Chan Sui Yee v. Ever Gain Engineering Ltd

DCPI 3031/2022

[2026] HKDC 1658

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 3031 OF 2022

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JUDGMENT

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A. INTRODUCTION

1.This case concerns an accident that the Plaintiff suffered whilst walking on a pavement (“the Pavement”) near the entrance of and outside Vigor Industrial Building (“the Building”), Nos 14-20 Cheung Tat Road, Tsing Yi, New Territories, Hong Kong on 31 October 2020. The Defendant has reached a settlement with the Plaintiff and now seeks an indemnity and/or contribution from the 1^st Third Party (“TP1”) and the 2^nd Third Party (“TP2”) for the Plaintiff’s claim and costs of the main proceedings.

2.The accident occurred in the morning of 31 October 2020 when the Plaintiff was commuting to work. The Defendant had been contracted to lay gas pipes at Cheung Tat Road, and pursuant to an excavation permit obtained from the Lands Department had dug a trench (“the Trench”) on the Pavement which was covered by 2 trench covers (each a “Trench Cover” and collectively “the Trench Covers”). The section of the Pavement in question was near but not directly in front of the Building’s carpark entrance. When the Plaintiff was walking along the Pavement, she stepped on one of the Trench Covers which cracked and in which a hole appeared, causing her leg to fall into the Trench (the “Accident”). The Plaintiff fractured her right ankle and required surgery and internal fixation.

3.TP1 operated a logistics business and was the occupier of one or more workshops on the Ground Floor of Block A of the Building. TP2 was the manager of the Building.

4.CCTV footage showed that on the night of 30 October 2020 ie. the previous night, two forklift trucks (collectively the “Two Forklift Trucks”) were handling goods just outside the Building’s carpark entrance. It is the Defendant’s case that one of the Two Forklift Trucks drove onto one of the Trench Covers and damaged it, which was the reason why the relevant Trench Cover cracked when the Plaintiff walked over it, causing the Accident.

5.The Defendant alleged that TP1 was responsible for the control, supervision and management of the drivers of the Two Forklift Trucks, who were engaged in activities in connection with TP1’s logistics business. The Defendant’s case is that the damage of the relevant Trench Cover and hence the Accident was caused by negligence on the part of TP1. The Defendant averred that:-

(i)  The drivers of the Two Forklift Trucks wrongfully operated the Two Forklift Trucks out of the boundary of the Building and damaged the relevant Trench Cover, which they should have known would present a hazard to any pedestrian, but did not report the damage or take any remedial measures;

(ii)  TP1 allowed or permitted the Two Forklift Trucks owned by it to move out of the boundary of the Building and damage the relevant Trench Cover, and failed to control and supervise its employees, contractors or agents operating the Two Forklift Trucks;

(iii)  TP1 is therefore liable for its own negligence as the owner of the Two Forklift Trucks, and vicariously liable for the negligent acts or omissions of the drivers of the Two Forklift Trucks.

6.In its Defence, TP1 said that by an oral agreement in or around mid-2019 with Lee Siu Yin (“Siu Yin”) trading as Siu Ho Trading Company (“SH Trading”), it engaged Siu Yin as its independent contractor to provide logistics services to TP1 at night time, and allowed Siu Yin to have 6 of the 8 forklift trucks owned and/or possessed by TP1 for his exclusive use and control (of which only 1 of the 6 was licensed under the Road Traffic Ordinance (“RTO”), Cap 374). TP1 says that Siu Yin agreed to drive and use only the licensed forklift truck on roads, and to be wholly liable for all loss and damage caused by, inter alia, the misuse, abuse, negligence and physical damage of the said 6 forklift trucks.

7.TP1 said that the remaining 2 forklift trucks that it owned and/or possessed (which were licensed) were only used during in the daytime, hence, at the time of the CCTV footage, those 2 forklift trucks were parked inside the Building and were not in use, and cannot have been the forklift trucks seen in the CCTV footage.

8.In addition to its assertion that it had allowed its independent contractor Siu Yin to use and control 6 forklift trucks, TP1 also did not admit that any of the 6 forklift trucks operated by Siu Yin were the Two Forklift Trucks seen in the CCTV footage. In short, TP1’s case was that the Two Forklift Trucks seen in the CCTV footage were completely unconnected to TP1’s business.

9.The Defendant alleged that the damage of the relevant Trench Cover and hence the Accident was also caused by negligence on the part of TP2 as the manager of the Building. The Defendant averred that TP2:-

(1)  Was informed about the pipe laying work which would involve the Pavement and knew or should have known that the Two Forklift Trucks could damage the Trench Covers if they were allowed to drive over them;

(2)  Knew or should have known that the Two Forklift Trucks were unlicensed and not lawfully allowed to travel on the Pavement;

(3)  Knew and should have known that the cylindrical cone placed on the ground at the entrance of the Building had been removed so that the Two Forklift Trucks could move freely in and out of the entrance of the Building without blockage;

(4)  Allowed the Two Forklift Trucks to move from inside the Building to outside the Building onto the Pavement, and to use the part of the public road close to the entrance of the Building as an extension of the loading and unloading areas of the Building;

(5)  Failed to check the Trench Covers, report the damage or take any other remedial measures.

10.In its Defence, TP2 said that it did not owe the Plaintiff any duty of care because the Accident happened outside of the Building and did not fall within the management duty of TP2 as the building management of the Building. TP2 also denied that the Accident was caused by any acts or omissions on the part of TP2, and as such TP2 was not liable to the Plaintiff in common law negligence and not liable to contribute to the Defendant’s legal liability towards the Plaintiff.

11.Insofar as the Defendant’s case against TP2 was based on a breach of TP2’s managerial duties as stated in the Deed of Mutual Covenant (“DMC”) and Sub-Deed of Mutual Covenant (“Sub-DMC”) of the Building, TP2 said its managerial duties under the DMC and Sub-DMC only applied to the management of the Building and did not extend to the public pedestrian footway outside the Building.

12.In relation to the terms of the settlement between the Plaintiff and the Defendant of the Plaintiff’s claim and of the Plaintiff’s costs, TP1 argued that both the settlement sum for the Plaintiff’s claim and the settlement sum for the Plaintiff’s costs were unreasonable and excessive. TP2 did not contest the reasonableness of the settlement sum for the Plaintiff’s claim and the settlement sum for the Plaintiff’s costs.

B.  THE LAW

13.This Court was referred to a number of case authorities by the parties in relation to various issues. This section summarises the main statutory provisions and common law principles which this Court had regard to in reaching its decision.

B.1  The Civil Liability (Contribution) Ordinance, Cap 377 (the “CLCO”)

14.The Defendant sought contribution from TP1 and/or TP2 pursuant to section 3(1) and (4) of the CLCO, which state:-

“(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.”

15.TP1 relied on Section 3(5) of the CLCO in support of its argument that the settlement sums paid by the Defendant to the Plaintiff were unreasonable and excessive:-

“3(5) On assessing any contribution under this section the court shall disregard any part of the payment in respect of which the contribution is sought which appears to the court to be excessive.”

B.2  Vicarious Liability of TP1

16.The Defendant argued that insofar as TP1 is concerned, if it is established that the forklift truck which was responsible for causing damage to the relevant Trench Cover was TP1’s, TP1 is vicariously liable for the acts of the driver of that Forklift Truck whether the driver is an agent, employee or independent contractor. This was not accepted by TP1.

17.The Court was referred to the Hong Kong Court of Appeal’s decision in Chong Ngan Seng v China Harbour Engineering Co Ltd [2013] 2 HKLRD 223. In that case, the light goods vehicle which was involved in the traffic accident was registered to the 1^st defendant, the main contractor employed by the Highways Department under a main contract to carry out maintenance works in the New Territories. The driver was driving the vehicle to a site in the New Territories when the traffic accident happened on 26 November 2008. Although the 1^st defendant was the registered owner of the vehicle at the time of the accident, it had already sold and delivered the vehicle to the 3^rd defendant, a subcontractor of the 1^st defendant under the main contract. There was a 4^th defendant who was a subcontractor of the 3^rd defendant. The transfer of registered ownership did not take place until 8 months after the traffic accident. The trial judge found that it was more probable than not that the driver was employed by the 4^th defendant, and that the driver was not employed by the 1^st defendant, at the time of the accident. On appeal, it was argued that the Deputy Judge’s conclusion that the 1^st defendant was vicariously liable for the negligence of the driver was flawed given that she had found that the driver was the employee of the 4^th defendant and not the employee of the 1^st defendant.

18.The focus in the appeal was on whether the Deputy Judge was entitled to find that the 1^st defendant had permitted the driver to drive the vehicle as its agent, and thereby give rise to vicarious liability on the part of the 1^st defendant. At §49 of the Court of Appeal’s judgment, Fok JA said that on the facts of the case, where the 1^st defendant had sold the vehicle to the 3^rd defendant for the purposes of its being used in the execution of the subcontract works and where the vehicle was being driven by an employee of a sub-subcontractor for the purposes of executing the subcontract works, the journey was not being undertaken for the purposes of the 1^st defendant, there being no evidence that the 1^st defendant knew that the driver would be driving the vehicle that day for that particular purpose or had authorized him to do so. For that reason, the Court of Appeal said that the journey was not a task or duty that the 1^st defendant had delegated to the driver and the 1^st defendant exercised no control over the driver, and hence it was not open to the Deputy Judge to conclude that the 1^st defendant had authorized the driver to drive the vehicle or that the driver was carrying out a task or duty delegated from the 1^st defendant or that the driver was driving the vehicle as the 1^st defendant’s agent. The Court of Appeal held that, as a matter of law, mere ownership of a vehicle was not enough to fix the owner with vicarious liability for the negligence of the person driving it.

19.The factual circumstances in Chong Ngan Seng were unusual as the 1^st defendant had (nominally) remained the registered owner of the vehicle whilst having no possession of the vehicle or control over how it was used by the driver.

20.At §27 of the Court of Appeal’s judgment in Chong Ngan Seng, it was stated:-

“27. It is clear that vicarious liability on the part of the owner of a vehicle may attach by reason of the driver being the agent of the owner. As Lord Wilberforce observed, in Launchbury v Morgans [1973] AC 127 at p. 135B and D-E:

“… I regard it as clear that in order to fix vicarious liability upon the owner of a car in such a case as the present it must be shown that the driver was using it for the owner’s purposes, under delegation of a task or duty …

I accept entirely that ‘agency’ in contexts such as these is merely a concept, the meaning and purpose of which is to say ‘is vicariously liable,’ and that either expression reflects a judgment of value – respondent superior is the law saying that the owner ought to pay. It is this imperative which the common law has endeavoured to work out through the cases. The owner ought to pay, it says, because he has authorised the act, or requested it, or because the actor is carrying out a task or duty delegated, or because he is in control of the actor’s conduct.”

And Viscount Dilhorne in the same case said (at p. 139E-G) with reference to the case of Hewitt v Bonvin [1940] 1 KB 188:

“Du Parcq L.J. thought that the better way of putting the respondent’s case was on the basis of agency, and said, at pp.194-195:

‘The driver of a car may not be the owner’s servant, and the owner will be nevertheless liable for his negligent driving if it be proved that at the material time he had authority, express or implied, to drive on the owner’s behalf. Such liability depends not on ownership, but on the delegation of a task or duty.’

Thus, it was held that, whether it be alleged that the driver was the servant or the agent, to establish liability on the part of the employer or the principal it must be shown that the driver was acting for the owner and that it does not suffice to show that the driving was permitted.

Just as the inference may be drawn, from proof that the vehicle was owned by another, that the driver was driving as servant or agent of the owner (Barnard v. Sully (1931) 47 T.L.R. 557), so may a presumption arise, where it is proved that the driver at the time of the negligence was doing something which was in the interest of the owner or for his benefit, that the driver was then acting as a servant or agent of the owner.”

21.I agree that the ownership of the vehicle is not determinative, and that what is important in determining whether the owner of the vehicle is vicariously liable for the negligent acts of the driver of the vehicle (whether that driver is an employee or not) is to ascertain whether the driver was driving the vehicle for the owner’s purposes under delegation of a task or duty, such that at the material time he had authority, express or implied, to drive on the owner’s behalf.

22.The Court was also referred to the Hong Kong Court of Final Appeal’s decision in Luen Hing Fat Coating & Finishing Factory Ltd v Waan Chuen Ming (2011) 14 HKCFAR 14.

