丁志剛 v. 梁勁烽經營烽物流公司 AND OTHERS

DCEC 1783/2023

[2026] HKDC 1201

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1783 OF 2023

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IN THE MATTER OF AN APPLICATION BETWEEN

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DECISION ON COSTS

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Background

1.  The Applicant (“A”) claims in this action against his employer as the 1^st Respondent (“R1”) and the principal contractor as the 2^nd Respondent (“R2”) for employees’ compensation (“EC”) under the Employees’ Compensation Ordinance (Cap 282) (“ECO”) in respect of a work accident that he met on 16 February 2022 (“Accident”).

2.  A was a transportation driver and was driving a lorry bearing registration number XT1185 (“Lorry”) provided by his employer in the Accident. He sustained injuries when the Lorry hit the ceiling of a car park.

3.  The EC Application was filed on 4 August 2023.

4.  A had all along been acting in person until almost 2 years after commencement of the action when he was granted Legal Aid. The Director of Legal Aid (“DLA”) filed a Notice to Act for him on 23 July 2025.

5.  R1 has not entered an appearance in these proceedings and was absent from all court hearings. Interlocutory Judgment was entered against him on 19 September 2025.

6.  R2 denies being the principal contractor and asserts that the Intended 3^rd Respondent (“IR3”) held that role.

The Summonses

7.  There were 2 summonses before this Court:

(1) A’s Summons filed on 15 October 2025 seeking to join IR3 in this action as the 3^rd Respondent out of time (“A’s Summons”),[1] with his Affirmation in support;[2] and

(2) IR3’s Summons filed on 30 April 2026 (ie more than 6 months after A’s Summons was issued), also for the same relief of joinder of IR3 (“IR3’s Summons”).[3]

8.  Thus the parties are agreed for IR3 to be joined in this action as the 3^rd Respondent out of time.

9.  The only issues before this Court are costs which include (i) costs of A’s Summons; (ii) costs of IR3’s Summons; and (iii) costs of the hearing of substantive arguments.

10.  Mr Simon Wong of counsel appeared for A.

11.  R1, acting in person, was absent. He made no response to A’s Summons nor IR3’s Summons though both Summonses were duly served on him.

12.  R2 was represented by Mr Lewis Chan of Messrs Winnie Leung & Co.

13.  Mr Leon Ho of counsel appeared for IR3.

Costs Orders Sought

14.  A initially, as set out in A’s Summons, proposed costs in the cause of A’s Summons in respect of the joinder of IR3 out of time; but as the arguments escalated and upon issue of IR3’s Summons, A now seeks and argues for the following costs order:

(i) Costs of and occasioned by A’s Summons on or before 8 November 2025 be in the cause, the rationale being that IR3 should have by which time (ie 21 days after issue of A’s Summons and Affirmation in support) had ample time to consider and act reasonably by consenting to A’s Summons;

(ii) Costs of and occasioned by A’s Summons after 8 November 2025 be to A, payable by IR3, on the indemnity basis, with certificate for counsel; and

(iii) Costs of IR3’s Summons also be to A, payable by IR3, on the indemnity basis, with certificate for counsel.

15.  On the other hand, IR3 seeks costs against A of both A’s Summons and IR3’s Summons, with certificate for counsel. IR3’s main arguments are that A was acting unreasonably and by whose delay had necessitated or resulted in the issue of A’s Summons to join IR3 in the action out of time. A was seeking the indulgence of the court and thus should pay IR3’s costs.

16.  R2 takes a neutral stance to A’s Summons and IR3’s Summons for joinder and on the issues on costs. It simply asks that its costs of the Summonses be provided for.

IR3’s Summons

17.  IR3’s Summons, issued after IR3’s strenuous opposition to A’s Summons for more than 6 months, seeks the same relief of joinder of IR3 as the 3^rd Respondent (and some consequential amendments), vacating the substantive arguments hearing fixed for A’s Summons and costs to IR3 against A.

18.  IR3 was thus in essence consenting to the relief sought in A’s Summons leaving the question of costs to be argued. It is wholly unnecessary for a separate summons to be issued.

19.  I do not follow nor accept the submissions of IR3’s counsel Mr Ho that IR3’s Summons would help to clarify the stance of IR3 or narrow down the issues or considerations of costs. He had no answer to this Court’s question why IR3’s Summons had to be issued, nor any authority in support.

