RE LI SAU YING HCMP002384/2007

S’s words:-

First of all, the Debtor suggested that the staff of the Unrepresented Litigants Resource Centre told her the wrong number of days to commence an appeal procedure against bankruptcy order. I believe that in our profession there are lot of people who do not know the differnce of the usual 28 days from the 21 days as prescribed by Section 98(2) of the Bankruptcy Ordinance. Thus, it is also not surprised that the Centre might wrongly inform the Debtor the same.

Fortunately, it should be expected that such a difference will be resolved after the passing of the Bankruptcy (Amendment ) Ordinance in future. In any event, it is still the existing bankruptcy law that an appeal should be made within 21 days and further, if extension of time is required, an application before the bankruptcy judge is required (but not to make the application to the Court of Appeal).

It thus explains that up to this moment, bankruptcy law is still not an easy subject at all with something different from the usual civil rules.

--- quote from judgment ---

Date of reasons for decision: 11 December 2007

On 31 October 2007, Deputy Judge L. Chan made a bankruptcy order against Li Sau Ying.

Appeals from orders given in bankruptcy proceedings are governed by s.98(2) of the Bankruptcy Ordinance Cap. 6. This section provides that every order of the court shall be subject to appeal to the Court of Appeal, and the appeal should be commenced within 21 days from the time when the decision appealed against is pronounced or made. In the context of this case, the appeal should have been commenced within 21 days of 31 October 2007, i.e. by 21 November 2007.

Miss Li says on affirmation that she had been informed by the staff of the Unrepresented Litigants Resource Centre that the appeal period was 28 days, and therefore after preparing her Notice of Appeal on 22 November 2007, she sought to file it on 27 November 2007. Of course by then the appeal was out of time.

I pause to note that this was not the first case where litigants (even those with legal representation) had missed the deadline for appealing an order in bankruptcy proceedings because of the shorter time limit in s.98(2), as in ordinary civil proceedings the time limit is 28 days from the sealing of the order (see e.g. re Li Tat-kong [2003] 2 HKC 72, Prudential Assurance Co. Ltd v Edward Ho [2003] 3 HKLRD L4, re Lau Kwok Fai, Bernard HCMP2224/2005). Happily this anomaly has now been addressed by way of the Bankruptcy (Amendment) Ordinance, which however does not apply to the present case.

Coming back to this case, on 27 November 2007 Miss Li had to make an application to extend time for appealing. This was done by way of a summons which was filed in Miscellaneous Proceedings. The summons was fixed to be heard by a single judge of the Court of Appeal.

The Petitioner opposed Miss Li’s application. In Mr Wong’s written submissions on behalf of the Petitioner he argued that the application for extension of time to appeal was governed by r.204 of the Bankruptcy Rules which provides:

“ The court may, under special circumstances and for good cause shown, extend or abridge the time appointed by these rules or fixed by any order of the court for doing any act or taking any proceeding”.

In written submissions, the Official Receiver submitted that Bankruptcy Rule 204 did not apply to appeals because the time limit for appeals was fixed by s.98(2) of the Bankruptcy Ordinance, not by the Bankruptcy Rules. Mr Wong rightly conceded this at the hearing.

The Official Receiver pointed out in his written submissions that applications to appeal an order made in bankruptcy proceedings are governed by s.100(4) of the Bankruptcy Ordinance, which provides:

“ Where by this Ordinance or by general rules the time for doing any act or thing is limited, the court may extend the time either before or after the expiration thereof upon such terms, if any, as the court may think fit to impose”.

This however led to another problem – under s.2 of the Bankruptcy Ordinance,

“ ‘court’ means the Court of First Instance sitting in its bankruptcy jurisdiction”.

Mr Wong also referred to paras.59/4/12 and 59/4/14 of Hong Kong Civil Procedure 2008. However the Official Receiver argued (rightly in my view) that Order 1 rule 2(2) of the High Court Rules specifically provided that the High Court Rules did not have effect to bankruptcy provisions, and s.99 of the Bankruptcy Ordinance applied High Court Rules only where they were not inconsistent with the provisions of the Bankruptcy Ordinance. As s.100(4) clearly stipulated that it was for the Court of First Instance sitting in its bankruptcy jurisdiction to consider applications thereunder, that would override any High Court Rules permitting the Court of Appeal to deal with applications for extension of time in ordinary civil actions.

In the circumstances, on Miss Li giving an undertaking that she will within 7 days make an application to the Court of First Instance sitting in its bankruptcy jurisdiction to extend time for appealing, I made no order on her application in these proceedings.

TSE PARC KI a minor by her father and next friend, TSE WAH YUEN JOSEPH v. ATLANTIC TEAM LTD t/a LE BEAUMONT LANGUAGE CENTRE DCPI001981/2006

S’s words:-
The Minor was injured when she was having a Spanish program. The liability on the part of the school is obvious. Without legal representatives’ assistance, the Defendant chose to defend the issue of liability that caused a referral to the police for an investigation of employing an unemployable.

I believe the Defendant is/was not insured (or properly insured) at the material time, or otherwise, the insurer would take over the conduct of the proceedings and the tragdey abovementioned would not occur.

For the issue of quantum, the amount of PSLA awarded in the sum of HK$40,000.00 is another good amount that in future we can adopt to rely on for minor injuries. Certainly, it is expected the father of the Minor (as a father) would not regard the injuries as minor.

Who is the father of the Minor? That is another matter I believe the Honourable Court has not taken into account.

--- quote from judgment ---

Date of Handing down Judgment : 11th December 2007

Parc-ki was 2 and 1/2 years old when she was enrolled in a 12-lesson Spanish program offered by the Defendant at its language centre in Admiralty.

How did the accident happen?
Parc-ki’s parents were not present when the accident happened. According to Parc-ki’s mother, she was told what had happened when she returned to the Defendant’s language centre after the accident. Tony and Emily (who were both staff at the Defendant’s language centre) told her that Parc-ki had wanted to use the toilet during the lesson and left the classroom. As Parc-ki was trying to put on her shoes at the doorway, Sonia slammed the classroom door. Parc-ki’s right middle finger was caught by the door and was crushed.

The Defendant put forward a very different version of events in its Amended Defence. The Defendant says that the Spanish program had already finished when the accident happened. Parc-ki had left the classroom and was no longer under the care of Sonia. As Parc-ki’s parents were late to receive Parc-ki, she had to put on the shoes herself. When she lifted up one leg to put on her shoe, she lost balance and stretched her hands backward towards the doorway. Shortly before that, Sonia had just given a gentle push to close the classroom door. Parc-ki’s right middle finger was therefore caught by the closing door and was crushed.

Two different versions of events have been put forward by the parties. I find the Defendant’s version unreliable for the above reasons. On the other hand, the Plaintiff’s version is not based on direct evidence but on hearsay evidence. Be that as it may, there is nothing for me to cast doubt on the testimony of Parc-ki’s mother as to what she was told. It is only reasonable for the Defendant’s staff to report to her when she attended the Defendant’s language centre after the accident. Tony and Emily were clearly on duty at the time. Indeed, Tony admits having spoken to Parc-ki’s mother after the accident although he now claims to have forgotten what was said to her. The Defendant has also put much emphasis on the impossibility of Sonia “slamming” the door. In my view, it matters not whether the door was slammed shut or closed gently. This is a figure of speech and a matter of perception. There is really no dispute that Parc-ki’s finger was indeed caught by the door that was closed by Sonia. What matters is whether Sonia had done what was required of her as Parc-ki’s teacher in the circumstances of this case to ensure the safety of Parc-ki. This will be discussed further below.

In the premises, I find the Plaintiff’s version of what happened more believable.

Whether the Defendant is liable for the personal injuries suffered by Parc-ki?
There is a positive duty on schoolteachers to protect their students’ well-being. The duty of a schoolteacher has been said to be to take such care of his pupils as a reasonably careful father would take of the children of the family. It is a schoolteacher’s duty to take all reasonable and proper steps, bearing in mind the known propensities of children, to prevent any of his pupils from suffering injury, whether from inanimate objects, from the actions of their fellow pupils, or from a combination of both. What things are likely to injure pupils is a question of degree, depending on the nature of the thing and the age of the pupils. A schoolteacher is also under a duty to exercise supervision over pupils whilst they are on the school premises. The amount of supervision required depends on the age of the pupils and what they are doing at the material time, but no teacher could reasonably be expected to keep a close watch on each child every minute of the day, unless there is some reason to be alerted or put on inquiry. Given the level of responsibility, the standard of care is high, although not expressed as any more than should be reasonably expected in the circumstances. See Charlesworth & Percy on Negligence, 11th edition (2006), §§8-179 to 8-193.

The Defendant operated the language centre and Sonia was assigned by the Defendant to run that program. In my view, the positive duty put on schoolteachers to protect their students’ well-being applies equally to Sonia. On the day in question, Sonia closed the door knowing full well that Parc-ki was still trying to put on her shoes at the doorway. Sonia was negligent in failing to ensure that Parc-ki had put on her shoes or was otherwise well clear of the doorway before closing the door. Whether the door was slammed shut or closed gently is beside the point. The Defendant as the provider of the Spanish program relied on Sonia to run the program in order to earn the course fees. In my view, the tortious act of Sonia was so closely connected with her employment with the Defendant that it would be fair and just to hold the Defendant vicariously liable.

In the premises, I find the Defendant liable for the personal injuries suffered by Parc-ki.

What is the amount of compensation payable to Plaintiff?
After the accident, Parc-ki was taken to the Accident and Emergency Department of Queen Mary Hospital. Physical examination by Dr. Lo Wing-kee showed avulsed nail and bleeding from the nail bed in the right middle finger. X-ray showed a chip fracture in the distal phalanx.

According to Parc-ki’s mother, it took 8 months for Parc-ki to get over from being conscious of the injury. Thankfully, there is nothing to suggest that Parc-ki has suffered any permanent disability.

