Hong Kong’s Civil Justice Reform, which took effect on 2 April 2009, was designed with the benefit of hindsight as to the successes and failures of the 1999 Woolf Reforms in England. One such success was Part 36 of the English Civil Procedure Rules, dealing with offers to settle and payments into court, which has been praised as an effective means of quickly resolving claims. Hong Kong adopted Part 36 wholesale (with immaterial modifications) as the new Order 22 of the Rules of the High Court (Cap 4A).

One of the key developments is the ability of a plaintiff to make a sanctioned offer. If the sanctioned offer is not accepted by the defendant, and if the plaintiff goes on to obtain a judgment more advantageous than the sanctioned offer, the court may order costs on an indemnity basis and interest at an enhanced rate (on both the judgment sum and the indemnity costs) against the defendant.

The relevant provisions for the purposes of this discussion are contained in O 22 r 24:

(2) The court may order interest on the whole or part of any sum of money (excluding interest) awarded to the plaintiff at a rate not exceeding 10% above judgment rate for some or all of the period after the latest date on which the defendant could have accepted the offer without requiring the leave of the court.

(3) The court may also order that the plaintiff is entitled to –

(a) his costs on an indemnity basis after the latest date on which the defendant could have accepted the offer
without requiring the leave of the court; and
(b) interest on those costs at a rate not exceeding 10% above judgment rate.

The phrase ‘after the latest date on which the defendant could have accepted the offer without requiring the leave of the court’ (hereafter, the ‘latest date’) is of importance because it regulates the time from which the indemnity costs and the enhanced interest rate are to apply.

Order 22 rule 16 provides for the time for acceptance of the plaintiff ’s sanctioned offer. In simple terms, if the plaintiff ’s sanctioned offer is made not less than 28 days before trial (a ≥28 days offer), then the defendant may accept it without leave of the court. If the plaintiff’s sanctioned offer is made less than 28 days before trial (a <28 days offer), or if the defendant wants to accept a ≥28 days offer after the expiry of the 28-day period, then leave of the court is required unless – and this, as we shall see below, is where the problem arises – the parties agree on liability for costs, in which case, leave of the court is not required.

The rationale underlying the operation of O 22 is to allow the defendant to have sufficient time, namely 28 days, to consider the plaintiff ’s sanctioned offer. One would have thought that the latest date means the 28th day, ie the last date upon the expiry of the 28-day period for a ≥28 days offer. Support for this construction can be found in paragraph 311 of the Final Report of the Working Party on Civil Justice Reform:

“The 28 day period should be the required minimum period before commencement of the trial for the making of sanctioned offers, so that offers allowing less than 28 days before trial for acceptance would not qualify. In the Working Party’s view, this requirement would be of particular importance in relation to sanctioned offers made by plaintiffs. It would be undesirable to enable a plaintiff to place a defendant under the significant threat of additional interest at potentially punitive rates at the very door of the court (having already incurred the bulk of the defence costs) as a means of forcing what may be an unfair settlement.”

According to O 22 r 16, since the defendant cannot accept a <28 days offer without leave of the court, one would have thought that there is no latest date for a <28 days offer, and as a result O 22 r 24 is not engaged and not applicable. This seems to be the intention. However, this has been clarified as not being the case by the recent Court of First Instance decision in Tsoi Hak Kong Herbert v Sun Chiu Kee (a firm) [2009] HKCU 844 (HCA 4/2006, 9 June 2009), the first occasion on which the court has had to consider the operation of the
new O 22.

Tsoi Hak Kong

The facts of Tsoi Hak Kong were simple. The plaintiff made a sanctioned offer to settle his claim for HK$850,000 on 2 April 2009, the first day of the coming into effect of CJR. The trial commenced on 22 April 2009. The plaintiff ’s sanctioned offer was therefore made less than 28 days before the commencement of trial. Judgment was handed down on 6 May 2009 against the defendant in the sum of HK$1,287,500. The judgment awarded to the plaintiff therefore exceeded his sanctioned offer. The plaintiff asked for his costs on an indemnity basis and an enhanced interest rate.

As set out above, if the defendant wants to accept a ≥28 days offer out of time or a <28 days offer, leave of the court is required. The one scenario in which the defendant may accept such sanctioned offers without leave of the court is when the parties agree on liability for costs.

