LU GUO XIANG v. HONG KONG MING WAH SHIPPING CO LTD

HCPI 254/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 254 OF 2006

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Dates of Hearing : 1-5, 8-11 and 17 December 2008

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REASONS  FOR  JUDGMENT

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INTRODUCTION

1. The plaintiff, Mr Lu, was the captain of the defendant’s ship Pacific Paradise which is an 80,000 metric ton bulk freighter.  He was employed under the Seaman’s Employment Contract dated 8 December 1999, which incorporated the International Transport Workers’ Federation’s Uniform “TCC” Collective Agreement (“ITF” contract).  He boarded the ship in December 1999.  

2. On 6 November 2000, the ship was on its way to New Orleans USA from Brazil and he was about two more days’ journey to reach the port.  He sustained serious injuries from a fall through the window of his Master’s Office at around 10:20 hours.  He said that he was cleaning the surface of “the metal structure” supporting the overhead fly bridge on the starboard side outside its window.  The fall from his Upper Bridge Deck onto the Life-Boat Deck is about 6.5 m.

THE THREE ISSUES

3. The writ in the present action was filed on 17 March 2006.  In the defence to the common law personal injury action, the defendant pleaded that the cause of action accrued on the date of the accident and therefore the action was time barred on 6 November 2003. 

4. The 1^st issue is whether this court should exercise its discretion under section 30 of the Limitation Ordinance, Cap.347 that the provision of section 27 barring the plaintiff’s action should not apply to this action.

5. After the writ was issued, the plaintiff further made the following contractual claims as follows :

(a)       in April 2008, by amendment of the Statement of Claim, the plaintiff claimed under Clause 21 of the ITF contract for disability compensation; and

(b)     by its green amendment in October 2008, the plaintiff further claimed for sick leave pay under Clause 17 of the ITF contract.  

6. The defendant asserts that the cause of action accrued on the date of the accident and therefore the contractual action was barred after 6 years on 6 November 2006.

7. However the plaintiff contended that the action under the contract has not been time barred for the following reasons :

(1)     estoppel in respect of engaging US lawyers;

(2)     the date of breach of contract should be after 11 January 2006;

(3)     under Clause 21, the claim for disability compensation did not accrue until the plaintiff’s condition was certified to be permanently disabled by Dr Chun Siu Yeung’s medical report dated 17 October 2008;

(4)     similarly the claim for sick leave under Clause 17 did not accrue until 17 October 2008; and

(5)     sick leave claim had been acknowledged by the defendant by various letters during the period from 3 October 2003 to 11 January 2006.

8. The 2^nd issue is whether the contractual claim is time barred. 

9. The 3^rd issue is of course whether the defendant is negligent or in breach of implied terms of employment. 

THE 1^ST ISSUE—TIME BAR TO COMMON LAW PERSONAL INJURY CLAIM

10. The plaintiff relied on the common law negligence and breach of duty arising from an implied term under the ITF contract with the defendant.  The time bar was three years under section 27 of the Limitation Ordinance.

11. However, section 30 of the Limitation Ordinance provided that :

“(1)    If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which—

(a)   the provisions of section 27 or 28 prejudice the plaintiff or any person whom he represents; and

(b)   any decision of the court under this subsection would prejudice the defendant or any person whom he represents, the court may direct that those provisions shall not apply to the action, or shall not apply to any specified cause of action to which the action relates.

(2)     The court shall not under this section disapply section 28(2) except where the reason why the person injured could no longer maintain an action was because of the time limit in section 27; so that if, for example, the person injured could at his death no longer maintain an action under the Fatal Accidents Ordinance (Cap 22) because of the time limit under the Carriage by Air Ordinance (Cap 500), the court has no power to direct that section 28(2) shall not apply. (Amended 13 of 1997 s. 20)

(3)     In acting under this section the court shall have regard to all the circumstances of the case and in particular to-

(a)   the length of, and the reasons for, the delay on the part of the plaintiff;

(b)   the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought within the time allowed by section 27 or 28, as the case may be;

(c)   the conduct of the defendant after the cause of action arose, including the extent, if any, to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff's cause of action against the defendant;

(d)   the duration of any disability of the plaintiff arising after the date of the accrual of the cause of action;

(e)   the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages;

(f)    the steps, if any taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received.”

Prejudice

12. The parties agreed that the plaintiff’s injuries were serious enough to warrant sufficiently high amount of damages that are not disproportionate to legal costs.   Thus, it can be inferred that there is a substantial prejudice to the plaintiff if he is not allowed to proceed in this action to recover substantial damages for his serious injuries and disabilities. 

