Personal Injuries Action2006

LAI WING SUN v. HIGH LINK TECHNOLOGY LTD AND OTHERS

Files (2)

63251-EN-2008-11-13

HTML content

DCPI 78/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO. 78 OF 2006

----------------------

BETWEEN

	LAI WING SUN	Plaintiff
	and
	HIGH LINK TECHNOLOGY LIMITED	1^st Defendant
	SHUN WO ENGINEERING	2^nd Defendant
	CONSULTANT SERVICES LIMITED
	formerly known as SHUN WO
	TECHNICAL SERVICES LIMITED
	WU KWOK MAN	3^rd Defendant
	WU KWOK LEUNG	Third Party

----------------------

Coram: Her Honour Judge Mimmie Chan in Court

Dates of hearing: 12, 16, 17 & 24 September, 2008

Date of handing down Judgment: 13 November, 2008

----------------------------------------

J U D G M E N T

----------------------------------------

Background

1. Mr. Lai was working in the computer room ("Computer Room") on the ground floor of the Hong Kong Convention & Exhibition Centre ("Site") on 18 January 2003 at about 5:50 p.m. when he met with an accident. He was in the process of installing a heavy mineral board weighing about 70 kg and measuring about 8 feet x 3 feet in the ceiling of the Computer Room, standing on a platform about 7 feet from the ground. The platform was a temporary structure constructed by putting a wooden board on top of two A-shaped wooden ladders. A leg of one of the wooden ladders broke, as a result of which Mr. Lai fell onto the ground and fractured his right upper arm. Mr. Lai claims that he has sustained damages in the sum of $709,200 as a result of the Defendants' negligence, and breach of statutory and common law duties of care. At trial, he concedes that he was 25% to be blamed for the accident which was caused partly by his own negligence.

2. It is not in dispute that the 1st Defendant ("High Link") is the principal contractor for carrying out works at the Site. High Link sub-contracted the renovation works at the Site to the 2nd Defendant ("Shun Wo"). The works for which Shun Wo was engaged to do included the provision of labor and equipment to demolish the existing partition wall, false ceiling system and floor system in the Computer Room; to build a concrete curb with cement sand plastering along the perimeter of the Computer Room; to erect a mineral board ceiling; and to install a false ceiling system in mineral fiber tiles.

3. Mr. Lai claims that he was employed by the 3rd Defendant ("Kwok Man"), who was Shun Wo’s sub-contractor. Alternatively, he claims that Kwok Man carried on a business with the Third Party ("Kwok Leung"), and/or other workers and Mr. Lai himself as partners, and that they carried out work at the Site with a view to profit.

4. All the Defendants deny liability. High Link claims that it was not the employer of Mr. Lai. It claims that Mr. Lai had fabricated the accident himself because he needed money and wished to recover a handsome amount from High Link by way of compensation. It is High Link's case that Mr. Lai had used an unauthorized wooden ladder and self-made platform to do his work, and that he had conspired with others including Kwok Man to cut one leg of the wooden ladder after the usual and authorized working hours at the Site to create the accident. High Link claims that it and Shun Wo had provided all safety equipment and taken all safety measures at the Site. It had on site supervisors present, and had instructed Mr. Lai and his co-workers to use the aluminium platform provided by the client at the Site for carrying out the work in question.

5. Shun Wo claims that Mr. Lai was carrying out the work in question as a partner of Kwok Leung, and that they were independent subcontractors of Shun Wo. It is Shun Wo's case that Mr. Lai had used the wooden ladders and the wooden platform in breach of the safety instructions given to him, and that the accident occurred after Mr. Lai had been instructed to leave at 5:30 p.m.. Shun Wo denies that it was in breach of any duty owed to Mr. Lai.

6. Kwok Man denies that he was either Shun Wo's subcontractor, or Mr. Lai's employer. He claims that Shun Wo's subcontractor was Sam Tung Construction Engineering Co ("Sam Tung"), a business solely owned by his brother Kwok Leung, and that Mr. Lai was employed by Kwok Leung. Kwok Man also denies that he was Kwok Leung's partner, and claims that he was Kwok Leung's employee. Kwok Man denies that he owes any duty to Mr. Lai as he was neither the occupier nor in control of the Site. He claims that he was not present and was not doing any work at the Site on 18 January 2003.

Issues

7. These are NOT employee compensation proceedings. The Defendants’ liability does not depend on whether they have a contract of employment with Mr. Lai. The absence of a relationship of employment, by itself, does not absolve a Defendant of liability. The parties, in my judgment, spent unnecessary time and energy, prior to trial at least, in placing focus on the employment relationship, or the lack thereof, between Mr. Lai and the parties involved in the project.

8. For the purpose of determining the Defendants' respective liability, the issues at trial are:

(1) Did Mr. Lai sustain injury in the manner he described?

(2) Was Mr. Lai's injury caused by the Defendants’ negligence or breach of duty?

(3) What are the damages recoverable by Mr. Lai?

Did Mr. Lai sustain injury in the manner he described?

9. High Link claims that Mr. Lai had made up the entire accident in order to get compensation. No evidence was adduced to support such allegation, save for the fact that Mr. Hui of High Link was informed that after he had had a meeting with Mr. Lai and Kwok Leung after the accident, Kwok Leung was overheard to have expressed joy at the prospect of Mr. Lai's and his ability to claim “millions of dollars” from High Link by way of compensation as a result of the accident, and that they could go back to China and enjoy life together. Whilst there may be debate as to whether this, even if true, represents a macabre or optimistic view of events on Mr. Lai’s or Kwok Leung’s part, I fail to see how it can possibly prove that the accident did not happen as accounted by Mr. Lai.

10. According to Mr. Lai's evidence, he, Kwok Leung and another worker, Mr. Cheng, were in the course of installing some mineral boards in the false ceiling of the Computer Room. The false ceiling was about 14 feet from the ground. To reach the false ceiling, Mr. Lai and his co-workers used 2 A-shaped wooden ladders, and placed a wooden batten approximately 10 inches wide across the top of the 2 ladders to form a wooden platform. At the material time, Mr. Lai and Kwok Leung were standing on the wooden platform, and Mr. Cheng was standing on one of the 2 wooden ladders. The wooden platform was about 7 or 8 feet from the ground.

11. Mr. Lai's evidence is that the mineral boards weighed approximately 70 kg, measuring 8' x 3'. Mr. Cheng had passed the mineral board to Mr. Lai as he stood on the wooden platform atop the 2 ladders. Mr. Lai was screwing the mineral board into the false ceiling, with Kwok Leung’s help. It was while he was completing the screwing of a mineral board that a leg of the ladder on which Mr. Cheng was standing broke, causing the ladder and the wooden platform to fall. Mr. Lai fell from the wooden platform onto the ground, landing on his right and injuring his arm as a result.

12. None of the Defendants’ witnesses who gave evidence was present when the accident occurred at about 5:50 p.m. on 18 January 2003. However, the contemporaneous report to the Wanchai Police confirmed that a report was made to the police at about 5:51 p.m. in relation to Mr. Lai carrying out renovation works in the Computer Room and falling from a wooden ladder because one leg of the ladder broke.

13. Mr. Lai was sent to the nearest Ruttonjee & Tang Shiu Kin Hospitals, the contemporaneous records of which show that he was admitted at 6:28 p.m. on 18 January 2003, and sent to the doctors on a stretcher. His complaint to the attending doctors was that he had fallen from a ladder from a height of about 8 feet, with right upper arm injury. The findings made by the doctors were that Mr. Lai had a "fractured mid right humerus with angulation". It was noted that Mr. Lai had fallen from a ladder of about 8 feet, landing on his right upper arm. "Deformity and reduced range of motion", "bulging, tenderness, bruise and swelling" were all noted.

14. According to the report from the Ruttonjee and Tang Shiu Kin Hospitals, Mr. Lai was examined on 18 January 2003 and found to have tender swelling over the right shoulder region. X-rays of his right shoulder showed fracture of the mid-shaft of the right humerus with angulation. He was treated and transferred to the Orthopaedic unit of Pamela Youde Nethersole Eastern Hospital. Mr. Lai had a humeral brace applied at the Pamela Youde Nethersole Hospital, received follow up treatment at the outpatient clinic from January to April 2003, and then had physiotherapy. These injuries as recorded in the hospital reports are consistent with a fall from a height, as described by Mr. Lai. On the evidence, I find no basis to reject Mr. Lai's evidence in relation to the circumstances of the accident as he described.

Was Mr. Lai's injury caused by the Defendants’ negligence or breach of duty?

15. Mr. Lai 's causes of action for breach of statutory duties (under Cap.59, Cap.509 and Cap.314), contractual duties and negligence at common law all involve the same standard, i.e. to take reasonable care.

16. In particular, Mr. Lai claims that the Defendants were occupiers of the Site, and that Mr. Lai was a lawful visitor. As such, it is claimed that the Defendants owe a duty at common law and under Cap. 314 to take reasonable care to see that Mr. Lai would be reasonably safe in working at the Site.

17. The foundation of occupier's liability is occupational control, which has been clearly established to mean "control associated with and arising from presence in and use of or activity in the premises" (Wheat v. E. Lacon & Co. Ltd [1966] A.C. 552). Clearly, as the main contractor engaged to carry out the works undertaken at the Site, High Link had occupational control of the Site. It is clear from the evidence that High Link retained general control and supervision of the Site for the purposes of ensuring, amongst other things, that the work contracted out was done. Mr. Hui himself claims that High Link's supervisors and engineers were at the Site to supervise work and progress, and admits in his evidence that High Link was the occupier of the Site.

18. Shun Wo, the sub-contractor engaged by High Link to do the false ceiling and other work in the Computer Room, also had control of the Site. Mr. Yeung Kam Yip (“Yip”) who gave evidence on behalf of Shun Wo claims he was at the Site every day to supervise and to give instructions to the workers.

19. Mr. Lai, as one of the workers carrying out work on the false ceiling in the Computer Room, was within the class of persons reasonably foreseeable by High Link and Shun Wo to sustain harm or damage should the Site be unsafe, or the work system in the Computer Room was unsafe, or generally as a result of any act or omission on the part of High Link and Shun Wo. As such, both High Link and Shun Wo owe a duty at common law to take reasonable care as against Mr. Lai. This includes, at common law, the duty to provide a safe system of work for Mr. Lai, whether he is an employee or an independent contractor of them (Yeung Wan Chun (Administratrix of the Estate of Yu Chi Wai, deceased) v. Kwok Wing Kwan trading as Golden Harvest Transportation & Another [1987] 3 HKC 288).

20. High Link and Shun Wo claim that an aluminium platform had been provided at the Site for high-level work, and that workers, including Kwok Man, Kwok Leung and Mr. Lai, had been instructed to use only the aluminium platform, and not any wooden ladder, for their work. It is their case that they had taken all steps to ensure that Mr. Lai could work safely by providing the aluminium platform which was a safe and appropriate means of support to be used by Mr. Lai for the work which he was engaged to do at the Site, and that the accident was caused as a result of Mr. Lai using the wooden ladders and wooden platform against their instructions.

21. According to Shun Wo's evidence, Mr. Yeung Kam Yuen ("Yuen"), his brother Yip (both of whom were from Shun Wo), Mr. Tam from High Link, Kwok Man and Kwok Leung had visited the Site together prior to commencement of work, in the course of which Yip had explained to Kwok Man and Kwok Leung the job requirements and safety guidelines for work at the Site. It is accepted that Mr. Lai was not present at this first visit. They were all shown the aluminium platform which was to be constructed for use for high-level work at the Site. It could be freely constructed with aluminium frames, was freely adjustable and could be dismantled. Mr. Tam had explained to Yuen that more aluminium platforms or frames were available, if required.

22. It is not disputed that Kwok Man was the first worker from Mr. Lai's group to commence work at the Site. According to Kwok Man, his first day of work at the Site was 9 January 2003, and his involvement was to dismantle the original false ceiling in the Computer Room. In his Statement, Kwok Man claims that an aluminium platform was already in the Computer Room on his first day of work. According to Yip’s evidence, on the first day of Kwok Man's work, there was only a partly constructed aluminium platform in the Computer Room, and some parts or frames. Yip said that he showed Kwok Man how to construct the aluminium platform with the aluminium frames and parts, and that they erected the aluminium platform together on the first day. Kwok Man used this platform to dismantle the original false ceiling in the Computer Room. Kwok Man worked alone on this, and on the third day after he had commenced work, he completed the dismantling of the false ceiling. On Kwok Man's evidence, he dismantled the aluminium platform then, and replaced the aluminium frames and parts in the corridor of the Computer Room.

23. Mr. Lai denies that he had ever been instructed by anyone not to use wooden ladders at the Site. According to Mr. Lai, all the workers at the Site used A-shaped wooden ladders, and he had never seen the aluminium platform in the Computer Room. He had seen it before in the corridor (which is consistent with Kwok Man’s evidence that he had left the frames and parts of the aluminium platform in the corridor), far away from the Computer Room. He had never been involved in its erection, although he had seen others do it. According to Mr. Lai, no one from Shun Wo had shown him how to use or construct the aluminium platform. Mr. Lai claims that the aluminium platform was too heavy and inconvenient to take into the Computer Room. It had to be erected inside the Computer Room, and it took too long to construct or dismantle the platform. According to Mr. Lai, there were too many workers working in the Computer Room at the same time, all doing different work, and it was inconvenient if not impossible to use the aluminium platform for his work on the ceiling in the Computer Room. He claims that the aluminium platform would be in the way of everyone's work if it was used in the Computer Room. Moreover, as Mr. Lai claims, the floor level was uneven and it was not possible to use the aluminium platform.

24. I do not entirely accept Mr. Lai's evidence that it was impossible to use the aluminium platform in the Computer Room. However, I can envisage that for the majority of the workers in the Computer Room, the aluminium platform would be an unpopular choice for their work. They would find it inconvenient and time-consuming. From Mr. Lai's evidence, many workers were working at the same time in the confined space, and the erection of a large aluminium platform would inevitably cause problems. Obviously, workers have to bear the consequences of taking shortcuts and preferring convenience to safety, and Mr. Lai accepts that he is partly to be blamed for not using the aluminium platform which is clearly safer than the wooden makeshift platform he constructed.