20.  I accept A’s counsel Mr Wong’s submissions that IR3’s Summons is entirely misconceived, and a waste of time and costs. It is in my view reflective of IR3’s unreasonable and oppressive litigation conduct which would be relevant to the court’s consideration of costs, as explained later in this Decision.

21.  At the end of the hearing, I dismissed IR3’s Summons with costs reserved to this Decision.

Chronology of Events / Procedural History

22.  I have perused the case files and A’s Affirmation in support of A’s Summons.

23.  Solely on the issue of costs of the 2 Summonses, it would not be necessary for this Court to go into detail of the Accident or the relationship between A, R1, R2 and IR3, or to rule on whether the reasonable excuse requirement under s14(4) of the ECO was satisfied by A to justify the joinder of IR3 out of time.

24.  In considering costs of the 2 Summonses, the following chronology of events/procedural history is pertinent:

16.2.2022	Accident
11.7.2022	A notified the Labour Department (“LD”) of the Accident, naming “Projecat team” to be his employer[4]
18.8.2022	LD’s letter to A informing him of R2’s report that A’s employer should be “King’s Logistics Company Limited” (“King’s Logistics”), a sub-contractor of R2. “Projecat team” and R2 apparently had the same office address hence R2 had received the letter addressed to “Projecat team” from LD;[5]
31.8.2022	R2 filed a Form 2 with LD denying being A’s employer[6]
14.11.2022	Death of A’s wife (unrelated to the Accident or this action)
4.8.2023	Application (naming King’s Logistics and R2 as the respondents)
12.12.2023	Amended Application (naming R1 “烽物流公司” and R2 as the respondents)
12.4.2024	R2, represented by Messrs JC Legal (“JC Legal”), filed an Answer pointing at IR3 to be the principal contractor
19.7.2024	JC Legal ceased to act for R2 (who thereafter took no action and became unresponsive)
25.7.2024	Re-Amended Application (naming R1 “梁勁烽經營烽物流公司” and R2 as the respondents)
9.8.2024	Letter from the Employees’ Compensation Assistance Fund Board (“Fund Board”) to A requiring the latter to identify and consider to sue the principal contractor[7]
26.2.2025	Letters of Administration granted to A in respect of the estate of A’s late wife[8]
3.7.2025	A was granted Legal Aid
23.7.2025	Notice to Act for A by DLA
19.9.2025	Interlocutory Judgment against R1
22.7.2025 - 9.10.2025	DLA issued 14 letters to R1, R2, IR3, The Dairy Farm Company, Limited (“Dairy Farm”) and Wellcome Company Limited (“Wellcome”) (suspected to be related to A’s work and the Accident) seeking information on the identity of the principal contractor and/or their involvement in A’s work/the Accident[9] – no reply was received
15.10.2025	A’s Summons to join IR3
11.11.2025	Notice to Act for IR3 by Messrs Johnson Stokes & Master (“JSM”)
11.11.2025 - 10.4.2026	Exchange of 21 letters between JSM and DLA on arguments on A’s Summons to join IR3 and “without prejudice” correspondences whereby IR3 requested A to discontinue/withdraw the action against IR3 on a “drop-hands” basis[10]
20.2.2026	Notice to Act for R2 by Messrs Winnie Leung & Co (“WL & Co”)
9.4.2026	R2 filed a witness statement of its Senior Manager 狄裕安 (“Dik”) stating the involvement of IR3 and its relationship with R1, R2 and A[11]
22.4.2026	JSM’s letter to DLA, agreeing to the joinder with costs to be paid by A to IR3[12]
30.4.2026	IR3’s Summons seeking to be joined with costs against A
21.5.2026 - 1.6.2026	Further correspondences between JSM and DLA arguing on costs[13]

Discussion

Unreasonable Conduct of A?

25.  Mr Ho for IR3 argues that the unreasonable conduct of A would justify costs orders in favour of IR3 and against A in respect of both Summonses.

26.  The unreasonable conduct of A referred to by Mr Ho in fact points to the alleged unreasonable delay on the part of A beyond the 2-year limitation period, resulting in the late joinder application/A’s Summons issued on 15 October 2025. The delay was of a substantial length of 20 months.

27.  This seems to me to be water under the bridge as IR3 had consented to the joinder application. IR3 is not complaining about A’s litigation conduct pertaining to the issue of or events arising from A’s Summons.

