SHADID, HUSSAIN v. ENVIRONMENTAL SEAL CORPORATION LTD AND ANOTHER

bjbj DCEC7/2007 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES COMPENSATION CASE NO. 7 OF 2007 ------------------------ BETWEEN SHADID, HUSSAIN Applicant and ENVIRONMENTAL SEAL CORPORATION LIMITED 1st Respondent HERITAGE GOLF (HONG KONG) LIMITED 2nd Respondent ------------------------ Coram: H H Judge Marlene Ng in Chambers (open to the public) Date of Hearing: 23rd March, 2007 Date of Handing Down Ruling on Costs: 27th March, 2007 ------------------------ RULING ON COSTS ------------------------ I. Introduction The Applicant by his Application issued on 3rd January 2007 ( EC Application ) claimed that on 18th May 2006 he suffered personal injuries by accident arising out of and in the course of his employment with the 1st Respondent. The Applicant claimed that he slipped and hit his back whilst lifting a stone block ( Accident ) when he was working at The Clearwater Bay Golf and Country Club ( Club ). The EC Application issued against the 1st and 2nd Respondents pleaded that [at] all material times, the 1st Respondent was a sub-contractor within the meaning of the [Employees Compensation] Ordinance to the principal contractor within the meaning of the Ordinance, namely the 2nd Respondent . It is now common ground that the 2nd Respondent was not the principal contractor of the relevant works ( Works ) being carried out at the Club ( Site ) on 18th May 2006. In the circumstances, at the call-over hearing on 23rd March 2007, with no objection from Mr Ngai and Ms Kwok, respectively solicitors for the 1st and 2nd Respondents, Mr Burke, solicitor for the Applicant, applied for and I granted leave to the Applicant to withdraw his claim against the 2nd Respondent. The remaining dispute related to the 2nd Respondent s costs of these proceedings. The parties respective positions were as follows : Unsurprisingly, the 2nd Respondent asked the Applicant to pay the 2nd Respondent s costs of these proceedings. The Applicant suggested (i) there should be no order as to costs between the Applicant and the 2nd Respondent or alternatively (ii) if the 2nd Respondent were entitled to its costs against the Applicant that such costs be in the cause between the Applicant and the 1st Respondent. The 1st Respondent argued it should not be liable for the 2nd Respondent s costs directly or indirectly. II. Principles Under section 53 of the District Court Ordinance, costs are in the discretion of the court, and the court has full power to determine by whom and to what extent the costs are to be paid. Order 62 rule 3 of the Rules of the District Court provides that if the court in the exercise of its discretion sees fit to make any order as to costs of or incidental to any proceedings, the court shall, subject to Order 62, order the costs to follow the event, except when it appears to the court that in the circumstances of the case some other order should be made to the whole or any part of the costs. So in appropriate circumstances it may be possible to depart from the general rule that a defendant/respondent is entitled to costs when an action is discontinued or withdrawn against him. The question is whether it is appropriate to do so in the circumstances here. III. Overall view Mr Burke submitted that the joinder of the 2nd Respondent in these proceedings was based on an error that had nothing to do with the Applicant and that in light of the conduct of the 1st and 2nd Respondents the order or alternative order for costs proposed by the Applicant was a just one. On the other hand, Mr Ngai and Ms Kwok submitted that the EC Application against the 2nd Respondent was misconceived and the 1st and 2nd Respondents were innocent any conduct that would justify laying the 2nd Respondents costs at their doors. Having considered all the circumstances, including the draft trial bundle lodged by the Applicant s solicitors ( s Solicitors ), the chronology prepared by AP s Solicitors, the correspondence amongst the parties respective solicitors, their written submissions by letter and their oral submissions at the call-over hearing on 23rd March 2007, I am of the firm view that the Applicant should pay the 2nd Respondent s costs of these proceedings and that the 1st Respondent should not be visited with such costs at all. As will be evident from the unfolding events in the analysis below, I am of the view that neither the 1st nor 2nd Respondent committed or omitted to do any act that would have reasonably led the Applicant to assume or believe the 2nd Respondent was the principal contractor of the Works at the Site on 18th May 2006. I find that such assumption or belief was the Applicant s own leap of faith rather than a situation of the 1st and/or 2nd Respondents own making. I bear in mind that the burden was on the Applicant as claimant to make out his case against the 2nd Respondent at the very least on reasonable if not substantial grounds. The EC Application was issued about half a year after the Accident. At that time there was no risk of any imminent time bar for issuing employees compensation claim against the 