SUNNY FAR EAST LTD v. PRIME CONSOLIDATOR & WAREHOUSING CO LTD AND OTHERS

DCCJ 13361/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 13361 OF 2001

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JUDGMENT

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Background

1. In this case, the Plaintiff seeks to recover compensation paid to an employee and consequential legal costs against the Defendants under Section 25 of the Employees' Compensation Ordinance Cap. 282.

2. The Plaintiff has obtained judgment on liability against the 3rd and 4th Defendants on 19 September 2001 and 4 July 2002 respectively leaving damages for the Plaintiff's costs in defending Employees' Compensation Case No. 29 of 2001 to be assessed.

3. The matter before me was a trial against the 1st and 2nd Defendants on both liability and quantum.

4. On 23 January 1999 Mr. Lo Chun Keung, an employee of the Plaintiff, sustained injury in the course of his employment at East Wing, Centre A, Asia Terminals Buildings, Berth 3 Container Terminal, Kwai Chung, New Territories.

5. As a result of the injury sustained at work Mr. Lo, represented by solicitors, commenced Employees' Compensation Case No. 29 of 2001 on 11 January 2001 against the Plaintiff for compensation under the Employees' Compensation Ordinance Cap. 282. Messrs. Ip Kwan & Co represented the Plaintiff.

6. On 30 July 2001 the Plaintiff and Mr. Lo, through their solicitors, filed a Consent Application dated 30 July 2001 asking for judgment be entered in favour of Mr. Lo against the Plaintiff for the agreed compensation of $102,030.28 inclusive of interest and for the agreed costs of Mr. Lo's solicitors of $15,000.

7. The Plaintiff has paid Mr. Lo $102,030.28 and his solicitors $15,000, and has further paid its own solicitors $45,800 being the legal costs of defending the employees' compensation case. The Plaintiff now seeks to recover these sums from the Defendants.

The Plaintiff's evidence

8. The Plaintiff called three witnesses - Mr. Lee Wai Hung, Mr. Lo Chun Keung and Ms. Kwan Long Yi.

9. Mr. Lee, a director of the Plaintiff, said when Mr. Lo was working for the Plaintiff on the podium of the warehouse he saw a forklift truck hit him. He later knew that the driver of the forklift truck was Mr. Kwok Yeuk Hip. The Plaintiff paid $102,030.28 to Mr. Lo, $15,000 to Mr. Lo's solicitors and $45,800 to the Plaintiff's solicitors.

10. Mr. Lo said he was a tally clerk employed by the Plaintiff to take record and photographs of goods at the warehouse. He went with Mr. Lee to the warehouse to inspect ATM machines. When he was taking photographs of the goods a forklift truck hit his leg. He knew the driver was Kwok Yeuk Hip as he had been handling the Plaintiff's goods. He commenced the employees' compensation case and received $102,030.28.

11. Ms. Kwan Long Yi was the Plaintiff's solicitor in the employees' compensation case and the Plaintiff's solicitor in this action, and was called to produce a number of documents. She said that the Court made an order in terms of the Consent Application in Employees' Compensation Case No. 29 of 2001.

12. The documents produced by the Plaintiff and admitted as evidence were:

(1) Exhibit P1 - A sketch drawn by Mr. Lee;

(2) Exhibit P2 - Business Registration dated 17.3.99 in the name of Cheong Yi Development Consultant Co.;

(3) Exhibit P3 - Business Registration dated 7.1.91 in the name of Cheong Yi Development Consultant Co.;

(4) Exhibit P4 - Letter from Messrs. Ho Wong Tai & Partners dated 22.5.01;

(5) Exhibit P4A - Certificate of Assessment issued by the Labour Department dated 3.4.01;

(6) Exhibit P4B - Method of calculation of compensation issued by the Labour Department undated;

(7) Exhibit P5 - Letter from Cheong Yi Development Consultant Co. dated 4.9.01 signed by the 2nd Defendant to the Plaintiff's solicitors;

(8) Exhibit P6 - Letter from Cheong Yi Development Consultant Co. dated 19.9.01 signed by the 2nd Defendant to the Plaintiff's solicitor;

(9) Exhibit P7 - Letter from the Plaintiff's solicitors to Cheong Yi Development Consultant Co. dated 3.3.01;

(10) Exhibit P8 - Letter from Messrs. Massie & Clement to the Plaintiff's solicitors dated 16.3.01;

(11) Exhibit P9 - Letter from Messrs. Massie & Clement to the Plaintiff's solicitors dated 22.3.01;

(12) Exhibit P10 - Application in Employees' Compensation Case No. 29 of 2001;

(13) Exhibit P11- List of earnings in Employees' Compensation Case No. 29 of 2001;

(14) Exhibit P12- Consent Application in Employees' Compensation Case No. 29 of 2001.

