HO WAI SANG v. FOK KAI AND ANOTHER

CACV 3883/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 3883 OF 2001

(ON APPEAL FROM HCPI NO. 1330 OF 1999)

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J U D G M E N T

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Hon Rogers VP:

1. This is an appeal from a judgment of Suffiad J given on 19 September 2001 whereby he dismissed the plaintiff's claim for damages for personal injuries.

Background

2. The plaintiff was employed as a welder by the 1st defendant from approximately 1 May 1996. There is no dispute that on 28 November 1996, the plaintiff was admitted to the Kwong Wah Hospital. He was found to have local tenderness about the cervical spine and reduced movement of the neck. He was in hospital until 2 December 1996 but continued to receive treatment thereafter. In February and March further investigations were carried out and it was found that he had prolapsed intervertebral discs. In June of the same year an anterior spinal fusion operation was carried out. He remained on sick leave for a considerable time thereafter.

3. In November 1998 action was brought in the District Court to claim employee's compensation. In that claim the plaintiff claimed that on 28 November 1996 he had been injured in an accident at the construction site in Central at which he was working. The claim was brought against both defendants as respondents. In their answer it was said that the plaintiff had not been employed by the 1st and 2nd respondents but by a Mr Lee Yau Kan ("Mr Lee"), who was the sub-contractor of the 1st respondent. It should be noted that in paragraph 6 of the answer it was stated that:

"Save it is admitted that the Applicant was at the time of the alleged accident working at the construction site at the comprehensive redevelopment project at Queen's Road Central, Jubilee Street, Hong Kong, no admission is made to paragraph 3(3) of the Application. It is specifically denied the alleged accident occurred in the course of employment of the Applicant with the Respondents."

4. The employees' compensation claim was settled by a Tomlin Order of 5 August 1999. That order stayed the proceedings. There was no admission as to liability but a sum of $516,829 inclusive of interest was to be paid in full and final settlement of the claim and credit was to be given for a sum of $130,000 which had already been paid. It is to be noted that the plaintiff's solicitors had initially asked for a consent order to be entered for the same amount in the standard form of a judgment admitting liability. That was refused.

5. Following the conclusion of the employees' compensation claim the plaintiff commenced the present action seeking damages for negligence and breach of statutory duty. The basis of the claim was injury resulting from an accident which was pleaded to have occurred "on or about 28 November 1996". This time the allegation in the statement of claim that the plaintiff had been working at the construction site on 28 November 1996 was specifically denied in paragraph 4 of the defence. That paragraph went on to deny that there had been an accident as alleged on 28 November 1996 and reasons were given for that denial on the basis that no such accident had occurred. It was in that state of the pleadings that the action went to trial.

6. It is clear from the plaintiff's opening that it was known that it was the defendants' case that the injury complained of occurred in all probability on 27 or 26 November. This had become clear from the witness statements and, indeed, the hearsay statements which exhibited some of the medical reports.

7. The attention of this court has been drawn to several passages in the transcript of the trial in which the question of the defendants' stance as to whether the plaintiff went to work on 28 November 1996 was discussed. It appears that the conclusion of the discussion was that the defendants' position was that the plaintiff had not been at work that day but the judge did not regard it necessary to have the pleadings amended at that stage. He considered that the matter could be dealt with de bene esse. Likewise, in the absence of an amendment to the defence the judge did not require any formal pleading in respect of the plaintiff's case that the defendants were estopped from denying that the plaintiff had been injured in an accident at work on 28 November 1996. The matter was dealt with on the basis that the judge would reach a decision on the facts and the law and the evidence was taken accordingly.

8. In the result the judge came to the conclusion that the plaintiff had not returned to work on 28 November 1996. For present purposes it is unnecessary to elaborate on the reasons for the judge's conclusion. Mr Yau, on behalf of the plaintiff, specifically put the plaintiff's case on the basis that the defendants were estopped as I have indicated. He made it very clear that in the event that the estoppel argument should fail the plaintiff did not seek to challenge the judge's finding of fact that the plaintiff had not returned to work on 28 November.

The judgment below

9. After deciding as a matter of fact that the plaintiff had not returned to work on 28 November, the judge turned to the question of issue estoppel. He referred to paragraph 6 of the answer in the employee's compensation case. He regarded that pleading as being the basis for the plaintiff's argument on issue estoppel. In paragraph 28 of the judgment he made it clear that that was the way in which the matter was put. In paragraph 29, however, he referred to the fact that Mr Lee had been colluding with the plaintiff with a view to deceiving the 2nd defendant and/or its insurers and to the fact that this may have led to the admission being made in paragraph 6. At the end of paragraph 29 he came to the conclusion that there were special circumstances which would make it unjust to hold that the defendants were estopped in the way alleged by the plaintiff.

