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HCA006845/1986
IN THE SUPREME COURT OF HONG KONG
HIGH COURT
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BETWEEN
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LAW YIM KWAN |
Plaintiff |
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and
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CHINA INSURANCE COMPANY LIMITED |
Defendant |
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Coram: Barnes, J.
Date of hearing: 17th September, 1987
Date of delivery of judgment: 25th September, 1987
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JUDGMENT
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1. On 14 March 1980 King Man industrial Co. Ltd. ("the Insured") entered into an employer's liability insurance agreement with the Defendant. The material terms of the agreement read as follows:-
".... if at any time during the Period of Insurance any employee in the Insured's immediate service shall sustain personally injury by accident ... arising out of and in the course of his employment by the Insured .... and if the Insured shall be liable to pay compensation for such injury either under [the Employees' Compensation Ordinance] or at Common Law then subject to the terms exceptions and conditions contained herein or endorsed hereon the [Defendant] will indemnify the Insured against all sums for which the Insured shall be so liable ............
Period of Insurance:
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(a) From 12/3/80 to 11/3/81
...................
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Premium: HK$2,703.65
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Subject to adjustment in the terms of Condition 6. The estimated amount of wages salaries and other earnings on which Premium is based. |
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_____________________________________________________________
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Estimated
number of
employees
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Occupations
of employees
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Estimated
total
earnings
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Place or
places of
employment
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______________________________________________________________
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a.1 |
Pressing
worker
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HK$24,000.00 |
Anywhere
HK, Kowloon
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b.2 |
do |
HK$32,400.00 |
do
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c.3 |
Packing
workers
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HK$27,000.00 |
Insured's
premises
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d.1 |
Delivery |
HK$12,000.00
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HK$95,400.00
==========
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Anywhere
HK, Kowloon
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CONDITIONS
............................................................................................................................................
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6. The first premium and all renewal premiums that may be accepted are to be regulated by the amount of wages and salaries and other earnings paid by the Insured to employees during each Period of Insurance. The name of every employee together with the amount of wages ..... shall be properly recorded .... If the amount so paid shall differ from the amount on which premium has been paid the difference in premium shall be met by a further proportionate payment to the [Defendant] or by a refund by the [Defendant] as the case may be. |
...........................................................................................................................................
ENDORSEMENT
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It is hereby declared and agreed that in respect of Common Law liabilities the limit of the amount of the [Defendant's] liability in respect of any one claim or series of claim arising out of any one event shall be HK$150,000.00." |
On 30 October 1980 the same parties entered into a further agreement the terms - of which were identical with those of the first agreement except for the following particulars:
"Period of Insurance:
(a) From 13th Oct., 1980 to 12th March, 1981
.......................................................................
Premium: HK$1,155.000
.......................................................................
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____________________________________________________
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Estimated
number of
employees
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Occupations
of employees
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Estimated
total
earnings
|
Place or
places of
employment
|
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___________________________________________________
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1 |
Plastic Pressing
Worker and/or
Delivery
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HK$10,000.00 |
Anywhere
HK, Kowloon
and N.T.
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1 |
do |
HK$11,000.00 |
do
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1 |
do |
HK$ 9,000.00
HK$30,000.00
==========
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do
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____________________________________________________"
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2. The premium payable under each policy was duly paid by the Insured. On 27 December 1980, within the period of insurance under each policy, the Plaintiff's right hand was crushed by a plastic injection moulding machine in the course of his employment by the Insured. He was subsequently awarded compensation in the sum of HK$79,327.11 under the Employees' Compensation Ordinance and this was duly paid to him by the Defendant.
3. On 31 July 1981 the Insured was compulsorily wound up whereupon the Plaintiff became entitled, pursuant to the provisions of s. 2(1)(b) of the Third Parties (Rights Against Insurers) Ordinance, to enforce whatever rights the Insured had against the Defendant under each of the aforementioned policies.
4. On 1 November 1983 the Plaintiff instituted proceedings against the Insured claiming damages at common law in respect of the accident. Damages in the sum of HK$378,350.00 were subsequently assessed and awarded in those proceedings.
5. In this action, the Plaintiff claims $299,022.89 ($378,350.00 - $79,327.11) if the Defendant's maximum liability is $300,000 or $150,000 if $150,000 is the maximum.
6. The Defendant contends that $150,000 is the maximum amount of its liability but that the amount paid pursuant to the Employees' Compensation Ordinance must be deducted leaving a total liability of $70,672.89. There is, however, no merit whatsoever in the "deduction" contention. The limitation endorsements do not relate to the combined liability in respect of Employees' Compensation Ordiance liability and common law liability but only to the latter. The only question therefore is: is the Plaintiff entitled to the larger or the smaller of his alternative claims?
7. No evidence was adduced at the trial. The parties have agreed to the issue being determined on the pleadings, the documents and counsel's submissions.
8. The Plaintiff's pleadings add nothing to what has been set out earlier. Apart from the contention which has already been rejected, the Defendant's pleadings admit the Plaintiff's averments but then aver as follows:-
".... that:-
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a) |
The First Policy and Second Policy collectively covered all the employees of the [Insured].
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b) |
Therefore the liability of the Defendant, if any, is limited to $150,000 only." |
9. The only documents relied on by the parties were the two policies, the material terms of which have been set out above.
10. Counsel, in their submissions, agreed that my task was to determine the intention of the parties by construing the two policies.
11. The Plaintiff's accident occurred at a time when the Insured was covered by two policies in respect of the same liability risk. The Defendant's pleadings clearly indicate that there was dual cover and that the second policy was not in substitution for the first. Why then was there a need for two policies "collectively" to cover "all the employees of the [Insured]"?
12. The two policies would "collectively" cover all the Insured's employees only if each was identified with a separate risk. Each, however, covers all employees in respect of the same type of liability. One can, therefore, find a separate risk in each policy only by construing the first as covering a liability risk to a ceiling of $150,000 and the second to cover a risk of liability above $150,000 to a ceiling of $300,000. I therefore conclude that the Insured was covered to a maximum of $300,000.
13. There will accordingly be judgment for the Plaintiff in the sum of $299,022.89 together with interest thereon at the rate of 10% per annum from 2.12.83 (the date of service of the writ in this action) until today, and costs.
14. I order that the Plaintiff's own costs be taxed under the Legal Aid (Scale of Fees) Regulations.
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E. C. Barnes
Judge of the High Court
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Representation:
Mr. Patrick Fung (Tai, Ho & Chan) for the Plaintiff.
Mr. Alexander Wong (Ford, Kwan & Co.) for the Defendant.
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