25. Mr. Lai's evidence is that he and his co-workers had brought the A-shaped wooden ladders to the Site. The wooden ladders were found at the scene of the accident after the event, with one leg broken.

26. According to Yip, after Kwok Man had completed dismantling the false ceiling, he was joined at the Site by Mr. Lai, Mr. Cheng and Kwok Leung on about the 4th day. According to Yip, he taught these workers again how to use the aluminium platform, and that the platform was in the Computer Room throughout their work from 9th to 18th January 2003.

27. Yuen and Yip deny that they had ever seen any A-shaped wooden ladders in the Computer Room. It is Yip's case that he was at the Site every day from 9th to 18 January 2003, and the aluminium platform was in the Computer Room throughout this time. Yip said that Mr. Lai and his co-workers used the aluminium platform all along, even on the day of the accident.

28. According to Mr. Hui of High Link, he had never seen anyone use the aluminium platform in the Computer Room, but this may be due to the fact that Mr. Hui himself would only visit the Site once a month. He claims that he left site inspection and supervision to his site supervisor, Mr. Tam, who reported to Mr. Hui on a daily basis, and to High Link's other engineers. Mr. Tam was not called to give evidence, but Mr. Hui claims that he had assumed that Yuen of Shun Wo would instruct the workers at the Site on how to use the aluminium platform. However, it is Mr. Hui's evidence that his site supervisor had complained to him before about Mr. Lai's team of workers on 2 or 3 occasions. The complaint was about their incompetence and their age, without further particulars provided by Mr. Hui. When asked what he had done as a result of such complaints, Mr. Hui said that he had informed Mr. Tam that he "could do the right thing" as may be required by the nature of the complaint, but Mr. Hui had not received any subsequent report of action taken.

29. According to Yip's evidence, he had instructed Kwok Man and Kwok Leung that the hours of work on the Site were 9 a.m. to 5:30 p.m., and that workers had to leave by 5:30 p.m.. This was denied by Mr. Lai, who claims that their working hours were 9 a.m. to 6 p.m., with one hour for lunch. On the day of the accident, at about 5:15 p.m., Yip told Mr. Tam he was leaving the Site but that Mr. Tam could call him if Mr. Tam needed him. Yip also told the workers to leave. Yip said that he had been at the Site for most of the day, and that Mr. Lai and his co-workers had been using the aluminium platform until Yip's departure.

30. It cannot be disputed that the accident took place because the wooden ladders and wooden platform were used by Mr. Lai instead of the aluminium platform which Yip claims to have been in use until at least 5:15 p.m.. I do not find it credible, as Yip claims, that he had never seen any wooden ladders at the Site. The evidence of Mr. Lai and Kwok Leung is that they had brought the wooden ladders to the Site, which is inherently very probable, and photographs taken after the accident show that the wooden ladders had the name of Shun Wo marked on them. Whether the wooden ladders belonged to or were brought onto the Site by Shun Wo, or by Mr. Lai's team and marked with the name of the subcontractor, Shun Wo, makes no difference in my judgment. It simply demonstrates that the wooden ladders had indeed been put at the Site, and that their presence must have been apparent to anyone working there. This, coupled with the matters outlined in paragraph 24 above, lead me to find that the evidence of Yuen and Yip, that they had never seen any A-shaped wooden ladders at the Site at all, is unbelievable. Either Yip was lying when he said that he had never seen any worker using A-shaped wooden ladders at the Site, or, as is more probable, he turned a blind eye when the wooden ladders were used by workers including Mr. Lai.

31. On the evidence, I consider that both High Link and Shun Wo had failed to take all reasonably practicable steps to ensure that a safe platform be used by Mr. Lai and his co-workers in the course of their high level work at the Site. It is insufficient for High Link to simply delegate or entrust to Shun Wo the task of ensuring the use of the aluminium platform in the Computer Room by workers. Nor is it sufficient for High Link as main contractor and Shun Wo as subcontractor to simply mouth safety rules and regulations or put them in place without taking all reasonable steps to enforce them and to ensure their compliance. Particularly because there had been complaints in this case, as Mr. Hui and Yip claim, about the alleged incompetence or manner of work on the part of Mr. Lai and his team of workers, High Link and Shun Wo had been put on notice of such complaints and of non-compliance with their alleged safety rules, and both High Link and Shun Wo should have taken more action to supervise and to ensure compliance by Mr. Lai and his co-workers with these alleged work and safety instructions, including the use of the aluminium platform instead of the A-shaped wooden ladders for high level work, and otherwise to enforce such instructions. On Mr. Hui's evidence, no such enforcement action was taken despite the complaints made.

32. Yip claims that Mr. Lai and his team of workers had demonstrated throughout that they were not up to standard so far as their technical skills and knowledge of false ceiling work was concerned, such that, as he said, he had to pay more attention and give more instructions to these workers. Despite such claims, however, Yip thought fit to leave Mr. Lai and his co-workers at their work at 5:15 p.m. on the day of the accident, instead of remaining to ensure that they worked from the aluminium platform and not on the wooden ladders, or otherwise to ensure that they leave the Site at the same time, if it is important that the workers leave by 5:30 p.m., as is alleged by High Link and Shun Wo.

33. It is also important to bear in mind Yuen’s evidence that Sam Tung (of which Kwok Leung is the registered sole proprietor) was not on Shun Wo's list of contractors to which Shun Wo would subcontract work of the type undertaken by Shun Wo at the Site. Nor is Mr. Lai or any other member of Kwok Leung's team on such list. Yuen admits in his evidence that he had not known Kwok Leung or any member of his team before this project, nor had Shun Wo given any work to Sam Tung or Kwok Leung before. Yuen only knew Kwok Man, who had introduced him to his brother Kwok Leung, but Yuen knew that Kwok Man had only done work related to fire services equipment or installation, and not renovation or construction work. This is accordingly not a case of Shun Wo subcontracting the work to a contractor which is known by it to be experienced and qualified in the field of work for which it was engaged to do.

34. As the main contractor engaged to carry out work in the Computer Room, it was High Link's responsibility to co-ordinate the work of the different subcontractors at the Site, to ensure that the aluminium platform could be safely used by all workers without hindering the work of others. According to Mr. Lai, it was inconvenient to use the aluminium platform for his work in the Computer Room because there were too many workers carrying out work in the Computer Room at the same time. On Hui's evidence, there were 10 workers working in the Computer Room at the relevant time. In failing to properly coordinate such work in the Computer Room, High Link had failed to take all reasonable and practicable steps to ensure that Mr. Lai could use the aluminium platform safely and properly in the course of his work.

35. It is clear from the above that both High Link and Shun Wo were in breach of their common-law duty, and their duty as occupiers of the Site, to take all reasonably practicable steps to ensure Mr. Lai's safety at the Site, and to provide a safe system and place of work.

