MEHMOOD KHALID v. MILLION HARVEST WHARVES & LOGISTICS LTD AND OTHERS

HCPI 401/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 401 OF 2006

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J U D G M E N T

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Introduction:

1.  Mr Khalid was employed by Millions Harvest Wharves & Logistics Ltd, (Millions Harvest), as a slinger in a stevedoring operation on the waterfront at Tsing Yi.  The slinger is required to go on to the top of a container which is to be lifted from the waterside and taken by crane to a vessel.  The slinger attaches the slings to the corners of the container preparatory to lifting.

2.  Mr Yeung was the crane operator on a Dumb Steel Lighter, (DSL), called Kam Wah 10.  The DSL was owned by Millions Harvest.  Mr Yeung operated the DSL as what was described as an “independent contractor” to Millions Harvest.  Millions Harvest Assets Investments Ltd is no longer a party to the action.

The accident:

3.  On 14 June 2004, at approximately 1:50 p.m., Mr Khalid and another slinger were standing on a platform, adjacent to the place where the DSL was berthed.  The platform enabled the slingers to stand at the same height as a container, which had been placed alongside the platform.  The platform gave the slingers easy access to the top of the container.  Mr Khalid was required to take the hooks, attached to the slings, which were lowered to his position by the crane, and attach them to the container, preparatory to lifting the container.

4.  In the course of carrying out this procedure, while standing on the platform, Mr Khalid reached for the hooks at his chest height, but found that the glove of his right hand was caught by the hook.  Before he could remove the hook from the glove, he was lifted some 3 to 6 feet into the air.  He was swung out away from the container, the glove tore, releasing the hook, and he fell to the ground, falling some 13 to 16 feet.

5.  As a result of the fall he suffered an injury to his left wrist.  An X-ray showed a displaced intra-articular fracture of the left radius and a fracture of the left ulnar styloid.

6.  Both Millions Harvest and Mr Yeung deny liability for the accident.  Both contend, in the pleadings, that Mr Khalid was guilty of contributory negligence.  There is an issue as to contribution between Millions Harvest and Mr Yeung.

The system of work:

7.  The procedure for lifting containers uses a 4 point hook at the end of the DSL’s lifting cable, (the primary hook), to which are attached 4 individual slings, each with a hook at the end, to be attached to the four corners of the container.  Each sling is 30 or more feet long, necessarily so, as the containers are 40 feet long, and the slings must be more than half the length of the container.

8.  The system of work used in this case involved the crane operator, Mr Yeung, swinging the boom of the crane across and above the platform, then lowering the empty slings to approximately the chest height of the slingers.  The slingers would then take hold of the hooks to be attached at each end of the container, each slinger taking two hooks.  They then stepped out on to the container, each separately moving to an end, and attached the hooks to the container.  They then stepped back onto the platform, after which Mr Yeung would lift the container, first moving it away from the platform, then up and over the platform, across the DSL, and into a river vessel berthed on the offside of the DSL.

9.  This system of work required the slingers to catch the hooks when they were suspended in the air, approximately at chest height.  The evidence that I have is that this system is used universally throughout the stevedoring trade in Hong Kong. 

The Marine Department Safety Guide:

10.  However the evidence also is that this system of work is directly contrary to that recommended by the Marine Department in the “Safety Guide for Shipboard Container Handling” published by the Marine Industrial Safety Section in December 2001.  A number of paragraphs of that Guide are pertinent.

11.  Section 5 deals with safe practices in container handling.  I note the following paragraphs:

“5.2.1     Lifting containers by four-legged slings hooked to the four top corner fittings has been widely used in shipboard container handling operations in Hong Kong.  This is especially true for shipboard container handling at mid-stream where the special working environment renders the use of conventional container handling equipment not feasible.

