YEUNG SHEA CHUN v. THE DIRECTOR OF LEGAL AID

HCA8439/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.8439 OF 1996

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J U D G M E N T

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1. This is the trial of an action commenced by Yeung Shea Chun ("the plaintiff") against the Director of Legal Aid ("the Director") for breach of duty in relation to his loss alleged to have been suffered as a result of an accident in 1970 when there was a fire in the kitchen and the stove that caught fire was carried very quickly by the plaintiff's employer Mr Ho out of the kitchen and threw out of the door. In the course of doing that, the stove landed on the plaintiff and the plaintiff was badly burnt.

2. The plaintiff was admitted to Queen Elizabeth Hospital for emergency treatment and he was there apparently for some time. The documentary evidence shows that he was discharged some time in 1971. The accident gave rise immediately to, as is normal, a claim for workman's compensation which would be very straightforward subject to strict liability. The evidence shows that the plaintiff went to the Labour Department to make a claim for workman's compensation. The matter apparently was then referred by the Labour Department to the Legal Aid Department ("the Department"). According to the ledger book kept by the Department, on 14 August 1971 an application was made for and on behalf of the plaintiff for legal aid to recover compensation from Mr Ho pursuant to the Workmen's Compensation Ordinance. Legal Aid was granted to the plaintiff for the workman's compensation claim on 11 October 1971 and the Department assigned that workman's compensation claim case to Mr Martin Fairbairn, a practising solicitor in Hong Kong at the time.

3. The Department in the 1970s did not have the facility or the capability of litigating in-house, or carrying out litigation from its in-house lawyers. So every time when there was litigation and legal aid certificate was granted, outside lawyers and sometimes a barrister would be assigned by the Department.

4. The plaintiff was not the only person who was granted legal aid in relation to the workman's compensation claim. Mr Ho was also granted legal aid to defend the workman's compensation claim. Mr Ho's application was made on 23 August 1971 and legal aid was granted on 12 October 1971. The solicitor assigned for Mr Ho for that workman's compensation case was Mr Clement Lo of Helen A. Lo & Co.

5. At the relevant time, the legal aid threshold under the Ordinance was a fairly low one so that anyone who apparently had assets of more than $3,000 or a monthly income of more than $500 would not be qualified for legal aid. This would suggest that Mr Ho, at the time, was financially in a very poor condition and that was why Mr Ho was granted legal aid by the Department in relation to his workman's compensation case.

6. The workman's compensation case against Mr Ho came before H.H. Judge Addison sitting at the Kowloon District Court. It is not clear from the papers and the material put before the court whether the application was contested or what evidence was adduced. But a workman's compensation, as I have indicated earlier, is normally of strict liability and depended very much on the monthly income of the workman involved, so liability and quantum would not be particularly difficult. In any event, a judgment was obtained for and on behalf of the plaintiff against Mr Ho in that workman's compensation case for the sum of $13,993 on 11 April 1972.

7. In mid-1972, execution of the said judgment of $14,000 was levied on Mr Ho's property, but execution was unsuccessful. The case summary at page B13 of the Bundle indicated the unsuccessful execution of the judgment because there were insufficient goods to levy upon and it also shows that as a result of the failure to obtain successful execution, Mr Ho was arrested and was delivered into the custody of the Commissioner of Prison as a prisoner for debt on 26 October 1972. He served prison for something like three weeks and eventually he was released on 14 November 1972. The judgment, however, remained unsatisfied. The ledger book of the Department indicated that all action on behalf of Mr Ho, so far as legal aid was concerned, had been completed on 4 September 1972 and that all action for and on behalf of the plaintiff had been completed on 9 November 1972.

