CHAN KING WAN AND OTHERS v. HONEST SCAFFOLD GENERAL CONTRACTOR CO. LTD. AND ANOTHER

HCPI 1267 & 1269/96

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTIONS Nos. 1267 & 1269 of 1996

__________________

_______________________

JUDGMENT
on
Assessment of Damages

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1. On 13.12.93. the 2 deceased were killed when the scaffolding on the 22nd floor of a unit in South Horizons gave way. The 2 deceased fell to their deaths.

2. Liability was entered against the 2nd defendant with a finding of 40% contributory negligence on the part of the 2 deceased. Therefore the 2nd defendant will be liable for 60% of the damages assessed by this court.

3. The hearing of assessment of damages was hotly contested. Mr Mumford SC appeared with Mr Louis Tong for the plaintiffs, and the 2nd defendant's case was argued by Miss Selina Lau with her usual skill and zeal. The main areas of dispute were the figures to be adopted as representing the income of the 2 deceased at date of death and at trial; and the assessment of loss of accumulation of wealth.

4. In order to put counsels' submissions into context, I will first relate a brief historical background of the cases.

5. In 1986, the 1st defendant Honest Scaffolding General Contractor Company Limited ("Honest Scaffold") was established. Up until the time of their deaths, the 2 deceased were shareholders, directors and employees of Honest Scaffold, together with a Madam Yip Siu Yin ("Madam Yip" who was PW2). These 3 persons each held one third of the shares of Honest Scaffold and they were all directors of the company.

6. Honest Scaffold's work was in the erection and the dismantling of bamboo scaffoldings.

7. Pausing here, it must be immediately apparent that the 2 deceased were not like the scaffolding workers one usually deals with in assessments. The normal scaffolding worker is an employee who earned a fixed wage. These deceased left estates of approximately HK$2.5 million each. About $1.3 million of each of their estates were investments in landed properties.

8. There was a division of labour in Honest Scaffold. Madam Yip took care of the administration and accounting side of the business, and the 2 deceased performed the actual scaffolding work. Honest Scaffold acted principally as a sub-contractor of scaffolding work, it hired workers when the need arose. At times Honest Scaffold would in turn sub-contract work out to others.

9. Madam Yip and the 2 deceased were paid monthly salaries. They also received dividends from the company about once a year. The audited accounts of Honest Scaffold for the 3 years prior to the fatal accident were produced as Exhibits P3A, P3B, and P3C.

10. Madam Yip explained that in order to reflect the difficult and dangerous aspects of their work, the 2 deceased received salaries amounting to double her salary. Around 1990, the 2 deceased were getting $13,000 per month to Madam Yip's $6000. These sums were gradually increased to $16,400 and $7560 respectively around 1992 or 1993. The level of the 2 deceased monthly wages were fixed by reference to the Union rates x 30 days.

11. The 2 deceased also received reimbursement for the sums they spent on travelling expenses and meals. These reimbursements came to around $1500 or $1600 each.

12. The 2 deceased were married men with families. At the date of the accident, the 1st deceased was aged 50, and had 4 children. As for the 2nd deceased, he was aged 39, and the sole support of his mother, wife and 2 children.

13. Since the 2 deceased's scaffolding work generated the income of Honest Scaffold, the accident in December 1993 also dealt a fatal blow to the company. Honest Scaffold folded. Madam Yip had to set up "Honest Scaffolding Company Limited" referred to throughout as "the new company" with 2 new partners. The new company performed the same sort of work as that of the old company. Unfortunately the 2 new partners of Madam Yip did not have the experience of the 2 deceased.

14. Before calculating the assessments, it should be noted that many of the issues are common ones, relating to both of the 2 deceased. As Counsel for the parties in their written submissions have dealt with the 1st deceased, followed by that of the 2nd deceased. I too will deal with their cases in that order.

15. The evidence of PW2 Madam Yip was crucial to the evaluation of the income of the deceased.

16. When I considered her evidence I reminded myself that Madam Yip cannot be regarded as an independent witness. She had been in business with the 2 deceased for many years. It was clear that she displayed a warm regard for the families of the 2 deceased when she gave evidence.

17. I found Madam Yip to be a most impressive and truthful witness. Madam Yip possessed all the qualities of the pioneers who came to Hong Kong in the last century and built this place from the "barren rock" to the thriving modern metropolis it is today. She was only a clerk in 1986 when she formed the idea of starting a scaffolding company. She recruited the 2 deceased. With application, hard work and co-operation, the old company was slowly built up. In the year after its inception, the financial picture was already starting to look healthy. She managed the accounts, so I have no doubt that it was Madam Yip who masterminded and steered the old company into a successful enterprise, amassing enough assets to enable the 3 shareholders to invest in landed properties.

18. Madam Yip gave her evidence clearly and calmly. Not only did she stand up well to a long and searching cross-examination, I thought that during cross-examination, she displayed a thorough grasp of the affairs of both the old and the new companies.

19. When she was cross-examined on aspects of her estimates of the notional monthly income of the 2 deceased, she stated that their incomes would have risen from $30,000 per month in 1994 to $60,000 per month in 1999.

20. The defence argued that Madam Yip's estimates of the deceased's incomes had they not met with the fatal accident were speculative and involved a complete departure from the well established practice followed in the old company. One should not forget that together, the 2 deceased and Madam Yip were the old company. The 3 of them could have chosen not to follow the rates reported by the Union. They could have agreed to adopt some other rate as a basis of their wages, or could have set their own salaries at any level.

21. I do not find Madam Yip's estimates to be speculative. She had a wealth of documentary material in support of pre-accident figures, and she put forward reasoned arguments for arriving at her estimated figures.

22. Madam Yip explained to the court why a different system was adopted for the new company. She described how she had been facing the challenge of building up business confidence after the disastrous accident. She pointed out that her new partners did not have the experience of the 2 deceased. With added responsibilities in the new set up, it was reasonable for her to receive a higher wage.

23. Counsel argued that Madam Yip's assertion that the new company had lately achieved profits of about $900,000 was unsubstantiated since the audited accounts for the post accident period showed that the new company had made losses every year. Although she did not produce the latest audited accounts in support, Madam Yip's evidence on this point was persuasive and cogent. She gave graphic details of her strategy to build up the new company. She recounted her plan to forgo early profits in order to gain a foothold in the market. I accepted her evidence that the new company deliberately under-bid its competitors so that it would get more contracts, and that the new company's share of the market was obtained at the expense of making early profits. After it had established itself, the new company showed a turnover of $26 million in 1998. I accept her evidence that the new company has now become a profitable enterprise.

Method of calculation of the income of the 2 deceased

24. It is the "income" of the deceased that forms the basis of the value of the dependency, see page 2 of Mr Justice Seagroatt's decision in page 2 of Tsang Mei Ying and So Sau Lin, HCPI 544/98 (unreported). The dividends received by the 2 deceased were paid to them for their labour. There can be no argument that the dividends were part of their income.

25. I rejected the defence's argument that neither the dividends paid nor the sums reimbursed to the 2 deceased should be brought into account for the purposes for computing the value of the dependency for the reasons given below.

26. Miss Lau submitted that since profitability of the company was uncertain, it would be wrong to bring the amounts paid by way of dividends into that computation. Madam Yip has provided us with ample documents relating to both the old and new companies. Evidence of company accounts from 1986 to the last accounting year were available to the court.

27. It was argued that the 2 deceased did not apply the dividends to the support of their families, since the money had been paid into joint accounts or invested in properties. The money representing the dividends had been paid to the deceased. They could have spent it, or applied the funds in whatever manner they chose to. The deceased could have spent the sums on presents or holidays for the family. It just so happened that they chose to invest the funds.

