YUEN CHUN WAH v. KANSON CRANE SERVICE CO LTD AND OTHERS

HCPI 893/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 893 OF 2006

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JUDGMENT

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1.  The 2^nd and 3^rd Defendants together have made payment into court which was accepted by the Plaintiff.  The outstanding issue is who should bear the costs of the Plaintiff in claiming against the 1^st Defendant (“P’s costs”) and costs of the 1^st Defendant in defending the Plaintiff’s claim (“D1’s costs”).

Background

2.  As pleaded, D1 was the direct employer of the Plaintiff. D3 was the principal contractor and D2 was the sub-contractor.  D1 provided mobile cranes to D2 at the subject construction site and the Plaintiff was the trailer driver.

3.  The Defendants were all sued in breach of occupier’s duty and the same statutory duties.  D1 was additionally sued for breach of contract of employment.

4.  D1 as one camp and D2 and 3 as the other each pleaded contributory negligence on the part of the plaintiff and the other camp.

5.  The Statement of Damages claimed about $3.89 million (revised to $3.6 million after close of pleadings) with continuing damages.  The Answer filed by D2 and D3 pleaded damages in sum of $901,962, net of the employees’ compensation received in the ECC proceedings.

6.  The case had been placed in the warned list.  At about the same time D1 issued a contribution notice against the other defendants.  D2 and D3 paid in $500,000.  The notice of payment-in made it abundantly clear that it was to satisfy all causes of action having given credit to the ECC compensation ($430,400) received.  The Plaintiff accepted the payment-in and withdrew the action against D1.

The Parties’ Proposals on Costs

7.  The Plaintiff proposes no order as to costs between him and D1 but seeks P’s costs from D2 and D3.

8.  The non-paying in defendant (D1) submits that either the Plaintiff, or D2 and D3, should bear D1’s costs and P’s costs.

9.  The paying-in defendants (D2 and D3) agree to bear the costs of the Plaintiff in suing them.  However, they refuse to pay P’s costs or D1’s costs.

The Court’s Power on Costs

10.  There is no dispute that the Court has jurisdiction to order the paying-in defendant to bear the costs of the non-paying-in defendants who are sued jointly: Hodgson v. Guardall Ltd & others [1991] 3 All ER 823; or severally: General Accident Insurance Asia Ltd v. Hampton, Winter & Glynn (a firm) & others HCA No. 5570 of 1996.  The question was whether or not it was reasonable for the plaintiff to sue the non-paying defendant: General Accident Insurance Asia Ltd v. Hampton, Winter & Glynn (a firm) & others, supra.

Were the Defendants Sued Jointly or Severally?

11.  The causes of action against the Defendants are common and hence they were sued jointly, except for breach of contract of employment which was several to D1.  However, the factual circumstances of the accident giving rise to the causes were applicable to all the Defendants although each of them was liable in a different capacity.  The quantum of damages recoverable from each defendant would be same.  The additional cause of action for breach of contract of employment would not add to the quantum recoverable.   Indeed the Statement of Damages (and its revised version) served did not distinguish the quantum recoverable from each defendant camp.

Was it Reasonable for the Plaintiff to Sue D1?

12.  The Plaintiff was working on the platform of the trailer at the material time.  In the course of it, the block of lifting pulleys suddenly swung at him.  As he stepped back to avoid being hit, the Plaintiff fell off the trailer platform at a height of about 1.7m and suffered serious injuries.  This was a classic case where a plaintiff worker would allege that the employer, main contractor and/or the sub-contractor had failed in their duties in, amongst others, providing adequate safety measures.  The 2 defendant camps were putting the blame on each other and on the Plaintiff.  Clearly the Plaintiff would benefit from having all 3 defendants in the action so as to secure evidence from one defendant to assist him in establishing liability against the others and to safeguard his costs in the event of the action going to trial or settled.  I am of the view that it was not unreasonable for the Plaintiff to sue D1.

13.  Mr. Wong for D2 and D3 takes a different view.  His arguments can be broadly summarized as follows:

(i)  All 3 defendants had contributed to the total damages now accepted by the Plaintiff and it was the Plaintiff’s choice not to further pursue (or practically discontinue or withdraw) the balance of his claim of about $3.6 million against D1 upon the payment in by D2 and D3.

(ii)  Of the total $930,400 damages received by the Plaintiff, $278,400 was paid by D1 and $652,000 was paid by D2 and D3.  “This alone should have sufficiently distinguished the facts of this action from those in [General Accident Insurance Asia Ltd v. Hampton, Winter & Glynn (a firm) & others HCA No. 5570 of 1996].”

