HKSAR v. GAMMON SKANSKA LTD AND ANOTHER

HCMA38/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.38 OF 2003

(ON APPEAL FROM KTS2904-5 OF 2002)

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J U D G M E N T

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1. The two appellants in this case were each summonsed with an offence contrary to regulations 10(2)(a) and 17(4) of the Electricity Supply Lines (Protection) Regulations made under section 59 of the Electricity Ordinance, Cap.406. The summons in each case read the same :

"On 14 September 2001 at the location of a construction site near Wing On Plaza, Salisbury Road, Kowloon, Hong Kong, carried out or caused or permitted another to carry out in the vicinity of an underground electricity cable works which were below ground level, and failed to ensure that all reasonable measures were taken to prevent the occurrence of an electrical accident or an interruption to the supply of electricity arising from those works."

Each appellant was convicted and fined $10,000. They both appeal their convictions.

2. The two appellants were participants in the joint venture, the Gammon Nishimatsu Joint Venture, undertaking work at the East Rail Extension Construction Site at Salisbury Road in Tsimshatsui. On 4 September 2001, there was an interruption to the electricity supply in the area because two underground cables lying approximately 1.6 metres below ground level were damaged by a worker as he was demolishing a concrete drainpipe.

3. Regulation 10(2)(a) provides that :

"(2) A person who

(a) carries out or causes or permits another to carry out in the vicinity of an underground electricity cable any works which are below ground level; or

...

shall ensure that all reasonable measures are taken to prevent the occurrence of an electrical accident or an interruption to the supply of electricity arising from those works."

4. The first two grounds of appeal may be dealt with shortly. The magistrate referred to the defendants being "equal shareholders" in the joint venture. The joint venture was an unincorporated association which does not have shareholders. The appellants claim that the magistrate's use of the word "shareholders" demonstrated that he had not understood the nature of the joint venture. I do not agree. He was not using the word in its legal sense and cannot have meant anything other than equal participants. That much is clear from the transcript.

5. The second ground is similarly lightweight. The magistrate referred to the two appellants jointly facing a charge. They did not. They each faced a separate summons but were tried together on the same evidence and that is what he meant.

6. Submitting such grounds of appeal is unhelpful, in my view, and does nothing to further an appellant's cause.

7. The third ground contends that the magistrate erred in finding that the machine which caused the damage was a mechanical excavator when he noted a discrepancy in the evidence about which of two machines may have been used at the time, and yet did not indicate how he resolved the discrepancy. It is not clear where the discrepancy arose but it seems, from reading the limited transcripts I have, to have come from the hearsay comments of someone who attended the scene later. At the trial, Mr Halkes representing the 1st appellant at both the trial and the appeal, appears at page 90 of the bundle to have accepted this. The discrepancy was a minor one, and the magistrate was well aware of it, having discussed it with the prosecution and Mr Halkes during the trial. I have seen copies of the photographs produced at the trial, and note photographs of both excavators and breakers. I cannot say with certainty which were referred to in the evidence. What is clear is that the magistrate made a clear finding of fact as to which machine caused the damage, and made that finding after he had heard from the operator of the machine and other witnesses. I am certainly not in a position to overturn such a finding of fact at this remove.

8. The fourth ground refers to the magistrate's phrase that the cable was damaged as "a result of the negligence of the joint venture" and the appellants then launch into a disposition about whether the magistrate was referring there to criminal negligence or referring to tortious negligence. He was, of course, doing neither. He was making a sensible observation about how the damage occurred but his phrase does lead to a further point : whether or not the magistrate found that all reasonable measures had been taken to prevent the interruption of the electricity supply by the works as required by the regulation 10(2). What he said was :

"... in all the circumstances I am satisfied beyond reasonable doubt that the cable was damaged as a result of the negligence of the joint venture and that this damage so caused led directly to an interruption in supply within the meaning of section 10(2)(a)."

He said nowhere in terms that he was satisfied beyond reasonable doubt that the cable was damaged because all reasonable measures had not been taken to prevent the interruption of electricity supply by the works.

9. There can be no doubt, however, that the magistrate was well aware of the requirements of the regulation for he said so at page 15 of the bundle :

"... In this case then the question arises as to whether the defendants took all reasonable measures within the meaning of section 10(2)(a)."

He goes on to make the finding that the machine used was a mechanical excavator, a finding which I referred to earlier. The relevance of that finding here is that it brings in paragraph 45 of the approved Code of Practice and by Regulation 16, such an approved code may be used in criminal proceedings to help establish that all reasonable measures had not been taken. The magistrate followed this with the finding that the worker was working within three metres of the underground cable and was therefore in breach of the Code of Practice. That finding does not itself prove that all reasonable steps have not been taken but it tends to establish that fact.

10. The magistrate continued with his observation, sensibly made, that quite apart from the Code, a mechanical excavator should not have been used in such close proximity to the cable, and that the cable should have been clearly marked on the ground. He found that this was not done and moreover that the worker was inadequately supervised.