8. The result of the unsuccessful bailiff execution, combined with the imprisonment of the debtor, yielding no money, would in practically all circumstances indicate that all avenues to enforce judgment had been exhausted. That was apparently the view taken in early 1973. An application was then made, on behalf of the plaintiff, by the Labour Department to Brewin Trust Fund for ex gratia payment in January 1973. The application to Brewin Trust for fund is, according to the evidence, generally speaking the last resort, and in fact the Brewin Trust would only pay out if it is satisfied that all avenues had been exhausted. The maximum sum under the Brewin Trust that would be payable was a one-off payment of $5,000. The application was successful and the plaintiff received the sum of $5,000. The documentary evidence shows that the plaintiff at that time had apparently been discharged from hospital, was no longer being bed-ridden in any hospital and that he physically went to the Labour Department to collect that $5,000. Page 3 of Bundle B shows the receipt and it reads :

" I YEUNG Shea-chun, the undersigned (HKID Card No.XXXXXXX), hereby acknowledge receipt of a cheque payable to me for the sum of $5,000, being the amount awarded to me by the Commissioner of Labour from the Brewin Trust Fund."

The document is in both English and Chinese and in relation to the amount, it is certainly in Chinese and it bears the signature, a perfectly good signature in Chinese, of the plaintiff. This receipt is of some significance because the plaintiff said he is illiterate and could not read and write Chinese whereas if he could read and write Chinese, then it would be difficult for him to explain away the receipt of this $5,000 or that he did not know that it was ex gratia payment because all avenues had been exhausted.

9. This was the state of affairs so far as the Government side is concerned, that is to say the Labour Department helped the plaintiff to obtain $5,000; he received the $5,000 and he left the Labour Department. It was only in 1993 that the plaintiff began to make noises and started to make claims against the Labour Department initially and then subsequently against the Legal Aid Department.

10. Between 1973 and 1993, what did the plaintiff do? The evidence of the plaintiff was that throughout the period from 1973 until 1989, he was continuously bed-ridden in one or more hospitals and except for the occasional short periods of not more than each time 12 hours during some weekends when he was allowed to go home, he was continuously hospitalized and being treated. The documentary evidence, however, shows a somewhat different picture. It shows that the plaintiff, although having to undergo a large number of operations, was not continuously in hospital and bed-ridden and that he was in fact, for large periods of time, at home and not in hospital. It was only during periods when he required to be operated on that it seemed that he was admitted into hospital and after the operations and recovery, he would be discharged. So these two very different pictures are in strong contrast.

11. The scene after 1993 consisted mainly of the plaintiff making repeated applications for legal aid so that he could pursue proceedings against the Department which were refused, and the matter eventually came to court with the assistance of the various organizations, in particular at the trial of this action with the assistance and appearance of counsel who have agreed to appear on pro bono basis for the plaintiff.

12. The issues in this case involves the consideration in relation to firstly, the claim for workman's compensation, the alleged negligence of the Department and under this aspect there are three questions :

1. Whether the Department owed a duty of care to the plaintiff and whether it was in breach of that duty of care?

2. Whether the claim of the plaintiff against the Department was time-barred by reason of the Limitation Ordinance? And

3. If there was a breach of duty and the claim was not time-barred, what would have been the loss suffered by the plaintiff?

13. In relation to the claim for common law damages which the plaintiff otherwise might be able to pursue against Mr Ho, the same three questions will also arise. I will consider each matter in turn. But before I do that, I should first say something about the credibility of the plaintiff, the only witness who gave evidence before me.

14. The plaintiff was born in 1938 and when the war ended, he came to Hong Kong. At that time he was aged 8 and he claimed that he did not go to any school, he had received no schooling from that age onwards. That certainly is his evidence. He seemed to have told that to Dr Green and Dr Green then reflected this in his report. I do not believe the plaintiff at all on this. It seems to me inherently improbable that someone of that age would have, for all those years, received no education whatsoever. The handwritten signatures of the plaintiff in document after document that had been put before this court suggest a fluent handwriting in such a way as to indicate it is not someone who is illiterate in Chinese. Someone who is illiterate in Chinese would be building up strokes in a very different way. That is my first observation. Of course I have the advantage over Dr Green because Dr Green could not read or write Chinese and he had to rely on what he had been told.

