Hussain Tanweer v. Focus Roller Shutter Ltd

DCEC1145/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1145 OF 2005

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BETWEEN

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Coram:  H H Judge Marlene Ng in Court 

Date of Hearing:   18^th September 2006

Date of Ruling:      18^th September 2006

Date of Handing Down Reasons for Ruling:  18^th September 2006

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REASONS FOR RULING

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Introduction

1.The Applicant, a welder employed by the Respondent, claimed that on 29^th January 2005 he suffered personal injury by accident arising out of and in the course of employment. He therefore applied for employees’ compensation in these proceedings.

2.The Applicant claimed that on 29^th January 2005 at Yau Tong Industrial Building he was assigned to lift up a heavy metal bar which weighed about 60-70kg. He was unable to lift up such heavy weight and felt immediate pain. The Applicant fell down and the metal bar hit his left knee. He claimed to have suffered injuries to his back and left knee.

Winding-up of the Respondent

3.The Respondent did not appear at the call-over hearing of the Application on 28^th October 2005 and failed to file any Answer or List of Earnings pursuant to the my order of the same date. On 3^rd March 2006, judgment on liability was entered in favour of the Applicant against the Respondent for compensation to be assessed (“3/3/06 Order”). According to the affirmation of service filed on 15^th September 2006, the 3/3/96 Order was served to the Respondent’s registered office (“Office”) on 10^th July 2006.

4.The Respondent was again absent at the hearing on 26^th May 2006. I gave directions that (a) the parties do file and serve list of documents and witness statements as to quantum within 14 and 35 days respectively and (b) the assessment of compensation be fixed for hearing on 18^th September 2006 before a bilingual District Court judge (“26/5/06 Order”).

5.By an affirmation of service filed on 15^th September 2006, the 26/5/06 Order was served to the Office on 10^th July 2006. By a further affirmation of service also filed on 15^th September 2006, the Applicant’s solicitors served the Applicant’s List of Documents to the Office on 24^th July 2006. On 30^th August 2006, the Applicant’s solicitors served the Applicant’s List of Documents, 1^st Supplemental List of Documents, Hearsay Notice and witness statement to the Office. The Respondent did not file any List of Documents or witness statement.

6.However, it transpired from the assessment bundle that the Respondent was wound up by the court pursuant to the Order of S Kwan J dated 27^th March 2006 (“WU Order”), ie after the 3/3/06 Order but before the 26/5/06 Order. The WU Order was received by the Companies Registry on 6^th April 2006. Messrs Bruno Arboit and Simon Richard Blade, the Respondent’s provisional liquidators, filed a Form W3 (Notification of Appointment of Liquidator of Provisional Liquidator) with the Companies Registry on 19^th April 2006. 

7.Information on the winding up of the Respondent was publicly available at the Companies Registry or from the Official Receiver since some time in April 2006. However, this court was not informed of such fact at the hearing on 26^th May 2006 or at any time prior to the lodging of the assessment bundle on 14^th September 2006.

8.Section 186 of the Companies Ordinance Cap.32 provides that “when a winding-up order has been made, or a provisional liquidator has been appointed, no action or proceedings shall be proceeded with or commenced against the company except by leave of the court, and subject to such terms as the court may impose” (my emphasis).

9.As at 26^th May 2006, the Companies Court had not granted any leave to proceed with the present proceedings and hence the hearing on 26^th May 2006 as well as the 26/5/06 Order were in breach of section 186 of the Companies Ordinance. The 26/5/06 Order was therefore defective and likewise service of the documents referred to paragraph 5 above to the Office was also defective.

10.It appears from the aforesaid affirmation of service that the Applicant’s solicitors became aware of the winding up of the Respondent on 30^th August 2006. But this does not alter the fact that the 26/5/06 Order and the steps taken prior to 12^th September 2006 (see paragraph 12 below) to progress the present proceedings were all barred by section 186 of the Companies Ordinance.

11.On 30^th August 2006, the Applicant’s solicitors wrote to the Respondent’s provisional liquidators for consent to proceed with the present proceedings. On 7^th and 11^th September 2006 the Applicant’s solicitors wrote to the Respondent and the Respondent’s provisional liquidators respectively to remind them of the date of the hearing of assessment of compensation and to seek their views on the indices of the assessment bundle. The letter to the Respondent had no meaning since the Respondent had been wound up.

12.On 12^th September 2006, S Kwan J granted an order by consent for inter alia the Applicant to proceed with the present proceedings (“Proceed Order”). On 14^th September 2006, the Applicant’s solicitors served the Proceed Order and the assessment bundle on the Respondent’s provisional liquidators.

