Lam Ping Kit v. Zung Fu Company Ltd

HCPI 90/2019

[2025] HKCFI 1388

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 90 OF 2019

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J U D G M E N T

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Introduction

1.This is the trial on the remaining issue in this action, namely the apportionment of liabilities, if any, between the Defendant and the 2^nd Third Party (“TP2”).

2.The Plaintiff slipped and fell in the male toilet (“the Toilet”) on the 1^st Floor of Zung Fu Car Park Building (“the Premises”) at around 9 p.m. on 24 March 2016 (“the Accident”). The Plaintiff commenced proceedings against the Defendant as occupier and the Defendant commenced third party proceedings against the 1^st Third Party (“TP1”), as the Plaintiff’s employer, and TP2, as allegedly an occupier.

3.By a consent order dated 8 June 2023, the Defendant settled the dispute with TP1 by paying HK$500,000 to TP1. On 13 June 2023, the Plaintiff and the Defendant settled the Main Action by the Defendant paying to the Plaintiff HK$1,155,680, inclusive of HK$955,680 received by the Plaintiff in his Employees’ Compensation Case, plus costs, on a non-admission of liability basis.

4.The Defendant relies on Section 3(1) and (4) of Civil Liability (Contribution) Ordinance (Cap. 377) (“CL(C)O”) to claim against TP2, which provide 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.”

5.The Defendant alleges that TP2 was the occupier of the Premises as they were carrying out mechanical works at the Premises after the normal opening hours and the Defendant did not have control of the Premises during the time.

6.It is the Defendant’s case that the Accident was caused or contributed by the negligence and/or breach of duty under the Occupiers Liability Ordinance (Cap. 314) (“the OLO”) of TP2 on the following grounds:

(1)  Failing to carry out or arrange the cleaning of the Toilet;

(2)  Failing to ensure that the Toilet was clean and/or dry;

(3)  Failing to request the Defendant and/or agree with the Defendant that the Defendant should be responsible for cleaning the Toilet;

(4)  Failing to notify the Defendant about the condition and/or problems with the Toilet.

7.On the other hand, TP2 maintains that the Premises including the Toilet was under the exclusive occupational control of the Defendant.

8.TP2 also argues that the Defendant has failed to prove that the Defendant is liable to the Plaintiff, which is a pre-requisite for invoking Section 3(1) of CL(C)O, as there is no evidence before the court to prove that the Plaintiff’s claim against the Defendant is a valid one.

9.Besides, TP2 argues that there is no proof on whether the settlement between the Defendant and the Plaintiff was bona fide.

The Accident

10.The Plaintiff was not called to give evidence at trial. In his Statement of Claim, the Plaintiff pleaded that:

“3. On 24^th March 2016 at or about 9:00 p.m., the Plaintiff, as a lawful visitor to the Car Park, was instructed by his employer, namely, Manpower Services (Hong Kong) Limited to work at the Car Park and he was required to go to the 1^st Floor male toilet (“the Toilet”).

4. At all material times:-

(1) The floor of the Toilet was wet and/or slippery and/or greasy;

(2) The lighting at the Toilet, where the Accident took place, was relatively dim and/or insufficient; and

(3) No appropriate and/or adequate sign and/or notice warning of the condition of the Toilet were displayed.

5. While the Plaintiff was walking in the Toilet in the circumstances described hereinabove, the Plaintiff suddenly slipped due to the wet and/or slippery and/or greasy floor of the Toilet. As a result, he lost his balance and severely sprained his back.”

The Parties

11.The Defendant was the exclusive distributor of the Mercedes-Benz brand vehicles in Hong Kong and the sole tenant of the Zung Fu Car Park Building, which was owned by Zung Fu Land Investment Ltd., a company in the Zung Fu group of companies.

12.TP2 was a company incorporated in Shanghai. By an agreement dated 3 December 2015 with Daimler AG (“Daimler”), the maker of Mercedes cars, TP2 agreed to carry out in Hong Kong the replacement work of the camshafts of a significant number[1] of Mercedes cars (“the Work”) to be imported to the Mainland. For this purpose, Daimler engaged the Defendant to provide a workplace and equipment. The Defendant provided the Premises where mechanical bays and buffer bays were available for the Work.

13.Apart from bringing its own technicians to Hong Kong to do the Work, TP2 also engaged TP1, an employment agency, for the supply of additional local temporary technicians. The Plaintiff was one of those technicians procured by TP1.

Evidence

14.There are only two witnesses in this trial. Mr Lam Kit, a director of the Defendant; and Mr Zhang Wei, Vice President of TP2.