28. The defence argued that as the $1500 paid to the deceased each month were for items consumed by the deceased, or given to them as transportation money, those sums were never available to the 2 deceased for contribution towards the support of their dependents. The $1500 or $1600 reimbursed to the 2 deceased for food and travel may not have been directly applied to the maintenance and support of their families. However, if the deceased had not been in receipt of those sums, there would have been about $1500 a month less for them to apply towards maintenance and support. Therefore in essence those sums formed part of their income.

29. Therefore I find that both the dividends and the reimbursed sums form part of the income of the 2 deceased, together with the wages received from the company. So far I have dealt with the cases of the 2 deceased together. There are differences in their cases, and these differences will be indicated at the appropriate places in this judgment.

30. It was argued by the defence that the conventional percentages approach is inappropriate when assessing the cases of the 2 deceased. Counsel argued that the loss of dependency should instead by based on "a real assessment of the notional dependency of the dependents". I find that the approach laid down by Mr Justice Seagroatt in the Tsang Mei Ying case to be the one that I should follow here. It was stated in Tsang Mei Ying that the calculation of the value of the dependency should be on a percentage of the income of the deceased unless there are cogent reasons to the contrary.

The assessment of the dependency of the 1st plaintiff

The dependents of the 1st deceased were:
Chan King Wan, the widow, born on 8.6.50.
Leung Lai Sin Josephine, daughter, born on 20.7.73.
Leung Siu Kuen Kelly, daughter, born on 12.5.75.
Leung Tik Lung, son, born on 11.11.77.
Leung Tak Wai, son, born on 25.1.80.

31. He was aged 50 at the time of the accident, and to all accounts a fit and healthy man.

32. Madam Yip told us, and I accept that evidence, that the 1st deceased received wages of $16,400 at date of death. Added to the sum of $1500 received as reimbursements, the monthly receipts amounted to $17,900. He also received a dividend of $180,000 for the year 1992/1993.

33. The widow said that the expenses of maintaining daughter Josephine in Taiwan came to the sums shown in page 44 Bundle B. Those amounts were $121,060 in 1993; $221060 in 1994; $210,000 in 1995; $232,000 in 1996; and $122,500 in 1997, the year Josephine graduated. The average amount spent on Josephine is about $181,324 per year.

34. The defence contended that the widow's evidence was wholly unreliable. The main basis for the rejection of the widow's evidence was that she stated in court that the 1st deceased had given $7000 to her for her own exclusive use, which was inconsistent with her witness statements. In the widow's witness statements she had said that $7000 was for household expenditure.

35. It was argued that the expenses claimed by the widow were greatly exaggerated in that the sums therein substantially exceeded the income of the 1st deceased.

36. I agree with Miss Lau that the widow's evidence about the $7000 was inconsistent with her earlier statements, but did that inconsistent statement render the whole of her evidence unreliable?

37. I considered the whole of her evidence with care. I recalled her demeanour in court. She impressed me as a subservient housewife with little education. During her husband's lifetime she would have happily deferred all decisions to him. After the accident, she would have deferred all decisions to her children. Although her evidence on the sum of $7000 was inconsistent with previous statements, I do not think that rendered the whole of her evidence unreliable. I do not accept that she made that statement to mislead. Certainly no one was misled by her contention. In my view, she is the type of middle-aged woman imbued with misguided Confucian ethics. As such she would think it necessary to tell all and sundry that the deceased gave her plenty of spending money, as some kind of proof of his devotion to her. After a while she would have convinced herself that that was indeed the case. It may also be that the widow was affected by the occasion of her appearance in court. I certainly do not accept that she was the type of person who would exaggerate or enhance her claim. She had her opportunity of doing so in respect of some of the expenses, but she did not. With the greatest of respect to her, I do not find her intellectually capable of attempting to mislead the court.

38. The figures presented are reasonable in the circumstances. The 1st deceased was a hard working man who toiled to give his family a good life. It is true that his expenditure exceeded his income in the sense that he had to draw upon his dividends, but as Mr Mumford had demonstrated, the 1st deceased was making enough to cover expenses. If the figures given were accepted for the sake of argument, Mr Mumford was able to use the figures to illustrate that the shortfall of $137,616 (that is the difference between expenses of $412,556 and income of $396,000) could have been absorbed without much difficulty. It was common ground that the 1st deceased left an estate of about $2.5 million. At only 5% interest per annum, that sum of $2.5million would have yielded a sum of $125,000.

39. I accepted the evidence of the widow that the 1st deceased was a frugal person who only spent about $5000 on himself a month. At the time of the accident, the children were aged 20, 18, 16 and 13. The expenses stated are reasonable and credible in all the circumstances. Josephine had left to go to university in Taiwan several months before her father died. The sum of $121,060 for the upkeep of a university student in 1993 cannot be challenged. Kelly was then a student at Caritas Vocational School. Only a modest sum of $2500 was claimed as her expenses. The sums for the boys were $2373 and $1000 respectively. No item in the list of family expenses call for any particular comment. It was claimed that the family spent $4000 on food and the same amount for "outdoor dinners". These are all modest and reasonable sums, and the 1st deceased could have afforded to spend these sums, after all the old company was doing well enough to move to new premises when the accident occurred.

40. What would have been the earnings of the 1st deceased at trial?

41. As identified by Mr Mumford, the notional earnings of the 2 deceased would have depended on what the old company's prospects might have been. The defence has criticized the evidence put forward by the plaintiffs as being inconsistent with government statistics and in any event far too vague.

42. This aspect of the case is dependent upon the evidence of Madam Yip. I have considered her evidence against every point put forward by defence counsel and I find that she has successfully countered those objections. I accept her evidence that if the old company had continued, it would have shown better results than the new company, as the new company had to establish itself. The increase in turnover of the new company gives an indication of what the business of the old company might have been. The new company's turnover went from $3.5 million to $26 million in 1998.

43. Madam Yip stated that the 2 deceased's incomes would have been along the following lines, and I have no reason to doubt her estimates.

44. The evidence relating to the expenses of the family show that they remained more or less constant. Since the accident, the children have progressed and grown. Josephine finished her course in Interior Decorating in Taiwan in 1997. She was married in 1998. Kelly was in vocational school when her father died. She had to work to help support the family after the accident. The widow informed us that Tik Lung had just graduated from the Baptist University at the time of the trial at the end of May 2000, but she could not enlighten us what his field of study was. Be that as it may, the figures supplied by the widow as representing Tik Lung's expenses are both reasonable and believable. They were a modest $2373 in 1993. At that time he was a schoolboy. Those figures remained constant until he went to university in 1997. This is to be expected. At that time the figure was $5350. The youngest child Tik Wai is now in Australia. He went there last year and we are told that he is now in a class that is the equivalent of our Form 6. He is expected to stay at school for another year before going to university. The widow was unable to tell us what his present expenses are.

45. I have no doubt that the 1st deceased would have continued to work hard to provide for the continual education of his family. After Josephine finished her studies, he might have even stayed within his income. If he managed to do so, more money would have been applied towards savings.

The Multiplier for the 1st deceased

46. PW3 Mr Yip Tim said that scaffolding work depended on technique and skill more than physical strength. I have been referred to the case of Ta Xuong v Incorporated Owners of Sun Hing Building (1997) 4 HKC 171 where Mr Justice Seagroatt accepted that a scaffolder would be able to continue in that work until he was 65.

