Bank of China Group Insurance Co Ltd v. Joint Venture Construction Engineering Ltd

DCCJ 79/2022

[2023] HKDC 837

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 79 OF 2022

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BETWEEN

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ASSESSMENT OF DAMAGES

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Introduction

1.This is an assessment of damages of the plaintiff’s claim against the defendant for a recovery of the amount paid by the plaintiff to the defendant’s employee (the “Employee”) in respect of the proceedings commenced by the Employee in DCEC 555/2020 to claim compensation against the defendant (the “EC Action”).

2.No defence has been served by the defendant.

3.Interlocutory judgment was entered against the defendant on 4 April 2022 with damages to be assessed.

4.The defendant was absent from the hearing on 7 June 2023.

The Plaintiff’s case

5.The defendant was the employer of the Employee.

6.The plaintiff is an insurance company which had issued an employee’s compensation insurance policy (the “Policy”) to the defendant as required under section 40 of the Employees’ Compensation Ordinance (Cap. 282) (the “Ordinance”).

7.On 8 May 2018, during the course of employment with the defendant, the Employee was instructed by the defendant to erect a bamboo scaffolding on the exterior of a building (the “Scaffolding Task”).

8.Whilst carrying out the Scaffolding Task, the Employee’s left leg was hit by a pole of a tram passing by (the “Accident”).

9.As a result of the Accident, the Employee sustained left foot injury.

10.At the material time of the Accident, the Employee was contracted to perform the Scaffolding Task only.

11.Pursuant to Clause 6 of the Policy:

“6. AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY

If the Company [i.e. the plaintiff] is obliged by the Ordinance to pay an amount for which the Company would not otherwise be liable under this Policy the Insured [i.e. the defendant] shall forthwith repay such amount to the Company.”

12.According to the Schedule of the Policy, the contract covered by the Policy includes:

“CONTRACT

INTERIOR & EXTERIOR WORKS, EXTERNAL WALL MAINTENANCE, AIR-CONDITIONING, ELECTRICITY & WATER SUPPLY WORKS (INCLUDING USE OF SCAFFOLDING, ERECTION AND DISMANTLE OF SCAFFOLD WORKS, BUT EXCLUDING THE CONTRACT WORK IS ERECTION AND DISMANTLE OF SCAFFOLD WORKS ONLY)”

13.Further, paragraph 4 of the Memorandum in the Schedule of the Policy provides that:

“4. THIS POLICY DOES NOT COVER A STAND-ALONE SCAFFOLDING JOB/CONTRACT.”

14.Accordingly, the Scaffolding Task was a stand-alone scaffolding job which was not covered by the Policy.

15.By a letter dated 30 July 2019, the plaintiff repudiated its liability under the Policy to indemnify the defendant in respect of its liability to the Employee arising out of the Accident.

16.On 28 April 2020, the Employee commenced the EC Action against the defendant.

17.On 26 February 2021, the Employee obtained interlocutory judgment against the defendant in the EC Action.

18.On 8 October 2021, the plaintiff joined in the EC Action as a 2^nd respondent.

19.On 28 October 2021, the plaintiff paid a sum of HK$900,525.72 into court as sanctioned payment (the “Sanctioned Payment”) in settlement of the whole of the Employee’s claim in the EC Action.

20.On 15 November 2021, the Employee accepted the Sanctioned Payment.

21.On 1 December 2021 and 17 December 2021, the plaintiff paid a total sum of HK$95,000 into court as sanctioned payment (the “Further Sanctioned Payment”) in settlement of all of the Employee’s costs and disbursements in the EC Action.

22.On 20 December 2021, the Employee accepted the Further Sanctioned Payment.

23.On 29 December 2021, the settlement between the parties in the EC Action was approved by the court. The Sanctioned Payment and Further Sanctioned Payment were paid to the Employee.

24.At the assessment hearing, the plaintiff called Mr. Leung Tak Kee (“Mr. Leung”), the Manager of the Claims Department of the plaintiff, as a factual witness.

Relevant legal provisions

25.Section 42 of the Ordinance provides that:

“(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.

…

(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.”

26.Further, section 3 of the Civil Liability (Contribution) Ordinance (Cap. 377) provides that :-

“(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).

…

(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.”

Findings

27.Mr. Leung’s evidence was supported by documentary evidence. I find him a credible witness and accept his evidence in full.

28.Pursuant to the terms of the Policy as well as the legal provisions set out above, I find that the plaintiff is entitled to recover from the defendant the Sanctioned Payment and Further Sanctioned Payment paid to the Employee in the EC Action.

29.Further, the plaintiff is also entitled to recover from the defendant the plaintiff’s own legal costs and disbursements in the EC Action in the sum of HK$100,474.

Summary

30.In summary, I find that the plaintiff is entitled to recover the following sums from the defendant:-

	Item	Amount (HK$)
1.	Sanctioned Payment paid to the Employee in the EC Action	900,525.72
2.	Further Sanctioned Payment paid to the Employee in the EC Action	95,000.00
3.	Legal costs and disbursements of the plaintiff in the EC Action	100,474.00
	Total:	$1,095,999.72

Interest

31.The plaintiff shall be entitled to interest on the said sum at prime plus 1% from the date of Writ (i.e. 7 January 2022) to the date of this assessment and thereafter at judgment rate to the date of payment.

Costs

32.I order the defendant to pay the plaintiff’s costs of this action, which is summarily assessed at HK$71,514, and to be payable forthwith.

Mr Leon Chan, instructed by Messrs. Boase, Cohen & Collin, for the plaintiff

The defendant was not represented and did not appear