Chan Sze Yuen v. Tin Wo Engineering Co.Ltd. and Others

HCPI 427/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 427 OF 2008

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BETWEEN

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Coram : Before Master J Chow in Chambers

Date of Hearing : 22 August 2012

Date of Decision : 17 September 2012

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DECISION

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Introduction

1.The 2^nd defendant is a Macau company.  On 14 October 2011, it took out a summons for a forum non conveniens application for an order to set aside the Writ of Summons and Statement of Claim and also leave to serve the Writ out of jurisdiction against the 2^nd defendant pursuant to Order 12 rule 8, Rules of High Court.  The 2^nd defendant says Macau court should be the proper forum.

Background

2.The plaintiff was a steel binder who had injured his right foot in an industrial accident happened on 24 June 2005 at the Venetian Hotel construction site in Macau (“the Accident”).  The 2^nd defendant is a company incorporated in Macau and was a contractor responsible for steel binding work at site.

3.In 2007, the plaintiff commenced hiscorresponding employees’ compensation proceedings[1] (“the EC proceedings”).  The 2^nd defendant did not dispute quantum at trial, the only issue was the identity of the plaintiff’s employer. The trial judge found the 2^nd defendant was his employer, not the 1^st defendant. The 2^nd defendant appealed against the findings, and subsequently, the Court of Appeal dismissed the 2^nd defendant’s appeal and had confirmed the findings below[2]. The plaintiff discontinued his claim against the 1^st defendant in this action accordingly.   

The Macau Legal Experts

4.Both the plaintiff and the 2^nd defendant submitted legal opinion from their respective Macau legal experts.  At the hearing, both parties agreed the plaintiff is able to commence actions in Macau for compensation in a manner similar in Hong Kong courts: an employees compensation claim and a common law claim.

A Preliminary Point – Order 12 rule 8(2)

5.Mr. Lam, counsel for the plaintiff, raised a preliminary point that the 2^nd defendant’s application was made out of time.  Order 12 rule 8(2) of the Rules of the High Court specified that the time for taking out such application shall be “time limited for service of a defence”[3]. The 2^nd defendant served its acknowledgement of service on 11 June 2010, the application was only taken out on 14 October 2011, in the absence of time extensions to file the defence, the 2^nd defendant’s application was at least one year late from the prescribed time.  It has failed to comply with Order 12 rule 8(2) and should be deemed to have submitted to the jurisdiction under Order 12 rule 8(7).

6.Mr. Chan, counsel for the 2^nd defendant argued that the PI Master has given directions to the 2^nd defendant to take out a summons for the present application. This point has not been raised before the PI Master and that the 2^nd defendant should be entitled to proceed with the application.

7.I aware there was a remark on the 2^nd defendant’s acknowledgement of service that “the jurisdiction of the Hong Kong Court to hear the Plaintiff’s claim is challenged”, this could not be considered as a proper application under the rules. A defendant must apply within the prescribed time, i.e. “time limited for service of a defence”, under the new regime after the Civil Justice Reform. This application is made out of time, and accordingly, the 2^nd defendant should be treated as submitted to the jurisdiction and be debarred from raising the objection.  This is sufficient to dispose of the 2^nd defendant’s summons.

8.Notwithstanding this, the PI Master has given detailed directions for parties to proceed with the application, and if I were wrong in finding the 2^nd defendant’s application was made out of time with consequence, I shall also deal with the merits of the present application as well.

The Application

9.The relevant legal principles are agreed.  The fundamental principle is well established in The Spiliada [1987] A.C. 460.

“The fundamental principle applicable to both the stay of English proceedings on the ground that some other forum is the appropriate forum and also to the grant of leave to serve proceedings out of the jurisdiction, is that the court will choose that forum in which the case can be tried more suitably for the interests of all parties and for the ends of justice.”

10.A 3-stage test still holds good as summarized in The Lanka Muditha [1991] 1 HKLR 741 at 744:

(i)  Stage I: Is it shown that Hong Kong is not only notthe natural and appropriate forum for the trial, but that there is another available forum which is clearly or distinctly more appropriate than Hong Kong?

(ii)  Stage II: If the answer to (I) is yes, will a trial at the other forum deprive the plaintiff of any legitimate personal or juridical advantages?

(iii)  Stage III: If the answer to (II) is yes, the court has to balance the advantages of (I) against the disadvantages of (II).

11.In Noble Power Investment Ltd. v. Nissei Stomach Tokyo Co. Ltd [2008] 5 HKLRD 631, it is decided where leave to serve the Concurrent Writ of Summons out of jurisdiction is obtained, the legal burden is on the plaintiff to demonstrate Hong Kong Court is the proper forum, which the action has the most real and substantial connection.  This is the case here.

12.The grounds that the 2^nd defendant relies on are that (i) the tort was committed in Macau; (ii) the Court requires assistance from Macau legal experts; and (iii) witnesses, including doctors for treatment and care, mainly reside in Macau. I shall consider all factors globally.

STAGE I: Is Hong Kong the natural and appropriate forum?

