SHING HO WA BY LAM WAI FONG, HIS MOTHER AND NEXT FRIEND v. REALLY SUPER LTD AND ANOTHER

HCPI 1329/2016

[2019] HKCFI 1751

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 1329 OF 2016

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D E C I S I O N

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1.  This is an application for a spilt trial in a personal injuries action. The plaintiff fell from an all-terrain camera vehicle on a film site in Wuxi, Jiangsu Province in China on 2 December 2013. He suffered very serious injuries and is now in a vegetative state. The plaintiff had been employed to be a driver at the shooting of a movie at the film site. The 2^nd defendant was involved in the shooting of the film at the site. It carried on business as a producer of movies and co-ordinator of movie shots. The 1^st defendant was engaged in the business of providing movie stunt drivers and other drivers to drive vehicles at film sites.

2.  Briefly stated, the following issues arise between the parties.

3.  It is the plaintiff’s case that the 1^st defendant and/or the 2^nd defendant were negligent in failing to provide a safe system of work and, in particular, a safe system of transporting workers engaged at the film site.  Specifically, it is the plaintiff’s case that he was employed by the 1^st defendant, or by the 2^nd defendant, or jointly by both of them, as a stunt driver.  By an agreement dated 13 September 2013, the 1^st defendant had undertaken to provide stunt drivers, including the plaintiff, to the 2^nd defendant to be filmed in the production of a movie for the period from 15 September 2013 to 13 December 2013 (“the Agreement”).  At the time of the accident, the plaintiff was on board the all-terrain camera car (‘the Camera Car”) that was fitted with a metal frame and foot panels at either side of the car body.  There was only one passenger seat without any safety belt and a flat surface was fitted in the Camera Car behind the passenger seat. As both the seat and the flat surface were occupied by other passengers, the plaintiff had to stand and stay on the foot panel at the nearside of the Camera Car and he did so by holding onto the mounted metal frame.  When the Camera Car was being driven down a slip road by the driver provided by the 1^st defendant, the plaintiff lost his balance and fell backwards hitting his headon the ground.  After the accident, the plaintiff was conveyed to Wuxi People’s Hospital.  He was medically evacuated to Hong Kong on the same day and admitted to Tsuen Wan Adventist Hospital.

4.  It is the 1^st defendant’s case that it was the stunt coordinator for the movie at the film site.  The 1^st defendant only assisted Base FX LLC, a film production company, to engage the plaintiff as a casual driver.  Specifically, he was engaged, not as a stunt driver, but as a background driver to drive cars that were in the background in the filming of a highway sequence.  The 1^st defendant did not know who the plaintiff’s actual employer was, or what his terms of employment were, but believed that the plaintiff and other background drivers like him would be employed by Base FX LLC.  The 1^st defendant accepted that it owned the Camera Car and that it had engaged a driver to drive it at the film site.  It also accepted that the stunt drivers it had provided to the 2^nd defendant under the Agreement were employees of the 1^st defendant.  However, the plaintiff was a background driver and not the employee of the 1^st defendant. Specifically, the 1^st defendant averred that the accident was caused or contributed to by the plaintiff’s own negligence.  He had been prohibited from using the Camera Car for non-film shooting purposes.  The accident occurred because the plaintiff jumped off the Camera Car after being told that his hat had been blown off.

5.  It is the 2^nd defendant’s case that the plaintiff was a stunt driver employed by the 1^st defendant. Although the 2^nd defendant was responsible for the general production and direction of the shooting and filming, the 1^st defendant was obliged to coordinate the stunts, provide stunt drivers, and provide camera cars and shooting equipment including the Camera Car.  At the time of the accident, the plaintiff was initially seated on the Camera Car without wearing a seatbelt.  He later stood up after his cap was blown off.  He then lost his balance and fell off the vehicle. The action was caused or contributed to by the plaintiff’s own negligence, including his failure to use a small shuttle bus that was available at the film site to transport workers there.

6.  The application for a split trial on liability and quantum was taken out by the 2^nd defendant.  The 1^st defendant took a neutral stand on the application. In the related employees’ compensation proceedings in the DCEC 2437/2015, the plaintiff was granted leave to obtain expert reports from a neurologist, Dr Yu Yuk Ling, and an occupational therapist, Mrs Alice Tsang. Their reports, dated 16 November 2017 and 14 August 2017, are available to be used in these proceedings.  At the time of the hearing of the summons for a split trial, the parties had been directed to exchange witness statements as to facts. As the plaintiff is in a vegetative state the plaintiff’s legal representatives will rely on the evidence of a co-worker who witnessed the accident. There is an outstanding summons issued by the plaintiff for leave to adduce the reports of Dr Yu and Mrs Tsang in these proceedings and for leave to obtain a urological expert report from Dr George Koo.

