LAM CHI FAT v. LIBERTY INTERNATIONAL INSURANCE

HCA3232/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.3232 OF 2001

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J U D G M E N T

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The facts

1. The following summary of the factual background to this action represents findings of fact in this trial. That said, the facts are not really in dispute : they are largely contained in documents, affidavits or the plaintiff's Witness Statement. Although there has been some cross-examination of the plaintiff, this has gone to matters which, in the end, do not impact much on the real issues that divide the parties.

2. On 10 March 1992, the plaintiff (then aged 39) was working as a painter at a construction site on Des Voeux Road West when the scaffolding (probably more of a working platform) on which he was standing, collapsed. He fell about 20 feet and sustained injuries to the left side of his chest, left wrist and right shin. Apparently, the working platform had accumulated a lot of debris which had gathered as a consequence of the demolition of an illegal canopy.

3. The contractor of the building works was one So Kam Sui, Kenneth ("Kenneth So") who carried on business under name of Foo Yan Construction Co. ("Foo Yan"). The foreman at the time of the accident, an employee of Foo Yan, was Lui Yu Chung ("Lui").

4. By what is commonly referred to as a Form 2 Notice dated 1 April 1992, made under the Employees' Compensation Ordinance Cap. 282 ("the ECO"), Foo Yan (named therein as the plaintiff's employer) notified the Commissioner for Labour of the plaintiff's accident. The insurance company named in the Form 2 Notice was Provincial Insurance Plc, later known as Provincial Insurance Hong Kong Limited ("Provincial").

5. Provincial was named as insurer because it had issued an employees' compensation policy dated 15 November 1991 numbered 3003606-91-41 in favour of Foo Yan ("the Policy") covering, inter alia, Foo Yan's liability (statutory or otherwise) to pay compensation (including costs) in case any of Foo Yan's employees sustained injury arising out of and in the course of their employment. The Policy specifically covered only those employees in Foo Yan's "immediate service" and there was an express exclusion in relation to any liability which may be incurred by Foo Yan to employees of its contractors. I shall have more to say about this policy presently. The defendant is involved in the present action because it has taken over the liabilities under the portfolio of insurance policies issued by Provincial, including the Policy.

6. On 8 November 1993, the plaintiff applied to the District Court (in ECC 584 of 1993) ("the EC Proceedings") for employees' compensation against Foo Yan and Lui under sections 8, 9, 10 and 10A of the ECO. In the Application, it was expressly pleaded that the plaintiff was an employee employed by Lui. By an order dated 12 January 1994, H.H. Judge Beeson entered judgment on liability against Foo Yan and Lui (who were not present before her) and adjourned the assessment of damages. The compensation was subsequently assessed at $208,901 ("the EC Award").

7. On 28 December 1994, the plaintiff instituted proceedings in the High Court against Foo Yan and Lui in relation to his accident. This was HCPI 167 of 1994 ("the 1994 Action"). The way in which the plaintiff's claim was pleaded in the Statement of Claim in that action assumes importance in the present action and I shall be dealing in detail with this pleading below.

8. Neither defendant entered an Acknowledgment of Service in the 1994 Action. On 28 January 1995, interlocutory judgment in default of Acknowledgement of Service was entered with damages to be assessed. In a written Decision handed down on 26 October 1995, after a hearing on 12 October 1995 in which the two defendants were again absent, Master Jones assessed the damages due to the plaintiff at and entered final judgment in the sum of $1,499,840 together with interest ("the Judgment Sum").

9. Neither the Judgment Sum nor the EC Award was satisfied by Foo Yan or Lui. On 19 March 1998, the plaintiff presented a bankruptcy petition against Kenneth So and on 27 May 1998, a bankruptcy order was made against him. He was of course the sole proprietor of Foo Yan.

