LAI CHI PON v. TOTO STEEL & IRON WORKS LTD. and Others

1995, No. P.I.1149

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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Facts

1. This is a trial on liability. The Plaintiff was the employee of the 3rd Defendant who was the sub-contractor of the 1st Defendant. The 1st Defendant was the principal contractor of a work site ("the work site") in Ocean Terminal, Kowloon, Hong Kong. The work site was a shop under decoration.

2. On 20th January 1987, the Plaintiff was instructed to plaster the outside of a fire barrier. The fire barrier consisted of fibre boards fixed to a steel frame. The fire barrier was constructed vertically above the frontage of the shop and facing the pedestrian mall. To gain access to the fire barrier, the Plaintiff had to erect his own scaffold and working platform using materials available at the site. At the time of the accident, the shop front had not been installed with glass panels. Wooden hoarding was built around the exterior of the shop and the workers engaged in the decoration work had to work inside the hoarding. The hoarding was made from plaster boards which were nailed to wooden beams secured to the floor. The hoarding was not secured to anything at the top. The distance between the hoarding and the bottom railing of the glass panels at the shop front was about 1'5". The platform was assembled from two 'A' shaped metal ladders, each about 7 or 8 feet high. These were placed at right angles to the hoarding. On the top of each ladder a wooden plank was placed, with one end resting on the ladder and the other on the top of the hoarding. The planks were tied to the ladder using wire string. The planks were not secured to the top of the hoarding. Each of the planks were 4 inches wide and 4-5 feet long and 2 inches thick. Across the top of these two planks another wooden plank was placed, which was to be the working platform. This plank was of similar size to the other two planks, and overlapped them. All the planks were nailed together and the top of the hoarding was about 2-3 inches above the top of the two ladders so there was a slight slope. The floor of the shop had not yet been concreted or plastered. It was quite rough and the Plaintiff used a hammer to level the area where the legs of the two ladders rested. However, despite this, the ladders still wobbled slightly.

3. The Plaintiff who built this platform with another co-worker were not supervised in the building of the platform. They were not told by the Defendants to do it any other way, nor were they given anything else to use. The Plaintiff had never assembled such a platform before and he made it up as best as he could to suit the circumstances and from what was available at this construction site. The Plaintiff could not have the ladders placed between the hoarding and the bottom railing due to the narrow space.

4. While the Plaintiff was plastering, the ladders toppled backwards and he fell down and landed on the ground. His back hit against some pieces of metal which were lying around on the ground and he sustained serious injuries.

Employer's duty

5. The 3rd Defendant, as the employer of the Plaintiff, was required to provide, inter alia, a safe system of work, effective supervision and a safe place of work: Wilsons and Clyde Coal Co. v. English [1938] AC 57. The duty of care is personal and non-delegable. InGeneral Cleaning Contractors Ltd. v Christmas [1953] AC 180, Lord Reid said at 194:

"It is the duty of the employer to consider the situation, to devise a suitable system, to instruct his men what they must do and supply any implements that may be required ... No doubt he cannot be certain that his men will do as they are told when they are working alone. But if he does all that is reasonable to ensure that his safety system is operated he will have done what is bound to do."

6. An employer cannot expect his workmen to lay down and operate a system for themselves. Lord Oaskey said in General Cleaning Contractors Ltd. v. Christmas [1953] AC 180, 190:

"Workmen are not in the position of employers. Their duties are not performed in the calm atmosphere of a boardroom with the advice of experts. They have to make their decisions on narrow window sills and other places of danger, and in circumstances in which the dangers are obscured by repetition."

Unsafe system of work

7. It is clear that the makeshift scaffold and working platform were unsuitable and unsafe for working at height. Dr Jurfi, a safety expert, stated that the safe system of carrying out the work of plastering the fibre boards of the fire barrier would be any one of the following :

i. Plaster the fibre boards on the ground and then install them in position on the steel framework; or

ii. Move the timber hoarding outwards to provide sufficient space for the steel ladder and work from the ladder. The ladder in this case should be at least 4.5m (14 ft. 9 ins.) high; or

iii. Erect a tubular steel or bamboo scaffold and working platform near the timber hoarding and work from the top of the working platform.

8. As to these recommendations it should be noted that it was the usual practice to plaster the boards after they had been fixed in position otherwise when they were put in position some of the plasters might be knocked off. The timber hoarding was erected by the main contractor at the work site and it would not be reasonably practicable to have it removed. Furthermore, the hoarding was required to protect the pedestrians in the shopping mall.

9. The construction of a tubular steel or bamboo scaffolding and working platform near the hoarding board would have been the safest and most obvious system of work, but the Plaintiff was never provided with the necessary materials nor instructed to construct such a platform. Furthermore, the Defendants should ensure that the makeshift scaffold constructed by the Plaintiff should be securely fastened by instructing a co-worker to hold onto the ladders. This was not done because there was no worker available at that time.

10. The 3rd Defendant failed to provide a system of work to the Plaintiff. He could not rely on the skill and experience of the Plaintiff so as to discharge his duty of care. By leaving the construction of the working platform to the Plaintiff, the 3rd Defendant was in breach of his duty of care to the Plaintiff as an employer.

