HUNG MAN PING v. WING YICK & CO BUILDING CONTRACTOR (a firm) AND OTHERS

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HEADNOTE

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                    Limitation Ordinance. Whether action against third parties time-barred. Knowledge of plaintiff. Objective test. Whether the court should exercise its power under s.30 to override the time limit.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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JUDGMENT

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1. I have before me a preliminary issue to be decided pursuant to an order made by Master Chan on the 1st March 1989 as to whether the plaintiffs claim against the 2nd and 3rd defendants is time-barred under the Limitation Ordinance, Cap.347 and insofar as it may be necessary, whether the court should or should not exercise its power under section 30 of the Limitation Ordinance to override the time limit.

2. The plaintiff suffered severe personal injuries and loss on the 20th July 1981 at about 8 p.m.when he fell a distance of about 50 feet down a lift shaft at a building site in Tuen Mun when he was in the course of leaving the premises after completing his work there, fitting fire precaution equipment. The accident was caused as a result of the lift shaft being inadequately fenced and unlit, the lights having been switched off. At the time of the accident the plaintiff was 24 years of age.

3. On the 28th July 1981, the plaintiff's mother made two applications for legal aid, the first for a claim under the Employees' Compensation Ordinance and the second for a common law claim for damages. When the application was made, the plaintiff's mother said that her son was employed by Mr Poon Wah, a sub-contractor of the 1st defendant, but in a statement that was made later by the plaintiff, he said that Mr Poon Wah was the contractor of the 3rd defendant. Legal aid was granted to the plaintiff in respect of the Employees' Compensation Claim to take proceedings against the 1st defendant which resulted in an award being made by consent on the 31st March 1983.

4. On the 26th May 1983, the plaintiff was granted legal aid for the common law claim and Ronald Ho & Co. were assigned as solicitors on his behalf. One of the documents sent to the solicitors was the factory inspector's report of the accident which described the plaintiff's employer as the 1st defendant although against the word "Remark", it was stated that he was directly employed by the 3rd defendant. The circumstances of the accident as set out in the factory inspector's report read as follows :-

"On the day of accident, I/P had to work overtime to fit the fire fighting equipment on the top floor of a building under construction. At 8 p.m. it was time to leave. I/P packed up his tools and went to join his workmates working at 14/F via the staircase. Meanwhile, all the lights in the building went off and thus there was complete darkness. Then they together went to their store-room at 1/F to lock their tools in it. After that they intended to leave by means of the same staircase. However, I/P mistakenly took the lift shaft opening as the staircase opening and got into it. Therefore he fell a distance of about 25 ft. down to the bottom of the lift pit at G/F.

At the time of accident, a sliding door had been fitted onto the lift shaft opening at 1/F, but this door was open and the lift shaft opening was unfenced."

5. The writ in this action was issued on behalf of the plaintiff by Ronald Ho & Co. on the 21st October 1983 against the 1st defendant as the sole defendant. The particulars of negligence in the statement of claim include, inter alia, allegations that the 1st efendant had failed to ensure that the lift shaft opening was securely fenced, and failed to provide efficient lighting. Particulars of the 1st defendant's conviction on the 7th June 1982 for a breach of Regulation 45(c) of the Construction Sites (Safety) Regulations, Cap.59 by reason of its failure to guard the lift shaft adequately are also pleaded.

6. A defence was filed by the 1st defendant on the 22nd November 1983 at which time third party notices were issued by the 1st defendant against the 2nd, 3rd and 4th defendants. In the defence, it was denied that the plaintiff was employed by the 1st defendant, but was an employee of the 3rd defendant. The defence goes on to allege that the 1st defendant had complied with all safety provisions in connection with the installation of the lifts at the site and had employed a reputable specialist contractor, the 2nd defendant, to carry out the work as a separate independent contractor. The 3rd defendant was also described as an independent specialist contractor for the installation of fire fighting equipment whilst the 4th defendant was described as an independent contractor for carrying out the electric work.

7. The 1st defendant denied all allegations of negligence and contended that the plaintiff was entirely to blame for the accident or, in the alternative, was guilty of contributory negligence.

8. In its particulars, the 1st defendant alleged that the plaintiff or the supervisor of the 3rd defendant had been informed by the 4th defendant that the lights at the premises would be turned off at 8 p.m. on the date of the accident so that the plaintiff should have left the premises before 7.45 p.m., but did not heed the warning.

