CHUNG YUEN YEE v. SAM WOO BORE PILE FOUNDATION LTD AND OTHERS

HCPI 1053/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1053 OF 2006

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REASONS FOR JUDGMENT ON LIABILITY

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Introduction

1.  The wages of a worker are often calculated from his toil but the risk he suffers is seldom taken into consideration.  The deceased (Mr Lai Wing Kee,黎榮基)(“Mr Lai”), was lifting aforklifttruck onto a lorry at about 3:00 p.m. on 27 July 2004on the pavement outside 35-37 Cha Kwo Ling Road.  Due to the unsafe method of lifting and other failures, which will be explored more fully below, the truck[1] unfortunately fell and crushed the deceased to death.

2.  The plaintiff (Chung Yuen Yee,鍾婉儀) was the wife of thedeceased.  She is the administratrix of the deceased.  They have a son and a daughter age 20 and 23 at the time of the accident.  The plaintiff now sues thedefendants in negligence and/or breach of statutory duties for herself and on behalf of her children.

The 4 defendants

3.  All 4 defendants belong to the same group of companies (“the Sam Woo Group”).  The 1^st, 3^rd and 4^th defendants (“D1”, “D3”, and “D4”) are represented by Ms Queenie Ng, while the 2^nd defendant (“D2”) is represented by Ms Christina Lee. The plaintiff is represented by Mr Andy Hung.

4.  Careful readers may notice that the D2 is separately represented even though it belongs to the same group of companies as the rest of the defendants.  This is because D2 was insured for this kind of accident while the rest were not.  However the state of insurance of each party is irrelevant to my decision herein because there is no evidence that D1, D3 or D4 is unable to meet the agreed damages of $2,064,000.

5.  This case therefore is not just a battle between the plaintiff and the defendants as a whole, but also a contest among the defendants.

The accident

6.  How did the fatal accident happen?  This is a hard question given that the eyewitnesses did not testify in the trial.  This is not surprising, given that the two potential eyewitnesses, Mr Lam Siu Mo (“Mr Lam”) (the crane operator at that time) and Mr Wan Pui Yuen (“Mr Wan”) (the alleged supervisor), had been criticised by the Coroner at the death inquest. Without their direct testimony, this court can only proceed on their statements and evidence given in the Coroner Court together with inferences made in the expert reports as to what happened.  It is most regrettable that the truth is readily available but the court is denied access to it.

7.  The factual issues will be explored more fully herein below.  According to my finding of facts on the limited evidence before me coupled with the excellent assistance by the expert witnesses, the following events happened.

8.  On 27 July 2004, D4 through its employee, Mr Wan, a supervisor asked the deceased, Mr Lai, to carry out a lifting operation of a forklift truck.  Mr Lau Chun Kwok (“Mr Lau”) (a director of all 4 defendants) said in his statement that Mr Lai and Mr Lam (the crane operator and driver) were to transport the forklift truck owned by D2 for maintenance so that it can be used by D3. Mr Lam was employed by D3 and the crane truck was provided by D3 as it was driven by Mr Lam but owned by D2.

9.  The operation took place on the pavement outside 35-37 Cha Kwo Ling Road.  According to Mr Lau, who is a director of all 4 defendants, No.35 is a 3‑storey building occupied by D4.  D4 occupied it since 2002 as a workshop to perform repairing, upgrading and renovation work to used vessels.  No.36 to 37 was occupied solely by D2 as an office, a depot for plant, machinery and equipment, a warehouse for storage of spare parts and rolling stocks, and a workshop for maintenance and repairing work.  He said that there was an oral licence granted by one Cheer Crown Ltd to D2 to occupy No.36 to 37.  However that oral licence had been terminated already in June 2004 (i.e. just before the accident in July 2004).  Thereafter, he said, D2 was moving its belongings from No.36-37 to No.35 until August 2004.  In other words, D2 was in the process of moving its equipments, including its metal chains when the accident happened. (What a co-incidence!)

10.  I got the impression that Mr Lau gave the above evidence only because D2 was insured.  He was only putting all the blame, as much as possible, onto D2. 

