Azhar Hussain v. Fastcut Services Ltd and Another
Read the full judgment text of DCPI 902/2004 on BabelCite. This District Court judgment.
1. This is a claim by the Plaintiff for damages for personal injuries arising out of an accident in a renovation site at House 52, Palm Drive, Redhill Peninsula, Stanley, Hong Kong. The Plaintiff was the employee of the 1 st Defendant. The 1 st Defendant who was responsible for coring work at the site was the subcontractor of the 2 nd Defendant. The 2 nd Defendant was the main contractor at the site.
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DCPI902/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION PERSONAL INJURIES ACTION NO. 902 OF 2004 -------------------- BETWEEN
-------------------- Coram : H. H. Judge C.B. Chan in Court Dates of Trial : 11th, 14th, 15th & 21st November 2005 Date of Handing down Judgment : 14th February 2006 _________________ JUDGMENT _________________ 1.This is a claim by the Plaintiff for damages for personal injuries arising out of an accident in a renovation site at House 52, Palm Drive, Redhill Peninsula, Stanley, Hong Kong. The Plaintiff was the employee of the 1st Defendant. The 1st Defendant who was responsible for coring work at the site was the subcontractor of the 2nd Defendant. The 2nd Defendant was the main contractor at the site. 2.At the trial, the Defendants conceded to the issue of liability in relation to the accident and the Plaintiff conceded to being liable to contributory negligence at 10%. The parties agreed to the following items of damages:
3.The only issues left as between the Plaintiff and the Defendants are:
4.It is not in dispute that M.P.F. contribution will be awarded at 5% of the total sum of loss of earnings assessed. It was agreed that M.P.F. came into operation on 1st December 2000. 5.The 1st Defendant’s case against the 2nd Defendant is that by virtue of an agreement between the1st and 2nd Defendant, the 1st Defendant is entitled to be indemnified by the 2nd Defendant in relation to any damages paid to the Plaintiff by the 1st Defendant. The 1st Defendant pleaded that the 2nd Defendant had agreed, partly orally and partly in writing by a written quotation dated 28 August 2001 between the 1st and 2nd Defendants, that the 2nd Defendant would be responsible to obtain insurance cover against all risks and workmen’s compensation, including but not limited to the Plaintiff’s injury, if any. The 2nd Defendant disputes this. The issue between the 1st and 2nd Defendants is whether the 1st Defendant is entitled to be indemnified by the 2nd Defendant in relation to any damages paid by the 1st Defendant to the Plaintiff. 6.The Plaintiff was awarded employee’s compensation in the sum of $299,000.00 in March 2005. However the Plaintiff has only received $206,000.00 of this sum in advance payment made to him. The balance is still outstanding. Issues Between the Plaintiff and the Defendants Pre-Trial and Post-Trial Loss of Earnings 7.The Plaintiff is a Pakistani male born on the 4 June 1977. At the date of the accident he was aged 24. At the date of trial he was aged 28. 8.The Plaintiff is claiming loss of earning from his reduced ability to work in the sum of $1,500 per month before trial and the same amount of loss of earning per month after trial using a multiplier of 15 being that appropriate for his age. 9.The Defendants dispute the pre-trial and post-trial loss of earning for the reason that the Defendant was stated by Dr. Arthur Chiang, the medical expert as being able to return to his pre-accident work. Dr. Arthur Chiang however stated that there “may be a very mild reduction in his capacity as related to the mild residual stiffness in the right ankle. This would likely be in the form of a mild decrease in his endurance with unduly prolonged staying in squatting, and when prolonged period of excessive heavy object lifting is required.” 10.The evidence of the Plaintiff is that after the sick leave period, he did not seek to return to work for the 1st Defendant because he was of the view that he could not do the work that he had done before for the 1st Defendant. He said that after the sick leave period, he had the following difficulties:
(3) He had difficulty walking more than 3 to 4 flights of stairs. (4) He had difficulty with slopes. 11.The 1st Defendant’s witness Mr. Ha Quoc Luong stated that as a general worker, the Plaintiff was only to assist the operation of the drilling machine. It was seldom that the Plaintiff was required to operate a drilling machine as there were other “Masters” who had had over 10 years’ experience to operate the drilling machines. 12.A person can and should operate the drilling machine when standing up, without prolonged period of squatting during the operation of the drilling machine. 13.There are mainly two kinds of construction sites where the 1st Defendant worked, namely renovation sites and construction sites under construction. 14.For renovation sites, there is no need to go up stairs. About 20 - 30% of the sites where the 1st Defendant had contracts were construction sites under construction, in which case there were normally more than 10 storeys. 