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POON CATHERINE (a minor by her next friend TSHI MIAU SIAN) & ANOR v HOSPITAL AUTHORITY
COURT OF FIRST INSTANCE PERSONAL INJURIES LIST NO 381 OF 2011 MASTER KK PANG 24 OCTOBER, 7 NOVEMBER 2011

Tort Personal Injuries Interim payment Factors to be considered Whether need or hardship had to be proved Whether court should investigate how the money to be used Civil Procedure Interim payment Factors to be considered Whether need or hardship had to be proved Whether court should investigate how the money to be used Rules of the High Court (Cap 4A) O 29 r 11, 12

(4A)29,11,12
The 1st plaintiff, an infant, was asphyxiated on delivery and was now in a vegetative state. Damages were claimed for the 1st plaintiff and for her mother, the 2nd plaintiff. Liability was admitted. The plaintiffs applied for interim payment of $3 million. Interim payment of $100,000 for the 2nd plaintiff was agreed, but the 1st plaintiffs application was in dispute. The issue was whether the 1st plaintiff was required to prove need or hardship and whether the court should investigate how the money was to be used. The 1st plaintiff contended that as this was a very substantial claim and an interim payment of $3 million would pose no risk of overpayment, the court should order the interim payment sought without considering such factors. Stringman (a minor) v McArdle [1994] 1 WLR 1653 (CA) and Sun Jianqiang v Chan Tai Kau & Anor [2001] 2 HKC 702 were relied on. The defendant argued that Stringman and Sun Jianqiang should not be followed mechanistically. It was submitted that more recent cases suggested that in deciding whether, and if so, in what sum an interim payment should be ordered, the court should also take into account the factor of the level playing field/possible prejudice of the defendants interest. Campbell v Mylchreest [1999] PIQR Q17, Tinsley v Sarkar [2004] EWCA Civ 1098 and Eeles v Cobham Hire Services Ltd [2010] 1 WLR 409 were cited. The defendant noted that one of the motives of the application was to provide funds for the 1st plaintiff to move to live at home or a nursing home. It was submitted that the level playing field would be significantly altered when the future care and needs of the 1st plaintiff were yet to be clearly addressed; that the defendants position would be considerably prejudiced by a risk of overpayment. E

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Held, ordering interim payment of $2 million: (1) Having considered the defendants authorities the court was persuaded that where it is known that a plaintiff intends to use the money received by way of interim payment in a way which might prejudice the fair conduct of the trial, it was a relevant factor for consideration by the court in the exercise of its discretion. As a matter of principle, in the exercise of the courts discretion in the present case, the court should consider if, allowing the interim payment for the expenditure of the stated purpose, there was a real danger that a status quo would be established before the assessment of damages and the playing field would be rendered unlevel. Campbell v Mylchreest [1999] PIQR Q17 referred to (para 17). (2) The 1st plaintiff had been under hospital care since birth. To allow funds to move the 1st plaintiff to live at home or in a nursing home would render a change in the status quo. It was worthy of noting that the 2nd plaintiff accepted that hospital care would save the defendant substantial damages to be paid. To allow funds for the intended move would not only change the status quo, but also would be potentially unfair to the defendant (para 20). (3) The finding of a potential proleptic effect on the status quo did not operate as an absolute bar to interim payment. It was at best a factor which the court exercising its discretion should take into account, and it was for the court to decide to give how much weight to it (para 21). (4) The next question was whether the move of the 1st plaintiff was reasonably necessary. Evidence suggested it was premature at this stage for the court to resolve the question. It was going to be an issue at the assessment of damages. If the trial judge held that setting up a permanent habitation for the 1st plaintiff as proposed was not reasonably necessary, there would not be money awarded for the expenditure proposed. In such scenario, if the court had allowed interim payment for the said expenditure, there would be a risk of overpayment (paras 22-27). (5) At this stage the court should not order interim payment for the expenditure on the stated purpose of moving the 1st plaintiff. Still it was sensible to order an interim payment to help the 1st plaintiffs recovery or lessen her familys financial burden. A very conservative estimate of the total damages the plaintiff was likely to recover was not less than $4 million. In its discretion the court would make an order for interim payment of $2 million. This figure would ensure there would be sufficient margin to guard against overpayment. The 1st plaintiff being a party under disability, it was ordered that the defendant pay the 1st plaintiff interim payment on account of damages in the sum of $2 million into court within 21 days (paras 28-40). Cases referred to

