HO MAN YU v. TANG, WONG & CHEUNG (a firm)

DCCJ 2156/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2156 OF 2007

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JUDGMENT

1.  The Plaintiff, Mr. Ho Man Yu claimed against the Defendants (a firm of solicitors) for professional negligence resulting in the Plaintiff being made liable for legal costs of $571,541.53 and an unquantified item.  The Defendant admitted being liable for $4,000 and the unquantified item.  The Plaintiff’s claim is therefore as follows:-

(a)  indemnity costs including interests to Messrs. Gary Lau & Partners representing Shing Kee Engineering Co. Limited under action HCPI 332 of 2004 (“the said action”) in the sum of $442,253.53;

(b)  party and party costs of Messrs. Krishnan & Tsang representing the 3^rd Defendant Hyundai in the said action in the sum of $45,000;

(c)  the Director of Legal Aid taxation costs of $28,000;

(d)  common fund costs paid to Wilkinson & Grist for change of solicitors before conclusion of Mr. Ho’s personal injuries claim at $52,288.

Background

2.  The Plaintiff (“Mr. Ho”) was a construction site labourer.  He was injured in an accident at work on 9 May 2001 at a construction site.  Mr. Ho claimed the accident was caused by the negligence of his employer and the principal contractor of the construction site where he worked on 9 May 2001.  Through the introduction of a friend, Mr. Ho’s son Mr. Ho Ying Wah contacted the Defendants.  Mr. Ho was advised to apply for legal aid to claim against his employer.  On 2 August 2003, the Director of Legal Aid issued a legal aid certificate assigning Mr. Ian Packwood (“Mr. Packwood”) who was a consultant with the Defendants to pursue Mr. Ho’s personal injuries claim on his behalf.

3.  On 20 April 2004, the Defendant issued a writ of summons on Mr. Ho’s behalf claiming against Ngai Shing Sau trading as Shing Kee Engineering Co. as the 1^st defendant, Shing Kee Engineering Co. Ltd. as the 2^nd defendant and Hyundai Engineering Co. Ltd. as the 3^rd defendant under HCPI 332 of 2004 (“the said action”).  The notice to insurer was issued on the same day to United India Insurance Co. Ltd.  On 10 June 2004, Messrs. Krishnam & Tsang, Solicitors, wrote to the Defendants notifying the Defendants that they represented the insurer with instructions to accept service of the proceedings on behalf of the 1^st and 3^rd defendants in the said action.  On 4 October 2004, a defence was filed on behalf of the 1^st and 3^rd defendants. 

4.  The 2^nd defendant Shing Kee Engineering Co. Ltd. (“Shing Kee Limited”) filed a defence through Messrs. Gary Lau & Partners denying it was the employer of Mr. Ho or that it was a sub-contractor at the construction site at the material time.  On the same day, the 2^nd defendant issued a Request for Further and Better Particulars on the Statement of Claim.  As the Defendants failed to supply an answer, on 3 July 2004, a summons for Request for Further and Better Particulars was taken out by Messrs. Gary Lau & Partners against Mr. Ho.  On 27 July, Registrar Chan of the High Court ordered Mr. Ho to file and served an Answer to the Request for Further and Better Particulars on the Statement of Claim of 20 April 2004.  The Defendant failed to serve the answer until 22 September 2004.

5.  In July 2004, on the application of the Defendants on Mr. Ho’s behalf, the name of the 3^rd defendant in the said action was amended to Hyundai Engineering & Construction Ltd. (“Hyundai”) the said name had appeared on the Form 2 filed by Hyundai.  The 1^st and 3^rd defendants in the defence filed on 4 October 2004 admitted that Mr. Ho had met with an accident at the construction and further admitted the 1^st defendant was the employer of Mr. Ho and the 3^rd defendant was the main contractor at the construction site. 

6.  On 23 March 2005, Mr. Packwood left the Defendants’ firm and another solicitor of the Defendants, Mr. John Wong, was reassigned as Mr. Ho’s solicitor in the said action. 

7.  On 24 September 2003, Messrs. Gary Lau & Partners wrote to the Defendants on behalf of Shing Kee Engineering Co. Ltd. in reply to the Defendants’ letter of 10 September 2003 denying Shing Kee Engineering Co. Ltd. had ever employed Mr. Ho as its employee on the day of the accident.  In the same letter, the Defendants were informed that the business registration number set out in the Form 2 forwarded to Messrs. Gary Lau & Partners earlier did not belong to Shing Kee Engineering Co. Ltd. nor was the address set out in the Form 2 the business address of their client.  Messrs. Gary Lau & Partners enclosed with the letter a business registration record of Shing Kee Engineering Co. (the 1^st defendant) and requested the Defendants to stop their demand on the 2^nd defendant.  On 23 May 2005, Messrs. Gary Lau & Partners wrote to the Defendants again referring to its letter of 24 September 2003 and the Defendants’ letter to Messrs. Gary Lau & Partners of 28 June 2004 informing them that if the 1^st and 3^rd defendants admitted Mr. Ho to be their employee, the 2^nd defendant would be released from the said action.  Messrs. Gary Lau & Partners requested the Defendants to discontinue the action against their client as the 1^st defendant had already admitted in the filed defence that he was the employer of Mr. Ho. 

