LEE LAP PANG v. YUEN TAT WAH t/a CHONG HING MOTOR CO AND ANOTHER

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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JUDGMENT

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The background:

1. The Plaintiff, a man now aged 46, was injured on 7.7.95 which was the fourth day of his employment with the 3rd Defendant as a welder. In the District Court, he recovered employees' compensation against the 3rd Defendant but his claims against the 1st and 2nd Defendants were dismissed. He then commenced common law action against all the three defendants; but subsequently discontinued his action against the 2nd Defendant with leave of the Court.

2. The 3rd Defendant filed a notice to appeal against the decision of the District Court but has eventually withdrawn it. He is not now disputing his position as the direct employer of the Plaintiff. However, the background leading to the Plaintiff's employment with the 3rd Defendant is relevant for the purpose of understanding whether any duty of care was owed by the 1st Defendant to the Plaintiff.

The facts and credibility:

3. The 1st Defendant was the owner of a garage in Fort Street in North Point ("the garage"). After acquiring another nearby premises at the ground floor of No.17-19 Kin Wah Street ("the premises"), he arranged for the construction of a movable iron structure ("the structure") outside the premises. He obtained a number of quotations for the construction of the structure which he rejected as being too high. He knew the 2nd Defendant who was a bankrupt and former partner of a decoration business called Multi Sky which had formerly engaged the services of the 3rd Defendant. He was introduced to the 3rd Defendant by the 2nd Defendant.

4. The three defendants had a meeting at the premises to discuss the construction of the structure. The structure to be built was about 4 feet wide, 8 feet long and 10 feet high and had six wheels under the base. It was to consist of a framework built of angular iron bar and a base reinforced by I-shaped iron beams. This framework was to be covered by three tiers iron sheets on three sides, leaving one side fully open. The 3rd Defendant estimated it to weigh about one ton. The 1st Defendant was to provide all tools and materials while the 3rd Defendant was to provide the labour for welding the iron bars and iron sheets together. A price of $8,000 was agreed between the 2nd Defendant and the 3rd Defendant. Unknown to the 3rd Defendant then, the 1st Defendant was to give the 2nd Defendant $10,000. The 3rd Defendant regarded the 2nd Defendant as his principal contractor. That contention was dismissed by the District Court in the employees' compensation proceedings. However, I do not have to consider the role of the 2nd Defendant, as he is now not a party before me and nothing turned on that as against this 1st and 2nd Defendants.

5. In relation to that meeting, four points of significance arose. Firstly, the structure was designed by the 1st Defendant. Though no precise drawings had been produced by him, he told the 3rd Defendant what he required of the structure and he drew some rough sketches for reference.

6. Secondly, the 1st Defendant was to provide all the tools and materials required. These tools included heavy equipment like welding machines, cutters, and oxyacetylene blow torches etc. The materials included I-shaped iron beams, angular iron bars and welding sticks. This was disputed by the 1st Defendant who said that they belonged to Multi Sky. Who was the owner of these tools is unimportant. The important point is that the 1st Defendant arranged for the tools and made them available for use by the 3rd Defendant and his employees, including the Plaintiff. He must also be the person who provided this one ton weight of iron. It is wholly unrealistic to imagine that the 3rd Defendant would have contracted to build this structure for $8,000 inclusive of labour and materials. It is equally unrealistic to imagine that for the $2,000 the 2nd Defendant would have provided this one ton weight of iron for the structure.

7. Thirdly, the 1st Defendant gave instructions as to how the third tier of iron sheets were to be welded onto the framework. He told the 3rd Defendant that he would provide a truck with a hoist to turn the structure face down for his workers to weld the iron sheets. Thus he must appreciate the danger of welding the third tier of iron sheets with the structure erected.

