Hung Chiu Kwan Danka v. Lui Chi Mun Teddy Formerly t/a Sammy Exhibition Design Production Co and Another
Read the full judgment text of DCEC 703/2012 on BabelCite. This District Court judgment was delivered on 14 September 2015.
1. This is an application for employees’ compensation in respect of an accident that took place on 25 October 2011. The application is brought against the 1 st Respondent in his capacity as the Applicant’s employer. Insofar as the 2 nd Respondent is concerned, the application is brought against him also in his capacity as the employer (being the Applicant’s fall-back position) should the court find the 1 st Respondent not to be the employer but instead a principal contractor under section 24 o
Cites 3 cases
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DCEC 703/2012 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO 703 OF 2012 --------------------- IN THE MATTER OF AN APPLICATION BETWEEN:
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--------------------- JUDGMENT --------------------- Introduction 1.This is an application for employees’ compensation in respect of an accident that took place on 25 October 2011. The application is brought against the 1st Respondent in his capacity as the Applicant’s employer. Insofar as the 2nd Respondent is concerned, the application is brought against him also in his capacity as the employer (being the Applicant’s fall-back position) should the court find the 1st Respondent not to be the employer but instead a principal contractor under section 24 of the Employees’ Compensation Ordinance, Cap 282 (“the Ordinance”). 2.In the 1st Respondent’s home-made Answer dated 30 October 2012, he simply denied he was the Applicant’s employer and because of this, he asserted that he was not liable for paying compensation to the Applicant. 3.In the 2nd Respondent’s Answer dated 23 July 2013, the 2nd Respondent denied he was the Applicant’s employer and also denied liability for compensation. Instead, the 2nd Respondent asserted that he himself was an employee of the 1st Respondent and upon being informed by the 1st Respondent that more workers were required, he introduced the Applicant to the 1st Respondent. He admitted he was at the scene of the accident and saw the Applicant injure himself while working there. 4.On 26 June 2012, the Employee’s Compensation (Ordinary Assessment) Board (“the Board”) assessed that the loss of earning capacity caused to the Applicant in respect of the injury he sustained as a result of the accident was 1.75%. This assessment was reviewed by the Board on 25 September 2012 and the loss of earning capacity was revised to 2%. The Applicant does not accept this assessment and has lodged an appeal against the finding of the Board under section 18 of the Ordinance. 5.The 1st Respondent has never been represented in these proceedings and has been acting in person when appearing in pre-trial hearings. However, he together with his intended witness surnamed Fan have both been absent at trial. After satisfying myself that the 1st Respondent had been duly notified of the trial date and had been served with all the relevant papers, I directed that the trial should proceed in the absence of the 1st Respondent. The Accident 6.The Applicant gave evidence. He adopted his witness statement dated 29 August 2013 as part of his evidence. 7.In his statement, he said he was born on 30 July 1965 in Hong Kong. The accident occurred on 25 October 2011. That time he was 46. At time of the statement, he was 48. He was educated to Form 3 level in Hong Kong. He was right-handed. At the time of the accident, he was a decoration worker and had been so for 10 odd years. He and the 2nd Respondent had been friends for a few years prior to the accident. They were both decoration workers and had worked together previously and had maintained contact since then and introduced decoration work to each other. On or about 23 October 2011, the 2nd Respondent told him that he (2nd Respondent) had started work in Convention and Exhibition Centre and that his employer would like to hire more decoration workers for the job. The daily wage would be $500 and the time of work would be from 9 till 6 with overtime pay if applicable. The main duty was to assemble booth structural components. The Applicant signified interest. They agreed for the Applicant to go on site at 9 am on 25 October 2011 for an interview and to start work. 8.On the appointed day, the Applicant turned up at the particular booth of which the production company was the company under which the 1st Respondent was formerly trading. The 2nd Respondent introduced the 1st Respondent to the Applicant. In the presence of the concerned parties, the 2nd Respondent explained that the 1st Respondent was the Applicant’s employer and that only with the consent of the 1st Respondent would the Applicant be able to start work. 9.On site, the Applicant acted mainly according to the instructions of the 1st Respondent with occasional instructions coming from an unknown Putonghua speaker via the interpreting service of the 2nd Respondent. The equipment for the assembling work was already on site. The Applicant did not bring any tools along to the site. 10.The Applicant insisted that the 2nd Respondent, like himself, was a decoration worker employed by the 1st Respondent and did not play the role of a ganger. Besides, after the incident, in the beginning of November 2011, there was a meal gathering specially arranged for the purpose of discussing the matter of compensation. It was attended by the Applicant and the two Respondents. During the meal, the 2nd Respondent did not take part in any discussion about the compensation matter between the Applicant and the 1st Respondent. At that time, the 1st Respondent in the capacity of an employer gave to the Applicant a sum of HK$7,000 as the then sick leave pay and medical expenses compensation; the Applicant signed in the 1st Respondent’s notebook in acknowledgement of receipt. 