Liability of the 1st Defendant

11. The 1st Defendant is the principal constructor of the work site. The inadequacy of the scaffold and the working platform was or ought to have been obvious to the 1st Defendant or its foreman.

Breach of statutory obligations

12. Both the 1st and 3rd Defendants were in breach of the Construction Site (Safety) Regulations namely:

"iii. Section 38B

Failed to provide, place and keep in position for use and properly maintained either scaffolds or, ladders or other means of support, all of which shall be sufficient, strong and suitable for the purpose."

iv. Section 38C

Failed to ensure that the scaffold was erected under the immediate supervision of a competent person and by competent workmen possessing adequate experience of such work.

v. Section 38D. (1) (a).

Failed to ensure that every scaffold provided on the construction site and every part thereof was of good construction, made of strong and sound materials, and free from patent defects.

vi. Section 38D. (2)

Failed to ensure that the scaffold was kept so fixed, secured or placed in position as to prevent accidental displacement."

Defendants liable

13. I find that liability has been established against the Defendants.

Contributory negligence

14. The Defendants bear the burden of proving contributory negligence of the Plaintiff. Since they have not contested the hearing, this is no longer a live issue. In any event, I am satisfied that the Plaintiff was not guilty of any contributory negligence because the Defendants never provided the Plaintiff with any suitable working platform and thus requiring the Plaintiff to improvise an unsafe working platform. In Machray v Stewarts and Lloyds Ltd [1964] 3 All ER 716, 721E where McNair J. Stated :

"... here I am dealing with a man who is skilled in this kind of operation, a man who, by his own admission, knows the right way to do the work and who would not expect in this rigging operation to be told by his charge-hand how to do the work. Nevertheless, he does use a method which, as I put to him, must have been plainly a method which, if not palpably or obviously dangerous, was quite obviously less safe than the method which he would have preferred to use. On the other hand, when I find a workman, an employed man, adopting a course of conduct not for the sake of saving himself trouble but in order to get on with his employer's business, and I find that he has been prevented from doing the work in the way in which he would have preferred to do by the employer's breach in not providing him with the proper tackle, I am very slow to put any blame on him and I do not feel that, although the dangers of what I have called the make-shift arrangement become very apparent ... they were or ought to have been so apparent to the skilled rigger at the time as to necessitate that I should visit him with any responsibility for the accident. ... Accordingly, in my judgment, the plaintiff has succeeded in establishing a 100% liability."

This case was applied in Pilling v Matto (1973) C.A. 99, digested at U11, p.136 of Bingham's Negligence Cases (4th ed).

Conclusion

15. Accordingly there shall be judgment for the Plaintiff on liability against the 1st and 3rd Defendants. The Plaintiff is entitled to costs nisi of the action in respect of liability.

Employees' Compensation Assistance Fund Board

16. At my request, the Employees Compensation Assistance Fund Board ("the Board") attended court and explained its position in relation to the present case. The courtesy of the Board is appreciated. I made the request in order to ascertain the position of the Board since the outcome of the case would have a effect on the Employees Compensation Assistance Fund ("the Fund") administered by the Board. The 1st Defendant was insured, but its insurer, the 2nd Defendant, is repudiating liability under the insurance policy. The 1st Defendant is apparently no longer trading. The 3rd Defendant, who I find to be the true employer of the Plaintiff, had no insurance coverage for his employees. As it turned out, the 1st Defendant and the Personal Representative of the 3rd Defendant did not attend the hearing.

Statutory scheme

17. Mr Horace Wong, who appeared on behalf of the Board, informed the Court that the Board had considered the position but decided not to participate in these proceedings. Mr Wong also addressed me on the statutory scheme as provided in the Employees Compensation Assistance Ordinance ("the Ordinance"). Mr Wong submitted that the Board is intended to serve as a last resort for obtaining payment of compensation or damage legally awarded to employees. In the case of applications by employee, only after he has established liability against the employer and has taken all reasonable proceedings to recover from the employer : s.16(1), (2) and (3). In the case of applications by employers, only after the insurer has been shown to be insolvent : s.17 and 18.

18. The Ordinance does not envisage the Board participating in the private litigation of the parties save in the specified circumstances provided under s.25 where there would be a statutory assignment of the rights and liabilities of the employer to the Board. There are no provisions for notice of proceedings to be given to the Board (contrast the position of insurers under the Employees' Compensation Ordinance or the position of Motor Insurance Bureau under the First Fund Agreement). There is no statutory basis for the Board to represent a defendant and conduct the proceedings on his behalf.

19. On the other hand, the Ordinance provides for an independent power on the part of the Board to make inquiries but only after it has received an application under Part IV (s.21(2)). It is not envisaged by the legislation that the Board will actively take part, and in so doing commit the Fund to expenses (sometimes very substantial expenses), in litigation to which it is not a party under s.25.

20. Section 25 is the only statutory provision whereby the Board can take part in proceedings. Section 25 provides that -

"(1) This section applies to any claim against an employer for compensation or damages where-

(a) the employer -

(i) cannot be identified or, if identified, cannot be found;

(ii) is insolvent;

(iii) is dead or in the case of a company, has been dissolved, wound up or struck off the register; or

(iv) for any reason, cannot be served with proceedings; and

(b) no policy of insurance is known to be in force in relation to the employee.

