NG NGAN CHIU v. PARAMOUNT PRINTING CO. LTD. and SHELL HK LTD. (Third Party)

1996 No. P. I. 328

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES LIST

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J U D G M E N T

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1. This is the trial of a preliminary issue.

2. The Plaintiff in this Action was employed by Paramount Printing Company Ltd. ("Paramount") as a printing worker from about August 1990 to March 1991. His duties included the frequent cleaning of the rollers and plastic sheets of the printing machines with a chemical solvent provided by Paramount. This was a product called "X55B" which was more commonly known as "white petrol"; a highly volatile mixture containing the substance n-hexane ("the product"). Whilst working with Paramount and in the course of carrying out his duties with his employer, the Plaintiff was exposed to the high concentration of the vapour of the product in the atmosphere and he inhaled the same.

3. In about January 1991 he began to note numbness in his hands and it got worse as time went on. Later on, his legs also suffered from numbness and weakness. He sought medical treatment in about March 1991 and was diagnosed to be suffering from peripheral neuropathy which was caused by intoxication, through contact and inhalation of n-hexane contained in the product.

4. The Plaintiff stopped working for Paramount in March 1991. In July 1992 he applied for legal aid. On 27th January 1994 the writ was issued against his employer Paramount. The Statement of Claim was filed on 12th July 1994. The Defence was filed on 19th October 1994. Third party proceedings were commenced with a Third Party Notice filed on 27th March 1995 against Shell Hong Kong Ltd. ("Shell") on the basis that the product was supplied and/or distributed by Shell and that the injury, loss and damage to the Plaintiff was caused by Shell's negligence as particularised in the Third Party Notice. Shell's Defence to the Third Party claim was filed on 6th July 1995.

5. On 19th October 1995 the Plaintiff issued a summons to amend the Writ and Statement of Claim seeking leave to add Shell as the 2nd Defendant in the Action and for leave to file and serve the Re-Amended Writ with the amended Statement of Claim and the amended Statement of Special Damages attached to the summons. That summons was dismissed by Mr. Registrar Betts on 29th November 1995. A Notice of Appeal was lodged on 30th November 1995. The matter came before Le Pichon J. on 11th March 1996 who ordered, inter alia, that there be a trial before a Judge of the following issues:

(1) whether the Plaintiff's claim against the Third Party is statue-barred pursuant to S. 27(3) of the Limitation Ordinance, Cap. 347, at the date of the Writ herein or at the date of the Plaintiff's application to join the Third Party as an additional Defendant;

(2) if the answer to (1) above is in the positive, whether the Court should nevertheless exercise its power under S. 30 of the Limitation Ordinance to disapply the provisions of S. 27;

She also ordered that the Plaintiff's appeal from Mr. Registrar Betts' order be stood over to the Judge trying the issues.

6. At the outset of the trial of the issues before me, I was informed by Counsel for the Plaintiff that he was no longer pursuing the first issue in the light of the instructions that he had received after the Plaintiff had seen the photographs of the drums containing the product in Shell's Bundle of Documents. The Plaintiff accepted that some of the drums that he had seen at his workplace had yellow caps of the type shown in the photographs having the Shell logo. Counsel very properly conceded that he could no longer pursue the previous stance that the Plaintiff did not have the knowledge of the identity of the 2nd Defendant until much later. He conceded that the first issue was no longer a live issue before me and accepted that the Plaintiff's claim against Shell was time-barred. The only issue, therefore, before me is whether the Court should exercise its power under S. 30 of the Limitation Ordinance (Cap. 347) to disapply the provisions of S. 27.

7. I heard evidence from the Plaintiff, Mr. Benjamin Cheung of the Legal Aid Department and from Mr. Ngai Kam-Hung, the logistics and health, safety and environment manager of Shell. Paramount has not taken part in the trial of this issue although Counsel for Paramount held a watching brief.

