LUEN HING FAT COATING & FINISHING FACTORY LTD v. WAAN CHUEN MING

FACV No. 19 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 19 OF 2009 (CIVIL)

(ON APPEAL FROM CACV NO. 281 OF 2008)

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J U D G M E N T

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Chief Justice Ma :

1.  For the reasons set out in the judgment of Mr Justice Bokhary PJ, I agree that the appeal should be dismissed.

Mr Justice Bokhary PJ :

Question of law

2.  The question of law on which leave to appeal to this Court was granted is whether there is a duty of care owed by X to Y in the following circumstances :

(1) X engages an apparently competent independent contractor to do work on X’s premises.

(2) The work is not intrinsically hazardous.

(3) X lends the independent contractor equipment which is not intrinsically dangerous or faulty.

(4) As X knew or ought reasonably to have known would happen, the independent contractor uses that equipment to do the work by a method which is unsafe. 

(5) Y, who is a servant of the independent contractor, is injured as a result. 

In the present case, X represents the appellant Luen Hing Fat Coating & Finishing Factory Ltd (“the Factory Operator”) and Y represents the respondent Mr Waan Chuen Ming (“the Worker”).

Broad facts

3.  Shortly stated, the broad facts of the case are these.  As it had done on a number of previous occasions, the Factory Operator engaged an independent contractor Mr Lo Kin Nam trading as Kar Kin Engineering & Supplier Co. (“the Independent Contractor”) to come to its factory and there to repair the calendaring unit (“the Unit”) of its stentering machine (“the Machine”).  So the Independent Contractor and his employee the Worker went to the factory to repair the Unit. 

4.  In order to repair the Unit, they had first to detach it from the Machine.  They did so.  Then they moved the Unit some 5 or 6 metres to another part of the factory.  There they repaired the Unit.  Having done so, they moved the Unit back with a view to reinstalling it in the Machine.  The Unit was 167.5 cm high, 240 cm long and 70 cm wide.  It weighed 1.5 tons.  While the Independent Contractor and the Worker were attempting to reinstall it in the Machine, the Unit fell on to and crushed the Worker’s legs.  The moving of the Unit from and then back to the Machine was effected by the use of two pallet jacks and a bearing trolley.  Those two pallet jacks, that bearing trolley and another bearing trolley were used in the attempt to reinstall the Unit in the Machine.  Both pallet jacks and bearing trolleys belonged to the Factory Operator.  It lent them to the Independent Contractor.  They were normally used for transporting cloth (either in rolls placed on pallets and transported by pallet jacks or in paper cartons and transported by bearing trolleys).

Action succeeds at trial

5.  The worker brought an action against the Independent Contractor and the Factory Operator in the High Court.  No defence was filed by the Independent Contractor, who appears to be impecunious.  Judgment was not entered against him in default of defence.  So the action proceeded to trial against both defendants.  The Independent Contractor did not take part in the trial.  At the end of the trial, the trial judge (Suffiad J) held both defendants liable.  He held the Independent Contractor liable on the basis that he had failed to provide the Worker with a safe system of work.  Such failure of course put the Independent Contractor in breach of an employer’s duty at common law to take reasonable care for his employees’ safety.

6.  Pleaded against the Factory Operator were : (i) negligence; (ii) breaches of the statutory duties imposed by various provisions of the Occupational Safety and Health Ordinance, Cap.509; and (iii) liability under the Occupiers Liability Ordinance, Cap.314.  The Worker also pleaded that he was employed by the Factory Operator.  But that averment was abandoned at the trial.  As to the bases on which the claim was pursued against the Factory Operator, the trial judge says in his judgment that “counsel for [the Worker] indicated at the commencement of the trial that he will proceed against [the Factory Operator] on the basis of the Occupiers Liability Ordinance and also the Occupational Safety and Health Ordinance”.  It was under the Occupiers Liability Ordinance that the trial judge found the Factory Operator liable.

7.  When the Factory Operator appealed from the trial judge’s decision to the Court of Appeal, the Worker filed a respondent’s notice.  By that respondent’s notice, he asked the Court of Appeal to hold that at common law the Factory Operator was a joint tortfeasor with the Independent Contractor and to dismiss the Factory Operator’s appeal on that additional ground.

Affirmed by a majority in the Court of Appeal

8.  The Court of Appeal (Tang VP and Cheung JA with Stone J dissenting) affirmed the trial judge’s decision in favour of the Worker.  Mr Justice Tang VP decided in the Worker’s favour on the basis of negligence, concluding his judgment by saying that he agreed “with the analysis of Cheung JA that a clear case of negligence was made out against [the Factory Operator] as a joint tortfeasor”. 

