CHEVALIER (HK) LTD v. CHAN WING CHING AND ANOTHER

DCCJ 3366/2022

[2024] HKDC 950

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3366 OF 2022

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ASSESSMENT OF DAMAGES

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Background

1.  This is an assessment of damages of the Plaintiff’s claim against the 1^st Defendant only.

2.  Interlocutory Judgment was entered against the 1^st and 2^nd Defendants on 1 February 2023 with damages to be assessed.

3.  On 20 December 2023, the Court ordered all proceedings against the 2^nd Defendant, who had been adjudged bankrupt, be stayed until further order.

4.  The 1^st Defendant was absent at the hearing on 5 June 2024. Having read the affirmation of service filed on 31 May 2024, I was satisfied that notice of assessment hearing had been duly given to the 1^st Defendant prior to the hearing. It was the 1^st Defendant’s election not to attend the assessment hearing. I proceeded with the assessment of damages in this case in the absence of him.

The Plaintiff’s case

5.  The 1^st Defendant was the owner of a private car bearing registration number VF736 (“the car”). The 2^nd Defendant was the driver of the car which collided with the motorcycle driven by the Plaintiff’s employee, namely: Mr Sum. As a result, Mr Sum was injured.

6.  Mr Sum commenced an employees’ compensation claim against the Plaintiff in DCEC 269/2022 (“DCEC Case”). They reached the settlement where the Plaintiff paid HK$90,578 as compensation (“EC Settlement Sum”) + HK$30,000 as Mr Sum’s legal costs (“Mr Sum’s Legal Costs”).

7.  The Plaintiff also incurred HK$30,000 as its own legal costs in the DCEC Case (“P’s Legal Costs in DCEC Case”).

8.  The 1^st Defendant was convicted of (i) causing or permitting another person to use a vehicle without insurance and (ii) suffering or permitting the use of an unregistered / unlicensed vehicle.

9.  The 2^nd Defendant was convicted of (i) careless driving, (ii) driving / using an unregistered / unlicensed vehicle; and (iii) using vehicle without insurance.

10.  In the present action, the Plaintiff therefore seeks contribution from the 1^st and 2^nd Defendants.

Legal principles

11.  Section 25(1)(b) of the Employees’ Compensation Ordinance (“ECO”) provides that:-

“(1) Where the injury in respect of which compensation is payable was caused in circumstances creating a legal liability in some person other than the employer (in this section referred to as the third party) to pay damages to the employee in respect thereof -

…

(b) the employer by whom compensation is payable … shall have a right of action against the third party for the recovery of any sum which he is obliged to pay as a result of the accident, whether by way of compensation or indemnity or by virtue of any agreement made with the employee prior to the accident, and may exercise such right either by joining in an action begun by the employee against the third party or by instituting separate proceedings:

Provided that the amount recoverable under this paragraph shall not exceed the amount of damages, if any, which in the opinion of the court would have been awarded to the employee but for the provisions of this Ordinance.”

12.  Section 3 of the Civil Liability (Contribution) Ordinance (“CLCO”) provides that:-

“(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).

…

(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.”

13.  In China Ping an Insurance (Hong Kong) Co Ltd v Chong Tin Po [1], Master B Mak cited the following at paras 20-21:

“20. In Wah Kwong Construction Material v Wong Man Yip, CACV 54/1994, the Court of Appeal held that the words “any sum” under Section 25(1)(b) of the Employees’ Compensation Ordinance are not limited and that a claimant can recover not only the compensation or indemnity but also costs which he is obliged to pay as a result of the accident.

21. Applying the same principle, Her Honour Judge H C Wong in Hong Kong Red Cross v The Hong Kong Federation of Youth Groups, DCCJ 2233/2007 held that a claim based on Section 25(1)(b) of the Employees’ Compensation Ordinance and Section 3 of the Civil Liability (Contribution) Ordinance also includes costs paid to the claimant and his own legal costs in defending the claim.”

