr Cao argued that the plaintiff has failed to show that it is unjust for the court to apply the relevant costs consequences:-

(1)  Although the defendant contested liability, it was justified because:

(a)  the plaintiff’s pleaded case was unsatisfactory as to the cause of the accident;

(b)  it was only at trial that the plaintiff revealed during oral evidence that it was an Indian female colleague pushing the table that caused the stack of trays to fall. 

(c)  the medical records seemed to suggest that the plaintiff did not mention the accident during her consultation at Kwong Wah Hospital. 

(d)  the plaintiff did not call any witness to corroborate her account of the accident. 

Mr Cao says all these casted doubt on the accident having happened at all.

(2)  the plaintiff’s conduct throughout was to be criticised as she failed to provide certain documentation to the defendant in a timely manner.

(3)  The plaintiff’s claim was grossly exaggerated. She was only awarded less than 15% of the pleaded damages in the Revised Statement of Damages.

17.  Having considered all the circumstances of the case, I am of the view that the plaintiff has only to a limited extent demonstrated that it is unjust for the court to make the relevant orders for the following reasons:-

(1)  It is misconceived to say that the sanctioned payment contradicts the Rules of the District Court.  The offers and the sanctioned payments of the EC Claim and the PI Claim were made on different dates and thus would naturally have different cut-off dates in relation to costs.  I do not see how they were made in conflict of the Rules of the District Court.  Further, no detail was given on what costs the plaintiff would have to pay in the EC Claim between 19 September 2014 and 20 June 2016 to demonstrate any injustice suffered by the plaintiff.

(2)  I do not accept that the plaintiff did not have sufficient information when the sanctioned payment was made.  As I found in the Judgment, the plaintiff had been suffering from right trigger thumb the latest from 2012.  She did not need an expert report for her to realise she had a pre-existing condition.  There was also no dispute that despite the accident, the plaintiff returned to full time work and also worked a second job with no lessening of earnings.  There is thus little force in saying that without the expert evidence in apportionment she would have considered the accident to have contributed to a large extent of her condition.

(3)  As the defendant’s mistakes when providing information on how the accident happened and the monthly earnings of the plaintiff had been rectified before the commencement of the EC Claim and the PI Claim, I am of the view that it had little impact on how the Court should exercise its discretion on costs.

(4)  At the same time, the plaintiff also failed to provide certain documentation requested by the defendant in a timely manner.  I do not accept that the it was reasonable for the plaintiff to behave in such a manner simply because she was 55 years old and had little education.  It has to be borne in mind that the plaintiff was all along legally represented.  Even though the plaintiff might not have appreciated the importance of timely submission of documents or the importance of providing accurate information, her legal representatives ought to have explained the same to her.

(5)  The plaintiff has grossly exaggerated her claim.  She claimed around HK$350,000 in damages, when eventually she was only awarded HK$50,826.  The court has time and again shown its displeasure on exaggerated claims by way of costs.

(6)  I consider it a red herring for the plaintiff to argue that IF the plaintiff proceeds to revive her EC Claim, she MIGHT get a better award for a multitude of reasons, and hence it was reasonable for her to reject the sanctioned payment of HK$22,000 in the EC Claim.  Bharwaney J in Andrew William Maxwelli[3]had given guidance on what is the proper practice when an employee’s compensation has been stayed pending the determination of the common law proceedings:

“Very often the employees’ compensation proceedings are held in abeyance, pending the common law claim, to be revived in case the common law claim fails on the issue of liability. I would observe that the proper course to take in such cases, where the employees’ compensation proceedings are held in abeyance pending the determination of the common law claim, is to mention that fact in the Statement of Damages and to state that the employees’ compensation proceedings would be discontinued in the event that damages are awarded to the plaintiff…

There may be cases where the plaintiff may still wish to pursue his employees’ compensation claim after the award of common law damages, for example, in cases where there is a concern that the court may assess a high degree of contributory negligence on the part of the plaintiff.  In such cases, the parties should first proceed with the employees’ compensation claim and the further prosecution of any common law claim should depend on and await the determination of the employees’ compensation proceedings.  Where the court, for good reason and in the exercise of its case management powers, permits the common law claim to proceed first and the plaintiff is unwilling to state, in his Statement of Damages, that he would discontinue the employees’ compensation proceedings in the event that he succeeds in the common law claim, then he must give particulars of his employees’ compensation claim in the Statement of Damages and request the court dealing with the common law claim to assess the value of the employees’ compensation claim that has not yet been determined by an employees’ compensation court, and to deduct that value from the award of common law damages, as required by the proviso to section 26(1) of the ECO.”

It is trite that the statutory award of employees’ compensation was not designed to be additional to common law damages.  No calculations, only speculations, had been put forward by the plaintiff as to what she might obtain under the employees’ compensation regime.  I am not persuaded that the plaintiff has demonstrated that given my findings, by which she is bound, she can obtain an award of employees’ compensation in excess of my award. 

