Waan Chuen Ming v. Lo Kin Nam t/a Kar Kin Engineering & Supplier Co and Another

CACV 281/2008

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 281 OF 2008

(ON APPEAL FROM HCPI 588 and 597 OF 2003 (Consolidated))

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BETWEEN

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Before : Hon Tang VP, Cheung JA and Stone J in Court

Date of Hearing : 31 March 2009

Date of Judgment : 12 May 2009

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J U D G M E N T

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Hon Tang VP :

1.I have had the benefit of reading the judgment of Cheung JA in draft and gratefully adopt his statement of the facts. 

2.The plaintiff by its Respondent’s Notice asked that the judgment be affirmed on the basis that:

‘… at common law, the learned Judge ought to have found, expressly, that the 2^nd Defendant was a joint tortfeasor with the 1^st Defendant ...’

3.The facts are unusual.  The defendant provided the pallet jack and roller trolley to the 1^st defendant knowing and intending that the 1^st defendant should use them for the transportation of the stentering machine.

4.The learned judge said:

‘59.    … That unsafe system of transportation was clear to anyone and everyone who was there to see it to realize that it was an unsafe system as was made clear from the evidence of Ip (the 2^nd defendant’s supervisor).  Moreover, the 2^nd defendant had a hand in that unsafe system in that it had supplied the equipment and therefore had assisted in perpetrating that unsafe system of transportation.’

5.As the learned judge recorded, Ip (the 2^nd defendant’s supervisor):

‘33.    … agreed that he thought it was ‘extremely unsafe’ when he saw the calendering unit being transported by the pallet jack and bearing trolley as there was a risk that the calendering unit might topple over. …’

6.On such findings, I am of the view that the 2^nd defendant owed a duty of care to persons who might be injured by the unsafe use of the pallet jack and trolley.  Just as a person who allowed his lorry to be used intending or knowing that it would be used to carry an excessive and dangerous load owes a personal duty of care to other road users.  The fact that the 1^st defendant was an independent contractor is not sufficient to negate liability.  We are not concerned with vicarious liability but the duty of care of a person who permitted its chattel to be used in an obviously dangerous way.  Stone J, whose judgment I also have had the opportunity of reading in draft, relies on what Lord Goff said in Ferguson v Welsh [1987] 1 WLR 1553,

“… of the ordinary householder who calls in an electrician; and the electrician sends in a man who, using an unsafe system established by his employer, creates a danger in the premises which results in his suffering injury from burns. I cannot see that, in ordinary circumstances, the householder should be held liable … in negligence, for failing to tell the man how he should be doing his work, …”

But that is not what I have in mind.  I have in mind, rather, a case where the householder lends a faulty (or unsuitable) ladder knowing that it would be used by the employer in an obviously unsafe manner, resulting in injury to his employee or someone else who was in the vicinity.

7.I agree with the analysis of Cheung JA that a clear case of negligence was made out against the 2^nd defendant as a joint tortfeasor, and the appeal should be dismissed.

Hon Cheung JA :

8.The plaintiff obtained judgment from Suffiad J in the sum of $2,569,786 together with interest and costs against the 1^st and 2^nd defendants in respect of personal injuries he sustained in an industrial accident.  The 2^nd defendant now appeals against the judgment in respect of liability. 

The background

9.The plaintiff was an employee of the 1^st defendant.  The 2^nd defendant was the operator of a factory which carried on the business of ‘PU coating of cloth for the manufacture of waterproof garments such as windbreaker and raincoat’.  The machines that were used by the 2^nd defendant included a stentering machine.  The 2^nd defendant engaged the 1^st defendant to do repair and maintenance work for the stentering machine.

10.The stentering machine was a huge machine.  It had a detachable calendering unit (‘the unit’).  The unit was also big and heavy.  It was about 1.68 m in height, 7 m in width and 2.5 m in length.  It comprised of a steel frame, two cylinders, a motor and other metal parts.  The unit was about 1.5 tonnes in weight.  The unit was designed such that the centerlines of the cylinders were not aligned with that of the unit.  As a result, the centre of gravity of the unit was not centrally located. 

11.On 10 June 2000 the plaintiff together with the 1^st defendant attended the factory to do repair work.  This required the unit to be detached and removed from the stentering machine so that repair and maintenance can be done on the unit. After the unit had been detached, the plaintiff and the 1^st defendant used a pallet jack and a roller bearing trolley to transport the unit.  The pallet jack was inserted into the underside of the unit on one side of it and the trolley was placed under the other side of the unit.  After they had repaired the unit, which was resting on the pallet jack and the trolley, they pulled it back to about five or six meters near its original position within the stentering machine.

12.In order to push back the unit into its original position within the machine a second pallet jack was used.  The 1^st defendant first jacked up one end of the unit using the first pallet jack so that a second pallet jack could be inserted underneath the front part of the unit.  Two pieces of wood were also placed on the forks of the second pallet jack by the 1^st defendant.  When the second pallet jack had been inserted into position, the forks of the first pallet jack were lowered so as to allow the unit to rest on the second pallet jack.

13.When that was done, the plaintiff took hold of the handle of the first pallet jack while the 1^st defendant attempted to jack up the second pallet jack in order to enable the first pallet jack to be pulled out from underneath the unit and then pushed the unit backwards by about 1 meter using the second pallet jack on which the unit now rested. 

