LAI WING SUN v. HIGH LINK TECHNOLOGY LTD AND OTHERS

DCPI 78/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO. 78 OF 2006

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REASONS FOR RULING ON COSTS

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I.   Background

1.  On 14^th January 2006, the Plaintiff commenced the present claim for damages for personal injuries against the 1^st, 2^nd and 3^rd Defendants as a result of an alleged accident on 18^th January 2003 (“Accident”). However, the Writ of Summons was only served in November 2006.

2.  In November 2006, the Plaintiff also served Notice to Insurer on inter alia Nipponkoa Insurance Company (Asia) Limited (“Nipponkoa”), the present 4^th Defendant, in relation to an insurance policy issued by Nipponkoa covering the 2^nd Defendant (“Policy”).

3.  At that time, the 1^st, 2^nd and 3^rd Defendants were unrepresented. On 1^st December 2006, prior to filing and service of the Statement of Claim, each of them filed/served his/its home-made Defence in the Chinese language. In a nutshell,

(a) the 1^st Defendant averred that the Plaintiff was the business partner of the 2^nd and 3^rd Defendants and/or worked for a Wu Kwok Leung (ie the present Third Party);

(b)    the 2^nd Defendant averred that the Plaintiff “並非本公司工人” and “該工程是本人與[the 3^rd Defendant]是合作形式處理工作”; and

(c) the 3^rd Defendant averred that the Plaintiff was employed by or was a partner of Wu Kwok Leung.

4.  The Statement of Claim was served on the 1^st, 2^nd and 3^rd Defendants on 12^th December 2006. By the Statement of Claim, the Plaintiff claimed that 1^st Defendant was the principal contractor for the relocation work project (“Project”) at the site where the Accident occurred (“Site”), the 2^nd Defendant was the 1^st Defendant’s sub-contractor for part of the Project (“Works”), and 3^rd Defendant was the 2^nd Defendant’s sub-contractor in respect of the Works at the Site. The Plaintiff further pleaded that he was employed by the 3^rd Defendant as a renovation worker carrying out the Works at the Site, or alternatively both the 3^rd Defendant and the Plaintiff were employed by the 2^nd Defendant as renovation workers carrying out the Works at the Site.

5.  Quite apart from allegations of breach of statutory duties and negligence, the Plaintiff averred in the Statement of Claim that (a) at all material times the 2^nd or the 3^rd Defendant owed him a duty under the implied terms of the contract of employment, and (b) the Accident was caused inter alia by breach of implied terms of contract on the part of the 2^nd or 3^rd Defendant.

6.  On 13^th January 2007, Nipponkoa’s solicitors wrote to the Plaintiff’s solicitors to explain that the Policy was an employees’ compensation policy which only covered the 2^nd Defendant against liability at law, including liability under the Employees’ Compensation Ordinance (“Ordinance”), if any employee in the 2^nd Defendant’s immediate employ shall sustain injury by accident arising out of and in the course of his employment, but the Policy did not cover the 2^nd Defendant in respect of injury sustained by its sub-contractor’s employees and/or the principal contractor. It was said that Nipponkoa was not on risk under the Policy at the time of the Accident, and the Plaintiff was urged to withdraw the Notice to Insurer.

7.  On 5^th February 2007, Nipponkoa’s solicitors chased the Plaintiff’s solicitors for a reply. There was no response.

8.  On 21^st February 2007, Nipponkoa issued a summons (“Joinder Summons”) seeking inter alia the following reliefs :

(a) Nipponkoa be joined as the 4^th Defendant in the present action pursuant to Order 15 rule 6(2)(b)(i) and/or (ii) of the Rules of the District Court (“RDC”);

(b)    the Writ of Summons and all pleadings in this action be amended by adding the name of Nipponkoa as the 4^th Defendant; and

(c) leave to the 4^th Defendant to file and serve a Defence within 14 days from the date of the order to be made.