The Plaintiff’s counsel fairly concedes the claim for “future loss of earnings / loss of opportunity” and the claim for “loss of earning capacity / handicap in the labour market”. In any event, I do not think such an award is justified given the fact that Parc-ki has not suffered any disability that would affect her future earning capacity.

As to the claim for damages for PSLA, the Plaintiff’s counsel (who did not settle the Revised Statement of Damages) relies on Singh Jagdeep v. VSC Engineering Products Company Limited, DCPI 391/2005 and Yu Pau Yau v. Co-Ray Design & Construction Limited, DCPI 864/2006 and now suggests a figure of $50,000 to $100,000.

In Jagdeep, the plaintiff’s left hand was hit by a broken disc from an electric disc cutter machine. He suffered abrasion over the left dorsal part of his hand. Fingers’ movement and sensation were otherwise normal and there was no fracture. Sick leave was granted for a total of 16 days. The learned judge found that the plaintiff had suffered a ½ cm abrasion with minimal pain and suffering and awarded $30,000 for PSLA in June 2005. I find Parc-ki’s injury slightly more serious than that suffered by the plaintiff in Jagdeep.

Taking everything into consideration, I consider that an award of $40,000 for PSLA is justified.

As the facts of this case reveal that the Defendant might have committed a criminal offence in employing Sonia who was not legally employable in Hong Kong at the time, the case is referred to the Department of Justice through the Registrar for investigation.

HCB 9850/2002, HCB 17353/2002 and HCB 20609/2002

S’s words:-

The trustees in those three cases tried to ask the Court to vary the costs order. Without going into details of each case, I believe the Judgment of HCB 11719/2002 should be sufficient for me not to repeat any words further.

Is it a coincidence that different Judge(s)/Master(s) all rejected the trustees’ entitlement for costs in different cases?

Please re-consider your quasi-judicial obligation before making applications.

--- quote from judgment ---

Date of Decision (Handed Down): 13 November 2007

By their letter dated 29 October 2007, the trustees asked me to vary my order to the extent that they are not entitled to recover their costs of and occasioned in the hearing for directions before Master Kwang on 27 March 2007 only, which was the hearing for the interim order prolonging the bankruptcy of the bankrupt.

The trustees’ grounds 1 and 2 can be considered together. It is not necessary to go into detail of the trustees’ grounds in support of their application as they have withdrawn their application. This court had no opportunity of investigating into those grounds. The trustees chose not to withdraw their application after Judge Kwan’s judgment handed down on 9 January 2007. In fact, Judge Lam in Fred Lee v Liu Man Hoo HCB11719of 20002 unreported and Judge Barma in Fred Lee and Chow Wai Lan, Christine v Wong Hing Wah Michael HCB26018 of 2002 commented that the trustees should have raised the misconducts with the bankrupt after they had discovered such misconducts. They should not wait until the end of the bankruptcy order. They have failed to do so here.

The question remains: Were they discharging their quasi-judicial obligations? I repeat my reasons in paragraphs 9-11 of my Decision in Bankruptcy Proceedings No.9850 of 2002. I take the view that in exercising my discretion as to the trustees’ costs from the estate, I should take a global view of the matter, taking into consideration of all relevant factors. I hold that the trustees have not shown to me that they had taken reasonable investigation into the matter before they took out this application. This application has prolonged the bankrupt’s bankruptcy order unnecessarily. I do not consider that the trustees have discharged their quasi-judicial obligations.

For the reasons above, I confirm my order to disallow the trustees’ costs of their application from the estate. I also disallow their costs for this application from the estate.

BANK OF CHINA (HONG KONG) LIMITED v. CHOI LAI LAR HCMP 3925/2002

S’s words:-

I was not a party or any legal representatives in the action. Mr. Ng for the Bank did quite a good job in the application hereinbelow mentioned. The legal principles regarding the rules of maintenance and champerty and also contingency fee agreement have been considered. The Bank was not required to pay for the costs when the Wife did have legal representatives due to the so-called contingency fee agreement between the Bank and her former solicitors.

However, if the Wife was not asked to act for herself shortly before the trial, I would have some hesitations as to whether the Bank could establish a prima facie case of any breach of the indemnity principle.

Thus, with very much reluctance, I have to agree with the learned Master for his comment that “I can appreciate the lenience of Mr. Sun, but such fee agreement is not allowed under our costs system.”

--- quote from judgment ---

Date of Decision : 7 November 2007

The paying party (“the Bank”) raised a preliminary issue in a taxation. It argued that the costs arrangement between the receiving party (“the Wife”) and her solicitor was:

(a) against the rule of maintenance and champerty,
(b) a contingency fee agreement, and/or
(c) in breach of the indemnity principle.

So, in summary, C&A would charge the Wife on time basis, subject to discretionary discount. Due to the financial position of the Wife, C&A agreed that she did not have to pay the interim bill right away. Further, it was to be reviewed later. No further bill was issued. The question would be further discussed after settlement or determination of the Wife’s case at trial.

Applying the above costs arrangement to the complaints made by Mr. Ng. I do not find it contrary to the rule of maintenance and champerty. However, it is contingent. Further, I am not satisfied that the indemnity principle has not been breached in the circumstances.

Maintenance and Champerty?

The law of maintenance and champerty has been recently and thoroughly considered by the Court of Final Appeal in Siegfried Adalbert Unruh v Hasn-Joerg Seeberger (unrep., FACV Nos. 9 and 10 of 2006, [2007] HKEC 268)). Four points were stated to highlight the current approach of this principle.

(a) An agreement to share the spoils of litigation encourages the perversion of justice. Gambling the outcome of the litigation endangers the integrity of judicial process. These traditional legal policies underlying maintenance and champerty continue to apply.
(b) However, one has to examine the totality of the facts to see if the ends of justice is or is not undermined.
(c) In so doing, modern public policies should be taken into account, including ensuring the poor to give fair access to justice.
(d) The law of maintenance and champerty should not be relied too readily to strike down arrangements attempting to achieve justice. Other public policies may be relied upon instead, like unconscionable contract and contingent fee agreement.

In my view, under the present costs arrangement, C&A was not funding the Wife’s litigation. Mr. Sun was not trying to share in the spoils of litigation to the exploitation of the vulnerable Wife. Indeed, he did all he possibly could in the circumstances for the Wife. Only when he could not taken up the personal risk of liability to pay counsel fees, he then quitted. There is no risk to the integrity of the court’s process. Quite to the contrary, Mr. Sun tried to help to Wife to obtain justice.

Contingent fee agreement?

Contingency fee agreement is not allowed under our system. Wallersteiner v Moir (No. 2) [1975] QB 372, 402 was referred to by the said case of Siegfried Adalbert Unruh at paragraph 104.

“ Under a contingency fee agreement the remuneration payable by the client to his lawyer in the event of his success must be higher than it would be if the lawyer were entitled to be remunerated, win or lose: the contingency fee must contain an element of compensation for the risk of having done the work for nothing. It would, it seems to me, be unfair to the opponent of a contingency fee litigant if he were at risk of being ordered to pay higher costs to his opponent in the event of the latter’s success in the action than would be the case if there were no contingency fee agreement. On the other hand, if the contingency fee litigant were to lose the action, his opponent’s right to recover costs against him should not in fairness be affected by the fact that the former party has a contingency fee agreement. Consequently under our system of what are sometimes called indemnity costs a contingency fee litigant would in the event of success have to bear a heavier burden of fees, irrecoverable from his opponent, than he would otherwise do, while remaining exposed to the risk of being ordered to pay his opponent’s taxed costs in the event of his failure. The arguments in favour of a contingency fee system are accordingly a good deal less cogent here than they are in the United States of America.”

I can appreciate the lenience of Mr. Sun, but such fee agreement is not allowed under our costs system.

Indemnity Principle?

Indemnity principle in the context of taxation requires that the receiving party cannot recover a sum in excess of his liability to his own solicitors. Then, what exactly is the liability of the Wife towards C&A? A definite answer is unavailable because it is “variable” depending on the trial result. Will the answer of “the amount of costs I recover from the other side will be the costs charged by me” help Mr. Sun? I do not think so because such arrangement has been held by Mr. Registrar Chan under Holiday Resorts (Management) Co. Ltd v Chan Yuk Yan & another, judgment dated 2 May 2001, as “so vague and uncertain” that the liability of the client towards his client was not known. I agree with such observation.

顧明 v. 南方大廈業主立案法團HCSA11/2007

S’s words:-

We have so many cases relating to water leakage, whether regarding outer walls or ceilings.

We do not know how many cases were ruled with the same wrong concept of an adjudicator in Small Claims Tribunal, of which now The Honourable Mr. Justice Jam clarified that how a plaintiff could establish his claim against the Incorporated Owners for damages in outer walls.

In this particular case, the subject outer wall do form a part of the common area and if the water leakage related to the poor condition of the outer walls, even though without a re-trial, a different conclusion from another adjudicator in Small Claims Tribunal could be expected after the actual re-trial to be taken place.

Unfortunately, what in my mind again is, why should we recommend the owners to form an Incorporated Owners for their own buildings?

