EDWARD MARTIN WILLIAMS v. THE HONGKONG LAND PROPERTY CO LTD AND ANOTHER

HCPI 522/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.522 OF 2001

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REASONS FOR JUDGMENT

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1. This is an appeal against the decision of Master Woolley dismissing the 2nd defendant's summons dated 30 June 2003 for specific discovery of :

(1)	Report(s) prepared by GAB Robins, the loss adjusters instructed by the 1st defendant, following the investigation which took place on 12 August 2000, together with all statements, photographs, and appendices attached thereto, and
(2)	Statements taken by GAB Robins and/or the 1st defendant from relevant witnesses in relation to the plaintiff's accident on 12 August 2000, including but not limited to personnel from Olivers and Pizza Hut.

2. The background is this. On 12 August 2000 the plaintiff slipped on a patch of oil or grease on the public footpath in Ice House Street outside the 1st defendant's Landmark building, and fell to the ground. The building and the footpath are on land leased by the 1st defendant. At the relevant time the 1st defendant engaged the 2nd defendant as cleaning contractor to clean the footpath. The plaintiff issued proceedings against the 1st defendant; the 1st defendant admitted that it owed the plaintiff a duty of care but claimed that it had discharged such duty by reasonably entrusting the work to the 2nd defendant and having in place a thorough system for monitoring the work done by the latter. The 2nd defendant was brought into the proceedings by amendment. Contribution notices were issued. The plaintiff's claim has been settled by his acceptance of a sum jointly paid by both defendants subject to the issue of liability being resolved between them. The action proceeds in the form of contribution proceedings between the defendants.

3. It is not in dispute that the accident happened on 12 August 2000 at about 9:45 a.m. The 2nd defendant's case is that it had duly performed its cleaning service earlier that morning, and that no complaint of any default in cleaning had been received from the 1st defendant. It was not involved in the investigations following the accident, and did not know of the accident until it received a letter from the 1st defendant's solicitors in June 2001 inquiring as to the identity of cleaners on duty on the day of the accident.

4. One Mr Eric C.F. Ho, of the firm of loss adjusters GAB Robins, which was instructed by the 1st defendant or its insurers arrived on the scene to carry out investigations at about 11.20 a.m. on the morning of the accident. It appears that inquiries were made of employees of the food shops Olivers and Pizza Hut which are situated in the Landmark building; the 2nd defendant considers that the oil patch at the accident scene might have been left by the cleaning contractors engaged by those shops; apparently they took rubbish out over the pavement at the accident scene. The 2nd defendant says that it had previously complained to the 1st defendant of dirt, dirty water and grease being left on the pavement by these operations.

5. The 2nd defendant envisages that the GAB Robins report will contain statements of witnesses of the accident and other relevant persons, including in particular named employees of Olivers and Pizza Hut, photographs of the scene and a covering report setting out comments on the accident. It is claimed that the report and statements are relevant to the issues in the proceedings, in particular the involvement of Olivers and Pizza Hut in the accident, and should be disclosed.

6. There is, it appears, no dispute that Mr Ho attended the scene and subsequently made a report. The 1st defendant's solicitor, Ms Moore, in her affidavit refers to it as "the report prepared by GAB Robins Hong Kong Limited on 12 August 2000". However the 1st defendant, through its solicitors took the position in correspondence that the report was not relevant to the issues between the defendants, and in any event the loss adjusters were engaged in contemplation of the present lawsuit and their report is therefore privileged.

7. In her affirmations the 2nd defendant's solicitor, Ms Chan, deposes to a belief derived from correspondence between solicitors that the report was commissioned by the 1st defendant rather than its insurers. She suggests that the purposes of the report were to find out the circumstances of the accident, to determine its cause and who was responsible for it, to determine whether the matter should be referred to the insurer of the 1st defendant or the responsible party and to determine what steps should be taken to improve safety and prevent similar accidents.

8. In her affidavit, which is the only affidavit evidence for the 1st defendant, Ms Moore deposes that GAB Robins was engaged by the 1st defendant's public liability insurer, and not, as is said for the 2nd defendant, by the 1st defendant itself. She says that as is usual with any incident which will involve a claim made under the 1st defendant's insurance policy, a report was made to the insurer immediately after the accident occurred. The 1st defendant has confirmed to its solicitors that the insurer instructed GAB Robins. She goes on to say simply that "the loss adjuster's report was commissioned by insurers for the purpose of seeking legal advice in anticipation of any future litigation".

9. It is not in dispute that the report exists, and it has not been argued that its contents are not relevant to the issues between the defendants, which they obviously are. The only question is whether the 1st defendant can claim privilege in respect of the report.

