LU GUO XIANG v. HONG KONG MING WAH SHIPPING CO LTD

   HCPI 254/2006

   IN THE HIGH COURT OF THE

   HONG KONG SPECIAL ADMINISTRATIVE REGION

   COURT OF FIRST INSTANCE

   PERSONAL INJURIES ACTION NO. 254 OF 2006

-----------------------------

BETWEEN

-----------------------------

-------------------------------------------------------------------

REASONS FOR JUDGMENT (NO. 3)

-------------------------------------------------------------------

Background

1.  On 17 December 2008 I gave judgment for the plaintiff on liability against the defendant. On 9 January 2009 I handed down my reasons for judgment (No. 1).

2.  On 10 December 2009 I handed down my judgment (No. 2) concerning the liability of the defendant under the ITF Contract.

3.  There are two issues involved in this judgment (No. 3), namely :

(1)  the settlement agreement;

(2)  discovery.

Settlement agreement

4.  On 17 July 2009 the defendant further re-amended its defence. In the new defence the defendant pleaded that there was a legally binding compromise agreement between the parties at the meeting held on 6 January 2006 that the sick pay payable by the defendant to the plaintiff under Clause 17 of the ITF Contract was US$22,338.00. The issue before me is whether this alleged settlement agreement is a liability issue which should be raised at the trial on liability or whether it is an item under the second stage of assessment of damages.

5.  The claim of the plaintiff under this item was pursuant to Clause 17 of the ITF Contract which provided that :

“  Sick Pay

§17

When a Seafarer is signed off and landed at any port because of sickness or injury, her/his wages shall continue until s/he has been repatriated at the Company’s expense or has arrived at her/his home or place of her/his original engagement, whichever place is more convenient for the Seafarer.  Thereafter s/he shall be entitled to sick pay at a rate equivalent to her/his basic wages and subsistence allowance (as per Article §25) while s/he remains sick up to a maximum of 112 days.  However, in the case of injury the sick pay shall be paid until the injured Seafarer has been cured or until the incapacity has been declared to be of a permanent character.  Proof of her/his continued entitlement to sick pay shall be by submission of satisfactory medical certificates.  At the time s/he leaves the Ship the Seafarer shall be paid an advance of her/his sick pay for the estimated number of days certified by a Doctor for which s/he is expected to be sick or injured.”

6.  In effect the seaman would receive full monthly payments after sickness or injury until he has been repatriated back home. Then he will receive sick pay at a different rate which would be his basic wages together with subsistence allowance. This will continue until there was a declaration made by a medical certificate that his incapacity has become permanent or his injury has been cured.

7.  The effect of the settlement agreement was that the claim under this item would be discharged by the defendant’s payment in the sum of US$22,338. The original minutes of 6 January 2006 stated as follows :

「  1、雙方同意病假工資和傷殘賠償分開處理，船公司在無條件的情況下一次性發放病假工資(一年零五天)共USD22,338作為按照TCC COLLECTIVE AGREEMENT (1 JAN 1998) CL.17 SICK PAY的最終解決。」

Since this was meant to be a full and final settlement of the plaintiff’s claim for sick pay under Clause 17 of the ITF Contract, this should be pleaded as a defence to the defendant’s liability thereunder.

8.  However Ms Selina Lau, counsel for the defendant, pointed out that in my Judgment (No. 1) in paragraphs 37 to 40, I had found that the cause of action for sick pay would not have accrued until Dr Chun on 17 October 2008 assessed that the plaintiff’s injury was of a permanent character under Clause 17. Dr Chun was jointly appointed by the parties in face of the requirement of a doctor to be appointed by the ITF under Clause 21. In my judgment I considered that there was no question of any time-bar regarding the ITF claim since that item is under sick pay, the cause of action did not accrue until the certificate was issued on 17 October 2008, and it was therefore unnecessary for the plaintiff to rely on the alternative as a last resort that his claim is limited to six years counting back from the date of Dr Chun’s assessment on 17 October 2008 or six years counting back from the filing of the Re-Amended Statement of Claim on 21 November 2008.

9.  Ms Lau pointed out that the settlement agreement was only relevant if the defendant will succeed in the appeal on liability to be heard on 28 April 2010 before the Court of Appeal in respect of this part of my judgment on the defendant’s liability under Clause 17. In other words, if my judgment is upheld by the Court of Appeal, the settlement agreement would not come into play at all.

10.  Be that as it may, the limitation of the plaintiff’s entitlement under the sick pay provision is clearly, to my mind, a liability point. By the alleged settlement the parties agreed to put an end to the defendant’s liability in the amount of US$22,338. This should be raised in the first part of the trial on liability. It is therefore in any event too late for the defendant to raise the alleged settlement well after the trial on liability.

11.  Further, Mr Tim Kwok counsel for the plaintiff pointed out that the stance of the defendant at the trial on liability was that all negotiations between the two parties were made on “without prejudice” basis. In fact counsel for the defendant at that time submitted in paragraphs 25 and 28 of his written submissions dated 12 December 2008 that :

“Fu [Fu Ying] also testified that for all those meetings (November 2003 and January 2006) and letters in exchange with P or his wife, they were made on ‘without prejudice’ basis.  Such was communicated to P over the phone and that was the understanding throughout the entire negotiation process …

Submit the evidence is in favour to the effect that the negotiations and letters were on without prejudice basis between the parties and therefore even if upon proper construction of the documents there was acknowledgement of the claims, such acknowledgement should not be binding on D.”

12.  The defendant therefore could not have argued the case on the basis that the negotiations were made not on without prejudice basis. In this respect in my Judgment (No.1) I found that those letters written by the defendant between the period of 22 October 2001 up to 27 January 2006, constituted acknowledgement of the plaintiff’s claim and the time limitation began to run afresh for the ITF claim pursuant to section 23(3) of the Limitation Ordinance.

13.  In fact the first document stated to be made on without prejudice basis was from the defendant’s lawyer in Guangzhou dated 19 July 2005. I therefore do not consider that all the letters written beforehand were on without prejudice basis (see paragraphs 31 to 35 of my Judgment (No.1)). In any event I am persuaded by the case of Bradford & Bingley plc v Rashid [2006] 4 All ER 702 where the House of Lords decided that without prejudice documents treating the debt as an undisputed liability and leaving the extent of the liability to be ascertained are not protected by the without prejudice rule for the purpose of section 29(5) and (6) of the Limitation Act 1980 (which is similar to our section 23(3) of the Ordinance).

14.  It is therefore not open to the defendant now to put a new case inconsistent with his original case.

15.  In the end I disallow the amendment in paragraph 26C(ix) and the defendant is not allowed to rely on the alleged compromised agreement between the parties on 6 January 2006. The costs in respect of this issue shall be to the plaintiff in any event.

Discovery

16.  The defendant by way of summons applied for discovery of certain documents in three categories from the plaintiff. It is evident from the correspondences between the parties that the plaintiff is not objecting to the discovery sought by the defendant. The plaintiff was only asking for time because of the coming appeal on 28 April 2010. The plaintiff’s solicitors would like to concentrate on the appeal and of course if the appeal is allowed, all this discovery will be superfluous. In any event there will be ample time for making discovery between April and September when the assessment of damages will be heard. The plaintiff now lives in Guangzhou and it will not be straightforward to obtain instructions and original documents from the plaintiff himself.

17.  However there is one document called “海員服務簿”, which is translated as “Seaman’s Record Book”, of the plaintiff which the defendant would require urgently. I therefore ordered discovery of this document on or before 9 April 2010. All the other parts of the summons are adjourned sine die with liberty to restore with costs of the summons reserved.