CHAN CHUNG LEUNG v. DHL EXPRESS (HONG KONG) LTD AND ANOTHER

DCPI 1759/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO. 1759 OF 2010

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JUDGMENT

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Background

1.This is the Third Party Proceedings in the common law claim brought by the Plaintiff as a result of an accident inside a warehouse at Ground Floor, 100 Texaco Road, Tsuen Wan, New Territories, Hong Kong.

2.The warehouse was operated by the Defendant. They provided logistics service to its customers and the Third Party was a subcontractor providing related services engaged by them. The Plaintiff was at the material times working in the warehouse as a temporary part time operation assistant for the Third Party.

3.On a without admission of liability basis, the main action was settled by the parties in sum of $371,065.20 (inclusive of interest) and costs pursuant to a Consent Order dated 20 October 2011 (“the Consent Order”).

Accident

4.In the early hours of 12 September 2008, when the Plaintiff was walking whilst pulling a pallet truck with his right hand, at the back of a forklift truck, the forklift truck reversed and he was injured.

5.The close circuit TV footage played in Court showed that at the material times, the Plaintiff was walking very close to the moving forklift truck in the same direction when the latter backed. The same was driven by Lui Pak Yin (“ Lui”) at the time.

6.Although it was said that there was continuous flashing light on top of the forklift truck when the same was being operated and that there were also 2 rear red lights when the brake was stepped on, one could not see these lights from the footage shown in Court.

7.In fact, Lui agreed in cross-examination that the footage did not show both the flashing light on top of the forklift truck nor the brake lights.

8.Lui said however there was continuous warning sounds emitting from the forklift truck when same reversed and although there was noise inside the warehouse, one could notice the same if he paid attention.

9.Lui said at the material times the loading platform in the front of the forklift truck was already packed with goods and there were also goods placed on the floor in front of the forklift truck. The forklift truck could not go further forward and he therefore unloaded the goods on the carriageway and reversed the truck. He said it was usual that forklift trucks backed in such circumstances in the warehouse.

10.The Plaintiff agreed that he had noticed similar incidents happening in the past, i.e. the forklift truck reversing after unloading the goods on the carriageway. On the day however, he did not pay attention to the front of the forklift truck and therefore did not notice the unloading of the goods on the floor by Lui nor the condition on the loading platform. He said also that he did not notice any brake lights, flashing lights and even warning sounds from the forklift truck.

11.Lui admitted that before he reversed his forklift truck, he did not check the back of the forklift truck. He also agreed that on the day in question, he did not check carefully whether the lightings of the forklift truck was in order. He said he was aware of the presence of the Plaintiff only after the accident.

12.Plaintiff in Court said he had been employed by Third Party since 23 July 2008. He said he was never briefed by anyone about Safety Rules and Guidelines of the warehouse set by the Defendant (“Safety Rules”) or indeed any safety rules and guidelines before the Accident. He said he was just told how to perform his duties. He denied Ngai Ka Ho (“Ngai”), the onsite supervisor of the Third Party did explain to him and brief him as to the Safety Rules. Plaintiff further said that had he been explained the same, he would have waited until the forklift truck had left before he walked.

13.Ngai, witness for the Third Party said in Court that he was the one responsible to brief and explain to all temporary workers the Safety Rules. He admitted that the Third Party had received copy of the Safety Rules of the Defendant from the Defendant and further that they were under a duty to explain the same to all its workers. He said he had been explaining the Safety Rules paragraph by paragraph to temporary workers before they started work and that he had done so for 70 – 80 times already. Ngai said he would spend on each recruit 10 odd minutes.

14.Mr. Dennis Law (“Mr. Law”), counsel for the Defendant referred Ngai to the attendance record g produced by Third Party to the Defendant involving 41 workers of the Third Party who had attended the safety briefing conducted on 10 October 2007. Ngai admitted he was not aware of this safety briefing session. After reading the attendance record, Ngai said none of the attendees were temporary workers.

15.Ngai admitted he was the only one in the Third Party responsible to introduce and explain the Safety Rules to the temporary workers. When asked by this Court, he answered after quite long pause, that if the Safety Rules was not in his hand, he would be able to remember about 50% of its contents.

