ZHENG BIAO v. KWOK WAI LUNG AND OTHERS

HCPI 115 /2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 115 of 2001

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J U D G M E N T

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Background:

1. This is an action for damages for personal injury. While there is no dispute that the Plaintiff (Mr. Zheng), was injured in an accident, both liability and quantum are at issue.

2. Mr Zheng is a citizen of the People's Republic of China, and had come to Hong Kong lawfully as an imported worker on a construction project associated with the New Airport Railway. The principal contractor on the project was the 3rd Defendant, Maeda-Kumagai Joint Venture (Maeda). Mr Zheng is an electrician by trade, and was employed by the 2nd Defendant, Ryoden Engineering Company Limited, (Ryoden), in that capacity, on a 10 month contract which was due to expire on 8 June 1998.

The accident:

3. The accident occurred in the following way. On the morning of 29 April 1998, Mr Zheng had gone to a container office in the construction site where he was working, at Tsing Yi North Bridge, to clock in before work. Having clocked in, he then walked along a rough walkway between container offices and containers used for storage, towards another container in which were stored items of equipment that he would use on that day. This container was directly adjacent to, and parallel to, a rough mud track used as a roadway for vehicles engaged in construction work.

4. To enter the container it was necessary for Mr Zheng to turn right, from the walkway, onto an unformed pathway between the roadway and the storage container. As Mr Zheng walked along the walkway he was following close behind another worker. That worker made the right turn into the pathway adjacent to the roadway first, and Mr Zheng followed him. Approaching them, on the roadway, was a small 5.3 tonne crane lorry. The lorry was driving slowly, and as it did so, Mr Zheng saw the man in front of him converse with the driver, pat the side of the cab, and enter the container. As Mr Zheng followed him, intending also to enter the container, the lorry struck him, crushing him between the lorry and the container.

5. Although Mr Zheng did not lose consciousness he was dazed and fell to the ground. He suffered injury in the accident. I shall refer to his injuries in more detail when dealing with the issue of quantum.

6. The lorry was driven by an unknown driver. Mr Zheng alleges that the lorry that struck him bore the registration number EY 3871. That lorry is owned by the 1st Defendant, (Mr Kwok) who held third party insurance cover with the 4th Defendant, New India Assurance Company Limited (New India).

7. Neither the driver nor Mr Kwok can now be found. New India, as the third party insurers, have been joined to the proceedings as 4th Defendant, in its capacity as an "Insurer Concerned" within the definition of the Domestic Agreement dated 1 February 1981 between the Motor Insurers' Bureau of Hong Kong and Authorised Motor Insurers (the MIB Agreement). Mr Zheng seeks a declaration to the effect that New India must be obliged to indemnify any liability found against Mr. Kwok, to the extent that any judgment against Mr Kwok is not satisfied within 28 days of judgment.

The issues:

8. A number of issues arise for determination. First, New India deny that the vehicle involved in the accident was the lorry bearing registration number EY 3871. New India then says that even if that vehicle was involved in the accident, Mr. Zheng has not established that the vehicle was being driven by an authorised driver on behalf of Mr. Kwok, or for an authorised purpose. While contributory negligence on the part of Mr Zheng was pleaded in the defence, that issue was not pursued at trial. There are the usual issues as to whether Ryoden, the employer, and Maeda, the principal contractor, are liable, either under the tort of negligence or by way of breach of statutory duty, for the accident which caused the injuries to Mr Zheng. Next, there is an issue between Ryoden and Maeda, on the one hand, and New India, on the other, as to the contribution between the driver/owner of the vehicle, and the two construction companies. There is no contribution issue between Maeda and Ryoden. Next, New India say that under the terms of the third party insurance policy, they should not be held liable to indemnify the owner of the vehicle, because the event occurred not on a road, but in a construction site. This issue raises questions of the interpretation of the policy, and the interpretation of the Motor Vehicles Insurance (Third Party Risks) Ordinance, Cap 272. Finally, there are the usual issues of the extent of the injury, the consequences of the injury, and the quantum of damages to be awarded.