11.  In this operation, Mr Lai took two metal chains, which are for lashing purpose but not lifting purpose, from the crane truck and rigged the forklift truck with the metal chains[2]. The forklift truck was lifted from the ground and became unstable.  Mr Lai went under the forklift truck to try stabilising it.  No one saw what Mr Lai did to stabilise the forklift truck because Mr Lam was operating the crane from the crane truck and his view was blocked.  One of the chains (referred as Chain A by the experts) snapped and the forklift truck fell.  The forklift truck weighed over four tones and Mr Lai was crushed by its sheer mass to death.

Finding of facts

12.  There are numerous factual issues that need to be addressed before I proceed with the legal analysis.  The first issue pertains to the provider of the metal chains used in the fatal accident.  The second issue is whether the chains were defective.  The third issue is who gave order to the deceased in this operation.

Factual Issue 1 — Who provided the metal chains?

13.  The metal chains used by the deceased were not the kind of chains that could be easily purchased from a retail store.  The chains are so long and heavy that moving one of them requires an adult to hold it with both hands.  The deceased was unlikely to have bought them at his expenses.  Some or all of the defendants must have provided the chains to him.  They either could have been transported by the crane truck to the location of the operation, or were obtained readily inside 36-37 Cha Kwo Ling Road.

14.  According to Mr Lau, some metal chains from D1, D2 and D4 were placed at No.36-37.  Those from D4 were put on the ships and used exclusively by D4.  When asked by Ms Lee for D2 at 11:37 on 4 March 2010, he said that the metal chains from D1 were put at an eye-catching area (“擺係當眼既地方”).  When he gave this answer, he was straightforward without any hesitation.  However, on the same day later at 11:47, I referred to his testimony given at 11:37 and asked him again who put the metal chains at an eye-catching area, he answered it was D2 (“係三和機械”).  He maintained that it was D2 despite the constant clarification by Ms Lee that he answered D1 earlier.  It gave me the impression that Mr Lau had little regard to what he had said earlier in court and he was determined to put the blame on D2 when he suddenly recalled that that was his “mission” in his testimony.

15.  As for Mr Lam the crane operator, he said that he did not know where the deceased obtained the metal chains.  There is no evidence before me that can establish the source of those chains.  There were also other chains found in the crane truck after the accident as appeared in the photographs produced in court.

16.  I am inclined to believe that the chains were probably obtained from the crane truck because the chains were so heavy and long that it would be too tiring for the deceased to move them from inside the premises at 36-37 Cha Kwo Ling Road to the location of the truck-lifting operation alone.  Also, neither Mr Lam nor Mr Wan can recall seeing the deceased transporting the chains, which would have been obvious to them.  That suggests that the deceased used the chains found in the crane truck.

17.  Although D2 owned the crane truck, D3 was controlling the crane truck through its employee Mr Lam, I hold it more likely than not that the chains used by the deceased belonged to D3.

Factual Issue 2 – Were the chains defective?

18.  All counsel accepted in their final submissions that Chain A snapped.  There could be numerous reasons why Chain A snapped, and the two most likely ones are : 1) the chain was used for an improper purpose; and/or 2) there was an inherent defect in Chain A. 

19.  Ms Ng, counsel for D1, D3 and D4 submitted that there was no inherent defect in Chain A and the snapping of Chain A was entirely due to improper procedure employed by the deceased.  Mr Hung, counsel for the plaintiff, submitted that there was an inherent defect in the chain. 

20.  The expert reports gave different explanation as to why Chain A snapped.  In light of the concession made by Ms Ng that Chain A snapped, I need not go through every report in detail.  For the better understanding of the lifting operation, some sketches taken from the reports are annexed hereto as appendixes 1 and 2.  It should be noted that Chain A refers to the chain that was agreed as having been broken.  Chain B is the other chain that was used in the lifting operation.

21.  The Technical Report and the Fatal Accident Report prepared by Mr Chan Wing Cheung (“Mr Chan”) andMr Ngan Ka Wah (“Mr Ngan”) of the Labour Department made the following findings as to the cause of the accident :

(a)     The chains, including the eyehooks, were designed for lashing instead of lifting.

(b)     The chains had not been tested and examined by a Registered Professional Engineer.

(c)      The chains were not of the same length and size.

(d)     The two ends of Chain A were attached back to the chain.

(e)      Chain B was not of the appropriate size, i.e., too small.

