NG KEUNG LUNG v. THE PERSONAL REPRESENTATIVE AND/OR THE EXECUTOR AND/OR THE ADMINISTRATOR OF THE ESTATE OF LAM CHIK SUEN (DECEASED)

HCPI 512/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 512 OF 2004

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D E C I S I O N

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Background

1.  This is an appeal against the decision of Master B Kwan made on 10 October 2005 ordering that the Plaintiff’s claim in this action be statute barred by the provisions of section 27 of the Limitation Ordinance and that it would not be equitable to allow this action to proceed under section 30 of the Limitation Ordinance.

2.  The Plaintiff was an employee of either Lam Woo Construction Limited or Lam Woo & Co.  Lam Woo Construction Limited was the principal contractor in respect of the building works at Tai Yuen Estate Market while Lam Woo & Co was its sub-contractor.  Lam Woo & Co was a sole proprietor business of Lam Chik Suen (deceased).  Through a third company of the Lam Woo group, namely Lam Woo Company Limited, Lam Chik Suen (deceased) held 28% of the issued shares in Lam Woo Construction Limited.  Lam Chik Suen (deceased) passed away on 14 September 2002.  The personal representative of his estate is the Defendant herein. 

3.  On 9 February 2001, the Plaintiff suffered injury arising out of and in the course of his employment.  He filed an application for compensation under the Employees’ Compensation Case No DCEC 54 of 2003 against Lam Woo Construction Limited on 17 January 2003.  On 2 April 2003, Lam Woo Construction Limited filed an Answer denying liability and asserting that the Plaintiff was an employee of Lam Woo & Co.  Eight months later, the Plaintiff instituted personal injuries action under HCPI 1368 of 2003 against Lam Woo Construction Limited on 18 December 2003.  On 13 January 2004, Lam Woo Construction Limited filed a similar defence asserting that the Plaintiff was an employee of its sub-contractor Lam Woo & Co.  On 9 June 2004, the Plaintiff issued a Writ of Summons in a personal injuries action against the Defendant under HCPI 512 of 2004, i.e. the present proceedings.

4.  On 1 February 2005, the Plaintiff took out a summons seeking an order that the two personal injuries actions against Lam Woo Construction Limited and the Defendant be consolidated (the “Plaintiff’s summons”).  On the following day, the Defendant took out a summons seeking a determination of two issues, whether the Plaintiff’s action against the Defendant was time barred under section 27 of the Limitation Ordinance, and if it was, whether it would be equitable for the Court to allow the Plaintiff’s action to proceed under section 30 of the Limitation Ordinance (the “Defendant’s summons”).  On 10 October 2005, Master B Kwan ruled both issues in the Defendant’s summons in favour of the Defendant.  Against that decision, the Plaintiff now appeals.  The hearing of the Plaintiff’s summons was adjourned sine die.

The facts

5.  The Plaintiff was 43 years old when he entered into the employment contract with his employer.  He attained secondary level education in China.  He is able to read and write Chinese but not English.  On 19 August 1999, the Plaintiff was interviewed for employment to work in the Tai Yuen Estate Market project by Mr Leung Kai Tak (“Mr Leung”), a common staff of Lam Woo Construction Limited and Lam Woo & Co.  Mr Leung gave the Plaintiff his name card describing him as the site agent of Lam Woo Construction Limited.  The Plaintiff filled in his personal particulars on a two-page Chinese employment contract bearing the name of Lam Woo & Co set out prominently both in English and Chinese in the uppermost left-hand corner on the second page of the contract.  He agreed to be employed by Lam Woo & Co and signed his name on the first page of the contract.  According to the Plaintiff, he was so eager to commence work that he did not read the contract despite Mr Leung had given him the contract and asked him to read through its contents.  It is common ground that the Plaintiff was not given a copy of the contract. 

6.  The Plaintiff received his wages between the period 2 September 1999 and 19 February 2001 and during which period he had signed his name thirty-seven times on the wage record bearing the name of Lam Woo & Co prominently displayed in both Chinese and English at the top centre of the wage record.