14.When the 1^st defendant was attempting to jack up the unit with the second pallet jack, the plaintiff heard him said that the forks of the second pallet jack would not rise.  On hearing that the plaintiff came over to the front.  At that moment the unit began to topple towards the plaintiff and 1^st defendant.  The plaintiff tried to push back the unit with his hands but it was too heavy for him and as a result the unit fell on top of him and crushed both of his legs.  Later on firemen and ambulancemen arrived at the scene and rescued the plaintiff underneath the toppled unit. 

15.The two pallet jacks and the trolley were equipment in the 2^nd defendant’s factory.  They were used to transport cloth by the 2^nd defendant.

16.The plaintiff’s pleaded case against the 2^nd defendant was based on negligence, breach of statutory duty and breach of common duty of care under the Occupiers Liability Ordinance (‘the Ordinance’) (Cap. 314).

The decision

17.The Judge found that the 1^st defendant as the employer of the plaintiff had failed to provide a safe system of work for the plaintiff.  The system used for the transportation of the unit was unsafe for the following reasons :

‘ 35.   Firstly, the fork of the pallet jack was only 1.5 metres long, but the calendering unit was 2.5 metres long, as a result, a bearing trolley was placed under the other side of the calendering unit to transport it.  The bearing trolley was not connected to the pallet jack at all and in that sense the equipment used to transport the calendering unit was not itself an integral unit but two wholly separate pieces of equipment.

36.    Secondly, the calendering unit had a height of 1.68 metres and when put on the pallet jack which, when jacked up with the calendering unit on it, the calendering unit on the pallet jack would be taller than a person.  The calendering unit was some 1.5 tonnes in weight with a cylinder of some 500 kg at the top part of it.  Given Ip’s evidence when the 2^nd defendant used the pallet jack to transport cloth, they normally see to it that the cloth placed on the pallet will not be taller than a normal person’s height, therefore the method employed to transport the calendering unit on the pallet jack must result in the calendering unit, when sitting on the pallet jack, being top heavy thereby increasing the risk of its toppling over.

37.    Thirdly, no steps were taken to secure the calendering unit in any manner whatsoever, when it was being transported on the pallet jack, to minimize the risk of its toppling over.

38.    Fourthly, the placing of two pieces of wood on the second pallet jack in order to raise the calendering unit higher than otherwise the pallet jack could show it to be a makeshift system designed to move or transport the calendering unit in any way and with whatever equipment is available but without any proper regard to safety measures.’

18.The plaintiff had previously pleaded that the 2^nd defendant was his employer.  Apparently the 2^nd defendant had been persuaded by the 1^st defendant to claim that the 1^st defendant and the plaintiff were its employees.  This was recorded in the statement of Mr. Ip Kam Wo, the supervisor of the Production Department of the 2^nd defendant, when he made a declaration to the Occupation Safety Officer of the Labour Department and also under the notice (Form 2) filed by the 2^nd defendant pursuant to the Employees’ Compensation Ordinance (Cap. 282).  However, in the employees’ compensation proceedings the position was clarified that the 2^nd defendant only engaged the 1^st defendant to carry out the repair and the plaintiff was the employee of the 1^st defendant.

19.At paragraph 10 of the judgment the Judge stated that :

‘ 10.  As for the 2^nd defendant, counsel for the plaintiff indicated at the commencement of the trial that he will proceed against the 2^nd defendant on the basis of the Occupiers Liability Ordinance and also the Occupational Safety and Health Ordinance.  In so doing, counsel for the plaintiff effectively conceded that, although pleaded, he will not be pursuing the claim against the 2^nd defendant on the basis that the 2^nd defendant was the employer of the plaintiff (or for that matter also of the 1^st defendant) in relation to the works carried out by them when the accident happened.’

20.The concession indicated by the Judge must be understood in the light of what had transpired in this case. 

21.In respect of the 2^nd defendant the Judge held that :

‘ 62.     I therefore find that the 2^nd defendant, in assisting the 1^st defendant by permitting its pallet jacks and bearing trolley to be used for the unsafe system of transportation together with the failure of the 2^nd defendant through its supervisor Ip to stop such unsafe system of transportation as being a breach of the common duty of care owed by the 2^nd defendant to the plaintiff in respect of this accident.

63.    Accordingly, I find the 2^nd defendant to be liable to the plaintiff for the accident, being in breach of the common duty of care under the Occupiers Liability Ordinance.’

Occupiers Liability Ordinance

22.Mr. Godfrey Lam SC who appeared together with Mr. Kent Yee as counsel for the 2^nd defendant challenged the Judge’s decision based on theOrdinance.  Mr. Lam’s stand is that the Ordinance was not engaged in this case because it is concerned not with an occupier’s ‘activity duty’ but only with ‘occupancy duty’.

23.Under section 3(1) of the Ordinance an occupier of premises owes the same duty which is described as the ‘common duty of care’ to all his visitors.  The description ‘common duty of care’ is used to remove the previous distinction drawn on the nature of duty owed to different types of visitors.

24.The ambit of the common duty of care by an occupier is provided by section 3(2), namely, it is

‘ a duty to take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.’

25.Section 2(1) further provides that,

‘ The rules enacted by sections 3 and 4 shall have effect, in place of the rules of the common law, to regulate the duty which an occupier of premises owes to his visitors in respect of dangers due to the state of the premises or to things done or omitted to be done on them.’

The distinction

26.‘Occupancy duty’ is said to be limited to dangers due to the state of the premises.  ‘Activity duty’ is in respect of danger from activities on land, rather than from the state of the land itself, such duty is governed by the general rule of negligence, in which issues such as the status of the injured person are largely irrelevant : see Clerk & Lindsell on Torts (19^th Ed. 2006) para 12-03.