Which vehicle was involved:

9. The evidence of Mr Zheng himself was not sufficient, even on a balance of probabilities, to establish the identity of the vehicle that struck him. The best that he could say was that he had been told the registration number about a year after the accident. He could not remember whether he was told the registration number by his lawyers or by a safety supervisor employed by Ryoden.

10. The evidence of the Ryoden safety supervisor, Mr Chan, was that shortly after the accident, having returned from the hospital where he saw Mr Zheng, he spoke to the foreman of a company called Kam Bong, which had a site office in a container, adjacent to the container Mr Zheng was to enter. That foreman told Mr Chan that the vehicle involved in the accident was a crane lorry registered number EY 3981, that was used by Kam Bong. Mr Chan knew the vehicle and was familiar with it on the site. While the evidence of the identity of the vehicle is hearsay evidence, having regard to Mr Chan's own knowledge of the vehicle, and the circumstances in which he was told the registration number, I am satisfied on the balance of probabilities that the vehicle that struck Mr Zheng was the crane lorry registered number EY 3981.

Was the driver authorised:

11. There was no evidence at all as to who was driving the vehicle, nor the purpose for which it was driven. In those circumstances, it was argued for New India, that, as the accident took place just prior to 9 a.m., the inference was open that, at the material time, the vehicle may not have been being used for an authorised purpose or by an authorised driver. I place no weight at all on the time at which the incident occurred. There is nothing at all unusual about vehicles being used on a construction site early in the morning, especially just before 9.00 a.m. when work will usually begin. I am satisfied that, in the absence of in any evidence to the contrary, the evidence is sufficient to establish that the vehicle was being driven by an authorised driver, and for an authorised purpose, at the time of the incident. In so holding, I have had regard to Laycock v Grayson (1939) 55 TLR 698, Barnard v Sully (1931) 47 TLR 557 and Rambarran v Gurrucharran [1970] 1 WLR 556.

Was the lorry driver negligent:

12. It is beyond argument, and it was not seriously argued otherwise, that the driver of the lorry was negligent. The pathway running parallel to the construction site roadway was unformed, and was some three to four feet wide, adjacent to the container office. There was no distinct boundary between the roadway and the pathway, in the way in which a guttering forms a distinct separation on public roads with adjacent footpaths. The pathway upon which Mr Zheng was walking was the appropriate place for a pedestrian to walk. There was a plain obligation on the driver of the crane lorry to manoeuvre his vehicle in such a way that he did not come into contact with either pedestrians on the pathway or the container itself. The clear inference to be drawn from the undisputed evidence is that in carrying out a conversation with the worker walking in front of Mr Zheng, the driver of the crane lorry has failed to see Mr Zheng. That failure was a plain breach of the duty of the driver. Having found that the vehicle was being driven by an authorised driver, for an authorised purpose, Mr. Kwok is accordingly, vicariously liable for the acts of the driver.

Is there any liability on Ryoden and Maeda:

13. It is trite law that both Ryoden, as the direct employer of Mr Zheng, and Maeda, as the principal contractor, and both as occupiers of the site, are required to provide safe access, and a safe place of work to Mr Zheng, who was an employee and a worker at the site. New India, in its defence, admits that both Ryoden and Maeda were negligent and adopts the allegations of negligence, breach of common duty of care and breach of statutory duty made by Mr Zheng against them.

14. The evidence established that the construction site road in question was a two way road, about 10 to 12 feet wide, and that at the entrance to the construction site a speed limit of 5 kmph was posted. The road was a dead end road, over which half a dozen or so vehicles a day passed. Its primary purpose appears to have been to allow vehicles carrying construction materials to enter the site in order to deposit those materials. In the area where the accident occurred there were a number of containers being used either as offices or for storage.

15. The narrow nature of the road, the narrow nature of the pathway, and the lack of any clear demarcation between the two, creates a situation where there is a real risk that a vehicle using the roadway may stray on to the pathway. The proximity of the container offices and storage containers to the pathway creates a situation where men will be regularly using the pathway to gain access to the containers. In those circumstances, where it is reasonably expected that men will be walking on the pathway, in close proximity to vehicles using the roadway, the probability of an accident greatly increases.

