PATRICIA ANNETTE SHEPPARD v. RICHSTONE INDUSTRIES CO LTD AND ANOTHER

HEADNOTE

                 Joinder of an insurer as a party in an Employee's Compensation Application under Rule 24 of the Employee's Compensation Ordinance - failure to take over the proceedings from the insured no bar to such joinder - Order 15 Rule 6 of R.S.C. is not applicable in view of Rule 24.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CRIMINAL JURISDICTION

EMPLOYEE'S COMPENSATION CASE NO.113 OF 1984

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EX TEMPORE RULING

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1. In the call over of this application in conjunction with No. 116 and 117, the issue arose as to whether the 3rd Respondent Eastern Insurance Co. Ltd. in 113 (as 2nd Respondent in the other two cases was rightly joined in law as a party to all these three sets of proceedings. For easy reference, I shall refer to the Eastern Insurance Co. Ltd. as the Insurer, and the other Respondents by their names. My brother Henry Wong some times ago ordered the Insurer be joined as one of the Respondents, and subsequently when asked to clarify, he did express that the joinder was made under Rule 24 of the Employee's Compensation Rules not under Section 43 thereof as Section 43 obviously had no application because the fatal accident occurred prior to 1st January 1984, the commencement date for Section 43.

2. The other Respondent solicitors has been released upon indication by him that he is consenting to the award as claim. Mr. Bond was released, at least temporerity. The Applicant has come to terms with all the other Respondents and the Insurer feels that the settlement may be against its interest as it appears to the Insurer who was the true employer of the deceased is still very much in doubt. The determination of which relationship will decide whether the Insurer is liable to pay out the insurance money covered by the policy or policies.

3. Miss Mo rather ingeniously and strongly supported by Mr. Baum submitted that in legal terms the Insurer had waived his right to take over the proceedings because the Insurer did not exercise such contractual right pursuant to the term of contract and it is too late of the day now to do so. Heavy reliance was placed in the case of CHEUNG For-kuen Action No.2350 of 1975 (appararently unreported) in which a master's order of joinder was set aside by Trainer J. quoting an obiter from Cones J. as he theft was in LEE Kwan-hung

"Where an insurance company has a contractual right to take over the conduct of proceedings, it does not seem to me to be necessary for that company to be joined in his own right under Order 15, Rule 6(2). This view is confirmed by Diplock L. J. in Gurtner v. Circuit (1968) 2 Q.B. 587 at 603".

4. I am, however, convinced by Mr. Bharwarney's submission that rule 24 of Employee's Compensation Rules is the key to the door of joinder in these applications. For easy reference, Rule 24 is reproduced : -

"24. The Court may at any stage of the proceedings, upon request make to it in writing or of its own motion, order that any person appearing to be interested be joined in the proceedings".

Rule 24 is tied up with Section 18A of Cap. 282 in that all claims for compensations, specific exception saved as provided, and any matter arising out of proceedings of employee's compensations nature shall be determined by the District Court, which read in conjunction with Section 21 that confers very very right power on the Court to determine all claims for compensation and any matter connected therewith, stands joinder of a pasty in an employee's compensation application out as a category of its own. Rule 24 empowers the Court, no doubt, when it is desirable in the interest of justice and expedient to do so, to order a joinder at any stage of the proceedings. Whereas Order 15 does not confer such wide power for joinder. Section 21(1) is crystal clear that the District Court rules are applicable only when there was no provision to cover the matter in the employee's compensations rule itself and no where in Cap.282 or the rules thereunder was it provided that the rules of Supreme Court shall apply. In my opinion, Rule 24 confess jurisdiction on my brother, Henry Wong to join the Insurer as a party as he did.

5. A close look at NG Mei-ho (1962) District Court Law Report 52 at 54 and 55 reinforces my views. At Page 55 of the penultimate paragraph Sir Alan Huggins observed:

"...At the same time I do think that it would be in the interests of justice that notice of the present proceedings should be given to the factory so that they may then for themselves decide whether or not to apply to the Court under Rule 24 to be made parties (emphasis by myself.)

6. In my brother Roy's recent judgment in Sheppard Employee's Compensation Case No.113 of 1984, further fortifies my already firm views. I must say that I and my brother Roy are of one mind in his observation :

"The joinder of the party under Rule 24 is however, clearly a different matter from that of the Court's jurisdiction to grant indemnity against an interested party. NG Mei-ho demonstrates that such party may be joined in the proceedings and participate in the hearing because it has an interest in the sub-matter and outcome since it may well be liable to satisfy the judgment. Indeed as pointed out in NG Mei-ho by the honourable judge, unless it does so it may find itself faced with an order for payment of compensation against the Respondent which it will no longer be able to dispute. However, what the District Court cannot do in my opinion, is to grant relief by way of indemnity  against a party in compensation proceedings, because he has no jurisdiction to do so."

7. The natural justice aspect was neatly summed up by Lord Diplock in Gurtner v. Circuit (1968) Q.B. at 602 : -

"Here the rules of natural justice required that a person who is to be bound by judgment in an action brought against another party and directly liable to penalty upon a judgment should be entitled to be heard in the proceedings in which the judgment sought is to be obtained. A matter in dispute is not, in my view effectively and completely adjudicated upon unless the rules of natural justice are observed and all those who would be liable to satisfy the judgment are given an opportunity to be heard. In the case of an ordinary insurer this does not arise in practice since the standard terms of the 3rd Party Liability Policy give to the insurer a contractual right to conduct the defence of the running flown action in the name of the assured. As I road his judgment in the Fire Auto And Marine Case (1962 2 Q.B. 687) John Stephenson's J., would have allowed an ordinary insurer to be added as a party to a running down action if the policy of the insurance did not contain such a term. And this, I think, would be right."

Circuit was decided as a running down case under the rules of Supreme Court of England, which, as I have already said, are much narrower in scope than Rule 24 that no doubt, was intended to confer as wide a power as possible to cover as many situations as possible for employee's compensation in Hong Kong.

8. Miss Mo's second contention is that the insurer does not fall within the two categories of persons as specified under Order 15 Rule 6(2)(b). Here again my views completely coincide with that of Mr. Bharwarney in that even if that were so which I need not decide to save time and space for this exercise, the scope and extent of our Rule 24 is so wide that by itself it covers a situation like the present one and all the reasons I have above given practically serve as an answer as a whole to this contention.

9. Even if I had gone in the other direction in this my ruling, I would in the interest of justice have stayed all these three applications for the insurer to take over the proceedings as late as this stage. That cause, would of course, be more time consuming and therefore more expensive.

10. In the event, I rule and reconfirm that my brother Henry Wong's order of joinder under kale 24 joining the insurer as a Respondent in 113 is lawful and correct.

11. I have yet to hear solicitors and Counsel on the resulting issue as to what extent and limit should the insurer be entitled and allowed to participate in all these proceedings.

12. In view of this Ruling, it must follow that the application for renaming the insurer along the line of application 113 must be granted without the necessity of any further argument.   Costs are reserved pending arguments on the resulting issue at 2 p.m.  For clarity purposes, costs so far are reserved and secondly the renaming and retitling of the insurer along the line of 113 shall apply equally to 116 and 117.