CHU KEUNG FAI AND ANOTHER v. SUCCESS INSURANCE LTD AND OTHERS

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J U D G M E N T

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Silke, V.-P.:

1. On the 14th December we allowed the appeal of the plaintiff and made consequential orders on the cross appeal of the 2nd Defendant and as to costs. We said we would give our reasons later. This we now do.

2. On 29th July 1973 during the height of the second bout of Typhoon Agnes, and with the NO.8 signal raised, Mr. Lai Pat Chuen, 61, and his wife Madam Chu Wah Ying, 49, boarded a taxi for the journey between the Old Shatin Market where they were hawkers and their home at Fo Tan Cottage Area in the upper reaches of the Fo Tan Valley.

3. Their intended journey would take them through part of the Shatin New Town Development, Stage 1 Phase 2, passing near Pat Tze Wo Village.

4. A number of participants were concerned in this development: Hong Kong Government, which had resumed the land; Maunsell Consultants Asia, who were the Resident Engineers for the project and who acted on behalf of Government; Sang Lee Construction - "Sang Lee" - and Express Transport and Building Contractors Limited - "Express".

5. Sang Lee had built a temporary road which ran alongside land described in the evidence as "a natural catchment area". This was bounded on another side by rising ground and, eventually, on its third site by an artificial spur of land made by the dumping of soil there by Express. The area thus bound is referred to throughout as "the pond" for it contained water. At some future date it was Express's intention to fill it in up to the level of the spur.

6. The taxi had turned off the Taipo Poad onto a road marked "Road 3" and then onto the Sang Lee temporary road. The temporary road originally gave access to the village of Pat Tze Wo and also access to areas beyond and up the valley. It was used by the vehicles of Express who made upwards of 400 return journeys per day. A new Road 4 had recently been built to the left of the temporary road and this was intended for the use of those going beyond the village.

7. On 23rd July, the temporary road was closed Barriers and a Road Closed sign were erected. Near the place where there was a turn off to Pat Tze Wo Village the temporary road sloped downwards to a low point. When it was closed on 23rd July, there were representations by the villagers and a space was left in the barriers for vehicles to use it in order to go to the village. The Road Closed sign was placed at the side.

8. When the taxi reached the junction of the temporary road and Road 4 the passers directed the driver to continue up the temporary road. It would seem that, as they did not return every day from Shatin to their home village, they were not aware that the road had been closed and that access further up the valley was not possible from it.

9. The road was flooded to depth of 2 to 3 inches. When they got to the turn to Pat Tze Wo Village, they found the taxi could go no further. The driver suggested that they walk the rest of the way but the passengers refused as their home was still some considerable distance away. The rain was very heavy, reaching its intensity just about then. It was decided to turn around and go back to Shatin.

10. The taxi did turn. On his outward journey, the taxi driver had kept to his left hand side of the road where there was a clear road edge which he could see. After his turn around and as he came down the road the edge of the road that then was on his left could not be seen as the water has flowed over it making it one with the pond in an extended sheet of water. The only thing could be considered as marking the edge was a single telephone pole and, a little beyond it, a road speed sign.

11. As the driver made his day back the taxi lurched to the left and then very shortly afterwards went further to the left - this was just past the single telephone pole - and slid down into the pond there being a steep slope concealed by the water. The taxi was entirely covered by the water.

12. The taxi driver escaped but the passengers drowned.

13. On 3rd July 1981, the administrators of the estate of the deceased - "the Plaintiffs" - issued their writ. Named in it as Defendants were Mr. Yeung Por - "1st Defendant" - the owner of the taxi; Mr. Lai Chak Man - "2nd Defendant" - the driver; and Express as the 3rd Defendant.

14. As the years went by Mr. Yeung died and was replaced as 1st Defendant by Success Insurance Limited. Further, third party proceedings were instituted and the 1st and 2nd Defendants were made lst and 2nd Third Parties.

15. At trial all claims against the 1st Defendant were, properly, abandoned and the Plaintiff was ordered to pay them their costs.

16. At the conclusion of the trial, Deputy Judge Cruden found for the Plaintiff against the 2nd Defendant; he dismissed the Plaintiff's claim against Express and made an order as to costs which is now in controversy as is the dismissal of the Plaintiff's claim against Express.

17. The claim against Express was based upon two issues:

(1) That they were in occupation of the site when the accident occurred and that they owed a duty as occupier to those who came upon that site and;

(2) that by causing or permitting the pool of water - the pond - to accumulate they created a hazard.

The "spur point". It was alleged that they, by the creation of the spur, laid upon themselves a duty to ensure the safety of those using the temporary road and that they failed to discharge that duty.

18. There is also before us a cross-appeal by the 2nd Defendant which depends on the result of the main appeal. We, therefore, thought it right that we should determine that issue first.