27.In the Report on Liability for Damage or Injury to Trespassers and Related Questions of Occupiers’ Liability (Law Com No. 75) the Law Commission of the United Kingdom recognized the distinction between ‘activity duty’ and ‘occupancy duty’.  It agreed with the view of the majority of commentators that the words ‘anything done or omitted to be done’ on the premises’ [i.e. the words in section 1(1) of the English Occupiers’ Liability Act 1957 or section 2(1) of the Ordinance] do not have the effect of bringing within the scope of the 1957 Act all claims for injuries on the occupiers’ premises arising from every kind of activity or omission on them irrespective of whether they are connected with the safety of those premises as such.  The Law Commission was of the view that the danger arising from some activity for which the person sought to be made liable is not responsible in his capacity as an occupier of the premises will continue to be treated in accordance with ordinary principles of negligence at common law, see Revill v. Newberry [1996] 1 All ER 291 at 297. 

Ferguson v. Welsh

28.The distinction between ‘activity duty’ and ‘occupancy duty’ was discussed in a number of English cases.  In Ferguson v. Welsh and others [1987] 1 WLR 1553 the plaintiff was an employee of a firm of sub-contractors who carried out demolition work in the building of a district council.  The council had contracted the work to Mr. Spence who illegally subcontracted it to the subcontractor.  The work was carried out in a dangerous manner and the plaintiff sustained serious injuries.  The plaintiff’s case against the council was unsuccessful.  Lord Keith of Kinkel dismissed the appeal by concentrating on section 2(4) of the 1957 Act (i.e. section 3(4) of the Ordinance).  His view was agreed by Lord Brandon of Oakbrook, Lord Griffiths and Lord Oliver of Aylmerton.

29.Lord Keith was of the view that if the plaintiff was a lawful visitor and a common duty of care under section 2(2) was owed to him, the Council would still have a valid defence under section 2(4) because the Council had engaged a contractor whom it had reasonable grounds for regarding as competent.  Section 2(4)(b) of the 1957 Act (i.e. section 3(4)(b) of the Ordinance) provided that :

‘ where damage is caused to a visitor by a danger due to the faulty execution of any work of construction, maintenance or repair by an independent contractor employed by the occupier, the occupier is not to be treated without more as answerable for the danger if in all the circumstances he had acted reasonably in entrusting the work to an independent contractor and had taken such steps (if any) as he reasonably ought in order to satisfy himself that the contractor was competent and that the work had been properly done.’

30.Lord Keith after referring to that section held at page 1559 that :

‘The enactment is designed to afford some protection from liability to an occupier who has engaged an independent contractor who has executed the work in a faulty manner.  It is to be observed that it does not specifically refer to demolition, but a broad and purposive interpretation may properly lead to the conclusion that demolition is embraced by the word “construction.”  Further the pluperfect tense employed in the last words of the paragraph “the work had been properly done” might suggest that there is in contemplation only the situation where the work has been completed, but has been done in such a way that there exists a danger related to the state of the premises.  That would, however, in my opinion, be an unduly strict construction, and there is no good reason for narrowing the protection afforded so as not to cover liability fromdangers created by a negligent act or omission by the contractor inthe course of his work on the premises.  It cannot have been intended not to cover, for example, dangers to visitors from falling masonry or other objects brought about by the negligence of the contractor.  It may therefore be inferred that an occupier might, in certain circumstances, be liable for something done or omitted to be done on his premises by an independent contractor if he did not take reasonable steps to satisfy himself that the contractor was competent and that the work was being properly done.’

31.Lord Keith then referred to special circumstances in which the occupier may be held liable,

‘ It would not ordinarily be reasonable to expect an occupier of premises having engaged a contractor whom he has reasonable grounds for regarding as competent, tosupervise the contractor’s activities in order to ensure that he was discharging his duty to his employees to observe a safe system of work.  In special circumstances, on the other hand, where the occupier knows or has reason to suspect that the contractor is using an unsafe system of work, it might well be reasonable for the occupier to take steps to see that the system was made safe.

The crux of the present case therefore, is whether the council knew or had reason to suspect that Mr. Spence, in contravention of the terms of his contract, was bringing in cowboy operators who would proceed to demolish the building in a thoroughly unsafe way.’  (emphasis added)

32.Lord Oliver of Aylmerton at page 1562 stated that :

‘ It is possible to envisage circumstances in which an occupier of property engaging the services of an independent contractor to carry out work on his premises may, as a result of his state of knowledge and opportunities of supervision, render himself liable to an employee of the contractor who is injured as a result of the defective system of work adopted by the employer.  But I incline to think that his liability in such case would be rather that of joint tortfeasor than of an occupier.’

33.Lord Goff of Chieveley’s decision was based on section 2(2) of the 1957 Act.  He further held at page 1563 that :

‘ ......There can, no doubt, be cases in which an independent contractor does work on premises which result in such premises becoming unsafe for a lawful visitor coming upon them, as when a brick falls from a building under repair onto the head of a postman delivering the mail.  In such circumstances the occupier may be held liable to the postman, though in considering whether he is in breach of the common duty of care there would have to be considered, inter alia, the circumstances specified in section 2(4)(b) of the Act.  But if I ask myself, in relation to the facts of the present case, whether it can be said that Mr. Ferguson’s injury arose from a failure by the council to take reasonable care to see that persons in his position would be reasonably safe in using the premises for the relevant purposes, the answer must, I think, be no.  There is no question as, I see it, of Mr. Ferguson’s injury arising from any such failure; for it arose not from his use of the premises but from the manner in which he carried out his work on the premises.  For this simple reason, I do not consider that the Occupiers’ Liability Act 1957 has anything to do with the present case.