9.  Nipponkoa’s solicitors filed a supporting affirmation confirming that the nature of the Policy as described in paragraph 6 above. It was argued that the 4^th Defendant was not on risk under the Policy since the 2^nd Defendant by its Defence denied having employed the Plaintiff at the time of the Accident. Further, Nipponkoa claimed it only became aware of the Accident upon receipt of the Notice of Insurer, and the 2^nd Defendant was in breach of the policy condition by failing to report the Accident to Nipponkoa. Nipponkoa applied to be joined in the present action as an “interested” party since it was possible that pursuant to section 43 of the Ordinance the Plaintiff might enforce against Nipponkoa any judgment it might obtain in the present action.

10.  On 28^th February 2007, the 3^rd Defendant’s solicitors filed Notice to Act.

11.  At the hearing of the Joinder Summons on 7^th March 2007 at which all parties were present, H H Judge Lok granted inter alia the following directions (“Order”) :

(a) “根據區域法院規則，第15號命令第6(2)(i)及(ii)條規則，加入申請人[Nipponkoa]在本訴訟中為第四被告人”;

(b)    “本訴訟中的傳訊令狀及所有狀書，須作出修訂，將申請人加入為第四被告人”; and

(c) “第四被告人獲得許可，於本命令日期起14天內，將答辯書存檔及送達原告人”.

12.  For the purpose of the hearing before me, there was some contention between the Plaintiff and the 4^th Defendant as to whether the Order was made by consent or not. I note the Order was perfected and filed on 16^th March 2007, and there was no indication on its face that it was made by consent. No application has been made for rectification or variation, so I am not prepared to go behind the perfected Order.

13.  It is plain from the Order that the court granted leave to the 4^th Defendant to join in the present action pursuant to Order 15 rule 6(2)(b)(i) and (ii) of the RDC, ie on the basis that the 4^th Defendant :

(a) “ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon” (Order 15 rule 6(2)(b)(i) of the RDC); and

(b)    was “a person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter” (Order 15 rule 6(2)(b)(ii) of the RDC).

14.  On 15^th March 2007, the 3^rd Defendant’s solicitors filed a formal Defence in the English language. In such Defence, the 3^rd Defendant averred that the Plaintiff and the 3^rd Defendant himself were employed by Wu Kwok Leung trading as Sam Tung Construction Co, and denied the Plaintiff was employed by the 2^nd Defendant.

15.  On 21^st March 2007, the 1^st Defendant filed an Amended Defence claiming that the Plaintiff was employed by Wu Kwok Leung. On the same day, the 4^th Defendant by its solicitors (ie Nipponkoa’s solicitors) filed its defence specifically denying that the 3^rd Defendant and the Plaintiff were employed by the 2^nd Defendant.

16.  On 22^nd March 2007, the 2^nd Defendant’s solicitors filed a formal Defence in the English language. The 2^nd Defendant claimed that in early or mid-January 2003 it sub-contracted certain works to Wu Kwok Leung and the Plaintiff as partners. Alternatively, the Plaintiff was the sub-contractor of Wu Kwok Leung in undertaking such sub-contracted works. The 2^nd Defendant denied there was any employment relationship between himself and the Plaintiff.

17.  The 1^st, 2^nd and 3^rd Defendants filed their respective List of Documents on 21^st and/or 22^nd March 2007.

18.  At the Check List Review hearing on 16^th April 2007, Master K W Wong granted extension of time of 21 days for the Plaintiff to file and serve (a) the Amended Writ of Summons to reflect the joinder of the 4^th Defendant in the present action, and (b) the Amended Statement of Claim and Statement of Damages (“Time Order”).

19.  On 7^th May 2007, the Plaintiff filed the Amended Writ of Summons that not only reflected Nipponkoa as the 4^th Defendant, but also included amendments to the general indorsement of claim that added a claim for damages against the 4^th Defendant on the following basis :

“The Plaintiff’s claim is for damages for personal injury, loss and damage sustained in the course of his employment arising out of the negligence and/or breach of statutory duty and/or breach of common duty of care of the 1^st, 2^nd, and/or 3^rd and/or 4^th Defendants its servants or agents at [the Site] on the 18^th day of January 2003.”