11.After taking hold of the second sick leave certificate, the Applicant again approached the 1st Respondent for more sick leave pay. However, the 1st Respondent refused; hence the Applicant turned to the Labour Department for help. 12.The day of accident was the first day of the Applicant’s duty. Apart from the Applicant and the 2nd Respondent, there were two other workers in the job of assembling. The 1st Respondent and the Putonghua speaker were giving the workers instructions at the side. 13.The assembling work continued till lunch time. On returning to the site after lunch, at about 3 pm, the workers were endeavouring to lift a cross-shaped frame to the top of the booth structure for installation. The frame measured 2.5 m x 2.3 m and would fit into the space at the top neatly. Its weight was between 10 and 20 kg. The top of the booth structure was about 3 m. 14.At the time, the Applicant and a co-worker surnamed SIU were each standing on an A-shaped ladder taken from the site and were bearing the weight of the frame. The two ladders were about 2 m apart. The Applicant was standing at a position of about 1 m from the ground. The 2nd Respondent and another worker were fixing the frame onto the booth top. 15.When the worker to the Applicant’s right had finished the installation, for unknown reason SIU and his ladder fell towards the Applicant. There was no way to avoid them. Consequently, the Applicant and his ladder fell. 16.The Applicant was taken to Ruttonjee Hospital by ambulance. The right wrist bone was fractured. He was admitted for an operation to be conducted on 28 October and he was discharged three days after the operation. 17.The Applicant’s injuries and treatment history were as per the medical reports filed which had been explained to him by his legal representatives. 18.The Applicant still felt powerless and numbness in the right wrist. Even now, the Applicant still felt occasional pain and numbness in the right arm. The capability of the right arm/hand simply could not return to the status before the accident. 19.The Applicant added in the witness box that previously, he could lift goods continuously for 2 to 3 hours; now he could do so for only one hour and then had to rest. As a result, his work speed had been delayed. He was working in decoration and doing sign board free-lance work. After he had used force for a long time, he would feel numb and needed to rest. His right wrist injury affected not his normal life but affected his work. The Applicant’s Injury 20.After the accident, the Applicant attended the Accident & Emergency Department of Ruttonjee Hospital for medical treatment from which he was transferred to Ruttonjee and Tang Shiu Kin Hospitals, Department of Orthopaedics and Traumatology, for further handling. Physical examination found a deformed right wrist. X-ray of the right wrist showed an intra-articular fracture of the distal radius. An initial treatment of close reduction and slab was done on the day of admission. Operation of open reduction and internal fixation were performed on 28 October 2011 and the Applicant was discharged 3 days after operation. The Applicant then received physiotherapy and occupational therapy treatments. 21.Although the Applicant was cross-examined, there was no challenge to his evidence. The 1st Respondent’s Case 22.The 1st Respondent has filed a witness statement of himself (undated) and a witness statement of an eye-witness Fan Chi Keung (also undated). 23.However, the fact that none of them appeared at trial meant that I would have to think long and hard before allowing their witness statements to go in as untested evidence. Given that the statements on their face covered many areas of dispute, I was not prepared to let them in without the chance of their makers being cross-examined. The 2nd Respondent’s Case 24.The 2nd Respondent gave evidence. He adopted his witness statement dated 8 September 2013 as part of his evidence. He added that he was not the Applicant’s boss but the 1st Respondent was. 25.In the statement, the 2nd Respondent said that he was a decoration worker and had been so for over 10 years. His job mainly was to be employed by different decoration companies, to perform decoration work for the employer. He came to know the Applicant about one year ago (as of date of statement), when they were working together previously. Since then, he and the Applicant contacted each other occasionally and introduced work to each other. 