XCHRX Nip Kwok Wah v. Wing Chong Engineering Co. and Another

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES COMPENSATION CASE NO. 735 OF 1998

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J U D G M E N T

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1. This is an application by the respondents to strike out the applicant's claim for employees' compensation for want of prosecution.

2. I have before me a chronology prepared by Mr Ismail, whose application this is, which contains more than a hundred items. At the risk of sounding ungrateful for the assistance that he has given the court, I will only need to make reference to a small proportion of those dates.

3. The accident which is said to give rise to the claim occurred on 11 October 1996. The applicant was employed by the respondents as a fitter to work on the construction of the passenger terminal building at the new airport at Chek Lap Kok. A piece of plywood board that the applicant was carrying with a fellow workman, Mr Lee Kin-sun, was allowed to fall and strike his right ankle and he was subsequently given sick leave for that injury. Later, according to the applicant, his back began to play up as a result of this incident and the claim itself relates to both ankle and back injuries.

4. The genuineness or otherwise of the back injury is very much in issue and as it has some impact on this application, I will need to make further reference to it presently.

5. Other than the date of this accident, the other dates, so far as the court itself is concerned, are both few and far between. The application is dated 3 October 1998, that is to say some eight days before the expiry of the limitation period, although it is right to observe that the court retains a discretion to allow applications to be brought outside the two year limitation period where the applicant can show reasonable cause for not having come within the two year period.

6. When he made the application, the applicant was unrepresented. On 18 November 1998, the court having appointed this date, the application was "called-over" before Judge To, this being the normal procedure in this court with all such applications. Judge To made the usual orders on this occasion. He ordered the respondents to file their Answer and a list of the applicant's earnings for the period of 12 months immediately prior to the accident within 21 days and he adjourned the application generally with liberty to restore.

7. The respondents filed their Answer denying liability promptly on 26 November 1998. On 7 December 1998, they filed a list of the applicant's earnings. So far as the court is concerned, no further steps were taken before it to progress the matter until 13 March this year when the applicant's solicitors, who had been appointed under a legal aid certificate dated 9 August 2000, took out a summons for directions under Order 23A, rule 7 of the Rules of the District Court returnable on 21 March.

8. On 20 March, the respondent's solicitors issued this summons to dismiss the application for want of prosecution. Judge Z. E. Li, who heard the summonses on 21 March, adjourned them before me on 26 June and so for a period of 2 years and 5 months, that is to say from 18 November 1998 when Judge To gave his directions, until 13 March this year when the applicant issued a summons for directions, there has been no progress in this litigation. That leisurely pace, particularly in the context of a jurisdiction which is there to provide a relatively uncomplicated and speedy method of providing a workman with compensation for injuries suffered in the workplace and without the necessity of proving any negligence or breach of statutory duty by his employers is unimpressive. It is certainly far slower and inactive than is the norm in this type of case.

9. I have deliberately isolated the very few occasions when the court has been invited to make any orders; just two occasions in 29 months. Nevertheless, it is right to say that the applicant has been occupied with a number of other matters more or less directly related to the prosecution of the application. I should identify the most significant which I gladly take from Mr Ismail's chronology. I propose first to isolate the applicant's medical treatment.

10. On 14 October 1996, he was admitted to the orthopaedic ward of Queen Elizabeth Hospital for treatment to his right ankle. The ankle was swollen with no bony fracture. Movement of the ankle was restricted. On 16 October 1996, he was discharged but told to undergo physiotherapy and granted sick leave for that purpose. On 17 October, he attended the outpatient clinic of the Physiotherapy Department at Queen Elizabeth Hospital. He attended 53 sessions of physiotherapy until November 1997. His sick leave was continued due to the ankle injury. On 22 October 1996, physiotherapy was started on the right ankle where swelling and tenderness were noted. In October and December 1996, he complained to the Physiotherapy Department of back pain for which he was given treatment. By 6 January 1997, the right ankle discomfort had recovered. On 10 February 1997 and on 10 March 1997, he was given sick leave for low back pain.

11. On 31 March 1997, the respondents, who up till then had paid the applicant sick leave payments totalling $52,407, stopped those payments because they took the view that his then back symptoms were not related to his work-related ankle injury of 11 October 1996. The applicant continued to be given sick leave certificates for low back pain until 2 November 1998. Following the respondents' refusal to pay further sick leave pay from 31 March 1997 until sick leave certificates were no longer issued in November 1998, the applicant complained to the Labour Department about the respondents' alleged default in this respect. This was on 8 July 1997. In any event, prior to this, on 3 June 1997, the Labour Department had written to the respondents indicating that it intended asking the Occupational Health Officer to determine if sick leave after 10 February 1997 was related to the injury of the 10 October 1996. This issue was resolved on 11 February 1998 when the Labour Department wrote to the applicant to tell him that the Occupational Health Officer had determined that the sick leave accorded to him for back pain was not related to the injury at work on 11 October 1996.