10. Meanwhile, as far as the Policy was concerned, the plaintiff had by a Notice dated 28 December 1994 from his solicitors to "Po Hang Insurance Company Limited" (there is no dispute that this was a reference to the English transliteration of Provincial's Chinese name), informed Provincial of the fact that the 1994 Action had been instituted against Foo Yan and Lui, who were described in this Notice as "the employers of the [plaintiff]". It was further stated that the 1994 Action had been instituted for damages payable for personal injuries suffered by the plaintiff arising out of and in the course of his employment with the defendants. It is clear that this Notice was intended to be served pursuant to section 43(2)(b) of the ECO.

11. By a letter dated 16 January 1995 from its solicitors, Provincial responded, inter alia, by reiterating a point made in earlier correspondence in response to the EC Proceedings, that the Policy did not cover employees of Foo Yan's contractors. It was asserted that the plaintiff was Lui's employee. The final paragraph of that letter put the plaintiff on notice that even though in the Statement of Claim in the 1994 Action, the plaintiff had asserted that he was employed by both Foo Yan and Lui, Provincial reserved the right to dispute the alleged employment relationship between the plaintiff and Foo Yan in the event he obtained a judgment against Foo Yan (which, as noted above, he eventually did).

12. Despite Provincial's position that the plaintiff was not employed by Foo Yan but only by Lui, this is not borne out by the facts. In my judgment, in so far as necessary, I find that the plaintiff was in fact employed by Foo Yan :

(1)	This was actually the position that Foo Yan has itself all along maintained. First, in the Form 2 Notice (referred to in paragraph 4 above), Foo Yan stated that it was the employer of the plaintiff. Secondly, this was confirmed in a letter dated 6 June 1995 from Foo Yan to Provincial. Thirdly, in that letter, it was also stated that although the plaintiff had apparently informed the Labour Department that his employer was Lui (and this therefore explains perhaps why in the EC Proceedings and in some other documents, Lui was referred to as the plaintiff's employer), in fact Lui was a foreman of Foo Yan and the plaintiff was employed by Foo Yan through him.
(2)	Lui is referred to in various documents as Foo Yan's employee. In an affirmation dated 6 September 1995, Lui confirms this to be the case. He states that for the period from about October 1991 to November 1992, he was Foo Yan's site supervisor. His worker's ID card confirms this. What is particularly relevant is a Form 2 Notice dated 5 May 1992 in which an accident to Lui, which occurred on 27 April 1992, is reported. In this Notice, Foo Yan is stated to be the employer and it is signed by Kenneth So as Lui's employer. Not only that, the insurer named in the Form 2 Notice was Provincial, so it is probable (at least) that Provincial would have known that Lui was himself Foo Yan's employee.
(3)	In his Witness Statement made for the purposes of the trial of the present action, it is clear that the plaintiff did not really have much idea as to the identity of his employer (and probably did not care too much either about this question as long as he was paid). He says he was paid by Lui and it was presumably because of this that he may have assumed that Lui was his employer. In cross-examination, he accepted that even now he was not sure who his employer actually was. I have no doubt that the plaintiff is telling the truth and I accept his testimony. Although what he says does not really support the contention that he was employed by Foo Yan, it does not contradict it either.
(4)	On the whole of the evidence before me, it is reasonably clear that the plaintiff was in Foo Yan's employment at the time of the accident and I so find.

13. The matter does not end here, however, for this finding is not at the heart of the present case. Though the defendant made no concessions on this issue, it is clear that it was not the focus of the trial at all.

14. Instead, Mr Kenny Lin (for the defendant) concentrated on the effect of section 43 of the ECO (which is the foundation of the plaintiff's case in the present action). It was Mr Lin's contention that the requirements of section 43 are not met in the present case and that therefore the action fails.

An insurer's liability to employees under section 43 of the ECO

15. Sections 42, 43 and 44 contained in Part IV of the ECO provide as follows :

"42. Insurer's liability

(1) Notwithstanding anything in a policy of insurance issued for the purposes of this Part, an insurer is liable, in a proceeding under section 36LA or 44, for the amount of the liability of the employer not exceeding the available amount covered by the policy of insurance. (Amended 47 of 1995 s. 7)

(1A) For the avoidance of doubt, it is declared that an insurer is liable, in a proceeding under section 36LA or 44, for the amount of the liability of the employer not exceeding the available amount covered by the policy of insurance issued for the purposes of this Part notwithstanding the obligation imposed upon the employer by section 40 to insure for an amount in excess of the amount insured. (Added 47 of 1995 s. 7)

(2) This section does not apply to a policy of insurance issued for the purposes of this Part that is issued before the commencement of this section.