47. In the light of the evidence adduced, I find that had he not met with the accident in 1993, the 1st deceased would have been able to work as a scaffolding worker until the age of 65. It is quite possible he may have worked as a contractor until the age of 70.The 1st deceased was 50 years old. There is no indication he was anything other than fit and active. Therefore in all the circumstances I find the multiplier of 10 is a reasonable one to adopt.

48. I am satisfied that on the figures adduced by the 1st plaintiff, the support given by the deceased to his family was $38,850 at death and $68,825 at trial as calculated by Mr Mumford. The median would come to $53,838.

49. The period from death to trial is reckoned at 78 months.

50. Although expressed as a simple mathematical division amongst all the members of the household, I accept Mr Mumford's figures for what the 1st deceased was spending on himself, and the calculation for his share of the rent and food to be about 24%.

51. The pre-trial loss of support will therefore be 76% of $53,838 x 78 =$3,191,526.

Post Trial dependency

52. The only dependents at trial were the widow and Tik Wai. Josephine had married, and Kelly had gone out to work long ago. Tik Lung graduated from university just before the trial.

53. For the 3 years post-trial multiplier, the overall dependency would be $68,825 (the support at trial) less the 24% of his own upkeep x 12 which comes to $627,684.

Loss of Accumulation of Wealth

54. It has been said that what the court looks for is whether or not at the date of death by natural causes the 1st deceased would have achieved an accumulation of wealth. As Deputy Judge Jones said in Ho Pang Lin v Ho Shui On [1994] 3HKC 294 :

" I suggest that there are three situations a court will have to consider on the issue of accumulation of wealth. First and most simply, there is the deceased with the obvious savings pattern. This should be applied in quantifying the accumulation and perhaps upgraded for a likely increase, for example when the future departure of children from the household would increase the disposable income.

The second category is where there is no savings pattern and no indication whatsoever from the lifestyle of the deceased whether or not accumulation was likely. This situation would usually be found when the deceased was a young person whose lifestyle had not yet crystallized into a recognizable pattern. This was precisely the position I addressed in Wai Kang Kwan in declining to make an accumulation award to the estate of a young girl who died at 17. Not only did the evidence fail to disclose a savings pattern, but there was no indication that the deceased either was or was not likely to have accumulated wealth. In those circumstances an award could only have been speculative.

The third category of situation is that of the deceased without any identifiable savings pattern, but whose habits and lifestyle indicate a probability that he would accumulate wealth. As always, the court must avoid speculation. However, if thrift, frugality, responsibility and perhaps good employment prospects clearly emerge from the evidence then an award should be made even if the contemporary income is fully utilized, for example on maintaining a young family. "

Counsel for the plaintiffs used this example to demonstrate that "even in one of the worst years, the 1st deceased would have saved $105,000".

55. Counsel submitted that in 1994, according to Madam Yip's figures the 1st deceased would have earned $30,000 in wages and received $180,000 as dividends. If one added the sum of $125,000 that he could have earned as interest on his assets of $2.5 million, it would come to $665,000.

56. I am satisfied on the evidence that a saving pattern definitely existed. As the 1st deceased had saved $2.5 million, proportionately using the 10 year multiplier, he would have saved $4,166,666.

Loss of Services

57. This was pleaded as "Do it yourself expenses". The plaintiffs submit that Berry v Humm (1915) 1 KB 627 is authority for the proposition that a claim for services is maintainable, and it lies under the FAO. Further, section 20B(a) of LARCO Cap 23 only referred to the loss of a wife's services, not to a husband's. In fairness counsel also referred me to the case of Chan Ki v Travel Trade Ltd (1998) 2 HKC 153. Master Cannon held in this case that a husband could not claim for a deceased's wife's services. The plaintiffs submitted that s20C(4) of Cap 23 does entitle a wife to claim for the loss of services of a husband.

58. Having considered Chan Ki's case, I agree with Master Cannon that as claims for bereavement and loss of a spouse's society were mutually exclusive, the widow cannot claim for the loss of services of the 1st deceased.

59. The case for the children is different. S20C of LARCO does not operate to deprive them of a claim for loss of services. I considered all the points put forward by Miss Lau against an award under this head. I did not agree that the widow's evidence on this matter to be incredible. Even fathers with full time jobs are known to cook the occasional meal for the family. In the case of middle class families it may be breakfast on Sundays, or a barbecued meal. I did not find it surprising that a man with a full time job might find cooking the occasional meal a pleasant past-time.

60. Having said that, I found that the figures adopted for the calculations by the counsel for the 1st plaintiff to be too high since they are inclusive of the interest of the widow. A sum of $251,067.38 was claimed. A reduction of 20% of this figure i.e. $200,853.90 would be about right. That sum is awarded to the children to be equally divided between them.

Bereavement The amount of $70,000 is agreed.

Funeral Expenses

61. The funeral expenses came to $81,341. There was a small sum of $160 claimed for cotton vest and hat; and $1600 for 2 tables of vegetarian food. I agree with the principles stated in Lau Tak Lung v Ngan Guen Min & Anor [1998] 2 HKC 75 that expenses of burial ceremonies were recoverable if the items were reasonable in all the circumstances. The status, financial position of the deceased, his family and religious beliefs were to be considered. Taking everything into consideration, $81,341 was a reasonable sum for a man in the circumstances of the deceased, as was the provision of the vegetarian food. The provision of vegetarian food accords with customary practices and the sum expended was modest.

62. The $81,341 claimed will be allowed.

Legal Costs

63. It may be recalled that the old company were just about to move into new premises when the accident occurred. A transaction for the sale of the old premises had been entered into just before they died. Legal costs of $21460 were incurred for each of the deceased. These costs were incurred in applying for probate limited to the completion of the sale. The plaintiffs rely on the cases of Siu Yik Lin v Ho Kwai Fong 16 HKLJ (1986) 153; and Thomas v Cunard White Star Ltd (1950) PD 153 for this proposition. The plaintiffs submitted that in Thomas's case, the costs of obtaining letter of administration in order to bring the action are recoverable as costs.

64. The defence argued that even if the legal costs could be regarded as losses to the estate consequent upon the death of the deceased, are expressly prohibited by s20(2)(b)(i) of LARCO. That section provides :

" 20. Effect of death on certain causes

(1) ..........

(2) Where a cause of action survives as aforesaid for the benefit of the estate of a deceased person, the damages recoverable for the benefit of the estate of that person -

(a)...

(b) shall, where the death of that person has been caused by the act or omission which gives rise to the cause of action -

(i) be calculated without reference to any loss or gain to his estate consequent on his death, except that a sum in respect of funeral expenses may be included;"

Having regard to the wording of the section, I find that Miss Lau's interpretation is correct. This item cannot be allowed.

Summary

Interest:

1. Interest on the award for Bereavement should be at the rate payable for Suitor's Funds, Kwan Lai Kuen v National Insurance Co Ltd [1998] 1 HKC 98.

2. The pre-trial dependency and funeral expenses will be at half rates from the date of the accident.

3. The loss of accumulation of wealth award will not carry interest for the period before trial, following Hsu Li Yun v Incorporated Owners of Yuen Fat Building [2000] 1 HKLRD 900.

65. There will be judgment for the 1st plaintiff against the 2nd defendant for $4,367,347.54 with interest, and costs to be taxed if not agreed.

66. The 2nd Plaintiff's case

The dependents of the 2nd deceased were :

Poon Chung Kam, the widow, born on 10.4.58.
Leung Suk Man, daughter, born on 8.12.75.
Leung Chun Kit, son, born 8.6.81.
Chan Ho, mother of the 2nd deceased, born on 9.11.21.