8. Counsel for the Plaintiff conceded that the Plaintiff's claim against Shell was statute-barred three years after March 1991, namely, in March 1994. He submitted that in the exercise of the Court's power under S. 30(1) of the Limitation Ordinance, the Court considers whether it would be equitable to allow an action to proceed and the overriding consideration is the degree to which the Plaintiff would be prejudiced if the limitation provision is not overridden and the decision to override the time limit would prejudice Shell. And that in exercising its discretion the Court shall have regard to all the circumstances of the case, and in particular the six matters under S. 30(3).

9. He submitted that although the Plaintiff had a strong case against Paramount it was not a cast-iron case and in the event that the Court at trial should find Paramount not liable at all but that Shell should be responsible for the Plaintiff's injuries, then the Plaintiff would recover nothing at all. He further submitted that Shell would suffer no real prejudice if joined as a Defendant as it was already involved in the proceedings as a Third Party. Shell will have to take part in the trial as a Third Party. The issues between the Plaintiff and Shell are substantially the same as the issues between Paramount and Shell in the Third Party proceedings and it is likely that Shell's defence will be the same in both cases. The nature and cogency of Shell's evidence will not be affected. The only scenario where Shell will suffer prejudice if joined is where Paramount is exonerated altogether but Shell is found to be responsible for the Plaintiff's injuries and loss. But Counsel says this highlights the prejudice the Plaintiff will suffer if there is no joinder of Shell as a Defendant.

10. Counsel for Shell submitted that the burden was on the Plaintiff to satisfy the Court that the time-bar should be disapplied (Thompson v. Brown [1981] 1 WLR 744 @752E). He submitted that the Plaintiff has failed to discharge the burden. Counsel for Shell further submitted that the scenario that Paramount will be exonerated altogether but Shell found to be responsible for the Plaintiff's injuries and loss was an unlikely one. The prejudice suffered by the Plaintiff if the discretion is not exercised and that suffered by Shell if the discretion is exercised is equal in which case the onus on the Plaintiff has not been discharged.

11. Counsel also submitted that the delay from July 1992 when the Plaintiff applied for legal aid to October 1995 when the application to join was taken out is largely unexplained and that I ought not to exercise my discretion in the Plaintiff's favour relying on Lee Yuet Ling and others v. Kwan Kwing Kai [1985] HKLR 495. He further argued that I had to take this into account both under S. 30(3) of the Ordinance and quite separately, as a second limb and that in the absence of an explanation for the delay for that period the Court should refuse to exercise its discretion in the Plaintiff's favour.

12. In my judgment, the onus is on the Plaintiff to show that in the particular circumstances of the case it would be equitable to override the time limit but I have an unfettered discretion in the matter. (Thompson v. Brown [1981] 1 WLR 744 @ 752E-F) In this case, it is common ground that the Plaintiff's cause of action against Shell was time-barred in March 1994. The Court's power to override the time-limit is contained in S. 30 of the Limitation Ordinance. S. 30(1) provides as follows:

"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 S. 27 or 28 prejudice the plaintiff, ..... and

(b) any decision of the Court under this subsection would prejudice the defendant .....,

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."

S. 30(3) provides that the Court shall have regard to all the circumstances of the case and in particular to six matters contained in (a) to (f) of that sub-section. In this case, it is relevant to have regard to the matters contained in (a) namely, the length of and the reasons for the delay on the part of the plaintiff; (b) namely, 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-limit; (e) namely, 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 and (f) namely, 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.

13. In the present case, the issues between the Plaintiff and Paramount and between Paramount and Shell in the Third Party proceedings will have to be resolved at trial. Paramount has raised a number of defences. It has also pleaded, in answer to the allegation that it failed to provide any safe or proper ventilation system in the factory, that it employed a reputable and competent air-conditioning engineering contractor to design and install the ventilation and air-conditioning system in the premises. All of the matters raised are matters which will have to be properly resolved at trial. Although I make no findings on the issues to be resolved at trial, it does appear to me that the Plaintiff has a strong claim against Paramount. It is not, however, in my judgment a certainty or to use the expression used in some of the cases, it is not a cast-iron case.

