Wong v. Vianet

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DMC/INS/13/01
Wong Shu Kuen v.Vianet International & Services Co. and China Insurance Co Ltd Hong Kong, as third party
Hong Kong District Court: Carlson J: [2001] HKEC 570: March 2001
Mr.Simon Westbrook, instructed by Shadbolt and Co., represented Vianet
Mr. Ashok Sakhrani, instructed by Messrs. Deacons, represented China Insurance
EMPLOYEE COMPENSATION CLAIM: EMPLOYER SEEKS JOINDER OF INSURER AS PERSON APPEARING TO BE INTERESTED IN THE PROCEEDINGS: HONG KONG EMPLOYEES’ COMPENSATION ORDINANCE: LIABILITY OF INSURERS UNDER SECTIONS 43(1) AND 44(1) OF ORDINANCE: DISPUTE UNDER EMPLOYEES’ COMPENSATION POLICY: MOTIVES FOR JOINDER: WHETHER JOINDER RELEVANT TO ISSUES IN COMPENSATION PROCEEDINGS

Summary
In an employee’s compensation case, the employer was held not entitled to join its insurance company as a third party, even though the insurer ‘appeared to be interested in the proceedings’ according to the Employees’ Compensation Ordinance Rules of Court Rules, since the motive for the application was related to the employer’s dispute with the insurance company under the policy and had nothing to do with the relevant issues in the application for compensation brought by the injured employee.

DMC Category Rating: Developed

Facts
This was an employee’s compensation case brought by Wong Shu Kuen as employee, against the employer, Vianet International. In accordance with the Hong Kong Employees’ Compensation Ordinance, Vianet had insured its liability as an employer with China Insurance Co. Ltd. China Insurance had denied liability for any liability that Vianet might have to the employee. As a result, Vianet had commenced proceedings against China Insurance, but this action had been stayed, in order that the dispute could be determined by arbitration, in accordance with the policy. Vianet now sought to join China Insurance as third party to the employee compensation proceedings, on the grounds that it was ‘a person appearing to be interested in the proceedings’ under the provisions of the Hong Kong Employees’ Compensation Ordinance. China Insurance resisted the application.

Judgment
The judge held that, by virtue of the provisions of the Employees’ Compensation Ordinance, China Insurance was a person appearing to be interested in the proceedings. Under s.43(1) of the Ordinance, the Employees’ Compensation insurer was liable to pay any sum awarded to the injured employee against his employer, notwithstanding anything to the contrary in the policy. Under s.44(1) of the Ordinance, the injured employee was entitled to recover directly from the Employees’ Compensation insurer in his own name the amount of any liability that he would have been entitled to recover from his employer. Where the Employees’ Compensation insurer disputed its liability under the policy for the injury in question, it was entitled to claim indemnity from the employer for any amount paid out by it to the employee.

However, the judge refused to order joinder in this case. In his view, no purpose could possibly be served by the joinder, as ‘the motive for this application to join the insurance company has everything to do with the employer’s private contractual dispute with the insurance company and absolutely nothing to do with the real and relevant issues in the application for compensation brought by employee’. The joinder application was just another attempt by Vianet to bring the insurer to court by other means.

Comment
This case is of potential interest to employers and their Employees’ Compensation insurers, in that it provides some guidance as to the considerations they should take into account in joinder situations. In practice, insurers will frequently seek to be joined to an employee’s action against the employer, in order to protect their interests, provided that they can show sufficient reason based on the issues in the particular case. This case was unusual in that it was the employer, rather than the insurer, who applied for the joinder.

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