20.  On the same day, the Plaintiff filed the Amended Statement of Claim not only reflecting Nipponkoa as the 4^th Defendant, but adding the following pleaded averments :

(a) the 4^th Defendant was the insurer of the 2^nd Defendant under the Policy (paragraph 1(e));

(b) “[by] reason of the matters pleaded above, if the 2^nd Defendant is held to be an employer of the Plaintiff and being liable for the Plaintiff’s claims herein, the 4^th Defendant is obliged under Section 43 of the [Ordinance] to pay the damages, interest, and costs that the Plaintiff is entitled to herein, notwithstanding anything to the contrary in the Policy” (paragraph 12).

21.  On 16^th May 2007, the 3^rd Defendant filed his Amended Defence by not admitting paragraphs 1(e) and 12 of the Amended Statement of Claim.

22.  On 5^th June 2007, the 4^th Defendant filed its Amended Defence by not admitting paragraphs 1(e) and 12 of the Amended Statement of Claim, and expressly repeating that the Plaintiff was not employed by the 2^nd Defendant.

23.  On 20^th June 2007, the 1^st Defendant filed his Re-Amended Defence by maintaining that the Plaintiff was employed by Wu Kwok Leung and not admitting paragraphs 1(e) and 12 of the Amended Statement of Claim.

24.  On 6^th July 2007, the 2^nd Defendant filed its Amended Defence by admitting paragraph 1(e) and not admitting paragraph 12 of the Amended Statement of Claim.

25.  Parties exchanged their respective witness statements on 13^th August 2007.

26.  At the Check List Review hearing on 20^th May 2008, the Personal Injuries Master set the case down for trial in the fixture list on 12^th September 2008 at 9:30am at Court No.29 with 4 days reserved.

II.    Plaintiff’s Summons

27.  On 9^th May 2008, the Plaintiff applied by summons for inter alia the following reliefs (“Summons”) :

(a) leave for the Plaintiff to discontinue the action against the 4^th Defendant; and

(b) there be no order as to costs of this action including the costs of such application between the Plaintiff and the 4^th Defendant.

The adjourned hearing of the Summons came before me on 30^th July 2008.

III.  Plaintiff’s evidence and submissions

28.  According to the 2 affidavits of the Plaintiff’s solicitor, Ms Lai Lai Shan Esther, filed in support of the Summons, when the Plaintiff’s solicitors first received instructions to act for the Plaintiff, they issued an originating summons against the 1^st, 2^nd and 3^rd Defendants to seek pre-action discovery of the relevant insurance policy. The Plaintiff obtained information about 2 insurance policies, ie a policy issued by AXA General Insurance Hong Kong Limited (“AXA”) and the Policy issued by the 4^th Defendant. The Plaintiff’s solicitors were handicapped by the fact that there was no detailed investigation by the police or the Labour Department, so as a matter of prudence they issued Notice to Insurer to both AXA and the 4^th Defendant in November 2006.

29.  Ms Lai claimed the Plaintiff was not in a position to ascertain the 4^th Defendant’s potential liability when Nipponkoa’s solicitors invited the Plaintiff to withdraw the Notice to Insurer. She said that at that time the Defendants’ Defence had not been filed, discovery had not been made and witness statements had not been exchanged.

30.  In my view, this is not quite correct because all Defendants have filed and served their home-made Defence long before the Order. Indeed, solicitors’ correspondence revealed that the Plaintiff’s solicitors did send a copy of the 2^nd Defendant’s home-made Defence to Nipponkoa’s solicitors on 13^th January 2007. The stance of the 2^nd and 3^rd Defendants that Wu Kwok Leung was the Plaintiff’s true employer/ partner was firm and consistent throughout the present action. In any event, even up till now (upon the eve of the trial and when the Plaintiff’s investigation of the 4^th Defendant’s liability should have been complete), the Plaintiff still stood on the Notice to Insurer to Nipponkoa.

