Tsang Chin Keung v. Employees Compensation Assistance Fund Board

CACV003312/2001

CACV 3312/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 3312 OF 2001

(ON APPEAL FROM HCPI 161 OF 2001)

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Coram: Hon Mayo VP and Stone J in Court

Date of Hearing: 3 and 4 July 2002

Date of Judgment: 11 July 2002

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J U D G M E N T

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Hon Mayo VP:

1.This is an appeal from a ruling of Suffiad J when he declined to strike out the plaintiff's claim on the grounds that it was either an abuse of process or that the plaintiff had failed to comply with the terms of an unless order. This appeal is confined to the abuse of process issue.

2.This litigation has a somewhat chequered history. The plaintiff was injured in an accident which occurred on 26 June 1988.

3.He commenced proceedings (ECC 80/1989) in the District Court against Hung Kwong Glassworks (Hung Kwong) the sole proprietor of whom is Mr Lo Tat-kwong (Mr Lo). In the statement of claim he claimed Hung Kwong was his employer at the time of the accident. The claim was made pursuant to the provisions contained in Employees' Compensation Ordinance Cap. 282.

4.During the hearing before W. Wong DJ the plaintiff gave evidence that his employer was in fact a Mr Hui.

5.The Judge adjourned the proceedings so as to enable the plaintiff to add Mr Hui as a party to the litigation.

6.On the advice of his then legal advisers the plaintiff did not join Mr Hui as a party to the proceedings. The pleading was amended so as to enable the plaintiff to plead in the alternative that Hung Kwong was the principal contractor of Mr Hui at the time of the accident.

7.Hung Kwong amended their defence to plead that it was the plaintiff's employer at the time of the accident not Mr Hui but that the accident did not occur in the course of his employment.

8.The trial proceeded de novo. Surman DJ presided. He heard evidence from the interested parties. This is referred to later in this judgment.

9.The Judge made these findings of fact at the conclusion of the case when he dismissed the plaintiff's claim:

"Based on that summary and the evidence that I have heard from these 3 principal witnesses, I make the following findings:-

(1) that on 26/6/88 the Applicant was employed by the Respondent Co. to deliver glass to Mr. Hui;

(2) that that delivery of glass was the only contractual relationship between Mr. Hui and the Respondents that day;

(3) that the Applicant did deliver glass to Mr. Hui and whilst at the premises he used the electric saw either on the direct, or implied instruction of Mr. Hui;

(4) the operation of the saw by the Applicant was not in the context of any contractual agreement between Mr. Hui and the Respondent;

(5) although the Applicant was employed by the Respondent the accident did not arise out of or in the course of that employment."

10.The plaintiff then commenced a common law action against Hung Kwong and Mr Hui. This was based upon their alleged negligence. This was HCA 4555/1991.

11.By this time Mr Hui had "disappeared". A default judgment was entered against him with an order that damages be assessed.

12.Hung Kwong filed a defence which was consistent with the defence it ran in the employees compensation litigation.

13.The solicitors representing the plaintiff then applied successfully to set aside the default judgment and amend the statement of claim. In the amended statement of claim the plaintiff based his claim against Mr Hui on his alleged employment by him and did not proceed with any claim against Hung Kwong.

14.Again Mr Hui did not appear in the litigation and a default judgment was entered against him together with an order that damages be assessed.

15.Damages were assessed on 9 October 1996 at $2,917,243.00 with costs.

16.The plaintiff's solicitors informed the Employees Compensation Assistance Fund Board, the defendant in the present action HCPI 161/2001, of the action they were taking against Mr Hui.

17.The defendant sought particulars of the employment which was alleged but took no part in the action and the assessment of damages.

18.Shortly after the defendant was served with the writ in the present proceedings it applied to the court to strike out the writ as being an abuse of the court's process. This was on the basis that there had already been an adjudication by the competent court on the very issue which was at the heart of this action namely the plaintiff's employment status at the time of the accident.

19.The Judge however had not been satisfied that the present action which had been commenced pursuant to the provisions contained in section 24 of the Employees Compensation Assistance Ordinance Cap. 365 (the Ordinance) amounted to a collateral attack upon Surman DJ's judgment or that it constituted an abuse of process such as to justify the action being struck out.