(f)      Defect already existed in at least a link in Chain A when being used.

(g)     A master ring had not been used to connect the two separate chains to the hook of the crane.

22.  Point (d) refers to the dangerous way the deceased organised the chains. The deceased should not use Chain A to create a loop by attaching its end to its mid-section (see Appendix 2).  The aforesaid director Mr Lau suggested that the correct method should be by attaching the shackle of the chains to the lifting eyes of the forklift truck, as illustrated in Appendix 1.

23.  The report prepared by Dr Chung for the defendants concluded that Chain A did not snap, and the cause of the accident was that another chain, Chain B slid away from the forklift truck.  In light of the concessions made by all counsel that Chain A snapped, I do not give any weight to this conclusion of Dr Chung’s report.  The report prepared by Dr Eddie Siu Shu Lam for the plaintiff concluded that Chain A snapped and it was due to the presence of a notch on Chain A.

24.  A broken piece probably of a ring in ametal chain was also found at the scene of accident and that was labelled as the Broken Link.  The Broken Link itself was obviously much smaller than any other ring in Chain A as the other piece had been broken off from it and could not be found at the scene.  But both the broken link and anyone of the ring in the chain have the same diameter.  Initially there was a dispute as to whether the Broken Link was a part of Chain A and a joint examination was conducted by Dr Chung and Dr Lam on this issue.  It was thought that if the Broken Link was a part of Chain A then Chain A must have snapped.  As all parties now agree that Chain A snapped, there is no need for me to consider whether the Broken Link was part of Chain A. Suffice it for me to say here that the two experts on each side differed in their opinion.

25.  After considering all the evidence before me, I come to the conclusion that the snapping of Chain A was probably partly caused by the inherent defect of the chain and partly by the improper rigging employed by the deceased. I agree with Mr Chan and Mr Ngan of the Labour Department that there were multiple causes of the snapping of Chain A (i.e.: I am not satisfied that either cause was the sole reason of the snapping of the chain).  There is no evidence that one of the causes was the predominant cause or the significant cause.  I draw the inference that both causes equally contributed to the snapping of Chain A.

Factual Issue 3 — Who ordered the deceased to perform the lifting operation?

26.  Who ordered the deceased to perform the lifting operation?  Normally the employer, or the person whom the employee is seconded to, has the authority to order an employee.  However, this is not an ordinary case.  The deceased might well need to follow orders from any one of the defendants because they are part of the “Sam Woo” group.  The deceased was said to be employed by D2 but was paid by D1, and he had been ordered to perform a lifting operation for the benefit of D3.  There is also evidence to suggest that it was D4 who ordered the deceased to perform the lifting operation.

27.  Ms Ng accepted that the “instruction to carry out the lifting operation was conveyed through WAN [Wan Pui Yuen, employee of D4] to the Deceased”.  However, she submitted that “other than that, the lifting operation itself had nothing to do with D4, the forklift truck did not belong to D4 and it was not required for use by D4”.  She further submitted that as the forklift truck was originally located inside No.36‑37 Cha Kwo Ling Road (“the Premises”), which was solely occupied by D2 under an oral licence agreement granted by Cheer Crown Limited, the accident had nothing to do with D4, who operated in No.35 Cha Kwo Ling Road (“the Building”).  It should be noted that despite the purported segregation of 35-37 Cha Kwo Ling Road, D2 and D3 (together with D1 and D4) share the same office at Flat C, 2/F, Fairwind Court, 70-80 Tak Cheung Street, Mong Kok.  As previously mentioned, Mr Lau, who is a director of all the defendants said in his statement that the forklift truck belonged to D2 but was required by D3.  Mr Lau also said D2 solely occupied No.36-37.

28.  From the evidence given above by Mr Lau, he would like me to believe that the lifting operation has nothing to do with D4.  However, the pieces of evidence are disputable.  First, the contention that as D4 did not hire the truck and thus the lifting operation had nothing to do with D4 is just a legal fiction.  The reality was that all the defendants appeared to be working as a group of companies and each one of them benefitted from the prosperity of another.  Therefore a benefit to D3 might well have been a motivation for D4 to participate in the lifting operation. 

