LIU KIN WAH v. BETTER PIPES INDUSTRIAL COMPANY LTD. AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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JUDGMENT

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1. On 22nd January 1987 a Master ordered that a summons by the appellant/2nd defendant to dismiss for want of prosecution the respondent/plaintiff's claim in an action for damages for personal injury be dismissed. It is against that order that the appellant ("defendant") now appeals. Moreover, in dismissing the summons the Master made an order for costs against the respondent/plaintiff ("plaintiff"). The plaintiff now cross appeals against that order.

2. The accident which forms the basis of the plaintiff's action for damages occurred at the defendant's warehouse at Hung Shui Kiu on the morning of 5th October 1981. According to a medical report the plaintiff after having fallen from a platform, sat and rested for an hour and then drove a delivery van back to the defendant's factory. He suffered a back pain which was initially slight but became more severe in the afternoon. On 8th October he was admitted to Princess Margaret Hospital where he remained for several days until 13th October. He then received physiotherapy treatment from 18th to 23rd October 1981 and occupational therapy from 23rd February to 13th March 1982, and was granted sick leave until 31st May 1982.

3. The matter was complicated by the fact that the plaintiff had sustained injury in an earlier accident that had occurred in 1973. Dr. Wedderburn, who first examined the plaintiff in November 1982, informed the Legal Aid Department on 23rd November that he had difficulty in separating the results of the two accidents and in apportioning symptoms and signs to the 1981 accident. He strongly recommended that both he and Professor Hodgson examine the plaintiff and arrive at a joint opinion as to the disability suffered by him in the 1981 accident.

4. On 18th March 1983 Professor Hodgson and Dr. Wedderburn produced a joint report in which they concluded that as a result of the 1981 accident the plaintiff suffered a prolapse of the intervertebral discs L4 and L5 and L5 and S1 as disclosed in a myelogram. They stated that until they received from Queen Elizabeth Hospital the X-rays and notes pertaining to the earlier injury they would be unable to evaluate the residual impairment sustained by the plaintiff.

5. On 4th May 1983 the Legal Aid Department was advised that the records relating to the 1973 accident had been destroyed. I understand that this had occurred prior to the 1981 accident.

6. On 2nd October 1984 the Legal Aid Department, acting on behalf of the plaintiff, issued the writ in this action. This was several days before the expiration of the three year limitation period.

7. The following is a timetable of subsequent events :

8. Mr. Litton, who appeared for the defendant on this appeal against the Master's decision, submitted that on a consideration of the course that the proceedings had taken and the principles governing the dismissal of actions for want of prosecution the Master was wrong in refusing to grant the defendant the relief he had sought. In support of his contention Mr. Litton made the following submissions :

9. Mr. Litton cited Biss v Lambeth, Southwark and Lewisham Area Health Authority^(l), Gloria v Sokoloff⁽²⁾, Martin v Turner ⁽³⁾, and Trotter, v Lambeth, Southwark and Lewisham Area Health Authority ⁽⁴⁾, Rowe v Tregaskes⁽⁵⁾ and Vaughan v F. Parham Ltd. ⁽⁶⁾  as well as the well known authorities Allen v Sir Alfred McAlpine and Sons Ltd.⁽⁷⁾ and Birkett v James ⁽⁸⁾.

10. The principles which emerge from these cases are too well known to bear repetition, and Mr. Ching, who appeared on behalf of the plaintiff, readily agreed that he did not take issue with Mr. Litton on any matter of law. He did, however, rely upon a number of matters which he submitted were sufficient to conclude this appeal in favour of the plaintiff.

11. First he drew the court's attention to the defence, filed and served on 20th December 1984, which contained a positive assertion that the plaintiff was merely employed as a driver of a delivery vehicle, an admission that the plaintiff had suffered an accident at the defendant's premises on the date alleged, an assertion that the defendant was on a frolic of his own, a plea of contributory negligence and an admission that the platform was unsafe to stand on.

12. Thus, he contended, the first issue that arose was whether the plaintiff had been on a frolic of his own. This had effectively been resolved in favour of the plaintiff by an admission in an affirmation of the defendant's factory manager filed on 19th January 1987 that there was no dispute that the plaintiff had been employed by the defendant as a driver of delivery trucks and was, inter alia, responsible for the loading and delivery of goods from the warehouse at Hung Shui Kiu.

13. Secondly, since the defendant was able in 1984 to make positive assertions on which it based an allegation of contributory negligence, and a further positive assertion that the platform was unsafe, the questions which arise and remain unanswered are what evidence does the defendant need to call and which witnesses are unavailable to testify? There had been no suggestion that the supervising foreman is unavailable to testify as to the scope of the plaintiff's duties. Indeed, the defendant had given no indication as to identity of any possible witness to the accident from whom a statement might easily have been taken shortly there - after but who is no longer available to give evidence.

14. Thirdly, the defendant had agreed in a written document dated 15th July 1982 and pertaining to employees' compensation, that on the relevant date at the defendant's warehouse at Hung Shui Kiu, the plaintiff had lost his footing while taking out rubber hose from the warehouse and had fallen from an iron frame and injured his back, that in accordance with the Employees' Compensation Ordinance the defendant was liable to pay compensation in respect of the injury and that a specified sum would be paid as compensation. Moreover, the defendant agreed in paragraph 4 of the document that by reason of his injury the defendant had been incapacitated from work for 232 days from 5th October 1981 to 31st May 1982.

