Work Accidents Outside Hong Kong – The Appropriate Platform for Trial By Ray Lee, Partner, ONC Lawyers

Facts

The plaintiff was employed by the first and second defendants in Hong Kong as a site service specialist on a fixed term written contract and was assigned to work at a sewage treatment factory in Ningbo (the Ningbo Factory). The plaintiff is and was a Hong Kong permanent resident, whereas the first defendant was a Hong Kong company with a registered office in Hong Kong, and the second defendant was a company incorporated in, and had its office in, the United States. In the ordinary course of employment, the plaintiff was required to report to the staff at the Hong Kong office of the first defendant.

In 2014, the plaintiff suffered serious injuries to his left shoulder, left leg and head (which caused vision defects) in a work-related accident while on duty in the Ningbo Factory (the Accident). He returned to Hong Kong soon after the Accident. He then commenced an action in Hong Kong against the first and second defendants (whom the plaintiff claimed to be his employer) for damages for the injuries sustained in the Accident. He alleged that the injuries were caused by the first and second defendants and their servants and/or agents due to their (1) negligence, (2) breach of occupiers’ liability, (3) breach of implied terms of his employment contract, and (4) breach of statutory duty.

Subsequently, the plaintiff and the first defendant reached a settlement. The plaintiff also obtained an interlocutory judgment against the second defendant (whose last known address was in the United States) (the Interlocutory Judgment) after the second defendant failed to appear in the present action. In view of this course of action, the Employees Compensation Fund Board (the Board) intervened and asked the Court of First Instance (the Court) to (1) set aside, inter alia, the Interlocutory Judgment; and (2) stay all further proceedings. The Board did so because it was of the view that the action should be conducted in the Ningbo Court instead of the Hong Kong Court. The Court therefore had to decide whether Hong Kong was the appropriate forum for the plaintiff’s claim against the second defendant. 

Decision

The test is whether the forum is one with which the action had the most real and substantial connection. The starting point in tort cases is that the place where the tort was committed is the natural forum. However, the Court stressed that the place of commission is by no means determinative. Other relevant factors the Court may consider would include: (1) convenience and expenses (including availability of witnesses); (2) the place where the parties reside or carry out business; and (3) the legal and practical issues involved, such as questions of local knowledge or special expertise/ experience of a particular forum in dealing with complex disputes. As the Accident took place in Ningbo, the starting point was that the PRC courts were the forum conveniens, namely the appropriate forum for the disputes. However, the Court considered some other factors that tilted the balance in favour of Hong Kong as the forum conveniens. They are discussed below.

Choice of law of the plaintiff’s claim in contract and tort

For the claim in contract, the Court found that there was a good arguable case that the governing law of the employment contract signed by the plaintiff, the first and second defendants was Hong Kong law, taking into account the language used and place of execution.

For the claim in tort, as the Accident took place in the PRC, in determining whether it is actionable in Hong Kong, the Court applied the double actionability rule. The first criterion of the double actionality rule is that the wrong must be of such a character that it would have been actionable if committed in Hong Kong. The second criterion is that the act must not have been justifiable by the law of the place where it occurred. As there was nothing to suggest that the plaintiff’s tort claim would not be actionable under Hong Kong law, nor was there any evidence that the second defendant would not be liable for negligence under Hong Kong law and/or PRC law, the Court considered that there was a good arguable case that the plaintiff’s tort claim could proceed in accordance with Hong Kong law.

Availability of witnesses

The Court also considered the evidence to be adduced in the present case to determine the issue of forum conveniens. In particular, the Court took into account, inter alia, the following factors:

1. As the plaintiff had returned to Hong Kong a few days after the Accident, the evidence (whether documents or witnesses) in the post-Accident period would mostly be from Hong Kong. As such, this means most witnesses on quantum-related matters (namely, the plaintiff himself and experts) would be from Hong Kong and it would be extremely inconvenient for them to travel to the PRC to provide evidence.

2. It was doubtful whether the professional witnesses on quantum matters could be compelled to attend the PRC courts to provide evidence.

3. Substantive costs had already been incurred in relation to the present claim as the plaintiff had engaged local Hong Kong medical experts to prepare expert medical reports at an early stage.

4. The Court rejected the Board’s contention that the plaintiff’s pretrial and post-trial loss of earnings would require evidence concerning the employment environment in the PRC as the plaintiff was offered his employment in Hong Kong.

5. In alleging that there would be further evidence or witnesses to be discovered or located in the PRC, the Board failed to pinpoint for the purpose of the trial who exactly would be the likely further witnesses residing out of jurisdiction, and how important or relevant their evidence would be to the determination of the issues in the plaintiff’s claim.

6. 6The plaintiff was granted legal aid in pursuing his claim against the second defendant in Hong Kong, which he would not have if he were to start his claim afresh in the PRC courts.

Therefore, the Court held that Hong Kong was clearly and distinctly the forum conveniens for the plaintiff’s action and dismissed the applications by the Board.

Takeaway points for HR professionals

• There is no hard and fast rule to determine the proper forum for claims.

• Employers can still be sued in Hong Kong even if a work accident takes place outside of the city. 

Note: The information contained herein is intended to be a general guide only and is not intended to provide legal advice. This journal, its publisher and the HKIHRM do not assume any legal responsibility in respect of any comments provided in this article, which do not constitute legal advice and should not be taken or construed as such. Independent professional legal advice should be sought as necessary in respect of legal matters and issues raised in this article.