XCHRX Ng Ming Chor v. Pui Hing Construction Co. Ltd. and Others

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINSTRATION REGION

CIVIL ACTION NO. 496 OF 1996

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Decision

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1. The Applicant filed an application for employees' compensation against the Respondents who filed an answer denying liability. On 9 March 1998, the Respondents paid $294,000 into court and gave notice of the payment in to the Applicant in the usual terms of Form 23 of the Rules of the High Court as used in the case of payment into court under Order 22. The notice reads:

Take notice that the 1st, 2nd 3rd Respondents have paid HK$294,000.00 inclusive of interest into Court. The said sum of HK$294,000.00 is in satisfaction of all the causes of action in respect of which the Applicant claims in this action and is paid after credit has been given to the sum of $177,324 being advanced payments made to the Applicant by the 1st, 2nd and 3rd Respondents.

2. With a view to accept the payment, the solicitors for the Applicant drafted a consent summons accepting the payment in for the approval of the Respondents' solicitors. The terms of the acceptance is essentially along the lines of the terms of the payment in, i.e. in satisfaction of all the causes of action. However, solicitors for the Respondents proposed certain amendments, including addition of the words "on a without admission as to liability basis".

3. This was rejected by solicitors for the Applicant as they took the view that at least one of the respondents must have admitted liability by making the payment. After exchanges of correspondence which were unable to resolve their differences, the solicitors for the Applicant threatened to take out a summons for order for payment out if no agreement could be reached, which they eventually did. In the summons, they seek an order that the Applicant be at liberty to accept the payment in full and final discharge and satisfaction of all causes of action under the Employees' Compensation Ordinance, which is essentially in the same term as the Respondents' notice of payment into court..

4. Miss Kwan for the Respondents opposed to the application. She submitted that under section 18A of the Employees' Compensation Ordinance, compensation and any matter arising out of the proceedings in respect of such claims shall be determined by the District Court and the Court should not leave the issue of liability undetermined by merely determining the quantum. Her approach is difficult to understand. She was desirous of settling the matter by payment out to the Applicant and objected to have judgment entered against any of the respondents but insisted that the Court should not leave the issue of liability undetermined. That is also different from the stand she took in her previous correspondence with the Applicant's solicitors. I believe she meant that the issue of liability should be determined in favour of the respondents. If I should determine the issue of liability in favour of the respondents, it is certainly wrong for me to order payment out to the Applicant. I can only do so if I consider the payment into court as if it were a payment made under Order 22.

5. Formerly, Mr. Leung on behalf of the Applicant argued that the payment should be treated as a payment under Order 22 and took the view that it was not necessary for the Court to determine the issue of liability and urged me to order payment out to the Applicant. However, when Mr. Leung appeared on behalf of the Applicant he re-stated the Applicant's position that the Applicant does not accept that the settlement was reached without admission of liability, but was also desirous to accept the payment.

6. Even though the notice of payment into court used by the Respondent is similar to the prescribed form used under Order 22, I do not consider the payment in which was made under that Order because that Order applies to action for a debt or damages. Employees' compensation is neither a debt nor damages. It is a statutory claim as defined in section 3 of the Ordinance, which provides for various heads of claims, including compensation for permanent or temporary, total or partial incapacity and medical and funeral expenses. Section 3 also distinguishes compensation from damages and defines "damages" as meaning any damages recoverable by an employee independently of this Ordinance in the case of personal injury to the employee by accident arising out of and in the course of his employment and any interest payable on such damages. Hence I consider the rules under Order 22 inapplicable for payment into court in connection with a claim for employees' compensation.

7. Mr. Leung referred me to Rule 20(1) of the Employees' Compensation (Rules of Court) Rules which provides that "a respondent from whom compensation is claimed may pay into court a sum which is considered by him to be sufficient to cover his liability." He submitted that payment made under this rule must include an admission of liability.

8. Rule 20 is the only rule which covers payments into court in connection with employees' compensation proceedings. Apart from the phrase "to cover his liability", it is silent as to the effect of the payment in, except as regards costs. Payment into court has been a well established practice. By 1948, a statement as to whether liability was admitted or denied was no longer required. Impliedly, the payment was made without admission of liability. In the words of Devlin, L.J. in A. Martin French v. Kingswood Hill Ltd., [1961] Q.B. 96 "a payment into Court is simply an offer to dispose of the claim on terms. The payment in implies no admission about the merits of the cause of action; there has been no adjudication on it, and therefore no estoppel is created." The same practice has been imported into the Employees' Compensation Ordinance albeit with the addition of the words "to cover his liability." However, I do not consider these words as wide enough to displace the concept of payment without admission of liability which has been associated with the practice for such a long time. In practice the majority of claims for compensation are settled presumably because of compulsory insurance. Very often, these claims are settled without admission of liability. This is to ensure a speedy and costs saving disposal of the compensation claims but without prejudicing the parties' position in relation to the common law claim that sometimes follow. To hold otherwise would require the parties to embark on a course of unnecessary and costly litigation on the issue of liability, even though the parties have no dispute on quantum and are consent to pay and to receive the compensation. Had it been the intention that payment into court includes an admission of liability, it would have been more expressly provided in the rule. In the circumstances, I consider payment into court under Rule 20 has the same effect as a payment under Order 22. The payment does not imply an admission of liability.

9. I now turn to the Applicant's application before me. Miss Kwan objected to the application on the ground that the court should not grant an order for payment out leaving the issue of liability undetermined. I have decided that the payment in under Rule 20 has the same effect of a payment in under Order 22. The whole purpose of the payment in is to dispose of the action without having to decide on the merits. I cannot see why the question of liability could not be put aside as a result of payment in. The Respondents made the payment in on the terms as stated in the notice, i.e. in satisfaction of all the causes of action in respect of which the Applicant claims in this action. This is a payment in without admission of liability. As the Applicant is now seeking an order to accept the payment basically on precisely the same terms as the terms specified in the notice of payment in and other ancillary orders such as order for payment out and legal aid taxation, I cannot see any reason for refusing the application.

10. Miss Kwan asked for costs of the application. The application would have been unnecessary had it not been for the erroneous view taken by the solicitors for the Applicant as to the effect of payment into court. Equally, the Respondent's solicitors should not have contested the application for payment out for reasons as explained in the preceding paragraph. Hence, I make no order as to costs.