As a result of the potential agreement between the parties on liability for costs, thereby exempting the requirement of leave of the court for acceptance, the court in Tsoi Hak Kong interpreted the latest date, in the context of a <28 days offer, as meaning the date immediately preceding the date on which the court pronounces its judgment (in this case, 5 May 2009). This conclusion was arrived at on the following reasoning:

• In relation to the phrase ‘the defendant could have accepted the offer without requiring the leave of the court’, the legislation is not concerned with whether the defendant in fact accepts the offer without the leave of the court; it suffices as long as notionally the defendant could have done so at some stage: at [30].
• Notionally, the defendant could have accepted a <28 days offer if liability for costs was agreed between the parties.
• A <28 days offer could have been accepted by the defendant without leave of the court up to but excluding the time at which the judgment was issued, because ‘once that event occurs, it will be too late for him to do so’: at [35].

While the court was careful to confine its reasoning to a <28 days offer (at [6]), it is submitted that this caveat is artificial and ineffective because O 22 r 24 makes no distinction between different types of plaintiffs’ sanctioned offers; the court’s reasoning in relation to a <28 days offer is equally applicable to a ≥28 days offer. For example, after the expiry of a 28-day period for a ≥28 days offer, the defendant could still accept the offer without leave of the court if liability for costs is agreed between the parties. Accordingly, the court’s interpretation of the latest date is in effect applicable to all types of plaintiffs’ sanctioned offers irrespective of whether they are characterised as <28 days or ≥28 days.

Implications

There are serious and far-reaching implications of interpreting the latest date to mean the date preceding the date of judgment. Indemnity costs and the enhanced interest rate will only apply from (and including) the date of the judgment. Insofar as the enhanced interest on the judgment sum is concerned, if the defendant pays the judgment sum immediately upon the handing down of the judgment, the plaintiff gains very little on the enhanced interest. Insofar as indemnity costs are concerned, the costs which will attract an indemnity scale refer only to those costs incurred after the latest date (see Tsoi Hak Kong at [53]). There is very little, if not virtually zero, cost incurred by the plaintiff on the date of judgment and thereafter.

Taking this interpretation through to its logical conclusion, it has rendered a plaintiff ’s sanctioned offer almost useless. For example, in relation to a ≥28 days offer, eg an offer made at an early stage of the proceedings, the costs incurred by the plaintiff between the 29th day since the making of such sanctioned offer to the day immediately preceding the date of judgment – which can be years – will not attract the indemnity scale nor the enhanced interest rate. The indemnity costs and enhanced interest rate provisions in O 22 r 24 do not really put pressure on the defendant. These provisions, which provide the backbone to the successful operation of the new O 22, no longer bite.

By parity of reasoning, the phrase ‘the latest date on which the [defendant’s sanctioned] payment or offer could have been accepted without requiring the leave of the court’ in the context of a defendant’s sanctioned offer or payment in O 22 r 23 refers to the date preceding the date of judgment as well. A defendant’s sanctioned offer or payment will also then fail to exert any pressure on the plaintiff.

CPR Part 36

In England, prior to amendments to Part 36 of the CPR which took effect in April 2007, the old Part 36, on which Hong Kong’s new O 22 has been modelled, used the similar phrase ‘the latest date on which the defendant could have accepted the offer without needing the permission of the court’ (hereafter, ‘English latest date’ and ‘old CPR 36.21’ respectively). English courts did not seem to have problems in construing this phrase, at least in the context of a normal offer made not less than 21 days (the stipulated period under the old Part 36 in which the offer would be open for acceptance) before trial.

In McPhilemy v Times Newspapers Ltd (No 2) [2002] 1 WLR 934 at 936, the English Court of Appeal said that:

“In that context and for the purposes of paragraphs (2) and (3) of the [old CPR 36.21], ‘the latest date [on which/when] the defendant could have accepted the offer without needing the permission of the court’ is prescribed by rule 36.12. Where the offer is made not less than 21 days before the start of the trial, it means the date not later than 21 days after the offer was made.”

English courts did not consider that the potential agreement between the parties on liability for costs, thereby exempting the requirement of permission of the court in the case of a defendant wanting to accept the offer out of time, notionally satisfied the words ‘could have’ in the English latest date. There appear to have been no reported cases in England in which the meaning of the English latest date was explained in the context of an offer made less than 21 days before trial. It is unclear how the old CPR 36.21 would apply (if ever) to an offer made less than 21 days before trial. However, since the English courts adopted a liberal approach to the interpretation of Part 36, even if the old CPR 36.21 did not apply to such an offer, the English courts would likely have been prepared to take such an offer into account in the exercise of their discretion over costs.