5.2.2     A container should normally be lifted with a suitable lifting equipment that applies a vertical force to all its four corner fittings.  Applying out-of-vertical lifting force will apply stresses to the containers that they are not designed to withstand and horizontal compression stresses will be imposed on the container structure.  The danger of this practice is that certain weight bearing parts of the container could be so over stressed that it fails - not necessarily at the time that perhaps at a later date.  In addition, in this mode of operation  slingers have the work along unguarded edges on container tops where a fall hazard exists.

5.2.3      Because of the unique local situation, until automatic container handling equipment that can eliminate slingers working on tops of containers is developed for mid-stream operations, containers may be handled by top lift slings provided the following guidelines are strictly observed.

              ……

5.3.1      Shipboard container handling, especially when top lift slings are used, requires workers to work on tops of containers.  It is essential that safe systems of work are developed and used in order to protect workers from severe hazards, including that of falling.

…..

5.3.15    Slingers working on the tops of containers should keep a safe distance from approaching slings.  The slings should be lowered and rest on the deck or container top before slingers approach to avoid being hit by swinging hooks.

……

5.4.1      During mid-stream container handling operations, vessels, lighters in particular, would always be in motion due to actions of the sea on the vessels and due to the movement of containers by cranes of the vessels.  Utmost care should be exercised by observing proper working procedures and taking adequate safety measures while working under such circumstances.  Never act in a hurry as that could easily lead to an accident. ”

12.  Paragraphs 5.2.1-3, 5.3.1 and 5.4.1 are general provisions which serve to highlight the inherent danger in container handling operations.  Although the operation in this particular case might not strictly be termed a mid-stream operation, it bears many of the characteristics of such an operation.  First, just as in a mid-stream operation, Millions Harvest’s stevedoring operation used slings to handle the containers and not lifting gear which provided a vertical force to the four corners of the container.  Second, because the DSL was berthed in the water, it was plainly subject to motion due to the action of the sea, whether caused naturally or by the wash from passing vessels, in precisely the same way as a DSL berthed alongside a cargo ship in midstream operations.

13.  Paragraph 5.3.15, however, is not a general provision, but a specific provision setting out the safe working method.  That safe working method requires the lowering of the slings to rest on the deck or container top before they are approached by the slingers.  An obvious explanation for this procedure is set out.  If the slingers approach the slings while still in the air there is a real and obvious danger that they may be hit by swinging hooks.

Analysis of the system of work:

14.  The obvious risk of swinging hooks is aggravated by the known hazard of the crane vessel or DSL itself being caused to move by the movements of the sea, thereby emphasising in the swinging motion of the lifting gear.  That such a hazard exists is not only clear from the Safety Guide, but was also clear from the evidence of the slinger and crane operator before me.  Both Mr Khalid and Mr Yeung were well aware that sea waves, particularly wash caused by passing vessels, might cause the DSL, and its crane boom to move.  Mr Yeung, when he is able to, keeps a check for such waves or wash.  However when his back is to the sea, when he is looking at the land-based aspect of the operation, he is unable to make such observations.

15.  This case is an object lesson in the fact that there are a myriad of ways in which a man may be injured in a container handling operation.  That the specific risk that occurred in the present case is not highlighted in paragraph 5.3.15 does not in any way derogate from the plainly foreseeable risk  that a man might get caught by a hook and lifted in the air.

16.  The evidence is that notwithstanding the plain recommendation contained in the Safety Guide, the universal practice in container handling operations in Hong Kong is that the slingers approach the slings at chest height, and to take the hooks in the air, without waiting form the slings to come to rest on the top of the container.

17.  In the normal course of trials, a plaintiff who seeks to have condemned as unsafe, a system of work which has been generally used for a long time in an important trade, undertakes a heavy onus: see General Cleaning Contractors Ltd v Christmas [1953] AC 180 at 192.  But the onus is not heavy where the universal practice is in direct contradiction to the recommendation of the appropriate authority.  Further, as was seen in General Cleaning, the onus may be displaced where the danger is obvious and the practice is patently unsafe.