9.  In holding that a duty of care was owed by the Factory Operator to the Worker, Cheung JA reasoned as follows.  First, he said, the injuries suffered by the Worker were foreseeable because the operation was dangerous.  Secondly, he said, there existed the requisite proximity between the Factory Operator and the Worker because he was lawfully on its premises.  Thirdly, he said, it is fair, just and reasonable to impose liability on the Factory Operator because it had allowed the dangerous operation to take place on its premises and had done nothing to prevent it.  When he came to expand on the element of proximity, Cheung JA added that the Factory Operator had participated in creating the dangerous situation by lending the Independent Contractor the equipment used in the dangerous operation.

10.  Was the Factory Operator in breach of the duty of care which it was held to owe the Worker?  And was it open to the Court of Appeal to decide in the Worker’s favour on the basis of negligence even though the trial judge had decided in the Worker’s favour under the Occupiers Liability Ordinance?  On these questions, Cheung JA said this :

“ While [the trial judge’s] decision against [the Factory Operator] … was said to be based on the breach of common duty of care by an occupier, his reasoning is equally applicable to that based on negligence.

[The Worker] had issued a respondent’s notice to affirm the judgment by relying on a claim based on joint tortfeasor.  In my view even without a specific plea that [the Factory Operator] was a joint tortfeasor, [the Worker] had sufficiently pleaded a case of negligence against [the Factory Operator] and the facts supported the claim.  This is a case where the facts speak louder than the labels.  Based on the evidence adduced in this case, I would, in any event, allow [the Worker] to rely on the respondent’s notice.”

Having said that, Cheung JA added that he would, if necessary, hold the Factory Operator liable on the basis that it “knew or had reason to suspect that [the Independent Contractor] was using an unsafe system of work” and ought reasonably to have taken but failed to take “steps to see that the system was made safe”.

11.  As appears from cases like The Koursk [1924] P 140 at p.157 and CBS Songs Ltd v. Amstrad Plc [1988] AC 1013 at p.1056E-F, persons are said to be joint tortfeasors when their respective shares in the commission of the tort are done in furtherance of a common design.  And it might be said that the Factory Operator and the Independent Contractor were in effect acting in furtherance of a common design when the work was being carried out with the equipment which the Factory Operator had lent the Independent Contractor.  But the Factory Operator would have no share in the commission of any tort of negligence if it did not owe the Worker a duty of care.  As we have seen, Cheung JA, with whom Tang VP agreed, found such a duty by way of an approach based on foreseeability, proximity and considerations of fairness, justice and reasonableness.

12.  On occupiers liability, Stone J (who dissented) said this :

“ True it is that as a matter purely of physical fact the accident took place within [the Factory Operator’s] factory, but that is as far as it goes.

I perceive no good reason why this occurrence is anything to do with [the Factory Operator’s] statutory responsibilities, qua occupier, under [the Occupiers Liability Ordinance].”

Turning to the issue of negligence, Stone J dealt with the evidence and considered what Lord Goff of Chievely said in Ferguson v. Welsh [1987] 1 WLR 1553 at p.1563A-D.  Having done that, Stone J said this :

“ It follows from the foregoing that in this case I am unable to discern any basis for formulating any sustainable finding in negligence against [the Factory Operator], and thus rendering him a joint tortfeasor with [the Independent Contractor], however inviting it may be to create a situation in which [the Worker] is able obtain the adjudged recompense for his injuries.

            In my view, as a matter of policy and principle our law does not make, nor indeed does it seek to make, the employer of an independent contractor effectively the insurer of that contractor should anything go amiss in the performance of a normally delegable task which that contractor is retained to carry out … .”

13.  With leave granted by the Appeal Committee, the Factory Operator now appeals to this Court.  After stating the question which now appears in opening paragraph of this judgment, the Appeal Committee said (i) that it is a question of law which, by reason of its great general or public importance, ought to be submitted to this Court and (ii) that leave to appeal was granted for it and possibly other questions to be decided here.