Campbell v Mylchreest [1998] EWCA Civ 60, [1999] PIQR Q17 (CA, Eng) Eeles v Cobham Hire Services Ltd [2010] 1 WLR 409, [2009] EWCA Civ 204 (CA, Eng) Stringman (a minor) v McArdle [1994] 1 WLR 1653 Sun Jianqiang v Chan Tai Kau & Anor [2001] 2 HKC 702 (CFI) Tinsley v Sarkar [2004] EWCA Civ 1098 (CA, Eng)

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Legislation referred to Rules of the High Court (Cap 4A) O 29 rr 11 & 12 [Editorial note: For discussion of interim payments see Wilkinson, Cheung & Booth, Guide to Civil Procedure in Hong Kong (4th Ed), ch 11, pp 530-535; and see Hong Kong Civil Court Practice, commentary under Order 29 rules 11 and 12.] Application This was an application for interim payment of damages in a medical negligence case in which liability had been admitted. The facts appear sufficiently in the following judgment. Ashok Sakhrani (Ip, Kwan & Co) for the 1st and 2nd plaintiffs. Kumar Ramanathan SC (TS Tong & Co) for the defendant.

Master KK Pang: The application 1. This is the hearing of the 1st and 2nd plaintiffs application for interim payment in the sum of $3 million by summons filed on 28 July 2011. 2. At the beginning of the hearing, I suggested to counsel for the parties that as the 1st and 2nd plaintiffs respective heads of claim for damages are totally different from each other, it might be sensible to deal with their applications separately, rather than by way of a joint application. Counsel readily accepted my suggestion and agreed to sever the joint application into two, namely: (1) the 1st plaintiffs application for interim payment in the sum of $2.9 million; and (2) the 2nd plaintiffs application for interim payment in the sum of $100,000. Not before long, with minimal encouragement from the court, the parties reached agreement that, in order to dispose of the 2nd plaintiffs application, the defendant shall pay the 2nd plaintiff an interim payment on account of the damages claimed in the sum of $100,000 within 21 days i.e. on or before 14 November 2011. The 1st plaintiffs application remained in dispute. Admissibility of the Affirmation of Cheng Wui See Henry 3. The plaintiffs summons was filed together with the affirmation of Tshi Miau Sian in support on 28 July 2011. The defendant filed the opposing affidavit of Dr Lee Shing Yan Robert on 2 September 2011 and the plaintiffs filed the 2nd affirmation of Tshi Miau Sian in reply on 6 October 2011. At the beginning of this hearing, the defendant produced to the court clerk the affirmation of Cheng Wui See Henry, a partner of the solicitors for the defendant. The 1st plaintiff opposed to its admission but was agreeable to the defendant to adduce the said affirmation de bene esse.

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At the end of the hearing, after having had the opportunity of reading the said affirmation and having heard the parties submissions, I rejected the said affirmation. The reasons are as follows: (a) The said affirmation contained, as exhibits to it, the medical notes and records of the 1st plaintiffs treatment received at Canossa Hospital (CH) under the care of Dr Alfred Tam during the period from 4 to 23 August 2011. (b) Dr Alfred Tam prepared a report dated 23 August 2011 on the 1st plaintiffs admission and his assessment, which was produced and exhibited to the affirmation of Tshi Miau Sian. In his report, Dr Alfred Tam opined that the 1st plaintiffs condition stabilised in CH with closer nursing and better positioning. She could go off oxygen for 5 to 8 hours when she was resting or sleeping. The 2nd plaintiff started to learn gastric feeding and nasal oral suction. The amount of oral nasal secretion decreased and the 1st plaintiff was more settled with the 2nd plaintiff around. The 2nd plaintiff echoed Dr Alfred Tams assessment. In her affirmation, the 2nd plaintiff deposed that, during the short period of hospitalisation in CH, the 1st plaintiffs condition improved noticeably by slowly weaning off nasal oxygen and reduced secretions, more than she had in two and a half years at Princess Margaret Hospital (PMH). (c) The contents of Dr Alfred Tams said report are relevant to the issue on whether it is of the interest and benefit of the 1st plaintiff to have her discharged from hospitalisation and to go home or to reside in a nursing home. (d) The defendant contested that some of the notes and medical records clearly showed that the rosy picture that the 2nd plaintiff portrayed of the hospitalisation in CH was not that accurate. (e) The 1st plaintiff contended that in substance the defendant was making use of the medical notes and records to launch an attack on the validity of Dr Alfred Tams report dated 23 August 2011. The 1st plaintiff took the position that, if the said affirmation was admitted, the 1st plaintiff would need time to take instructions on the correct interpretation of the medical notes and records from Dr Alfred Tam and to adduce further evidence in this regard by way of affirmation. That would mean, were the late filing of the said affirmation allowed, an adjournment for a part-heard hearing would have been necessary. (f) The defendant was unable to give a satisfactory explanation of the delay in the filing of the said affirmation. In view of this, coupling with the defendants position and the obvious undesirability of an