9. The third party notices refer to various agreements entered into between the 1st defendant and the other three defendants to which the plaintiff was not a party. No further steps have been taken in the third party proceedings since the notices were issued.

10. The defence was amended on the 24th November 1983 but no further steps were taken until Ronald Ho & Co. sought counsel's opinion in December 1984, which was five months after the three year limitation period had expired, as to whether the third parties that had been joined by the 1st defendant should be joined as co-defendants. Counsel settled an amended statement of claim joining the third parties as defendants in January 1985, but Ronald Ho & Co. neglected to take any further action in the proceedings.  After Ronald Ho & Co. cased to act in January 1986 another firm of solicitors was assigned by the Legal Aid Department to act for the plaintiff in March 1986.

11. On the evidence, there appears to be a very good case for a claim for damages in negligence by the plaintiff against Ronald Ho & Co. It is indeed significant that the plaintiff admits that there is a viable cause of action against Ronald Ho & Co. which has a good prospect of success and that the damages recovered might exceed the amount the plaintiff might claim from the present defendants and that it is likely that a full indemnity in respect of costs and interest will be awarded.

12. Master McInnes made an order joining the third parties as defendants on the 20th November 1986.

13. In the amended statement of claim which was filed on the 26th November 1986, the plaintiff now alleged that he was an employee of the 3rd defendant whilst the 1st defendant was sued as the main contractor.

14. By their defence, the 2nd and 3rd defendants have pleaded that the plaintiff's action is time-barred under s.27 of the Limitation Ordinance.

15. Section 27 where relevant reads as follows :-

"27.(1)    This action applies to any action for damages for negligence, … or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under an Ordinance or imperial enactment or independently of any contract or any such provision) where the damages claimed by the plaintiff for the negligence, ... or breach of duty consist of or include damages in respect of personal injuries to the plaintiff or any other person.

 

16. Prior to the filing of the defence and third party notices by the 1st defendant, the plaintiff said that he had no knowledge that he had a cause of action against either the 2nd or 3rd defendants. Whilst he said that he was aware that a separate contractor was responsible for the installation of the lifts, he was not aware of the identity of the company.

17. With regard to the 3rd defendant, the plaintiff was not aware of the allegation made by the 1st defendant that the 3rd defendant had been informed by the 4th defendant that the lights would be switched off at 8 p.m. on the evening of the accident and that the employees of the 3rd defendant were required to leave by 7.45 p.m. He states that he had informed his solicitor Mr Roy Chan of Ronald Ho & Co. that the 3rd defendant was his employer, but did not realise that he had a cause of action until the defence was filed. Mr Chan testified that he does not have a written record as to whether the plaintiff told him of this fact but believes that if he had been informed, he would have written it down. The evidence on this matter was inconclusive, but is immaterial to my decision.

18. The plaintiff was unsure who was his employer for although he received his wages from Mr Poon Wah, the 3rd defendant paid employees' insurance on his behalf and also paid his wages direct on one occasion when he was absent from work for a few days due to injuries sustained in a minor accident some months before the accident in question in these proceedings. Whilst he was in hospital after the accident the plaintiff received two-thirds of his wages as sick pay from the 3rd defendant for about four months. He said that the 3rd defendant was making the payments as they would be able to recover them from the 1st defendant. Following receipt of sick pay from the 3rd defendant the plaintiff received sick pay from the 1st defendant until July 1982.

19. The plaintiff agreed that he had heard of the name Hitachi in connection with electrical goods but was unaware that they were also in the construction business. The plaintiff states that he neither reads nor writes English and was unaware of the 2nd defendant's logo nor had he seen any vehicles belonging to the 2nd defendant at the site, nor had he seen any notice or hoarding at the site bearing the 2nd defendant's name. In addition he said that he had not seen any evidence of the 2nd defendant's name on any of the equipment that it was using for the installation of the lifts. In cross-examination, the plaintiff said that he worked in close proxmity with the employees of the 2nd defendant who were putting in the lift equipment, but did not speak to them although he had been working at the site for between four and five months.