7.  Starting from 1 January 2001, Lam Woo & Co began to pay the Plaintiff’s Mandatory Provident Fund (“MPF”).  The Plaintiff does not dispute he received monthly MPF advices from his bank showing Lam Woo & Co as his employer making the MPF contributions.

8.  On 9 February 2001, the Plaintiff suffered injury while at work.  He was given a long period of sick leave during which he was paid periodical payments in accordance with the Employees’ Compensation Ordinance.  The periodical payments were made by cheques drawn on the bank account of Lam Woo & Co.  The Plaintiff also signed receipt for the cheques in the company’s record, which was in English.  However, three of the payments were made by cheques drawn on the account of Lam Woo Construction Limited and acknowledged by the Plaintiff on the payment record of Lam Woo Construction Limited.  That record is also in English.

9.  On 4 July 2002, the Plaintiff instructed his solicitors, Messrs Yeong & Co to act for him in respect of the present action.  About two weeks later, the Plaintiff was interviewed by the adjuster of Lam Woo & Co, Mr Cheung of Lawrence & Wong Ltd about his injury.  Two months later, Lam Chik Suen passed away and Lam Woo & Co ceased business as a result.

10.  In the meantime, after receiving the Plaintiff’s instructions, his solicitors wrote to the Labour Department and on 25 September 2002 and obtained a copy of the Form 2 filed by Lam Woo Construction Limited in respect of the accident.  Lam Woo Construction Limited purportedly filed the form in its capacity as the principal contractor responsible for the construction site where the accident occurred.  In the form, Lam Woo & Co was identified as the Plaintiff’s employer.  On 26 September 2002, the Plaintiff’s solicitor, Mr Gary Yeong, showed the Plaintiff a copy of the Form 2 and sought instructions from him as to who his employer was.  The Plaintiff then produced the name card of Mr Leung showing his title as site agent of Lam Woo Construction Limited and confirmed to Mr Gary Yeong that his employer was Lam Woo Construction Limited. 

11.  However, the Plaintiff’s assertion is inconsistent with his enquiry with the Labour Department about a month and half later on 11 November 2002, in which he sought advice from the Labour Department as to how he could prosecute his claim for employee’s compensation since his employer had died.  This enquiry indicated that the Plaintiff actually knew that his employer was Mr Lam Chik Suen (deceased) trading as Lam Woo & Co.  Had he thought Lam Woo Construction Limited was his employer, he would not have bothered with the death of Mr Lam Chik Suen, especially as he had attended a conference with his solicitors on 26 September 2002 about the identity of his employer.

12.  It would be illuminating to set out the following chronology of events summarising the events since the accident on 9 February 2001:

No	Date	Event
1	9.2.2001	Plaintiff suffered injury at work
2	4.7.2002	Plaintiff instructed solicitors
3	17.7.2002	Defendant’s adjuster took statement from Plaintiff
4	14.9.2002	Mr Lam Chik Suen died
5	20.9.2002	Plaintiff’s solicitors requested for Form 2 from Labour Department
6	25.9.2002	Labour Department gave a copy of Form 2 to Plaintiff’s solicitors
7	26.9.2002	Plaintiff’s solicitors showed the Form 2 to Plaintiff and took instructions as to the identity of Plaintiff’s employer
8	11.11.2002	Plaintiff informed Labour Department that his employer had passed away and sought advice
9	17.1.2003	Plaintiff filed an application for compensation in DCEC 54 of 2003 against Lam Woo Construction Limited
10	2.4.2003	Lam Woo Construction Limited filed Defence asserting Defendant was Plaintiff’s employer
11	18.12.2003	Plaintiff instituted HCPI 1368 of 2003 against Lam Woo Construction Limited
12	13.1.2004	Lam Woo Construction Limited filed Defence asserting Defendant was Plaintiff’s employer
13	9.6.2004	Plaintiff instituted HCPI 512 of 2004 against Defendant

13.  The two issues raised by this appeal are :

(1) when did time start to run against the Plaintiff for the purpose of section 27 of the Limitation Ordinance; and

(2) if the Plaintiff’s action is time barred under section 27 of the Limitation Ordinance, whether it would be equitable for the Court to allow the Plaintiff’s action to proceed under section 30 of the Limitation Ordinance.

