XCHRX TSANG CHIN KEUNG v. EMPLOYEES COMPENSATION ASSISTANCE FUND BOARD

HCPI 161/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.161 OF 2001

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R U L I N G

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1. The plaintiff brings this claim against the Employees' Compensation Assistants Fund Board ("the Board") for payment of a judgment sum in the amount of HK$2,917,243 together with interests and costs which the plaintiff obtained on 9 October 1996 in HCA No.A4555 of 1991 against Hui Yuk Fui ("Mr Hui").

2. The defendant has taken out this present application by Summons to strike out the plaintiff's claim on two grounds - firstly, on the ground that the plaintiff failed to comply with an Unless Order of Master Kwan made on 9 January 2001 and secondly, on the grounds of abuse of process by the plaintiff.

3. I shall first deal with the 2nd ground, namely, the abuse of process.

4. In order to properly consider this ground, it is necessary to go into the history of this matter in some detail as background. In so doing it allows for the whole matter to be seen in chronological context.

Background

5. On 20 June 1988, the plaintiff injured his left hand and thumb on an electric saw inside premises on 20th floor, Block D, Kwai Chung Garden, Kwai Chung, New Territories ("the premises"). As a result of that injury to the plaintiff, a Form 2 was filed by Hung Kwong Glassworks to the Labour Department informing them of that accident and stating therein that the plaintiff was employed at the material time by Hung Kwong Glassworks, the sole proprietor of which being a Mr Lo Tat Kwong ("Mr Lo"). There is no dispute that Mr Lo had obtained Employees Compensation insurance cover. In the circumstances, employees compensation proceedings were brought against Hung Kwong Glassworks in ECC No.80 of 1989 in the District Court. These proceedings were brought by the plaintiff who had obtained Legal Aid.

6. In the employees compensation proceedings, the case was initially pleaded by the legal advisers of the plaintiff on the basis that Hung Kwong Glassworks was the employer of the plaintiff at the time of the accident. At the first hearing before W. Wong DJ, the plaintiff gave evidence that he was employed by Mr Hui at the time of the accident and not by Hung Kwong Glassworks. Once this part of the evidence was reached, Wong DJ adjourned the trial and gave leave to the plaintiff to amend the claim by adding Mr Hui as a second respondent.

7. Notwithstanding that and notwithstanding the plaintiff's instructions on the matter, Messrs Fairbairn Catley Low and Kong, the solicitors assigned by the Director of Legal Aid to act for the plaintiff in the employees compensation proceedings formed the view that it was unnecessary to join Mr Hui as a second respondent to the claim, but instead amended the claim to plead in the alternative that Hung Kwong Glassworks was the principal contractor of Mr Hui who was the direct employer of the plaintiff at the time he met with the accident. This amendment met with the defence that the plaintiff was, at the material time, an employee of Hung Kwong Glassworks but not an employee of Mr Hui.

8. After such amendments, the trial was heard de novo before Surman DJ. At the hearing held on 11 and 12 November 1991 the plaintiff in his evidence given in Court insisted that he was employed by Mr Hui on the date of the accident as a carpenter and had been so employed by Mr Hui for the last three or four years. The plaintiff also gave evidence that it was in the course of that employment with Mr Hui that he was using the electric saw and injured himself.

9. The respondents to the employees compensation case called as their witnesses Mr Lo, the proprietor of Hung Kwong Glassworks, his wife, Madam Lo, as well as Mr Hui. Madam Lo gave evidence that the plaintiff was employed by Hong Kong Glassworks one day before the accident. On the day of the accident, the plaintiff was asked to deliver glass panes to Mr Hui at the premises where the accident occurred and it was no part of the plaintiff's duty as an employee of Hung Kwong Glassworks to use the electric saw at the premises. In so using the electric saw, the plaintiff did so on his own. She also gave evidence that she had filled out the Form 2 to the Labour Department because the plaintiff had injured himself whilst he was employed by Hung Kwong Glassworks.