29.  Secondly, I do not believe D2 or at least not only D2 was occupying the Premises under an oral licence from Cheer Crown Limited.  Mr Hung had cross‑examined Mr Lau as to why this oral licence was not announced in accordance with the Listing Rules but Mr Lau failed to give a satisfactory answer.  This would be a serious breach of the Listing Rules.  In fact Mr Lau appeared to be quite surprised when he was, perhaps unexpectedly, asked this question. Also, one would expect the granting of a licence on a land of such size and importance should be more formalised than an oral agreement. 

30.  Thirdly, the evidence suggests that Mr Wan was in a superior position vis-à-vis Mr Lam and the deceased.  Mr Wan said in his statement to the Labour Department made on 24 August 2004 that he ordered the deceased what to do (吩咐).   Mr Lam also referred to Mr Wan as the supervisor (管工) in his statement to the Labour Department on 6 August 2004.

31.  Based on the evidence before me, I am inclined to believe that it was D4 who ordered the deceased to perform the lifting operation.

Legal analysis

32.  Having found that the deceased, Mr Lai operated under an unsafe system and was not supervised, the critical question is : Who had the duty of preventing the situation from happening, and was the duty discharged negligently? 

33.  The starting point is that D2 (and D1, see below) was the general employer of Mr Lai and by that role it owes a duty of care to Mr Lai to ensure that he would work under a safe system.  However as I have found above D4 ordered Mr Lai to perform the relevant work, it is therefore possible that D4 is also liable as employer pro hac vice.

34.  On this issue, Ms Ng cited Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Limited and another [1947] AC 1 for the proposition that as D3 and D4 did not have control over how the lifting operation was to be done, D3 and D4 are not liable.  However, it should be noted that Mersey Docks is a case of vicarious liability.  The employer was sued for the act of its employee.  The injured party in Mersey Docks was not employed by the appellant or the respondent in that case where in this case the injured party (Mr Lai) was employed by D2 and was under the instruction of D4. 

35.  In Nelhams v Sandells Maintenance Ltd [1996] PIQR P52, Kennedy LJ said :

“We have had the advantage of being referred to the decision of this court in Morris v. Breaveglen [1993] P.I.Q.R. P294 which may not have been fully brought to the attention of the trial judge. In that case, as in this case, a plaintiff in the general employment of one employer sustained injury whilst working, as he had been instructed to work, under the directions of employees of a second employer. The general employers contended that because they were not exercising control over the plaintiff, they should not be held liable, but both at first instance and in this court that contention failed. Giving the leading judgment in this court, Beldam L.J. analysed all of the well known authorities relating to this branch of the law, and pointed out that there is an important distinction to be drawn between cases where damage has been caused by an employee in the general employment of one employer who is working under the directions of a second employer and cases where it is the employee himself who sustains the damage. In the first category of case the general employer may be able to escape vicarious liability. In the second category of case vicarious liability is not in issue, and the general employer remains subject to his duty to exercise due care and skill for the safety of his employees by providing them with suitable plant and equipment and a safe system of work. As it happens, the employee has been instructed, in the course of his employment, to go to a site which his employer does not control, and to work there under the directions of a supervisor or supervisors employed by others who thus become the agents through whom the general employer seeks to discharge his obligations to his employee, but the employer remains liable if the agents themselves do not use due care and skill in carrying out the employer’s duty (Wilsons and Clyde Coal Co. v. English [1938] A.C. 57). As Lord Hailsham said in McDermid v. Nash Dredging Reclamation Co. [1987] A.C. 906 at 910, ‘the employer cannot escape liability if the duty has been delegated and then not properly performed’.” [Emphasis supplied]

36.  Therefore, there is an important distinction between a case where the employers are vicariously liable for the act done by their employee (as in Mersey Docks) and a case where the employers are liable for injury done to the employee himself (as in Nelhams and the present case).  It was held in Nelhams that in apportioning liability between two defendants (the general employer and the employer pro hac vice), the Court needs to “look at the matter overall in terms of blameworthiness and causative potency”.

37.  In Nelhams the employer pro hac vice had to completely indemnify the general employer.  The court looked at several factors, particularly the attitude of the main contractor (not a party to that case) and the fact that the plaintiff “was clearly a mature man and a responsible employee” such that the general employer would think it “unlikely that the [employer pro hac vice] would operate in [the unsafe manner]”.

