Tsui Chi Hung Tony v. Hsin Chong Construction Co Ltd and Another

HCPI 145/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.145 OF 2005

---------------------

BETWEEN

----------------------

Before : Hon Suffiad J in Chambers

Date of Hearing : 23 February 2006

Date of Judgment : 17 March 2006

-------------------------

J U D G M E N T

-------------------------

1.This is an appeal from the decision of Registrar Chan made on 26 January 2006 in which he struck out the plaintiff’s claim and dismissed the whole of the plaintiff’s action herein (upon the application of the defendant) on the grounds that the plaintiff had fully settled with the defendant the claim that is now brought by the plaintiff in this action.

Background

2.The plaintiff was employed by the 2^nd defendant as a scaffold worker on 29 May 2001.

3.On that day, he was dismantling some bamboo scaffold at a construction site at Shun Lee Disciplined Services Quarters, Lee On Road, Kowloon, at which site the 1^st defendant was the main contractor.

4.In the course of that work, the plaintiff fell from the 15^th floor to the 13^th floor sustaining injuries to his head, right hip, lower back and left knee, the major injury diagnosed being a prolapsed intervertebral disc giving rise to persistent pain to his back and lower limbs.

5.An operation of fenestration and disectomy of L5/S1 was performed on the plaintiff on 18 February 2003 and he was discharged from United Christian Hospital on 25 February 2003 with sick leave granted to him up to April 2003.

6.In about October 2001, the plaintiff was told by the 1^st defendant to contact the insurers, Summit Insurance (Asia) Ltd, of the 1^st defendant, no doubt with a view to deal with the question of compensation for the accident.

7.Since then, the plaintiff had been in touch with a Raymond Wong of the insurers and had discussed the question of settlement.

8.Several days after his discharge from United Christian Hospital the plaintiff called Raymond Wong and during their telephone conversation, Raymond Wong informed the plaintiff that the insurers now offered $300,000 to settle the matter privately.  (Up to that time, the plaintiff had already received $326,000 by way of periodic payment totally.)

9.After discussing the matter with his wife, the plaintiff made a counter offer of $350,000 to Raymond Wong.

10.After taking instructions from his boss, in a further phone conversation with the plaintiff about an hour later, Raymond Wong informed the plaintiff that the insurers will agree to the plaintiff’s counter offer of $350,000 which will be on top of the periodic payment of $326,000 already received by the plaintiff and told the plaintiff to attend the insurer’s office on 25 March 2003 to sign some documents.

11.On 25 March 2003, the plaintiff attended the insurer’s office and was shown a copy of a Settlement Agreement (in Chinese) by Raymond Wong who read it out to the plaintiff and asked the plaintiff to look at it.  Raymond Wong then asked the plaintiff to sign the Settlement Agreement which the plaintiff did.  As for the payment of the compensation, the plaintiff was told by Raymond Wong to call back the following month.

12.Some time later, the plaintiff was told to attend the insurer’s office on 14 April to collect the cheque.  Before handing over the cheque, Raymond Wong told the plaintiff that he had to sign a further document.  Raymond Wong then showed the plaintiff a document in Chinese headed “Discharge of Liability” which Raymond Wong read to the plaintiff and then passed over to the plaintiff for him to read.  The plaintiff then signed the Discharge of Liability after which he was given a cheque for $350,000 and for which he also signed a receipt.  The plaintiff was then asked to sign a letter (in Chinese) to the Labour Department informing them of the settlement of the claim.

13.On 21 March 2004, the plaintiff was admitted to the United Christian Hospital.  Whilst there, he discussed his case with some volunteers during some hospital service and came to the realization that he might have entered into an unfair settlement over his injuries sustained in the accident.

14.He later sought legal advice and then commenced these proceedings claiming compensation from the defendants.

15.These matters stated by way of “Background” are facts which are either not in dispute between the parties or that they come from the evidence of the plaintiff, in view of the usual practice that disputed facts are normally taken in favour of the party sought to be struck out, since the present hearing concerns the striking out of the plaintiff’s claim.