20.Miss Eu SC who represented the defendant submitted that the Judge by focusing his attention simply upon the plaintiff's employment with Mr Hui had not considered the issue on a sufficiently wide basis. What he should have done was to consider the plaintiff's employment status as a whole.

21.This was on account of the way in which the proceedings had been conducted before Surman DJ.

22.What had happened was that the plaintiff had given evidence to the effect that he had been employed by Mr Hui all along and that he had not on the morning in question delivered glass to Mr Hui while in the employment of Hung Kwong.

23.Mrs Lo and Mr Hui had given evidence which directly contradicted the plaintiff. According to them the plaintiff had delivered glass to Mr Hui while in the employment of Hung Kwong and that the accident had occurred subsequently at the premises where Mr Hui was undertaking work in relation to its decoration.

24.What has to be said immediately is that the way in which the plaintiff's then legal representatives conducted this litigation was far from satisfactory.

25.Para. 1 of the statement of claim which it will be noted was amended was in this form:

"1.	(a) on the 26th day of June 1988, personal injury by accident arising out of and in the course of employment was caused to the Applicant, an employee employed by the Respondent and/or Hui Yuk Fu.
	(b) (deleted)
	(c) Alternatively, at all material times Hui Yuk Fu was a sub-contractor within the meaning of the Ordinance to a principal contractor within the meaning of the Ordinance namely the Respondent."

26.It is however significant to observe that Mr Hui was not made a party to the proceedings and accordingly there would not appear to have been much point in alleging that the plaintiff had been employed by him.

27.Be that as it may the Judge did consider the overall circumstances surrounding the plaintiff's employment status and generally preferred the evidence of Mrs Lo and Mr Hui to the plaintiff's evidence.

28.Miss Eu submitted that in prosecuting the present action it would necessarily be the case that the court would have to revisit the issues which had been adjudicated upon by Surman DJ and this amounted to a collateral attack upon the judgment. She then went on to argue that the proceedings would amount to an abuse of process.

29.Miss Eu cited a number of authorities which referred to situations which amounted to an abuse of process. From these she was able to extract the principle that the court would not relitigate an issue which had previously been adjudicated upon even though the parties to the litigation were not the same. She also referred to the judgment of Sir Thomas Bingham then the Master of the Rolls in Smith v Linskills [1996] 1 WLR 763 at 773 where he considered the public policy implications of the rule:

"The main considerations of public policy which underlie the existing rule are, as we understand, threefold:

(1) The affront to any coherent system of justice which must necessarily arise if there subsist two final but inconsistent decisions of courts of competent jurisdiction. Such would, we think, be the case here if there were a subsisting Crown Court decision that Mr. Smith was, beyond reasonable doubt, guilty of aggravated burglary and a subsisting civil court decision that if his defence had been properly prepared he would and should have been acquitted. No reasonable observer could view this outcome with equanimity.

We cannot of course shut our eyes to the possibility that a criminal defendant may be wrongly convicted, perhaps because his defence was ineptly prepared or conducted. When that occurs, it represents an obvious and serious injustice. There are two possible solutions. One is to relax the present restraint on seeking to establish that injustice by civil action. The other is to ensure that, in appropriate cases, the conviction itself can be reviewed. It seems to us clear that it is this second solution which has, over the past century, been favoured: by giving a criminal defendant a right of appeal; by providing a relatively low standard for the admission of fresh evidence on appeal; by empowering the appellate court to order a new trial; by giving the Home Secretary power to refer a case back to the Court of Appeal; and by proposals to establish a new review body.

(2) The virtual impossibility of fairly retrying at a later date the issue which was before the court on the earlier occasion. The present case exemplifies the problem. It is over 12 years since the crime was committed. Recollections (of the participants and the lawyers involved) must have faded. Witnesses have disappeared. Transcripts have been lost or destroyed. Hayes may, or may not, be available to testify. Evidence of events since the trial will be bound to intrude, as it already has. It is futile to suppose that the course of the Crown Court trial can be authentically re-created.

