SINGH BALWINDER v. SINO PHIL ENGINEERING SERVICES LTD AND ANOTHER

DCEC 374/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO.374 OF 2003

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J U D G M E N T

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Introduction

1. The Applicant was a construction site worker.  He was allegedly injured in the course of his employment with the 1^st Respondent when he was working in the construction site of which the 2^nd Respondent was the main contractor. 

2. The 1^st Respondent has no dispute that it employed the Applicant at the material time.  It says however that the alleged accident has never happened and alternatively, that the injuries suffered by the Applicant was not serious.   

3. Apart from relying also on the above defences, the 2^nd Respondent says further that the Applicant was not an employee of the 1^st Respondent.

4. The 1^st Respondent was acting in person at trial represented by its director Mr. De Souza (“DS”).  At the material times DS and his wife controlled a number of companies including, inter alia, the 1^st Respondent, Geotechnical Engineering Services Ltd (“Geotechnical”) and Jaytey Engineering Ltd (“Jaytey”).  The 1^st Respondent’s name was used for signing the sub-contracting agreement with the 2^nd Respondent for the subject project.  Under the agreement the 1^st Respondent was to supply manual labours to work at the Tung Chung MTR Station construction site (“the site”).

5.   The 2^nd Respondent says the Applicant was probably the employee of Geotechnical or Jaytey or even DS himself rather than the 1^st Respondent.

6. According to the Applicant, he worked as a general labourer at the site on 15/5/2001.  When he was working inside a multi-storey residential building which was then under construction within the site, a piece of concrete fell from a hole on the ceiling and hit his left hand that caused his left ring finger seriously injured.

7. Under the Certificate of Review of Assessment issued on 21/5/2003 (“the Form 9”), the injury was described as “left hand injury resulting in left ring finger pain, weakness and stiffness”.  The loss of earning capacity permanently caused by the injury (“loss of earning capacity”) was assessed as 2.5%.    The periods of absence from duty necessary as a result of the injury stated on the Form 9 were from 15/5/2001 to 6/5/2003.  The Applicant appealed under Section 18 of the Employees’ Compensation Ordinance Cap. 282 (“the Ordinance”), asking this court to reassess his loss of earning capacity.

Evidence

The accident

8. The Applicant gave evidence that on the day in question he worked on the 30^th floor of a building at the site, his duty was to convey the construction debris and rubbish there to the ground level.  There was another worker called “Ah Chung” working together with him.  At around 4:00 p.m., a piece of concrete suddenly fell from above and struck his left hand.  He told the Nepalese foreman called ‘Ram’ or ‘Rai’ about the accident. This Nepalese foreman went with him to the site office and put cotton and bandage on his finger in the presence of a Korean site manager whose name he is not sure.  He was then told to go to the hospital and he went to the Prince of Wales Hospital by bus. 

9. The Applicant was cross-examined extensivelyon the details of how the alleged accident happened.  He was asked about, for example, the size of the concrete, his exact position when he was hit, the time when he first noticed the concrete, and what part of his body was being hit.  Suffice it to say is that, although there are discrepancies in some area (e.g. the size of the concrete) between what was stated in the Applicant’s witness statements and his oral testimonies in describing the accident, the discrepancies are not so significant that can render his evidence unreliable in itself.  Given the fact that the alleged accident happened in split seconds, the difficulty in giving details is understandable.  As regard how the accident was happened, the Applicant’s evidence is consistent on the whole.

10. There is an issue as to whether the Applicant had attended the site at all on the relevant day.  DS relied on some hand written records prepared by the 1^st Respondent’s foreman to suggest that the Applicant was on sick leave that day.  However, these records are contradicted by the computer records produced by the 2^nd Respondent showing that the Applicant had entered the site in the morning and left early at around 4:37 p.m. in the afternoon.  This is consistent with the Applicant’s evidence that he was told to go to the hospital at around that time.

11. For these 2 sets of records, I prefer the records produced by the 2^nd Respondent as the accurate ones.  As submitted by Mr. Brettell, solicitor representing the Applicant, the 1^st Respondent’s records are incomplete and could not have been used by the 1^st Respondent as the basis of calculation of the Applicant’s working days when submitting the charges to the 2^nd Respondent.  On the other hand, the records of the 2^nd Respondent were kept under a managed system and there is no reason to doubt their accuracy. 

12. It can be seen from the Attendance Record of the A & E Department of Prince of Wales Hospital that the Applicant arrived at the hospital at 6:29 p.m. on the alleged date of injury.  This is, in my view, to a large extent consistent with the account given by the Applicant. 

13. There was a safety supervisor in the name of Rai Ram Kumar working at the Site (“Rai”).  DS in his evidence suggested that this person had not begun working at the Site on the day in question.  The 2^nd Respondent also put in documents from the Inland Revenue Department to show that he had only started working for them after the accident.  However, neither of the Respondents asked Rai to testify or make any witness statements to the court to prove the same.  On the other hand, Mr. Szeto Wing Hing (“Szeto”), an employee of the 2^nd Respondent, testified in court that Rai had started working at the Site in the end of 2000 before the date of the alleged accident.

14. DS in his affirmation filed on 28/9/2004 stated that the Applicant told him that on the day in question the Applicant had reported the accident to Rai.  He then contacted Rai by telephone and he was told that the reports of the accident were handed to the safety department of the 2^nd Respondent.  DS said in court that he had asked Rai about the accident and Rai was aware of it.

15. I appreciate the fact that Rai or Ram is a name very common in Rai’s origin.  However, the fact that DS made enquiry to Rai reflects that DS understood Rai as the one to whom the Applicant had reported about the accident on the day in question.     Further, if the Applicant had not told Rai about the accident on that day, DS would have learnt about this from him and would therefore not have conceded liability in the first place.  I find as a fact that the Applicant did report to Rai of the accident on 15/5/2001. 

16. I have no hesitation in concluding that the Applicant did work at the Site on the day in question.

17. There is also an issue as to whether the alleged accident happened as described by the Applicant or at all.

18. It is submitted by the Respondents that there were no written records of the accident and it was not made known to the 2^nd Respondent about the accident until a very late stage.  It is also submitted that the evidence given by the Applicant is not reliable and his account of how the accident happened is improbable.

19. DS and Mr. Lui Ting Kwan (“Lui”), a foreman of the site, gave evidence that there could not be holes on the ceilingsof the buildings under construction for debris or concretes to fall through.  On the other hand, a chute was built outside and attached to the building for the purpose of transferring debris to the ground level.  According to Lui, the construction work of the block where the Applicant was working (Block 6) had been finished and there should not be any “mivan holes” existed.   However, both of them could not give direct evidence as to whether there was actually a hole as described on the ceiling.