28.  For the purposes of considering costs only, it is not necessary for me to go into detail or make a ruling whether A had demonstrated a reasonable excuse under s14(4) of the ECO. However, in view of the attack on A’s conduct (of unreasonable delay) by IR3, I have considered the matters set out in A’s Affirmation in support, bearing in mind in particular the question whether A’s conduct should warrant costs sanctions.

29.  The following matters are not disputed which in my view would tip the balance in favour of a reasonable excuse being established hence granting leave under s14(4) ECO:

(1) A had no legal representation all along and acted in person until he was granted Legal Aid on 3 July 2025 and thereafter represented by DLA;

(2) R1 (the employer) did not file a Form 2. He took no part in these proceedings and was absent from all court hearings. A could not elicit any help or information from R1 on the identities of the potential respondents/principal contractor;

(3) A was able, only with the assistance of LD long after the Accident, to identify R2 who had a contractual relationship with R1. He had difficulties ascertaining the identity and correct name of his employer R1. He had no knowledge about any principal contractor. It had taken A almost a year after issue of the EC Application and not until after 4 court hearings when he finally on 25 July 2024 filed a Re-Amended Application just to make correct the name of R1;

(4) He did not know about the name nor the alleged involvement of IR3 until R2 in its Answer filed on 12 April 2024 pointed to IR3 to be the principal contractor. By then the 2-year limitation period had already expired;

(5) On a separate matter, A had to attend to personal/family matters of his late wife (who passed away in November 2022) including applying for the Letters of Administration of the estate which were subsequently granted on 26 February 2026;

(6) A was requested by the Fund Board per its letter dated 9 August 2024 to ascertain the identity of the principal contractor and consider whether to sue it. He was under pressure to consider to join IR3 otherwise his eligibility for relief payment in future might be jeopardised;

(7) By then R2 had become unrepresented and unresponsive, and from whom A could not get further information regarding the principal contractor;

(8) A applied for Legal Aid in April 2025, which was granted on 3 July 2025;

(9) Upon filing a Notice to Act, DLA immediately made investigation/enquiry by sending some 14 letters in the following 2 to 3 months to R1, R2, IR3 and the suspected related parties Dairy Farm and Wellcome;

(10) IR3, Wellcome and Dairy Farm share the same registered office address. As revealed in DLA’s investigation, Wellcome was the registered owner of the Lorry provided for A’s work in the Accident. Dairy Farm had followed up on the claim of another co-worker 劉典聲 (“Lau”) who was injured together with A in the Accident. R2 had reported to LD that King’s Logistics, R2’s subcontractor, was A’s employer;

(11) Having received nil response to any of his letters, DLA issued A’s Summons on 15 October 2025;

(12) Finally, JSM acting on behalf of IR3 replied on 11 November 2025 and denied its involvement. Lengthy correspondences ensued on IR3’s opposition to A’s Summons, requests for discontinuance and costs arguments, etc, until the issue on 30 April 2026 of IR3’s Summons, whereby IR3 consented to be joined;

(13) Upon R2’s re-engagement of legal representation (of WL & Co) on 20 February 2026, JSM insisted that IR3’s consideration of the joinder would depend on the evidence to be adduced by R2; and

(14) In Dik’s witness statement filed on 9 April 2026 by R2, he states the relationship between R2, its subsidiary Pickupp Groceries Technology (Hong Kong) Limited and IR3 in their business operation and the transportation work undertaken by A at the time of the Accident. He also states that IR3 had settled the claim by the other injured co-worker Lau arising out of the Accident, but R1 or R2 were not involved.

30.  Upon A’s Affirmation in support and the evidence set out in §29 hereinabove, I would have considered the reasonable excuse requirement under s14(4) ECO satisfied and granted leave to the joinder out of time even if A’s Summons were contested by IR3.

31.  The particular facts of the present case are such that I am driven to conclude that IR3’s opposition, maintained for 6 months after the issue of A’s Summons, was unreasonable.

32.  On the evidence, the period of delay or inaction of A during which he should have taken steps to join IR3 would commence, as pointed out by Mr Ho, from the filing of R2’s Answer in April 2024, or the latest when A was alerted by the Fund Board in August 2024. By then the 2-year limitation period had already expired. A could not then seek help from R1 or R2 who took no part in the action as R2 became unrepresented. A approached DLA for assistance in 2025. Legal Aid was granted on 3 July 2025. Thereafter DLA promptly made investigation and enquiry, and with no help forthcoming, issued A’s Summons on 15 October 2025.