15.When the drilling machine needed to be transported to certain floor in those high rise buildings, there would either be a “cage lift” or a “cargo lift” to transport the machine, and workmen would not be required to transport the machine manually all the way up to that floor. 16.Once a drilling machine is transported to a certain floor for coring work, it would not be taken down from that floor before the work on that floor is finished. On the other hand, some mini drilling tools weighing about 3 - 4 pounds would be taken away after work everyday. 17.The drilling machine weighs about 25 - 30 kilograms (or 60 pounds). The drilling machine consists of different parts with the heaviest part, being the motor, weighing about 18 kilograms. 18.The 1st Defendant’s Counsel submitted that Dr. Chiang in his medical report dated 9 May 2004 had taken into consideration the fact that the Plaintiff had no difficulty in squatting, and could walk up about 3 - 4 flights of stairs and the muscle of the plaintiff’s right thigh and calf showed satisfactory muscle bulk, before coming to the conclusion that the Plaintiff was able to return to his pre-accident job. 19.In relation to whether the Plaintiff could have returned to his pre-accident work, the duties of the Plaintiff in his pre-accident work are relevant. There is a discrepancy in evidence between the Plaintiff and the 1st Defendant related to the duties of the Plaintiff in the pre-accident job. 20.In my view, there must be some exaggeration on the Plaintiff’s part in relation to his description of his pre-accident duties as it is unlikely that his duties required him to walk up 35 flights of stairs 4 to 5 days a week carrying the core drilling machine. It seems to me that as the 1st Defendant’s company took on contracts for renovation work as well as contracts on construction sites, it is unlikely that he would be working on construction sites everyday of the week and that these construction sites all had buildings that were 35 floors or more. It may have been the case that the Plaintiff was required to carry the coring machine or the dismantled parts of the machine and walk some flights of stairs at times and these times could be once a week or more in construction sites where there was no cage lift or cargo light. In my view it may highly have been the case that he, being a young man, was required to carry the coring machine or the dismantled parts of the coring machine walking on level ground for some distances several times a week. According to the Plaintiff, he had to cut up the cored parts of concrete and had to do so by squatting. In my view the evidence of the Plaintiff related to this fact seems highly probable. I find the Plaintiff’s evidence that he had difficulty squatting for long periods of time to be credible in the light of the injury he suffered in his right ankle with its residual stiffness and mild residual decrease of endurance with prolonged squatting as found by Dr. Chiang. 21.From the aforesaid I find that there is a certain amount of squatting, which the Plaintiff was required to do in his pre-accident work and also there would be some carrying of tools and even machine parts. I am of the view that the Plaintiff’s capacity to do the duties in his pre-accident work is reduced to some extent. Even if he were to return to his pre-accident job, he would not be able to return to all the duties that he formerly engaged in, in his pre-accident job. 22.In relation to the evidence of the 1st Defendant’s witness Mr. Ha, it seems to me that his evidence was not without exaggeration when he stated that the coring machine would be left on the upper floors to which it had been carried overnight and it was not necessary to carry it down. This seems to me to be unlikely as the machine could easily have been lost or taken away. There would not only be a monetary loss if that were to happen, there would also be an inconvenience to the workers whose time at work would have been wasted when they could not work on the machine. 23.I note Mr. Ha said that were the Plaintiff to return to work with the 1st Defendant, he would give the Plaintiff work of a less taxing nature which the Plaintiff is able to cope with. However, were the Plaintiff required by force of circumstances to have a break in employment with the 1st Defendant for whatever reason, (such as going to Pakistan to see his family for a few months) he may well be thrown back into the job market on his return. The Plaintiff’s competitiveness in the job market in obtaining work similar to his pre- accident work would be affected by the residual effect of his injuries, as I found that he was not able to carry out some of his pre-accident duties. Further Dr. Chiang in the last page of his report at page 259 of the Bundle of Documents stated that there was a “mild residual stiffness in the right ankle, likely to be in the form of a mild decrease in his endurance with unduly prolonged squatting and with period of excessive heavy object lifting”. In my view it is highly likely that the Plaintiff would not be able to find work of a nature similar to his pre-accident work in the open market without a reduction of salary. 24.The Plaintiff’s Counsel referred to the case of Li Wan Choi v Choi Wan Hing & Anor [2000] 4 HKC. She particularly referred to the passage of the Judgment at page 555 at B-C as follows,
