Lord Lloyd J:

On 8 September 1983 the "Barquentine Osprey" was moored in Repulse Bay, Hong Kong, when she was hit by the typhoon "Ellen". As a result, she became detached from her moorings, and capsized the following day. Several members of the crew lost their lives, including Chan Ying Lung, the cook, and Sae Heng Hai, an able seaman. They were employed by Axelson Company Limited, the owners of the "Osprey". In September 1984 their personal representatives brought proceedings in the District Court of Hong Kong claiming compensation under the Employees Compensation Ordinance. They were awarded HK$242,000. On 27 May 1986 they brought further proceedings against Axelson claiming damages for negligence. On 20 November 1986 they were awarded HK$589,081 and HK$443,000 respectively. Meanwhile Axdson had been would up by order of the Supreme Court of Hong Kong. The judgments in favour of the plaintiffs were never satisfied.

Accordingly on 19 January 1988 the plaintiffs commenced the current proceedings against the respondents, Eastern Insurance Company Limited, claiming payment under the Third Parties (Rights Against Insurers) Ordinance. Section 2(1) provides:

Where under any cont