33.  I do not accept Mr Ho’s argument that there was unreasonable delay on the part of A. The overall circumstances have in my view provided explanations satisfying the reasonable excuse requirement under s14(4) of the ECO.

34.  Also I do not consider Mr Ho’s complaint of the alleged “unreasonable delay” of A, resulting in the late joinder application, would per se and without more, justify costs sanctions against A in respect of A’s Summons.

35.  Had IR3 genuinely thought that there was unreasonable delay by A, it could have contested A’s Summons, avoided the joinder and won costs against A.

36.  IR3 had consented to the relief of joinder sought by A. Its consent must be reflective of IR3’s consideration whether the late joinder was a result of A’s unreasonable delay (as alleged by IR3), or whether the evidence satisfies the reasonable excuse requirement, justifying granting of leave under s14(4) ECO.

37.  There is nothing in the evidence which suggests that A has acted unreasonably in issuing or after the issue of A’s Summons.

IR3’s Litigation Conduct

38.  Rather, I consider IR3’s litigation conduct left much to be desired.

39.  From the overall evidence, IR3 should have knowledge of its capacity and role vis-à-vis A’s work from day one and its potential involvement in the action well before A’s Summons was issued.

40.  According to the evidence of R2’s Senior Manager Dik, IR3 had settled the claim by A’s co-worker Lau who was also injured in the Accident. IR3 must be alerted of its potential liability in this action upon DLA’s numerous letters of enquiry sent during July to October 2025 to IR3, Wellcome and Dairy Farm who were shown to be related and might be involved in the Accident, though it had chosen not to reply.

41.  Upon the issue of A’s Summons, IR3 had maintained strenuous opposition to the proposed joinder and argued on costs for 6 months by exchange of some 20 letters with DLA. It also demanded A to withdraw/discontinue the action against IR3 on a “drop-hands” basis, with threats on costs failing discontinuance.

42.  I have considered the contents of the correspondences exchanged between A and IR3.

43.  I do not accept Mr Ho’s submissions that any of such correspondences were genuine “without prejudice” discussions on settlement aiming to resolve the disputes in any reasonable or sensible manner. It was obvious that IR3 was raising the strenuous opposition aiming to pressurise A to withdraw the action against IR3 with no order as to costs.

44.  By 10 April 2026, JSM asserted that its filing of an affirmation in opposition to A’s Summons would be contingent upon receipt and review of R2’s witness statement to be filed.

45.  This is wholly unreasonable – the material facts and evidence revealed in Dik’s witness statement subsequently filed regarding (i) IR3’s relationship with the other parties and its capacity/involvement in A’s work and ultimately whether it was a principal contractor; and (ii) the alleged settlement by IR3 of the claim of the other worker (Lau) injured in the Accident are all within IR3’s own knowledge.

46.  IR3, likely related to the large corporate entities of Wellcome and Dairy Farm (as they all share the same registered office address), should know full well all along its own role in the business operation. It needs not wait to be told by R2 of its capacity and involvement in A’s transportation work and for that matter, potential liability arising from the Accident.

47.  I accept A’s counsel Mr Wong’s submissions that IR3’s strenuous opposition and threats on costs for 6 months until after filing of R2’s witness statement, resulting in substantial costs of arguments, was unreasonable. It was adopting an opportunistic approach aiming to deny A’s legal entitlements under the ECO behind the veil of different corporate entities with contractual arrangements only known amongst themselves.

48.  The issue of IR3’s Summons and its attempts to seek costs of both Summonses after it had indicated concession to A’s joinder application out of time, and after substantial costs were incurred on its arguments and belated concession, escalated to a substantive hearing on the only issues of costs, are even more unreasonable and demonstrative of IR3’s arrogant and oppressive litigation conduct.

49.  The enormous costs that have been incurred upon IR3’s unreasonable opposition, the unconstructive arguments for 6 months and the substantive hearing would likely become highly disproportionate to the claim itself. This is undesirable and wholly defeats the underlying objectives of the CJR under O1A r1 of the Rules of the District Court, Cap 336H (“RDC”).