23.TP1 submitted that in Luen Hing Fat, the Court of Final Appeal held that a person is not vicariously liable for his independent contractor’s torts, and relied on Luen Hing Fat in support of its case that the drivers of the Two Forklift Trucks were Siu Yin’s agents or employees, not TP1’s agents or employees.

24.In Luen Hing Fat, the defendant was a factory operator and engaged an independent contractor to repair a machine at its factory. The employee of the independent contractor suffered a horrific accident during the process and sued both the factory operator and the independent contractor. At trial, the trial judge held both the factory operator and the independent contractor liable. At §20 of its judgment, the Court of Final Appeal said:

“A person is not vicariously liable for his independent contractor’s torts. But that only goes to the absence of vicarious liability. A person who engages an independent contractor may be liable for, as it is put in Winfield & Jolowicz on Tort (18^th ed., 2010) p. 978, “his own negligence, for example in failing to take care to select a competent contractor”. His having engaged an independent contractor does not exclude the possibility of his committing the tort of negligence himself.”

25.Luen Hing Fat was concerned with a situation where the work was not intrinsically hazardous and the factory operator had lent the independent contractor equipment which was not intrinsically dangerous or faulty, but the factory operator knew or ought to have known that the independent contractor would use that equipment to do the work by a method which was unsafe. The Court of Final Appeal examined a host of cases from Donoghue v Stevenson [1932] AC 562 onwards to more modern cases such as White v Jones [1995] 2 AC 207 to distil the approach to determine whether a duty of care exists, and at §30 of Bokhary PJ’s judgment, he stated: “Ultimately it is necessary to stand back and take a holistic view of foreseeability, proximity and the need to be satisfied that it would be fair, just and reasonable to impose a duty of care.”

26.So even if a principal engages an independent contractor, they can still both be liable, and nothing in Luen Hing Fat derogates from the general principle that a person cannot deny liability simply by claiming they subcontracted the work out, and that they remain fully responsible if, for example, they owe a non-delegable duty, were negligent in hiring the subcontractor, or authorized the harmful act in question.

B.3  Duty of Care of TP2

27.The position as against TP2 is somewhat different, as the very existence of a duty of care towards the Plaintiff first has to established. The Defendant referred the Court to Lam Tam Luen v Asia Television Ltd [2008] 5 HKLRD 5, which stated that whilst there is no general duty to prevent a third party from causing damage to another, there are four situations where a duty may be imposed:

(i)  There is a special relationship between the defendant and claimant based on an assumption of responsibility by the defendant;

(ii)  There is a special relationship between the defendant and the third party based on control by the defendant;

(iii)  The defendant is responsible for a state of danger which may be exploited by a third party; and

(iv)  The defendant is responsible for property which may be used by the third party to cause damage.

28.TP2 argued that TP2 did not assume any responsibility to ensure that the Trench Covers were safe and there was no special relationship between the Plaintiff and TP2, as such TP2 did not owe the Plaintiff any duty of care for any hazard created by the Defendant and/or for any danger caused by the drivers of the Two Forklift Trucks.

29.TP2 further argued that even if it was considered that TP2 ought not to have allowed and permitted the Two Forklift Trucks to travel out of the entrance of the Building, this was an omission, a failure to intervene, rather than a positive act, and a failure to prevent an act by the Defendant and/or TP1 to cause damage to the Plaintiff did not constitute any breach of duty.

30.In this regard, TP2 referred the Court to the following passage from the UK Supreme Court’s judgment in Tindall v Chief Constable of Thames Valley Police [2025] AC 1046 at §1:-

“It has long been recognized that the tort of negligence draws a fundamental distinction between acts and omissions or, in the more illuminating language adopted in recent years, between making matters worse (or harming) and failing to confer a benefit (or to protect from harm). As a general rule, a person has no common law duty to protect another person from harm or to take care to do so: liability can generally arise only if a person acts in a way which makes another worse off as a result. In recent years this distinction has taken on added significance because it is now firmly established (or re-established) that the liability of public authorities in the tort of negligence to pay compensation is governed by the same principles that apply to private individuals. Many public authorities – notably, protective and rescue services such as the police force and fire brigade – have statutory powers and duties to protect the public from harm. But failure to do so, however blameworthy, does not make the authority liable in the tort of negligence to pay compensation to an injured person unless, applying the same principles, a private individual would have been so liable. That means that to recover such compensation a claimant generally needs to show that the public authority did not just fail to protect the claimant from harm but actually caused harm to the claimant.”

31.In Tindall, Mr Kendall lost control of his car on an area of black ice, and his car slid and rolled into a roadside ditch. Because Mr Kendall knew that the ice on the road presented an imminent danger to other road users, he waved vigorously to a passing van and other traffic trying to encourage them either to stop or slow down so as to avoid any further accident. In his call to the police, Mr Kendall told them about the cause of accident and warned them of the ice on the road. Mr Kendall was placed in the care of the ambulance service upon their arrival. During that time, a “police slow” sign was placed in the vicinity. The road was swept and debris from the accident was removed. A constable told the police station that attendance of a gritter was necessary but did not communicate the urgency. When the constables left, the “police slow” sign was removed. Thereafter, Mr Bird lost control of his car on the same area of black ice, his vehicle crossed into the opposite lane and collided head-on with the car driven by Mr Tindall, and both Mr Bird and Mr Tindall died either on impact or shortly thereafter.  The Independent Police Complaints Commission concluded that the officers had a case to answer for gross negligence manslaughter and misconduct, however the Crown Prosecution Service decided not to prosecute. Two officers were found guilty of misconduct and a third officer was found guilty of gross misconduct by the police disciplinary tribunal. The jury of a death inquest gave a narrative verdict that the police officers should have done more.

32.Thereafter, Mrs Tindall as administratrix of Mr Tindall’s estate brought proceedings against the Chief Constable of Thames Valley Police for breach of duty of care. Mr Kendall’s evidence was that he would have done more in alerting motorists to the danger had the police not arrived at the scene. However, in order to succeed on her claim, Mrs Tindall would have needed to show more ie. to show that the police knew or ought reasonably to have known that their conduct had or might have had the effect of putting off or preventing Mr Kendall from warning other motorists. On that basis, the Supreme Court determined that Mrs Tindall’s claim should be struck out.

33.I agree that in common law negligence, a distinction is generally drawn between positive acts (for which, in principle, a claimant can recover) and omissions (for which a claimant usually cannot). As a general rule, a person has no common law duty to protect another person from harm or to take care to do so: liability can generally arise only if a person acts in a way which makes another worse off as a result. In Tindall, the UK Supreme Court further recognized as a principle of tort law what has been referred to as the “interference principle”, which was described as follows at §50:-

“if A knows or ought to know that B is in need of help to avoid some harm, and A knows or ought to know that he has done something to put off or prevent someone else helping B, then A will owe B a duty to take reasonable steps to give B the help she needs.”

34.The way in which the interference principle operates is that one should not make matters worse by acting in a way that creates an unreasonable and reasonably foreseeable risk of physical injury to the claimant, including acts which are foreseeably likely to have the effect of putting off or preventing someone else from taking steps to protect the claimant from harm. However, it is not enough to show that the defendant has acted in a way which had the effect of putting off or preventing someone else from helping the claimant. Rather, for a duty of care to arise, it is necessary to show that the defendant knew or ought to have known (ie that it was reasonably foreseeable) that its conduct would have this effect.

35.The interference principle puts knowledge as the basis upon which liability is established, and a claimant would have to establish that (i) the defendant knew or ought to have known that the plaintiff was in need of help to avoid harm, and (ii) the defendant knew or ought to have known that what it did would put off or prevent someone else from helping the plaintiff.

36.Ultimately, the interference principle does not usurp or erode the omission rule, and instead targets the situation of knowing interference of harm prevention. It is that interference with the knowledge that such interference would prevent the positive act of someone else that would render that first person liable. Whilst a public authority (such as those providing emergency services and whose mandate is to protect members of the public) might need to show that it did more, it will be rare for a private person (such as TP2 in the present case) to interfere in this way.

C.  THE ADMISSION/THE ESTOPPEL POINT

37.The Defendant relied on the fact that on 21 June 2023, TP1’s solicitors confirmed in writing that TP1 was the owner of the Two Forklift Trucks (whilst asserting that the operators of the Two Forklift Trucks were not the employees of TP1), following which the Defendant issued a Third Party Notice against TP1. The exact words used in the 21 June 2023 letter were:-

“We are instructed that our client was the owner of the 2 forklift trucks. However, the operators of the 2 forklift truck were NOT the employee of our client.”

38.After TP1 filed a Defence denying that it was the owner of the Two Forklift Trucks, the Defendant in its Reply pleaded that TP1 was estopped from pleading a different case from its own admission that it was the owner of the Two Forklift Trucks.

39.TP1 submitted that the Defendant should not be permitted to rely on estoppel because estoppel must be specifically pleaded, and that the Defendant’s pleaded case is insufficient to support a case of estoppel. The relevant commentary in the White Book (Hong Kong Civil Procedure 2026) at §18/8/15 states:-

“… This principle applies equally whether estoppel is pleaded as a defence or a cause of action. In order for the plaintiff to let the defendant know what the live issues are and the true extent of the dispute, he is expected to make the following 3 important averments in pleadings (or otherwise allegations in evidence), given the nature of his claim: (1) a representation has been made by the defendant; (2) reliance on it has been placed by him; and (3) as a result, in reliance of the representation, he has acted to his detriment …”

40.In my view, this is not strictly speaking a case of estoppel, with all of the reliance and detriment which estoppel entails, nor is it a case of admission by TP1 on the pleadings. The point here is really about the credibility of TP1’s denial that it was the owner of the Two Forklift Trucks in light of the admission which was made and the subsequent withdrawal of that admission.

41.I will proceed to consider and determine the third party claim against TP1 on the basis that TP1 denies that it is the owner of the Two Forklift Trucks. As the analysis of the evidence below will show, in determining the question of the ownership of the Two Forklift Trucks, I have taken into account the credibility of TP1’s witness evidence as to how the admission came to be made.

D.  THE WITNESSES

42.There were a total of 3 factual witnesses at trial, 劉紹礎 for the Defendant (“Mr Lau”), Mr Khoo Ming Siu (“Mr Khoo”) for TP1 and Mr Pat Man Lung (“Mr Pat”) for TP2.

43.Mr Pat had been employed by TP2 since 2010 but was not responsible for the management of the Building until July 2021 ie. some months after the Accident took place. The reason why Mr Pat had been called to give evidence by TP2 was that TP2 was originally due to call Mr Lee Kwong Chak (“Mr Lee”), and had filed a witness statement from Mr Lee, but Mr Lee had a surgical operation on 23 July 2026 and was required to be hospitalized afterwards, and was physically unable to travel or appear in court during the trial dates. Mr Pat was therefore called to give evidence in place of Mr Lee. TP2 also filed a hearsay notice in respect of the contents of Mr Lee’s witness statement.

44.The principles in relation to the assessment of evidence and witness testimony are well established. Amongst other things, in assessing credibility of a witness, the court takes into account the following factors: (1) inherent probabilities or plausibility; (2) consistency with contemporaneous documents or evidence; (3) if a witness is found to be untruthful or unreliable on one matter, that may affect the witness’ credibility and reliability in other matters; (4) the demeanour of the witness; and (5) a witness’ motives - see Triunion (HK) Cereal & Oil Co Ltd v APAC Investment Holdings Ltd [2022] HKCFI 3326 at §48 per Recorder Victor Dawes SC. If there are two competing theories of events before the court, rejection of one may justifiably lead to the acceptance of the other: see Triunion §62 per Recorder Victor Dawes SC.

45.Submissions were made by Counsel as to the overall credibility of each of the witnesses. However, this was not one of those cases where the 3 factual witnesses were giving different accounts of the same events or matters. In fact, there was virtually no overlap in the evidence given by Mr Lau, Mr Khoo and Mr Pat:-

(i)  Mr Lau was a civil engineer and a Sub-Agent of the Defendant at the material time and was involved in laying the gas pipes at Cheung Tat Road and in digging the Trench, but he did not witness the Accident and was questioned about many matters which he had no knowledge of, or which he would not be privy to as he was not involved in the management of the Defendant. The only matters which he could really speak to related to the installation and use of the Trench Covers at the site of the Accident, and the discussions between the representatives of the Defendant and of TP2 at a site meeting on 9 September 2020, for which he was present. As will be seen below, I generally accepted Mr Lau’s evidence in relation to those matters which he was able to speak to.