8.  On 12 August 2005, Messrs. Krishnam & Tsang wrote to the Defendants confirming that Shing Kee Engineering Co. Ltd. was not a sub-contractor at the site of the accident.  On 8 September 2005, a Consent Summons of Discontinuance was filed leaving the costs issue to be argued.  The Registrar of the High Court refused to make an order in terms of the summons and at a hearing before Master Kwan on 16 January 2006, a costs order on indemnity basis was made against Mr. Ho on the discontinuance of the action against the 2^nd defendant in the said action.  An attempt was made requesting Master Kwan to review her indemnity cost order against Mr. Ho; it was unsuccessful and the order was made absolute on 8 May 2006.  On 14 August 2006, a solicitor at Messrs. Wilkinson & Grist was assigned as the solicitor for Mr. Ho in the said action.

9.  Mr. Ho’s present claim against the Defendants is for the loss and damage caused by their negligence and/or breach of contract of the Defendants, their servants or agents:-

(i)  in failing to exercise with due care and skill in the conduct of Mr. Ho’s PI action;

(ii)  failure to identify the correct parties to sue;

(iii)  failure to act on the information contained in the business registration records of Shing Kee Engineering Co. Ltd. and Shing Kee the firm;

(iv)  failure to conduct investigation on the business registration of the two aforesaid entities;

(v)  failure to inform Mr. Ho of the result of the business registration searches before issue of proceedings;

(vi)  failure to desist from suing Shing Kee Engineering Co. Ltd. when Mr. Ho did not give instructions to do so;

(vii)   failure to advise Mr. Ho of the intention to issue proceedings against both Shing Kee the firm and Shing Kee Engineering Co. Ltd.;

(viii)  failure to sue the 3^rd defendant “Hyundai” in its correct name set out in the Form 2 when the writ was issued;

(ix)  failure to advise Mr. Ho of the cost consequences in the amendment of the writ in order to sue the 3^rd defendant in its correct name;

(x)  failure to advise Mr. Ho that they had been requested by Shing Kee Engineering Co. Ltd. to discontinue the action against it;

(xi)  failure to advise Mr. Ho the reasons for refusing to discontinue the claim against Shing Kee Engineering Co. Ltd.;

(xii)   failure to take instructions from Mr. Ho on the proposed discontinuance summons;

(xiii)  failure to advise Mr. Ho of the cost consequences of suing the wrong party;

(xiv)  failure to advise Mr. Ho of the cost consequences of discontinuance;

(xv)   failure to advise Mr. Ho of the cost consequences of seeking a review against a cost order nisi;

(xvi)  failure to advise Mr. Ho of the prospects of success of seeking a review against the cost order nisi;

(xvii)  failure to advise Mr. Ho that Shing Kee Engineering Co. Ltd. had issued a summons for Further and Better Particulars;

(xviii)  failure to advise Mr. Ho of the cost consequences of not providing the Particulars in time;

(xix)  failure to take timely instructions from Mr. Ho to provide the Particulars requested;

(xx)   failure to desist from alleging that Ngai Shing Sau was the agent of Shing Kee Engineering Co. Ltd. in the Particulars when Mr. Ho did not give such instructions;

(xxi)  failure to advise Mr. Ho that an adverse cost order had been made against him in the summons for Further and Better Particulars;

(xxii)  failure to exercise care and skill commensurate with a personal injury solicitor of reasonable competence.

(see p. 13 to 15 of Bundle A, para. 26 of the Statement of Claim).

10.  It was based on the aforesaid particulars of negligence that Mr. Ho claimed against the Defendants for loss incurred by him to indemnify Shing Kee Engineering Co. Ltd. or having wrongly joining Shing Kee Engineering Co. Ltd. as the 2^nd defendant and joining Hyundai in the wrong name as the 3^rd defendant and the consequential costs incurred.

The Plaintiff’s Case

11.  It is Mr. Ho’s evidence that around two weeks after legal aid was granted to him, his son Mr. Ho Ying Wah took him to see Mr. Packwood at the Defendants’ office at the end of August 2003.  He alleged that Mr. Tong Wing Leung Wallus (“Mr. Tong”), a clerk in the employ of the Defendants acted as the interpreter at that meeting.  At that one hour meeting, Mr. Ho was asked to describe the accident, the identity of his employer and the main contractor, his salary and sick leave pay and the doctor’s refusal to extend his sick leave, etc.  Mr. Ho claimed that when he was asked who his employer was, he told Mr. Packwood and Mr. Tong he did not know the full name of his employer, all he knew was a man called Ngai Shing Sau for whom he had worked before had asked him to start work at the construction site 10 odd days before the accident.  So far as he knew, Mr. Ngai Shing Sau was the proprietor of Shing Kee but he did not know the full name.  He was asked at the meeting if Shing Kee was a limited company, Mr. Ho frankly told them he had no idea whatsoever.  He also told them that he had obtained sick leave pay from the main contractor Hyundai Engineering & Construction Company Limited after the accident.  At the same meeting, he gave Mr. Packwood a witness summons in the case against the main contractor heard at the North District Magistracy and the judgment handed down by the Magistrate to assist further action. 

12.  At the same meeting, Mr. Ho claimed Mr. Packwood and Mr. Tong showed him a letter from the Labour Department concerning his claim on employees’ compensation.  The letter contained his signature.  In the letter, the Labour Department reminded him that he had to lodge a claim for employees’ compensation within 24 months of the accident and if he wished to apply for an extension of sick leave he is required to apply to court.  At the same meeting, Mr. Ho was informed by Mr. Packwood and Mr. Tong that the time limit for an application under the Employees’ Compensation Ordinance had expired and since he had signed the letter indicating his understanding of the contents, Mr. Ho was advised to concentrate on the personal injuries claim. 