13. The defendant witness DW4 Fu Ying asserted that it would be difficult for the defendant to defend this action for the following reasons :

(1)     some relevant crews had retired and some had been deployed elsewhere;

(2)     some are difficult to locate; and

(3)     documents are difficult to trace. 

14. However the defendant has been able to produce 9 witnesses although 3 were not called at the trial.  Not one of them had any difficulty in recalling the facts on the day of the accident although naturally some of them said they could not be very clear since there was a lapse of 8 years since the accident. 

15. Even the deputy general manager Huang Yong Quan (黃涌泉) said in cross-examination that even now he considered that the defendant should pay the plaintiff reasonable compensation for his injuries.  Accordingly I accept the plaintiff’s submission that the weight scale here clearly tips in favour of the plaintiff. 

Considerations under section 30(3)

(a)     The length of and the reasons for the plaintiff’s delay

16. The main reason for the plaintiff’s delay are as follows :

(1)     There was a mutual understanding that upon refraining from instructing the US lawyer at a very early stage, i.e. a few days after the accident, the defendant would pay the plaintiff’s compensation in a satisfactory manner (the evidence of the plaintiff and his wife in preference to the aforesaid Mr Huang would be considered in more detail herein below).  

(2)     The plaintiff and his wife desired to preserve the good relationship with the defendant in order to ensure that the claim for compensation would be processed and paid. 

(3)     The injuries and disabilities required medical assessment and the defendant had repeatedly requested for the assessment and appraisal documents and to undergo surgery even outside the limitation period. 

(4)     Apart from the initial understanding in sub-paragraph (1) above, the defendant had behaved all along in such a manner which was consistent with their message that they would paid the plaintiff’s compensation without having to resort to litigation. 

(b)     The evidence of the plaintiff or the defendant is likely to be less cogent?

17. As considered herein before, the assertion of difficulty in locating witnesses was not real.  The defendant was able to call witnesses to support their allegations of facts. 

18. In respect of documentary evidence, they are able to produce a logbook, the onboard instructions manual, ship plans, measurements, photographs, and onboard meeting records.  There was no suggestion that the cogency of their evidence was compromised. 

(c)     The conduct of the defendant

19. From the correspondences between the parties, it is clear that the defendant had all along taken the stance that they would pay compensation.  In fact they had repeatedly requested for assessment documents and to undergo surgery even outside the limitation period as aforesaid.  They even had meeting outside the limitation period on 6 January 2006 trying to resolve of the matter.  The defendant’s conduct throughout had led the plaintiff to believe that he would receive compensation without having to resort to litigation. 

20. There was no issue under :

(d)     the duration of disability of the plaintiff;

(e)      the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at the time of giving rise to the action for damages;

(f)      the step, if taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received. 

21. By reasons for the aforesaid matters, and in taking into account of the evidence of the plaintiff and his wife since occurring for the accident, which I shall deal with herein below in considering the time bar for the ITF contract, I would exercise my discretion under section 30 of the Limitation Ordinance to override the time bar.

THE 2^ND ISSUE—Time bar under ITF contract

Estoppel

22. The issue of estoppel concerned with the plaintiff’s engagement of US lawyer shortly after the accident whilst he was receiving treatment at the Tampa Hospital in Florida.  The plaintiff’s evidence and submission is that the defendant through Mr Huang had requested the plaintiff to cease engaging the US lawyer and in exchange the defendant promised to pay for all the plaintiff’s medical expenses and they would resolve the matter of the plaintiff’s compensation without going through a court action. 

23. Mr Huang denied that he had ever made the aforesaid promises.  He said in fact the plaintiff’s wife was also very surprised as he did when she learned that the plaintiff had already engaged the US lawyer.  However the documentary evidence did not tally with Mr Huang’s evidence.  In this respect I prefer the evidence of the plaintiff and his wife rather than Mr Huang for the following reasons.  The letters from the US lawyer dated 28 June 2001 related the telephone conversation with wife on/about 14 November 2000.  The lawyer had in fact spoken to the wife through an interpreter Ms Wang.  Thus the wife would not express any surprise over the telephone conversation with Mr Huang when he related the information that the plaintiff apparently had engaged the US lawyer already. 