--- quote from judgment ---

宣判日期 ： 2007年8月28日

上訴人顧明先生是小額錢債審裁處案件中的申索人。他是南方大廈7 字樓A 座的業主，因大廈外牆滲水影響他的居所，所以對南方大廈業主立案法團提起訴訟。他訴稱外牆滲水使他家中的牆壁受到損毀，以致須花41,000 元來維修；此外，他又申索9,000 元以補償他精神上的損失。換言之，他合共申索 50,000 元，然而，他的申索被小額錢債審裁處的審裁官撤銷，申索人因而提出上訴。

本席認為，審裁官的判決在法律觀點上犯了錯誤。審裁官在判決理由書第14 段中指出，申索人在法律上有舉證責任，須向法庭提出有關證據，根據相對可能性的衡量的準則，證明被告人疏忽造成外牆滲水，導致他的樓宇單位內的房間的窗邊牆身滲水，因而蒙受損失。審裁官接着談到上述兩封信，指出信中只是說「可能和懷疑外牆滲水」。在本案中，雙方就外牆滲水的原因有爭議，被告人指滲水的問題是因為申索人加建了一只窗而導致，申索人則辯稱外牆本身損毀，從外面也可以看到，而食環署的信亦指出外牆的防水層可能損毀。

審裁官在判案理由書第18 段中又指出，即使外牆的防水層損毀，申索人在法律上仍須舉證證明防水層損毀的原因，被告人怎樣疏忽，以及防水層損毀為何與他或前業主曾更改鋁窗一事無關。最後，審裁官基於申索人的樓宇單位內只是出現天花板滲水的情況，以及申索人沒有提出相關的證據，裁定申索人未能根據相對可能性的衡量的準則，證明防水層損毀和外牆滲水是因被告人疏忽所致。他最後在第20 段中重申：「基於以上理由，本席裁定申索人未能履行他的責任，根據相對可能性的衡量的準則，證明外牆滲水的真正原因是由於被告人疏忽。」因此，審裁官撤銷顧先生的申索。

本席認為，根據香港法例，申索人毋須證明滲水的問題是因業主立案法團疏忽而導致。首先，南方大廈的公契是於1964 年簽署的，這份公契屬於較舊的一種，並沒直接提到大廈外牆誰屬的問題，只是說明每一個樓宇單位都由單位的業主全權擁有，以及業主有責任保持單位內的良好狀況。《建築物管理條例》(香港法例第 344 章)第 2 條清楚說明公用部分(common part)是甚麼：「A. 建築物的全部，但不包括在土地註冊處註冊的文書所指明或者指定專供某一業主使用、佔用或享用的部分；及B. 附表1指明的部份，但上述文書如此指明或指定的部分除外。」附表1 清楚指明外牆屬公用部分的一部分。

接着下來要處理的問題是：立案法團對公用部分須負那些責任？答案於第18 條已清楚說明：

「 第18 條 法團的職責及權力
(1) 法團須——
(a) 使公用部分和法團財產維持良好、合用的狀況，並保持清潔。」

故此根據法例，法團有責任使公用部分(包括外牆)維持良好合用的狀況，並保持清潔。因此，顧先生只需證明外牆滲水，而他亦已通知法團有關的情況，便已完成舉證責任，因為外牆滲水已證明法團沒有使該部分維持良好合用的狀況。但審裁官裁斷申索人須證明因法團疏忽而導致滲水的情況，已犯了法律上的錯誤。當然，顧先生在舉證時，只須證明外牆損毀而導致他的睡房出現滲水情況，因為這是他的申索所指明的部分。被告人的代表李先生提到一些其他事情，如滲水情況是因窗戶打開而導致，但涉及的是樓宇單位內的其他部分，與本申索部份無關。

基於審裁官所犯的法律觀點上的錯誤，本席裁定申索人的上訴得直，案件須發還小額錢債審裁處重審，由另一位審裁官就以下的爭議點作出裁斷：顧先生的單位內的滲水問題是否由於大廈外牆損毀而導致？如果結論是滲水確由外牆損毀所導致而法團又已知悉上述情況的話，則法團便有責任進行維修，以維持大廈良好、合用的狀況。

Li Ching v. Guard Able Limited DCPI 2416/2006

S’s words:-

No legal issues I would like to say but my feeling after I read the judgment.

With so many versions of the Plaintiff how she was injured, it was too difficult to convince the Court to accept her story.

I did have the opportunity to handle a case that faced with difficulties in the plaintiff’s story. That case was settled shortly before the trial for a minimal compensation.

--- quote from judgment ---

Date of handing down Judgment : 12th November, 2007

This is the Plaintiff’s claim for damages for personal injury, loss and damages sustained by her in the course of her employment arising out of the negligence and breach of common duty of care of the Defendant under the Occupiers’ Liability Ordinance.

In evidence-in-chief she said that she took a look and found that it was Tang Siu Kwong who touched her. She was frightened. She stood up quickly. Her leg was numb because she had sat there and it was cramped there. When she got up there was something in front of her. She turned 90˚. When she was turning she sprained her left ankle. She lost her balance.

Under cross-examination she said that when her superior asked her to patrol she was not running. She was walking. When she was turning her body she paid attention. She said that she did not walk hurriedly.

The Plaintiff’s Counsel submits that “As a result of the hurried return to work, she fell on weak legs and injured herself ….” But it was not pleaded in the Statement of Claim or in her witness statement that she “fell on weak legs and injured herself.” She only mentioned this matter in Court.

Dr. Cheung Tak Fai in his medical report (dated 26.3.2004) states that the Plaintiff attended his clinic on 28.3.2003, and “She gave the history of an injury during work on the captioned date. While she went out from the rest room, she tripped over the door-step and fell. She sprained her left ankle and hit her left side of body against door-case, sprained her neck and low back as well. She experienced severe left ankle and back pain and left upper limb numbness that she could barely walk a few steps.”

The medical report (dated 20.2.2004) of Dr. Y.F. Yeung of the Department of Surgery of the Prince of Wales Hospital states: “Madam Li fell down on duty after tripping over the door frame in 3/2001 and suffered from left shoulder pain radiating down to the fingers afterwards.”

The report of Dr. Li Shun Cheong of the Tai Po Jockey Club Clinic (dated 7/1/2004) states: “She claimed to experience a dizzy spell during work on 22/3/2002. This resulted in a fall and sprained her left ankle.” The medical report of Dr. Chan Ho Yan of the Alice Ho Miu Ling Nethersole Hospital (dated 14.3.2003) says that the Plaintiff sprained her left ankle while she was on duty with preceding syncope on 22/3/02.

In the Notification of Accident at Work submitted to the Labour Department on 29th April 2002, she stated “As I was wearing the shoes provided by the company and those were not in the suitable size, I fell and sustained sprain injury.”

The Plaintiff gave inconsistent accounts of the accident to medical doctors, to the Labour Department and to this Court. I am not satisfied that she was telling this Court what had actually happened on the date of the accident. In any event her evidence does not show the cause leading to the spraining of her ankle. She has failed to show how the spraining of her ankle had anything to do with the Defendant. The onus is on the Plaintiff to show that there was negligence on the part of the Defendant, or that the Defendant was in breach of the Occupiers’ Liability Ordinance. She has failed to do so. I therefore dismiss her claims against the Defendant.

FRED LEE, trustee of the property of LIU MAN HOO, a bankrupt HCB 11719/2002

S’s words:-

The Trustee tried to make an application to vary the costs order regarding the Decision of the Court on 14th September 2007. In fact, as the Judge did have commented, “this is an application that should not have been brought in the first place.”

The quasi-judicial function of the trustees should be properly exercised, or otherwise, we may still have some cases that the Judge(s)/Master(s) may comment that such an application should not have been made at all.

Different Judge(s) and Master(s) have rightly pointed out the quasi-judicial obligation on the part of the trustees. Thus, the trustees should not raise applications for suspension as a norm but should take such necessary investigations beforehand.

In order to protect the interests of the creditors, we should not discourage the trustees to make applications, or otherwise, the trustees may choose to make no application at all even in suitable situations.

So, I wish I could have the chance to read more judgments that the trustees do have made investigations and submit applications with sufficient reasons. Some guidelines of the Court have already been given. It is the right time for the trustees to prepare their cases (including investigations) well. I further wish that we would not have the chance to read further judgments with groundless applications being put before the Court, but unforuntately, I cast some doubts thereon.

--- quote from judgment ---

Date of Decision on Costs : 13 November 2007

I made a costs order nisi in Para.87 of my Reasons for Decision of 14 September 2007. The Trustee applied for a variation of the order. At the hearing on 5 November 2007, I was invited by the Trustee to vary the costs order to no order as to costs.

The main plank of the Trustee’s argument is the finding by this court that the Bankrupt’s conduct before the commencement of the bankruptcy has been unsatisfactory and thus a case under Section 30A (4)(d) was established. Mr Chan submitted that in such circumstances, the Trustee was not at fault in the exercise of his judgment in applying for suspension. He also suggested that in these circumstances, the Bankrupt should not be regarded as the successful party in the application.

It is further submitted that though the court ultimately decided that there should not be any suspension, it was more in the nature of a grant of indulgence to the Bankrupt in the exercise of the discretion by the court.

Mr Chan also argued that given the quasi-judicial role of the Trustee, the normal rule of costs following event can be displaced more easily.

On the other hand, Mr Lam for the Bankrupt argued that the normal rule should apply and unless an exception under Ritter v Godfrey [1920] 2 KB 47 can be established, the Bankrupt should get his costs. In the present case, counsel submitted that none of the exceptions applies. It was an application that should never have been brought in the first place. Mr Lam also contended that the Trustee had not been acting reasonably.

Hence, I am of the view that the normal rule should equally be applicable to this type of proceedings. But that is subject to the principle laid down in Ritter v Godfrey.

As regards the third exception in Ritter v Godfrey, Atkin LJ said at p.61 that it “extends to cases where the facts complained of, though they do not give the plaintiff a cause of action, disclose a wrong to the public by which I understand some criminal or quasi criminal misconduct, e.g. fraud or crime or preparation of for a fraud or crime, or possibly some act of serious oppression.” I do not think the unsatisfactory conducts which I found to be established against the Bankrupt come anywhere near to this category.

Thus, I will answer the first question by holding that there is no good reason for depriving the Bankrupt of his costs in resisting the application in the present case.

Turning to the incidence of such costs, it could either fall on the Trustee or the estate. Rule 32A(3) of the Bankruptcy Rules gives limited protection to a trustee regarding personal liability for costs. However, it does not apply here since the application was made by the Trustee instead of he being made a party to proceedings issued by other parties.

