XCHRX ANTHONY GALLAGHER v. MASS TRANSIT RAILWAY CORPORATION AND OTHERS

HCPI 986/98
(formerly HCA219/90)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 986 OF 1998

____________

____________

_______________

J U D G M E N T

_______________

1. The Plaintiff in this action is now almost 52 years of age. He is Irish by birth and has spent much of his working life since 1963 working on large construction developments, particularly tunnelling schemes including the Victoria underground railway line in London, England in the mid to late 1960's. Much of his early work was in free (i.e. non-compressed) air conditions.

2. In 1983 he came to Hong Kong and worked on the contract for the construction of the Mass Transit Railway (known as contract no.405) as a Pit Boss employed by the Third Defendants (or the Second Defendants). His work involved supervision of workers in the construction of underground tunnels, as well being involved in the physical work itself. Although he worked in compressed air conditions he was not supervising the compressed air workers. The contract finished in March 1984.

3. After completion of this contract he returned to England and worked on low pressure construction. In July 1989 he left England to work in Singapore on the construction of the Mass Rapid Transport system. He had been given medical clearance to do so. Initially he did not work in compressed air conditions but started doing so in or about April 1985. The contract in Singapore finished in or about March 1986.

4. On his return to England he was employed on several contracts with different companies and found himself unable to meet the piece work rate, eventually being dismissed or having to leave the work. He was experiencing pain in the shoulders and attributed the employment problems to this.

5. In the summer of 1987 he received a medical report the contents of which he did not understand. Eventually, he says in September 1989, he learned the significance of this from a Dr. King. Between those times he obtained and lost employment of varying kinds finally working from 1988 for the Liverpool Country Council until he was made redundant in 1992.

6. He commenced his action with the support of the Legal Aid Department in January 1990. The crux of his claim is that dysbaric osteonecrosis developed from his having to work in compressed air in 1983/84. His employers (the 2nd and/or 3rd Defendants) and the principal contractor (the MTRC) were negligent, allegedly, in failing to ensure that such work was carried out in circumstances which adequately protected workmen from such degenerative development in the bones, and in failing to ensure that he was medically examined properly and at appropriate times. He contends that he learned of his condition only when the contents of Dr. King's report were read to him by his solicitors. In his Statement of Claim, now in a Re-Amended form, he sought the court's discretion under section 30 of the Limitation Ordinance to disapply section 27 for the reasons set out in paragraph 11. The limitation issue will be resolved at trial rather than as an early preliminary point.

7. Fundamental to the Plaintiff's case is an allegation that Dr. Wood, examining the Plaintiff on behalf of the 3rd Defendant, notified the 3rd Defendants' engineer, Mr. Bermingham, in a report of the 19th March 1984, of definite early changes of dysbaric osteonecrosis in the head of the left humerus and possibly in the head of the right femur. In retort, the Defendants contend that the Plaintiff must have known of his condition at or about this time on the premise that "it is likely that the results were made known to the Plaintiff that day (i.e. 17th March 1984) or .... shortly thereafter" [Defendants' counsel's submission]. Additionally reliance is placed upon an entry of the 19th March 1984 in the Plaintiff's own compressed Air Health Register at the end of his contract in 1984. It is contended that he must thereby have known of his condition in 1984. Those arguments must remain for resolution in due course. For present purposes I have to proceed on the basis that the Plaintiff's knowledge arose in September/October 1989.

8. There is much to learn about this disease the aetiology of which is still not completely understood. It has alternative titles more readily understood by the layman such as Caisson disease, or more directly, compressed air illness.

9. In January 1997 the Defendants took out a summons to strike out the Plaintiff's claim for want of prosecution. It was heard by Master Chu (now Mr. Registrar Chu) on the 11th November 1998, who dismissed the application. The Defendants appeal from that decision.