24. Thereafter the letter from the defendant was written by Mr Huang on 18 November 2000 to Hai Hou in Hainan Island where his wife was receiving training in a training camp.  The fax number and the room number was obviously given by the wife which Mr Huang also agreed.  There upon according to the wife whose evidence I accept, she immediately cut short her training and went back to Guangzhou to meet Mr Huang.  The letter dated 18 November 2000 from the wife to the defendant was written at the suggestion of Mr Huang.  The declaration in the second paragraph was inconsistent with the wife’s knowledge that the plaintiff had already engaged the US lawyer, having spoken to him a few days earlier.  There was no reason for her to feel shocked or puzzled.  The declaration was written in accordance with the suggestion of Mr Huang himself. 

25. Mr Huang at least expressed this concern which was also the concern of the defendant that the plaintiff had engaged US lawyer.  This concern was also expressed in his subsequent letter.  Thus the declaration of the wife was “useful” to the defendant, which Mr Huang admitted under cross-examination.  

26. Accordingly I accept the plaintiff’s version that it is the defendant who requested the plaintiff to void his instructions to his US lawyer whilst he was still in Tampa General Hospital in exchange for the promise that his treatment, and injuries and compensation would be processed and paid for in a satisfactory manner. 

27. The plaintiff even wrote his own declaration on the back blank page of a hospital document after talking to the wife over the phone.  The defendant submitted that the so-called declaration is meaningless in that the plaintiff did not sign on it and had not forwarded it to the defendant.  To my mind, this is neither here or there.  The letter of his wife was sufficient to the defendant.  The US lawyer in fact did not act further for the plaintiff.  His declaration corroborated the chain of events starting from Mr Huang’s “concern” that US lawyers were involved in acting for the plaintiff. 

28. Consequently, the defendant had made use of the declaration given by the wife.  The declaration was given when the plaintiff and his wife acted on the defendant’s promises and representations and stopped engaging the US lawyer to their detriment.  The defendant’s promises and representations had caused a change of the plaintiff’s position. 

29. In the end I prefer the evidence of the plaintiff’s wife than that of Mr Huang.  This is so in spite of the fact that she had made a mistake in her original witness statement that by reason of the plaintiff’s claim in Hong Kong, she was hard pressed by her company leader and was subsequently demoted from a section head to a section member.  She corrected herself at the outset of her evidence-in-chief.  The demotion was her company’s policy unrelated to the action herein.  However, I accept her evidence that she had, nonetheless, hard pressed by her company senior in relation to the plaintiff’s action herein. 

30. In this issue of estoppel, I find that, but for the defendant’s promises and representations, the plaintiff in all probabilities, as submitted by the plaintiff, would have engaged or continued to engage the US lawyer to handle his claim in the US jurisdiction.  This is something which the defendant and/or their insurer did not want to happen.  Consequently the defendant should be estopped from raising the issue of time bar under the ITF contract since the parties had always acted upon a common understanding that they would resolve the matter without going through litigation.  It is now inequitable to allow the defendant to assert this issue of time bar. 

Acknowledgement under section 23(3) Limitation Ordinance

31. Section 23(3) of the Limitation Ordinance provided that :

“(3)    Where any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate of a deceased person or to any share or interest therein, and the person liable or accountable therefor acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment or the last payment:  Provided that a payment of a part of the rent or interest due at any time shall not extend the period for claiming the remainder then due, but any payment of interest shall be treated as a payment in respect of the principal debt.”

32. The documents, mainly in terms of letters written by the defendant, clearly constituted acknowledgement of the plaintiff’s claim and the time limit began to run afresh for the ITF claim.  These documents were between the period of 22 October 2001 up to 27 January 2006.  Reading these documents together, it is clear that the defendant has acknowledged its liability to pay the claim in question.

33. The defendant submitted that those letters were written and meetings were convened on without prejudice basis.  In fact the first document stated to be made on without prejudice basis was from the defendant’s lawyer in Guangzhou dated 19 July 2005.  I do not consider that all the letters written beforehand were on without prejudice basis. 

34. In any event, in the case of Bradford & Bingley plc v. Rashid [2006] 4 All ER 705, the House of Lords decided that where without prejudice documents treated the debt as an undisputed liability leaving the extent of the liability to be ascertained, the documents are not protected by the without prejudice rule for the purpose of section  29(5) of the Limitation Act 1980 (which is similar to our section 23(5) of the Ordinance). 

35. In fact Lord Hoffmann went to the extent to hold that the without prejudice rule does not apply to an acknowledgement for the purpose of section 29(5) of the Act at all on the ground that the acknowledgement is an acknowledgement that the debtor allows the creditor to proceed with the case, lifting the procedural bar. 