20. The plaintiff attended the hearing at the Magistrates Court when the 1st defendant was prosecuted in 1982 when he became aware that the 2nd defendant was responsible for the construction of the lifts, but did not appreciate that he had a good cause of action to take against them for damages. The 2nd defendant in fact was not prosecuted for any offence under the Construction Sites (Safety) Regulations.

21. Miss Yu Siu-yuk, the 3rd defendant's secretary testified that the 3rd defendant had paid the plaintiff's insurance direct and had also paid his wages direct when he was injured in a minor accident.  Following a clear admission by Miss Yu in her affirmation of the 12th May 1989 that the plaintiff was an employee of the 3rd defendant, the 3rd defendant now seeks to resile from that admission on the grounds that he was an employee of Mr Poon Wah, a sub-contractor of the 3rd defendant. By way of explanation, the 3rd defendant claims that it refers to workers in a loose sense meaning those workers who were recruited by its sub-contractors.

22. Mr Ng Sing, the assistant manager of the 2nd defendant, gave evidence with regard to the vehicles of the 2nd defendant that were driven to and from the site which bore the logos, symbols or signs of the 2nd defendant. There was also further evidence of the 2nd defendant's presence by way of a notice board at the entrance to the site bearing the 2nd defendant's name indicating that it was responsible for the installation of the lifts whilst equipment delivered to the site in big wooden boxes had the logo, symbol or sign of the 2nd defendant as did an advertising board affixed to some scaffolding on the 2nd floor of the building at the site. Mr Ng produced photographs which supported his evidence.

23. It is the plaintiff's case that he was not aware that he had a cause of action against either the 2nd or 3rd defendants until the defence and third party notices were served on the 22nd November 1983. As a result, if the plaintiff is right, the application for joinder was within the statutory period of three years from the date when he acquired knowledge. For the 2nd defendant, it has been submitted that the plaintiff should have been aware of the presence of the 2nd defendant having regard to the evidence of Mr Ng and that in all probability he had spoken to some of the 2nd defendant's employees. However, no evidence was adduced by the 2nd defendant from any of their employees having spoken to the plaintiff. It is not in dispute that the plaintiff neither reads nor writes English so that the logos of the 2nd defendant in English would not have drawn his attention to the 2nd defendant's presence. It was also argued on behalf of the 2nd defendant that a more aggressive approach by Ronald Ho & Co. and the lawyers of the Legal Aid Department should have resulted in the disclosure of the 2nd defendant's identity. It was also contended on behalf of the 2nd defendant that Ronald Ho & Co. and the Legal Aid Department were in a position to give expert advice on law so that the plaintiff should be fixed with constructive knowledge of the 2nd defendant. However, the advice given to the plaintiff was to rely upon the negligence and breach of statutory duty of the 1st defendant so that having regard to the proviso to s.27(8) of the Ordinance I do not consider that the plaintiff was fixed with knowledge.

24. The test of knowledge is an objective test to be decided by considering whether a reasonable man invested with the characteristics of the plaintiff, aged 24 at the time of the accident, would have realised that the two defendants could have been responsible for his accident.

25. Having seen and heard the plaintiff, I am quite satisfied that he was an honest and truthful witness. At the time when the accident occurred, he was clearly under the impression that the 1st defendant, as the main contractor, was responsible for security at the site and his attention had not been directed to any other possible defendant. Whereas he acquired knowledge that the 2nd defendant was responsible for the installation of the lifts during the prosecution of the 2nd defendant in 1982, the 2nd defendant was not as I have said a defendant in those proceedings. Even if he had knowledge of the 2nd defendant's presence, which I accept as a fact that he did not, this would not be sufficient to bar the plaintiff's claim. Until the allegations of the 1st defendant were disclosed in November 1983, I am quite satisfied that the plaintiff was not aware that the 2nd defendant could be culpable so that I find that he did not acquire knowledge until that time.

26. With regard to the 3rd defendant, there has been much confusion as to who in fact was the plaintiff's employer. The 3rd defendant, as I have said, has pleaded from the outset that they employed the plaintiff, but now contends that the word "worker" was used loosely, and that an application will be made to amend the defence. Confusion also arose with regard to the proceedings under the Employees' Compensation Ordinance which placed primary liability upon the principal contractor to satisfy any judgment.  As the principal contractor ordinarily carries the insurance cover for the employees of sub-contractors, there is no doubt that an employee would be confused as to the identity of his employer. The 1st defendant discharged its responsibility for the employees' compensation claim and I do not see any reason to doubt the plaintiff's evidence that at the time when proceedings were instituted he believed that only the 1st defendant was liable in damages.