20. The Applicant said not every floor of the building has access to the chute. Workers had to transfer the debris to the floors having access to the chute first before using it to dispose of the debris. 

21.  In the “Minutes of the Site Safety Committee” produced by the 2^nd Respondent, it was recorded that “many floor openings were found in the floor slabs” and the relevant contractor was warned to rectify floor opening violation at upper level of Tower 6 in the material times.

22. Szeto agreed that the “floor openings” mentioned in the minutes should be something different from the “mivan holes”.

23. Looking at the Attendance Record of the A & E Department of Prince of Wales Hospital again, the medical findings of the treating doctor on the Applicant were: “(1) Tender over lower back and left shoulder, (2) Tender over left middle finger, (3) Tender swelling and bruise around tip of left ring finger with slight decrease ring finger movement and (4) X-ray of left hand was normal.”  It was also recorded that the Applicant was injured by a “falling stone”.

24.  In reliance on the above medical findings, it is unquestionable that the Applicant did suffer from injuries on his left ring finger on the very day.  With my findings that the Applicant did work at the site and tell Rai about an accident, I have no difficulty in concluding that the Applicant had probably injured his finger when he was working at the site.

25. The suggestion that there was a hole on the ceiling allowing a piece of concrete to fall through is in itself unusual.  However, given the fact that the Applicant was injured while he was working at the site, it would be unlikely that he would lie about the existence of the hole.  It would be apparent to him that his employer or whoever liable to compensate him, who was well aware of the conditions of the buildings, would raise serious queries about the existence of the hole and hence the cause of his injuries.  If there was no hole on the ceiling, he could have come up with another story conveniently without referring to any such hole.

26. Furthermore, the contemporaneous account given by the Applicant to the Hospital that he was “injured by a falling stone” is also consistent with his evidence.

27. Mr. Sadhwani, counsel for the 2^nd Respondent, helpfully summarized in his final submission some aspects of the Applicant’s evidence that were said to have rendered his version of facts unbelievable.  Mr. Sadhwani’s complaints about the Applicant’s evidence include: the inconsistencies as to the details of how the accident happened, the fact that DS had written a letter stating that the Applicant was taken by a white car to the hospital, the Applicant described his finger as “broken” in a letter which did not accord with the medical evidence, the content of a written statement of the Applicant recorded by an officer of the insurance company (“the Toplis Statement”), some minor discrepancies in relation to the medical notes and sick leave certificates describing the Applicant’s injuries and the amendment of the “notification of accident form” to the Labour Department of the name of the employer.

28. The Applicant is certainly not a witness giving perfect evidence.  However, given the fact that the accident happened in 2001, he should not be expected to give a perfect account of exactly how the accident happened, particularly as to details like the size of the falling concrete and his exact position when he was hit.  After the accident, the Applicant had to report the matter throughout the years to various people representing different interests, for instance, Rai, the Labour Department, the officer(s) of the insurance company, numerous medical officers or experts, legal practitioners, and even DS.  Given the background of the Applicant, it is not to be surprised that discrepancies might have happened due to misunderstandings.  Furthermore, people could have made mistakes in receiving and recording information.

29. My view is that, as analysed in paragraphs 8 to 25 hereinabove, the Applicant had probably suffered injuries on his left hand when he was at the site on the day in question, and it is improbable that he would make up a story by inventing a hole on the ceiling, the imperfection of the Applicant’s evidence could not be sufficient to render it unbelievable.

30. Bearing in mind that there is no direct evidence to contradict the Applicant’s evidence as to how the accident happened, I accept the version of facts in relation thereto and conclude that he was injured at the site in the course and arising out of his employment on 19/5/2001.      

31. Mr. Sadhwani also suggested that the injury to the Applicant’s left ring finger might have been a pre-existing one.  With respect, I would dismiss this suggestion as a mere speculation for having no concrete evidence in support.    

32. It is also improbable that the fracture of the left ring finger happened after the accident in view of the expert opinion of Dr. Jack Wong that gained also the support of the joint medical expert Dr. Arthur Chiang.

The employer

33. It is common ground that there was a subcontracting agreement between the 1^st and 2^nd Respondents for supply of manual labour for the project at the site.  There was no other contract between any other DS’s companies including DS himself and the 2^nd Respondent in respect of the site.

34. DS himself admitted that the 1^st Respondent was the employer of the Applicant on the date of the accident.  The 2^nd Respondent issued a working permit to the Applicant to work at the site naming the 1^st Respondent as the contractor employing the Applicant.  

35. It is submitted by Mr. Sadhwani that all along the Applicant treated DS personally as his employer and DS had not been named as a director of the 1^st Respondent until after the accident.  He submitted also that the 1^st Respondent was not operational in that it had no insurance and MPF scheme for the employees.  On the other hand, Geotechnical and Jaytey were companies in operation having insurance policy for their employees.    

36. Furthermore, the 1^st Respondent’s name was deleted and replaced by that of Geotechnical on the “Notification of Accident” submitted to the Labour Department.  There was also a document titled “Casual Worker Employment Contract” signed between Geotechnical and the Applicant.  In a form titled “Notice by Employer of the Death of an Employee or of an Accident to an Employee resulting in Death or Incapacity” submitted to the Labour Department in September 2001 and signed by Geotechnical, the name of the insurance company of Geotechnical (“Ming An Insurance Company Hong Kong Limited”) was provided as the insurer in relation to the accident.  There are 3 copies of cheques made out to the Applicant by Geotechnical for periodical payments in August 2002 and April 2003.

37. As regard Jaytey, according to the Applicant’s tax return, Jaytey was his employer at least until 31/3/2001.  In a letter dated 15/3/2002 from Jaytey addressed to “To Whom It May Concern”, it was certified that the Applicant was working with Jaytey from 1/4/2001 until the date of the letter.  There was another similar letter signed by a different person produced by the Applicant at trial.  Between 18/7/2001 and 20/11/2001, 3 cheques of Jaytey were issued to the Applicant. 

38. Mr. Sadhwani submitted further that even if this court takes the view that the Applicant was working for the 1^st Respondent at the time, as it was not operational, the possibility arises that the Applicant was lent or let on hire by either Geotechnical and/or Jaytey and/or DS and the 1^st Respondent would not be liable as it would then not be an employer within the definition of the Ordinance.

39. Mr. Sadhwani’s submissions are on the face of it attractive.  I have also without doubt that the Applicant all along did not care about the identity of his employer provided that he has works to do and wages to earn.  Albeit very well framed, Mr. Sadhwani’s arguments could not really answer the very question that none of the possible employers except the 1^st Respondent had the right to provide workers to the site.  They were simply not parties to the subcontract with the 2^nd Respondent. 