16. It is right, as Mr Lin submitted, that an occupier is not bound to guard against improbable but possible accidents, the occupier only being bound to exercise care to prevent probable accidents; see Bolton v Stone [1951] AC 850. Having regard to whole of the circumstances of the roadway, the pathway and the containers, I am satisfied that the risk of an accident between a man on the pathway and a vehicle on the roadway was a probability not a possibility. In my view, the fact that only a few vehicles a day may use the road ought not to exempt the occupiers from the duty to fence the road as I have described.

17. While it would not be necessary to fence the entire road I am satisfied that, having regard to the regular use of the containers as offices and for storage, directly adjacent to the roadway, it was incumbent on both Ryoden and Maeda to fence, at least, those areas of the pathway adjacent to the entrance doors to containers, and probably the whole length of a container adjacent to the roadway. Such fencing can be cheaply and effectively undertaken by the use of plastic netting. It is right that such netting would not act as a physical barrier preventing a vehicle from coming into contact with a man on the pathway, but it would create a clear demarcation between the pathway and the roadway which would have the effect of guiding vehicles on the roadway and keeping them clear of the pathway. I am satisfied that had such fencing been in place this accident would not have occurred.

18. I am accordingly satisfied that both Maeda and Ryoden failed to discharge their duty at common law and as occupiers in statutory liability to provide safe access to persons using the site.

The contribution between the driver and Ryoden and Maeda:

19. The greatest part of the responsibility for this accident must lie with the driver of the vehicle. He failed completely to keep a proper lookout, and failed to avoid, as was his duty, both Mr Zheng and the container. While the driver would have been assisted in discharging that duty by the provision of fencing, primary responsibility to avoid both the container and Mr. Zheng still lay with him. In those circumstances, I am satisfied that 15% of the liability should lie with Maeda and Ryoden, and 85% with the driver.

Is New India liable to indemnify the driver under the policy:

20. By s 4(1) of the Motor Vehicles Insurance (Third Party Risks) Ordinance Cap 272, (the Ordinance), it is an offence:

"....for any person to use, or to cause or permit any other person to use, a motor vehicle on a road unless there is in force in relation to the user of the vehicle by that person or that other person, as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Ordinance."

The section goes on to provide for penalties and to set out limited exceptions which are not relevant here. Section 3(1) of the Ordinance applies the Ordinance to private roads, but with a special exemption in relation to roads on construction sites in the following terms:

"For the avoidance of doubt, it is hereby declared that the provisions of this Ordinance shall apply to private roads, other than private roads in areas wholly or mainly used for the carrying on of construction work or industry, as they apply to roads...." (the emphasis is mine).

There was no dispute that the roadway at issue in these proceedings was a road that fell within that exemption, and that accordingly there was no statutory requirement that a vehicle using the roadway should have third party risk insurance.

21. The insurance policy issued for the vehicle is, on its face, a standard commercial vehicle policy with all the usual terms that one might expect. Section I relates to insurance on the motor vehicle itself and is in a standard form with the usual exceptions. Section II is entitled "Liability to Third Parties". Clauses 1 and 2 provide as follows:

"1. The Company will subject to the Limits of Liability and the Jurisdiction Clause indemnify the Insured against all sums including claimant's costs and expenses which the Insured shall become legally liable to pay in respect of

(a) death or bodily injury to any person

(b) damage to property where such death or injury or damage arises out of an accident caused by or in connection with the Motor Vehicle or the loading or unloading of the Motor Vehicle.

2. The Company will subject to the Limits of Liability and the Jurisdiction Clause indemnify any Authorised Driver against all sums including claimant's costs and expenses which the Insured shall become legally liable to pay in respect of

(a) death or bodily injury to any person

(b) damage to property where such death or injury or damage arises out of an accident caused by or in connection with the Motor Vehicle or the loading or unloading of the Motor Vehicle."

There is nothing in the policy in the provisions of the Limits of Liability or the Jurisdiction Clause which is relevant to these proceedings.