I wish to add that I do not, with all respect, subscribe to the opinion that the mere fact that an occupier may know or have reason to suspect that the contractor carrying out work on his building may be using an unsafe system of work can of itself be enough to impose upon him a liability under the Occupiers’ Liability Act 1957, or indeed in negligence at common law, to an employee of the contractor who is thereby injured, even if the effect of using that unsafe system is to render the premises unsafe and thereby to cause the injury to the employee.  I have only to think of the ordinary householder who calls in an electrician; and the electrician sends in a man who, using an unsafe system established by his employer, creates a danger in the premises which results in his suffering injury from burns.  I cannot see that, in ordinary circumstances, the householder should be held liable under the Occupiers’ Liability Act 1957, or even in negligence, for failing to tell the man how he should be doing his work.  I recognise that there may be special circumstances which may render another person liable to the injured man together with his employer, as when they are, for some reason, joint tortfeasors; but such a situation appears to me to be quite different.’

Makepeace v. Evans Brothers

34.In Makepeace v. Evans Brothers (Reading) and another [2001] ICR 241 a claimant, a painter and decorator, was employed by the subcontractor to carry out painting work at a building site.  The claimant while doing work suffered serious injuries when a tower scaffold collapsed.  The scaffolding belonged to the site contractor, whose site agent lent it to the claimant for his use.  The claimant’s claim against the site contractor was dismissed.  Mantell LJ at 244 stated :

‘ 7.     The question whether the common law duty of care is subsumed in the common duty of care created by the Occupiers’ Liability Act 1957 or survives as an independent basis of claim in respect of activities carried out on premises is of no practical importance save possibly as a pleading point.  Certainly it is unnecessary to attempt to resolve the question in the present appeal.

......

9. ...... I do not say, and neither did the judge, that there will never be occasions when the main contractor or occupier will owe a duty of care to the employees of others who come upon the premises distinct from the duty which exists in relation to the state of the premises themselves.’

35.Holman J held that :

‘ 14.   Essential ingredients of the present case are that: (i) use of the tower scaffold (although entirely free from any defects) was inherently dangerous unless used correctly, although the dangers are not obvious and are not always appreciated; (ii) it was McAlpines who brought this inherently dangerous piece of equipment onto the site; (iii) it was McAlpines’ site agent, Mr Hughes, who directly encouraged or instructed the claimant to use it; (iv) Mr Hughes did not inquire whether the claimant appreciated the dangers and/or knew how to use it correctly, and did not forbid him to use it until he had received proper tuition.

15.   It seems to me that those ingredients, in combination, are capable in certain circumstances of giving rise to a common law duty of care upon a main contractor to an employee of a subcontractor.  But it is relevant and necessary also to consider (a) the piece of equipment in question.  There is a spectrum between the ordinary and commonplace (although inherently dangerous), and the unusual or rare; and (b) the trade of the employee in question of the subcontractor. A ladder, an electric drill, or even a hammer can all be dangerous if not used correctly.  But it would be extending what Diplock LJ called “the nursemaid school of negligence” too far to say that if Mr Hughes (on behalf of the main contractor) had instructed or encouraged the claimant, an experienced painter and employee of a subcontractor, to use a ladder (albeit provided by McAlpines), he was under a duty to ask the claimant whether he knew how to use a ladder correctly and whether he appreciated the dangers inherent in incorrect use; similarly, if the piece of equipment were an ordinary drill or a hammer, and the tradesman a carpenter.’

Fairchild v. Glenhaven Funeral Services

36.In Fairchild v Glenhaven Funeral Services Ltd and others [2002] 1 WLR 1052 the claimants were employees of contractors that had been exposed to asbestos dust and they were either suffering from mesothelioma or might develop such illness in the future.  The relevant issue for the purpose of this appeal concerned the liability of the occupiers of the buildings which exposed the claimant to the asbestos dust.  The cases against the occupiers were dismissed.  There was specific finding that the occupiers did not know of the risks to which the contractors were exposing their employees. 

37.The English Court of Appeal reviewed, among other things, the common law position before the enactment of the 1957 Act.  Brooke LJ held that :

‘ The common law made a distinction between the liability of an occupier for the dangerous condition of his premises and the liability of an occupier in relation to dangerous activities carried out on his premises.’

38.In respect of the position after the enactment he held that :

‘ The Act does not provide an answer, however, when a question arises whether an occupier, without more, is liable to a visitor for an injury he suffers as a result of an activity conducted by a third party on his premises.  For that purpose one has to go to the common law to see if a duty of care exists, and if so, what is its scope, or to some other statutory provision such as the (new repealed) section 63(1) of the Factories Act 1961.’

39.Brooke LJ held :

‘ While we must not assume that in using the language adopted in section 2(2) of the 1957 Act Parliament necessarily decided to adopt the emerging distinction between “occupancy liability” and “activity liability”, the selection of the phrase “care … to see that the visitor will be reasonably safe in using the premises for the [invited or permitted] purposes” is a fairly strong indication that Parliament intended the Act to be concerned with what used to be described as “occupancy liability”.’