31.  Ms Lai went on to say that counsel advised the 4^th Defendant should not have been joined as a defendant and the action against the 4^th Defendant should be discontinued with no order as to costs for the following reasons :

(a) if the court at trial finds the 2^nd Defendant liable as a contractor responsible for the Site as a result of breach of statutory duties and/or negligence, there is no role for the 4^th Defendant to be joined as a defendant;

(b) if the 4^th Defendant does have an interest in the proceedings, there is no reason for the 4^th Defendant not to take over the proceedings from the 2^nd Defendant instead of causing the Plaintiff to incur additional and unnecessary legal costs by becoming an additional defendant.

32.  It was further argued that the 4^th Defendant need not be a defendant in the present action because :

(a) if the 4^th Defendant wished to obtain any information in order to assess the 2^nd Defendant’s potential liability, it could have obtained the same from the 2^nd Defendant or the Plaintiff, and the Plaintiff’s solicitors had duly answered their queries;

(b) if the 4^th Defendant thought the Policy was on risk, it would have been able to exercise its right of subrogation to take up the case for the 2^nd Defendant;

(c) once the 4^th Defendant chose to join in the present action, it would have to bear the cost consequences if it turned out that the Policy was not on risk;

(d) it is unreasonable for the Plaintiff to bear the 4^th Defendant’s costs as the Plaintiff never applied to join the 4^th Defendant as a party to the proceedings.

33.  Therefore, Ms Lai argued the general rule that a defendant would be entitled to costs when an action was discontinued should be departed from in the present action “where the discontinuance …… is due to the claim against the 4^th Defendant having become academic, rather than to any acknowledgment by the Plaintiff of likely defeat. The claim against the 4^th Defendant is not initiated by the Plaintiff. The Plaintiff has not sued the 4^th Defendant in the Writ of Summons in this action. It was the 4^th Defendant who made its own application to join in as a Defendant in this action.” The Plaintiff therefore asked for leave to discontinue the action against the 4^th Defendant with no order as to costs save that costs of the adjourned hearing for argument before me should be to the Plaintiff.

34.  The written submissions of the Plaintiff’s solicitors argued that even if it were reasonable and appropriate for the 4^th Defendant to apply to join in the present action, it could have invited the Plaintiff to discontinue the proceedings at an earlier stage. On 22^nd March 2007, the 2^nd Defendant (then legally represented) filed a Defence pleading that it was not the Plaintiff’s employer. At that time, the 2^nd Defendant could properly defend their own interests as well as the 4^th Defendant’s interest in the present proceedings. It was not necessary for the 4^th Defendant to proceed with the case any further, and could have invited the Plaintiff to discontinue the proceedings against them at that time.

35.  In short, the Plaintiff’s contention that the 4^th Defendant should not be a party to the present action rested on 2 limbs, ie it was not reasonable and appropriate for the 4^th Defendant (a) to be joined as a defendant in the first place and/or (b) to maintain its status as a defendant thereafter.

IV.  4^th Defendant’s evidence and submissions

36.  The 4^th Defendant maintained it should remain as a defendant in the present action. The position was put succinctly in the affirmation of the Defendant’s solicitor, Leung Fung Chi. The 4^th Defendant was not in a position to take over the conduct of the present action on behalf of the 2^nd Defendant because, as already explained in the affirmation in support of the Joinder Summons, (a) the 4^th Defendant was not on risk under the Policy, and (b) the 2^nd Defendant was in breach of the policy condition. The 4^th Defendant has therefore declined liability under the Policy, so the interests of the 2^nd to 4^th Defendants were different.

37.  However, should the court find the 2^nd Defendant to be the employer of the Plaintiff at the time of the Accident on the Plaintiff’s alternative plea, and the 2^nd Defendant fails to pay the judgment debt, it is possible that the Plaintiff may pursuant to section 43(1) of the Ordinance enforce against the 4^th Defendant any judgment it may obtain in the present action against the 2^nd Defendant even though the 2^nd Defendant was in breach of the policy condition.

