KWOK YU KEUNG v. YEUNG PANG CHEUNG AND OTHERS

HCPI 579/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.579 OF 2004

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D E C I S I O N

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1. This is an appeal by the 2^nd and 3^rd defendants against the order of Master de Souza made on 17 February 2005 dismissing the 2^nd and 3^rd defendants’ application for stay of these proceedings with costs.  The defendants’ application for stay of proceedings was on the grounds that the Hong Kong court is not the appropriate forum to hear this matter.

Background

2. The plaintiff claims damages against the defendants for personal injuries sustained by him from a traffic accident which occurred in the Guangdong Province of the People’s Republic of China.

3. At the time of the accident, the plaintiff was one of a number of passengers travelling in a coach driven by the 1^st defendant.  The coach was registered under the name of the 2^nd defendant and the coach service provided by the 3^rd defendant.

4. The plaintiff is and was at the material time a resident of Hong Kong.

5. The 1^st defendant, being the driver of the coach is and was at the material time a Hong Kong resident in the employ of the defendants.

6. The 2^nd and 3^rd defendants are companies incorporated in Hong Kong.

7. The accident occurred when the coach driven by the 1^st defendant collided with another vehicle which had overturned on the road.

8. The plaintiff together with a number of the other passengers in the coach were injured as a result of the accident and all of them were sent to Wei Loi Yuen People’s Hospital for treatment.

9. The plaintiff underwent an operation in the Wei Loi Yuen People’s Hospital.  After that operation, and seemingly against medical advice, the plaintiff discharged himself from the Wei Loi Yuen People’s Hospital and travelled back to Hong Kong to seek further treatment.  According to the plaintiff he did so because he complained of the environment in the Wei Loi Yuen People’s Hospital being unsatisfactory and the sanitation sub-standard.

10. It is common ground that the plaintiff had been invited by the Public Security Bureau (“PSB”) to take part in the mediation organized by the PSB arising from this accident, but the plaintiff did not take part in such mediation preferring to bring his claim for damages in Hong Kong.

Defendants’ application for stay

11. In making the application for stay, the defendants submit as follows :

(a)	since the accident happened in the PRC, the PRC court is the proper forum for the determination of the plaintiff’s claim as being the jurisdiction in which the tort was committed;
(b)	the proper law to apply would be PRC law, both because the accident occurred in the PRC and because that was a term of the contract of the carriage;
(c)	in PRC law, the concept of vicarious liability as it is known under Hong Kong law does not exist;
(d)	if the case was brought in the PRC, the plaintiff could only claim against the 1st defendant as driver (since the concept of vicarious liability is unknown in PRC laws), therefore, under the rule of double actionability the case cannot be brought in the Hong Kong courts.

Decision

12. Essentially two matters need to be determined in this application.  One the choice of law and secondly the proper forum (or whether the Hong Kong court is an appropriate forum).

A.  Choice of law

13. It has long been recognized that claims in tort raise peculiarly difficult questions of choice of law. 

14. Paragraph 6-04 of Clerk and Lindsell on Torts (15^th ed.) states as follows :

“If a tort is committed in France, it might at first sight appear that French law (the lex loci delicti) should govern all aspects of the claim.  However, if the claim is brought by claimants who are English school children on a coach trip across Europe and they allege negligence by the English coach driver, the connection with France as the place of the tort looks less conclusive.”

15. Indeed effect was given to such by the House of Lords in their decision in Boys v. Chaplin [1971] AC 356, where the plaintiff and defendant were both English nationals involved in a road collision in Malta.  Maltese law differed from English law in that under Maltese law, the plaintiff could only recover pecuniary loss, not compensation for pain and suffering as in English law.  The House of Lords concluded that as both parties were English and were only temporarily present in Malta, English law should apply as the system of law much more closely connected with the relationship between the parties.

16. In coming to such a decision, it can at once be seen that the general rule that the wrong be doubly actionable, both in England and the place where the tort was committed, can be displaced on evidence that in all the circumstances English law has the most significant relationship with the occurrence and the parties.

17. Quite apart from the legal rules itself, the defendants also rely on contract in submitting that PRC law should apply in this case.  The defendants rely on the fact that the boarding permit to the coach was issued subject to the terms and conditions of the carrier which the defendants say were displayed at the counter selling the boarding permits in the booking office.  (There is a factual dispute between the parties with the plaintiff disputing that he had notice of such terms.)  The defendants further rely on Clause 5 of such terms and conditions.

18. The agreed translation of Clause 5 of the terms and conditions are as follows :

“This company has bought third party passenger insurance both in PRC and Hong Kong, according to the stipulation by State law, if traffic accident occurs in Mainland, causing injury or death to passenger, the concerned insurance company will provide compensation.”

19. Upon such wording of Clause 5, I take the view that even if that clause applied, all it says is that State law requires the company to purchase third party insurance and in the event of accident in the Mainland causing injury or death to any passenger, compensation will be provided by the insurance company as required by State law.

20. Nothing in Clause 5 refers to governing law or jurisdiction as between the parties.

21. Moreover, whilst PRC laws may well apply to accidents occurring in the Mainland, it is not the governing law as between the parties under the contract of carriage.