Since its 2007 amendment, Part 36 has used the phrase ‘the date on which the relevant period expired’ (CPR 36.14) instead of the English latest date. The ‘relevant period’ is defined in CPR 36.3(1)(c) to mean one of four things: (i) a stated period of not less than 21 days if the offer is made not less than 21 days before trial; (ii) such longer period as the parties agree; (iii) otherwise, the period up to the end of the trial; or (iv) such other period as the court has determined. The phrase ‘relevant period’ has removed the ambiguity arising from the application (if ever) of the old CPR 36.21 to an offer made less than 21 days before trial. Under CPR 36.14, in the absence of a court order specifying otherwise, the ‘relevant period’ for an offer made less than 21 days before trial would be up to the end of the trial.

Conclusion

Hong Kong has gone in its own direction. Under this new interpretation of the latest date, a plaintiff ’s sanctioned offer will be of limited practical benefit. As the court said in Tsoi Hak Kong, albeit in the context of a <28 days offer, ‘the practical benefit to the offeror of a plaintiff ’s offer is minimal’: at [58]. Since the court’s reasoning is equally applicable to all plaintiff ’s sanctioned offers and defendant’s sanctioned offers and payments, unless the meaning of the latest date is re-interpreted or further clarified, or unless this decision is not followed or overruled, it is expected that sanctioned offers and payments will be rendered less attractive and their use greatly reduced.

Peter So
Senior Associate
Lovells
peter.so@lovells.com

附帶條款和解提議或付款仍有其效用嗎﹖
蘇子敏律師論述了原訟法庭在Tsoi Hak Kong Herbert v Sun Chiu Kee一 案中所作的裁決，指其限制了附帶條款和解提議或付款所起的鼓勵和解作用。

於2009年4月2日開始實施的香港民事司法制度改革，是經過考察1999年英國伍爾夫改革的成敗後制定。該項改革的其中一項成效，是《英國民事訴訟程序規則》(English Civil Procedure Rules)中， 關於和解提議及繳存款項於法院的第36部規定，並被稱許為乃迅速解決申索的有效方法。香港將這第36部規定全部收納(只作出了一些非關鍵性的修改)，成為新制訂的《高等法院規則》(第4A章)第22號命令。

當中的一項重要發展，是原告人得以作出「附帶條款和解提議」。但假如被告人並不接納這一「附帶條款和解提議」，而原告人於其後取得較該提議更為有利的判決，則法庭可以命令被告人支付按彌償基準計算的訟費，以及按提高利率計算的利息(包括判定款項及彌償訟費兩者)。

本文的論述所涉及的相關條文，載於第22號命令第24條規則：

(2) 法庭可就判給原告人的任何款項的全數或部分(利息除外)衍生利息作出命令，該利息按不高於判定利率10%的利率，就在被告人本可無需法庭許可而接受有關提議的最後日期後的某段或整段期間計算。

(3) 法庭亦可命令原告人有權獲付—

(a) 他在被告人本可無需法庭許可而接受有關提議的最後日期後的按彌償基準計算的訟費；及
(b) 按不高於判定利率10%的利率計算的該等訟費的利息。

「被告人本可無需法庭許可而接受有關提議的最後日期」(以下簡稱「最後日期」)一語相當重要，因為它規限彌償訟費和提高利率開始適用的時間。

第22號命令第16條規則對接受原告人的「附帶條款和解提議」的時間作出了規定。簡而言之，假如原告人的「附帶條款和解提議」是不少於審訊前的28天作出(一項≥28天的提議)，則被告人可無需法庭許可而接受有關提議。假如原告人的「附帶條款和解提議」是少於審訊前的28天作出(一項<28天的提議)，又或是被告人於該28天限期屆滿後，希望接受一項≥28天的提議，則需要得到法庭的許可，除非—而這亦正是出現問題的地方，下文將加以說明—各方就訟費的法律責任達成協議；在這一情況下，則不需要得到法庭的許可。