The striking out application

16.The defendants’ application to strike out the plaintiff’s claim is based on the Settlement Agreement and the Discharge of Liability signed by the plaintiff on 25 March 2003 and 14 April 2003 respectively.

17.It is the defendants’ case that the plaintiff had fully settled all causes of action he may have against the defendants arising from the accident by reason of the agreement reached between the parties as contained in the Settlement Agreement and the Discharge of Liability signed by the plaintiff therefore he can have no further claim against the defendant in respect of the accident on 29 May 2001.

18.On the other hand, the plaintiff, though not denying that he had signed the Settlement Agreement and Discharge of Liability, submits that he is not bound by the agreement contained in either of the two documents relying on non est factum.

19.Moreover, the plaintiff further contends that on a true construction of the Settlement Agreement and Discharge of Liability, in particular relying on Clause D of the Settlement Agreement, he is not debarred from bringing the present claim against the defendants.

20.In any event, the plaintiff says that the rules of practice is such that the claim should not be struck out unless it is plain and obvious that the claim is unsustainable and impossible for it to succeed.  Where the determination of the claim relates to the proper construction of a document which is “fact sensitive” then it should go to trial on the disputed facts and should not be struck out summarily.

21.Since the Settlement Agreement and the Discharge of Liability is central to the dispute between the parties in these proceedings, it is only proper that I should go to the relevant clauses in those two documents.

The Settlement Agreement

22.The parties to the Settlement Agreement are expressly stated therein to be the 1^st and 2^nd defendants in this action together with Summit Insurance (Asia) Ltd (“Summit”) and also the plaintiff.

23.After reciting the accident to the plaintiff at the site on 29 May 2001 causing injuries to the plaintiff, and the fact that the ‘industrial injury’ was being handled by the Labour Department, it is stated that as regards the damages for the ‘abovementioned industrial injury accident’ the parties have reached agreement as follows :

(A)	“[The plaintiff] agrees to accept a total sum of Hong Kong Dollars HK$676,000 (including medical expenses) being the total final and complete settlement of all claims including but not limited to any claim from the injuries, damage and all other losses and all such expenses, whether direct or indirect, whether present or contingent, all arisen from the above industrial injuries under the Employees’ Compensation Ordinance and the common law.
(B)	As regards the abovementioned agreed compensation, after deducting the sum of HK$326,000 previously paid by [the 1st defendant], [the 2nd defendant] or Summit, the balance is HK$350,000 and shall be paid to [the plaintiff] within 14 days after signing this agreement.
(C)	[The plaintiff] promises that after receiving the abovementioned damages he will not go to the Labour Department, Legal Aid Department or other departments to apply for claims for the abovementioned industrial injury, and will within 7 days after receiving that compensation go to such departments to cancel all applications in relation to the abovementioned industrial injury, and further renounce and withdraw and release completely and absolutely all claiming actions against the employer and its employee, agent, contractor, associated trading company and insurance company.
(D)	If [the plaintiff] still continues to claim for damages for the related industrial injury later, whether under Employee’s Compensation Ordinance and/or claiming damages for personal injuries at the High Court, [the plaintiff] must refund all of the received compensation of HK$676,000 to ‘Summit’ plus interests.  And all legal expenses and related expenses of ‘Summit’, [the 1st defendant] and [the 2nd defendant] shall all and completely be borne by [the plaintiff].
(E)	Paying that compensation does not mean that [the 1st defendant], [the 2nd defendant] and ‘Summit’ admits any liability in this claim for industrial injury compensation as regards the Employee’s Compensation Ordinance and common law.
(F)	All parties agree that the above agreement can both be handled and interpreted as a wholly or partly, severed independently.  If some part of the agreement for whatever reason cannot be implemented, the other parts still have the legal binding effect.
(G)	[The plaintiff] is signing this agreement with [the 1st defendant], [the 2nd defendant] and ‘Summit’ while being completely voluntary and not subject to any coercion.  [The plaintiff] has been advised to seek independent legal advice before signing this agreement, and [the plaintiff] will also consult the relevant legal advice.
(H)	The contents of this agreement have been carefully read by [the plaintiff] or been read to [the plaintiff] in detail by the representative of the Insurance company, therefore fully understanding the contents thereof.  [The plaintiff] signs this agreement of his volition, not subject to any influence of inducement.”

