Chan Kwok Man v. New World First Bus Services Ltd
Read the full judgment text of DCEC 186/2013 on BabelCite. This District Court judgment was delivered on 9 February 2015.
1. This is the respondent’s application for striking out the applicant’s claim for employees’ compensation pursuant to Order 18, Rule 19 of the Rules of the District Court (“RDC”).
Cites 2 cases
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DCEC 186/2013 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO 186 OF 2013 --------------------
-------------------- INTRODUCTION 1.This is the respondent’s application for striking out the applicant’s claim for employees’ compensation pursuant to Order 18, Rule 19 of the Rules of the District Court (“RDC”). 2.The issue I am asked to decide is whether the applicant’s application for employees’ compensation should be struck out on the ground that it is frivolous and/or vexatious and/or otherwise abuse of process of the court. BACKGROUND 3.This claim arose out of an accident happened to the applicant. On 12 September 2011, while he was in the course of his employment with the respondent, he suffered personal injury as a result of a traffic accident. The accident involved the public bus he was driving for the respondent and a taxi (“the Accident”). 4.The applicant was assessed by the Employees’ Compensation (Ordinary Assessment) Board (“the Board”) on 11 January 2012. The Board issued the certificate of assessment (Form 7) on 21 January 2012. The certificate of compensation assessment (Form 5) was issued on 27 January 2012. 5.On 10 February 2012, the applicant submitted a notice of objection of assessment to the Labour Department. As a result, the applicant was re-assessed by the Board on 9 May 2012. 6.On 23 May 3012, the Board issued the certificate of review of assessment (Form 9) whereby the applicant was found to have suffered from sprain back resulting in residual pain with loss of earning capacity assessed at 1%. A total of 50 days of sick leave was also endorsed by the Board. 7.On 5 July 2012, the applicant signed a Chinese discharge form under which the plaintiff was paid $29,471.20 by the respondent and/or its insurer in full and final settlement of all his claims arising out of the Accident (“the Discharge Form”). In the Discharge Form, the applicant agreed to abandon all his rights to bring any further legal proceedings against the respondent and/or its insurers arising out of the Accident. [emphasis added] 8.The statutory prescribed period for the applicant’s appeal against the assessment is 6 months from the date of issue of the Form 9. Hence, the appeal period expired on 22 November 2012. 9.The applicant commenced the present employees’ compensation action by filing the application herein on 28 January 2013. 10.By a summons dated 13 August 2014, the respondent claims that the application should be struck out on the ground that it is frivolous and/or vexations and/or otherwise abuse of the process of the court. The respondent’s application is supported by the affidavit of Mak Yan Yan Winnie, solicitor for the respondent. The Discharge Form 11.The Discharge Form is a one-page document prepared by the staff of the respondent. It is a standard type-written document. The only parts which were filled in for the purpose of this case are: (1) particulars under the title of the document; (2) the facts and settlement sum particular to this case under the 1st paragraph (which has been put in bold type font); and (3) the signature and date handwritten by the applicant. 12.For ease of reference, I shall produce the Discharge Form written in Chinese here:
The respondent’s case 13.The respondent’s case is that it had fully settled the causes of action the applicant might have against the respondent and/or its insurer arising from the Accident as a result of the agreement reached between the parties. Even though in the main body of the Discharge Form it mentioned that the settlement was for “full and final settlement of all losses and personal injuries suffered” by the applicant arising from the Accident, the respondent contends that this could only mean to include the applicant’s employees’ compensation claim against the respondent and/or its insurer. The reason being that it has been clearly stated under the heading of the document that the payment was for employees’ compensation only. 14.Further, the respondent relies on §3 of the Discharge Form where the applicant agrees to assign his rights to the respondent or its insurer either in the applicant’s name or in the name of the respondent or the insurer to seek recovery against any third party. 15.Lastly, the respondent relies on the declaration made by the applicant in §4 of the Discharge Form where he expressly stated that he had read and/or been explained the contents of the Discharge Form and that he fully understood the contents of the document. In the declaration, the applicant also confirmed that he had entered into the settlement voluntarily without any inducement or duress on the part of the respondent. 16.The respondent argues that the present claim should be struck out after taking into account the legal effects of the Discharge Form and by reason of the fact that the appeal against the assessment of the Board has now been time-barred. The applicant’s case 17.It is not disputed that the applicant had signed the Discharge Form. However, the applicant contends that on a true construction of the Discharge Form, he is not debarred from bringing the present claim against the respondent. 18.As to the circumstances under which the applicant signed the Discharge Form, the applicant in his affirmation states that, on 5 July 2012, he received a call from a Mr Cheung of the claims department of the respondent who asked him to attend the office of the respondent to collect the outstanding balance sum of HK$22,294.05 from the respondent. While at the office of the respondent, the applicant was presented with a few forms, including the Discharge Form, for which he was told that he had to sign before he could get any employees’ compensation. As he had not received any legal advice, he thought that his “signatures on the forms were mere formalities”. He claims that he was made to believe that he had no real choice in the matter but to sign on the documents. Otherwise, he believed that he would not be able to collect the money he was so desperately in need of. 19.The applicant further claims in his affirmation that he had never been reminded by the respondent that he had the right to seek independent legal advice either from the Labour Department or his own lawyers before he was asked to sign the Discharge Form. Further, he claims that the respondent had never explained to him the legal consequences in signing the forms. 