Qbe Hongkong & Shanghai Insurance Ltd v. Au Kam Shun and Another

DCCJ 3986/2022

[2024] HKDC 1016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3986 OF 2022

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ASSESSMENT OF DAMAGES

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Background

1.This is an assessment of damages of the Plaintiff’s claim against the 1^st and 2^nd Defendants (collectively “the Defendants”).

2.Interlocutory Judgment was entered against the Defendants on 6 December 2022 with damages to be assessed.

3.The Defendants were absent at the hearing on 18 June 2024. Having read the affirmation of service filed on 13 June 2024, I was satisfied that notice of assessment hearing had been duly given to the Defendants prior to the hearing. It was the Defendants’ election not to attend the assessment hearing. I proceeded with the assessment of damages in this case in the absence of them.

The Plaintiff’s case

4.The 1^st Defendant was the owner of a light goods vehicle bearing registration number RZ8364 (“the car”).

5.The 2^nd Defendant was the driver of the car which hit a pedestrian Mr Suen who was working in the course of employment with Hong Kong Television Network Limited (“the Employer”). As a result, Mr Suen was injured. The 2^nd Defendant was convicted of careless driving on 3 June 2019.

6.The Plaintiff was at the material times the motor insurer of the car.

7.The Employer paid Mr Suen a total sum of HK$309,906.24. Subsequently, in October 2020, the Employer made a recovery claim (without commencing action) against the 2^nd Defendant for the said sum paid to Mr Suen together with the Employer’s own legal costs (“EC recovery claim”).

8.On 29 May 2020, Mr Suen commenced DCPI 1541/2020 against the 2^nd Defendant for damages resulting from his injuries caused by the accident mentioned in paragraph 5 above and costs (“PI Action”).

9.The Defendants have never notified the Plaintiff of the said accident, the prosecution, the conviction, and Mr Suen’s PI Action, notwithstanding the following conditions and clauses in the motor insurance policy:

“(18) GENERAL CONDITIONS

(b)  In the event of any occurrence which may give rise to a claim under this Policy the Insured shall immediately give notice thereof to [the Plaintiff] with full particulars. Every letter claim writ summons and process shall be notified or forwarded to [the Plaintiff] immediately on receipt by the Insured. Notice shall also be given in writing to [the Plaintiff] immediately the Insured or any person claiming to be indemnified shall have knowledge of any impending prosecution inquest or fatal injury in respect of any occurrence which may give rise to a claim under this Policy”

“(1) INSURING CLAUSE

The Insured and [the Plaintiff] agree:

(d) the following shall be conditions precedent to any liability of [the Plaintiff]:

(i) observance of the terms and conditions of this Policy relating to anything to be done or not to be done or to be complied with by the Insured or any other person claiming to be indemnified.”

10.The Plaintiff also relies on:

“(15) AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY

If [the Plaintiff] is obliged by the laws of any country within the Geographical Area or by virtue of any agreement between [the Plaintiff] and The Motor Insurers’ Bureau of Hong Kong to pay an amount for which [the Plaintiff] would not otherwise be liable under this Policy, the person on whose account the payment is made (whether that person is the Insured or any other person) shall forthwith repay such amount to [the Plaintiff].”

11.The Defendants breached the policy. Policy liability was thus repudiated against the Defendants by way of a letter issued by the Plaintiff’s solicitors dated 25 January 2021.

12.The Plaintiff was given leave to join the PI Action by an Order on 11 May 2021. The Plaintiff eventually reached a settlement with Mr Suen for the PI Action. It also reached a settlement with the Employer for the EC recovery claim.

13.The Plaintiff thus incurred: (1) HK$362,000 for the EC recovery claim (which includes compensation, costs, and other expenses)^[1]; (2) HK$330,000 for the PI Action (which comprises HK$210,000 damages + HK$120,000 costs); and (3) HK$80,901 as the Plaintiff’s own legal costs in handling (1) and (2) above. The total sum is HK$772,901.

14.In the present action, the Plaintiff seeks the said HK$772,901 from the Defendants.

Legal principles

15.Section 10(1) and (4) of the Motor Vehicles Insurance (Third Party Risks) Ordinance provide that:

“(1) If, after a certificate of insurance has been issued under section 6(3) in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under section 6(1)(b) (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any law relating to interest on judgments.”