13.To start off with the causes of actions, the plaintiff pleaded the 2^nd defendant was in breach of the employment contract as well as a breach of common law duty and/or a civil law duty under the Macau law.  The Court is at liberty to consider which is the applicable law at trial and thus remains a live issue for the trial judge to decide the choice of legal principles to be adopted.

14.The plaintiff has started the EC proceedings in 2007, judgment has been given on 25July 2012.  The trial judge found, inter alia, the plaintiff was recruited and engaged in Hong Kong.  The findings were confirmed by the Court of Appeal in CACV 71 of 2011.  In the EC proceedings, neither did the 2^nd defendant dispute how the accident has happened, nor did it argue on quantum, the only issue at the EC proceedings was merely the identity of the plaintiff’s employer. It is not in the interest of the plaintiff if the entire litigation be commenced afresh in the Macau jurisdiction, where the 2^nd defendant might be given an opportunity to reopen the issues on liability.

15.Geographical factor is not a problem.  Witnesses, as submitted by Mr. Chan, reside in Macau.  If leave be granted for them to testify at trial, the witnesses could travel back and forth on the same dayby ferry. As submitted by Mr. Lam, the 2^nd defendant has failed to demonstrate the real difficulty of having those witnesses to testify in Hong Kong court.

16.In the affirmation of Tsang Chun Fung, manager of the 2^nd defendant, he stated there was no investigation done after the Accident in Macau.  At the hearing, Mr. Chan admitted the whereabout of some the eye witnesses are unknown.  If that is so, there is a possibility that the 2^nd defendant is unable to call any factual witness at trial, practically.

17.With regard to the evidence of the plaintiff’s doctors of treatment and care, it is known in the PI practice that medical reports of the doctors of treatment and care will usually be adduced as agreed evidence.  Mr. Chan attempted to challenge the plaintiff’s injury immediately after the Accident did not tally withthe diagnoses recorded in the medical reports. This is not detrimentalbecause the plaintiff had returned to Hong Kong few days after the Accident for further treatment, the medical reports and expert reports done in Hong Kong should be those which carry weight.

18.Mr. Lam further submitted, and I agreed, that the directors and shareholders of the 2^nd defendant are Hong Kong residents. As shown in the company records, Hong Kong addressesare found.  Those directors are those of the 1^st defendant, which is a Hong Kong company. It demonstrates, ironically, connections with the local jurisdiction.

19.I also find further substantive connections with the Hong Kong forum: according to the Macau legal experts, the plaintiff, not being a Macau resident, is not entitled to legal aid in Macau.  Mr. Chan argued if the plaintiff has to commence an action in Macau, he can negotiate with his legal representatives in Macau to defer payment on legal fees.  I disagree.  The plaintiff is a Hong Kong resident, he is now currently on legal aid in both the EC proceedings and the common law claim, it would be unfair and unjust for the plaintiff to start the action in Macau when he is a person with limited resources.

20.Mr. Chan further argued that the plaintiff could have enjoyed higher level of damages in Hong Kong Court, I find this is misconceived.  There is no evidence to support that.

21.I also consider the time spent by the plaintiff in both the EC proceedings and in this action.  The EC proceedings commenced in 2007 and the Court of Appeal decision has just been delivered last month.  The common law action was commenced in 2008 and up to now, there is some 4 years already.  If the plaintiff is asked to commence the action afresh in Macau, the time spent in the legal proceedings in Hong Kong would be wasted and that in this respect, the plaintiff would be seriously prejudiced.

22.With the foregoing reasons, I find Hong Kong is the natural forum.

Tests for Stage II and Stage III

23.I do not need to proceed to Stage II and Stage III analysis.

Conclusion

24.In a balancing exercise, I agree with Mr. Lam that it is in the ends of justice that Hong Kong is the natural and appropriate forum with real and substantial connections.  There is no other forum available which could be distinctly a more appropriate forum than the Hong Kong Court.

25.On the ground that (i) the 2^nd defendant’s summons was made out of time alone and (ii) on merits, the said summons be dismissed.

26.I considered the conduct of the 2^nd defendant.  The PI Master had adjourned the 2^nd defendant’s summons twice for the parties to consider the judgment of CACV of 2011.  The decision is apointer to the merits of this application.  The 2^nd defendant chose to proceed within this summons in light of the favourable findings for the plaintiff.  I share the same view with the Court of Appeal that this application is “unmeritorious as well as oppressive”.  That being the case, I make an order nisi that costs of the said summons be to the plaintiff, taxed on an indemnity basis, if not agreed, the order nisi be made absolute after 14 days.  The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.

27.I shall also direct both the plaintiff and the 2^nd defendant to restore the Checklist Review hearing with proposed case management directions jointly within 14 days from the date of this decision.

Mr. Simon Lam, instructed by Messrs Tse Yuen Ting Wong, for the plaintiff.

Mr. Vod Chan, instructed by Messrs Li, Wong, Lam & W. I. Cheung, for the 2^nd defendant.