20.He further claims that, notwithstanding the forms were written in Chinese, he was “being rushed through the whole signing process, which took no more than a few minutes”. It was his impression that he was merely “asked to acknowledge receipt of the cheque” from the respondent. 21.I note the above allegations of the applicant were not challenged by the respondent and no evidence from any of its staff or officers, in particular from Mr Cheung of the claims department, have been filed to contradict the applicant’s case. No explanation was given also as to why such evidence could not be obtained and filed on behalf of the respondent. DISCUSSION Legal principles involved 22.On the Discharge Form itself, it has been well established that, whether the effect of a settlement agreement would be valid depends “ultimately on the particular terms and wordings of the settlement agreement and the circumstances surrounding its signing”: See Arrale v Constain Civil Engineering Ltd [1976] 1 Lloyd’s Rep 98 (CA). Thus, each case is “fact sensitive” and depends on the evidence produced by the parties and the construction of the wordings of the settlement agreement itself. 23.On an application to strike out, it is not disputed that only in plain and obvious cases that the court should exercise its discretion to strike out the pleadings. Further, it is only if the claim is unsustainable and impossible for it to succeed that the court ought to exercise its discretion: see Hong Kong Civil Procedure 2015 at §18/19/4. It has been said that 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 dispute facts and should not be struck out summarily: see Tsui Chi Hung Tony v Hsin Chong Construction Company Limited & another unreported HCPI 145 of 2005 (Suffiad J.; 17 March 2006). 24.Although a number of issues have been raised by the applicant in the written submissions, by the time when oral submissions were made on his behalf at the hearing by his solicitor, it has become clear that the main grounds relied on by the applicant was a plea of non est factum and/or mistake only. Non est factum / mistake 25.It is submitted on behalf of the applicant that he has mistaken about the nature and the legal consequences of the Discharge Form. Or put another way, the applicant is saying that this was not the deed he had signed, ie non est fatcum. The applicant says that the Discharge Form should be set aside based on this ground alone. 26.In my judgment, there may be some substance in what the applicant says regarding the nature of the Discharge Form or that the document signed was not his deed. 27.First, it is not disputed that there was an apparent inconsistency between the contents and the title of the Discharge Form. Under the title of the Discharge Form, the words “employees’ compensation” (「工傷賠償」) were used next to the words “Nature of Payment” (「付款性質」). However, the contents of the document went further than that. It says that the amount of HK$29,471.20 was to act as compensation in full and final settlement of all losses and personal injury (「全部損失及人身傷害」) in relation to the Accident. [emphasis added] 28.The applicant’s understanding is that the Discharge Form was merely to enable him to obtain his employees’ compensation only, it was not for the settlement of all his claims arising out of the Accident: see § 8 of the applicant’s affirmation. The respondent says that despite of those wordings in the main body of the agreement, it is clear that it only meant to include the applicant’s employees’ compensation only due to the title. 29.I am afraid I cannot agree with the respondent’s submission on this for 2 reasons. First, the wording contained in the main body of the agreement clearly intended to cover all claims arising out of the Accident and not employees’ compensation only. Second, if it was the intention of the respondent that the Discharge Form was meant to cover the settlement of the employee’s compensation only, then there is no explanation coming from it to say why the agreement was drafted in such a way. 30.Second, the Discharge Form states that the applicant, by signing the form, was prepared to abandon all claims against the respondent or its insurer or related persons arising out of the Accident. This clearly could not be the case as the title of the document stated it was for employees’ compensation only. To give up all claims in my view would have included any common law claim which was not what the applicant had been told by Mr Cheung of the claims department when he signed the document. 31.Third, it is clear that it was not the applicant’s intention to enter into a full and final settlement of all losses and personal injury resulting from the Accident when signing the Discharge Form. He was told to sign in order to obtain the employees’ compensation only. In view of the relatively small amount of the settlement sum, it is unlikely that this would include the common law claim damages also. 32.As no evidence has come from the respondent to contradict the applicant’s claim that he was rushed through the process of signing and therefore was not afforded the chance of reading through the document carefully, I am left with the applicant’s version to consider only. Further, as there is no evidence coming from the respondent to contradict the applicant’s version that the respondent had never explained to him the legal consequences in signing the forms, again I can only accept the applicant’s evidence on this. 33.The applicant relies on the case of Ng Chi Wai v Lai Man Hoi trading as Hoi Fu Engineering Company (unreported, DCPI 1963/2012; Deputy District Judge Ludwig Ng), which contains similar but not entirely identical facts, to say that the Discharge Form was meant to settle the plaintiff’s claim under the employee’s compensation only and no consideration was provided for settlement of the common law claims. By relying on the English case of Arrale v Costain Civil Engineering Ltd [1976] 1 Lloyd’s Rep 98 (CA), the applicant in that case submitted that there was no consideration provided for the common law claim. I agree with Deputy Judge Ludwig Ng that although the Arrale case had been relied on in a number of cases in Hong Kong without success in the past, the case has recognized a legal ground to overcome the effect of a settlement agreement and whether this ground succeed or not would depend ultimately on the particulars terms and wording of the settlement agreement and the circumstances surrounding its signing. 