(7)  As to the defendant’s conduct in contesting liability, I agree that it should be something that the court should take into account when considering costs.  This is because the sole defence witness, Miss Wong, was present on the day of the accident.  I had already found that being the direct supervisor of the plaintiff, the plaintiff had to inform Miss Wong before she left work early on the day of the accident.  Miss Wong thus should have been informed by the plaintiff about the accident on the day.  In those circumstances, to continue contesting liability is opportunistic behaviour on the defendant’s part in hoping that the plaintiff does not come up to proof.  I agree that it was unreasonable for the defendant to insist on contesting liability.

18.  Having considered all the circumstances of the case and submissions from counsel, I am of the view that although the sanctioned payment was valid and attracts the costs consequences under Order 22 Rule 23; given that the defendant’s unreasonable and opportunistic behaviour in contesting liability, I will deprive the defendant of costs on the higher basis of indemnity basis, and will only award the defendant costs incurred after 20 June 2016 on a party and party basis. 

Enhanced interest

19.  The defendant asks for enhanced interest on costs, which is within the court’s power under Order 22 Rule 23 (4)(b).  The plaintiff argues that interest should only be allowed for the amount of costs actually paid and should run from the time each payment was made.  I agree and would adopt the traditional approach of ordering enhanced interest on each payment of costs made by the defendant from the date of payment by the defendant or its insurer up to the date of Judgment, at 1% above judgment rate, and thereafter, at judgment rate until full payment of the same.

20.  There is no dispute that interest on costs should only be allowed for the amount of costs actually paid.  In that regard, I will grant leave for the defendant to file an affirmation submitting evidence with documentation in support thereof.  The award of enhanced interests on costs actually paid is subject to the undertaking of the defendant filing and serving an affirmation within 35 days hereof. 

Costs Order Absolute

21.  I will vary the costs order nisi to the following costs order absolute:-

(1)  The defendant do pay the plaintiff’s costs with certificate for counsel (including all costs reserved, if any) up to 20 June 2016 on a party and party basis, to be taxed if not agreed.

(2)  The plaintiff do pay the defendant’s costs with certificate for counsel (including all costs reserved, if any) incurred after 20 June 2016 on a party and party basis, to be taxed if not agreed.

(3)  Upon the defendant undertaking to file and serve an affirmation within 35 days hereof, setting out evidence of the date and amount of costs paid by the defendant or its insurer, the plaintiff do pay the defendant enhanced interest at 1% above judgment rate on each payment of costs (incurred after 20 June 2016) from the date of payment by the defendant or its insurer up to the date of Judgment, and thereafter, at judgment rate until full payment of the same.

22.  The interest on the award will also be varied accordingly in view of my decision to take into account the sanctioned payment:-

“There will be judgment in the sum of HK$50,826 with interest at 2% p.a. on the award for PSLA from the date of the service of the writ until 20 June 2016, and interest on pre-trial loss of earnings and other special damages at half the judgment rate from the date of the accident to 20 June 2016.”

The plaintiff’s costs to be set off against the defendant’s costs

23.  The defendant asks that the plaintiff’s costs be set off against the defendant’s costs to minimise administrative work. The plaintiff objects for a lack of legal and evidential basis.

24.  I do not see any special circumstances why the court should make such an order. 

Withholding payment out

25.  Seeing it as almost certain that the plaintiff will need to make further payment to the defendant in costs, the defendant asks that the sum of HK$60,000 be kept in court instead of paid out to the plaintiff, as the sum would earn a more preferential rate of interest and would be beneficial to both parties.

26.  The plaintiff says she is the winning party and should be entitled to the award immediately.  Further, the time it will take for all costs to be finalised can be lengthy.  There is also no evidence that the plaintiff will be unable to pay costs.  I agree with Mr Wong’s submission and decline to make an order withholding payment out.

Costs of the Summons

27.  In view of the result, the plaintiff and the defendant are successful on parts of the summons respectively.  I make an order nisi that that there be no order as to costs in relation to the summons dated 5 February 2020.

28.  I thank counsel for their helpful written submissions.

Mr Simon Wong instructed by Kenneth W. Leung & Co., for the plaintiff

Mr Yuan Shan Cao instructed by WMC Partners, for the defendant

DCPI 2016/2015

[2020] HKDC 69

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONNAL INJURIES ACTION NO 2016 OF 2015

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JUDGMENT

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Introduction

1.  The plaintiff’s claim is for damages for personal injuries suffered by her in an alleged accident on 18 October 2012 in the course of her employment with the defendant as a concourse group leader.  At the time the plaintiff was working at a branch of the defendant (a fast food restaurant) at the basement of Causeway Bay Commercial Building, 1-5 Sugar Street, Hong Kong.  It is alleged that on 18 October 2012 at approximately 9 am, the food trays which were stacked up to a height of approximately 3 feet on the table suddenly fell down and hit the plaintiff’s right hand and as a result her right thumb was injured (the “Accident”). 