13.However, there is no provision in either section 186 of the Companies Ordinance or in the Proceed Order that allows any leave granted by the Companies Court for the Applicant to proceed with the present proceedings to apply retrospectively to validate the 26/5/06 Order for (a) letting time run against the Respondent for filing and serving List of Documents and witness statements or (b) fixing the hearing of the assessment of compensation. Indeed, Mr Wong, counsel for the Applicant, conceded that any contention otherwise would be indefensible.

14.The Respondent is absent at the hearing on 18^th September 2006. There is no consent forthcoming from the Respondent for the matter to proceed despite the aforesaid.

15.In the circumstances, I am persuaded that the matter should not proceed on 18^th September 2006. This view is reinforced by the following analysis in relation to the section 18 appeal discussed below.

Section 18 appeal

16.In paragraph 2(b) of the Application, the Applicant applied for the following Relief : “Appeal against Certificate of Assessment and/or Certificate of Review of Assessment, if any, issued by the Employees’ Compensation (Ordinary Assessment) Board pursuant to Section 18(1) and (2) of the Employees’ Compensation Ordinance Cap.282”.

17.At the hearing on 28^th October 2005, I was informed by the Applicant’s solicitors that no Certificate of Assessment (Form 7) or Certificate of Review of Assessment (Form 9) had been issued in respect of the Applicant and the subject accident. The relief sought under section 18 of the Employees’ Compensation Ordinance Cap.282 (“Ordinance”) was therefore plainly hypothetical. For the reasons discussed in paragraphs 73 and 74 of my Decision in Lam Pui Yi Anita v Secretary for Justice for and on behalf of Director of Food and Environmental Hygiene formerly known as Director of Urban Services DCEC844/2001 (unreported, 18^th August 2005), paragraph 2(b) of the Application was struck out.

18.At the hearing before me on 26^th May 2006, the Applicant’s solicitor expressed an intention to adduce expert medical evidence but reminded that paragraph 2(b) of the Application had been struck out. I therefore enquired with the Applicant’s solicitor whether any Form 7 or Form 9 had been issued. The Applicant’s solicitor informed me that a Certificate of Assessment (Form 7) had been issued although he was unable to say what the date of issue was. But as at 26^th May 2006 the Applicant had not filed any section 18 appeal in respect of the assessments in the said certificate.

19.In light of Ng Ming Cheong v Mass Transit Railway Corp [1997] 3 HKC 413 which held that the court ought not entertain any expert medical evidence at the trial as the respondent had chosen not to appeal against the assessment in the certificate of assessment, I enquired with the Applicant’s solicitor why expert medical evidence would be relevant. The Applicant’s solicitor conceded it seemed expert medical evidence was not relevant.

20.The assessment bundle revealed that pursuant to the Certificate of Assessment (Form 7) issued in respect of the Applicant and the subject accident by the Employees’ Compensation (Ordinary Assessment) Board on 20^th April 2006, the Applicant’s sick leave was assessed to be from 29^th January to 13^th May 2005 and from 10^th June to 5^th September 2005. The board also assessed the Applicant to have suffered 0.5% loss of earning capacity.

21.The Applicant filed and served his notice of appeal against the assessments in such certificate on 15^th September 2006, ie one and a half working days before the hearing of the assessment of compensation.

22.Mr Wong in his written opening submissions relied on the expert orthopaedic report of Dr James Kong dated 3^rd August 2005. Although such report was disclosed in the Applicant’s List of Documents and included in the Applicant’s Hearsay Notice (which were served to the Office but not on the Respondent’s provisional liquidators), there is no evidence before me that such report was ever sent to the Respondent’s provisional liquidators prior to service of the assessment bundle on 14^th September 2006 (ie two and a half working days before the hearing of the assessment of compensation). Without any expert directions given by the court, service of such report by way of the assessment bundle had no meaning for the Applicant was not entitled to adduce such expert evidence.

23.Order 38 rule 36(1)(a) of the Rules of the District Court provides inter alia that except with the leave of the court, no expert evidence may be adduced at the trial or hearing of any cause or matter unless the party seeking to adduce the evidence has applied to the court to determine whether a direction should be given under rule 37 or 41 (whichever is appropriate) and has complied with any direction given on the application.

24.Order 38 rule 37 provides inter alia that unless the court considers that there are special reasons for not doing so, it shall direct that the substance of the evidence be disclosed in the form of a written report or reports to such other parties and within such period as the court may specify.

25.Even if expert directions had been given, a separate application had to be made to the court to adduce such expert evidence by hearsay. Order 38 rule 41 provides inter alia that where the applicant alleges that the maker of the statement containing expert evidence cannot or should not be called as a witness, the court may direct that the provisions in rules 20 to 22 (ie the hearsay rules) shall apply with such modifications as the court thinks fit.