(3) Where under this Part an amount is paid by the insurer which would, but for this section, not be payable under the policy of insurance, the employer is liable to pay that amount to the insurer.

(Replaced 66 of 1993 s. 12)

43.	Conditions under which liability for payment by insurer arises

(1) Subject to this section, where in relation to an employee there is in force a policy of insurance issued for the purposes of this Part and the employer of the employee becomes liable to pay any sum under this Ordinance or independently of this Ordinance in respect of an injury to the employee arising out of and in the course of his employment, such sum shall forthwith become due and payable by the insurer, including any sum payable in respect of interest and costs, notwithstanding anything to the contrary in the policy of insurance. (Amended 66 of 1993 s. 13)

(2) No sum shall be payable by an insurer under this section--

(a)	unless, in the case of compensation agreed upon between the employer and an employee under section 16CA, such insurer has consented to pay the sum agreed upon as compensation to the employee; (Amended 66 of 1993 s. 13)
(b)	unless, in the case of compensation or damages determined or adjudged by a court or tribunal to be payable to the employee or any other person, the insurer had sufficient notice of the institution in the court or tribunal of proceedings for compensation or damages, as the case may be, to enable such insurer to be added as a party to the proceedings;
(c)	in respect of any judgment to pay compensation or damages, while execution thereon is stayed by the court or pending appeal; (Amended 47 of 1995 s. 8)
(d)	if before the happening of the accident which was the cause of the injury giving rise to the liability, the policy of insurance was cancelled by mutual consent or by virtue of any provision contained therein; or (Amended 47 of 1995 s 8)
(e)	in respect of the sum liable to be paid under subsection (1) in excess of the available amount covered by the policy of insurance (Added 47 of 1995 s 8)

(2A)-(2B) (Repealed 36 of 1996 s 22)

(3) If sufficient notice of the institution of proceedings for the recovery of compensation or damages is given to an insurer to enable such insurer to apply to be added as a party to the proceedings, the court or tribunal, as the case may be, shall, on such application being made, add the insurer as a party and the insurer shall have the same right to defend the proceedings as if such insurer were the employer.

(4) Where under this Part an amount is paid by the insurer which would, but for this section, not be payable under the policy of insurance, the employer is liable to pay that amount to the insurer. (Replaced 66 of 1993 s. 13)

44. Right of injured party to proceed against insurer

(1) Every policy of insurance issued for the purposes of this Part shall be deemed to provide that any employee or other person having a claim against the person insured in respect of the liability in regard to which such policy was issued shall, subject to section 42, be entitled to recover in his own name, as though he were a party to the policy, directly from the insurer any amount which he would have been entitled to recover from the person insured. (Amended 66 of 1993 s. 14; 47 of 1995 s 9)

(2) An employee or other person having a claim against the person insured under a policy of insurance issued for the purposes of this Part shall not commence proceedings against the insurer unless he also commences or has commenced proceedings against the person insured. (Added 66 of 1993 s. 14)

(3) Notwithstanding subsection (2), where an employee or other person having a claim against the person insured has reasonable grounds to be satisfied that

(a)	the person insured cannot be readily located in Hong Kong;
(b)	the person insured is insolvent; or
(c)	the insurer has disclaimed liability under the policy of insurance,
	he may take proceedings against the insurer without taking or having taken proceedings against the person insured. (Added 66 of 1993 s. 14)

16. Part IV of the ECO deals with the compulsory insurance of liabilities of employers, whether under the ECO (such as employees' compensation) or independently of it, towards employees for injuries by accident or for death, arising out of and in the course of employment : see in particular section 40 of the ECO.