1st and 2nd Respondents. As will be seen below, there was time and opportunity for the Applicant to seek clarification from appropriate parties that might have cleared the air (eg letter enquiry or if necessary pre-action discovery against the Club), but those steps were not taken. Further, it was open to the Applicant to have commenced the present proceedings against the 1st Respondent (as direct employer) and then apply to add the 2nd Respondent as co-respondent (if appropriate) after clarification with the 1st Respondent of the existence of the principal contractor (if any) by seeking further and better particulars or discovery and/or by administering interrogatories or written request pursuant to section 24(3) of the Employees Compensation Ordinance. Whilst I have no doubt that the Applicant sued both the 1st and 2nd Respondents with a view to better protect his interests in case the 2nd Respondent was the principal contractor of the Works at the Site on 18th May 2006, in the absence of reasonable grounds and/or sufficient enquiries, it was a gamble whether the 2nd Respondent was the principal contractor. When it turned out it was not, the Applicant should not be allowed to escape responsibility for shouldering the costs consequence. IV. Events and analysis (a) Forms submitted to the Labour Department in relation to the Accident On 9th June 2006, the Applicant filed Notification of Accident with the Labour Department ( Notice of Accident ) stating that the 1st Respondent was his employer, but leaving the section on particulars of the principal contractor blank. On 1st August 2006, the 1st Respondent filed Form 2 with the Labour Department ( Form 2 ) stating that the 1st Respondent was the Applicant s employer but leaving the particulars of principal contractor blank. On 31st August 2006, the 1st Respondent filed an Information Amendment Sheet with the Labour Department and again Section C of such sheet on information about the principal contractor was left blank. Mr Burke complained that the 1st Respondent failed to complete a proper Form 2. Since it is no longer disputed that the 1st Respondent had no principal contractor for the Works at the Site on 18th May 2006, I do not see how it could be said the Form 2 was improper in describing the 1st Respondent as direct employer and leaving the section on principal contractor blank. Indeed, it made sense to leave such section blank, but even if it were otherwise, I cannot see how the Applicant could have assumed from the blank section for particulars of the principal contractor in the Form 2 that there was actually another principal contractor for the Works. I note the Applicant also completed the Notification of Accident in a like manner. (b) Pre-action letter to the 1st Respondent On 15th September 2006, AP s Solicitors sent a pre-action letter to the 1st Respondent referring to the Form 2 and enclosing the Notice of Accident ( R1 Pre-action Letter ). Whilst the R1 Pre-action Letter asked the 1st Respondent for various particulars and documents (ie details of the 1st Respondent s employees compensation policy, copy contract of employment, copy wage record and MPF record), it did not ask for the name, address and particulars of its principal contractor (if any). There was no evidence that the 1st Respondent responded to the R1 Pre-action Letter (see AP s Solicitors letter to the 2nd Respondent dated 29th November 2006 ( R2 Pre-Action Letter )). Mr Burke claimed that the Applicant sued the 2nd Respondent because there was no response to the R1 Pre-Action Letter, and he submitted that the Applicant would not have done so if the 1st Respondent had responded. I disagree. Even if the 1st Respondent had responded to the requests for particulars and documents made in the R1 Pre-action Letter, it would not have helped to clarify whether there was any principal contractor for the Works at the Site on 18th May 2006. (c) Notification of Construction Work At the request of AP s Solicitors, the Labour Department provided them with a copy of the Notification of Construction Work dated 17th January 2005 and submitted by the 2nd Respondent to the Labour Department ( Notification ). The Notification stated that (a) the contractor was the 2nd Respondent of 804, 8/F, ABBA Commercial Building, 223 Aberdeen Main Road, Aberdeen, Hong Kong ( Old Address ), (b) one of its sub-contractors was the 1st Respondent, (c) the location of the construction site was at 139 Tai Au Mun Road, Clearwater Bay, New Territories, and (d) the nature of the work was reshaping greens, trees and bunkers, grassing, and fixing and repairing leaks to ponds. The Notification also stated as follows : The date upon which the work was commenced 10 January 2005 The expected duration of the work 6 months So even on the face of the Notification, it was expected that the works described therein would have been completed by 9th July 2005. But the Accident happened more than 10 months thereafter (ie on 18th May 2006). Yet there was no evidence that prior to the issuance of the EC Application the Applicant made any attempt to check with the 1st and/or 2nd Respondents