CHU YUEN WAH v. LEE KWOK KEE AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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Background

1. The Plaintiff sustained serious injuries in a traffic accident on 8th June 1990. She was the passenger in a car driven by her husband. The car overturned. No other car was involved in the accident. The action was only commenced by her against her husband on 8th March 1994. The insurer of the husband joined as a party to this action and applied to strike out the action for being brought outside the limitation period: the limitation expired on 7th June 1993. The Plaintiff seeks an order to override the limitation period under s.30 of the Limitation Ordinance.

The principles

2. Lord Diplock in Thompson v. Brown (1981) WLR 744 observed that the onus is on the plaintiff and what the court has to decide is whether it would be equitable to allow the action to proceed. He further held that when a court directs the limitation not to apply, this is by way of exception because unless the court makes the direction, the primary limitation period will continue to apply.

3. In Donovan v. Gwentoys Ltd. (1990) 1 WLR 472, Lord Griffiths after referring to the equivalent of s.30(1), held at p.477 that:

"This subsection bestows upon the judge a discretion in unfettered terms to allow an action in respect of personal injuries or death to proceed despite the expiry of the limitation period if he considers it fair to do so having regard to the degree which the plaintiff would be prejudiced on the one hand and the defendant on the other hand."

Section 30(3) of the Limitation Ordinance requires the court in exercising the discretion to consider all the circumstances of the case and in particular to six factors, namely-

Lord Griffiths in Donovan v. Gwentoys Ltd. stated these specific considerations are not intended to place any fetter on the court's general discretion.

The six factors

4. I shall now consider the factors. The delay to be considered is the period between the expiration of the limitation and the commencement of this action, see Thompson v. Brown at p. 751 and Donovan v. Gwentoys Ltd. at p.478. In this case, the period is between 7th June 1993 and 8th March 1994, a delay of nine months. The Plaintiff has filed three affidavits. Her case for the delay can be summarised as follows. Firstly, she was not aware of the three year limitation period until advised by her solicitor on 17th January 1994. Her mind was preoccupied with coming to terms with her disablement and the last thing on her mind was seeking compensation. Furthermore, there was the problem regarding her husband's insurance policy. In June or July 1990, her husband was told by the insurer that the policy was void and if the husband sued the insurer, the insurer would seek an indemnity against the husband for the compensation the insurer might have to pay to the Plaintiff. Later, she was told by an officer of the Traffic Accident Victims Assistance Scheme that if the policy was void she would not be able to obtain any compensation from the insurer.

5. In October 1993, she received from the District Office a pamphlet published by the Motor Insurance Bureau ("MIB") saying that if there was no insurance, the MIB would satisfy judgments made against a owner or driver by a court in Hong Kong. Enquiries were then made. The MIB by a letter dated 17th November 1993 advised the Plaintiff to claim against the insurer and to seek legal advice. After that she was still struggling with whether to file a claim or not. She then tried to find a lawyer but did not know the way. She was still not sure whether she would have a successful claim without her husband being asked to indemnify the insurer.

6. Later she approached her younger sister who is a university lecturer, the sister approached the Hong Kong University Free Legal Advice Scheme but without success. Later the firm of Wilkinson & Grist was recommended to her sister. The firm was approached on 17th January 1994. The solicitor advised the Plaintiff of the time bar and she was then referred to Legal Aid. Legal Aid was refused on 1st February 1994. The Legal Aid Department by a letter of 21st February 1994 further advised her that she was not entitled to supplementary legal aid. She instructed Wilkinson & Grist to issue the writ on 8th March 1994.

7. On the question of cogency of evidence, for the purpose of s.30, the cogency is directed to the degree to which either party is prejudiced in the presentation of the claim or defence because the evidence is either no longer available or has been adversely affected by the passage of time. In Hartley v. Birmingham City District Council (1992)1 WLR 968 Parker L.J. held that, "What is of paramount importance is the effect of the delay on the defendant's ability to defend."

8. On the question of cogency of evidence in this case, there is no question of losing contact with witnesses or of witnesses becoming infirm or having died. There was no question of document lost or memories of witnesses having faded.

9. On the question of conduct of the defendant, the conduct of the defendant, as Lord Diplock in Thompson v. Brown held, included the conduct of its solicitors or insurers. In the present case the insurer had informed the husband of their intention to seek indemnity from him if the claim is made by the wife. As Miss Eu pointed out, the insurer has the right to take this stand. Mr Saroney relied on this matter not as a criticism of the 2nd Defendant but as one of the circumstances the Plaintiff relied for not pursuing the claim during the primary period of limitation.

10. On the conduct of the Plaintiff and steps taken to seek legal advice, the MIB by letter of 17th November 1993 asked her to seek legal advice and to sue the insurer. By then the limitation period had already expired. Mr Saroney submitted that, at the highest, if the letter is to be used against the Plaintiff, it showed that she had some claim. The advice that I should consider must be in the nature of legal advice. Lord Diplock in Thompson v. Brown at p.752 held that:

"Until he has obtained legal advice a plaintiff (unless he is himself a barrister or solicitor) will not know whether or not he has a cause of action for damages against the defendant"

11. On the question of disability, the Plaintiff was in hospital between 8th June 1990 and 20th October 1990. She is now a tetraplegic. She has paralysis of all the four limbs with loss of sensation in her body below her nipple line and loss of bladder and bowel control and loss of sexual function. She also suffers psychiatric disability in the form of depression. Mr Saroney is not relying on the injuries as a disability which would preclude her from bringing the action within time, instead they were relied upon as giving an insight to her state of mind during the primary period of limitation.

