CHAN YIN YEE v. SECRETARY FOR JUSTICE AND ANOTHER

HCPI 1435/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1435 OF 2000

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JUDGMENT

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The Accident

1. At about 1:40 p.m. on Saturday 18th July, 1998, the Plaintiff was a rear seat passenger in a taxi (DS 1820) travelling along Tai Wo Service Road West in a southwesterly direction. She sustained serious injuries when the taxi collided with a light goods vehicle ("the LGV") bearing registration number AM 3307 travelling in a northeasterly direction. The LGV was then driven by the 2nd Defendant. The accident arose as a result of the negligence on the part of the 2nd Defendant. On 31st March, 1999, the 2nd Defendant was convicted of careless driving and driving the LGV without third party insurance.

2. The Plaintiff instituted these proceedings on 27th May, 2000 against the 2nd Defendant and the 1st Defendant representing the interests of the Government as the employer of the 2nd Defendant. Pursuant to the directions given by Master Kwan on 6th November, 2001, I am concerned solely with the issue of liability.

Relationship between the 1st and the 2nd Defendants

3. At the date of the accident, the 2nd Defendant was a Works Supervisor II employed by the Drainage Services Department. Prior to the accident, his performance at work had always been exemplary.

4. The 2nd Defendant had been posted to work in North Lantau Island as Works Supervisor II since February, 1997. He worked under the direct supervision of Mr. Wong Kwok Yin (Works Supervisor I) ["Mr. Wong"] and Mr. Leung

Shing Tun (Electrical Inspector) ["Mr. Leung"]. His official working hours were from 8 a.m. to 5 p.m. for Monday to Friday and from 8 a.m. to 1 p.m. on Saturday.

5. The 2nd Defendant's duties included the maintenance and operation of various sewage treatment facilities and the testing and commissioning of new facilities. As he was the only person in North Lantau who held a licence to drive government light goods vehicle, the 2nd Defendant was given the additional duty as driver of the LGV for delivery of sewage and sludge samples and documents to and fro between Lantau Island and Stonecutters Island Sewage Treatment Works.

6. Standing Orders were issued to all Government Drivers. The following are relevant provisions of the Standing Orders :

(a) Paragraph 1 : These orders will be abided by all drivers and any contravention may involve summary disciplinary action or dismissal.

(b) Paragraph 8 : On completion of duty, drivers will return with their vehicles directly to their department's parking area or garage.

(c) Paragraph 12 : Drivers must not carry any passenger or load for payment or any other gain. Nor may they offer lifts to family members, personal friends, and any other unauthorized person or load.

(d) Paragraph 29 : A driver is required to provide a daily record of his work by completing a vehicle log book.

7. Prior to the accident the usual practice was that every day when the 2nd Defendant reported for duty, he would obtain the ignition key to the LGV parked in North Lantau from Mr. Wong and would return the key to Mr. Wong before he went off duty. Mr. Wong was entrusted with the custody of the key because of his supervisory rank and because he lived within a short distance from work. A log book was maintained in relation to the use of the LGV by the 2nd Defendant. The entries in that log book by the 2nd Defendant would be checked by Mr. Wong and his superior.

8. On 17th July, 1998 (Friday), at about 5.30 p.m., the 2nd Defendant was instructed to deliver sewage samples from South Lantau Island to a laboratory in Stonecutters Island Sewage Treatment Works. The 2nd Defendant finished the delivery at about 6 p.m. He sought and obtained permission from Mr. Leung to park the LGV at the Department's Cheung Sha Wan Pumping Station, which was nearby. Mr. Leung granted this permission as it was already past office hours (i.e. 5 p.m.). Mr. Wong was therefore not available to collect the ignition key in North Lantau. The 2nd Defendant was already working overtime. Given the distance between North Lantau and the 2nd Defendant's then residence in To Kwa Wan, he could only reach home by about 7 to 8 p.m. if he were to park the LGV back in North Lantau. The 2nd Defendant had previously been permitted to park the LGV at the Cheung Sha Wan Pumping Station under similar circumstances on 13th and 16th June, 1998. Nothing out of ordinary had occurred on those occasions. The gate to the Cheung Sha Wan Pumping Station was locked after working hours. Approval for access had to be sought from the officer-in-charge of the control room there. The 2nd Defendant was on leave the following day. As he was the only person in the North Lantau team who could drive the LGV, there was no one to drive the LGV on Saturday and Sunday in any event.