Third Party Claim

16.In the present Third Party claim, the Plaintiff relies on the contractual indemnity given by the Third Party as provided in the terms of the Sub-Contract dated 1 July 2008 between the Defendant and the Third Party (“the Subcontract”) as well as section 3 and 4 of the Civil Liability (Contribution) Ordinance, Cap. 377 for an indemnity or contribution.

Contractual indemnity

17.Under the Subcontract, the Defendant agreed to sub-contract some of its transportation services to the Third Party, a company providing logistics services to customers and Third Party agreed to provide such services in the warehouse.

18.The relevant clauses of the Subcontract are set out as follows:-

“a. Clause 3.1 states that the Third Party shall provide the Defendant with transportation services with reasonable skill and care as would be expected of a professional service provider;

b. Clause 3.3 states that the Third Party shall use only suitably qualified and competent drivers and/or labour at all times;

c. Clause 5.3 states that the Third Party must endeavour to promptly comply with the Defendant’s instructions;

d. Clause 7.1(e) states that the Third Party shall procure and ensure its employees to comply with all the applicable laws, regulations, code of conduct, guidelines and practices for different industries in providing the service and in performing its obligation;

e. Clause 7.1(f) states that the Third Party shall observe such safety requirements as required by law or by the Defendant from time to time and put into practice such measures in compliance with such requirements so as to maintain proper industrial safety;

f. Clause 9.2 further states that the Third Party shall indemnify and hold the Defendant harmless from and against all and any claims, demands, losses, costs, expenses, liabilities and damages whatsoever and by whomsoever made arising from or in connection with the provision of the services and the breach of the Sub-contract.

g. Clause 9.5 states that in addition, the Third Party shall indemnify the Defendant for all costs incurred by reason of the Defendant’s defence of any claim against it arising from or in relation to the services.”

19.It is admitted by the Third Party that the Defendant had laid down and had given copy of the Safety Rules of the warehouse to them and that they were under an obligation to conduct safety briefings to their employees including operation assistant like the Plaintiff so that they were familiar with and would comply with the same before they were assigned to work in the warehouse.

20.Ngai said also that when Plaintiff attended work everyday, he had to apply for a temporary work permit before he could enter the warehouse and during the application, the security guard employed by another subcontractor would direct the Plaintiff to read the Safety Rules.

21.Plaintiff on the other hand said everyday when he applied for the temporary work permit, all that was required from him by the security guard was his telephone number and his Hong Kong Identity Card. He was not referred to any Safety Rules. He said the whole registration process took only about 15 seconds.

22.Although Ngai said he was the onsite supervisor of the Third Party and that he was responsible for conducting safety briefings to the operations assistants before the individual new recruits commenced to work in the warehouse, the Third Party including Ngai were unable to produce any documentary evidence in support of the alleged briefings.

23.On the other hand, Third Party was able to produce attendance records of 41 of their employees (Plaintiff not included) in relation to safety briefings. The same however did not seem to have included, according to Ngai, temporary workers. In any event, Ngai was not even aware of existence of such safety briefings himself although he had been working for the Third Party for 5 years. Ngai was already in the employ of the Third Party at the time when the safety briefing on 10 October 2007 took place.

24.Chan Koon Ho, the duty manager of the warehouse at the material times said in his witness statement that Third Party had given the Defendant the attendance records of safety briefing conducted. There was however no similar briefing record for temporary new recruits.

25.This Court is therefore left with the evidence of the Plaintiff and the conflicting evidence of Ngai as to whether Plaintiff was briefed of the Safety Rules.

26.This Court notes that Plaintiff had resigned from his employment with the Third Party on 13 May 2009 and that the main Action had also been settled, it appears therefore that he had not much interest to lie.

27.It is also clear from the evidence that Third Party had treated the temporary workers differently from that of the permanent staff as even Ngai himself as supervisor of temporary workers was unaware of the safety briefing sessions conducted.

28.In Court, when Ngai was asked as to how much he could remember of the Safety Rules, without a copy of the same before him, it took him quite some time to answer even though as he said, he had read the same to new recruits about 70 to 80 times in the past paragraph by paragraph.

29.Moreover, according to Ngai, he opined that the contents of the Safety Rules were really common knowledge and that people should be aware even without reference to the Safety Rules. I am doubtful as to whether he did as he said, explain the same to new recruits paragraph by paragraph or at all?