8. Fourthly, the 1st Defendant said that he would provide general manual labour to assist the welders, if necessary.

9. According to the 3rd Defendant, he worked for three days doing basically preparatory work, such as estimating materials and connecting the power source, etc. He said on the second and third day, he worked with a worker surnamed Chan. It rained on those two days, as a result of which he had a cold. He then asked Chan to find a substitute worker to work in his place and left it to Chan to handle the work. He did not attend the premises until after he was informed of the Plaintiff's accident. A day or so later, he went to the premises. The 1st Defendant drove a truck there and lowered the structure down for him and Chan to complete the welding work for the third tier of iron sheets. The 3rd Defendant might have reasons to lie in the District Court proceedings to conceal his role as the Plaintiff's employer and might felt it necessary to adhere to the evidence he gave earlier. However, the fact that he had the meeting with the 1st and 2nd Defendant and his absence from the premises while the structure was being erected and fell is not disputed by him.

10. The Plaintiff said he was recruited for the work by Chan. He worked with Chan for four days until the accident occurred. During those days, the 1st Defendant visited the premises once or twice daily to check on the progress. On the first day, the 1st Defendant told him and Chan what they were required to build, how to build the structure and its dimensions. The 1st Defendant's son, Ah Foo, was also at the premises most of the time and rendered assistance, such as buying welding materials, iron bars and iron sheet, etc. By the third day, the Plaintiff and Chan completed the framework and finished welding the lower two tiers of iron sheets.

11. On the fourth day, Chan did not come back to work and the Plaintiff had to work on his own. When the Plaintiff returned to the premises, he found that someone had secured the structure by means of an iron chain, one end of which was welded to the structure and the other end was welded to a signboard outside the premises. In order to further secure the structure, he welded another angular iron bar to the structure and to a signboard on the wall. The 1st Defendant did not visit the premises that morning, but he came to check the progress in the afternoon. After welding the iron sheets for the third tier together on the ground, he asked Ah Foo for assistance. Ah Foo brought along five workers to help to support the structure and hold the welded iron sheets for the third tier in place for the Plaintiff to make a few welding points so as to secure the sheets temporarily to the structure. After that was completed, the Plaintiff requested for two or three of the workers to stay behind to support and the structure so that he could weld the iron sheets firmly to the structure. Ah Foo refused and discharged the workers so that they could return to their work, but Ah Foo stayed behind to help him.

12. The structure was ten feet high. The Plaintiff had to stand on a ladder in order to do the welding. The base of the structure was made of I-shaped iron beams and angular iron bars. The ladder could not properly stand in an open "A" position on these beams or bars. He therefore had to fold the ladder and rest it against the structure. He told Ah Foo to support him and the structure from the other side. Despite that, the structure fell forward while he was welding and he suffered injuries. Ah Foo then helped him up and took him to the 1st Defendant's garage where an ambulance was called to take him to the hospital. He was searchingly cross-examined by the 1st Defendant. The harder he was pressed, the stronger and more cogent his evidence appeared. He gave spontaneous answers when cross-examined, which suggests that his answers contained every ring of the truth. I accept his evidence.

13. The 1st Defendant's evidence is that he contracted with the 2nd Defendant to build a folding iron gate for the premises for $10,000, inclusive of labour and materials. The 2nd Defendant was to provide the tools needed for the job. He never went to see how the work progressed. He never instructed anybody to build the structure. He never authorised anyone to help the Plaintiff. His son, Ah Foo, never helped the Plaintiff or bought any materials for him. After the alleged accident, he did not see the structure outside the premises and did not know where it had gone. He did not help the 3rd Defendant to lower the structure with a hoist on his truck. On the day of the accident, the Plaintiff came into his garage alone and said he slipped while working on the premises. Like a good citizen, he called an ambulance for the Plaintiff.

