Business Electronics Ltd v. Promotors Ltd
Read the full judgment text of HCA 264/1981 on BabelCite. This High Court CFI judgment.
1. On the 2nd April 1981 Mr. Registrar McClelland refused, inter alia, an application by the defendant, Promotors Limited to strike out that part of the Statement of Claim of the plaintiff, Business Electronics Limited, based on the cause of action under Section 25(1)(b) of the Employees Ordinance Cap.282.
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HCA000264/1981
IN THE SUPREME COURT OF HONG KONG HIGH COURT ACTION NO. 264 OF 1981 -----------------
Coram: Silke J. in Chambers Date of Judgment: 30th April 1981 ----------------- JUDGMENT ----------------- 1. On the 2nd April 1981 Mr. Registrar McClelland refused, inter alia, an application by the defendant, Promotors Limited to strike out that part of the Statement of Claim of the plaintiff, Business Electronics Limited, based on the cause of action under Section 25(1)(b) of the Employees Ordinance Cap.282. 2. The defendants now appeal from that decision. I am at large upon the appeal and unhindered by the reasons for the decision of the Registrar for, as is apparently common practice these days, he gave none - at least in writing. I dismissed the appeal on the 30th April giving short oral reasons and said I would reduce these reasons to writing. This I now do. 3. Mrs. LUI of Ronald Wong & Co. who appeared for the appellant/defendant based her arguments on the "personal injury" aspect of the claim and the Statute of Limitations. 4. To understand this it is necessary to set out in brief the history of the matter. 5. On the 10th March 1977 there was a fire in that part of the International Factory Building 175, Hoi Bun Road, occupied by the defendant. The plaintiff also has floors in that building. An employee of the plaintiff, LAM Chun-sang, was severely injured as the direct result of the fire. 6. Mr. LAM quite properly claimed under the provisions of the Workmen's Compensation Ordinance, as it was then entitled, against his employer the plaintiff. There is of course no concept of common law engligence inherent in such a claim. 7. On the 1st November 1979 that claim was determined by the award of $83,056.00 to Mr. LAM. Costs were assessed at $1,024.50 and were payable by the plaintiff. 8. In the meantime a series of actions were mounted against the defendant in one of which, 5179 of 1979, Mr. LAM was plaintiff. This was for personal injuries founded on, as I understand it, the negligence of the defendant. 9. On the 9th of May 1980 interlocutory judgment was entered as follows, and by consent,
10. In a series of other actions - all were consolidated - where the plaintiffs were also workmen orders were made that sums paid as Workmen's Compensation were to be deducted from the eventual damages. 11. This was also done in Mr. LAM's case. 12. Again in the meantime the plaintiff here, sued the defendant here, in Action No. 1829 of 1978 the Writ being issued on the 13th June 1978, in respect of damage caused to them by the fire. 13. This I am told was eventually compromised without admission of liability on the payment by the defendant of the sum of $85,000. That action contained no claim either in respect of their workmen by the plaintiffs nor in respect of any compensation that might he pay him. 14. This raises one matter which is not directly on point in this appeal but which is of some general importance. 15. Section 25(2) of the Employees Ordinance reads:
16. This therefore would appear to be a prohibition upon an employee instituting proceedings as against a third party for damages unless (a) he has notified his employer of his intentions and (b) unless he has lodged a claim for compensation. 17. The latter requirement was satisfied here the former not. It may well be that an employee's failure to notify his employer in accordance with section 25 would render any proceedings, or settlement of any proceedings already instituted on notice but without notice of the intention to settle, a nullity. 18. Mr. Allman-Brown, who, on the instructions of Haldane, Midgley & Co., appeared for the plaintiff on this appeal described this section as a safety net for the employer. It enables him to contemplate the recovery of any compensation he may have paid his employee from a third party condemned in damages to that employee or, in appropriate cases, claim an indemnity. 19. This has importance in the light of the provisions of Section 25(1)(b) - and indeed in this case - though the appeal does not turn upon it. 20. It would be advisable if there were some form of notice to bring to the attention of employees, who contemplate suing a third party at common law, the important provisions of Section 25(2). If they do not comply with them they are at risk. Their advisors should certainly be aware of it. Failure could cause the employer to lose his extended time allowed under subsection (3) of Section 25 and deprive him of a protection to which he is entitled. 21. Now Section 25(1)(b), which is what this appeal is all bout, reads as follows:
Not being aware of it the plaintiff here did not seek to join in the employee's proceedings as against the defendant: it did bring separate proceedings issuing its writ on the 13th January 1981 and serving it the next day. This as will be apparent, is approximately three years and ten months after the happening of the accident. I would accept that the plaintiff had knowledge of the accident, for the purposes of this appeal, on the day of its occurrence. 22. If this is in the nature of a claim for damages for negligence, breach of duty on personal injuries then it is outside the period of limitation as set out in Section 27 of the Limitation Ordinance. And Mrs. LUI has fully and attractively argued that this is exactly what it is. I must confess the format of the Statement of Claim lends colour to her submissions for that, while stating, in its paragraph 2, that the plaintiff brings the action under Section 25 of the Workmen's Compensation Ordinance and at Common Law, of which latter claim more later, it goes on in its paragraph 8 the allege breach of statutory duty and/or negligence and gives particulars of both. 23. Mr. Allman Brown would have it that these allegations are simply the proof in relation to the acts upon which the Section 25 claim is based and goes on to submit that his claim is for "compensation" as contrasted with "damages". "Compensation" need not arise from an actionable wrong, "damages" must. 24. If this is so then the periods of limitation set out in Section 4(1)(d) of the Limitation Ordinance are applicable and the writ is in time. He would ask why should the defendant have the benefit of the deduction of the amount of employees compensation from whatever damages he may have to pay Mr. LAM and the plaintiff be at the loss of that amount of compensation. If Mr. LAM is entitled to his damages but not to have his compensation twice over, and if, to effect this, the compensation, which is intended in part to look after the immediate needs of the employee, is deducted from the damages why should the defendant be the beneficiary? I agree but with this reservation that the proceedings brought to recover the compensation must be in time. 25. Section 4(1) (d) reads: "The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued, that is to say - (a) ..... (b) ..... (c) ..... (d) actions to recover any sum recoverable by virtue of any ordinance or imperial enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture" It is not necessary for me here to consider when the cause of action accrued for the 6 year period has not yet elapsed and in my judgment this is an action to recover a sum recoverable by virtue of section 25 of the Employees Ordinance for the right of action expressly given by that section is for the "recovery of the compensation". 26. I have some doubts, and I was not specifically addressed upon this, as to the right to recover costs. I would however leave this for the trial judge as the matter is not unarguable - and I might add if I am wrong in the conclusions to which I have come I would equally well have refused to strike out this claim on the grounds that there is a good arguable case and the matter should go to trial rather than be struck out in limine. 27. I did say I would refer to the "common law" claim. The Registrar struck that out: there had been in fact a plaintiff's summons to amend the Statement of Claim by deleting the "common law" claim and set down for hearing in the same date as the defendant's summons. 28. The Registrar took the sensible way out by striking out this claim and giving leave to withdraw the plaintiff's summons. Hence the somewhat unusual order as to costs which I do not disturb. 29. The costs of this appeal are to the Respondent plaintiff with a certificate for counsel.
Representation: Mrs. LUI of Ronald Wong & Go. for appellant/defendant Mr. Allman-Brown (Haldane Midgley & Co.) for respondent |