13.  The Defendants sent a letter before action on 28 August 2003 to Shing Kee Engineering Limited and Hyundai Engineering & Construction Co. Ltd. based on the addresses set out in the accident notice (Form 2) lodged with the Labour Department by Hyundai (“the said Form 2”).  The letter to Shing Kee Engineering Company Limited was returned to the Defendants on 8 September 2003.  After a business registration search on Shing Kee Engineering Company Limited, the Defendants discovered the address of the business registration of the limited company to be different from the one set out in the said Form 2.  Furthermore, the business registration number of Shing Kee Engineering Company Limited was different from the one in the said Form 2.

14.  On 10 September 2003, the Defendants served a letter before action on the registered address of Shing Kee Engineering Co. Ltd. at the address found on the business registration search of Shing Kee Engineering Company Limited.  A week later, the Defendants received a letter from Messrs. Gary Lau & Partners requesting the Defendants to produce proof that Shing Kee Engineering Company Limited was Mr. Ho’s employer at the said accident.  The Defendants then forwarded a copy of the said Form 2 to Messrs. Gary Lau & Partners.  On 24 September 2003, Messrs. Gary Lau & Partners informed the Defendants that their client Shing Kee Engineering Company Limited was not the same Shing Kee in the said From 2 and further denied that Shing Kee Engineering Company Limited was Mr. Ho’s employer at any time.  Enclosed with that letter was a copy of the business registration record of Shing Kee Engineering Company which showed Ngai Shing Sau was the proprietor of the business registration with the same business registration number set out in the said From 2. 

15.  According to the Defendants’ record, the Defendants did on 30 September 2003 conduct a company registration search on Shing Kee Engineering Co., the result confirmed Ngai Shing Sau was the proprietor of Shing Kee Engineering Co.  Consequently, it is Mr. Ho’s case that by October and November 2003, the Defendants should have ascertained Ngai Shing Sau trading as Shing Kee Engineering Co. was Mr. Ho’s employer at the time of the accident.  Furthermore, it had the same business address and business registration number as that set out in the said Form 2. 

16.  Mr. Ho said that on or about March 2004, he had a telephone conversation with Mr. Tong and Mr. Tong asked him once again the name of his employer and he repeated that he was told by Ngai Shing Sau to work at the construction site and his company was called Shing Kee and that he did not know the full name of Shing Kee. 

17.  Mr. Ho claimed he had no idea when the Defendants had issued the writ of summons on his behalf because he was not given a copy of the writ of summons nor were the contents of the writ of summons and the amount claimed explained to him.  He said he was only informed in early 2006 that the Defendants had claimed against three defendants under a writ of summons issued on 20 April 2004 and that apart from suing Ngai Shing Sau as the 1^st defendant and Hyundai Engineering & Construction Co. Ltd. as the 3^rd defendant, the Defendants had also joined Shing Kee Engineering Company Limited as the 2^nd defendant in the alternative.  However, Mr. Ho insisted that he had no idea prior to early 2006 that the Defendants had joined two Shing Kee Companies in the alternative as his employer and he had never given any instructions for them to do so. 

18.  Mr. Ho further claimed that he had no knowledge that Messrs. Gary Lau & Partners had served a Request for Further and Better Particulars on the Statement of Claim requesting him to supply information on the relationship of employment with Shing Kee Engineering Company Limited.  He said he was never told there was a summons issued by Messrs. Gary Lau & Partners for Further and Better Particulars to be answered or that there was an order of the court requiring him to supply the particulars with a costs order against him on 27 July 2004.  Further, he had not been informed at the time that Shing Kee Engineering Co. Ltd. had already filed a defence on 11 June 2004 denying it was his employer or a subcontractor to the main contractor at the construction site. 

19.  According to Mr. Ho, the second time he had a meeting at the Defendants’ office with Mr. Packwood was in the summer of 2004.  During the meeting, he was asked to sign a few documents and questioned about his employment before the accident.  He informed Mr. Packwood and Mr. Tong that it was Ngai Shing Sau who had asked him to work at the construction site and instructions of daily work sometimes came from the representative of Hyundai.  He further informed Mr. Packwood and Mr. Tong that it was a foreman named Chan Man who assigned him the particular job on the day of the accident and that he thought Chan Man was Shing Kee’s employee.  Mr. Ho denied that the contents of the Answers to the Request for Further and Better Particulars filed by the Defendants on his behalf on 22 September 2004 were obtained at the 2^nd meeting at the Defendants’ office in the summer of 2004. 

20.  Mr. Ho further claimed that he had always cooperated with the Defendants including their requests to meet with him or to supply documents he had in his possession.  However, the Defendants had never told him of the deadline to supply the Answer to the Request for Further and Better Particulars.  In fact, he knew nothing about a request for particulars.  Neither was he told that the 1^st and 3^rd defendants had already filed a defence in October 2004 admitting to be his employer and the main contractor respectively. 

21.  Mr. Ho claimed that in March 2005 he was informed by Mr. Tong that Mr. Packwood would be leaving the Defendants and enquired if he wished to continue to instruct the Defendants to act on his behalf in the action.  After Mr. Ho Ying Wah attended the Defendants’ office and met with Mr. Tong, Mr. Ho agreed to the Defendants’ suggestion for his case to be re-assigned to another lawyers in the Defendants’ firm by the name of Mr. Wong Wah Chiu John. 

22.  On 16 March 2005, Mr. Ho attended the Defendants’ office for the third time accompanied by his wife.  He met Mr. Tong who explained to him that a neurologist and an urologist would conduct examinations on him.  Mr. Tong further informed him that the Defendants had admitted 70% liability; consequently, his case may conclude in the following year.  He was then asked to sign a few documents including an application to the Legal Aid Department to re-assign his case to Mr. John Wong Wah Chiu. 