(3) The importance of finality in litigation. The present rule has been seen by some as a rule invented by judges to protect their professional brethren. It is of course true that no one welcomes a negligence claim against him. But the maxim interest reipublicae ut finis sit litium was not invented by English judges, and nothing (on one view) could better serve the personal interests of the legal profession than endless relitigation of the same issues. If, as suggested in Bleak House, 'The one great principle of English law is, to make business for itself . . .' there could be no better way of doing so. But the view has long been taken that a final decision should, save in special circumstances, be final.

These broad considerations of public policy remain compelling. Even if it were open to this court to vary the general rule propounded in Hunter's case, we would not feel justified in doing so."

30.Miss Eu argued that it was clear that if the case was allowed to go to trial that the court would have to consider exactly the same issues which were before Surman DJ and the difficulties and problems referred to by Sir Thomas Bingham would be applicable.

31.Mr Bleach SC for the plaintiff did not accept that any collateral attack would arise if the case were to go to trial and that the defence had wholly failed to discharge the heavy burden imposed upon it of establishing that there was an abuse of process and that the case should be struck out.

32.The first point he made was that his client was in possession of a valid judgment which held that Mr Hui was his employer and that damages of $2,917,243.00 were payable to him.

33.Although this was a default judgment no attempt whatever had been made by the defendant to set the judgment aside.

34.This was notwithstanding the fact that the defendant had been put on notice of the action which had been taken by the plaintiff to obtain the judgment and the assessment of damages payable under it.

35.I do not think that this is a valid point. There is nothing in the Ordinance which requires the defendant to set aside any judgment which is being relied upon by a claimant to support his claim.

36.Perhaps more importantly, as was pointed out by Miss Eu, it was her case that the plaintiff was estopped from relying upon the default judgment on account of the previous judgment delivered by Surman DJ.

37.Mr Bleach accepted that the only difference which would arise from hearing the application now rather than at the time when the judgment was entered would be the question of delay. As no duty was imposed by the Ordinance to set aside a judgment which was obtained the issue of delay was not one which had a bearing upon the matter.

38.Whether this issue was ventilated now or at the time when the judgment was entered is not a material matter. The important question was to consider whether continuing with the present action was an abuse of process having regard to the issues which had been before Surman DJ.

39.This brings us to the next issue which was raised by Mr Bleach which is of more substance.

40.He submitted, in my view quite correctly, that it was essential to have regard to the nature of the hearing, which would take place if the plaintiff is permitted to proceed to trial.

41.In this connection he contended that the defendant would be placed at a significant advantage over the plaintiff as it would be able to place before the court the fruit of any investigations or inquiries which it had conducted in discharging its duties under sections 21 and 22 of the Ordinance.

42.This situation needed to be contrasted with the prospect which faced the plaintiff. If Miss Eu was right in her submissions and the scope for introducing new evidence was severely circumscribed the plaintiff would be in a much less advantageous position than the defendant.

43.It is necessary to have regard to exactly what is provided for in sections 21 and 22 and also to consider section 24 which provides the basis for the plaintiff bringing this action:

"21. Applications

(1) An application for payment from the Fund under this Part shall, subject to section 25 -

(a) be made to the Board; and

(b) unless the Board otherwise directs, be made in the prescribed manner and form.

(2) Upon receipt of an application under this Part, the Board shall carry out such inquiries as it considers necessary to make a determination under section 22.

(3) It is the duty of every applicant to assist the Board in carrying out inquiries under this section, and where an applicant fails without reasonable excuse so to assist the Board, the Board may, notwithstanding any other provision, determine that the applicant shall not be entitled to payment from the Fund.

(4) For the purpose of carrying out inquiries under this section the Board may -

(a) require the employer (if the applicant is an employee or an employee's member of the family or representative) or the employee or his member of the family or representative (if the applicant is an employer), the employer's insurer or any other employee of the employer to furnish such information or particulars relating to an application; and

(b) make such inquiries from any other person connected or associated with the application, as the Board considers necessary.