(ii)  Mr Khoo was a director of TP1. Mr Khoo was heavily cross-examined about whether the Two Forklift Trucks belonged to TP1 and about the alleged contracting arrangement between TP1 and Siu Yin, and what emerged from his oral evidence was materially different to what had been said in TP1’s pleaded case and in Mr Khoo’s own witness statements. Extensive submissions were made by Counsel for the Defendant about Mr Khoo’s credibility, and a full analysis of Mr Khoo’s evidence in relation to whether the Two Forklift Trucks belonged to TP1 and the alleged contracting arrangement between TP1 and Siu Yin is set out below in the sections addressing those issues.

(iii)  Whilst Mr Pat had worked for TP2 since 2010 and was now an Estate Manager and Mr Lee’s boss, he was not involved in the management of the Building at the time of the Accident, and although he subsequently assumed responsibility for the Building from July 2021 onwards, he explained that he was responsible for the whole of the Tsing Yi area rather than the Building specifically, and was not stationed in the Building. Mr Pat further explained that he would only visit the Building once a month or so, to attend meetings. Hence, there were many details concerning the management of the Building, and many matters concerning the relevant events in October 2020, that Mr Pat was unable to answer, and to which he could only answer that he did not know or that due to the passage of time he was unable to say. Mr Pat also had a habit of not answering questions directly, although his reticence in answering some of the questions may be explained by the fact that he was called upon at short notice to appear in Court to give evidence in place of Mr Lee, and was clearly not the person who was best placed to answer those questions. In general, I did not find Mr Pat’s evidence to be all that helpful.

46.It is noted that Siu Yin was not called to give evidence in this case. Given that it was TP1’s case that it was not vicariously liable for the acts of the operators of the Two Forklift Trucks as TP1 had a contracting arrangement with Siu Yin whereby Siu Yin operated TP1’s forklift trucks, one might have expected TP1 to have called Siu Yin to give evidence of such arrangements, and the Defendant initially asked this Court to draw adverse inferences from TP1’s failure to call Siu Yin to give evidence.

47.As shall become apparent from the analysis of Mr Khoo’s evidence in relation to the alleged contracting arrangement between TP1 and Siu Yin, what emerged during Mr Khoo’s evidence about the said contracting arrangement was materially different to what had been said in TP1’s pleadings and in Mr Khoo’s witness statements, and Siu Yin in fact played little if any part in the alleged contracting arrangement. Accordingly, the fact that Siu Yin has not been called to give evidence did not really have any significant impact on the evidence.

48.After hearing Mr Khoo’s evidence, the Defendant also submitted that Mr Khoo, and TP1, had intentionally withheld the identity of the true counterparty to the alleged contracting arrangement and obscured the nature of the relationship which TP1 had with them so as to avoid calling them to give evidence, and that adverse inferences should be drawn against the explanations given by Mr Khoo regarding the ownership of the Two Forklift Trucks and the existence of the alleged independent contracting arrangement.

49.TP1 argued that adverse inferences are not drawn merely because a witness has not been called, and that as there is no property in a witness, a party arguing for the adverse inference must establish a proper evidential foundation for doing so, including explaining why the party seeking to rely on the inference could not have called or subpoenaed that witness itself.

50.In response, the Defendant complained that TP1 had actively hidden the identity of the true counterparty to the alleged independent contracting arrangement and as such, the Defendant had not appreciated that that true counterparty (who as the analysis of the evidence below will show was Gary Chung) would have material evidence to give if he had been called or subpoenaed to give evidence, and had hence been deprived of the opportunity of obtaining that person’s evidence. As the analysis of the evidence below will show, there is ample reason to be sympathetic to the Defendant’s complaint in this regard.

51.However, in my view, the point here again is really about the credibility of Mr Khoo’s evidence regarding the ownership of the Two Forklift Trucks, and the existence of the alleged independent contracting arrangement, in the absence of any evidence from other witnesses who could have given material evidence about such matters and corroborated Mr Khoo’s account, all of which has been taken into account in the analysis of the evidence below.

E.  THE CAUSE OF THE ACCIDENT

52.The relevant CCTV footage from around 6:53 am on 31 October 2020 (“CCTV Footage 1”) shows the Plaintiff and her colleague walking towards the Pavement and the Trench Covers. The Pavement and the Trench Covers cannot be seen from this video camera angle as the video camera was on the other side of Cheung Tat Road and a large lorry was parked in front of the video camera. However, the heads of the Plaintiff and her colleague walking in the background can be seen above the parked lorry and the head of the Plaintiff suddenly disappears from view, which is presumably the moment when her leg fell through the crack in the relevant Trench Cover.

53.TP1 argued that there was no evidence that there was any damage to, or any cracks in, the relevant Trench Cover before the Accident. The Plaintiff in her witness statement stated that the relevant Trench Cover cracked when she stepped on it, causing a gaping hole to appear through which her leg went.

54.It was common ground that the Trench Covers were 50mm thick plastic covers. Mr Lau could not say why the relevant Trench Cover broke, or that any tests had been conducted afterwards on the relevant Trench Cover to determine the cause. Mr Lau could only refer to a test report which the Defendant had caused to be conducted on a trench cover of the same type, which the Defendant relies upon to say that this type of plastic trench cover would require enormous pressure to break and would not break as a result of being walked on by a pedestrian.

55.Mr Lau accepted that (i) the test report concerned tests conducted on a different trench cover, not the relevant Trench Cover, (ii) he did not know when the Defendant purchased the Trench Covers, or how long they had been in use, and (iii) there was no regular practice of taking the Trench Covers in for inspection or for testing for maintenance purposes.

56.It was not in dispute that the Trench Covers were installed in the afternoon on 30 October 2020, shortly before the events shown in CCTV Footage 1. Mr Lau was involved in the digging of the trench and the installation of the Trench Covers, and said that they would not have used any trench covers which had obvious signs of damage.

57.Mr Lau was shown close up photographs of the Trench Covers which were taken in daylight immediately after they had been installed, and was asked whether what appeared as white discoloration on the surface of one of the Trench Covers showed that that Trench Cover was already damaged at that point. Mr Lau said that it was not, and that he believed it was simply dust or dirt. In any event, that Trench Cover was not the Trench Cover which subsequently broke. On the contrary, at the time when the photographs were taken, there were no visible signs of any damage to the Trench Cover which subsequently broke.

58.The relevant CCTV footage from the preceding night from around 9:42 pm on 30 October 2020 (“CCTV Footage 2”) shows two forklift trucks coming out from the ground floor of Block A of the Building onto Cheung Tat Road. There were some empty pallets on the road opposite the Building. The first forklift truck (the “1^st Forklift Truck”) was not carrying any load. The Pavement and Trench Covers were not initially visible from the video camera angle from across the road as a minivan was parked next to the Pavement where the Trench Covers were. The 1^st Forklift Truck appeared to be waiting for the second forklift truck (the “2^nd Forklift Truck”), and to be manouvering to make room for the 2^nd Forklift Truck, but possibly because the minivan was parked where it was on the road, reversed into the area where the Pavement covered by the Trench Covers was. It then stayed in this spot for a prolonged period of time of over one minute, seemingly stuck and requiring assistance. The 2^nd Forklift Truck was coming out of the Building carrying a loaded pallet, but dropped this load at the carpark entrance of the Building to go and help the 1^st Forklift Truck. By this time, the minivan had driven off, enabling the 2^nd Forklift Truck to help the 1^st Forklift Truck from the side by using its forks to lift the 1^st Forklift Truck by its roof off the 1^st Trench Cover.

59.In the part of CCTV Footage 2 where the minivan had driven off, it can be seen that one of the rear wheels of the 1^st Forklift Truck was sunken directly over the spot on one of the Trench Covers (the “1^st Trench Cover”) where the crack through which the Plaintiff’s leg went subsequently appeared. The last part of CCTV Footage 2 also shows a darkened area on the spot on the 1^st Trench Cover where the rear wheel of the 1^st Forklift Truck had been and where the crack subsequently appeared. Given that it was nighttime and the video camera was some distance away across the road, it was not possible to identify precisely what this darkened area was. When Mr Khoo was shown CCTV Footage 2, he agreed that there was a darkened area on the spot on the 1^st Trench Cover where the rear wheel of the 1^st Forklift Truck had been.

60.Rear licence plates were not visible on either of the Two Forklift Trucks seen in CCTV Footage 2. Mr Khoo denied that he recognized the Two Forklift Trucks and said that he did not know whose forklift trucks they were. Mr Khoo also said that he did not recognize the drivers of the two forklift trucks, or another man wearing shorts who can be seen throughout CCTV Footage 2. This third man was in the vicinity, witnessed the whole incident, came over during the incident to inspect the Trench Covers, and also appeared to talk to the driver of the 1^st Forklift Truck.

61.The Defendant submitted that CCTV Footage 2 showed that the drivers of the Two Forklift Trucks, and the third man wearing shorts, looked at the 1^st Trench Cover after the 1^st Forklift Truck had driven off, and that they were clearly aware of the condition of the 1^st Trench Cover and that something had happened to it. I agree.

62.One additional observation that can be made from the various photos of the Pavement and the Trench Covers, as well as from CCTV Footage 2, is that the Pavement was not on a section of pedestrian walkway which intersected with the car park entrance to the Building, and hence might be travelled over by vehicles with any regularity. On the contrary, the Pavement was narrow, to the side of the car park entrance to the Building and was separated from the vehicular road by metal railings, such that it would not have been possible for a private motor vehicle on the road to mount the Pavement. Therefore, one would expect that in ordinary circumstances, only pedestrians would walk over the Pavement.

63.TP1 argued that the mere fact that the 1^st Forklift Truck went onto the 1^st Trench Cover was not of itself negligent or the cause of the Accident, and that the Defendant has to prove that the 1^st Trench Cover was broken by the 1^st Forklift Truck to hold the driver of the 1^st Forklift Truck liable.

64.Pausing here, it should be noted that it is not necessary for the Defendant to prove that the 1^st Forklift Truck caused a crack to appear in the 1^st Trench Cover immediately when it moved onto the 1^st Trench Cover. If it had, the Accident might not have occurred, as the Plaintiff might have seen the crack and avoided walking over it. Rather, it is sufficient for the Defendant to prove that 1^st Forklift Truck had caused sufficient damage to the 1^st Trench Cover, and affected its integrity, to the extent that it would crack and the Plaintiff’s leg would fall through it when she walked on it.

65.In its closing submissions, TP1 submitted that the Defendant has shown no more than that the 1^st Forklift Truck rolled over the 1^st Trench Cover approximately 9 hours before the Accident occurred, that there are other realistic alternative possibilities as to the cause of the failure of the 1^st Trench Cover, and that the Court should not choose any one possible explanation over the others without any evidential basis for preferring that explanation.

66.It is true that there is no evidence before this Court to show anything that might have happened to the Trench Covers in the period between CCTV Footage 2 and CCTV Footage 1, but it is no more than speculation on TP1’s part to say that something else might have happened to that particular spot on the 1^st Trench Cover during that period of around 9 hours during the small hours of the night. The same goes for TP1’s assertion that the 1^st Trench Cover may have suffered from deterioration arising from age, wear and tear or prolonged exposure to the elements (and therefore cracked on its own as a result of such wear and tear). These are not, as TP1 has submitted, competing possibilities which the Court should not disregard. They are mere suppositions without any evidential basis.

67.As stated above, the video evidence showed that the weight of the 1^st Forklift Truck (which would have been much more than the weight of the people which the 1^st Trench Cover could safely bear) was exerted onto the 1^st Trench Cover over a sustained period of time through the rear wheel of the 1^st Forklift Truck on the same spot where the crack subsequently appeared on the 1^st Trench Cover.

68.As a matter of causation, I find that the Defendant has established, on a balance of probabilities, that the 1^st Trench Cover was damaged by the 1^st Forklift Truck when the 1^st Forklift Truck drove over the 1^st Trench Cover as shown in CCTV Footage 2, which led to the Accident.

F.  THE OWNERSHIP ISSUE

69.TP1 denied that the Two Forklift Trucks were its forklift trucks, and said that there were other persons who operated forklift trucks in the Building.