23.  According to Mr. Ho, he and his son had never met Mr. Wong before or after the case was re-assigned to him; all communications after the re-assignment were with Mr. Tong.  On 15 July 2005, he was asked to attend the Defendants’ firm to sign a witness statement.  Even at that stage, Mr. Tong failed to inform him he had joined 3 defendants including Shing Kee Engineering Co. Ltd. in the said action. 

24.  On 20 April 2006, Mr. Ho was informed by his son that Mr. Tong told him on the telephone that Mr. Ho had lost an application.  Mr. Tong told him ‘Shing Kee’ had denied liability and the court had ruled that he should bear the costs.  Mr. Tong suggested that he should attempt an appeal against the costs order.  Mr. Tong told him counsel fee is high and suggested retaining Mr. Packwood to represent him in the appeal would save costs.  Mr. Ho Ying Wah was asked to go to the Defendants’ office to collect a form for Mr. Ho’s signature if Mr. Ho agreed to Mr. Tong’s suggestion.  Mr. Ho accepted Mr. Tong’s suggestion, and on the same day, Mr. Ho Ying Wah obtained an authorization document from the Defendants for Mr. Ho to sign.  The document was returned to the Defendants after it was signed.  He was never explained the appointment was against legal aid regulations until he was contacted by the Legal Aid Department.

25.  On 10 May 2006, Mr. Ho received a phone call from a Miss Lee of the Legal Aid Department enquiring about his retaining Mr. Packwood to act on his behalf at a review application.  Miss Lee informed him that Mr. Packwood was no longer working at the Defendants’ firm, therefore, it would be improper for Mr. Ho to instruct Mr. Packwood to represent him.  She suggested that he should either continue to retain the Defendants to act on his behalf or consider taking his case to a different firm.  As he did not quite understand what Miss Lee meant, he asked his son to call the Legal Aid Department to clarify the position.  After talking to Miss Lee, Mr. Ho Ying Wah was informed that the Defendants had wrongly joined Shing Kee Co. Ltd. resulting in Mr. Ho losing costs on two occasions to the wrongly joined Shing Kee Engineering Co. Ltd.  When Mr. Ho Ying Wah informed Miss Lee that neither Mr. Ho nor he had any knowledge of these matters, Miss Lee advised him to seek clarifications with the Defendants and consider engaging another firm of solicitors. 

26.  The next day, on 11 May 2006, Mr. Ho Ying Wah called the Defendants requesting a meeting with Mr. Tong; at the same time Mr. Ho went to the Association for the Rights of Industrial Accident Victims for assistance.  As a result, a Miss Leung from the Association for the Rights of Industrial Accident Victims accompanied Mr. Ho and Mr. Ho Ying Wah to the Defendants’ office and met with Mr. Tong.  Mr. Tong told them that the Defendants had on Mr. Ho’s behalf joined two Shing Kee companies, one was a limited company and the other a firm.  Mr. Tong denied that the Defendants did anything wrong by joining the two companies.

27.  Mr. Ho claimed that he had never been informed there were two companies named Shing Kee or that the Defendants had joined the two Shing Kee companies in the said action.  Mr. Ho insisted that whenever he was asked the identity of his employer he had informed the Defendants his employer was Ngai Shing Sau.  Had the Defendants told him there were two Shing Kee companies, he would have telephoned Ngai Shing Sau directly to find out which Shing Kee Co. was his employer.  He claimed he did not know there were three defendants joined in the said action.

28.  On 22 June 2006, Mr. Ho attended the Legal Aid Department to meet with Legal Aid Counsel Miss Lee.  She explained to him that because the Defendants had acted on his behalf and wrongly joined a defendant in the said action, it resulted in his having to bear the legal costs of the wrongly joined party.  The costs amounted to approximately $594,000.  Miss Lee gave Mr. Ho the bill of costs of Messrs. Gary Lau & Partners.  When Mr. Ho Ying Wah showed the bill of costs to Mr. Tong at the Defendants’ office on the next day, Mr. Tong said to him Messrs. Gary Lau & Partners’ bill would be taxed down; and, in any event, it was not unreasonable.  Mr. Tong further told him his firm would try to get the other two defendants to pay a large sum of legal costs to Mr. Ho and his firm would reduce its costs to compensate Mr. Ho for his loss.  By then, Mr. Ho had lost his trust in the Defendants and decided to proceed with the reassignment to Messrs. Wilkinson & Grist.  On 15 March 2007, Mr. Ho obtained a judgment against the 1^st and 3^rd defendants and was awarded $2,213,780 in compensation. 

29.  Mr. Ho claimed that the $4,000 costs awarded by the court on 27 July 2004 due to the delay of the Answer to Further and Better Particulars was caused by the negligence and lack of care of the Defendants.

30.  Under the court order of 15 February and 8 May 2006, Mr. Ho was ordered to pay $45,000 costs to the 1^st and 3^rd defendants because he lost the application against the 1^st and 3^rd defendants to pay his costs in the summons to withdraw the claim against the 2^nd defendant.  Again, this was incurred due to the lack of skill and care of the Defendants in the conduct of the said action. 

31.  The bill of costs of Shing Kee Engineering Co. Ltd. was taxed on 8 August 2006 and assessed at $410,943.  Mr. Ho attributed the wasted costs entirely to the lack of due care and skill and the negligence of the Defendants. 