How the accident happened

14.  As to how the accident happened, this is what the trial judge found :

“When [the Independent Contractor] was attempting to jack up the second pallet jack with [the Unit] on it, [the Worker] heard [the Independent Contractor] say that the forks of the second pallet jack [would] not rise. On hearing that [the Worker] came over to the front where [the Independent Contractor] was intending to find out why the forks of the second pallet jack [would] not rise. Just at that moment, [the Unit] began to topple forward towards [the Worker] and [the Independent Contractor]. [The Worker] tried to use his hands to push back the toppling [Unit], but found it too heavy and as a result [the Unit] fell on top of [the Worker] pinning and crushing both his legs.”

And the trial judge found that the operation in the course of which the accident happened was unsafe.  He considered it unsafe by reason of : the pallet jacks and the bearing trolleys being “separate” rather than “integral”; their normal rather than this unusual use; the “top heavy” nature of the Unit which increased the risk of it toppling over; the absence of any steps taken to secure the Unit on to either pallet jack; and the placing of two pieces of wood on the second pallet jack in order to raise the Unit higher than that pallet jack could otherwise raise it.

15.  On any realistic view of the evidence, there was no equipment other than the pallet jacks and bearing trolleys available for the operation which culminated in this accident.  Mr Ip Kam Wo was a supervisor in the Factory Operator’s employ, and was called to give evidence on its behalf.  He had witnessed a similar operation being carried out by the Independent Contractor on an earlier occasion.  And he said that the operation carried out then was “extremely unsafe” because of the risk that the Unit would topple over.  But he neither did nor said anything to stop or even to warn against operating in that manner. Why not?  Because, Mr Ip testified, the Independent Contractor had reinstalled the Unit on previous occasions and he “trusted” that the Independent Contractor “could manage it”.  But that means no more than that it was possible that no accident would happen.  The lack of safety, the trial judge found, was clear. And, the trial judge added, the Factory Operator “had a hand in” and “assisted in perpetrating” the unsafe system since it had provided the pallet jacks and bearing trolleys used.  It was in those circumstances that the trial judge held that the Factory Operator was “in breach of the common duty of care under the Occupiers Liability Ordinance”.

Duty of care breached if owed

16.  The Factory Operator contends that it would not have been in breach of a duty of care owed to the Worker even if, which it disputes, it owed him such a duty.  If lending unsuitable equipment imposed a duty of care on the Factory Operator, then the majority in the Court of Appeal would be justified in holding that the Factory Operator was in breach of that duty.  Such a duty would be a continuing one.  And the Factory Operator would have been in breach of it by reason of having had a hand in the creation of the danger which flowed from the use of unsuitable equipment and then failing to take any steps to put a stop to or even warn against such use before it resulted in an accident.

Factory Operator’s argument that no duty of care was owed

17.  Did the Factory Operator owe the Worker a duty of care?  It is contended on the Factory Operator’s behalf that it did not.  As foreshadowed in its printed case, it is submitted on the Factory Operator’s behalf that it cannot be just and reasonable to impose such a duty because, it is said :-

(1) The Worker was experienced in the repair of machinery both generally and in relation to the Unit.  By the time of the accident, which occurred on 10 June 2000, he had engaged in the repair of machinery and electrical appliances for some 30 years.  Since 1995 he had been to the Factory Operator's factory to repair the Unit two to three times a year, and for over 10 times by 2000. Since 1996 he and the Independent Contractor had done the work by the two of them only.

(2) The work to be done for the Factory Operator was simple.  It was not an inherently dangerous activity, being simple repair of a machine which the Independent Contractor and the Worker had together undertaken many times.

(3) In the work which was performed, the Independent Contractor was commissioned by the Factory Operator as an independent contractor. The Independent Contractor decided whom he would bring along to assist him, what tools they needed and the work method and system to be adopted.  On the day in question, the Independent Contractor and the Worker had brought along wires, straps and pulley blocks.

(4) The Factory Operator had no control over the manner of work of the Independent Contractor and the Worker. From the Factory Operator's point of view, they were an independent contractor and his assistant. The Factory Operator had in no way taken it upon itself to exercise any supervision or control of its independent contractor's activities.  Neither the Worker nor the Independent Contractor took instructions from the Factory Operator.

(5) Pallet jacks and bearing trolleys are ordinary and commonplace tools. The ones used were tools of the Factory Operator placed in its factory for its own purposes i.e. for transporting textile products.  There was no plea, evidence or finding that the pallet jacks and bearing trolleys were in any way defective or not functioning properly.  The Unit was well within the weight capacity of each pallet jack and bearing trolley.

(6) There was nothing wanting in the condition of the premises. They were well-lit.  The ground was even, level and in good condition.

