MANZOOR HUSSAIN v. BAVARIAN CHEMICALS CO LTD

CACV 37/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO.37 OF 2003

(ON APPEAL FROM DCEC NO.809 OF 2001)

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J U D G M E N T

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Hon Stone J :

The appeal

1. This is an appeal from an order of Her Honour Judge H.C. Wong made in Chambers on 21 January 2003 whereby she ordered that judgment dated 19 November 2001 in District Court Employees' Compensation Case No. 809 of 2001 be set aside, that the case be relisted for the issue of liability to be tried, and an order nisi that the respondent's costs of the application be in the cause, with certificate for counsel.

2. The appellant, Manzoor Hussein, seeks an order that the decision of the learned judge below be set aside, and that the costs of the hearing below, and of this appeal, be paid by Mr Hussein's former employer, Bavarian Chemicals Ltd, the respondent herein.

The background

3. The appellant, Mr Hussein, who was employed by Bavarian Chemicals Ltd, commenced employees' compensation proceedings alleging a leg injury arising out of and in the course of his employment at work.

4. There is some dispute about the correct date of the alleged accident, but in any event the date of 22 May 2001 is that which appears upon the 'Form 2', the proforma document which constitutes the statutory notice to the Labour Department by the employer, pursuant to section 15 of the Employees' Compensation Ordinance, Cap.282, regarding an accident to an employee resulting in death or incapacity.

5. On this particular Form 2, which was completed on behalf of the employer by a Mr So King Ting, in section D, under 'Description of accident', the following legend appears :

"On 22nd May, an industrial accident happened whilst at work (when 99% acetic acid was poured into a stainless steel container, the employee slipped carelessly and his leg got in contact with the acid. After washing by water, the employee immediately attended the Tuen Mun Hospital for consultation.)"

6. On 19 November 2001, pursuant to a consent summons filed on 16 November, His Honour Judge Carlson made a consent order in Employee's Compensation Case No.809 of 2001, wherein Hanzoor Hussein is named as applicant and his employer, Bavarian Chemicals Company Limited, as respondent. Paragraph 1 of this order records that judgment on liability be entered against the respondent in favour of the applicant. Consequential directions were made, and the assessment of damages was adjourned sine die with liberty to restore.

7. Pursuant to this consent order, which was not filed until 10 April 2002, formal judgment dated 19 November 2001 was entered and sealed on 24 April 2002.

8. In the interim, however, matters had taken a somewhat unusual course. By a letter dated 28 January 2002 sent by the Employees' Compensation Unit of the Labour Department to Bavarian Chemicals Ltd regarding Mr Hussein's accident, the date of which now was stated to be 21 May 2001, the employer was notified that "after making enquiries, considering information and obtaining medical advice, we are of the view that the injury to the employee was not caused by an accident arising out of and in the course of employment." This letter concluded that if the employee still wished to continue with his claim for employee's compensation, he may consider lodging his claim with the District Court.

9. The basis of this conclusion now reached by the Labour Department was a medical report dated 29 January 2002 on Mr Hussein's condition, a report which had been compiled by Dr Lau Chu-leung, a medical officer in the Accident and Emergency Department of Tuen Mun Hospital.

10. Dr Lau's report states that Mr Hussein had attended at the hospital "at 1627 hours on 21.5.2001 and reattended on 22.5.2001, 1.6.2001 and 7.6.2001". The condition of Mr Hussein's right leg is recorded consequent upon medical examination upon each of these four hospital attendances, and the report also notes (at paragraph 2) that "The chief complaint was right leg swelling and pain for one year."

11. Dr Lau's report was sent "for your information" to the solicitors for the respondent on 6 February 2002 under cover of a letter of that date from the Legal Services Division of the Labour Department.

12. This course of events clearly caused Bavarian Chemicals to reassess its position with regard to Mr Hussein and his apparent accident at work. By this stage, of course, the employer had been party to the consent order (as yet unfiled) accepting that judgment on liability be entered with compensation to be assessed, and in light of the information which now had come to light it took steps to alter its position.

13. Accordingly, on 8 March 2002 Bavarian Chemicals issued a summons which sought the setting aside of the judgment dated 19 November 2001, and it is this application which came on for hearing before Her Honour Judge H.C. Wong on 3 January 2003 and which resulted in the judgment presently under appeal.

The hearing below

14. In her careful decision the learned judge rehearsed the salient facts and was persuaded in the exercise of her discretion that the judgment by consent should be set aside, and the case relisted for trial on liability. She specifically bore in mind the conceptual difficulties inherent in setting aside consent judgments, and further in this connection the fact that the respondent employer had taken out its summons to set aside before filing of the consent order or perfection of the judgment on 24 April 2002. In this context she relied, inter alia, upon the English authority of Marsden v. Marsden [1972] Fam. 280, wherein Watkins J had proceeded to consider the application to set aside a consent order by the wife in that case, in the situation wherein her counsel had made a mistake, on the basis that notice had been given of the application before the order was perfected.