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adjournment, I rejected the said affirmation. Factual backgrounds 4. This is a medical negligence claim in which by reason of the negligence of PMH (liability admitted) the 1st plaintiff was asphyxiated on delivery on 10 December 2008 and suffered hypoxic ischaemic encephalopathy. She is now in a vegetative state with minimal cognitive and expressive function, severely compromised hearing and vision and spastic quadriplegia. 5. The asphyxiation of the 1st plaintiff came as a devastating blow to her mother, the 2nd plaintiff, who suffered from psychiatric problems as a result requiring treatment from January 2009. 6. Since birth, the 1st plaintiff had been under the care of the Special Care Baby Unit (SCBU) of PMH until she was transferred to CH on 23 August 2011. She suffered from respiratory insufficiency requiring constant oxygen through nasal cannula, and copious nasal secretion, which, together with the inability to swallow, had led to the need of constant suction and therefore the need of continuous nursing care in hospital. 7. Surgery of gastrostomy and fundoplication was performed on 24 July 2009 but unsuccessful. 8. Dr Alfred Tam, a specialist in paediatrics and neonatology, saw the 1st plaintiff in January 2011. Dr Alfred Tam thought that the SCBU was not the right place for habilitation and care of an infant with neurological deficit. He considered that the parents should be actively involved in the 1st plaintiffs daily care but the setting of the SCBU is restrictive for the parents to visit and not conducive towards the parents bonding with the 1st plaintiff. 9. In late June 2011, it was disclosed that the 1st plaintiff suffered from hiatus hernia. 10. In August 2011, the parents decided to seek second opinion and had the 1st plaintiff transferred to CH under the care of Dr Alfred Tam. In his assessment, Dr Alfred Tam recommended correction of the hiatus hernia and the redo-fundoplication. 11. On 23 August 2011, the 1st plaintiff was transferred to Queen Mary Hospital (QMH) for the redo-fundoplication. In late August 2011, the redo-fundoplication was successfully performed under the care of Prof. Paul Tam of QMH. After the operation, the 1st plaintiff continued staying at QMH. Plaintiffs argument 12. The 1st plaintiffs argument is straightforward. The 1st plaintiff contended that as this was a very substantial claim and an interim payment

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at $3 million would pose no risk of overpayment, the court should order the interim payment sought. The plaintiff should not be required to prove need or hardship and the court should not, when considering whether to order an interim payment, investigate how the money was to be used {see Stringman (A minor) v McArdle [1994] 1 WLR 1653, CA}. 13. The basic provision for interim payments is contained in O 29 rr 10 & 11. As to the circumstance in which an interim payment may be made, the court was also referred by counsel for the plaintiffs to Sun Jianqiang v Chan Tai Kau & Anor [2001] 2 HKLRD 435. Defendants argument 14. It was the defendants contestation that the Stringman v McArdle principle which was adopted and followed by Suffiad J in the Sun Jianqiang case should not be followed mechanistically. It was submitted that more recent cases suggest that in deciding whether, and if so, in what sum an interim payment should be ordered, the court should also take into account the factor of the level playing field/ possible prejudice of the defendants interest. {see Campbell v Mylchreest [1999] PIQR Q17, CA: Q20 (2nd para), Q21(2nd para), Q22(2nd, 3rd and 4th para) and Q24 (Auld LJ); Tinsley v Sarkar [2004] EWCA Civ 1098 (unreported) (CA) (paras 16-19, 32-3, 48); Eeles v Cobham Hire Services Ltd [2010] 1 WLR 409 (CA) (paras 4, 30, 43-45)}. 15. The defendant noted that one of the motives behind this application is to provide funds to facilitate the 1st plaintiff to move to live at home or to reside in a nursing home with neuro-habitation facilities. 16. It was submitted that applying those principles to the facts of the present case, it will be wrong in principle to grant an order for interim payment as sought. The level playing field will be significantly altered when the future care and needs of the 1st plaintiff are yet to be clearly addressed and the defendants position will be considerably prejudiced and when there is a risk of overpayment. Analysis

17. Having considered the defendants authorities, I am persuaded that where it is known that a plaintiff intends to use the money received by way of interim payment in a way which might prejudice the fair conduct of the trial, it is a relevant factor for consideration by the court in the exercise of its discretion. It follows that, as a matter of principle, in the exercise of the courts discretion in the present case, I should consider if, allowing the interim payment for the expenditure of the stated purpose, there is a real danger that a status quo will be established before the assessment of damages and the playing field will be rendered unlevel as stated in Campbell v Mylchreest.