2.  The defendant disputes both liability and quantum.  The defendant disputes that the Accident happened at all.

3.  This is the trial for both liability and quantum of the plaintiff’s personal injuries claim arising out of the Accident.

The plaintiff’s working background

4.  The plaintiff was born on 13 July 1957 and was aged 54 at the time of Accident and is currently 62 years old.  She was educated in the PRC up to secondary school F4 level and can read and write simple Chinese.  She moved to Hong Kong in 1992.

5.  The plaintiff had been under the employ of the defendant since March 2007 as a server at Fairwood, the fast food restaurant chain.  Her work duties include cleaning, collecting and emptying trays.  Her usual working time is from 8 am to 5 pm daily, with a daily average of 5 hours over time work. 

Liability - Did the Accident Happen?

6.  The plaintiff gave evidence on her own behalf. The plaintiff’s account of the Accident is as follows: at around 9 am on 18 October 2012, she was collecting trays and clearing the tables after the customers finished their meals.  She noticed there was a stack of about 70-80 dirty trays of about 3 feet high on a work table near the bar area.  As the plaintiff saw that there were so many dirty trays and that the clean trays had almost been used up, she decided to take some of the dirty trays from the stack for cleaning.  However, before the plaintiff touched the stack of dirty trays, the work-table swayed and 30-40 of the dirty trays from the stack fell and hit the plaintiff’s right hand.  As a result, the right thumb of the plaintiff was injured.  The plaintiff said she had immediately reported to the branch manager Ms Wong about the Accident after the trays fell on her. and that there should be colleagues who had witnessed the Accident.

7.  The defendant denies the Accident having happened at all.  The defendant says that the Alleged Accident is inherently improbable.  Ms Wong, the branch manager of the branch at which that the plaintiff worked gave evidence for the defendant to the effect that:

(i) She was working at the bar area at the time and did not witness the Accident having occurred.

(ii) The plaintiff did not report the Alleged Accident to her immediately after it happened.

(iii) The plaintiff continued to work as normal after the Alleged Accident happened, other than the days of sick leave from 19 – 22 October 2012.

(iv) The plaintiff had only handed the sick leave certificate to Ms Wong approximately a week after the Alleged Accident happened.

(v) Ms Wong did not hear of any sound of a stack of trays falling.

(vi) Ms Wong had asked other staff on duty that day if they had heard of the plaintiff mentioning the Alleged Accident or had heard of the sound of trays falling.  No one said that they had heard of either.

(vii) Ms Wong also queried whether it was possible that according to the plaintiff the highest tray was stacked 173 cm from the ground.  According to Ms Wong, it would take 160 trays to reach a height of 3 feet high.  Usually only about 40 trays would be stacked together.

(viii) The staff at the branch at which the plaintiff worked are on average not very tall and it would have been difficult for them to stack the trays to the alleged height.  There would also be no reason for them to have done so as it would have been inconvenient.  There was more than enough space to put the trays on multiple stacks on the work table.

(ix) The time of the Alleged Accident was not during peak hours and there should have been no chaos during that time.

(x) Ms Wong had never seen trays being stacked too high or that there had been similar accidents in the past at the branch.

8.  When assessing a witness’ credibility, this Court tests her evidence against contemporaneous documents and/or undisputed and/or indisputable and/or independent evidence. If that is impossible and the truthfulness of the evidence depends entirely on a witness’ credibility, the evidence will be assessed by reference to the consistency of her testimony with her prior answers/statements given orally or in writing. Whether a witness’ evidence is to be believed will also be assessed by reference to its inherent plausibility or implausibility taking into account the circumstances of the particular case. Further, when a witness is discredited when cross-examined on an issue, particularly on a material one, it throws light negatively on his/her overall credibility[1].

9.  I find the plaintiff to be an overall straightforward and honest witness and I accept her evidence on how the Accident happened.  I accept and find that the trays had to be stacked on one column despite the table being a long one, as Ms Wong had during cross-examination admitted that during busy times, the rest of the table space could have been occupied by trays with bowls and utensils, leaving only space for one column of trays without bowls to be stacked up.

10.  Ms Wong gave oral evidence for the defendant and I do not find her to be a truthful or reliable witness:

(1) Ms Wong claimed that the plaintiff did not tell her she had an accident on 18 October 2012.  At first, Ms Wong said that she could not remember if the plaintiff had left early on that day and disagreed that she had left at 2 pm that day.  After being shown the records, she agreed that the plaintiff had in fact left at 14:03 on 18 October 2012, before her shift ended. 

