Luen Hing Fat Coating & Finishing Factory Ltd v Waan Chuen Ming

FACV No. 19 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 19 OF 2009 (CIVIL)

(ON APPEAL FROM CACV NO. 281 OF 2008)

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J U D G M E N T

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Chief Justice Ma :

1. For the reasons set out in the judgment of Mr Justice Bokhary PJ, I agree that the appeal should be dismissed.

Mr Justice Bokhary PJ :

Question of law

2. The question of law on which leave to appeal to this Court was granted is whether there is a duty of care owed by X to Y in the following circumstances :

(1) X engages an apparently competent independent contractor to do work on X’s premises.

(2) The work is not intrinsically hazardous.

(3) X lends the independent contractor equipment which is not intrinsically dangerous or faulty.

(4) As X knew or ought reasonably to have known would happen, the independent contractor uses that equipment to do the work by a method which is unsafe.

(5) Y, who is a servant of the independent contractor, is injured as a result.

In the present case, X represents the appellant Luen Hing Fat Coating & Finishing Factory Ltd (“the Factory Operator”) and Y represents the respondent Mr Waan Chuen Ming (“the Worker”).

Broad facts

3. Shortly stated, the broad facts of the case are these. As it had done on a number of previous occasions, the Factory Operator engaged an independent contractor Mr Lo Kin Nam trading as Kar Kin Engineering & Supplier Co. (“the Independent Contractor”) to come to its factory and there to repair the calendaring unit (“the Unit”) of its stentering machine (“the Machine”). So the Independent Contractor and his employee the Worker went to the factory to repair the Unit.

4. In order to repair the Unit, they had first to detach it from the Machine. They did so. Then they moved the Unit some 5 or 6 metres to another part of the factory. There they repaired the Unit. Having done so, they moved the Unit back with a view to reinstalling it in the Machine. The Unit was 167.5 cm high, 240 cm long and 70 cm wide. It weighed 1.5 tons. While the Independent Contractor and the Worker were attempting to reinstall it in the Machine, the Unit fell on to and crushed the Worker’s legs. The moving of the Unit from and then back to the Machine was effected by the use of two pallet jacks and a bearing trolley. Those two pallet jacks, that bearing trolley and another bearing trolley were used in the attempt to reinstall the Unit in the Machine. Both pallet jacks and bearing trolleys belonged to the Factory Operator. It lent them to the Independent Contractor. They were normally used for transporting cloth (either in rolls placed on pallets and transported by pallet jacks or in paper cartons and transported by bearing trolleys).

Action succeeds at trial

5. The worker brought an action against the Independent Contractor and the Factory Operator in the High Court. No defence was filed by the Independent Contractor, who appears to be impecunious. Judgment was not entered against him in default of defence. So the action proceeded to trial against both defendants. The Independent Contractor did not take part in the trial. At the end of the trial, the trial judge (Suffiad J) held both defendants liable. He held the Independent Contractor liable on the basis that he had failed to provide the Worker with a safe system of work. Such failure of course put the Independent Contractor in breach of an employer’s duty at common law to take reasonable care for his employees’ safety.

6. Pleaded against the Factory Operator were : (i) negligence; (ii) breaches of the statutory duties imposed by various provisions of the Occupational Safety and Health Ordinance, Cap.509; and (iii) liability under the Occupiers Liability Ordinance, Cap.314. The Worker also pleaded that he was employed by the Factory Operator. But that averment was abandoned at the trial. As to the bases on which the claim was pursued against the Factory Operator, the trial judge says in his judgment that “counsel for [the Worker] indicated at the commencement of the trial that he will proceed against [the Factory Operator] on the basis of the Occupiers Liability Ordinance and also the Occupational Safety and Health Ordinance”. It was under the Occupiers Liability Ordinance that the trial judge found the Factory Operator liable.

7. When the Factory Operator appealed from the trial judge’s decision to the Court of Appeal, the Worker filed a respondent’s notice. By that respondent’s notice, he asked the Court of Appeal to hold that at common law the Factory Operator was a joint tortfeasor with the Independent Contractor and to dismiss the Factory Operator’s appeal on that additional ground.

Affirmed by a majority in the Court of Appeal

8. The Court of Appeal (Tang VP and Cheung JA with Stone J dissenting) affirmed the trial judge’s decision in favour of the Worker. Mr Justice Tang VP decided in the Worker’s favour on the basis of negligence, concluding his judgment by saying that he agreed “with the analysis of Cheung JA that a clear case of negligence was made out against [the Factory Operator] as a joint tortfeasor”.

9. In holding that a duty of care was owed by the Factory Operator to the Worker, Cheung JA reasoned as follows. First, he said, the injuries suffered by the Worker were foreseeable because the operation was dangerous. Secondly, he said, there existed the requisite proximity between the Factory Operator and the Worker because he was lawfully on its premises. Thirdly, he said, it is fair, just and reasonable to impose liability on the Factory Operator because it had allowed the dangerous operation to take place on its premises and had done nothing to prevent it. When he came to expand on the element of proximity, Cheung JA added that the Factory Operator had participated in creating the dangerous situation by lending the Independent Contractor the equipment used in the dangerous operation.

10. Was the Factory Operator in breach of the duty of care which it was held to owe the Worker? And was it open to the Court of Appeal to decide in the Worker’s favour on the basis of negligence even though the trial judge had decided in the Worker’s favour under the Occupiers Liability Ordinance? On these questions, Cheung JA said this :

“ While [the trial judge’s] decision against [the Factory Operator] … 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.

[The Worker] 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 Factory Operator] was a joint tortfeasor, [the Worker] had sufficiently pleaded a case of negligence against [the Factory Operator] 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 Worker] to rely on the respondent’s notice.”

Having said that, Cheung JA added that he would, if necessary, hold the Factory Operator liable on the basis that it “knew or had reason to suspect that [the Independent Contractor] was using an unsafe system of work” and ought reasonably to have taken but failed to take “steps to see that the system was made safe”.

11. As appears from cases like The Koursk[1924] P 140 at p.157 and CBS Songs Ltd v. Amstrad Plc[1988] AC 1013 at p.1056E-F, persons are said to be joint tortfeasors when their respective shares in the commission of the tort are done in furtherance of a common design. And it might be said that the Factory Operator and the Independent Contractor were in effect acting in furtherance of a common design when the work was being carried out with the equipment which the Factory Operator had lent the Independent Contractor. But the Factory Operator would have no share in the commission of any tort of negligence if it did not owe the Worker a duty of care. As we have seen, Cheung JA, with whom Tang VP agreed, found such a duty by way of an approach based on foreseeability, proximity and considerations of fairness, justice and reasonableness.

12. On occupiers liability, Stone J (who dissented) said this :

“ True it is that as a matter purely of physical fact the accident took place within [the Factory Operator’s] factory, but that is as far as it goes.

I perceive no good reason why this occurrence is anything to do with [the Factory Operator’s] statutory responsibilities, qua occupier, under [the Occupiers Liability Ordinance].”

Turning to the issue of negligence, Stone J dealt with the evidence and considered what Lord Goff of Chievely said in Ferguson v. Welsh[1987] 1 WLR 1553 at p.1563A-D. Having done that, Stone J said this :

“ 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 Factory Operator], and thus rendering him a joint tortfeasor with [the Independent Contractor], however inviting it may be to create a situation in which [the Worker] is able obtain the adjudged recompense for his injuries.

In my view, as a matter of policy and principle our law does...