HO TZE YING CONNIE v. AVIATION SECURITY CO LTD

DCEC 653/2018

[2022] HKDC 284

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 653 OF 2018

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IN THE MATTER OF AN APPLICATION BETWEEN:

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DECISION

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1.  By an Order of Her Honour Judge Levy dated 20 September 2021, leave was granted to the applicant to discontinue this EC action leaving costs to be determined. In this dispute, both parties are seeking cost of the action against the other.

Background

2.  The applicant was employed by the respondent as a security officer at the Hong Kong International Airport. She was responsible for inspection of luggage.

3.  It was not disputed that the accident happened during a lunch break on a working day (12 January 2018). The applicant has completed her morning duties at around 1pm and has taken off all her equipment to be passed for return to the respondent. She was still wearing her uniform and went for lunch in a restaurant of her choice in the airport, Super Super Congee & Noodles (“the Restaurant”, which has no relationship with the respondent).

4.  The accident happened when the applicant sat on a chair of the Restaurant. The chair broke and the applicant suffered various injuries.

5.  On 21 March 2018, the applicant commenced this EC action against the respondent.

6.  On 23 December 2019, the applicant commenced common law action against the Restaurant (“the PI action”) but failed to notify the respondent as required ECO section 25(2). The applicant’s then solicitors only notified the respondent’s solicitors of such on 7 October 2020.

7.  The applicant settled the PI action with the Restaurant on 16 March 2021 at the sum of HK$500,000 by accepting the Restaurant’s sanctioned offer. However, the applicant did not notify the respondent of her intention to settle as required by ECO section 25(2).

8.  The respondent was only aware of the settlement later and its solicitors wrote on 12 April 2021 requesting the applicant to discontinue the EC action. The applicant’s solicitors wrote back on 22 June 2021 agreeing to discontinue the EC action but only on the condition that costs should be paid by the respondent.

9.  By a consent summons dated 27 July 2021, the parties sought the court’s leave to discontinue the EC action leaving the costs of the action to be reserved for argument.

10.  I have ordered that this argument is to be dealt with by way of paper disposal.

Legal principles

11.  There is no dispute on the legal principles regarding the costs of discontinuance, per Her Honour Judge Levy in WU RUFANG v XIAO YONGRU trading as CHIEN KEE PLASTIC MATERIALS (unreported, DCEC 558/2013, 19 August 2016):

“A court has a complete unfettered discretion on costs, and the exercise of discretion is to be based on doing justice between the parties.

When a proceeding is discontinued, the starting position is for the costs to be paid by the discontinuing party unless it can be displaced by the demonstration of exceptional circumstances.

In situations where the parties have not chosen to go to trial to resolve their outstanding questions of costs, the normal rule should apply, namely, a claimant shall be required to demonstrate, that his case is so strong that he is bound to win had it gone on to trial and therefore he was justified in commencing the action in the first place.”

12.  The test for the “strength of the case” is clearly high, as Deputy Judge Muttrie stated in Leung Yuen Ching v. Leung Yuet Kun HCA 9924/2000:

“…the general rule remains that the defendant should have his costs…there must be good reasons to depart from that general rule…As I see it, this could only happen where the plaintiff’s case is certain of success…Certainty of success means, in my view, that the defence if found would be open to striking out under Order 18 Rule 19….”

13.  The dispute between the parties was whether the accident was one “arising out of and in the course of the employment” (ECO Section 5(1)) so the crux of the matter is whether the applicant has demonstrated that she is bound to win in this issue.

14.  It is trite that this is a two-stage test: the court has to ask firstly, whether the injury by accident was sustained “in the course of the employment” (“Stage 1”), and if it was, then whether it was an injury “arising out of the employment” (“Stage 2”).

15.  Stage 1 is a matter of finding of the facts of the case: whether there is a time and place connection between the accident and the employment.

16.  Paragraph 41 of Leung Hak Chai v Lamma Transportation Co Ltd [2014] 3 HKC:

“…one is looking in general terms to see if the accident has occurred to the employee at his place and during his time of work.”

17.  However, in the current case, the applicant could have her lunch at any place she wanted. There is a factual dispute between the witnesses as to whether there was a restriction to leave the airport premises during lunchtime, but it seems that there was no restriction that the applicant must wear her uniform during lunchtime even on her own evidence. It was a matter of convenience that she did not change. It was not in dispute that the respondent has no relationship with the Restaurant.

18.  As for Stage 2, it is not disputed that any acts necessary to life, comfort and convenience while at work can be deemed incidental to the employment.

19.  Paragraph 58 of the Leung Hak Chai case :

“It is plainly established that such acts as are necessary to the life, comfort and convenience of an employee, while at work, though strictly personal to himself and not acts in pursuance of his employment as such, are incidental to that employment. Thus, a person must occasionally drink water or tea or coffee, go to the toilet, stretch his legs or make a personal telephone call while at work. Absent a situation in which any of those activities might reasonably be prohibited, those acts are incidental to the employment and an accident happening to the employee whilst doing those act would be one which arises out of the employment.”

20.  The key words in the above paragraph are “while at work”, which appeared twice in the paragraph. These words refer to the Stage 1, which clearly must be passed before Stage 2 is to be considered.

21.  The facts of the Leung Hak Chai case were very specific in that Leung was required to live and work on board a particular vessel and could not go elsewhere during his leisure time.