(2) Ms Wong agreed that usually when staff needed to leave early, they needed to seek permission from her and provide a reason.  However, Ms Wong claimed that the plaintiff did not say she suffered an injury at work when she sought to leave work early.  Ms Wong first claimed that the plaintiff sought permission to leave work early and said she was going to see a doctor (without mentioning she suffered from an injury at work).  However, when she was asked why she did not ask the plaintiff for a sick leave certificate afterwards, she changed her answer and said she did not know the plaintiff had wanted to see a doctor.  When pressed on whether the plaintiff in fact told her she was going to see a doctor, her answer became “I cannot remember”. 

(3) She also claimed that she could not remember what was the reason the plaintiff gave to justify early leave on 18 October 2012.  She later said during cross-examination that the plaintiff only said she had to do something and had to leave without giving an explanation.  I find Ms Wong’s evidence in this regard contradictory and unreliable, if not dishonest.  According to her, all staff would need to seek approval from her for early leave.  It is incredible that Ms Wong would have allowed a staff to leave during her shift without having been provided by a legitimate reason.

(4) Further, the plaintiff was absent from work from 19 – 22 October 2012. The plaintiff indicated in a declaration to the Labour Department dated 25 April 2013 that she handed the sick leave certificate from Kwong Wah Hospital for 19 – 22 October 2012 to Ms Wong upon her return to work on 23 October 2012. Ms Wong said in her oral evidence that she first received the sick leave certificate on 31 October 2012.  However, if indeed that was the case, Ms Wong could not provide any satisfactory answer as to why she did not ask for a sick leave certificate upon the plaintiff returning to work on 23 October 2012.  It is incredible that Ms Wong would not have asked for any sick leave certificate after the plaintiff returned to work on 23 October 2012, after having been absent for 4 days.

(5) On the 2^nd day of the trial, Ms Wong further gave evidence that she reported the plaintiff’s injury to the personnel office situated in Shenzhen on 31 October 2012.  Ms Wong insisted that she reported the injury upon the plaintiff telling her about the injury for the first time on 31 October 2012.  Ms Wong alleged that upon hearing about the plaintiff’s Accident, she had made enquiries with other staff and nobody else had witnessed it.  However, Ms Wong could not explain why she reported the Accident despite the fact that she did not witness it and that none of the other staff had witnessed it and had doubts if the accident had happened at all.  I have no hesitation in rejecting Ms Wong’s evidence in this regard.  Ms Wong admitted that she was the one responsible for investigating any allegation of accident at work and she had the duty to inform the Shenzhen office if she had any doubt about the Accident. Ms Wong admitted towards the end of her oral evidence that if indeed she had harboured any doubt as to whether the accident did happen, she would have reported it to the Shenzhen office.

(6) The Accident is consistent with the information put forward by the defendant itself in Form 2, when the defendant reported the Accident to the Labour Department.  There was no other contemporaneous document from the defendant denying the Accident took place.

11.  Having considered the totality of the evidence, Ms Wong’s actions were more consistent with her having been informed by the plaintiff on 18 October 2012 of the Accident and having received the sick leave certificate upon the plaintiff’s return to work on 23 October 2012.  I find that Ms Wong did know about the Accident on 18 October 2012, and that the Accident did happen.  I reject Ms Wong’s evidence and accept the plaintiff’s evidence that she did inform Ms Wong that she was injured at work in the morning of 18 October 2012 and had told Ms Wong about it when she left early at 14:03.

12.  Mr Cao, Counsel for the defendant urged the Court to dismiss the plaintiff’s claim as the plaintiff only mentioned in her oral evidence for the first time that it was an Indian female colleague that pushed the table causing the stack of trays to fall.  Mr Cao said that this was one of the most important facts in the plaintiff’s case and she ought to have pleaded it or mentioned it in her witness statement.  Mr Cao submitted that the defendant had no opportunity to deal with this and it would be unfair for the defendant if the Court were to accept the plaintiff’s “radical departure of” her case.

13.  Whilst I agree that the plaintiff mentioned the Indian colleague having touched the table for the first time in her oral testimony, I disagree with Mr Cao’s submission that the plaintiff’s claim should thus be dismissed.  The core facts behind the plaintiff’s case were that “the food trays which were being stacked up to a height of approximately 3 feet on the table suddenly fell down and hit the Plaintiff’s right hand”.  It was not the plaintiff’s case (either in the statement of claim or the plaintiff’s witness statement) that the trays collapsed without anyone having touched the table.  At most, one can say that there was no detail provided as to how the trays collapsed.  This, if so desired, the defendant could have sought further and better particulars on.

14.  The plaintiff had said during cross-examination that the table was not sturdy.  It was also her evidence that the stacked trays were tilted and tumbled down before the Indian colleague had reached or touched the table.  She said that there was someone working at the table and the table shook upon contact.  She candidly agreed that this was not mentioned in her witness statement.  However, I do not consider this to be a departure from or is inconsistent with the plaintiff’s case.  At most it can be said that such detail was not mentioned in her witness statement. 