(7) On previous occasions when Mr Ip saw the Independent Contractor and the Worker use such tools, he had not objected to them using those tools for the purpose of their work. But this is a far cry from the Factory Operator actively providing the tools to them or encouraging or instructing them to use such tools and hence assuming responsibility for the Worker's safety in using them (as in Makepeace v. Evans Bros (Reading) [2001] ICR 241 and McGarvey v. Eve NCI Ltd [2002] EWCA Civ 374).

(8) Mr Ip had on previous occasions seen the Independent Contractor and his assistants use such tools to move the Unit.  He admitted that he felt that was extremely unsafe.  The fact that Mr Ip felt it was unsafe is hardly significant, since the trial judge concluded that it was clear to anyone and everyone (which included the Worker) who was there to see it that the system of transportation was unsafe. This is not a case where the owner had some special knowledge about certain hidden risks involved of which the Independent Contractor and his employees were or might be expected to be unaware.

(9) There is no allegation or evidence that this was the only way in which the work could be carried out.  On the day of the accident, Mr Ip did not attend to the Worker or the Independent Contractor and did not see them work at all. The Worker and the Independent Contractor were left to themselves at the scene.  There was no criticism of the fact that on the day in question no one from the Factory Operator saw them work.

(10) On this occasion, when they were trying to re­install the Unit in the Machine, the Independent Contractor fetched two pieces of wood from somewhere in the factory and placed each of them on each of the two arms of the forklift of the second pallet jack without the knowledge or consent of the Factory Operator. On the Worker'sown case these wooden blocks destabilised the Unit.  There is no evidence or finding that pieces of wood were similarly used on previous occasions. The evidence is that the Factory Operator knew nothing at all about the two pieces of wood, and had not seen the process of reinstalling the Unit.

18.  On the basis of the foregoing, it is said in the Factory Operator’s printed case and submitted on its behalf as follows.  Whether, and if so how, the pallet jacks and bearing trolleys were to be used was a matter for the Independent Contractor and the Worker to decide.  They may have tried to “make a little go too far” and in so doing set up the conditions which might have led to the accident.  All the causes operating to bring about the accident sprang from what the Independent Contractor and the Worker themselves did and not from anything that the Factory Operator did or omitted to do.  In these circumstances, it cannot fairly be said that the Factory Operator owed any duty of care to the Independent Contractor or his employee the Worker who were themselves doing the very thing which is said to have caused the risk.

Occupiers liability not relied upon

19.  In this Court, leading counsel for the Worker did not rely on occupiers liability.  He was right not to do so.  This accident was not due to “the state of the premises” (to employ the expression used by Lord Gardiner LC in Commissioner for Railways v. McDermott [1967] 1 AC 169 at p.186).  If the Worker is to succeed against the Factory Operator, it has to be in the tort of negligence.

Approach by which to determine whether a duty of care exists

20.  A person is not vicariously liable for his independent contractor’s torts. But that only goes to the absence of vicarious liability.  A person who engages an independent contractor may be liable for, as it is put in Winfield & Jolowicz on Tort, 18th ed. (2010) at p.978, “his own negligence, for example in failing to take care to select a competent contractor”.  His having engaged an independent contractor does not exclude the possibility of his committing the tort of negligence himself.

21.  Broadly speaking, the essential elements of a successful claim in the tort of negligence are (i) a duty of care owed by the defendant to the plaintiff, (ii) breach of that duty, (iii) damage suffered by the plaintiff as a result and (iv) such damage not being too remote.  The present appeal turns on whether the first element, namely a duty of care, is present.

22.  How does one go about determining whether a duty of care exists?  In answering this question, it is only natural to begin with Lord Atkin’s famous statement in Donoghue v. Stevenson [1932] AC 562 at p.580 that :

“The liability for negligence, whether you style it such or treat it as in other systems as a species of ‘culpa’, is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay. But acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief. In this way rules of law arise which limit the range of complainants and the extent of their remedy. The rule that you are to love your neighbor becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”

Donoghue v. Stevenson is of course the first and most famous case in the “trilogy of cases” referred to by Lord Wilberforce in Anns v. Merton London Borough Council [1978] AC 728 at p.751F-G when laying down a two-stage test for determining whether a duty of care exists.  The other two cases in that trilogy are Hedley Byrne & Co. Ltd v. Heller & Partners Ltd [1964] AC 465 and Dorset Yacht Co. Ltd v. Home Office [1970] AC 1004.