12. To summarise the position, therefore, the applicant had been given sick leave for the whole of 1997, most of it for low back pain, and by February 1998 he had a ruling that the low back pain was not referable to what had occurred on 11 October 1996. That, in my judgment, concluded an important first phase of the medical issue, if I can so describe it. He had that ruling some eight months before the expiry of the limitation period.

13. On the same day, 11 February 1998, the Commissioner of Labour, whose staff had up to that point been assisting the applicant, wrote to the Legal Aid Department to tell them that through his staff he had advised the applicant to apply for legal aid so as to apply for employees' compensation and for damages for personal injury arising out of the respondents' alleged negligence. On 19 March 1998, legal aid was refused because the applicant's means exceeded the legal aid limits.

14. For most of 1998, the applicant had also continued with treatment for low back pain until the conclusion of his sick leave on 2 November 1998. On 21 September 1998, the Labour Department wrote to the court informing the Deputy Registrar that the applicant had been advised to come to court to apply for employees' compensation, which he did, and with the court's staff assistance his application was drafted, filed and served on 3 October 1998.

15. The next phase which needs to be considered is from the date of the application in October 1998 until the issue of the summons for directions on 13 March this year. Before I do that, it should be observed that in May 1997 the applicant and his wife separated. She then petitioned for divorce on 25 May 1999 on the ground of one year separation and consent. On 3 September 1999, she was granted a decree nisi of divorce which was made absolute on 25 October 1999. The applicant's wife was also granted custody of their children. The applicant relies in part on these events to excuse some of the delay and so I must also return to this matter presently.

16. After the issue of the application and the respondent's Answer in November 1998, two medical reports were obtained from the Queen Elizabeth Hospital in December 1998. In April 1999, a medical assessment was arranged for the applicant by the Labour Department. The finding was a 2 per cent loss of earning capacity for residual right ankle pain and together with a finding that the back pain was not work-related. A certificate of assessment was issued on 29 November 1999 confirming the earlier medical assessment in April.

17. On 2 December 1999, the applicant lodged an objection on the grounds that the assessment did not have regard to his back injury. On 9 August 2000, the applicant, having re-applied for legal aid, was on this occasion successful and his solicitors, Messrs Liau, Ho & Chan were assigned to represent him. On 22 August, they had their first conference with him. They made arrangements to have the applicant examined by a medical expert and on 26 August 2000 they wrote to the Commissioner for Labour to enquire about the progress of the review of the medical assessment having regard to the fact that the applicant's objection was dated 2 December 1999.

18. On 29 August 2000, the Labour Department replied that the review would be conducted on 11 October 2000. On 25 October, a certificate of review was issued confirming the 2 per cent assessment. In the meantime, during September, there was toing and froing about a suitable date for the applicant to be examined by the respondent's medical expert, Doctor David Cheng, who examined him on 19 September. Then, on 18 January this year, the Legal Aid Department authorised the applicant's examination by Doctor Au, the original request having been made to the department on 22 August 2000. Doctor Au examined him on 23 February 2001 and his report was prepared and dated 5 March 2001. Lastly, the applicant's solicitors issued their summons for directions on 13 March 2001.

19. From that review of the chronology, I turn to the law which, although well-known and clear, can present difficulties when the court seeks to apply the facts of the particular case before it to the legal principles which govern the exercise of the court's powers to strike out a claim for delay. An action may be struck out where the court is satisfied that there has been inordinate and inexcusable delay on the part of the applicant and such delay (a) will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or, (b) is such as is likely to cause or to have caused serious prejudice to the respondent either as between himself and the applicant or between him and a third party. This is the approach established by the House of Lords in Birkett v James [1978] AC 297 per Lord Diplock, 318F-G.

20. The definition of "delay" has been refined by May LJ in Lev v Fagan, Court of Appeal unreported transcript, 15 March 1988, as follows:

"In my opinion the relevant delay does not only mean the passage of time in which nothing is done on either side. I accept that those periods are usually more important and can usually be more precisely identified but there can be delay even though things are happening, albeit in a desultory fashion."

