Johnson Cleaning Services Co. Ltd. v. Tang Chun Wing

DCCJ13745/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 13745 OF 2001

____________________

____________________

_____________

R U L I N G

_____________

1. This is a summons taken out by the defendant under order 18 rule 19 of the Rules of the District Court to strike out paragraph 5 of the plaintiff's reply on the ground that that paragraph is scandalous, frivolous or vexatious and/or that it tends to prejudice, embarrass or delay the fair trial of the action.

2. In order to understand why this summons has been taken out, it is necessary for me to recount the background to the action itself, which I can do shortly. On 13 September 1999, a lady called Lee Mei-lan was walking along Larch Street in Kowloon and pushing a handcart. At the time that she was doing that, she was employed by the plaintiffs in this action. She was then struck by a light goods vehicle that was being driven by the defendant, Tang Chun-wing. He was an employee of CLP Power Hong Kong Limited. She was injured as a result, and did two things: firstly, she claimed employee's compensation under the Employees' Compensation Ordinance from the plaintiffs in this action, and that matter was settled by her employers in the amount of $45,308, together with interest and costs; and she also brought proceedings in the High Court against Mr Tang, the driver, and his employer, CLP Power Hong Kong Limited, for damages for personal injuries, pain and suffering, and also for items of special damage.

3. What then happened was that the defendants in that action in the High Court made a payment into court dated 29 June last year, and it is important to look at the precise terms of the notice of payment into court. It was in these terms:

"Take notice that the defendants have paid a sum of $145,000 into court. The said sum of $145,000 is in full and final satisfaction of all causes of action in respect of which the plaintiff claims, inclusive of interest, after taking into account the sum of $45,308 received by the plaintiff in DCEC721 of 2000."

That being a reference to the application that she had made against the plaintiffs in this action, who were her employers, and to which I have already referred.

4. In these proceedings, her employers are now suing Mr Tang, the driver of the vehicle that had struck Madam Lee, to recover what they had paid to her in her application for employee's compensation, together with costs that they had incurred, and of course her costs, and so this claim is quantified in the sum of $188,188.

5. The defendant, in his defence, has indicated that the accident itself was caused by the negligence of the plaintiff and, as a result, he should not reimburse the plaintiff.

6. The reply seeks to deal with part of that allegation by raising what, in effect, is a clean point of law, and that is contained in paragraph 5 of the reply which the defendant now seeks to strike out. It is therefore necessary for me to recite paragraph 5 in full, and it is as follows:

"Further, or alternatively, the plaintiff avers that the defendant has admitted his liability to Madam Lee and the plaintiff in respect of the personal injuries and/or pecuniary losses suffered by Madam Lee and/or the plaintiff arising out of the accident.

Particulars

(a) By a notice of payment into court dated 29 June 2001 in respect of another action brought by Madam Lee against, inter alia, the defendant in the Court of First Instance in HCPI1042/2000 ("Madam Lee's action") paid a sum of $145,000 into court stating the same to be "in full and final satisfaction of all causes of action" in respect of which Madam Lee claims, inclusive of interest, after taking into account the sum of $45,308 received by Madam Lee in DCEC721/2000;

(b) the defendant's payment into court in Madam Lee's action as pleaded in paragraph 4(a) hereof amounts to an admission on the defendant's part:-

(i) as to the amount of $45,308 paid by the plaintiff to Madam Lee in respect of DCEC721/2000 as set out in paragraph 5 of the statement of claim herein;

(ii) as to the fact of payment by the plaintiff to Madam Lee of the sum of $45,308 in respect of DCEC721/2000 as set out in paragraph 5 of the statement of claim; and

(iii) as to the defendant's liability to Madam Lee in respect of the latter's personal injuries arising out of the accident as set out in paragraphs 3 and 4 of the statement of claim."

7. Having recited the paragraph, let me briefly consider the test which I need to apply in deciding whether I should strike that part of the pleading out. The test is helpfully set out at page 303 of the current edition of Hong Kong Civil Procedure under the notes to order 18 rule 19 as follows:

"It is only in plain and obvious cases that the court should exercise its summary powers to strike out the endorsement on any writ or any pleading under this rule. There should be no trial upon affidavit; disputed facts were to be taken in favour of the party sought to be struck out, nor should the court decide difficult points of law in striking out proceedings. The claim must be obviously unsustainable, the pleadings unarguably bad, and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out."