14. I find the 3rd Defendant an incredible witness. He is prepared to offer any lies to dissociate himself from the accident. His story is bizarre. His evidence about the iron gate is totally out of line with the evidence of the Plaintiff and the 3rd Defendant that it could not be true. If the Plaintiff wanted to fabricate a claim, he need not fabricate something about this huge structure. He could easily fabricate a story of falling from height while mounting the iron gate. If the Plaintiff wanted to fabricate serious injuries, he would tell the 3rd Defendant that he fell from height rather than he just slipped. In any event, whether he slipped or fell from height, the Plaintiff would be entitled to employees' compensation or to bring a common law action for personal injuries. There is no reason why the Plaintiff should lie about these matters. There is also no reason why the 3rd Defendant should lie about this structure. I find the 1st Defendant incredible and do not accept his evidence.

Liability as against the 1st Defendant:

15. The Plaintiff's claim against the 1st Defendant is based on negligence and occupier's liability. It is the Plaintiff's case that the 1st Defendant played an active role in the construction of the structure and was in the same position as if he were the Plaintiff's employer and owed similar duty of care towards the Plaintiff. There were certain peculiar features in this works contract. The 1st Defendant designed the structure and supplied all the building materials to be used, including welding materials. He provided all the equipment. These were heavy equipment usually to be supplied by welding contractors. The 3rd Defendant did not supply these equipment, and certainly not the Plaintiff. He promised to supply general manual labour to assist the Plaintiff and his co-worker, Chan. He did provide five workers to help once and that was an hour or so before the accident. His son was also rendering assistance at the very time of the accident. At one stage he decided how the most important step was to be carried out. By this, I mean the welding of the third tier of iron sheets, which was the most dangerous and difficult part of the construction. He told the 3rd Defendant that he would use a truck to hoist up the structure and lay it face down for the welding to be done and then have it repositioned. Had that procedure been adopted, the accident would have been avoided. These features are unusual but are not conclusive of the existence of such a special relationship as to create a duty of care similar to that owed by an employer to his employees.

16. Apart from these special features, the 1st Defendant visited the premises once or twice a day to check on the progress. Just before that eventful day, he secured the structure by welding a chain on one end to the structure and on the other end to a signboard. On his evidence, he did not ask for the structure to be built and never saw the structure. Thus, impliedly the chain was not welded by him. However, as I accept the Plaintiff's evidence that the Plaintiff did not weld the chain to the structure, who else but the 1st Defendant, who was the owner of the premises and the structure, would have welded it or caused it to be welded by his own servants?

17. In my view, it was the 1st Defendant's right to specify what was to be built and to check occasionally if what was being built corresponded to his specification. A visit once or twice a day for that purpose could not amount to supervision. After all, there is no evidence that he interfered with the work of the Plaintiff. Similarly, there is no evidence that his son supervised the Plaintiff. He was just there attending to the Plaintiff's needs in accordance with the 1st Defendant's obligation under the contract to provide equipment, materials and occasional labour.

18. The 1st Defendant contracted the works to the 3rd Defendant, an independent contractor. The Plaintiff and Chan were skilled workers. They had a free hand in the performance of their work. They were assisted to some extent by the 1st Defendant. Despite the special features in this works contract and the participation by the 1st Defendant, in the absence of evidence of control and supervision by him, I am unable to find that he was in a similar position to that of an employer, as to owe the plaintiff a duty of care. He might owe the Plaintiff a duty of care in relation to the equipment he supplied, but that is not the issue in here.

19. The Plaintiff also alleged that Ah Foo was negligent in not properly supporting the structure. His evidence was that he told Ah Foo to support the structure from the other side. Ah Foo agreed and went over. He could not see if Ah Foo did as he was told. However, after the fall, Ah Foo was there almost immediately to pick him up and help him to the garage. Ah Foo was therefore near the structure and probably supporting it. If the chain and angular iron harnesses could have given way, Ah Foo could be no match for this one ton structure. If any duty was owed, it would be owed by the Plaintiff to Ah Foo. I do not think the Plaintiff has discharged the burden of proving negligence on the part of Ah Foo as agent of the 1st Defendant.