In Benoit v The London Borough of Hackney, unreported Court of Appeal transcript, 11 February 1991, Stuart-Smith LJ proposed a similar approach:

"Where a plaintiff delays starting proceedings until the last possible moment allowed under the Limitation Act and then delays for a further period as permitted by the rules before serving the proceedings, it is incumbent upon that party to proceed with the case with all due diligence. It is not sufficient simply to look at the periods of time when nothing appears to be happening as between the plaintiff and the defendant. It is necessary for the court to consider various periods of delay and decide whether it is satisfied that there was inordinate and inexcusable delay, and in so doing it is necessary to bear in mind that even in the periods when some action is being taken it may be so desultory and inadequate compared with what is required in the circumstances that the court should say that it amounts to inordinate and inexcusable delay."

21. It is clear that an applicant can use up the whole of the limitation period before he issues his proceedings; that is his right. Nevertheless, if he chooses to do so, he is then required to press on with the matter with due diligence. Lord Diplock J in Birkett v James supra referred to this at page 322G in this way:

"A late start makes it more incumbent upon the plaintiff to proceed with all due speed and a pace which might have been excusable if the action had been started sooner may be inexcusable in the light of the time that has already passed before the writ was issued."

On the same aspect, Lord Denning MR in Biss v Lambeth, Southwark and Lewisham Health Authority (1978) 1 WLR 382 at 390H observed that:

"It is his duty to proceed with it with expedition after the issue of the writ. He must comply with all the rules of court and do everything that is reasonable to bring the case on quickly for trial. Even a short delay after the writ may in many circumstances be regarded as inordinate and inexcusable and give a basis for an application to dismiss for want of prosecution."

In Trill v Sacher [1993] 1 WLR 1398E, Neill LJ warned that:

"Where a plaintiff delays issuing proceedings until towards the end of the limitation period, he is then under an obligation to proceed with the case with reasonable diligence (Birkett v James). Accordingly, a court is likely to look strictly at any subsequent delay which is in excess of the period allowed by rules of court for taking the relevant step and may regard such subsequent delay as inordinate even though a similar lapse of time might have been treated less strictly had the action been started earlier."

22. As to whether delay falls to be categorised as inordinate must turn on the facts of a particular case. In the current edition of Hong Kong Civil Procedure, paragraph 25/4/5 at page 425, "inordinate" is said to mean "materially longer than the time usually regarded by the profession and the courts as an acceptable period". In Trill v Sacher supra at page 1398C, Neill LJ said as follows:

"Inordinate delay cannot be precisely defined. What is or is not inordinate delay must depend upon the facts of each particular case (Allen v Sir Alfred McAlpine Limited). It is clear, however, (a) that for delay to be inordinate, it must exceed probably by a substantial margin the time prescribed by the rules of court for the taking of steps in the action and, (b) the delay in issuing the writ cannot be classified as inordinate provided the writ is issued within the relevant period of limitation."

23. An additional requirement to delay being inordinate is that it should be inexcusable. It would appear that once delay has been shown to be inordinate, it will prima facie be inexcusable. In Allen v Sir Alfred McAlpine & Sons Limited (1968) 2 QB 229, Salmon LJ at 268F-G held that:

"In order for such an application to succeed, the default must show (2) that this delay is inexcusable. As a rule, until a credible excuse is made out, the natural inference would be that it is inexcusable (see also Trill v Sacher per Neill LJ 1398D). Delay which is inordinate is prima facie inexcusable. Once delay is shown to be inordinate, an evidential burden is placed on the plaintiff [or applicant as in this case] to offer a credible excuse for that delay."

The principle is that whether or not there has been inexcusable delay should be examined from the defendant's or the respondent's point of view, or at least objectively (see Ho Hip-lik v Kwan Man-ho & Others [1996] 2 HKLR 184 per Liu J.A. at 186A).

24. Lack of finance which causes delay must be viewed critically and with care (see Hymer v MTRC [2000] 2 HKLRD 589, a decision of the Court of Appeal where this aspect was considered. The headnote (5) sufficiently reproduces the court's judgment:

"Delays caused by impecuniosity or lack of finance were not as such excusable. Even though the court might afford an impecunious plaintiff a certain indulgence while he was trying to raise funds or otherwise progress the case, there was likely to come a time when his action had to be struck out. However, delays incurred in the process of getting legal aid, such as where complications were encountered or processing took a particularly long time might, in appropriate circumstances, constitute a valid excuse for delay. A diligent application for legal aid might well be regarded as part of the plaintiff's proper prosecution of the action preventing the time spent in that process from being inexcusable."

In this matter, where the defendant had to apply for legal aid twice, I will need to make further reference to this aspect.