22. Because of the exemption of construction site roads from the requirement for vehicles using those roads to have third party risk cover, a policy which is deliberately expressed to not extend to such roads would be perfectly lawful. It may even be that an insurer, choosing to so limit a policy, may feel able to offer a reduced premium. Mr. Sadhwani made two arguments for New India. First, he said that because there was no statutory requirement for third party risk cover for a vehicle on a construction site road the court should not extend the policy to cover such roads. Second, he argued, relying upon Churchill Insurance v Charlton [2001] EWCA Civ 1230 CA, that on a proper interpretation of the policy cover did not extend to this accident.

23. On its face, the policy in this case is not limited, in the sense that it is not restricted so that it does not offer cover when the insured vehicle is on a construction site road. There is no such limitation in the clauses I have cited above or elsewhere in the policy. In the absence of such a limitation, I can find nothing in the Ordinance, nor in public policy, which would require me to so limit the policy.

24. Further, the submission appears to disregard the consequence of s 6(2), which provides:

1. "Notwithstanding anything in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the persons or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of persons."

This provision makes it plain that if a third party indemnifier chooses to give cover under the policy that is wider than that required by the legislation, then the insurer shall be liable according to the terms of the policy.

25. The facts in Churchill were that the claimant was a rear seat passenger in a car which was stationary in a hotel car park. The insured driver deliberately reversed his car into the car in which the claimant sat. As a result the claimant sustained significant injury. The driver subsequently pleaded guilty to causing criminal damage, but there was no evidence to suggest that he intended to injure claimant. Two points were taken by the insurance company. First it denied that the incident was an "accident" within the meaning of the policy. Second, it contended that as the incident did not happen on a road, there was no statutory obligation on the company to indemnify the driver, and that accordingly the policy should not be construed to extend to cover an accident, not on a road.

26. The case is not easy, and is complicated by the fact that the judges where required to analyse the issue as to whether or not the deliberate act of the insured driver was an "accident". They concluded that it was not. The case does however appear to be authority for the proposition that in England an indemnifier under the third party requirement is not, apparently notwithstanding the provisions of a policy, required to indemnify the insured beyond the extent of the duty imposed upon the insurer under the provisions of s 151 Road Traffic Act 1988.

27. The simple answer to the suggestion that this conclusion applies in Hong Kong lies in s 6(2) of the Ordinance, set out in paragraph 22 above. No equivalent or similar provision exists in the English Act. It is quite clear that the effect of s 6(2) is that notwithstanding any limits that may be argued there are upon the duty of indemnifier giving indemnity pursuant to the Ordinance, if the indemnifier chooses to issue a policy giving indemnity to the policyholder beyond the strict limitations of the requirements of the Ordinance, then the indemnifier will be bound by the terms of the policy, and obliged to hold the insured protected. I am accordingly satisfy that, notwithstanding any argument that there was no statutory obligation on Mr Kwok to have third party cover in respect of the use of a vehicle on a construction site, the policy he held, issued by New India, did in fact cover accidents involving third parties, occurring on a construction site, whether on a road or not, and that accordingly New India are obliged to hold Mr Kwok indemnified.

28. It is right, as Mr. Sadhwani submits, that, as a matter of procedure New India has come in to the action in its capacity as "Insurer Concerned" under the MIB Agreement, and accordingly is not exposed, as pleadings presently stand, to a direct judgment against it in favour of Mr Zheng: see Hong Kong Civil Procedure 2004 16/L/16. It is not necessary for me, because the policy is not limited to the requirements of the Ordinance, to consider the situation under the MIB Agreement. The simple situation is that I find, that as matter of the interpretation of the policy, New India is obliged to indemnify Mr. Kwok.

Mr. Zheng's injuries:

29. As a result of the accident on 29 April 1988 Mr Zheng suffered apparent soft tissue injury to his pelvis, his left shoulder, and his chest. He was admitted to Yan Chai Hospital shortly after the accident where he was observed for several hours, before being discharged with analgesics. His condition was treated conservatively and he was placed on sick leave. On 25 May 1998 he returned to the Accident & Emergency Department of Yan Chai Hospital, and was referred to the Department of Medicine for further treatment. On 18 September 1998 he was referred to the Department of Orthopaedic and Traumatology for further investigation. The diagnosis was multiple joint pain. He commenced physiotherapy on 12 October 1998. After five months physiotherapy treatment he had regained full mobility in his left shoulder but still had persistent pain over his left chest and at the back region.