14. I turn to the question of delay. As I have to consider "all the circumstances of the case" it is pertinent to consider the delay in the pre-limitation period as well. (Donovan v. Gwentoys Ltd. [1990] 1 WLR 472).

15. The delay complained of is for the period from July 1992 to October 1995. The claim was time-barred in March 1994. The Plaintiff gave evidence that he applied for legal aid in July 1992. That application was granted in February 1993. He said that soon after he was granted legal aid he became aware that he might have a claim against the supplier of the product, that he did tell the Legal Aid Department about the identity of Shell and that he wanted to sue Shell as well. From this evidence, it appears that his legal advisers knew of Shell's identity in or around February 1993 but failed to commence an action against Shell in time. That would in itself give the Plaintiff a cause of action against his legal advisers. However, having heard his evidence on other matters, it seemed to me that his recollection of time and dates was not very clear. Although it appears that he does have a cause of action against his legal advisers, I would not go so far as to say that he has an unanswerable claim against them.

16. Mr. Benjamin Cheung gave evidence and referred to a Chronology in a related action against Paramount suffered by another workman, namely in Action No. 818 of 1994. On 12th July 1994, the Legal Aid Department enquired from counsel as regards joinder of Shell and on 10th August 1994 Counsel's advice was to wait pending particulars from the Defendant. Third Party proceedings were taken there as well on 27th March 1995 and on 1st August 1995 instructions were sent to counsel to advise on joinder. On 5th August 1995 counsel advised to join Shell as a Defendant. I should mention that the counsel referred to in Mr. Cheung's evidence and in the Chronology is not Mr. Chow who appeared for the Plaintiff before me but a different counsel. It appears that there was in July 1994, after the limitation period had expired in this case, some consideration of the question whether Shell should be joined. Mr. Cheung also had the conduct of this action at that time.

17. I must say that the delay from February 1993 to July 1994 when a decision was made to consult counsel in the other case on Shell's joinder is largely unexplained and I take this into account. Of course, in July 1994 the limitation period had already expired. After that, the Legal Aid Department did ask counsel for advice. Counsel's advice was to wait for particulars from the Defendant before advising on the joinder of Shell. The Defence in this action was filed on 19th October 1994 but the Defence in Action No. 818 of 1994 was filed in May 1994 and there was delay until October 1995.

18. This was not a case where there was mere inactivity throughout the whole period of delay. Some explanation is given in the evidence of Mr. Cheung and in the Chronology he produced. It is not entirely satisfactory and I have to take this into account. It is, however, not totally unexplained delay as was the situation in the case of Lee Yuet-Ling and another v. Kwan Kwing-Kai and another [1985] HKLR 495. The position was quite different there. In that case, the Plaintiff deliberately chose not to put before the Court all the facts which the Court has to have regard to. The Plaintiff there did not give any reason for the delay.

19. I would also observe that in the case of Kwok Pat Mui and another v. Fok Chi Wah and others [Civil Appeal No. 148 of 1996] there was a delay of over 5 years from the expiry of the limitation period. No satisfactory explanation was given for much of the delay. Notwithstanding this, the Court of Appeal considered that the overriding point, at the end of the day was the question of prejudice to the Defendants. The issues sought to be litigated had already been issues in the same action in the Third Party proceedings and it was held that there was no real prejudice to the Defendants.

20. In almost all cases, the prejudice suffered by the Plaintiff will be balanced by the prejudice suffered by a Defendant depending on whether the discretion is exercised or not. I respectfully adopt what Parker L.J. said in Hartley v. Birmingham City District Council [1992] 2 All E.R. 213 @224 as follows:

"In my view, however, as the prejudice resulting from the loss of the limitation defence will always or almost always be balanced by the prejudice to the Plaintiff from the operation of the limitation provision the loss of the defence as such will be of little importance. What is of paramount importance is the effect of the delay on the defendant's ability to defend."