15.  Further, the defence case is that the Accident never happened at all.  I do not consider that this particular additional detail provided by the plaintiff during cross-examination in any way prejudiced the defendant’s preparation of its Defence.  Even if one were to disregard this new detail, I do not consider it was inherently improbable that the trays fell down without anyone touching the table, having accepted the plainitff’s evidence that the work table was not sturdy.

Breach of Duty

16.  The test of an employer’s liability for common law negligence is trite. “The common law demands that employers should take reasonable care to lay down a reasonably safe system of work.  Employers are not exempted from this duty by the fact that their men are experienced and might, if they were in the position of an employer, be able to lay down a reasonably safe system of work themselves.  Workmen are not in the position of employers.  Their duties are not performed in the calm atmosphere of a board room with the advice of experts.  They have to make their decisions on narrow window sills and other places of danger and in circumstances in which the dangers are obscured by repetition.”[2]

17.  The plaintiff worked every day at the fast food restaurant where during peak hours, the condition of the work table (where dirty trays were collected and put) was such that trays (after bowls and utensils had been cleared off) were piled up in a single column waiting to be cleaned.  The pile got so high that eventually it fell.  The danger is plainly evident.

18.  Ms Wong admitted that she was not sure if her predecessor had informed the plaintiff of the safety guidelines in relation to stacking trays to a high level.  In any event, such guidelines were only oral guidelines, to be given only when a staff was seen stacking up trays.  Also, Ms Wong admitted during cross-examination that she had seen trays being stacked up to a high level. Clearly there was no set system in place to warn the staff not to stack up trays to such a high level.

19.  I find that the defendant was in breach of its common law duty as an employer for not having in place a system that warns against trays being stacked up to a height which poses as a danger in the workplace.

20.  The defendant decided in its closing submissions not to pursue the issue of contributory negligence.

Injuries and Treatment

21.  The plaintiff says she went to a private medical practitioner near her home on 18 October 2012, the day of the Alleged Accident.  However, no medical report or record of attendance had been disclosed by the plaintiff for this consultation. 

22.  From the medical report, it seems that the plaintiff then went to Kwong Wah Hospital the next day on 19 October 2012 and was given sick leave from 19-22 October 2012.  There are 2 medical reports issued by Kwong Wah Hospital:

(i) Report for employee’s compensation dated 31 January 2013 (first attended clinic on 26 October 2012) (“2013 KW Report”),

(ii) Medical Report dated 20 March 2014 (first attended A&E department on 19 October 2012) (the “2014 KW Report”).

23.  The plaintiff attended the A&E department of Kwong Wah Hospital the day after the Accident on 19 October 2012.  The 2013 KW Report disclosed that “History of injury at work: No … The [plaintiff] complained of right thumb pain for 3 months with no definite history of acute trauma.  Decreased range of thumb motions was noticed by the patient.”  The 2014 KW Report contains statements to the similar effect: “The [plaintiff] registered at our Emergency Department at 15:39 on 19/10/2012.  She complained of right thumb pain for three months with no definite history of acute trauma.”

24.  The plaintiff then consulted Dr Ng Yuet Sun at St Teresa’s Hospital on 26 October 2012 and on 2 November 2012 she received right thumb operation there.  St Teresa’s Hospital issued a medical report dated 31 January 2013 (the STH Report”). In the STH Report, it was stated that the plaintiff “first attended on 26/10/2012 … History of injury at work: yes, right thumb sprain when a stack of plates fell onto her… Right thumb sprained while at work … pain and swelling and ↙ motion.”

25.  From the contemporaneous medical documents, it seems that the plaintiff did not mention the Accident to the doctors in Kwong Wah Hospital on 19 October 2012.   The first medical documentation showing the plaintiff having mentioned suffered from injury at work was 22 October 2012 in the A&E notes from Kwong Wah Hospital: “IOD (Injury on Duty)”

26.  Subject to the issue of history of injury at work, the 2013 KW Report and the 2014 KW Report and the STH Report as to diagnosis, treatment and care of the plaintiff are non-controversial and are thus treated as agreed evidence.

Joint Medical Report dated 6 March 2017

27.  The plaintiff was jointly examined by the plaintiff’s expert, Dr Peter Tio (“Dr Tio”) and the defendant’s expert, Dr Arthur Chiang (“Dr Chiang”) on 3 January 2017.  After the physical examination of the right hand and thumb, there were the following complaints from the plaintiff: 

(i) There is diffuse tenderness of the whole right thumb.

(ii) Stiffness over right thumb

(iii) Sensation much reduced over whole right thumb. 

(iv) No more triggering. 

(v) Complete loss of right hand grip strength

(vi) Active 45° of right thumb, passive 60° of right thumb. 