and/or the Club as to whether on 18th May 2006 (a) the works described in the Notification were still on-going and/or (b) the 2nd Respondent was still the contractor of such works with the 1st Respondent as its sub-contractor. Further, insofar as the 1st Respondent was concerned, there was no evidence that it had any knowledge of how the Notification was completed by the 2nd Respondent. Without any efforts made to seek the aforesaid clarification, I am not persuaded there was any sufficiently reasonable basis for the Applicant to assume that the Works being carried out at the Club as at 18th May 2006 were part and parcel of the works described in the Notification that were estimated to have been completed some 10 months ago. (d) R2 Pre-action Letter On 29th November 2006, AP s Solicitors sent the R2 Pre-action Letter to the 2nd Respondent at the Old Address and enclosed a copy of the R1 Pre-action Letter for which they had not received any response. The R2 Pre-action Letter went on to say inter alia as follows : 4. [AP s Solicitors] are informed by the Labour Department, that [the 2nd Respondent] is the Main Contractor for the work being done and [AP s Solicitors] enclose for [the 2nd Respondent s] reference a copy of the [Notification]. 5. As Main Contractor, [the Applicant] is permitted to pursue the claim for Employee s Compensation against [the 2nd Respondent] as well as against his direct employer. The R2 Pre-action Letter also asked for copies of the 2nd Respondent s contract with the 1st Respondent and its employees compensation insurance policy. It is interesting to note that despite the limited estimated duration of the works described in the Notification, AP s Solicitors in the R2 Pre-action Letter did not seek clarification as to whether the 2nd Respondent was still the principal contractor of the Works at the Site on 18th May 2006. Instead, they boldly assumed (presumably from the Notification) that the 2nd Respondent was the main contractor against whom the Applicant had a viable claim. Yet, as explained above, the Notification did not reasonably justify such assumption. The R2 Pre-action Letter was not returned undelivered through the dead letter post. According to letter from the 2nd Respondent s solicitors ( s Solicitors ) to AP s Solicitors dated 29th January 2007, the R2 Pre-action Letter merely reached [the 2nd Respondent] recently . In their further letter to AP s Solicitors of 17th January 2007 ( R2 Service Letter ), they said that the R2 Pre-action Letter which was wrongly addressed to [the 2nd Respondent] has just resent and received by [the 2nd Respondent] on or about 12th January 2007 . There was no contrary evidence to such assertion. Indeed, AP s Solicitors in their letter to the court dated 21st March 2007 also stated that [a]pparently [the R2 Pre-action Letter] was only delivered by Post Office on 12th January 2007 without demur. In such circumstances, the 2nd Respondent did not respond to the R2 Pre-action Letter prior to the issuance of the EC Application. R2 s Solicitors in their subsequent letters to AP s Solicitors (see paragraphs 31, 35 and 44 below) explained that the 2nd Respondent had changed address (ie to Room 202, 2/F, Valley Centre, 80-82 Morrison Hill Road, Hong Kong ( New Address )). Mr Burke queried why the 2nd Respondent did not arrange for mail forwarding (see letter from AP s Solicitors to R2 s Solicitors dated 21st March 2007). However, it is apparent that by the time of the 2nd Respondent s annual return made up to and dated 8th October 2006 the New Address was already its registered office. Such information was already in the public arena at the time when AP s Solicitors issued the R2 Pre-Action Letter. In my view, irrespective of the absence of any arrangement for mail forwarding, the 2nd Respondent could not be faulted for not receiving the R2 Pre-action Letter. Further, the 2nd Respondent could hardly have anticipated that AP s Solicitors would wish to write to them about the Accident in relation to Works at the Site not carried out by them. (e) EC Application The EC Application was issued on 3rd January 2007. In the EC Application, AP s Solicitors used the New Address as the 2nd Respondent s address, so by that time at the latest (if not earlier) AP s Solicitors must have been aware that the Old Address used in the R2 Pre-action Letter was incorrect, which might explain why there was no response from the 2nd Respondent. Yet there was no evidence that prior to issuing the EC Application AP s Solicitors wrote to the 2nd Respondent again to reiterate their assertions or requests in the R2 Pre-action Letter or to seek clarification as to whether the 2nd Respondent was the principal contractor of the Works at the Site as at 18th May 2006. (f) Service of the EC Application On 3rd January 2007, AP s Solicitors arranged for service of the EC Application on the 2nd Respondent together with a covering letter of the same date ( AP Service Letter ) by leaving the same at the New Address. The AP Service Letter stated inter alia as follows : 4. If [the 2nd Respondent] intend to dispute the claim Defence must