“(4) If the amount which an insurer becomes liable under this section to pay in respect of a liability of a person insured by a policy exceeds the amount for which he would, apart from the provisions of this section, be liable under the policy in respect of that liability, he shall be entitled to recover the excess from that person.”

16.Section 25(1)(b) of the Employees’ Compensation Ordinance provides that:-

“(1) Where the injury in respect of which compensation is payable was caused in circumstances creating a legal liability in some person other than the employer (in this section referred to as the third party) to pay damages to the employee in respect thereof -

…

(b) the employer by whom compensation is payable … shall have a right of action against the third party for the recovery of any sum which he is obliged to pay as a result of the accident, whether by way of compensation or indemnity or by virtue of any agreement made with the employee prior to the accident, and may exercise such right either by joining in an action begun by the employee against the third party or by instituting separate proceedings:

Provided that the amount recoverable under this paragraph shall not exceed the amount of damages, if any, which in the opinion of the court would have been awarded to the employee but for the provisions of this Ordinance.”

17.Section 3 of the Civil Liability (Contribution) Ordinance 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.”

18.In China Ping an Insurance (Hong Kong) Co Ltd v Chong Tin Po ^[2], Master B Mak cited the following at paragraphs 20-21:

“20. In Wah Kwong Construction Material v Wong Man Yip, CACV 54/1994, the Court of Appeal held that the words “any sum” under Section 25(1)(b) of the Employees’ Compensation Ordinance are not limited and that a claimant can recover not only the compensation or indemnity but also costs which he is obliged to pay as a result of the accident.

21. Applying the same principle, Her Honour Judge H C Wong in Hong Kong Red Cross v The Hong Kong Federation of Youth Groups, DCCJ 2233/2007 held that a claim based on Section 25(1)(b) of the Employees’ Compensation Ordinance and Section 3 of the Civil Liability (Contribution) Ordinance also includes costs paid to the claimant and his own legal costs in defending the claim.”

Findings

19.The Plaintiff called its technical manager Mr Choi as the only witness. His testimony was not subject to any challenge from the Defendants who had adduced no documentary evidence and witness evidence for the purpose of assessment of damages and were absent during the hearing.

20.But for the operation of section 10 of Motor Vehicles Insurance (Third Party Risks) Ordinance, the Plaintiff would not have incurred the 3 heads of loss.

21.For (1) the EC recovery claim, Mr Choi gave elaborations on how the Plaintiff reached an agreement with the Employer, through its solicitors Messrs Munros, at the sum of HK$362,000 (all inclusive).

22.For (2) the PI Action, Mr Choi explained how the Plaintiff was joined in the DCPI Action where judgment had already been entered against the 2^nd Defendant. He also explained an agreement was eventually reached with Mr Suen, through his solicitors Messrs Rita Law & Co, at the sum of HK$330,000 (consisting of HK$210,000 damages + HK$120,000 costs).

23.For (3) the Plaintiff’s own legal costs, Mr Choi referred to a client receipt dated 25 January 2022 issued by Messrs Hasting & Co at the sum of HK$80,901 for handling the EC recovery claim and PI Action.

24.Mr Choi’s testimony is based on contemporaneous documents available to him and the fact that he has been handling this case for the Plaintiff. I accept Mr Choi’s evidence. I have no reason to question the Plaintiff’s claim in the present action.

25.Applying the legal principles cited, I find that the Plaintiff is entitled to recover from the Defendants the following:

(1)     EC recovery claim:	HK$362,000.00
(2)     PI Action:	HK$330,000.00
(3)     The Plaintiff’s own legal costs:	HK$80,901.00

Total

HK$772,901.00

Summary

26.In summary, I find that the Plaintiff is entitled to recover from the 1^st and 2^nd Defendants: HK$772,901.00.

Interest

27.The Plaintiff shall be entitled to interest on the said sum at judgment rate from the date of Writ (ie 13 October 2022) to the date of the Interlocutory Judgment and thereafter at judgment rate to the date of full payment.

Costs

28.I order that the Defendants do pay the Plaintiff’s costs of this action (including the costs reserved), with Counsel Certificate for the hearing on 18 June 2024, to be taxed if not agreed.

29.A Chinese translation will be supplied to the Defendants at their request.

Mr Poon Wing Keung, Ryan instructed by Hastings & Co for the Plaintiff

The 1^st and 2^nd Defendants were not represented and did not appear

[1] as per the Discharge Form dated 22 February 2021 signed by the Employer

[2] (29/07/2011, DCCJ 3525/2010) unreported