50.  Having said that, it was reasonable for Mr Wong to suggest that IR3 should upon issue of A’s Summons be allowed some time to make enquiry/investigation and seek legal advice in evaluating its position and further conduct. I consider that a period of say 6 to 8 weeks, up to no later than 3 December 2025, would be reasonably required for which period an order of costs in the cause would be appropriate.

51.  A’s Summons should have been resolved by consent to the joinder within that period had IR3 taken a reasonable approach, whereupon costs would have been in the cause.

52.  Other than that, to show the court’s disapproval of IR3’s unreasonable litigation conduct, I consider it appropriate in the circumstances that IR3 should bear the costs of A and R2 in respect of A’s Summons and IR3’s Summons.

53.  It is nevertheless expected that as R2 took a neutral stance to both Summonses and was not involved in the arguments and exchange between A and IR3, its costs of the Summonses, other than attendance at the substantive hearing, should be minimal. R2’s costs of the Summonses payable by IR3 should be on the usual party and party basis.

54.  There should be no order as to R1’s costs of A’s Summons and IR3’s Summons as he made no response and remained absent though having been duly served with the Summonses.

55.  Mr Ho has referred me to some authorities in which other costs orders (less favourable to or against the applicants) were made upon the court’s granting leave to the applicants for joinder out of time under s14(4) ECO.

56.  The court has full discretion as to costs pursuant to section 53(1) of the District Court Ordinance (Cap 336). Having considered the authorities submitted by Mr Ho, I do not find it helpful to draw an analogy from those decided cases with entirely different facts.

57.  Also as provided under O62 r5 of the RDC, the court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account, inter alia, the underlying objectives set out in O1A r1 and the conduct of all the parties, and be guided by O62 r2.

Indemnity Costs

58.  A seeks indemnity costs against IR3 on both Summonses.

59.  O62 r28(3) empowers the court to order indemnity costs as and when it thinks fit to do so. The discretion of the court is not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be “appropriate”. If the pursuit of a defence constitutes oppressive conduct which was part of an oppressive game plan, then invocation of the power to award costs on an indemnity basis might well be justified. (See Hong Kong Civil Procedure 2026 §62/App/12)

60.  I accept the submissions of A’s counsel Mr Wong and find that after issue of A’s Summons, IR3 had acted unreasonably in (i) maintaining its strenuous opposition until after filing of R2’s witness statement in April 2026; (ii) issuing IR3’s Summons; and (iii) seeking costs against A for all the costs of both Summonses, when most of which had been resulted from IR3’s unreasonable opposition and arguments on costs, all demonstrative of its oppressive litigation conduct.

61.  Having considered all the circumstances of this case, I consider it appropriate to award A costs of both A’s Summons and IR3’s Summons, to be paid by IR3, on the indemnity basis.

Order

62.  Upon the parties’ consent/nil objection to IR3 being joined in these proceedings to become the 3^rd Respondent, this Court granted at the end of the hearing case management directions for the further conduct of this action.

63.  I further ordered that costs of the hearing on case management, apportioned at 45 minutes, be in the cause.

64.  In respect of A’s Summons and IR3’s Summons, I make the following costs order:

(1) Costs of A’s Summons up to 3 December 2025 be in the cause;

(2) IR3 do pay A’s costs of A’s Summons after 3 December 2025 and IR3’s Summons (including the costs of the hearing of the Summonses), to be taxed if not agreed, on the indemnity basis, with certificate for counsel;

(3) IR3 do pay R2’s costs of A’s Summons after 3 December 2025 and IR3’s Summons (including the costs of the hearing of the Summonses), to be taxed if not agreed;

(4) There be no order as to costs between A and R1, and between R1 and IR3 of A’s Summons after 3 December 2025 and IR3’s Summons; and

(5) The Applicant’s own costs be taxed in accordance with the Legal Aid Regulations.

65.  I consider it appropriate to deal with the costs ordered in §64(2) and (3) hereinabove by way of summary assessment in accordance with O62 r9A(1)(a) of the RDC.

66.  For those purposes, I direct that:

(1) A and R2 do lodge and serve their Statements of Costs (i) of A’s Summons covering the period from 4 December 2025 up to the hearing; and (ii) of IR3’s Summons within 21 days from the date hereof; and

(2) IR3 do lodge and serve, if so advised, its Lists of Objections to the Statements of Costs of A and R2 within 14 days thereafter.

67.  Summary assessment will be conducted by this Court on paper.