There cannot be any doubt that the court does have the power to order costs against a trustee personally if the circumstances warrant such sanction. On the other hand, such power should be exercised with circumspection when a trustee is performing his ‘quasi-judicial’ function properly.

In the appeal in Leung Chin Yeung CACV 32 of 2007, 23 October 2007, the Court of Appeal upheld the decision of Kwan J. Further, the Court of Appeal took the view that the appeal should never have been brought and ordered the trustee to pay the costs of the Official Receiver and the respondent on indemnity basis and not to recoup the costs of the appeal from the estate.

In the present case, I regret to say that the Trustee had adopted a fundamentally flawed approach towards this application. As I said in my Reasons for Decision, the Trustee did not make any meaningful investigation before he decided to launch the application. Further, the Trustee took the misconceived view that he was only concerned with establishing a ground of objection under Section 30A(4) and failed to address his mind to the more important issue, viz. whether the circumstances as a whole warrant an application for suspension being made. This amounts to a serious failure on his part to carry out his quasi-judicial function properly.

Mr Chan submitted that the Trustee did not have the benefit of the recent case law on the subject when the application was made. I do not regard this as a good excuse for the Trustee’s failings mentioned above. It is not too much for the court to expect a reasonably competent trustee to carry out proper investigation on all relevant matters before making an application. Unless this has been done, it is difficult to see how a trustee can make a proper and responsible decision on whether it is appropriate to make an application for suspension.

Further, the decision of Kwan J in Leung Chin Yeung should have alerted the Trustee to reconsider his approach to this application. Unfortunately, the Trustee chose to press on with a flimsy application.

Looking the matter in the round, I am of the view that no reasonable trustee carrying out his quasi-judicial function could have concluded on the materials available that he should launch an application for suspension if he took a balanced and impartial attitude towards the matter. This is an application that should not have been brought in the first place.

In my judgment, the Trustee had acted unreasonably in the application and the incidence of costs should not fall upon the creditors. I therefore vary my costs order nisi by ordering the Trustee to pay for the costs of the Bankrupt in the application including the costs of the hearing on the question of costs personally and the Trustee shall not recoup his costs from the estate.

LIMBU LAXMI PRASAD v. DRAGAGES (HK) JOINT VENTURE DCEC 1227/2006

S’s words:-

The following case is not any interesting case at all.
What attracts me is that His Honour Judge Lok refuses to join in the debate to the deeming provision of Section 10(2) of the Employees’ Compensation Ordinance.
We have two line of cases for this issue and that forms the views of the judges in District Court.
At the same time, in fact, legal practitioners do form two views as well.
It is expected that those concentrating their works for applicants are in favour of the view of irrebuttable presumption. On the contrary, those legal representatives acting for insurers do suggest the otherwise.
The debate may go on until a date that such an issue is put to the Court of Appeal (and further probably the Court of Final Appeal) for consideration.

Personally, I support the view that the presumption is irrebuttable.
But when we read the article of Hong Kong Lawyer in the issue of October 2007, the author therein may support the otherwise.

--- quote from judgment ---

Date of handing down of Judgment : 24 October 2007

Based on the aforesaid findings, the Applicant has suffered no occupational disease or permanent injury as a result of the accident, and so he is not entitled to claim any compensation for permanent partial incapacity under s. 9 of the ECO. His appeal against the assessment of loss of earning capacity made by the Board in the Certificate also fails.

The Applicant has managed to obtain various sick leave certificates from Dr. Alfred Lo covering the period from November 2004 to September 2005, and the next issue I have to consider is therefore whether the Applicant, by relying on these certificates, is able to claim any compensation for temporary incapacity under s. 10 of the ECO.

There is some uncertainty as to the effect of the deeming provision in s. 10(2). On the one hand, we have cases which suggest that, in the absence of fraud, the deeming provision is conclusive about the period of sick leave for the purpose of calculating the compensation under s. 10. On the other hand, we have another line of cases which suggest that the deeming provision is rebuttable. A good summary of these two lines of cases can be found in the judgment of Deputy Judge Anthony Chow in Siu Fu Yau v. Wong Po Lee Limited & 0rs., unreported, DCEC No. 654 of 2003 (decision on 5 October 2006). Unless the interpretation of s. 10(2) is clarified by the higher courts, such uncertainty in the law will still continue to exist. But fortunately for our present case, it is not necessary for me to resolve this particular issue, and so I do not intend to add further confusion in this area of the law by giving additional view. It is clear that even for the cases which suggest that the deeming provision is irrebuttable, it is subject to an important provisio that there is no fraud involved. As I find that there was malingering on the part of the Applicant and that his complaint is not genuine, the court is entitled to disregard the sick leave certificates issued by Dr. Lo for the purpose of assessing the compensation for temporary incapacity under s. 10.

As the Applicant is not entitled to claim for any compensation under the ECO, his claim is dismissed. I also dismiss the Applicant’s appeal against the assessment made in the Certificate. On the other hand, the Respondent’s appeal is successful and I disallow the sick leave period stated in the Certificate from 27 October 2004 to 8 September 2005. Further, I make an order nisi that the costs of this action be to the Respondent with certificate for counsel, which would be made absolute 14 days after the date of the handing down of this judgment.

ATHANASIOS KONDYLIS v. KIM'S YACHT COMPANY LIMITED DCEC 918/2005

S’s word:-

It is so rare that we can find an employees’ compensation claim involving the issue of security for costs. The following case demonstrates an example.

I believe that we do have very much employees compensation claim involving such an issue due to the following reasons:-

1. most injured employees are not ordinarily residents overseas;
2. even though residents overseas, not all such employees do have the means to pay for security for costs;
3. in many employees’ compensation claims, the insurers/respondents do not agree the injured was not an employee.

But, in this case, the Applicant did have taken a very constructive approach for the issue of security for costs. Even before the hearing, the Applicant did have proposed to give a very substantial amount of security for costs and such amount was finally accepted by the Court.

Therefore, the Respondent could only get part of the costs for the application for security for costs but at the same time had to bear the balance and in more important the costs for the hearing.

So, the Applicant was still the winner of the application.

It thus also explains that why constructive offers should always be in our mind to protect the issue of costs.

--- quote from judgment ---

Date of delivering and handing down decision : 24 October 2007

This is the Respondent’s application for security for costs pursuant to O.23, r.1 of the Rules of the District Court, Cap.336. The ground is that the Applicant is ordinarily resident overseas.

There is no dispute that the Applicant is ordinarily resident overseas for the purpose of O.23. The Applicant’s address reported is in Guangdong, the Mainland.

The Applicant also does not argue that he has substantial assets within the jurisdiction which may be of sufficiently permanent nature and available for enforcement of any adverse costs order.

The Applicant opposes the application on the following grounds:

(1) The Applicant has a genuine and strong prospect of success in this case. Effectively the risk of an adverse costs order is low.
(2) There was intentional delay on the part of the Respondent in taking out the application for security.
(3) In any event, the amount of security requested is excessive.

In the circumstances, this remains an appropriate case to order security. The question will then be that of the appropriate amount.

In my view, the amount of HK$150,000 proposed by the Applicant is fair and realistic. I am minded to order security in such amount. I shall finalise the order after hearing parties on costs of this application since this forms part of the security requested.

[Parties submit on costs. The court’s attention is drawn to the fact that the Applicant offered security in the amount of HK$150,000 by his solicitors’ letter dated 30 August 2007, such offer being open for acceptance in 7 days. The Respondent rejected the offer.]

(1) All proceedings be stayed until the Applicant provides security for costs up to the end of trial in the amount of HK$150,000 by payment into court within 21 days from the date of this order.
(2) Costs of this application up to and including 6 September 2007 be to the Respondent, to be taxed, if not agreed.
(3) Costs of this application since 7 September 2007, including the costs of today’s hearing, be to the Applicant, to be taxed, if not agreed.

WONG KIN FAN v. FOK YUE MING DCPI 1207/2006

S’s words:-

The parties agreed the quantum leaving the issue of liability and contributory negligence to be decided by the Court.

Drivers are still having a rather high requirement to take reasonable care.

In this case, even though the Plaintiff was the one that was substantially to be blamed, the Defendant being the driver was still liable for 1/3.

If there was any calderbank offer for the issue of contributory negligence, it is highly possible that the Plaintiff could get almost nothing from the action.

--- quote from judgment ---

Date of handing down judgment: 23 October 2007

The Plaintiff was to blame for the accident. But was the Defendant negligent too?

Ms Lau for the Plaintiff submitted that even if the Defendant’s case is accepted, the Defendant was still negligent. She relied on numerous cases in which the drivers were found liable for having failed to exercise reasonable care to avoid colliding with the pedestrians upon seeing them. Mr Wong for the Defendant submitted that the scenarios in these cases are distinguishable from the present case.

In Williams v Needham [1972] RTR 387, the pedestrian was standing by a car and clearly intending to cross the road. In Foskett (an infant) v Mistry [1984] RTR 1, the 16 and ½ year-old boy was cycling downhill and the defendant driver should have seen him from a distance. In Kong Chung Ching & Anor v Lam King Ho & Anor [1992] 1 HKC 104, the pedestrian was outside the railing and looking straight ahead as if he was about to cross the road. In Wong Shek Keung & Anor v Leung Sing Kiu & Anor [1989] 1 HKC 202, the defendant was driving at excessive speed without proper lookout.

The facts in these previous decisions are bound to vary from one to another. However the key question discerned from these decisions should be whether the driver was or ought to be aware of a real possibility that the pedestrian might cross the road though the pedestrian was apparently not looking in the direction of the approaching vehicle. How real such possibility has to be for the driver to take precaution was best explained by the Court of Appeal in Kong Chung Ching (at 107D referring to Ng Ching Hung v Lau Shun Hing, unreported, CA 182/90):

“……There, the court also referred to Fardon v Harcourt-Rivington (1932) 146 LT 391. The court said:

The root of this liability is negligence, and what is negligence depends on the facts with which you have to deal. If the possibility of the danger emerging is reasonably apparent, then to take no precautions is negligence; but if the possibility of danger emerging is a mere possibility which would never occur to the mind of a reasonable man, then there is no negligence in not having taken extraordinary precautions.