40. It is beyond dispute that DS had the control of the 3 relevant companies.  If the 1^st Respondent was chosen to be the party to the subcontract, there was no reason why DS would take the trouble to employ labourers by the other companies.  If insurance or MPF were issues, DS could simply use either Geotechnical or Jaytey to sign the subcontract instead of the 1^st Respondent.

41. My view is that, the arrangement between the Applicant and DS and his group of companies was that the Applicant would be employed by the company or person who had subcontracted a particular project to work at the site of that project.  The fact that the Applicant was employed by one of the companies at a particular time for a particular project does not bar him from being employed by another company at another time for another project.

42. For the confusion that the name of Geotechnical was given as the employer to the Labour Department, I accept the evidence of DS that it was a mistake but I believe that the mistake was also a deliberate one caused by the fact that there was no insurance policy covering the 1^st Respondent.

43. I accept the evidence of the Applicant that the letters certifying his employment with Jaytey were for the purpose of visa application and they can have no bearing on who was the employer of the Applicant at the material times for his work at the site.

44. Since all the 3 companies were controlled and beneficially owned by DS and/or his wife, the fact that part of the periodical payments were settled by a particular company does not help much in determining the true employer.

45. There is simply no evidence to prove that the Applicant was hired or let to the 1^st Respondent as suggested by Mr. Sadhwani.  I can see no reason why DS should have taken such trouble.

46. In the premises, I find that the Applicant was employed by the 1^st Respondent at the time he was injured and the 1^st Respondent and the 2^nd Respondent were liable to pay him compensation under and in accordance with the Ordinance.

Quantum

47. The Applicant claims under Section 9, 10 and 10A of   the Ordinance.  It is agreed that the Applicant has received a total sum of HK$212,780.00 as periodical payments.

Monthly earnings

48. It is not in dispute that the Applicant earned a basic wage of HK$400 per day.  As for the subject project, he commenced working from 2/5/2001 and stopped since after the accident.  From what it shows on the 1^st Respondent’s wage roll, the Applicant received the amount of HK$6,437.50 for the 12 days’ work including one overtime day. 

49. The said wage roll also shows that 23 out of the 33 workers (including the Applicant) worked more than 20 days in the month of May 2001.  Excluding the overtime days, the average number of working days for these 23 workers is approximately 24.  The average number of overtime days is approximately 2.5.  Adopting these figures for calculation of the Applicant’s monthly earnings, taking HK$600 as the overtime wage per day, the amount would be HK$400 x 24 + HK$600 x 2.5 = HK$11,000.00.

Loss of earning capacity

50. The Applicant suffered blunt trauma injury to the end phalange of his left ring finger.  He received conservative treatment at the A & E Department.  On 22/6/2001 a malunited mallet fracture of the finger was shown on scan.  An operation to excise dorsal osteophytes was performed on 5/8/2002.  The X-ray on 11/11/2002 showed mild deformity of end phalanx and mild to moderate degenerative change at DIP joint.

51. The Applicant still complains of pain on the left index finger upon exertion.  It is his evidence that he could no longer perform the kind of heavy works that was required under his original employment.

52. Dr. Arthur Chiang opined that the Applicant should be able to return to his former employment whilst Dr. Jack Wong had the view that he will not be able to perform as a construction site worker in full capacity.  Dr. Wong agreed that the limitation of the Applicant’s ability to perform heavy work is due to his pain suffered at the left index finger and this is very subjective.

53.  By way of subpoena, DS called one Mr. Luk Koon Tin (“Luk”) who was the last employer of the Applicant carrying on a recycling business.  Luk gave an account of the nature of work that the Applicant was required to perform in his company.  According to Luk, the duties of the Applicant had no difference from the other workers except that he was not required to operate the machines.  From time to time the Applicant was required to lift heavy objects and to pull heavy cables.  He noticed no problem of the Applicant performing this kind of heavy duties.

54. Luk’s evidence was different from that of the Applicant.  However, I can see no reason to doubt Luk’s evidence as he has no interest whatsoever in the present litigation.  Although there was another employees’ compensation claim against Luk’s company by the Applicant, the liability was covered by insurance and there was no purpose to serve for him to give false evidence in this court.  Furthermore, I was impressed by the prompt and straightforward way of Luk in answering questions that I find him a very credible witness.

55. Whether there exists pain is a very subjective matter and it depends much on the evidence of the Applicant.  In view of the evidence of Luk, I doubt very much that the Applicant could no longer be able to perform heavy lifting duties as alleged.  I prefer the evidence of Dr. Chiang that the Applicant has no difficulties in resuming to work as a construction worker.

56. In this light, I find the formula under the “Hong Kong Paper Mills” formula for calculation of loss of earning capacity not applicable.  

57. In the circumstances, considering the opinions of Dr. Chiang, Dr. Wong and the First Schedule of the Ordinance and regarding the Applicant’s injury as arthrodesis or fusion of the finger joint, I would adopt the assessment of the Assessment Board of 2.5% as a fair figure for the Applicant’s loss of earning capacity.  Hence, the appeal of the Applicant under Section 18 of the Ordinance is dismissed.

Compensations

58. Compensation under Section 9 would be HK$11,100 x 96 x 2.5%  = HK$26,640.00. 

59. For compensation under Section 10, in light of the deeming provision under Section 10(2) of the Ordinance and the opinions given by Dr. Chaing and Dr. Wong, the certified sick leave by the Assessment Board cannot be said to be unreasonable.  The amount awarded would therefore be HK$11,100/30 x 617 x 80% = HK$182,632.00. 

60. I accept that the medical expenses of the Applicant was HK$2,645.00 in total and I award the amount accordingly under Section 10A.

61. According to Section 10(4) of the Ordinance, no periodical or lump sum payments paid or payable under Section 10 shall be deducted from any amount of compensation payable under sections 6, 7, 8 or 9.

62. However, as the periodical payments have already exceeded the total amount awarded under Section 10 and 10A, the total sum to be awarded by this court should only be HK$26,640.00.

63. In the premises, I order that judgment be entered against the Respondent in favour of the Applicant in the amount of HK$26,640.00 and interest thereon at half judgment rate from 15/5/2001 to the date of handing down of this Judgment and thereafter at judgment rate until payment.

64. I make a cost order nisi as follows :-

(i)	costs of the Application of the Applicant be borne by the 1st and 2nd Respondents on common fund basis, to be taxed if not agreed;
(ii)	costs of the 1st and 2nd Respondents in respect of the Applicant’s appeal under Section 18 of the Ordinance be borne by the Applicant on party and party basis to be taxed if not agreed;
(iii)	no order as to cost between the 1st and 2nd Respondents.
(iv)	counsel’s participation is certified.
(v)	Applicant’s own costs be taxed in accordance with legal aid regulations

This order nisi shall be absolute upon expiry of 14 days from the date of handing down of the Judgment.