25.She referred to Li Wan Choi where $4,000 was taken as monthly loss on an income of $11,200 at the time of the accident. The injuries of the Plaintiff in that case were to the pelvis, left femur and tibia resulting in 8 - 9% disability of the whole person. In this case the Plaintiff had been assessed by the Medical Assessment Board to have suffered 5% loss of earning capacity. 26.She referred to the passage of Li Wan Choi at page 551 at F-I as follows,
27.She then submitted that a sum of $1,500 per month was an appropriate figure to assess the likely loss of earning of the Plaintiff as a result of the residual effect of his injuries. 28.Having regard to the fact that the Plaintiff is likely to take one to two months year to go to Pakistan to visit his family, and the fact that the Plaintiff may have been able to work for the 1st Defendant for less taxing duties if he had returned to work for the 1st Defendant, I would adopt a lesser sum of loss of earning per month in assessing loss of pre-trial and post- trial earnings. I adopt the loss of earning at $1,000 per month. 29.I assess pre-trial loss of earnings of the Plaintiff at $1,000 x 26, which is $26,000. In relation to post-trial loss of earnings, as the Plaintiff would have been 28 years at the date of trial I adopt a multiplier of 15. I assess post-trial loss of earnings at $1000 x 12 x 15 = $180,000. I add 5% employer’s contribution to M.P.F in respect of the total amount of loss of earnings ($26,000 + $168,000) x 5% comes to $10,300. Loss of Earning Capacity 30.I am of the view that this should be awarded to the Plaintiff as his competitiveness in the job market is likely to be reduced were he to seek employment in work similar to his pre-accident employment. I refer to the authority cited by the Plaintiff’s Counsel, Li Wan Choi at page 555 at I, where it states in respect of loss of earning capacity,
31.I am of the view that the same situation applies here as in Li Wan Choi and that compensation of loss of earning capacity should be awarded. I adopt the same method of assessing loss of earning capacity. The earnings of the Plaintiff according to the 1st Defendant in their letter dated 20 Sept.2001 to the 2nd Defendant show an average salary of $11,796.51 per month for the period between 1st Jan to 31st Aug 2001. I adopt this amount as the monthly salary of the Plaintiff in calculating loss of earning capacity. I calculate this at $11,796.51 x 15 being the multiplier and this comes to $176,947.65. 32.Total damages assessed comes to:
33.The parties have agreed that the Plaintiff is liable for contributory negligence at 10%. After deducting the amount of 10% contributory negligence, the Plaintiff is entitled to damages of $898,599.28. As the Plaintiff has received the sum of $206,000.00 out of $299,000.00 of Employee’s Compensation awarded to the Plaintiff, the sum of $206,000 would be deducted from this sum when effecting payment. Issue Between 1st and 2nd Defendants 34.The evidence of the 1st Defendant on this issue comes from Mr. Ha Quoc Luong the contract manager and project manager of the 1st Defendant. He stated that the 1st Defendant had contracted with the 2nd Defendant for many years. The 1st Defendant always required the 2nd Defendant to effect insurance cover for the 1st Defendant’s employees working on their site in each of the contracts with the 2nd Defendant. 35.In relation to the contract in question, the 1st Defendant had previously done a contract for the 2nd Defendant on this same site before. In relation to the contract in question he stated that on 28th August 2001, he faxed the quotation in question to the 2nd Defendant as shown at page 268 of the Bundle of Documents. The quotation contained the clause “Insurance to cover all risks, workmen’s compensation and CAR and third party risk are to be provided by client”. After faxing the quotation to the 2nd Defendant, in early September, Mr. Carlox Luk the project manager of the 2nd Defendant telephoned him and verbally accepted the said quotation in the telephone conversation and asked the 1st Defendant to proceed with the work in the said quotation. He stated that in the circumstances the 2nd Defendant had orally accepted the terms of the quotation including that related to insurance cover. Under cross-examination by the 2nd Defendant’s Counsel Mr. Ha stated that he had to be satisfied that the 2nd Defendant accepted all the terms in the quotation before he would send his workers to work on the contract on site. By their acceptance of the quotation he would be sure that the 2nd Defendant would provide the insurance in place. It has been a long history of dealing between them when this manner of operation took place. The quotation would be sent and the acceptance of it confirmed by the 2nd Defendant before he would send his workers on site. 36.The Plaintiff was cross-examined on the quotation at page 261 (a different