23.  In Hedley Byrne the House of Lords held that even in the absence of a contractual or fiduciary relationship, inaccurate information negligently imparted may afford a claim for damages for financial loss caused thereby.  The law, their Lordships held, imposes a duty of care when information is sought from and imparted by a party who is possessed of special skill, is trusted to exercise due care and knew or ought reasonably to have known that reliance was being placed on his skill and judgment.

24.  Referring to Lord Atkin’s “neighbour” statement in Donoghue v. Stevenson, Lord Reid said in Dorset Yacht at p.1027 that although it “will require qualification in new circumstances”, it “ought to apply unless there is some justification or valid explanation for its exclusion”.

25.  Coming now to Lord Wilberforce’s two-stage test, this is how he stated it in Anns v. Merton at pp 751G-752A :

“First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his party may be likely to cause damage to the latter – in which case a prima facieduty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise.”

26.  That two-stage test was applied in a set of leading cases, and then came to be discarded in another set of leading cases.  This process of efflorescence and then decline forms a saga too well-known to need re-telling.  It is, however, worth noting that the cases in which Lord Wilberforce’s two‑stage test was applied include in McLoughlin v. O’Brian [1983] 1 AC 410 (a decision of the House of Lords on nervous shock) and Junior Books Ltd v. Veitchi Co. Ltd [1983] 1 AC 520 (a decision of their Lordships on economic loss).  And it is equally worth noting that the cases in which that test was doubted if not criticised include Governors of Peabody Donation Fund v. Sir Lindsay Parkinson & Co. Ltd [1985] AC 210 (decided by the House of Lords), Yuen Kun Yeu v. Attorney-General of Hong Kong [1988] AC 175 (decided by the Privy Council), Rowling v. Takaro Properties Ltd [1988] AC 473 (decided by the Privy Council) and Hill v. Chief Constable of West Yorkshire [1989] AC 53 (decided by the House of Lords).  As is well-known, the decision of the House of Lords in Anns v. Merton was departed from by their Lordships in Murphy v. Brentwood District Council [1991] 1 AC 398 (at the same time overruling the Court of Appeal’s decision in Dutton v. Bognor Regis Urban District Council [1972] 1 QB 373).

27.  I turn now to the decision of the House of Lords in Caparo Plc v. Dickman [1990] 2 AC 605.  In that case their Lordships held that the auditors of a company owed no duty of care to shareholders deciding on further investment in the company or to non-shareholders contemplating investment in the company.  At p.617G Lord Bridge of Harwich spoke of “the inability of any single general principle to provide a practical test which can be applied to every situation to determine whether a duty of care is owed and, if so, what is its scope”.  He then went on to say this at pp 617H-618B :

“What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’ and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other. But … the concepts of proximity and fairness embodied in these additional ingredients are not susceptible of any such precise definition as would be necessary to give them utility as practical tests, but amount in effect to little more than convenient labels to attach to the features of different specific situations which, on a detailed examination of all the circumstances, the law recognises pragmatically as giving rise to a duty of care of a given scope.”

That is the “foreseeability/proximity/fairness, justice and reasonableness” approach (followed by the majority in the Court of Appeal in the present case).

28.  When the case of White v. Jones [1995] 2 AC 207 was before him in the Court of Appeal prior to it reaching the House of Lords, Sir Donald Nicholls V-C (as Lord Nicholls of Birkenhead then was) provided a typically helpful explanation of how the Caparo approach operates.  He treated “foreseeability” as the first heading, “proximity or neighbourhood” as the second heading and “the requirements of fairness, justice and reasonableness” as the third heading. After dealing with foreseeability, he turned to the second and third headings, saying (at p.221 F-G) that

“there is no real demarcation line between them. They shade into each other. Both involve value judgments. Under the third heading the court makes its assessment of the requirements of fairness, justice and reasonableness. Likewise, although less obviously, built into the concept of proximity or neighbourhood is an assessment by the court that in a given relationship there ‘ought’ to be liability for negligence. These two headings are no more than two labels under which the court examines the pros and cons of imposing liability in negligence in a particular type of case.”

29.  That reference to labels was echoed by Lord Walker of Gestingthorpe in Customs and Excise Commissioners v. Barclays Bank plc [2007] 1 AC 181.  At p.209G he said that “the elements of the threefold test are labels” and that “their usefulness is limited”.  As to the extent of their usefulness, he had earlier (at E‑F on the same page) expressed his agreement with Kirby J’s observations in Perre v. Apand Pty Ltd (1999) 198 CLR 180 at p.284 that labels “help steer the mind through the task in hand”.