15.The followings are not in dispute in their evidence:

(1)  The Work was to be performed between 12 December 2015 until end of March 2016 at the Premises;

(2)  The Defendant performed the Work in weekends by their own technicians;

(3)  TP2 performed the Work during 7pm to around 4am in weekdays. As the people of TP2 are not familiar with the Premises, a foreman of the Defendant will be present at the time TP2’s people are working;

(4)  When the cars arrived in Hong Kong, they will be parked at a place in the New Territories and the Defendant’s staff will drive them to the Premises for the Work to be done when mechanical bays are available.

16.In his oral testimony, Mr Zhang added something he did not mention in his witness statement.

17.Firstly, Mr Zhang said that during the night shifts, the Defendant’s employees entered the Premises to drive cars within the Premises and further, that TP2 only occupied some of the mechanical bays and the Defendant used the remaining ones for repairing of their own vehicles.

18.Secondly, there were meetings between Daimler AG, the Defendant and TP2, during which name lists of the technicians of TP1 and TP2 were given to the Defendant and the security guard would check the people who entered the Premises against the name lists before they entered the Premises and when they left the Premises. Every day, the leaders of Daimler AG, the Defendant, and TP2 would confirm a rework plan and decide the number of workers to be brought in by TP2, how many cars were to be driven by the Defendant, and the leaders would inform their respective workers. The security guard would know from the leader of the Defendant the number of people coming in each night. There is a “check-in check-out” mechanism under which the security guard would count the number of people coming and leaving such that it matches the number on the lists each day.

19.Thirdly, the Defendant was required to clean the Toilet under the agreement with Daimler AG.

20.Mr Leon Ho, counsel for the Defendant, submitted that this court should not consider the new evidence from Mr Zhang.

Discussion

Was TP2 an occupier?

21.There can be more than one occupier of a premises at the same time and therefore, as submitted by Mr Ho, the fact that the Defendant was an occupier does not mean that TP2 was not. The test of whether a person is an occupier is the degree of control the person has over the premises.

22.The learned authors of Clerk & Linsell on Torts[2] wrote:

“11-10 Other occupiers Apart from owners and lessees, a person is likely to be regarded as an ‘occupier’ if he has a sufficient degree of control over premises to be able to ensure their safety, and to appreciate that a failure on his part to use care may result in injury to a person coming on to them. The control need be neither entire nor exclusive. So someone with the immediate supervision and control of premises, such as a builder in de facto control of part of a house, may be an occupier, whether or not he has the power of permitting or prohibiting the entry of other persons to it. Furthermore, it is submitted that someone who does have the legal right to invite or permit others to come on them, such as the concessionaire of space at a fairground, will almost certainly be an occupier. It is submitted that for these purposes the occupier’s control need not necessarily be lawful: thus, it is suggested, there is no reason why a squatter should not be liable under the Act. In a suitable case one may of course occupy premises through a servant or agent.

11-11 On the basis of the above principles, therefore, a builder or contractor may be liable as an occupier, for example if he has practical control of part of the premises:

‘The answer in each case depends on the particular facts of the case and especially on the nature and extent of the occupation or control in fact enjoyed or exercised by the defendants over the premises.’”

23.The Defendant and TP2 carried out the Work in different time slots. It was an intentional and clear division of labour as agreed by all parties.

24.As mentioned above, a foreman of the Defendant was arranged to be present in the night shifts because TP2 was unfamiliar with the Premises. It means that, in my view, the Premises was left to TP2 alone to do the Work during the night shifts and, but for the fact that TP2 was unfamiliar with the place, it would not be necessary for any person from the Defendant to be present during the night shifts.

25.Besides, TP2 was the one responsible for arranging workers to work in the night shifts.

26.In my judgment, the understanding between Daimler, the Defendant and TP2 was that the Premises was left to be in charge of by TP2 during the night shifts and TP2 was trusted with the immediate supervision and control of the Premises. The situation is similar to the case of a builder or contractor.

27.I am of the view that TP2 has a sufficient degree of control over the Premises to be able to ensure that it is safe, and to appreciate that a failure on its part to use care may result in injury to a person coming on to the Premises, including the Plaintiff.

28.I found TP2 an occupier at the time of the Accident within the meaning of the OLO.

29.I do not consider Mr Zhang’s evidence in any way diminished the duty of care of TP2 because, even if the Defendant assumed a certain degree of control over the number or identities of the workers in the night shifts, TP2 was the one in charge of and entrusted with the Premises during nighttime.

What the Defendant needs to prove under CL(C)O?

