HONG KONG COURT EXTENDS THE SCOPE OF JURISDICTIONAL GATEWAY FOR TORT COMMITTED OVERSEAS

November 2020

In Fong Chak Kwan v Ascentic Ltd & Ors [2020] HKCFI 679, the Plaintiff (“P”) employee, who is a Hong Kong permanent resident, suffered multiple injuries as a result of an accident that took place in a sewage treatment factory in Ningbo City, Mainland China where he was working as a site service specialist at the material times under the employment of the 2nd defendant (“D2”), a company incorporated in the United States (“US”). For the first time, the Hong Kong Court of First Instance considered the jurisprudence discussed by the UK Supreme Court in Brownlie v Four Seasons Holdings Inc [2018] 1 WLR 192 on the concept of “damage” in the gateway provision for invoking the Court’s long arm jurisdiction on tort committed outside jurisdiction.

It was not disputed that P suffered direct damage (that is the immediate bodily injuries) as a result of the Accident at the Ningbo factory and P suffered pain, suffering and loss of amenities, received medical treatment and incurred medical expenses in Hong Kong.

One of the major legal issues in the current case centred around whether P was entitled to issue and serve the writ of summons on D2 at its US address on the basis that “the damage was sustained…within the jurisdiction” under the second limb of Order 11 rule 1(1)(f) (“Gateway F”) of the Rules of the High Court (“RHC”).

This case is significant as it is the first time for a Hong Kong court to consider the landmark decision of the UK Supreme Court in Brownlie v Four Seasons Holdings Inc [2018] 1 WLR 192 when interpreting the word “damage” within Gateway F in respect of the local court’s jurisdiction.

P relied on the majority view in Brownlie and argued that the words “damage…sustained within the jurisdiction” should be given its ordinary and natural meaning and hence they are wide enough to cover any kind of damage, direct or indirect, which P suffered as a result of the tortious conduct of D2. This way, the fact that P suffered pain, suffering and loss of amenities, received medical treatment and incurred medical expenses in Hong Kong per se will be sufficient for him to obtain leave to serve the writ in the US via Gateway F.

The Employees Compensation Assistance Fund Board, which intervened the action as the 3rd defendant (“D3”), relied on the minority view in Brownlie (in particular Lord Sumption’s judgment) and contended that the meaning of “damage” was confined to bodily injuries P instantly suffered upon occurrence of the Accident in Ningbo. D3 regarded the indirect damage as mere evidence of the financial value of the direct damage. The difference between direct and indirect damage stems from the distinction between damage done to an interest protected by the law and facts which are merely evidence of the financial value of that damage. Law of tort in general concerned with non-pecuniary interest, including bodily integrity, physical property and reputation. Where these interests are deliberately or negligently injured, the tort is complete at the time of the injury.

The Court of First Instance, however, followed the majority view in Brownlie. It is remarked that the majority view provided a clear and persuasive answer to the distinction drawn by Lord Sumption of the minority between “damage” and evidence of financial valuation of such damage for three reasons. Firstly, Lord Sumption’s distinction equates “damages” with “damage which completes the cause of action” but “damage” is not an essential component for every tort. Secondly, by limiting “damage” to “damage to the interest protected”, even Lord Sumption himself recognized the conceptual difficulty where the relevant interest may be located and damaged in more than one country. Thirdly, the Court ruled that the legislature likely had in contemplation the ordinary and natural meaning of the word “damage” at the time of drafting Gateway F of the RHC.

By adopting the majority view of Brownlie, the Court of First Instance dismissed the concern that a wide interpretation of “damage” under Gateway F would create a “universal jurisdiction” to entertain claims by local residents of personal injuries suffered anywhere in the world as that would be adequately addressed by the discretion as to forum conveniens. The judgment has the effect of giving Gateway F of RHC a liberal interpretation, by allowing a person against whom tort was committed overseas to sue in Hong Kong provided that he suffered consequential loss and damage, such as medical treatment, in Hong Kong after the accident.

By the subsequent decision dated 7 August 2020, leave has been granted to appeal this decision to the Court of Appeal on the basis that the majority and minority views in Brownlie should be further considered by the appellate courts.