DCEC 374/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

          EMPLOYEES’ COMPENSATION CASE NO. 374 OF 2003

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REASONS FOR DECISION
AND
DECISION ON COSTS

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1.  This is an application by the 1^st Respondent to withdraw the admissions of liability made by its former solicitors in the letter dated 10June 2004 and in the direction hearing before myself on 9 July 2004.  After the hearing, save that the 1^st Respondent is still bound by the admission that it was the employer of the Applicant at the time of the accident, I allowed the 1^st Respondent’s application to withdraw the admissions on liability.  These are my reasons.

2.  The present case concerns an application by the Applicant for employees’ compensation in respect of an industrial accident on 15 May 2001.  It is the Applicant’s case that the 1^st Respondent was his direct employer and the 2^nd Respondent was the principal contractor of the construction site in issue at the time of the accident.  In the letter dated 10 June 2004 and in the direction hearing before myself on 9 July 2004, the 1^st Respondent’s former solicitors admitted liability in respect of the accident and that the 1^st Respondent was the employer of the Applicant at the time of the accident, and these are the admissions that the 1^st Respondent now seeks to withdraw.

3.  Before the hearing, the Applicant made an open offer to allow the 1^st Respondent to withdraw the admissions on condition that the 1^st Respondent would not challenge its employment relationship with the Applicant.  There was some further correspondence exchanged between the parties after the offer but there was no agreement made.  In the hearing, Mr. De Souza, who is a director representing the 1^st Respondent, conceded for the first time after the issuance of the summons and without attaching condition, that the 1^st Respondent would not withdraw the admission in respect of its employment relationship with the Applicant.  However, the Applicant was not happy with such late concession and maintained its objection to the 1^st Respondent’s application.  But no matter what is the result, the 1^st Respondent is still bound by the concession made in the hearing.

4.  The admissions in the present case were not made in pleadings.  However, it has been held in Bird v. Birds Eye Walls Ltd., The Times, July 24 1987 (CA) that, even if an admission is made in a letter and not in the formal pleadings, leave of the court is required to reopen the issues formerly admitted by a party.  Hence, it is common ground that leave is required to withdraw the admissions made by the 1^st Respondent’s former solicitors.

Reasons for the Mistaken Admissions

5.  In his two affirmations made in August 2006, Mr. De Souza sought to explain why the admissions were made by the 1^st Respondent’s former solicitors.  According to him, the case had all along been handled by a young clerk of the solicitors’ firm, who did not advise the 1^st Respondent properly about the conduct of the case.  The 1^st Respondent was not advised about the significance of the issuance of the Indemnity Notice by the 2^nd Respondent against the 1^st Respondent, nor was it advised about the reasons, effects or consequences of admitting liability.  Mr. De Souza was only advised that admitting liability would save costs, and it was under such circumstances that the admissions were made on the 1^st Respondent’s behalf.  Further, the solicitors did not inform the 1^st Respondent specifically that admissions were indeed made in the letter dated 10June 2004 or in the direction hearing on 9 July 2004.

6.  As the 1^st Respondent was not satisfied with the services offered by the solicitors’ firm, the 1^st Respondent terminated its services and Mr. De Souza started to conduct the case on behalf of his company.  Mr. De Souza then went through the documents disclosed after discovery and found that there were various discrepancies in the Applicant’s case.  In the supporting affirmations and in the hearing itself, Mr. De Souza highlighted the following discrepancies and dubious features in the Applicant’s case:

(i) the Applicant claims that there was a fracture in his finger caused by the accident, but this was inconsistent with his medical record of the Accident and Emergency Department of the Prince of Wales Hospital;

(ii) the Applicant claims that there was a hole in the ceiling to dispose of the debris, which, according to Mr. De Souza who has been a qualified mechanical engineer for many years, was quite impossible as no structural engineer would have allowed such hole to exist;

(iii) the Applicant claims that a worker named “Ah Chung” has witnessed the accident, but the time sheets show that no such person worked at the site on the day of the accident;

(iv) the attendance record made by 1^st Respondent’s “gang leader” at the site shows that the Applicant was on sick leave on the day of the accident;

(v) the Applicant claims that he had received first aid treatment after the accident, but that is not supported by the record kept by the safety department of the 2^nd Respondent;

(vi) the Applicant claims that he was injured by the falling debris, whereas the Notice by Employer commonly known as Form 2 show that the accident was caused by a falling iron bar;

(vii) the Applicant was seen running a mobile phone business during the sick leave period after the alleged accident;

(viii) the 1^st Respondent learnt from another worker that the Applicant was making a bogus claim; and

(ix) the Applicant has amended the contents of the Application and has changed his version of events in his witness statements a number of times, thereby undermining the credibility of his case.

7.  By reason of the aforesaid discrepancies, the 1^st Respondent contends that the Applicant might have fabricated the accident and it was a mistake for the 1^st Respondent to admit liability in the first place.

The Law

8.  There is some dispute as to the proper principles to be applied in determining whether leave should be granted for a party to withdraw an admission.  Mr. Brettell, solicitor for the Applicant, refers me to the judgment of Hunter J., as he then was, in Tse Yuk Kin v. Chee Cheung Hing [1984] HKLR 391 and submits that leave should only be granted to withdraw an admission if the party seeking to do so can supply good reasons, in particular it expects the party to put before the court a convincing credible explanation as to why the admission was made under a mistake.  In fact, similar argument has been put before Deputy Judge Lin in Burlington Air Express Limited v Nuovo Collection Limited, unreported, DCCJ No. 8865 of 2001 (decision on 15 August 2002).  In that case, the learned deputy judge reviewed the authorities and held that the modern approach to such question should be one formulated in the case of Gale v Superdrug Stores PLC [1996] 1 WLR 1089, in which Millet J. said the following:

“In the High Court the plaintiff may be able to crystallize the position by applying under R.S.C., Ord. 27, r. 3 for judgment on admissions.  But the defendant can resist the application by seeking leave to withdraw the admission and, if necessary, amending his defence. In my judgment leave should normally be granted if the application is made in good faith, raises a triable issue with a reasonable prospect of success, and will not prejudice the plaintiff in a manner which cannot be adequately compensated.” (emphasis added)

9.  The principles in Gale were also cited with approval by the Hong Kong Court of Appeal in Re Chung Wong Kit (a bankrupt) [1999] 1 HKLRD 410.  In that case, Rogers JA said the following about the requirement of proper explanation:

              “[Counsel for the Appellant] relying upon the authority of Tse Yuk Tin………argued that the respondents should not have been allowed to rely upon this affirmation as it constituted a withdrawal of an admission which was being made without proper explanation.  This however is not a rule of law in itself but just an example of the proposition that a party should not be permitted to resile from an admission unless it was just to allow it to do so having regard to the interests of both side.” (p. 413J – p. 414B)

10.  Hence, according to Deputy Judge Lin in the Burlington Air Express case, the question whether there is a proper explanation or not now goes to the issue of good faith, to which I totally agree.  As these guiding principles now reflect the modern approach regarding the granting of leave to withdraw admissions, I will adopt them in considering the present application (see also Hong Kong Civil Procedure 2007, vol. 1, para. 27/3/9).

