WU KWOK BIU v. CHAN HO SUN

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES LIST NO.496 OF 1998

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JUDGMENT

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1. By a summons dated 13^th February 1999, the Defendant in this action seeks an order that all proceedings be stayed on the grounds that the writ was issued out of time and that s.27 of the Limitation Ordinance, Cap.347 applies. By a counter summons dated 12^th March 1999, the Plaintiff seeks an order that s.27 shall not apply and that directions for the continuance of the action be given under s.30 of Cap.347.

2. The burden of proof is on the Plaintiff to satisfy the Court that s.30 should apply. The Plaintiff accepts that the writ was issued out of time. The cause of action (a "running down" action) occurred on 23^rd August 1994. The writ was issued 3 years and 8 months later in May 1998. The limitation period under s.27 is 3 years and the Plaintiff's solicitors acknowledge that they should have but failed to, at least issue a protective writ before 23^rd August 1997. The relevant parts of s.30 Cap.347 provide as follows:-

"          (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 ---

It is well established that once it has been determined that the Plaintiff is entitled to invoke s.30, the Court's discretion is unfettered. It is further worthy of note that s.30(3)(a) to (f) are not the only matters to which the Court may have regard because the subsection commences with the words "the court shall have regard to all the circumstances of the case and in particular to ...".

The facts of the accident

3. On 23^rd August 1994 the Plaintiff was driving his motor vehicle in the early hours of the morning along the Princess Margaret flyover in Kowloon. He had two male passengers who were friends of his and three female passengers who have been described, somewhat euphemistically as "public relations girls". The Plaintiff and his friend had met them that evening in a local karaoke club.

4. It seems that the Plaintiff lost control of his vehicle and it overturned at or near a bend in the flyover. It came to rest on its side across the near side lane. Luckily there were hardly any injuries to the occupants of the vehicle arising from this incident. However, after all the occupants had got out of the overturned vehicle and when the Plaintiff was standing at the rear of his vehicle on the inside lane of the carriageway, a vehicle, driven by the Defendant came around the bend in the road and struck the Plaintiff. He was seriously injured. He spent the next four weeks in hospital and was unable to resume employment for approximately two years.

5. The only other facts of significance to this summons are firstly, that on a date in January 1995, the Defendant pleaded guilty in the Magistrate's Court to an offence of driving without due care and attention. Secondly, the accident report indicates that the Defendant's vehicle left a tyre mark on the road which was about 165 feet long and came to an end at or near the point where the vehicle struck the Plaintiff. Thirdly, the three girls from the karaoke club left the scene and have not been seen since. No information is or ever has been available as to their identity, residence or place of work. In short, the ladies disappeared into the night whence they came.

Post accident events

6. It was 21 months before the Plaintiff went to see a solicitor. It was the same solicitors who now represent him in this summons. His only explanation for his delay in seeing solicitors was that he was "off sick" during this period. Be that as it may, the Plaintiff's file in this case was opened by his solicitors on 22^nd May 1996. Thereafter the progress of the case was unremarkable, save for the solicitors' failure to take any action in relation to the limitation period of three years. The Plaintiff's Counsel, Mr Delaney, has directed the Court's attention to various correspondence, all of which serves to show that once the solicitors had gathered all the necessary information, statements, police and accident reports and so on, and they had entered into discussions and correspondence with the Defendants' insured, all the indications were that this matter would be settled. It seems that the solicitors' error in allowing the limitation period to expire stems from a combination of three factors : firstly, that the file was handled by three different solicitors within the firm (due to people leaving). Secondly, a failure to appreciate that the date of the accident was almost two years prior to the file being opened. In 1997 it was regarded as a one year old file when it should have been regarded as a three year old file. Thirdly, the papers were with a counsel (not the counsel in this application) for a long time. The papers were recovered from this counsel and a new counsel instructed after the expiry of the limitation period.