The discharge of liability

24.The second document signed by the plaintiff is dated 14 April 2003, titled “Discharge of Liability”, is addressed to Summit, the 1^st defendant and the 2^nd defendant and states as follows :

“	I, Tsui Chi Hung Tony, now residing at Flat K, 15th floor, Block 8, Beverly Garden, Tseung Kwan O, holder of Hong Kong Identity Card No. G650640(1), now confirm to accept a total sum of Hong Kong Dollars Six Hundred and Seventy-six Thousand (HK$676,000.00) (including medical expenses and traveling expenses therein) from Summit Insurance (Asia) Ltd.  This sum is pursuant to an agreement reached on 25th March 2003, being the complete and final settlement of, as regards an accident happened at the construction site of Kwun Tong Lee On Road Civil Servants Quarters on 29th May 2001, any of my claims (including but not limited to employee’s compensation and negligence claim according to the common law) against Summit Insurance (Asia) Ltd, [the 1st defendant], [the 2nd defendant] and any other person or persons for the injuries, damage and all other losses and expenses arisen from that accident, expressly direct or indirect, whether present or contingent.  This sum of Hong Kong Dollars Six Hundred and Seventy-six Thousand (HK$676,000.00) (including medical expenses and traveling expenses therein).
	I agree that after receiving this sum, in the event of in breach of this agreement to claim for  the related damages, I must first refund all of the received damages plus interests.  And all the legal costs and related expenses of ‘Summit’ and [the 1st defendant] and [the 2nd defendant] shall all and completely be borne by Tsui Chi Hung Tony.
	I agree that this sum is not paid to me by reason of admission of liability by Summit Insurance (Asia) Ltd, [the 1st defendant], [the 2nd defendant] and any other person or persons.”

Non est factum

25.In so far as the plaintiff’s reliance on the defence of non est factum is concerned, the evidence from the plaintiff in support thereof is simply that he “did not understand fully the contents, meanings and the legal consequence” of both the Settlement Agreement and the Discharge of Liability.

26.This is stated by the plaintiff in paragraphs 21 and 25 of his Affirmation filed on 12 October 2005 in opposition to the application by the defendants to strike out the claim.

27.That the plaintiff did not understand fully the contents, meanings and the legal consequences of both these documents was despite the fact that on both occasions, the plaintiff accepts that Raymond Wong had “read out the Settlement Agreement verbatim” to him and had asked him to look at the same before the plaintiff was asked to sign on it (paragraph 21 of plaintiff’s Affirmation), and in the case of the Discharge of Liability, again Raymond Wong had “read out the Discharge of Liability verbatim” to him and passed the same to him to read before he was asked to sign that document.

28.The plaintiff says that Raymond Wong did not, on either occasion, explain the detailed contents or the meanings or the legal consequence of those two documents to him and because he was only educated up to Form 2 level, he therefore did not understand fully the contents, meanings and legal consequence of both documents.

Proper construction

29.It was submitted by the plaintiff that when Clause D of the Settlement Agreement is looked at, those wording properly construed, not only does Clause D not prohibit the plaintiff from bringing a claim for damages at common law in respect of the accident to the plaintiff on 29 May 2001, but that the words of Clause D expressly allows the plaintiff so to do.

30.It was further submitted by the plaintiff that the only reservation provided for by Clause D is that the plaintiff, if he chooses later to bring a common law claim for damages, will have to refund the HK$676,000 received by him which he is prepared to do.

31.It was also urged by the plaintiff that since the proper construction of both the Settlement Agreement and the Discharge of Liability has to be decided by the court, this matter ought to go to trial since a court can only reach a determination as to proper construction of documents in the light of the factual matrix surrounding the making of such documents.

32.In this connection of proper construction, the plaintiff seeks to rely on the decision of the English Court of Appeal in Arrale v. Costain [1976] Lloyd’s Law Reports 98 in particular on the point of accord and satisfaction.