Equitable to extend time

12. Having considered all the circumstances, I am satisfied that it is equitable to extend time. The length of delay was not long. It was a delay of nine months after the expiration of the limitation period. Miss Eu argued that nine months was about one quarter length of the three year limitation period imposed by law. Furthermore, in cases like Thompson v. Brown, Hartley v. Birmingham City District Council and Simpson v. Norwest Holt (1980)1 WLR 968, the delay was much shorter and nine months was a long time.

13. I think the point on the period of delay is that it was not three years and nine months after the accident that the insurer first became aware of the accident. The insurer was notified by a report of the accident which was sent by the husband one day after the accident and there was a meeting between the husband and the insurer after the accident. Lord Griffiths in Donovan v. Gwentoys Ltd. at p.479 stated that,

"The primary purpose of the limitation period is to protect a defendant from the injustice of having to face a stale claim, that is a claim with which he never expected to have to deal."

It cannot be said that the claim in the present action can be regarded as stale.

14. As for the reasons for not commencing the action, this is someone who was injured by the negligent driving of her husband; she was not aware of the three year limitation period; she received information that the insurer would seek indemnity from the husband if she was to claim: in effect her claim would be a futile claim. Furthermore, her concern was to have a speedy recovery of her disabilities. Nourse L.J. in Halford v. Brookes [1991]1 WLR 428 at p.438 held that:

".... the plaintiffs ignorance of her legal rights may be a very important factor to be placed on her side of the balance."

As soon as she received information contained in the MIB pamphlet she took steps to seek information and legal advice. It is true that her husband has sought legal advice but she did not: there is no evidence to show that her contention is false.

15. The Court of Appeal observed in Dale v. British Coal Corporation Times L.R. July 1, 1992:

".... the test is an objective one: What would a reasonable man in the position of the plaintiff have done."

In my view, it is reasonable, at least it is not unreasonable, for the Plaintiff, in the circumstances of this case, not to have pursue the claim within the limitation period.

16. On the question of prejudice to the defendant, Lord Diplock in Thompson v. Brown at p.750 held that:

"A direction under the section must therefore always be highly prejudicial to the defendant, for even if he also has a good defence on the merits he is put to the expenditure of time and energy and money in establishing it, while if, as in the instant case, he has no defence as to liability he has everything to lose if a direction is given under the section. On the other hand if, as in the instant case, the time elapsed after the expiration of the primary limitation is very short, what the defendant loses in consequence of a direction might be regarded as being in the nature of a windfall."

Miss Eu argued that the 2nd Defendant must have suffered prejudice because if the claim was not brought within three years there would not be a claim against the insurer. Furthermore, the reference to "windfall" relates to a situation where the expiration of the primary limitation is very short. Miss Eu further argued that her client is prejudiced because having avoided the policy, the insurer could not seek co-operation from the husband; the insurer does not have personal knowledge of the accident and it could not for example, cross-examine the husband if he chooses not to give evidence.

17. In his statement to the police, the husband described how the accident occurred. He said he might have applied the brake too hard when he noticed a swinging of the car after he passed a road bend. While I should not go into details on the question of negligence, there really is no contrary evidence that the husband was not otherwise negligent in the accident. He was found guilty of careless driving, a charge which was contested by him. The Plaintiff was a passenger in the car: there was no question of contributory negligence on her part. With this background, to describe the 2nd Defendant as receiving a windfall because the action was not brought within the three year period could not be an exaggeration. It is not helpful in this context to concentrate merely on the length of delay. Leggatt L.J. in Hartley v. Birmingham City District Council stated:

"It was not for the judge to ignore what he called the windfall concept'."

18. Furthermore, there is no evidence that the insurer's ability to defend is affected by the delay. The problem regarding the cross-examination of the husband, or taking instructions from him would be the same even if the claim was brought within the limitation period. In any event, I am not persuaded that the position of the insurer is prejudiced in relation to the gathering of evidence from the husband. The husband had lodged a notice of accident, he had a meeting with the insurer and he had given a statement to the police. He could be subpoenaed to give evidence if oral evidence is required.

19. The Plaintiff has suffered a severe disability. The claim is substantial, she would be prejudiced if she is not allowed to pursue the claim. Unlike some of the cases that were referred to me in argument, there is no alternative party to pursue the claim. The prejudice is unmitigated.

20. The conclusion is that I shall direct that the limitation period shall not be applied in this case.

[Argument on costs. Hearing adjourned.]

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RULING ON COSTS

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Date of handing down ruling: 8th November 1995

21. Although the s.30 application was only brought in response to the 2nd Defendant's application to strike out the claim, the question of limitation is something that would have to be resolved at the trial if the matter is not dealt with at this stage. This is clear from s.27(3) of the Limitation Ordinance which provides that subject to s.30, an action shall not be brought after the expiration of the limitation period.

22. The costs should be part of the proceedings and I order that the costs of the s.33 summons and the summons to strike out be in the cause.