CHAN SIK PAN v. WYLAM'S SERVICES LTD. AND OTHERS

CACV 108/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRTIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 108 OF 2000

(ON APPEAL FROM HCPI NO. 648 OF 1995)

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REASONS FOR JUDGMENT

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Hon Woo JA (giving the reasons for judgment):

The applications

1. There were two applications before this Court both for leave to appeal to the Court of Final Appeal, one by the 3rd defendant Yu Chi Kong ("Yu") and the other by the plaintiff Chan Sik Pan ("Chan"). The applications were as a result of a judgment of this Court handed down on 31 July 2000. There was another application by the 1st defendant Wylam's Services Limited ("Wylam") seeking security for costs of the appeal, in case leave was granted, against Yu.

2. At the conclusion of the hearing on 20 December 2000, we granted leave to Chan and Yu with costs in the cause of the appeal before the Court of Final appeal. We also dismissed Wylam's application of against Yu. We proposed to hand down our reasons, and here they are.

Background

3. The matter arose out of an accident in Windsor House in Causeway Bay in which Chan was injured after falling from a platform on which he had been working on a fire services piping. He brought a claim against Wylam, the 2nd defendant Leung Kwok Chau ("Leung") and Yu for common law damages, the employee's compensation having already been dealt with in the District Court. The action was split into two parts, on liability and quantum of damages. The trial before Deputy Judge Z E Li was on liability, and one of the key issues requiring his decision was who of the three defendants was the employer of Chan. He held that Wylam was the employer, but this Court found that there was overwhelming evidence that it was Yu who was the employer and as a result, we set aside the Judge's judgment and found against Yu.

4. Both Yu and Chan sought leave to appeal from our judgment to the Court of Final Appeal.

5. Yu's application by notice of motion was taken out on 26 August 2000, within the 28 days from the date of our judgment as prescribed by s 24(2) of the Hong Kong Court of Final Appeal Ordinance, Cap 484 but Chan's notice of motion for leave was taken out on 14 September 2000. In the skeleton argument submitted for Wylam, counsel sought to argue that Chan's application was out of time and therefore leave should be considered against the factors whether there was reasonable explanation as to the delay and whether the intended appeal had merit. The argument caused Chan to file a notice motion to seek leave to appeal out of time. However, it transpired that Yu had applied for legal aid, and although it was eventually refused the notice of application for legal aid had stayed proceedings in the meantime. At the outset of the hearing before us, Mr Ng on behalf of Wylam very fairly dropped the point. Therefore we made no order on Chan's notice of motion for time.

The law on leave

6. Section 22 of the Ordinance provides as follows:

"(1) An appeal shall lie to the Court in any civil cause or matter-

(a) as of right, from any final judgment of the Court of Appeal, where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more, or where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more; and

(b) at the discretion of the Court of Appeal or the Court, from any other judgment of the Court of Appeal, whether final or interlocutory, if, in the opinion of the Court of Appeal or the Court, as the case may be, the question involved in the appeal is one which, by reason of is great general or public importance, or otherwise, ought to be submitted to the Court for decision."

7. It appears that unliquidated damages of a claim should not be considered as being within the ambit of para (a) of s 22(1). In Zuliani & Ors v Veira [1994] 1 WLR 1149, the Judicial Committee of the Privy Council dealt with the question of appeals as of right to it under the 1983 Constitution of Saint Christopher and Nevis, which was in pari materia as our s 22. Lord Nolan, delivering the judgment of the Committee, said at p 1155E-G as follows:

"In providing that the automatic right of appeal should arise only where the matter in dispute was of the value of (or in excess of) a precise figure the legislature has chosen not to include an award of unliquidated damages. In the view of their Lordships this provision should be strictly construed. No doubt there will be many cases, of which the present is one, where it can be said as a matter of utmost probability, or even of virtual certainty, that the damages ultimately awarded will be in excess of E.C.$5,000, and in such cases the Court of Appeal may very well think it right, as general rule, to grant leave in the exercise of its discretion. Equally, however, there may be cases-and again the present case may serve as an example-where the likely amount of damages is at or above the statutory threshold, but which are so lacking in merit that the Court of Appeal in its discretion would refuse leave."

8. In Cheng Lai Kwan v Nan Fung Textiles Ltd [1998] 4 HKC 1, at 3G-I, the Appeal Committee of the Court of Final Appeal cited the above passage and expressed agreement to it.

9. Mr Ng also referred us to Gary William Moore v The Royal Hong Kong Jockey Club, Civ App No 123 of 1989 (26 April 1990, CA, unreported), where this Court, differently constituted, refused to grant leave to appeal to the Privy Council. Fuad VP said at p 9 of the judgment:

"It is common ground for the purposes of this application that the decision of the Full Court in Hui Shiu Wing v Cheung Yuk Lin [1968] HKLR 176 correctly sets out the way in which the words 'or otherwise' in the rule should be interpreted and applied. That Court held that the ejusdem generis rule did not apply and that the expression 'or otherwise' contemplates cases which could not reasonably be described as being of great general or public importance. However, the Court held that the circumstances leading to the exercise of that discretion should be exceptional in the sense of not involving 'ordinary everyday questions' or, it was said, the case should present some unusual feature either of law or of fact."