Undue influence and unconscionable bargain

33.Although undue influence and unconscionable bargain was argued by the plaintiff before Registrar Chan, at the hearing of this appeal, counsel for the plaintiff indicated that he will not rely on undue influence and unconscionable bargain and therefore no submission was made in this respect although counsel also indicated that he was not abandoning this point.

Decision

34.I am of the view that the point of non est factum relied upon by the plaintiff is a non-starter.

35.It is quite clear from the evidence coming from the plaintiff himself that at all times, even before the Settlement Agreement and the Discharge of Liability was signed by him, that the plaintiff well knew that he was negotiating for a settlement of the accident to him.

36.It is also clear from the plaintiff’s own evidence that the Settlement Agreement and the Discharge of Liability was read to him “verbatim” by Raymond Wong before he was asked to sign on them.  Both documents were written in the Chinese language.

37.The thrust of the plaintiff in this connection is simply that he did not fully understand the contents, meaning and legal consequences of the two documents.  That, however, is hardly the test or the criteria for non est factum.

38.There is simply no evidence from the plaintiff to show that there was a fundamental mistake made by him (whatever may be the cause) as to the character, nature or effect of these two documents.

39.For these reasons, I have no hesitation coming to the conclusion that the defence of non est factum is not even open to the plaintiff to make on the evidence of the plaintiff before me.

40.As for the proper construction to be put on these two documents, Clause D of the Settlement Agreement cannot be read in isolation.  It has to be read with the entire document.  When read with the rest of the Settlement Agreement, there can be no doubt that the parties intended for that settlement to be a full and final settlement of all the plaintiff’s claim arising from his accident on 29 May 2001, whether for employee’s compensation or a common claim for negligence against the 1^st defendant, 2^nd defendant and/or Summit.  That much was expressly stated in the Settlement Agreement.

41.The fact that Clause D seeks to make provision in the event that the plaintiff resile from or may succeed in showing that he is not bound by the Settlement Agreement, does not mean that Clause D gives to the plaintiff an entitlement or right to resile from the agreement reached by the parties as contained in the Settlement Agreement.

42.As for the plaintiff’s submission as to the surrounding circumstances relating to the proper construction, the general rule of construction is that meaning of the contents of a document is prima facie to be sought in the words of the document itself.  However, where the words used in a document may not be entirely clear by simply looking at the document itself, it does not prevent a court from looking at all the circumstances surrounding the making of that document to decide on the proper meaning of the words used.

43.Neither is there anything in the plaintiff’s evidence to show why, in this case, the plaintiff should be allowed to depart from the general rule and to admit or rely on any extrinsic evidence to contradict the terms of the Settlement Agreement or the Discharge of Liability.

44.In the present case, there is no suggestion that any of the words used in the Settlement Agreement or the Discharge of Liability is unclear or equivocal when looked at objectively such that the court cannot properly construe its meaning and intention by simply looking at those documents.  The fact that the plaintiff himself may not have fully understood the meaning contents or legal consequences of those two documents is neither here nor there.

45.Lastly, the case of Arrale cannot help the plaintiff here.  That case was decided on drastically different facts, the major distinguishing facts from our present case being that the signed receipt relied on in that case only made reference in the heading to ‘workman’s compensation’ such that although the body of the receipt expressly stated the words “in full satisfaction and discharge of all claim”, those words were construed by the Court of Appeal in England as not debarring the plaintiff from bringing the claim in common law since a proper reading of the receipt signed by the plaintiff did not show any evidence of a true accord and satisfaction of his common law claim, but only his workman’s compensation claim.

46.For the above reasons, Registrar Chan was quite correct in coming to the decision he did and cannot be faulted for any of his reasons.

47.The plaintiff’s appeal is therefore dismissed with costs and all the orders of the Registrar to stand.

Mr K.C. Chan, instructed by Messrs Gary Lau & Partners, for the Plaintiff

Mr Neal Clough, instructed by Messrs Henry H.C. Wong & Co., for the 1^st and 2^nd Defendants