11. The magistrate was well aware of the requirements of the Regulations and the findings he made demonstrated that he found that the appellants failed to ensure all reasonable measures were taken to prevent an interruption to the supply of electricity arising from the works. It might, with respect to the magistrate, have been clearer if he had said so in the plain words of the regulation but ultimately there can be no mistaking his meaning.

12. In the sixth ground of appeal, the appellants complain that the magistrate did not follow the judgment of a fellow magistrate, given in a similar case. He did not have to. The earlier decision was persuasive only and was not binding on him.

13. Grounds five, seven and eight concern themselves with who was the "person" who carried out the works, they concern themselves with who should have been prosecuted, the appellant companies, or the joint venture. The joint venture is an unincorporated association. It was not itself a limited company. In his Textbook of Criminal Law, 2nd Edition at page 977, Glanville Williams thought that an unincorporated association could not usually be guilty of a criminal offence because it is not a body which is regarded by the criminal law, although the professor would no doubt recognize that these days there are statutory exceptions to his comment (see, for example, the Factories and Industrial Undertakings Ordinance, Cap.59 where a "contractor" is defined to include a "firm").

14. The appellants say that the joint venture itself should have been prosecuted not the individual companies, but I am not persuaded that the joint venture, as it was set up in this case, is recognised by the criminal law. This view is supported by other authority than Professor Williams. The question of whether or not an unincorporated association can be prosecuted was considered recently by Stock J (as he then was) in Jiang Enzhu v. Lau Wai Hing Emily [1999] 3 HKC 8 where he commented :

"It is said that the fact of the unincorporated status of Xinhua posed a problem for the informant : Xinhua could not be prosecuted and therefore 'an individual had to be named as a defendant'. Mr Hoo suggests that the first premise, namely, that an unincorporated association cannot be a defendant to criminal proceedings, is flawed, in support of which argument he draws my attention to the definition of 'person' in section 3 of the Interpretation and General Clauses Ordinance as including 'any public body and any body of persons, corporate or unincorporate, and this definition shall apply notwithstanding that the word 'person' occurs in a provision creating or relating to an offence ....'. I do not think that the position thereby becomes clear cut. A similar provision in the New Zealand Crimes Act 1961 has drawn the comment that the provision renders it possible 'to charge two or more accused with an offence ... of conspiracy to defraud 'the public, or any person' where the 'person' was an unincorporated association. However, it would not be possible to charge an unincorporated association with an offence, whether on indictment or summarily. To convict an unincorporated association would be a legal nonsense, so, in that situation the context is inconsistent with such an interpretation. But of course, individual members of such a body can be prosecuted in their own names in respect of their own acts or omissions as members.' (See Adams on Criminal Law, section 1A, para.CA2.27.07)"

and I have also been referred to Lord Woolf's remarks in AG v. Able [1984] 1 All ER 277 at 286 :

"It must be remembered that the society is an unincorporated body and there can be no question of the society committing an offence."

Whilst it is true that the definition of "person" in the Interpretation Act of the UK is narrower than in the Interpretation and General Clauses Ordinance in Hong Kong, Stock J was aware of the local definition and indeed referred to it in the Jiang Enzhu case. Halsbury's Laws of Hong Kong, Vol.20, talk about joint ventures at paragraph 290.220, thus :

"There is no generally accepted definition of a joint venture. However, a joint venture may be defined for present purposes as any arrangement whereby two or more parties co-operate in order to run a business or to achieve a commercial objective.

This co-operation may take various forms, and may involve the running of a business on a long-term basis or the realization of a particular project. The business may be entirely new or it may be an existing business which it is believed will benefit from the introduction of a further participant. A joint venture is, therefore a highly flexible concept, and the nature of a particular joint venture will depend to a very large extent on its own facts and on the resources and wishes of the parties."

15. The appellants have urged upon me the view that this joint venture was a partnership. If that is so, then the summonses were correctly drawn. They prosecute the partners who were carrying on the business in the name of the joint venture. It seems to me that when criminal liability is being considered in this case, the work carried out at the site in the name of the joint venture was work carried out by the 1st and 2nd appellant companies.

16. The appellants point to the structure of the joint venture, the employment of a project director and supervisory board. The two companies had, they say, employed people to carry out the works and had employed safety officers. They urge upon me that the two companies were too far removed from what happened at the site to be criminally liable. I do not agree.

17. Joint ventures are, on occasions, set up for a particular project as was the one in this case. They may well have a short life. If the appellants' argument is correct, it would enable those responsible for such sites to interpose a barrier between the offences and those ultimately liable for them. A barrier which could be dismantled so soon as the joint venture finished its work, leaving no responsibility and worthless legislation. I do not believe that to be right either at law or in justice.

18. This is a strict liability offence. The two companies engaged in the works at the site and did so through the agency of the joint venture, and they were required to "ensure" that all reasonable measures were taken. The magistrate found that they did not do so, and he was perfectly entitled on the evidence before him to do that.

19. A final ground of appeal was not pursued at the hearing. The appeals are both dismissed.