34.Based on the same factual matrix, the applicant says that when he signed the Discharge Form, he was under a mistaken belief that he was merely acknowledging the receipt of a cheque and not signing any legal binding documents. 35.Given the unchallenged evidence of the applicant in this case, I cannot exclude the possibility that he was rushed into signing of the Discharge Form and that he has mistaken on the true nature and effect of the document. Undue influence 36.The applicant also claims that the respondent had unfairly abused its position of influence over the applicant when causing him to sign the Discharge Form. This was not seriously pursued during the hearing. 37.On the face of the evidence, I cannot see any undue influence exerted by the respondent in his capacity as the applicant’s employer and how they could have induced the applicant into signing of the Discharge Form. Misrepresentation 38.It is alleged by the applicant that the respondent represented to him that he had to sign the Discharge Form before he could get any employees’ compensation. The applicant says that this was a false representation made to induce him into entering into the Discharge Form. Again, this matter has not been seriously contended at the hearing. 39.The respondent argues that the Discharge Form was entered into voluntarily by the applicant free from any misrepresentation by the respondent. 40.On the face of the evidence presented by the applicant and in the absence of any evidence from the respondent, I cannot say whether there was any false representation made and whether the applicant in fact relied on such representation when entering into the agreement. This will be a matter to be decided by the trial judge. Legal advice 41.It is also contended by the applicant that he had not received any legal advice before signing the Discharge Form and that there were no explanation on the part of the respondent at all time in respect of the legal consequences of his endorsements on such forms. 42.On the other hand, the respondent says that the applicant should have no difficulty in understanding the contents of the Discharge Form. It has been specifically provided in the Discharge Form that he has read and/or being explained the contents of the document and he fully understood the same. The respondent further argues that the Discharge Form must be valid as the applicant should have sufficient intelligence to understand the legal consequences of signing the form and knowledge in his rights in lodging the appeal of assessment of the Certificate of Assessment dated 23 May 2012 to the District Court. 43.I cannot agree with that respondent’s submission on this. While there is nothing to suggest that the applicant was unable to read or understand the Chinese language, due to the apparent inconsistency and ambiguity of the agreement, it is doubtful whether the applicant would able to understand and appreciate the full legal impact of signing of the document without any legal advice. Further, given what the applicant has stated in his affirmation, he was simply not given the opportunity to carefully read or the contents having been explained to him before he signed the document. He was merely asked to sign in order to obtain the cheque and was rushed through the whole process. This was not disputed by the respondent by way of evidence. Finality of litigation 44.The respondent submits that it is the policy of the law to promote finality of litigation the prevention of stale claim and preventing a defendant from having a claim hanging over his head indefinitely. In this regard, the respondent relies on the dictum of Wigram V-C in Henderson v Henderson (1943) 3 Hare 100 at 114. It further refers to the judgment of Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1 at 31. 45.I have no argument with the above. However, I cannot see how such principle would have any application to our present case given the fact that the agreement signed by the applicant might not be the one he had intended to sign in the first place. Further, the issue of whether the Discharge Form was valid or not will have to be decided by the court first. Therefore, the issue of finality of litigation does not arise here. Time-bar 46.It is submitted by the respondent that the appeal periods for Form 9 and Form 6 have expired within 6 months of their respective issuance, pursuant to section 18 of the Employees’ Compensation Ordinance, Cap 282 (“the Ordinance”). The respondent further says that the applicant has already been fully compensated under the Discharge Form. 47.On the other hand, it is submitted by the applicant that the court has power to, if it thinks fit, extend the time within to appeal notwithstanding that the time has elapsed, pursuant to section 18(2) of the Ordinance. 48.The court was invited by the applicant to consider the following two undisputed facts:-
49.I agree with the applicant’s submission that under those circumstances it would be unfair to even expect the applicant would question as to the availability of further appeal. In my view, it would be most unjust for the respondent, having apparently more experience in dealing with such matters, to be able to rely on the standard clauses against the applicant, being a layperson in need of money without any legal advice. Under such circumstances, I think the court would likely exercise its discretion to extend the period of appeal. Conclusion 50.In the aforestated premises, I do not regard that this is a plain and obvious case where the applicant’s claim for employees’ compensation should be struck out under Order 18 r 19. 51.I would therefore dismiss the respondent’s summons with costs in favour of the applicant, such costs to be taxed if not agreed. The applicant’s own costs to be taxed in accordance with the legal aid regulations.
Miss K Chan of W K To & Co, assigned by the Director of Legal Aid, for the applicant Miss Mak Yan Yan Winnie of Winnie Mak, Chan & Yeung, for the respondent | ||||||||||||||||||||