30.  Ultimately it is necessary to stand back and take a holistic view of foreseeability, proximity and the need to be satisfied that it would be fair, just and reasonable to impose a duty of care.  In Marc Rich & Co. v. Bishop Rock Ltd [1996] 1 AC 211 at p.235E-G Lord Steyn endorsed the statement in the Court of Appeal by Saville LJ (as Lord Saville of Newdigate then was) that “these three matters overlap with each other and are really facets of the same thing”.  The relationship between proximity and what is just and reasonable was addressed in the Supreme Court of Canada by McLachlin J (as McLachlin CJ then was) in Norsk Pacific Steamship Co. Ltd v. Canadian National Railway Co. [1992] 1 SCR 1021.  At p.1152 she said that “the concept of proximity may be seen as an umbrella, covering a number of disparate circumstances in which the relationship between the parties is so close that it is just and reasonable to permit recovery in tort.”

31.  In Stovin v. Wise [1996] AC 923 Lord Nicholls again discussed the Caparo case.  As to the question of whether imposing a duty of care would be fair, just and reasonable, he said (at p.933A) that :

“it is an uncomfortably loose test for the existence of a legal duty. But no better or more precise formulation has emerged so far, and a body of case law is beginning to give the necessary further guidance as courts identify the factors indicative of the presence or absence of a duty.”

32.  After a citation of cases decided in Australia, Canada, Ireland, New Zealand and Singapore, it is observed in Charlesworth & Percy on Negligence, 12th ed (2010) at p.28 that “[i]t may be that too much can be made of the differences between these approaches”.  And then (on the same page) the statement in the Supreme Court of New Zealand by Elias CJ in Couch v. Attorney General [2008] 3 NZLR 725 at p.750 is cited.  This is that in New Zealand the courts “have tended to take the view that no substantial difference in result follows the changes in emphasis” since Anns v. Merton.  The discussion in Winfield & Jolowicz on Tort of the Australian, Canadian and New Zealand cases is preceded by the observation (at pp 191-192) that “[t]he search for ‘ultimate principle’ has not been confined to England and there are now some disparities in the various approaches to the duty of care question in the various Commonwealth countries, though how much difference that makes to the outcome of cases is difficult to judge”.  Of course none of this is to make light of the various lines of careful thought which have given rise to these disparities.  It is only to recognise that differently articulated approaches may sometimes, perhaps not infrequently, yield the same result. 

33.  That said, the different results reached by the House of Lords and the High Court of Australia in the “unintended child” cases should be noted.  These cases are McFarlane v. Tayside Health Board [2000] 2 AC 59 and Rees v. Darlington Memorial Hospital NHS Trust [2004] 1 AC 309 decided by their Lordships and Cattanach v. Melchior (2003) 215 CLR 1 decided by their Honours.  The McFarlane decision was unanimous.  But the Rees decision was by a bare majority of 4 to 3, and so was the Cattanach decision.  We are not called upon to say on this occasion how we would or might decide any “unintended child” case if such a case were to arise in Hong Kong.

34.  It is well to remember what Sir Robin Cooke P (as Lord Cooke of Thorndon then was) said in South Pacific Manufacturing Co. Ltd v. New Zealand Security Consultants & Investigations Ltd [1992] 2 NZLR 282 at p.294.  This is that “[t]here is no escape from the truth that, whatever formula be used, the outcome in a grey area case has to be determined by judicial judgment” and that “[f]ormulae can help to organise thinking but they cannot provide answers”.

35.  The tendency in the past was to invoke policy considerations to justify not imposing a duty of care.  But, as pointed out to Street on Torts, 12th ed. (2007) at p.43, “considerations of fairness, justice and reasonableness can now also be employed to ground the imposition of a duty of care; either in circumstances in which no such duty has previously existed, or in circumstances where a duty has previously been denied”.  It is of course to be understood that the policy considerations involved are of a legal rather than a political nature.  Whether operating for or against the imposition of a duty of care, the policy is of the kind thus referred to in Lecture 1 of Holmes: The Common Law (1881) at pp 35-36 of the unabridged Dover edition (1991) :

“Every important principle which is developed by litigation is in fact and at bottom the result of more or less definitely understood views of public policy; most generally, to be sure, under our practice and traditions, the unconscious result of instinctive preferences and inarticulate convictions, but none the less traceable to views of public policy in the last analysis.”