25. The final matter to refer to concerns the need by the applicant for a striking out order to demonstrate that the delay is likely to cause or to have caused him or it serious prejudice. In Birkett v James, Lord Diplock at 323G said that:

"To justify dismissal of an action for want of prosecution some prejudice to the defendant, additional to that inevitably flowing from the plaintiff's tardiness in issuing his writ, must be shown to have resulted from his subsequent delay beyond the period allowed by rules of court in proceeding promptly with the successive steps in the action. The additional prejudice need not be great compared to that which may have been already caused by the time elapsed before the writ was issued, but it must be more than minimal and the delay in taking a step in the action, if it is to qualify as inordinate as well as prejudicial, must exceed the period allowed by rules of court for taking that step."

26. In this regard, prejudice caused by the totality of periods of delay can be considered (see Rowe v Tregaskes [1968] 1 WLR 1475 per Denning MR 1477F-G).

"We have said on many occasions that we consider all the delay, not only the delays after the writ but also the delay before it. The delay in the first two or three years is often the most prejudicial of all. At any rate, if a plaintiff does delay until the period of limitation is nearly expired, he should keep to the timetable thereafter."

And, and Roebuck v Mungovin [1994] 2 AC 224 per Lord Browne-Wilkinson at 234B-C:

"Once the plaintiff is guilty of further delay, the prejudice caused by the totality of the periods of his delay can be looked at."

The prejudice relied upon in this matter relates to missing witnesses and impaired memories which are categories of prejudice well recognised by the courts.

27. I now turn to the facts of this matter. Has there been inordinate delay? Mr Gidwani, who appears for the applicant and who has said everything that could possibly be said on his behalf, rightly submits that at this stage of the enquiry one must identify the relevant period to be considered and to then judge whether that period of time is to be characterised as a period of inordinate delay. In Birkett v James supra, Lord Diplock at 322G held that:

"To justify dismissal, the delay relied on must relate to time which the plaintiff allows to lapse unnecessarily after the writ has been issued.

That having been said, the court in judging such post-writ delay will also have regard to the requirement that a party using up all of the limitation period is then bound to get on with the litigation and bring it to trial with all due dispatch.

28. The period I am primarily concerned with therefore is the two and a half years from October 1998 to March 2001 when the applicant's solicitors took out their summons for directions. All that occurred during this time in terms of litigation was a call-over in November 1998 - and that appointed by the court - and then nothing until March 2001. It strikes me that this period of inactivity in the litigation properly falls to be described as materially longer than the time usually regarded by the profession and the courts as an acceptable period. This is two and a half years in which effectively nothing was done to move the case along and this following the use of the whole of the limitation period before the issue of the application; this is inordinate delay in all the circumstances. It is therefore also prima facie inexcusable.

29. I now need to consider the reasons put forward by the applicant for this delay. The excuse need only relate to the post-application period. He has no need to make any excuses for using up the limitation period, that is his entitlement. But in assessing the excuses put forward, I must regard them against the standard of a requirement to press on with all due diligence after the issue of the application.

30. I should preface my remarks by saying that the respondents had stopped making sick leave payments as from 31 March 1997, which perhaps should have provided some sort of incentive for the applicant to press on and try and obtain an award from the court. He had applied for legal aid in February or March 1998 and was refused on 19 March 1998. He was eventually granted legal aid on 9 August 2000.

31. It is submitted that consideration should be given to him because for the first 22 or 23 months of the post-application period he was in person and therefore could hardly be expected to exercise the sort of urgency that a competently represented litigant might display and this at a time when he had become rather bogged down with a dispute over the certificate of assessment for loss of earning capacity.

32. The medical assessment had been made on 14 April 1999 and a certificate of assessment given on 29 November 1999, which he formally objected to on 2 December 1999, and which in fact was not finally ruled upon until 25 October 2000, some two months after he had become represented by solicitors.

33. There is some force in this point but it is really going too far to submit, as Mr Gidwani does, that there is nothing that the applicant could do from the date of the call-over in November 1998 until the first assessment in April 1999. Even making every allowance for the fact that he was in person, he had by then received the Answer and the list of earnings. He could and, in my judgment, should have approached the court office to ask for advice. Instead he chose to take no further step in the application for the whole of the rest of 1999 and until he had been granted legal aid eight months into 2000. The only matter that he engaged in with proper dispatch was to react to the certificate of assessment in November and December 1999 when he made a prompt objection to the award.

34. These assessments do take time but they are no bar to the litigation itself being prepared for trial. I am afraid that even making every allowance for the applicant's ignorance of the court's procedures and generally for the fact that he was unrepresented for very nearly the first two years of the litigation, I can find no excuse for the inordinate delay where nothing was done by the applicant.