70.As mentioned earlier, in his cross-examination, Mr Khoo was shown CCTV Footage 2, and said that he could not recognize the Two Forklift Trucks or their drivers, and did not know whether they were carrying TP1’s cargo. However, Mr Khoo accepted that TP1’s alleged independent contractor was performing work for TP1 on the night of 30 October 2020 (when CCTV Footage 2 was taken).

71.Unsurprisingly, Mr Khoo was asked during cross-examination why he had instructed TP1’s lawyers to confirm that TP1 was the owner of the Two Forklift Trucks after TP1’s lawyers had been sent CCTV Footage 2, in particular why he had instructed TP1’s lawyers to do so if he had thought that the forklift trucks in the CCTV Footage 2 were not the forklift trucks that TP1 had provided to its alleged independent contractor when he saw CCTV Footage 2. Mr Khoo did not provide any meaningful answer over and above what he had stated in his witness statements.

72.The substantive explanation for the admission given by Mr Khoo in his first witness statement was that when TP1’s lawyers first sent CCTV Footage 2 to him, it appeared to him that the Two Forklift Trucks were similar to those owned and/or possessed by TP1, and he had unwittingly assumed that the Defendant’s lawyers had already conducted their own investigation or they would not have made the assertion that TP1 was the owner of the Two Forklift Trucks, so he mistakenly thought that the Two Forklift Trucks belonged to TP1 at the time. Afterwards, when he was working with TP1’s lawyers to prepare TP1’s case, he carefully examined CCTV Footage 2 and discovered that it did not show any licence plates or other distinguishing characteristics, and there were other forklift truck users in the Building, so he was unable to determine whose forklift trucks they were.

73.Mr Khoo was asked during cross-examination whether he had, after receiving CCTV Footage 2, checked with TP1’s alleged independent contractor to see if they knew anything about the incident. Mr Khoo said that he had not.

74.Mr Khoo was also asked during cross-examination whether there were any other tenants in the Building who would conduct business at night or use forklift trucks to do so around the time of the Accident, but he said that he did not know, as he would leave work at or around 7 pm each day and would not be aware of what happened after that time.

75.In TP1’s pleadings, TP1 had originally pleaded that it had 10 to 13 forklift trucks. This plea had subsequently been amended to 8 forklift trucks. When asked why he had initially instructed his lawyers that TP1 had 10 to 13 forklift trucks, Mr Khoo said that he had misunderstood the question and had stated the total number of forklift trucks which were used by all tenants of the Building. Mr Khoo said that he had included in the total number his estimate that another tenant, which I shall call Tenant B, had 3 to 4 forklift trucks.

76.As indicated above, Mr Pat, who gave evidence at trial for TP2, was not able to provide any relevant evidence about what was happening in the Building prior to or at the time of the Accident. He was not familiar with TP1’s operations and did not know which tenants operated at night or which tenants had forklift trucks at the time.

77.However, Mr Lee did have knowledge of TP1’s operations, which tenants operated at night and which tenants had forklift trucks at the time, as he had been an Assistant Customer Manager at the Building since September 2017 with responsibility for the guarding and security of the Building. In Mr Lee’s witness statement, he said that prior to the time of the Accident, on the ground floor of Block A of the Building, only TP1 and Tenant B operated logistics businesses and used forklift trucks, and that Tenant B ordinarily operated during the hours of around 7 am to around 4  pm, but Tenant B did not open for business during COVID, therefore at the time of the Accident, only TP1 continued to operate after 9 pm on the ground floor of Block A of the Building.

78.For reasons explained above, Mr Lee was unable to give evidence at trial, and a hearsay notice was filed by TP2 indicating that it intended to adduce Mr Lee’s witness statement as evidence at trial. There was no objection to the admission of Mr Lee’s witness statement, and hence no reason for the Court to exclude Mr Lee’s witness statement pursuant to Section 47 of the Evidence Ordinance, Cap 8. It is therefore only a question of what weight is to be given to the contents of Mr Lee’s witness statement.

79.I have had regard to the considerations under Section 49 of the Evidence Ordinance, and have taken into account that (i) it would not have been reasonable and practicable for TP2 to have produced Mr Lee as a witness given that he was recuperating in hospital after having just had major surgery, (ii) Mr Lee’s witness statement was made in March 2024, not long after third party proceedings had been commenced by the Defendant against TP2 (in November 2023), (iii) the matters set out in Mr Lee’s witness statement do not involve multiple hearsay or hearsay from unidentified sources, as Mr Lee has direct knowledge of those matters. I conclude that Mr Lee’s evidence in relation to which tenants on the ground floor of Block A of the Building used forklift trucks and which tenants were operating after 9 pm at the time of the Accident is reliable.

80.On the other hand, I do not find Mr Khoo’s evidence that he could not recognize the Two Forklift Trucks in CCTV Footage 2 to be credible, given in particular the following matters:-

(i)  Mr Khoo’s explanation of the initial admission that the Two Forklift Trucks belonged to TP1 does not make sense and is simply not credible. Mr Khoo said that when he first viewed CCTV Footage 2, it appeared to him that the Two Forklift Trucks were similar to those owned and/or possessed by TP1. However, he says that upon subsequent viewing, he did not see any distinguishing characteristics, and there were other forklift truck users in the Building, so he was unable to determine whose forklift trucks they were. Those two explanations are inherently inconsistent and hard to reconcile. If it was hard to identify the forklift trucks from CCTV Footage 2 because there were no distinguishing characteristics, then it is hard to understand why Mr Khoo would not have thought so the first time that he viewed CCTV Footage 2, and why he would not have said so to TP1’s lawyers, instead of confirming that the Two Forklift Trucks belonged to TP1.

(ii)  Mr Khoo said that when he mistakenly thought that he was asked to state the total number of forklift trucks which were used by all tenants of the Building, he had included in the total number his estimate that Tenant B had 3 to 4 forklift trucks. So to the extent that Mr Khoo might have reason to say that the Two Forklift Trucks in CCTV Footage 2 belonged to another tenant, on his own case, that other tenant could only have been Tenant B. However, Mr Khoo also said that he did not know whether any other tenants in the Building would conduct business at night or use forklift trucks to do so. It is therefore hard to understand why Mr Khoo might have thought, on further viewing of CCTV Footage 2, that the Two Forklift Trucks were operated by other forklift truck users in the Building. In any event, based on Mr Lee’s evidence, at the time of the Accident, only TP1 continued to operate after 9 pm on the ground floor of Block A of the Building, so the Two Forklift Trucks must have been conducting TP1’s business.

(iii)  In his explanation of the initial admission, Mr Khoo also asserted that he had assumed that the Defendant’s lawyers had already conducted their own investigation or they would not have made the assertion that TP1 was the owner of the Two Forklift Trucks. Mr Khoo must have appreciated at the time that it was an adversarial situation and that the Defendant’s lawyers were acting in the interests of the Defendant, so to say that he would have blindly relied on the truth of what the Defendant’s lawyers were asserting without conducting some investigation of his own makes little sense. I do not find the explanation that Mr Khoo had blindly accepted what the Defendant’s lawyers had asserted to be credible.

81.There was a belated attempt, in TP1’s closing submissions, to assert that TP1’s admission had been made under an honest but mistaken belief induced by what TP2 (and subsequently the Defendant) had said. TP1 said that a letter dated 13 December 2022 issued by TP2’s insurer asserted that the 2 Forklift Trucks belonged to TP1. Although that letter did not explain how TP2’s insurer had concluded that the 2 Forklift Trucks belonged to TP1, TP1 said that there was no reason for Mr Khoo to appreciate that the assertion had no identifiable factual foundation, and that it was entirely understandable for Mr Khoo to assume that TP2 or its insurer had conducted some investigation before making such an assertion.

82.TP1 said that likewise, the Defendant’s correspondence to TP1 indicated that investigations had been conducted, and TP1 simply acted carelessly in accepting the assertions without conducting its own investigation, and made the admission under an honest but mistaken belief induced by the assertions made by TP2 and repeated by the Defendant.

83.As indicated above, I have already considered the explanation which was given by Mr Khoo as to how TP1’s admission had come to be made, which I did not find credible. As for the additional point now being made that the admission was induced by assertions made by TP2 and by the Defendant without any identifiable factual foundation, in my view, it does not take matters any further for TP1. Firstly, as the Defendant submitted, it is not consistent with the actual explanation given by Mr Khoo in his evidence as to how TP1’s admission came to me made, which did not mention any reliance on the letter dated 13 December 2022 from TP2’s insurer. Secondly, if anything, the fact that neither the Defendant nor TP2 had identified the factual foundation for the assertion that the 2 Forklift Trucks belonged to TP1 would mean that it is more likely that TP1 would have acted more cautiously and to conduct its own investigation, rather than acted carelessly.

84.Moreover, as the Defendant pointed out, the letter from TP1’s solicitors dated 21 June 2023 not only stated “We are instructed that our client was the owner of the 2 forklift trucks.”, but also stated “However, the operators of the 2 forklift truck were NOT the employee of our client.”

85.The Defendant submitted that not only was the first sentence an unequivocal confirmation, made without any reservation saying that the Defendant was unsure or that it needed to make further enquiries to ascertain the full facts, or using any wording suggesting that any reliance was being placed on what the Defendant had asserted, but that the second sentence was both specific and deliberate. It was not necessary for TP1’s solicitors to have gone any further beyond the first sentence, but the point was made specifically that TP1 denied that the drivers of the Two Forklift Trucks were its employees. The Defendant said this indicated that TP1 knew exactly who the drivers of the Two Forklift Trucks were and wanted to expressly disavow responsibility for the actions of the drivers of the Two Forklift Trucks, with the intention of relying on the independent contractor argument.

86.I agree with the Defendant’s submission. I find TP1’s initial admission to be telling and that Mr Khoo did recognize the Two Forklift Trucks in CCTV Footage 2 or otherwise knew that the Two Forklift Trucks in CCTV Footage 2 were TP1’s, which was why he had given instructions to TP1’s lawyers resulting in that admission.

87.For the aforesaid reasons, I disbelieve Mr Khoo’s evidence that he did not recognize the Two Forklift Trucks in CCTV Footage 2. For much the same reasons, I find on the balance of probabilities that the Two Forklift Trucks in CCTV Footage 2 were TP1’s.

88.TP1 also argued that it did not have ownership or control of the forklift trucks which TP1 allowed its alleged independent contractor (who that independent contractor was and whether there was a contracting relationship are explored further below) to use.

89.At §5 of its Amended Defence in the third party proceedings, TP1 averred that at the material time it “owned and/or was in possession of 8 forklift trucks … which were used, operated and parked inside the Building …”. (emphasis added)

90.Mr Khoo’s evidence was that the 5 unlicensed forklift trucks (the “Unlicensed Forklift Trucks”) which it had allowed its alleged independent contractor to use did not actually belong to TP1, but had been left with TP1 in late 2018 by a “Mr Yeung”, who Mr Khoo had previously had business dealings with. According to Mr Khoo, “Mr Yeung” had said that TP1 could rent the Unlicensed Forklift Trucks out, but if he (ie. “Mr Yeung”) ever decided to come back to the logistics business he would take back the Unlicensed Forklift Trucks. Thus, Mr Khoo said, he did not regard the Unlicensed Forklift Trucks as belonging to TP1.

91.At the very least, TP1 had possession of and clearly exercised control over the Unlicensed Forklift Trucks, including allowing an alleged independent contractor to use them (whether the arrangement was in the nature of a lease or something else).

92.The upshot of TP1’s case is that having denied making the admission that TP1 was the owner of the Two Forklift Trucks, it relied on a case whereby the ownership of the Two Forklift Trucks was shrouded in mystery to assert that the Defendant had failed to prove that the Two Forklift Trucks belonged to TP1. It was furthermore TP1’s contention that even if the Court found that the Two Forklift Trucks belonged to TP1, the Defendant must still establish a legal basis upon which liability can be attributed to TP1, relying on Chong Ngan Seng for the proposition that mere ownership of a vehicle is insufficient to fix the owner with vicarious liability for the negligence of its driver. TP1 contended that the Defendant must additionally establish that the operators of the Two Forklift Trucks were acting as TP1’s employees, agents or persons for whose acts TP1 was responsible.