9. At about 12 p.m. on 18th July, 1998, the 2nd Defendant received a call from the Wo Hop Shek cemetery informing him that his grandmother's grave was due for exhumation. He was asked to get there to sort out the situation or else her tomb would be moved to the Sandy Ridge cemetery, which was a co-burial area. The 2nd Defendant immediately set off to Wo Hop Shek. He could not get a taxi. As he was anxious, he took the LGV from the Cheung Sha Wan Pumping Station. He drove the LGV to Wo Hop Shek with 3 of his friends on board. The accident involving the Plaintiff occurred in the course of this journey.

10. Disciplinary proceedings were instituted against the 2nd Defendant. He was given a serious reprimand and cautioned.

11. In relation to the current proceedings, interlocutory judgment was entered by the Plaintiff against the 2nd Defendant on 6th February, 2001.

Case of the Plaintiff

12. I am of the view that the Plaintiff's case is essentially divided into 2 parts. The first part relates to alleged liability on the part of the 1st Defendant on the basis of facts matters and circumstances surrounding the accident on 18th July, 1998. It is said that the 1st Defendant is vicariously liable for the 2nd Defendant's tort. Alternatively, it is said that the 1st Defendant is in breach of her own duties. The 2nd part relates to alleged liability stemming from events in 1951, 1981, 1985 and 1995. It is said that the 1st Defendant is liable on the basis of certain exchanges that took place in the Legislative Assembly during the debates over the enactment of the Motor Vehicles Insurance (Third Party Risks) Ordinance. Further or in the alternative, it is said that liability stems from the position adopted by the Hong Kong Government when it made various agreements with the Motor Insurers Bureau ["M.I.B."] in 1981, 1985 and 1995.

Vicarious liability

13. The Plaintiff builds her case on two 1999 decisions of the Canadian Supreme Court : Bazley v. Curry (1999) 174 DLR (4th) 45 and Jacobi v. Griffiths (1999) 174 DLR (4th) 71. Mr. Sarony S.C., Counsel for the Plaintiff, submits that I should not follow the decision of the Court of Appeal in Tse Ngan Heung v. Ritx-Carlton Ltd. [2002] 1 HKC 146. In Lister v. Hesley Hall Ltd. [2001] 2 WLR 1311, Lord Steyn at p. 1323c pointed out that those Canadian authorities "will be the starting point" when problems in relation to vicarious liability are considered in the future in the common law world. Mr. Sarony S.C. says that the Court of Appeal failed to adopt this starting point. Given the failure to refer to the 2 Canadian authorities, Tse Ngan Heung was decided per incuriam. In the light of those Canadian authorities, Mr. Sarony S.C. contends that vicarious liability is generally appropriate where there is a significant connection between the creation or enhancement of a risk and the wrong that accrues therefrom, even if unrelated to the employer's desires.

14. Mr. Bleach S.C., Counsel for the 1st Defendant, was also Counsel in Tse Ngan Heung. He informed me that the 2 Canadian authorities were indeed cited before the Court of Appeal in Tse Ngan Heung.

15. I have complied with the directive of Lord Steyn in Lister v. Hesley Hall Ltd. and considered the judgments of the Canadian Supreme Court in Bazley v. Curr and Jacobi v. Griffiths. Whilst those decisions provide me with valuable insights into the jurisprudential basis of the doctrine of vicarious liability, I share, with respect, the sentiments succinctly expressed in the judgment of Lord Hobhouse in Lister v. Hesley Hall Ltd. (above cited at 1334H) :

"My Lords, the correct approach to answering the question whether the tortious act of the servant falls within or without the scope of the servant's employment for the purpose of the principle of vicarious liability is to ask what was the duty of the servant towards the plaintiff which was broken by the servant and what was the contractual duty of the servant towards his employer. The second limb of the classic Salmond test is a convenient rule of thumb which provides the answer in very many cases but does not represent the fundamental criterion which is the comparison of the duties respectively owed by the servant to the plaintiff and to his employer. Similarly, I do not believe that it is appropriate to follow the lead given by the Supreme Court of Canada in Basley v. Curry...The judgments contain a useful and impressive discussion of the social and economic reasons for having a principle of vicarious liability as part of the law of tort which extends to embrace acts of child abuse. But an exposition of the policy reasons for a rule (or even a description) is not the same as defining the criteria for its application. Legal rules have to have a greater degree of clarity and definition than is provided by simply explaining the reasons for the existence of the rule and the social need for it, instructive though that may be. In English law that clarity is provided by the application of the criterion to which I have referred derived from the English authorities".