30.Plaintiff admitted that he was wrong in his witness statement when he denied there was the issue of a temporary work permit at the warehouse. In Court, he admitted there was such issue. He however denied there was anyone explaining the Safety Rules whether work permit application was being processed. In practice, one would not expect the security guard at the entrance to the warehouse processing the work permit to explain to each worker the Safety Rules. Anyway, it was not the case of the Third Part that the Defendant was under a duty to brief the Plaintiff the Safety Rules.

31.The Plaintiff was forthcoming when he gave evidence in Court, even when cross examined.

32.By reasons aforesaid, this Court prefers the evidence of the Plaintiff and finds as a fact that Ngai and the Third Party did not brief the Plaintiff of the Safety Rules imposed by the Defendant prior to the Accident.

33.The same clearly constituted a breach of clause 5.3 of the Subcontract, in that the Third Party failed to brief its worker of the Safety Rules as instructed by the Defendant.

34.Third Party had also committed a breach of clause 7.1(e) and (f) of the Subcontract in that the Third Party had failed to procure and ensure its employees to comply and observe safety guidelines and requirements as required by the Defendant and that the Plaintiff as agent of the Third Party did not observe such safety requirements as required by the Defendant.

35.Under the Contract Safety Guide issued by the Defendant, copy which was handed to the Third Party, it was set out in clauses 2.3, 2.4 and 2.5 that :-

“2.3 Contractors should take all reasonable measures to ensure the health and safety at work of their employees or workers. Contractors are required to comply with all safety regulations and DHL internal safety requirements applicable to their provided services.

2.4 Contractors should be responsible to any loss associated as a result of any health and safety risks or accidents due to their own omissions or their employees’ or workers’ disciplinary behaviours.

2.5 Contractors should provide copies of any health and safety procedures, practices, or training records for their employees or workers to demonstrate their compliance on safety regulations or DHL internal safety requirements applicable to their provided services upon request.”

36.Under clause 3.1.1 of the same, it was set out that:-

“Work at DHL Service Centers/Premises

Contractors should communicate relevant information to their workers for confirming with this Guide and regulations applicable to their services provided to DHL.

Contractors should communicate the general safety procedures to their workers including temporary and new contractors’ employees who are working at DHL Service Centers (Appendix 1 and Appendix 2)”

37.Appendix 1:-

“行人

1. 必須留意運作中心內的車輛及剷車進入範圍，該範圍有黃黑斜線於地上或指示牌標示。

2. 工作時亦應時刻留意身邊的環境，如:

中心內行駛中的車輛會亮著車頭大燈，剷車亦會亮著閃燈;

所有車輛(包括剷車)倒車時都會有警告聲响

3. 切勿站近正在起缷的貨車並保持安全的距離; 另亦應避免在移動中的車輛(包括剷車)旁或後面工作及保持適當的距離。

5. 避免在車輛後面站立、逗留或經過。”

38.Appendix 2:-

“行人

1.必須留意運作中心內的車輛及剷車進入範圍，該範圍有黃黑斜線於地上或指示牌標示。

2. 工作時亦應時刻留意身邊的環境，如:

中心內行駛中的車輛會亮著車頭大燈，剷車亦會亮著閃燈;

所有車輛(包括剷車)倒車時都會有警告聲响

3.切勿站近正在起缷的貨車並保持安全的距離; 另亦應避免 在移動中的車輛(包括剷車)旁或後面工作及保持適當的距離。

5. 避免在車輛後面站立、逗留或經過。

訪客或承辦商亦須邊遵從運作中心的安全指引，如《正確搬運的方法》，《安全腰帶的佩帶方法》，《貨車尾板操作的安全指引》等。相關指引可於保安中心借閱。

如對自己工作安全或中心內的安全事項有任何疑問，可致電當值經理6711 7050查詢。”

39.The Plaintiff at time of accident was clearly acting in breach of these guidelines. He was not observing the expected conduct in Appendices 1 and 2, such as paying attention to the surroundings whilst at work and avoid standing, remaining or passing at back of forklift truck.

40.In Court, Plaintiff testified that had he been briefed of the Safety Rules, he would have acted differently and would not have walked so closely behind the forklift truck. He said he would have stopped early to allow the forklift truck to move away first.