27. Evidence reveals that the plaintiff was paid his wages by both Mr Poon Wah and the 3rd defendant and according to Miss Yu that if the plaintiff was unable to return to work, he could go to the main contractor, the 1st defendant, so that he had been paid both by the 3rd and 1st defendants. I am therefore quite satisfied that the plaintiff did not have knowledge within the meaning of s.27 of the Ordinance until the 1st defendant served its defence and third party notices on the 22nd November 1983 so that the plaintiff was in time when the 3rd defendant was joined in the action on the 20th November 1986.

28. If I had held that the plaintiff had acquired knowledge of a cause of action against the 2nd or 3rd defendants before the service of the defence and the third party notices, it was submitted on behalf of the plaintiff that I should exercise my discretion by disapplying the provisions of s.27 by virtue of s.30 of the Ordinance. S.30 where relevant reads as follows :-

29. The burden is upon the plaintiff to establish that once he became aware of the potential claims against the 2nd and 3rd defendants he acted promptly and reasonably. No blame can be attached to the plaintiff for it is clear that it was the fault of the solicitors Ronald Ho & Co. that steps were not taken to join the defendants at an earlier date. Some fault appears to lie with the Legal Aid Department for the considerable delay that occurred before legal aid was granted to take proceedings for the common law claim and for their failure to ensure that Ronald Ho & Co. proceeded to prosecute the case with due diligence. Nevertheless, it was contended on behalf of the 2nd and 3rd defendants that the plaintiff will suffer no prejudice if I refuse to disapply the provisions of s.27 because he has a very strong case against the 1st defendant and that if only 1% liability is established, he will be entitled to recover in full against the 1st defendant who is insured, and that there is no likelihood of damages not being recovered. Further, any claim against Ronald Ho & Co. is also likely to be met.

30. Although Mr Ozorio for the 2nd defendant submitted that the 2nd defendant would not suffer any specific prejudice, he said that the evidence of witnesses so long after the accident would not be so fresh or clear which amounts to general prejudice.

31. The 1st defendant has alleged, apart from pleading negligence and/or breach of statutory duty on the part of the 2nd, 3rd and 4th defendants, a breach of common law duty of care under s.3(4)(b) of the Occupiers Liability Ordinance, Cap.314 which reads :-

As a result, the 1st defendant, if it succeeds in this defence, would not be liable for damages to the plaintiff. Clearly, the plaintiff would be prejudiced if he does not succeed against the 1st defendant and is deprived of his action against the 2nd and 3rd defendants. The 1st defendant at present may well be in a good position to satisfy any claim for damages, but it must be borne in mind that many companies formerly thought to be in a healthy financial state have become insolvent whilst there have been recent cases of insurance companies in Hong Kong having been wound up on the grounds of insolvency.

32. With regard to the alternative course of suing the solicitors Ronald Ho & Co., it will still necessary for the plaintiff to establish that he will succeed against the primary tortfeasor. However, although relevant, I do not consider that it carries great weight in the circumstances of this case for both the 2nd and 3rd defendants knew that they had a claim to face within the limitation period after the third party notices had been issued. I am satisfied that no prejudice has been suffered by either the 2nd or 3rd defendants.

33. The court has an unfettered discretion to disapply the three year time-bar, see Conry v. Simpson [1983] 3 All ER 369 and Thompson v. Brown Construction (Ebbw Vale) Limited [1981]2 All ER 296, [1981]1 WLR 744.

34. The cause of the time-bar was the confusion that arose with regard to the identity of the plaintiff's employer at the time of the accident and the plaintiff's lack of knowledge that there was a cause of action against the 2nd and 3rd defendants.

35. In the event that I had found that the action was time-barred under the first limb, I would have had no hesitation in exercising my discretion in favour of the plaintiff under the second limb to disapply the time-bar under s.30.

36. As a result, I hold that the plaintiff's claim against the 2nd and 3rd defendants is not time-barred under the Limitation Ordinance. In handing down this judgment I shall make an order nisi for costs of this application to the plaintiff with the usual taxation in accordance with the Legal Aid (Scale of Fees) Regulations.