16. I accept Mr. Bleach S.C.'s intimation. The Court of Appeal in Tse Ngan Heung has provided me with valuable criteria in applying the principle of vicarious liability. In Tse Ngan Heung, a car jockey of the Ritz-Carlton Hotel drove a bellboy of that hotel in a limousine of a car hire company on a trip to buy food. Rogers VP referred to the judgments of their Lordships in Lister v. Hesley Hall Ltd. (p. 150 G - p. 151D). His Lordship emphasized that the mere fact that the employment gave an opportunity to the servant to commit a wrong was not enough to make the employer liable and that it is important to analyze the task upon which the employee was engaged at the time the tort was committed and the duties which he was engaged to perform broadly defined. Woo JA concluded (at p. 153B) that :

"At the material time, he was not driving for the hotel's business or purposes or performing any part of his duties towards the hotel or towards the hotel guests that the hotel had entrusted upon him to perform. It would stretch the law of vicarious liability as expounded in Lister v. Hesley Hall to an unacceptable extent to say that the second defendant's driving of the Parklane car to get food, which was expressly not allowed, as being within the scope of his employment, however broadly one views that scope."

17. There is no doubt whatsoever that at the material time the LGV was not driven by the 2nd Defendant for the business or purpose of his employer. He was on leave on 18th July, 1998. He had no authority to drive the LGV to Wo Hop Shek. This unauthorized and wrongful act of the 2nd Defendant is not connected with acts authorised by his employer so as to constitute a mode of doing those authorised acts. Indeed, the Plaintiff agrees that the trip in question "was not a duty trip". The case is on all fours with Tse Ngan Heung. The 1st Defendant is not vicariously liable for the for the defaults of the 2nd Defendant.

Breach of an alleged duty in permitting the 2nd Defendant to drive the LGV uninsured

18. Both sides accept that in order to hold that a duty of care exists, a Court has to be satisfied that the injury or damage was foreseeable, that there is a sufficiently proximate relationship between the parties and that it is fair, just and reasonable to impose the liability.

19. Mr. Sarony S.C. submits that it was plainly foreseeable that the 2nd Defendant might drive the vehicle on an unauthorized journey and the steps taken by the 1st Defendant to prevent the LGV being driven without authorization were plainly insufficient.

20. Mr. Bleach S.C. submits that in the absence of special circumstances an owner of a vehicle is not under a positive duty to keep a vehicle in safe custody and to prevent it from being used without proper authorization. Mr. Bleach S.C. further submits that the allegations of Mr. Sarony S.C. are unsubstantiated.

21. Mr. Bleach S.C. referred me to a long line of authorities in support of the absence of the alleged duty. It suffices for me to refer to 2 of the authorities which he cited :

(a) In Fulwood House Ltd. v. Standard Bentwood Chair Co. Ltd. [1956] 1 Lloyd's Rep. 160 the Defendant's lorry was left unattended whilst its driver went to lavatory. He did not remove the ignition key. A warehouseman, without authority, tried to turn the lorry around and damaged the plaintiff's premises. The Court held that the defendant was not negligent in leaving the ignition key in place as it was not reasonably foreseeable that a third party would interfere with the lorry.

