KAUR PARAMJIT v. LI ON NA t/a 新長發快餐 AND OTHERS

DCEC 1479/2012

[2018] HKDC 1388

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1479 OF 2012

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REASONS FOR DECISION

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A.　INTRODUCTION

1.  Mdm Kaur, the applicant in these employees’ compensation proceedings, allegedly met an accident on 5 January 2012 whilst she was working in a restaurant called San Cheung Fast Food (“Restaurant”), which was believed to have been owned by Li On Na (“Mdm Li”).  Before the expiry of the two years’ limitation period provided by s.14 of the Employees’ Compensation Ordinance, Mdm Kaur, through her then legal-aid solicitors, brought these proceedings on 23 August 2012 against Mdm Li trading as San Cheung Fast Food.

2.  Mdm Kaur obtained a default interlocutory judgment and a final judgment respectively on 15 February and 17 October 2013 in default of Mdm Li’s appearance.

3.  After Mdm Li made an application to apply to set aside the default judgments, the Employees Compensation Assistance Fund Board applied to be joined as the 2nd respondent, and to set aside the default judgments. 

4.  It was Mdm Li’s assertion that she ceased to be the owner of the Restaurant as from 11 November 2011 after she sold the Restaurant business to Mdm He Xiao Ying (“Mdm He”) by a transfer of business agreement.  Since the alleged accident happened after she sold the Restaurant to Mdm He, Mdm Li strenuously denied that she was the employer. 

5.  On 28 September 2016, I handed down a decision (“Decision”) setting aside the default judgments.

6.  On 10 May 2017, the Director of Legal Aid discharged Mdm Kaur’s legal aid certificate.  Mdm Kaur then became privately represented until 4 December 2017 when she acted in person.

7.  On 30 November 2017, whilst still privately represented, Mdm Kaur filed a summons together with a supporting affirmation for leave to join out of time a new party - He Xiao Ying trading as San Cheung Fast Food - as the 3rd respondent in these employees’ compensation proceedings.  “He Xiao Ying” (Mdm He), according to Mdm Li’s assertion, was the alleged new owner of the Restaurant. 

8.  Undisputedly, Mdm Kaur’s joinder application was late for about 3 years and 10 months. Apart from Mdm Kaur, both Mdm Li and Mdm He also acted in person. Mdm He opposed the summons, and filed an affirmation in Chinese in support of her opposition. By her letter to this court, Mdm Li stated that she consented to the application and indicated that she would not attend the hearing. The Fund Board maintained a neutral stance.

9.  At the hearing on 23 October 2018, Mdm Kaur and Mdm He both appeared in person, and the Fund Board was represented by its solicitor, Mr Li. Mdm Li was absent.

10.  After hearing submissions from the parties, I acceded to Mdm Kaur’s joinder application and indicated that I would give my reasons later.

11.  These are the reasons for my decision, and they should be read together with the Decision.  Unless expressly stated, I will adopt the same nomenclature used in the Decision.

12.  Mr Li also made submissions on the costs of the summons at the end of the hearing. Hence, I will also give my decision on costs below.

B.　LEGAL PRINCIPLES

13.  On behalf of the Fund Board, Mr Li has rendered much assistance to this court by providing a helpful written submission together with a list of authorities.

14.  Section 14(4) of the Ordinance empowers a court to receive and determine applications (including an application to join a new party) out of time if it is satisfied that there was reasonable excuse for the delay. The court’s power however should be exercised liberally.[1]

15.  In considering what constitutes “reasonable excuse”, a court may take into account all the circumstances of the case including but not limited to matters such as (i) reason for the delay;  (2) length of the delay; (iii) merits of the claim;  and (iv)  prejudice to the intended respondent[2].

16.  When considering whether Mdm Kaur has provided reasonable excuse for the delay, I will bear these principles in mind.

C.　RELEVANT CONSIDERATIONS IN THIS APPLICATION

C.1　Reason for the delay

17.  One of the most important considerations in the exercise of my power will be the reason for the delay. In Mdm Kaur’s affirmation in support of the joinder summons, it appears that the only reason for the delay is Mdm Kaur’s alleged complete ignorance of the alleged change of ownership of the Restaurant from Mdm Li to Mdm He when her legal-aid solicitors commenced the proceedings and obtained the Default Judgments.   She stated that it was not until much later, on or about 8 December 2015, when a representative of Mdm Li informed her about the bankruptcy proceedings against Mdm Li that she was told of the alleged change of ownership from Mdm Li to Mdm He.

18.  Mdm Kaur’s explanation, on the whole, seems to be consistent with Mdm Li’s assertion that she had already ceased to be the owner of the Restaurant on the alleged date of the accident.  The explanation, in my view, is convincing.