(5) Where, by reason of the failure of a person other than an applicant to comply with a requirement or respond to an inquiry of the Board under subsection (4) an applicant or the Board incurs additional expense in proving or determining an application under this Part, such additional expense is recoverable from that person by the applicant or the Board as a debt due to the applicant or the Board, as the case may be."

"22. Determination of applications by the Board

(1) The Board shall in respect of any application under a section of this Part determine -

(a) whether or not it is satisfied as to an applicant's entitlement to apply under that section; and

(b) if so, what amount should be paid from the Fund; and

(c) to whom such amount should be paid,

and shall advise the applicant and any interested person by written notice of its determinations.

(2) An amount payable by the Board following a determination under this section carries simple interest at the rate determined from time to time by the Chief Justice for the purpose of section 49(1)(b) of the High Court Ordinance (Cap 4) on such part of the amount as remains unpaid by the Board"

"24. Proceedings against the Board where applicant dissatisfied

(1) An applicant who is dissatisfied with a determination of the Board under section 22 may commence proceedings in a court against the Board.

(2) Proceedings under this section shall be commenced by writ."

44.The significant point to note from these sections is that while it is indeed true that the defendant is required to make investigations and inquiries there is nothing whatever in any of the sections to suggest that the Board is not in exactly the same position as the plaintiff in so far as introducing new evidence in relation to the main issue which has to be determined namely the employment status of the plaintiff at the time of the accident.

45.Mr Bleach accepted that a number of the propositions of law relating to the collateral attack on previous court proceedings were well founded and that in fact there was not a great deal of difference between the parties in relation to the law applicable.

46.He submitted however that what was necessary was to consider the overall circumstances and particularly the nature of the issues which would have to be determined at the new trial and then determine whether the defendant was able to discharge the burden of demonstrating that the proceedings were an abuse of process thus justifying having them struck out.

47.Mr Bleach referred to a passage from the speech of Lord Bingham at p. 498 of Johnson v Gore Wood & Co. [2001] 1 All ER 481 which summarised the relevant considerations:

"It may very well be, as has been convincingly argued (Watt 'The Danger and Deceit of the Rule in Henderson v. Henderson: A new approach to successive civil actions arising from the same factual matter" (2000) 19 CJQ 287), that what is now taken to be the rule in Henderson v Henderson has diverged from the ruling which Wigram V-C made, which was addressed to res judicata. But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in early proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice."

48.Mr Bleach argued that having regard to all the difficulties and problems which had been encountered by the plaintiff no one having in mind the principles enunciated by Lord Bingham could say either that the defendant would be unduly harassed if the case was allowed to proceed or that the proceedings would amount to an abuse of process.

49.Much of the very unfortunate history of this litigation is attributable to the lamentable legal advice given to the plaintiff by his former legal advisers.

50.While anyone reviewing this history will have the utmost sympathy for the plaintiff it remains a fact that the law on this subject is clear namely that the negligence of legal advisers cannot amount to a "special circumstance" such as to enable these proceedings to continue. Authority for this can be seen from p. 299 of the judgment of Stuart-Smith LJ in Talbot v Berkshire County Council [1994] QB 290:

"With all respect to the judge I do not agree that these amount to special circumstances. The mere fact that a party is precluded by the rule from advancing a claim will inevitably involve some injustice to him, if it is or may be a good claim; but that cannot of itself amount to a special circumstance, since otherwise the rule would never have any application. The court has to consider why the claim was not brought in the earlier proceedings. The plaintiff may not have known of the claim at that time (see, for example, Lawlor v. Gray [1984] 3 All ER 345 where the claim for interest by the revenue which the plaintiff sought to pass on to the defendant had not been made at the time of earlier proceedings) or there may have been some agreement between the parties that the claim should be held in abeyance to abide the outcome of the first proceedings; or some representation may have been made to the plaintiff on which he has relied, so that he did not bring the claim earlier. These would be examples of special circumstances, though of course they are not intended to be an exhaustive list.