17. Where an insurance policy has been issued covering such liabilities as have to be compulsorily covered and the employer becomes liable to pay any sum whether under the ECO or independently of it, in respect of an injury to an employee arising out of and in the course of his employment, the employee will be able to claim, in his own name, that sum (which includes interest and cost) directly from the insurer up to the amounts covered by the policy in question. This is so notwithstanding anything to the contrary in the relevant policy. The only permitted exceptions are those set out in section 43(2) of the ECO. The above represents, in summary, part of the effect of sections 42, 43(1) and 44(1) of the ECO.

18. This statutory right to claim against the insurer in the employee's own name, treats the employee as though he were a party to the policy itself (but with the advantage of not being bound by many of the provisions in it).

19. For the purposes of section 43(1), an employer becomes liable to pay a sum in respect of an injury to an employee arising out of or in the course of employment, when the employer's liability has been quantified in one of the ways provided for in the ECO : see Wong Po-wah v. Pacific Insurance Company Limited [1988] 2 HKLR 417, at 420H-I (Court of Appeal). Thus, for example, an agreement arrived at between an employer and employee under section 16CA of the ECO is one of the ways in which there can be quantification or perhaps even an employer's liability under section 16A. Another example, and this is the relevant situation in the present case, is where a judgment has been entered against the employer for a sum of money : see section 43(2)(b); Pang Wai Chung v. Tai Ping Insurance Company Limited [1999] 2 HKLRD 354 (Court of Appeal).

20. Accordingly, the relevant questions that have to be addressed whenever an employee seeks to claim against an insurer under sections 43(1) and 44(1) of the ECO can be identified in the following way :

(1)	Question 1 : Was there in existence at the material time (i.e. the time of the accident giving rise to the death or injury) a policy of insurance providing the compulsory cover as required under Part IV of the ECO?
(2)	Question 2 : If so, has the relevant employer (namely the insured under this policy) become liable to pay a sum whether under the ECO or independently of it, in respect of an injury to an employee arising out of and in the course of employment? In other words, in relation to such liability, has this been quantified?
(3)	Question 3 : Do one or more of the exceptions set out in section 43(2) apply?

The disputes in the present action

21. Of the questions I have identified, only questions 2 and 3 feature in the present case.

22. Mr Neal Clough (for the plaintiff) submits that the position is simple. The plaintiff has obtained a judgment against Foo Yan who was his employer in respect of an injury to him arising out of and in the course of his employment and the judgment is quantified in the Judgment Sum. Foo Yan was liable to pay this Judgment Sum to him but has not done so.

23. Mr Lin argues otherwise. His contentions are :

(1)	The judgment that the plaintiff obtained against Foo Yan in the 1994 Action (being both the interlocutory and final judgments) was not in respect of Foo Yan's liability in respect of an injury to the plaintiff arising out of and in the course of his employment with Foo Yan. The judgment was only on the basis of Foo Yan's liability as principal contractor, not as employer and as this liability was not covered by the Policy, no claim can be made under section 43 of the ECO. (Issue 1 : The nature of the judgment against Foo Yan).
(2)	Further, the defendant (or more accurately, Provincial) was not given due notice of the 1994 Action for the purposes of section 43(2)(b) of the ECO. (Issue 2 : Notice under section 43(2)(b) of the ECO).

24. Is the defendant right?

Issue 1 :The nature of the judgment against Foo Yan

25. Both Mr Clough and Mr Lin refer to the need to analyse and understand the Statement of Claim in the 1994 Action to see exactly what was the basis of the liability of Foo Yan. If, as Mr Lin submits, Foo Yan was liable only as a principal contractor, this was not covered by the Policy (see paragraph 5 above). Reference was made to Leung Chack v. Asia Insurance Company Limited [1991] 2 HKLR 496 (Court of Appeal by a majority).