30. Mr. Zheng's present complaints are periodic chest pain on the left side when excited, neck pain on movement of the neck, rib pain on the left side of the chest on the movement of upper limbs, feeling of right hip pain when sitting with legs crossed, right hip pain after walking or standing for more than 1 to 2 hours, and inability, or difficulty, in carrying heavy objects. I am satisfied that Mr. Zheng's condition is genuine and that he has neither feigned nor exaggerated his condition.

31. Although there was some argument from Mr. Sadhwani that a later incident on 19 July 1998, when Mr. Zheng was admitted, again to Yan Chai Hospital, for a sprain injury to his left shoulder whilst lifting heavy weights, was the real culprit for the conditions Mr. Zheng now suffers, I am satisfied that that was merely an exacerbation of a present condition existing as a result of the accident on 29 April 1998, and not a new injury.

32. There is a mild disagreement between the two orthopaedic surgeons who have made reports. Both agree that Mr. Zheng can now resume his pre-accident job as an electrician, although with some limitations and decreased working deficiency and loss of earning capacity, estimated at 5%. They disagree on the extent of time for which sick leave was appropriate, the Defendants' doctor asserting no more than five months, and the Plaintiff's doctor arguing for up to one year.

33. Mr Zheng was on sick leave from 29 April 1998 to 30 September 2000. That is a period of two years and five months. There is no dispute that throughout the whole of that time he was given appropriate sick leave certificates by doctors, and there is no suggestion that those doctors have acted in any way improperly. While it may well be that a person suffering from the same injuries might have gone back to work earlier, in the absence of any evidence to challenge the validity of the sick leave certificates for the period of two years and five months, upon which Mr Zheng was entitled to rely, I am satisfied that the period of sick leave cannot be challenged. It is right that both orthopaedic surgeons have said that a shorter period would be appropriate, but neither directly questions the validity of sick leave certificates issued.

Pain, Suffering and Loss of Amenities of Life:

34. In the usual way a number of comparables were cited by counsel in relation to damages. Mr. Wong for Mr. Zheng argues that the damages for PSLA should be set at $345,000. For Ryoden and Maeda it is argued that the sum should be $120,000, and for New India, $80,000. Having seen and heard Mr Zheng, and having regard to his present complaints, and having considered the various medical reports, I am satisfied that he will continue to suffer some pain and discomfort in his neck and shoulder as a result of the accident. In fixing the damages under this head I bear in mind that Mr Zheng was only 22 years of age at the time of the accident and will accordingly suffer the consequences for many years to come. Weighing all these matters I fix damages for pain suffering and loss of amenities of life at $180,000.

2. Pre-trial loss of earnings:

35. There is no dispute between the parties that Mr Zheng's pre-accident earnings were HK$16,035.18. Mr Zheng's contract with Ryoden was due to expire on 8 June 1998. The Defendants' contend that consequently he is entitled to loss of earnings only for the period of 1.3 months, to 8 June 1998. Mr Wong contends that by virtue of s 48 Employee's Compensation Ordinance Cap 282 it is an offence for an employer to terminate an employee's contract by virtue of an incapacity giving rise to an entitlement to compensation, and that accordingly it follows that the injured man is entitled to compensation for loss of earnings until he is declared fit for work.

36. Counsel for the Defendants' argue that that is a misinterpretation of s 48, and that the contract, expiring by the efluxion of time, comes to an end, and with its entitlement for loss of earnings. That argument however disregards the fact that by virtue of the incapacity the injured person is prevented from taking another contract. I am satisfied that the fact that the worker is from the Mainland, and thereby required to return to the Mainland on the expiry of the contract is irrelevant. The contract itself permits an extension. Having successfully completed one contract the worker, upon returning to the Mainland, may obtain a new contract in Hong Kong.

37. I am satisfied that Mr Zheng is entitled to pre-trial loss of earnings for the 29 months from 29 April 1998 to 30 September 2000, at the rate of $16,640 per month, a total of $482,560. He must give the usual credit for weekly compensation payments received.

