GURDIAL SINGH v. YAT FAI CONSTRUCTION AND ENGINEERING CO LTD AND OTHERS

DCEC518/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 518 OF 2007

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D E C I S I O N

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1.  There are 2 summonses before me this morning: the first one is by the Applicant for extension of time to accept the Respondents' payments into court made on 24 July 2007 and 25 September 2007, and the second one is by the Respondents for leave to withdraw the payments into court and for the dismissal of the claim as the quantum of the Applicant's claim cannot possibly exceed the amount of the part payment already received by the Applicant. 

2.  The parties agree that I should first deal with the Applicant's application for extension of time to accept the payments into court and the Respondents' application for leave to withdraw such payments into court.  These 2 applications are, indeed, two sides of the same coin.

3.  The main consideration for these 2 applications is whether the court should allow the Respondents to withdraw the payments into court.  The principle for this sort of application has been succinctly set out in Hong Kong Civil Procedure 2008, vol. 1, paragraph 22/1/19:

“Once a payment has been paid into court under the rule, it cannot be withdrawn without the leave of the court, para. (3). 

If the defendant can show good reason, e.g., the discovery of further evidence which puts a wholly different complexion on the case, or a change in legal outlook brought about by new judicial decision, the court may grant leave for the payment out to him of the whole or part of the money paid in.  Money paid into court by mistake or on a mistaken meaning of the statement of claim may be ordered to be withdrawn by the defendant. 

The court has a complete discretion, to be exercised judicially, whether to allow a payment into court to be paid out back to the defendant, and if so, on what terms.  The test to be applied is “whether there is a sufficient change of circumstances since the money was paid in to make it just that the Defendant should have an opportunity of withdrawing or reducing his payment”.  The court will so order where since the date of the notice of payment in the character of the litigation has entirely changed.” (with the references to cases omitted)

4.  Mr Clement, solicitor for the Applicant, submits that there was no material change in circumstances which justifies the Respondents to withdraw the payments into court.  The Respondents had received the Applicant's pleading, supporting documents and medical report before they made the payments into court.  They were in position to assess the quantum of the Applicant's claim by that time and the nature of the Applicant's claim has all along remained the same.  Hence, in such circumstances, it is not appropriate for the court to allow the Respondents to withdraw the payments into court.

5.  On the other hand, Mr Wong, solicitor for the Respondents, relies heavily on the expiry of the appeal period against the Form 7 Certificate in February 2008 as a material change of circumstances.  As laid down in the authoritative decision of Ng Ming Chong v MTR Corp. [1997] 2 HKC 413, an assessment made by the Employees' Compensation (Ordinary Assessment) Board (“the Board”) pursuant to section 16F of the Employee Compensation Ordinance, Cap. 282 (“the ECO”) would be binding on the court in assessing the compensation for permanent partial incapacity under section 9 of the ECO.  The relevant parties have a right to ask the Board to review the assessment or to lodge an appeal against such assessment to the court within 6 months of the issuance of a certificate.  In the present case, there was no application for such review and the period for the appeal to the court expired on 14 February 2008.  In such circumstances, the court is bound by the assessment made in the certificate.  Since the percentage of loss of earning capacity assessed by the Board was only 0.5%, the quantum of the Applicant's claim would be relatively small.  In such circumstances, the Respondents have a good case of arguing that the Applicant's claim cannot possibly succeed as the quantum of his compensation is less than the amount of the advance payment already received by him.

6.  In my judgment, the expiry of the appeal period against the assessment made by the Board is a material change of circumstances in the present case.  In most employees' compensation claims, the claims for compensation for permanent partial incapacity under section 9 are the main battlefields of the litigation.  In determining the quantum of such claim, the court has to assess the percentage of loss of earning capacity suffered by the injured worker as a result of the accident.  In most cases, the injured worker will launch an appeal against the assessment made by the Board, either on the ground that the assessment made by the Board is erroneous or that, under section 9 (1A) of the ECO, the assessment cannot reflect the true loss of earning capacity in the special circumstances of the relevant worker.  The injured worker may also produce further medical reports in support of his claim.  These were exactly the circumstances facing the Respondents when they made the payments into court in 2007. 

7.  However, the circumstances changed after the expiry of the appeal period.  The assessment would be binding on the court and the quantum of the Applicant's claim would be relatively small in view of the assessment made by the Board.  The Applicant can always launch an application for extension of time to appeal against the assessment made by the Board under section 18(2) of the ECO.  However, the Applicant may not succeed in such application.  Hence, after the expiry of the appeal period, the Respondents would have a better case to contest the Applicant's claim and this alone justifies the court to grant leave to them to withdraw the payments into court. 

8.  In an attempt to salvage the sinking ship, Mr Clement relies on the fact that the Applicant's solicitor first wrote to the Respondents' solicitors on 15 February 2008 for their consent to allow the Applicant to accept the payments into court out of time.  However, this attempt was made after the expiry of the appeal period on 14 February 2008.  In any event, the issuance of the letter cannot alter the fact that the Respondent did have a much better defence after the expiry of the appeal period, and this, in my judgment, amounts to a material change of circumstances.

9.  Based on the aforesaid, I dismiss the Applicant's application for extension of time to accept the payments into court and I allow the Respondents' application to withdraw such payments.