In my opinion the error made by the judge was to divorce the activity or inactivity of the plaintiff from that of his solicitors. Messrs R I Lewis, later Liddell Zurbrugg, were his solicitors; they were the solicitors on the record, even though they had been nominated by insurers to act on his behalf. It may not infrequently be the case that the negligence or inadvertence of which Wigram V-C spoke will be that of the legal advisers instructed by the party rather than the party himself. But the action or inaction of the agent is that of the principal."

51.In viewing this appeal as a whole I have no doubt that Miss Eu was correct in her submission that Suffiad J considered the application altogether too narrowly.

52.The issue which will have to be considered by the court if it is permitted to go to trial is the employment status of the plaintiff. There has already been a trial on this very issue. The plaintiff gave evidence which was not believed by Surman DJ. He did however believe Mrs Lo and Mr Hui that the plaintiff was employed by Hung Kwong to deliver glass and that the accident occurred outside of this employment.

53.Although Mr Bleach has referred us to various matters which should have been brought to the Judge's attention it has to be said that grave difficulties would be encountered in obtaining leave to adduce this additional evidence at the trial.

54.There is a further matter to be considered. It would be wholly unsatisfactory to attempt now 14 years after the accident to go through all this evidence another time. In this connection it needs to be borne in mind that it is most unlikely that Mr Hui would be available to give evidence as to what transpired in 1988.

55.All of this leads me to a conclusion that were this litigation allowed to continue it would amount to an abuse of process.

56.This being the case in my view this appeal should be allowed and an order nisi should be made that the defendant should get its costs both here and below.

Hon Stone J:

57.I have the misfortune to disagree, at least in part, with the judgment of the Vice President.

58.The circumstances giving rise to this appeal are unusual, and I gratefully adopt the procedural history recounted by Mayo VP in his judgment. To this I would add that Mr Tsang Chin Keung, an odd-job carpenter and the plaintiff in this action, is entitled to some degree of bewilderment at the efforts of the legal system to decide whether, and by whom, compensation should be paid for the damage caused to his left hand when he was using an electric saw at a flat in Kwai Chung Garden some 14 years ago.

59.Shorn of detail, the fundamental points presently at issue are two-fold: first, can it properly be said that the proceedings instituted by Mr Tsang against the defendant Board in HCPI 161 of 2001 constitute a collateral attack upon a previous finding made by Surman DJ in employee's compensation proceedings ECC No.80 of 1990?, and if so, second, whether these proceedings amount to an abuse of process?

60.To both these questions Miss Eu SC, for the defendant Board, answered an emphatic 'Yes'. To the contrary, Mr Bleach SC, appearing for Mr Tsang, responded with an equally emphatic 'No'. There is no room for accommodation.

Collateral Attack

61.Miss Eu submitted that, on any sensible reading, there could be no doubt that in finding that Mr Tsang was employed by Hung Kwong Glass Works - albeit that the accident did not occur in the course of the employment - Surman DJ necessarily found that at the time of the accident Mr Tsang was not, as he had maintained, an employee of Mr Hui Yuk Fu, which latter gentleman also gave evidence in the District Court proceedings but who (for reasons which continue to elude me) had not been joined as a party to those proceedings.

62.If this be correct, argued Miss Eu, it followed that Mr Tsang's present claim (I shall call it 'the section 24 claim'), brought pursuant to section 24 of the Employees Compensation Assistance Ordinance, Cap. 365, as "an applicant who is dissatisfied with a determination of the Board under section 22", constituted a collateral attack upon a prior finding by Surman DJ as to Mr Tsang's employment status at the material time, and that, in the circumstances of this case, such also constituted an abuse of process.

63.Clearly the existence or otherwise of a collateral attack is a threshold point. As to this, I am inclined to think that Miss Eu succeeds, notwithstanding the valiant efforts of Mr Bleach to persuade the court that, on the relatively limited material available, the defendant was unable to satisfy the onus of demonstrating that Surman DJ had found that Mr Tsang was not employed by Mr Hui at the time of the accident.

64.It has not been in dispute that, whatever terminology be adopted, the concept of issue estoppel has moved on from the traditional formulation which confined it to that species of estoppel arising in civil actions between the same parties and their privies: see, for example, the observations of Lord Diplock in Hunter v Chief Constable of West Midlands, [1982] AC 529, at 541, and that which is often described as the "classic formulation" of Lord Keith (quoted below at paragraph 26 of the judgment) in Arnold v Natwest Bank PLC, [1991] 2 AC 93, at 105.