32.  Mr. Ho further claimed that he had to pay the sum of $28,000 to the Legal Aid Department for the assessment of the bill of costs and the further expense of reading time incurred by Messrs. Wilkinson & Grist due to the reassignment resulting in further costs wasted at $52,288.  These were due to the negligence and lack of care of the Defendants.

The Defence Case

33.  The Defendants admitted the sum of $4,000 costs incurred due to the delay in answering the Further and Better Particulars.  Other than the aforesaid sum, the Defendants denied the liability and negligence alleged by the Plaintiff.

34.  Because of Mr. Packwood’s departure from the Defendants’ firm on 1 March 2005 and his passing away in June 2007, it was impossible for the Defendants to call Mr. Packwood as a witness in this action.  The Defendants based their defence on the record in the file of the said action kept by the Defendants and the evidence of their clerk Mr. Tong Wing Leung Wallus.  It is the defence case that actions taken by Mr. Packwood in joining the 2^nd defendant Shing Kee Engineering Co. Ltd. was based on Mr. Ho’s instruction after Mr. Packwood had ascertained from him the following:-

(1)  Mr. Ho was told by Mr. Ngai Shing Sau to start work at the construction site;

(2)  the said Ngai Shing Sau was said to operate a company known as Shing Kee but Mr. Ho was not sure if Shing Kee was a limited company or an unlimited company;

(3)  that a Mr. Chan Man was a foreman in the employ of a limited company known as Shing Kee who instructed Mr. Ho to clear the refuse chute on the day of the accident;

(4)  that Mr. Chan Man had testified in the Magistrate Court hearing where Hyundai Engineering & Construction Co. Ltd. was charged with failing to ensure provision and proper maintenance of suitable and adequate safe access and egress from the place of work (North Kowloon Magistracy Court Summons No. 21220-1 of 2001, see p. 26 of Bundle I). 

(5)  the accident report compiled by the Labour officer on 31 July 2001 had referred to the direct employer of Mr. Ho as Shing Kee Engineering Co. Ltd. (p. 65 to 77 of Bundle A);

(6)  the said Form 2 filed by Hyundai Engineering & Construction Co. Ltd. named Mr. Ho’s employer as Shing Kee Engineering Co. Ltd. (p. 58 of Bundle A).

35.  The Defendants therefore claimed that the writ of summons issued on 20 April 2004 was in accordance with the Plaintiff’s instructions.  Further, the writ was issued with his full knowledge and consent that Shing Kee Engineering Co. Ltd. was to be joined as a party.  Further, Mr. Ho’s claim against his employer will be time-barred if the writ was not issued by 8 May 2004.  

36.  The Defendants admitted that before the writ was issued in April 2004, Mr. Packwood had written to Shing Kee Engineering Co. Ltd. in September 2003 a letter before action and the reply from the solicitors of Shing Kee Engineering Co. Ltd., Messrs. Gary Lau & Partners, denied Shing Kee Engineering Co. Ltd. was an employer of Mr. Ho.  The Defendants claimed they had Mr. Ho’s full consent to join Shing Kee Engineering Co. Ltd. as an alternative to Ngai Shing Sau trading as Shing Kee as Mr. Ho’s employer and Hyundai as the main contractor.  That as soon as liability was established against a party other than Shing Kee Engineering Co. Ltd., the action against Shing Kee Co. Ltd. would be discontinued.  That was why on 28 June 2004, the Defendants wrote a letter to Messrs. Gary Lau & Partners informing them that if Shing Kee the firm admitted to be the employer of Mr. Ho, the action against Shing Kee Engineering Co. Limited would be discontinued. 

37.  The Defendants claimed that after Ngai Shing Sau and Hyundai filed their Defence in which Ngai Shing Sau admitted to be the employer of Mr. Ho on 4 October 2004, instructions were obtained from Mr. Ho.  They alleged Mr. Ho had told them that at the Magistrate Court hearing, a company called Shing Kee Limited was mentioned and the foreman Mr. Chan Man was in the employ of Shing Kee Limited.  They claimed Mr. Ho agreed that the action against Shing Kee Engineering Co. Ltd. should continue for the time being until the full transcript of the Magistrate Court proceedings was obtained and/or Shing Kee the firm and Hyundai admitted liability and agreed to pay compensation to him. 

38.  In March 2005, after Mr. Packwood left the Defendants’ firm, the case was re-assigned to Mr. John Wong, a partner with the Defendants.  At a conference with Mr. Ho on 24 August 2005, Mr. Tong informed Mr. Ho they had finally received a letter from Messrs. Krishnam & Tsang, Solicitors for Ngai Shing Sau and Hyundai, confirming that Shing Kee Engineering Co. Ltd. was not a sub-contractor of Hyundai.  Mr. Ho was then advised there was no further reason to continue the action against Shing Kee Engineering Co. Ltd.  Mr. Ho, upon receiving the advice, signed a note instructing the Defendants to discontinue the action against the 2^nd defendant and to seek an order of costs against Ngai Shing Sau and Hyundai in the application to discontinue the action against the 2^nd defendant because Hyundai had wrongly stated in the said Form 2 that Shing Kee was a limited company.  In the same note, Mr. Ho had also agreed to retain Mr. Packwood to appear in the application even though he understood Mr. Packwood was no long the assigned solicitor in the case. 

The Issues

39.  The issues in this action are:-

(1)  whether the Defendants had rightly joined Shing Kee Engineering Co. Ltd. in the said action and whether it was done on the instruction of Mr. Ho;

(2)  whether the Defendants was correct in maintaining the claim against Shing Kee Engineering Co. Ltd. until 2 September 2005.