26. Counsel's approach in this case is entirely correct in circumstances where there is no reasoned judgment to assist in this exercise. As I have noted above, the interlocutory judgment entered on 28 January 1995 pursuant to Order 13, rule 2 was made in default of Acknowledgement of Service. No reasons for the judgment were given in these circumstances. This judgment was therefore entered on the basis that the facts as contained in the Writ of Summons, were true and admitted by the defendants : see Hong Kong Civil Procedure 2002 Vol.1 at paragraph 13/0/10 referring to Cribb v. Freyberger [1919] WN 22 (English Court of Appeal). This, I should add, is also the position where judgment is entered in default of pleadings (in this situation the facts are those as contained in the relevant pleading) : see Young v. Thomas [1892] 2 Ch. 132, at 137 (English Court of Appeal).

27. The basis for default judgments I have just referred to, give rise to the obvious consequence that as the facts on which the plaintiff's claim is based are deemed to be admitted, judgment will only be given on the plaintiff's claim provided the pleaded facts give rise to the relief sought. Where, however, the facts do not give rise to the relief sought, then unless the Writ or Statement of Claim is amended, no judgment will be given. In default judgment situations, the court looks to the pleaded facts alone and no other evidence will be permitted. As I have said, if the plaintiff wishes to rely on other facts, leave to amend will be required together with all that this entails (such as re-service, etc). See here : Smith v. Buchan [1888] 58 LT 710 (English High Court); Young at 136; Hong Kong Civil Procedure 2002 Vol.1 at 19/7/11.

28. The relevance of all this in the present case is it is the defendant's contention that the Statement of Claim endorsed on the Writ of Summons in the 1994 Action only disclosed a cause of action against Foo Yan on the basis of his being a principal contractor and not the plaintiff's employer. This being the basis of the default judgment against Foo Yan, there was accordingly for the purposes of section 43 of the ECO no liability to pay a sum in respect of an injury to an employee arising out of and in the course of employment. Foo Yan's liability to pay the Judgment Sum was only as a principal contractor. The only liability of an employer towards an employee was that of Lui and Lui of course was not the insured under the Policy.

29. In support of these submissions, Mr Lin referred to the fact that by a summons dated 4 April 2001, over five years after Master Jones had assessed the Judgment Sum, the plaintiff sought leave to set aside both the interlocutory judgment dated 28 January 1995 as well as the final judgment of Master Jones dated 26 October 1995, and to amend the Statement of Claim in the 1994 Action so as to plead expressly the fact that the plaintiff was employed by Foo Yan and not Lui (indeed the proposed amendments deleted all references to Lui). The defendant intervened in the summons as an interested party and two affirmations from its solicitors were served. It is clear just why the application was made by the plaintiff (by now his representation had changed from the original solicitors assigned by the Legal Aid Department to the Department itself). Not having had satisfaction of the Judgment Sum from either Foo Yan or Lui (despite a bankruptcy order having been made against Kenneth So as well) and with the defendant continuing to dispute liability more or less on the same basis as it disputes liability now, the plaintiff (or rather the Legal Aid Department) took the view that an amendment to the Statement of Claim in the 1994 Action on the basis I have identified, would put the matter beyond doubt. Indeed it would have but Master C.B. Chan dismissed the summons on 25 July 2001. There has been no appeal from that decision.

30. While these submissions set the context of the present action and now bring into critical focus the meaning of the original Statement of Claim in the 1994 Action, they do not however assist in the interpretation of that document any more than if extraneous evidence were relied on (whether for or against the plaintiff). There is, I note, no suggestion on the defendant's part that Master C.B. Chan had actually determined the question of the meaning of the Statement of Claim in her decision on 25 July 2001, so that some form of issue estoppel arises.

31. It is accordingly necessary in the present proceedings to analyse the Statement of Claim in order to ascertain the basis on which the court ordered judgment against the Foo Yan in the 1994 Action. There was, as I have said, no reasoned judgment in relation to the interlocutory default judgment such that the basis of that judgment (which was on liability) can be identified. There was, however, a reasoned Decision dated 26 October 1995 in relation to the final judgment when Master Jones assessed the Judgment Sum. I do not regard this Decision as containing the reasons giving the basis for the default interlocutory judgment earlier entered on 28 January 1995. Although Master Jones referred to the fact that both Foo Yan and Lui employed the plaintiff (mistakenly referred to as the defendant in that Decision), this was either just a statement of the background or the learned master's interpretation of the effect of the default interlocutory judgment. The reasons contained in this Decision go merely to the basis for the assessment, not the basis for the interlocutory judgment on liability.

