Leung Yuk Lan v. Success Design Consultants Ltd

DCEC1519/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1519 OF 2008

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BETWEEN

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Before: His HonourJudge Lok in Chambers (Open to Public)

Date of Hearing:   25 September 2009

Date of Ruling:   25 September 2009

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R U L I N G

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1.This case (“the EC Action”) is now ready for trial. However, there is also a related personal injury claim in the Court of First Instance (“the PI Action”). The check list review hearing of the PI Action has been adjourned to 26 November 2009 for leave to set down for trial. According to the query raised by H H Judge M Ng in the direction dated 13 August 2009, the learned judge suggested that the trial of the EC Action should be heard after the conclusion of the trial of the PI Action. The Respondent opposes the suggestion and I have to make a ruling in this regard.

2.The parties involved in the EC Action and the PI Action are the same and they are represented by the same firm of solicitors. According to the Respondent’s solicitors, they were appointed by the insurer of the Employees’ Compensation Policy taken out by the Respondent. If the court were to make a ruling in the EC Action that the deceased worker was not an employee of the Respondent, the Respondent is not entitled to indemnity for insurance under the EC insurance policy. In other words, the Respondent’s solicitors do not need to continue to act for the Respondent in the PI Action as the claim would fall outside the scope of the insurance coverage. Hence, it will be in the interest of the Respondent’s insurer to proceed with the EC Action first.

3.While I appreciate that this is the concern of the Respondent’s insurer, I do not accept that the court should take into account its interests in considering the conduct of the EC Action.

4.Obviously and in the interest of case management, it will be desirable for the trial of the PI Action to proceed first. Firstly, the issues covered in the PI Action are much wider. The court has to deal with issues such as the relationship between the deceased worker and the Respondent and whether the Respondent, whether he was the employer or not, was liable in negligence. On the other hand, the only issue for liability in the EC Action is the relationship between the deceased worker and the Respondent. If the trial of the PI Action proceeds first, the High Court will make rulings on all the relevant issues and it is not necessary by reason of the principle of res judicata to have a second trial in the EC Action to deal with the liability issue. On the other hand, if the trial of the EC Action proceeds first and the court makes a ruling that the deceased worker was an employee of the Respondent, there will still be a trial on liability in the PI Action to deal with the other outstanding issues of liability, such as whether the Respondent was liable in negligence. In order to avoid possible two separate trials on liability, I take the view that the trial of the PI Action should proceed first. As the witnesses on liability would be the same in both the EC Action and the PI Action, one single trial can also avoid inconsistent findings of fact. If there is only one trial on liability in the PI Action, it can dispose of all the relevant issues concerning liability of the accident.

5.In any event, the Respondent’s solicitors are also acting for the Respondent in the PI Action. All the witness statements in the PI Action have been filed, and I understand that the case is now ready for trial. In such case, I am of the view that the underlying objectives of cost effectiveness and procedural economy should override the interests of the Respondent’s insurer in the present case.

6.The Plaintiff’s claim in the PI Action is pleaded in the alternative. It is alleged that the Respondent was liable in negligence whether the deceased worker was the Respondent’s employee or just an independent contractor. In the course of submission, Mr Yeung, solicitor for the Respondent, submits that the Respondent’s insurer would be put in a difficult position of conflict of interest if the trial in the PI Action is to proceed first, as the Respondent’s insurer would not be liable if the deceased worker was only an independent contractor at the relevant time. However, the Respondent’s insurer has already defended the case on behalf of the Respondent in the PI Action. In other words, the dilemma has all along been there and the Respondent’s insurer has made the decision to defend the PI Action on behalf of the Respondent. In such circumstances, I do not see how the Respondent’s insurer can now rely on the conflict of interest argument in the present application. I therefore make an order that the trial of the EC Action will be heard after the conclusion of the trial of the PI Action.

Mr Jeffrey Chan, of Cheng, Yeung & Co., for the Applicant.

Mr Ivan Yeung, of Messrs Winnie Mak, Chan & Yeung, for the Respondent.