Cause of action accrued from breach

36. A contractual cause of action accrues upon the failure to perform contractual obligation.  Throughout the course of the negotiation between the parties, the defendant’s position had always been that they would honour the contractual obligation.  Even by their letter dated 27 July 2006, the defendant said in unequivocal terms that they would honour the ITF contract.  Thus the breach occurred upon their failure to pay any compensation under the ITF contract. 

Certification of the plaintiff’s disabilities

37. Further under Clause 17 and Clause 21 of the ITF contract, the defendant’s obligation to perform did not arise until the plaintiff’s disabilities were ascertained.  In fact the defendant had repeatedly been pressing the plaintiff to obtain a final appraisal or assessment of his disabilities.  If the plaintiff had been so certified by the Zhuzhang Hospital by their “診斷證明書” (Certificate of Diagnosis) dated 11 May 2001 (a copy of which had already been given to the defendant), they would not have repeatedly thereafter pressed him for such a final appraisal or assessment.  For example by their letter dated 14 November 2003, they were still saying they need an assessment certificate from a recognized institution.  A further request for the same was made on 11 January 2006.  [C294]

38. The plaintiff’s disabilities have only been assessed by Dr Chun on 17 October 2008, who was jointly appointed by the parties in place of the requirement of a doctor to be appointed by the ITF under Clause 21.  Dr Chun’s assessment constituted a declaration that incapacity was of a permanent character under Clause 17.  

39. Accordingly there is no question of any time bar regarding the ITF claim. 

40. In the end it is unnecessary for the plaintiff to rely on the alternative as a last resort that his claim is limited to 6 years counting back from the date of Dr Chun’s assessment on 17 October 2008 or 6 years counting back from the filing of the Re-Amended Statement of Claim on 21 November 2008.

41. For the aforesaid reasons, I consider that there is no time bar in respect of the plaintiff’s claim under the ITF contract.

THE 3^RD ISSUE—NEGLIGENCE AND/OR BREACH OF IMPLIED TERMS

42. In deciding the liability of the defendant under this heading, it is necessary first of all to decide how the accident occurred.  The plaintiff has described in detail of the PSC inspection and the fact that the inspectors would first attend his day room or Master’s office.  If they noticed the metal plate immediately outside his room was dirty, this would cause them to have a more detail and wider inspection of the whole ship.  He had in fact complained to the Chief officer about this but the condition of the metal plate was still dirty.  He therefore took it upon himself to clean those dirty spots on the metal plate comprising soot and rusty spots.  He said he was at one time kneeling on the sofa and at one time standing on the chair.

43. After the fall it was DW2 Shen Jian Zhong, the political officer who had heard the sound of an impact and rushed to the boat deck and saw the plaintiff lying on the deck.  DW3 Pan Xiang Tang was later summoned to accompany the plaintiff after he was carried to the sick room.  Both Shen and Pan had inspected the day room later and saw newspaper was put on the sofa with a half bucket of water nearby.  In fact Pan also said there was cleaning cloth in the room also.  All these supported the plaintiff’s version that he was cleaning an area outside the window.

44. Both of them said they noticed certain scratch mark on the water pipe which was about a meter on the right hand side of the window.  They said that possibly the plaintiff was trying to climb down from the water pipe.  However I find this conjecture is not acceptable.  There is no reason why the plaintiff had to climb out of the window and it is quite difficult for him to reach for the water pipe.  There was no cause for him to climb to the water pipe and try to climb down to the deck.  The scratch mark if existed on the water pipe, to my mind, is unconnected with the fall of the plaintiff. 

45. The next question is why the plaintiff was seen lying about 1.5 meter away from the spot directly underneath his window towards the bow side.  The front right hand corner of the box on the deck was damaged.  It then led me to the consideration whether the ship had had a sudden turn to the left and therefore it was tilted to the right hand starboard side.

46. The plaintiff said there was a sudden turn of the ship while he was cleaning the metal plate outside the window.  He might had reached out a little bit further himself, but the sudden turn caused him to fall from the window.  He described such a condition might be the situation of “running rudder” which means the rudder suddenly had certain malfunctioning and caused the ship to change its direction.  He said that such a situation had appeared in the past and he had reported to the defendant company.  But there was no mending of such a situation. 

47. All three defence witnesses, DW1Wen Meng Xi together with Shen and Pan said there was no sudden turn of the ship.  Wen was in the control room in the bridge and he said all along as appeared in the logbook the ship was sailing in a constant direction with no change of route. 