10. Mr Hui gave evidence that the plaintiff had been previously employed by him, but not any more on the day of the accident. He said that the plaintiff came to the premises to deliver glass panes on behalf of Hung Kwong Glassworks from whom he had ordered glass panes in order to carry out works contracted to him at the premises where the accident occurred. He said that after the plaintiff had delivered the glass panes to him at the premises, it was lunchtime and he went out to get two lunchboxes for him and the plaintiff. When he returned to the premises the accident had occurred and the plaintiff had already been taken away for medical treatment.

11. Mr Lo's evidence supported that given by his wife. He also gave evidence that he had previously permitted his friend Mr Hui to use his telephone number but not his business address although both the telephone number and his business address appears on a business card of Mr Hui.

12. Having heard this evidence, Surman DJ gave judgment on 9 December 1991 against the plaintiff. In the judgment, the Judge specifically found that the plaintiff was employed by Hung Kwong Glassworks on the day of the accident and that the plaintiff was asked to deliver glass to Mr Hui on that day. The Judge further found that the only contractual relationship between Hong Kong Glassworks and Mr Hui was the contract under which Hung Kwong was to deliver glass to Mr Hui and that the plaintiff had used the electric saw at the premises as a result of which he had injured himself. However, the Judge left open the question whether the plaintiff had used the electric saw on the direct or implied instructions of Mr Hui. Lastly, the Judge came to the conclusion that the plaintiff did not sustain the injury in the course of his employment by Hung Kwong Glassworks and therefore, dismissed the plaintiff's claim for employees compensation.

13. Thereafter, the plaintiff started proceedings being HCA No.A4555 of 1991 to claim common law damages for the injuries which he sustained in the same accident. Initially, those proceedings were commenced against both Hung Kwong Glassworks and Mr Hui as the 1st and 2nd defendants respectively. That claim was pleaded against both defendants solely on negligence and the employment relationship of the plaintiff with Mr Hui was not pleaded. Mr Hui did not enter an Acknowledgement of Service and interlocutory judgment upon such default was entered against Mr Hui with damages to be assessed on 20 July 1992.

14. Hung Kwong Glassworks, being the 1st defendant, filed a Defence which pleaded matters consistent with the defence raised by it in the employee's compensation claim earlier on.

15. When Messrs Hoosenally & Neo was re-assigned by the Director of Legal Aid to be the solicitors for the plaintiff in lieu of the former solicitors, not only was the claim discontinued against Hung Kwong Glassworks in HCA No.A4555 of 1991, but an application was also taken out to set aside the interlocutory judgment already obtained against Mr Hui. Leave was then obtained to amend the Statement of Claim to plead that Mr Hui was the employer of the plaintiff at the time of the accident. When Mr Hui failed to file a Defence to meet this amended claim by the plaintiff, interlocutory judgment was once more entered against him on 18 March 1996 with damages to be assessed.

16. Before any of the above steps were taken by Messrs Hoosenally & Co., they had written to the Board by letter of 18 August 1995 informing the Board of the proposed discontinuance of the plaintiff's claim against Hung Kwong Glassworks and putting the Board on notice of the intention to pursue the claim only as against Mr Hui and the possibility that the Board may have to satisfy whatever judgment they may obtain against Mr Hui.

17. On 17 September 1996, Messrs Hoosenally & Neo again wrote to the Board keeping them informed of the progress of the developments in that matter and enclosing copies of orders obtained as well as a copy of the interlocutory judgment obtained against Mr Hui.

18. On 18 July 1996 Messrs Hoosenally & Neo again wrote to the Board informing it of the hearing date fixed for the hearing of the assessment of damages against Mr Hui and requesting a settlement in order to save costs. A reply was received by the plaintiff's solicitors from the Board for the first time through solicitors acting for the Board by way of a letter dated 11 September 1996 requesting a Schedule of Damages in that matter for their consideration. A further letter from the Board's solicitors raising a number of queries with reference to the judgment of Surman DJ and requesting further evidence to support the plaintiff's claim that Mr Hui was his employer at the material time.