The 1^st Issue – when did time start to run

14.  The limitation period prescribed by section 27(4) of the Limitation Ordinance is three years from the date on which the cause of action accrued or the date of the plaintiff’s knowledge of certain facts.  Insofar as is relevant in the present case, the reference to the date of a person’s knowledge for the purpose of section 27(4)(b) is defined in section 27(6) as references to the date on which the person first had knowledge of the identity of the defendant.  A person’s knowledge is extended by section 27(8) to include his constructive knowledge.  That subsection provides:

“For the purposes of this section and section 28 a person’s knowledge includes knowledge which he might reasonably have been expected to acquire -  

(a)  from facts observable or ascertainable by him; or

(b)  from facts ascertainable by him with the help of medical or other appropriate expert advice which it is reasonable for him to seek,

but a person shall not be fixed under this subsection with knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain (and, where appropriate, to act on) that advice.

15.  In Brian Cressey and E Timm & Son Ltd & E Timm & Son Holding Ltd [2005] EWCA Civ 763, Lord Justice Rix made the following obiter observation on section 14(3) of the Limitation Act which is equivalent to our section 27(8) at paragraph 35:

“35.   The context of the Limitation Act 1980 is that of litigation.  The identity of the defendant is obviously one of a number of critical facts for the purpose of the running of time against a would-be claimant.  Section 14(3) shows that constructive as well as actual knowledge is relevant where a claimant might reasonably be expected to acquire actual knowledge from facts observable or ascertainable by him, and that would include solicitors retained by him: Henderson.  In these circumstances, the identity of a defendant appears to look to something specific enough to enable a person to be identified for the purpose of a claim form, and that is ultimately looking for a name.  One cannot sue ‘the driver of the other car’, or even ‘my employer’: a name has to be provided.  Moreover, artificial person, such as companies, can hardly even be described, save by their name.”

Insofar as the date of a person’s knowledge of the identity of the defendant is concerned, this includes the date of his actual knowledge as well as the date at which he might reasonably have been expected to acquire that knowledge from facts observable or ascertainable by him.

16.  The proper defendant in this case is the Plaintiff’s employer.  Thus, the question raised by this issue is when did the Plaintiff have knowledge of the identity of his employer.  “Identity” is a difficult concept because a person’s identity can be established in different ways.  A person may be identified by sight or by a description.  But in the context of a litigation, the defendant has to be identified by a name.  Thus, there is a distinction between knowing a person and being able to describe the identity of that person by name or to recall that name for the purpose of naming him as a defendant on a writ.

17.  Mr Law, counsel for the Plaintiff, submits that the Plaintiff had no knowledge that his employer was Lam Woo & Co because he was not given a copy of the written contract or copies of his pay slips showing the name of his employer.  He argues that when the Plaintiff signed to acknowledge receipt of his wages or compensation on the payment records of Lam Woo & Co, the Plaintiff’s attention or concern was the payment rather than the identity of the person paying him.  He submits that as the Plaintiff was given a copy of Mr Leung’s name card as site agent of Lam Woo Construction Limited it was reasonable for the Plaintiff to assume that corporation was his employer. Hence, Mr Law submits that having regard to the Plaintiff’s background and all the circumstances in this case, the Plaintiff did not have knowledge of the identity of the proper defendant until 25 September 2002 when his solicitors received a copy of the Form 2 from the Labour Department and hence time did not start to run against the Plaintiff until 25 September 2002.  Counsel for the Defendant, Mr Pun argues otherwise. 