quotation from the one in question), which was dated 10th August 2001, and he was asked whether the work quoted was done on the day before the quotation as the quotation was sent together with an invoice sent to the 2nd Defendant. The Plaintiff replied that the quotation at page 261 was an amended quotation as could be seen in the number of the quotation that is F/QHK4869A, which has the letter “A” after the number. He stated that the original quotation was dated 2nd August 2001. He showed the original quotation that had the same number but did not have the letter “A” after the number “4869”. He stated that during the course of the work, the 2nd Defendant asked to remove one item of work from the original quotation. The Report of work is at page 263 of the Bundle and the Report has the signature of the 2nd Defendant’s representative. The Report of work showed that the work done on 9th August 2001 was that in the quotation at page 261, which was amended from the original quotation. To cover the change in work items he faxed the amended quotation together with the invoice on 10 August 2001. He stated that giving site instruction to amend the work quoted is quite usual and such instructions for amendment of work does not have to be in writing. 37.Under cross-examination Mr. Ha stated that when he orally quoted the work the subject of this action, he told Mr. Carlox Luk that the 1st Defendant would not be responsible for insurance for workmen compensation. After Mr. Luk agreed to the quotation dated 28 August 2001, he again told Mr. Luk that the 1st Defendant would not be responsible for the insurance for workmen compensation. He stressed the insurance cover so much because with 20 years of experience he could see the risks of the job. 38.There is no dispute that after the accident, the 2nd Defendant filed Form 2 on 21 Sept 2001, at page 100 of the Bundle of Documents. The 2nd Defendant also paid sick leave pay to the Plaintiff at 4/5 of his monthly salary for 20 months. Mr. Ha stated that although the 1st Defendant had effected insurance cover for employee’s compensation, yet he failed to file an insurance claim on behalf of the Plaintiff until the 2nd Defendant stated that they refused to be responsible for the Plaintiff’s workmen compensation at the stage when they had legal advice 20 odd months later after paying the sick leave pay of the Applicant for 20 months. By then the 1st Defendant’s insurance company stated that it was too late for the 1st Defendant to file its claim against them. It was around that time the 1st Defendant filed the Form 2 through their insurance company. This is dated 16 June 2003 and is at page 90 of the Bundle of Documents. 39.The 2nd Defendant’s Counsel in cross-examination put to Mr. Ha that he had put pressure on the 2nd Defendant to treat the Plaintiff as one of its employees for the purpose of employee compensation. It was because of that, that the 2nd Defendant filed Form 2 and paid the sick leave pay to the Applicant. Mr. Ha denied that he had done that. It seems to me highly unlikely that a company would be file Form 2 and pay the sick leave pay of a workman unless it were of the view that it was liable and duty bound to do so. 40.The 2nd Defendant did not call Mr. Carlox Luk to give evidence. There is no direct evidence to challenge the evidence of Mr. Ha related to the communication between Mr. Ha and Mr. Carlox Luk. The witness of the 2nd Defendant, Fung Siu Man, Queenie gave evidence and stated that the job in question was a minor job. Therefore the 2nd Defendant did not make any formal contract with the 1st Defendant. She stated that usually the 2nd Defendant would orally instruct the 1st Defendant to commence work. The 1st Defendant would respond by a verbal quotation. Sometimes, the 1st Defendant would send a quotation to the 2nd Defendant after their completion of the job. She referred to the quotation and invoice referred to aforesaid at pages 261 and 262 of the Bundle of Documents. 41.She stated that Mr. Carlox Luk was a new staff at the time of the contract in question and had to report to her related to all work handled by him. At the time, Mr. Carlox Luk just reported the price of the job to her and did not refer to the requirement on the 2nd Defendant’s part to provide workmen compensation. 42.She stated that the 2nd Defendant filed a Form 2 only because the 1st Defendant told her at the time that they did not have employee’s insurance cover. However Mr. Ha had given evidence that the 1st Defendant had effected employee’s insurance cover as stated above. 43.Ms. Fung also stated that it was not the 2nd Defendant’s policy to provide insurance cover for employees of their subcontractors. Credibility of Witnesses 44.I found Mr. Ha a credible witness. I find that he has clearly explained why the quotation at page 261 dated 10 August 2001 was dated one day after the work done. I found that his explanation was truthful and reasonable. His evidence had the conviction of truth to it. I do not accept the evidence of Ms. Fung that the 1st Defendant would send the quotation on occasions when such are sent, after the completion of the job. This is not reasonable nor credible because after the completion of the job, there would be no need to send a quotation. There would only be the need to send an invoice. 