The appeal

10. Our attention was drawn to a number of authorities in relation to issue estoppel. It is one of the facets of the inherent power of the court to prevent misuse of its procedure. The judgment of Wigram VC in Henderson v Henderson (1843) 3 Hare 100 at 114-115 is often cited as being one of the earliest authorities laying down the broad propositions upon which the rule is founded. In that case it was stated in terms that:

"In trying this question, I believe I state the rule of the court correctly, when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case."

11. In the case of Arnold v NatWest Bank Plc. [1991] 2 AC 93 at 105D Lord Keith said:

"Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue."

He went on to refer to a number of cases and then cited the judgment of Lord Diplock LJ in Thoday v Thoday [1964] P. 181 at 198 where he said:

"The second species, which I will call 'issue estoppel,' is an extension of the same rule of public policy. There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action. If in litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was."

Lord Keith then went on to consider the question of issue estoppel covering cases where in subsequent proceedings it is sought to raise a point which might have been put but was not raised in earlier proceedings.

12. Turning to the facts of this case, it is an undoubted fact that the plaintiff has unfortunately suffered injury to his back. It is more than likely that that injury was suffered in the course of his work. That being so the plaintiff would be entitled to an award under the employees' compensation provisions without any further ado. The plaintiff would only be entitled to damages for negligence or breach of statutory duty if it was shown that at least the employer had been negligent or there had been a breach of statutory duty.

13. The settlement of the employees' compensation proceedings was clearly without any admission as to liability. It was for that reason that Mr Yau placed his argument on the basis of the admission in paragraph 6 of the answer. That, alone, however cannot be sufficient to raise an issue estoppel. Nothing was decided in the employees' compensation proceedings. Even if the settlement were to be regarded as an admission that the plaintiff was entitled to payment that would be payment of employees' compensation which, as indicated above, would arise upon proof of injury at work no matter when and how it occurred. In those circumstances I do not consider that the circumstances of issue estoppel arise on the facts of the present case. Paragraph 6 of the answer was not the basis of any finding of liability nor was it the basis of the settlement.

14. For my part, I would find difficulty in considering it correct to hold that special circumstances arose because of the fact that the plaintiff and Mr Lee had been complicit in putting forward a fraudulent claim. As has already been explained, the pleadings were left in a state where they were incomplete. Part of that incompleteness was the absence of any plea of estoppel. If any reliance were to be placed on special circumstances tantamount to fraud which would prevent reliance upon estoppel that should have been pleaded. In this respect Mr Yau's complaint that the matter of a fraudulent claim had not been properly ventilated and that the plaintiff had not had an opportunity to deal with the matter has some validity.

15. It was said that even if issue estoppel should not prevent the court from holding that the accident did not take place on 28 November 1996, the plaintiff had nevertheless proved that he had suffered an accident by reason of the defendants' negligence. It was said that the plaintiff's explanation as to how the accident occurred remained unshaken. In my view, the date of the accident is highly important as regards any conclusion to which the court can come. Although the statement of claim contained the averment that the accident occurred "on or about" 28 November, in contrast to the pleadings in the employees' compensation case where there was no latitude as to the date, the date of an accident is highly important. A defendant is entitled to be told when an accident occurred so that due and proper investigations can be made in respect of it. Despite the fact that there appear to have been few witnesses called on behalf of the defendants that, in part, is explicable by the fact that it was the plaintiff's case that the accident occurred before normal working hours. Unless the party alleged to have been responsible for an accident has a fair chance of investigating the matter, I do not consider that a court would be justified in simply accepting part of the plaintiff's allegation, particularly where another part of his evidence is not accepted. In the circumstances of this case, therefore, given the fact that the judge had disbelieved the plaintiff as to the date of the accident, I do not consider it can be said that he should nevertheless have held that the accident occurred in the manner in which the plaintiff had said.

16. In my view, this appeal should be dismissed with an order nisi of cost in favour of the defendants.

Hon Le Pichon JA:

17. I agree.

Hon Yuen JA:

18. I agree.

Hon Rogers VP:

19. This appeal will be dismissed, accordingly, with an order nisi of costs in favour of the defendants.