18.  The factual situation here is not one of identifying a wrongdoer in a hit and run accident.  This is not a case of the Plaintiff not knowing who is the proper defendant.  The Plaintiff entered into the contract of employment with wide-open eyes.  The employment contract was written in Chinese.  The name of his employer is prominently set out on the contract in Chinese and English.  The Plaintiff signed his name on the declaration declaring his willingness to be employed by Lam Woo & Co at the Tai Yuen Estate Market project.  He must have knowledge of the identity of the person with whom he was working for.  It is not open to him to disclaim that knowledge by saying he was careless or he was so anxious to start his employment that he was not concerned about the name of his employer.  This is not a case where an employer conceals his true identity or gives misleading information as to his identity.  The Plaintiff knows his employer and he knows his employer is the proper defendant.  Not only that, there is positive evidence that the Plaintiff had knowledge of the identity of his employer was Mr Lam Chik Suen for he took the trouble of seeking advice from the Labour Department as to how he could prosecute his claim for employee’s compensation when he learned of Mr Lam Chik Suen’s death. His employer has always been there at the site or represented by those acting for him.  I therefore find that the Plaintiff had knowledge of the identity of his employer on 19 August 1999 when he entered into the contract of employment.  Hence, on the date of the accident, he had knowledge of the identity of the defendant.  Accordingly, the date on which the cause of action accrued was the date of the accident.

19.  I fully appreciate that given the Plaintiff’s background, that he was not given a copy of his employment contract, his inability to read English and the similarity between the name of his employer and that of its principal contractor, he may not be able to describe or recall the precise name of his employer.  These do not affect his knowledge of the identity of his employer.  He knew his supervisor, his foreman, the person who paid him at the end of the month and the site agent, Mr Leung who interviewed him for employment.  He could ascertain the name of his employer by simply asking any of these people for the correct name of his employer for the purpose of naming a defendant on a writ.  He could also ascertain the proper name of his employer from his MPF advices which he had a copy every month since January 2001 which incidentally was at about the date of the accident.  It is said that the advices are in English and the Plaintiff could not read English, but he could have given the MPF advices to his solicitors in just the same way as he gave them Mr Leung’s name card.  There is no reason why he or his solicitors should attach more importance to the name card than to the MPF advices.  These were steps which were reasonably expected to have been taken by him or his solicitors in order to find out the proper name of his employer for the purpose of naming him as a defendant on a writ.  There are ample facts on which the Plaintiff could have ascertained the identity of his employer at the time of the accident.   The Plaintiff’s position is the same even if he did not know the identity of his employer at the time of the accident.

20.  Accordingly, I find that the Plaintiff had actual knowledge of the identity of his employer on the date when he first started his employment with Lam Woo & Co.  He may have difficulties in describing or recalling the name of his employer, but he is fixed with constructive knowledge of the identity of his employer under section 27(8) of the Limitation Ordinance.  The facts which would enable him to find out that identity have always been there and available to the Plaintiff.  Thus, time started to run against him from the date on which the cause of action accrued, i.e. the date of the accident.  This personal injuries action is therefore time barred under section 27(4).

2^nd Issue – whether it would be equitable to allow the action to proceed under section 30 of the Limited Ordinance

21.  Section 30 of the Limitation Ordinance gives the Court discretion to disapply the limitation period under section 27(4) to an action or to any specified cause of action to which the action relates.  The relevant provisions of section 30 of the Limitation Ordinance are in the following terms:

 “(1)  If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which -

(a)  the provisions of section 27 or 28 prejudice the plaintiff or any person whom he represents; and

(b)  any decision of the court under this subsection would prejudice the defendant or any person whom he represents,

the court may direct that those provisions shall not apply to the   action, or shall not apply to any specified cause of action to which the action relates.

…

  (3)  In acting under this section the court shall have regard to all the circumstances of the case and in particular to —

(a)  the length of, and the reasons for, the delay on the part of the plaintiff,

(b)  the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought within the time allowed by section 27 or 28, as the case may be;

(c)  the conduct of the defendant after the cause of action arose, including the extent, if any, to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff’s cause of action against the defendant;

(d)  the duration of any disability of the plaintiff arising after the date of the accrual of the cause of action;

(e)  the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages;

(f)  the steps, if any taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received.”