20. The second basis of the Plaintiff's claim is that the 1st Defendant was in breach of the common duty of care owed by him as an occupier of the structure. The structure was a huge one to be built as a movable extension to the premises of the 1st Defendant. It was like a small container, but even higher. He visited the premises once or twice a day as the structure was being erected. He supplied the materials for its construction and was to pay for the labour. It was erected outside the premises which he owned. He had the right to exclude others from trespassing this structure. He secured it with a chain. That must be because he was aware of the risk that the structure would fall more than his worry that someone would remove this huge structure. Thus he knew he had a responsibility for the structure. In the circumstances, I have no difficulties to find that he had both the intention to possess as well as the actual possession of the structure during all the stages of its erection. He was therefore an occupier of the structure and owed the duty of care as imposed on him by section 3 of the Occupiers Liability Ordinance (Cap. 314) to the Plaintiff who was lawfully invited by him to be on the structure.

21. The 1st Defendant designed this tall but narrow structure. It had wheels and rested on a sloping pavement. He expected the Plaintiff to work and built on it in the course of its erection. He was aware of the danger of this structure. That was why he secured it by welding a chain to it. As the events turned out, this chain, not even with the added support of the angular iron bar welded by the Plaintiff and the support offered by Ah Foo, failed and the structure fell. Mr. Li submitted that this must be a clear breach of this common duty of care in failing to see that the Plaintiff would be reasonably safe in using the structure.

22. Mr. Li referred me to Mak Kwai Yin v. USA Fur Processing Ltd. & Another, [1994] 1 HKC 485. In that case, the plaintiff, engaged by the 2nd defendant to do welding work in the premises of the 1st defendant, was severely burnt when sawdust particles impregnated with flammable liquid from the fur processing activities caught fire from the oxyacetylene flame used by the plaintiff. Kaplan, J. held that the 1st defendant as occupier of the premises was liable for not turning off the fur processing machines and warning the plaintiff of the risks inherent in using welding equipment.

23. I think the case of Mak Kwai Yin is distinguishable from the present case. In that case, the danger was an inherent one which the Plaintiff could not have known about. That plaintiff had no knowledge of how fur was processed. He could not have known of the existence of sawdust particles in the air and that these particles were impregnated with flammable liquid from the fur processing activities. However, in the present case, the danger was obvious as the structure was a tall and narrow one. It appeared that no one mentioned to him about the use of the truck and hoist. That was unfortunate, but was also beside the point. Not only that the danger was obvious to an objective bystander, the Plaintiff was actually aware of it. That was why he welded another angular iron bar to futher secure the structure and asked for Ah Foo's help to support it. This is wholly different from the danger caused by the invisible and inflammable sawdust particles.

24. I think the proper approach is to ask what is the common duty of care as in all the circumstances of the present case is reasonable to see that the Plaintiff would be reasonably safe. One of the most important circumstances was that the Plaintiff was engaged to erect this structure. He knew what were the materials used. He was told how to erect it. He decided on the work procedures and had a completely free hand to adopt whatever steps he wished. He knew this structure better than anyone else. It was not an elaborated structure with any hidden danger. The 1st Defendant's duty was therefore very minimal and was no more than alerting the Plaintiff of any inherent danger. That danger, the Plaintiff was aware of anyway.

25. Further, section 3(5) of the Ordinance provides

The Plaintiff was engaged to erect this structure. He may not be an expert working at height. He nevertheless appreciated the risks, which in my view were not only ordinarily incident to the type of construction work which he was engaged but was obvious to anybody. He had therefore willingly accepted the risks as his own. He had a free hand to decide how to conduct his work. This reinforces my view that the common duty of care owed by the 1st Defendant as occupier of the structure in the circumstances was a very light one. To impose any higher duty as what the Plaintiff pleaded in the statement of claim is to impose on him the stricter duty of care which is owed by an employer. That could not be right.

26. As a result, I find that the 1st Defendant had not been in breach of the common duty of care towards the Plaintiff. The action against the 1st Defendant must be dismissed.