22. Furthermore, the insurance contract obtained by the 2^nd or 3^rd defendants are privy only as between them and the insurance company.  Whatever may be stipulated in the insurance contract has nothing to do with and cannot be binding upon the plaintiff as to the governing law.  Therefore the stipulation in the insurance policy providing that the PRC Regulations as being the applicable law has no connection with Clause 5 of the terms and conditions of the carriage between the defendants and the plaintiff.

23. In conclusion on the choice of laws, I take account that the parties are either Hong Kong residents or companies incorporated in Hong Kong, secondly, although the accident happened in the Mainland, the parties were only there temporarily.  Thirdly, in the absence of any agreement that PRC law was the applicable or governing law for the contract of carriage, those factors would be sufficient to displace the general rule that the lex loci delicti should be the governing law in the matter under dispute and that Hong Kong law should apply.  This decision is arrived at notwithstanding the submission by the defendants that the concept of vicarious liability as it is understood in Hong Kong law has no application in PRC laws.  It is no different from the decision in Boys v. Chaplin where under Maltese law only pecuniary loss can be entertained whereas under English law the plaintiff can claim damages for pain suffering and loss of amenities.

B.  Appropriate or proper forum

24. The starting point is the leading case of Spiliada Maritime Corp v. Cansulex Ltd [1987] AC 460 where Lord Goff stated that :

“The basic principle is that a stay will only be granted on the ground of forumnon conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.”

25. Following that decision, a 3-stage approach was set out in The Adhiguna Meranti [1987] HKLR 904 at 907-908.

26. What I have to consider and apply in the present case therefore is this 3-stage approach as follows :

(a)	Whether it is shown that Hong Kong is not only not the natural or appropriate forum for the trial, but there is another available forum which is clearly or distinctly more appropriate than Hong Kong; the emphasis being upon “appropriate” rather than “convenient”.  The purpose is to identify the forum “with which the action has the most real and substantial connection”.
(b)	If the answer to (a) is yes, will a trial at this other forum deprive the plaintiff of any “legitimate personal or juridical advantages” the evidential burden being upon the plaintiff.
(c)	If the answer to (b) is yes, then I will have to balance the advantages of (a) against the disadvantages of (b) and in so doing keep in mind that deprivation of one or more personal or juridical advantage will not necessarily be fatal to the applicant provided that the court is satisfied that notwithstanding such loss “substantial justice will be done in the available appropriate forum”.

27. In applying the stage (a) test, there can be no doubt that prima facie, the accident having occurred in the PRC, the PRC courts applying PRC law would be the natural forum.  However, having in the earlier part of this Decision concluded that Hong Kong law would, in the present case, be more applicable for those reasons already given, it must follow that for those same reasons the Hong Kong courts has the most real and substantial connection in the determination of this dispute.

28. Moreover, I also take into account the following matters.

29. Firstly, in so far as evidence on liability is concerned, although the PRC Traffic Police Branch has already investigated this accident and has found liability on the 1^st defendant as well as the driver of the overturned truck, and that the 2^nd defendant has admitted liability through their PRC lawyers, there is no lack of evidence before the Hong Kong court as to the occurrence of this accident since the 1^st defendant has given a detailed factual defence statement in this case.

30. Secondly, as to evidence on the plaintiff’s injuries, there is a report available from the Wei Loi Yuen People’s Hospital.  Moreover, the medical reports from the North District Hospital relating to the plaintiff are also available.  Quite apart from those hospital reports, both parties have instructed orthopaedic experts and a joint report has been prepared by the respective experts in respect of the injuries and disabilities of the plaintiff.

31. For these reasons stated above, I am unable to come to the conclusion that it has been shown that the PRC court is the more appropriate forum than the Hong Kong court to determine this dispute.

32. Having reached such a conclusion, strictly speaking, there is no need for me to go any further to consider the stage (b) test.  However, in the event that I am shown to be wrong in reaching the conclusion that I did, I should deal also with the stage (b) test.

33. As for the stage (b) test, it is common grounds between the parties that damages assessed by the Hong Kong court will be substantially more than damages assessed by the PRC court.  However, in this connection it should be noted that the damages assessed by Hong Kong courts are compensatory in nature.  Viewed from that angle, it must follow that if damages assessed by the PRC courts are substantially less, then it must mean that such damages assessed by a PRC court is inadequate to properly compensate the plaintiff and therefore deprive him of a personal advantage if he had to bring his case in the PRC court.

34. A further matter that I take into account is the fact that it is the defendants’ stance that the concept of vicarious liability (as it is known in Hong Kong law) has no application in the PRC court under its laws.  Therefore if he had to bring his case in the PRC court, that would also deprive the plaintiff of a juridical advantage of being able to claim in the Hong Kong court against the employers of the 1^st defendant on the basis of vicarious liability for the negligence of the 1^st defendant.

35. To conclude, it can be seen for the reasons given above that there is an overwhelming balance in favour of the Hong Kong courts as opposed to the PRC court being the more appropriate forum.

36. For these reasons therefore, the appeal by the defendants against the order of Master de Souza is dismissed with costs (the costs order being an order nisi in the usual manner).