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18. In the present case, the parents want the 1st plaintiff to go home or to reside in a nursing home with facilities for neuro-habitation. They are now looking at a flat in Tsuen Wan for $15,800 per month and awaiting rehabilitation specialist to advice on adaptations of the new flat. The annual rents and management fees of say $2,000 per month will be not less than $213,600. In the para 50 of her affirmation, the 2nd plaintiff further deposed that she contemplated that they would incur a lot more future expenses in setting up a permanent habitation for the 1st plaintiff. 19. The question is whether interim payment should/ should not be allowed for expenditures on the stated purpose. It comes to the court to make a decision on the issue. My considerations are as follows. 20. The 1st plaintiff has been under hospital care since birth. To allow funds, at this stage, to move the 1st plaintiff to live at home or in a nursing home will render a change in the existing status quo. It is worthy of noting that in the para 14 of her supplemental affirmation, the 2nd plaintiff put that if the 1st plaintiff was to be returned to PMH, the defendant would save substantial amount of damages to be paid in the present case. In that event, I find that not only to allow funds to the intended move will change the status quo, but also a change in the status quo as such will be potentially unfair to the defendant. 21. The finding of a potential proleptic effect on the status quo does not operate as an absolute bar to an interim payment. It is at best a factor which the court exercising its discretion should take into account and it is for the court to decide to give how much weight to it. Was there sufficient evidence showing that the stated purpose is desirable for the benefit of the plaintiff, the court could still allow interim payment for expenditures on the stated purpose in spite of the level playing field concern {see Campbell v Mylchreest, Q22(4th para)}. 22. In the circumstance, it makes sense for the court hearing the application to be asked to focus on whether the kind of expenditure proposed is reasonably necessary (see Tinsley v Sarkar, para 19). 23. In this way, the next crucial question is whether the expenditures to be incurred for the move of the 1st plaintiff to go home or to reside in a nursing home and setting up of a permanent habitation for the 1st plaintiff are reasonably necessary. 24. The parents intend to make such move because, having completely lost their trust and confidence in PMH, they are convinced by Dr Alfred Tams opinion that the hospital was not the right place for habilitation and care of the 1st plaintiff. They also relied in support of the words of the doctors of QMH that the 1st plaintiff could go home after she had the redo-fundoplication performed. 25. Apart from the usual medical and nursing, the 1st plaintiff received regular limb physiotherapy, developmental stimulation to gross motor function, occupational therapy, sensory stimulation and play therapy under

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hospital care. While it is readily understandable that, the parents desire the infant plaintiff to live at home, instead of to be brought up in hospitals and there is no doubt that the parents wish the 1st plaintiff well with the intended home or nursing home care, it is noted that up to now the medical experts nominated by the parties to provide medical expert evidence (on both issues of liability and quantum) have not yet examined the 1st plaintiff. No medical expert assessment has been done on the 1st plaintiffs condition, future prognosis and the long term rehabilitation, or addressing the question of what her future care and attention regime should be, or the estimated costs of the same. Still less are there any details on whether the 2nd plaintiff working together with private nurses has the suitable knowledge, skills and experience in looking after the 1st plaintiff, except some sketchy information about that she learnt gastric feeding and nasal oral suction during the period of the 1st plaintiffs hospitalisation in CH. The parents are still awaiting rehabilitation specialist to advice on adaptations of the new flat and are unable to give details as to matters like what adaptations will be necessary, how long they will take, or how much they will cost. Side by side, notwithstanding that the 1st plaintiff is in a vegetative state with cerebral palsy, none are there any details about her future life expectancy in the light of her serious and severe medical conditions. 26. All these suggest that it is premature at this stage for the court to resolve the question on whether the proposal to have the 1st plaintiff moved to go home or to reside in a nursing home is beneficial to the 1st plaintiff. 27. The question of what care is appropriate in future is relevant to quantum of damages. The question of whether it is in the 1st plaintiffs interest or if it is reasonably necessary to alleviate her injury and diminish her disability to keep her at home or to a nursing home with facilities for neuro-habitation is going to be an issue in the assessment of damages. If for instance the trial judge holds that the kind of expenditures to be incurred in setting up a permanent habitation for the 1st plaintiff now being proposed is not reasonably necessary in the future, there will not be money being awarded for the expenditures proposed. In such scenario, if the court has allowed interim payment for the said expenditures, there will be a risk of overpayment. 28. In all, I conclude that at this stage I should not order the interim payment for the expenditures on the stated purpose of moving the 1st plaintiff to go home, to reside in a nursing home or setting up a permanent habitation for the 1st plaintiff. 29. Still, in the present case, interlocutory judgment for liability, with damages to be assessed, having been entered, it is sensible to order an interim payment, which may be used to help the 1st plaintiffs recovery or lessen her familys financial burden, bearing in mind that the court must