Findings

14.  The Plaintiff called its senior district manager Mr Shiu as the only witness. His testimony was not subject to any challenge from the 1^st and 2^nd Defendants who had adduced no documentary evidence and witness evidence for the purpose of assessment of damages and were absent during the hearing.

15.  Mr Shiu explained that Mr Sum, who was employed as a technician for the Plaintiff, sustained injuries and/or disabilities including contusion to back and left buttock and/or multiple injuries resulting in coccygeal pain, as a result of the careless driving of the 2^nd Defendant. He gave further explanations as to how the Plaintiff estimated Mr Sum’s entitlements under sections 9, 10, and 10A of the Employees Compensation Ordinance, prior to reaching the settlement with Mr Sum.

16.  In addition, Mr Shiu also gave an account as to how the Plaintiff reached an agreement with Mr Sum’s solicitors at HK$30,000 for Mr Sum’s Legal Costs. He also elaborated the Plaintiff incurred HK$30,000 as P’s Legal Costs in DCEC Case.

17.  Mr Shiu’s testimony is based on contemporaneous documents available to him and the fact that he has been following up on this case for some time for the Plaintiff. He has also been kept informed of the progress. I accept Mr Shiu’s evidence.

18.  Applying the legal principles cited, I find that the Plaintiff is entitled to recover from the 1^st and 2^nd Defendants the EC Settlement Sum paid to Mr Sum in the full sum of $90,578.70.

19.  Counsel for the Plaintiff relied on China Ping an Insurance (Hong Kong) Co Ltd v Chong Tin Po [2] and submitted the respective sums claimed for Mr Sum’s Legal Costs and P’s Legal Costs in DCEC Case are reasonable. I agree. Hence, I find that the Plaintiff is also entitled to recover from the 1^st and 2^nd Defendants Mr Sum’s Legal Costs at the sum of $30,000 and P’s Legal Costs in DCEC Case at the sum of $30,000.

20.  A summary of the respective sums is as follows:

(a)	compensation paid to Mr Sum:	HK$90,578.70
(b)	legal costs paid to Mr Sum’s solicitors:	HK$30,000.00
(c)	legal costs of the Plaintiff:	HK$30,000.00
	Total	HK$150,578.70

21.  The total sum does not exceed the amount allowed under section 25(1)(b) of the ECO, ie the amount which would have been awarded to the employee but for the provisions.

Apportionment

22.  Having found the Plaintiff’s entitlement to seek contribution, the Court then is to consider the proper apportionment of contribution between the 1^st and 2^nd Defendants.

23.  There is no arithmetic formula in assessing the exact amount of apportioned contribution. The starting point is section 4(1) of the CLCO:

“… in any proceedings for contribution under section 3 the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage in question.”

24.  In Liao Kuo Chun v Win Captial (HK) Ltd and Others [3], Bharwaney J observes at paras 50-51:

“50. It is well established that the exercise of assessing the amount of contribution recoverable from any person, in such amount as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage in question, requires the court to assess blameworthiness as well as causative potency. Non-causative factors that also involve a breach of duty are relevant considerations. Greater causal impact by one party may be balanced against greater blameworthiness by the other. As Hobhouse LJ, as he then was, said in Downs v Chappell [1997] 1 WLR 426 at 445:

“It is just and equitable to take into account both the seriousness of the respective parties’ faults and their causative relevance. A more serious fault having less causative impact on the plaintiff’s damage may represent an equivalent responsibility to a less serious fault which had a greater causative impact.”

51. The judge must apportion the damages between the parties who are actually before the court and he should not apportion damages between them and some other person or persons, not a party to the proceedings, whose fault may have contributed to the plaintiff’s damage (Mayfield v Llewellyn [1961] 1 WLR 119). In this case, I am concerned to apportion liability between the 1^st and 4^th defendants only. However, in apportioning liability between them, I attribute to each of them the acts and defaults of their respective contractors and sub-contractors. In my judgment, a person’s responsibility for the damage in question includes responsibility for the acts and defaults of that person’s contractors and sub-contractors, even though such acts and defaults of independent contractors may not create tortious personal or vicarious liability on the part of that person.”