18.  Notwithstanding the fact that the system of work adopted by Millions Harvest is universally adopted throughout the mid-stream operations in Hong Kong, I have no doubt whatsoever that it is obviously dangerous, and the practice is patently unsafe.  The system of work exposes slingers to the plain risk of being struck by heavy hooks.  It exposes them to the risk of being caught in swinging slings.  And, as the factual circumstances of this case demonstrate, it exposes them to the risk of being caught by a hook.

19.  The real reason why the present system of work is used was exposed by the crane operator, Mr Yeung, when he was cross-examined as to the recommended system.  Quite simply, the recommended system takes longer, and not as many containers would be processed in the day.  The safety of workmen has been cast aside in favour of profit for employers.

20.  The system of work in universal application in midstream operations, whereby slings are lowered to the chest height of slingers who then catch the hooks in the air, and take them to the corners of the containers to attach, is an unsafe system of work.

The cause of the accident:

21.  There was a dispute between Millions Harvest, and Mr Yeung, as to precisely how it was that Mr Khalid came to be lifted from the container after his glove was caught in the hook.

22.  Mr Kwok, for Millions Harvest, cross-examined Mr Yeung closely and at length as to the various levers and pedals that the crane operator is required to use in the course of operations.  The procedure is complex, involving four levers, and four pedals, the latter operating as brakes in respect of the various movements created by the application of the levers.  In addition, the crane operator is required to regulate the speed of the engine driving the various movements, by the use of a hand operated accelerator. 

23.  Ultimately, Mr Kwok put it to Mr Yeung that Mr Yeung had, by mistake, operated the lever causing the hook to rise in the air.  Mr Yeung denied the proposition.

24.  Mr Yeung’s explanation for the lifting gear rising was that the DSL had been moved by a wave caused by the wash of a passing tugboat.  Mr Yeung said that the tugboat had come from behind him, and that with his attention directed away from the water, towards the land operation, he had not seen the tugboat and was unaware that the wash was about to hit the DSL.  The effect of wash or sea waves hitting the DSL is to rock the DSL causing the level deck to rise and fall unevenly, and with it the lifting gear.  With the deck of the DSL rocking from side to side the end of the crane boom will rise or fall at the same time.

25.  The boom of the crane is 128 feet long.  Ms Loh calculated, but without producing the calculations, that it would take little movement of the DSL, a change in the level of the deck by some 2° to 4°, to raise the end of the boom 3 to 6 feet, thereby lifting a person caught by a swinging sling hook by that distance.  There can be no doubt that it will take little in the way of a sea wave or wash of a passing tugboat to change the angle of the deck of the DSL by 2° to 4°, and consequently increase the boom height by 3 feet or 6 feet[1].

26.  But at the end of the day, it does not matter whether the fact that Mr Khalid was lifted off the platform by the raising of the lifting gear and hook, was caused by an operational error on the part of Mr Yeung, or the movement of the DSL from the wash of a passing vessel.  In both circumstances, the primary cause of the event has been the unsafe system of work whereby the sling and hook is brought to the slinger at chest height, thereby exposing the swinging hook to the danger of being unexpectedly raised, either by the action of the crane operator or the movement of the deck of the DSL.

27.  Had the Marine Department recommended system of work been adopted the slings would be lying loose on the top of the container and a movement of the primary four point hook, even if it rises 6 feet, will not cause the hooks on the ends of the slings to rise above the level of the container.  In simple terms, had the recommended system of work been adopted, this accident would not have occurred. 

28.  Mr Khalid must plainly succeed on liability.

Contributory negligence:

29.  Although contributory negligence was pleaded by both defendants, by the conclusion of the trial, the allegation was not pressed.  Mr Khalid was doing nothing more than following the system of work prescribed by Millions Harvest.  There was no contributory negligence.

