LAI CHEUNG MUI AND OTHERS v. WONG WAI LEUNG AND ANOTHER

HEADNOTES

              The District Court in an application for indemnity under Section 25 of the Employees' Compensation Ordinance has no jurisdiction to make an order for indemnifying an employer, Respondent, in respect of compensation paid for injuries caused to the employee for which a third person not being a contractor or sub-contractor of any nature was or might be responsible - a separate action must be instituted for such an indemnity under Section 25. NG Mei-ho & ors. v. LEUNG Sil (1962) D.C.L.R. followed. LAI Kit-ping, Employees' Compensation K.C.J. No.3 of 1984 not followed.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

EMPLOYEES' COMPENSATION CASE N0.144 OF 1984

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EX-TEMPORE - RULING

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1. It falls upon me to rule on whether or not the District Court in an application for indemnity under Section 25 of the Employees' Compensation Ordinance has jurisdiction to make an order for indemnifying an employer Respondents in respect of compensation paid for injuries caused to the employee for which a third person was or might be responsible. For, if not, a separate action will have to be instituted either in the High Court or in the District Court, depending on the amount of indemnity in question. Both Counsel urged me in their submissions to assume such jurisdiction and place heavy reliance on KCJ Employees' Compensation Case No.3 of 1984 (hereinafter called Case No.3) in which one of my brethren on the other side of the harbour held to the effect that Section 21 of the Employees' Compensation Ordinance does confer such jurisdiction on the District Court. Certainly my brother did not have the benefit of LEUNG Sil (1962) D.C.L.R., where Sir Alan Huggins, V.P. (Huggins, D.J. as he then was) ruled that the District Court did not have the jurisdiction on the ground that proceedings under the Workmen Compensation Ordinance, now known as Employees' Compensation Ordinance, were not "a civil action", as defined in the District Court Ordinance, 1953. Had my brother been aware of LEUNG Sil I venture to say that he might have gone the opposite direction in Case No.3. In the words of Sir Alan Huggins at page 55 of his judgment: -

"...Nevertheless I am clearly of the opinion that the words "civil action" in Section 24 of the Workmen Compensation Ordinance (Section 25 of Cap. 282 now ), 1953 were intended to refer to proceedings brought within the jurisdiction of the District Court by virtue of Section 14 of the District Court Ordinance 1953. 1 find some support for this view in the terms of Section 20, to which Mr. Grindey himself referred, because if proceedings under this Ordinance were civil actions they would have been necessary to provide that in determining questions under the Ordinance, the Court should have all the power and jurisdictions exercisable by the District Court in or in connection with civil action.(Emphasis by me)."

What was then Section 14 is of course now Section 32 in Cap. 336. A close look at the Employees' Compensation (Amendment) Bill, 1982 particularly Clause 30 at C 574 reinforces my view as expressed in my last Friday's ruling in VCJ Employees' Compensation 167 of 1984 CHIU Chan's case (hereinafter called CHIU Chan) that LEUNG Sil has not been affected, left alone overruled by the 1982 Amendment, which re-legislated Section 25. The ratio decidendi of Sir Alan Huggins was that a Workmen Compensation Application did not fall within a civil action and the word 'action' still appears in Section 25 after the 1982 Amendment. I cannot but presume that the legislature must have been aware of LEUNG Sil at the time when that Amendment was made. Had it been the intention to the contrary, it would have broadened the definition of action in its 1982 Amendment.

2. By the 1982 Amendment the word "civil" was deleted from civil action. However, such deletion, in my opinion, does not change the Law as it stands and correctly stated in LEUNG Sil whatever the intention of such deletion be, possibly to embrace other kinds of Court action but not necessarily Employees' Compensation Application.

3. There is the very forcible and able arguments on the past of Mr. Kwok that the deletion of the words "by the District Court Civil Rules" by the amendment to the definition of action under Section 2 of the Distric Court Ordinance in July 1962 (Bills of Hong Kong 1962 page 59 refers) which deletion in July 1962 came after Sir Alan's judmgnet in February the sane year had widened the scope of now Section 25 to include indemnity in an Employees' Compensation Application. A look at the 1962 Bill gives us no assistance at all as the Objects and Reasons did not specifically deal with that deletion. Be that as it may, I incline to the view that such deletion was to cover various situations such as appeal proceedings to the District Court under the Stamp Duty Ordinance and various reviews under various Ordinances rather than an Employees' Compensation Application. Emphatically, I fortify my own firm conviction by again referring to Sir Alan's words at page 55: -

".....The words "civil action" in Section 24 of Workmen Compensation Ordinance, 1953 were intended to refer to proceedings brought within the jurisdiction of the District Court by virtue of Section 14 of the District Court Ordinance, 1953 ... ".