22.  In XIE QUYUN v EASY LIVING PROPERTY MANAGEMENT LIMITED [2020] HKDC 1246, DCEC No. 2705 of 2016, a cleaning lady was knocked down by a minibus but could not recall what she was doing at the time. However, in that case, the accident happened during her working hours and the Judge held that she was at work and probably looking for rubbish to clear. Thus, that case has also passed the 1^st Stage test.

23.  In YAU KAM CHING v MAN FAT COMPANY LIMITED trading as MAN FAT RESTAURANT [2013] HKDC 667, DCEC No. 1400 of 2009, an employee was injured during meal time whilst crossing the road to fetch bowls and the employer was held liable.

24.  The restaurant in that case was operated by the employer and it occupied both sides of the road. The employees also usually dined in the restaurant so there was clearly a connection between the accident and the employer. Further, there was a clause in the employer’s insurance policy that stated:

“in the event of any employee…staying in the insured premises during meal and lunchtime being injured or killed shall be deemed to have arisen out of and in the course of the employee’s employment.”

25.  Thus, although the YAU KAM CHING case may have some relevance to the current case, it by no means provides such a strong support that the applicant will “bound to win”.

26.  In the Australian case of HATZIMANOLIS v ANI CORPORATION LTD [1992] 106 ALR 611, it was stated that:

“…An injury occurring during the interval between periods of actual work in such a case is more readily perceived as being within the current conception of the course of employment as it occurred during the periods of actual work.”

27.  Again, the key words are “in such a case” so it is not meant to be a general principle but a finding particular to the circumstances of that case: an employee was employed to work in a remote area in Western Australia and sustained injury during a sightseeing journey on his day off, and a supervisor had made available the use of vehicles and food and has invited employees to attend the journey.

28.  As such, the facts were more akin to the LEUNG HAK CHAI case: the employment was of such nature that the employee was required to live and work in a particular location.

29.   Further, the court in HATZIMANOLIS case concluded that:

“…an interval…within an overall period…of work occurs within the course of employment, if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval…at a particular place or in a particular way…an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity…”

30.  In the current case, it was not in dispute that the respondent neither induced nor encouraged to have lunch at the restaurant.

Discussions

31.  The considerations of the two-stage test are clearly specific to the facts and circumstances of a particular case.

32.  There are two ends to this spectrum: on one end, this would be like a case of a doctor doing an “on-call” duty during which he would be required to cover a certain period of time for all emergencies in a particular hospital. He would be required to carry a call-device and must not be, say, more than 5 minutes away from the hospital at all times. As such, he might be sleeping in the accommodations provided by the hospital, and if he were to venture outside for a coffee or a meal, he could only do so within, say, a 5-minute radius. He would routinely get calls when he would be expected to drop everything and return to the hospital within a certain time.

33.  This might create a situation close to the cases of LEUNG HAK CHAI and HATZIMANOLIS: the doctor was deemed to be at work both in terms of time period and location during his “on-call period” so any accident that happened during “acts as are necessary to the life, comfort and convenience” of that doctor might deemed to have satisfied Stage 2.

34.  On the other end of the spectrum, if that same doctor was no longer “on-call”, has returned his call-device, gone off work to eat in a restaurant and met with an accident, he could not then claim that he has still been “in the course of employment” by arguing that, say, if somehow a natural disaster happened to occur during this time, he could be recalled back to help out in the hospital.

35.  Applying that to the current case: the applicant’s case is that she was still wearing the uniform at lunchtime (though not a requirement but a matter of personal convenience) and she might be recalled in emergencies (but she did not specify the nature of such emergencies and how often this occurred) etc.

36.  However, the main difference is that a doctor on duty is required to carry a call-device because he was expected to be “called” all the time. That was his specific work during the “on-call” period. But here, at lunchtime, it was not disputed that the applicant has actually returned her “walkie-talkie”.

37.  This might raise a reasonable argument that this was not a period where the applicant was doing “on-call” duty for any expected emergencies (whatever that might be), but rather, like the off-work doctor, would only be recalled if there was, say, a disaster or an unexpected “all hands on deck” event.

Disputes on quantum

38.  The applicant also argued that she has a strong case to recover compensation more than the HK$500,000 she received in the PI Action.

39.  I am not sure why the issue of quantum has relevance in the question of costs in a discontinuance application: if the applicant has demonstrated she is “bounded to win” in the EC action, then she should recover costs of the action since the obvious reason for the discontinuance was that she has received adequate damages award from the PI Action. If that award was inadequate, there would be no reason why the applicant should discontinue given that the issue of liability was a “sure win”.

40.  Thus, arguing that the applicant would actually recover further money from the EC action and yet chose to discontinue the action was, arguably, unsupportive to the applicant’s position that she was “bound to win” the EC action.

41.  In any case, the only question for the current dispute is whether the applicant can demonstrate she is bound to win on liability in the EC action.

Conclusion

42.  Having looked at all the circumstances of the case and perused the precedents presented (including the above mentioned cases), I cannot see how the applicant has demonstrated that her case is “so strong that she is bound to win”.

43.  Certainly, if the applicant were to apply to strike out the defence, I cannot see how the court would allow it: the defence is very far from having “no reasonable cause of action or defence, being scandalous, frivolous or vexatious; may prejudice, embarrass or delay the fair trial of the action; or is otherwise an abuse of the process of the court”.

44.  As such, I would order that the costs of the action (including the current application) be to the respondent to be taxed if not agreed, with certificate for counsel for the current application. The Applicant own costs to be taxed in accordance with the Legal Aid Regulations.