13. I accept the evidence of Mr. Lee, Mr. Lo and Ms. Kwan, which are not controversial.

14. Accordingly, I find the following matters proved:

(1) Mr. Lo Chun Keung sustained injury on 23 January 1999 in the course of employment with the Plaintiff at East Wing, Centre A, Asia Terminals Building, Berth Three Container Terminal, Kwai Chung, New Territories, when he was hit by a forklift truck driven by the 3rd Defendant;

(2) The injury arose out of such employment;

(3) Mr. Lo Chun Keung commenced Employees' Compensation Case No. 29 of 2001 against the Plaintiff for compensation under the Employees' Compensation Ordinance Cap. 282;

(4) The Plaintiff was obliged by a Judgment of the District Court to pay, and has paid, compensation of $102,030.28 to Mr. Lo Chun Keung under the Employees' Compensation Ordinance Cap. 282 and his legal costs of $15,000;

(5) The Plaintiff has paid its own legal costs of $45,800 for defending Employees' Compensation Case No. 29 of 2001;

(6) The injury to Mr. Lo Chun Keung by accident was caused entirely by the 3rd Defendant's negligent driving of the forklift truck.

The case against the 1st Defendant

15. This trial commenced on 7 February 2003. The 1st Defendant had been legally represented until 5 February 2003 when an order was made upon application that the 1st Defendant's solicitors ceased to act.

16. At the beginning of this trial the Plaintiff applied to proceed in the absence of the 1st Defendant. At my request the Plaintiff's solicitors managed to ascertain from the 1st Defendant's former solicitors that they had informed the 1st Defendant of the date of this trial. Upon being satisfied that the 1st Defendant had knowledge of the trial date I allowed this trial to proceed in the absence of the 1st Defendant.

17. Mr. Lo in his evidence said that he went to the unit at 4F Block B, Asia Terminals Building where he was injured by a forklift truck driven by Kwok Yeuk Hip. He said that this unit in the warehouse was occupied by a number of companies one of which was the 1st Defendant. Neither the oral evidence nor the documentary evidence show that the forklift truck that hit Mr. Lo belonged to the 1st Defendant. The Plaintiff produced no evidence to prove the 1st Defendant was as at 23 January 1999 an incorporated company and was the owner of the forklift truck.

18. On the question of entity, since 1st Defendant had been represented by a firm of solicitors and counsel until 2 days before this trial commenced, there is no reason to doubt that the 1st Defendant was an incorporated company that had given instructions to its solicitors to defend this action. I therefore find that the 1st Defendant was an incorporated company at all relevant times.

19. Counsel for the Plaintiff submitted that by paragraphs 2 and 3 of the Amended Defence of the 1st Defendant, the 1st Defendant has admitted that it was the owner of the forklift truck. Upon perusing paragraphs 2 and 3 or the Amended Statement of Claim and paragraphs 2 and 3 of the Amended Defence of the 1st Defendant I accept that an admission to such effect has been made on the pleadings.

20. Counsel for the Plaintiff further submitted that since the 1st Defendant was the owner of the forklift truck, it should be vicariously liable for 3rd Defendant's negligence. There is certainly a prima facie case of vicarious liability against the 1st Defendant. Since there is no evidence in rebuttal, I find the Plaintiff's case on vicarious liability against the 1st Defendant proved. There will be judgment for the Plaintiff.

The case against the 2nd Defendant

21. There is no direct evidence that the 3rd Defendant was an employee, servant or agent of the 2nd Defendant at the time of the accident.

22. The Plaintiff relied on the 2nd Defendant's Business Registration filed on 17th March 1999 (Exhibit P2) in the same name as the 4th Defendant's Business Registration filed on 7 January 1991(Exhibit P3) i.e. Cheong Yi Development Consultant Co., and 2 letters from Messrs. Massie & Clement dated 16 March 2001 and 22 March 2001 (Exhibits P8 and P9).

23. The letter from the Plaintiff's solicitors dated 3 March 2001 (Exhibit P7) addressed to Cheong Yi Development Consultant Co. alleged that the 3rd Defendant drove the forklift truck as the company's employee and requested for particulars for the forklift truck. In the first letter (Exhibit P8) Messrs. Massie & Clement informed that the 1st Defendant was the owner of the truck and made no denial to the allegation that Cheong Yi Development Consultant Co. was the employer of the 3rd Defendant. In the second letter (Exhibit P9) Messrs. Massie & Clement referred to a letter from the Plaintiff's solicitors dated 19 March 2001 and said "We on behalf on our client have denied the allegation that our client employ a person by the name of 郭若怯 on 13th March 2000."

24. It was pointed out that the letter issued by the Plaintiff's solicitor to Cheong Yi Development Consultant Co (Exhibit P7) was sent to the address stated in the 2nd Defendant's Business Registration and that the letters from Messrs. Massie & Clement in reply (Exhibits P8 and P9) claimed that they acted for Cheong Yi Development Consultant Co.