15. Dr Green also said that the plaintiff was a simple man. I do not agree. In my view, he is clever, he is astute, he is observant and he is definitely not simple. Dr Green also said in his report that the plaintiff is a non-assertive man. That is not the impression I have of the plaintiff. He was extremely adept in the course of his being cross-examined in producing various documentation. From 1993 onwards (from all the documentation put before the court), he had certainly displayed the ability to assert his claim, pressed it not less than 11 times by making repeated applications for legal aid, even though every time it was rejected, solicited the sympathy of a large number of the Hong Kong community to the extent of being able even to persuade the august body of the Bar Association to lend its help. I certainly do not believe that the plaintiff was a non-assertive man. I think the manner and the way he gave his evidence displayed that this is a man who knew what he was doing and was prepared to push forward to achieve his objective.

16. What was he like as a witness? I do not believe that he is a witness whose evidence can be accepted at face value. I would reject his evidence on all aspects unless it is supported by credible independent evidence to the contrary. I think there are many aspects of his evidence which can be demonstrated to be not reliable. A key example of this would be his assertion that he was continuously bed-ridden in hospitals, that even on the odd occasions when he had to go home, he had to be wheeled to the taxi and then again wheeled to his home. That, compared with the documentary evidence which reveals that he was staying at home and making daily visits to the hospitals, would suggest some degree of mobility and certainly a far less serious condition than the picture he wanted to paint to the court. So my finding on credibility is that I reject him as a credible witness.

17. I now turn to the issues and I will first start with my consideration on the claim for workman's compensation.

18. The claim for workman's compensation was assigned by the Department to Mr Martin Fairbairn, an outside solicitor. The relationship between a legally aided person, the Department and an outside solicitor was very carefully analyzed in the leading case on this matter. In the judgment of McMullin VP in Ngao To-ki otherwise spelt as Ngo Dao-kei v. Attorney General [1981] 1 HKLR 259, the following was said (at 266) :

" What is clear is that s.24 does not make the Director vicariously liable for acts or defaults of the assigned lawyers as distinct from any acts or omission of his own of which complaint might be made either because it is said to be a culpable interference with the personal or proprietary rights of the aided person in some very general sense within the principles of Donoghue v. Stevenson [1932] AC 562 etc. or else because it is said to be a failure to perform or a negligent performance of some positive duty under the Ordinance.

When one reads the provisions of the Ordinance and the regulations as a whole it is, I think, apparent that the purpose of the regulation being the grant, within defined limits, of legal aid to persons who are not financially competent to get it for themselves, the principal duty cast upon the Director is to see that the scheme is competently managed so that public funds are not wasted. Thus the various provisions which empower the Director to intervene either to make inquiries or to give directions (for example under Regulation 12) after solicitors or counsel have been assigned are not, to my mind, intended to give him a supervisory control of legally aided proceedings or, as the judge put it, to intermeddle with the conduct of the case by the assigned lawyers in the interests of the aided person. His supervisory power, as I see it, in any case where lawyers are assigned is concerned with the grant and continuance, suspension, limitation or revocation of aid and does not extend to invigilating the performance of the assigned lawyers."

Further on, McMullin VP continued (at 269) :

" In answer to all of this Mr Kaplan does not contend that the Director is protected from the consequences of all negligence in the discharge of his duties under the Ordinance. He could, for example, be liable in tort for such things as careless loss of papers occasioning delay or miscarriage of litigation, or for delay, causing loss, in the consideration of an application for aid or perhaps in the negligent performance of any specific duty cast upon him by the Ordinance. But once lawyers have been assigned he has no duty and counsel would say, no right, to intervene and direct the course of the proceedings. His concern, in any case in which he has no assumed the direct responsibility for the maintenance of the litigation, is with the due administration of public funds and not with the cause of the aided person save in the secondary sense that any mismanagement of that cause may require inspection to detect, and if necessary to curtail, undue expenditure.

Thus far, it seems to me, counsel is clearly right. This is the proper answer to the contention that the Director, in such cases, has a supervisory duty running in some manner parallel to that of the assigned lawyers. That cannot be so. His general supervisory duty relates only to the control of public expenditure. Nor can it be said that some judicial duty is to be presumed from the fact-if it be so-that the appellant was relying on the Director to expedite his case and that this must have been apparent to the Director because of the frequent complaints and entreaties addressed to him by the appellant. The Director's position might be seriously imperilled and the due administration of the legal aid scheme greatly embarrassed if it were possible for an indigent litigant to extend the ambit of the Director's duties to the extent here suggested simply by being importunate."

Finally (at 270), the following passage is perhaps also worth bearing in mind, it said :

"... It is a forceful way of putting what I think is a valid and very important point viz.: that although both the Director and the solicitors have obligations to the aided person arising from the relationships between them, and although those obligations import into these relations a duty of care in the discharge thereof the obligations and duties of the solicitors and those of the Director, although connected by a common thread of interest in the manner in which proceedings are conducted, are not the same duties and obligations and may at times even be in conflict. The solicitor's primary duty is to his client; that of the Director to the public purse."

19. Mr Shum in his very able submission does not dispute the proposition or the correctness put forward by Mr Chow on behalf of the defendant by relying on the dictum I have read out in the judgment of McMullin VP. This is a case when one considers the question of duty of care and the alleged breach of duty where an outside solicitor, Mr Martin Fairbairn, had been assigned to look after the claim of the plaintiff against Mr Ho in relation to workman's compensation, the duty therefore that are alleged in paragraphs 12(1) - (5) of the Statement of Claim are all the duties (if they apply at all) of Mr Martin Fairbairn as assigned solicitor to the plaintiff. There was no parallel duty on the Director in relation to those five aspects pleaded in paragraphs 12(1) - (5). It seems to me that there is clearly no case of a breach of duty by the Director vis-à-vis the plaintiff in relation to those conduct alleged therein relating to the workman's compensation case. One only needs to read each and every one of these to appreciate that it is not for the Director but for Mr Martin Fairbairn to be doing those things :

1. failed to ask the plaintiff if he wish to attend the hearing of his claim under the Employee's Compensation Ordinance;

2. failed to inform the plaintiff the result of the proceedings under the Employee's Compensation Ordinance;

3. failed to take instructions from the plaintiff as to Ho's assets before levying execution;

4. failed to inform the plaintiff of the unsuccessful execution of Ho's property; and

5. failed to advise the plaintiff on the consequence of unsuccessful execution and the further course of enforcement open to him, including bankruptcy proceedings.

It seems to me that on the first limb, the first hurdle for the plaintiff to overcome under the workman's compensation claim, that hurdle cannot be cleared. Strictly speaking, that would be sufficient to dispose of the case, but I go on to proceed on the basis that I may be wrong and that somehow it could be said that there was a breach of duty by the Director and the question of limitation arises.

20. The matter was argued by the parties on the basis of two disputes : one of law and one of fact. The dispute of law is what is the meaning of section 22 of the Limitation Ordinance and whether disability under section 22(1) is limited to the kind referred to under section 22(3), that is infancy or unsound mind, or is of a more general kind. For the purposes of this judgment, I am prepared to assume in favour of the plaintiff that a liberal view should be taken, that is to say disability does not have to be of unsound mind in the sense of mental patient, but disability, under the Ordinance, can also assist the plaintiff if it is of the kind where the plaintiff could not manage his affairs. Now applying that test to the facts of this case, then the second dispute would have to be resolved. This is the dispute on the facts.

21. The case of the plaintiff and his evidence, strongly to this effect, is that he was totally incapable of looking after his own affairs. Has that been borne out by the evidence? I do not think so. As I have indicated earlier, in my view, the plaintiff was clearly receiving medical treatment, but he was, also clear to me, perfectly able to know what was going on and in fact his mobility, by going to the hospital every day, and his mobility by going to the Labour Department to obtain his cheque and to make the application for the Brewin Trust money and his own evidence that he really did not want to deal with the claim aspect until he was fully cured are facts from which I find that he was not disabled from managing his affairs and it therefore follows that on the facts of this case, the limitation plea could not be made out.

22. On the evidence, it shows clearly that upon his discharge in 1984, he was from 1984 to 1989 clearly much better and that, therefore, if there was, prior to 1984, an inability to manage his affairs, he certainly was able to do that after 1984. But, however, according to his own evidence, the fact was that he was discharged in April 1989 and he did not bring this action until July 1996. He would clearly be time-barred, even on his own admission, by April 1995 (6 years from April 1989). So it would seem that under the workman's compensation, the time-bar point is really unarguable.