Principles governing orders for split trials

7.  Order 33, r.4 of the Rules of the High Court (“RHC”) provides:

“(1) In every action begun by writ, the Court shall by order determine the place and mode of the trial.

(2) In any such action different questions or issues may be ordered to be tried at different places or by different modes of trial and one or more questions or issues may be ordered to be tried before the others.

(2A) In an action for personal injuries, the Court may at any stage of the proceedings and of its own motion make an order for the issue of liability to be tried before any issue or question concerning the amount of damages to be awarded

…”

8.  The exercise of discretion is guided by the Underlying Objectives set out in Order 1A, r.1 and the provisions in O.1A r.4 which state that:

“(1) The Court shall further the underlying objectives of these rules by actively managing cases.

(2) Active case management includes —

…

(f) helping the parties to settle the whole or part of the case;

…

(h) considering whether the likely benefits of taking a particular step justify the cost of taking it;

(i) dealing with as many aspects of the case as practicable on the same occasion;

…”

9.  The starting point is that all issues in a case are to be tried at one and the same time.  There is a good basis for this.  Split trials often result in delays, particularly if there is an appeal from the determination of the preliminary trial, and duplication of costs.  An application for a split trial should only be made when there are good grounds to support such an order.

10.  A departure from this general rule may occur in cases where it is just and convenient, efficient and proportionate to order a split trial.  Just and convenient means not only just and convenient to the parties, but also to the court, for the fair and efficient determination of all the contested issues.

11.  When the issue arises as to whether or not to order a split trial, the approach that the court adopts to resolve it is essentially a pragmatic one, which takes into account various, often competing, considerations. Hildyard J gives a helpful statement of these considerations in Electrical Waste Recycling Group Ltd & Anor v Philips Electronics UK Ltd & Ors (Rev 1) [2012] EWHC 38 (Ch), in §5, which include:

(1)   whether the prospective advantage of saving the costs of an investigation of quantum if liability is not established outweighs the likelihood of increased aggregate costs if liability is established and a further trial is necessary;

(2)   what are likely to be the advantages and disadvantages in terms of trial preparation and management;

(3)   whether a split trial will impose unnecessary inconvenience and strain on witnesses who may be required in both trials;

(4)   whether a single trial to deal with both liability and quantum will lead to excessive complexity and diffusion of issues, or place an undue burden on the judge hearing the case;

(5)   whether a split may cause particular prejudice to one or other of the parties (for example by delaying any ultimate award of compensation or damages);

(6)   whether there are difficulties of defining an appropriate split or whether a clean split is possible;

(7)   what weight is to be given to the risk of duplication, delay and the disadvantage of bifurcated appellate process; and

(8)   generally, what is perceived to offer the best course to ensure that the whole matter is adjudicated as fairly, quickly and efficiently as possible.

12.  Hildyard J went on to state, in §§6-8 of Electrical Waste Recycling Group Ltd & Anorv Philips Electronics UK Ltd & Ors(Rev 1), that other factors to be considered, as guided by the UK equivalent of O.1A r.4, include:

(a)   whether a split trial would assist or discourage mediation and/or settlement; and

(b)   whether an order for a split late in the day after the expenditure of time and costs might actually increase costs;

and that all of the abovementioned factors were potentially relevant and needed to be taken into account in what was essentially a pragmatic balancing exercise in assessing how the case, which had to be assessed by reference to its own facts, features and peculiarities, was likely to unfold if a split trial was ordered and if a split trial was not ordered.

13.  Suffiad J expressly stated in Chan Yin Na v. Union Medical Centre Ltd. HCPI 804/2003, 27 April 2006, that saving the costs of obtaining expert reports on quantum was a factor to be considered but was not decisive:

“13. It would appear that the submission of the defendants is really based on the fact that a split trial would save them having to incur substantial costs in obtaining the numerous medical reports needed to meet the plaintiff’s case on quantum. That however is only one of the factors which I will have to consider in determining whether it is just and convenient to order a split trial here.

14. I am of the view that a more important consideration is the time element.

15. Even if a split trial is ordered, it is unlikely, given the fact that the trial on liability alone is estimated to be about 7 to 8 days that it can come on for trial before mid‑2007. That being the case, between now and the trial itself, there really is no good reason (apart from saving the costs of quantum reports) why the parties cannot prepare for a full‑blown trial on both liability and quantum.”

14.  Whether the defendant has a reasonable prospect, as opposed to a mere theoretical prospect, of establishing a successful defence is the critical factor that must be weighed against the possibility of wasting the costs of preparing the case on quantum if a split trial is not ordered.  Clearly, the costs of preparing the case on quantum are likely to be wasted if the defendant has a very good prospect of establishing a successful defence and this factor would weigh heavily in favour of a split trial order.  It was this factor that hugely influenced the exercise of my discretion to order a split trial in Kende Benjamin John Bovard v. Hong Kong Rugby Union Ltd. HCPI 718 of 2013, unreported, 21 June 2018, where the cost of obtaining all the required quantum expert reports would have been to the order of $1 million, if not more.

15.  On the other hand, where the defendant enjoys some prospects, as opposed to a very good prospect, of establishing a successful defence, another factor comes into play, in addition to the countervailing factors of duplication of costs and delay, namely, whether or not a split trial would discourage mediation and/or settlement. Courts are duty bound to encourage overall settlements.  A split trial of liability and quantum in a personal injury action will inevitably discourage settlement if the preparation of the case on quantum is stayed as, without an expert medical report on quantum, the parties would be in the dark as to the likely award to be made if the defendant was found liable at the preliminary trial on liability.  A court, minded to order a split trial of liability and quantum, may consider transgressing a little into the realm of quantum by only requiring the parties to obtain a joint expert report on quantum, without requiring witness statements on quantum, or an updated statement of damages to be prepared and served.  In Chiang Kin Yau by his next friend Cheng Hong Kei v Chui Ka Yeung HCPI 899/2017,the plaintiff sued for damages for personal injuries following a medical mishap after an operation under general anaesthesia.  He suffered cardiac and respiratory arrest, severe deprivation of oxygen, and severe brain damage resulting in him becoming severely disabled, unable to make eye contact or to communicate, and requiring long term constant care and attention.  The parties came before me on 24 June 2019 on a joint application for a split trial on liability and quantum, which I allowed. However, bearing in mind the need to encourage mediation and overall settlement, I did not completely stay all trial preparation on quantum but required the parties to obtain a joint report from neurologists on the plaintiff’s condition and future prognosis.  In this action, the plaintiff, who had been a businessman, claimed damages for pre-trial and post-trial loss of earnings in excess of $90 million.  I also required the plaintiff to file a list of documents, specifically accounting documents and tax returns, relating to the businesses of the plaintiff for a period of at least 3 years preceding the date of the occurrence complained of.  I granted liberty to the defendant to apply, if so advised, for inspection of the documents disclosed and for discovery of further documents relating to this head of claim.  I made these directions, not for the purpose of trial preparation on quantum, but to facilitate mediation and overall settlement, by enabling the parties to have an overview of the likely quantum of the plaintiff’s claims.

16.  Whether a clean split between the issues of liability and quantum is possible is an important factor to consider.  That may not be possible in cases where issues on liability and quantum are intertwined, such as cases whether the plaintiff’s credibility impacts on the determination of liability as well as quantum issues.

17.  These are general propositions.  The above mentioned factors, when they come into play in a case under consideration, must be weighed by reference to the facts, features and peculiarities of the case in question.

Discussion

18.  As stated above, the 1^st defendant took a neutral stand on the split trial application and, in my view, rightly so, given that the plaintiff has strong prospects of establishing vicarious liability on the part of the 1^st defendant should the trial judge find that the driver of the Camera Car, who drove as the servant or agent of the 1^st defendant, was negligent in permitting the plaintiff to travel on the Camera Car by hanging onto the metal frame.

The 2^nd defendant’s prospects of success

19.  Although the insurance claim form named the 2^nd defendant as the employer of the plaintiff, I agree with the submissions made on behalf of the 2^nd defendant that the 2^nd defendant has reasonable prospects of success in establishing that the plaintiff was employed by the 1^st defendant, and not the 2^nd defendant, given the 1^st defendant’s concession that it was the employer of the stunt drivers and given the terms of the Agreement which provided, amongst other things:

(a) for the 1^st defendant to “render stunts and car stunts services in the film which is invested/produced by” the 2^nd defendant”;

(b) the working period when the 2^nd defendant “could receive the services provided by the members of” the 1^st defendant was from 15 September 2013 to 13 December 2013;

(c) as to payment, the 1^st defendant “and the members of [the 1^st defendant] agreed to perform their professional services for” the 2^nd defendant for a lump sum of US$699,414; and

(d) as regards insurance, it was expressly provided that personal accident insurance cover would be available “for members who are directly employed by” the 1^st defendant.

20.  However, the plaintiff submits that liability should attach on the 2^nd defendant, even if it was not the plaintiff’s employer, for the reason that it was overall in charge of the production and exercised a high degree of control over the film site, as evidenced by the 2^nd defendant’s admission in its defence that the 1^st defendant’s team of workers must adhere to all rules and regulations applicable at the film site pursuant to clause 8 of the Agreement, which also stipulated that the 1^st defendant’s team of workers must maintain close communication with the 2^nd defendant staff in charge at the film site.  Specifically, it was the 1^st defendant’s case that all modes of transport to and from the film site were provided by and arranged by the 2^nd defendant.  Indeed, the 2^nd defendant admitted that it provided a shuttle bus service for its employees at the film site.   Whether the 2^nd defendant had a duty to provide safe transportation services to all workers at the film site, including employees of the 1^st defendant and, if so, whether the 2^nd defendant was in breach of any such duty are triable issues.

21.  I conclude that the 2^nd defendant has reasonable prospects of success in defending these proceedings.

The costs of preparing the case on quantum that may be wasted if the split trial is not ordered

22.  Whilst I do not see the need for expert evidence on quantum from a clinical psychologist, or a physiotherapist, or a dietician, or an orthopaedic specialist, or a surveyor, or a case manager, I note that the total fees that the 2^nd defendant would have to incur, in order to engage a neurologist, a urologist and an occupational therapist, would be in the region of $150,000, which would be wasted if the 2^nd defendant succeeds in its defence of this action.

Clear demarcation of the issues of liability and quantum

23.  There is a clear demarcation between the issues of liability and of quantum in the present case.  The defence raised by the 1^st defendant that the plaintiff’s injuries, loss and damage was aggravated by the negligence of the staff of Wuxi People’s Hospital does not prevent a clear demarcation of the issues of liability and quantum, as the 1^st defendant has expressly stated that it does not intend to adduce any expert evidence in the present case.  Unless the person, who witnessed the accident and will be called on the issue of liability, will also give evidence on the plaintiff’s past and notional future earnings, I do not see any duplication of evidence on the issues of liability and quantum, nor the need to call the same witness to give evidence twice.

Countervailing factors of duplication of costs and delay

24.  The aggregate costs of 2 trials are likely to be higher than the cost of a single trial, and delay is inevitable, whenever an order for a split trial on liability and quantum is made.  The quantum of increased aggregate costs would depend on the additional legal costs that need to be expended on the assessment of damages, and which would not have been incurred if a split trial order had not been made, and whether there is a need to call the same witnesses twice at both trials.  The likelihood, and quantum, of such increased aggregate costs, and the length of the delay, caused by the split trial order, must be balanced against the factors weighing in favour of a split trial order.

25.  The state of our present court lists are such that dates for trial in the fixture list are being assigned some 2 years or more after the date of setting down for trial.  A shorter preliminary trial on liability may be set down in the running list or get an earlier date in the fixture list.  Active case management, in the preparation of the preliminary trial on liability, can include mapping out a timetable for the preparation of the subsequent assessment of damages that would take place if the plaintiff succeeds on liability, with a view to providing for a speedy trial on quantum and, thereby, reduce some of the delay caused by an order for a split trial on liability and quantum.  The delay caused by a split trial order ought to be less if the subsequent assessment of damages can be heard by a master.  The current practice is for masters to hear the assessment of damages where the claim is in the region of $5 million or less.  Claims in excess of $5 million can also be assessed by a master where the issues for determination at the assessment are not complex.

The ability of the 1^st and/or 2^nd defendant to satisfy any judgment entered against them or either of them

26.  Even if the plaintiff establishes liability against both the 1^st  and 2^nd defendants, there is a real possibility that the plaintiff may not be able to obtain full satisfaction of any such judgment.  I was informed by the legal representatives of the 1^st defendant that it was not covered by insurance and that it “would have a real difficulty” satisfying any judgment entered against it and, further, that the 1^st defendant would not expend any moneys to engage experts on quantum and would not apply for leave to adduce expert evidence.  The 2^nd defendant is a company set up for the specific purpose of film production which purpose was spent many years ago.  I was informed by its legal representatives that “it will not be able to meet any damages awarded against it”, if its’ employees’ compensation insurers maintain their disclaimer of liability.