15. Accordingly, in the present case the judge decided, in effect, that there was no jurisdictional bar standing in her path in terms of setting aside a judgment she accepted had been entered under a misapprehension on the part of the employer, and concluded that the respondent had shown "sufficient facts" in support of the application to set aside to convince her that the issue of liability should be reopened.

16. One aspect which in my view is significant about the course of the hearing below is the ambit of the evidence which was placed before the learned judge.

17. The totality of the evidence before the court upon the application to set aside the judgment on liability took the form of two affirmations of Wong Chi Cheung, the respondent's solicitor, acting on the instructions of the respondent's insurer.

18. The 1st affirmation of Mr Wong, sworn on 7 March 2002, deposed to the fact that the respondent employer had completed the information within the Form 2 in terms of the applicant's report of the accident, namely the spillage of acid on himself whilst working, that the applicant went to hospital on the same day, and that there was no independent witness to the accident. The apparent confusion as to the date of the incident is raised, that is, whether it was the 21 or 22 May 2001 - the significance of this being that no production had taken place involving the use of acid on the latter date - but that this had been dismissed as an "inadvertence", and that, since no material existed to dispute the occurrence of the accident, instructions were given to admit liability, hence the consent summons dated 16 November 2001, and the consequent order in terms three days later.

19. Reference is also made in this affirmation to the impending prosecution of the respondent by the Labour Department under the Factories and Industrial Undertakings Ordinance for failing to ensure the safety of an employee. Perhaps most important, however, is reference to the letter of 28 January 2002 from the Labour Department indicating that the view now was taken that the alleged injury was not caused by an accident arising out of and in the course of employment, which was exhibited, as was a copy of the medical report of Dr Lau of the Tuen Mun Hospital, emphasizing the allegation of pain and swelling in the right leg for one year. The deponent further submitted that not only did this information cast doubt over the genuineness of the applicant's allegations, and whether indeed there had been an accident, but further confirmed the previous unavailability to his client of the information now placed before the court.

20. The 2nd affirmation of Mr Wong, sworn on 11 September 2002, took the opportunity to record the fact of conviction and fine of the respondent, on 3 April 2002, at Tuen Mun Magistracy upon the industrial safety prosecution, and the fact of a successful appeal against such conviction, which was quashed by Deputy Judge To by order dated 29 August 2002.

21. Exhibited to this affirmation is part of the transcript, with translation, of the evidence of the applicant's treating physician, Dr Lau, who in his evidence rehearsed the symptoms displayed, namely "some soft tissue inflammation in his right lower leg", which subsequently developed ulceration, and the fact that on each occasion the patient had visited the A&E Department the applicant had denied having had any injury, and that there were no corroborative symptoms on his leg of typical acetic acid injury which would cause the skin tissue to suffer from a chemical burn. In this evidence Dr Lau further confirmed that if acetic acid spillage onto the leg had immediately been washed with water, the harm thus caused would be very light and would not lend itself to the conditions which developed later, and also that the patient's complaint at the time that he visited the hospital was that he had been in pain for one year, and had no signs of a new wound.

22. In face of this evidence put in by the respondent, the applicant, Mr Hussain, has maintained a discreet silence and has said nothing whatever. In fact, in this entire sequence of events the sole information which appears to have emanated from him - the one person who knows what did or did not occur, given the absence of any eye-witness to the accident - is that which was recorded in the Form 2, as completed by his employer, which has been set out verbatim earlier in this judgment.

23. One further document, which does not appear to have been placed before the judge below, but which seems, without objection, to have found its way into the bundle before this court as part of a sequence of correspondence between the solicitors for the respondent employer and the Labour Department during the period 27 February 2002 and 12 September 2002, is a Labour Department letter dated 10 April 2002, which records consideration of the medical reports on Mr Hussain, including the diagnosis of a dermatologist of 'lichen simplex chronicus', and notes that the view taken by the Employees' Compensation Division was that Mr Hussain's skin condition was "likely to be a natural disease", and thus that the Department had "put aside" Mr Hussain's case with effect from 28 January 2002.

The argument

24. It is probably correct to surmise that when anticipating this appeal Mr Clough, counsel for the appellant, took the view that the issue of jurisdiction constituted his main point of attack in seeking to set aside the judgment below and to restore the consent judgment on liability. Certainly, his helpful skeleton argument indicated this to be the position.

25. At the outset of his submissions, however, he very fairly announced that having considered the skeleton argument in the response of Mr Leong SC, he was abandoning the jurisdiction point.

26. With respect, I think that he was correct to do so. In my view the learned judge clearly had jurisdiction to act as she did - she was in no sense functus officio, and Mr Leong's argument regarding the ambit of section 48 of the District Court Ordinance, and the conference of ancillary jurisdiction on that court, struck me as compelling - so that the question thus neatly resolved into consideration of whether there existed sufficient legal basis for her to do what she did, and to interfere with the apparent consensus between the parties as represented by the consent judgment. As to this, Mr Clough suggested that the answer clearly was 'no', whilst Mr Leong asserted that equally clearly the conclusion must be 'yes'. If I may say so, both sides of the Bar table did ample justice to their respective arguments.