19. The assessment of damages took place on 17 September 1996 and final judgment was entered against Mr Hui for damages and interests assessed at $2,917,243 and costs on 9 October 1996. The Board did not participate at that assessment.

20. There is no dispute between the parties as to these occurrences stated above which makes up the background.

The abuse of process application

21. This ground of application to strike out the plaintiff's claim is in effect put on the footing of issue estoppel. The defendant is effectively saying that since the issue regarding who was the employer of the plaintiff on the date of the accident has been judicially and finally determined by Surman DJ in the employees' compensation proceedings, it is, therefore, an abuse of process for the plaintiff to issue the present action against the Board, the claim of which is premised upon the plaintiff's inability to recover from Mr Hui and who the plaintiff must prove to be his employer at the material time if he is to succeed in the present action; and that because that issue has already been determined against the plaintiff by Surman DJ, the plaintiff is estopped from re-litigating it in the present action.

22. On the other hand, Mr Bharwaney, counsel for the plaintiff, while not disputing that the plaintiff must prove in the present proceedings that Mr Hui was the plaintiff's employer at the time of the accident in order to succeed, submits that the plaintiff is not estopped from re-litigating that issue merely because Surman DJ had made a finding against the plaintiff's assertions in proceedings in which neither Mr Hui nor the Board were parties. He further submits that the plaintiff is not, in the present proceedings, estopped from alleging otherwise.

23. The 2nd point taken by counsel for the plaintiff is that there is now new evidence in the form of a statement from the owner of those premises in which the accident occurred saying that at the material time he had engaged Mr Hui to do decoration works in those premises but those decoration works did not include anything which would require the delivery of glass panes to those premises.

24. The 3rd point taken by counsel for the plaintiff is that it is too late for the Board to take these points when well before the assessment hearing in HCA No.A4555 of 1991 took place, the Board had been informed by Messrs Hoosenally & Neo, then acting for the plaintiff, of the possibility that the plaintiff will be looking to the Board to satisfy any judgment the plaintiff may obtain against Mr Hui in those proceedings yet the Board took no steps and allowed the plaintiff to obtain final judgment against Mr Hui for damages, interests and costs after the assessment hearing in those proceedings.

Decision

25. As for the 1st point whether estoppel applies in the circumstances of this case when looked at against its background, it must be recognized at once that this is not a case of cause of action estoppel nor the wider sense type of Henderson v. Henderson estoppel. Once that is recognized, the dispute narrows itself down to the pure form of issue estoppel. The issue being "whether the plaintiff was employed by Mr Hui at the time of the accident".

26. The classic formulation for issue estoppel is to be found in the words of Lord Keith in the case of Arnold v. Natwest Bank PLC [1991] 2 A.C. 93 at 105 where he said:

"Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open the issue"

27. This statement of the law as to issue estoppel is accepted by the defendant here. It is also common grounds that the parties to the employees compensation case were different to the parties in the present action.

28. The findings made by Surman DJ in the employees compensation case are as follows :

"Based on that summary and the evidence that I have heard from these 3 principal witnesses, I make the following findings:-

(1) that on 26/6/88 the Applicant was employed by the Respondent Co. to deliver glass to Mr. Hui;

(2) that that delivery of glass was the only contractual relationship between Mr. Hui and the Respondents that day;

(3) that the Applicant did deliver glass to Mr. Hui and whilst at the premises he used the electric saw either on the direct, or implied instruction of Mr. Hui;

(4) the operation of the saw by the Applicant was not in the context of any contractual agreement between Mr. Hui and the Respondent;

(5) although the Applicant was employed by the Respondent the accident did not arise out of or in the course of that employment."