32. I therefore come to the critical question : did the interlocutory judgment on liability in the 1994 Action (which become quantified in the Judgment Sum) establish a liability of Foo Yan's part to pay a sum in respect of an injury to an employee (i.e. the plaintiff) arising out of and in the course of employment?

33. As I have said, only the facts pleaded in the Statement of Claim are relevant. Any extraneous evidence is not admissible and this would explain why Mr Lin took the view that irrespective of whether the facts now demonstrate Foo Yan to have been the plaintiff's employer, the court can only look at the Statement of Claim. This approach is technical (meaning here that it ignores the true state of the facts) but in my view, correct.

34. It has to be accepted immediately that the Statement of Claim in the 1994 Action is poorly drafted, but given a sensible reading, what were the causes of action pleaded in it?

35. I first set out in full the relevant paragraphs in the Statement of Claim :

"STATEMENT OF CLAIM

1.	The Plaintiff was born on 13th August 1952. At all material times, the Plaintiff was employed by the 1st and 2nd Defendants as a painter.
2.	At all material times, the 2nd Defendant was a sub-contractor of the 1st Defendant at Nos. 307-329 Des Voeux Road West, Hong Kong ("the Building").
3.	The 1st Defendant was the principal contractor at the Building.
4.	It was a term of contract of employment between the Plaintiff and the 2nd Defendant and it was the duty of the Defendants to take all reasonable precautions for the safety of the Plaintiff while he was at work, not to expose him to any risk of damage or injury of which the Defendants knew or ought to have known, to take all reasonable measures to ensure that the place where the Plaintiff carried out his work was safe and provide and maintain a safe and proper system of work.
5.	On or about 10th March 1992, the Plaintiff was in the course of his employment at the Building and was standing on a scaffolding of about 20 feet hight from the ground and engaged in the painting cement on the outside walls of the Building. Suddenly, the scaffolding collapsed and the Plaintiff fell to the ground and became unconscious. The Plaintiff has sustained injuries to his left chest, left wrist and right shin as a result of the accident.
6.	The said accident was caused by the negligence of and/or breach of Section 3 of the Occupiers Liability Ordinance and/or breach of common duty of care and/or breach of contract of employment on the part of the 2nd Defendant, its servants or agents.

PARTICULARS OF NEGLIGENCE OF THE
1ST AND 2ND DEFENDANTS

i.	Failing to provide the Plaintiff with a safe working environment and subject him to unnecessary risks of injury;
ii.	Failing to take any precaution in order to ensure that the scaffolding on which the Plaintiff stood would not collapse;
iii.	Failing to take any or any proper or adequate care for the safety of the Plaintiff while he was engaged upon his work;
iv.	Exposing the Plaintiff to risks of damage or injury which the Defendants knew or ought to have known;
v.	In the circumstances, failing to provide a safe and proper system of work."

36. In my judgment, properly read and understood, the Statement of Claim contained a claim by the plaintiff against Foo Yan in respect of the latter's liability for an injury sustained by him as an employee arising out of and in the course of employment. I am of this view for the following reasons :