36.  It is not to be ignored that there might be a further reason why fairness, justice and reasonableness should be accorded a proper and visible role in the determination of whether a duty of care exists.  As pointed out in Markesinis & Deakin’s Tort Law, 6th ed. (2008) at pp 132-135 (where the decisions of the European Court of Human Rights in Osman v. United Kingdom (1998) 29 EHRR 245 and Z v. United Kingdom (2002) 34 EHRR 3 are discussed), exemptions from liability by operation of the duty concept may be open to human rights scrutiny.  In Z’s case the Strasbourg Court said (in para.100) that it was satisfied that the law of negligence as developed by the British courts since the Caparo case and as analysed in Barrett v. Enfield London Borough Council [2001] 2 AC 550 includes the fair, just and reasonable criterion as an intrinsic element of the duty of care and that the ruling of law in question did not disclose the operation of an immunity.  I put it no higher than that an approach to the question of whether a duty of care exists would naturally be more likely to sit comfortably with human rights if it accords due weight to considerations of fairness, justice and reasonableness than if it ignored them or failed to take them sufficiently into account.

37.  No common law landmark, not even one as respected and worthy of respect as Lord Atkin’s “neighbour” statement, can be expected to stand alone and sufficient on its own forever.  That is one of the clearest lessons that legal history teaches.  While having due regard to the importance of predictability and continuity, the courts will, as they must, develop the common law to provide such fresh or adapted solutions as may be needed to cope with new problems as and when they emerge.  Subject of course to that, I would adopt the Caparo approach as explained by Lord Nicholls in White v. Jones at p.221F-G and bearing in mind what Lord Cooke said in the South Pacific Manufacturing case at p.294 and Lord Walker said in the Customs and Excise Commissioners case at p.209E-G. 

Applying the approach to the present circumstances

38.  What remains to be done is to apply that approach to the circumstances of the present case.  Each side’s citation of cases involved some attempt to resort to analogy, and therefore suffers from what Viscount Simon referred to in Schiffahrt-Treuhand GmbH v. Her Majesty’s Procurator General [1953] AC 232 at p.264 as “the weakness which attends all arguments from analogy”.  It is important at this stage to bear in mind Lord Hoffmann’s observation in the Customs and Excise Commissioners case at p.198H.  This is that phrases such as “proximate” and “fair, just and reasonable” are “often illuminating but discrimination is needed to identify the factual situations in which they provide useful guidance”. The factual situation in the present case is broadly as indicated by the terms of the question of law on which this appeal comes to the Court.  Its details are as appear from the trial judge’s findings of facts which findings have been endorsed by the majority in the Court of Appeal.  These findings are those summarised earlier in this judgment.

39.  As far as foreseeability is concerned, there can be no doubt that the harm in question was foreseeable.  It was obvious that the operation was dangerous.  And it was equally obvious that the Worker was one of the persons in danger.

40.  What about proximity?  Well, the crucial facts are these.  The Worker was on the Factory Operator’s premises.  He was there doing work which his employer the Independent Contractor had been engaged to do for the Factory Operator.  And he was using equipment on loan from the Factory Operator.  On those facts, proximity existed between the Worker and the Factory Operator.

41.  Is it fair, just and reasonable to hold that a duty of care was owed by the Factory Operator to the Worker?  It would appear that Stone J was of the view that to so hold would be to make the Factory Operator “effectively the insurer” of the Independent Contractor.  But that does not take sufficient account of the fact that the Factory Operator had loaned the Independent Contractor the pallet jacks and bearing trolleys and knew or ought reasonably to have known that they would be used to do the work by an unsafe method.  The Factory Operator chose to engage an independent contractor who had to borrow makeshift equipment from it.  It could have chosen instead to engage an independent contractor who had the equipment needed to do the work in a safe manner.  That would presumably have been more costly.  But safety is not a thing on which to cut costs like this.

42.  Still on the question of fairness, justice and reasonableness, it has to be borne in mind that the danger involved was to life and limb.  Without making light of purely economic loss, it is fair to say that the fact of personal safety being at stake is always significant.  Thus in Cathay Pacific Airways Ltd v. Wong Sau Lai (2006) 9 HKCFAR 371 the Court observed (at p.376F) that while the duty of care owed by an employer to his employees was not absolute, the standard of care demanded is naturally high since personal safety is at stake.  Just as that was a factor in that context, so is it a factor in the present context.  In Perret v. Collins [1998] 2 Lloyd’s Rep. 255 at p.275, col.1, Buxton LJ said that “when one turns to the judgmental issues of justice, fairness and reasonableness the importance of the fact that what is put at risk is the plaintiff’s body, and not just his goods, is … deeply embedded in the law of negligence”.  Indeed it is, and rightly so.  This is an area in which legal policy is involved.  And there can be no doubt that the policy considerations in favour of personal safety are naturally very powerful. 