The relationship between the stevedore and the crane operator:

30.  On the morning of the trial Millions Harvest filed a contribution notice against Mr Yeung, contending that Mr Yeung’s negligence contributed to the accident, and that consequently Millions Harvest were entitled to recover a contribution from Mr Yeung in respect of any sum ordered to be paid to Mr Khalid, by Millions Harvest.

31.  When the writ was issued, Mr Khalid’s solicitors were unsure of the true relationship between Millions Harvest and Mr Yeung.  The statement of claim pleaded that Mr Yeung was a sub-contractor and/or employee of Millions Harvest.  Mr Yeung, in his defence stated that he was a sole proprietor, and was a contractor of Millions Harvest for the operation of the DSL and the crane thereon, for Millions Harvest’s stevedoring business.

32.  The contract between Millions Harvest and Mr Yeung was produced.  The contract shows that Millions Harvest handed over the DSL to Mr Yeung to operate, on a sub-contract fee of $51,000 per month.  Although a monthly sub-contract fee was payable, the contract provided that year end half double pay shall be calculated on a daily basis.

33.  Mr Yeung was required to provide two crew members and a cargo hookman.  They were paid from the sub-contract fee.  In addition Mr Yeung was required to meet all government taxes, MPS payments and the like in respect of those employees.  However Mr Yeung’s employees could be moved to any other DSL operated by Millions Harvest without objection by Mr Yeung.  Millions Harvest had the right to send the barge to Zhuhai or any other seaport in China.  Although in that circumstance, Mr Yeung would be paid an additional allowance, he could not object to the change in location.

34.  It was Mr Yeung’s evidence, unsuccessfully challenged by Mr Kwok, that if he wished to change the system of work he would need to obtain permission to do so from Millions Harvest’s supervisor.  Mr Yeung gave that evidence in response to a question from me. 

35.  Prior to asking the question I specifically warned Mr Kwok that he may not like the answer.  I enquired of Mr Kwok if he appreciated the consequences of the answer.  He assured me that he did.  He cross-examined Mr Kwok further following the answer.  However he confined that cross-examination to the appropriateness or otherwise of the two different systems of work.  In that cross-examination he did not challenge Mr Kwok’s assertion that to change the system of work he would require permission from Millions Harvest.

36.  To determine whether or not Mr Yeung was an independent contractor or an employee the court will look at the detailed circumstances of the arrangement, rather than the mere label attributed to the arrangement by the parties: see Market Investigations v Minister of Social Security [1969] 2 QB 173, at 184-5, approved in Lee Ting Sang v Chung Chi Keung [1990] 1 HKLR 764 PC: 

“The fundamental test to be applied is this: is the person who has engaged himself to perform these services performing them as a person in business on his own account?  If the answer to that question is yes, then the contract is a contract for services.  If the answer is no, then the contract is a contract of service. 

No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which of these various considerations should carry in particular cases.  The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance such matters is whether the man performing for services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.”

37.  Having regard to the reality of the circumstances in which Mr Yeung worked with Millions Harvest as set out in paragraphs 31-34, I have no doubt whatsoever that notwithstanding the use of the expression sub-contract in the agreement between Mr Yeung and Millions Harvest, he was in reality an employee of Millions Harvest. 

38.  While being paid a “sub-contract fee”, Mr Yeung was also paid year-end double pay, a concept traditionally associated with the notion of a wage earner, not a sub-contractor.  While Mr Yeung hired his own helpers, he had no real control over them.  They could be taken from him at any time by Millions Harvest.  Mr Yeung had no control over the system of work adopted.  There is nothing to indicate that he was free to provide stevedoring services to anyone other than Millions Harvest.  They could move to the DSL anywhere they liked and Mr Yeung must go with it.  There is nothing to indicate that by sound management Mr Yeung could improve the profit he might make.

39.  Mr Kwok argued that Mr Yeung was bound by his pleading that he was an independent contractor.  The status of Mr Yeung in relation to Millions Harvest is a mixed matter of fact and law.  A party is not bound by a pleading of fact or law if, on the evidence, the fact is shown to be wrong, or his interpretation of the law is determined by the court to be wrong.