28.  Dr Chiang opined that the diffuse tenderness was not anatomically explainable.  To some extent Dr Tio agreed as he opined that any residual pain should only be localized to the volar aspect of the MCP joint rather than diffusely over the thumb.  Dr Tio also opined that there should no longer be any numbness after surgical release.  Dr Chiang also found that the grip strength shown was exceptionally low, not even in cases of trigger thumb with active symptoms.  Dr Tio opined that the hand grip should also not be as minimal as shown in the examination.  To that extent both experts seem to be of the opinion that there was some exaggeration by the plaintiff of her symptoms. Passive range of movement performed by the doctor was noted to be good, indicating good range of movement of the right thumb.

29.  Both doctors agreed that further treatment is not required.  They also agreed that at the time of the assessment, the plaintiff’s injuries have reached maximal medical improvement.  Dr Tio was of the view that the plaintiff could resume her former duty as fast food chain cleaning worker, with mild reduction in work efficiency and capacity.  Dr Chiang was of the view that the plaintiff should be able to resume pre-injury job with a satisfactory capacity.  Dr Tio opined that the degree of whole person impairment and loss of earning capacity is 3% and Dr Chiang suggested 0.5% to 1% whole person impairment with no loss of earning capacity.

30.  It is the plaintiff’s own evidence that she had been able to continue working for the defendant (and another fast food restaurant) after the Accident and related injuries.  Taking into account the totality of the evidence, I find that the plaintiff had achieved satisfactory recovery with mild residual pain and stiffness over the right thumb and mild tenderness over the MCP joint. 

Causation

31.  The defendant disputes causation because the plaintiff had a pre-existing finger condition.  The defendant said that even if the Accident did occur, it had only mildly aggravated the plaintiff’s pre-existing condition.

32.  The principles governing the issue of causation and the quantification of loss suffered by a claimant have been set out in the case of Yu Wai Kan v Law Cho Tai[3]:

“(a) The burden is on the plaintiff to establish on the balance of probabilities that the accident caused or materially contributed to the loss and damages he has sustained (see CMYv Tam Siu Wing [2008] 4 HKLRD 604, 613).

(b) The law’s approach to causation is pragmatic where there are several concurrent factors operating to cause injury (see Lee Kin-kai, a patient by his father and next friend Li Wah v Ocean Tramping Co Ltdt/aOcean Tramping Workshop [1991] 2 HKLR 232, 236).A material contribution to the outcome is sufficient to impose liability for that outcome.A contribution which does not fall within the exception de minimus non curat lex must be material; and a cause is sufficient, it does not need to be the sole cause (see CMYat p.612).

(c) Causation is essentially a matter for the judge and not for the doctors.The judge will be assisted by the medical evidence but is not bound by it; he is not confined to those matters which the doctors may individually have picked out in their consulting rooms. It is important to bear in mind that law and medicine apply different standards. In law, there is a causal connection if it is shown on the balance of probabilities that the accident is a substantially contributing cause of the injury.On the other hand, the doctors practice the science of aetiology and look for “clinical cause” or “irrefragable chain of causation” which is to be proved beyond reasonable doubt or beyond any doubt (see Lee Kin-kai, a patient by his father and next friend Li Wah at pp.235-236, Lee Sau Keung v Maxcredit Engineering Ltd& anor [2004] 1 HKC 434, 450, and Ansar Mohammad v Global Legend Transportation Limited CACV 162/2010 (unreported, 24 March 2011) at para.22(2)).

(d) The wrongdoer must take his victim as he finds him so that the wrongdoer remains liable even though the severity or extent of the damage has been increased due to the victim’s pre-existing weakness or susceptibility to harm. This “thin skull” rule (see Charlesworth & Percy on Negligence 12^th ed para.5-26 at p.350) extends to “eggshell personality” (see Charlesworth & Percy on Negligence 12^th ed paras.5-31 – 5-33 at pp.351-352, Lam Wing Ming v Dragages et Trauvaux Publics (HK) Ltd & anor HCPI 1090/1995, Master A Chung (as he then was) (unreported, 21 July 1998) at paras.14-17,CMYat pp.610-613 and Page v Smith [1995] 2 All ER 736).Thus, if the primary victim has a pre-existing propensity to depression or psychiatric illness which is activated or re-activated by physical injury caused by the wrongdoer’s negligence, the wrongdoer cannot escape liability for the loss caused by the activated or re-activated depression even in rare or aggravated form by pleading lack of foreseeability once the relevant duty of care is established and personal injury of some kind is reasonably foreseeable.

(e) When considering the effect of a pre-existing condition on an award of damages, there are 3 possible scenarios.The first is where the plaintiff is almost certain to have gone through life unaffected by the condition, and the defendant will be liable for all damage caused. The second is where there is a strong possibility that some other event or natural progression of the condition will have brought about the plaintiff’s present state, so it will be necessary to assess the degree of the possibility in deciding what reduction is appropriate in the same way as it is necessary to assess the effect of other vicissitudes of life that may abbreviate the plaintiff’s working life or lifespan and thus abridge his loss.The third is where this will certainly have occurred at some stage in any event so that clearly an allowance has to be made but the extent of which depends on the evidence as to when the precipitating event will have occurred (see Chan Kam Hoi v Dragages et Trauvaux Publics [1998] 4 HKC 523, 527).