93.Not only did TP1 exercise such a degree of control over the Unlicensed Forklift Trucks that it could dictate whatever terms it liked to allow its alleged independent contractor to use them, including charging rent (even though on TP1’s case the arrangement with its alleged independent contractor did not include an element of a straight rental charge), but according to Mr Khoo’s evidence, TP1 later disposed of the Unlicensed Forklift Trucks in 2023 rather than returning them to “Mr Yeung”, and did so without first seeking permission from “Mr Yeung”. Based on the evidence, I find that even if the Unlicensed Forklift Trucks had once belonged to someone else, they had been given to TP1 and TP1 could do whatever it wanted with them. Contrary to Mr Khoo’s assertion that he did not regard the Unlicensed Forklift Trucks as belonging to TP1, I find that they did belong to TP1 at the time of the Accident.

94.However, I agree that as a matter of law, the ownership of the vehicle is not determinative, and the question, in determining whether TP1 is vicariously liable for the negligent acts of the drivers of the Two Forklift Trucks, is whether the drivers were operating the Two Forklift Trucks for TP1’s purposes under delegation of a task or duty, such that at the material time they had authority, express or implied, to drive on TP1’s behalf.

G.  THE INDEPENDENT CONTRACTOR ISSUE

95.Both in TP1’s pleadings and in Mr Khoo’s witness statements, it was said that TP1 entered into an oral agreement in or around mid-2019 (the “Agreement”) with Lee Siu Yin (“Siu Yin”), trading as Siu Ho Trading Company (“SH Trading Company”) whereby it engaged Siu Yin as its independent contractor to provide logistics services to TP1 at night time, and 6 forklift trucks were given to Siu Yin for his exclusive use and control (being the Unlicensed Forklift Trucks and 1 licensed forklift truck with licence plate beginning with UK).

96.Very detailed terms of the Agreement were set out in TP1’s pleadings and in Mr Khoo’s original witness statement, including the term that Siu Yin agreed to drive and use only the licensed forklift truck on roads, and to be wholly liable for all loss and damage caused by, inter alia, the misuse, abuse, negligence and physical damage of the said 6 forklift trucks.

97.However, during Mr Khoo’s cross-examination at trial, a very different picture emerged.

98.Mr Khoo said that TP1’s own business was local cargo delivery business, and that in 2019 he had wanted to find someone who had experience in handling air cargo business, which involved packing cargo in a specific way onto special pallets for air cargo transportation, as he could get the business in but he himself did not have the requisite experience to do the work. Through the recommendations of one acquaintance then another, Mr Khoo was introduced to Chung Ho Yin Gary (“Gary Chung”), who did have experience in handling air cargo business. It was with Gary Chung who Mr Khoo then had discussions, over a period of a few months and both over the telephone and in person, about a co-operation arrangement. Throughout those discussions, Mr Khoo never met Siu Yin.

99.Mr Khoo said that during his discussions with Gary Chung:-

(i)  Gary Chung said that he would perform the work through his company, but he said he had different companies which he could use and did not know which one he would use.

(ii)  Although his evidence as to when the name SH Trading Company first came into the picture was confused, he did say that after the arrangement had already started, TP1 had asked Gary Chung for a business registration certificate when TP1 was preparing its tax returns, and it was at that point that the business registration certificate of SH Trading Company was provided to TP1.

(iii)  He did not ask about the scale or capabilities of Gary Chung’s operation, or what equipment or staff he had. The arrangement for TP1 to allow Gary Chung to use 6 of TP1’s forklift trucks came about as Gary Chung did not have his own and asked to use TP1’s.

(iv)  No specific charge or rent for the use of the 6 forklift trucks was discussed, but the arrangement was that TP1 would pay HK$0.19 per kg of cargo transported if Gary Chung used TP1’s 6 forklift trucks, or HK$0.25 per kg of cargo transported if Gary Chung provided his own forklift trucks.

(v)  Gary Chung mentioned that he had a partner but he did not say who. The name of Siu Yin only came up after an agreement had been reached. Mr Khoo was told that Siu Yin was responsible for the financial and accounting side of things, which was why after the arrangement started, TP1 made all payments to Siu Yin, but Siu Yin was not involved in performing the actual work, for which Gary Chung was responsible.

100.So who TP1 had made the Agreement with was totally different from what had been pleaded by TP1 and set out in Mr Khoo’s witness statement. It was clearly not with Siu Yin. It could not have been with SH Trading either, which was a sole proprietorship of Siu Yin, and which Gary Chung had no interest in or connection to. Furthermore, SH Trading ceased business on 1 October 2020.[1]

101.Mr Khoo also said that it was not the case that the detailed terms of the Agreement as pleaded or as set out in his witness statement were actually discussed and agreed between Mr Khoo and Gary Chung, using the same or similar words, on any one particular occasion. Rather, Mr Khoo said, what has been pleaded to be the terms of the Agreement represented all of the terms which would be required to regulate their business relationship.

102.Insofar as the pleaded term that Gary Chung had agreed to drive and use only the licensed forklift truck on roads was concerned, Mr Khoo said that this term had not actually been expressly discussed or agreed between him and Gary Chung, but represented things which Gary Chung ought to have known and accepted.

103.Insofar as the pleaded term that Gary Chung would be wholly liable for all loss and damage caused by the 6 forklift trucks was concerned, Mr Khoo said that compensation for such incidents had only been discussed after the business relationship started, when Gary Chung or his people had made a mistake leading to loss or damage.

104.So the overall picture which emerged as to when the Agreement had been reached, and if so what its terms were, was also wholly different from, and stood in stark contrast to, what had been pleaded by TP1 and set out in Mr Khoo’s witness statement.

105.During cross-examination, Mr Khoo also disclosed for the first time that TP1 and Gary Chung had a similar co-operation arrangement at another industrial building in Kwai Chung, which had started a few months after they started their business relationship at the Building, and Mr Khoo said that some of the summaries or records produced by TP1 to evidence the financial dealings between TP1 and Gary Chung in relation to the Building may have mixed in their financial dealings in relation to the Kwai Chung site also.

106.Mr Khoo did not give any further details about TP1’s dealings with Gary Chung in relation to the Kwai Chung site, and there was no other evidence adduced by TP1 about those dealings. However, it did reinforce the picture that all of Mr Khoo’s dealings were with Gary Chung, and not with Siu Yin or SH Trading.

107.Overall, Mr Khoo’s evidence as to who TP1’s independent contractor was and who it was said an oral agreement had been entered into with was vague and confused. What is clear however is that Mr Khoo did not have any discussions or direct dealings with Siu Yin, and that SH Trading was not involved. All of Mr Khoo’s dealings were solely with Gary Chung.

108.Mr Khoo was also asked why TP1 had pleaded that the Agreement ended in August 2021. Mr Khoo said that this was because to his understanding Gary Chung and Siu Yin had fallen out around that time and parted ways. However, TP1’s records showed that work had continued to be performed and TP1 had continued to make payments to Gary Chung subsequent to that point in time. This also shows that TP1’s relationship was with Gary Chung and not anyone else. Whilst Mr Khoo sought to characterize this (ie. the fact that from August 2021 onwards the person to whom TP1 issued cheques changed from Siu Yin to Gary Chung) as an “accounting issue”, this does not change the analysis that the Agreement was not made initially with either Siu Yin or SH Trading.

109.Taking into account all of the foregoing, I find that any agreement which TP1 had was with Gary Chung, and not with either Siu Yin or SH Trading. As to what the nature and the terms of that arrangement were, it is impossible in light of the factual evidence to find that there was any agreement which existed in any form resembling what has been pleaded as the Agreement. Rather, given the way in which Mr Khoo conducted his dealings with Gary Chung, which was that everything was done verbally, and Mr Khoo did not consider that everything had to be discussed explicitly, it is likely that only basic terms, such as what TP1 would pay Gary Chung, were agreed prior to their commencing their working relationship.

110.In relation to TP1’s assertion that it was a term of the Agreement that it had granted exclusive use and control of the 6 forklift trucks to its alleged independent contractor, the Defendant submitted that it is more likely than not that TP1 made no distinction between the 8 forklift trucks which it owned and/or possessed, which were all used by its employees, its agents or their employees, and no independent contractor had exclusive use and control of the Unlicensed Forklift Trucks. In this regard, the Defendant relied on the following points based on the witness evidence in support of its submission:-

(i)  Whilst Mr Khoo had stated in his evidence that TP1 had reserved two forklift trucks (with licence plates beginning with VP) for its own operations, Mr Khoo had later said that none of his staff had the licence to operate those two licensed forklift trucks and he would not allow his own staff to drive those two licensed forklift trucks out of the Building.

(ii)  That being the case, the Defendant submitted that it was illogical and against business efficacy for TP1 to have only retained those two licensed forklift trucks and to have given exclusive use and control of the third licensed forklift truck and the Unlicensed Forklift Trucks to its alleged independent contractor.

(iii)  When asked about the storage and parking of the 6 forklift trucks after the commencement of the relationship with Gary Chung, Mr Khoo said that he did not know where the 6 forklift trucks were parked, but agreed that he had never seen Gary Chung transfer the 6 forklift trucks away from the Building.

(iv)  The Defendant submitted that it is inherently unlikely that Gary Chung would transport the forklift trucks he used to the Building every night and take them away again after each night’s work, and that given it was Mr Pat’s uncontested evidence that all forklift trucks had to be parked by tenants in their own workshops and not in the common area of the Building, the 6 forklift trucks were parked in TP1’s workshop at the Building when not in use.

(v)  Mr Khoo asserted that under the terms of their arrangement, Gary Chung was allowed to use the 6 forklift trucks for his own business, although Mr Khoo had never seen Gary Chung conducting his own business and did not know the extent to which Gary Chung would conduct his own business whilst using the 6 forklift trucks at the Building. The Defendant submitted that it is implausible, given TP1’s case that the 6 forklift trucks were given to its alleged independent contractor to perform TP1’s work at the Building, that TP1 would have permitted its alleged independent contractor to do other work with the 6 forklift trucks, about which no concrete evidence was put forward by TP1.

111.Taking into account the inherent discrepancies in Mr Khoo’s evidence about the existence of the Agreement and its terms, and the contradictions between TP1’s pleaded case and Mr Khoo’s evidence about the existence of the Agreement and its terms, and the aforementioned evidence from Mr Khoo in relation to the use and control of the 6 forklift trucks, I find that there was no granting of exclusive use and control of the 6 forklift trucks to Gary Chung.

112.I have found against TP1’s case that it had entered into the Agreement as pleaded with either Siu Yin or SH Trading Company. I have also found against any case that TP1 entered into the Agreement as pleaded with Gary Chung. As to the actual relationship between TP1 and Gary Chung, the Defendant submitted that the relationship between TP1 and Gary Chung was one of agency and/or employment, rather than one of independent contracting. In support of this submission, the Defendant relied on, inter alia, the following points:-

(i)  That TP1 was dealing with Gary Chung, an individual, and not a company.

(ii)  An independent contractor would have provided all his own tools and equipment. However, TP1 provided the forklift trucks and the freight pallets for international logistics services which Gary Chung needed to service TP1’s work.

(iii)  An independent contractor would have hired and been responsible for paying his own workers. However, TP1’s records of the services provided by Gary Chung to TP1 showed that TP1 had paid Gary Chung for some part-time workers who Mr Khoo said were employed by Gary Chung to perform the work.

(iv)  That Mr Khoo knew most if not all of Gary Chung’s alleged staff. At first, Mr Khoo said he did not know who and how many people Gary Chung would bring to the Building each day. Later on in his evidence, Mr Khoo accepted that he actually knew several members of Gary Chung’s staff (namely 阿聲and 老野). TP1 also had direct financial dealings with 老野, and continued to give work to 老野 after Gary Chung allegedly disappeared in around May 2023. The Defendant submitted that 阿聲and 老野 were in fact agents and/or employees of TP1, and not of Gary Chung.

(v)  An independent contractor would have borne financial risk. However, in the arrangement between TP1 and Gary Chung, in addition to providing the forklift trucks and other equipment, it was Mr Khoo’s evidence that TP1 would settle in the first instance any claims for compensation by third parties arising from the actions of Gary Chung and those he employed, before claiming contribution from Gary Chung.

113.TP1, on the other hand, sought to rely heavily on contemporaneous documents which it said indicated that the relationship was one of independent contracting. This included TP1’s internal accounting documents (which recorded payments as being made to 兆浩貿易公司 ie. SH Trading Company) and purchase journals (which described payments to Siu Yin as “Sub-Contracting-裝板”). TP1 also relied on its audited accounts which recorded the payments as subcontracting expenses rather than salaries or wages.

