WING LUNG INSURANCE CO LTD v. WU SHU MAN t/a JAT SUN DECORATION ENGINEERING CO

DCCJ 754/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 754 OF 2008

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ASSESSMENT OF DAMAGES

1.  Wing Lung (the Plaintiff) was the insurer of Wu (the Defendant) under an employees’ compensation insurance policy covering the period between March 2004 and March 2005.  On 5 August 2004, an industrial accident happened to an employee of Wu at work.  As a result, Wu was prosecuted and convicted of offences under the relevant industrial safety regulations.  Claims for employees’ compensation (DCEC 95/2006) and common law damages (DCPI 1396/2006) followed.

2.  For breach of conditions of the insurance policy, Wing Lung repudiated liability.  Nevertheless, without prejudice to its rights, Wing Lung took over the conduct of the proceedings and was also joined as a party in the personal injuries action.  It eventually settled both sets of proceedings with the employee.  Wing Lung now claims against Wu for damages that effectively reflect an indemnity of the amount it has paid in settlement of the employee’s claims.

3.  Interlocutory judgment was entered against Wu on 28 March 2008 for damages to be assessed and costs.

4.  Wu has always been absent from the proceedings in the present action.  He is absent today.  Referring to the affirmations of service filed on behalf of Wing Lung, I am satisfied that these proceedings have been brought to Wu’s notice at his usual and last known address.  I am not aware of any circumstance that should prevent Wing Lung from proceeding today.

DCEC 95/2006

5.  The settlement sum was HK$39,731 with agreed costs of HK$8,000.  This was arrived at after the negotiation between the solicitors for the employee and Wing Lung respectively.  This is evidenced by the correspondence between the solicitors in February and March 2006.

DCPI 1396/2006

6.  According to the pleading, the employee claimed damages in the region of HK$800,000.  In June 2007, the claim was settled at HK$332,547 inclusive of interest.  Consent summons was filed for the disposal of the action.  Giving credit to the amount received by the employee, the net amount was HK$230,000.  The negotiation is evidenced by the correspondence between the parties’ solicitors in May 2007.  Wing Lung had to pay costs.  The employee’s costs claim was in the region of HK$220,000.  Negotiation between the parties’ solicitors began in June 2007.  In the meantime, appointment for taxation of costs was made and list of objections was filed by Wing Lung’s solicitors.  Eventually, parties agreed to settle at the amount of HK$130,000 in October 2007.

Wing Lung’s own costs

7.  For the employees’ compensation case, Wing Lung incurred costs of HK$5,500.  The breakdown was contained in the invoice and receipt issued by Wing Lung’s solicitors in February 2008.

8.  The costs incurred for the personal injuries action was more substantial.  The amount was HK$114,600.  The breakdown was contained in the invoice issued by Wing Lung’s solicitors in November 2007.

Conclusion

9.  Miss Chan, claims manager of the general agent of Wing Lung, who had the conduct of the employee’s claims, gave evidence.  I accept her evidence.  Also considering the documents, I am satisfied that these were genuine and reasonable settlement of both sets of proceedings.

10.  In summary, Wing Lung is entitled to be indemnified the following amount:

(1)	Settlement sum in DCEC 95/2006
	HK$(39,731 + 8,000)	HK$  47,731
(2)	Settlement sum in DCPI 1396/2006
	HK$(230,000 + 130,000)	HK$360,000
(3)	Wing Lung’s own costs
	HK$(5,500 + 114,600)	HK$120,100
	Total:	HK$527,831

Order

11.  I order that Wu shall pay damages to Wing Lung in the sum of HK$527,831 together with interest thereon at the judgment rate from the date of writ until payment.  Wu shall pay Wing Lung costs of this action including these assessment proceedings.  Costs shall be taxed.

Representation: