DCEC 535/2017
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
EMPLOYEES’ COMPENSATION CASE NO 535 OF 2017
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IN THE MATTER OF AN APPLICATION BETWEEN
LAM HO LUN (林浩麟)
Applicant
and
吳耀文
1st Respondent
CHAN’S BUILDING CONTRACTORS LIMITED
2nd Respondent
GRAND HARVEST ENGINEERING LIMITED
3rd Respondent
SUN FOOK KONG CONSTRUCTION LIMITED trading as SUN FOOK KONG GROUP
4th Respondent
and
THE PARTICIPATING INSURERS OF THE EMPLOYEES’ COMPENSATION INSURANCE RESIDUAL SCHEME BUREAU LIMITED
Intervener
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Before: HH Judge Levy in Chambers
Date of Hearing: 6 December 2017
Date of Ruling: 6 December 2017
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RULING ON COSTS
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1. On 14 September, the insurer of the 2nd respondent, whom I will call as “the Intervener”, issued a summons returnable on the same date as the first call-over hearing on 15 September, to ask for leave to be joined in these proceedings. In support of this summons was an affidavit of Mr Reeves (the Intervener’s solicitor), in which the reasons for the making of the application were given.
2. At the hearing on 15 September, the 1st respondent was absent. The 2nd respondent was not represented and attended by a manager.
3. Since the summons was issued shortly before the hearing, the applicant indicated that it did not have sufficient time to consider the summons.
4. The manager of the 2nd respondent had indicated to the court that the company would later engage legal representation.
5. The solicitor for the 3rd and the 4th respondents, Miss Lau (who also represented them today), at that time informed the court that her clients had no objection to the joinder application. However, she was agreeable to the suggestion made by the applicant’s solicitor to adjourn the summons.
6. Since the summons was only issued the day before the directions hearing, I also took the view that it was appropriate to adjourn the summons. This would, firstly, enable the applicant’s solicitors to have more time to consider the application. Further, the 2nd respondent at that time was not represented but had indicated to the court that it would engage solicitors. Hence, the summons was adjourned until today for disposal.
7. Several days before the adjourned hearing today, this court had referred the parties to a case similar to the present joinder application made by an insurer in an Employees’ Compensation proceeding, in the case of DCEC 2437/2015[1] .
8. The reason why this court wished to draw the parties’ attention to that case, was because in that case the learned Deputy Judge had dealt in great detail with the various considerations a court should take into account when dealing with an application to intervene by an insurer. This court is of the view that, when considering the Intervener’s present joinder summons, it should also be guided by similar considerations.
9. After that case was referred to the parties, apart from Mr Reeves for the Intervener, who had lodged written submissions in which he agreed with these guidelines, no other parties had made any written submissions in relation to it. In Mr Reeve’s written submissions, he was trying to draw to the court’s attention the reasons why the Intervener had chosen to seek to intervene to these proceedings.
10. The applicant’s solicitors before the hearing had filed two appendix D forms. In the first and also the revised appendix D, the applicant’s solicitors did not indicate the applicant’s stance in relation to the joinder summons. It was only at the hearing today that Miss Cheng for the applicant informed this court that the applicant would not oppose the joinder summons and that the applicant was satisfied that costs be costs in the cause. Similarly, the solicitors for the 2nd , 3rd and the 4th respondents all informed the court that they were not opposing the joinder summons.
11. In light of the guidelines or the criteria discussed in the case of DCEC 2437/2015, notwithstanding the stance taken by all the represented parties, this court was concerned as to whether the Intervener had satisfied the criteria for joinder in these proceedings.
12. In the course of the discussions between the court and the solicitor for the Intervener, Mr Reeves had additionally provided to the court further information that was not contained in his affidavit in support. In order to justify the reasonableness of the joinder summons, Mr Reeves had additionally told the court that, whilst the 2nd respondent was acting in person, at a meeting between his client (the Intervener) and the 2nd respondent, it was intimated to the Intervener through the 2nd respondent’s director that the 2nd respondent, in relation to the alleged incident, was the employer of the applicant.
13. He further told the court that since issuing the summons, there was a new development that would have put his application in quite a different light, namely, the 2nd respondent has since become represented and also filed an answer giving a bare denial of liability towards the allegation.
14. In order to have a better understanding of the potential liability of the insurer (Intervener), and since the 1st respondent was acting in person, this court then briefly discussed with the 1st respondent his stance in relation to the allegation made against him in order to try to understand his position. In that very brief inquiry, it seems that the 1st respondent would likely deny liability as the employer of the applicant.
15. As a result of this inquiry, Mr Reeves asked the court for some time to take his client’s instructions as to whether or not they should continue to pursue the application to join.
16. After Mr Reeves was able to obtain his client’s instructions, the court was informed that the Intervener would withdraw the summons and not pursue the application to intervene.
17. Insofar as costs are concerned, Mr Reeves asks for an order that there be no order as to costs.
18. The 1st respondent and the 2nd respondent agree with this proposed costs order.
19. Yet, the applicant and the 3rd and 4th respondents ask for costs to be paid by the 2nd respondent and the Intervener jointly. The reason given is that the insurer (Intervener) was the party who instituted these proceedings. Upon withdrawal, the Intervener should bear the cost. They propose that costs should be ordered against the 2nd respondent on the ground that it was the 2nd respondent which had indirectly caused the Intervener to make the application.
20. In considering whether it is fair to order the Intervener to pay the costs of the applicant and the 3rd and the 4th respondents, I should consider whether it was reasonable in the first place for the Intervener to have issued this summons.
21. Given that the insurance policy issued between the Intervener and the 2nd respondent covers the date of the alleged accident, the insurer (Intervener) always has potential liability under the policy to pay in the event that the 2nd respondent is liable to pay to the applicant compensation. Such potential liability still exists, notwithstanding the present contention made by the insurer (Intervener) that it is repudiating the liability under the policy in relation to the 2nd respondent.
22. According to a relevant clause in the insurance policy, the Intervener will be liable to indemnify (the 2nd respondent) should it be found that the 2nd respondent was the applicant’s immediate employer . In the circumstances, the Intervener would be most concerned should there be any indication or evidence implicating the 2nd respondent as the direct employer of the applicant.
23. According to the affidavit in support, there was indeed such evidence, one of which was the notice of the accident filed by the applicant, informing the Labour Department of the alleged accident. In that notice, the applicant named the 2nd respondent as his employer.
24. Apart from this, as I have referred to earlier on, Mr Reeves at the hearing today had further informed the court of a meeting that I had referred to with the insurer (Intervener) and the 2nd respondent, at which it was suggested that the 2nd respondent was the employer.
25. Obviously, this additional information was not contained in his affidavit. Nonetheless, I had no reason to disbelieve that that was the information that the insurer (Intervener) had at the time when this application was issued.
26. Having regard to the fact that the 1st respondent was not represented and did not even appear in the first hearing and that the 2nd respondent was also not represented and had not filed any answer to this application, I take the view that it was justified for the Intervener to have been concerned with its potential liability.
27. However, between the last hearing and the hearing today, there has indeed been a new development which at that time of the application did not exist, namely the 2nd respondent’s serving of an answer denying liability.
28. In the light of the new development as well as the discussions we have had in the court, Mr Reeves’ client, the Intervener, in my view, had taken the extremely sensible steps of withdrawing this application because the development had made it no longer economically and commercially viable to be actively involved with these proceedings.
29. In my view, it is not fair for the applicant’s solicitor as well as the solicitor for the 3rd and 4th respondents to ask for costs against the Intervener, given the fact that they had all along taken the stance of not opposing the application. Such stance, in my view, impliedly accepting the summons as being a proper application.
30. For this reason, the fair costs order is that there should be no order as to costs against the Intervener.
31. Neither do I consider it fair to order costs against the 2nd respondent. Firstly, I do not believe that the assertion made by Mr Reeves today suggesting that the 2nd respondent had intimated to the Intervener that it had admitted to be the employer was sufficient to make the 2nd respondent a party to be blamed for this application.
32. It is particularly inappropriate to blame the 2nd respondent when the applicant in his notice of accident which I had referred to earlier in Mr Reeves’ supporting affidavit, had named the 2nd respondent as the employer, which allegation in fact seems to be inconsistent with the averments now contained in the employees’ compensation application. In the application, the applicant is now alleging the 2nd respondent as the contractor of the 1st respondent, not naming the 2nd respondent as the employer as it had previously stated in the notice of accident.
33. For all these reasons, I will not order the 2nd respondent to pay costs to the applicant and the 3rd and 4th respondents.
34. So my order is this: -
(1) Leave to the Intervener to withdraw;
(2) No order as to costs; and
(3) The applicant’s own costs are to be taxed in accordance with the Legal Aid Regulations.
(Katina Levy)
District Judge
Ms Cheng Yi Ming, of CL & Co Solicitors, assigned by the Director of Legal Aid, for the applicant
The 1st respondent appeared in person
Ms Liu Kit Sum Margaret, of Chong & Partners LLP, for the 2nd respondent
Ms Monita Lau, of Fongs, for the 3rd and 4th respondents
Mr Mark Reeves, of Munros, for the intervener
[1] Shing Ho Wa, a mentally incapacitated person by his mother and next friend, Lam Wai Fong v Really Super Limited & Anor, DCEC 2437/2015 (unrep), Deputy District Judge S.H. Lee, 10 Nov 2016.