KWONG KWAN HING v. CENTRE MARK ENGINEERING LTD.

HCPI 320/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 320 OF 2000

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J U D G M E N T

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1. Pursuant to an order of a Master, the issue I am to determine at this stage is whether the Defendant is liable in law to pay compensation: quantum is to be determined at a later stage.

2. The Plaintiff sues in her capacity as administratrix of the estate of the late LEUNG Tak-kwong, who was her son. It is not in dispute that he was a passenger in a motor vehicle being driven by one KO Wing-yip when that vehicle came to grief on 6th April 1997 on Hainan Island, China; that he died as a consequence of that occurrence; that he was employed by the Defendant at that time as the Resident Engineer on a hotel construction project known as Gloria Resort Sanya ("the project"); that he was being carried as a passenger in the vehicle in the course of his employment; that KO was driving the vehicle in the course of his employment.

3. The Plaintiff alleges that KO was also employed either by the Defendant or by another company Super Worth Contracting Company Limited ("Super Worth"). The Defendant denies this and alleges that KO was employed by a third company, New Decoration Company Limited ("New Decoration"). In response, the Plaintiff says that even if this were so, the end result is the same for, at the time of the occurrence, KO was acting as agent of the Defendant in addition to which the deceased and KO were about the affairs of the Defendant.

4. There are two issues: firstly, did KO drive the vehicle negligently and, secondly, is the Defendant vicariously liable for any such negligence?

Did KO drive negligently?

5. There are no known witnesses to the occurrence in which the deceased and KO died. Indeed, a feature of this case is the dearth of evidence: such as there is is very largely hearsay, a fact which I bear in mind when assessing the weight to be placed upon it.

6. The Plaintiff relies inter alia upon several documents from Hainan: a "Determination of liability for road traffic event", the provenance of which is not entirely clear, which determines "This incident took place because KO...was driving with neglect to traffic safety, the speed of the vehicle was too fast whilst the section of the road was downhill with sharp bends, handling improperly..." it also appearing that this caused the vehicle "...to tilt left, slide and overturn from the side of the bridge abutment into the water under the bridge..."; a "Forensic Expert Opinion regarding death" emanating from the Coroner of the Public Safety Department of Hai Nan Province in which the conclusion, apparently after an autopsy, is reached that the deceased and KO "fell into water alive and drowned"; and a Notarial Death Certificate which repeats the cause of death as drowning.

7. The Defendant criticises reliance upon the "Determination" on the basis that it contains no information as to how its author arrived at the conclusion and that, in any event, it appears only to be a provisional determination. The important feature of this document, in reality, is its description of the terrain where the accident occurred rather than its finding.

8. In addition to these documents there is the oral evidence of the Plaintiff. She related how she had been notified of the occurrence the same day and travelled to Hainan with members of her family the following day; how she had been one among a number, including members of KO's family as well as more senior members of the Defendant and New Decoration, present at a breakfast gathering when the circumstances of the occurrence were discussed in general terms; how one of those present at that meeting had been the driver of another vehicle which, according to that driver, KO had been following but later abandoned to take a different route.

9. There is a further feature: the Plaintiff testified that she had been allowed to view a videotape of the scene of the occurrence in which she saw the vehicle upside down in a shallow river and, nearby, two bodies the clothing of one of which she recognised as being that of the deceased. Understandably that evidence was not challenged.

10. The Plaintiff also relies on a "Form 2" under the Employee's Compensation Ordinance, Cap. 282, submitted by Super Worth in which the accident is described as "Fallen into a river at a downhill bend while travelling in a vehicle of which control was lost". In the absence of any evidence to the contrary and there was none it seems more than probable to me that it was information obtained during the trip to Hainan that resulted in the completion of Form 2 in its present format. In this sense, the content of the Form 2 supports the Plaintiff's recollection of what was said during that trip and demonstrates Super Worth's adoption of it.