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not risk over paying the 1st plaintiff. Value of the 1st plaintiffs claim 30. The 1st plaintiffs claim as per the statement of damages is for (a) PSLA in excess of $2 million (b) Preliminary estimate of medical expenses for immediate treatment at no less than $400,000 (c) Future losses and expenses (rights reserved but no details provided in the statement of damages) (d) Care and attention by parents globally at $8,000 per month until the respiratory issue of the 1st plaintiff is dealt with and another suitable placement and accommodation is found for her (e) Special damages as at date of the statement of damages at about $60,000 31. Costs of the 1st plaintiffs hospitalisation for the period from 4 to 23 August 2011 at Canossa Hospital were almost $200,000. 32. The nurses at QMH have required the parents to hire their own private nurse, which is now being done in two 12-hour shifts at $4,000 per day, or about $120,000 per month. Assuming the trial takes place in about 1 years time from now, only the pre-trial expenses on private nurses alone will be exceeding $1,500,000. 33. The 2nd plaintiff decided to hire a domestic helper to help her care for the 1st plaintiff. The 2nd plaintiff estimated that including food and utilities, the costs of keeping the domestic helper would be about $7,000 per month. 34. Additionally, there are miscellaneous expenses for the 1st plaintiff, eg milk power, diapers, lotion and other sundry items at about $5,000 per month. 35. There are also the daily travelling expenses for the 2nd plaintiff from her residence in Tai Wu Hau, Kwai Chung to PMH/QMH every day. The 2nd plaintiff estimated the travelling expenses at on average about $150 per day, or about $4,500 per month. Decision 36. The 1st plaintiffs application for interim payment for expenditures to be incurred to move the plaintiff to go home or to reside in a nursing home and setting up a permanent habitation for the 1st plaintiff is premature. The court would not order interim payment on such expenditures at this stage. 37. In the present case, the court will make an interim payment of such amount as it thinks just, not exceeding a reasonable proportion of the

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damages which in the opinion of the court are likely to be recovered by the plaintiff. From all the facts and the contents of the medical reports which are now available, I consider that a very conservative estimate of the total damages which the plaintiff is likely to recover will not less than $4,000,000. In arriving that figure, I have taken into account that the general damages for pain and suffering is likely to be very substantial and I have also taken note of the expenses mentioned in the above paras 30 to 35. For that part of the process, I take no regards as to what the plaintiffs intend to do with the money. 38. For the above reasons, in the exercise of my discretion, I would make an order for interim payment for the sum of $2,000,000. I am satisfied that this figure ensures that there is a sufficient margin to guard against any overpayment. 39. The 1st plaintiff being a person under disability, it is ordered that the defendant shall pay the 1st plaintiff interim payment on account of damages claimed in the sum of $2,000,000 into court within 21 days i.e. on or before 28 November 2011. 40. The 2nd plaintiffs application was disposed of by agreement reached between the parties at the beginning of this hearing. The 1st plaintiff is successful in obtaining an order for a very substantial amount of interim payment though it is less than the figure put forward by the plaintiffs legal representative. At this juncture, I see no reason why costs should not follow the event. I make an order nisi that costs of this application be to the 1st and 2nd plaintiffs, with certificate for counsel, to be taxed if not agreed, which shall become absolute unless a party has applied for variation within 14 days, ie on or before 21 November 2011. The plaintiffs own costs are to be taxed in accordance with the Legal Aid Regulations. 41. I am indebted to both counsel for the assistance they have rendered to the court. Reported by WS Clarke