67. Many of the matters discussed in relation to the 1st deceased are equally applicable to the 2nd deceased. I do not intend to repeat them here. Where necessary, I will just deal with matters which apply specifically to the 2nd deceased.

Dependency

68. At the time of the 2nd deceased's death, his son and daughter were aged 12 and 18. They were both at school. The widow was a housewife. She told the court that the 2nd deceased kept $4000 himself, he gave her $10,000 and $500 pocket money to his mother. The widow spent about $2000 to $3000 on facials, cosmetics and clothes. The daughter was taking piano lessons, and the son was taking computer lessons. It was submitted by the defence that the widow had exaggerated these expenses.

69. I do not agree. These are quite normal expenditures if the families can afford them. The widow, aged 42, was still a very attractive woman at trial, so I expect she would have been quite good looking at the time of the accident nearly 7 years ago. I find that most loving husbands and fathers who are able to afford to do so would be quite willing to pay for non-essentials like music lessons, facials and pretty clothes.

70. Income at date of death. I am satisfied that on the figures adduced by the 2nd plaintiff, the support given by the deceased to his family was $38,850 at death and $68,825 at trial as calculated by Mr Mumford. The median would come to $53,838.

71. The pre-trial loss of support is calculated to be about 80% of the median figure of $53,838 i.e. $43,070. This is arrived at by taking the 2nd deceased's share of the 1993 household expenditure ($12,470÷4=$3117) as a percentage.

The Multiplier

72. The 2nd deceased was 39 when he died. Mr Mumford submitted that a multiplier of 16 was appropriate, citing the case of Ta Xuong. It was argued that as the 2nd deceased would have had a working life of 26 years ahead of him, (until the age of 65) a multiplier of 16 as a scaffolding working was reasonable. After that it would be reasonable to adopt a 3 year period for his work as a contractor.

73. Miss Lau has agreed on 16 for the widow, on the basis that the 2nd deceased would have continued to support the widow to the end of his natural life, assuming a natural life expectancy of 78 years. Miss Lau submitted that the multiplier for the mother should be 8; a multiplier of 9 to be adopted for the son; and up until July 1997 only for the daughter. She also suggested that a multiplier of 13 only ought to be applied to common family expenses.

I find that a multiplier of 15 is appropriate.

Pre-trial loss of dependency

74. The figure for calculating the pre-trial loss for all the dependents : $43070 x 78 months = $3,359,460.

The mother of the 2nd deceased received $500 from him, so $500 x 78 = $39,000.

75. For the widow and children, the dependency figure to be used is $42,570 being $43,070 - $500.

76. The calculation of their individual shares are as follows. The daughter was a student at the time of the accident. She ceased to be a dependent in 1997 when she started work as a secretary. A period of 44 months is adopted in her case. $42,570 x 44 x 1/3 = $624,360.

77. The calculations for the son and the widow would have to take into account the change in circumstances when the daughter ceased to be a dependent.

For the son the figures would be as follows:

$42,570 x 44 x 1/3 = $624,360 for the earlier period.
$42,570 x 34 x 1/2 = $723,690 for the later period.
Making a total of $1,348,050.

The figures for the widow would be as follows:

$42,570 x 44 x 1/3 = $624,360 for the earlier period.
$42,570 x 34 x 1/2 = $723,690 for the later period.
Making a total of $1,348,050.

Post trial dependency

78. It was the evidence of Mr Yip Tim PW3 that a scaffolder would be able to carry on as such until the age of 60. I accept that evidence. The post trial period would be (180-78) 102 months.

The mother of the 2nd deceased is now 78. Counsel for the plaintiff suggested her part should be assessed as 5 years x $6000. I think that 3 years x $6000 would be more realistic. $6000 x 3 = $18,000.

79. I agree that another 1 1/2 years is to be allowed for the son. The widow said that once he finishes his present course to become a chef, he would be likely to take another one. The son's calculation would be as follows. The figure for income at trial is $68,825. This sum less the $500 for grandma comes to $68,325. At 50% x 18 months the sum comes to $614,925.

80. The widow should also receive $614,925 for the next 18 months. Thereafter she should receive 84 months at $68,825 x 2/3 which comes to $3,854,200.

Loss of Services

81. I found that the evidence adduced was sufficient for me to form the impression that the death of the 2nd deceased deprived his children of the love and attention of a caring father. I accept the widow's evidence that the 2nd deceased would spend time with them on his days off. For the same reasons given above in relation to the 1st deceased, the claim for loss of services are allowed for the children but not for the widow.

82. Having said that, I found that the figures adopted for the calculations by the counsel for the 1st plaintiff to be too high since they are inclusive of the interest of the widow. A sum of $237,031.69 was claimed. A reduction of 33% of this figure i.e. $158,021 would be about right. This sum is awarded to the children to be equally divided between them.

The loss of accumulation of wealth

83. The loss of accumulation of wealth will be calculated in the same way as for the 1st deceased. The evidence adduced also showed that the 2nd deceased too accumulated $2.5 million in assets at the date of his death. Using a multiplier of 15, applied proportionately the award under this head is $6,249,999.99.

Funeral Expenses

84. The actual expenses of the funeral of $30,896 have been agreed by Miss Lau in her final submission. There was one item which was contested, this was the $86,910 for niche charges. That sum was objected to on the basis that the sum claimed represented a double niche space, that was large enough to accommodate the spouse's urn as well, when the time came. It was submitted that even if that was so, the expense was a reasonable one because if the adjacent niche were to be filled, the widow would not be able to finding a resting place next to her husband. I agree with the defence that only half of the niche fees should be allowed. The total awarded under this head is therefore $77,651 ($30,896 + $43,455 + $3300 half of the management fees for the niche).

The Legal Costs

85. The legal costs incurred in applying for limited probate is disallowed for the same reasons given above.

Summary

Interest:

1. Interest on the award for Bereavement should be at the rate payable for Suitor's Funds, Kwan Lai Kuen v National Insurance Co Ltd [1998] 1 HKC 98.

2. The pre-trial dependency and funeral expenses will be at half rates from the date of the accident.

3. The loss of accumulation of wealth award will not carry interest for the period before trial, following Hsu Li Yun v Incorporated Owners of Yuen Fat Building [2000] 1 HKLRD 900.

86. There will be judgment for the 2nd plaintiff against the 2nd defendant for $8,005,859.19 with interest, and costs to be taxed if not agreed.

HCPI1267 & 1269/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1267 & 1269 OF 1996

_______________________

_____________________

J U D G M E N T

_____________________

1. The plaintiffs seek a Sanderson order against the 2nd defendant in respect of their costs of pursuing the claim against the 1st defendant and the 1st defendant's costs of defending that claim. The appropriate test for making such an order has not been disputed, namely, whether it was reasonable for the plaintiffs in all the circumstances to join the 1st defendant as a defendant.

2. The principal contention put forward by Mr LIU on behalf of the 2nd defendant is that it was not reasonable in view of the fact that Madam YIP, the sole surviving director of the 1st defendant, was herself one of the 1st plaintiffs. All the factual circumstances relating to the liability of the 1st defendant were therefore known to the plaintiffs before the commencement of these proceedings.

3. I am persuaded by Mr Bharwaney that it was reasonable for the plaintiffs' solicitors to join the 1st defendant as a defendant in all the circumstances of the case. These circumstances included the fact that the same solicitors were acting for both the 1st and the 2nd defendants. The fact that very little additional time would be expended at trial in relation to the liability of the 1st defendant, bearing in mind the fact that it was clear that contributory negligence was going to be a very significant factor in the proceedings against the 2nd defendant, and the deceased's relationship to the 1st defendant was going to be a highly material factor to such an issue, and the fact that the 1st defendant as the deceased's employer, was the party required by law to carry compulsory insurance.