65.In North West Water v Binnie & Partners, [1990] 3 All ER 547, at 552, Drake J noted that in this area that which is now termed the 'broad approach' is that "which holds that the true test of an issue estoppel is whether for all practical purposes the party seeking to put forward some issue has already had that issue determined against him by a court of competent jurisdiction, even if the parties to the two actions are different."

66.On the basis of this test, it seems to me that it is difficult to read the judgment of Surman DJ, even in its somewhat attenuated form, without taking from it that in the proceedings before him the judge was confronted with two diametrically conflicting versions as to the employment status of Mr Tsang, and that on this issue he disbelieved Mr Tsang. So that in concluding that at the time of the accident his employer was Hung Kwong and not, as Mr Tsang had insisted, Mr Hui, it cannot fairly be said that the judge did other than concomitantly find that Mr Tsang was not employed by Mr Hui.

67.In this regard I bear in mind the submission of Mr Bleach that it is unfortunate that the judgment of Surman DJ appears from the available record to have been a judgment delivered from notes, and that, at least in one element, there is some ambiguity in that (at Finding (3)) the learned judge opines that he is "not sure" whether the use of the saw "was on the direct, or implied, instruction of Mr Hui."

68.Whilst I agree that the record is not ideal, I do not think that the difficulty can be regarded as substantially detracting from Miss Eu's argument. The judgment is not to be approached as if it were a statute, and in my view it is tolerably clear when looking at the document as a whole as to what the judge had found in terms of the employment status of Mr Tsang at the time of the accident. Whilst Mr Hui was not a party to these employee's compensation proceedings, the alternative allegation that he was the employer of Mr Tsang was present on the amended pleading, and in the face of this averment the judge duly arrived at the conclusion that he did. A situation of dual employment was never the case put forward either by Mr Tsang or by Hung Kwong Glassworks, and I am unable to agree that the second sentence in Finding (3) is sufficient for Mr Bleach successfully to assert that by reason thereof the judge had "left open the question" whether at the material time Mr Tsang was an employee of Mr Hui. Indeed, in light of the judge's findings, and given the terms of the pleading before him, this particular sentence seems to me to be a gratuitous observation, and in all probability has as its provenance the allegation put to Mr Tsang in cross-examination that when he was using the saw he was on a frolic of his own.

69.In my judgment, therefore, the claim now pursued by the plaintiff in the current section 24 action asserting employment by Mr Hui technically does involve a collateral attack upon a prior finding upon the like issue by Surman DJ; I note that the present Statement of Claim in this section 24 action - HCPI 161 of 2001 - specifically pleads (at paragraph 4(e)(i)), that "the findings of the Trial Judge in ECC No. 80 of 1990 were erroneous."

70.It follows from the foregoing that within the confines of the present appeal I disagree with the conclusion reached by the learned judge below that there was no finding made by Surman DJ to the effect that the plaintiff was not employed by Mr Hui at the time of the accident. I disagree reluctantly in light of the unfortunate history of this case, indeed the strong conviction that in his efforts to obtain redress Mr Tsang has been well-served by neither layman nor lawyer. Nevertheless it seems to me that the judge's conclusion is the result either of an overly narrow reading of the District Court judgment or, perhaps, preoccupation with what the learned judge elsewhere in his judgment refers to as the "pure form of issue estoppel", with its emphasis upon the same parties in the subsequent proceedings, at the expense of the broader doctrine.

71.Be that as it may. Because of the particular conclusion reached by Suffiad J, a conclusion which in my view cannot be supported, there was no need for him to proceed to consider the question of whether, if indeed the present proceedings amount to a collateral attack upon a finding of Surman DJ, such proceedings also represent an abuse of process. It is this latter aspect which seems to me to represent the real battleground in this case, and it is with regard to this element that I regret that I am unable to agree with the Vice President.