40.After referring to Ferguson,Brooke LJ further stated that :

‘ We have had the benefit of much fuller argument than was available to the House of Lords in Ferguson v Welsh, and we can see nothing in the speeches of the other members of the House which casts any doubt on the correctness of Lord Goff’s interpretation of section 2(2).  Lord Oliver clearly tended to make the same distinction between occupancy liability and activity liability...

......

Lord Keith, too, was tending in the same direction, at p 1560B, in the sentence which starts “It would be going a very long way to hold...’

Bottomley v. Todmodern Cricket Club

41.In Michael John Bottomley v. Todmodern Cricket Club [2003] EWCA Civ 1575 the claimant helped a team of stuntman to perform a pyrotechnic display at a Cricket Club’s premises.  The claimant’s task was to place some gunpowder into a mortar tube which had been filled with petrol.  The gunpowder would be ignited by remote control.  As the claimant was placing the gunpowder charge into the mortar tube, the contents inside ignited and exploded in his face. 

42.The English Court of Appeal considered Ferguson and Fairchild and affirmed the judgment against the Cricket Club by the claimant.  Brooke LJ held that :

‘ 48. ……the cricket club ought to have taken reasonable care in its selection of a suitable “contractor” to conduct this dangerous pyrotechnics display on its land, and it failed to do so.’

43.He further held that

‘ 49.     Occupiers usually escape liability in a case like this because they can show they have taken reasonable care to select competent and safe contractors, and in those cases an injured employee or agent can look no further than his own employer or principal for redress.  But as the House of Lords acknowledged in Ferguson v Welsh, there may be circumstances in which the occupier of the land who wishes something dangerous to be done on his land for his benefit may be liable, too, and this in my judgment is one of those cases……’

Textbooks

44.The distinction between ‘occupancy duty’ and ‘activity duty’ is also recognized by the authors in works such as Clerk and Lindsell on Torts (19^th Ed, 2006) para 12-04; Charlesworth & Perry on Negligence (11^th Ed, 2006) para 7-03, 7-10 to 7-12 and 7-35; Markesinis and Deakin’s Tort Law (6^th Ed, 2007) pages 343-344 and North, Occupiers’ Liability (1971) pages 80-82.

My view

45.The authorities recognized the distinction between ‘occupancy duty’ and ‘activity duty’.  However, it is not necessary, for the purpose of this appeal, to decide whether the present case falls outside the ‘occupancy duty’ of the 2^nd defendant and therefore did not engage the Ordinance.  It is also not necessary to decide, whether based on the distinction between ‘occupancy duty’ and ‘activity duty’, what Lord Keith regarded to be the special circumstances where a liability is to be attached to the occupier must necessarily be outside the scope of the ‘occupancy duty’.  The distinction of these two types of duty obviously was canvassed before the House of Lords, yet Lord Keith did not specifically state that the ‘special circumstances’ must be considered in the context of a claim based on negligence.

Negligence was established

46.In my view negligence was established against the 2^nd defendant.  The plaintiff had pleaded that the accident was caused by the negligence of the 2^nd defendant, its servants or agents.  The relevant particulars on negligence were :

‘(k)   Failed to devise a safe system of work;

(l)     Failed to ensure that all apparatus used for the manual handling task were in proper working order and suitable for the purpose used.  The pallet truck and roller trolley were unsuitable and unsafe equipment in that the unit could not be held stable by 2 men.  In order to raise the level of the forks of the pallet truck to a suitable height, the 1^st Defendant had to place a piece of wood on each fork which destablilised the unit;

(m)     By its employee, the 1^st Defendant, failed to ensure that the unit was safely and securely positioned on the pallet truck before operating the same;

(n)   By its employee, the 1^st Defendant failed to have any or any adequate regard to the stability and centre of gravity of the unit before attempting to raise the same on the pallet truck;

(o)   By its employee, the 1^st Defendant, failed to ensure that the cloth used to cushion the unit whilst it was positioned on the roller bearing trolley was kept away from the rotating wheels of the trolley.  The unit might have started toppling over when the cloth became caught in the rotating rollers;

(p)   Failed to supervise the Plaintiff to ensure that he was able to carry out his work in safety;

(q)   Failed to have any or any adequate regard to the Plaintiff and exposed him unnecessarily to a risk of injury;

(r)    In the circumstances, failed to take reasonable care to see that the Plaintiff would be reasonably safe whilst working at its premises.’

47.In essence the plaintiff’s case is that the 2^nd defendant had failed to take reasonable care to ensure that he would reasonably be safe whilst working at its factory.  It had lent or allowed the 1^st defendant and the plaintiff to use the equipment to carry out the repair which were unsuitable and unsafe.  It was aware of the dangerous situation that arose when such equipment was used.  The plaintiff had, of course, not pleaded that the 2^nd defendant had failed to instruct a competent contractor to carry out the work.  This is understandable because of the 2^nd defendant’s previous position regarding the employment status of the 1^st defendant and the plaintiff.  However, it is not necessary for the plaintiff to rely on such a plea.  As a matter of fact, at the trial the 2^nd defendant had attempted to absolve liability by relying on the use of an independent contractor and its lack of control over his work. 

Duty of care

48.Even proceeding on the basis that the 2^nd defendant had engaged a contractor whom it had reasonable grounds for regarding as competent, liability against the 2^nd defendant had been established.  The issue ultimately is whether the 2^nd defendant owed a duty of care to the plaintiff.