So that is the very high burden which Mr Wong, who appears on behalf of the defendant, has taken upon himself.

8. The effect of a payment into court is dealt with in order 22 rule 1 of Hong Kong Civil Procedure, and that is conveniently set out at page 361 at paragraph 22/1/1:

"A payment into court is simply an offer to dispose of the claim on terms per Devlin LJ in A Martin French v Kingswood Hill Limited [1961] 1 QB 96 at 103:

'When a plaintiff accepts the amount paid in in respect of a cause of action, what happens is that that cause of action is settled as if by a payment under a compromise, but the conclusion of any action in this way is something quite different from its conclusion by a judgment. Payment in implies no admission about the merits of the cause of action. There has been no adjudication on it, and therefore no estoppel is created.'"

It is this in particular that Mr Wong draws to the court's attention. He says that the nature of this payment in is certainly not by way of an admission. It would greatly prejudice the defendants should the matter be put in this way and should the judge hear of the matter being put in that way, and I think he goes on to say that in such circumstances I should strike it out.

9. Miss Kwan, who appears on behalf of the plaintiff, puts the matter slightly differently, and she places great emphasis on the precise words of the notice of the payment in, particularly the final part of the recital of the way in which the payment in is calculated. She has invited me to consider the words "after taking into account the sum of $45,308 received by the plaintiff in DCEC721/2000". Miss Kwan submits that the effect of those words in the notice itself means that the defendant accepts his liability in respect of that payment, and in those circumstances that, as a matter of law, there can be simply no defence to that limb of the claim. It is a proper pleading as a matter of law, and she accepts that the logic of her submission must mean that she would be entitled to judgment in respect of that limb of the claim against the defendant.

10. As I approach this matter, I have come to the view that the proper way to determine the outcome of this summons is to decide whether that plea in paragraph 5 is a good one as a matter of law. If I were to hold that there is simply no substance in the plea and therefore that it is plainly wrong, I would then go on and strike it out. If it is bad in law, then nothing further should be heard of it, and the defendant should not have to, in effect, be bothered with it when the matter comes to trial. Of course, if I were to take that very strong step, then at the trial the plaintiff simply would not be allowed to raise it, and so when I express it in that way, it highlights the fact that the point is of some considerable importance, and of course I am very mindful of the fact that the defendant has a very high burden to discharge in the way that I have indicated when I previously read out the test which is the one to be applied by the court.

11. So I therefore return to the notice of payment into court, and I have got to look at the effect of those words which Miss Kwan places so much reliance upon. I have come to the conclusion that the words "after taking into account the sum of $45,308 received by the plaintiff in DCEC721/2000" are simply not capable of bearing the meaning which Miss Kwan has contended for. All that that recital does is to explain how the payment in of $145,000 is calculated. It can have no other meaning.

12. Having regard to the terms of section 25 of the Employees Compensation Ordinance, the plaintiff in her High Court action was bound to give credit to the defendants for the amount that she had received in the employee's compensation application that she had made against her employer, and those words in the notice of payment into court explain the basis upon which the $145,000 was being paid into court. So the logic of that is that had she not received that amount, the payment into court would have been $145,000 plus a further $45,308, and that is all that that can possibly mean.

13. Having come to that view, it seems to me that there is simply nothing in the point that paragraph 5 of the reply is seeking to make. It is bad as a matter of law. It is, in my judgment, simply unsustainable, and it should be struck out for that reason. There is simply no purpose to be served in leaving a pleading that is bad in law before the court.

14. I should say something further about paragraph 5(b)(iii), which has suggested that that payment of $45,308 also amounted to an admission by the defendant in respect of Madam Lee's action against him for personal injuries in the High Court action. It clearly cannot have had that effect, and for that I again draw attention to the note to order 22 rule 1 as to the nature of the payment into court. So in respect of that sub-paragraph, that is an additional reason why that should be struck out.

15. For all of these reasons, I propose to make an order in terms of paragraph 1 of the summons, and I suspect there is really no reason why Mr Wong should not have his costs. I think costs ought to follow the event.