19. The law is not in dispute and the judge set forth a passage from Charlesworth & Percy paragraph 7/52 which encapsulates it.

20. This reads:-

"The duty of a person, who is neither the owner nor the occupier of land may in some cases be greater than that of the owner or occupier. If he is doing something on the land, which he knows or ought to know will be a source of danger to persons on or likely to come on land and meddle with the subject of his activity, he is under a duty to take precautions to prevent damage. Reasonable precautions will include such matters as by giving warnings, guiding, fencing off or otherwise taking steps to preserve the safety of the persons, who come on the premises."

21. A great deal of the trial was concerned with whether or not Express were the occupiers of the site and, if they were, what their duty was. The judge decided that they were not the occupiers and there is no appeal against that finding,.

22. He also found that they had not created a hazard. And that is the subject matter of this appeal. The issue is: If it is found that they had created a hazard what was the duty upon them and if there were a duty had they discharged it.

23. First; was a hazard created.

24. A useful starting point for consideration of this aspect is a photograph at page 956 of the appeal bundle which was "Exhibit P11" at trial. This shows, in the background and to the left, the temporary road built by Sang Lee; the general area of that which became the pond and, behind the bushes on the top right, the area which became the spur. Immediately after the accident photographs (at pages 1434 and 1435) were taken - exhibited at trial as "D1 and D4,"  and they showed the nature of the area with the spur in existence. The end of the spur is shown as coming close up to the position where there was a pipe drain and at a point just before the turn off to Pat Tze Ho Village. The photographs (at pages 1439 and 1440), which were taken on 3th August 1978, depict the general area looking from the spur towards the temporary road.

25. Clearly there was a quarry like area created which was prone to fill with water.

26. The trial judge accepted the evidence of a witness, Mr. McPherson, that the general earthworks carried out before the date of the accident had materially changed the natural contours of the locality and altered the pre-existing catchment areas. He accepted that these works would have accelerated the flow of rainwater down the higher slopes towards Pat Tze Wo Village.

27. There was a delay in the resiting of that village and in the filling in of the pond area due to matters of "Fung Shui".

28. He said that a temporary diversion stream was built on the westerly side of the temporary road. Also that water flowing in the direction of the "natural catchment area" would creat a large and deep pond before it could reach the temporary stream diversion. It could only reach that diversion if it were drained under the temporary road or if it rose to a level so as to flood over it.

29. We digress here to say that the Plaintiff was in some difficulty as to who was the proper party, of those who participated in the works on the site, that he should sue. Government had prevented Express filling the pond because of the "Fung Shui" dispute with the villagers. Maunsell had not agreed to a culvert being installed under the temporary road to drain the pond. Sang Lee was in occupation of the temporary road. And Express built the spur. After the accident there was a certain amount of careful avoidance of blame by all these participants.

30. To continue: Express were fully aware of the flooding danger, an issue which had been raised at a meeting as early as January 1978. In March, with the typhoon season approaching, Maunsell had given certain directions relating to the diversion of water away from the Pat Tze do Village. It must be born in mind that in the whole site area there was a great deal of construction work being carried out which altered the topography quite considerably as that work progressed.

31. In finding in favour of Express on the hazard issue, the trial judge placed considerable reliance on the evidence of Mr. G. Mak, presently managing director of Express, who had knowledge of the site. Mr. Mak made reference to the diversion trench the effectiveness of which would depend to a great deal on the progress of other construction work and said that that trench had been backfilled but re-excavated before the accident. It was Mr. Mak's evidence that this trench would have assisted in diverting water, flowing down towards the village and the pond area, away to the northern side of the village.

32. This impressed the trial judge but, with respect to him, it was not the point. By building the spur where it was Express effectively created a triangle and one which inevitably would fill with water both from the downward flow and from rainfall - water which had very little chance of escape. The diversion trench might well have had some effect on the downward flowing water and its impinging on Pat Tze Wo Village but, on the evidence, would have had little effect upon the filling up of the pond. This was clear before the accident for the road was known to have flooded and, at the time of the accident, the only effective escape route for the water from the pond was across the temporary road. Had the spur, upon which work was continuing at all material times, not been created by Express then the conversion of the pond into a "quarry pit", as it was described in argument, and thus the increase in its depth would not have occurred. The temporary road would not have flooded. We find that there was a hazard and that it had been created by Express who were aware of it.

33. It being, accepted that if Express did create a hazard there was a duty upon them to take reasonable care for the safety of persons who might be endangered by it and as users of the temporary road, the next issue is did Express discharge that duty.