49.The editors of Charlesworth & Perry on Negligence (11^th Ed) at Chapter 2 discussed the development of duty of care from its early inception in Heaven v. Pender (1883) 11 QBD 503, to the classic formulation in Donoghue v. Stevenson [1932] AC 562, then to Anns v. Merton London Borough Council [1978] AC 728 (which had since been disregarded) and finally to the latest statement by the House of Lords as gleaned from decisions beginning from Spring v. Guardian Assurances plc [1995] 2 AC 296 where a three criteria approach is adopted, namely, the foreseeability of damages; proximity of relationship and justice and reasonableness. 

Basis of liability

50.The present case satisfies all the three criteria.  First, the injuries suffered by the plaintiff were foreseeable because of the dangerous operation.  Second, there was the requisite proximity between the 2^nd defendant and the plaintiff who was lawfully on its premises.  Third, it is fair, just and reasonable to impose liability on the 2^nd defendant because it had allowed and did not stop the dangerous event to take place on its premises.

Foreseeability of damage

51.First, damage is clearly foreseeable due to the dangerous method used in the removal of the unit.  The Judge found that the method of transporting the unit was extremely dangerous to the knowledge of the 2^nd defendant who had provided the equipment for the transportation :

‘ 54.   However, it cannot be disputed that that system of transporting the calendering unit was done not only with the knowledge of the 2^nd defendant as is shown in the evidence of Ip that on previous occasions he had seen a similar mode of transportation used for the calendering unit by the 1^st defendant.  It was also done with the assistance of the 2^nd defendant since the equipment for such transportation was provided by the 2^nd defendant, namely the pallet jacks and the bearing trolley.

55.     Not only that, but also Ip did at the time, or even before this accident occurred, realized that such transportation employed by the 1^st defendant was in his words “extremely dangerous”.  Nevertheless, he still allowed the 1^st defendant to continue such a system of transportation without so much as a caution or warning let alone preventing the 1^st defendant from continuing with such unsafe system.

56.    In short the 2^nd defendant had permitted an unsafe system of transportation to be carried out in the 2^nd defendant’s factory and which he knew or ought to have known would be dangerous either to the 1^st defendant or the 1^st defendant’s workers, or for that matter, any of the 2^nd defendant’s own workers who may come close to the calendering unit when being transported in this way, all of those persons being ‘visitors’ as defined by the Ordinance and to whom a duty is owed by the 2^nd defendant.’

52.In summary the Judge held that

‘ 59. ……That unsafe system of transportation was clear to anyone and everyone who was there to see it to realize that it was an unsafe system as was made clear from the evidence of Ip.  Moreover, the 2^nd defendant had a hand in that unsafe system in that it had supplied the equipment and therefore had assisted in perpetrating that unsafe system of transportation.’

53.These are findings that the Judge was clearly entitled to make from the evidence adduced before him. 

Proximity of relationship

54.The plaintiff was lawfully on the premises of the 2^nd defendant.  The 2^nd defendant had participated in creating the dangerous situation by lending the equipment that was used in the removal operation.  It was aware of the danger involved by the use of the equipment and it could easily have put a stop to the operation.  There clearly was a proximity of relationship between the parties.

Just, fair and reasonableness

55.In this connection, I find Lord Browne-Wilkinson’s statement in Barrett v. Enfield London Borough Council [2001] 2 AC 550 gives the best practical guidance on how this matter should be approach,

‘ In English law the decision as to whether it is fair, just and reasonable to impose a liability in negligence on a particular class of would-be defendants depends on weighing in the balance the total detriment to the public interest in all cases from holding such class liable in negligence as against the total loss to all would-be plaintiffs if they are not to have a cause of action in respect of the loss they have individually suffered. ’

56.Based on the unique facts disclosed in this case, I cannot see any detriment to the public interest if the 2^nd defendant was to be held liable for the injuries of the plaintiff. The case is different from situations in Ferguson, Makepeace or Fairchild where the occupiers had engaged competent contractors and were not aware of the risks that the injured persons were exposed to.  Here the specific finding was that the 2^nd defendant was well aware of the extremely dangerous method of work that the plaintiff and the 1^st defendant were engaged in by using the equipment that the 2^nd defendant had lent them.  The 2^nd defendant was in a position to stop it but had not chosen to do so.

Bottomley adopted the same approach

57.  In fact Brooke LJ in Bottomley adopted the three criteria approach when he found liability against the Cricket Club.  He held that

‘ If this result is tested by applying the range of tests for identifying a legal duty of care which the House of Lords has developed in the years that followed Ferguson v Welsh, the result is in my judgment the same.  The injuries suffered by Mr Bottomley were foreseeable if there was no proper safety plan: there was the requisite proximity between the club and Mr Bottomley, who was lawfully on their premises that evening; and it is fair, just and reasonable to impose liability on the club because it did not do what it ought to have done before it allowed this dangerous event to take place on its land.’

58.I have no hesitation in finding that liability was established against the 2^nd defendant based on well established principles.

Respondent’s notice

59.While the Judge’s decision against the 2^nd defendant under paragraphs 62 and 63 of his judgment was said to be based on the breach of common duty of care by an occupier, his reasoning is equally applicable to that based on negligence.

60.The plaintiff had issued a respondent’s notice to affirm the judgment by relying on a claim based on joint tortfeasor.  In my view even without a specific plea that the 2^nd defendant was a joint tortfeasor, the plaintiff had sufficiently pleaded a case of negligence against the 2^nd defendant and the facts supported the claim.  This is a case where the facts speak louder than the labels.  Based on the evidence adduced in this case, I would, in any event, allow the plaintiff to rely on the respondent’s notice.