22.  The general rule must be that the limitation period under section 27(4) applies, unless the plaintiff is able to persuade the court that it would be equitable to allow the action to proceed.  The plaintiff therefore bears the burden of showing to the satisfaction of the court that it is equitable to disapply the limitation period: K R & Others v Bryn Alyn Community (Holding) Ltd (in liquidation) and another [2003] QB 1441.  The Court shall have to balance the degree of prejudice which would be suffered by the plaintiff if the limitation period under section 27(4) is applied against the prejudice which would be suffered by the defendant if it is disapplied and determine what the equity between the parties demands.  In the balancing exercise, the court shall take into consideration all the circumstances, in particular those set out in section 30(3).

23.  I now turn to consider the specific circumstances set out in section 30(3).

Length of and reasons for the delay

24.  The Plaintiff’s action was time barred on 9 February 2004.  The writ in the present action was taken out on 9 June 2004.  The Writ was issued out of time by four months.  That was not a particularly long period of delay.

25.  However, the Plaintiff could offer no reason for the delay.  The Plaintiff’s solicitor received a copy of the Form 2 from the Labour Department on 25 September 2002.  The Form 2 was filled in by the principal contractor responsible for the Tai Yuen Estate Market project.  It named Lam Woo & Co as the Plaintiff’s employer.  It gave different business registration numbers for Lam Woo Construction Limited and Lam Woo & Co. It gave the same address, telephone number and fax number for the two companies.  Yet, despite all these, the Plaintiff and his solicitors chose to rely on the Plaintiff’s dubious recollection of what happened during an interview about three years ago and Mr Leung’s name card.   The Plaintiff or his solicitor must have been put on enquiry upon receipt of the copy of Form 2 as to who the Plaintiff’s employer was.  Simple enquiries would have provided the answer.  They could have enquired from Lam Woo & Co directly.  If refused, they could have made a personal data request.  There is nothing to suggest that Lam Woo & Co was uncooperative. The Plaintiff’s solicitors could have asked the Plaintiff for an MPF advice or for sight of the compensation cheques issued by the employer before banking them to verify the identity of the Plaintiff’s employer.  Any reasonable solicitor would have made these enquiries before instituting an action.  But nothing along those lines had been done.  The Plaintiff’s solicitors certainly considered the information contained in the Form 2 pertinent, so they took the trouble to request for a copy from the Labour Department.  But having received a copy, they chose to completely ignore it and to rely on the Plaintiff’s confirmation based on his dubious recollection of what happened during an interview three years ago and the name card of Mr Leung. 

26.  The Plaintiff filed an application under DCEC 54 of 2003 for employees’ compensation against Lam Woo Construction Limited.  He received an Answer containing a similar assertion on 2 April 2003 from Lam Woo Construction Limited that it was the principal contractor and that Lam Woo & Co was his employer. The Plaintiff and his solicitors chose to ignore that.

27.  On 18 December 2003, the Plaintiff filed a statement of claim under HCPI 1368 of 2003 for personal injuries action against Lam Woo Construction Limited.  He received a similar Defence on 13 January 2004 from Lam Woo Construction Limited asserting that Lam Woo & Co was his employer.  Again, he and his solicitors chose to ignore that.

28.  Upon receipt of the Answer and Defence from Lam Woo Construction Limited, it would have been reasonable for the Plaintiff or his solicitors to take appropriate steps immediately to verify and ascertain the true identity of his employer.  But both of them neglected to do so.

29.  Then for no discernible reason, the Plaintiff suddenly decided to sue Lam Woo & Co.  There was absolutely no change in circumstances.  There was no new information which came into the possession of his solicitors or himself that could explain the change of mind.  It was said that the Plaintiff did not have a copy of his employment contract, he cannot read English on the MPF advices or the cheques to identify his employer.  This is just a red herring as his case was in the hands of his solicitor at a very early stage in July 2002.  There has all along been an obstinate refusal to heed the information in the Form 2 and a negligent failure to make enquiries on the part of the Plaintiff or his solicitors.  I find there is no reason for the delay. 