41.Third Party did not seek to challenge this piece of evidence of the Plaintiff.

42.It is also not in dispute that the maximum speed of the forklift truck was only 5.2 km/hr.

43.Under the circumstances, I have no doubt that had the Third Party not breached the Subcontract and had briefed the Plaintiff of the Safety Rules, the Accident would have been avoided and there would not be the present action.

44.Following the basic principles of Law of Contract, the Defendant should therefore be put in the same position as if the Third Party had not breached the Subcontract.

45.Clause 9.2 of the Subcontract reads:-

“9.2 The Service Provider agrees to indemnify and hold DHL harmless from and against all and any claims, demands, losses, costs, expenses, liabilities and damages whatsoever and by whomsoever made arising from or in connection with the provision of the Services and the breach of this Agreement.

46.Clause 9.3 also reads:-

“9.3 DHL will use its reasonable endeavours to incorporate DHL’s Standard Terms and Conditions within the Principal Agreement. Subject to Clauses 9.4 and 9.5 below, insofar as DHL’s Standard Terms and Conditions are incorporated within a Principal Agreement, the Service Provider’s liability to DHL shall be limited in accordance with DHL’s Standard Terms and Conditions so incorporated.”

47.Mr. Szeto, counsel for the Third Party argued that the accident did not arise from or was in connection with the provision of services and the breach of the contract.

48.“Services” in the Subcontract was defined as “all and any labour, vehicles, equipment and/or services provided by the Service Provider to DHL under this Agreement, the specifications of which are set out in Schedule 1.”

49.Schedule 1 reads:-

“Service Schedule

Provide manpower to perform pick up shipment inspection, loading & unloading, sorting, reweighting and scanning.”

50.Clearly, “services” includes the provision of labour by the Third Party to the Defendant under the Subcontract such as an operation assistant like the Plaintiff here in loading and unloading of goods.

51.Further, Third Party in their Defence admitted providing operation assistant (including the Plaintiff) to the Defendant at the material times.

52.The accident occurred whilst the Plaintiff was performing, as employee of the Third Party, the contracted work of Third Party as a subcontractor of the Defendant at the warehouse. I have no doubt that the accident in question did “arise from and was in connection with the provision of services and the breach of the Subcontract”.

53.The Subcontract was subsisting at time of accident and in view of the breach of the same, the indemnity clauses 9.2 and 9.3 would operate.

54.Mr. Szeto has conceded that should this Court finds there was a breach of the Subcontract by the Third Party and further that clause 9.2 of the Subcontract operates, then there should be 100% indemnity by the Third Party.

55.Mr. Law invited this Court to adopt the approach of Suffiad J in Wong Chun Kuen v. Wong Tin Lam HCPI 163/2002 (unreported), Suffiad J 27 February 2006. He submitted that the basis of the Third Party claim in that case is similar to the present case i.e. contractual indemnity and contribution under the Civil Liability (Contribution) Ordinance. The Court in that case held that the indemnity would include the amount of legal fees which the Defendant had to pay to its own lawyers to deal with the Plaintiff’s claim. I agree.

56.As a result of the present action by the Plaintiff, the Defendant now needs to pay the sum of $371,065.2 plus costs of the action to the Plaintiff. They had also incurred costs for the present proceedings both in defending the action by the Plaintiff and in the present Third Party proceedings. These had all resulted from the “provision of the services and the breach of this Agreement”.

Civil Liability (Contribution) Ordinance

57.In the circumstances, there is no need for this Court to further consider the Defendant’s claim based on the Civil Liability (Contribution) Ordinance.

Conclusion

58.Accordingly, I order that the Third Party should pay the Defendant:-

(a) the sum of $371,065.2, being the sum payable to the Plaintiff pursuant to the Consent Order;

(b)interest on the said sum of $371,065.2 from date of payment by the Defendant to date of judgment at half judgment rate and thereafter at judgment rate till date of payment;

(c) costs payable to the Plaintiff pursuant to the Consent Order;

(d)interest on costs paid to the Plaintiff pursuant to the Consent Order at half judgment rate from date of payment till date of judgment and thereafter at judgment rate till date of payment;

(e) costs of the Defendant both in defending the Action and in the Third Party proceedings, the same to be taxed if not agreed with certificate for counsel.