It appears very clear to me that by "action" under Section 25(1)(b), it meant an action other than an Employees' Compensation Application as correctly interpreted by Sir Alan Huggins. The mischief which Section 25(1)(b) intended to put right was to give the aggrieved party the option of either joining in the action already begun by the employee against the third party or by instituting separate proceedings. Nowhere in Section 25 nor anywhere else in the Ordinance or the Rules thereunder was it mentioned or implied that an Employees' Compensation Application was to be included in an action referred to. Next, there is the submission by Mr. Kwok that Section 21(2) of Cap.282 was purposely added by the 1962 Amendment to confer the jurisdiction. With every respect, the sub-section goes no further than to make it crystal clear that the amount claimed may exceed the normal monetary jurisdiction of the District Court. It does not widen its jurisdiction in an Employees' Compensation Application to include the claim of an indemnity under Section 25. Apart from this additional sub-section, the wordings of Section 21 now were identical to those of Section 20 of the then Workmen Compensation Ordinance as first enacted in 1953 in the present context. It would follow therefore that Sir Alan Huggins had very much Section 20 then (now Section 21) in mind when he concluded his judgment in LEUNG Sil as he had expressly referred to the terms of Section 20 above cited as being against rather than for jurisdiction. I have also considered the other submissions particularly those by Mr. Lai, but with respect, I do not think that they hold water. Particularly the reference to definition of 'action' in Halsbury, 4th Edition, Volume 37, pages 24 to 25 are of no assistance to the advancement of his submissions if not really against rather than in favour of jurisdiction. Quitely properly Mr. Lai submitted that a separate action in this instant case would incur unnecessary time and expenses as being duplicity relying on what I had said at pages 3 and 4 of Chiu Chan. What were relied upon really must not be read in isolation but should be read in conjunction with what I had said in LEUNG Sil especially that LEUNG Sil has not been overruled by the 1982 Amendments to Section 25. Incidentally, my observation that third party proceedings were not intended to be limited to Section 25 at the bottom of page 3 was meant to be the solution of the submission by Mr. Yung in that case that indemnity in its jurisdictional sense was intended by the Legislature to be limited to Section 25.  For avoidance of the slightest doubt, I did not and I do not mean to convey in ChIU Chan that the District Court in an Employees' Compensation Application has jurisdiction to entertain an indemnity against a third party in respect of negligence.  CHIU Chan's case was that of litigation agmonst the principal contractor and various superior and inferior sub-contractors at different levels with the third party being one of the inferior sub-contractors within the ambit of "employer-employee" relationship and within the preamble to the Employees' Compensation Ordinance, namely "to provide for the payment of compensation to employees who are injured in the course of their employment". (Emphasis by myself).  Whereas in this instant case the third party not being a contractor or sub-contractor of any nature is alleged to have been responsible for the injuries caused, in the capacity of a third party in its true sense of a third party.

4. In the result, I rule that I do not have jurisdiction to entertain the indemnity issue in this Employees' Compensation Application.

5. To save time and the length of this Ruling, I shall deal with the matter of costs and other incidental matters in my Notes of Proceedings after hearing Counsel.

6. I am not unaware of the normal judicial practice that a judgment of the same level which comes later than one before it has the benefit of being more persuasive but with uttermost respect, in the words of Leggatt, J. in Steward v. Oriental Fire and Marine Insurance Co. Ltd. (1984) W.L.R.741 at 745: -

"Although there can be no benefit in having conflicting decision at first instance, I am nonetheless persuaded that if I were fully satisfied that the Bedford's case was wrong it would be my duty to say so, regardless of the temperity of such a conclusion."

I mention this becuase my brother's decision in Case No.3 came some 22 years after Sir Alan Huggins and at the 'sane level.

ADDENDUM

7. After I had delivered the above Ruling but before it was transcribed I have had the benefit of reading my Brother His Honour Judge Roy's Judgment VCJ Empoyees' Compensation Case No.113 of 1984 delivered the day before mine. That judgment further fortifies my views of no jurisdiction on indemnity insofar as S.25 - an independant contractor or non-substractor is concerned.