(f) Where a pre-existing condition is likely to lead to disability and loss in the absence of the injury for which the plaintiff is entitled to recover, the usual method of assessing the recoverable loss is to take account of the risks by an appropriate assessment of general damages.Past loss of earnings may also be reduced if the risks during the years concerned are sufficiently high.For future loss of earnings, a reduced multiplier is usually the most accurate way of giving effect to the findings on the medical evidence, especially when a plaintiff’s working life is likely to be limited by a pre-existing condition (see Chan Kam Hoi at p.529 and Cheung Fat Tim v Wong Siu Ming trading as Kee Construction Company & anor HCA 5079/1991, Findlay J (unreported, 17 January 1995)).

(g) The principles in (e)-(f) above have been developed by the courts to give the plaintiff reasonable compensation in order to achieve restitutio in integrum, which is the key objective in awarding loss caused by negligence.”

33.  I will apply the above principles on causation and consideration of the quantification of damages.

34.  The 2014 KW Report shows that when the plaintiff first presented to Kwong Wah Hospital on 19 October 2012, she complained of right thumb pain for 3 months with no definite history of acute trauma.  This is consistent with information in the 2013 KW Report.  It is mentioned in the 2014 KW Report that the plaintiff had received a right thumb injection in July 2012. As such, there can be little dispute that the plaintiff had been suffering from right trigger thumb prior to the Accident.

35.  The plaintiff re-attended the Accident & Emergency Department on 22 October 2012 and was diagnosed as right trigger thumb.  Physical examination noted that the plaintiff could not flex her thumb.  She was given an injection and was referred to the orthopaedics specialist clinic and occupational therapy.  The plaintiff then consulted Dr Ng Yuet Sun at St Teresa’s Hospital on 26 October 2012.  On 2 November 2012 she received right thumb operation to release her right trigger finger. 

36.  Dr Tio, the plaintiff’s expert opined that as the plaintiff’s pain was relieved by injection in July 2012  and she was able to continue working until the Accident, the Accident had aggravated the pre-existing right trigger thumb to the extent that she needed an operation eventually in November 2012.  Dr Tio thus estimated 30% of the current residual condition to have been attributable by the pre-existing element and70% by the Accident.

37.  Dr Chiang, the defendant’s expert on the other hand opined that the uncertainty of the date of the injury suggested that the aggravation of the Accident on the pre-existing right trigger thumb was mild.  The history of the pre-existing condition based on the natural course of trigger thumb also supported the estimation of 30% of the current residual condition to have been attributable by the Accident and 70% by the pre-existing element.

38.  Having considered the totality of the evidence, in particular, the contemporaneous medical records, I agree with Dr Chiang’s reasoning and his estimate for the following reasons:

(1) It is clear from the medical records that the plaintiff had received an injection to relieve her pain from right trigger thumb in July 2012, three months prior to the Accident.  However, when she went to the A&E Departmemt of Kwong Wah Hospital on 19 October 2012, the triage notes said she had been suffering from thumb pain for 4 months and the doctor’s notes recorded thumb pain for 3 months.  This shows that despite the injection in July 2012, the plaintiff was still in pain prior to the Accident.  Contrary to Dr Tio’s suggestion, the pain had not resolved after the injection.

(2) The fact that the plaintiff did not mention upon her first consultation at Kwong Wah Hospital on 19 October 2012 that the pain she was suffering from was caused by the Accident also speaks volumes.  If the plaintiff had thought that the pain that she was suffering from was substantially caused by the Accident, she would have mentioned it during consultation on 19 October 2012, one day after the Accident.  She clearly only treated it as the same as the pre-existing pain for the past 3 or 4 months when she went to Kwong Wah Hospital on 19 October 2012 as it was recorded in the triage data as “non- trauma”.  The plaintiff also did not mention the Accident when she consulted Dr Ng on 26 October 2012.

39.  I find that the plaintiff was already suffering from thumb pain (which was not resolved by injection) prior to the Accident.  I agree with Dr Chiang’s opinion and find that the plaintiff’s residual condition is 30% attributable by the Accident and 70% attributable by her pre-existing condition.

PSLA

40.  The plaintiff claims HK$250,000 as damages under the head of PSLA.

41.  When assessing PSLA, I take into account the trauma of the Accident, the plaintiff’s injuries and any loss of enjoyment and amenities. As set out above, I have found the plaintiff to be suffering from mild residual symptoms only.