21. It is also important to bear in mind what the purpose of a limitation period is. This was helpfully set out in the speech of Lord Griffiths in Donovan v. Gwentoys Ltd. [1990] 1 WLR 472 @ 479 where he 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."

22. In this case, Shell will not be facing a stale claim in the sense of one that it never expected to have to deal with. Shell was made a Third Party on 27th March 1995 by the Third Party Notice. It has actively been preparing itself for the preparation of the defence to the Third Party claim. The claim made by the Plaintiff against Shell is substantially the same. From the evidence of Mr. Ngai Kam Hung, Shell has already gathered all the evidence that it requires for the defence of the Third Party proceedings. I would naturally expect that Shell would have taken the Third Party proceedings seriously and was actively gathering its evidence after notice of the Third Party proceedings and this is what Mr. Ngai also said in evidence. In my judgment, Shell's ability to defend the Plaintiff's claim has not been affected by the delay. As far as the cogency of the evidence is concerned, I am of the firm view that the evidence likely to be adduced by Shell will not be less cogent than if the action had been brought within the time allowed by S. 27.

23. I am satisfied that it would be equitable to allow the Plaintiff's action against Shell to proceed and I exercise my discretion in the Plaintiff's favour by directing that the provisions of S. 27 shall not apply to that action.

24. As to Mr. Ng's argument that as a second limb and quite independently of the statutory provisions, I should refuse to exercise my discretion in the Plaintiff's favour because of unexplained delay, I am not prepared to accede to Mr. Ng's submission. In exercising its discretion to override the time limit, the court is acting under a statutory power. The statutory provisions set out the matters that the court should have regard to and the reasons for the delay is a factor to be taken into account under S. 30(3). Having come to the conclusion that it would be equitable to allow the Plaintiff's action against Shell to proceed, I see no reason why I should refuse to exercise my discretion in the Plaintiff's favour.

25. It remains for me to express my gratitude to both Counsel for their very helpful and skilful way in which they presented their case.

26. I will hear Counsel on the order I should make.

27. [After hearing submissions]

28. The Plaintiff's appeal by his Notice of Appeal dated 30th November 1995 is allowed to the extent that para. 1 of the order of Mr. Registrar Betts dated 29th November 1995 is set aside save that part dealing with costs. I order that the Third Party be added as the 2nd Defendant in the main action. I give leave to the Plaintiff to amend the Writ of Summons, the Statement of Claim and the Statement of Special Damages as per the draft annexed to the Plaintiff's summons dated 19th October 1995. Service of the Re-Amended Writ of Summons, the Amended Statement of Claim and the Amended Statement of Special Damages is to be dispensed with. I give leave to the 1st Defendant Paramount to amend its Defence within 14 days and leave to the 2nd Defendant, Shell, to file a Defence within 14 days. The Plaintiff is given leave to file a Reply to the Amended Defence of the 1st Defendant, if so advised, within 14 days of service of the Amended Defence of the 1st Defendant. Leave is also given to the Plaintiff to file a Reply to the Defence of the 2nd Defendant, if so advised, within 14 days of service of the Defence of the 2nd Defendant. The Plaintiff is to pay the 1st Defendant its costs of and occasioned by the said amendments in any event, but no order is made as to the 1st Defendant's costs of the attendance of the hearing before me on 14th and 15th May 1998 and of to-day. The Third Party is to pay the Plaintiff his costs of the appeal and costs of the hearing before me on 14th and 15th May 1998 and of to-day, such costs to be taxed if not agreed, in any event. The Plaintiff's own costs is to be taxed in accordance with Legal Aid Regulations.

(Arjan H. Sakhrani)

Judge of the Court of First Instance