48. However the plaintiff said that the defendant had specifically directed that nothing unusual should be entered in the logbook without their knowledge and consent.  The entry on 6 November 2000 at 10:20 hours supported the plaintiff’s version.  First of all, nobody knows who made this entry.  The entry is as follows.

“1020:  Found captain was seriously injured on life deck and first aid by purser and crew.

10:45:   Informed owner and U.S.C.G. requested immediate assistance.  Captain jumped off his starboard window.  Reason unknown.”

49. The defendant had not adduced any evidence at all in this respect.  Further, the last entry of “Captain jumped off his starboard window.  Reason unknown.” apparently was written by another ball pen and by another person.  It was apparently a post-entry added later on.  Even Wen could not tell who actually made those entries albeit he was on duty between 08-12 and again 20-24 that day.  It is also unknown why the writer could take a positive stand that it was the captain himself who jumped off from his window and did not say it was an accidental fall of the captain from his window.  The entry was clearly very protective of the defendant’s position.  I accept that these entries were made after consultation with the defendant and the writer was directed to put such an entry in such a form and content. 

50. Further Wen said whilst he was on duty between 08-12, one Zhang Xue Xian A.B. was supposed to be at the wheel.  However Wen said for most of the time, Zhang was not in fact at the wheel and he was doing other duties on the deck below.   For both shifts between 08-12 and 20-24, the name of Zhang signed in the logbook under the column of wheel was actually written by Wen himself.  He could not even remember for how long Zhang was at the wheel at all.  

51. I find Wen’s evidence insofar as they contradict the plaintiff’s to be not acceptable.  His version that the ship had not swerved at all cannot be accepted. 

52. Again, I do not find either Shen or Pan’s evidence that the ship had not suddenly turned shortly before the plaintiff’s fall to be unacceptable either.  They appeared to be very protective for the defendant.  I prefer the evidence of the plaintiff in this respect and I find the plaintiff to be an honest and credible witness.  Thus the plaintiff’s fall was caused by a sudden turn of the ship and that was why he was found a little bit to the bow side underneath his window which had caused the damage to the front right corner of the wooden box.  Even Shen agreed that the plaintiff might have claimed down from the water pipe was only his own conjecture and it might not be the case.

53. As aforesaid the plaintiff had complained to the chief officer that the metal plate outside his window was dirty.  However he received the reply that it had already been cleaned by water jet.  There were also 2 horizontal metal plates in the metal structure.  The one above the position marked C might not be reachable by the water jet.  The ship was about to reach New Orleans and everyone was working under a tight schedule to meet the PSC inspection.  It is understandable that even as a captain the plaintiff took it upon himself in such circumstances to clean the metal structure himself. 

54. Clause 34 of the ITF contract provided that the defendant was obliged to set up an on-board safety committee and to designate an on-board competent safety and health officer to implement the company’s safety and health policy.  No such committee was established and no such officer was appointed.

55. There was no assessment of risk associated with the plaintiff’s own duties and responsibilities.  The duty to carry out risk assessment arose out of common law duty of care and implied term of the ITF contract. 

56. Further the possible effect of the dirt on the metal structure situated at an awkward position had been communicated to the defendant by fax according to the plaintiff.  The defendant had actual knowledge of the state of the metal structure and its possible effect.  The defendant did not respond to the notice from the plaintiff and have not arranged any appropriate means to have the metal structure clean from time to time. 

57. In the end, I find that the defendant has failed to discharge its duty under common law and under the implied term of the employment contract as particularised under paragraph 11 of the Re-amended Statement of Claim.

58. I do not find any contributory negligence on the part of the plaintiff because his decision to clean the metal plate is not a negligent act on his part in the circumstances of this case and his fall was contributed by the sudden change of direction of the ship causing the ship to tilt to the starboard.  It therefore cannot be said that since the ship was under the sole management and control of the plaintiff as the captain of the ship, he was guilty of lack of care for his own safety.

CONCLUSION

59. Under the defendant’s defence of time bar to the common law personal injury claim, this court would exercise its discretion under section 30 of the Limitation Ordinance that the provision of section 27 thereof shall not apply to this action.  

60. The plaintiff’s claim under the ITF contract is not time barred for the aforesaid reasons. 

61. The defendant is liable to the plaintiff in negligence and breach of implied terms of employment and the plaintiff is not guilty of any contributory negligence.

62. Costs of the action in respect of the trial on liability be to the plaintiff and the plaintiff’s own costs be taxed according to the Legal Aid Regulations.