36. Further, the applicable version of regulation 38C of the Construction Sites (Safety) Regulations under Cap. 59 provides that where work cannot be safely done on or from the ground, the contractor responsible for the construction site concerned shall ensure the use of a scaffold, ladder or other means of support, all of which shall be safe for the purpose. In failing to properly supervise Mr. Lai, and failing to enforce the safety and work instructions claimed by High Link and Shun Wo to have been given to Mr. Lai in relation to the carrying out of high level work, High Link as the principal contractor undertaking work at the Site is in breach of regulation 38C (Choi Yiu Tat v. Fong Man Chi HCPI 742/2001).

37. So far as Kwok Man is concerned, Mr. Lai admits in his evidence in court that he, Mr. Cheng, Kwok Man and Kwok Leung were partners in the project. On his understanding, the work was sourced by Kwok Leung and he only knew Kwok Man through Kwok Leung's introduction. They had discussed and agreed to share the proceeds from the work, and Mr. Lai had envisaged receiving 25% of the share of the profits. On such evidence, I do not accept that Kwok Man was Mr. Lai's employer, as originally pleaded in the Statement of Claim.

38. From Mr. Lai's evidence, he never received any instructions from Kwok Man in his work. According to Mr. Lai, they all knew their work and could and did work independently. There is no evidence from Mr. Lai that it was Kwok Man who had instructed him to bring the wooden ladder onto the Site, or to use the wooden platform for Mr. Lai's work. On the evidence available, I am unable to find on a balance of probabilities either that Kwok Man had control of the Site or Mr. Lai’s work, or that any act or omission by Kwok Man had caused the accident.

39. On the evidence as a whole, I accept that Mr. Lai was told and knew that an aluminium platform was available for use in the Computer Room for high level work. He had seen it in the corridor. He had seen others construct it. He was able to give reasons why it was inconvenient to use the aluminium platform for his work in the Computer Room. It may have been inconvenient to use the platform, but I do not accept that it was impossible to use it for the work which Mr. Lai had to do at the Site. Kwok Man was able to use it for his work in dismantling the false ceiling in the Computer Room. Nevertheless, Mr. Lai did not use the aluminium platform when the heavy mineral boards had to be lifted and screwed into the false ceiling. The use of the wooden batten put across 2 A-shaped wooden ladders, as devised by Mr. Lai and his co-workers, was clearly unsafe and unsuitable for the work which he had to do at a height. Mr. Lai ought to have known that there was danger of the wooden batten or wooden ladder giving way or collapsing in view of the weight of the mineral boards, which required 2 workers to lift and handle. Despite the concession made by Mr. Lai that he was 25% to be blamed, after considering the cases cited by Counsel for Kwok Man (Manwaring v. Billington [1952] 2 All ER 747, Lane v. Shire Roofing Company (Oxford) Ltd [1995] PIQR P417, Boyle v. Kodak Ltd [1969] 1 WLR 661 and Williams v. Port of Liverpool Stevedoring Co Ltd [1956] 1WLR 551), I consider that Mr. Lai is 50% to be blamed for the accident.

What are the damages recoverable by Mr. Lai?

40. Mr. Lai fractured his right arm as a result of the accident, was hospitalized for 3 days and was given sick leave from 18 January 2003 to 20 May 2003, for a total of 123 days. The fracture was treated by bracing, and upon healing of the fracture, Mr. Lai had undergone physiotherapy until April 2003. He did not receive further treatment after the expiry of his sick leave. Mr. Lai claims that he currently still suffers from residual shoulder pain, has difficulties in carrying heavy objects, and could not resume his job as a construction site worker.

41. According to Dr. Tsoi who examined Mr. Lai on 31 August 2007, Mr. Lai had recovered in a satisfactory manner, with pulpable bony deformity along the humerus, no wasting of the shoulder griddle and arm muscle, and no tender spot. The strength of the right shoulder and elbow was normal, and Dr. Tsoi reported no neurovascular deficit over the right upper limb. The right elbow enjoyed full range of motion, and stiffness of the right shoulder was minimal. According to Dr. Tsoi, Mr. Lai could resume his pre-injury job upon the expiry of his sick leave in May 2003.

42. I consider that Mr. Lai's injuries are less serious than those suffered by the plaintiffs in the cases cited (Sin Sau Mui v. Yuen Sai Kwong HCA 11319/1993, [1996] HKCU 2 and Lam Chiu v. Poon Tat Hing and Another DCPI 203/2001). I will award a sum of $110,000 for Mr. Lai's pain and suffering.

43. Mr. Lai claims loss of earnings from 18 January 2003 to 17 August 2003, on the basis of his full loss of earnings at $16,000 per month. Thereafter, he claims partial loss of earnings at $6,000 a month. He claims that after his sick leave, he could only work as a casual worker with light duties at a construction site, earning $10,000 per month. According to Mr. Lai, he was not as flexible as he was before the accident and could not work long hours to lift heavy equipment

44. I accept Mr. Lai's evidence that his daily wage was $800 at the time of the accident, and that he could work 20 days in a month. I allow his claim for full loss of earnings from 18 January 2003 to 20 May 2003, for 4 months, at $64,000 ($16,000 x 4), on the basis of Dr. Tsoi's opinion that Mr. Lai could resume work upon the expiry of his sick leave in May 2003.

45. I will also allow Mr. Lai's claim for partial loss of earnings at $6,000 a month from the expiry of his sick leave in May 2003 for 3 years, at $216,000 ($6,000 x 36 months). Mr. Lai claims no further loss of earnings beyond that point, as he was already 67 years old by then.

46. Mr. Lai informed Dr. Tsoi that he had retired in 2006, but was able to work as a part-time carpenter for 2 or 3 days a month. I will not award any further amount for loss of future earnings.

47. Considering the evidence, I will allow Mr. Lai's claim for medical and traveling expenses in the sum of $9,000, and a reasonable amount of $1,000 for tonic food, giving a total sum of $10,000.

Award

48. The total award for damages to be paid by High Link and Shun Wo to Mr. Lai is :

(1) PSLA $110,000
(2) Pre-trial loss of earnings $280,000
(3) Pre-trial loss of MPF $ 14,000
(4) Special damages $ 10,000
Total $414,000
50% $207,000

49. I will award interest on the award of PSLA at the rate of 2% per annual from the date of the writ to the date of judgment, and on the award of special damages at half the judgment rate from the date of the accident to the date of judgment.

50. I will further make an order nisi that the costs of the action be paid by High Link and Shun Wo to Mr. Lai, with certificate for counsel, to be taxed if not agreed; and that Kwok Man’s costs of the action be paid by Mr. Lai, with certificate for counsel, to be taxed if not agreed. Mr. Lai and Kwok Man’s own costs are to be taxed in accordance with the Legal Aid Regulations.