114.In its closing submissions, TP1 sought to suggest that it did not matter who Mr Khoo thought TP1 was sub-contracting with, and that one ought to rely upon TP1’s internal documents to establish who TP1 was sub-contracting with.

115.However, one major problem with what is stated in TP1’s own documents is that they do not present any uniform picture as to who any independent contracting relationship was with. Furthermore, the clear impression which I received from Mr Khoo’s evidence was that the way that things were recorded were done for convenience and/or did not necessarily accord with the underlying actual position.

116.The most obvious example is that whilst some of the internal documents were said to be evidence that SH Trading Company or Siu Yin was the alleged independent contractor, based on the fact that they recorded payments as having been made to SH Trading Company or Siu Yin, based on the witness evidence, neither SH Trading Company nor Siu Yin was the party which performed the work under the alleged independent contracting arrangement.

117.Another example is TP1’s reliance on its internal documents as evidence of instances where the independent contractor (rather than TP1) paid out compensation for damage caused by its own acts pursuant to the terms of the Agreement. However, as I have found above, based on Mr Khoo’s own evidence, the term of the Agreement which TP1 had pleaded had been agreed (that Siu Yin agreed to be wholly liable for all loss and damage caused by, inter alia, the misuse, abuse, negligence and physical damage of the said 6 forklift trucks) had not been agreed before the business relationship between TP1 and Gary Chung had started, and had only been discussed on what appears to have been a case-by-case basis when such incidents occurred. So the fact that any compensation had been paid by another party (rather than TP1) on any given occasion was not proof of the independent contracting relationship which TP1 asserted had been created in the discussions between Mr Khoo and Gary Chung leading to the existence of the Agreement.

118.A further example is that Mr Khoo testified that TP1 and Gary Chung also had other business dealings (the arrangement at another industrial building in Kwai Chung, about which no other evidence had been tendered by TP1) and that some of TP1’s internal documents mixed in and also reflected financial transactions arising from those business dealings. That being the case, it is impossible to place any reliance on TP1’s internal documents as evidence of the financial transactions between TP1 and Gary Chung relating to the Agreement and/or to the Building only.

119.The meaning of what was shown in TP1’s internal documents was not plain and obvious, and Mr Khoo was unable to answer any questions about the contents of those internal documents, stating that he was not involved in their preparation. In short, Mr Khoo was unable to provide any assistance as to how those internal documents should be interpreted. Clearly, Mr Khoo was not intended to be a witness who could speak to the contents of the internal documents. If TP1 had intended to place reliance on the internal documents, it ought to have tendered a witness who was involved in their preparation to speak to the contents of the internal documents. TP1 did not do so.

120.For the foregoing reasons, I did not find TP1’s own documents to be a reliable source of evidence as to the existence of an independent contracting relationship or who that relationship was with.

121.For the sake of completeness, I should mention that it was the Defendant’s submission that adverse inferences should be drawn against Mr Khoo regarding his evidence/explanations about the ownership of the forklift trucks, about the existence and terms of the Agreement and about the alleged independent contracting relationship, because TP1 had not called any of the relevant individuals involved, in particular Gary Chung and 老野, to give evidence corroborating Mr Khoo’s evidence/explanations about such matters.

122.I agree that it is unsatisfactory that TP1 ran a case that it was not liable because the acts concerned were those of an independent contractor, without calling any of the individuals involved in that independent contracting relationship to give evidence, and obscured who that independent contracting relationship was with until trial. Whatever TP1’s reasons for hiding Gary Chung’s identity and/or involvement, which this Court will never know, it contributed to a situation where there were extensive problems with the evidence put forward by TP1.

123.The onus is on TP1 to make out its case that there was an independent contracting relationship and who that relationship was with. For the foregoing reasons, including the extensive problems with the evidence put forward by TP1 summarised above, I find that TP1 has failed to do so. For the foregoing reasons, I find on the balance of probabilities that Gary Chung was not an independent contractor of TP1, and that Gary Chung and the drivers of the Two Forklift Trucks on the night of 30 October 2020 were agents of TP1.

H.  WAS TP1 NEGLIGENT?

124.I have found that the Unlicensed Forklift Trucks were owned by TP1 at the material time and that the 1^st Trench Cover was damaged by the 1^st Forklift Truck, which led to the Accident. I have also found that Gary Chung and the drivers of the Two Forklift Trucks on the night of 30 October 2020 were agents of TP1.

125.I now turn to the question of whether TP1 is vicariously liable if the negligence of the drivers of the Two Forklift Trucks is established.

126.As indicated above, based on the principles set out in Chong Ngan Seng, this question is to be answered by determining whether the drivers were driving the vehicles for TP1’s purposes under delegation of a task or duty, such that at the material time they had authority, express or implied, to drive on TP1’s behalf.

127.Mr Khoo accepted in his evidence that on the night of 30 October 2020, Gary Chung was using the Two Forklift Trucks to provide services for TP1. Mr Khoo’s evidence was that every night when Gary Chung arrived for work, he would be handed a document listing out all of the work that would have to be done by him that night. So all of the work which Gary Chung performed based on those instructions would have been authorised or requested by TP1.

128.However, TP1 submitted that in order for TP1 to be vicariously liable, the activities of the drivers of the Two Forklift Trucks had to be authorised and/or requested by TP1, and TP1 had not authorised and/or requested the drivers of the Two Forklift Trucks to go outside the Building or go onto the Pavement.

129.I have already found that TP1 has not proved the existence of the Agreement as pleaded, which allegedly contained a term that Siu Yin agreed to drive and use only the licensed forklift truck on roads. To the contrary, during his evidence, in addition to saying that the work which Gary Chung performed would involve driving forklift trucks onto the road outside the Building to deal with the air cargo pallets, Mr Khoo also said that TP1 could not control what Gary Chung used the Unlicensed Forklift Trucks for, but that if Gary Chung drove them onto the road then he would need to bear the consequences of doing so himself.

130.Mr Khoo also stated in his evidence that the reason TP1 had acquired 3 forklift trucks which were permitted to travel on the roads within a certain distance from the Building was because he had been advised by acquaintances that due to the layout of the Building, it might be necessary to conduct loading and off-loading operations on the road outside the Building from time to time.

131.So Mr Khoo was clearly aware that Gary Chung might drive the Unlicensed Forklift Trucks out of the Building to conduct loading and off-loading operations on the road outside the Building, but essentially took the view that it was of no concern to him.

132.In my view, it was clearly contemplated by TP1 that in instructing Gary Chung to perform the relevant work, the drivers of the forklift trucks might go onto the road, but TP1 did nothing to prohibit or regulate such actions. That being the case, if the drivers of the Two Forklift Trucks went outside the Building or onto the Pavement on the night of 30 October 2020, such actions were authorised and/or requested by TP1.

133.TP1 then argued that the damage to the 1^st Trench Cover and the consequent risk of injury to pedestrians was not reasonably foreseeable. TP1’s argument was that as licensed forklift trucks could go on the Pavement on which the Trench Covers were located, it was not foreseeable that damage would be caused by forklift trucks going onto the Pavement.

134.TP1 submitted that under Section 2 of the RTO, the definition of roads, which is as follows, does not exclude pedestrian footways:-

“includes every highway, thoroughfare, street, lane, alley, court, square, car park, passage, path, way and place to which the public have access either continuously or intermittently, whether or not the same is the property of the Government, and includes the carriageway of the North-west Railway, but does not include any private road, or any part of the carriageway of the North-west Railway designated by the Commissioner for the purposes of this definition by notice in the Gazette”

135.TP1 submitted that where the legislature intended to exclude a pedestrian footway from the meaning of “road”, it did so expressly in other sections of the RTO, and cited the example of Section 123(5) of the RTO which states:-

“[i]n this section road does not include any road or portion of a road which comprises a footway within the meaning of regulation 2 of the Road Traffic (Traffic Control) Regulations (Cap 374 sub leg G), any pedestrian road within the meaning of regulation 29 of those regulations, or any road or portion of a road set aside for bicycles or tricycles”.

136.TP1 also referred to Regulation 2 of the Road Traffic (Traffic Control) Regulations (Cap 374G) (the “RT(TC)R”) which defines a “footway” as “a pavement comprised in a road with a right of way on foot only”, and contended that this meant that a footway is not something separate from a road but rather forms part of the road. TP1 said that likewise, Regulation 29 of the RT(TC)R defines a “pedestrian road” as “a road, or any portion of a road, on unleased Government land which …”.

137.There may well be good reasons why the aforementioned provisions of the RTO and the RT(TC)R were drafted in such terms. As mentioned above, there may be sections of pedestrian walkway which intersect with car access entrances to Buildings and on which vehicles are expected to travel. However, in the present case, the Pavement ie. the section of pedestrian walkway where the Accident happened, was not at such an intersection, and was separated from the vehicular road by metal railings, such that one would not therefore expect private motor vehicles to drive onto that section of pedestrian walkway.

138.TP1 submitted that one ought not to judge the matter with the benefit of hindsight, and the issue is not whether the Accident ultimately occurred, but whether a reasonable forklift truck driver, standing in the position of the driver at the material time, ought reasonably to have foreseen the relevant risk.

139.If the driver of the 1^st Forklift Truck had driven onto the Pavement when no trench had been dug and covered with the Trench Covers, there might well have been no damage to the Pavement and no foreseeable risk of causing injury to pedestrians. But that is not what happened. What happened, as seen in CCTV Footage 2, has been described in detail above.

140.TP1 submitted that the trench covers were an abnormal susceptibility in another person’s property, and a reasonable forklift driver could not be expected to foresee that a trench cover installed in the Pavement was incapable of safely supporting forklift traffic, or to foresee that merely driving over the 1^st Trench Cover would cause it to fail and thereby create a danger to pedestrians. I disagree.

141.Firstly, the driver of the 1^st Forklift Truck would have seen and would have appreciated that the relevant section of the Pavement was covered with plastic trench covers. In my view, a reasonable forklift driver would have foreseen that such plastic trench covers might not bear the weight of a forklift truck and that there was risk that driving over it would damage it and result in injury to either himself or to others. He nevertheless decided to drive over it, and indeed ended up getting the wheel of the 1^st Forklift Truck stuck on the 1^st Trench Cover. Secondly, it is clear from CCTV Footage 2 that the driver of the 1^st Forklift Truck, the driver of the 2^nd Forklift Truck and the other person seen in the video appreciated that some damage had been caused to the 1^st Trench Cover, and knew or ought reasonably to have appreciated the consequent risk for pedestrians, but did nothing about it and took no remedial action.

142.I have already found that on the night of 30 October 2020, Gary Chung was using the Two Forklift Trucks to provide services for TP1, and the activities of the Two Forklift Trucks as shown in CCTV Footage 2 were authorised and/or requested by TP1.

143.In my view, once the incident captured on CCTV Footage 2 had occurred, it was reasonably foreseeable that the damage to the 1^st Trench Cover might cause injury to any pedestrian walking on the Pavement and on the 1^st Trench Cover.

144.I find that the drivers of the Two Forklift Trucks were negligent as they (i) operated Two Forklift Trucks out of the boundary of the Building onto the Pavement and damaged the 1^st Trench Cover, (ii) knew or should have known that the 1^st Forklift Truck had damaged the 1^st Trench Cover which became a hazardous object for any pedestrian to walk on, and (iii) did not report the damage or take any remedial measures.

145.I further find that TP1 was vicariously liable for the negligence of the drivers of the Two Forklift Trucks which caused the Accident.

146.I would mention that submissions were advanced by the Defendant and TP1 in relation to the point as to whether, even if the Court did find that Gary Chung was an independent contractor, TP1 remained liable for its own negligence.

147.As stated in Luen Hing Fat, whilst a person is not vicariously liable for his independent contractor’s torts, it remains the case that he may be liable for his own negligence, for example in failing to take care to select a competent contractor. The Defendant argued that even if the Court found that Gary Chung was an independent contractor of TP1, TP1 had failed to exercise reasonable care in selecting the contractor and was hence liable. TP1 argued that no such case has been pleaded against TP1 and that the Defendant should not be permitted to pursue an unpleaded allegation of negligence at trial. In response, the Defendant submitted that such a case had not been pleaded due to TP1 obfuscating the identity of the independent contractor and not disclosing and pleading facts which the Defendant could have responded to. As I have already found that Gary Chung was not an independent contractor of TP1, and that TP1 was vicariously liable for the negligence of the drivers of the Two Forklift Trucks, it is not necessary for me to go on to consider whether TP1 was nevertheless liable for its own negligence.