26.Near the end of October 2011, the 1st Respondent suggested employing the 2nd Respondent for decoration work at the Hong Kong Convention and Exhibition Centre. After reaching consensus on salary and working hours with the 1st Respondent, the 2nd Respondent agreed to be employed, with duty to begin on 24 October 2011. The 1st Respondent added that he wanted the 2nd Respondent to introduce other decoration workers to him, so as to help finish the subject decoration work. That time, the thought of the Applicant sprang to mind and therefore the 2nd Respondent told the 1st Respondent that he could so introduce the Applicant. The 1st Respondent agreed and asked the 2nd Respondent to invite the Applicant to start working at the Convention and Exhibition Centre on 25 October 2011. 27.As a result, on 23 October 2011, the 1st Respondent relayed the message to the Applicant who agreed. The 1st Respondent then told the Applicant to go to the Convention and Exhibition Centre to look for the 1st Respondent, at the same time telling him that he (the 2nd Respondent) was a mere introducer, that so far as the employment terms were concerned, the Applicant should discuss about them with the 1st Respondent, as they were none of his (the 2nd Respondent’s) business. 28.In the morning of 25 October 2011, after the Applicant had arrived at the Convention and Exhibition Centre, the 2nd Respondent introduced him to the 1st Respondent. After the Applicant and the 1st Respondent had reached a consensus on the employment terms, the 1st Respondent then instructed the 2nd Respondent and the Applicant to do assembling work on one of the booths. The 2nd Respondent maintained that he was at all times an employee of the 1st Respondent, and not a ganger/subcontractor. 29.At about 3 pm that day, the 2nd Respondent, the Applicant and two other workers were instructed to install a cross-shaped square structure onto the booth top. The four of them were positioned each on one side of the booth. Each made use of a ladder to lift up the square structure to the booth top. When it was in position, the 2nd Respondent would fix it onto the booth top with screws. Because of the size and weight of the square structure, before the 2nd Respondent was able to tighten up the screws to stabilize it, the Applicant and the other 2 workers were still required to keep the square structure into position on their respective ladders. 30.After the 2nd Respondent had completed the stabilization task on one of the sides, suddenly one of the workers fell with his ladder in the direction of the Applicant. Being unable to dodge the incoming impact, the Applicant fell with his ladder too. He was later taken by ambulance to Ruttonjee Hospital. 31.About November 2011, the 2nd Respondent received notification that the Applicant and the 1st Respondent were to meet for negotiating the compensation matter of this accident. The 2nd Respondent was invited to and did attend. Because it was really none of his business, he simply attended without expressing any views. In the middle of the meeting, he had other things to do so he left early and did not know the outcome of that meeting. 32.After the meeting, although the 2nd Respondent had occasionally had contact with the Applicant, they did not discuss about the accident or compensation matter. Because the 2nd Respondent was simply an introducer, he was unwilling to intervene in the labour dispute. 33.There was no cross-examination of the 2nd Respondent by the Applicant. The Issue of Liability 34.Section 5(1) of the Ordinance reads,
35.Section 2(1) of the Ordinance provides a definition of an employee:-
36.The Applicant alleges in the application that both the 1st and the 2nd Respondents were his employers. It has never been the Applicant’s case that, alternatively, the 1st Respondent was the principal contractor and the 2nd Respondent was the subcontractor cum the Applicant’s employer. 37.Both the 1st and 2nd Respondents denied in their respective Answers being the Applicant’s employer and therefore denied liability. 38.There is on the evidence nothing to indicate that the 2nd Respondent was the employer. Quite the contrary, the evidence was all one way to suggest that the 1st Respondent was the employer. 39.There is on the evidence nothing to suggest that the 1st Respondent was the principal contractor with the 2nd Respondent as his subcontractor. The fact that there was no cross-examination of the 2nd Respondent by the Applicant tends to suggest that the Applicant agrees with the 2nd Respondent’s entire case which no doubt included the claim that the 2nd Respondent was himself a mere employee of the 1st Respondent and that he was simply an introducer between the 1st Respondent as employer and the Applicant as employee. 40.In order to determine whether the Applicant was indeed the employee of the 1st Respondent, the Court does not merely look at the claim of the parties. The test is as laid down by Cooke J in Market Investigations v Minister of Social Security [1969] 2 QB 173, 184-185:-
41.Another much quoted passage which is helpful in the determination of the question is that in Hall v Lorimer [1992] 1 WLR 939, per Mummery J, at 944:-