4. I do not consider that the issue of the liability of the 1st defendant was as a matter of law so clear as to make the contrary argument unarguable. Even on factual matters, the issue of whether it was reasonable for the 1st defendant to leave it to the deceased to decide on a suitable design and method of construction without, for instance, seeking the advice of an engineer, was a matter which could not, with confidence, be predicted at the outset at the proceedings.

5. Accordingly, I am prepared to make a Sanderson order. The order I make is as follows:

(i) the 2nd defendant pay to the 1st and 2nd plaintiffs their entire costs of the actions, including all costs ordered to be in the cause and the costs incurred against the 1st defendant from the commencement of the action up to the date of the first payment into court;

(ii) the 2nd defendant pay to the 1st and 2nd plaintiffs their entire costs of the actions, including all costs ordered to be in the cause and the costs incurred against the 1st defendant from the date of the first payment into court up to the date of the interlocutory judgments, to be taxed, if not agreed, provided however, that in the event that:

(a) the amount of final judgment in favour of the 1st plaintiff be less than the amounts paid into court in satisfaction of the 1st plaintiff's claims then the costs of the 1st plaintiff's action from the date of the effective payment into court be reserved to the Master to be determined after the assessment of damages have been completed;

(b) the amount of final judgment in favour of the 2nd plaintiff be less than the amounts paid into court in satisfaction of the 2nd plaintiff's claims, then the costs of the 2nd plaintiff's action from the date of the effective payment into court be reserved to the Master to be determined after the assessment of damages have been completed;

(iii) save as varied by any orders contained herein, all orders relating to costs made previously in the actions and the consolidated actions are hereby expressly confirmed,

(iv) this order be sealed and brought to the attention of the Master assessing damages in this matter only after final judgments have been entered for the 1st and 2nd plaintiffs against the 2nd defendant;

(v) there be liberty to apply.

6. Insofar as interim payment is concerned, I order that there be payment out of $1 million from the amounts paid into court to the 1st plaintiffs by way of interim payment. I order that there be payment out of $1.6 million out of the amounts paid into court to the 2nd plaintiffs by way of interim payment. The 1st and 2nd plaintiffs do have costs of today's hearing with certificate for counsel, damages to be assessed by a Master with four days reserved for the assessment.

HCPI 1267 & 1269/96

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NOS. 1267 & 1269 OF 1996

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(Actions consolidated by the Order of Mr. Registrar Betts dated 5th February)

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J U D G M E N T

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1. These two actions arise out of the death of two scaffolders, Leung Hoi Sung then aged 50, and Leung Kit Chuen then aged 39 on 13th December 1993 when the temporary scaffold they were constructing outside the bay window of a bedroom on the 22nd Floor of Unit D in Block 12 of South Horizons, Ap Lei Chau became detached from the building and fell to the street below.

2. With the consent of the parties, I ordered that the issues of liability and quantum be tried separately, and in the event of liability being established against either or both of the Defendants, that the issue of quantum should be tried by a Master.

3. There is very little factual dispute regarding the circumstances surrounding the deaths of the deceased. The 2nd Defendant, Kai Tai Construction and Engineering Company Limited was the principal contractor responsible for the construction of the South Horizons Development. Block 12 had been completed and handed over to the developer in December 1992. Practical completion of that block had taken place in June 1993. By agreement, the 2nd Defendant as the principal contractor was responsible for rectification of defects found in Block 12 during what was known as the "defects liability period" between June 1993 and May 1994.

4. On 13th December 1993 as a result of this agreement, the 2nd Defendant was responsible for rectification of water seepage to the bay window of the bedroom of the flat in question on the 22nd Floor.

5. The 2nd Defendant sub-contracted the work of erecting a temporary scaffold outside this bay window, which its employees or contractors would subsequently use to effect the necessary repairs, to the 1st Defendant, Honest Scaffold General Contractor Company Limited. The two deceased were both directors and employees of that company. The 1st Defendant company had been set up by the two deceased and Madam Yip Siu Yin, another director, in 1986. All three held equal shares in the company. The two deceased already had many years experience in the scaffolding trade; Madam Yip had experience in accounting. It was agreed that she should be responsible for the office side of business, and two deceased would be responsible for the scaffold construction work of the business. At Madam Yip's suggestion all three directors and shareholders became employees of the company. The two deceased were responsible for selecting all the material necessary for their work, including the bamboo and ties.

6. The job to be performed on the 22nd Floor of Block 12 was just one of very many performed by the 1st Defendant for the 2nd Defendant at the South Horizons Development. The 1st Defendant had already constructed more than a 100 similar structures which were commonly known as "hanging scaffolds" or in engineering terms as "trussed out scaffolds" for the 2nd Defendant.

7. On the morning of 13th December 1993, the two deceased had gone to the South Horizons Development with Mr. Ng Wai Tak, a daily waged employee of the 1st Defendant, who was responsible for passing the bamboo and other materials to the deceased from inside the building while they constructed the scaffold. At the Development they were met by Mr. Yeung Yuen, the foreman of the 2nd Defendant, who handed them a piece of paper with the work they were required to do that day. They started by dismantling two temporary scaffolds before being taken to a flat by Mr. Yeung when they erected their first scaffold. Mr. Yeung left and later returned and took them to the flat in question on the 22nd Floor. He then left.

8. No independent life line to which the deceased could attach safety belts was erected by the 2nd Defendant.

9. The two deceased then started to erect the scaffolding while Ng Wai Tak passed them materials.

10. Initially, the deceased would fix two eyelet pins to the outside of the building on either side of the bottom of the bay window using a fastening gun. Two bamboo poles were attached to the anchorage points with three strands of 1mm wire (wire coils). A platform about 0.63m deep was then constructed from these two poles. Small bamboos attached to the bottom of the platform at right angles to it, rested on the 3-inch window sill outside the window. Two long vertical poles known as "rakers" were then attached to the platform at an angle so that they rested where the outside wall met the roof of the bay window of the flat beneath. This work was effected without the deceased venturing outside the window. The deceased then both climbed onto the platform in order to affix similar wire coils to two further anchorage points which were affixed to the wall above the window in order to complete the structure.

11. It was at this stage after the deceased had climbed out onto the platform and when Ng Wai Tak's back was turned that the structure fell.

12. Neither of the deceased was wearing a safety belt or harness. There were no safety belts available in the flat on the 22nd Floor. There was evidence that the deceased had two safety belts in the vehicle which they had used to travel to the Ap Lei Chau Development. There was evidence also that the 2nd Defendant had safety belts in its site office at the development. Not only were the deceased not wearing safety belts but there was no place to which safety belts could safely be anchored. As I have said, no independent life line had been installed from the roof which would have been a normal point of anchorage for scaffolding workers doing such work. No alternative anchorage such as an eyebolt fixed into the soffit of the bay window had been installed.

13. I am satisfied from the evidence that the window frame itself would have been an unsuitable anchorage point from its configuration, the fact that it was made from aluminium but more particularly from the fact that it could have come detached if it suddenly had to bear the force of a falling man.

14. Mr. Cheng Foon, an occupational safety officer of the Labour Department, inspected the structure very soon after the accident as it lay in the street below. It was apparent from examination of the structure and the four anchorage points found around the window that at least one of the two upper wire coils had already been attached before the accident, as well as the bottom two coils and that all had broken. The four anchorage points around the window were intact. Therefore, the immediate cause of the detachment of this structure from the building was the failure of the wire coils.