30.The statutory presumption under section 3 of CL(C)O has been discussed by Au-Yeung J in Li Shiu To v Cheung Pik Ng (No 2) [2018] 1 HKLRD 934. In the judgment, Her Ladyship quoted[3] the relevant paragraphs from the The UK Law Commission’s Law of Contract: Report on Contribution (Law Com No 79) (1977) which set out the reasoning for the recommendations that led to section 1(4) of the Civil Liability (Contribution) Act 1978, an identical provision to section 3(4) of CL(C)O. It is helpful to repeat the paragraphs here:

“44. One of the problems that we discussed in our working paper concerned the defendant who settled the plaintiff’s claim against him before judgment and then sought to recover contribution from another defendant. The problem was exposed in Stott v West Yorkshire Road Car Co Ltd where the first defendants settled the plaintiff’s claim against them, which arose out of a traffic accident, by paying £10,000 without admitting liability; they then sought to recover a contribution from the other defendant who they alleged had contributed to the accident by the negligent parking of his vehicle. The Court of Appeal held that the contribution claim should proceed but pointed out that it would fail unless it was established in the contribution proceedings that the defendant claiming the contribution was a tortfeasor. …

45. In our working paper we suggested that it was unsatisfactory to require the “settling” defendant to prove his own liability as a tortfeasor in order to entitle him to contribution from the other. It is convenient to repeat here the three points that we made. The first is that it means turning all the usual conventions of civil litigation upside down; D1 (the settling defendant) has to call evidence that is in the possession of the plaintiff in order to establish his own liability in tort, and D2 (the other defendant) then calls D1’s witnesses in order to raise a doubt as to D1’s liability. The second is that if the result of the contribution proceedings on the facts of Stott’s case was that the liability of D2 was established but that the liability of D1 was not, the person who made the compromise, D1, would get no contribution towards the £10,000 although he was not in fact to blame, and D2 who really was to blame would have to pay nothing at all. The third reason is that defendants might be deterred from compromising claims in which liability was in doubt if their right of contribution was thereby put at risk. Salmon LJ said in Stott’s case that it would be very unfortunate if a defendant was obliged to fight a case to judgment in order to protect his contribution rights. We attached particular importance to the third point and made the provisional recommendation that a person who had compromised a claim made against him so as to benefit some other possible defendant should have the right to claim a contribution from the other defendant provided that the other could be shown to be liable; we added that it should not be an answer to such claim that the person who settled the claim would not have been held liable if the action against him had been tried. …

…

50. As for the point about prejudice to D2, the suggestion was made that D2 might find it harder to defend himself on issues of liability and quantum after the fait accompli of a settlement between P and D1, and that D1’s right of contribution after the compromise with P should only be available where D2 has unreasonably refused to be party to the compromise or to take part in the negotiations.

51. We are not convinced by the fait accompli argument. We do not see why D1’s compromise should make it harder for D2 to defend himself on the issue of liability or on the question of the amount recoverable. As to liability, D1 would have to establish that D2 was liable to P, and the case against D2 would, presumably, be much the same whether it was advanced by P in the main proceedings or by D1 in his claim for contribution. …

…

55. We accordingly recommend that the defendant who compromises a claim against him should be entitled to claim a contribution from any wrongdoer against whom liability can be proved. … ” (emphasis added)

31.As can be seen from the above reasoning, the very purpose of creating a presumption under section 3 of CL(C)O is to prevent the obscure situations mentioned under §45 of the UK Law Commission’s report to occur. To require the Defendant to adduce evidence to prove its own liability to the Plaintiff will defeat the purpose of the legislation.

32.Her Ladyship concluded under §33 of the judgment:

“On a proper interpretation of sections 3(1) and (4), D1 must prove, among other things, that TP is liable to P (in the sense that P is entitled to recover compensation from TP) and that such damage is the same damage for which D1 is allegedly liable to P. Section 3(1) is subject to the following provisions of section 3, including section 3(4) which requires the settlement to be bona fide.”

33.In Gurung Bishan v Profit Spread Limited & Another [2022] HKCFI 862, Lisa Wong J applied Li Shiu To and had the following to say[4]:

“On the proper interpretation of s 3(1) and (4) of the CLCO, where the plaintiff and the defendant have settled and insofar as there are any overlapping material facts to be established in the main action and the third party proceedings, the statutory assumption would apply. In other words, in the third party proceedings, the defendant does not have to prove facts overlapping those in the main action. See Li Shiu To v Cheung Pik Ng, supra, at [34]-[37].”

34.I respectfully agree.

35.In the present case, as the Defendant would have been liable as an occupier assuming the factual basis under the Statement of Claim could be established, the Defendant is not required to adduce any additional evidence to prove the Accident or its liability to the Plaintiff.

36.Mr Kam Cheung, counsel for TP2, argued that as the Defendant denied liability in its Defence and there were no separate pleadings filed for the contribution proceedings, the Defendant shall not be allowed to take a different stance in this trial.