第22號命令施行的基本原由，是為了要讓被告人獲得充分時間(即是28天)，以考慮原告人所提出的「附帶條款和解提議」。人們會認為，最後日期是指該第28天，即是有關一項≥28天和解提議的28天期限屆滿的最後一天。支持這一見解的論述，可參看《民事司法制度改革工作小組的最後報告書》第311段：

「該28天期限應為所規定的於審訊開始前作出「附帶條款和解提議」的最低期限。因此，給予對方少於審訊前28天以供考慮接受的和解提議，將不會被接納。工作小組的意見是，這一規定對於原告人所作出的「附帶條款和解提議」尤為重要。讓原告人在訴訟程序展開前，以可能的懲罰性利率所計算的額外利息來威脅被告人 (其已經招致了相當數目的辯護費用)，並以此作為一項強迫對方達成不公平和解的手 ，這是屬於不適當的做法。」

根據O 22 r 16的規定，由於被告人不能在沒有法庭許可情況下接受<28天的提議，人們便會聯想到<28天的提議並沒有最後日期，故在這情況下O 22 r 24並沒有被使用，亦並不適用。雖然這看來是它的意圖，但原訟法庭於近期的Tsoi Hak Kong Herbert v Sun Chiu Kee (a firm) [2009] HKCU 844 (HCA 4/2006, 9 June 2009)案件中所作的裁決，已表明情況並非如此，而這也是法庭第一次需要考慮該新制訂的第22號命令的施行。 

Tsoi Hak Kong案件

Tsoi Hak Kong一案的案情很簡單。原告人於2009年4月2日(民事司法制度改革生效的第一天)作出了「附帶條款和解提議」，意圖藉此將其85萬港元的申索了結，故原告人的「附帶條款和解提議」是少於審訊開始前的28天作出。法庭於2009年5月6日下達判決，裁定被告人的賠償金額為1,287,500港元。因此，原告人所獲判給的賠償金額，超過了原告人所作出的「附帶條款和解提議」中的金額。原告人遂要求按彌償基準獲得訟費及提高利率。

根據以上所述，假如被告人希望接受一項逾時的≥28天和解提議，或是一項<28天和解提議，便需要獲得法庭的許可。除非各方就訟費的法律責任達成協議，這樣被告人便可以無需法庭的許可而接受該「附帶條款和解提議」。

基於各方就訟費的法律責任方面的潛在協議，從而豁免了在接受提議前須獲法庭許可的規定，法庭在Tsoi Hak Kong一案中乃闡釋了於作出<28天和解提議情況下的最後日期，是指緊接法庭宣告其判決當天之前一日(在本案中為2009年5月5日)。達至這一結論是基於下列理由：

• 就「被告人本可無需法庭許可而接受有關和解提議」這一語句而言，法例所關注的並非被告人事實上是否在沒有法庭許可情況下接受和解提議；
只要在概念上被告人於某階段本可如此實行便已足夠：見[30]。
• 在概念上，被告人本可接受一項<28天的和解提議，假如各方已就訟費的法律責任達成協議。
• 被告人本可無需法庭許可而接受一項<28天的和解提議，直至但並不包括判決發出的時間，因為「一旦該事情發生，他要如此實行便為時已晚」：
見[35] 。

雖然法庭小心地局限其對該<28天的和解提議的論證(見[6])，但筆者認為這一闡釋是人為和沒有多大作用的，因為O 22 r 24並沒有對原告人所作的不同類別「附帶條款和解提議」作出區分；法庭就<28天的和解提議所作的論證，同樣適用於≥28天的和解提議。例如，一個關於≥28天的和解提議之28天期限屆滿後，被告人仍可無需法庭的許可而接受有關提議，假如各方就訟費的法律責任達成協議的話。因此，法庭對最後日期的闡釋，乃適用於原告人的所有類別的「附帶條款和解提議」，不論其被描述為是<28天或≥28天。

產生的影響

將最後日期解釋為乃指判決日期的前一天，這會產生重大和深遠的影響，而彌償訟費及提高利息將只有在判決日期起(包括當天)才適用。對於判決金額 的提高利息來說，假如被告人於判決下達後便馬上支付該判決金額，原告人從提高利息方面的得益便只會很少。就彌償訟費而言，招致適用彌償尺度的訟費，只會是該些於最後日期之後才產生的訟費(參見Tsoi Hak Kong at [53])。原告人於判決日期或之後所產生的訟費，只會是微不足道，若非實質為零的話。

將這一解釋引伸至一個邏輯性的結論，便可使由原告人作出的「附帶條款和解提議」幾乎歸於無有。例如，就≥28天的和解提議而言(即是在法律程序的較早階段作出的和解提議)，原告人於作出「附帶條款和解提議」後的第29天起，至判決日期之前一天止(這一期間甚至可以長達數年)，其所招致的訟費將不能適用彌償尺度和提高利率。O 22 r 24所載的有關彌償訟費和提高利率的規定，並未能真正地令被告人遭受壓力。該等為新訂立的第22號命令的施行而作為其後盾之規定不再具有威力。

同樣道理，倘在O 22 r 23中，關於被告人的「附帶條款和解提議或付款」規定中所述的，「本可無需法庭許可而接受[被告人的附帶條款]付款或和解提議的最後日期」，也是指判決日期之前一天，則被告人所作的附帶條款和解提議或付款，亦同樣無法給原告人施加任何壓力。

《民事訴訟程序規則》第36部

在英國對2007年4月生效的《民事訴訟程序規則》(CPR)第36部進行修訂前，原來的第36部(香港新制訂的第22號命令乃以它為藍本)也是使用類似的語句—「被告人本可無需法庭批准而接受和解提議的最後日期」(下文分別稱為「英國最後日期」及「原來的CPR 36.21」)。英國法庭在解釋這一語句方面看來並沒有遇上問題，最少是在正常的和解提議於不少於審訊前21天(即是在原來的第36部下的規定期限，而於該期限內可以接納和解提議)作出的情況下。英國上訴法庭在McPhilemy v Times Newspapers Ltd (No 2) [2002] 1 WLR 934 at 936一案中稱：

「就[原來的CPR 36.21的]第(2)及(3)段而言，『被告人本可無需法庭批准而接受和解提議的最後日期』由第36.12條規則作出規定。在和解提議並非少於審訊前的21天作出的情況下，它是指並不晚於和解提議作出後的21天的該日期。」 英國法庭並不認為各方就訟費法律責任所達成的潛在協議(從而使被告人希望接受逾時和解提議所須的法庭批准得以免除)，在概念上能滿足英國最後日期中「本可」一詞的要求。

英國似乎並沒有任何經報導的案例，就少於審訊前21天作出和解提議的情況，闡釋英國最後日期的含意。至於原來的CPR 36.21會如何適用(如果有的話)該少於審訊前21天作出的和解提議，實在不得而之。但是，由於英國法院對第36部採取了寬泛的解釋，故即使原來的CPR 36.21並不適用於該和解提議，英國法院在對訟費行使酌情決定權時，亦很可能會將該項和解提議列入考慮範圍之內。

自從第36部於2007年進行修訂後，它已經以「相關期間屆滿當天」(CPR 36.14)這一用語來代替英國最後日期。「相關期間」在CPR 36.3(1)(c)中被界定 為屬於以下四種情形之一：(i)一個不少於21天的指定期間，假如和解提議並非少於審訊前的21天作出的話；(ii)一個經各方同意的較長期間；(iii)否則，將為直至審訊終結的期間；或(iv)由法庭確定的其他期間。「相關期間」一語去除了原來的CPR 36.21適用於(如果有的話)少於審訊前21天作出的和解提議而導致產生的不明確情況。根據CPR 36.14，假如法庭沒有作出其他相關命令，則與審訊前21天作出的和解提議有關的「相關期間」，將會伸延至該審訊的終結。

結語

香港正循著自己的方向發展。根據這一對最後日期所作的新闡釋，一名原告人所作出的「附帶條款和解提議」，將只會產生有限的作用。正如法庭在Tsoi Hak Kong一案中指出，對於<28天的和解提議，「作出原告人和解提議的該名人士，其所能得到的利益非常微少」：見[58]。由於法庭的這一論證同樣適用於所有的原告人和解提議、被告人和解提議及付款的話，因此除非對最後日期的意思作出重新闡釋或是進一步的述明，又或是除非這一裁決不被遵循或被撤銷，否則我們預期「附帶條款和解提議及付款」的吸引力將會減退，其效用亦將會大大降低。

蘇子敏律師
Senior Associate
路偉律師行
peter.so@lovells.com