LAI YEUK PAN v. SUEN YAT HAU t/a KING CHEUNG MIRROR & GLASS ENGINEERING AND ANOTHER

HCPI 318/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 318 OF 2015

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D E C I S I O N

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1. The plaintiff has already discontinued his claim against the 1^st Defendant and this is his application for no order as to costs of the said proceedings.

BACKGROUND

2. This is a personal injury claim.  The plaintiff was dismantling a glass panel which shattered, causing multiple cut injuries.  The plaintiff initiated action on 27 March 2015 against the 1^st defendant, whom he understood was his employer.  The plaintiff joined the 2^nd defendant (whom the 1^st defendant claimed was the true employer) by an application on 24 June 2015.

3. From around September 2013 onwards, there were discussions between the parties for the discontinuance of the claim against the 1^st defendant. There was negotiation regarding costs issues which was not resolved.

4. Finally, this court gave an order on 3 March 2016 for the plaintiff to discontinue the action against the 1^st defendant leaving the issue of costs to be argued.

THE MATTERS IN DISPUTE

5. The plaintiff’s case, in short, was that the 1^st defendant, Suen Yat Hau (“Suen”) has always held himself out to be the employer to him and his colleagues working in King Cheung Mirror and Glass Engineering (“King Cheung”).  The plaintiff has no written employment contract but it was Suen who met and agreed to employ him, Suen who instructed him to work, and Suen who paid his salary in cash.  Even after the injury, the plaintiff’s medical expenses and periodic payments were signed by Suen and bore King Cheung’s name.

6. Further, in the Labour Department Accident Report, the Direct Employer was stated as “King Cheung”. In “Form 2”, Suen signed (confusingly) himself as “Partner” and “King Cheung” as the employer. The chop that was used in various documents had the name of “King Chung” on it.

7. Also, by way of discovery later in the proceedings, the 1^st defendant revealed the plaintiff’s employee’s insurance (which did not cover the current accident).  This insurance policy was taken out under the name of King Cheung.

8. In summary, the plaintiff’s case is that he has never heard of the 2^nd defendant’s name, King Well Glass Products Company Limited (“King Well”) all this time. The 2^nd defendant’s name was only first mentioned after the accident in a letter dated 15 February 2014 from the 1^st defendant’s then solicitors.

9. Suen claimed that the reason for establishing the 2^nd defendant was for liability purposes, and yet the name “King Well” never appeared as the plaintiff’s employer in any documents.  Further, Suen also claimed that “King Well” did not hold any bank account for those 16 years since it was incorporated.

10. All these, plus other examples, raised the plaintiff’s suspicion whether King Well was nothing but a scam to avoid Suen’s liability as the real employer, and there was a big question on whether King Well would pay out at all.

11. However, when King Well settled the EC claim, this went some way to address the plaintiff’s suspicion of whether it would pay.

12. The 1^st defendant’s case is that the plaintiff was informed of this “arrangement” as long ago as 15 February 2014 in the letter mentioned above (during the EC claim).  The letter pointed out that King Well’s Business Registration number was put on “Form 2” in the Employees’ Compensation proceedings.  A search of the BR registration would have revealed that “Name of Business / Corporation” was King Well and “Business / Branch name” was King Cheung.

13. Mr. Lo, counsel for the 1^st defendant, submitted that there was nothing wrong with both Suen and King Well using King Cheung as the “trade name”.  King Well was established in 2000 so it was not a “cover” made up after the accident.  Further, the whole arrangement was explained in detail to the plaintiff in another letter dated 12 November 2014.  Even taking the plaintiff’s case to the highest and hold that he was reasonable to commence action against the 1^st defendant, the action should not be maintained “until the last moment”.

14. Thus, the main thrust of the 1^st defendant’s argument was that the claim against him should be discontinued earlier.

15. As for the plaintiff’s submission that the employee’s insurance was taken out by King Cheung and not King Well, Mr. Lo referred the court to a document titled “General Ledger” of King Well which appeared to showed that the sum paid as the plaintiff’s insurance premium was accounted for by King Well.

16. This is precisely the problem here: Suen claimed to have created an arrangement with King Well as the “true” employer but this was not made known to the plaintiff until after the accident.  This, by itself, would only contribute to the plaintiff’s distrust and suspicion.  And even then, the evidence supporting such an arrangement came from Suen’s own explanations or the “internal” accounting documents of King Well.  None of such evidence could be considered “conclusive”.  Having created all this, Suen now questions why, at an earlier stage, the plaintiff would not simply trust his words and his evidence.

17. Ms. Tjia, counsel for the plaintiff, submitted that to discontinue the claim was a difficult decision to make, but consideration was given, including the fact that the plaintiff was legally aided therefore public fund was at stake, and that the evidence of such arrangement could only be led from Suen so might not be easy to challenge.  In fact, the ability and willingness of King Well to pay remained questionable when it has not even a bank account.

18. I agree with Ms. Tjia.  The court is not conducting a mini‑trial here but looking at the evidence even now, one may have sympathy to the dilemma that the plaintiff is facing.  Under such circumstances, the plaintiff is not unreasonable to initiate the action against the 1^st defendant and the plaintiff cannot be criticised for the late decision in discontinuing the claim.

19. This confusing employment arrangement was entirely of Suen’s own making and, as such, this should be one of those rare circumstances that costs should not follow event.  The plaintiff is seeking no order as to costs, which is not unreasonable.

ORDER

20. I would therefore make the order that there be no order as to cost in the action between the plaintiff and the 1^st defendant, with the plaintiff’s own costs be taxed in accordance with Legal Aid Regulations with certificate to Counsel.