Liability as against the 3rd Defendant:

27. The District Court has found the 3rd Defendant liable as the Plaintiff's employer for employees' compensation. The 3rd Defendant is precluded from disputing that issue: see Wong Wang Sum v. Lee Kam Engineering Co. (A firm) & Another, [1996] 3 HKC 627. He is not disputing that in the present proceedings, but alleged that the Plaintiff was contributory negligent.

28. It is well established law that an employer owes a duty of care to his employees in providing a safe system of work or to ensure a safe system was in place: see Hollis v. Denholm Ship Management, [1993] P.I.Q.R. P.104. According to the 3rd Defendant, he never attended the premises after finishing the initial preparatory work and that he gave no instruction to the Plaintiff or Chan as to how the works were to be carried out. He did not tell them about the 3rd Defendant's earlier suggestion of using a truck and hoist to lay the structure on the ground to work on. He never supervised or checked the progress of work and whether the Plaintiff had sufficient support from his co-worker. He gave no instructions on safety precautions. He simply let them finish the task in whatever way they saw fit. On these facts, he was in clear breach of his duty as employer to provide a safe system of work or to ensure a safe system was in place.

Contributory Negligence:

29. The 3rd Defendant submitted that the Plaintiff was fully aware of the risks but nevertheless decided to take it. It is true that upon Ah Foo discharging the workers, the Plaintiff could stop work and defer to the next day until Chan returned. If he did, Ah Foo might change his mind or the 1st Defendant might offer the use of his truck and hoist. His choice, albeit unwise in retrospect, should be understood in the light of the circumstances when he had to make it. The workers were suddenly withdrawn from him. He had the iron sheets temporarily secured only. The structure in that condition might pose as a danger to other users of the road or to pedestrians, unless the iron sheets were properly welded. He had taken some precautions, such as welding another angular iron bar to the structure and had secured Ah Foo's support from the other side. On balance, I find that he really had no choice. I therefore do not find him contributory negligent.

Quantum:

30. The Plaintiff suffered right shoulder pain due to bicept and rotator cuff tendenitis, and right elbow pain due probably to ulnar neuritis. Dr. Lau assessed him to have suffered 14% permanent disability.

31. He had no fracture or lacerations and did not fall from great height. The injuries that he suffered appeared to be more extensive than what one could have anticipated. However, on the evidence of Dr. Lau Hoi Kuen, I am satisfied that the Plaintiff had not exaggerated his injuries. Dr. Lau gave three reasons for that. Firstly, Dr. Lau said that he had tested the genuineness of the complaint of the pain in his shoulder many times and the Plaintiff was very consistent as to the location of the pain. Secondly, Dr. Lau found that when pressure was applied to the right elbow, the Plaintiff complained of numbness over one and half of his fingers. Dr. Lau said it would take someone with some knowledge of human anatomy to be able to put up such pretence. Thirdly, Dr. Lau said he had observed the Plaintiff's movements during the two consultations. He was satisfied that the movements were consistent with the pain which the Plaintiff complained of. I accept Dr. Lau as an expert and have no reason to doubt the correctness of his evidence. I accept his evidence and his assessment.

PSLA:

32. Mr. Li submitted that the injury is within the lower end or borderline of "serious injury" category. In Chan Pui Ki v. Leung On & Anor, [1996] 2 HKLR 401, the Court of Appeal approved awards in the serious injury category of between $400,000 and $540,000. The Plaintiff did not suffer any fracture or laceration. He did not have to undergo any operation and was not hospitalised, though he was given more than two years' sick leave. His only complaint is pain. Though his preferred hand was injured, he did not lose much of his amenities. He is able to carry on his daily activities without difficulties. I consider his injuries do not fall within the serious injury category.