(b) In Patrick Breslin v. Noel Corcoran & The Motor Insurers' Bureau of Ireland [unreported, the High Court of Ireland, 1999/9145P (Lexus Transcript), 17th July, 2001], the 1st Defendant there left his car unlocked and with key in ignition. He dropped into a shop to get a sandwich. As he emerged from the shop, an unknown person jumped into the car and drove it off at speed. It turned into a lane and struck the plaintiff. In dismissing the plaintiff's claim against the 1st defendant, the Court stated that :

"the only type of circumstances in a case such as this where I could envisage a Plaintiff succeeding against the owner of a stolen vehicle would be where there was actual and clear evidence that the vehicle was left in an area where it should be known to the owner that people routinely stole cars for the purpose of driving them around in a reckless and dangerous fashion"

22. I accept the submissions of Mr. Bleach S.C. There is no evidence before me to indicate that Government drivers regularly deploy Government vehicles under their control for frolics of their own. As far as the 2nd Defendant is concerned, his service records prior to the accident were unblemished. Nothing out of the ordinary had occurred when the LGV was parked at the Cheung Sha Wan Pumping Station under similar circumstances on 13th and 16th June, 1998. I reject Mr. Sarony S.C.'s submission that a duty exists in these circumstances. Even if such duty subsists, Mr. Sarony S.C. did not explain why the steps taken by the 1st Defendant were inadequate and what further steps the 1st Defendant should have taken.

The 2nd part of the Plaintiff's case

23. In relation to this part of the case, one is no longer concerned with faults leading to the Plaintiff's physical injuries on 18th July, 1998. One is concerned with events well prior to 18th July, 1998 and whether the 1st Defendant is in breach of a duty to protect the Plaintiff against economic loss arising from the inability of the 2nd Defendant to answer any monetary judgment awarded against him consequential upon his defaults which the 1st Defendant is not vicariously liable.

Alleged duty arising from the exchanges in the Legislative Assembly in 1951

24. Mr. Sarony S.C. submits that the current S.A.R. Government is bound by any undertaking or representation made by an officer of the pre-Resumption of Sovereignty Government and that the Plaintiff has a legitimate expectation arising from the speech of the then Acting Attorney General in response to questions raised by the Hon. C. Terry on the second reading of the Motor Vehicles Insurance (Third Party Risks) Bill in 1951.

25. Section 4(1) of the Motor Vehicles Insurance (Third Party Risks) Ordinance (Cap. 272) provides that :

"Subject to the provisions of this Ordinance it shall not be lawful for any person to use, or to cause to permit any other person to use, a motor vehicle on a road unless there is in force in relation to the user of the vehicle by that person or that other person, as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Ordinance"

26. Section 4(4)(a) of that Ordinance further provides that :

"This section shall not apply to any motor vehicle which is the property of Her Majesty or the Government upon any occasion upon which such vehicle is being used by a person authorized by Her Majesty or the Government to use the same on such occasion".

27. In the course of the debate on these provisions in 1951, the Hon. C. Terry raised the following question :

"...Sir, I refer to section 4 sub-section (4)(a) which exempts all vehicles owned by the Government and other vehicles used by any person in the service of the Government exclusively in such service. What, however, is the position where a Government owned vehicle is allotted permanently to a Government Servant, and is and may be used other than in specific Government service ? For instance, the driver might well be driving home from his club, or some such similar circumstances. Does Government then become in effect the insurer and accept liability for claims for any accident that may occur under those circumstances though, as may well be, the individual is not able to meet a claim for heavy damages?"

28. The then Acting Attorney General replied as follows :

"The Honourable Member has also asked for clarification in the case of Government vehicles. I am authorized to say that although in Hong Kong the Crown could not be sued for damages caused by the negligence of its servants, Government does not, so far as concerns liability for accidents on the road caused by persons authorized to drive Government vehicles, propose to take advantage of this immunity. It is Government's intention to acknowledge liability in every case in which an employer, a private employer, would be liable. Moreover, government proposes that where it has authorized the use of Government vehicles for what might perhaps be termed the personal convenience of Government Servants, such as cars hired to Government servants for recreational purposes, arrangements will be made whereby Government will either carry the insurance itself, making a suitable charge to the Government servant concerned, or will negotiate special insurance for such occasions. The final decision as to which of these courses should be taken has not yet been decided, but the Honourable Members may rest assured that it will be taken before sub-clause (1) of clause 4 is brought into operation, and that there will be appropriate cover. Government cannot, however be expected to carry the insurance where a wholly unauthorized use is made of a Government vehicle as, for example, where a joy-rider removes a Government vehicle from a car park and causes an accident in the course of his joy-ride. That would only be possible if an agreement covering unauthorized user generally were negotiated with the insurance companies as it has been in the United Kingdom".