The Defendants’ Argument

40.  Mr. Chong, Counsel for the Defendants, submitted that the court has to decide the primary issue whether joining Shing Kee Engineering Co. Ltd. was done without Mr. Ho’s instruction before proceedings to the secondary issue of whether joining the limited company as a co-defendant was a matter of (1) professional negligence or (2) misjudgment on the part of Mr. Packwood in the discharge of his duty as a solicitor.  Furthermore, on the issue whether maintaining the limited company as a co-defendant until 2^nd September 2005, was Mr. Packwood professionally negligent or was it a misjudgment on his part.

41.  According to the Plaintiff’s claim against the Defendants, the primary complaint is they had failed to conduct Mr. Ho’s personal injuries claim with due skill and care resulting in a wrong party being sued and Mr. Ho had to bear the costs consequences. 

42.  Mr. Chong, Counsel for the Defendants, submitted that the court should disregard certain paragraphs in the witness statements of Mr. Ho and Mr. Ho Ying Wah because these paragraphs contained hearsay evidence or matters of opinion expressed by Mr. Ho’s legal advisers.  So far as the factual evidence of Mr. Ho and his son are concerned, I found some of the hearsay evidence were communications between Mr. Ho and his son of their meetings and telephone conversations with Mr. Tong or what Mr. Ho Ying Wah was told by Mr. Tong.  So far as their evidence collaborated with each other, as both had given evidence in court, I accept them as evidence of fact.  As to factual evidence supported by documents, I have considered them together with the court orders and records disclosed by both the Plaintiff and the Defendants.  As to the evidence of opinion expressed by Mr. Ho’s legal advisers, I have considered them together with the documents including orders of the court and notes of proceedings and have formed my own view according to the law. 

43.  In my deliberations of the Defendants’ defence against the Plaintiff’s claim, I have taken into account the professional decisions and actions taken by the Defendants’ consultant Mr. Packwood and at a later stage, Mr. John Wong Wah Chiu, who was the assigned solicitor of Mr. Ho at the relevant period. 

Analysis

(1) Whether the Defendants had rightly joined Shing Kee Engineering Co. Ltd. in the said action and whether it was done on Mr. Ho’s instructions?

44.  Mr. Ho decided to engage the services of the Defendants because his son Mr. Ho Ying Wah was introduced to Mr. Tong by Mr. Tong’s colleague at the Defendants’ firm.  Mr. Tong was said to be an expert in personal injuries actions.  Mr. Tong admitted in court that he is a clerk with over 16 years experience in litigation handling both criminal and civil litigation cases under the supervision of partners and consultants of the Defendants.  He admitted that he would on the average handle 6 to 7 personal injuries cases a year and was assisting Mr. Ian Packwood who in August 2003 was a consultant at the Defendants.  In March 2003, Mr. Tong suggested to Mr. Ho Ying Wah that his father should apply for Legal Aid and asked the Legal Aid Department to assign Mr. Ian Packwood, the consultant of the Defendants to handle his personal injuries claim.  On 2 August 2003, Mr. Packwood was assigned by the Director of Legal Aid to represent Mr. Ho in his personal injuries claim.  A meeting was arranged at the end of August 2003 for Mr. Ho to meet with Mr. Packwood at the Defendants’ office.  Mr. Tong admitted he was the interpreter at that meeting.  Mr. Tong claimed that there were two other meetings with Mr. Ho before the writ was issued in April 2004.  Mr. Ho and his son Mr. Ho Ying Wah, on the other hand, denied there were any further meetings between Mr. Ho and Mr. Packwood and Mr. Tong before the writ was issued. 

45.  Unfortunately the Defendants could only find in the file on the said action two handwritten notes recorded by Mr. Packwood.  From the contents of these two notes, it is apparent that they were written in Mr. Packwood’s handwriting and both were undated.  As Mr. Packwood had passed away within 1 month of the issue of the writ of summons of the present action, there is no evidence from the Defendants as to the dates the two notes were recorded.  From the contents of these two pages of recordings (at p. 195 and p. 197 of Bundle E), both seemed to be made before the writ was issued.  At the end of the 2^nd note at p. 197 of Bundle E, it recorded:-

“Doctor refused to give certificate because 2 years expired.  Further appointment 26 September 2003.  Doctor says fit for work [letter]

17 and 24 September assessment”

46.  This indicated that the recording must have been entered before 26 September 2003.  There is a third handwritten note recorded by Mr. Tong on file.  It was dated 7 March 2003 with the initials ‘WT’ at the bottom of the page (p. 196 of Bundle E).  Mr. Tong claimed in court that the date of the note should be 7 March 2004 instead of 2003.  It was a record of a telephone conversation between Mr. Ho and Mr. Tong.  Mr. Tong recorded that he had explained the contents of a letter to Mr. Ho over the telephone and Mr. Ho was asked the name of his employer again, Mr. Ho confirmed the name was Mr. Ngai Shing Sau but he did not know the company’s full name, he knew it as ‘Shing Kee’.  Mr. Ho had at that telephone conversation confirmed that the company who paid the sick leave compensation was the principal contractor.  If the date of this conversation was 7 March 2004, it was probably the last communication between Mr. Ho and the Defendants before the writ was issued.  There were no further record on the dates, time and number of meetings Mr. Ho had with Mr. Packwood and Mr. Tong in the Defendants’ file produced; further, it is not clear if the two recordings of Mr. Packwood were notes of conferences or telephone communications.

