NGAI YIP CONSTRUCTION ENGINEERING LTD v. STARWAY CONSTRUCTION ENGINEERING (ASIA) LTD AND OTHERS

HCA 781/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 781 OF 2004

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J U D G M E N T

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1. This is an application taken out by the plaintiff against 16 defendants for various reliefs. 

2. On 13 July 2004, interlocutory judgment was granted by this court in favour of the plaintiff against the 2nd, 4th, 8th, 9th, 10th, 11th and 16th defendants for indemnity to be assessed.  As far as the other defendants are concerned, their indemnity has been assessed by Master Hui earlier on and it is only the 16th defendant's case has to be dealt with by this court today.

3. The notice of today's assessment had been served on the 16th defendant by the plaintiff and affirmation of service has been filed with the court.  I am satisfied with the service.  The 16th defendant is absent today and, accordingly, I proceed with today's assessment on an ex parte basis.  There is one bundle of documents produced by the plaintiff consisting of two parts - Bundle A and Bundle B.  They have called one witness, Mr Hong Kam-chiu.  Mr Hong, in giving evidence, adopted firstly his statement given earlier on in this court dated 25 October 2004.  In this statement, he set out the relationship between the plaintiff with the 16th defendant and it is quite clear that the 16th defendant is a subcontractor of the plaintiff in respect of a contract for minor works in 2003 for a hospital managed by the Hospital Authority for Hong Kong East and Hong Kong West Clusters - Contract No. HA-TMC-010 dated 5 December 2003.

4. According to Mr Hong, in mid-2004, the 1st defendant failed to pay its subcontractors including the 16th defendant.  As a result, the aggrieved employees took up the matter with the Labour Department and subsequently lodged their claims in the Labour Tribunal. 

5. In the supplemental witness statement of Mr Hong dated 28 September 2005, he further confirmed that on 13 August 2004, the plaintiff was ordered to pay $114,448.00 to various employees of the 16th defendant, together with other defendants in the Labour Tribunal action No. LBTC 2706 of 2004.  They have subsequently applied for review of the order by the Labour Tribunal and such application was dismissed on 24 September 2006.  As a result, the plaintiff has to pay a further sum of $2,700.00 in the Labour Tribunal action being costs for the review. 

6. The whole sum was subsequently settled by the principal contractor of the said contract, Goldfield N & W Construction Company Limited, on 4 November 2004.  Mr Hong confirmed that this was indeed a sum debited to the amount payable by the principal contractor to the plaintiff and the net result is that the plaintiff had paid this sum to the Labour Tribunal. 

7. From the evidence in front of me, I am satisfied that the 16th defendant is a subcontractor of the plaintiff and the plaintiff has been found liable to pay the employees of the 16th defendant pursuant to section 43F of the Employment Ordinance and they have made the payment to the Labour Tribunal. 

8. As a result, they are entitled under section 43F to recover such amount from the direct employer of the employees, being the 16th defendant.  It is a straight-forward situation and given the evidence of Mr Hong and the document in front of me, I have no difficulty in assessing the indemnity to be in the sum of $114,548.00. 

9. Initially, the plaintiff also applied for a sum of $2,700.00 to be paid by the 16th defendant.  I refuse for two reasons. Firstly, it does not appear to be covered by section 43F. But, in any event, it is the plaintiff who decided to take the matter on review and, unfortunately, if it is not successful. Such costs should be borne by the plaintiff itself and should not be recovered against the 16th defendant.  Hence, I refuse this amount from the sum to be indemnified by the 16th defendant. 

10. Miss Ma for the plaintiff further seeks interest from the day of interlocutory judgment, namely, 13 July 2004.  It is quite clear from evidence that the actual payment was only effected in November so I do not believe it is right for this court to award any interest earlier than 4 November 2004.  The only information I have here is that I believe there was a setoff by the contractor against the plaintiff on 11 November 2004. 

11. So I would award interest on the sum that I have assessed at judgment rate from the 11th day of November 2004 until payment.  And, finally, on the question of costs, I had a bit of hesitation at one stage because this matter could have been, if handled better, dealt with at the same time with the assessment before Master Hui.  But I do take into consideration the fact that if this matter had been dealt with at the same time, there would still be additional costs to be incurred.

12. In the circumstances, I conclude there would not be injustice to the 16th defendant if I do award costs to the plaintiff.  Hence, on that basis, I exercise my discretion in favour of the plaintiff and do award costs to the plaintiff on this application for assessment to be taxed if not agreed.