29. With respect, Mr. Sarony S.C.'s submission under this head is based on a truncated and distorted reading of the exchanges quoted in paragraphs 27 and 28 above. The reference to the Government carrying the insurance itself was in the context of authorized use of Government vehicles. No representation was made by the then Acting Attorney General that Government will cover victims injured whilst Government vehicles were used by joy-riders. Quite apart from the doubtful relevance of the concept of "legitimate expectation" in the context of the tort of negligence, these exchanges provide no justification for any expectation on the part of the Plaintiff. I reject the submissions of the Plaintiff.

Duty arising from the agreements between the Government and the M.I.B.

30. The M.I.B. was incorporated on 10th December, 1980. All insurance companies and Lloyd's Underwriters authorised by law to carry on motor vehicle insurance business in Hong Kong must become members of the M.I.B. By the First Fund Agreement dated 1st February, 1981 between the Government of Hong Kong and M.I.B., M.I.B. agreed that if judgment is obtained against any person in a court in Hong Kong and either at the time of the accident giving rise to liability there is not in force a policy or such policy is ineffective for any reason other than inability of the insurer to pay its debts by reason of its insolvency and any such judgment is not satisfied in full within 28 days, then M.I.B. will pay to the person such judgment. Clause 10 of that agreement however provides that M.I.B. shall not incur any liability in a case where the claim arises out of the use of a motor vehicle owned by or in the possession of Her Majesty or Government. By the Domestic Agreement between M.I.B. and the Authorised Motor Insurers of the same date, the motor insurers committed themselves to joining the M.I.B. and to contribute such funds as may be required by the M.I.B.

31. On 1st November, 1985, the Government of Hong Kong and M.I.B. executed the Insolvency Fund Agreement. By this agreement, the protection offered by M.I.B. to the public was extended to include claims by traffic accident victims which remain unpaid as a result of the insolvency of the insurer concerned.

32. By an Undertaking dated 29th June, 1995, M.I.B. further undertook to extend the protection to cover claims by traffic accident victims which exceed the amount of insurance under the policy and which remain unpaid.

33. In these circumstances, Mr. Sarony S.C. submits that it has always been Government's policy to protect third parties against the risks arising from both authorised and unauthorized use of motor vehicles. By the First Fund Agreement, Government sought to make provision for victims of road traffic accidents where no policy of insurance was in effect. Third party victims of the negligent use of a private motor vehicle was guaranteed to be able to recover damages. Mr. Sarony S.C. further submits that it is contrary to common sense and not fair and reasonable for the Government to establish specific provision to protect third parties against the risk of unauthorized-uninsured use of motor vehicles but to make an exception of its own vehicles.

34. Mr. Bleach S.C. submits that Government has not established specific provision to protect third parties against the risk of unauthorized-uninsured use of motor vehicles and has not made an exception of its own vehicles. The M.I.B. was initiated by the insurance industry and not by the Government. On the basis of Sutherland Shire Council v. Heyman (1985) 157 CLR 424, Mr. Bleach S.C. further submits that a public authority does not expose itself to liability in tort for failing to perform functions at the policy making level.

35. I am of the view that it would not be right to impose a duty on the 1st Defendant in the circumstances of this case. I have not found any fault on the part of the 1st Defendant in her capacity as the employer of the 2nd Defendant. One is concerned here solely with the economic loss of the 2nd Defendant. The 1st Defendant does not stand in any special relationship vis-a-vis the Plaintiff. There was no assumption of responsibility by the 1st Defendant in favour of the Plaintiff. The issue boils down to proper deployment of public funds. The Legislature has not seen fit to introduce a system of no fault insurance in Hong Kong. Public funds have not been earmarked to meet claims of motor accident victims which fall outside the undertakings of the M.I.B. The fact that the culprit is a Government servant adds little to this analysis. In these circumstances, I see no reason why I should impose a duty on the part of the 1st Defendant to use public funds to cover unsatisfied claims arising from private and personal acts of its servants.

Conclusion

36. I rule in favour of the 1st Defendant on the issue of liability.

37. I make an order nisi for costs in favour of the 1st Defendant.