38.  The 4^th Defendant claimed it had a legitimate interest in joining and taking part in the present action through to its conclusion. If the Plaintiff considered the 4^th Defendant ought not to have joined in the present action as a defendant, he ought to have raised such objection at the hearing of the Joinder Summons. It was further suggested that had the Plaintiff acceded to the 4^th Defendant’s request for withdrawal of the Notice to Insurer, the 4^th Defendant would not have applied to the court for joinder. The 4^th Defendant claimed that in the circumstances it should remain as a defendant in the present action to protect its interests pursuant to section 43(1) of the Ordinance because to date the Plaintiff has not withdrawn the Notice to Insurer, and still maintains his alternative plea that the Plaintiff was employed by the 2^nd Defendant.

V.    Propriety of the present application

39.  It is evident from the aforesaid narration of the Plaintiff’s evidence and submissions that he intends to remove the 4^th Defendant as a party to the present action. Given such objective, the Summons is misconceived.

40.  The 4^th Defendant became a defendant to the present action in March 2007 not because of any then claim by the Plaintiff against the 4^th Defendant, but because H H Judge Lok acceded to the 4^th Defendant’s Joinder Summons. By the Order, H H Judge Lok found that the 4^th Defendant was “a party who ought to have been joined or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon” as well as a person between whom and any party in the present action “there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed [herein] which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter”.

41.  The Order has been granted, perfected and sealed, and there has been no appeal therefrom. Further, the above chronology of the present action shows that the parties have acted on the Order. In the circumstances, the Order is binding on all parties to the present action.

42.  I cannot see how an application by the Plaintiff to discontinue his claim or his action (if any) against the 4^th Defendant can cause the 4^th Defendant to cease to be a party to the present action given that the Order is binding on both the Plaintiff and the 4^th Defendant.

43.  The appropriate mode of application to remove the 4^th Defendant as a defendant herein, if there are sufficient grounds to support the same, is an application under Order 15 rule 6(2)(a) of the RDC which provides that the court may “order any person who has been improperly or unnecessarily made a party or who has for any reason ceased to be a proper or necessary party, to cease to be party”.

44.  No such application has been made. The Summons is confined to an application to discontinue the Plaintiff’s claim or action (if any) against the 4^th Defendant. When this was pointed out to Ms Chow, solicitor appearing on behalf of the Plaintiff before me, she rightly conceded she would not ask for an order that the 4^th Defendant cease to be a party.

VI.  Issue estoppel

45.  Had the Plaintiff made an application under Order 15 rule 6(2)(a) of the RDC, I still do not see any merit in the suggestion that the 4^th Defendant was not reasonably and appropriately joined as a defendant in the present action in the first place.

46.  As explained above, the Order is binding on the parties and as such it constitutes issue estoppel on the subject of whether the 4^th Defendant was a necessary or appropriate party to be joined as a defendant in the first place. It is simply not open to the Plaintiff to mount the argument in the above paragraph as a backdoor attempt to subvert the Order without lodging any appeal against the same.

VII. Application for discontinuance

47.  There is no dispute that the Plaintiff did not sue the 4^th Defendant in the Writ of Summons in the present action, and the joinder application was made by Nipponkoa who became the 4^th Defendant pursuant to the Order. The question is whether after the Order and by now there is any claim by the Plaintiff against the 4^th Defendant that can be the subject of the application for discontinuance.

48.  The Order and Time Order required the Writ of Summons and all pleadings in the present action to be amended by adding Nipponkoa as the 4^th Defendant. The Plaintiff could have followed this strictly without adding any claim against the 4^th Defendant, thereby leaving the 4^th Defendant to plead any defence arguments it considered necessary to protect itself against any contingent liability under section 43 of the Ordinance. But the Plaintiff went further by voluntarily adding a claim for damages against the 4^th Defendant in the Amended Writ of Summons and Amended Statement of Claim (see paragraphs 19 and 20 above). In such circumstances, there is in fact subject-matter for the application for discontinuance.