40.  Being satisfied that Mr Yeung was nothing more than a mere employee of Millions Harvest, his complete answer to the contribution notice is that he was merely an employee carrying out his task as directed by his employer, Millions Harvest.  The claim for contribution fails.

The injury:

41.  Mr Khalid fell from a height of a little over 10 feet.  He landed on his outstretched left upper limb, resulting in fractures to his left radius and left ulnar styloid.  The fractures were treated by a closed reduction and his arm was placed in a cast.  Two days later Mr Khalid was discharged from hospital, being readmitted on 21 June 2004.  Surgery was undertaken to achieve internal fixation of the fracture of the ulnar styloid.  The left radius was fixed externally.  He was discharged on 26 June 2004, but readmitted on for August 2004 for the removal of the external fixation.

42.  Mr Khalid was on sick leave until late February 2005, a relatively short period of time, having regard to the nature of the injury and surgery performed.  He has returned to light duty work following the completion of sick leave.

PSLA:

43.  Mr Khalid suffered a painful accident resulting in a fracture of his wrist which could not be treated simply by a plaster cast.  It was necessary for there to be surgery, with external fixation, undoubtedly a distressing and uncomfortable experience.  Pain is highly subjective, but I accept the statement in the report of Dr Lee that a fracture of this type is prone to produce pain and stiffness at the joint. I am satisfied that Mr Khalid continues to suffer pain on exertion, and in cold weather.

44.  Mr Khalid is a relatively young man, being 27 years at the date of the accident, he will be 31 in September2007.  He enjoyed playing cricket on a regular basis, but can no longer properly wield a cricket bat.

45.  I am satisfied that the sum sought of $200,000 is appropriate for the award for PSLA.

Loss of earnings:

46.  At the time of the accident Mr Khalid was earning $11,000 per month.  As part of his case he produced wage certificates from another slinger which showed that that person, a friend of Mr Khalid, was now earning, with overtime, about $13,000 per month.  The evidence was hearsay, but was comprised in Mr Khalid’s witness statement. 

47.  In the course of the examination of Mr Yeung, Ms Loh sought to reduce oral evidence of the income of other slingers.  The evidence was not supported by any documentation, neither had it been properly signalled in the witness statement, thereby warning those advising Mr Khalid that his assertions as to earnings were under challenge.  I declined to allow the evidence to be led.

48.  On the whole of the evidence I am satisfied that but for the accident Mr Khalid would have continued to work as a slinger and would have earned on average $12,000 per month.

49.  Following the accident Mr Khalid has made every effort to find suitable work, within the limitations of his acknowledged disability.  Statistics were put before me setting out a number of types of occupations, particularly that of a driver, showing that a driver can earn $12,000 per month.  Mr Khalid has a driver’s licence, and for a very short period had worked as a driver while a friend was on leave.  But he had difficulty with the work because of the restrictions in his wrist.

50.  Mr Khalid’s ability to find employment cannot be measured against the standard of a native born Hong Kong person, able to speak Cantonese, and to read and write Chinese.  Being unable to speak Cantonese, or read and write Chinese greatly restricts the scope of occupations open to Mr Khalid.  In the same way that a pre-existing disability affects the ability of a person to find work, so does Mr Khalid’s cultural background.  I am satisfied that Mr Khalid is made every effort to find work.  He now works longer hours for less money in a lower paid job, one that is within the scope of his disability.

51.  I am satisfied that he is able to earn $7,500 per month but no more.

Pre-trial loss of earnings:

52.  On that basis, the pre-trial loss of earnings calculation contained in the revised statement of damages is accurate, subject only to the extension of the calculation to the trial date, a period of two months.  I accordingly fix pre-trial loss of earnings at $296,866.70.