(Mimmie Chan)
District Judge

Mr. Victor Gidwani, instructed by Messrs. Deacons (assigned by D.L.A.) for the Plaintiff

1^st Defendant appearing in person and represented by Mr. Hui Fai Kin, its director

Mr. Sam Yeung of Messrs. Rowdget W. Young & Co. for the 2^ndDefendant

Mr. Brian Wong, instructed by Messrs. Edward Lau, Wong & Lou (assigned by D.L.A.) for the 3^rd Defendant

62100-EN-2008-08-04

LAI WING SUN v. HIGH LINK TECHNOLOGY LTD AND OTHERS

HTML content

DCPI 78/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO. 78 OF 2006

----------------------

BETWEEN
	LAI WING SUN	Plaintiff
	and
	HIGH LINK TECHNOLOGY LIMITED	1^st Defendant
	SHUN WO ENGINEERING CONSULTANT SERVICES LIMITED formerly known as SHUN WO TECHNICAL SERVICES LIMITED	2^nd Defendant
	WU KWOK MAN	3^rd Defendant
	NIPPONKOA INSURANCE COMPANY (ASIA) LIMITED	4^th Defendant
	and
	WU KWOK LEUNG	Third Party

----------------------

Coram: H H Judge Marlene Ng in Chambers (Open to the Public)

Date of Hearing: 30^th July 2008

Date of Decision: 30^th July 2008

Date of Handing Down Reasons for Ruling: 4^th August 2008

------------------------------------------------------

REASONS FOR RULING ON COSTS

------------------------------------------------------

I. Background

1. On 14^th January 2006, the Plaintiff commenced the present claim for damages for personal injuries against the 1^st, 2^nd and 3^rd Defendants as a result of an alleged accident on 18^th January 2003 (“Accident”). However, the Writ of Summons was only served in November 2006.

2. In November 2006, the Plaintiff also served Notice to Insurer on inter alia Nipponkoa Insurance Company (Asia) Limited (“Nipponkoa”), the present 4^th Defendant, in relation to an insurance policy issued by Nipponkoa covering the 2^nd Defendant (“Policy”).

3. At that time, the 1^st, 2^nd and 3^rd Defendants were unrepresented. On 1^st December 2006, prior to filing and service of the Statement of Claim, each of them filed/served his/its home-made Defence in the Chinese language. In a nutshell,

(a) the 1^st Defendant averred that the Plaintiff was the business partner of the 2^nd and 3^rd Defendants and/or worked for a Wu Kwok Leung (ie the present Third Party);

(b) the 2^nd Defendant averred that the Plaintiff “並非本公司工人” and “該工程是本人與[the 3^rd Defendant]是合作形式處理工作”; and

(c) the 3^rd Defendant averred that the Plaintiff was employed by or was a partner of Wu Kwok Leung.

4. The Statement of Claim was served on the 1^st, 2^nd and 3^rd Defendants on 12^th December 2006. By the Statement of Claim, the Plaintiff claimed that 1^st Defendant was the principal contractor for the relocation work project (“Project”) at the site where the Accident occurred (“Site”), the 2^nd Defendant was the 1^st Defendant’s sub-contractor for part of the Project (“Works”), and 3^rd Defendant was the 2^nd Defendant’s sub-contractor in respect of the Works at the Site. The Plaintiff further pleaded that he was employed by the 3^rd Defendant as a renovation worker carrying out the Works at the Site, or alternatively both the 3^rd Defendant and the Plaintiff were employed by the 2^nd Defendant as renovation workers carrying out the Works at the Site.

5. Quite apart from allegations of breach of statutory duties and negligence, the Plaintiff averred in the Statement of Claim that (a) at all material times the 2^nd or the 3^rd Defendant owed him a duty under the implied terms of the contract of employment, and (b) the Accident was caused inter alia by breach of implied terms of contract on the part of the 2^nd or 3^rd Defendant.

6. On 13^th January 2007, Nipponkoa’s solicitors wrote to the Plaintiff’s solicitors to explain that the Policy was an employees’ compensation policy which only covered the 2^nd Defendant against liability at law, including liability under the Employees’ Compensation Ordinance (“Ordinance”), if any employee in the 2^nd Defendant’s immediate employ shall sustain injury by accident arising out of and in the course of his employment, but the Policy did not cover the 2^nd Defendant in respect of injury sustained by its sub-contractor’s employees and/or the principal contractor. It was said that Nipponkoa was not on risk under the Policy at the time of the Accident, and the Plaintiff was urged to withdraw the Notice to Insurer.

7. On 5^th February 2007, Nipponkoa’s solicitors chased the Plaintiff’s solicitors for a reply. There was no response.

8. On 21^st February 2007, Nipponkoa issued a summons (“Joinder Summons”) seeking inter alia the following reliefs :

(a) Nipponkoa be joined as the 4^th Defendant in the present action pursuant to Order 15 rule 6(2)(b)(i) and/or (ii) of the Rules of the District Court (“RDC”);

(b) the Writ of Summons and all pleadings in this action be amended by adding the name of Nipponkoa as the 4^th Defendant; and

(c) leave to the 4^th Defendant to file and serve a Defence within 14 days from the date of the order to be made.

9. Nipponkoa’s solicitors filed a supporting affirmation confirming that the nature of the Policy as described in paragraph 6 above. It was argued that the 4^th Defendant was not on risk under the Policy since the 2^nd Defendant by its Defence denied having employed the Plaintiff at the time of the Accident. Further, Nipponkoa claimed it only became aware of the Accident upon receipt of the Notice of Insurer, and the 2^nd Defendant was in breach of the policy condition by failing to report the Accident to Nipponkoa. Nipponkoa applied to be joined in the present action as an “interested” party since it was possible that pursuant to section 43 of the Ordinance the Plaintiff might enforce against Nipponkoa any judgment it might obtain in the present action.

10. On 28^th February 2007, the 3^rd Defendant’s solicitors filed Notice to Act.

11. At the hearing of the Joinder Summons on 7^th March 2007 at which all parties were present, H H Judge Lok granted inter alia the following directions (“Order”) :

(a) “根據區域法院規則，第15號命令第6(2)(i)及(ii)條規則，加入申請人[Nipponkoa]在本訴訟中為第四被告人”;

(b) “本訴訟中的傳訊令狀及所有狀書，須作出修訂，將申請人加入為第四被告人”; and

(c) “第四被告人獲得許可，於本命令日期起14天內，將答辯書存檔及送達原告人”.

12. For the purpose of the hearing before me, there was some contention between the Plaintiff and the 4^th Defendant as to whether the Order was made by consent or not. I note the Order was perfected and filed on 16^th March 2007, and there was no indication on its face that it was made by consent. No application has been made for rectification or variation, so I am not prepared to go behind the perfected Order.

13. It is plain from the Order that the court granted leave to the 4^th Defendant to join in the present action pursuant to Order 15 rule 6(2)(b)(i) and (ii) of the RDC, ie on the basis that the 4^th Defendant :

(a) “ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon” (Order 15 rule 6(2)(b)(i) of the RDC); and

(b) was “a person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter” (Order 15 rule 6(2)(b)(ii) of the RDC).

14. On 15^th March 2007, the 3^rd Defendant’s solicitors filed a formal Defence in the English language. In such Defence, the 3^rd Defendant averred that the Plaintiff and the 3^rd Defendant himself were employed by Wu Kwok Leung trading as Sam Tung Construction Co, and denied the Plaintiff was employed by the 2^nd Defendant.