The trial judge found that while there was clearly substantial contributory negligence on the part of the deceased, the first appellant was also to blame for the accident……”

Was the possibility of the Plaintiff suddenly stepping onto the Road reasonably apparent or a mere possibility which would never occur to the mind of a reasonable man?

The present case contains its peculiar facts. Unlike the cases referred to above, the spot where the Plaintiff stepped onto the Road was an open pavement without railings or parked vehicles. Pedestrians could step onto the Road at any time. This should not be surprising if they did. As can be seen from the photographs, the kerb of that part of the Pavement had in fact been modified into a concrete slope descending onto the Road, and so had been the corresponding kerb of the pavement on the other side the Road. Pedestrians were therefore reasonably expected to make use of this part of the Pavement (and the corresponding part of the opposite pavement) for crossing the Road. A driver approaching there should be able to see that.

In the circumstances, that the Plaintiff might all of a sudden step onto the Road from that part of the Pavement was not a mere possibility which would never occur to the mind of a reasonable man. The possibility in fact occurred to the Defendant’s mind. The whole point of his deciding to drive the Taxi further to the right was to avoid accident in case such possibility materialised. The Defendant had to agree with this in court.

In the circumstances, the Defendant was negligent in causing the accident.

I have no reservation that the Plaintiff was substantially to blame for causing the accident. In Williams, the plaintiff was 2/3 responsible. In Kong Chung Ching, the plaintiff was 50% responsible. In Foskett, the plaintiff was 75% responsible.

The quantum has been agreed at HK$120,000 inclusive of interest and net of the employees’ compensation received by the Plaintiff. Discounted by the contributory negligence, the amount would become HK$40,000.

FRED LEE, trustee of the property CACV 30/2007, CACV 31/2007 and CACV 32/2007

S’s words:-

These three appeals were commented an appeal that should never have been brought.
More important, the Trustees in those three cases were required to pay for the costs of the appeal on INDEMNITY BASIS.

Further, with the support of the Court of Appeal, the judgment of Her Honourable Madam Justice Kwan on 9th January 2007 will be good guidelines for the trustees to decide whether to make objections.

As I have mentioned in other posts in this site, I do expect that we will have more cases in the future that the trustes could make much better objections. The incentive to make objections has been explained by these appeals that in each order in favour of the trustee, the like amount of the trustee’s costs may be in the region of $30,000.00.

--- quote from judgment ---

Date of Handing Down Reasons for Judgment: 23 October 2007

These were appeals from an order of Kwan J given on 9 January 2007 whereby the judge ordered that the 3 summons issued by the trustee in bankruptcy of three bankrupts be adjourned to the master and that, similarly, the joint applications for discharge made by the bankrupts and the trustee should likewise be adjourned back to the master to consider the merits of both applications with the guidance of the decision of 9 January 2007. The judge disallowed the trustee from recovering out of the bankrupts’ estates his costs of and occasioned in the hearing of 20 December 2006 before the judge.

The trustee in bankruptcy appealed the orders remitting the matter back to the master. He sought an order in each case that the summons issued by himself objecting to the automatic discharge of the bankrupts be allowed and he sought to appeal as to costs.

This court was concerned, for reasons which will emerge, that these appeals were incompetent in view of the stance taken on behalf of the trustee in the court below. Nevertheless, the court heard the matter on a de bene esse basis. The court considered that not only were there no grounds for appeal but the appeals should never have been brought. The appeals were therefore dismissed. The costs of the appeals of both the Official Receiver and the respondent to CACV 30 of 2007, who was represented in this court by counsel, were ordered to be paid by the trustee on an indemnity basis. The trustee was not to recoup the costs of the appeals from the estates. Furthermore, in view of the fact that the trustee conceded that he did not wish the interim suspension of the automatic discharge under section 30A(1) and (2) of the Bankruptcy Ordinance Cap. 6 (“the Ordinance”) to continue, those orders were discharged.

The manner in which these applications have come before the court justifiably led to the concern that the decision to abandon the opposition to the automatic discharge was taken solely on the basis that there would be some further contribution, albeit in some of the cases of almost negligible interest to the creditors, and a substantial contribution to the trustee’s costs of bringing the application to object to the automatic discharge. On that aspect, it might be observed that this court was told in the course of argument that 37 conditional discharge orders have already been made with the consent of the trustee. If each order provided for a like amount of $30,000 the total would come to $1,110,000. If similar consent orders were to be made in the 438 other cases in which the trustee has filed objection to automatic discharge, the amount involved would come to more than $13 million.

In those circumstances there is no question in my mind that these appeals should never have been brought. On that basis the appeals as to costs would have required leave; that had not been sought or obtained. Furthermore, it was not argued that the orders as to costs were not within the discretion of the court. In my view, the judge was correct in coming to the conclusion that the applications under section 30A(9) were joint applications by the trustee and the bankrupts. The circumstances of the volte face in originally applying that the periods for automatic discharge should cease to run and then seeking to withdraw the applications were not explained to the court. In the light of that I consider that the judge made the correct order in depriving the trustee of the costs of the hearing before her.

In this context I agree with the observations of the learned judge in her judgment – see [2007] 1 HKC 164 at 183H-184C – that “the trustee should not act too readily in deciding to object to automatic discharge”, that “the discretion to object should be exercised with caution” and that “an order of continued contribution to the estate as a condition to discharge should be made with restraint and circumspection”.

FRED LEE and CHOW WAI LAN, CHRISTINE v. WONG HING WAH MICHAEL HCB 26018/2002

S’s words:-

A case that the trustees won.

However, please read CACV 30, 31 & 32 / 2007 as well.

In my own view, with more experience in making objections, I believe we will have more cases that are ruled against the bankrupts in the future.

The various case authorities, whether against or in favour of the trustees, are good examples/guidelines for the trustees to make objections in the future. Thus, planning can be made before objections are submitted.

--- quote from judgment ---

Date of Judgment : 12 October 2007

The grounds on which an order suspending an automatic discharge may be made are specified in section 30A(4) of the Ordinance.

The grounds on which the automatic discharge of Mr Wong from his bankruptcy are objected to were set out in an affirmation made by Mr Lee made in support of the application. Two matters were relied upon. Both were said to demonstrate unsatisfactory conduct on the part of Mr Wong in respect of the period before his bankruptcy.

The approach to the exercise of the discretion under section 30A(3)

As has been observed in a number of decisions, the introduction of the present section 30A of the Ordinance marked a significant change in the approach of the law towards bankrupts. Previously, there was no provision for automatic discharge. A bankrupt had to apply for his discharge, and it was generally difficult for him to obtain it. The effect of the change has been to place the emphasis on rehabilitation of the bankrupt so as to enable him to resume a normal life (see e.g. Re Hui Hing Kwok [1999] 3 HKC 683, per Le Pichon J at 687B).

So far as the power under section 30A(3) to suspend the automatic discharge of a bankrupt is concerned, it is, I think, clear that one of its main purposes is to provide the bankrupt with an incentive to cooperate with his trustee, and to comply with his obligations under the Ordinance. However, this cannot be its only purpose. If it were, there would be no point in including among the grounds for objection any reference to the pre-bankruptcy behaviour of the bankrupt. Other purposes that are served by the power to suspend automatic discharge would appear to me to include the protection of the public, where there is reason to think that the reintroduction of the bankrupt into ordinary commercial life might pose risks or dangers against which lenders and others who might have dealings with him should be protected, and, in appropriate cases, as a mark of disapproval of the way in which the bankrupt has conducted his affairs whether before or after his bankruptcy.

The court has recently considered the approach which should be adopted to objections to discharge in cases involving allegedly unsatisfactory pre-bankruptcy conduct in Lee Fred v Leung Chin Yeung [2007] 1 HKC 164 (Kwan J), Re Tong Yuk Kin (unreported, HCB 22870/2002, Deputy Judge A To, 20 June 2007) and Re Liu Man Hoo (unreported, HCB 11719/2002, Lam J, 14 September 2007). I should point out that the last of these decisions was given after the hearing in this matter concluded, and was not the subject of submissions by either party. However, the approach adopted in it is, I think, broadly in line with that taken in the other two decisions.

These authorities make it clear that there are two stages involved when the court is considering the exercise of its powers under section 30A(3). It is first necessary to determine whether one or more of the grounds mentioned in section 30A(4) has been established. If this is done, the court then moves on to consider whether or not, in the exercise of its discretion, a suspension of the automatic discharge that would otherwise have been available to the bankrupt should be ordered. It will not be in every case where a ground for suspension is made out that a suspension will be called for or imposed. In determining whether or not a suspension should be ordered, the court will have regard to all the circumstances of the case, including the nature of the acts complained of and the post-bankruptcy conduct of the bankrupt.

That said, bearing in mind the policy of rehabilitation, I would accept that save in very serious cases, a suspension of automatic discharge in respect of unsatisfactory pre-bankruptcy conduct is likely to be for a shorter period than might be ordered in a case in which a bankrupt had been guilty of other, post-bankruptcy ground for suspension, where a longer period of suspension may well be called for so as to ensure that the bankrupt properly complies with his obligations.

Taking account of the fact that there are no complaints as to Mr Wong’s post-bankruptcy conduct, and that he appears to have provided information to the Trustees as and when required, I have come to the view that a suspension of Mr Wong’s automatic discharge for a period of four months would be sufficient in this case. Accordingly, I shall order that the relevant period under section 30A(1) of the Ordinance shall cease to run, in the case of Mr Wong, for a period of four months. The effect will be that he is to be treated as having been discharged from his bankruptcy on 24 June 2007.