be filed in Court within 21 days. 5. Pursuant to Section 44A of the Employees Compensation Ordinance, [AP s Solicitors] hereby request details of [the 2nd Respondent s] Employees Compensation insurer. If [the 2nd Respondent] fail to prove details that will be criminal offence, and [AP s Solicitors] will report the matter to the Labour Department for investigation. (g) Notice to Act and Answer There was no dispute that a staff of the 2nd Respondent ( R2 Staff ) promptly telephoned AP s Solicitors on the following day. According to the attendance note of AP s Solicitors, the R2 Staff queried why the EC Application was left on the floor of the New Address. The attendance note went on to say inter alia as follows : Explain to him it is a proper way of service, give the letter to insurer or lawyer. He said they have no insurance [illegible] and he don t know our client. Tell him give the letter to their lawyer. As seen in paragraph 33 below, AP s Solicitors complained that the R2 Staff failed to tell them that the 2nd Respondent was not the principal contractor. However, as seen in paragraph 44 below, R2 s Solicitors claimed that the R2 Staff had explained to AP s Solicitors inter alia that the 2nd Respondent was not the principal contractor of the 1st Respondent. I am unable to resolve such factual dispute by way of correspondence and attendance note. However, even if the R2 Staff failed to tell AP s Solicitors that the 2nd Respondent was not the principal contractor, such reticence on the part of a lay individual is understandable especially when he was urged by AP s Solicitors to refer the matter to R2 s Solicitors for handling. Plainly, the 2nd Respondent followed the suggestion by AP s Solicitors and sought advice from R2 s Solicitors. On 16th January 2007, R2 s Solicitors filed Notice to Act in these proceedings. In compliance with the admonition in the AP Service Letter to file the Answer within 21 days, R2 s Solicitors filed the Answer in these proceedings on 16th January 2007. The 2nd Respondent s Answer was served on the following day (ie 17th January 2007). On 24th January 2007, the 1st Respondent s solicitors ( s Solicitors ) filed Notice to Act and Answer on behalf of the 1st Respondent. The 1st Respondent in its Answer particularly denied that it was a sub-contractor of the 2nd Respondent. (h) Service of the 2nd Respondent s Answer R2 s Solicitors served the 2nd Respondent s Answer under cover of the R2 Service Letter. Apart from pointing out that the wrongly addressed R2 Pre-action Letter was only received on/about 12th January 2007, R2 s Solicitors also stated that at the material time the 1st Respondent s project at the Club was outside the estimated duration of the 2nd Respondent s works described in the Notification. It was made clear in both the 2nd Respondent s Answer and the R2 Service Letter that the 2nd Respondent did not have any contractual relationship with the 1st Respondent in relation to the Works, and the 2nd Respondent therefore declined the Applicant s request for details of its employees compensation insurance. AP s Solicitors replied by letter on the following day (ie 18th January 2007) confirming that the Applicant would not proceed with his claim against the 2nd Respondent if the latter were not involved in the Works at the Site on 18th May 2006. AP s Solicitors explained that they had sent a letter to the Club for clarification and would advise the Applicant on whether to continue with the claim against the 2nd Respondent once they received a proper reply from the Club. AP s Solicitors in their letter of 18th January 2007 went on to complain that the R2 Staff failed to tell AP s Solicitors during their telephone conversation on 4th January 2007 that the 2nd Respondent was not the principal contractor, which would have avoided the need to instruct lawyers as [AP s Solicitors] would have agreed to withhold any action pending the resolution of this issue. s Solicitors in their letter to the court dated 21st March 2007 reiterated that had AP s Solicitors been so told, they would have agreed to withhold action pending clarification with the 1st Respondent. AP s Solicitors further complained in their letter of 18th January 2007 that the 2nd Respondent s demand for payment of costs was based on an error that has nothing to do with [the Applicant]. As indicated in [the R2 Pre-action Letter], [AP s Solicitors] were writing to [the 2nd Respondent] based on the information provided by the Labour Department. If they had finished work at the site this is a simple matter that could have been clarified with [the Club]. . R2 s Solicitors replied by letter dated 29th January 2007. They pointed out that the R2 Pre-action Letter (which was wrongly addressed) only reached the New Address recently. Had such letter been properly addressed to the New Address, the Applicant might have replied to it without seeking advice from lawyers. But the Applicant commenced the present legal proceedings against inter alia the 2nd Respondent and threatened that the 2nd Respondent might commit a criminal offence if it did not comply with [AP s Solicitors ] requests as set out in [the AP Service Letter], [so] it is prudent for [the Applicant] to seek legal advice on the above matter in order to protect its own interests . The letter from R2 s Solicitors dated 29th January 2007 went on to say as follows : At the material time, [the 2nd Respondent] did not have any clue of why it was being sued by [the Applicant]. [The 2nd Respondent] is not in a position to speculate whether [AP s Solicitors] would withhold any action pending resolving this matter or if [AP s Solicitors] would proceed with the matter. In particular, there should be a hearing fixed for this action. Moreover, the Notification revealed that [the 2nd Respondent s] project at Clearwater Bay should have completed in or about mid-2005. If [the Applicant] is in doubt, [the Applicant] could have clarified it with the [Club]. However, he has failed to do so. Furthermore, [AP s Solicitors] should have ascertained from his employer, i.e. the 1st [Respondent] in this action, regarding the identity of the Principal Contractor, if any, prior to commencing legal action against [the 2nd Respondent]. Apparently, [the Applicant] has failed to seek such clarification from his employer. [R2 s Solicitors] therefore do not agree with [AP s Solicitors ] view that [the EC Application] against [the 2nd Respondent] was based on an error that has nothing to do with [the Applicant]. R2 s Solicitors asked the Applicant to withdraw the EC Application against the 2nd Respondent and pay the 2nd Respondent s costs in due course. On 31st January 2007, AP s Solicitors replied by letter to say that they were conducting enquiries with the 1st Respondent and the Club respectively, and they asked the 2nd Respondent to withhold further action pending their further reply. In my view, AP s Solicitors were correct in saying that whether the 2nd Respondent was the principal contractor of the Works at the Site on 18th May 2006 was a simple matter that could have been clarified with [the Club] . As seen in above paragraph, they could also have made enquiries with the 1st Respondent as well. This the Applicant eventually did after the 2nd Respondent denied it had any contractual relationship with the 1st Respondent. Having failed to do so prior to the issuance of the EC Application, I do not consider the Applicant could legitimately ask the 2nd Respondent (or for that matter the 1st Respondent) to shoulder the cost consequence of erroneously suing the 2nd Respondent. I have already dealt with the issue of the Applicant s assumption from the Notification that the 2nd Respondent was the principal contractor of the Works at the Site and found that such assumption was not reasonably justified or could not reasonably be said to be an error that has nothing to do with [the Applicant] . AP s Solicitors suggested that the 2nd Respondent could have avoided instructing solicitors. I see no reason why the 2nd Respondent should not seek legal advice and instruct solicitors to act on its behalf when (a) faced with a legal claim issued by the Applicant who was legally represented, (b) warned to file the Answer within 21 days, (c) demanded to provide details of its employees compensation insurance on threat of a criminal offence, (d) urged to give the R2 Service Letter to its insurer or solicitors for handling. The 2nd Respondent should act reasonably and I cannot say that in the context of the above circumstances it failed to do so. (i) Investigative steps On 5th March 2007, AP s Solicitors wrote to the court claiming that as regards the 2nd Respondent : (i) They are jointed based on Notification they filed with Labour Department copy herewith; (ii) [AP s Solicitors] have sought clarification from the 1st Respondent but there has been no response; and (iii) [AP s Solicitors] have sought clarification from [the Club] but there has been no response. AP s solicitors asked for (a) specific discovery within 7 days against the 1st Respondent for documents to show the contract for the Works at the Site on 18th May 2006 which would allow decision to be made whether or not to continue with the action against the 2nd Respondent and (b) the call-over hearing on 9th March 2007 be adjourned for 2 weeks. On 6th March 2007, I directed that the application by AP s Solicitors be made inter partes. On 8th March 2007, I granted a consent order inter alia that (a) the 1st Respondent do make discovery by solicitors letter within 7 days of documents to show the contract for the Works at the Club on 18th May 2006 and (b) the call-over hearing on 9th March 2007 be vacated and adjourned to 23rd March 2007. The relevant contract for the Works was eventually disclosed and revealed that the 2nd Respondent was not the principal contractor of the Works at the Site as at 18th May 2006. (j) Putting an end to the Applicant s claim against the 2nd Respondent By a without prejudice save as to costs letter to AP s Solicitors dated 13th March 2007, R2 s Solicitors objected to the withdrawal of the Applicant s claim against the 2nd Respondent with no order as to costs. Various grounds were put forward for the objection. First, the 2nd Respondent