37.With respect to Mr Cheung, this argument cannot be right as this will require additional costs to be incurred for amendment or filing of pleadings purely for academic purpose, which is contradictory to the underlying objectives under Order 1A, Rules of High Court.

Is the settlement bona fide?

38.Mr Cheung did not go so far as to suggest that the settlement was mala fide. However, he submitted that the Defendant has to prove that it was bona fide.

39.The Plaintiff claimed nearly HK$7 million in his claim. I agree with Mr Ho that it was commercially sensible for the Defendant to pay an additional HK$200,000 on top of the HK$955,680 employees’ compensation received by the Plaintiff to settle the claim, given the scale of litigation the Defendant will face if the action between them was to proceed.

40.Besides, there is no apparent reason for the Defendant to come up with a settlement with the Plaintiff that is not bona fide. There is also no hint of any impropriety in the course of the negotiation or arriving at the settlement.

41.I am satisfied that the settlement was a bona fide one.

Is TP2 liable to the Plaintiff?

42.As mentioned above, I found TP2 an occupier within the meaning of OLO. The remaining question is whether there was a breach of duty on the part of TP2.

43.TP2 in the evidence has done nothing to prevent the Accident to occur given an obvious risk that people working at the Premises in the night shift might slip and fall in the toilet. TP2 should have checked the condition of the toilets more frequently and/or made arrangement with the Defendant to ensure that the toilet is safe for use.

44.Although it would be more convenient for the Defendant to engage cleaning services, TP2 was in a better position than the Defendant to check the condition of the Toilet during the night shifts.

45.In my judgment, TP2 is liable to the Plaintiff’s claim.

Apportionment

46.Mr Ho set out in his opening submission the legal principles regarding apportionment of liability.

47.Section 4(1) of CL(C)O provides that:

“Subject to subsection (3), in any proceedings for contribution under section 3 the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage in question.”

48.In Sze Che Sau & Others v Dragages Et Travaux Publics (HK) Ltd [2007] 4 HKLRD 890, Sakhrani J held at §§143 and 144 that:

“143. As to the proper basis of apportionment I was also referred to Clerk & Lindsell on Torts (19^th ed., 2006) para.4-25 where it is stated:

There was some initial controversy as to the proper basis of apportionment. Hilbery J took “responsibility” to refer to the extent to which each tortfeasor caused the damage, and not to their relative culpability. Hallett J, on the other hand, declined to follow this interpretation, and it is now well-established that neither element should be disregarded. For example, in Downs v Chappell a negligent defendant was required to contribute equally with a fraudulent defendant on the basis that the negligence had a greater causative impact. Hobhouse LJ said that: “It is just and equitable to take into account both the seriousness of the respective parties’ faults and their causative relevance. A more serious fault having less causative impact on the plaintiff’s damage may represent an equivalent responsibility to a less serious fault which had a greater causative impact.

144. The apportionment of damages is substantially a matter of discretion. The court must apportion the damages between the parties who are actually before the court. It is not relevant to have regard to the possible negligence of some other person, not a party to the proceedings, whose fault may have contributed to the damages suffered by the injured plaintiffs and the deceased (Clerk & Lindsell on Torts (19^th ed., 2006) para.4-25).”

49.Both the Defendant and TP2 are liable as occupiers. The Defendant was the usual occupier of the Premises responsible for its regular management. With the additional works carried out in the night shifts, the Defendant should have considered enhancing the cleaning service of the Toilet as the use of it would be inevitably more frequent. In addition, the Defendant was in a much better position than TP2 to do this as it has already put in place a system of maintenance and cleaning for the building including the Premises. The Defendant could have enhanced the existing arrangement by, for example, requesting additional cleaning sessions from the cleaning contractors. Moreover, the Defendant is a local company as oppose to TP2 who was apparently foreign to Hong Kong.

50.In my judgment, as between the Defendant and TP2, the Defendant should bear 2/3 of the liability towards the Plaintiff’s injuries as occupier. As the settlement sum was HK$1,155,680 in total, TP2 is liable to pay HK$385,227 to the Defendant, which is 1/3 of the amount.

Disposition

51.I order that judgment be entered against TP2 in favour of the Defendant for the sum of HK$385,227 with interest thereon at 4% per annum from 13 June 2023 to the day of this judgment and thereafter at judgment rate until payment.

52.The award of interest is an order nisi.

53.Costs order nisi that costs of the Defendant in these contribution proceedings be borne by TP2, to be taxed if not agreed.

54.The above interest order nisi and costs order nisi shall become absolute unless either party applies to vary within 14 days from the date of the Judgment.

Mr HO, Leon L.O. instructed by Clyde & Co. for the Defendant

Mr CHEUNG, Kam K. L. instructed by Fred Kan & Co. for the 2^nd Third Party