43.  That is particularly so where the person is in a vulnerable position.  The point is neatly put in Charlesworth & Percy on Negligence at p.34. There, under the sub‑heading “Protecting the vulnerable”, it is said that “[t]here is a concern to protect those at a disadvantage, who have no reasonably available means of protecting themselves”.  That applies to the Worker.  He does appear to have been in a vulnerable position and at a disadvantage accordingly.  For he does not appear to have been in a good position to protest against, let alone veto, the unsafe method of work with which his employer and the person who engaged his employer were content.

44.  In the Dorset Yacht case Lord Diplock observed (at p.1060E-F) that “[t]he very parable of the good Samaritan (Luke 10, v.30) which was evoked by Lord Atkin in Donoghue v. Stevenson illustrates, in the conduct of the priest and of the Levite who passed by on the other side, an omission which was likely to have as its reasonable and probable consequence damage to the health of the victim of the thieves, but for which the priest and Levite would have incurred no civil liability in English law”.  That was cited by Lord Goff in Smith v. Littlewoods Ltd [1987] AC 241 at p.271B-D for the proposition that “the common law does not impose liability for pure omissions”. But the present case is not one of pure omission.

45.  As to that, let us begin by turning once again to the evidence of Mr Ip, the supervisor employed by the Factory Operator.  It would appear that Stone J who dissented in the Factory Operator’s favour in the Court of Appeal had misapprehended Mr Ip’s evidence or at least the effect of it.  This is because Stone J referred to Mr Ip’s view that the operation was extremely unsafe as a “post facto” view.  But Mr Ip, it will be remembered, had recognised before the accident that the operation was extremely unsafe.  Nevertheless neither he nor his employer the Factory Operator took any steps to stop or even to warn against it.  As to why not, he explained, it will be remembered, that he trusted that the Independent Contractor could manage the operation.  But how far can one reasonably trust someone to manage an operation without mishap when he proceeds in an extremely unsafe manner?  It being a supervisor’s function to supervise, Mr Ip’s knowledge is to be attributed to his employer the Factory Operator.  And his failure to act on that knowledge is its failure.

46.  Moreover the Factory Operator’s position is adversely affected by something besides its employee Mr Ip’s omission.  It had taken a positive part, thus assuming a positive role, in the creation of the danger, doing so by lending the Factory Operator equipment which it knew or ought reasonably to have known would be used to do the work by an unsafe method.  Such participation, too, goes to it being fair, just and reasonable to hold that the Factory Operator owed the Worker a duty of care.  Indeed, such participation lies at the heart of the Worker’s case against the Factory Operator in negligence, and justifies the result reached by the majority in the Court of Appeal.

47.  The question of law on which leave to bring this appeal was granted is set out in the opening paragraph of this judgment.  I would answer it thus.  A duty of care can arise in circumstances such as those described in that question.  And such a duty did arise on the particular facts of this case.

48.  For the foregoing reasons, I would, despite the able arguments presented by leading counsel for the appellant Factory Operator, dismiss this appeal.  As to costs here and below, I would (i) order legal aid taxation of the respondent Worker’s own costs and (ii) make an order nisi in his favour against the Factory Operator, such order nisi to become absolute after 21 days in the absence of notification to the Registrar that a different order as to costs is sought.  I would order that in the event of such notification, the question of costs be dealt with on written submissions as to which the parties should seek procedural directions from the Registrar.

Mr Justice Chan PJ :

49.  I agree with the judgment of Mr Justice Bokhary PJ.

Mr Justice Ribeiro PJ :

50.  I agree with the judgment of Mr Justice Bokhary PJ.

Lord Walker of Gestingthorpe NPJ :

51.  I agree with the judgment of Mr Justice Bokhary PJ.

Chief Justice Ma :

52.  Accordingly, for the above reasons, the appeal is unanimously dismissed and we make the orders as to costs set out in para.48 above.

Mr Godfrey Lam SC and Mr Kent Yee (instructed by Messrs King & Co.) for the appellant

Mr Neville Sarony SC and Mr Y L Cheung (instructed by Messrs Samuel Li & Co. and assigned by the Director of Legal Aid) for the respondent