25.  In So Kai Hau v Ysk2 Engineering Company Ltd [4], Bharwaney J cited the guidance provided by Lord Hobhouse in Dubai Aluminium Co Ltd v Salaam and Others [2002] 2 AC 366 at para 143:

“In a simple case, say, injury to a passenger arising from a collision between two cars, both to blame, no problem arises. The court apportions the liability between the two drivers. But where, as in the present case, there has been a conspiracy to defraud involving a number of individuals, complications can arise. Only some of them may be before the court; some may be beyond the practical reach of the law; some may be insolvent; the routes by which liability has arisen may differ.

Section 2 of the statute requires the court to order contribution in an amount which is “just and equitable having regard to the extent of that person's responsibility for the damage in question”, the “person” being the person being ordered to contribute and the “damage in question” being the damage suffered by the victim for which the persons claiming and paying contribution were both liable. The concept of what is just and equitable corresponds to the restitutionary principles applied elsewhere in the law, for example, contributions between sureties or between insurers. The right to a contribution arises from the fact that one person has borne a disproportionate burden which it is just that another should share or even bear in full, section 2(3)). Likewise responsibility includes both the degree of fault and the causative relevance of that fault. The power given to the court is principled but not otherwise restricted. It is this power which the court must use to solve any problems and arrive at a just and equitable outcome.”

26.  Having set out the guiding principles in the above, the Court is faced with two further complicating factors relevant to the apportionment exercise in the present case: First, there is no finding by any court as to the degree and/or percentage of liability borne by the 1^st Defendant and/or the 2^nd Defendant respectively towards Mr Sum. Second, the 2^nd Defendant is now adjudged bankrupt.

27.  To address the first factor, I confirmed with Counsel for the Plaintiff that no other documentary evidence relevant to apportionment was filed by the Plaintiff, nor is Mr Shiu’s evidence of any help in this specific regard. While I am fully aware of the offences of which the 1^st and 2^nd Defendants were convicted respectively, as set out in paras 8-9 of this Decision, I turn my mind to the Statement of Claim, specifically the particulars of negligence pleaded therein:[5]

(a)  The 1^st Defendant was negligent in (i) carelessly and/or recklessly causing or permitting the 2^nd Defendant to use the car without insurance / when its licence and/or registration had already expired, (ii) failing to take sufficient steps to ensure the car had a registered licence and/or valid licence or registration, (iii) failing to take reasonable care to all road users and exposing Mr Sum to a danger and/or foreseeable risk of injury which the 1^st Defendant as an owner of the car, knew or should have known at the time of the accident.

(b)  The 2^nd Defendant was negligent in (i) failing or omitting to check or ascertain whether the car had a valid insurance cover / valid licence and/or registration, (ii) failing to pay attention to Mr Sum, (iii) driving carelessly, (iv) failing to take reasonable care to all road users exposing Mr Sum to a danger and/or foreseeable risk of injury which the 2^nd Defendant knew or should have known at the time of the accident.

28.  Counsel for the Plaintiff submitted the 1^st Defendant should bear liability of a greater portion, since the 2^nd Defendant (being an employee of the 1^st Defendant) was acting upon the 1^st Defendant’s instructions; and it was the 1^st Defendant who permitted the 2^nd Defendant to use the car, despite being uninsured and/or with its expired registration. As such, Counsel for the Plaintiff submitted the 1^st Defendant should be liable for 80%.