10. The first delay complained of consists of periods in 1990 following the issue of proceedings. The chronology shows that the Statement of Claim was filed in March 1990 and the Defences of the then four Defendants - there are now only three - were filed in April (4th Defendant) May (2nd and 3rd Defendants) and October (1st Defendant) of the same year. Also in October 1990, the 2nd and 3rd Defendants filed Further and Better Particulars of their Defence. Although the Defendants complain of periods of delay in 1990 they are not made out. Discovery was obviously of considerable importance in this case.

11. The second Defendants were put on notice of a potential claim in June 1988 when, before the action, the Plaintiff's then solicitors sought release of all his medical records made and X-rays taken during his work in compressed air and overall period of employment, as well as records of the level of pressures which he worked in between January 1983 and March 1984. They were asked for the manlock and decantlock registers for the relevant periods and tunnels, as well as the Resident Engineer's weekly progress reports concerning the relevant tunnels. Almost eight months later the Second Defendant replied that the weekly reports were with the Resident Engineer and all other documents had been damaged by vermin etc., and subsequently burnt.

12. In December 1989 the Legal Aid Department gave notice to the Second Defendant to retain all records in respect of work under the contract and relating to the Plaintiff.

13. Before the Legal Aid Department was involved the Plaintiff's former solicitors had also written to the first Defendants in September 1989 inquiring as to lock registers, weekly or monthly safety reports and/or progress meeting minutes and other statutory and other relevant documents. A Mr. Duncan of the First Defendants made it clear that since the Plaintiff was not in their direct employment, he did not have the compressed air locks records but that substantial documentation had been retained as was required. In October 1989 he said he would arrange for all relevant documents (safety and/or progress reports) to be sent in several days. They were not. As far as the third Defendants were concerned, the Plaintiff's direct employers, they had ceased business some five years' earlier in November 1984. Any subsequent loss by the first and second Defendants of any documents in relation to the work concerned and to the Plaintiff cannot have been occasioned by any shortcomings in the progress of this action. Much documentation has apparently been lost by the neglect and error of the first Defendants.

14. In 1991 the Plaintiff served particulars in response to the fourth Defendants' request and its list of documents in April. In early July 1991 the first to the third Defendants filed their lists of documents. That was known to be far from complete. I am satisfied that there was no delay in 1990 through to July of 1991.

15. The period from late 1991 until the end of 1993 is on the face of it a long period during which the action was not progressed. That lack of progress must be seen against the significant dragging of the feet by the 1st and 2nd Defendants concerning discovery. In January 1998 both served what were described as Further and Better Lists of Documents. In September 1998 and then in November 1998 the 1st Defendants served their 3rd and 4th list of documents respectively.

16. Between July and the end of 1991 activity was largely confined to contact between the Plaintiff and his Hong Kong and London solicitors involving Counsel as well. The period also saw inspection of documents disclosed in the Defendants' list of documents and a request by the Defendants' solicitors for disclosure of the Plaintiff's X-rays. This was complied with in September 1991 and they were returned in December 1991.

17. Throughout 1992-1993 there was no progress in the action and the affidavit of Mr. Turnbull, then of the Legal Aid Department does not purport to assert otherwise. Activity on behalf of the Plaintiff appears to have involved his London solicitors with the emphasis upon evidence gathering particularly from experts. The only steps involving the Defendants was the discontinuance of the action against the 4th Defendant in April/May 1992. The Defendants appear to have sat back and allowed this time to drift away. It may be that they had consciously adopted a policy of letting sleeping dogs lie as they viewed the situation.

18. The picture in 1994 changed significantly. Following the Plaintiff undergoing an operation in January, Notice of Intention to Proceed was given in early February. Three and a half months later a summons for a split trial and directions was issued and heard in early June by Mr. Registrar Betts.