(1)	Regarding paragraph 1 of the pleading, Mr Clough says the position could not have been clearer. The words mean what they say. The word "employed" in this context means quite simply that the plaintiff was an employee of Foo Yan. It is difficult to see what other meaning the words could sensibly mean.
(2)	Mr Lin, however, argues that in paragraphs 2 and 3, it was pleaded Foo Yan was the principal contractor at the relevant site while Lui was his subcontractor. Further, paragraph 4 pleads a term of contract only as between the plaintiff and Lui. This is confirmed by the important paragraph 6 in which there is only pleaded a breach of contract on Lui's part. In that paragraph, the only reference to Foo Yan was that particulars of his negligence were provided.
(3)	I see the force Mr Lin's submissions but am unable to agree with him.
(4)	Paragraphs 2 and 3 plead the status of Foo Yan and Lui but do not advance the matter much. They do not nullify or qualify what is pleaded in paragraph 1 as regards the relationship between the plaintiff and Foo Yan.
(5)	Paragraph 4 admittedly refers to the contract only as between the plaintiff and Lui, but when read as a whole, it can been seen that both Foo Yan and Lui are intended to be caught. The words "and it was the duty of the Defendants" indicate that although the earlier reference to the contract was only as between the plaintiff and Lui, it must have been intended to include Foo Yan as well. Although this requires additional words to be inserted into the pleading, this is permissible so as to give the paragraph meaning by making it reconcilable with what is pleaded in paragraph 1. Certainly, it cannot be said that paragraph 4 somehow nullifies what paragraph 1 expressly says or even qualifies it.
(6)	Paragraph 6 is of course important because it pleads the breaches on the part of both defendants. Again, although I fully recognize that the reference to a breach of contract is only to the contract between the plaintiff and Lui, when the paragraph is read as a whole, again in order for it to be reconciled with paragraph 1, it must mean that the plaintiff intended to plead a breach of contract against Foo Yan as well. There is some, albeit limited, support for this in that the particulars under this paragraph refer to both Foo Yan and Lui, so that although the particulars are stated to be of their negligence, they must in reality be particulars of what is pleaded in the body of that paragraph but relating to both defendants. Again, it cannot be said in any way that this paragraph somehow nullifies or qualifies paragraph 1 of the Statement of Claim.
(7)	I acknowledge that in arriving at my views on the construction of in particular paragraphs 4 and 6, I have had to modify the language contained in those paragraphs. However, in order to arrive at what I believe to be the true intention and meaning of the Statement of Claim, it is necessary to do so. I am of course much influenced by the contents of paragraph 1 of the Statement of Claim and the need to reconcile all the paragraphs in the Statement of Claim with that paragraph. In my view, this is the right approach. I find it difficult, if not impossible, sensibly to construe paragraph 1 as being either qualified by the paragraphs that follow it or worse still, nullified.

37. Although pleadings are not contracts, the rules of construction are the same in that it is the court's function in construing them to ascertain the true intention behind the document. A useful analogy therefore is that as in the case of contracts, the court may modify words if the plain words would lead to inconsistency with the rest of the document : c.f. Chitty on Contracts (28th edition) Vol.1 at paragraphs 12-053, 12-070 and 12-073. Normally, a court need not embark on such an elaborate procedure in construing pleadings because the court would simply request that the relevant pleading be clarified. However, the present case poses special problems because the court is not able to do this.

38. In view of my conclusions as to the meaning of the Statement of Claim, I therefore hold that the requirements of section 43(1) of the ECO are fulfilled and that Foo Yan (the insured under the Policy) has been made liable for the Judgment Sum in respect of an injury to an employee arising out of and in the course of employment.

Issue 2 : notice under section 43(2)(b) of the ECO

39. This can be dealt with quite shortly.

40. Mr Lin's case was not that Provincial had not received a notice of proceedings for the purposes of section 43(2)(b). It clearly had : see paragraph 10 above. Rather, his argument was that this was not a notice in relation to an action in which the insured (Foo Yan) was potentially liable for a sum in respect of an injury to an employee arising out of and in the course of employment.

41. Put in this way, this issue therefore stands or falls with the determination of Issue 1. Given my conclusions on that Issue, it must follow that I am also of the view the sufficient notice was given for the purposes of section 43(2)(b) of the ECO.

Judgment

42. In view of the foregoing, I give judgment in favour of the plaintiff against the defendant in the following sums :

(1)	$1,499,840 being the Judgment Sum, together with interest thereon as pleaded in paragraph 5 of the Statement of Claim in the present action;
(2)	$106,115 being the plaintiff's taxed costs in the 1994 Action.

43. I will leave it to the parties to agree on the exact sum and interest, failing which the matter can be restored before me.

44. As for costs, I make an order nisi that the plaintiff should have his costs of the action and also that the plaintiff's costs should be taxed in accordance with the Legal Aid Regulations.