Abuse of Process

72.Once again there is no dispute between counsel as to the thrust of the primary authorities. It is clear that the existence of a collateral attack in itself is not an abuse of the process: as Lord Hoffmann expressed the position in Arthur J.S. Hall v Simons, [2000] 3 WLR 543, at 574:

"But I do not think that [Lord Diplock in Hunter, op cit] meant that every case falling within this description was an abuse of process or even that there was a presumption to this effect which required the plaintiff to bring himself within some exception. That would be to adopt a scheme of categorization which Lord Diplock deplored...each case depends upon an application of fundamental principles. I think that Ralph Gibson LJ was right when...he said in Walpole v Partridge & Wilson [1994] QB 106, 116A that Hunter's case [1982] AC 529 decides "not that the initiation of proceedings is necessarily an abuse of process but that it may be."

73.There is, moreover, consensus as to the public policy rationale underpinning the collateral attack/abuse of process rule, with the emphasis upon finality in litigation, the affront to any coherent system of justice if there subsist two final but inconsistent decisions of courts of competent jurisdiction, and the difficulties arising in the retrial of issues which were before the court on an earlier occasion: see Smith v Linskills [1996] 1 WLR 763, at 773 per Sir Thomas Bingham MR.

74.Miss Eu submitted that the present case meets the established criteria for abuse of process. She says that to permit this action to proceed would be manifestly unfair to the Employees Compensation Assistance Fund Board, which had been established under the legislation as the payer of last resort, and also would bring the administration of justice into disrepute. She maintained that in the circumstances an Order 18 rule 19 strike out was the appropriate remedy, and she invited the court to exercise that power.

75.The response of Mr Bleach was that even if a collateral challenge was found to exist (which he disputed), the present action was not abusive of the process. In considering the issue of abuse it was, he said, essential to have regard to the nature of the subsequent proceedings, praying in aid the words of Lord Bingham CJ in the Court of Appeal judgment in Arthur J.S. Hall v Simons [1999] 3 WLR 873, at 903G:

"In deciding whether, in any given case, the later proceedings constitute an abusive collateral challenge to the earlier judgment of the court it is always necessary to consider

(a) the nature and effect of the earlier judgment,

(b) the nature and basis of the claim made in the later proceedings, and

(c) any grounds relied on to justify the collateral challenge (if it is found to be such)."

76.In developing this argument, which it is fair to say attained sharper focus as the submissions continued, Mr Bleach stressed that the section 24 action now mounted by Mr Tsang is entirely a creature of statute, and is required to be brought by writ by "an applicant who is dissatisfied with a determination of the Board." The nature of these proceedings focused not upon the rectitude of the judgment in ECC No.80 of 1990, he said, but on the prior adverse determination of the Board with regard to Mr Tsang's claim. Given the statutory pre-condition (s.16(2)(a)(i), Cap 365), Mr Tsang thus was able to found his claim solely by virtue of the High Court judgment he had obtained against Mr Hui, final judgment having been entered, in the face of an amended Statement of Claim, on 9 October 1996. It would be an extraordinary situation, submitted Mr Bleach, if reliance upon a High Court judgment were to be regarded as an abuse of process.

77.The existence of this judgment in favour of Mr Tsang against Mr Hui has given me pause for considerable reflection. It is, I think, wrong to regard this, as undoubtedly there is a temptation so to do, as 'merely' a default judgment and, at that, a judgment entered by obtaining leave to uplift the existing judgment and repleading the claim (which was not defended) to assert that at the material time the plaintiff was employed by Mr Hui. The fact remains that, until set aside, this is a valid and enforceable judgment of the High Court, and in my view it will not suffice for Miss Eu to say, as she did in her spirited reply, that the plaintiff, Mr Tsang, is "estopped from reliance on the second judgment" because in obtaining this judgment "he has failed to have any regard" to the judgment of Surman DJ in the employees' compensation proceedings.