29. It is abundantly clear from the above findings that Surman DJ did not make any finding of fact that the plaintiff (or Applicant as he was referred to in that case) was not employed by Mr Hui at the time of the accident. Nor was it necessary for Surman DJ so to find because the employees compensation case named only Hung Kwong Glassworks as respondent. Mr Hui was not sued in the employees compensation case. Even on the alternative case framed, it was sufficient for Surman DJ to have found that the only contractual relationship between Mr Hui and Hung Kwong Glasswork was the delivery of glass that day and no other contractual agreement existed between them which would have involved the operation of the electric saw by the plaintiff (Applicant). As such there was no need for Surman DJ to decide the issue whether the plaintiff was employed by Mr Hui and he did not do so as can be seen from his express findings quoted above.

30. Moreover, I do not subscribe to the suggestion by counsel for the defendant that it should be inferred from the express findings of the learned judge that he must have determined the issue in question against the plaintiff. My own views is that if that was an issue that the learned judge needed to decide, he would have made express findings on it and not leave it to be inferred from his other findings in the case.

31. For the reason given above, I am of the view that the issue "whether the plaintiff was employed by Mr Hui at the time of the accident" was not an issue which was decided by Surman DJ in the earlier proceedings. Accordingly, issue estoppel does not arise and the ground of abuse of process taken by the defendant must fail.

32. There is no need for me to deal further with all the other arguments of law put before me by the parties in relation to abuse of process. This one point sufficiently disposes of the point of issue estoppel in this case.

Non-compliance with Unless Order

33. Initially, the claim by the plaintiff against the Board was brought in proceedings being HCPI No.1287 of 2000 (" the 1st Action"). The Writ in the 1st Action was issued on 5 October 2000 with a general Indorsement of Claim. The Statement of Claim, however, was not filed within the time prescribed by the rules and despite repeated reminders and indulgence granted by the defendant. On 6 December 2000 the Registrar ordered, upon application by the defendant, that the Statement of Claim be filed within 28 days of that order. The plaintiff again failed to comply. Upon a further application by the defendant, Master Kwan made an Unless Order on 9 January 2001 that unless the plaintiff file and serve upon the defendant the Statement of Claim by 4.00 p.m. on 16 January 2001, the plaintiff's claim in the 1st Action against the defendant be dismissed with costs to the defendant. That Unless Order was made by the consent of the plaintiff in the 1st Action.

34. Despite the Unless Order, no Statement of Claim was filed or served before the deadline imposed and the defendant applied for judgment on 17 January 2001. On 18 January, the solicitors for the plaintiff attempted to file and serve the Statement of Claim. The defendant did not give their consent to the late filing and eventually judgment was entered for the defendant.

35. On 6 February 2001 the same solicitors commenced this present action in which the plaintiff makes the same claim against the same defendant for the same relief. The defendant's application was issued on 6 March 2001.

36. It is against that background that the defendant now seek to strike out this claim on the grounds of non-compliance with the Unless Order of Master Kwan in the 1st Action.

37. By way of explanation, the solicitors for the plaintiff have filed an affirmation deposing to the fact that it was due to a breakdown in communication between the solicitor and his clerk in his office which resulted in their failure to file the Statement of Claim in the 1st Action within the time ordered by the Unless Order and that such failure was not a deliberate flouting of the Unless Order of the Court. The plaintiff's solicitors take full responsibility for the "mistake".

38. There are clear authorities to the effect that a failure by a party's solicitors (or for that matter the solicitor's office) to comply with a peremptory order of the court is no excuse for not striking out that party's claim or defence, however, I do accept in the present case, that such failure was not a deliberate flouting of the Unless Order and further that the plaintiff's solicitors had every intention to comply with that order but for the breakdown in communication between the solicitor and his clerk. In those circumstances, I am prepared to exercise my discretion in not striking out the present action.

Order

39. The defendant's application to strike out the plaintiff's claim be dismissed with costs (order nisi). The plaintiff's own costs to be taxed in accordance with Legal Aid Regulations.