7. In any event, the solicitors very properly acknowledge their oversight. Mr Delaney emphasises however, with some force, that even after the oversight had been recognized, the case proceeded with the usual negotiations. It proceeded on both sides as if they were within time. In particular, on 26^th February 1998, the Defendant's insurers having made a request for some further information, concluded a letter with these words :-

"In the meantime, we would request that we look to resolve the matter amicably and in such circumstances suggest that you do not issue proceedings at this point in time."

This letter was six months after the expiration of the limitation period. Similar correspondence was exchanged and further information provided between February and August 1998. It was not until a letter of 26^th August 1998 that the Insurers first made reference to the fact that the action was time barred. By this time the Plaintiff's solicitors had, in May, taken the precaution of issuing (although not yet serving because they did not consider it necessary to serve it whilst negotiation were continuing) the writ. It was only in February of 1999 that the Defendant's Insurers' solicitors took over the correspondence on their client's behalf.

The issues in this application

(a) Evidential prejudice

8. The Defence say they have been deprived of the opportunity of trying to trace the three karaoke girls who were passengers on the Plaintiff's vehicle. They say that the amount of alcohol consumed by the Plaintiff prior to the accident would be a relevant issue at trial. Whilst they concede that the relevance of alcohol on the Plaintiff's own accident which caused his car to overturn would be of little or no relevance to these proceedings, it would be nonetheless relevant to the Plaintiff's actions after he got out of his overturned car and stood on the road behind his crashed vehicle. They argue that the three girls could give independent evidence about how much he had drunk in the hours before the accident.

9. Counsel for the Plaintiff however submits firstly that the issue of the Plaintiff's drinking has little or no relevance to the issue of his possible contributory negligence by standing where he did at the time he was hit. Secondly, they say that there is contemporaneous evidence in the police accident report and evidence on affirmation from the two male passengers. Thirdly, they say that the girls are untraceable and would have been similarly untraceable had the writ been issued at the time one would normally have expected it to have been issued during the three year limitation period.

(b) The merits of the claim

10. The Defence say that their application to stay the proceedings is not a "windfall" defence. That is, it is not a situation where they seek to avoid an inevitable finding of liability against them by taking advantage of a mere oversight by the Plaintiff's solicitors. On the contrary, the Defence submits that were the matter to go to trial with the benefit of all the witnesses, they would have a real prospect of the Plaintiff being found wholly to blame for the accident.

11. The Plaintiff rejects this argument. They say they have a very strong case. The Defendant, they say, when confronted with an obstruction ahead of him, failed to stop in time. They point to his plea of guilty to careless driving and the evidence of excessive speed as demonstrated by the 165 feet tyre mark. The strength of their case, they say, should be taken into account when deciding whether or not it would be equitable for the Court to exercise its discretion.

(c) The alternative remedy

12. The Defence submits the Plaintiff has an unanswerable claim against his own solicitor for professional negligence. They say such a course would be quicker, easier and more certain.

(d) The Plaintiff's and his solicitors' conduct before and after the issuance of the writ

13. I have already outlined the facts in relation to this issue.

Conclusion

14. Having considered the issues raised, I have resolved each of them in the Plaintiff's favour and I am satisfied that s.30 of Cap.347 does apply in this case and that I should exercise my discretion in the Plaintiff's favour. Dealing briefly with each of the issues, my findings and conclusions are as follows :

(a) The evidential prejudice

15. A simple test (which I take from the judgment of Stephenson L.J. in Conry v. Simpson [1983] All ER 372) is to be applied, namely - is the Defendant really in any worse position for dealing with factual issues than he would have been if the action had been started within time? The Defence's only complaint is the lack of the three karaoke girls. In my judgment, even if the writ had been issued in late 1995 or early 1996 (the best one could have realistically hoped for) the prospects of tracing any of the girls would have been just as remote. Furthermore, even if such a witness were traced, the prospect of them being able to assist the Court on relevant matters of fact would be equally remote.