78.I fail to see how or why Mr Tsang should be estopped from relying upon a regular judgment of the High Court, nor why it should be open to the Board to take this point at this stage and in this manner, almost six years after this judgment has been entered. It would not, for example, avail Mr Hui, if execution on this regular judgment was sought, to refuse to recognize it because it was said to embody, or to be the result of, a collateral attack on a prior finding of the District Court in a case between different parties a decade or so earlier, and it is not easy to see why in these circumstances the Board now is in any better position. Should, for example, Mr Tsang's claim be satisfied by the Board pursuant to the statutory right of subrogation in section 37, Cap. 365, the Board stands precisely in Mr Tsang's shoes in terms of "his rights and remedies...existing immediately before the payment".

79.It is therefore the existence of this second judgment and the nature of the existing proceedings which in my view provides a salient distinguishing feature from the 'collateral attack' cases, whether in the criminal/civil or the civil/civil context, wherein the abuse of process argument generally has succeeded in preventing the litigation in the subsequent proceedings, subject only to those rare instances of fresh evidence "entirely changing the aspect of the case", the so-called test laid down by Lord Cairns LC in Phosphate Sewage Co Ltd v Molleson [1879] 4 App Cas 801, at 814.

80.Simply put, it may be said that a collateral attack already has taken place, and Mr Tsang now has a qualifying judgment entitling him to apply to the Fund for compensation. Although a default judgment, I can see no real difference between that and, for example, a situation in which Mr Hui may have appeared and defended the common law action, but had not taken the collateral attack point. Given that Miss Eu accepts that under this legislation the Board is not bound by the judgment giving rise to the application, as indeed is demonstrated in this case, it seems to me that the character of the judgment cannot be said to be decisive. And it is difficult to discern why Mr Tsang potentially may be at risk of being in a worse position by reason of the default judgment than if Mr Hui actively had defended the High Court action.

81.At the end of the day the stark fact remains that the Board seeks to impugn a final judgment in Mr Tsang's favour, the effect of which would be to achieve a de facto setting aside of that judgment via the present strike out application. The consequence of the Board's stance is that if he wishes to proceed, Mr Tsang has no alternative but to act in the statutorily prescribed manner. In this connection I note that Miss Eu also accepts that section 24 does not preclude the Board from introducing further evidence in the present action should it so wish, and if this be the case I can discern no reason why at the same time Mr Tsang should be subjected in these proceedings to the constraints of the test in Phosphate Sewage. If and in so far as this is what Mr Bleach was pleased to call his 'sauce for the goose is sauce for the gander' submission, I accept it.

82.To revert, therefore, to the considerations outlined by Lord Bingham CJ in Arthur J.S. Hall, op cit, I am firmly of the view in these very particular circumstances that in his pursuit of these proceedings Mr Tsang cannot be said to be guilty of an abuse of process. I do not think that permitting the present action to proceed will cause manifest unfairness to the Board, and I reject also Miss Eu's ambitious assertion that the Board is being "harassed" by the present proceedings. Nothing of the sort is occurring. Nor do I think that declining to strike out the present action will cause right-thinking members of the public to blanch at its continuation as representing an affront to the administration of our system of justice. To the contrary. I suspect that there is at least a possibility, in so far as the tortuous history of the past 14 years is comprehensible, that such right-thinking persons might consider there to be an affront if these proceedings now were not to be allowed so to proceed. This case seems to me to provide a prime example of that to which Drake J in Binnie & Partners, op cit, was referring when he stated (at 552) that "the court should proceed with very great caution before debarring a party, whether plaintiff or defendant, from putting forward his case in another action." For the reasons given I have formed the view that there is indeed the need for such caution in the present case.

83.In my judgment, upon the striking out application that was before him the learned judge below arrived at the right result for the wrong reason. This is not a case that should be struck out. I would dismiss this appeal.

Hon Mayo VP:

84.Regrettably we are equally divided on this appeal. This being the case no order can be made and pursuant to Order 59 rule 1(11) either party has a right to a rehearing before a court consisting of an unequal number of judges.

Representation:

Mr John Bleach, SC and Mr Mohan Bharwaney, instructed by Messrs Burke & Co., for the Plaintiff.

Ms Audrey Eu, SC and Mr Horace Y.L. Wong , instructed by Messrs Gallant Y.T. Ho & Co., for the Defendant.