15. On 21^st March 2007, the 1^st Defendant filed an Amended Defence claiming that the Plaintiff was employed by Wu Kwok Leung. On the same day, the 4^th Defendant by its solicitors (ie Nipponkoa’s solicitors) filed its defence specifically denying that the 3^rd Defendant and the Plaintiff were employed by the 2^nd Defendant.

16. On 22^nd March 2007, the 2^nd Defendant’s solicitors filed a formal Defence in the English language. The 2^nd Defendant claimed that in early or mid-January 2003 it sub-contracted certain works to Wu Kwok Leung and the Plaintiff as partners. Alternatively, the Plaintiff was the sub-contractor of Wu Kwok Leung in undertaking such sub-contracted works. The 2^nd Defendant denied there was any employment relationship between himself and the Plaintiff.

17. The 1^st, 2^nd and 3^rd Defendants filed their respective List of Documents on 21^s^t and/or 22^nd March 2007.

18. At the Check List Review hearing on 16^th April 2007, Master K W Wong granted extension of time of 21 days for the Plaintiff to file and serve (a) the Amended Writ of Summons to reflect the joinder of the 4^th Defendant in the present action, and (b) the Amended Statement of Claim and Statement of Damages (“Time Order”).

19. On 7^th May 2007, the Plaintiff filed the Amended Writ of Summons that not only reflected Nipponkoa as the 4^th Defendant, but also included amendments to the general indorsement of claim that added a claim for damages against the 4^th Defendant on the following basis :

“The Plaintiff’s claim is for damages for personal injury, loss and damage sustained in the course of his employment arising out of the negligence and/or breach of statutory duty and/or breach of common duty of care of the ~~1^st, 2^nd~~, and/or 3^rdand/or 4^th Defendants its servants or agents at [the Site] on the 18^th day of January 2003.”

20. On the same day, the Plaintiff filed the Amended Statement of Claim not only reflecting Nipponkoa as the 4^th Defendant, but adding the following pleaded averments :

(a) the 4^th Defendant was the insurer of the 2^nd Defendant under the Policy (paragraph 1(e));

(b) “[by] reason of the matters pleaded above, if the 2^nd Defendant is held to be an employer of the Plaintiff and being liable for the Plaintiff’s claims herein, the 4^th Defendant is obliged under Section 43 of the [Ordinance] to pay the damages, interest, and costs that the Plaintiff is entitled to herein, notwithstanding anything to the contrary in the Policy” (paragraph 12).

21. On 16^th May 2007, the 3^rd Defendant filed his Amended Defence by not admitting paragraphs 1(e) and 12 of the Amended Statement of Claim.

22. On 5^th June 2007, the 4^th Defendant filed its Amended Defence by not admitting paragraphs 1(e) and 12 of the Amended Statement of Claim, and expressly repeating that the Plaintiff was not employed by the 2^nd Defendant.

23. On 20^th June 2007, the 1^st Defendant filed his Re-Amended Defence by maintaining that the Plaintiff was employed by Wu Kwok Leung and not admitting paragraphs 1(e) and 12 of the Amended Statement of Claim.

24. On 6^th July 2007, the 2^nd Defendant filed its Amended Defence by admitting paragraph 1(e) and not admitting paragraph 12 of the Amended Statement of Claim.

25. Parties exchanged their respective witness statements on 13^th August 2007.

26. At the Check List Review hearing on 20^th May 2008, the Personal Injuries Master set the case down for trial in the fixture list on 12^th September 2008 at 9:30am at Court No.29 with 4 days reserved.

II. Plaintiff’s Summons

27. On 9^th May 2008, the Plaintiff applied by summons for inter alia the following reliefs (“Summons”) :

(a) leave for the Plaintiff to discontinue the action against the 4^th Defendant; and

(b) there be no order as to costs of this action including the costs of such application between the Plaintiff and the 4^th Defendant.

The adjourned hearing of the Summons came before me on 30^th July 2008.

III. Plaintiff’s evidence and submissions

28. According to the 2 affidavits of the Plaintiff’s solicitor, Ms Lai Lai Shan Esther, filed in support of the Summons, when the Plaintiff’s solicitors first received instructions to act for the Plaintiff, they issued an originating summons against the 1^st, 2^nd and 3^rd Defendants to seek pre-action discovery of the relevant insurance policy. The Plaintiff obtained information about 2 insurance policies, ie a policy issued by AXA General Insurance Hong Kong Limited (“AXA”) and the Policy issued by the 4^th Defendant. The Plaintiff’s solicitors were handicapped by the fact that there was no detailed investigation by the police or the Labour Department, so as a matter of prudence they issued Notice to Insurer to both AXA and the 4^th Defendant in November 2006.

29. Ms Lai claimed the Plaintiff was not in a position to ascertain the 4^th Defendant’s potential liability when Nipponkoa’s solicitors invited the Plaintiff to withdraw the Notice to Insurer. She said that at that time the Defendants’ Defence had not been filed, discovery had not been made and witness statements had not been exchanged.

30. In my view, this is not quite correct because all Defendants have filed and served their home-made Defence long before the Order. Indeed, solicitors’ correspondence revealed that the Plaintiff’s solicitors did send a copy of the 2^nd Defendant’s home-made Defence to Nipponkoa’s solicitors on 13^th January 2007. The stance of the 2^nd and 3^rd Defendants that Wu Kwok Leung was the Plaintiff’s true employer/ partner was firm and consistent throughout the present action. In any event, even up till now (upon the eve of the trial and when the Plaintiff’s investigation of the 4^th Defendant’s liability should have been complete), the Plaintiff still stood on the Notice to Insurer to Nipponkoa.

31. Ms Lai went on to say that counsel advised the 4^th Defendant should not have been joined as a defendant and the action against the 4^th Defendant should be discontinued with no order as to costs for the following reasons :

(a) if the court at trial finds the 2^nd Defendant liable as a contractor responsible for the Site as a result of breach of statutory duties and/or negligence, there is no role for the 4^th Defendant to be joined as a defendant;

(b) if the 4^th Defendant does have an interest in the proceedings, there is no reason for the 4^th Defendant not to take over the proceedings from the 2^nd Defendant instead of causing the Plaintiff to incur additional and unnecessary legal costs by becoming an additional defendant.

32. It was further argued that the 4^th Defendant need not be a defendant in the present action because :

(a) if the 4^th Defendant wished to obtain any information in order to assess the 2^nd Defendant’s potential liability, it could have obtained the same from the 2^nd Defendant or the Plaintiff, and the Plaintiff’s solicitors had duly answered their queries;

(b) if the 4^th Defendant thought the Policy was on risk, it would have been able to exercise its right of subrogation to take up the case for the 2^nd Defendant;

(c) once the 4^th Defendant chose to join in the present action, it would have to bear the cost consequences if it turned out that the Policy was not on risk;

(d) it is unreasonable for the Plaintiff to bear the 4^th Defendant’s costs as the Plaintiff never applied to join the 4^th Defendant as a party to the proceedings.