11. This is a situation contemplated by Keith, J., in TAN Hua-ning v TAM Wah-sung [1999] 3 HKC 490 @ 497:

"I accept that an admission of fact by someone who has no personal knowledge of the fact is of limited evidential value, but I reject the contention that it is of no evidential value at all. It would be open to the court to conclude that the admission is based on what the witness was told by others. It is therefore open to the court to infer that there were things which [the witness] was told which led him to believe..."

12. The Plaintiff contends that the maxim res ipsa loquitur is of application. I agree. It is plain that the vehicle in which the deceased was being carried had been traversing difficult terrain when it had left the road, overturned and came to rest in a river as a consequence of which both persons drowned. In the ordinary course of things, this does not happen: that it did affords reasonable evidence, in the absence of explanation by the Defendant, that the accident arose from want of care (Scott v London and St Catherine Docks Co (1865) 3 H&C 596). There is no explanation by the Defendant.

13. The Plaintiff has satisfied me, on a balance of probabilities, that it was the negligent manner in which KO drove the vehicle that was the cause of the occurrence.

Is the Defendant vicariously liable for such negligence?

14. The defence is that KO was not an employee of the Defendant nor its agent or servant: the Defendant is thus not vicariously liable for his acts or omissions. As to the issue of employment, I am satisfied that KO was, as a matter of fact, employed by New Decoration and not by the Defendant.

15. But the simple fact that KO was employed by other than the Defendant does not prevent him, of itself, from being also the agent, or servant, of the Defendant. There is no reason why he should not have acted in more than one capacity at any particular stage. Whether he did so at the time of the occurrence is a matter of fact to be decided on the evidence.

16. In considering the question of vicarious liability by the owner of a motor vehicle Viscount Dilhorne in Launchberry v Morgans [1973] AC 127 @ 139 said:

"Du Parcq LJ [in Hewitt v Bonvin [1940] 1 KB 188] thought that the better way of putting the respondent's case was on the basis of agency, and said, at pp. 194-195:

"The driver of a car may not be the owner's servant, and the owner will be nevertheless liable for his negligent driving if it be proved at the material time he had authority, express or implied, to drive on the owner's behalf. Such liability depends not on ownership, but on the delegation of a task or duty."

Thus, it was held that, whether it be alleged that the driver was the servant or agent, to establish liability on the part of the employer or the principal it must be shown that the driver was acting for the owner and that it does not suffice to show that the driving was permitted.

Just as the inference may be drawn, from proof that the vehicle was owned by another, that the driver was driving as servant or agent of the owner (Barnard v Sully (1931) 47 TLR 557), so may a presumption arise, where it is proved that the driver at the time of the negligence was doing something war sin the interest of the owner or for his benefit, that the driver was then acting as a servant or agent of the owner."

whilst in the speech of Lord Cross of Chelsea appears this at p. 144:

"In deciding whether or not the user was or was not the agent of the owner it may no doubt be relevant to consider whether the owner had any interest in the chattel being used for the purpose for which it was being used. If he had no such interest that fact would tell against the view that the user was his agent while conversely the fact that the owner had an interest might lend support to the contention that the user was acting as the owner's agent."

17. Although Launchberry dealt with the liability of an owner of a vehicle, the principles expressed are equally applicable in the present matter where the Defendant had possession of the vehicle as a consequence of borrowing it from the owner.

18. The facts as they emerge from such evidence as there is are these.

The companies

19. Super Worth was incorporated on 5th January 1995. The Defendant, Centre Mark, was incorporated on 10th January 1995. New Decoration was incorporated on 25th July 1995. As at the date of the occurrence Super Worth held 51% of the shares in the Defendant and 35% of the shares in New Decoration.

20. Common to Super Worth and the Defendant were two Directors CHAU Pak-chuen, Alan and YAU Man-ying, Fidelia. In addition, Super Worth was a director of New Decoration.

21. Another feature which demonstrates the interwoven nature of these companies and their joint involvement in the project is the fact that a single policy of insurance described as a "business" policy, including employees compensation cover, was issued to them as the insured by Commercial Union General Insurance.