JERRY CHEN v. WHIRLPOOL (HONG KONG) LIMITED FACV 23/2006

S’s words:-

The Final Court of Appeal was asked to decide an appeal of the Applicant that in my personal view was without merit at all. The Applicant was surprisingly supported with legal aid in this appeal to Court of Final Appeal. Why I make such a comment? Let us look at the decision of Court of Appeal refusing leave be given to the Appellant for leave to appeal:-

“1) We are not satisfied that this case involves matters of great general or public importance. First our decision is based on the unique facts of the case. The relevant legal principles are well established. Second while we accept many Hong Kong employers are asking their employees to work in the Mainland, we are not satisfied that the specific arrangement in this case is also a widespread practice which called for a determination by the Court of Final Appeal.

2) We are also not satisfied that this case comes within the ‘or otherwise limb’. It has not been shown that the situation is exceptional.”

I feel doubt whether we do require any law that extends the duty of an employer to such.

Why legal aid was granted? Would it be the situation that the Applicant had used all/most of the compensation he did receive in his Employees’ Compensation Claim in the litigations in High Court and Court of Appeal?

Anyway, the public fund is now required to pay for the costs of the Respondent. What a pity!

--- quote from judgment ---

Date of Judgment : 26 October 2007

The appellant was seriously injured in a traffic accident in Beijing on 13 October 1998. It happened when the car in which he was travelling as a passenger was negligently driven onto its incorrect side of the road and collided with an oncoming motor vehicle. He was in the employ of the respondent, designated as commercial director. The respondent is a Hong Kong company in the Whirlpool group. This group is centred in the United States, but is also present and active in many other parts of the world. As the appellant’s contract of employment with the respondent expressly provided, he was “based in Shanghai … with responsibilities to” a Mainland company headquartered in Shanghai. This company is named Whirlpool Narcissus (Shanghai) Co. Ltd (“WNS”). It served as the corporate vehicle for a joint venture in the Mainland between the Whirlpool group and a Mainland company named Shanghai Narcissus Electric Appliances Co. Ltd.

Employers’ duty of care/contractual liability

Whatever else employers’ common law duty of care and contractual liability despite delegation of performance involves in a case like the present, the appellant cannot succeed under either of these two bases of liability or both of them combined unless he can persuade us to reverse the concurrent findings of the courts below that Mr Zheng was a reasonably competent driver. After giving the matter anxious consideration, I have come to the conclusion that there are no circumstances that would justify us in the exceptional course of disturbing those concurrent findings. It is true that there is no evidence as to when Mr Zheng joined WNS, how long he had driven executives on his behalf or how often he did so. But the main thrust of the appellant’s case in the courts below in regard to the sort of driver required was that a professional one was required. That was the focus below, most significantly at the trial. Otherwise there might have been more evidence about Mr Zheng’s activities as a driver.

Vicarious liability

The two problems which the appellant faces on the foregoing argument as to vicarious liability are these. First of all, it cannot be said that there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at the trial. Secondly, entertaining that point would certainly involve entertaining a point which was not taken in the courts below but which, if accepted, would constitute a major development in the law.

For those reasons, I do not think that the appellant can in the circumstances succeed on vicarious liability. I say nothing on how the law of vicarious liability may develop in future.

The appellant has recovered employees’ compensation. Hopefully he will find some solace in that. I can find no basis on which to enable him to recover more. In the result, I would dismiss the appeal with costs and make an order for legal aid taxation of the appellant’s own costs. It is common ground that costs should be dealt with that way if, as it has turned out, the appeal is dismissed.

LEUNG TSANG HUNG AND LEE WAI YU v. THE INCORPORATED OWNERS OF KWOK WING HOUSE FACV 4/2007

S’s words:-

Kwok Wing House is a building in Mongkok with a famous bookshop in its Ground Floor. There was a loss of life in the accident. Not only the owner/occupier and tenant of the illegal structure, the Incorporated Owners of the Building was held liable. Once the Incorporated Owners was liable, it thus meant that every owner of the Building was liable. The Policy Consideration was rejected by the Final Court of Appeal. That should be the end of the appeal and the Incorporated Owners should have no way to avoid being responsible to pay for damages.

Personally, I partly agree with the view of Stock JA in Court of Appeal. It would be too harsh for the Incorporated Owners to be liable for the accident. The decision of the Final Court of Appeal was too harsh to the owners, but when we spend just a few minutes to consider the principle mentioned by Mr. Justice Bokhary, the decision was correct.

There is not yet any strict requirement for a building to have third party insurance to cover such kind of accident. We will have such statutory requirement soon. However, in the past, it was really difficult for a building to obtain any such insurance coverage. Now, every building whether old or not should obtain its own insurance.

But, if there was not yet any Incorporated Owners for the Building, it would be difficult for the Plaintiff to sue all owners. There are still lots of buildings in Hong Kong that are without any incorporated owners. The decision of the Final Court of Appeal may again discourage old buildings to have their Incorporated Owners.

That was definitely not in line with the existing policy of the Government to encourage owners to have their own incorporated owners.

---

Date of Judgment: 26 October 2007

Mr Justice Bokhary PJ:

Without attempting an exhaustive statement of the legal position, I think that at least this much can be said. Where any part of, or anything annexed to, the common parts of a building falls off as a result of its hazardous state and causes death, injury or damage in the street below, the incorporated owners are liable in nuisance for the consequences if they knew or ought to have known of the hazard in time to remove it but had unreasonably failed to do so. I regard such a rule as consistent with principle. And, as Lord Reid famously said in Dorset Yacht Co. Ltd v. Home Office [1970] AC 1004 at pp 1026H - 1027A, “when a new point emerges, one should ask not whether it is covered by authority but whether recognised principles apply to it”. That was said in regard to negligence. It holds good in regard to nuisance. On the basis of what these incorporated owners ought to have known in the circumstances of the present case as disclosed by the evidence, I am of the view that the estate of this deceased woman is entitled to succeed against them. For the foregoing reasons and those more fully stated in Mr Justice Ribeiro PJ’s judgment with which I agree, I would allow this appeal in the terms which he proposes.

Mr Justice Ribeiro PJ:

On 10 August 1999 at about 3.00 pm, Madam Liu Ngan Fong Sukey was plying her trade as a hawker at a fixed pitch in Tung Choi Street when she was struck by a piece of concrete which had fallen from the adjacent building. She died in consequence.

The building is known as Kwok Wing House (“the building”) and the object which had caused Madam Liu’s death was a triangular-shaped piece of concrete weighing some 15 lbs which had fallen from the 11th floor. It had formed the corner of a concrete canopy projecting out from over the enclosed balcony of Flat A on that floor (“the flat”), before it had become detached and fallen down into the street.

The plaintiffs are the administrators of the estate of Madam Liu. They sued Tse Yiu Pui and Ho Lai Bing who jointly owned the flat (“the owners”) as the 1st defendants. Chan Kwok Chi was their tenant (“the tenant”) and he was made the 2nd defendant. The 3rd defendants are the incorporated owners of the building, being a corporation which had come into existence on 12 April 1999 upon the owners being registered under the Building Management Ordinance[4] (“the BMO”).

The owners consented to judgment so that at the trial, the Judge was concerned only with the liability of the tenant and the corporation. They were each sued in negligence and public nuisance. His Lordship found the tenant liable along with the owners but dismissed the action against the incorporated owners with costs, holding that they did not owe any actionable duty to the deceased. Damages were assessed in the sum of $1,554,742.00 and judgment in that amount, together with various sums of interest and costs, was entered against the owners and the tenant. The plaintiffs’ appeal to the Court of Appeal in relation to the liability of the incorporated owners was dismissed,[5] again on the basis that the corporation owed the deceased no operative duty. An appeal on quantum is pending in the Court of Appeal. Leave to appeal to this Court was granted by the Court of Appeal[6] under section 22(1)(b) of the Court’s statute.

D.4 Control over the common parts

Given such attributes, can it be said that the incorporated owners in the present case exercised sufficient control over the building’s common parts to justify placing them in a category of actionability in respect of omissions?

In my view, the answer is affirmative. The Ordinance places the incorporated owners under a duty to “maintain the common parts and the property of the corporation in a state of good and serviceable repair ...; and to do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant ... for the control, management and administration of the building.”[100] The common parts include the external walls.[101] Obligations deemed by the BMO to form part of the DMC which the corporation is duty-bound to enforce include a prohibition against any person converting any common part to his own use without the approval of the owners’ committee.[102]

The DMC in the present case requires each owner to share in the cost of keeping the external parts of the building in good and tenantable repair and condition.[103] It also provides that the parties should not “make any structural alteration to the said building”.[104] Each owner covenants “not to place anything in or to occupy ... any part of the ... said building intended for common use.”[105] The parties also covenant to employ an agent to “generally take care of the said building for the common benefit of the parties hereto and to repair ... the structure and exterior of the said building or any part or parts thereof which are used by the parties hereto in common ...”[106]

To give these powers and duties teeth, the BMO authorizes entry on behalf of the incorporated owners into any flat for the purpose of inspecting, repairing, maintaining or renewing any common parts or other property in the flat causing concern; or for the purpose of “abating any hazard or nuisance which does or may adversely affect the common parts or other owners”.[107] If entry is refused, the BMO empowers a magistrate to issue a warrant authorizing a person to break into the flat in the presence of a police officer.[108] Members of the management committee exercising such powers in good faith and in a reasonable manner are given personal immunity.[109] Costs incurred in the exercise of these powers are recoverable from the owner in question,[110] as are the costs of remedial works which the corporation may undertake itself where the owner fails to do what is necessary, such costs being a charge upon the defaulting party’s share of the property.[111]

D.5 Incorporated owners’ actionable omissions

In the light of the foregoing, it is my view that the legal attributes, duties and powers of the incorporated owners place them in a category closely analogous with that occupied by the owners and occupiers discussed above.[112] They exercise a sufficient degree of control over the common parts of the building to justify making them subject to a duty which is actionable on the basis of omission in respect of nuisance hazards arising on or emanating from those common parts, subject to proof of the other necessary elements of liability.

