YIP CHI HO v. 黃啓德 AND OTHERS

Legal Aid No. LA/ECC/15512/2009(CG20)

DCEC 738/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 738 OF 2010

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Decision

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1.  In the Application, the Applicant alleges that the Applicant sustained personal injuries in an accident arising out of and in the course of his employment with R1 and/or R2.  R1 and/or R2 were the sub-sub-contractor to a sub-contractor (namely, R3).  R3 was a sub-contractor to a principal contractor (namely, R4).  Alternatively, R3 was a sub-contractor to R4 which was in turn a sub-contractor to a principal contractor (namely, R5).  In the further alternative, R3 was a sub-contractor to R5 which was in turn a sub-contractor to a principal contractor (namely, R4).

2.  On 10.9.2010, the Applicant discontinued his claim against R2.  On 19.11.2010, judgment on liability was entered against R3, and R3 was to pay to the Applicant costs up to 19.11.2010.  Compensation was yet to be assessed.  R1, R4 and R5 disputed the claim on liability and quantum.

3.  On 25.5.2011, the Plaintiff took out a summons (“the first summons”) for the following orders:-

(1)  Leave to the applicant to join Kerry Distribution (Hong Kong) Limited (“Kerry”) the 6^th Respondent in these proceedings out of time;

(2)  Consequential to 1 above, leave to the Applicant to discontinue the Applicant’s claim against the 4^th and 5^th Respondents;

(3)  Leave to the Applicant to amend the Application as per the copy attached … … ;

(4)  Costs of and occasioned by this Application be costs in the cause, and the Applicant’s own costs be taxed in accordance with Legal Aid Regulations.

On 22.7.2011, H.H. Judge Mimmie Chan granted leave to the Applicant to join Kerry as the 6^th Respondent (“R6”) and to discontinue its claims against R4 and R5.  The issue of costs as between the Applicant and R4 and R5 was adjourned for argument.

4.  On 22.8.2011, R6 made a sanctioned payment of $60,000 to settle the Applicant’s claim.  On 9.9.2011, the Applicant took out a summons (“the second summons”) for an order that:-

“1. Leave to the Applicant to accept the Sanctioned Payment made by the 6^th Respondent on 22^nd August 2011 in the sum of $60,000 in full and final settlement of the Applicant’s claim herein;

    2. The said sum of $60,000 shall be paid out to the Director of Legal Aid on behalf of the Applicant forthwith;

    3. The 6^th Respondent shall pay the Applicant’s costs of this action including costs in pursuing against all Respondents, to be taxed if not agreed.

    4. Consequential to clauses 1, 2 and 3 above, leave to the Applicant to discontinue these proceedings against the 1^st and 3^rd Respondents; and

    5. The Applicant’s own costs be taxed in accordance with Legal Aid Regulations.”

On 13.10.2011, the Court granted leave to the applicant to accept the sanctioned payment and to discontinue his claim against R1 and R3.  The issue of costs between the Applicant and R1, R3 and R6 was adjourned for argument.

5.  Regarding the first summons, since it is the Applicant who discontinued the Application against the 4^th and the 5^th Respondents, he has to pay to each of them the costs of the application against them respectively, including the costs of the first summons.

6.  Having dealt with the first summons, I turn to deal with the second summons. This summons was taken out pursuant to Order 22, rule 18 of the District Court, which provides:-

“(1) This rule applies where the plaintiff wishes to accept a sanctioned offer or a sanctioned payment made by one or more, but not all, of a number of defendants.

(2) If the defendants are sued jointly or in the alternative, the plaintiff may accept the offer or payment without requiring leave of the Court in accordance with rule 15(1) if –

(a) he discontinues his claim against those defendants who have not made the offer or payment; and

(b) those defendants give written consent to the acceptance of the offer or payment.

(3) If the plaintiff alleges that the defendants have a several liability to him, the plaintiff may –

(a) accept the offer or payment in accordance with rule 15(1); and

(b) continue with his claim against the other defendants.

(4) In all other cases the plaintiff may apply to the court for –

(a) an order permitting a payment out to him of any sum in court; and

(b) such order as to costs as the Court considers appropriate.”

The Applicant claimed that the respondents were severally liable to him.  It is not a case that he continued with his claim against the other respondents.  Therefore rule 18(3) does not apply, but rule 18 (4) applies.  Pursuant to rule 18 (4), where the Plaintiff accepts the sanctioned payment with leave of the Court, the Court can make such order as to costs as the Court considers appropriate.  In his written submission, the Defence Counsel argued that Order 21 rule 3 and section 52A of the High Court Ordinance were to be invoked in the second summons.  Section 52A is a section in the High Court Ordinance dealing with costs in the Court of First Instance and the Court of Appeal in its civil jurisdiction.  The High Court Ordinance does not apply to the District Court, and there is no equivalent of section 52A in the District Court Ordinance.