27. Mr Clough stressed the employer's statutory duty to complete the 'Form 2', and suggested that absent evidence on the point it should be supposed that Mr So King Ting, the officer of the employer who is stated to have completed the form, had made due inquiries before he appended the description of the accident. The essence of the argument was that it was insufficient now simply to cite what appeared to have been said to a treating physician as a basis for going behind not only the employer's description of the accident, but also the consent judgment inferentially encompassing acceptance of the manner in which Mr Hussain had suffered injury. In addition, submitted Mr Clough, there were sound policy reasons why consent judgments, once entered, should be regarded as sacrosanct. And in any event, he suggested, the issue of whether the injury was pre-existing remained live even at the stage of the assessment of damages: if it be decided by the assessor that there was no causative damage arising from the accident, then the decision on the assessment would reflect that fact.

28. For his part Mr Leong SC demurred. Whilst he accepted the proposition that consent judgments should not lightly be set aside, he submitted that the consent in question, and the consequent judgment, had resulted from a misapprehension on the part of his client, the employer, and that such had been the result of that which he was prepared to say had been a misrepresentation to his client by the employee, Mr Hussain. Nor did Mr Leong consider that the issue that now had arisen could properly be ventilated at what, if the judgment on liability remained, would be no more than a damages assessment. There was sufficient before the learned judge below, he said, to justify the stance that was taken, more particularly given the silence on the part of the appellant and the utter lack of any response to the evidence filed below on behalf of the employer.

Decision

29. For my part I would dismiss this appeal, with costs, and uphold the order made below.

30. Mr Clough was entirely correct to emphasise, throughout his attractive address, that the courts are always reluctant to interfere with consent judgments, with their contractual underpinning, albeit in this particular instance it is probably fair to say that the judgment in question represented more a question of non-objection than true consensus ad idem. Although a certain amount of argument revolved around this latter distinction, to which initially I was attracted, ultimately I do not think that it greatly matters. Consent remains consent.

31. What clearly does matter, however, are the circumstances underlying such consent. Clearly, before a court can or should be persuaded to set aside a consent judgment in a situation where, as here, the application to set aside pre-dated the sealing of the order, the court must be satisfied of the relevance and cogency of the evidence put forward by the applicant which explains the factual misapprehension leading to the consent from which it is now wished to resile. Each case will stand or fall on its own particular facts. Of necessity this is a 'fact-sensitive' exercise and serves to negate Mr Clough's 'floodgates' argument. And for the same reason there is no danger of being caught in that which Mr Leong described as a "contractual straitjacket".

32. Notwithstanding Mr Clough's submissions to the contrary, in my view there was enough on the evidence before the learned judge to justify her conclusion. The collateral independent medical evidence is not insignificant and cannot simply be disregarded. Nor should the appellant's complete silence in face of such evidence be overlooked.

33. In my view, on the state of the evidence as now available Mr Leong was justified in going so far as to assert misrepresentation on the part of Mr Hussain, and that such misrepresentation caused the misapprehension under which his client laboured in consenting to entry of the liability judgment; he presently did not have to prove this assertion, he said, it was sufficient if such was an allegation responsibly made on the face of the evidence. Whilst naturally I express no view as to the correctness or otherwise of this allegation, the truth of which a trial on liability will elicit untrammelled by any views of this court on the issue, nevertheless I accept that this contributes an appropriate approach.

34. Mr Clough's beguiling suggestion that there was no necessity to set aside the existing judgment on liability because the issue effectively would be at large in terms of a quantum assessment, and thus be reflected in any award, is, with respect, flawed. I fail to see how the premise of the medical evidence now sought to be called sensibly can co-exist with a judgment on liability which is conclusive upon the very issue such medical evidence seeks to contradict.

35. Either the liability issue is to be re-opened properly, or it is not. In my judgment the learned judge was correct in concluding that it should be re-opened, and that the consent judgment accordingly should be set aside.

Hon Woo JA :

36. I entirely agree with the judgment of Stone J.

37. Since the question of jurisdiction of the District Court in setting aside a consent order was raised, albeit abandoned in the course of argument, I think I should say a few words about it.

38. There is no question about the jurisdiction of the District Court to determine employees' compensation claims, even if the amount claimed exceeds the general jurisdictional limit in civil actions of the District Court. Section 21 of the Employees' Compensation Ordinance, Cap.282.

39. The issue is whether, after a consent order has been made but not yet perfected, the District Court has power to set aside the consent order. The relevant part of section 48 of the District Court Ordinance, Cap.336 provides as follows :

"(1) The court has the same power as the Court of the First Instance in any proceedings before it -

(a) to grant the relief, redress, or remedy or combination of remedies, either absolute or conditional; and

(b) ...

which ought to be granted or given."

40. The ambit of section 48 is very wide. In the present case, where the respondent had presented facts and evidence before the judge which justified its claim of misapprehension of significant facts relating to the injury of the applicant at work, I have little doubt that the District Court, which made the consent order, has ancillary jurisdiction or power to grant the necessary relief as may be just, i.e., to set it aside.

41. The appeal must be dismissed. We make an order nisi that the respondent do have the costs of this appeal.