15. It was the evidence of Dr. Lingard, the Plaintiff's expert, which I accepted, that the fracturing of the wire coils was probably not the primary cause of structure falling. It is more likely that something happened to disturb the immediate stability of the structure which provided enough force to cause the wire coils to fracture. One can only speculate to what this primary cause might have been. It is unlikely to have been a break in the bamboo as there was no sign of such breakage in the structure after it had fallen to the ground. It could have been one or both of the "rakers" slipping or some other parts of the structure coming loose. It may have been simply that one of the deceased had slipped.

16. Dr. Lingard gave evidence of his views of the structural safety of this structure when completed on the reasonable assumption that when constructed, it would have resembled another structure constructed by the deceased which had been photographed. Although if properly constructed, he considered it could sustain weights of 500kgs to 700kgs and was apparently a well known design amongst local bamboo scaffolders, he did not consider it would have been safe by engineering standard as it had no fail safe capability. In its uncompleted state, he considered it extremely hazardous for anyone to venture onto it. There was a serious risk of something unexpected occurring, as happened in this case. If anything went wrong with the vertical support (in this case a "raker"), there was nothing left to protect the workers. He commented that he was horrified that anyone should go out on such a partially completed structure without the safety belt and hardness. There was no real dispute about this evidence.

17. Where there was a dispute was whether or not Mr. Yeung, the 2nd Defendant's foreman, had informed the deceased that there were belts and life lines available in the site office. His evidence was that he had and that every time he took the deceased to the site of a particular job including the flat in question he had told them to wear belts and take safety precautions and had received assurances from the deceased that they would comply. He even went so far in evidence as to suggest for the first time that on the day of the accident he had told them to connect several safety belts together and attach them round the window frame.

18. I did not find Mr. Yeung a convincing witness. Mr. Ng Wai Tak, who I did find a convincing witness, had been at the site with the deceased on many of the 100 or so occasions when the deceased had built similar scaffolds. While he fairly conceded that he was not paying attention he had no recollection of Yeung ever telling them to wear safety belts. Indeed, I accepted Mr. Ng's evidence that just before taking them from the flat where they had erected the first scaffold that day to the flat where the accident occurred, Mr. Yeung would have been able to see the deceased working outside on a scaffold without safety belts.

19. I can place no weight on Mr. Yeung's evidence in this regard. Mr. Ng's evidence was that only on one occasion had he ever seen the deceased wearing safety belts and that was when they were working from the top of a roof where there was no foothold. If Mr. Yeung had been so concerned about safety as to warn the deceased about the need to wear belts, he would have noticed that it was not the practice of the deceased to wear belts or harnesses. I think it is likely that Mr. Yeung left the question of safety precautions to the deceased themselves.

The claim against the 1st Defendant

20. The Plaintiff's claim against the 1st Defendant is based on negligence, breach of an implied term in their contract of the employment and failure to discharge the common duty of care under the Occupier's Liability Ordinance, Cap. 134. I do not propose distinguish between the various types of claim because for practical purposes they are co-terminous.

21. There is nothing to suggest that the materials used in the construction of the platform were themselves faulty. But there can be no doubt that the system of work adopted by the deceased was unsafe. It involved them climbing onto a structure which had no fail safe capacity, without any form of safety belt or harness, and indeed, without any point on to which they could safely anchor such a belt or harness if they chose to use them.

22. The question for the court is whether the 1st Defendant can be held liable for this state of affairs bearing in mind the deceaseds' own position with the 1st Defendant and their role in causing the accident by choosing the method of work they did and failing to wear safety belts or harnesses.

23. The 1st Defendant was a limited company and could only act through its directors and/or servants. Insofar as the erection of these scaffolds and the adoption of safety measures are concerned, the evidence shows that these matters were left entirely to the two deceased. Madam Yip took no part in this part of the company's activities. The 1st Defendant cannot be liable for breach of duty to the deceased if they quite properly left these matters to the deceased who were competent and experienced men (see Richardson v. Stevenson Clarke Ltd. [1969] 3 All ER 705 which related to the selection of equipment).

24. The evidence, in my view, shows that it was reasonable for the company to leave these matters to the deceased. They were both apparently competent men of very many years scaffolding experience, not only in this company but with previous employers (see evidence of Madam Yip). I find that the proper test to be applied in a case such as this was set out by Pearson L.J. in Ginty v. Belmont Building Supplies Ltd. [1959] 1 All ER 414. Although that case concerned alleged breach of statutory duty by the employer, the principles are, in my view, equally applicable to the breach of duty alleged by the Plaintiff in this case. Pearson L.J. said that the important and fundamental question was: "Whose fault was it?" He went on:

"If the answer to that question is that in substance and reality, the accident was solely due to the fault of the Plaintiff, so that he was the sole author of his own wrong he is disentitled to recover. But that has to be applied to the particular case and it is not necessarily conclusive for the employer to show that it was a wrongful act of the employee Plaintiff which caused the accident. It might also appear from the evidence that something was done or omitted by the employer which caused or contributed to the accident; there may have been a lack of proper supervision or lack of proper instructions; the employer may have employed for this purpose some insufficiently experienced men, or he may in the past have acquiesced in some wrong behaviour on the part of the men. Therefore, if one finds the immediate and direct cause of the accident was some wrongful act to the man, that is not decisive. One has to enquire whether the fault of the employer (under the statutory regulations) consists of and is co-extensive with the wrongful act of the employee. If there is some fault on the part of the employer which goes beyond or is independent of the wrongful act of the employee and was a cause of the accident, the employer has some liability."

In this case, I find that there was no fault on the part of the 1st Defendant which went beyond or independent of the wrongful act of the deceased. I had already said that I find it reasonable to leave the construction of this scaffold and the adoption of safety measures to the deceased.

25. It has been suggested by Mr. Bharwaney that it would have been reasonable for the 1st Defendant to have insisted on the deceased undergoing a safety instruction course and for the advice of an engineer to be sought on the suitable design and method of construction for the scaffold in the circumstances.

26. I do not consider the 1st Defendant was in breach of duty to the deceased by failing to warn them of the dangers of going onto a part completed structure without safety harnesses or belts. An instruction course was not necessary to warn the deceased of the dangers inherent in what they were doing. They were obvious to anyone, especially to an experienced scaffolder.

27. Insofar as failing to seek the advice of an engineer is concerned, it has to be borne in mind that the accident happened to scaffolders when the scaffolding was in the course of erection. Even if an engineer had been consulted, he would not necessary have designed a scaffold upon which it would be completely safe to venture at any stage of construction without a safety belt or harness.

28. It is undoubtedly possible to design a scaffold suitable for the task which would not involve a workman going out onto it until it had its full load bearing capability. Dr. Lingard produced a design for such a scaffold. It would have involved considerable expense. It would have involved removing the window frames, both of the room in the flat in question and the one underneath. It is certain to have damaged the decoration of both rooms. Even if an engineer had been consulted, I think it unlikely that he would have recommended such a scaffold for this particular minor job when both the flat in question and the one underneath were occupied.

29. I consider that an engineer would properly have recommended a design that resulted in the completed structure being safer than this one would have been. That might well have involved the use of brackets attached the building which was an accepted method of construction in 1993 and is common place today. But the fixing of the brackets would involve an operation exposing the worker to considerable risk unless he was safeguarded by a harness or belt. In short, I consider that a reasonable method of construction for a scaffold in the circumstances would probably involve risk to the scaffolder from which he could only be safeguarded by a harness or safety belt.