49.  Ms Chow confirmed at the hearing before me that the Plaintiff wished to discontinue such claim or action against the 4^th Defendant, and Ms Leung, solicitor appearing for the 4^th Defendant before me, had no objection subject to preservation of the 4^th Defendant’s status as defendant in the present action. So at the hearing I granted leave to the Plaintiff to discontinue the whole of the Plaintiff’s claim in the present action against the 4^th Defendant, and for the avoidance of doubt made clear that such discontinuance is without prejudice to the Order. I further directed that the Plaintiff do within 7 days thereof file and serve his Re-Amended Writ of Summons and Re-Amended Statement of Claim to reflect the aforesaid discontinuance of his claim against the 4^th Defendant.

VIII.    Costs

50.  Not unexpectedly, Ms Leung asked for costs. Ms Chow disputed liability for costs on the basis that the 4^th Defendant should prior to the issuance of the Summons have applied on own motion to cease to be a defendant in the present action or to invite the Plaintiff to discontinue the claim against them.

51.  I find such argument wholly misconceived. It lies ill in the mouth of the Plaintiff to make such argument when the Order is binding on the parties and when there is no application before me for the 4^th Defendant to cease to be a party to the present action.

52.  Further, as explained above, the Plaintiff could have complied with the Order by adding the 4^th Defendant as a party in the Amended Writ of Summons and Amended Statement of Claim. But he took the initiative to add a claim for damages against the 4^th Defendant. The 4^th Defendant never invited such claim. It joined the present action as an “interested” party to protect its interests in light of its contingent liability under section 43(1) of the Ordinance.

53.  Since the Plaintiff made a claim against the 4^th Defendant, the 4^th Defendant was bound to defend the same if it were to avoid default judgment should the Plaintiff elect to enter judgment on liability on his alternative plea. A defendant does not choose to be sued, and I do not see any duty or obligation on the part of the 4^th Defendant to request the Plaintiff to discontinue the Plaintiff’s claim against it. I also do not see how the 4^th Defendant with an extant claim against it by the Plaintiff can apply to cease to be a party.

54.  Procedural considerations aside, there is also no viable substantive basis for suggesting that the 4^th Defendant should cease to be a defendant in the present action. There has been no change of circumstances since the Order. Indeed, the 2^nd and 3^rd Defendants maintained a consistent stance throughout the present action that the Plaintiff was not employed by the 2^nd Defendant; it was never a case of the Plaintiff’s claim against the 4^th Defendant “becoming” academic in the course of the proceedings as suggested by the Plaintiff’s solicitors.

55.  The 4^th Defendant could hardly have taken up conduct of the proceedings on behalf of the 2^nd Defendant when the coverage under the Policy is limited to employees of the 2^nd Defendant. Secondly, the breach of policy condition of failing to report the Accident to the 4^th Defendant makes clear that the interests of the 2^nd and 4^th Defendants are different.

56.  To suggest that the 4^th Defendant could have subrogated and taken up the present action on behalf of the 2^nd Defendant is to ignore the aforesaid policy restriction and/or obvious conflict arising from breach of the policy condition. The 4^th Defendant is not required to conduct of the present action on behalf of the 2^nd Defendant and thereby risk possible waiver of such policy restriction or breach.

57.  However, it cannot be disputed that the 4^th Defendant is under a contingent liability pursuant to section 43 of the Ordinance. On such basis, I do not see any reason why the 4^th Defendant should not be allowed to join in the present action as an “interested” party who has a legitimate legal or financial interest in the outcome of the issues in dispute, or why (when the 4^th Defendant’s interests are necessarily different from the 2^nd Defendant vis-à-vis the Policy) the 4^th Defendant should left to rely on the 2^nd Defendant to represent its interests or provide it with information.