The Application of the Principles

(i) Whether the application is made in good faith?

11.  As mentioned above, the Applicant claims that it was a mistake to admit liability in the first place.  The admissions were made without proper legal advice, and the sole consideration of the 1^st Respondent by that time was to save costs.  It was only after Mr. De Souza took up the conduct of the case that he realized the accident might be a fabrication on the part of the Applicant.

12.  On the other hand, Mr. Brettell submits that the 1^st Respondent had, at the time when the admissions were made, already been in possession of some of the documents that the 1^st Respondent sought to challenge the Applicant’s case, and so if the 1^st Respondent had properly studied these documents, the 1^st Respondent should not have admitted liability by that time.  Hence, Mr. Brettell says, the 1^st Respondent has not provided good reason or explanation to justify the withdrawal of the admissions.

13.  Looking at the history of the case, I think that Mr. Brettell is right in saying that Mr. Souza should have had at least some of the relevant documents when the admissions were made.  However, does it mean that the application is not made in good faith?  In my judgment, the answer is no.  The fact that Mr. Souza should have been more alert does not destroy the good faith in the making of the present application.  One must bear in mind that employer like the 1^st Respondent was put in a very difficult position facing a claim of this sort.  The Applicant’s accident was relatively a minor one, and no one informed the 1^st Respondent about the accident until much later on 28 May 2001 when the Applicant sent it a written notification.  As there were not many witnesses who could verify the truth of the accident, the Applicant’s case depended very much on the allegation of the Applicant himself.  With limited clue to challenge the Applicant’s case, the 1^st Respondent might have simply admitted liability with a view to save legal costs.  However, if the 1^st Respondent genuinely found out later that they had a good case to challenge the accident itself, the 1^st Respondent should, in the interest of justice, be allowed to reopen the issue of liability.  As there is nothing for me to doubt the truthfulness of Mr. Souza’s explanation, I accept that the application is made in good faith.

(ii) Whether there is a triable issue with reasonable prospect of success?

14.  As mentioned above, the Applicant has listed out various dubious features and discrepancies in the Applicant’s case.  In his submission, Mr. Brettell tries to offer different explanations for these discrepancies, in particular he says that there is documentary evidence to support that the Applicant was working on the day of accident.  However, I do not think that I should embark on a mini trial to determine whether the Applicant is telling the truth about the accident, which should be a matter to be decided in the proper trial.  At this stage, suffice it for me to say that the 1^st Respondent does have some justification to challenge the Applicant’s account of the accident, and it would only be fair and just to allow the 1^st Respondent to reopen the issue on liability.

(iii) Whether the Applicant will be prejudiced in a manner which cannot be adequately compensated?

15.  I then turn to the third consideration.  As I see it, the lack of prejudice is one of the main reasons why I should exercise the discretion in the 1^st Respondent’s favour.  Obviously, if the 1^st Respondent now seeks to challenge its employment relationship with the Applicant, it will cause serious prejudice to the Applicant as he will have difficulty in joining other possible employers in these proceedings by reason of the lapse of time.  However, what the 1^st Respondent now seeks to reopen is only whether the Applicant was injured in the accident as alleged by him on 15 May 2001.  As the previous admissions are in no way binding on the 2^nd Respondent, the Applicant knew from the outset that he had to prove the accident in order to establish liability on the part of the 2^nd Respondent.  In other words, the admissions have made no difference to the Applicant in respect of the preparation of the case, and he has not suffered any real prejudice by the withdrawal of the admissions.  In my judgment, the lack of prejudice is a strong reason as to why the 1^st Respondent should be allowed to withdraw the admissions conditionally.

16.  By reason of the aforesaid, I have ordered that, save the 1^st Respondent be disallowed to withdraw the admission that the 1^st Respondent was the employer of the Applicant at the time of the accident, leave be granted to the 1^st Respondent to withdraw the admissions on liability previously given.

Decision on Costs of the Application

17.  I have reserved my decision on costs.  In this regard, I have no reservation that the 1^st Respondent should pay the Applicant’s costs of such application.  Firstly, the 1^st Respondent is asking for the court’s indulgence to withdraw the admissions which should not have been made in the first place, and so it follows that the 1^st Respondent should pay the Applicant’s costs arising out of the withdrawal of the admissions.  Secondly, the Applicant was quite justified to oppose the 1^st Respondent’s request to withdraw the admission in respect of its employment relationship with the Applicant, and it was only in the hearing itself that the 1^st Respondent conceded that it was bound by such admission.  Hence, the Applicant has incurred unnecessary costs for which the 1^st Respondent should be responsible.  However, the hearing could have been finished within an hour had the Applicant not opposed the 1^st Respondent’s application after the latter confirmed their stance on the employment relationship, and so I only allow the Applicant to recover one hour of costs for the hearing on 18 January 2007.

18.  The more difficult question is about the costs of the 2^nd Respondent.  As I see it, the present application is only one between the Applicant and the 1^st Respondent.  Since the 1^st Respondent’s admissions were not made on its behalf, the 2^nd Respondent is not bound by the admissions and is free to challenge the Applicant’s account of the accident in the trial itself.  Hence, the 2^nd Respondent has no real interest in the application, and if it chose to appear in the hearing to protect its interest, it should bear the costs of the application itself.  Further, as seen from the letter of the 2^nd Respondent’s solicitors dated 16 January 2007, the 2^nd Respondent has all along supported the 1^st Respondent’s application to withdraw all the admissions, including the one that the 1^st Respondent was the employer of the Applicant at the time of the accident.  This was partly unsuccessful in view of the concession made by the 1^st Respondent in the hearing.  Finally, the summons was taken out by the 1^st Respondent and the 2^nd Respondent’s stance on the summons has not caused the Applicant to incur unnecessary costs, and so it is also not appropriate for me to order the 2^nd Respondent to pay for the costs of the Applicant.  In such circumstances, I think that the most appropriate costs order is that the 2^nd Respondent should bear the costs of the summons itself.