25. Counsel for the Plaintiff submitted that these documents are circumstantial evidence to prove that the 2nd Defendant employed the 3rd Defendant on the date of the accident. I do not agree. The documents are not sufficient to give rise to an inference that the 2nd Defendant employed the 3rd Defendant at the time of the accident.

26. Counsel for the Plaintiff further submitted that because the 2nd Defendant used a trading name similar to the 4th Defendant's and the 4th Defendant's residential address as his business address, they were therefore partners. I am unable to accept this submission. I do not think I can infer a partnership from the mere use of name and address.

27. In his hand written Defence dated 19 March 2002, the 2nd Defendant said that he had never employed the 3rd Defendant, he never had any dealing with the 1st Defendant and he only commenced business on 22 February 1999 after the accident of 23 January 1999.

28. The 2nd Defendant gave evidence. He said he had never engaged the 3rd Defendant as employee, servant or agent on 23 January 1999. He commenced transportation business on 22 February 1999, as evidenced by the Business Registration he filed on 17 March 1999 (Exhibit P2). The reason why he used the same business name as the 4th Defendant's was that since the 4th Defendant had been working in the warehouse for some time and that he wanted to be regarded as being related to the 4th Defendant so that he would have the convenience of not having to queue up to enter the warehouse. The work of the 4th Defendant and his were different in that the 4th Defendant stuffed containers in the warehouse whereas he used vehicles to transport goods. The business address he used was his father's address occupied by the 4th Defendant and his wife. Messrs. Massie & Clement acted for the 4th Defendant only and he did not give any instructions to them to issue the letters (Exhibits P8 and P9). He pointed out that he commenced business on 22 February 1999 after the accident that took place on 23 January 1999.

29. When the letter from the Plaintiff's solicitors and the letters from Messrs. Massie & Clement were produced in the course of this trial on 7 February 2003 the 2nd Defendant objected to them being admitted in evidence. At the resumed hearing on 10 February 2003, I admitted these three documents in evidence after hearing arguments. Counsel for the Plaintiff submitted that the 2nd Defendant, given the benefit of the weekend adjournment, failed to call Messrs. Massie & Clement to give evidence to prove that they did not receive any instructions from him to issue the letters, and that as such the 2nd Defendant's evidence is questionable. The Plaintiff could have called Messrs. Massie & Clement but elected not to do so. As a result, there is no evidence to contradict what the 2nd Defendant said. In my view, there should not be any adverse inference to be drawn against the 2nd Defendant.

30. The 2nd Defendant appeared to be a truthful witness and I accept his evidence. I accordingly find that as a matter of fact the 3rd Defendant was not driving the forklift truck as an employee, servant or agent of the 2nd Defendant at the time of the accident on 23 January 1999. The claim against the 2nd Defendant is dismissed.

Quantum

31. Against the 1st Defendant, employees' compensation of $102,030.28 and legal costs of $15,000 paid to Mr. Lo's solicitors are clearly recoverable.

32. The Plaintiff's own legal costs incurred in Employees' Compensation Case No. 29 of 2001 are also recoverable. See Wah Kwong Construction Material v Wong Man-yip [1995] 1 HKLR 85, Court of Appeal. The Plaintiff asked me to enter judgment for the sum of $45,800 being such costs. He further submitted that the Plaintiff is entitled to that sum because the Plaintiff was only required to prove that the sum was incurred and paid, which it has done, and that the 1st Defendant was required to raise by pleadings if any the issue of unreasonableness, which it has not done. I do not accept that submission. In the Amended Defence of the 1st Defendant no admission is made to, and accordingly the Plaintiff is put to strict proof of, paragraph 6 of the Amended Statement of Claim, which pleads the sum of $45,800. Without any suggestion that that sum had not been incurred or had been unreasonably incurred, there is no evidence, such as a solicitors' bill of costs, before me to show how that sum was arrived at and what items of work had been carried out to enable me to award that sum.

33. Counsel for the Plaintiff submitted that alternatively damages should be assessed by way of taxation. This case came before me as a trial on both liability and quantum. I do not think I ought to leave the matter to be dealt with by another hearing. Since Mr. Lo's legal costs of $15,000 was the agreed costs for the Employees' Compensation Case No. 29 of 2001, I use it as a reference and accordingly award that sum to the Plaintiff in this action.

34. I shall make the following orders:

(1) There will be judgment in favour of the Plaintiff against the 1st Defendant in the sum of $132,030.28 i.e. ($102,030.28 + $15,000 +$15,000) with interest at half of the present judgment rate from the date the writ was issued to judgment date and thereafter at judgment rate;

(2) The 1st Defendant is to pay the Plaintiff the costs of this action brought against the 1st Defendant to be taxed if not agreed;

(3) The Plaintiff's claim against the 2nd Defendant is dismissed;

(4) The Plaintiff is to pay the 2nd Defendant's costs of defending this action brought against him to be taxed if not agreed.