47.  It is not disputed that the Defendants had written a letter before action to Shing Kee Engineering Co. Ltd. to an address found in the BR search of this company on 10 September 2003.  A copy of this letter was sent to United India Insurance Co. Ltd. which the Defendants attributed to be the insurer to Hyundai and Shing Kee Engineering Co. Ltd.  On 16 September 2003, Messrs. Gary Lau & Partners on behalf of Shing Kee Engineering Co. Ltd. replied to the Defendants’ letter of 10 September 2003 requesting the Defendants for documentary evidence to prove their client was the employer of Mr. Ho at the time of the accident.  On 18 September 2003, the Defendants forwarded to Messrs. Gary Lau & Partners a copy of the said Form 2 which had named Shing Kee Engineering Co. Ltd. as the employer.  On 24 September 2003, Messrs. Gary Lau & Partners replied and expressly denied Mr. Ho was employed by their client on 9 May 2001.  The letter pointed out that the said Form 2 had named the employer as Shing Kee Engineering Co. Ltd. with an address at Wong Po Sun Tsuen, Hung Hom, Kowloon and the business registration number 18107822, their client had a different business address and a completely different business registration number from the one set out in the said Form 2.  The letter further enclosed a business registration search on Ngai Shing Sau trading as Shing Kee Engineering Co. with the business registration number 18107822 and the address at Wong Po Sun Tsuen in Hung Hom, identical to the one in the said Form 2. 

48.  Based on the aforesaid, the Defendants maintained the decision to join Shing Kee Engineering Co. Ltd. as the 2^nd defendant in the alternative to the 1^st defendant when the Writ of Summons was issued on 20 April 2004 to be correct. 

49.  Up to the stage of the issue of Writ, the Defendants considered there was a need to join the 2^nd defendant as an alternative to Ngau Shing Sau (the 1^st defendant) as the Defendants claimed it was not clear if Mr. Ho was employed by a firm operated by Ngai Shing Sau or a limited company in the name of Shing Kee Engineering Co. Ltd.  The information on the said Form 2 filed by Hyundai had probably misled the Defendants on the identity of Mr. Ho’s employer.  It is also possible that further confusion was caused by the accident report of the labour officer referring to Mr. Ho’s employer as Shing Kee Engineering Co. Ltd.  However, the Defendants had been alerted by Messrs. Gary Lau & Partners in September 2003 that the business registration number referred to by the main contractor Hyundai in the said Form 2 belonged to Ngau Shing Sau trading as Shing Kee Co.  Upon being so informed, the Defendants were duty bound to conduct full investigations before joining the both Shing Kee companies in the alternative in the said action. 

(2) Whether the Defendants was correct in maintaining the claim against Shing Kee Engineering Co. Ltd. until 2 September 2005?

50.  Regards should be paid to the events that took place after the service of the writ on the 3 defendants in the said action.  On 10 June 2004, Messrs. Krishnan & Tsang informed the Defendants they have instructions to accept service on behalf of the insurer of Ngai Shing Sau trading as Shing Kee Company and Hyundai.  On 11 June 2004, Messrs. Gary Lau & Partners filed a defence on behalf of Shing Kee Engineering Co. Ltd. and requested for Further and Better Particulars on the Statement of Claim on the same day.  For some unknown reasons, the Defendants seemed to be ignorant of the 2^nd defendant’s filed defence and  wrote on 26 June 2004 to Messrs. Gary Lau & Partners giving them an extension of time to file a defence on Shing Kee Engineering Co. Ltd.’s behalf.  In the same letter, the Defendants informed Messrs. Gary Lau & Partners that it seemed likely the 1^st defendant will admit to be the employer and in such an event, the 2^nd defendant (Shing Kee Engineering Co. Ltd.) can be released from the action.  The Defendants further suggested to the 2^nd defendant the summons (for F&BP) should be withheld for the time being.  On the same day, Messrs. Gary Lau & Partners replied and informed the Defendants that they had already filed a defence on behalf of their client on 11 June 2004.  On 29 June 2004, Messrs. Gary Lau & Partners wrote again to the Defendants informing them that unless the answer to the F&BP was received on or before 30 June 2004, they would apply to court.  The summons was duly issued, and before the hearing on 21 July 2004, the Defendants consented to the terms of the summons with costs to the 2^nd defendant.  This was the $4,000 costs the Defendants agreed they are liable for.  As the answers to the F&BP failed to disclose anything new, it is quite possible Mr. Ho was never consulted before the answers were filed in September 2004.  This episode reflected the lack of due care and attention on the Defendants’ part.

51.  On 4 October 2004, Messrs. Krishnam & Tsang filed a defence on behalf of the 1^st defendant (Ngai Shing Sau trading as Shing Kee Company) admitting the 1^st defendant was Mr. Ho’s employer and Hyundai to be the principal contractor.

52.  It was Mr. Tong’s evidence that there was a meeting between Mr. Ho and Mr. Packwood after the 1^st and 3^rd defendants filed the defence in October 2004.  He claimed this was the 6^th meeting between the Defendants and Mr. Ho.  He claimed Mr. Ho had informed Mr. Packwood that a company known as Shing Kee Limited was mentioned in the proceedings in the Magistrate Court and that a foreman named Mr. Chan Man was in the employ of a limited company known as Shing Kee.  According to Mr. Tong, given the confusion of the identity of the parties involved, Mr. Ho had decided not to release Shing Kee Engineering Co. Ltd. for the time being unless and until (1) the transcript of the proceedings of the Magistrate Court hearing was obtained; and (2) Shing Kee Company and Hyundai Engineering & Construction Co. admitted liability and agreed to compensate him.  The Defendants claimed therefore, based on the aforesaid instructions, the claim against the 2^nd defendant had continued.  The aforesaid instructions were not recorded in any meeting notes of the Defendants or signed document of authorization from Mr. Ho.  If there was indeed a meeting at the Defendants’ office, it is unlikely that such an important decision should fail to be recorded by the Defendants.