27.  All that remains to be seen, but the prospect of an empty judgment was a factor which prompted me to ask the plaintiff to take instructions on whether the plaintiff would consider applying to join the employees’ compensation insurers to the proceedings.  If the uninsured 1^st defendant is adjudged liable as employer, the plaintiff can apply for a relief payment from the Employees’ Compensation Assistance Fund Board (“ECAFB”).  However, as can be seen from my judgments in Ng Tat Kuen v. Tam Che Fu & Ors, HCPI 896/2013, 3 May 2019 and Kong Hoi Lam v. Cheung Yuk Kwan & Ors, HCPI 801/2012, 19 October 2015, such relief payments are unlikely to be adequate to meet the plaintiff’s needs. Apparently, the stance taken by the 2^nd defendant’s employees’ compensation insurers is that, even if the plaintiff was employed by the 2^nd defendant at the relevant time, which is disputed, the 2^nd defendant’s liability to the plaintiff is not covered by the policy and the policy is not a policy issued for the purposes of Part IV of the Employees’ Compensation Ordinance, Cap. 282, (“ECO”) for the reasons that the plaintiff was not listed in the schedule to the policy and that the accident occurred outside the geographical area.  Having regard to the recent decision of the Court of Final Appeal in Lo Siu Wa v. Employees’ Compensation Assistance Fund Board & Anor, FACV 12/2017, 31 January 2018, to section 30B of ECO, and to Law Lai Ha & Anor v Zurich Insurance Company, HCA 2082/2005, 23 February 2011, at §73, if the plaintiff is adjudged to have been employed by the 2^nd defendant at the material time, it is arguable, in my view, that the 2^nd defendant’s employees’ compensation policy was a policy issued for the purposes of Part IV of the said ordinance.

28.  I adjourned the split trial application to enable the plaintiff to consider whether or not he wished to apply to join the employees’ compensation insurers to the proceedings.  For the reasons set out in the plaintiff’s supplemental skeleton submissions dated 20 July 2018, the plaintiff has indicated that he will not apply to join the employees’ compensation insurers to the proceedings.

Whether or not a split trial would discourage mediation and/or settlement

29.  Given the non-involvement of ECAFB and the 2^nd defendant’s employees’ compensation insurers in these proceedings, the prospects of mediation and/or settlement are slim, whether or not a split trial is ordered.  On the other hand, if the parties wish to do so, they are in a position to proceed to mediation, even on issues involving quantum, given that expert reports from a neurologist and an occupational therapist are currently available, as noted in §6 above.

My decision

30.  After having carefully considered all the relevant facts and circumstances of the case and the written submissions of the plaintiff and the 2^nd defendant, I have come to the decision that I ought to make an order for a split trial on liability and quantum in this case, that being the best course to ensure that the whole matter is adjudicated as fairly, quickly and efficiently as possible.

31.  The 2^nd defendant’s employees’ compensation insurers have not taken over the conduct of its defence in these proceedings. Whilst the 2^nd defendant appears to have sufficient funds to engage lawyers to defend the proceedings on liability, the additional burden of having to engage experts in defending the proceedings on quantum would be alleviated by the order for split trial.  Of course, such considerations would carry little weight if the defence put forward is weak. In this case, however, the 2^nd defendant enjoys reasonable prospects of success.

32.  It will also be in the plaintiff’s interest to know the result of the preliminary trial on liability before incurring more costs in preparing the case on quantum. After the conclusion of the preliminary trial on liability, he will know whether to look to ECAFB or to the 2^nd defendant’s employees’ compensation insurers for satisfaction, if it turns out that that the defendant, or defendants, adjudged liable are unable to satisfy the final judgment to be obtained after an assessment of damages.  If they can only look to ECAFB for satisfaction, the plaintiff would need to prepare his case on quantum in a very economical manner, given the risk that the costs of the proceedings may not be recoverable from ECAFB.

33.  In anticipation of being assigned as the trial judge for the preliminary trial on liability, I direct the parties to appear before me at a Checklist Review Hearing on 28 August 2019 at 10 a.m. (1 hour reserved) for further directions.

34.  I make a costs order nisi that the costs of the application for a split trial be costs in the cause of the trial on liability as between the plaintiff and the 2^nd defendant and that there be no order as to costs either in favour of or against the 1^st defendant in respect of the application for a split trial.  I grant certificate for 2 counsel for the application and the hearing before me.  I also direct that the plaintiff’s own costs be taxed pursuant to the Legal Aid Regulations.