23. There is a further string, however, to the limitation aspect. That does not, however, arise, as I understand from Mr Shum's submission, in relation to the workman's compensation aspect and I would touch upon and discuss it when I come to deal with the common law claim limitation.

24. So in relation to the workman's compensation, the plaintiff also falls down on the second hurdle of showing that there is no limitation bar.

25. I now turn to the third aspect which concerns the loss that had been suffered as a result of the breach of duty by the Director. The considerations that are relied upon by the plaintiff to contend that he has suffered loss is that Mr Ho was a man of some substance. The evidence given by the plaintiff to this court is that Mr Ho has two factories; has machines in each factory; has the ability to pay his workers; has imported material and there is no reason why he should not be able to satisfy the judgment. As I have indicated, I do not believe the plaintiff.

26. The contrary evidence is overwhelming. Firstly, there is the evidence that the bailiff's execution failed because there simply was not sufficient goods to answer to the execution. Secondly, that Mr Ho went to jail for three weeks for failing to pay and still he did not pay. Thirdly, that both the Labour Department as well as Brewin Trust considered, as had everyone else, that all avenues had been exhausted and that was why Brewin Trust gave $5,000 to the plaintiff, that is Mr Ho had no money. Fourthly, that legal aid was granted to Mr Ho and that was when the legal aid scheme was operated on the basis that an applicant would have to demonstrate that his total assets were below $3,000. Mr Ho was obviously able to satisfy the Department on that criterion. One must remember that when that happened, Mr Ho's application for legal aid was already a little bit later than the date of the accident, it was in 1971. The critical time was of course in 1972 and 1973. Was Mr Ho in such a financial position that he was able to pay then? I believe that clearly he was not, but the matter, of course, had to go a little bit beyond this because the case of the plaintiff is that if his case had been handled properly, he would then be able to say and point to Mr Martin Fairbairn where execution would yield result. It could have been a little bit 1972, or 1973, but it does not matter very much because the material put before the court certainly suggests to me that Mr Ho was not and could not pay that $14,000 workman's compensation. There has been no material put before this court (with all the evidence which could be presented by the plaintiff) to suggest that Mr Ho had the necessary asset to answer the judgment.

27. So I find as a fact that, in any event, no loss would have been suffered and, therefore, my conclusion on the claim of the plaintiff in relation to the workmen's compensation aspect is that the claim must fail.

28. I now turn to the claim for common law damages. Common law damages is, of course, a much more troublesome area. Unlike workmen's compensation, it depends on various circumstances as to whether an employer could be said to be liable because of the accident. This accident occurred in such a way that it is arguable that in the agony of the moment, Mr Ho did what he thought was reasonable in the circumstances and although it was unfortunate that the plaintiff was injured, what Mr Ho did might not amount to negligence. So this is not a straightforward or open and shut case such as workmen's compensation.

29. Now what is the scope of the duty of care of the Director or of the Department to the plaintiff? The evidence indicates, and I accept, that the plaintiff at no time had applied for legal aid for common law damages. The ledger book of the Department certainly does not suggest that; no document had been put forward to suggest to the contrary and there is strong probability that no legal aid application had ever been made by the plaintiff and I so find as a fact. Without legal aid application having been made, there was simply no question of a duty of care by the Department to the plaintiff. McMullin VP's judgment in Ngao To-ki certainly indicated that the primary duty of the Department is to ensure that public fund is properly expended on legal aid. As part of that duty, it is within the scope of the statutory duty of the Department not to waste its funds on hopeless causes. Imagine in 1972/early 1973, that would be the appropriate time when legal aid application might possibly be considered by the plaintiff to pursue the common law claim. What would be the reaction of the Department or the Director. There was not even the recovery for the $14,000 against Mr Ho in relation to the workman's compensation claim, would the Department or could the Department, in conformity with its statutory duty, grant legal aid to pursue a common law claim for a great deal more money with all the legal complication and incurring of costs when the answer was clear that there would be no recovery. It seems to me that the overwhelming evidence is that there was no application for legal aid, and that is why there was no involvement of outside solicitor; and that is also why, as far as the Department was concerned, that was the end of the matter. It is not the duty of the Department to volunteer legal aid, or to grant legal aid in these particular circumstances. Paragraphs 12(6) - (12) in the Statement of Claim pleaded various aspects where it is contended that the Department has an obligation and the duty of care to the plaintiff. Let me just take the first one :