        O. 21, rule 3(1) of the District Court Ordinance provides that: -

“(1) Except as provided by rule 2, a party may not discontinue an action … … … or counterclaim, or withdraw any particular claim made by him therein, without the leave of the Court, … … …” This rule just deals with the discontinuation of an action, or counterclaim, or the withdrawal of a claim.  It does not deal with the acceptance of a sanctioned offer or payment.  Order 22 rule 18 deals specifically with the “acceptance of sanctioned offer or sanctioned payment made by one or more, but not all, defendants”.  The second summons is an application for an order relating to the acceptance of a sanctioned payment.  Hence Order 22, rule 18(4) applies, and Order 21, rule 3 does not apply.  The submission of the Defence Counsel cannot stand.

7.  In Li Kai Yin v Atla Trans Ltd and Another (HCPL 196/2009), the Court held that:-

“the proper course for the plaintiff to take, when he wishes to accept a sanctioned offer or payment by one of the defendants and when he does not wish to pursue his remaining claims, if any, against the other defendant, is to ask for an order that the proceedings be discontinued against the other defendants and for the paying-in defendant to bear the costs of the plaintiff incurred against the discontinued defendants as well as the costs of the discontinued defendants. The plaintiff can obtain such an order if he can demonstrate that it was reasonable for him to sue the discontinued defendants.”

8.  This case is binding upon me.  I have to determine whether it is reasonable for the Applicant to sue the respondents.  In his witness statement, the applicant provided information to show that the 1^st Respondent was his direct employer.  R1 and R3 were obviously sued upon the information provided by the Applicant and by the Labour Department, which confirmed that R1 was the direct employer of the Applicant, and R1 was the sub-contractor of R3. R1 disputed his liability as the Applicant’s employer.  In his answer, R1 said that in November 2008, through the introduction of Cheung Ka Ho, the Applicant worked as a casual driver.  On the 3^rd day of work, the Applicant crashed the vehicle he was driving, and disappeared.  So R1 handed over $960 ($320 x 3) (1 being 3 days’ casual workers wages for the 3 days’ work prior to the car accident) to Cheung Ka Ho for transfer to the Applicant, and that is the working record of the Applicant working for R1.  This is a clear admission of employing the Applicant as his employee.  Thus it is reasonable to sue R1.

9.  On the basis of the information provided by the Labour Department, it is reasonable to sue R3.  In any event, judgment on liability was entered against R3 on 19.11.2010.    This supports the Applicant’s contention that it is reasonable to sue R3.

10.  The Applicant barely knew R1.  He was injured on the 6^th day of his employment.  He was asked to work in one of Kerry’s godowns, in lorries bearing the name of “嘉里物流”.  He was asked to wear uniform bearing the same words and logo.  If the Applicant’s employer (namely, R1) was not contractually related to R4, how could he allow the Applicant to wear the uniform bearing the name of R4, and also to work in the godown of R4?  The relationship between R1 and R4 could only be between a principal contractor and a sub-contractor.  So it is reasonable for the Applicant to sue R4.

11.  In the course of delivery work the Applicant was asked to undertake, he saw invoices or delivery notes bearing the name of R5.  There is no evidence showing the contents of these invoices or delivering notes.  There is insufficient evidence to sue R5 because these invoices or delivery notes do not indicate the relationship between R1 and R5.  So there is no reasonable basis to sue R5.  His application to ask R6 to bear the Applicant’s costs in pursuing R4 is dismissed.

Costs

12.  For the summons dated 25.5.2011, the Applicant do pay costs of this Application and this summons to the 4^th and 5^th Respondent respectively, to be taxed, if not agreed.  Subject to this, the costs of and occasioned by this summons be costs in the cause.  The Applicant’s own costs be taxed in accordance with Legal Aid Regulations.

13.  For the summons dated 9.9.2011, the 6^th Respondent do bear the Applicant’s costs of this action, including the costs in pursuing the 1^st Respondent, the 3^rd Respondent (from 20.11.2010 to the conclusion of this case), and the 4^th Respondent.  The Applicant’s claim against the 6^th Respondent for his costs in this action against the 5^th Respondent is dismissed.  The 6^th Respondent has to pay the Applicant 70% of this summons (including the hearing on 13.10.2011).  The Applicant’s own costs be taxed in accordance with Legal Aid Regulations.