19.  Hence I make the following order in respect of the costs of the 1^st Respondent’s summons dated 6 December 2006:

(i) that the 2^nd Respondent do bear its own costs of the summons;

(ii) save that the Applicant is only entitled to recover one hour of costs for the hearing on 18 January 2007, the 1^st Respondent do pay to the Applicant his costs of the summons.

20. The Applicant has also invited me to deal with the issue of costs occasioned by the adjournment of the trial before Deputy Judge A Chow on 16 August 2006.  The trial was adjourned partly due to the inaccurate record of proceedings in the direction hearing before myself on 9 July 2004.  However, as there was not sufficient time for me to listen to such further submissions in the hearing, I would leave the matter to be decided by the trial judge.  But if the parties think that it would be more appropriate for me to hear the matter, they are at liberty to restore the application before myself.

Mr. David Brettell of Messrs. Munros, for the Applicant

Mr. De Souza Tome Jose Carlos Elvino, director of the 1^st Respondent, representing the 1^st Respondent

Mr. Kamlesh Sadhwani, instructed by the Messrs. Krishnan & Tsang, for the 2^nd Respondent

DCEC374/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 374 OF 2003

Coram:  Deputy District Judge J Ko in Court

D E C I S I O N

1.  This is my decision concerning the application to set aside the writ of Subpoena duces tecum issued against Miss Leung.

Background

2.  This case concerns with the applicant’s application for compensation under the Employees’ Compensation Ordinance (hereinafter called “the Ordinance”) against the 1st respondent as his employer and the 2nd respondent as the principal contractor.  The trial was scheduled to start on 10 October. 

3.  On 26 September, the 2nd respondent issued a writ of Subpoena duces tecum (hereinafter called “the Subpoena”) against Miss Carol Leung Pui-yee (hereinafter called “Miss Leung”) of Ming An Insurance Company (Hong Kong) Limited (hereinafter called “Ming An”) requiring her to attend the trial and produce the following documents:

“1. Correspondences, declarations and statements between Hip Shing Contractors Limited (formerly known as Geotechnical Engineering Services Limited) and The Ming An Insurance Company (Hong Kong) Limited in relation to the applicant;

2. Correspondences with the Labour Department and The Ming An Insurance Company (Hong Kong) Limited in relation to the applicant; and

3. Correspondences, declarations and statements between SP Engineering Services (Hong Kong) Limited (formerly known as Jaytey Engineering Limited) and The Ming An Insurance Company (Hong Kong Limited) in relation to the applicant, and all other documents related to the aforesaid applicant.”

4.  Ming An is the insurer under two separate employees’ compensation insurance policies taken out respectively by Geotechnical Engineering Services Limited, which is now known as Hip Shing Contractors Limited (hereinafter called “Geotec”) and Jaytey Engineering Limited which is now known as SP Engineering (Hong Kong) Limited (hereinafter called “Jaytey”).

The application

5.  By a summons dated 8 October, Miss Leung applied to set aside the Subpoena on the ground that the issue of the Subpoena was oppressive and vexatious and an abuse of the process of the court. 

6.  The application is resisted by the 2nd respondent.  The applicant and the 1st respondent take a neutral stance insofar as the application is concerned. 

7.  Given the fact that the trial is due to start before me irrespective of my ruling on the present application, the less I say, the better.

Argument in support of the application

8.  Mr Lam, counsel for Miss Leung, mounts an attack on the Subpoena along the two hurdles identified by Mayo J in Brisilver Investment Limited v Wong Fat Tso, CACV 251/1999, as follows:

(1) that it must be demonstrated that the exercise is not akin to obtaining discovery from a party who is not a party to the litigation; and

(2) that the documents must be relevant and admissible.

9.  In relation to the first hurdle, Mr Lam observes that the documents identified in the Subpoena are described in very vague and general terms.  Even assuming that such documents exist, the mere existence of such documents is not sufficient to justify the issuance of the Subpoena.  He submits that the 2nd respondent has no idea what specific documents may be involved and, more importantly, what the content of such documents is.  The inference to be drawn is that the 2nd respondent is embarking on a speculative exercise against Ming An or Miss Leung who are not a party to these proceedings, hoping that some documents in the insurer’s possession might assist their case.  He submits that the 2nd respondent has treated the Subpoena as if it were a specific discovery application under Order 24, Rule 7 against a party.

10.  In relation to the second hurdle, Mr Lam submits that the identity of the applicant’s employer does not appear to be a live issue in this case.  This is because the applicant is claiming the 1st respondent to be his employer at the time of the accident and which is admitted by the 1st respondent.  Irrespective of who the employer was, the 2nd respondent would be liable as the principal contractor under the Ordinance.

11.  He further observes that the 2nd respondent had applied to join Geotec and Jaytey as respondents in this case.  The application was dismissed by Her Honour Judge Wong on 22 December 2004 (hereinafter called “the Joinder Decision”).  Whilst Mr Lam is not suggesting that the Joinder Decision constitutes res judicata against the 2nd respondent, Mr Lam does not stop there.  He prays in aid the judgment of Andrew Cheung J in Ng Yat Chi v China Resources (Holdings) Company Limited, HCA 424/2005, and submits that this court should act on its own motion to strike out the averment in paragraph 2(i) of the 2nd respondent’s Answer that the applicant was employed by Geotec.  He submits that it is an abuse of process for the 2nd respondent to continue to allege at the trial that either Geotec or Jaytey was the employer when the 2nd respondent has neither appealed against the Joinder Decision nor made a second application to join Geotec and Jaytey in light of the new evidence that the 2nd respondent says has emerged since the Joinder Decision.

Argument in opposition to the application

12.  On the part of Mr Krishnan, the solicitor representing the 2nd respondent, he submits that the 2nd respondent’s case in these proceedings is that:

(1) the 2nd respondent disputes the fact of the accident, and

(2) more importantly, the 2nd respondent contends that the applicant was not employed by the 1st respondent at the time of the accident but was an employee of either Geotec or Jaytey. 

13.  According to Mr Krishnan, the significance of the 2nd respondent’s contention regarding the identity of the applicant’s employer is that the 1st respondent was not insured at the time of the accident but both Geotec and Jaytey were.  If the 2nd respondent’s contention is correct, Geotec or Jaytey may be deemed to be the applicant’s employer by reason of the definition of “employer” under section 3 of the Ordinance, and the 2nd respondent may then get meaningful indemnity under section 24 of the Ordinance from Geotec or Jaytey through their employees’ compensation insurance with Ming An.