38.  The critical difference between Nelhams and the present case is that in the present case D2 (general employer) and D4 (employer pro hac vice) are closely related while in Nelhams the two employers were dealing at arm’s length.  In my judgment, the unsafe system adopted by D4 was known to, or could have easily been discovered by D2 because of the close relationship between them.  Therefore unlike the general employer in Nelhams, D2 did have a reason to suspect that Mr Lai would have operated in the unsafe manner.

39.  In Jerry Chen v Whirlpool (Hong Kong) Ltd [2006] HKEC 1316, the Hong Kong Court of Appeal adopted a different approach, which was first expounded in Cook v Square D Ltd[1992] ICR 262. Cheung JA said at paras.17 and 22 :

“17. In my view a better approach will be to identify who is the employer who has entered into the contract with the employee and then decide whether in the circumstances of the case the employer breached its duty of care towards the employee. The fact that the employee is asked to work for another entity and takes orders from that entity is only one of the factors to be taken into account in considering whether the employer’s duty of care has been breached or not …

…

22. The starting point is that an employer is required to provide a safe system of work for the employee. This duty is personal to the employer and cannot be delegated. This principle is found in the classic case of Wilsons & Clyde Coal Company v. English [1938] AC 57 where Lord Thankerton at page 64 stated this :

‘First—If the master retains control, he has a duty to seethat his servants do not suffer through his personal negligence, such as (1) failure to provide proper and suitable plant, if he knows, or ought to have known, of such failure; (2) failure to select fit and competent servants; (3) failure to provide a proper and safe system of working; and (4) failure to observe statutory regulations; but,

          Second—If he delegates his duty to take care of the safety of his servants to competent subordinates, hisresponsibility in respect of his primary common law duty ceases, unless there is proof of knowledge by him not acted upon; so that the master’s liability in respect of his common law duty may be said to depend on the extent of his interference.’ ”

40.  In respect of the failure of D2 to provide Mr Lai with the proper supervision to ensure that he would operate in a safe manner, Ms Lee, counsel for D2, submitted that :

“It would be a counsel of perfection to expect the 2^nd Defendant to send someone round to supervise the operation or to send another worker to hold the guide rope with Mr Lai when it did not even know the operation was taking place.” [my emphasis]

41.  For the reasons stated above in relation to the Nelhams test, I believe D2 knew that the operation was taking place, and it was likely that D2 also knew of the danger therein, therefore with respect I do not accept the aforesaid submission.  Even If I am wrong, then applying Jerry Chen,the submission above only goes to show D2’s negligence instead of exonerating D2 of its liability.  It should be reminded that Cheung JA said the “starting point is that an employer is required to provide a safe system of work for the employee”.  This duty “cannot be delegated”. 

42.  If D2 allowed its employee to carry out whatever work as required by its associated companies in the Sam Woo Group (D1, D3 or D4) without knowing the nature of work or the system of work at the place of its partner, it can hardly be said that D2 had discharged its non-delegable duty of providing a safe system of work for the employee.

43.  As D1 is also the general employer of Mr Lai, the analysis above also applies to D1.  I do not believe the statement by Mr Lau regarding the relationship between D1 and Mr Lai.  He said that D1 only “innocently” entered its name as the employer when filing the return for Mr Lai and that D2, not D1 should be entered as the employer.  It should also be noted that D1 paid Mr Lai wages and Mandatory Provident Fund (MPF), to this Mr Lau said D1 was only paying on behalf of D2 “for administrative and accounting convenience”.  I find it very difficult to believe that Mr Lai was not employed by D1, given that D1 had plainly treated itself as the employer throughout the period of 1 April 1994 to 27 July 2004 (the date of the accident). There is a strong inference that an employment contract existed between D1 and Mr Lai.  Again Mr Lau was trying very hard to push the blame onto D2 as it was insured.  But his oral evidence is against the documentation of D1.

Contributory negligence

44.  The deceased, Mr Lai could be held to be contributorily negligent for :

(1)     using the improper chains (lashing instead of lifting) for the lifting operation;

(2)     improper rigging of the chains; and

(3)    going under the lifting load.