10. Whether a report of this sort attracts privilege depends on the dominant purpose for which it was brought into existence. If that dominant purpose was to prepare for anticipated litigation, privilege can be claimed. See Waugh v. British Railways Board [1980] AC 521. As Bokhary J (as he then was) put it in Tam Yuk Kwan v. Chu Cheuk Tao & Ors [1989] 2 HKLR 493 at 494G-H :

"An accident report is privileged from production if - but only if - at least the dominant, even if not the sole, purpose for which it was prepared was that of submitting it to a legal advisor for advice in connection with, or use in reasonably anticipated litigation arising out of the accident."

11. The onus is on the 1st defendant to establish that the report attracts privilege. In effect the 1st defendant's argument is quite simply that the report was commissioned by the insurer, and there could be no other reason for the insurer to commission the report than that there may in future be a claim against the insured. However, counsel for the 2nd defendant argues that this is not necessarily so. The insurance policy itself has not been disclosed; the 1st defendant refuses to disclose it. The policy may require the insured to take steps to investigate the accident, even before any question of a claim or litigation arises. A notice of accident by an insured to an insurer is not ipso facto made for the purpose of litigation, which is not anticipated as a matter of course; see Mutual Underwriters v. Yu Kam Chung [1978] HKLR 447. The position is the same here. Further the 2nd defendant relies on a dictum of Lord Edmund-Davies in Waugh at p.544 to the effect that :

"... the test of dominance will, as I think, be difficult to satisfy when inquiries are instituted and reports produced automatically whenever any mishap occurs, whatever its nature, its gravity, or even its triviality."

12. In this case, it appears from contemporaneous evidence that the accident appeared trivial. The plaintiff only complained of embarrassment, and of having got his trousers dirty in the fall. He was able to leave the scene and come back later. There would at that stage be no reason to anticipate litigation, as, for instance, there would be in an accident on a building site where a person suffered serious injury and someone would inevitably be sued for it.

13. Ms Moore's evidence is also attacked on the ground that her affidavit does not comply with Order 41, rule 5(2) of the Rules of the High Court. She does not properly identify who, in the 1st defendant, told her that the report was commissioned by the insurer and that it was commissioned for the purpose of seeking legal advice in anticipation of litigation.

14. For my own part I find the proposition attractive that a loss adjuster instructed by an insurer to investigate an accident will only do so for the purpose of seeking advice in anticipation of litigation. The insurer will only come into the picture if a claim is made and litigation is anticipated. This is not a simple accident report from the insured to the insurer which has to be made in every case, pursuant to the policy. We are probably not dealing, as the court was in Waugh, with an accident report produced pursuant to a practice whereby a report is made in every case of accident; but if we are, the reason for the production of a such a report by the insurer's loss adjuster would probably be the anticipation of litigation. At the same time it would not necessarily be so particularly in an apparently trivial case.

15. I take the point, however, that the onus is on the 1st defendant to show that privilege attaches, and that the evidence is somewhat unsatisfactory. As the learned authors of the Hong Kong Civil Procedure 2002 point out at paragraph 41/5/4, an affidavit should where possible be sworn by the person with the most direct knowledge of the matters deposed to, and this will usually be the party rather than his solicitor. Ms Moore simply says that the 1st defendant confirmed to her firm that it was the insurer, and not the 1st defendant who commissioned the loss adjuster's report. She does not identify the source of the confirmation. As to the purpose she merely says that the report was commissioned for the purpose of seeking legal advice in anticipation of any future litigation; she does not say who, in the 1st defendant or its insurer, told her this. She seems to rely primarily on her own view that this must be the only purpose. However, though that is attractive, it is not necessarily inevitable. That was the view taken by Bokhary J in Tam Yuk Kwan though in that case the court had the benefit of an affirmation by an officer of the insurer as to what was the purpose of instructing the loss adjuster's report.

16. I am not therefore satisfied that the 1st defendant has established that privilege must necessarily attach to the report or on the evidence that it does attach in this case. The appeal will therefore be allowed. In place of the Master's order it is ordered that the 2nd defendant's application by summons dated 30 June 2003 be allowed.

17. The 2nd defendant failed to comply with the practice direction as to skeleton arguments, but has won overall, on the same arguments as before the Master, and in any event, particularly on my finding of unsatisfactory evidence on the part of 1st defendant, I do not think that the presence or absence of a skeleton argument in the hands of the other side would have made any difference. I do not see that I could make no order for costs or an order that there be no certificate for counsel; the law was gone into by counsel for the 2nd defendant in some depth. There will be an order for costs of the appeal and below to be to the 2nd defendant with certificate for counsel.