15. Mr. Ching contended that in the light of this admission it lies ill in the mouth of the executive director to now affirm in his eleventh hour affirmation that he had come to know towards the end of March 1982 that the plaintiff had been employed since 16th March 1982 by another company and had, since 1st May 1982, set up his own company in competition with the defendant. Equally, in view of the long period of incapacitation, it is absurd to say that the defendant had thought that the injury was only minor.

16. Fourthly, that in an affirmation that was before the Master, the defendant's factory manager stated that due to the fact that the plaintiff had not issued a writ until almost 3 years after the accident, the defendant had thought that the matter was closed and had nothing to worry about. Thus Mr. Ching contended that, at least initially, the defendant had felt concern over the matter and that it is idle to suggest that it did not investigate the circumstances of the accident and take statements from all relevant witnesses.

17. Furthermore, he maintained that because of the employees' compensation claim and the written agreement, the defendant must have been alive to the distinct possibility that the plaintiff would institute a common levy action for damages against it. Indeed, Mr. Litton had conceded that the defendant could not have ruled out such a possibility.

18. In essence, Mr. Ching submitted that the defendant had not been able to demonstrate that the delay in setting down the action for trial had given rise to a substantial risk that it was not possible to have a fair trial of the issues or that it was such as is likely to cause or to have caused serious prejudice to the defendant as between itself and the plaintiff or between itself and a third party.

19. Mr. Ching further argued that there was no evidence that the defendants medical advisers would have been unable to ascertain the cause of the plaintiff's injuries if the defendant had asked him to submit himself for examination. This could and should have been done. Also there was no evidence that the defendant had made any attempt to make enquiries from the insurers as to the availability of the statements they would have taken in respect of the compensation claim.

20. It is plain from affidavits from a Legal Aid Counsel that settlement negotiations had been taking place between the Legal Aid Department and the defendant's solicitors, and that on 14th April 1986 the latter had indicated that although they were still concerned to have the plaintiff medically examined, their client was temporarily outside Hong Kong and they would have to await instructions in this regard. They must therefore have been of the view that an examination would be of use in determining which injuries were attributable to the 1981 accident. Had the defendant's solicitors been of the view that their clients cause had been prejudiced, it is surprising, says Mr. Ching, that they waited until the plaintiff filed a summons to amend the statement of claim before making an application to have the plaintiff's action dismissed for want of prosecution.

21. That this is so is further reinforced by the letter from the defendant's solicitors dated 13th March 1986, from which it is plain that settlement negotiations were continuing and that they were specifically asking the Legal Aid Department to take no further action until it had heard further from them.

22. Mr. Ching posed the question as to what had happened in the following six months that caused prejudice to the defendant. He pointed out that there was no evidence to indicate precisely what prejudice had arisen. Moreover, this was not a situation where the defendant had merely let sleeping dogs lie. It had actively been carrying on pre trial negotiations and had requested the plaintiff to defer action. Indeed Mr. Litton accepted that had the plaintiff set the case down for trial on the day after that on which the defendant's solicitors had indicated in that letter that they hoped to be able to reply to the Legal Aid Department, the defendant's case for dismissal of the plaintiff's claim would be weaker. Again, submitted Mr. Ching, there is no evidence that anything had occurred after that day to cause prejudice to the defendant.

23. As to the argument that the defendant company's paid up capital is merely HK$1 million, Mr. Ching observed that this figure has no direct relevance to the financial standing of the company and that no other material had been placed before the court to indicate its true financial position.

24. Whilst I am mindful of all the matters raised by Mr. Litton and of the authorities cited by him, I am of the view that, although there has been undue delay in having this action set down for hearing, the defendant has not demonstrated that it has been such that will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action. Nor do I consider that it has been shorn that the delay is likely to cause or has caused serious prejudice to the defendant.

25. The affirmations filed on behalf of the defendant and the matters referred to by Mr. Ching leave me in doubt as to the genuiness of some of the important factual background on which the contentions advanced on its behalf by Mr. Litton have been based.

26. Moreover, although I entirely accept that it is not incumbent on a defendant to stimulate a plaintiff into activity but may wait passively in the hope that the action will sink into oblivion, I find it impossible to say in this case that the defendant, in conducting the pre trial negotiations in the manner in which it did, as can readily be seen by the letter requesting the plaintiff to defer action until further notice, did not contribute to and actually agree to a measure of delay.

27. In all the circumstances therefore I have come to the conclusion that the defendant's appeal must be dismissed.

28. As to the Master's award of costs to the defendant I must confess some puzzlement. Although a judicial officer undoubtedly has a discretion in making an order for costs, it is the usual course, unless there is good reason to justify a contrary approach, to award costs to the successful party.

29. From what I have been told by both junior counsel, who appeared at the hearing before the Master, the letter dated 13th March 1986 from the defendant's solicitors to the Legal Aid Department was not before the Master because junior counsel for the defendant then took the view that as it was a "without prejudice" communication he could not properly disclose its contents to the Master without his client's consent. He now accepts, as do Mr. Litton and Mr. Ching, that with the benefit of hindsight this was not a correct view of the matter.

30. I am inclined to think that had the Master known the contents of this letter he would not have made the order for costs that he did. In any event, as this is an appeal by way of rehearing, I take the view that on the material before me the proper order for costs is one in favour of the plaintiff both in respect of this appeal and the proceedings before the Master. I therefore allow the plaintiff's cross appeal.