D.8 Conclusion as to liability

It follows, in my view, that all the elements of liability on the incorporated owners’ part have properly been made out. They are accordingly liable for damages for public nuisance along with the flat’s owners and tenant.

F. Policy considerations

In reaching his decision, Stock JA referred to policy considerations which led him to the view that fixing incorporated owners with liability in a case like the present might have “harsh and unreasonable pragmatic consequences”.

This passage suggests that Stock JA was proceeding on the basis that liability is strict, so that the incorporated owners would be liable even where there is no reasonable basis for considering the structure a hazard. However, if, as has been held above, it is recognized that the law has evolved to the point where liability is premised on the defendant knowing or properly being taken to know of the existence of the hazard, this policy objection falls away. There is nothing harsh or unreasonable about making the body responsible, on behalf of the owners collectively, for keeping the common parts in good repair liable for failing to do so where they know or ought to know of the existence of a nuisance hazard endangering members of the public. The powers of enforcement given to the corporation by the BMO have been mentioned above.[143] The available measures are not confined to action in the courts.

There are moreover, in my view, sound reasons for making the incorporated owners, and not merely the individual owners implicated, responsible. Where the hazard involves the external common parts of a high-rise building, effective inspection and maintenance works can really only be carried out if those parts (and any illegal accretions thereto) are dealt with as a whole, with the erection of scaffolding and the like and with all the owners’ contributing to the cost, subject to possible adjustment regarding the individual owners implicated. And where the nuisance hazard consists of some unauthorized structure encroaching upon or being attached to the common parts, the individual owners who may have erected or adopted the structure and benefit from its existence, may well be unwilling to take any steps to remove it. Compulsion from, or direct action by, the incorporated owners may well be required if the hazard is to be nullified.

HKSAR v. CHOW TIN SHING (周天勝) CACC 85/2007

S’s words:-

We should have heard many cases that defendants were charged of dangerous driving causing death and finally sent to prisons.

For the appeal against conviction for Charge 1 (that suggested that the Applicant endangered the life of his own crew), the conviction was quashed without surprise. In fact, the breach of the International Regulations for Preventing Collisions at Sea did not automatically suggested that the Applicant was endangering the life of his own crew. The Court of Appeal used the words:-

We are not not sure why the judge referred to the prosecution having “proved beyond reasonable doubt the defendant’s conduct in not keeping a proper lookout”.

Then leaving the sentencing for Charge 2.

The Court refused to rely motor vehicles offences to consider the sentencing. In no doubt, we do not have much case authorities as reference for the sentencing of such charges pursuant to Section 72 of the Shipping and Port Control Ordinance. My personal view is that, motor vehicles offences are relevant, but that was not accepted by the Court of Appeal.

Fortunately, the Court of Appeal also agreed that those cases involving high speed chases were distinguished. The Applicant performed no deliberately dangerous maneouvres but a life was lost. That was the reason why the sentence of the Applicant was reduced to 17 months but not any further.

If there was no loss of life but injuries only, would the Applicant be sent to prison for only 12 months or even shorter period? I feel some doubt on whether immediate custodial sentence would be imposed if that was the situation.

--- quote from judgment ---

Date of Judgment : 22 October 2007

On 13 March 2007, the applicant was convicted after trial before Her Honour Judge Chua in the District Court of two offences of endangering the safety of others at sea, contrary to section 72 of the Shipping and Port Control Ordinance, Cap. 313 (“the Ordinance”), being Charges 1 and 2 respectively. In respect of the offence the subject of Charge 1, the applicant was sentenced to six months’ imprisonment and in respect of the offence the subject of Charge 2, to two years’ imprisonment. The sentences were ordered to be served concurrently, resulting in a totality of sentence of two years’ imprisonment.

The applicant has been granted leave to appeal out of time his conviction in respect of the 1st charged offence. He seeks leave also to appeal the sentences imposed for both offences.

Appeal against conviction for Charge 1

In all those circumstances, independently of any breach of the Regulations by the applicant, it is difficult to see how the prosecution on the evidence before the court had proven to the requisite standard that the applicant’s actions in failing to alter course so as to leave the tug to port had created a real risk of danger.

Accordingly, we grant leave to appeal against conviction so far as the 1st charged offence is concerned, treat the hearing of the application as the hearing of the appeal and allow the appeal. The applicant’s conviction of the 1st charged offence is quashed and his sentence in respect of that conviction is set aside.

Appeal against sentence

Mr Ross has provided us with a number of authorities related to sentences imposed in respect of motor vehicle offences, but we do not think those of direct application to a sentence imposed pursuant to section 72 of the Ordinance. As a matter of general principle, any sentence imposed pursuant to a section 72 offence will primarily depend upon the degree of danger created by the acts of the offender in the circumstances as they existed at the time of the offence. Those circumstances will vary enormously. The weather, degree of visibility, sea state, speed of vessels, manouvres performed and other factors pertaining to those circumstances will often be relevant.

In cases involving high speed chases by police launches of sampans carrying illegal immigrants in Hong Kong waters, sentences of 2½ years and three years’ imprisonment after trial have been approved by this court : see A.G. v. Chan Siu Yun (1995) 2 HKCLR 223 and R. v. Sze Yui, unreported, CACC 348 of 1995. In the latter case, a subsequent similar offence by the same applicant led to a starting point at the maximum of four years’ imprisonment being endorsed : see HKSAR v. Sze Yu,unreported, CACC 143 of 2003. It should be noted in these cases, however, that the acts of endangerment were deliberately reckless and of great risk to the safety of the passengers in the sampans and to a lesser extent to the crew of the pursuing police launches.

We do not think the same considerations apply in the circumstances of the present case. The applicant performed no deliberately dangerous maneouvres. He proceeded at the barge’s maximum speed, but at a speed well within the limit for the fairway. It is true he had elected to proceed on the wrong side of the fairway and in the vicinity of possible inshore traffic in circumstances where he knew his forward vision was reduced and that the applicant’s act brought about a person’s death. But it was not a situation where the applicant in a calculated way risked the lives and safety of others such as was so in the above cited cases. Indeed, immediately after the collision the applicant stopped and contacted the authorities in a successful attempt to bring assistance to the scene. Marine police came and rescued the injured son of the deceased. This is to be distinguished from the callous indifference to life displayed by the defendants in the cited cases. The fact that in those cases there was no loss of life is a matter of pure chance.

Given the maximum term for the sentence of four years’ imprisonment, the contrast between the applicant’s conduct and the conduct of those involved in intentionally risking the lives of others, should have been given greater recognition in the sentence imposed in this case.

For these reasons, we consider the sentence imposed to have been manifestly excessive. In our view in the circumstances of this offence a sentence of 18 months’ imprisonment after trial was called for. There was some mitigation available for the applicant given his clear record and his immediate calling of assistance to the scene, and that sentence should be discounted to 17 months’ imprisonment. We do not regard the applicant’s relative inexperience as a master of such vessels to be a mitigating factor in the circumstances of this case.

Francis Burkett passed away on 5th October 2007

Francis Burkett passed away on 5^th October 2007

Quoted from an email from School of Law of City University of Hong Kong:-

“Dear All, some of you will no doubt remember Francis Burkett who was with the School of Law some 10 years ago. Others may have met him in Practice. Francis died on 5th October and I attach details of the funeral arrangements for your information. Regards, Tony Upham”

His funeral arrangements will take place on 19^th & 20^th October 2007.

Francis was a Barrister in Hong Kong from 1997 (but in UK from 1969). Although I do not believe he was once my lecturer, I remember that I did have met him in my practice. Unfortunately, I have to admit that I do not have a clear recollection of his appearance, age or otherwise. But, in any event, our legal professional again lost a senior member.

2007-10-15

CHAU MING LUNG v. FASTCUT SERVICES LTD AND OTHERS HCPI545/2001

S’s words:-

What had happened ...
The plaintiff was 48 years when he was injured and now he is 57 years old.
The plaintiff spent 3 years for commencing legal proceedings and spent another 6 years to obtain his judgment.

Further, a simple calculation ... 48 + 9 + 6 = ??

Again, with due respect, ... nothing to say further ...

--- quote from judgment ---

Date of Handing Down Judgment : 17 September 2007

On 3 July 1998, the plaintiff Mr Chau was injured whilst working on a platform and fell from a height of about 3 metres. The platform on which he was standing collapsed and he fell to the ground. He was then 48 years of age.

Here Mr Chau has a continuing pain in his hip and both knees. He is now 57 years of age.

(a) Pre-trial loss of earnings
$15,383 x 12 x 9 years 2 months (9.17 years) $1,692,745.00
Less : Wages received - $409,986.00
$1,282,759.00

CHAN KAM PUI v. WONG SIU HUNG AND ANOTHER DCPI1920/2006

S’s words:-
With due respect, ... nothing to say ...

--- quote from judgment ---

Date of Handing down Judgment : 28 September 2007

In these circumstances, I find the Plaintiff was 30% contributory negligent.

In view of the 30% contributory negligence on the part of the Plaintiff, there will be a Costs Order nisi that D1 pays 2/3 of the costs of the action to the Plaintiff, to be taxed if not agreed, with certificate for Counsel. Such Costs Order nisi is to be made absolute 14 days after the handing down of the Judgment.

FRED LEE, trustee of the property of WONG CHI WAI SUNMY, a bankrupt v. WONG CHI WAI SUNMY HCB12941/2002

S’s words:-
Will the Court give more and more judgment in favour of the bankrupts in relation to the application for suspension of automatic discharge on the part of the Trustees, in particular, the Trustee who regarded by the Court as having routinely done the same.