Post-trial loss of earnings:

53.  I have had regard to the various comparables put before me by counsel as to the appropriate multiplier.  Having regard to Mr Khalid’s age at the present time, 30 years, and the nature of the work in which he was engaged, vigorous risky work, I am satisfied that a multiplier of 14 years is appropriate.

54.  The monthly loss is $4,500.  Defence counsel suggested that as Mr Khalid returned to Pakistan every year for about six weeks, his annual earnings should be appropriately reduced.  But it is not the normal rule that a workers future loss of earnings are reduced for periods of annual leave, and as a permanent resident of Hong Kong Mr Khalid had every entitlement to double pay at Lunar New Year.

55.  I calculate post-trial loss of earnings at $4,500 x 12 months x 14 years: $756,000.

Loss of MPF:

56.  Loss of MPF on pre-trial loss of earnings is $14,843. Loss of MPF on post-trial loss of earnings is $37,800.  Total loss of MPF is accordingly $52,643.

Loss of earning capacity and a loss of leisure:

57.  Dr Lee is of the opinion that the irregularity of the joint space, following the injury, will render Mr Khalid prone to develop post-traumatic arthritis in his left wrist.  Dr Lau did not consider there would be any deterioration in range of movement in Mr Khalid’s left wrist since December 2004, and considered the chance of increasing disability as a result of degenerative arthritis to be minimal.  That opinion acknowledges the risk of post-traumatic arthritis.

58.  Post-traumatic arthritis will restrict Mr Khalid’s future earning capacity if it occurs.  It is a risk which in my view must be recognised.

59.  Mr Khalid now has to work longer hours and has not been able to achieve his preaccident earnings.  As a result of longer hours he has less time to enjoy leisure.  In those circumstances damages for loss of leisure appropriate: see Kemp & Kemp; The Quantum of Damages, 2002 para 5-128.

60.  I am satisfied that an award of $100,000 will properly compensate Mr Khalid for both loss of earning capacity and loss of leisure opportunity.

Special damages:

61.  Special damages were agreed at $7,610.

Judgment:

62.  There will be Judgment for Mr Khalid against Millions Harvest for the sum of $1,413,120.  Mr Khalid must give credit for all sums received under the Employment Compensation Ordinance.  PSLA will carry interest at the rate of 2% since the date of the writ to the date of Judgment, and special damages at half Judgment rate from the date of accident to the date of the Judgment.

Costs:

63.  Mr Khalid is entitled costs against Millions Harvest, those costs to be taxed in the party and party basis, and, if required, on Legal Aid Regulations.

64.  Mr Khalid’s solicitors did not know the precise relationship between Millions Harvest and Mr Yeung when the writ was issued.  Consequently, Mr Khalid cannot be criticised for pursuing both Millions Harvest and Mr Yeung, although at the end of the day he has succeeded only against Millions Harvest.  In those circumstances the appropriate costs order is a Sanderson order: see Hong Kong Civil Procedure Vol. 1 62/3/8.  Millions Harvest must pay Mr Yeung’s costs of the proceedings, including the contribution notice.

65.  The costs orders are orders nisi.

[1] When the boom length is known, 128 feet, and the angle of the boom to the level deck, assumed, at 45°, the height of the top of the boom, Y,  may be determined by the formula: sine 45° = Y divided by 128. Thus, Y = 90.51.  To determine the boom angle, X, to raise the height of the top of the boom by 3 feet, the formula applied is sine X° = (90.51 + 3) divided by 128. Thus, sine X° = 0.73, and X° = 46.88°, a change in angle of the deck of 1.88°.  Alternatively, to change the boom height by 6 feet: sine X° = (90.51 +6) divided by 128. Thus, sine X° = 0.75, and X° = 48.59°, a change in the angle of the deck of 3.59°. If the boom angle is higher than 45° the increase in angle to achieve 3 feet or 6 foot increase in boom height will be marginally more than 1.88° or 3.59° respectively.  Conversely, if the boom angle is less than 45°, the change required in deck angle to achieve the boom height increase will be marginally less.