19. The order made on that occasion and the Defendants' approach to the matters canvassed and agreed there, are in my view crucial to the Defendants' case on this application before me. It needs close attention. A split trial was ordered no doubt on the basis that there were elements of uncertainty in relation to the Plaintiff's health which time would resolve or clarify, and so much time had passed since the events complained of that a decision on liability was a priority. Although the Defendants had pleaded that the Plaintiff's cause of action was barred by the Limitation Ordinance there was no attempt by the Defendants to have that tried as a preliminary issue. By consenting to a split trial it was implicit that if they wished to pursue this Defence they would do so within the ambit of the trial on liability itself. Instead they agreed to exchange of witness statements and expert reports within 90 days. What then happened in a somewhat drawn out fashion was an attempt by the Plaintiff's solicitors eventually to get the Plaintiffs case into some state of preparedness in order to comply with these agreed orders. By contrast the Defendants appear to have done nothing to comply with the agreed directions.

20. In late June 1994 the Plaintiff requested Further and Better Particulars of the Defence. The Defendant served particulars in reply in early November 1994 and requested medical reports and a statement of damages. The request appeared to introduce the quantum issue which several months earlier had been postponed to the trial on liability. The same month Master Woolley decided that the particulars supplied met the Plaintiff's request.

21. There is of course no doubt that the Plaintiff's solicitors were in no position to exchange witness statements within the 90 days period and neither were the Defendants' solicitors. The same applied to the experts reports. Given that situation it is difficult to see why a 90 day period was suggested and agreed. It may be that the tendency in Hong Kong to put forward what seems to be a reasonable but in appearance comfortable period in the future expectation that parties and/or the Court will be flexible is at the root of this. The Defendants had agreed to it. Thereby they had in effect tied their hands to exchange. They could not force the Plaintiff's hands, because, as it subsequently turned out, they had nothing to exchange. Nor did they openly say, as they could have done - we have no statements, let us have yours. Instead they chose to acquiesce in time running on beyond the agreed period, allowing the Plaintiff slowly but steadily to get its case together.

22. In July 1995 the Plaintiff's solicitors disclosed to the Defendants' solicitors the medical report and statement of Dr. King. The Defendants raised no point on the lateness of disclosure then. The expert engineers report of a Mr. Caiden was sent to the Defendants in August 1995. In October the Plaintiff's solicitors issued a summons to Amend the Statement of Claim after having asked the Defendants (and received no reply) as to whether they would oppose the amendment which sought essentially to seek the Court's leave to disapply the Limitation provision. Master Woolley gave leave for the amendment to be made in March 1996. The Defendants filed their Amended Defences in April.

23. The text of the correspondence between April 1995 and the beginning of September 1996 (which was largely one sided) was concerned with requests by the Plaintiff's solicitors for confirmation that the Defendant would be in a position to exchange medical reports, expert engineer's report and witness statements. At some stage even Simmons & Simmons seem to have overlooked the Directions given by Master Betts in June 1994 and the Defendants made no effort to press the Plaintiff's solicitors to comply with them. They of course had nothing to exchange. They parried enquiries and requests with such comments as "we are unable to know what our client can or should agree (or alternatively what our experts has (sic) to say, in his report) without sight of your experts' reports." [5th May 1995] - "The action is now receiving attention from our leading counsel .... we shall revert to you as soon as possible." [23rd September 1996]

24. Having received the Plaintiff's medical report from Dr. King and the engineers report, with requests for the Defendants' own reports, the Defendants made no effort to comply with the general direction for exchange of material.

25. They did however raise again the question of a schedule of losses but I am prepared to accept that this particular case had sufficient problems in gathering evidence, expert opinion, and material documentation, that the Plaintiff's solicitors were justified in not being diverted into working on the quantum aspect, unless the Defendants were prepared to concede liability, an approach which Simmons & Simmons had already made quite clear. When they were invited to contact the Plaintiff's London solicitors to arrange a medical examination (in response to the Defendants' solicitors own request), they nonetheless did not do so.

