WONG KWOK WAH v. WONG KAM TO t/a WING CHEUNG DECORATION CO AND ANOTHER

DCEC 1400/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1400 OF 2010

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IN THE MATTER OF AN APPLICATION
BETWEEN

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REASONS FOR DECISION

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1.  For injury at work on 9 May 2009, the applicant (“Wong”) claims compensation pursuant to the Employees’ Compensation Ordinance, Cap. 282. The 1^st respondent (“Wing Cheung”) and the 2^nd respondent (“Lui”) were sued as the principal contractor and the employer respectively. Judgment on liability against Lui was entered on 8 April 2011.

2.  By summons dated 13 February 2012, Wong applies for:

(1)   leave to discontinue the claim against Wing Cheung;

(2)   Wong’s costs of claim against Wing Cheung and Wing Cheung’s costs of defending the claim are to be paid by Lui in any event to be taxed, if not agreed;

(3)   the own costs of Wong and Wing Cheung are to be taxed in accordance with legal aid regulations.

3.  The discontinuance of the claim between Wong and Wing Cheung was not controversial.  Wong sought what is known as a Sanderson order against Lui whereby the costs of Wong and Wing Cheung in the claim between them are to be paid directly by Lui.  Wing Cheung however contended that it was appropriate to make what is known as a Bullock order whereby Wong is to pay Wing Cheung’s costs up to the discontinuance of the claim; and to include that as part of his costs against Lui.

4.  Lui was late for court until after this court has delivered the decision.  It should make no difference to him insofar as the ultimate liability for the costs of Wong and Wing Cheung mentioned above is concerned.  The difference lies in whether he will face enforcement of costs order separately by Wong and Wing Cheung (in case of a Sanderson order), or Wong only (in case of a Bullock order).  Lui made no submission.

5.  This court gave an order in terms of the application.  As applied, I also ordered that the costs of Wong and Wing Cheung in this application are to be paid by Lui as well, also to be taxed if not agreed, and their own costs to be taxed according to legal aid regulations.  As indicated, I now give my reasons.

THE PRINCIPLES

6.  The principles for Sanderson and Bullock order are well settled.  The solicitors for Wong cited the recent case of Fung Chun Man v Hospital Authority and Anor, HCPI 1113/2006 (20 February 2012).  Bharwaney J noted what is currently explained in the Hong Kong Civil Procedure 2012 (at §62/1/6). But his Lordship had this to say (at §7):

“In the context of actions in tort, it does not matter that the claim against the successful defendant was not made in the alternative but was a separate and independent cause of action. Although a Sanderson or Bullock order is unlikely to be made in a case of successive or unrelated torts by different tortfeasors causing different damage, whether tortfeasors jointly caused the same damage or whether they separate caused different damage or only one of them caused the damage may only be known after a final determination by court. In exercising the discretion whether or not to make a Sanderson or Bullock order, the court would have to regard to all the circumstances of the case and the state of the evidence to determine whether or not it was reasonable for the plaintiff to pursue the successful defendant. In making its decision, the court must be careful not to lose sight of the uncertainties surrounding the case before its conclusion to lose sight of the uncertainties surrounding the case before its conclusion (per Bokhary J, as he then was, in Lee Lai Ha & Anor v Hong Sau Ling & Anor [1993] 1 HKLR 86).”

7.  Bharwaney J stressed (at §6) that if the plaintiff is in possession of evidence that can implicate the defendant, that turns out to be successful, evidence that is neither tenuous nor speculative nor far-fetched, it would be reasonable for the plaintiff to join or to proceed against the successful defendant and the court, at the conclusion of such a case, may, in the exercise of its discretion over costs, make a Sanderson or Bullock order.

THE CIRCUMSTANCES OF THE PRESENT CASE

8.  Wong was engaged by Lui to carry out demolition work at the Ground and Mezzanine Floors of the building in question at Mongkok, Kowloon.  On 9 May 2009, in the course of his employment, Wong fell through an unfenced floor opening on the Mezzanine Floor (“the Opening”) and was injured.

9.  Investigation by the Labour Department commenced.  In his declaration to the Department in June 2009, Wong made no mention of Wing Cheung at all.

10.  In his declaration to the Department in September 2009, Wing Cheung explained that he subcontracted the demolition work to Lui; but the work did not involve the making of the Opening.  Copies of the written contract for the work between him and the ultimate employer were provided.  But the subcontract to Lui was concluded orally.