35. I have no doubt that a simple visit to the Court Registry would at least have resulted in the matter being listed on his behalf for further directions to be given by the judge who would have taken stock of the situation and moved matters along.

36. In coming to this view, I have also had regard to the fact that on 25 May 1999 the applicant's wife had issued a divorce petition. Such an event clearly is an added distraction which I have had regard to, but it is right to say that the matter proceeded quickly to a decree nisi in October 1999 on an undefended basis where the parties had already been separated since May 1997. And so, whilst no doubt an important personal difficulty, in practice, the divorce itself appears to have occupied little time.

37. The applicant's solicitors who came into the picture in August 2000 have been criticised by Mr Ismail for having taken six or seven months to take out a summons for directions. In fairness to them, they would have had to read themselves into the case and they appear to have dealt with the matter reasonably but for the fact that they had inherited a completely stale and inactive case. They of course achieved more in seven months than the applicant had in the previous two years.

38. It is easy to judge such matters with the benefit of hindsight, but it seems to me that they would have been well advised to take out the summons for directions in September or October 2000 once they had become familiar with the case and ask the judge to set a timetable to take into account the fact that they needed to have their client medically examined.

39. Even with their relative speed from August to March, when I judge the whole period from October 1998 to March 2001, and by giving every consideration to the excuses put forward by Mr Gidwani, I have come to the conclusion that the applicant has not carried the burden of showing a reasonable excuse for this delay.

40. From this I now turn to the question of whether this inordinate delay, unexcused as it is, has given rise to the requisite degree of prejudice. Mr Gidwani relies on what Lord Diplock said in Parker v Ham (1972) 1 WLR 1583 that:

"If the post-writ delay, inordinate and inexcusable as it may be, does not worsen the defendant's position, then the case should not be struck out for want of prosecution.

That having been said, the degree of prejudice also needs to be considered. Lord Diplock in Birkett v James at 323G held that:

"To justify dismissal of an action for want of prosecution, some prejudice to the defendant additional to that inevitably following from a plaintiff's tardiness in issuing his writ must be shown to have resulted from his subsequent delay in proceeding promptly with the successive steps in the action. The additional prejudice need not be great compared with that which may have been already caused by the time elapsed before the writ was issued."

41. Mr Gidwani submits that there is no worsening of the respondent's position caused by the post-application delay. This is a relatively simple matter. There are post-accident reports available to the respondent prepared by their safety officers, Mr Rabelas and Mr Yam. There was a further report in 1997 signed by the applicant, by Mr Pang of the 1st respondent and by Mr Brian Yam of the 2nd respondent.

42. There are a series of medical reports from the government hospitals as to the progress of the applicant's condition. The only issue relates to whether the back injury rather than just the ankle injury is referable to the accident on 11 October 1996. Mr Ismail says that the very passage of time will dim memories. It is unlikely that a trial date can be obtained for at least another six months, which would be over six years after the date of the accident.

43. Further, the delay has meant that the respondents now have no hope of locating Mr Lee Kin-sun, the applicant's fellow workman when he was allegedly injured. He could have been in a position to speak about the circumstances of the accident and subsequent injury.

44. They are also now unable to locate Mr Pang, site clerk, who signed the accident report on 7 January 1997 and Mr Brian Yam who signed two accident reports. These reports may go to highlight inconsistencies in the applicant's case as to whether the applicant had really injured his back or whether the injury was limited to his right ankle. According to the respondents, they are three witnesses short which they may have been able to locate and call but for the post-application delay.

45. Mr Gidwani submits that Mr Lee's details could and should have been recorded at the time, and perhaps he may still have been available to the respondents had they done that. This delay has not worsened the respondents' position with reference to Mr Lee. As to this witness, I am inclined to say that Mr Gidwani is right but that cannot extend to Mr Pang, nor to Mr Brian Yam. The respondents have been deprived of their ability to call these witnesses to speak to their reports by virtue of this post-application delay. They have therefore suffered prejudice on a central issue which relates to the category of injury; back and ankle or ankle only, which the applicant seeks to be compensated for. This prejudice is more than minimal, it is material prejudice. Accordingly, the respondents have shown all the necessary ingredients to justify dismissal for want of prosecution. I shall therefore strike out the application and, I fear, with costs and certificate for counsel.

(Discussion re costs of previous summons for direction)

46. Application struck out with costs and certificate for counsel together with costs reserved on 21 March 2001. Legal Aid taxation of the applicant's costs.