FAN HUNG SHING v. HANG FUNG SHIPPING CO. LTD.

HCPI 1192/1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1192 OF 1995

____________

_______________

J U D G M E N T

_______________

1. In October 1988 this Plaintiff, then a 38 year old crane operator on board a barge, fell from a rope ladder which broke, as he returned to the barge, after telephoning for instructions following the hoisting of No. 3 typhoon signal. His accident therefore occurred some eleven years before we entered this new century and approach the year of the Dragon. This lapse of time calls for some explanation and comment and I shall deal with this later.

2. He had been working for the Defendant shipping company for about five months, with other stevedores whom he had recruited, when he met with his accident on 21 October 1988. He had been engaged on behalf of the Defendant by a Mr Lai Po Sun himself an employee, and some kind of supervisor, of the Defendant in May 1988. The Plaintiff became aware on the day in question of the hoisting of the No. 3 typhoon signal and went to telephone his employers to request a tow to Yaumatei typhoon shelter. It is clear therefore that he had not been provided with any telephone communication on board the barge, Hang Fung No. 4, and left the barge for the container vessel alongside which the barge was tied. On his return from the container vessel he descended the rope ladder access to the barge and fell for the reason referred to.

3. Proceedings under the Employees' Compensation Ordinance were commenced in 1990. Although the nature of his injuries were obviously severe and incapacitating to a degree, his common law claim was not commenced until three days before the expiration of the three-year limitation period, a fact to which I will also return later.

4. In those proceedings this Defendant and its Insurance Company for the purposes of Employees' Compensation liability, contended that the Plaintiff was not an employee but an independent contractor providing a labour force in addition to his own services as a crane operator. They relied upon a written contract signed by the Plaintiff, and on behalf of the Defendant company by Mr Lai Po Sun, the supervisor.

5. The case was tried before Mr Justice Cheung in the District Court. He found that the Plaintiff was an employee of the Defendant company taking instructions from the employers as to where to load and unload goods. He also found that the Plaintiff did not know or understand the contents of the contract when he signed it. He is of limited education. This contract was dated 10 September 1988 almost four months after the employment started. I shall return to this topic shortly in the context of the evidence adduced before me. The Plaintiff did give some evidence that he had to maintain tools and equipment but that the Defendant would carry out any repairs. He was also reimbursed for any spare parts he purchased. In that context I am satisfied that this related essentially to the operation of the crane and loading and unloading equipment.

6. The Learned Judge's findings are "res judicata" or issue estoppel, properly called (see Mills v. Cooper [1967] 2 QB 459 - see also Wong Waung Sum v. Lee Kam Engineering Co. [1996] 3 HKC (Cheung J)).

7. Since inevitably the Defendant company has sought to raise the same matter, I should also say that I respectfully agree with the findings of Mr Justice Cheung. The Defendant gave no evidence on the issue before him although it had every opportunity to do so. Before me evidence was given by its General Manager, Mr Ip Mau Cheung, who is also a director.

8. There is no dispute that the Plaintiff sustained his injuries in the circumstances alleged. However the Defendant contends that the Plaintiff was himself responsible for the maintenance of the rope ladder as part of the equipment of the barge. The Defendant admits that it owned the rope ladder and that it was properly used on the occasion of the accident i.e. as the means of access between the barge and the container vessel, it being attached to a bollard, stanchion or capstan on the container ship.

9. Mr Ip relies upon what he alleges to be a conversation at his office a few months after the Plaintiff started work and after the Plaintiff had signed the contract, which contract was in any event of no legal effect, as so found by Cheung J, because the Plaintiff could not read it and Mr Lai Po Sun did not explain the contents to him. Mr Ip said that he wanted to explain the contract to the Plaintiff before the latter started work, an apparently odd state of affairs since work started in mid-May, the contract is dated 18 September and the meeting took place subsequent to both events, although Mr Ip stated that he thought it was in August. Mr Ip said he specifically explained to the Plaintiff that he, the Plaintiff, was responsible for checking and maintaining the rope ladder in good condition, as well as other items of equipment. No evidence of this nature was adduced before Cheung J. The Defendant and its insurers were represented at that hearing by Solicitors and Counsel. It is inconceivable that such evidence, if it then existed, would not have been adduced or at the very least put to the Plaintiff in cross-examination. The Plaintiff denies this conversation took place. The meeting was occasioned he said by the failure to pay him and the other stevedores for a period. I accept his evidence. Mr. Ip is utterly mistaken, at least, in his contention.

10. In any event, given the nature of the employment of the Plaintiff and others on a barge which was hired out to others - not to the Plaintiff - I would find any suggestion that the terms of engagement included responsibility for the maintenance of all equipment on or belonging to the barge unreal. The extent of any responsibility for equipment was limited to the crane operated by the Plaintiff, as the mechanism for loading and unloading, and even that responsibility would in my view be substantially limited. The whole context of the meeting as described by Mr Ip is in my view highly unlikely. At one stage Mr Ip contradicted himself when I asked him about the sequence of events and his knowledge of the contract put to the Plaintiff by Mr Lai - originally he stated that he had asked Mr Lai to get the Plaintiff to sign the contract. He later changed this to a suggestion that Mr Lai had so asked without authority and Mr Ip's knowledge, when I pointed out to him the inherent unlikelihood of a meeting for the purpose he described. Finally on this topic, the Defendant company employed a barge master whose job it was to inspect the barge and ensure repairs and replacement of equipment. The idea that the Plaintiff should be responsible for the removal of rust and repainting of the barge or its equipment, as reflected in the contract, does not make sense.

11. The duty of care of an employer which is non-delegable extends to providing a safe means of access to a place of work as well as providing a safe place of work itself. Equipment provided should also be safe and properly maintained. This rope ladder was defective either in its manufacture or as a result of its use. There was no proper and effective system of inspection and replacement in existence. Of course users of the rope ladder could be expected to ensure that if it was damaged or otherwise unfit for its purpose it was replaced. No sensible person is going to use a ladder which is obviously unsafe.

12. This ladder does not appear to have been inspected after the accident in order to record the nature of the damage, or what caused it to break. The Defendant does not seem to have had any effective system in that respect either. The Defendant therefore remained ignorant as to whether it broke through damage caused by use, wear and tear, or some defect in the manufacture.

13. I am satisfied that at no time did the Plaintiff assume any responsibility for the regular inspection and maintenance of the rope ladder. The burden of so doing remained on the employer throughout. The Defendant is therefore wholly liable in negligence for this Plaintiff's accident. There is no basis for a finding of any contributory negligence.

QUANTUM

A. Pain, Suffering and Loss of Amenity

14. He suffered principally three injuries. A compression fracture of the 2nd lumbar vertebra, a fracture of the left medial malleolus; and a fracture of the right os calcis. All were treated by surgery and open reduction. The spinal injury required bone graft, fixation and fusion. The injuries to both feet also needed internal fixation. The comminuted injury to the os calcis was complicated by infection and debridément was carried out repeatedly.

15. He was in hospital for about one year. Follow up and physiotherapy lasted for a further twelve months by which time he was told he had reached a static condition. He was unable to return to any form of work until 1991 and from then on did what work he could. He was unable to return to work as a crane driver because of his disabilities and worked intermittently as a shop assistant, checker/ticker collector, watchman, and steersman on a brother's barge until April 1999, when he acquired a job as a checker/watchman on a construction site. This employment continues but it is not full-time - he works between 13 and 22 days each month, doing an 8-hour day.

16. He had frequent attacks of back pain radiating to the left buttock, with stiffness and weakness of the back. There is pain and stiffness in the right back aggravated by long standing and walking on uneven ground. His big right toe is deformed. He has to wear special shoes by reason of the right foot condition. He has some minimal discomfort over the left ankle.

17. There is surgical scarring of his back and both feet. He is quite unable to do any work involving heavy lifting, walking on uneven surfaces, standing for long periods, or which calls for speed, mobility and in particular the use of ladders of any form. He walks with a mild limp. He has had to endure much surgery. Even jobs of which he is now capable are essentially sedentary ones. Fortunately future deterioration is unlikely but his permanent state of disability, though free from arthritic change, involves discomfort in daily life including disturbance of sleep.

18. The figure under this head of damage will be $600,000.

B. Pre-Accident Loss of Earnings

19. The total loss of earnings as a crane driver to date is claimed at $2,760,669. This is on the basis that in 1995 he would have moved, as did his two brothers, to work as a crane - driver on a construction site. Barge crane operation was on the decline and there were better, higher paid opportunities in the construction business. I have heard evidence from one of his brothers, who has also produced his tax returns (save for one year) and recent payslips. I accept that evidence which includes the fact that his brother has been out of such work for only three months over a 41/2 year period.

20. The calculated loss is a reasonable one applying year by year since mid-1995 an annual average wage of $360,000 (i.e. $30,000 per month). From the gross figure is to be deducted the interim earnings of $489,106 leaving a net claim under this head of $2,271,563 which I allow.

C. Post-Accident Loss of Earnings

21. He is now 49 years of age. There is some uncertainty in the construction business - his brother was unemployed for the three month period early last year. I should reflect this in the multiplier. He said he would probably have worked as a crane driver until he was 60 years of age. That is reasonable and I would say realistic. The multiplier appropriate to this picture is 7, making a future loss of $1,974,000 [Monthly wage of $30,000 less current monthly earnings of $6,500 = $23,500 x 12 x 7]. On his retirement I think he would have obtained other work which would have been more remunerative than his current work, which he could continue until 65 years of age or longer, depending on its availability. The difference may well be of the order of $7,500 per month and I should apply a multiplier of 2 years to this producing $180,000. His total future loss is therefore $2,154,000.

D. Loss of Earnings Capacity

22. I think there is a real risk that if he loses his current job, which is not full time even now, he will have difficulty finding other work so he is likely to have further periods of unemployment in that event. I also think that there remains and will continue to remain a risk that his current job will be lost to him given the economic uncertainties. It was not until April of last year that he was able to obtain such relatively long-term work. There should be a Smith v. Manchester Corporation award. I calculate this should be $150,000.

E. Special Damages

23. Some of these were agreed by the Defendant's former Solicitors in their Answer to the Plaintiff's Statement of Damages.

Hospital expenses

Agreed at

$6,000

Travelling expenses

Agreed at

$3,000

Bonesetter fees

24. The Plaintiff's evidence put these at a much lower figure than was pleaded. I accept his figure of $37,100 up to 1995. Thereafter they merged into a composite item with nourishing or tonic food.

Nourishing or tonic food

25. Up to 1995 he calculated this on a monthly basis and it seemed entirely reasonable. I therefore allow $31,395.

Post-95 Bonesetters fees/tonic food

26. The figure of $24,000 is clearly a reasonable one. It is to be noted that he takes no conventional analgesics or other medicine, nor does he consult doctors practising Western medicine. The benefit he derives from the practitioners and the food supplement is not on a placebo principle. He was a genuine witness.

Special Shoes

27. This was mistakenly pleaded as a single sum of $400. In fact having examined the position with him carefully and setting off the cost of purchase and repair of ordinary and working shoes, his annual loss is $400. To date therefore his loss is (1989/1999) $4,000. He was in hospital for one year, 1988/1989.

F. Future Loss

Bonesetters fees and tonic food supplements

28. The annual cost is about $6,000. This is reasonable. A whole life multiplier of 12 is appropriate. The figure is therefore $72,000.

Shoes

29. There will continue to be an extra cost of $400 per year. I should apply the same multiplier. More sophisticated and therefore more expensive shoes will be designed and make their way onto the market. He would be entitled to claim for such. The provision I make can be criticised as a conservative one. I round it up to $5,000.

Summary

30. Those will therefore be judgment for the Plaintiff for $5,358,058 with costs to be taxed on a party and party basis.

Interest

31. The Plaintiff is entitled to interest on the items which I have marked with an asterisk, at the appropriate rate, but for how long?

32. As I commented in strong terms at the outset of the trial it appeared quite unjustified for this action to have taken so many years to come to trial. The Employees Compensation proceedings were commenced in 1990. The writ in this action was not issued until a few days before the expiration of the limitation period in October 1991. Judgment in the District Court on those earlier proceedings was given in March 1993. That was 41/2 years after the accident and itself too long a lapse of time in my view. But that decision effectively eliminated the issues between the parties, as I have stated earlier. At the very latest this action should have been tried in mid-1995, 41/2 years ago, and if prosecuted promptly, would have been.

33. I have been helpfully provided with a detailed note by the senior partner of the firm which has acted for the Plaintiff throughout in both proceedings. The frankness and responsibility expressed has impressed me. I have all to often heard time-wasting excuses put forward for delay in such litigation, but not on this occasion. Mr Yeung has manfully and refreshingly shouldered the burden. But the fact remains that the delay was excessive and unreasonable though I accept in deference to Mr Yeung's note that instructions from the Legal Aid Department were not received until two months before the end of the three year period.

34. The Defendant should not have to pay interest for the whole of this period. I accept Mr Sakhrani's point that the Defendant or their insurers have had the use of the money throughout the period. That however is not the point. Depriving a party of interest on damages for any period when an action has unreasonably taken so long, is meant to be punitive so as to encourage efficient and swift litigation. Everyone knows costs are inflated by delay in a number of ways. Accordingly I have decided that interest on the relevant heads of damage will be allowed up to 1 July 1995.

Legal Aid Costs

35. It is no fault of the Plaintiff himself that he is not to have interest on his damages over the past 4 1/2 years. He was entirely in the hands of his legal advisers. He has very limited education. I doubt he has any understanding of the intricacies of litigation. It is bad enough for him that he has had to wait so long for his damages in any event. I wish to ensure so far as I can that he does not have one dollar taken away from his award of damages for any costs which may not be recovered on a party and party basis from Defendant. As I said earlier delay generates extra costs. Once the District Court decision had been handed down the issues were very limited and this was a straightforward case. Very fairly and responsibly his Solicitors have decide to waive entitlement to Common Fund costs in respect of their charges.

36. The Ordinance appears nonetheless to require me to make an order for a Legal Aid taxation to deal with any other Common Fund costs. I have in mind that the Director of Legal Aid is empowered to exercise his first Charge over any damages recovered to provide for any costs or disbursements not recovered on a party and party taxation from the Defendant. For the reason set out earlier in the context of the limitation I have imposed upon the entitlement to interest on the damages, I hope he will exercise his discretion in such a way as to avoid the Plaintiff having to meet any such shortfall in costs out of his damages because he will not get the full amount of interest on his damages. There will be an order for Legal Aid taxation.

Representation of the Defendant

37. Until September 1999 the Defendant company was represented by a firm of Solicitors which regularly practises in these courts. They applied for leave to cease to act, no doubt for very good reasons and an order was made to that effect on 17 September 1999.

38. On 30 July 1999 only six or seven weeks earlier I had given final directions for trial and the action had been set down for trial in the running list not to be warned before 4 October 1999.

39. Until the papers came before me the night before the trial started, I had no idea that the Defendant was unrepresented. In the light of that, I did not know what was the Defendant's state of readiness or whether it had taken the necessary steps to enable the court to permit it to be represented by a duly authorised director. Fortunately exercising a fairly wide discretion I was able to deal with this and Mr Ip Mau Cheung, a director and the General Manager of the Defendant, represented the Company in a very realistic and sensible way which reflected credit on him, even though I was unable to accept aspects of his evidence.

40. But Solicitors who intend to remove themselves from the record, particularly after a case has received its final directions and been set down for trial should remember their obligations as officers of the Court. They should ensure that the Court is fully and properly informed of the "state of play" in writing so that a judge can decide whether he should list the case for mention, to give further directions, and thereby avoid problems which, if they persisted unknown to him, could result in avoidable waste of time and costs.