(b) The merits of the case

16. The merits of the case are plainly relevant to the question of prejudice. Where a Defendant has little or no prospects of defending the claim (subject to the possibility of a finding of some minor contributory negligence) it is appropriate to regard the Plaintiff's failure to issue proceedings in time as giving the Defence a "windfall" defence. Such a Defence would be purely fortuitous and should carry no weight when assessing prejudice to the Defence. This is all the more so when, as in our case, during the period after the limitation has expired, the parties were engaged in negotiations to settle. This was a claim which the Defence always expected to have to deal with and from the correspondence it is clear that they anticipated a settlement. It is not for this Court to speculate on the outcome of the case but it can take into account the apparent attitude of the Insurers which was to try and avoid litigation. This attitude, on the evidence available to them was commendable. They were faced with an accident which on its bare facts places prima facie blame on the Defendant added to which the Defence have the potentially difficult hurdles to surmount in the Defendant's plea of guilty to careless driving and the very long tyre mark stopping at or near the point of impact. Lord Griffiths in Donovan v. Gwentoys Ltd [1990] 1 WLR 479 said :-

"The primary purpose of the limitation period is to protect a defendant from the injustice of having to face a stale claim, that is a claim he never expected to have to deal."

This case was not stale, the Defendant expected to have to deal with it, it would be unjust if he did not.

17. By the same token the prejudice to the Plaintiff is greater if by being time barred he loses a case which he was very likely to win.

(c) The solicitor's liability

18. The solicitors in this case acknowledge their oversight. The reasons for it have been outlined earlier in this judgment. They also must acknowledge that, should this application under s.30 fail, they would probably have no defence to the proceedings that the Plaintiff would then bring against them. In my judgment, if having applied s.30(3), the Court decides it would be equitable in all the circumstances to disapply the limitation period, then the ease and speed and certainty in suing the solicitors carries little weight. The Court should have regard to all other matters first. If having considered all other matters, the Court decides that it would indeed be equitable for the litigation to proceed, then the vulnerable position in which the Plaintiff's solicitors find themselves is of no concern.

19. Lord Denning M.R. in Firman v. Ellis [1978] 1 QB 905 referred to this matter in the following way :-

"... there were negotiations for a settlement, but the plaintiff's solicitors, by the merest slip, allowed time to run out. They failed to renew the writ in time. This slip did not prejudice the defendant or his insurers in the least. Yet as soon as the defendant's insurers discovered it, they cried 'snap' and broke off the negotiations. They said to the plaintiff: 'You are statute-barred. We are not liable. You sue your own solicitors for negligence. Make their insurers pay. And not us. ... As a matter of simple justice, it is the defendant's insurers who should pay the plaintiff's claim. They have received the premiums to cover the risk of these accidents. They should not be allowed to foist their liability on to the plaintiff's solicitors or their insurers by calling 'snap' as if it were a game of cards."

This is not to say that the alternative remedy against the solicitors is never a relevant consideration. It can be as Lord Denning went on to say, later, in the same case :-

"In cases under the Limitation Act 1975, I think that the negligence of the plaintiff's solicitor - and a remedy against him - is an admissible consideration. It is one of 'the circumstances of the case' and one of 'the reasons for the delay.' It may tip the scale where the defendant has been substantially prejudiced by the delay."

20. In my judgment, the question does not come into play in this case because the scales are not evenly balanced and do not need tipping.

(d) The length of the delay

21. Prior to the issuance of the writ, the Plaintiff's solicitors were not guilty of any delay in their management of the case. Once the file was opened, matters progressed at an acceptable pace. The period of time from the expiration of the time limit to the writ being issued is about eight months. It cannot be said that is a short period. It is not a case where the time has just expired by a few days or a week or two and is immediately rectified. However, in the context of this case, neither is it an unduly long period. The writ was issued in the course of negotiations which the parties had every reason to expect would be fruitful. Even the issuance of the writ in May did not cause any ripples because it was not until the end of August that the Defence decided, for the first time, to call foul and point out to the Plaintiff's solicitors that the action was time-barred.

22. For all the above reasons, the Plaintiff's summons to disapply s.27 is granted and the Defence summons to stay the proceedings is refused. The action should now proceed with due expedition.

23. On the question of costs, the Plaintiff's summons seeks an order that costs be reserved. I do not consider such an order as appropriate in the circumstances of this case. The order I make is that there be no order as to costs.