(iii)  The issues of liability and contributory negligence had not been tried and given the overall circumstances of this action, it would not be appropriate to exercise the Court’s discretion to order a Bullock or Sanderson order”.  Reliance was placed on the authority of Lui Yin v. Chan Lin-mui DCPI 44 of 2000.

14.  With regard to argument (i), sure it was the Plaintiff’s decision not to pursue the balance of the substantial claim against D1.  However, the ultimate question was whether it was reasonable to sue D1 in the first place.  The first line of argument does not assist in resolving this issue.  Suffice to say it that the Plaintiff ceased to pursue his claim to avoid further costs being incurred.

15.  With regard to argument (ii), the distinction had no significance.  The amount paid by D1 was as an employer in the employee’s compensation context.  The fact remained that D1 has not paid anything to the Plaintiff under the present common law action.

16.  On argument (iii), Mr. Wong fails to point out which circumstances of the accident could assist him.  In Lui Yin’s case, the learned judge was of the view that when the Plaintiff’s doubt was as to the law (as opposed to facts), the court might decline to make a Bullock or Sanderson order.  However, the facts in Lui Yin case are distinguishable from the present one:

(a)   The costs order there was made after trial when the learned judge had all the relevant facts before him, whereas the present case does not involve adjudication on liability and quantum.

(b)   In that case, how the accident happened must have been within the peculiar knowledge of the Plaintiff herself, although not within the knowledge of those representing her.  In the present case, the cross allegations of facts need to be resolved.

(c)   In Lui Yin’s case,  “neither in the pleadings nor at the trial did the 2^nd Defendant, the restaurant, ever lay the blame for the accident on the shoulders of the 1^st Defendant.  So, unlike many typical cases where a Bullock or Sanderson order was made, there was no in-fighting between the co-defendants as to which the Plaintiff had not way to decide who was telling the truth.”  See paragraph 8 of the judgment.  In the present case, however, there were cross-allegations between the defendants’ camps on the pleadings.

17.  Mr. Wong also relies on Tam Kam Fai v. Michael Design Ltd. & others HCPI 347/2005, for what proposition is unclear.  Again, in my view, that case does not help him.  It was also a case after trial when the learned Recorder had all the facts before him.  The learned Recorder expressly found that the statement of claim disclosed no reasonable cause of action against D2 under the Occupiers’ Liability Ordinance.  There was also no legal basis to support the Plaintiff’s claim in negligence against D2.  He held that it was not reasonable for the Plaintiff to sue D2.  Moreover, although the Plaintiff had issued a letter before action to all 3 defendants, none of them had replied.  It could not be said that it was D3 (against whom costs were sought) was responsible for D2 being brought before the court.  That case was an example of the Court adopting the test of “reasonable to sue” but not exercising the discretion in favour of the plaintiff.  There was no legal principle established which could assist D2 and D3 in this case.

18.  I note also that D1 in the present case had issued a notice of indemnity and contribution.  However, that does not advance D2 and 3’s case.  That notice was a prudent step for D1 to take given the Plaintiff’s claim against 3 defendants and the defences filed.  It was a step that could not retrospectively support or disturb the reasonableness of the Plaintiff’s decision to sue D1.

Conclusion

19.  The claim against the Defendants were joint except for the cause in breach of contract of employment.  The damages recoverable would be the same under each cause of action.  It was reasonable for the Plaintiff to sue D1 and the other defendants.  None of the arguments advanced by Mr. Wong persuaded me otherwise.  In respect of the summons dated 18 April 2008, I therefore order as follows:

(i)  $500,000 paid into court in this action on 22 January 2008 by D2 and D3 be paid out to the Plaintiff, through the Director of Legal Aid in satisfaction of the causes of action against them.

(ii)  D2 and D3 will bear the costs of the Plaintiff’s action against them.

(iii)  Leave to the Plaintiff to discontinue the action against D1.

(iv)  As between the Plaintiff and D1, there will be no order as to costs.

(v)  D2 and D3 will bear the Plaintiff’s costs in claiming against D1.

(vi)  D2 and D3 will bear D1’s costs of defending the Plaintiff’s claim.

(vii)  There will be taxation of the Plaintiff’s own costs in accordance with Legal Aid Regulations.

20.  I also make an order nisi that D2 and D3 will bear the costs of the Plaintiff and D1 in this application, to be made absolute after 14 days from the date of this judgment.