26. As set out earlier in October 1995 Simmons & Simmons had written stating that they would seek leave to Amend the Statement of Claim to seek to disapply the Limitation provision. The Defendants' solicitors opposed this but made no effort to have the issue tried or even to strike out at that stage. Leave to amend was given on 19th March 1996. A further six months had passed during which the Defendants had done nothing in respect of the matters which had been sought of them - namely compliance on their part with the directions which related to liability. A further six months elapsed until on 2nd September 1996 Simmons & Simmons wrote asking for exchange of witness statements now that they were in possession of theirs. They explained their difficulty in seeking world wide the witnesses concerned. It is this which suddenly seems to have galvanised the Defendants into what I regard as a tactical "volte-face". Three months later, after fending off Simmons & Simmons with an anodyne "we will revert as soon as possible", they notified their intention to seek to strike out the Plaintiff's claim and took out their summons a little over one month later, in January 1997. In March the Plaintiffs went ahead and nonetheless served and filed their expert reports and witness statements. Sometime after 4th September 1998 the Defendants served two witness statements (Lofthouse and Black).

27. I have little difficulty in concluding that during this period there was no culpable delay. Clearly there had been problems on the Plaintiff's side in collating all the essential material but the Defendants had undoubtedly in my view acquiesced in the Plaintiff's solicitors' failure to meet the timetable which they had set themselves. It may well have been in their own interests not to try and push things along. I detect in their approach a calculated decision not to show their own hand (i.e. they were not and probably never would have been in a position to exchange the reports and statements provided for by the agreed order of Master Betts) in the hope that the Plaintiff would not be able to get his case on its feet; then when it looked as if they were being pressured they encouraged the Plaintiff to think that "without prejudice" negotiations might be fruitful and dispose of the action economically. They were somewhat hamstrung by the course to which they had agreed which resulted in the directions of Master Betts. The upshot was that the Plaintiff's action proceeded not with any great injection of pace, but inexorably, and with the tacit assurance, to be inferred from the Defendants' attitude, that they would not be put under any severe pressure. They also incurred substantial costs in that process. Only when their material was to hand and they could call upon the Defendants to exchange, did the latter change tack. That was too late for the Defendants.

28. There remains the arguably culpable delay of the earlier period i.e. late 1991 until the end of 1993. No material has been put before me to persuade me otherwise. It was a period not without progress in preparation or at least consideration of the Plaintiff's case which was occupying the attentions of lawyers in England as well as in Hong Kong. It was a complex case with a good deal of uncertainty. The Defendants acquiesced also in that period of procedural stagnation and nothing that occurred subsequent to June 1994 entitles them to resurrect it as inordinate delay which prejudiced them to any extent. The Defendants' response to the requests for discovery and the long-down out process - the last list of documents being served and filed in November 1998, seven years after the first and substantially incomplete List of Documents, and almost two years after taking out the summons to strike out the Plaintiff's claim - is an aspect which stands out on its own. I would have dismissed the Defendants' application on their failure in this respect alone. The picture fits in conveniently with the Defendants possible tactics as I have hitherto described them. This was not something which they had a choice over. They were obliged to give full and timely discovery. The documentation in this case was of paramount importance.

29. The Defendants have made much in argument about prejudice caused to them by loss and destruction of documentation given that the action did not commence until 1990.

30. But the Second Defendant had notice of a pending potential claim in June 1988 from the Plaintiff's then lawyers. The documentation which had to be kept for a minimum of five years under Regulations was kept in conditions which made a nonsense of any regard for the need to keep them in any worthwhile state. It is not clear when that destruction, attributable to the conditions in which they were kept, actually occurred. The information available suggests bare lip service was paid to the Regulations.

31. The destruction of a "library" of documents in 1993 was entirely the fault of a Mr. William Duncan who knew the documents were being kept in connection with a number of claims. Whatever the arguable delay in commencing proceedings or in advancing the action, no blame can be attached to the Plaintiff. There was simple negligence on the part of those entrusted with the security of such documents. Astonishingly, destruction was ordered without reference to an index of the documents, or to the solicitors dealing with any claims on behalf of the Defendants. I appreciate that this sequence of disasters puts the Defendants at great disadvantage, but they have only their own staff to blame. It does not of course account for, or excuse the protracted piecemeal disclosure. It may, though I am not able to look into the minds of those acting on behalf of the Defendants, have had considerable influence upon their attitude and tactics from 1992 until, knowing they could no longer avoid showing their hand when the Plaintiff's solicitors called for exchange of statements in September 1996, the summons to strike out the Plaintiff's claim was promised in December 1996.

32. I will review shortly the authorities pertinent to this case although I have been able to make my findings somewhat readily on the facts and circumstances of this case.

33. The classic authorities start with Allen v. McAlpine 1968 2 QB in which the Court of Appeal set out that delay which was prolonged and inexcusable, and was likely to cause serious prejudice to the Defendant, would justify the court in exercising its discretion to dismiss an action, leaving a Plaintiff to his remedy against his solicitor. Lord Denning made it clear that the Court would do all in its power to enforce expedition and Diplock L.J. dealt with matters which he later developed in Birkett v. James in particular the fact that the Defendant could not rely upon delay for which he had been responsible.

34. Birkett v. James 1978 A.C. confirmed the court's power to dismiss an action where the Plaintiff's conduct was intentional and contumelious (not alleged in this appeal) or delay was inordinate and inexcusable giving rise to a substantial risk that a fair trial would not be possible, or to serious prejudice to the Defendant. An appellate court should reverse the judge at first instance only if he (or she) had erred in principle by giving weight to something which he ought not to have taken into account, or by failing to give weight to something which ought to have been taken into account.

35. At p. 322 (F-H) of that decision Lord Diplock set out succinctly the basic approach to delay:

"To justify dismissal for want of prosecution the delay relied upon must relate to time which the Plaintiff allows to lapse unnecessarily after the writ has been issued. A late start makes it all the 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."

36. At p. 323 (D-E) he continued:

"As rules of court recognise, some time for preparation must elapse between successive steps in the procedure and if the time taken by the Plaintiff for any of these steps caused the Defendant no prejudice in his Defence, which could have been avoided or mitigated by his acting somewhat more expeditiously, it does not seem to me that the Plaintiff has failed to proceed with reasonable diligence."

37. Lord Edmund Davies (at p. 335 D-F) in considering how to approach the matter of delay in commencing proceedings adopted as correct that of Russell L.J. in William C. Parker Ltd. v. F.J. Ham & Son Ltd. 1972 1 W.L.R. 1583:

"... in ascertaining whether delay after the proceedings have started is inordinate and inexcusable and prejudicial to the defendant, it must be borne in mind that the delay comes on top of delay in launching the proceedings in a case where there has been delay in launching the proceedings; but that, nevertheless, does not mean to say that the delay before the issue of the writ is to be taken into direct consideration in considering whether there has been prejudice to the defendant... If it be the fact ... that the delay since the pleadings were closed did not contribute to any difficulties that the defendants might have ... then it seems to me quite clear, and quite clear on authority, that the inexcusable delay is not to be regarded as having contributed to the prejudice of the defendants ... if the delay is not excusable after the proceedings have been launched but does not worsen the position of the defendant, then it is not a case for dismissing for want of prosecution."

38. In Trill v. Sacher 1993 1 W.L.R., Neill L.J. reviewed Lord Diplock's speech in Birkett v. James, amongst other authorities, and set out in particularly helpful form, the principles and guidelines for use on an application to strike out for want of prosecution where there has been no intentional and contumelious default. It is not necessary for me to repeat these. They can be found in pages 1398 to 1400 of his judgment. They still hold good.

39. I will shortly state the findings I have made in relation to those principles and guidelines to the extent that they are relevant to the facts and circumstances of Mr. Gallagher's case.

1. I am not satisfied that there has been inordinate and inexcusable delay save possibly in regard to the period late 1991 to end 1993. In any event, even if this delay could be so categorised unequivocally, it has not given rise to a substantial risk that a fair trial cannot result nor to serious prejudice to the Defendants. I am satisfied that it has not impeded the gathering or preservation of evidence. The court will face the same difficulties at trial in the year 2000 as it would have done had the trial taken place in 1991, 1992 or 1993.