53.  I find the defence argument to be flawed.  According to Mr. Packwood’s notes prior to the issue of writ (p. 195 of Bundle E), the name of Chan Man, foreman of Shing Kee, was already mentioned to Mr. Packwood.  Mr. Chan Man was said to be the foreman who had, on the day of the accident, instructed Mr. Ho to go on the scaffolding and who had given him the equipment to clear the rubbish chute.  Furthermore, according to the notes of proceedings at the Magistrate Court hearing obtained in May 2005, Mr. Ho was called as the second prosecution witness and had named Mr. Chan Man as the foreman working for “our boss”.  The prosecutor had referred to Mr. Ho’s employer as ‘Shing Kee Engineering Co. Ltd.’, he then spelt out the words ‘Shing Kee’.  Mr. Ho’s answer at the time was “yes, Shing Kee” (p. 64 of Bundle I).  On the other hand, when Mr. Chan Man was called at the same hearing as the 4^th prosecution witness, the first question to him was: “Mr. Chan, you are the foreman of Shing Kee Engineering Company” and his answer was “yes” (p. 81 of Bundle I).  Mr. Ho denied he was present when Mr. Chan Man gave evidence at the Magistrate Court hearing.  He said he had already left when Chan Man gave evidence at the Magistracy.  If that was the case, Mr. Ho could not have informed Mr. Tong and Mr. Packwood that Chan Man had admitted at the Magistrate Court hearing he was employed by Shing Kee Co. Ltd.

54.  Mr. Ho denied there was a meeting in October 2004 or that he had given instructions for the claim against the 2^nd defendant to continue until the full transcript of the Magistrate Court hearing was obtained or the 1^st and 3^rd defendants admitted liability.  The documents produced showed that it was only after Messrs. Krishnam & Tsang wrote on 12 August 2005 to the Defendants confirming that Shing Kee Engineering Co. Ltd. was not a subcontractor at the site was the decision to withdraw the claim against the 2^nd defendant made.  This was despite Messrs. Gary Lau & Partners’ letter of 23 May 2005 requesting their client to be released from the action with costs.  The full notes of proceedings of the Magistrate Court hearing was obtained in May 2005, unfortunately, the notes did not help to clarify the position for the Defendants.  The delay in making the decision to withdraw the claim against the 2^nd defendant could be due to the departure of Mr. Packwood in March 2005 and the assignment of Mr. John Wong to handle Mr. Ho’s claim on 23 March 2005.  However, there were no explanations as to what was done between October 2004 and 1 March 2005 before Mr. Packwood left the Defendants’ firm, and what action Mr. John Wong took after he was re-assigned as the solicitor for Mr. Ho on 23 March 2005, and further, the actions he took upon receipt of the 23 May 2005 letter from Messrs. Gary Lau & Partners requesting their client to be released from the action.  The lack of action of Mr. Packwood and Mr. John Wong indicated the lack of due care on the part of the Defendants.

55.  I find the Defendants could easily have written to Messrs. Krishnam & Tsang to ascertain if Shing Kee Engineering Co. Ltd. was a sub-contractor of Hyundai at the site before the writ was issued in April 2004.  If Mr. Ho was told there were two Shing Kee companies, he would have resolved the confusion by calling Mr. Ngai Shing Sau on the telephone directly to find out whether Ngai Shing Sau was operating as Shing Kee Engineering Co. Ltd. at the construction site.  The fact that no one had suggested that to him indirectly indicated he was not consulted on the joining of the limited company as a 2^nd defendant in the alternative to Ngai Shing Sau as the 1^st defendant.  Mr. Ho is not an educated man, he is also unsophisticated, simple but honest.  I accept he is an honest witness.  I reject Mr. Tong’s evidence for I find his evidence to be self-serving.  As to the number of meetings the Defendants had with Mr. Ho, if there were over 6 meetings, the Defendants’ file would have made a record of all of them for billing purposes to say the least.

56.  Based on the sequence of events mentioned aforesaid, I find the Defendants should have conducted thorough investigations such as making full enquiries from Ngai Shing Sau or Hyundai before issuing the writ on the said action.  The Defendants should have ascertained who Mr. Ho’s employer was when the insurer’s solicitors accepted service on behalf of only the 1^st and 3^rd defendants.  Further, it was unreasonable for the Defendants to maintain the action against the 2^nd defendant after defence was filed by the 1^st and 3^rd defendants admitting the 1^st defendant was the employer of Mr. Ho.  Consequently, all costs incurred due to the Defendants’ failure to conduct full investigation from the 1^st defendant, Hyundai or their insurer and further failing to withdraw the claim against the 2^nd defendant after the 1^st and 3^rd defendants filed their defence admitting to be the employer of Mr. Ho and main contractor at the site should be borne by the Defendants.  I order judgment to the Plaintiff and all costs incurred to be borne by the Defendants.

Costs nisi

57.  Costs of this action to follow the event, to be taxed if not agreed with certificate for Counsel.  Should there be no application on costs within 14 days of the judgment, the costs order will be made absolute.  The Plaintiff’s own costs to be taxed in accordance with Legal Aid Regulations.