33. Mr. Li referred me to the case of Chun Sung-yong v. Au Sze-hung Christopher Kwan Man Wah, 21 (1991) HKLJ 400, HCA No. A118 of 1990. The plaintiff in that case suffered fractures to the left shoulder bones and bones in the left leg. He had to wear a plaster cast for some time and then a plaster mould which had to be changed from time to time and for a time he had to use crutches or walking aids. He was in hospital for an unspecified period. The fractures of the left leg bones did not heal properly. As a result his left leg was half an inch shorter than the right leg. He was advised to undergo further operation which he refused. His running and squatting ability was hampered and there was also permanent muscle weakness in the leg along with stiffness. Liu, J, as he then was, awarded him about $130,000. The plaintiff in that case suffered more serious injuries. Taking all circumstances, including inflation, into account, I consider an award of $200,000 for PSLA appropriate.

Pre-trial loss of earnings:

34. Mr. Li suggested to adopt $20,000 as the Plaintiff's monthly wages, inclusive of overtime payment, for the purpose of calculating his pre-trial loss of earnings. In the employees' compensation proceedings, the District Judge adopted a figure of $16,500 for his monthly wages, which was based on the Plaintiff's daily wages of $600 and 27.5 days per month. That finding must also be binding on the Plaintiff in the present proceedings. According to Wages and Labour Costs Statistics published by the Census and Statistics Department, the average daily wages of blacksmiths engaged in government building and construction projects was increased to $771.10 in September 1997, which was about the time when the Plaintiff's sick leave expired. There is no available statistics for welders. I consider the wages of blacksmiths as being comparable to those of welders. Hence, his pre-trial loss of earnings from 7.7.95 to 6.9.97 is:

[(16,500 + $771.10 X 26) / 21 X 26 months = $475,131.80

35. I accept Dr. Lau's evidence that after the accident the Plaintiff could only take up less skilful work as a watchman. According to the Average Monthly Salaries and Related Statistics published by the Census and Statistics Department, the monthly salary of a caretaker in the real estate management industry and of a guard in the security service in September 1997 were respectively $7,038 and $7,196, making an average figure of $7,117. The latest available corresponding figures for September 1998 which I accept to be the same for May 1999 were $7,472 and $7,270 respectively; making an average figure of $7,371. The average daily wages of blacksmith in May 1999 was $868. Hence his pre-trial loss of earnings from 7.9.97 to 6.5.99 is:

{[$771.10 + $868] / 2 X 26] - [$7,117 + $7,371] / 2}} X 20 months = $281,286.00

His pre-trial loss of earnings are therefore:

Loss of Future earnings:

36. The Plaintiff is now 46 years of age. Based on the difference between the estimated earnings of a welder/blacksmith and the earnings of a watchman/caretaker, and adopting a multiplier of 11, the Plaintiff's loss of future earnings is:

[($868 X 26) - $7,371] X 12 X 11 = $2,006,004.00

Loss of earning capacity:

37. The Plaintiff has made a number of attempts in the last year to look for alternative employment but was unsuccessful. In view of his age and his handicapped condition, he would have difficulties in finding or maintaining regular employment. I consider an award of $80,000 for loss of earning capacity, which is approximately equal to 12 months income as a watchman/caretaker, appropriate.

Other special damages:

38. There is no dispute that he incurred medical and travelling expenses in the sum of $4,312, most of which are supported by receipts. Accordingly, I award him $4,312 medical and travelling expenses.

Conclusion:

39. The total award is therefore $1,924,362.30, the breakdown of which is as follow:

Plus:

Less:

There will also be interest on the general damages at the rate of 2% per annum from the date of issue of writ to the date of judgment and interest on the special damages at the rate of 5.97% per annum from the date of accident to the date of judgment; and thereafter at judgment rate until payment.

40. I also make costs order nisi that the Plaintiff shall have costs of this action against the 3rd Defendant; and the 1st Defendant shall have costs against the Plaintiff. All costs are to be taxed, if not agreed. The Plaintiff's own costs are to be taxed in accordance with Legal Aid Regulations.