34. Up to 23rd July the duty had in reality been carried out by another for the edge of the road had been delineated by a makeshift fence and lighting put up by Sang Lee. When the temporary road was closed to all but Pat Tze Wo Village traffic this fencing was removed by Sang Lee. Mr. Mak was aware, and therefore so was Express, that the road was not a wholly dead road. He must have known that the fencing had gone for he had visited the site on a number of occasions between 23rd and 29th July. He had walked from the site offices, which were at the back of and about 100 yards away from the temporary road, down to the sign and barriers which had partially closed that road off.

35. Agnes and this during which was a double typhoon. On the morning of 25th July, the No. I signal had been hoisted and on 26th this became the No. 3. She was a very wet typhoon. On 27th July the No. 8 signal was lowered but, in the afternoon of the 29th, it was raised again. It remained hoisted until the 30th.

36. Mr. Mak was aware that before the spur had been built, the majority of the water would have flowed into the temporary diversion stream but that the creation of the spur prevented the emptying of the pool. When asked: "Was he obliged to make the road surface safe outside the contract site?", Mr. Mak replied that, if Express caused the hazard, they would be obliged to see that the hazard did not continue and to carry out works to protect others and the members of the public. It seems clear to me that Express thought that, as they were not in occupation of the site, it was not necessary for them to take any precautions to make the road safe in the sense of seeing that the edges were clearly depicted. This they should have done either by themselves or by ensuring that the work was being concurrently performed by someone else. It had been done while their lorries were using the road.

37. After the 23rd July, Express must have anticipated, by the reason of their knowledge that the signs blocking the road had been moved to permit access, and in common sense, that Pat Tze Wo Village would not be completely cut off and that there would be traffic to it. In heavy rain there would be flooding and there would be danger to that traffic. They made no attempt to warn the probable users. They knew of site instructions which had been issued in June and in early July which related to making the temporary road safe. There had been dispute before the road was closed as to who should carry out this work although it is clear that, if site instruction were issued, the work necessitated would be paid for within the contract.

38. In the condition this road was in on the 29th July once a vehicle unknowingly went too far to its left as it moved away from Pat Tze Wo Village it was immediately placed in danger of going down the steep decline which bordered the edge of the road. Fencing, lamps or some form of marking would have helped to avoid this.

39. Express, in our judgment, failed to discharge the duty which was placed upon it. A cause of the accident was the failure of the creators of the hazard, when they knew or ought to have known that the road would be used by traffic, to secure against danger:  this in the erroneous belief that as they were not the occupiers they had no responsibility. We therefore, allowed the appeal and reversed the judge's findings as regards Express.

40. The cross-appeal which mainly concerns contribution and costs was the final matter for consideration, both the 2nd Defendant and Express being negligent. The issues were what degree of negligence and proportionate entitlement to contribution attaches to these defendants in relation to the damages as assessed by the trial judge, the quantum of which is not disputed, and the appropriate order for costs of the proceedings overall.

41. The 2nd Defendant, the driver, could safely have returned from Pat Tze Wo Village by following the same route which he took on his outward journey, even if this meant keeping away from his "correct" side of the road. He drove in second gear and wound down his window to give him a better visibility, the general visibility being only about 20 feet. The action he took in respect of his window was not a very effective precaution given that that window was on the non-dangerous side. Nevertheless he knew that to his left was a large unbroken expanse of water and that he was in a highly dangerous situation given the very adverse weather conditions.

42. Express had created the "quarry pit". They knew that it would, not just could, fill with water. They knew that the water would, again not just could, overflow the road. They disregarded the dangers which would arise from its use by others, and this would include pedestrians at night.

43. It has been submitted that the negligence of Express was very much less than that of the taxi driver for, if he had driven prudently, there would have been no accident.

44. We did not agree. Even a prudent driver, and we accept that the taxi-driver was not, would be placed in a position of considerable danger for once a vehicle, even to a slight degree, left the road surface on the pond side there was then a steep muddy slope down which it inevitably would slide without hope of recovery.

45. In these circumstances we assessed the fair contibution at 50% each.

46. Having heard further argument relating to the proper consequential provisions as to costs we ordered that the Plaintiff should have costs of the action as against both the 2nd Defendant and Express. As to contribution between the defendants given that there were issues, for example, the occupier point, on which Express had succeeded at trial, we considered the fairest order, which would be in the nature of a direction to the Taxing Master, was that the contribution to the Plaintiff's costs should be in proportion to the costs incurred by the Plaintiff in establishing liability as against the one and the other defendant respectively.

47. The Plaintiff should have his costs of the appeal as against Express.

48. It was necessary for the 2nd Defendant to be a participant in this appeal so as to protect their interests depending upon its outcome.

49. As a result of our reversal of the finding on the liability of Express the 2nd Defendant became a very interested party indeed. Being properly before us and having had matters decided in their favour as against Express we though it proper that Express should pay the costs of the 2nd Defendant on the appeal.