I.  WAS TP2 NEGLIGENT?

148.The case which was pleaded by the Defendant against TP2 in the Re-Re-Amended Third Party Notice under the Section headed “Particulars of the Negligence of the 2^nd Third Party” was as follows:-

“(1) Allowing and permitting the aforesaid 2 forklift trucks owned by the 1^st Third Party to travel out of the entrance of the Building onto the public road and/or pedestrian footway at Cheung Tat Road in contravention of the Regulation, the Conditions of Licence, and/or regulation 111 of the Road Traffic (Construction) and Maintenance of Vehicles) Regulations Cap. 374A.

(2) Allowing and permitting the aforesaid 2 forklift trucks to travel out of the entrance to the Building onto the public road and/or pedestrian footway at Cheung Tat Road without any proper licences issued by the Commissioner for Transport in breach of the Road Traffic Ordinance, Cap. 374.

(3) Allowing and permitting the aforesaid 2 forklift trucks to travel out of the entrance to the Building onto the public road and/or pedestrian footway at Cheung Tat Road without insurance coverage in breach of Section 4 of the Motor Vehicle (Third Party Risks) Ordinance, Cap 272.

(4) Allowing and permitting the aforesaid 2 forklift trucks to travel out of the entrance of the Building with full knowledge of the potential hazard that they (or either one of them) could roll over the plastic trench covers placed by the Defendant on the pedestrian footway at Cheung Tat Road, and break and damage the cover(s).

(5) Failing to check the plastic trench cover(s) of the Defendant after allowing and permitting the aforesaid 2 forklift trucks to operate on the public road and the pedestrian footway at Cheung Tat Road close to the entrance of the Building.

(6) Failing to report the damage of a plastic trench cover to the Defendant and/or the Police.

(7) Failing to replace the Broken Plastic Trench Cover by another trench cover to prevent members of the public from walking over the Broken Plastic Trench Cover.

(8) Failing to put up a warning sign and to warn members of the public not to walk over the Broken Plastic Trench Cover.

(9) Failing to take any other remedial measures to ensure that members of the public could safely use the pedestrian footway at Cheung Tat Road, or otherwise would not walk over the Broken Plastic Trench Cover.

(10)  Failing to enforce the due observance and performance by the 1^st Third Party of the covenants and conditions of the DMC and/or Sub-DMC and to take any action in respect of any breach thereof.”

149.As indicated above, TP2 argued that it did not possess any power as the building manager of the Building to do any acts outside of the area of the Building, so none of the aforementioned conduct by TP2, even if proved, would give rise to any liability on the part of TP2. To put it more succinctly, TP2 argued that it did not have any duty (i) to enforce licensing laws or road traffic statutes, (ii) to prevent the hazard which was created by TP1, or (iii) to inspect the trench covers, ensure the safety of the worksite or to remedy the damage.

150.I agree that, per Lam Tam Luen v Asia Television Ltd, TP2 could only be made to bear responsibility for what the Two Forklift Trucks did if the Defendant can establish that there had been an assumption of responsibility giving rise to a duty of care to prevent TP1 from causing injury to the Plaintiff.

151.TP2 argued that it did not assume any responsibility to ensure that the Trench Covers were safe and there was no special relationship between the Plaintiff and TP2, and as such TP2 did not owe the Plaintiff any duty of care for any hazard created by the drivers of the Two Forklift Trucks.

152.TP2 further argued that even if the Defendant makes good its contention that TP2 ought not to have allowed and permitted the Two Forklift Trucks to travel out of the entrance of the Building, this was an omission, a failure to intervene, rather than a positive act, and a failure to prevent an act by TP1 to cause damage to the Plaintiff did not constitute any breach of duty.

153.The Defendant submitted that this Court ought to find that, under the principles set out in Lam Tam Luen v Asia Television Ltd, a duty on the part of TP2 to prevent a third party from causing damage to another had arisen. The Defendant argued that the following two situations where a duty may be imposed were satisfied:-

(i)  There was a special relationship between TP2 and TP1 based on control by TP2; and/or

(ii)  TP2 was responsible for a state of danger which may be exploited by TP1.

154.In relation to the existence of a special relationship, the Defendant argued that there was a high degree of foreseeability that forklift trucks would go out of the Building and onto the Pavement outside the entrance of the Building when conducting loading and unloading activities at the entrance outside the Building, and that danger would be caused to pedestrians using the Pavement, and TP2 had the power and the duty to control/regulate the moving of forklift trucks between the inside of the Building and the outside of the Building. Hence, TP2 had a special relationship with TP1 based on control by TP2 and owed a duty of care to prevent TP1 from causing damage to pedestrians such as the Plaintiff.

155.In relation to the allegation that TP2 was responsible for a state of danger, the Defendant relied on the existence of the gap next to the barrier gate to the carpark entrance of the Building through which forklift trucks and pedestrians could pass (and which TP2 permitted to happen).

156.The Defendant also relied on the following matters in support of its argument:-

(i)  The Pavement where the trench was dug was closely adjacent to the entrance of the Building. TP2 knew or should have known that people and forklift trucks going into and out of the Building would pass by that part of the Pavement.

(ii)  TP2 was informed of the progress of the Defendant’s work, and in particular, that the Trench would be dug on the Pavement and would not be covered by any steel plate. Hence, TP2 knew and should have known that forklift trucks could damage the Trench Covers if they were allowed to drive through it.

(iii)  TP2 either failed to stop the Two Forklift Trucks from moving out of and into the Building, or permitted or allowed the Two Forklift Trucks to do so.

157.The Defendant appears to have conflated the scenario of forklift trucks moving out of the Building to conduct loading and unloading activities on the road near the entrance to the Building, and the scenario of forklift trucks moving onto the Pavement.

158.TP2 may have been concerned with any vehicles conducting loading and unloading activities on the road near the entrance to the Building, which might have blocked vehicle access to the Building. But there was no reason for TP2 to foresee that conducting loading and unloading activities near the entrance to the Building would involve driving forklift trucks onto the Pavement and as a result potentially endanger pedestrians, given that the Pavement was not on a section of pedestrian walkway which intersected with the car park entrance to the Building, and was to the side of the car park entrance to the Building separated from the vehicular road by metal railings.

159.There was an issue raised by TP2 as to whether the Defendant ought to have covered the Trench with plastic trench covers or steel plates. The thrust of Mr Lau’s evidence on this issue was that if vehicular access was required over a trench which the Defendant had dug, for example immediately in front of the car park entrance of the Building, the Defendant would cover the trench with steel plates, however if the trench was on a pedestrian walkway, they would cover the trench with plastic trench covers as they would not expect vehicles to drive over those areas.

160.Mr Lau was asked about the excavation permit issued by the police and the conditions under that permit, in particular about one of the additional conditions which stated “Excavation not being worked on should be temporarily decked over by steel plate with its top level flushed with the existing rigid/flexible carriageway”. When asked whether this required the Defendant to use steel plates rather than plastic trench covers to cover the Pavement, Mr Lau said that this condition only referred to carriageways, which meant vehicular roads.

161.I agree with Mr Lau’s construction of the permit conditions, and I find that Mr Lau’s explanation (that steel plates would be used to cover trenches which vehicles would drive over, and plastic trench covers would be used for pedestrian walkways) makes eminent sense. As I have indicated above, one would not ordinarily expect private motor vehicles to drive over sections of pavement which would ordinarily only be used by pedestrians. I therefore do not consider that the Defendant was required to deck over the trench in the Pavement with steel plates. In any event, insofar as TP2 is concerned, TP2 submitted that the decision to use plastic trench covers and not steel plates was one which was made by the Defendant, and that no consequences flowing from this decision could be attributed to TP2, and I agree.

162.The following are aspects of the witness evidence which could be said to be relevant to the analysis of TP2’s liability:-

(i)  Mr Khoo said that TP2 had given TP1 warnings from time to time not to conduct their loading and off-loading operations on the road outside the Building.

(ii)  There was evidence that TP2 took steps to discourage its tenants from conducting loading activities on the road immediately outside the Building, and that a cylindrical cone had been placed in the gap next to the carpark barrier gate through which forklift trucks might pass to go onto the road immediately outside the Building.

(iii)  Mr Lau said that he had found out about the Accident at around 8:00 am on the morning of 31 October 2020 ie. within a couple of hours after the Accident occurred, as the Defendant was conducting other works in the area and the foreman on site told Mr Lau about the crack in the Trench Covers. Steps were then immediately taken to replace the broken Trench Cover as the Defendant had supplies nearby.

(iv)  Mr Lau also said that he would not expect or rely upon TP2 to take steps to replace the broken Trench Cover or to otherwise do anything in that situation.

(v)  Mr Pat gave examples of when TP2 might act to intervene in matters which happened outside the Building but which affected the Building, such as when there were vehicles being parked outside the Building which affected the traffic into and out of the Building. But Mr Pat’s evidence was that in such a situation, TP2 might ask the vehicle to leave, and if the vehicle refused to leave, TP2 might consider reporting the matter to the police.

163.In my view, whatever TP2 had done to discourage TP1, or indeed any other tenants, from conducting loading activities on the road immediately outside the Building was clearly done from the perspective of the manager of the Building seeking to ensure that there was no blockage to the carpark entrance of the Building, rather than to regulate what motorized vehicles moving in or out of the Building did once outside of the carpark entrance of the Building. TP2 simply had no power to regulate what motorized vehicles moving in or out of the Building did once outside of the carpark entrance of the Building, and what TP2 had done could not be said in any way to have constituted an assumption of responsibility for what motorized vehicles moving in or out of the Building did once outside of the carpark entrance of the Building.

164.Furthermore, whatever the state of knowledge of TP2 about forklift trucks moving out of the Building to conduct loading and unloading activities on the road near the entrance to the Building, in my view, it was not reasonably foreseeable by TP2 that such loading and unloading activities near the entrance to the Building would involve forklift trucks driving onto the Pavement and as a result potentially endangering pedestrians.

165.It was also the case that, on the evidence, TP2 was not aware of the broken Trench Cover until some time after the Accident had occurred.

166.For the aforementioned reasons, and leaving aside any argument that any duty arose from the terms of the DMC and/or Sub-DMC, which shall be addressed further below, I am unable to find that TP2 was under any duty to prevent the Two Forklift Trucks from travelling out of the entrance of the Building (or indeed had any power to do so). I also do not consider that TP2 could have reasonably foreseen that the Two Forklift Trucks would drive onto the Pavement and damage the Trench Covers, and I do not consider that any of the allegations which the Defendant has made about the conduct of TP2 (being aware of the activities of TP1, failing to ensure that TP1’s forklift trucks did not go out of the Building to conduct loading and unloading activities, failing to take steps to prevent the Two Forklift Trucks from leaving the Building, failing to take steps to check the Trench Covers or take remedial measures etc) amounted to anything more than omissions to act, and certainly did not constitute any positive acts which created the danger and caused the Plaintiff’s injury.

167.As stated in Tindall, a person owes no common law duty to protect another person from harm or to take care to do so, and liability can arise only if a person acts in a way which makes another worse off as a result. TP2 submitted that it did not do anything which made the situation worse, and as such, it cannot be held liable for not being a good Samaritan, even assuming that it had knowledge of the hazard in the first place and was in a position to do something about it. In any event, TP2 submitted that it certainly did not irresponsibly turn a blind eye to a hazard which it was aware of. I agree.

I.1  The DMC Argument

168.The Defendant also sought to rely on the following provisions under Section B.1 of the DMC which it said gave rise to a duty on the part of TP2 to regulate what the Two Forklift Trucks did outside of the Building:-

(i)  Clause (j): to prevent the obstruction of any of the Common Areas or the top roof or of the roadways pavements and open areas within the Land and the Development.

(ii)  Clause (r): to manage, control and maintain the parking of cars and other vehicles and the loading and unloading of goods within the Development and the flow of vehicular traffic over all roads and other areas intended for such purposes and in particular to ensure that the Car Parking Spaces and loading and unloading areas are used solely for their intended purposes and the latter remain unobstructed.