2. If this delay could be so categorised it is clear from a case of this nature that it was excusable. I accept that discovery and inspection was bound to play a significant part in the evaluation of the merits of the case. Earlier I have dealt with the Defendants shortcomings in this regard. The case was found to be difficult, time-consuming and expensive in preparation.

3. I am not satisfied that the Plaintiff delayed issue of proceedings. The question of when the Plaintiff had actual or constructive knowledge of his condition, and the possible cause, is yet to be resolved. Assuming for the moment that he acquired knowledge at the time and in the circumstances alleged the proceedings were issued within a reasonable time.

4. The Defendants are estopped from relying on any period of delay of which they have complained by their conduct which I have earlier described as acquiescence.

5. The Defendants, or at least the third Defendant, knew of the Plaintiffs condition from the medical report which they obtained in 1984. The risk of the development of this condition was well-known. That was why such medical examinations were instituted. It is a vital part of the Defendants' case that because the third Defendant at least knew of the Plaintiffs condition, the Plaintiff himself, in the ordinary course of events must have known. I do not need to deal with that as a logical proposition. An important aspect of the case may well turn on the duty of an employer positively to alert an employee to any adverse development in his physical well-being attributable to, or which may be attributable to, his employment, particularly where such a risk is well-known, as this was. Additionally the Defendants had a statutory obligation to retain documents; they formed at one stage a library of relevant documents relating to the contracts; they knew of a large number of claims in existence before that library was to all intents and purposes destroyed. They had at one stage, all the material which was denied to the Plaintiff for a long time and much of it was never disclosed in order to assess what relevance it had to the Plaintiffs claim. Given knowledge of the risk to which I have referred and the knowledge of the Plaintiff's condition, the Defendant certainly had the means, and the incentive, to obtain statements and reports from all responsible persons as to the system and precautionary measures being taken. Against this background I can see no prejudice to the Defendants.

40. It is not necessary for me to consider other authorities most of which turn upon their own facts, or are an application of the basic principles into extended areas of prejudice. The Defendants have however placed some reliance upon the House of Lords decision in Roebuck v. Mungovin 1994 2 A.C. p. 224 which was not considered by the Hong Kong Court of Appeal in Hong Kong & Shanghai Banking Corporation Ltd v. Kuan Tao Sheng & Ors 1998 1 H.K.C. 438. Although I would have expected the Court of Appeal to have been asked to consider it, I do not think that it would have occupied their attention for long. Roebuck involved a desire by the Defendants to settle the Plaintiffs claim, or at least be in a position to make a calculated payment into Court, where they had admitted liability five years earlier. They had been wholly frustrated in their efforts to obtain the necessary documents and information, over that period of time. The Defendants' actions were held to be minor, as against the Plaintiff's inordinate delay. Once again the court underlined that it was a matter for the judge in his discretion, in all the circumstances of the case, to weigh the defendant's actions against or in the context of the Plaintiff's conduct. In that case Lord Browne-Wilkinson opined:

"I trust that in the future there will be few occasions on which the Court of Appeal will be invited to review his decision on the point."

41. Finally I should revert to Neill L.J.'s helpful summary of factors in Trill v. Sacher:

"An appellate court should regard its functions as primarily a reviewing function and should recognise that the decision below involved a balancing of a variety of different considerations on which the opinions of individual judges may reasonably differ as to their relative weight. Accordingly, unless intervention, is necessary or desirable in order to achieve consistency where there appears to be conflicting schools of judicial opinion, the appellate court should only interfere where the judge has erred in principle."

42. The Learned Master was presented with a veritable catalogue of authorities and wide ranging submissions. Having heard all those in this review and considered the authorities germane to this area of interlocutory conflict I am satisfied that not only did she exercise her discretion properly but also that she came to the correct conclusion. This was also a somewhat exceptional case in its complexity though there may be others involving the same complex features.

43. The appeal is dismissed with costs to the Plaintiff.