C.2　The objection Mdm He raised

19.  In a short four-line Chinese affirmation Mdm He filed in opposition to the joinder summons, Mdm He, whilst not disputing the alleged transfer of the ownership of the Restaurant from Mdm Li to her, alleged that she was not the real owner.  The de facto owner, according to her, was her ex-husband, a Mr Hui Sing Wah (transliteration).  Mdm He also averred that she signed the transfer agreement on behalf of Mr Hui with the latter’s authorization.  Mdm He alleged that she had no involvement with the business of the Restaurant.  

20.  After this court refused Mdm He’s adjournment to file further supporting affirmation from her ex-husband, I permitted Mdm He (without objection from Mdm Kaur and Mr Li) to submit a Chinese statement of her ex-husband. In the four-line statement, Mr Hui states that he is the de facto owner and the person-in-charge of the Restaurant.

21.  By alleging that the ex-husband is the real owner of the Restaurant, Mdm He was implicitly suggesting that she was a mere “paper owner” and was not Mdm Kaur’s employer, thereby implying that she should not be made a party to these proceedings.

22.  Plainly, the ex-husband’s statement is a self-serving document. I do not consider the statement to be sufficiently cogent capable of supporting Mdm He’s assertions.  Mdm He’s assertions, in my view, are only bare assertions. 

23.  Pertinently, Mdm He has not denied that she is the owner (at least on the paper) of the Restaurant.  Granted, even based on the objection Mdm He raised that she was only an agent of an undisclosed principal, her ex-husband, Mdm He should be joined, as this will enable all the matters in dispute to be properly adjudicated upon.

C.3　Other considerations

24.  In allowing Mdm Kaur’s application, I also took into account the length of the delay.  Despite the delay of more than 3 years for Mdm Kaur to bring the application to join Mdm He, I do not believe that the late application has caused prejudice to Mdm He. There is no suggestion that Mdm He was not aware of the alleged accident or has been prejudiced in her defence of the claim as a result of the delay.

25.  In accepting that there was reasonable excuse for the delay, I also took into account that these proceedings were instituted within the limitation period.  Mdm Kaur or her former solicitors were only aware of Mdm He’s potential liability at a much later stage.

26.  Last but not least, I also consider that Mdm Kaur’s claim against Mdm He has merits. Were this court to have refused Mdm Kaur’s application, it would have likely caused grave injustice to Mdm Kaur in depriving the latter of the chance to bring a meritorious claim against the new owner of the Restaurant.

27.  Based on the reasons stated above, I granted leave to Mdm Kaur to join Mdm He as the 3rd respondent out of time.

D.　COSTS OF THE SUMMONS

28.  Apart from Mr Li, neither Mdm Kaur nor Mdm He made any submissions regarding the costs of the summons.

29.  In his written submission, Mr Li referred to this court a personal injuries case[3] on the dis-application of the limitation period, and urged this court to follow “the usual costs order” by drawing an analogy from it.  Mr Li’s proposed costs order consists of two parts as follows:

(i)   The costs of the summons including the costs of the supporting affirmation. Mr Li submitted that since the applicant (Mdm Kaur) was seeking the indulgence of the court, she should pay these costs.

(ii)   The costs after the filing of the summons including the costs of the hearing. Since Mdm He did not succeed in opposing the summons, Mr Li submitted that Mdm He should bear these costs.

30.  Costs are always at the discretion of the court. Hence, I do not find it helpful to draw an analogy from a case with entirely different facts.

31.  From the evidence Mdm He adduced, I believe that Mdm He’s attempt to resist the summons was at best half-hearted, and at worst, unmeritorious. Had she consented to the application at the outset, substantial costs would have been saved.  To do justice to the parties, this court needs to grant a costs order that can reflect the extra costs occasioned by Mdm He’s unsuccessful opposition to the summons. 

32.  Since Mdm Li did not participate in the application, I consider that a proper costs order should be no order to costs.

33.  As for the costs of Mdm Kaur, Mdm He and the Fund Board, I make an order that:

(1)   The costs of the summons (including the supporting affirmation) be costs in the cause;

(2)   Mdm Kaur’s and the Fund Board’s costs after the filing of the summons (and the supporting affirmation) be borne by Mdm He. These costs are to be summarily assessed at the same hearing as the directions hearing on 25 January 2019 at 2:30 p.m.  Mdm Kaur and the Fund Board should lodge and serve their written statements of costs 28 days before the hearing.  Mdm He’s written objections to any of these costs statements shall be lodged and served not less than 7 days before the hearing.  

34.  Since the Fund Board is the only represented party in these proceedings, I further direct the solicitors for the Fund Board to draw up the above costs order in both Chinese and English languages, and then serve a sealed copy order on the parties.

35.  As Mdm Kaur and Mdm He respectively speak Punjabi and Cantonese, I will also ask my clerk to arrange an English/Punjabi and an English/Cantonese interpreter to translate this decision to the unrepresented parties when it is handed down.