Post recovery loss of earnings:

38. Mr Zheng was permitted to stay in Hong Kong following the accident, whilst in receipt of Employee's Compensation payments, for the purpose of the present proceedings. From 30 September 2000 he was declared medically fit to work. He then chose to remain, unemployed, in Hong Kong. He can make no claim for loss of earnings during that period, because his earnings loss was as a result of his decision to stay in Hong Kong. He eventually returned to China on 28 March 2001. After his return to China he obtained work briefly at a much reduced income of RMB4,000 a month. While that sum is considerably less than his earnings in Hong Kong it is still a good income in China, and plainly the loss is not a consequence of the accident, but a consequence of lower income levels in the Mainland.

Future Loss of Earnings:

39. Mr Zheng is however in a unique situation. During the period he remained in Hong Kong he married a Hong Kong permanent resident. Mr Zheng has applied for a one-way visa to come to Hong Kong to live with his wife. While it may take some time, possibly as long as five years, I am satisfied that ultimately he will come and live in Hong Kong and hold a Hong Kong Identity Card in entitling him to work in Hong Kong. Consequently he is entitled to have future loss of earnings assessed on that basis.

40. Evidence was lead that in order to work in Hong Kong as an electrician he will be required to be registered. I am satisfied from the evidence and Mr. Zheng's work experience is such that he will be able to qualify in Hong Kong as a Grade A electrician without difficulty. The evidence was that the current salary of an electrician at that level is in the order of $20,400 a month. I accept Mr Wong's submission that, assuming he becomes a Hong Kong Identity Card holder in five years time, at age 32 the applicable multiplier would be 15. Mr Wong sensibly concedes that taking into account the vicissitudes of life and other imponderables the appropriate multiplier should be 13.

41. Mr Zheng's injuries are not such that he will be prevented from obtaining work as an electrician. However both doctors are agreed that he will have a decreased work capacity and some consequent loss of earning capacity. Taking a broad view of the matter I fix the future loss of earnings at $1,200 a month. The appropriate formula is therefore $1,200 x 12 x 13 = $187,200.

Loss of MPF contributions:

42. When he comes to Hong Kong Mr Zheng will be obliged to contribute 5% of his monthly earnings to the Mandatory Provident Fund (MPF). His employer will be obliged to contribute 5% of his monthly earnings. He is accordingly entitled to compensation for both his own reduced contribution and the employer's contribution lost as a result of his reduced earning capacity. The sum is $18,720, being 10% of the post recovery loss of earnings.

Future loss of earning capacity:

43. Mr Zheng claims a lump sum of $60,887.00 for future loss of earning capacity. I accept the Defendants' submission that the evidence is not such that I can say on the balance of probabilities that at some future time during his working life Mr. Zheng will lose his employment as a result of the injuries. Accordingly there should be no award under this head.

Special damages:

44. Hospital expenses of $308.00, and travelling expenses of $1,130.00 were not disputed. Mr Zheng claims a further $5,000.00 for herbal medicine and nutritious soups. There are no documents to support the claim but I find it to be modest and reasonable and I allow the sum.

Interest:

45. The period from the date of the issue of the writ (31 January 2001) to the trial is 3 years 5 months (41 months). I fix interest on PSLA at 2% to the date of trial, a sum of $12,300.00, and on pre-trial loss of earnings and special damages ($488,998.00), at 4%, a sum of $66,829.72. From the date of judgment interest shall run at judgment rate until payment.

Summary:

46. The damages awarded may be summarised as follows:

PSLA	$180,000.00
Pre-trial loss of earnings	$482,560.00
Post recovery loss of earnings	Nil
Future loss of earnings	$187,200.00
Future loss of earning capacity	Nil
Loss of MPF contributions	$ 12,300.00
Special damages	$ 6,438.00
Interest to date of trial	$ 79,129.72
Total:	$947,627.72

Judgment:

47. There will be judgment for the Plaintiff against the 1st, 2nd and 3rd Defendants for the sum of $947,627.72, with interest as declared. There will be an order nisi that the Plaintiff shall have his costs, to be taxed on a party and party basis, and on Legal Aid Regulations. In the likely event that I have made an arithmetical error in the calculations of damages, leave is reserved to apply.