Effect of delay on cogency of Defendant’s evidence

30.  The delay was only for a period of four months.  The effect such delay would have on the ability of the defendant to locate his witnesses or for the witnesses to recall the events is minimal.  In the present case, Lam Woo Construction Limited and Lam Woo & Co occupied the same address and shared the same telephone number and fax number.  Obviously, they shared common staff, particularly managerial staff.  This is evident from the fact that it was the site agent of Lam Woo Construction Limited who interviewed the Plaintiff for employment with Lam Woo & Co. Despite the separate identities of these two companies, both companies knew of the accident.   Lam Woo & Co had been making monthly periodical payments to the Plaintiff.  Most importantly, on 17 July 2002, Lam Woo & Co instructed an adjuster to interview the Plaintiff and to take a statement from him.  Lam Woo & Co must have identified, located and kept in touch with any potential witnesses whom it would wish to call should there be litigation.  I do not think the delay in the particular circumstances of this case has any prejudicial effect on the Defendant.

Conduct of the Defendant and response to Plaintiff’s request for information and other circumstances under section 30 of the Limitation Ordinance

31.  There is no allegation or complaint by the Plaintiff against the Defendant for failing to respond to his requests for information or for providing misinformation.  The conduct of Lam Woo & Co or the Defendant had all along been irreproachable.

Balance of prejudice

32.  Having considered all the circumstances set out in section 30, I think there is nothing that could be said in favour of the Plaintiff.  He could offer no reason for the delay.  There was a total failure to take prompt action.  There was an obstinate refusal on the part of the Plaintiff or his solicitors to heed the information in the Form 2, the Answer and the Defence filed by Lam Woo Construction Limited in DCEC 54 of 2003 and HCPI 1368 of 2003 respectively.  The Plaintiff’s solicitors are probably liable to the Plaintiff in negligence.  The availability of an alternative remedy against his own solicitors is also a factor which weighs against the Plaintiff when I come to consider where the equity lies.

33.  Mr Law submits that the Plaintiff suffered serious injuries and had a strong case.  It is well established that in all or nearly all cases, the prejudice to the plaintiff by the operation of relevant limitation provision and the prejudice which would result to the defendant if the provisions were disapplied will be equal and opposite.  As observed by Parker LJ in Hartley v Birmingham City District Council [1992] 2 All ER 213, the stronger the plaintiff’s case the greater is the prejudice to him from the operation of the provision and the greater will be the prejudice to the defendant if the provision is disapplied.  Hence it is usually not necessary to consider the relative strength of the plaintiff’s case and the defendant’s case.  I do not think this case is any exception.  In any event, I do not think there is enough material for me to consider the relative strength of the parties’ case.

34.  The Defendant was utterly without fault.  He has never been uncooperative or guilty of misinformation.  He is entitled to expect that the Court will not revive such a stale claim.  There is no equity that the Court should come to the aid of a party so guilty of dilatory conduct.  If there is any prejudice suffered by the Plaintiff, he could be properly redressed by the alternative remedy against his solicitors, who are ultimately the party responsible for such dilatory conduct.  On balance, I consider the prejudice likely to be suffered by the Defendant by disapplying section 27 outweighs the prejudice likely to be suffered by the Plaintiff by applying the section.  Accordingly, I do not consider it equitable to allow the action to proceed.

Conclusion

35.  In my view, the Master was correct.  Time had started to run against the Plaintiff from the date of the accident and the Plaintiff’s action against the Defendant in the present action was time barred under section 27 of the Limitation Ordinance.  On the facts of the present case, it would not be equitable to allow the action to proceed.  Accordingly, the Plaintiff’s appeal is dismissed with an order nisi that the Plaintiff shall pay the Defendant’s costs with Certificate for Counsel, to be taxed if not agreed.