(iii)  Clause (z): to enforce the due observance and performance by Owners or any person occupying any part of the Development under or with the consent of such Owners … and to take action in respect of any breach thereof including the commencement conduct or defence …

169.As is commonly known, a deed of mutual covenant regulates the relationship between the co-owners and occupants of individual units in a multi-storey building, setting out their rights and obligations. A deed of mutual covenant is legally binding upon all the owners, persons deriving title from the owners and occupants of the building, including tenants of individual units.

170.TP2’s submissions in response to the Defendant’s case based on the DMC were as follows:-

(i)  The Defendant and the Plaintiff were not parties to the DMC, and did not have any locus to enforce the terms of the DMC.

(ii)  Under the DMC, the purpose of TP2’s duties was limited to managing the Building and the Building itself, and did not extend to managing areas outside of the boundaries of the Building.

(iii)  Cheung Tat Road is a public pedestrian pavement, and does not fall “within the Land” or “within the Development” as defined in the DMC or Sub-DMC. The DMC did not impose any duty on TP2 to ensure the safety of the Pavement, which was public land.

(iv)  Clause (j) related to obstructions of common areas within the Building, rather than temporary placement of goods at the entrance as part of loading or unloading process.

(v)  Clause (z) applied to situations where TP2 was required to take legal actions to enforce the DMC.

171.I agree with TP2’s submissions. The Defendant sought to argue that as a matter of construction of Clause (j), it was to be construed as meaning that TP2 had (i) a duty to prevent the obstruction of “any of the Common Areas”, and (ii) a duty to prevent the obstruction of “the top roof or of the roadways pavements and open areas within the Land and the Development”. Hence, the argument went, the duty to prevent obstruction of the Common Areas encompassed not only obstructions within the Land and the Development, but obstructions outside the Land and the Development which obstructed the Common Areas of the Building.

172.In my view, not only is this a strained construction of Clause (j), but it also would not make sense given that TP2 did not have any power to police any conduct occurring outside the Building. As the witness evidence has established, even if loading and unloading activities outside of but near the entrance of the Building affected the traffic into and out of the Building, TP2 could only ask the offending vehicle to leave, and if the vehicle refused to leave, the only other thing which TP2 might do was to report the matter to the police. Furthermore, as TP2 submitted, the 1^st Forklift Truck was not obstructing the common areas of the Building at the material time.

173.I have found above that TP2 was not under any common law duty to prevent the Two Forklift Trucks from travelling out of the entrance of the Building.

174.Similarly, I find that TP2 was not under any duty under the DMC to regulate what the Two Forklift Trucks did outside of the Building.

J.  CONCLUSION ON LIABILITY

175.For the reasons stated above, I find that TP1 was vicariously liable for the negligence of the drivers of the Two Forklift Trucks which caused the Accident, and that TP1 is liable to contribute to the Defendant’s legal liability towards the Plaintiff.

176.For the reasons stated above, I find that TP2 did not owe the Plaintiff any duty of care, because the Accident happened outside of the Building and did not fall within the management duty of TP2 as the building manager of the Building, and that TP2 is not liable to contribute to the Defendant’s legal liability towards the Plaintiff.

177.Under section 4(1) of the Ordinance, I proceed to determine what contribution from TP1 is just and equitable having regard to the extent of TP1’s responsibility for the damage in question.

178.TP1 argued that responsibility attributable to TP1 ought to be limited, as the Defendant was responsible for the excavation works and for selecting, installing, maintaining and inspecting the Trench Covers which were used to cover the Trench. However, I have already found that the Defendant was not required to have covered the Trench with steel plates under the terms of the excavation permit issued by the police. It was not the use of the plastic trench covers by the Defendant, which would have been more than capable of bearing the weight of pedestrians walking over them, which caused the Accident. Although no tests had been conducted on the 1^st Trench Cover, the Defendant had a test report which confirmed that this type of plastic trench cover would require enormous pressure to break and would not break as a result of being walked on by a pedestrian. There was no evidence that the 1^st Trench Cover was already damaged when it was installed, and indeed the photograph of the 1^st Trench Cover taken after it was installed did not show any abnormalities or signs of damage. The Accident occurred just hours later. I do not see that the Defendant could have done anything differently, and the evidence shows that within hours of being made aware of the damage to the 1^st Trench Cover, the Defendant had taken steps to replace the damaged trench cover.

179.On the contrary, I have found that it was the 1^st Forklift Truck which had caused the damage to the 1^st Trench Cover which led to the Accident. Not only was it the negligence of the drivers of the Two Forklift Trucks which had caused the damage to the 1^st Trench Cover, but if the drivers of the Two Forklift Trucks had done something after the incident to report the damage, the damage might have been remedied and the Accident might not have happened. But they did nothing.

180.It follows that the singular cause of the Accident was the damage caused by the 1^st Forklift Truck to the 1^st Trench Cover, for which TP1 is liable, and that the Defendant is entitled to recover contribution from TP1. In my judgment, it is just and equitable to order TP1 to contribute 100% of the Defendant’s liability towards the Plaintiff.

K.  WAS THE SETTLEMENT UNREASONABLE AND EXCESSIVE

181.In May 2024, the Court appointed Dr Lau Hoi Kuen as the Single Joint Expert (the “SJE”), and the SJE filed his report on 15 October 2024. Dr Lau’s attendance at trial was dispensed with. In the SJE’s report dated 15 October 2024 (the “SJE’s Report”), the SJE indicated that he examined the Plaintiff on 25 July 2024 which was more than 3 years after the Accident. The SJE found that there was good healing of the Plaintiff’s fracture. Amongst other things, he stated:

“(15) The prognosis should be good. Progressive deterioration in the condition of Ms. Chan’s right ankle in the years to come, as a result of accelerated degenerative arthritis of the joint, is not expected.

(16) For both parties’ reference, (No need for apportionment)

Degree of permanent impairment of the whole person (PIWP) is assessed at 3%

Degree of loss of earning capacity (LOEC): 4%

(17) According to Ms. Chan, her pre-injury job as a cleaning worker involved a lot of walking and squatting. As such, she does have real problem in fulfilling her duties.

She is fit for ‘lighter and more sedentary jobs’ involving less heavy manual lifting, prolonger walking, standing or squatting. She can work as a security guard of sedentary nature, a cahier, office cleaning worker or car park attendant …

(20)  The sick leave period issued by the orthopedic colleagues of PMH is considered as appropriate. She was not able to return to work after the sick leave period because of the need to have the right adrenalectomy operation.”

K.1  The Settlement Sum

182.The Plaintiff’s claim as set out in a Revised Statement of Damages dated 15 January 2025 was for HK$1,288,372.11 plus interest. TP1 argued that the settlement sum of HK$500,000 (the “Settlement Sum”) paid to the Plaintiff by the Defendant was excessive.

183.In the Defendant’s Answer to the Revised Statement of Damages, the Defendant contended that the reasonable claim for damages should be assessed as follows:-

	Head of Damages	Amount (HK$)
(1)	Pain, Suffering & Loss of Amenities (“PSLA”)	$250,000.00
(2)	Pre-Trial Loss of Earnings	$187,000.60
(3)	Post-Trial Loss of Earnings	Nil
(4)	Future Medical Treatment	Nil
(5)	Loss of Earning Capacity	Nil
(6)	Special Damages	$10,419.20
(7)	Sub-total (HK$):	$447,419.80 (plus interest)

184.Once interest is added, the Settlement Sum closely mirrors what the Defendant had contended to be reasonable, and the Defendant’s Answer to the Revised Statement of Damages represents the starting point for analysing whether the Settlement Sum was reasonable or not.

185.TP1 did not take issue with PSLA (HK$250,000) and special damages (HK$10,419.2), but submitted that the loss of earnings (HK$187,000.60) was excessive. TP1 referred to §20 of the SJE’s Report which stated that the Plaintiff was not able to return to work after the sick leave period because of the need to have a “right adrenalectomy operation”, and submitted that whilst Princess Margaret Hospital (“PMH”) issued sick leave to the Plaintiff from 31 October 2020 to 19 November 2021, the said right adrenalectomy operation was done on 17 March 2021. TP1 submitted that if the Plaintiff was not able to return to work after the sick leave period because of the need to have the said right adrenalectomy operation, the Accident was not the “but-for” cause of the Plaintiff’s loss of income in the period from 18 March 2021 to 19 November 2021, and that a reasonable period for which the Plaintiff was entitled to claim for loss of earnings following the Accident should be from 31 October 2020 to 17 March 2021.

186.The Defendant submitted that there was no clear evidence that the right adrenalectomy operation was indeed conducted on 17 March 2021. The Defendant also submitted all the sick leave granted by PMH related to the Plaintiff’s leg injury and not to the Plaintiff’s right adrenalectomy operation (it is noted in this regard that the SJE Report stated “The sick leave period issued by the orthopedic colleagues of PMH is considered as appropriate”), and further treatment was suggested for the Plaintiff after the end of the sick leave period, hence regardless of the right adrenalectomy operation, the Plaintiff’s leg injury required the entire sick leave period granted. For these reasons, I agree with the Defendant’s submission and find that the Settlement Sum of HK$500,000 was reasonable and was not excessive.

K.2  The Settled Costs

187.TP1 argued that the amount paid by the Defendant to the Plaintiff in settlement of the Plaintiff’s costs, being HK$416,032.00 (the “Settled Costs”), was excessive. The Settled Costs mainly consisted of solicitors’ time costs (HK$300,000) and Counsel’s fees (HK$85,000), with the remaining amount attributable to the costs of obtaining medical records and expert report, the Mediator’s fee and other disbursements.

188.It ought to be noted that the Plaintiff’s claimed costs were in the total amount of HK$831,339.00, so the Settled Costs already represented a reduction of almost 50% to the costs originally claimed by the Plaintiff.

189.The objections raised by TP1 were of a general nature. Firstly, TP1 submitted that the Defendant should not have contested liability after it was provided with the CCTV footage on 1 November 2022. TP1 submitted that it was unreasonable for the Defendant to contest liability as against the Plaintiff at all, and the additional costs incurred by the Defendant’s insistence on contesting liability should be disallowed.

190.The Defendant submitted that it was not unreasonable for the Defendant to have filed a Defence in the main proceedings, as the Defendant did not witness the incident and did not have any first hand knowledge of the matters shown in the CCTV footage, and whilst the Defendant had admitted that the 1^st Trench Cover was broken, the cause of the Accident was still very much subject to argument (and indeed TP1 did not admit liability despite the CCTV footage). In the circumstances, I do not consider that it was unreasonable for the Defendant to contest liability.

191.Secondly, TP1 argued that the settled costs are in any event unreasonable and excessive. TP1 took issue with the profit costs claimed by the Plaintiff’s solicitors, and submitted that the main action was a simple and straightforward personal injuries claim, which required no amendments to pleadings and no interlocutory applications, and where the pleadings were prepared or settled by counsel. TP1 submitted that, on a broad-brush approach, the Plaintiff’s solicitors profit costs, on the basis that both liability and quantum were contested, should not exceed HK$200,000 (as opposed to HK$300,000), especially given that Counsel was involved.

192.On a broad-brush approach, I do not find the profit costs claimed by the Plaintiff’s solicitors or any other component of the Settled Costs to be excessive or unreasonable.

L.  CONCLUSION

193.For the aforesaid reasons, I order that TP1 pay to the Defendant HK$916,032.00 (representing the Settlement Sum and the Settled Costs), with interest at half judgment rate from the dates of payment of the Settlement Sum and the Settled Costs until the date of this judgment and thereafter at judgment rate until full payment.

194.As to costs, as the Defendant was successful in its third party claim against TP1 and in recovering a full indemnity from TP1, I order that TP1 pay (i) the Defendant’s own costs in defending the Plaintiff’s claim, to be taxed if not agreed, and (ii) the Defendant’s costs of the third party proceedings against TP1, to be taxed if not agreed, with certificate for Counsel.

195.As I have found that TP2 is not liable to indemnify the Defendant or to make any contribution, I order that the Defendant pay TP2’s costs of the third party proceedings against TP2, to be taxed if not agreed, with certificate for Counsel.

196.The aforementioned costs orders are made on a nisi basis, which will become absolute after 14 days unless a prior application is made to vary this order.  Any variation application will be dealt with on paper.

197.I am grateful to all Counsel involved for their able assistance in this case.

Ms Alison Kao, instructed by Paul C K Tang & Chiu, for the defendant

Ms Sally Wong, instructed by Ho & Associates, for the 1^st third party

Mr Victor Gidwani, instructed by Woo Kwan Lee & Lo, for the 2^nd third party