The arguments - the amount of the damages

10. Mr Fung SC for Chan did not seek to argue that his proposed appeal was as of right under para (a) of s 22(1), nor did he assert that the question involved in the proposed appeal was one of great general or public importance under para (b) of the subsection. He merely urged us to exercise our discretion in a very limited scope under the "or otherwise" basis pursuant to the para (b). He submitted that the split of liability and quantum of Chan's claim was merely for convenience and that after liability was decided, there was a fair chance of the quantum being agreed. He assessed the quantum of damages to be around $6,000,000, albeit unliquidated for the time being. On the other hand, Mr Ng told us that he did not concede the amount of damages being $1,000,000 or over, and that Wylam was to challenge Chan for his having failed to mitigate damage. It was said that after the accident, despite the injury and disability suffered by Chan, he had not chosen to take up jobs that paid more, and therefore he had failed to mitigate his loss of earnings.

11. Mr Ng also pointed out that there was a concession in Zuliani that the damages would exceed the statutory threshold, whereas he was disputing that the damages in the present case would reach $1,000,000. He argued that Chan had the burden to satisfy us (a) that the damages in the present case, being unliquidated, were as a matter of utmost probability of the value of $1,000,000 and (b) that there was merit in the proposed appeal.

12. Without going into details, we are of the view the damages reaching or exceeding the $1,000,000 threshold under s 22(1)(a) is an utmost probability.

13. While we are bound to treat the unliquidated damages in this case as not entitling Chan or Yu to appeal to the Court of Final Appeal as of right, we are of the view that had the issues of liability and quantum not been split, the Judge would have assessed damages in addition to deciding on liability. It was purely due to convenience that the two issues had been separated, and it would be unjust to the proposed appellants if they were not allowed to pursue their appeal merely because the amount of damages had not yet been decided, if such damages would exceed the statutory threshold.

The arguments - merits and unusual circumstances

14. We do not think that Mr Ng was correct in contending that the intended appellants have the burden to satisfy us that their appeals are meritorious. According to our reading of the judgment of Lord Nolan, the burden is a lighter one, which is that the proposed appeal must not be "so lacking in merit" that we should refuse leave.

15. There are also unusual features of facts in this case. Chan's claim against the three defendants was in the alternative, because he could only succeed against one of them as his employer owing him a duty of care and a common duty of care and having failed in those duties. The Judge found against Wylam. Wylam succeeded on its appeal before us and we found that Yu was the employer and was therefore liable. If Chan or Yu was allowed to appeal, Wylam or Leung might be held by the Court of Final Appeal to be liable. All the four parties would be involved. On the appeal heard by us, while Wylam and Chan were both represented by senior and junior counsel, Leung and Yu were unrepresented. On that occasion, Leung and Yu mainly relied on respectively the submissions made by counsel for Wylam and for Chan. These two defendants were not legally trained and since they had not been found liable by the Judge they were understandably not too concerned but considered that it was mainly a battle between Wylam and Chan.

16. On the applications for leave to appeal, Leung and Yu were again unrepresented. Leung opposed the applications. This time, because of our judgment against Yu, Yu addressed us very briefly but stressed that he was told by the Judge at the trial to sit down and not to give further evidence (and Mr Fung had very helpfully identified the relevant passage at the bottom of p 177 of the transcript in Bundle D). He also said that Leung had told him that the Company (Wylam) had taken out insurance and he (Yu) was not required to do so. He further told us that the Company had dealt with Chan for four years after the accident before he (Yu) was sued. He was certainly aggrieved by our judgment and therefore wished to appeal.

17. The case therefore involves all four parties, and each of them is required to be present in proceedings concerning liability. If Yu was granted leave to appeal, Chan would be involved and if Chan was allowed to go to the Court of Final Appeal, again Yu would be involved, and that applies to Wylam and Leung as well.

18. As far as the merits of Chan's proposed appeal are concerned, Mr Fung relied on the fact that there was no part of our judgment which dealt with the ground raised in paragraph 5A of the Amended Respondent's Notice. That paragraph referred to various admissions made by Wylam that it was the employer of Chan. Although we do not accept that the so-called admissions availed Chan in attaching liability to Wylam, we are not disposed to say that the ground was so lacking in merit that leave should not be granted. We are further impressed with the fact that Yu was not allowed to continue with his evidence before the Judge. Perhaps the Judge had come to a tentative view that Yu would not be found liable so that his continuing with his evidence was quite unnecessary. Anyhow, Yu should not be deprived of an opportunity to raise the points which he now raised which had not been dealt with by the Judge or by us in our former judgment.

Conclusion

19. By the above reasons, we came to the conclusion that leave should be granted to both Chan and Yu to appeal to the Court of Final Appeal, and we exercised our discretion accordingly.

Security for costs

20. Mr Ng sought security for costs against Yu on the ground of believed impecuniosity because Yu had applied for legal aid. Indeed, on this matter, Yu told us that he had no money to pay the damages to be awarded against him. We have little doubt that Yu was quite impecunious. However, it appears that insofar as Chan is allowed to bring his appeal before the Court of Final Appeal, Wylam would have to incur legal costs in opposing that appeal. Yu's appeal would hardly raise the amount of the costs expenditure of Wylam. There was no application for security for costs against Chan, and Mr Ng told us that he could not make such an application because Chan was legally aided. While it is unusual for the Court to order security for costs against a legally aided party, it does not preclude such an application being made (see para 59/10/29 of the Hong Kong Civil Procedure 2001, p 810). To allow Chan to appeal without requiring him to provide security but not allowing Yu to do so would place Yu in a conceived unequal position, which we think we should not do, especially where Yu's participation in the appeal would not increase costs for Wylam. We therefore refused Wylam's application.