11.  On 14 August 2010, Lui filed Form 2.  Oddly, he put down his name as both the employer and the principal contractor of Wong.  However, later in September 2010 when he made his declaration to the department, Lui confirmed that the demolition work was contracted orally from Wing Cheung; and the Opening was made to facilitate the conveyance of materials and debris during work.

12.  The Department compiled its accident report dated 28 October 2009.  It referred to the above information obtained during the interviews.  In particular, it recorded that Wing Cheung was the contractor and Lui was his subcontractor for the demolition work.  As to the Opening, it recorded that according to Wing Cheung, that “was not included in the agreed scope of work”.

13.  The employees’ compensation application was filed on 18 November 2010.  Wing Cheung was named and the principal contractor; and Lui the employer.

14.  On 13 December 2010, Wing Cheung filed his answer.  Besides reiterating his stance as declared to the Department, Wing Cheung gave further details about the making of the Opening.  Essentially, it was said to be part of the work that Lui contracted from the then tenant of the premises, a Mr Siu.  As that formed part of the work contracted by Lui from a third party, Wing Cheung denies liability as the principal contractor in respect of the same.

15.  So far, Lui had not filed his answer.  As mentioned, judgment on liability against him was entered on 8 April 2011.

16.  Pursuant to the court’s directions, witness statements were filed.  Wing Cheung did so and reiterated his explanation so far given.  Lui filed his statement on 9 December 2011.  For the first time, Lui confirmed what Wing Cheung has been saying.

17.  Trial was scheduled to take place on 21 February 2012.  On 31 January 2012, the solicitors for Wong wrote to the court seeking to vacate the trial.  The major reason was that upon consideration of the witness statement of Lui and counsel advice, Wong decided to discontinue the claim against Wing Cheung.  The court made the directions accordingly, including that for the present application to be taken out.

DISCUSSION

18.  Differing slightly from what the solicitors for Wong contended, I would not place too much weight on the so-called findings of fact in the accident report in the present case.  Apart from recording what the parties alleged during the investigation, the only conclusion that the department drew was that the Opening being unfenced was unsafe.

19.  Nevertheless I think the reasonableness of joining Wing Cheung as a respondent in these proceedings is beyond doubt.  I say this for the following reasons.

20.  As confirmed in his witness statement filed in November 2011, Wong was a causal worker and did not come know about Wing Cheung until after this accident report.  Indeed he made no mention of Wing Cheung in his declaration to the department.

21.  In his declaration to the department, Wing Cheung admitted that he was the principal contractor of the demolition work.  He made the point that the making of the Opening did not form part of the scope of contract work.  However, that would not negative liability to compensate under the Ordinance even assuming the Opening was made at the initiative of Lui without the knowledge or consent of Wing Cheung provided it was made incidental to the demolition work.

22.  In his declaration to the department, Lui indeed stated that the Opening was made for the purpose of conveyance of debris and materials.  Not only did Lui make no attempt to dissociate Wing Cheung from the making of the Opening, he added that it would be sealed off after the demolition work.  Lui somehow created the impression that he had the opening made for the purpose of the demolition work contracted from Wing Cheung.

23.  These were all that had been made known by the time of the commencement of legal proceedings.  In the circumstances, Wong could hardly be to blame for commencing proceedings against Wing Cheung as the principal contractor responsible for compensating him for injury at work.

24.  When Wing Cheung filed his answer, it was suggested that the Opening was made as a result of the work contracted by Lui separately from the tenant of the premises.  That was the very first time such suggestion came to light.

25.  From the point of view of Wong, Wing Cheung was not privy to the arrangement suggested in his answer.  Therefore it would not be reasonable to expect Wong to decide to drop the claim against Wing Cheung merely upon such assertion.  Carrying the burden of proof, Wong was reasonably expected to investigate such suggestion; and to do that, it would be necessary to know what Lui would say about that.

26.  As mentioned, Lui had filed no answer.  It was not until the court gave an unless order did Lui eventually file his witness statement.  It was only then did he confirm what Wing Cheung suggested in his answer.  Call that change of version or clarification as one wants to, one only then became in a better position to consider when the claim against Wing Cheung could continue.

27.  Wing Cheung was innocent.  But so was Wong in joining him.  Lui was clearly and solely responsible.  In my discretion, I see positive reasons for preferring a Sanderson order to a Bullock order.

28.  The solicitors for Wong also referred to the question of fair distribution of hardship caused by the possible insolvency of Lui and his inability to meet the judgment on costs, a point also made in the passage in Hong Kong Civil Procedure (above).  However, both Wong and Wing Cheung happened to be legally aided.  Principle aside, the concern appears to be a neutral consideration in reality.  The parties’ solicitors accepted that.