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。