45.I find the reason stated by Ms. Fung that they filed the Form 2 because the 1st Defendant told them that the 1st Defendant did not have insurance cover is obviously an untruth for the 1st Defendant according to them did have insurance cover. In the Form 2 filed by the 2nd Defendant, they stated that the Plaintiff was their employee. It seems that the 2nd Defendant did not effect insurance cover for the Plaintiff and only did so for their employees. It is unlikely, in my view that the 2nd Defendant would not immediately check whether the Plaintiff was their employee after having been notified of the accident. In fact, on the 20th Sept 2001, the 1st Defendant sent a letter to the 2nd Defendant stating the monthly salary of the Plaintiff from 1st Jan to 31 Aug 2001 together with the name, address and next-of-kin of the Plaintiff. This letter is at page 269 of the Bundle of Documents. The 2nd Defendant must have been notified clearly that the Plaintiff was the employee of the 1st Defendant and the monthly salary details of the Plaintiff was information required by the 2nd Defendant to make sick leave pay to the Plaintiff. It seems to me that Ms. Fung was not a truthful witness. 46.Further, she is not able to contradict the evidence of Mr. Ha related to his telephone conversation with Mr. Carlox Luk and his dealings with Mr. Luk. Finding of Facts 47.I accept the evidence of Mr. Ha in full. I accept that there has been a history of contractual dealing between the 1st Defendant and the 2nd Defendant for coring of concrete work over many years. For all contracts, which were medium sized as the contract in this case, the usual process of contract was for an oral quotation to be given followed by a written quotation before work commenced. It was always the case that the 1st Defendant stipulated both in oral and in written quotations the term that “insurance to cover all risks, workmen’s compensation and CAR and third party risks are to be provided by client.” It was clear between the 1st Defendant and the 2nd Defendant that the “client” of the 1st Defendant was the 2nd Defendant and reference in the Quotation to “client” was to the 2nd Defendant. 48.In my view, this clause is a clear contractual term between the 1st and 2nd Defendants that the 2nd Defendant had to provide insurance cover for the 1st Defendant’s employees to cover all risks which included workmen’s compensation and contractor’s all risks and third party risks. These risks are fully comprehensive and covered common law damages payable to a workman of the 1st Defendant. I find that the clause is not an exception clause but a term of the contract stating the contractual obligation of the 2nd Defendant. 49.I accept the evidence of Mr. Ha that when he quoted this contract orally to Mr. Carlox Luk, he had stated that the 2nd Defendant was to be responsible to provide insurance cover for the 1st Defendant’s employees. Subsequently when Mr. Luk telephoned to accept the terms in the written quotation which had been faxed to the 2nd Defendant on 28th Aug 2001, Mr. Ha again informed Mr. Luk that the 2nd Defendant had to provide insurance cover for the 1st Defendant’s employees. It is clear that Mr. Luk did not object to this term nor did the 2nd Defendant write to the 1st Defendant to make a counter proposal to the terms in the written quotation dated 28 Aug. 2001 to state that the 2nd Defendant would not provide insurance cover for workmen compensation of the 1st Defendant’s employees. 50.I find there was a clear contract made in relation to this provision. I find that the 2nd Defendant is liable to indemnify the 1st Defendant in relation to the Plaintiff’s claim. 51.Judgment for the Plaintiff against the 1st and 2nd Defendants in the sum of $898,599.28 together with interest on $270,000.00, representing PSLA at 2% per annum from the date of service of Writ to the date of judgment and at half judgment rate on $5,693.40 representing special damages from the date of accident to the date of judgment and thereafter at full judgment rate until payment. Credit to be given for the sum of $206,000.00 for employee’s compensation received by the Plaintiff. 52.In respect of the 1st Defendant’s claim against the 2nd Defendant I grant the following declaratory relief,
53.I grant an order nisi that the 1st and 2nd Defendants do pay the costs of the Plaintiff of the action to be taxed if not agreed with Certificate for Counsel and that the 2nd Defendant do pay the 1st Defendant’s costs of its claim for indemnity against the 2nd Defendant with Certificate for Counsel. The Plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations to be taxed if not agreed.
Representation: Miss Josephine Pinto instructed by Messrs. Hoosenally & Neo assigned by D.L.A. for the Plaintiff. Miss Margaret Yu instructed by Messrs. King & Co. for the 1st Defendant. Mr. Lee Pak Chau instructed by Messrs. Martin Law & Co. for the 2nd Defendant. |
Further hearings and rulings under DCPI 902/2004