14.  He submits that the issue of the identity of the applicant’s employer has always been a live issue in this case.  The 2nd respondent could not get meaningful discovery on this issue from the applicant.  The 2nd respondent obtained orders for specific discovery against the 1st respondent, Geotec and Jaytey respectively on 28 May.  On 1 August, the 2nd respondent received documents from Geotec in pursuance of the orders for specific discovery which include a letter dated 13 July 2003 from Toplis & Harding (Hong Kong) Limited, the loss adjustors appointed by Ming An (hereinafter called “The Toplis Letter”).  From the Toplis Letter, the 2nd respondent realises the existence of the documents identified in the Subpoena and hence the Subpoena.

15.  Mr Krishnan says that the Subpoena is not oppressive because the documents have been specified with sufficient particularity and the documents involved would only be two slim files at the maximum.  He submits that the request is proportionate to the claim. 

16.  Concerning the Joinder Decision, Mr Krishnan says that the decision was based on affidavit evidence before the judge at the time and has since been overtaken by subsequent discovery.  The 2nd respondent did not bother to appeal against the decision because the amount involved is small. 

17.  In any event, Mr Krishnan submits that the issue of who was the actual or deemed employer of the applicant can still be pursued as a live issue at the trial, notwithstanding the Joinder Decision.  He accepts that the 2nd respondent could have applied for specific discovery against Ming An or Miss Leung before trial, just like the 2nd respondent’s applications concerning Geotec and Jaytey.  However, he says that there is no obligation on the 2nd respondent to do so and he admits that the 2nd respondent has made a conscious decision to request for the documents by way of the Subpoena.

The relevant legal principles

18.  Mr Lam submits that the general principles applicable to the issue of Subpoena duces tecum can be found in the judgment of Nazareth VP of the Court of Appeal in To Kan Chi v Pui Man Yu [1998] 3 HKC 369 at 377G to 379G, which was quoted from the judgment of Yam J in the lower court and supplemented with comments of the Court of Appeal.

19.  In the subsequent case of Brisilver Investment Limited v Wong Fat Tso, CACV 251/1999, the Court of Appeal reaffirmed the correctness of the principles enunciated in To Kan Chi and summarised them as follows:

(1) There shall be no discovery from a non-party to an action [subject to certain exceptions]...;

(2) A subpoena should not be used for making discovery only [and the Court of Appeal observed that the reference to the word “only” can be misleading]...;

(3) Subpoena should not be used as a fishing exercise for documents nor speculative...; and

(4) A subpoena should not be oppressive to the witness when, say, for example, the terms are too wide.  The party issuing the subpoena … has to show that these witnesses are required to produce relevant and admissible evidence for trial and that those documents to be produced must be required and are necessary for the fair disposal of the case...”

20.  Mayo JA noted from these principles that:

“… essentially, two hurdles have to be surmounted for the defendants to establish that they are entitled to Subpoena the documents.  The first is that it must be demonstrated that the exercise is not akin to obtaining discovery from a party who is not a party to the litigation.  The second is that the documents must be relevant and admissible.”

21.  Although Mr Krishnan has submitted in his written submission that the test for specific discovery seems to be more stringent than, if not the same as, that for Subpoena, he does not dispute the general validity of the above legal principles.  He, however, reminds me that the claims in To Kan Chi and Brisilver were not in relation to a claim for personal injuries.  By that, I take him to refer me to the court’s power to order discovery of documents even against a person who is not a party to the proceedings in which a claim for personal injuries is made.  See section 47B of the District Court Ordinance and Order 24, Rule 7A of the Rules of the District Court.  Mr Krishnan submits that the present case, which is in the nature of a claim for personal injuries, is distinguishable from To Kan Chi and Brisilver. 

22.  In my view, the Court of Appeal in setting out the above general principles has already taken into consideration Mr Krishnan’s observation concerning section 47B of the District Court Ordinance and Order 24, Rule 7A of the Rules of the District Court.  Significantly, the Court of Appeal does not propound an absolute rule that there shall be no discovery from a non-party to an action but noted that the general rule should be subject to certain exceptions.

23.  I respectfully adopt the principles enunciated by the Court of Appeal in To Kan Chi andBrisilver, including the elaborations in the judgments for the purpose of the ensuing discussion. 

Discussion

24.  I shall begin the discussion by considering the Subpoena in relation to the first hurdle identified by Mayo J in Brisilver. 

25.  Mr Krishnan has submitted that the 2nd respondent was only informed of the existence of the documents requested under the Subpoena by the Toplis Letter.  He attempts to demonstrate by means of the letter the existence of documents such as correspondence(s), investigation report(s) and interview statement(s).  For the purpose of this application, Mr Lam is prepared to assume that some of these documents exist.

26.  To start with, I note that the scope of the documents requested under the Subpoena is significantly larger than the document, the existence of which may be disclosed in the Toplis Letter. 

27.  It is most important to note from the first paragraph of the Toplis Letter that the loss adjustor was appointed by Ming An to investigate the employees’ compensation claimed under policy No. PECH-00-02297-6 and in relation to the accident on 15 May 2001 only. 

28.  However, by the Subpoena, the 2nd respondent has requested for all correspondences, declarations and statements between Geotec and Ming An; all correspondence between the Labour Department and Ming An; all correspondence, declarations and statements between Jaytey and Ming An; and all other documents in relation to the applicant.  These documents, even if they do exist, may or may not relate to the policy identified in the Toplis Letter or to the accident in question.  More significantly, the documents requested under the Subpoena may or may not relate to the issue of the identity of the applicant’s employer at the time of the accident.

29.  In this connection, Mr Krishnan has conceded that while the 2nd respondent may have some idea as to what information may be derived from the documents identified in the Toplis Letter, he does not have specific knowledge in any detail.  Mr Krishnan then submits that it would be impossible for the 2nd defendant to know precisely what these documents are without seeing them and hence the Subpoena against Miss Leung. 

30.  The more Mr Krishnan explains the purpose of the Subpoena, the more it becomes clear that the argument amounts to little more than speculative assertion that there may be material which would show that the applicant was employed by either Jaytey or Geotec.  This process of extracting relevant evidence by means of the Subpoena has all the hallmark characteristics of obtaining discovery from Ming An or Miss Leung.  In my view, this amounts to an attempt to fish for relevant evidence on the part of the 2nd respondent.