Lam J’s judgment in Liu Man Hoo HCB 11719 of 2002 in no doubt will be the guidelines in future of which the Master in Wong Chi Wai Sunmy’s case also adopts the same.

The pre-bankruptcy conducts of the Bankrupt were doubtful. But when the total contribution to the Official Receiver in thie case was considered, “which is more than half of proven debts”, “the excessive borrowing conduct may be brushed aside.” It thus explains why no creditor would take initiative to object the automatic discharge.

Finally, a pure academic issue, that is, the decision of Master Au Yeung (now Registrar Au Yeung) was again adopted of which the suspension was lifted with retorspective effect as per the decision of Official Receiver v Chan Kwok Keung, HCB 20772 of 2002.

--- quote from judgment ---

Date of Handing Down Reasons for Decision : 28 September 2007

Envisaging that the Application would not be disposed of immediately should Mr. Wong object to the Application, the Trustee, who seems to have routinely done so, also on the same date of the Application issued a summons for an interim order to prevent Mr. Wong from being automatically discharged from bankruptcy. This resulted in the granting of an interim order by a Master on 1 September 2006 which order was further extended on 6 March 2007. The interim orders had been de facto preventing Mr. Wong from the automatic discharge until the Application was determined on 24 September 2007.

Before I handed down the judgment, Lam J on 14 September 2007 handed down a decision of Fred Lee, trustee of the property of Liu Man Hoo, a bankrupt v Liu Man Hoo, HCB 11719 of 2002, 14 September 2007 (unreported), which decision provides useful guidance (the relevant part of which will be discussed below) on how a trustee in bankruptcy should approach an objection to automatic discharge. That case involves not just the same trustee but also contains similar unsatisfactory pre-bankruptcy conducts as the present case. I consider that I should also have regard to the principles discussed in Re Liu Man Hoo.

In not less than 3 months before the date of Mr. Wong’s automatic discharge from bankruptcy, the Trustee on 3 June 2006 sent the section 30A(5)(a) notices to the proving creditors and informed them that he intended to object to the discharge on the ground of pre-bankruptcy unsatisfactory conduct under section 30A(4)(d).

No objection was raised by any proving creditors to Mr. Wong’s automatic discharge. The Trustee, as had indicated in his notices to the proving creditors, issued the Application, relying on the pre-bankruptcy unsatisfactory conduct ground under section 30A(4)(d).

At the hearing, Miss Ng has largely relied on the recent decision of Deputy High Court Judge To in Fred Lee and Chow Wai Lan, Christine (trustee of the property of Tong Yuk Kin) v Tong Yuk Kin, HCB No. 22870 of 2002, 20 June 2007 (unreported), a decision based on pre-bankruptcy conducts of excessive borrowing as well as misrepresentation as a ground of objection to discharge by the same trustee. In this case, the learned Judge referred to an earlier decision by Kwan J in Fred Lee and Chow Wai Lan, Christine (trustee of the property of Leung Chi Yeung) v Leung Chin Yeung, HCB No. 8779 of 2002 (and two other cases), 9 January 2006 (unreported) and expounded in detail the meaning of unsatisfactory pre-bankruptcy conduct under A30A(4)(d) in the context of the legislative objectives of section 30A.

Miss Ng also alluded to an earlier decision of Re Hui Hing Kwok [1993] 3 HKC 683, a decision expounding on the legislative objective behind section 30A, which lies in rehabilitation in allowing a bankrupt to resume a normal life in society.

To conclude, given the lack of detailed and timely investigations by the Trustee and the unchallenged evidence of Mr. Wong, I am unable to accept that the Trustee has satisfied me that the excessive borrowing and loss of money in speculation being unsatisfactory conduct. I however find that the conducts of gambling and misrepresentation have been - when viewed objectively - unsatisfactory.

Having concluded that some aspects Mr. Wong’s conducts have not been satisfactory, I should carefully consider whether I ought to exercise my discretion to suspend Mr. Wong from discharge of bankruptcy, and should I so find, to decide the appropriate period of suspension.

In considering how my discretion should be exercised, I shall bear in mind the principles elucidated in the cases referred to above, in particularly the very powerful observations of Lam J in Re Liu Man Hoo (op. cit.) at paragraph 66 that the court should take an overall view of the matter in the exercise of discretion and that suspension of automatic discharge should only be applied to conducts of exceptional gravity (See paras. 65 to 68 in Re Liu Man Hoo).

Mr. Wong’s said pre-bankruptcy unsatisfactory conducts should be balanced against the post-bankruptcy conducts as well as other factors such as the manner the Trustee conducts the investigations and all the circumstances of the case. The unsatisfactory conducts that I have found proved, in my view, are not grave. Further, no objections were raised by any proving creditors against Mr. Wong’s discharge from bankruptcy. Mr. Wong has cooperated with the Trustee in the administration of the estate. Further, from the amounts of contributions he had made to the bankruptcy estate, I am satisfied that Mr. Wong had done his best to contribute to the bankrupt estate without abusing the bankruptcy regime as a debt-clearing house. Last but not the least, by virtue of the interim orders, Mr. Wong prior to the disposal of this case, had effectively been prevented from discharge for about 12 months, which must have caused him much distress.

After having considered all the evidence and balanced the interests of Mr. Wong, that of the commercial world as well as the moral values behind section 30A, I consider that it is not fair to exercise my discretion to suspend any period of automatic discharge.

Upon dismissal of the Application, I also lifted the suspension imposed by the two interim orders granted by Masters and ordered that it should take retrospective effect, adopting the reasoning (with which I agree) in Official Receiver v Chan Kwok Keung, HCB 20772 of 2002, Master Au Yeung (as she then was) 5 July 2007 (unreported).

WONG MAN TAT v. CHAN YUEN MAN AND OTHERS DCCJ2853/2005

S’s words:-
It is rare that we can find case authorities that leave to appeal was granted by District Court.

The following case is one of them of which the Judge agreed that part of his findings came from inference and the Court of Appeal is entitled to draw a different inference.

However, it does not imply that every losing party could suggest the Judge form his conclusion by way of inference; otherwise, the Judge would be a rubber stamp in leave to appeal applications..

I believe this case will be an interesting case in the Court of Appeal in the future. In other daily life, we have received too much enquires in relation to water seepage allegations.

--- quote from judgment ---

Date of Handing Down Decision : 27th September 2007

DCCJ 2853/2005 was a claim by the owner of Flat 1802 (“1802”) of Block C, Westlands Gardens, No. 4 Westlands Road, Quarry Bay, Hong Kong (“the Building”) and against the ownersof Flat 1801 (“1801”) of the Building, due to water seepage from the Defendant’s master bathroom into the Plaintiff’s master bathroom.

The Plaintiff applied to this Court for an injunction restraining the Defendants from repeating or continuing the nuisance of water seepage from the shower stall and floor drain of the master bathroom in 1801 to 1802; an order that the Defendants to rectify the same; and damages for: (1) diminution in value of the premises to be assessed; (2) discomfort and inconvenience and disturbance; (3) surveyor fee of HK$20,000.00 and; (4) plumber charges of HK$15,000.00.

The Defendants counterclaimed against the Plaintiff for: (1) discomfort and inconvenience and disturbance to be assessed; (2) surveyor fee of HK$10,000.00; and (3) plumber charges of HK$8,500.00.

After trial, I granted the Plaintiff’s application for injunction, ordered the Defendants to rectify the water seepage, ordered the Defendants to pay the Plaintiff plumber charges of HK$15,000.00 and ordered the Plaintiff’s claim for diminution in value of the premises to be assessed on a day to be fixed. The counterclaim was dismissed with costs of both the claim and counterclaim to the Plaintiff, to be taxed if not agreed.’

The Defendants now seek leave to appeal my decision and a stay of execution pending appeal.

The applicable test is set out in Smith v Cosworth Casting Processes Limited [1997] 1 WLR 1538. Lord Woolf, MR stated the relevant principles as follows:

“ i) The court will only refuse leave if satisfied that applicant has no realistic prospect of succeeding on the appeal. The test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case. Why however this court has decided to adopt the former phase is because the use of the word “realistic” makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.
ii) The court can grant the application even if it is not satisfied. There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success. For example, the issue may be one which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raises an issue where the law requires clarifying.”

Part of the grounds of appeal deals with my finding of fact that water seeping from the tiles in the 1801 shower area was the source of water seeping into 1802. This finding was made by a process of inference, drawn when I found the 1801 shower area wall-tiles seeped water under the floor tiles, that it was more likely than not the shower area also seeped water under the wall-tiles onto the partition wall. When there was no evidence of any other source of water seepage, the water seepage under the shower area wall-tiles was more likely than not, the source of water seepage in the 1801 side of the partition wall.

The proper approach, when an appeal is against a Court’s finding of primary facts is set out in Ting Kwok Keung v Tam Dick Yuen & Ors [2002] 3 HKLRD at para. 32 to 46. Bokhary PJ’s judgment in Ting Kwok Keung can be summarized as follows :

(1) Appeals against findings of primary facts are approached very differently from appeals against findings of fact made by a process of inference;
(2) Where findings of facts are made by a process of inference, no question of credibility arises;
(3) An appellate court is universally reluctant to reject a finding of specific fact, particularly where the finding could be found on the credibility or bearing of a witness;
(4) On the other hand, an appellate court is customarily willing to form an independent opinion about the proper inference of fact, subject only to the weight which should be given to the opinion of the court below;
(5) Where the judgment turns on an issue of facts, the Court of Appeal must have regard to the nature of that issue of fact and to the advantage enjoyed by a trial judge who received evidence on such issue first-hand;
(6) The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received evidence first-hand, it is nevertheless satisfied that the trial judge’s conclusion on the facts is plainly wrong.

My finding of fact was based on a process of inference and the Court of Appeal is entitled to form its own opinion about the proper inference. Leave should therefore be granted.