only received the wrongly addressed R2 Pre-action Letter on 12th January 2007 after the issuance of the EC Application. Secondly, immediately after receipt of the EC Application and the R2 Service Letter, the 2nd Respondent phoned to [AP s Solicitors] direct requesting for explanation why they were named as 2nd Respondent in the above action. [The 2nd Respondent] explained to [AP s Solicitors] that they were not the main contractor of the 1st Respondent and no pre-action letter had ever been received by our client. However, [the 2nd Respondent] was informed they should instruct solicitors to respond to [the Applicant s] claim officially as [the Applicant] had already lodged his claim into court. It is therefore incorrect for [AP s Solicitors] to allege that costs could have been saved, if [the 2nd Respondent] had informed [AP s Solicitors] that they were not the main contractor of the 1st Respondent before instructing their solicitors to defend this action. Indeed, [the 2nd Respondent] did inform [AP s Solicitors] prior to engaging their own solicitors in defending this action. Apparently [R1 s Solicitors], has also confirmed to [AP s Solicitors] that [the 2nd Respondent] is not [the 1st Respondent s] main contractor. On 16th March 2007, AP s Solicitors wrote to R1 s Solicitors proposing that the Applicant do pay the 2nd Respondent s costs and then for those costs to be costs in the cause with the 1st Respondent. R1 s Solicitors replied on the same day seeking the basis for asking that the Applicant s payment of the 2nd Respondent s costs be in the cause with the 1st Respondent. On 21st March 2007, AP s Solicitors wrote to R1 s Solicitors to say that at the call-over hearing on 23rd March 2007 they would seek leave to withdraw the claim against the 2nd Respondent with no order as to costs, but if costs were awarded to the 2nd Respondent, the Applicant would ask for those costs to be in the cause between the Applicant and the 1st Respondent. At the call-over hearing on 23rd January 2007, the Applicant s claim against the 2nd Respondent was withdrawn. (k) Conclusion on the 2nd Respondent s costs Considering the aforesaid facts and analysis in their entirety, it is clear that liability for the 2nd Respondent s costs as a result of the Applicant s mistaken decision to join the 2nd Respondent in these proceedings should fall on the Applicant. There was no unreasonable conduct or omission on the part of the 2nd Respondent. Rather, the Applicant could have taken steps to seek clarification of the position prior to issuance of the EC Application. In the circumstances, it is inappropriate to grant no order as to costs between the Applicant and the 2nd Respondent. The proper order (which I do make) is for the Applicant to pay the 2nd Respondent s costs of these proceedings to be taxed if not agreed, and for the Applicant s own costs be taxed in accordance with Legal Aid Regulations. In respect of the 1st Respondent, there was still less justification for an order that the Applicant s payment of the 2nd Respondent s costs be in the cause between the Applicant and the 1st Respondent. The 1st Respondent never asserted the existence of any principal contractor in the Form 2. It was not a party to the Notification. The R1 Pre-action Letter did not seek clarification as to the name, address and particulars of the principal contractor (if any) of the Works at the Site as at 18th May 2006, so even if the 1st Respondent had replied to such letter it would not have been of assistance. Although Mr Burke complained that the 1st Respondent failed to file notification of commencement of construction work in respect of the Works with the Labour Department, it is not easy to see how the absence of such notification would lead to a positive assumption that the 2nd Respondent was the principal contractor of such Works when the only available information from the Labour Department came from the Notification (ie the works described therein were expected to have been completed in mid-2005). V. Costs In my view, the Applicant should pay costs of the 2nd Respondent s costs of these proceedings to be taxed if not agreed. Since I have found in favour of the 1st and 2nd Respondents, there is no reason why they should not be entitled to costs of the argument on such costs including the costs of the call-over hearing on 23rd March 2007 in relation to such matter. In the circumstances, I make a costs order nisi that the Applicant do pay the 1st and 2nd Respondents costs of the argument on the 2nd Respondent s costs of these proceedings including costs of the call-over hearing on 23rd March 2007 in relation to such matter to be taxed if not agreed. I apportion 5 minutes of the call-over hearing for such purpose to assist the Taxing Master. The Applicant s own costs be taxed in accordance with the Legal Aid Regulations. (Marlene Ng) District Court Judge Representation: Mr P Burke of Messrs Burke, Fung & Li for the Applicant. Mr T Ngai of Messrs Munros for the 1st Respondent. Ms K Kwok of Messrs Chiu, Szeto & Cheng for the 2nd Respondent. 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