31.  In this regard, I am guided by the following observation of Sir Donald Nicholas, VC in Panayiotou v Sony Music Limited [1994] Ch 142 at 151,  which has been quoted in To Kan Chi:

“...it is established that a Subpoena to produce documents cannot be drawn so widely as to amount to requiring the witness to give discovery.  The object of the Subpoena is to compel the witness to produce evidence directly material to the issue in the case.  The object is not to require him to produce documents just because they may be useful for the purpose of corroborating or challenging a witness or because they may lead to a chain of inquiry which may result in the discovery of evidence or may, in some other way, advance one party’s case or damage the other’s.  Nor is the witness to be required to undertake an unfairly burdensome search through his records to find this or that document or to see if he has any documents relating to a particular subject matter...”

32.  In my view, the fallacy in the 2nd respondent’s argument is in its failure to appreciate the difference between an application for specific discovery (even against a non-party in the proceedings involving a claim for personal injuries) and the use of Subpoena duces tecum. 

33.  Mr Krishnan admits that the 2nd respondent has been provided with Toplis Letter as early as 1 August 2005.  The 2nd respondent has made a conscious decision not to apply for specific discovery against Ming An or Miss Leung under Order 24, Rule 7A.  Instead, the 2nd respondent has elected to seek discovery by means of the Subpoena. But the 2nd defendant has failed to appreciate that the threshold for the issue of the Subpoena duces tecum is in fact more stringent than for an application for specific discovery.

34.  Given the present description of documents in the Subpoena, I also accept Mr Lam’s submission that Miss Leung will have difficulty knowing what documents to bring to court.  Mr Krishnan’s submission that there could at most be two slim files for Miss Leung to go over is pure speculation. 

35.  In this regard, I can do no better than to recite the observation of Godfrey J in Overseas Trust Bank Limited v Coopers and Lybrand (a firm), HCA 5764/1986:

“In a subpoena duces tecum, the description of the document required to be produced must be sufficiently specific to enable the addressee to put his hand on the documents or the file without having to consider for himself what documents he needs to produce and what documents he does not need to produce.”

36.  I now turn to the second hurdle.  The question of relevance and admissibility must be judged by reference to the pleadings in this case. 

37.  In paragraph 1 of the Amended Application, the applicant pleads that the 1st respondent was his employer and the 2nd respondent was the principal contractor.  Although the 1st respondent denies that the 1st respondent was the employer in paragraph 1 of its Answer, the 1st respondent has indicated in an open letter by its former solicitors and confirms at the hearing before me that it accepts that the applicant was its employee. 

38.  In paragraph 2(i) of the 2nd respondent’s Answer, the 2nd respondent avers that the applicant was employed by Geotec.  Significantly, it is noted that it is not the 2nd respondent’s pleaded case that the applicant was an employee of Jaytey. 

39.  In the premises, even if those “correspondences, declarations and statements between [Jaytey] and [Ming An] in relation to the applicant” exist and are evidence of the applicant’s being employed by Jaytey, they are not evidence relevant and admissible to the issues in this case as disclosed in the pleadings. 

40.  The specific discovery orders made by Her Honour Judge Chan on 28 May will not take the 2nd respondent’s case further.  First, neither Ming An nor Miss Leung was a party to that application and they are not bound by the orders.  Secondly, Mr Krishnan has in fact conceded that the scope of the documents requested under the Subpoena is beyond the scope of the orders.  Thirdly, the 1st respondent, Geotec, and Jaytey were all absent and the application was not argued.  And lastly, the test applied by the learned Judge is different from that to be applied here.

41.  Before I leave the second hurdle, I should also briefly deal with the effect of the Joinder Decision. 

42.  It is common ground amongst all parties that since the Joinder Decision is a decision on an interlocutory application, it does not in law give rise to res judicata or issue of estoppel. 

43.  In a Joinder Decision, Her Honour Judge Wong dismissed the 2nd respondent’s application to join Geotec and Jaytey as respondents.  The basis of the learned judge’s decision appears in paragraphs 23 to 24 of her decision.

44.  It is important to read the Joinder Decision in its proper context.  The learned judge considered the application on the basis of the affidavit evidence then before her.  Most significantly, she was careful not to make any finding on whether Geotec or Jaytey was the employer of the applicant. 

45.  Can the 2nd respondent still invite the court to find at the trial that Geotec or Jaytey was the employer given the Joinder Decision?  I guess a short answer to the question must be yes given the fact that there is no res judicata unless the court is prepared to go down the avenue suggested by Mr Lam.

46.  For the time being, I feel inhibited, without hearing the evidence, to go into the merits of the 2nd respondent’s case as to whether Geotec or Jaytey was the employer.  Suffice it to say that what Mr Lam suggests me to do is most draconian.  Having reflected on all the circumstances of this case and notwithstanding Mr Lam’s most able submission, I am not persuaded that I should exercise the discretion to strike out the averment in the 2nd respondent’s Answer out of my own motion.  Having said that, no doubt Mr Munro will pick up this matter again at the trial when he submits on the evidence. 

Conclusion

47.  For the above reasons, I accept that the issuance of the Subpoena is oppressive and vexatious.  I allow Miss Leung’s application and set aside the Subpoena issued against her.

(Court discussion re costs)

48.  For the reasons advanced by Mr Lam, I agree that the 2nd respondent should bear Miss Leung’s costs on an indemnity basis.  I have already found that the issuance of the Subpoena is oppressive and vexatious and it would be unfair to ask Miss Leung (who is not a party) to bear any portion of her costs of the application.  So I order Miss Leung’s costs of the application be borne by the 2nd respondent and payable forthwith on indemnity basis, to be taxed if not agreed, and with certificate of counsel.

49.  Regarding the applicant’s costs, the applicant is a party to the present application and will have to be here by reason of the trial.  I order the applicant’s costs of the application be paid by the 2nd respondent in any event, to be taxed if not agreed. 

50.  Regarding the 1st respondent’s costs, although Mr de Souza has been served with a Subpoena, that is served on him in a different capacity.  I order that the 1st respondent’s costs of the application be paid by the 2nd respondent in any event, to be taxed if not agreed.

(Further court discussion re costs)

51.  Without clear evidence as to the fault of causing the adjournment of the trial, a fair costs order would be costs of and occasioned by the adjournment be costs in the cause and I so order. 

Mr Tome Jose De Souza, for the 1st Respondent, in person, present

Mr Paul Munro, of Messrs Munros, assigned by the Legal Aid Department, for the Applicant

(1) Re: Summons filed on 8.10.05 to set aside subpoena

Mr Paul Lam, instructed by Messrs Tsang, Chan & Wong for Ms Leung Pui-yi, Carol (non-party)

Mr Krishnan S. of Messrs Krishnan & Tsang for the 2nd Respondent

(2) Trial (not yet started)

Mr Kamliesh Sadwani, instructed by Messrs Krishnan & Tsang, for the 2nd Respondent