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 It is not necessary to go into detail of the trustees’ grounds in support of their application as they have withdrawn their application.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”.