30. I find that the Plaintiffs are not entitle to recover damages against the 1st Defendant because as between the deceased and the 1st Defendant, the fault from this accident was that of the deceased and there was no fault on the part of the 1st Defendant which went beyond or was independent of the deceaseds' fault.

The 2nd Defendant

31. The Plaintiffs claim against the 2nd Defendant is based upon negligence, breach of contract, breach of occupier's liability and breach of statutory duty.

32. No argument was addressed to me about any contractual relationship between the deceased and the 2nd Defendant. I assume there was none and that for this reason this aspect of the claim has not been pursued.

33. The principal issue trial between the Plaintiff and the 2nd Defendant in this trial has been breach of statutory duty. Although in their Statement of Claim, the Plaintiffs' alleged breaches of Regulation 38D(1) and (2) of the Construction Sites (Safety) Regulations, Cap. 59 and Mr. Bharwaney at one stage said that he would be seeking to rely upon Regulation 38B of those Regulations, he ultimately conceded that those regulations did not have application to a scaffold under construction. What he relies upon are breaches of regulations 38Q(2), 38Q(3) and 38Q(5) of the Regulations which relate to the prevention of falls and provision of safety belts or nets.

34. Regulation 38Q places responsibility for carrying out its provisions on the "contractor responsible for a construction site". No serious issue has been taken with the Plaintiffs' allegation that the 2nd Defendant was the contractor responsible for a construction site.

35. I am satisfied that the place where the accident occurred was still a "construction site" within the meaning of Regulation 2 of the Construction Sites (Safety) Regulations, Cap. 59 and that being the principal contractor undertaking work there, the 2nd Defendant was the contractor responsible for the construction site.

36. Regulations 38Q(2) and (3) are conditional upon a safety belt being required by virtue of Regulation 38Q(1). That regulation only applies when it is impracticable for the contractor to comply with all or any of the requirements of the Regulations 38A, 38B, 38L, 38M, 38N, 38P of the Regulations. I find that it was impracticable for the 2nd Defendant to comply with all those regulations. Therefore, the obligations arose on the part of the 2nd Defendant to provide each workman with "a suitable safety belt" under Regulation 38Q(2) and "a suitable and sufficient anchorage and suitable fittings therefore" under Regulation 38Q(3).

37. At the time of the accident, the deceased as I have found were not wearing safety belts nor was there any suitable and sufficient anchorage, even if they had been wearing them. There was, of course, evidence which I have no reason to doubt that there were safety belts and life lines at the site office. While I cannot exclude the possibility that Mr. Yeung had at some time in the past informed the Plaintiff of the availability of these items, I do not believe it probable that he had done so in the recent past and in particular on the day of the accident.

38. In so far as the obligation to provide workmen with safety belts is concerned, I consider it would be an unduly restrictive interpretation of Regulation 38Q(2) to require the 2nd Defendant physically to hand over safety belts to workmen. It would be sufficient to make it known to workmen where such safety belts were available. However, I consider that the requirement to provide "a suitable and sufficient anchorage and fittings therefore" requires more of a contractor. It would not be sufficient for the 2nd Defendant to provide the means whereby the workmen could themselves make a suitable and safe anchorage, e.g. by telling them where they can find the life line. It must itself provide the anchorage. Here, there was no anchorage either in the form of life lines from the roof or eyebolts to which the belts could be anchored.

39. I find, therefore, that even if there is a possibility that Regulation 38Q(2) was satisfied, the 2nd Defendant failed to comply with Regulation 38Q(3).

40. But even if I had not been so satisfied, there can be no doubt that the 2nd Defendant failed to comply with Regulation Q(5) which required it to take all reasonable steps to ensure that no workman remain on any dangerous place on the construction site without wearing a safety belt provided to the workman.

41. I did not accept Mr. Yeung's evidence that he warned the deceased to wear safety belts or that they assured him that they would do so. Even if he or they had, it would have been incumbent on him to take reasonable steps to ensure that the belts were being worn. He did nothing to satisfy himself of that requirement either on the day of the accident or on the 100 or so other occasions the deceased had built similar scaffolds.

42. I, therefore, find the 2nd Defendant was in breach of the statutory duties imposed on it by Regulations 38Q(3) and (5) of the Construction Sites (Safety) Regulations, Cap. 59.

43. I am satisfied the breach of those duties caused the deaths of the two deceased. There is no reasons to suppose that if suitable anchorages had been provided in the form of life lines or eyebolts and the deceased had warned by someone on behalf of the 2nd Defendant to wear belts or harness that they would have disregarded such instructions or warnings.

44. In the light of this finding, it is unnecessary for this Court to consider whether the 2nd Defendant was in breach of any further duties at common law or under the Occupier's Liability Ordinance, Cap. 314. I would only comment that I would have considered it artificial to deem the 2nd Defendant to be an occupier of the partially constructed scaffold being erected by the deceased. In any event, the defence under S.3(3) of the Ordinance would have been available to it.

Contributory negligence

45. During the course of submissions, I have been referred to a number of previous cases and it has been submitted that the deceased were either more or less negligent than those injured or killed in those cases. Reference to previous cases can be of considerable assistance to a court but it must be borne in mind that the circumstances of each case is different. The court should not find itself enmeshed in attempting to reconcile the case before it with or distinguish it from other cases on the facts.

46. What the court must do is to look at all the circumstances of the case before it, and consider not only "the causative potency of a particular factor but also its blame worthiness" (per Lord Denning in Davies v. Swan Motors Company (Swansea) Limited [1949] 2 K.B. 291.

47. The Construction Sites (Safety) Regulations, Cap. 59 place a primary responsibility on the principal contractor to ensure that those working in dangerous places on a construction site wear safety belts and that they provide the necessary anchorage point.

48. In so providing, the law no doubt reflects the fact that workers, such as scaffolders often have other priorities than their own safety, such as mobility, speed and cost. They may too become enured to risk by constant exposure. The principal contractor may well be the best person to ensure that the cost of providing essential safety is incorporated into a construction project. In this case, the 2nd Defendant failed to provide the anchorage points to which the deceased could have attached safety belts if they had wished. They failed to provide any supervision.

49. Bearing these factors in mind, I find nonetheless that there was substantial contributory negligence on the part of the deceased. The dangers they faced were obvious. They were mature men of very considerable previous experience in scaffolding. It was indeed their specialisation and had been for many years. They were not lowly employees in the company constrained by their position not to complain or to ask the principal contractor to erect life lines. They could have done so and there was no reason to suppose that such a request would have prejudiced the continued use by the 2nd Defendant of their company's services. Being themselves responsible for the way they worked, they could have fixed an eyebolt into the soffit of the window from which they were working. This was not an isolated incident when the pressure of work constrained them from adopting safety measures. It was their usual everyday working pattern.

50. Bearing in mind the circumstances of the case, I am of the view that both deceased were equally responsible between themselves for the accident which caused their death and that their joint responsibility for the accident was 40%. I give judgment for the Plaintiff against the 2nd Defendant in both actions. I order that damages be assessed by a Master and that the 2nd Defendant pay 60% of those damages to the Plaintiffs.

51. I make the following order nisi as to costs that unless either party makes application to the court within 14 days, the Plaintiffs' costs be taxed and paid by the 2nd Defendant. The costs of the 1st Defendant to be taxed and paid by the Plaintiffs.