29.  While these reasons submitted by Counsel are not unsound, I cannot lose sight of the fact that it was the 2^nd Defendant’s own careless driving which directly caused the collision and hence Mr Sum’s injuries. Acting as an employer of a careless driver as well as the owner of the car, the 1^st Defendant does deserve a higher degree of responsibility. However, in terms of causative potency, it is specifically pleaded in the Statement of Claim “[w]hen [the car] was entering into a roundabout, [the car driven by the 2^nd Defendant] suddenly rammed into the left side of [Mr Sum’s motorcycle] solely due to the 2^nd Defendant’s carelessness. As a result of the collision, [Mr Sum] fell off from [the motorcycle] and sustained serious injuries”.[6] The seriousness of such fault of the 2^nd Defendant and its causative impact are not to be overlooked in weighing his share of responsibility over the damage in question.

30.  To address the second factor, in Aberdeen Winner Investment Co Ltd v The Incorporated Owners of Albert House and Another [7], the Court of Appeal has considered the effect of a co‑tortfeasor’s insolvency at the time of apportionment and held solvent defendants should bear the burden of an insolvent defendant’s contribution in proportion to the solvent defendants’ respective shares of liability at paras 16-17:

“16. The effect of a contributor’s insolvency on other contributors was considered by the late Professor Glanville Williams in his book on Joint Torts and Contributory Negligence, 1951 edition at §48. The judge referred to this in his judgment and noted that the upshot of Professor Williams’s analysis was that solvent defendants should bear the burden of an insolvent defendant’s contribution in proportion to the solvent defendants’ respective shares of liability. Such an approach accords with the rationale behind section 19(2) of the Law Amendment and Reform (Consolidation) Ordinance which provides for contribution to be “just and equitable having regard to the extent of that person’s responsibility for the damage”.

17. I am unable to discern any good reason for not adopting this approach. Leaving only one of several solvent defendants to shoulder virtually the entire burden of damages arising from the insolvency of one or more of the defendants would be contrary to the rationale underlying the statutory provisions for contribution. As Lord Hobhouse observed in Dubai Aluminium Co Ltd v Salaam and Others [2003] 2AC 366 at para 72,

“the right to contribution arises from the fact that one person has borne a disproportionate burden which it is just that another should share.” ”

31.  Bearing the relevant principles in mind, this Court is to decide how the contribution of the 2^nd Defendant, now a bankrupt, should be borne by the 1^st Defendant. Even though the present case involves only one solvent co‑contributor, the reasoning as set out by Le Pichon JA (as she then was) above in Aberdeen Winner Investment Co Ltd [8]is equally applicable.

32.  Counsel for the Plaintiff submitted the 1^st Defendant should be liable for 96% in total of the contributions to which the Plaintiff is entitled in these proceedings. This Court is urged to adopt 80% to begin with and impose an extra 16% (ie the 1^st Defendant is to bear 80% of the 20% being unmet by the 2^nd Defendant). While this Court understands the practical dimension of enforcement, especially the Plaintiff’s eagerness to recover from the solvent defendant here, I find this percentage on the high side in view of the facts of the present case.

33.  As a starting point, for the reasons explained, I find it just and equitable to apportion 65% of responsibility to the 1^st Defendant. For the 35% unmet due to the bankruptcy of the 2^nd Defendant, the 1^st Defendant is to bear 65% of this outstanding portion, ie an additional 22.75%. Therefore, the 1^st Defendant is liable for 65% + (35% × 65%) = 87.75%.

Summary

34.  In summary, I find that the Plaintiff is entitled to recover from the 1^st Defendant: HK$150,578.70 × 87.75% = HK$132,132.81.

Interest

35.  The Plaintiff shall be entitled to interest on the said sum at judgment rate from the date of Writ (ie 31 August 2022) to the date of the Interlocutory Judgment and thereafter at judgment rate to the date of payment.

Costs

36.  I order that the 1^st Defendant do pay the Plaintiff’s costs of this action (including the costs reserved in the hearing before Registrar Soong on 6 June 2023 and the case management conference on 20 December 2023). Having read the statement of costs filed on 31 May 2024, I summarily assessed the costs in the sum at $160,000 to be paid forthwith.

37.  A Chinese translation will be supplied to the 1^st Defendant at his request.