42.  Parties have referred me to the cases as listed in the Annex.  Having considered them and compared the facts including (but not limited to) the mode of the accidents, the trauma suffered and the injuries suffered, I consider the facts and residual conditions of the current case to be most comparable to the case of Ting Siu Ki and Singh Harpel.  Taking into account inflation, I consider an award of HK$140,000 to be appropriate under this head of damage.  A 70% discount is to be applied for the plaintiff’s pre-existing condition.  Thus the amount of damage under this head to be awarded is HK$42,000.

Pre-trial loss of earnings and MPF

43.  Parties have agreed on the amount of HK$4,537.60 (net of advance payment of HK$9,520).  This amount is the difference between the plaintiff’s 3 months of earnings (at her normal monthly earnings at HK$10,799.4) and the plaintiff’s actual earnings from October to December 2012, minus the advance payment of HK$9,520.

44.  Although the plaintiff has a pre-existing condition, the sick leave awarded was for the days after the Accident when the plaintiff suffered from pain.  It is arbitrary and inappropriate to divide the days of the sick leave awarded as to 30% vs 70% and I decline to do so.  The sum awarded under this head will not be apportioned by pre-existing condition and Accident.

Loss of Earning Capacity

45.  I agree with Mr Cao’s submission based on the case of Bishwakarma Bhakta Bahadhur v Pacific Crown Security Services Ltd[4] that: “Evidence to prove the risk of not being able to retain his job or to seek another job offering him a similar income level in the future due to his condition would be mandatory.”  The plaintiff has not adduced any satisfactory evidence to show that there is a risk of her losing her job.  The case of Gurung Bhakta Bahadur v Green Valley Landfill Ltd.[5] is distinguishable, as there is no back injury involved in the present case.

46.  The defendant had not fired the plaintiff despite the Accident.  For the past two years, the plaintiff had been working a second job at another fast food chain, other than working full time with the defendant, despite the residual symptoms.  The reason given was that the plaintiff needed the income to make mortgage repayments.  There is no indication that the defendant would fire the plaintiff from her job in future.  Further, it is the plaintiff’s evidence that she would in any case retire in July 2020.    Taking into account the totality of the evidence, I find that the plaintiff had achieved satisfactory recovery with mild residual pain and stiffness over the right thumb and mild tenderness over the MCP joint.  I also find that there is no loss of earning capacity, as the plaintiff had clearly been able to return to work after the Accident and the expiry of the sick leave.

47.  I am of the view that there is no satisfactory ground and evidence put forward to sustain a claim under this head.

Special Damages

48.  I agree that the plaintiff is entitled to the medical expenses at Kwong Wah Hospital and the Hong Kong Traumatology and Orthopaedics Institute Limited at HK$800.  I also allow travelling expenses of HK$500 and tonic food of HK$1,000 despite there being no receipts as such are reasonable sums claimed in the circumstances. 

49.  As discussed above，I find that before the Accident, the plaintiff was still in pain despite having received injections in July 2012. I am thus of the view that the operation will be necessary at some point, regardless of whether the Accident happened.  As such I will also apportion the cost of HK$6,228 of the operation as to 30% attributable to the Accident and 70% attributable to the plaintiff’s pre-existing condition.  The total amount of special damages is thus HK$800 + HK$500 + HK$1,000 + (HK$6,628 x 30%) = HK$4,288.40

Summary of Damages

PSLA	HK$42,000.00
Pre-trial loss of earnings and MPF (advance payment already taken into account)	HK$4,537.60
Loss of Earning Capacity	HK$0
Special damages	HK$4,288.40
Total:	HK$50,826

Interest

50.  I award interest on PSLA at 2% per annum from the date of service of the writ up to the date of judgment and interest on pre-trial loss of earnings and other special damages at half the judgment rate from the date of the Accident to the date of judgment herein, and thereafter at judgment rate until payment.

Costs

51.  I grant a costs order nisi that the defendant do pay the plaintiff’s costs (including all costs reserved, if any) to be taxed if not agreed. 

Orders

(1) There shall be judgment in the sum of HK$50,826 with interest at 2% p.a. on the award for PSLA from the date of the service of the writ until the date of judgment and interest on pre-trial loss of earnings and other special damages at half the judgment rate from the date of the Accident to the date of judgment.

(2) The defendant do pay the plaintiff’s costs with certificate for counsel (including all costs reserved, if any) to be taxed if not agreed.

52.  I thank Counsel for their assistance.

Mr Simon Wong, instructed by Kenneth W Leung & Co, for the plaintiff

Mr Cao Yuan Shan, instructed by WMC Partners, for the defendant

Appendix

Cases referred to by parties on PSLA

(1) Ting Siu Ki v Wun Che Ming & Anor[6]

(2) Singh Harpel v Najib Transport[7]

(3) Tsang Ka Hung Barry v鄧玉玲[8]

(4) Yu Yixin v Leung Chi Tin Andy[9]

(5) Singh Jagdeep v VSC Engineering Products Co Ltd[10]

(6) Lee Tsz Kin Ken v Climax Paper Converters Ltd[11]