Special circumstances

61.I would also, in so far as necessary, find that liability can be established based on the ‘special circumstances’ test propounded by Lord Keith in Ferguson, namely, the 2^nd defendant knew or had reason to suspect that the 1^st defendant was using an unsafe system of work, it was reasonable for the 2^nd defendant to take steps to see that the system was made safe and it had failed to do so.

Conclusion

62.I would dismiss the 2^nd defendant’s appeal with costs.

Hon Stone J :

63.I have had the advantage of reading in draft the judgments of the Vice President and of Cheung JA.  I regret that I am unable to share the majority view that the 2^nd defendant is to be held liable for this accident, and thus for the injuries consequently suffered by the plaintiff.

64.With respect, it seems to me that such finding of liability necessarily would result in an unwarranted extension of established principle, notwithstanding the attractive consequence that the plaintiff thus would be able to effect a recovery otherwise denied him by the circumstances of the 1^st defendant, his employer and tortfeasor, whom we are told now has had default judgment entered against him.

65.The essential facts of this case are tolerably straightforward.

66.The plaintiff was an employee of the 1^st defendant contractor.  He was instructed to present himself at the premises of the 2^nd defendant and to participate in the reinstallation of a calendering unit, which needed to be re-attached to the main stentering machine.

67.Apparently this was a procedure which had occurred on several occasions prior to the date of the accident, and when the desired reattachment had been achieved without mishap by fundamentally the like modus operandi as was used in this instance.

68.On this occasion, however, something went wrong.  We do not know precisely why this happened, although I suspect that the presence of two loose pieces of wood apparently placed upon the forks of the second pallet jack had something to do with the imbalance and consequent toppling of the calendering unit, which seems to have had a high centre of gravity.

69.Be that as it may.  Liability for this regrettable occurrence now has been held to accrue to the 2^nd defendant, in whose premises the accident occurred, and who had retained the 1^st defendant, qua independent contractor, to do this particular job.

70.As I am in the minority, my views are of no immediate consequence in terms of the result of this appeal, but for my part I fail to understand why in principle the 2^nd defendant should also be held liable as joint tortfeasor for this accident.

71.It is said that the 2^nd defendant is liable under the provisions of the Occupiers Liability Ordinance, Cap 314.

72.I am unable to agree.

73.True it is that as a matter purely of physical fact the accident took place within the 2^nd defendant’s factory, but that is as far as it goes. 

74.I perceive no good reason why this occurrence is anything to do with the 2^nd defendant’s statutory responsibilities, qua occupier, under that Ordinance.

75.The accident as occurred had nothing to do with the premises themselves, which represented no more than the physical setting for this accident, which transpired not by reason of the use of the premises but from the manner in which the work in question was carried out upon those premises; as Mr Godfrey Lam SC, for the 2^nd defendant, neatly summed up the position, in these circumstances the invocation of the Occupiers’ Liability Ordinance is and can be no more than a ‘red herring’.

76.Alternatively it is said that the 2^nd defendant is liable to the plaintiff in common law negligence, which as I understand the position represents the view of the majority of this court.

77.With respect, once again I find myself unable to agree.

78.The 1^st defendant was an independent contractor.  He was retained to do the job in question, precisely as he had been retained before, albeit on these earlier occasions happily with no adverse consequence.

79.As previously had occurred, the 1^st defendant apparently had employed a trolley and a pallet jack to effect the required procedure.  We are told that the trolley at least was available in the 2^nd defendant’s factory, and that the 2^nd defendant knew of its use for this purpose.

80.It is trite law that use of an independent contractor precludes vicarious liability ensuring to the person who retained the services of such contractor.

81.Therefore, unless this was one of those tasks which is regarded by law as intrinsically ‘non-delegable’, in other words by its very nature to be so dangerous or risky that delegation of its performance to an independent contractor – and thus protection against vicarious liability – is not to be permitted, the fault of such contractor, if fault there be, does not permeate through to the party which retains that contractor.

82.It is clear that this particular task to be performed on the occasion in question was not a task which fell within the realm of being ‘intrinsically non-delegable’; no doubt it had to be performed with due care and attention, but in itself this task is far from extraordinary, and seems to be well within the realm of normal delegability.

83.Why, therefore, should the 2^nd defendant factory owner now be held liable at common law?

84.The answer to this question appears to lie in the proposition that the 2^nd defendant knowingly had permitted his chattel(s) to be used in an ‘obviously dangerous’ way, and thus that use thereof by the 1^st defendant independent contractor is insufficient to negate liability of the 2^nd defendant to the injured plaintiff.

85.In this context reliance is placed upon certain cross-examination evidence that an employee and supervisor of the 2^nd defendant, a certain Mr. Ip, who was not present at the time of the accident, had opined that in his view the procedure was ‘dangerous’ or ‘extremely unsafe’.

86.Of course it turned out to be unsafe as matters transpired, and in light of the accident as occurred it would have been surprising had this particular employee seen fit not to express this view; I dare say that had he been asked for his opinion of this reconnecting operation at the time when it had been successfully performed, as it had been in the past, it is most improbable that Mr. Ip would have expressed the same view.

87.In any event, I do not regard this subjective post-facto opinion of Mr. Ip as anything to the immediate point.

88.The test for that which is to be classified dangerous can and must be objective: liability in this or indeed in any other case cannot depend upon the random ‘post-event perception’ of any particular individual – in this case a non-expert employee of the 2^nd defendant – who ventured this incidental opinion in the course of his cross-examination at the trial below. 