"(6) failed to take instructions from the Plaintiff as to whether to proceed with the common law claim;"

That, of course, would presuppose there was already an application for legal aid, a granting of the legal aid certificate, an assignment of outside solicitors (because we know that the Department was not able to handle it in-house); and then there is the question as to how to proceed with the claim for common law damages. It seems to me, on the facts of this case, that paragraph 12(6) is simply a non-starter and the same can be repeated again and again in relation to all the other heads of breach of duty.

30. On the question of the duty of care alleged to be owed by the Department to the plaintiff in relation to common law claim, I therefore hold that :

(1) that there was no duty of care in these circumstances; and

(2) that there was no breach.

31. I now turn to the question of limitation in relation to the common law claim. What I have said earlier in relation to the limitation on the workman's compensation of course equally applies except in this case I think there is a new element which Mr Shum relies upon. Mr Shum's case (and Mr Ozorio, when he appeared before me earlier, also made the same point) is that this is a case where it is not a simple one-off breach because it is a breach of one-off duty, but it is a continuous duty and therefore there is a continuous breach which went on way beyond the appropriate accrual of the cause of action. The normal cause of action, on the basis that we have analyzed, would have accrued probably sometime in March 1973 because that was the last date when the writ against Mr Ho for personal injury should have been issued, so the time-bar would have occurred in March 1979.

32. The argument put by Mr Shum to me today is that the duty of the Director to do various things as set out in paragraphs 12(6) to (12) is a continuous duty. I disagree. These duties, whether of omission or of commission, must be done within a reasonable time. Again taking paragraph 12(6) which we have dealt with earlier :

"(6) failed to take instructions from the Plaintiff as to whether to proceed with the common law claim;"

that duty must be a duty to take instructions within a reasonable time. It cannot be said that he could take instructions at any time. It must be within a reasonable time, and once that reasonable time has past, then there was the breach and that is the general way one looks at limitation and accrual of cause of action. I regret that I am unable to accede to the argument of Mr Shum who, of course, was invited by this court to produce concrete case examples or authoritative decisions of the kind of daily continuing duty of care which allows limitation period to be indefinitely prolonged. Unfortunately no such authority had been produced to the court. I therefore conclude, on the common law aspect, that the limitation defence succeeds and that the plaintiff is barred by that limitation defence. There is no loss in any event and as I have said earlier in relation to the workman's compensation, this also applies to the common law claim. It follows therefore that the plaintiff's claim on the common law negligence by the Director also fails.

33. The conclusion, therefore, is that the action of the plaintiff against the defendant must be dismissed. It seems to me that it is worth pointing out that this is a case where a great deal of energy and expense of the public had been spent at the call of the plaintiff for him to pursue the proceedings. It cannot be denied that the plaintiff had suffered serious injuries and it cannot be denied that this was very regrettable. He is certainly deserving of the compassion of a lot of people for the pain and injuries caused to him, but sympathy and compassion is not the same thing as legal right. The plaintiff had chosen to assert a legal right which was plainly not there, and in the course of pursuing that legal right, he has, I believe, squandered a great deal of the resources and the goodwill of many of the kind people of Hong Kong, including at least three barristers, a number of solicitors and also the Legal Aid Department, in having his case reviewed repeatedly. The truth of the matter is that the plaintiff had been very unfortunate in having suffered injuries in circumstances where his employer was not in the position to give him the compensation that he otherwise might have deserved. But this court must act according to the law and the facts which both show clearly that the plaintiff cannot and does not deserve to succeed in this action.

34. I would now hear the parties as to the costs of this action.

[Submissions on costs]

35. I think the costs of the action, including the costs previously reserved must be awarded to the defendant.

36. I would like to express my gratitude personally to all counsel for the work they have done which made the task of judging this difficult case somewhat a little bit easier.