33. Therefore, Ms Lai argued the general rule that a defendant would be entitled to costs when an action was discontinued should be departed from in the present action “where the discontinuance …… is due to the claim against the 4^th Defendant having become academic, rather than to any acknowledgment by the Plaintiff of likely defeat. The claim against the 4^th Defendant is not initiated by the Plaintiff. The Plaintiff has not sued the 4^th Defendant in the Writ of Summons in this action. It was the 4^th Defendant who made its own application to join in as a Defendant in this action.” The Plaintiff therefore asked for leave to discontinue the action against the 4^th Defendant with no order as to costs save that costs of the adjourned hearing for argument before me should be to the Plaintiff.

34. The written submissions of the Plaintiff’s solicitors argued that even if it were reasonable and appropriate for the 4^th Defendant to apply to join in the present action, it could have invited the Plaintiff to discontinue the proceedings at an earlier stage. On 22^nd March 2007, the 2^nd Defendant (then legally represented) filed a Defence pleading that it was not the Plaintiff’s employer. At that time, the 2^nd Defendant could properly defend their own interests as well as the 4^th Defendant’s interest in the present proceedings. It was not necessary for the 4^th Defendant to proceed with the case any further, and could have invited the Plaintiff to discontinue the proceedings against them at that time.

35. In short, the Plaintiff’s contention that the 4^th Defendant should not be a party to the present action rested on 2 limbs, ie it was not reasonable and appropriate for the 4^th Defendant (a) to be joined as a defendant in the first place and/or (b) to maintain its status as a defendant thereafter.

IV. 4^th Defendant’s evidence and submissions

36. The 4^th Defendant maintained it should remain as a defendant in the present action. The position was put succinctly in the affirmation of the Defendant’s solicitor, Leung Fung Chi. The 4^th Defendant was not in a position to take over the conduct of the present action on behalf of the 2^nd Defendant because, as already explained in the affirmation in support of the Joinder Summons, (a) the 4^th Defendant was not on risk under the Policy, and (b) the 2^nd Defendant was in breach of the policy condition. The 4^th Defendant has therefore declined liability under the Policy, so the interests of the 2^nd to 4^th Defendants were different.

37. However, should the court find the 2^nd Defendant to be the employer of the Plaintiff at the time of the Accident on the Plaintiff’s alternative plea, and the 2^nd Defendant fails to pay the judgment debt, it is possible that the Plaintiff may pursuant to section 43(1) of the Ordinance enforce against the 4^th Defendant any judgment it may obtain in the present action against the 2^nd Defendant even though the 2^nd Defendant was in breach of the policy condition.

38. The 4^th Defendant claimed it had a legitimate interest in joining and taking part in the present action through to its conclusion. If the Plaintiff considered the 4^th Defendant ought not to have joined in the present action as a defendant, he ought to have raised such objection at the hearing of the Joinder Summons. It was further suggested that had the Plaintiff acceded to the 4^th Defendant’s request for withdrawal of the Notice to Insurer, the 4^th Defendant would not have applied to the court for joinder. The 4^th Defendant claimed that in the circumstances it should remain as a defendant in the present action to protect its interests pursuant to section 43(1) of the Ordinance because to date the Plaintiff has not withdrawn the Notice to Insurer, and still maintains his alternative plea that the Plaintiff was employed by the 2^nd Defendant.

V. Propriety of the present application

39. It is evident from the aforesaid narration of the Plaintiff’s evidence and submissions that he intends to remove the 4^th Defendant as a party to the present action. Given such objective, the Summons is misconceived.

40. The 4^th Defendant became a defendant to the present action in March 2007 not because of any then claim by the Plaintiff against the 4^th Defendant, but because H H Judge Lok acceded to the 4^th Defendant’s Joinder Summons. By the Order, H H Judge Lok found that the 4^th Defendant was “a party who ought to have been joined or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon” as well as a person between whom and any party in the present action “there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed [herein] which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter”.

41. The Order has been granted, perfected and sealed, and there has been no appeal therefrom. Further, the above chronology of the present action shows that the parties have acted on the Order. In the circumstances, the Order is binding on all parties to the present action.

42. I cannot see how an application by the Plaintiff to discontinue his claim or his action (if any) against the 4^th Defendant can cause the 4^th Defendant to cease to be a party to the present action given that the Order is binding on both the Plaintiff and the 4^th Defendant.

43. The appropriate mode of application to remove the 4^th Defendant as a defendant herein, if there are sufficient grounds to support the same, is an application under Order 15 rule 6(2)(a) of the RDC which provides that 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 party”.

44. No such application has been made. The Summons is confined to an application to discontinue the Plaintiff’s claim or action (if any) against the 4^th Defendant. When this was pointed out to Ms Chow, solicitor appearing on behalf of the Plaintiff before me, she rightly conceded she would not ask for an order that the 4^th Defendant cease to be a party.

VI. Issue estoppel

45. Had the Plaintiff made an application under Order 15 rule 6(2)(a) of the RDC, I still do not see any merit in the suggestion that the 4^th Defendant was not reasonably and appropriately joined as a defendant in the present action in the first place.

46. As explained above, the Order is binding on the parties and as such it constitutes issue estoppel on the subject of whether the 4^th Defendant was a necessary or appropriate party to be joined as a defendant in the first place. It is simply not open to the Plaintiff to mount the argument in the above paragraph as a backdoor attempt to subvert the Order without lodging any appeal against the same.

VII. Application for discontinuance

47. There is no dispute that the Plaintiff did not sue the 4^th Defendant in the Writ of Summons in the present action, and the joinder application was made by Nipponkoa who became the 4^th Defendant pursuant to the Order. The question is whether after the Order and by now there is any claim by the Plaintiff against the 4^th Defendant that can be the subject of the application for discontinuance.

48. The Order and Time Order required the Writ of Summons and all pleadings in the present action to be amended by adding Nipponkoa as the 4^th Defendant. The Plaintiff could have followed this strictly without adding any claim against the 4^th Defendant, thereby leaving the 4^th Defendant to plead any defence arguments it considered necessary to protect itself against any contingent liability under section 43 of the Ordinance. But the Plaintiff went further by voluntarily adding a claim for damages against the 4^th Defendant in the Amended Writ of Summons and Amended Statement of Claim (see paragraphs 19 and 20 above). In such circumstances, there is in fact subject-matter for the application for discontinuance.

49. Ms Chow confirmed at the hearing before me that the Plaintiff wished to discontinue such claim or action against the 4^th Defendant, and Ms Leung, solicitor appearing for the 4^th Defendant before me, had no objection subject to preservation of the 4^th Defendant’s status as defendant in the present action. So at the hearing I granted leave to the Plaintiff to discontinue the whole of the Plaintiff’s claim in the present action against the 4^th Defendant, and for the avoidance of doubt made clear that such discontinuance is without prejudice to the Order. I further directed that the Plaintiff do within 7 days thereof file and serve his Re-Amended Writ of Summons and Re-Amended Statement of Claim to reflect the aforesaid discontinuance of his claim against the 4^th Defendant.

VIII. Costs

50. Not unexpectedly, Ms Leung asked for costs. Ms Chow disputed liability for costs on the basis that the 4^th Defendant should prior to the issuance of the Summons have applied on own motion to cease to be a defendant in the present action or to invite the Plaintiff to discontinue the claim against them.