89.I note, also, that there was no expert evidence on this issue.  In any event, I am unable to imagine how an operation of this nature could be conducted without some use of a trolley (or trolleys) and pallet jack (or jacks).

90.Nor was it pleaded in this case that the 2^nd defendant factory owner failed to ensure that the 1^st defendant contractor was competent to do this task.  Once again, this is unsurprising, given that this particular operation of separating this calendering unit from and reconnecting it to the ‘mother machine’ had been successfully performed on several previous occasions.

91.Accordingly (and whether pleaded or not) it seems to me that the 2^nd defendant had reasonable grounds to believe that the 1^st defendant was competent to do the job – or, putting it at its lowest, that he had had no reasonable grounds to believe that the contractor was not so competent – and as a matter of general principle I do not understand the law to be that an employer of an independent contractor, whom he reasonably (or not unreasonably) regards as competent, has any duty either to supervise the contractor’s activities and performance of that job, or any independent duty to ensure that the contractor is conforming to that contractor’s own personal duty to his employee(s) to provide a safe system of work. 

92.Save in the obvious ‘non delegable’ cases, this is precisely the reason that the retention of an independent contractor suffices to preclude liability on the part of the person, in this instance the factory owner, from being attracted into the potential ‘liability net’.

93.If this analysis be correct, as I believe that it is, that must be an end of the matter, however unfortunate for the injured plaintiff, who regrettably may wind up with an empty judgment against his 1^st defendant employer.

94.What then of the argument that in normal course the employer of the independent contractor does have a duty in law to oversee and to ‘vet’ the working procedure of the independent contractor and his workmen, and that in failing so to do he renders himself a joint tortfeasor with the 1^st defendant?

95.On the particular facts of this case I emphasize that I do not consider that at the relevant time the 2^nd defendant had any reasonable reason to believe that an unsafe system of work was in operation, but even were this to have been so, I have difficulty with the proposition that thereby it would be incumbent upon the employer of the independent contractor to intervene with that independent contractor’s work in order to ensure adoption of such a safe system of work as that employer perceived ‘safe’ or otherwise appropriate, and it seems to me not to matter whether this argument is said to arise under the provisions of the Occupiers’ Liability Act or under the principles of common law negligence.

96.In this context I respectfully adopt and agree with the observations of Lord Goff in Ferguson v Welsh [1987] 1 WLR 1553, who, after concluding that the Occupiers’ Liability Act 1957 had anything to do with the facts of that particular case (demolition work on a building) went on to observe (at 1563A-D):

‘ I wish to add that I do not, with all respect, subscribe to the opinion that the mere fact that an occupier may know or have reason to suspect that the contractor carrying out the work on his building may be using an unsafe system of work can of itself be enough to impose upon him a liability under the Occupiers’ Liability Act 1957, or indeed in negligence at common law, to an employee of a contractor who is thereby injured, even if the effect of using that unsafe system is to render the premises unsafe and thereby to cause injury to the employee.  I have only to think of an ordinary householder who calls in an electrician; and the electrician sends in a man who, using an unsafe system established by the employer, creates a danger in the premises which results in his suffering an injury from burns.  I cannot see that, in ordinary circumstances, the householder should be held liable under the Occupiers’ Liability Act 1957, or even in negligence, for failing to tell the man how he should be doing his work.  I recognize that there may be special circumstances which may render another person liable to the injured man together with his employer, as when they are, for some reason, joint tortfeasors; but such a situation appears to me to be quite different.’

97.In Ferguson, op cit., Lord Goff was of course making his comments against the factual backdrop of the potential application of the Occupiers’ Liability Act and of the premises in question being made unsafe by the demolition work in question; it strikes me that the position must be a fortiori on the facts of the instant case.

98.Accordingly, I do not consider that any such argument would be sufficient to get the plaintiff home in terms of liability either.

99.It follows from the foregoing that in this case I am unable to discern any basis for formulating any sustainable finding in negligence against the 2^nd defendant, and thus rendering him a joint tortfeasor with the 1^st defendant, however inviting it may be to create a situation in which the injured plaintiff is able obtain the adjudged recompense for his injuries.

100.In my view, as a matter of policy and principle our law does not make, nor indeed does it seek to make, the employer of an independent contractor effectively the insurer of that contractor should anything go amiss in the performance of a normally delegable task which that contractor is retained to carry out, and, if this be correct, it follows that, with respect, the majority conclusion that liability to the plaintiff thus can be founded against his employer, the 2^nd defendant, is not one to which I feel able to subscribe.

101.For the foregoing reasons, I would have been minded to allow the appeal of the 2^nd defendant, with costs to the appellant both here and below.

Hon Tang VP :

102.By a majority the appeal is dismissed with costs nisi to the plaintiff both here and below.

Mr. Neville Sarony, QC SC & Mr. Y. L. Cheung, instructed by Messrs Samuel Li & Co, for the Plaintiff

Mr. Godfrey Lam, SC & Mr. Kent Yee, instructed by Messrs King & Co, for the 2^nd Defendant

(I) 2nd Defendant's application for leave to appeal to Court of Final Appeal dismissed by Court of Appeal. Please refer to CACV281/2008 dated 12 October 2009 (II) Appeal by the 2nd Defendant to Court of Final Appeal dismissed by Court of Final Appeal. Please refer to FACV19/2009 dated 21 January 2011