(2) Subject to this section, proceedings for any claim against an employer to which this section applies may issue against the Board as if it were the employer.

(3) Proceedings against the Board under this section shall not issue unless the court is satisfied, on application made on notice to the Board, as to the matters specified in subsection (1)(a) and (b).

(4) Where proceedings are brought against the Board under this section, the rights and liabilities of the employer in respect of the compensation or damages the subject of the proceedings are vested in and transferred to the Board."

21. In Fok Por v. Sum Shuk Ching ECC No.172 of 1991, judgment 25th March 1992, H.H. Judge Downey stated that -

" In my judgment, the general scheme of the Ordinance is that the Board should serve as a last resort for obtaining payment of compensation or damages legally awarded to employees, only after it has been shown that attempts to obtain satisfaction have failed because of the insolvency of the employer or his insurer. Even then, the amount to be paid from the Fund, and whether any payment should be made, are matters left to the discretion of the Board. With the exception of cases which fall within section 25, there is no question of any entitlement on the part of employees to a payment from the Fund."

22. The Board has a quasi-judicial function to perform and is directed to exercise a statutory discretion under s.22 of the Ordinance. The discretion has to be exercised independently and fairly. The Board cannot put itself and cannot be seen to have put itself in any position of conflict of interest. The Board cannot abrogate itself from exercising the statutory discretion. It cannot commit itself to any conduct which would make it impossible for carrying out this aspect of its statutory function properly.

Intervention by the Board

23. Although Mr Wong submitted that the Board is intended to serve as a last resort and that any conflict in its role should be avoided, he also submitted that there is no restriction under the Ordinance for the Board to intervene in actions. Whether there should be an application by the Board to join in the proceedings will depend on whether the Board takes the view that in the proper administration of the Fund, it is necessary for the Board to do so. Such circumstances may arise if it has come to the Board's notice that there is a real likelihood that a judgment may be procured by fraud, or there is a real likelihood of collusion between the plaintiff and the defendant , or where a default judgment is likely to follow if the Board does not intervene. However, the Board is of the view that the mere fact that a potential claim may be made against the Fund or a defendant is not legally represented, does not of itself amount to appropriate circumstances to justify the Board making an application for joinder.

My suggestion

24. I do not wish to express a concluded view whether the Board has the power to intervene on its own accord in proceedings. But on the basis that the Board has the power to intervene, I would respectfully suggest that the Board should take a more active role in intervention by negotiation. A likely award of huge sums together with substantial costs must be one of the situations in which the Board should intervene in a case as soon as possible after it has received notice. Settlement of potential claims by the Board is expressly recognized by s.28 of the Ordinance which provides that-

"28. Payments in anticipation of entitlement

(1) Where it appears to the Board that a person is or might be entitled to apply under this Part for a payment from the Fund, the Board may, in the interests of the protection of the Fund, and on such terms as it sees fit, offer to pay from the Fund to or on behalf of that person an amount in satisfaction of such entitlement.

(2) Any offer by the Board of payment under subsection (1) shall specify the section of this Part pursuant to which the Board considers that the person is or might be so entitled, and any amount liable to be paid following acceptance of such an offer shall, for the purposes of section 26, be regarded as an amount liable to be paid in respect of an application under the section so specified."

25. In the present case, the Plaintiff who is now aged 38, suffers complete paraplegia of both legs as a result of the accident. The Statement of Claim stated that he is assessed to have suffered a permanent disability in the region of 90-100%. This is potentially a huge claim. Ng Kwok Wing v. Lau Ping Kwan & Ors. (P.I. No.1013 of 1995) is another example. In that case, notwithstanding the bankruptcy of the employers and principal contractor, the plaintiff had to incur substantial costs in order to obtain a judgment against the defendants. The judgment was for over $14 million.

26. It is laudable not to deplete the Fund with legal expenses, but in my view the resources of the Fund can in fact be enhanced if the Board can take a more active role and enter into settlement negotiations with the plaintiff. The majority of the personal injury litigation is settled by negotiation. While the plaintiff may not receive the full claim, the benefit is that he will receive an early and final determination of his claim. Most, if not all, of the industrial accident cases are funded by legal aid which is another public body. It must be in the public interest to resolve the claims of employees by agreement instead of incurring substantial legal fees in order to prosecute the cases to the very end so as to satisfy the Board that all remedies had been exhausted.

27. Further, the Board by not taking part in the proceedings, will not be able to advance arguments which may reduce the claim. Mr Wong stated that the Board in exercising its inquiry power may go behind a judgment whether it was a default judgment or one obtained after trial. Again it is not necessary for me to reach a concluded view on this matter. However, with respect to Mr Wong, I fail to see how the Board can go behind a judgment of the Court, particularly when notice of the proceedings had been given but the Board chose not to intervene. In any event, from a practical point of view, I just cannot see how the Board can possibly go behind a judgment when evidence had been called and findings had been made by the Court.