Hong Kong Court Awards Indemnity Costs to Employer in Discrimination Proceedings 

18May2023

Introduction 

We previously published two articles “Can and will an employee claiming discrimination be liable for legal costs if they lose?” and “Important points for making discrimination claims highlighted in a recent District Court case by a former student against a local university” which discuss the Court’s approach on assessing claims and costs in discrimination proceedings.  

In another recent case of Lee Chick Choi v Hong Kong Golf Club [2023] HKDC 515, the District Court not only ordered the Employee to pay the costs to the Employer, but also that this be on an indemnity basis. This is a more generous basis of assessment for the successful party. It means that all costs will be allowed except in so far as they are unreasonable and/or have been unreasonably occurred *(see note 1). 

Lee Chick Choi is one of the few, but increasingly common, local cases where the Court departed from the usual rule that parties in discrimination proceedings to bear their own costs. 

Case Background  

In mid-September 2015, the Employee entered an employment contract with Hong Kong Golf Club as an Assistant Chief Marshal / Bag Drop. From around April 2016, the Employee started to experience pain in his left shoulder (“Disability”) and in early September 2016, his employment was terminated by the Employer by payment of one month’s payment in lieu of notice. 

The Employee claimed compensation under the Disability Discrimination Ordinance (“DDO”) and also an order for his reinstatement. While the Employee alleged that he was terminated due to the Disability and/or related sick leave , the Employer’s case was that the termination was solely due to the Employee’s unsatisfactory work performance and attitude.  

In the circumstances, the Court had to consider whether the Employee’s termination was connected to and by reason of the Disability (whether in whole or part).  

The Legal Principles  

Hong Kong courts often adopt the two-stage comparator approach when dealing with discrimination claims: – 

  1. The first stage is the comparator issue, namely, to identify a comparator to determine whether there has been less favourable treatment.  
  1. The second stage is the causation issue, which is to determine whether the less favourable treatment is done on the grounds of the prohibited attribute.  

However, in this case, the Court decided it was more appropriate to adopt the alternative and simplified approach which primarily asks the question “why” was he terminated, especially because identifying the appropriate comparator causes unnecessary complications.  

Under the alternative approach, the burden of proof is on the employee to prove discrimination on a balance of probabilities, and there is no shifting of the evidential burden. In addition, the employee has to prove that the dismissal is connected to the disability.  

The Court emphasised that under section 3 of the DDO, if an act is done for two or more reasons and one of the reasons is because of the prohibited attribute (whether it is the dominant or a substantial reason for doing the act), then for the purposes of the DDO. the act is deemed to have been done for the reason of the protected characteristic.  

The Court’s Key Findings  

  1. The Court preferred the evidence of the Employer as the Employee changed his evidence several times or admitted that multiple parts of his evidence amounted to exaggerations or mischaracterisations.  
  1. The Court did not accept the Employee’s case that his ability or inability to lift heavy objects was a material consideration for the termination decision of the Employer. The Employee was not required to carry golf bags for the club members or guests, and his primary responsibility was to assist the golfers with on-course policies, golf course rules, and etiquette.  
  1. There were many complaints against the Employee by members as to his attitude, and it was unlikely the Employer orchestrated such complaints. In any event, the Disability did not prevent the Employee from properly discharging his duties. Therefore, Court found that there existed genuine performance issues on the part of the Employee.  

The Court’s Decision  

Based on the factual findings, the Court ruled that the Employee had failed to prove, on the balance of probabilities, that his termination was connected to the Disability. As noted by the Court, the cause of the Employee’s termination by the Employer was due to his performance issues rather than the Disability. Also, it is plain that the discrimination allegation was an afterthought on the part of the Employee who exaggerated his evidence.  

Having regard to all the above circumstances, the Court dismissed the Employee’s discrimination claims against the Employer and ordered him to pay the costs to the Employer on an indemnity basis.     

Key takeaways 

This judgement serves as a useful reminder to parties pursuing discrimination claims of the possible costs consequences. The Court has the discretion to order indemnity costs if the proceedings were brought maliciously or frivolously, or if there are special circumstances that warrant an award of costs*(see note 2).    

It is crucial for parties to carefully assess the strength of their cases before bringing discrimination claims. Otherwise, there is a real possibility that the parties might have to bear the legal costs of the successful party (in addition to paying his own legal costs) even though the starting point is that both parties pay their own costs.   

*Note 1: O.62, r.28(4A) of the Rules of the District Court (Cap.336H) 

*Note 2: s.73C(3) of the District Court Ordinance (Cap. 336) 

Russell Bennett and Stephanie Sy

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Russell Bennett
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Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.