22. It is apparent from advertising material placed before me that this was a substantial project in which these three companies were involved.

23. The Form 2 submitted in respect of the death of the deceased is signed by YAU Man-ying, Fidelia who describes herself as "manager" of Super Worth and was one of its directors. In that Form 2 it is asserted that the deceased was employed by Super Worth. That had to be subsequently corrected. It demonstrates that Super Worth, or YAU, neither cared about nor attached any importance to the relationship between the companies or for which of them acts were being performed by employees in execution of the common purpose for which they been formed.

24. None of this is surprising in view of the fact that "...it is a group of three companies. One is holding the other two and they're engaged in a project of building a new hotel in China..."; they "...were formed specifically for one project, to develop a hotel in Hainan. When the job was done, end of job, wind-up or cease business or go into dormant stage and then the employees sent off..." [my emphasis] as explained during submissions made on behalf of the Defendant, by its legal representative, at an earlier stage of these proceedings when seeking to amend its defence.

25. In the circumstances I am satisfied on a balance of probabilities that these companies were about a common purpose at the time of the occurrence.

Employment of the deceased and KO

26. The deceased was employed as the Resident Engineer at the project. The Plaintiff's evidence is that he spent three months at a time there, whereafter he returned to Hong Kong for two weeks. The Defendant accepts that he was not required to work in Hong Kong. He had full autonomy in exercising his professional skills in performance of his duties with no necessity to report back to his senior on a day to day basis: he need do so only when the necessity arose.

27. The fact that the deceased was employed by the Defendant and KO by New Decoration provides some explanation for them being together at the time of the occurrence. It does not explain what they were doing at the time or where they were going, of course.

The purpose of the journey

28. Evidence that deals with this issue is to be found in Form 2 completed by Super Worth. After detailing the circumstances in which the accident occurred, supra, it reads: "(from Sanya to Haikou for purchasing decoration materials)"

29. There is also evidence from the Plaintiff that she learned during her visit to Hainan that other persons, whom she referred to as "bosses", were also travelling from Sanya to Haikou in the vehicle which the lorry driven by KO had been following. I am satisfied on a balance of probabilities that the deceased was travelling to Haikou to purchase decoration materials for the project in pursuance of his employment.

30. It is an important fact that the vehicle being driven by KO had been borrowed by the Defendant. The Defendant also admits that KO was driving the vehicle in the course and scope of his employment, albeit with New Decoration. The Plaintiff's evidence is that the deceased was unable to drive.

31. The fact that the vehicle may have been being used in pursuance of the interests of New Decoration is no bar to it having been used simultaneously in pursuance of the interests of the Defendant, for which the driver was the Defendant's agent. Support for this appears from the judgement of Mayo, J, as he then was, in KUNG Kit-shing v Star Synthetic Flower Factory (a firm) and Others [1987] HKLR749 when, referring to Ormrod v Crosville Motor Services and Another [1953] 1 WLR 409, he said:

"...there can be a duality of interests. It may well be the case that the van was being used partly for the first defendant's purposes and partly for the third defendant's."

Conclusion

32. The facts establish that a vehicle, borrowed by the Defendant and thus under its control, was being driven for the purpose of conveying the deceased, admittedly acting in the course of his employment with the Defendant, to purchase decoration materials for the project, upon which the deceased and the driver of the vehicle were employed: the deceased and the driver were respectively employed by two out of three companies expressly formed for the purpose of undertaking that project and actively involved in pursuing that common purpose at the time of the accident, which was caused by the negligence of the driver.

33. I am satisfied on a balance of probabilities that KO was acting as agent of the Defendant at the time of the collision. That he may also have been acting as servant or agent of another or others is irrelevant to this determination. The Defendant is thus liable to compensate the Plaintiff for such damages as may be proven in due course.

34. Costs of the Plaintiff, as taxed or agreed, to be paid by the Defendant. The costs order shall be an order nisi with liberty to restore within 14 days of this judgement.