45.  Ms Lee and Ms Ng submitted that Mr Lai should be held to be 20% contributorily negligent.  Mr Hung submitted that the liability of Mr Lai, if any, should not exceed 10%.  He submitted that Mr Lai should not be blamed because he was only doing what was required of him with the limited resources he had.  That would be in respect of items (1) and (2) above. There is some force in his submission as Mr Lai was well trained in the lifting operation and he would probably have used the appropriate chains if they were available to him.  The improper rigging of the chains might also have been caused by the lack of appropriate chains.  I do not think Mr Lai should be held to be contributorily negligent for items (1) and (2) above.

46.  However, the same could not be said about item (3).  A prudent man never steps into the shadow of a hung boulder, lest it falls and crushes his skull.  The same is truer for a hung forklift truck: part of it may come loose and fall or the crane may fail and the forklift truck is lowered by a few centimetres.  The forklift truck in this case is not even hung properly and Mr Lai, being a skilled worker, would have known that.  Mr Lai would appreciate that the forklift truck was being lifted by metal chains that are unsuitable for lifting purposes (the chains were lashing chains) and that he had used an improper rigging method.

47.  Why did Mr Lai go to such a dangerous area?  The plaintiff’s case is that Mr Lai had to go under the forklift truck because it was swinging at that time.  But the forklift truck was a massive object (4.11 Tonnes, para.4.3 of the Technical Report prepared by Mr Chan) which means it must have a lot of momentum when it was swinging.  I do not think Mr Lai could do much to stabilise it by going under the load.  He was probably resisting the movement of the forklift truck by raising his arm above his head but this is definitely not the best way to provide a counter force to the forklift truck.  The number and strength of muscles he could use in this position is limited.  Thus the amount of force he could provide is at best minimal relative to the force of the swinging forklift truck possessed.  I think it was more likely that Mr Lai was moved by the forklift truck instead of stopping it.

48.  Unlike the cases where the employee had to go under the lifted mass to operate the crane, in this case the crane was operated by Mr Lam.  In other words the lifting operation could be performed without anyone going under the load.  If the forklift truck was having some undesired movement the proper way to stop the movement was to have two people, each holding a rope on other side, to guide the forklift truck.

49.  Mr Lai may fairly be criticised for taking such a great risk that does not help further his employer’s course.  I think 20% contributory negligence is a rather generous assessment in light of the fact that Mr Lai had gone under the load and allowed the accident to happen. However as none of the defendants intended to pursue further than that, I do not have to consider whether a higher percentage of contributory negligence is necessary to reflect his imprudence.  I accept the submission by Ms Ng and Ms Lee and hold that Mr Lai was 20% contributorily negligent.

Conclusion on liability

50.  The negligence and various breaches of statutory duties, (as pleaded by the plaintiff), by each of the defendants had caused the accident.  D1 and D2 were the general employers of Mr Lai and they had failed to discharge their non-delegable duty of ensuring that Mr Lai would be safe in his work. They had failed to provide the necessary supervision and examination of the equipment to ensure that Mr Lai would work under a safe system.  D3 provided the metal chains which are proven to be defective.  Mr Wan, employee of D4 and the supervisor of Mr Lai, ordered Mr Lai to perform the operation but he did not oversee the operation.  D4 was the employer pro hac vice and it had plainly failed its duty to ensure that Mr Lai would be safe in his work. 

51.  However it was unnecessary and unhelpful for Mr Lai to go under the forklift truck in order to stabilise it.  He therefore had negligently contributed to the accident by 20% as put forward by the 2 defence counsel.

Epilogue

52.  Two matters are still outstanding, namely :

(1)     The apportionment of liability among the defendants.  This I have directed the defendants’ counsel to make further written submissions.  They have been filed with the court already.  I will hand down a separate judgment (No. 2) on apportionment in due course.

(2)     Mr Hung said that in respect of the apportionment of the entitlement for the two adult children of the deceased, the plaintiff will apply ex parte and separately to this court for approval.

 

 

Mr Andy Hung, instructed by Messrs Pansy Leung Tang & Chua (assigned by DLA) for the Plaintiff

Miss Queenie W.S. Ng, instructed by Messrs Gilbert Tang & Co., for the 1^st, 3^rd and 4^th Defendants

Miss Christina Lee, instructed by Messrs Deacons, for the 2^nd Defendant