58.  Ms Chow relied on my ruling on costs in Ernst Eduard Sprecher on behalf of himself and the other dependants of Matthias Sprecher deceased v Zingrich Cabletrans Gmbh DCEC1498/2006 (unreported, 28^th November 2007). The factual matrix of that case is wholly different. In that case, the employees’ compensation policy covered employees of the insured’s sub-contractors so both the 1^st and 2^nd Respondents were covered (see paragraph 48 of the ruling). The insurer in that case intervened to join in the proceedings because it did not receive cooperative response from the respondents, who did not appear to defend the employees’ compensation claim. When the respondents instructed solicitors to resist the applicant’s claim, the insurer intervener withdrew the joinder application because from that point on its interests and those of the respondents were the same. This means that, unlike the present case, there was no determination as to whether it was necessary or appropriate for the insurer intervener to join in the proceedings. It is therefore logical that in considering costs the court had to consider whether it was appropriate for the insurer to intervene and later to withdraw the joinder application.

59.  Here the issue of joinder of the 4^th Defendant as a defendant has been determined and resulted in the Order. There is also no application for the 4^th Defendant to cease to be a party. In the circumstances, I see no basis for the Plaintiff to argue it should not bear costs on the basis that the 4^th Defendant should self-apply to cease to be a party and leave the 2^nd Defendant to resist the Plaintiff’s claim.

60.  As explained in paragraph 34 of my ruling in Ernst Eduard Sprecher, an insurer of an employees’ compensation policy under Part IV of the Ordinance is under a contingent and direct liability to the applicant irrespective of the policy terms between the insurer and the employer insured, and this forms the jurisdictional basis for joinder as a defendant in the relevant proceedings. I added in paragraph 64 of my ruling that the insurer cannot exercise the right of subrogation if the interests of the insured and the insurer are different, eg where the insurer disclaims liability under the policy. I therefore have no hesitation in coming to the conclusion that the 4^th Defendant has a right to be heard in respect of its potential liability under section 43(1) of the Ordinance (see Sami’an Sutinah v Katrina Leung Wai-kuen & anor [2002] 2 HKC 706, Chu Yuen-wah v Lee Kwok-lee & anor [1995] 2 HKLR 280 and paras.37-40 of my judgment in Ernst Eduard  Sphrecher).

61.  In conclusion, I see no arguable basis for not applying the usual order for costs. In a nutshell, the 4^th Defendant was and remains a necessary party in order to ensure all matters in dispute are effectively and completely determined and adjudicated upon, and in reality the Plaintiff by the present application is merely seeking to discontinue the claim which he chose to add against the 4^th Defendant. I have therefore granted an order at the hearing that costs of and occasioned by the Summons including all costs reserved be paid by the Plaintiff to the 4^th Defendant to be taxed if not agreed, and there be legal aid taxation for the Plaintiff’s own costs.

62.  Subsequent to the hearing but on the same day, the solicitors for the 4^th Defendant wrote to the court (with copy to the Plaintiff’s solicitors) to seek clarification as to whether the costs order was inclusive of the 4^th Defendant’s costs of defending the Plaintiff’s claim in this action.

63.  The solicitors for the 4^th Defendant are quite right to point out the lacuna in relation to this aspect of costs. Given the discontinuance of the whole of the Plaintiff’s claim against the 4^th Defendant, final disposal of such costs is necessary and appropriate. In light of the logic of my reasons for the ruling on costs, such costs should also be in favour of the 4^th Defendant. I therefore grant a costs order nisi that the Plaintiff do pay the 4^th Defendant costs incurred in defending the Plaintiff’s claim against the 4^th Defendant in any event to be taxed if not agreed, and there be legal aid taxation of the Plaintiff’s own costs.

64.  I note that this case will be warned for trial in mid-September 2008. It is hoped that the parties will focus on brining the matter to trial, and avoid further tactical skirmishes that do not advance any party’s case but may add to costs.