26.The Applicant has not made any application under the above rules. Mr Wong only made such applications before me at the hearing of the assessment of compensation. Although the Respondent has not participated in these proceedings to date, it is unclear whether the provisional liquidators (who newly joined the picture) will adopt a different stance upon sight of the expert report of Dr James Kong. To put it another way, the court cannot assume that the provisional liquidators will not contest the quantum of compensation if properly served with the relevant court directions for adducing expert medical evidence and properly informed that the Applicant would rely on Dr Kong’s report. It is inappropriate to let the matter proceed on 18^th September 2006.

Conclusion

27.In light of the above, although Mr Wong prepared full opening submissions with a view to proceed with the hearing of the assessment of compensation, he eventually conceded it would be more appropriate to seek further directions for the further conduct of this action. At Mr Wong’s request, I therefore gave the following directions :

(a) in all further proceedings in this action, the Respondent shall be named as “Focus Roller Shutter Limited (in liquidation)”;

(b) the Respondent do within 14 days from the date of service of the order file and serve its List of Documents;

(c) the Respondent do within 35 days from the date of service of the order file and serve its witness statement(s) as to quantum of compensation;

(d) the Applicant’s List of Documents filed on 24^th July 2006, the Applicant’s 1^st Supplemental List of Documents filed on 30^th August 2006 and the Applicant’s witness statement filed on 30^th August 2006 do stand as filed;

(e) the Applicant do within 14 days from the date of the order serve the aforesaid Applicant’s List of Documents, the 1^st Supplemental List of Documents and witness statement on the Respondent;

(f) the Applicant do within 14 days from the date of the order file and serve the expert orthopaedic report of Dr James Kong dated 3^rd August 2005;

(g) leave be granted for the Respondent to file and serve expert orthopaedic report within 42 days from the date of service of the order if so desired;

(h) expert medical evidence be limited to one orthopaedic expert for each party;

(i) the medical expert report of Dr James Kong dated 3^rd August 2005 shall be adduced at the re-fixed hearing of assessment of compensation without calling the maker thereof;

(j) the assessment of compensation be re-fixed to be heard before a District Judge in court at 9:30am on Thursday, 16^th November 2006 at Court No.8 with half day reserved.

Costs

28.Mr Wong conceded there should be no order as to costs of the hearing on 18^th September 2006. Such costs order is eminently appropriate. The matter was adjourned because of (a) the Applicant’s late application to seek leave to proceed when the information about the Respondent’s winding up was in the public arena for some time and (b) the filing of the Applicant’s section 18 appeal only a day and a half before the hearing of the assessment of compensation, which necessitated consequential directions.

Postscript

29.Where a party to proceedings has been wound up by the court, section 186 of the Companies Ordinance comes into play and serves a laudable purpose. It enables the Companies Court to scrutinise whether it is appropriate to grant leave to, say, the opposite party to continue with legal proceedings against the company that was wound up. In considering whether to grant leave, the Companies Court bears in mind not just the interest of the claimant but also the interests of the creditors of the company that was wound up. Section 186 also gives time for the provisional liquidators of the company that was wound up to assess the litigation and decide what stance to adopt.

30.Once a party becomes aware that its opponent has been wound up, it is incumbent on such party to immediately assess the situation and consider whether further directions are required for the conduct of the proceedings even if leave is granted by the Companies Court to continue with the proceedings. In appropriate cases, it may necessitate an application to vacate the hearing date and seek consequential directions. A party who fails to prudently consider the appropriate way forward may find he has to shoulder the liability for costs wasted.

31.A party has six months under section 18 of the Ordinance to appeal against the assessment in the certificate of assessment or the certificate of review of assessment. Such time limit does not necessary run in tandem with the progress of the applicant’s employees’ compensation proceedings. Injuries may take a while to stabilise or reach maximum medical improvement, so it is not uncommon to find that medical assessment by the board takes place some time after employees’ compensation proceedings have commenced.

32.Nevertheless, a decision whether to appeal against the assessments in the certificate of assessment or the certificate of review of assessment has implications on the conduct of the employees’ compensation proceedings, particularly on the assessment on the quantum of compensation. It may entail expert directions on expert medical evidence. So if the appeal is made shortly before the trial or the assessment of compensation (albeit within the section 18 time limit), it is incumbent for the appellant to carefully consider whether the hearing can be proceeded with or whether such hearing should be vacated for appropriate directions to be sought. Failure to prudently consider these matters may also result in the appellant having to bear liability for costs wasted.

Representation:

Mr Tommy Wong instructed by Messrs Huen & Partners for the Plaintiff.

The Respondent (in liquidation), in person and absent.