51. I find such argument wholly misconceived. It lies ill in the mouth of the Plaintiff to make such argument when the Order is binding on the parties and when there is no application before me for the 4^th Defendant to cease to be a party to the present action.

52. Further, as explained above, the Plaintiff could have complied with the Order by adding the 4^th Defendant as a party in the Amended Writ of Summons and Amended Statement of Claim. But he took the initiative to add a claim for damages against the 4^th Defendant. The 4^th Defendant never invited such claim. It joined the present action as an “interested” party to protect its interests in light of its contingent liability under section 43(1) of the Ordinance.

53. Since the Plaintiff made a claim against the 4^th Defendant, the 4^th Defendant was bound to defend the same if it were to avoid default judgment should the Plaintiff elect to enter judgment on liability on his alternative plea. A defendant does not choose to be sued, and I do not see any duty or obligation on the part of the 4^th Defendant to request the Plaintiff to discontinue the Plaintiff’s claim against it. I also do not see how the 4^th Defendant with an extant claim against it by the Plaintiff can apply to cease to be a party.

54. Procedural considerations aside, there is also no viable substantive basis for suggesting that the 4^th Defendant should cease to be a defendant in the present action. There has been no change of circumstances since the Order. Indeed, the 2^nd and 3^rd Defendants maintained a consistent stance throughout the present action that the Plaintiff was not employed by the 2^nd Defendant; it was never a case of the Plaintiff’s claim against the 4^th Defendant “becoming” academic in the course of the proceedings as suggested by the Plaintiff’s solicitors.

55. The 4^th Defendant could hardly have taken up conduct of the proceedings on behalf of the 2^nd Defendant when the coverage under the Policy is limited to employees of the 2^nd Defendant. Secondly, the breach of policy condition of failing to report the Accident to the 4^th Defendant makes clear that the interests of the 2^nd and 4^th Defendants are different.

56. To suggest that the 4^th Defendant could have subrogated and taken up the present action on behalf of the 2^nd Defendant is to ignore the aforesaid policy restriction and/or obvious conflict arising from breach of the policy condition. The 4^th Defendant is not required to conduct of the present action on behalf of the 2^nd Defendant and thereby risk possible waiver of such policy restriction or breach.

57. However, it cannot be disputed that the 4^th Defendant is under a contingent liability pursuant to section 43 of the Ordinance. On such basis, I do not see any reason why the 4^th Defendant should not be allowed to join in the present action as an “interested” party who has a legitimate legal or financial interest in the outcome of the issues in dispute, or why (when the 4^th Defendant’s interests are necessarily different from the 2^nd Defendant vis-à-vis the Policy) the 4^th Defendant should left to rely on the 2^nd Defendant to represent its interests or provide it with information.

58. Ms Chow relied on my ruling on costs in Ernst Eduard Sprecher on behalf of himself and the other dependants of Matthias Sprecher deceased v Zingrich Cabletrans Gmbh DCEC1498/2006 (unreported, 28^th November 2007). The factual matrix of that case is wholly different. In that case, the employees’ compensation policy covered employees of the insured’s sub-contractors so both the 1^st and 2^nd Respondents were covered (see paragraph 48 of the ruling). The insurer in that case intervened to join in the proceedings because it did not receive cooperative response from the respondents, who did not appear to defend the employees’ compensation claim. When the respondents instructed solicitors to resist the applicant’s claim, the insurer intervener withdrew the joinder application because from that point on its interests and those of the respondents were the same. This means that, unlike the present case, there was no determination as to whether it was necessary or appropriate for the insurer intervener to join in the proceedings. It is therefore logical that in considering costs the court had to consider whether it was appropriate for the insurer to intervene and later to withdraw the joinder application.

59. Here the issue of joinder of the 4^th Defendant as a defendant has been determined and resulted in the Order. There is also no application for the 4^th Defendant to cease to be a party. In the circumstances, I see no basis for the Plaintiff to argue it should not bear costs on the basis that the 4^th Defendant should self-apply to cease to be a party and leave the 2^nd Defendant to resist the Plaintiff’s claim.

60. As explained in paragraph 34 of my ruling in Ernst Eduard Sprecher, an insurer of an employees’ compensation policy under Part IV of the Ordinance is under a contingent and direct liability to the applicant irrespective of the policy terms between the insurer and the employer insured, and this forms the jurisdictional basis for joinder as a defendant in the relevant proceedings. I added in paragraph 64 of my ruling that the insurer cannot exercise the right of subrogation if the interests of the insured and the insurer are different, eg where the insurer disclaims liability under the policy. I therefore have no hesitation in coming to the conclusion that the 4^th Defendant has a right to be heard in respect of its potential liability under section 43(1) of the Ordinance (see Sami’an Sutinah v Katrina Leung Wai-kuen & anor [2002] 2 HKC 706, Chu Yuen-wah v Lee Kwok-lee & anor [1995] 2 HKLR 280 and paras.37-40 of my judgment in Ernst Eduard Sphrecher).

61. In conclusion, I see no arguable basis for not applying the usual order for costs. In a nutshell, the 4^th Defendant was and remains a necessary party in order to ensure all matters in dispute are effectively and completely determined and adjudicated upon, and in reality the Plaintiff by the present application is merely seeking to discontinue the claim which he chose to add against the 4^th Defendant. I have therefore granted an order at the hearing that costs of and occasioned by the Summons including all costs reserved be paid by the Plaintiff to the 4^th Defendant to be taxed if not agreed, and there be legal aid taxation for the Plaintiff’s own costs.

62. Subsequent to the hearing but on the same day, the solicitors for the 4^th Defendant wrote to the court (with copy to the Plaintiff’s solicitors) to seek clarification as to whether the costs order was inclusive of the 4^th Defendant’s costs of defending the Plaintiff’s claim in this action.

63. The solicitors for the 4^th Defendant are quite right to point out the lacuna in relation to this aspect of costs. Given the discontinuance of the whole of the Plaintiff’s claim against the 4^th Defendant, final disposal of such costs is necessary and appropriate. In light of the logic of my reasons for the ruling on costs, such costs should also be in favour of the 4^th Defendant. I therefore grant a costs order nisi that the Plaintiff do pay the 4^th Defendant costs incurred in defending the Plaintiff’s claim against the 4^th Defendant in any event to be taxed if not agreed, and there be legal aid taxation of the Plaintiff’s own costs.

64. I note that this case will be warned for trial in mid-September 2008. It is hoped that the parties will focus on brining the matter to trial, and avoid further tactical skirmishes that do not advance any party’s case but may add to costs.

(Marlene Ng)
District Court Judge

Representation:

Ms Chow Wing Yin of Messrs Deacons for the Plaintiff

Ms Winnie Leung of Messrs Winnie Leung & Co for the 4^th Defendant

(1) PSLA	$110,000
(2) Pre-trial loss of earnings	$280,000
(3) Pre-trial loss of MPF	$ 14,000
(4) Special damages	$ 10,000
Total	$414,000
50%	$207,000