Representation:

Mr. Mohan Bharwaney instructed by Messrs. Peter W.K. Lo & Co. for 1st Plaintiff and 2nd Plaintiff

Mr. Michael Liu instructed by Messrs. Clyde & Co. for 1st Defendant and 2nd Defendant

1996, Nos. PI 1267 & 1269

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURY LIST

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Coram : Hon Mr Justice Cheung in Chambers

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J U D G M E N T

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The Appeal

1. The 1st Defendant applied under O.15, r.6 of the Rules of High Court to strike out Yip Siu Yin ("Yip") of the 1st Plaintiffs as a party to the action on the basis that she was not a proper or necessary party. Master Jones granted the order. The 1st Plaintiffs now appeal.

Background

2. Yip together with Leung Hoi Sung and Leung Kit Chuen ("the two deceased") were the shareholders and directors of the 1st Defendant at the time of an industrial accident on 13th December 1993 in which the two deceased were killed. The writ was issued on 22nd November 1996 and Yip resigned as a director on 22nd April 1997. Chan King Wan is the widow of Leung Hoi Sung ("Leung"). She together with Yip are the administratrices of the estate of Leung. The proceedings were conducted on behalf of the 1st Defendant by its insurer AXA Insurance (Hong Kong) Limited.

Yip is a necessary and proper party

3. I must say that the application by the 1st Defendant is a bold one, and in the final analysis, one which is bound to fail.

4. Order 15, r.6 provides that at any stage of the proceedings the Court may order any person who has been improperly or unnecessarily made a party or who has for any reason ceased to be a proper or necessary party to cease to be a party.

5. Yip is not suing in her personal capacity or simply as the next friend or guardian of someone under disability. She is one of the administratrices of the estate of Leung appointed by the Supreme Court (now the High Court) of Hong Kong under its probate jurisdiction. The 1st Plaintiffs bring this action for damages for the death of Leung on behalf of the estate under s.20 (1) of the Law Amendment and Reform (Consolidation) Ordinance and also on behalf of Leung's dependants under the Fatal Accidents Ordinance. The Statement of Claim pleaded that Leung was an employee of the 1st Defendant. The cause of action under the Law Amendment and Reform (Consolidation) Ordinance is vested in the estate. Only the administratrices can represent the estate. Further, under s.5 (1) of the Fatal Accidents Ordinance, an action under that Ordinance "shall be brought by and in the name of the executor or administrator of the deceased."

6. The office of the administratrices consists of two persons, namely Chan and Yip. In an action by administrators, all should be joined as plaintiffs and if one refuses or is unable to do so, he should be added as defendant : Atkin's Court Forms Vol. 30, para. 4.6, Odgers on Civil Court Actions 24th Ed, para. 2.23, (citing Latch v. Latch [1875] LR 10 Ch. App. 464) and also Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 1993 Ed, pp.880-888. There is no difference in this regard between an administrative action and an ordinary litigation.

7. The present action cannot be carried on by one of the administratrices alone. Yip's office as an administratrix is still valid. There is no application to revoke her office. Until and unless Yip is removed from the office, she has to be one of the Plaintiffs in order for the 1st Plaintiffs' action to be properly carried on.

Wish of the beneficiaries

8. The 1st Defendant argued that it is unnecessary for Yip to become an administratrix because all the beneficiaries under the estate of Leung have by now reached the age of majority. Under s.25 (1) of the Probate and Administration Ordinance, two administrators are only required where there is a minority interest. At the time when the Letters of Administration was granted, Leung had three other children who were minors. When the 1st Defendant's summons was issued, the youngest child was still a minor.

9. Yip may not have the highest priority to take up the office, but if the beneficiaries of the estate of Leung are contented to let Yip carry on the administration, the question of priority simply does not arise. In any event, under s.25 of the Probate and Administration Ordinance, the maximum number of administrators is four. It must be up to the beneficiaries to decide how many personal representatives they need and who they want as their personal representatives.

10. According to the witness statement of Yip, she had known Leung since 1982 and from 1986, she was responsible for the daily administration and accounts of the 1st Defendant whereas Leung carried out the physical work of erecting scaffoldings which the 1st Defendant was engaged in. With this background, and without deciding on this matter, the fact that Yip became an administratrix is not something that is so unnatural that one would necessarily attribute some ulterior motive to her becoming a personal representative. But more importantly, the beneficiaries who are entitled to take up the Letters of Administration are prepared to let her take up the post.

Real complaint of the 1st Defendant

11. The real complaint of the 1st Defendant is that it was not able to take instructions from Yip because para. 11.02 of the Hong Kong Solicitors' Guide to Professional Conduct (Vol 1) prevents its solicitors from contacting Yip except through the Plaintiffs' solicitors, who have effectively refused to assist.

12. The 1st Defendant argued that Yip, as a director, owed a fiduciary duty to the 1st Defendant. The 1st Defendant owed a duty of full disclosure and assistance to the insurer and the only person who can reasonably discharge this duty is Yip. There is a conflict of interest between Yip's role as a director of the 1st Defendant and as a personal representative of the estate of Leung.

13. The 1st Defendant relied on Note 80/3/1 of the Supreme Court Practice where citing In Re Burgess (1884) 25 Ch D 243, it was stated that a co-defendant should not be a next friend of an infant. In Re Burgess is a case where the Court stepped in because of the risk of collusion. In this case the insurer has taken over the defence of the 1st Defendant. There is no question of collusion between the Plaintiffs and the 1st Defendant on the face of the documents I have seen. The insurer relied on her statement given to the loss adjuster in the employees' compensation proceedings.

14. Furthermore, as Yip had ceased to be a director of the 1st Defendant she could not continue to owe any fiduciary duty towards the 1st Defendant. If there is any breach of fiduciary duty that might occur between the time of the accident and the date of her resignation, the only one who could complain is the 1st Defendant and not its insurer. The right of an insurer exercising its right of subrogation only arises on payment, (MacGillivray on Insurance Law, 9th Ed, paras. 22-24) and in connection with claims against third parties to diminish his loss (paras. 22-36), but it cannot be subrogated to rights which have no connection with the subject matter of the insurance (paras. 22-38). Yip does not owe any contractual duty to supply information and render all necessary assistance to the insurer.

15. I have no doubt that the insurer faces practical difficulties without the assistance of Yip because she is the only surviving officer of the 1st Defendant who could give any useful information about the company. But we are not living in a perfect world which would provide a remedy for every problem. The problem is not unique in insurance claims : very often the insured disappeared or is a close friend or is related to the plaintiff. In Pang Wai Chung v. Hoi Tat Rubber Factory [1992] 2 HKC 447, the Court, although recognising the difficulties of the insurer obtaining proof of evidence from the insured who were often opposite parties, refused to intervene on an application by the insurer to join the action in its name. In any event, in this case, Yip is prepared to provide answers to the insurer if written questionnaires are submitted. This is, of course, not a solution that the 1st Defendant would wish.

Conclusion

16. No doubt the Court has a wide discretion to strike out an unnecessary or improper party, it also has a duty to ensure that only necessary and proper parties are before it : Halsbury's Laws of England, 4th Ed, Vol. 23, para. 223 and Note 15/6/5 of the Supreme Court Practice.

17. This is clearly a case where Yip is a necessary and proper party to the proceedings. Accordingly the appeal is allowed and the order of the Master is set aside. The 1st Plaintiffs are to have the costs below and of the appeal in any event.

Representation:

Mr Mohan Bharwaney, inst'd by M/s Peter W K Lo, for 1st Plaintiffs

Mr Joseph Fok, inst'd by M/s Clyde & Co., for 1st Defendant