In a recent decision in Wong Sin Yi v. Kwan Pui Wing and The Kowloon Motor Bus Company (1933) Limited (DCPI 408/2023) made by Hong Kong District Court Personal Injury Master Jo Siu, the learned Master commented that claims with no reasonable prospect to exceed HK$75,000 shall be commenced in the Small Claims Tribunal with the Plaintiff's costs to be taxed on Small Claims Tribunal scale.
BACKGROUND
On 10 October 2021, the Plaintiff was involved in a traffic accident while on board the Defendants' bus. The Plaintiff allegedly sustained minor abrasions to her limbs and pain in her left eye as a result of the accident.
The Defendants admitted common law liability shortly after the Plaintiff commenced legal proceedings. The Defendants made two Sanctioned Payments totalling HK$53,000, accompanied by a letter expressly putting the Plaintiff on notice that upon the acceptance of the Sanctioned Payment, the Defendants intended to apply to the Court for an Order that the Plaintiff's costs shall be disallowed, relying on Order 22 rule 20(1) of the Rules of the District Court. The Plaintiff accepted the Sanctioned Payment of HK$53,000 and insisted on claiming costs of the action on District Court scale. The Defendants made an application for an Order that the Plaintiff's costs shall be disallowed, or alternatively to be taxed on Small Claims Tribunal scale if not agreed.
JUDGMENT
The Court ruled in favour of the Defendants and made an Order that the Defendants shall pay the Plaintiff's costs of the action to be taxed on Small Claims Tribunal scale if not agreed. The Plaintiff shall pay the Defendants' costs of and occasioned by the application on the District Court scale to be taxed, if not agreed.
The Court made the following important observations:
- There was nothing procedurally wrong or anything debarring the Defendants from taking out the said application, especially since the Defendants acted promptly in doing so;
- The Defendants had given the Plaintiff effective, adequate and reasonable prior warning of their intention to invoke the Otherwise Proviso. Hence, when the Plaintiff filed and served the Notice of Acceptance of Sanctioned Payment, the Plaintiff had made an informed decision to accept the Sanctioned Payment subject to the Otherwise Proviso;
- Based on all documents available (medical documents reflecting minor injuries, sick leave certificates for only one month, and pleaded pre-accident monthly earnings at HK$15,000), the Plaintiff should have known that there was no reasonable prospect that her claim would exceed the jurisdiction of the Small Claims Tribunal. There was no good reason justifying the commencement of the proceedings in the District Court.
TAKEAWAY
The decision sends a strong reminder to legal practitioners to realistically assess all the available evidence when forming a view on the reasonable prospect of recovering damages in a claim, before deciding on which level of court to commence an action. The proper forum for determining minor injury claims is the Small Claims Tribunal and not the District Court. The decision also highlights the importance of giving an effective prior warning to the other party when one intends to rely on the Otherwise Proviso in Order 22 rule 20(1) in altering the usual costs orders.
This is a welcome decision for defendants and insurers faced with inflated and exaggerated claims and minor injury claims, as the scale of costs payable to the plaintiffs shall be proportionate to the likely recoverable damages.
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