42.Both of the above authorities have been cited with approval by the Court of Final Appeal in Poon Chau Nam v Yim Siu Cheung t/a Yat Cheung Airconditioning & Electric Co (2007) 10 HKCFAR 156. 43.Looking back at the evidence, and subject to the Court accepting the evidence as credible and reliable, one can see that the Applicant worked for the 1st Respondent on a daily wage, with the working hours prescribed by the 1st Respondent. The Applicant brought no tools to the site and worked according to the instructions given by mainly the 1st Respondent (and to a lesser extent by an unknown Putonghua speaker). The Applicant didn’t hire any helpers nor was there any evidence that he bore any financial risk. He earned his income by a daily wage and there was no evidence that a more efficient level of performance would bring about any extra gain on his part. 44.The picture thus emerged, when viewed objectively, is that of the Applicant working as an employee for the 1st Respondent as employer. 45.I note that the evidence regarding reaching of consensus of the terms of service(s) sourcing from the Applicant on the one hand and from the 2nd Respondent on the other might not be on all fours with each other. The Applicant alluded that it was the 2nd Respondent who brought to him the terms to which he signified interest on a day prior to his first day of work. The 2nd Respondent’s evidence was however that the discussion and consensus of terms took place between the Applicant and the 1st Respondent on site on the first day of the Applicant’s work before work started. 46.A closer examination of the two pieces of evidence reveals that they may nonetheless be reconciled with each other. In fact, both could be true without any conflict one with the other, in that the 2nd Respondent initially brought the provisional terms to the knowledge of the Applicant who signified interest and who agreed to go along to an interview on 25 October during which time the agreement was finally entered into as per the original provisional terms. 47.I noted on pp 100-101 of the trial bundle that there was a “Notice of work injury arising from accident” dated 21 November 2011 in which the Applicant had purportedly filled out the surname of the 1st Respondent incorrectly as “雷” rather than the correct “呂”. However, because of the similarity in sound of the two Chinese characters, I do not think there is anything in it. 48.I have also been informed in submissions (in fairness to the absent 1st Respondent) that there was previously a related industrial summons trial before a magistrate in which the 1st Respondent appeared as the defendant employer and the 2nd Respondent appeared as a prosecution witness trying to prove an employment relationship. I was told that the 1st Respondent was acquitted because the magistrate could not rule out the possibility that the 2nd Respondent might have been the independent contractor responsible for the construction instead of the 1st Respondent. That was all I knew about that case and it is not evidence that I can take into account. Quite apart from the fact that a criminal trial adopts a higher standard of proof, there is in the civil proceedings before me no challenge to the evidence, nor any evidence contrary thereto, of the Applicant and the 2nd Respondent which was all one way. 49.Having seen and listened to the two witnesses give evidence and considered the inherent probabilities or otherwise of their evidence, and taking into account there was really no challenge to any part of their evidence, I found that I was able, on the civil standard, to accept their evidence as credible and reliable and I gave it full weight. 50.I therefore found that for the purposes of the Ordinance, the 1st Respondent was the Applicant’s employer, and that in that employment, personal injury by accident arising out of and in the course of the employment has been caused to the Applicant as described in the evidence. 51.I found that, on the evidence, the 2nd Respondent was not the Applicant’s employer and was not liable to pay compensation to the Applicant under the Ordinance. The Appeal under Section 18 52.On 26 July 2013, the Applicant was examined by Dr Chak Hing Chung Eric, a specialist in Orthopaedics. According to Dr Chak, the Applicant complained of right upper limb transient numbness with electrical sensation. It attacked every two to three days a week and each attack lasted for several seconds. It was increased with exertion or working for 3 hours. He also complained of right forearm pain occasionally. It attacked every two to three days a week and each attack lasted for several seconds. It was increased with exertion or working for 3 hours. He also complained of mild right wrist pain occasionally. It attacked every 1-2 days and each attack lasted for several seconds. It was increased after working for 3 hours. On examination, Dr Chak noted there was mild intermittent residual pain in the Applicant’s right wrist and right forearm which might affect his wrist strength such as carrying of heavy object when required as exertion usually aggravated pain of such nature. Dr Chak also noted there was moderate reduction in the Applicant’s right hand grip strength measured when compared to the left and noting that the Applicant’s right hand was the dominant side, this could affect his right hand function and he might need more assistance with his left hand at work. Dr Chak opined that the Applicant’s endurance of right arm muscle might also be affected as his right wrist pain might be aggravated with repetitive motion at work. Dr Chak also opined that the Applicant’s right upper limb numbness was probably related to the accident. Although Dr Chak expected the Applicant to be able to return to his pre-injury work, his work efficiency would probably be affected as he complained of right wrist pain and forearm pain and right upper limb numbness after exertion – he might need to take more frequent rest after working for 3 hours. 53.Dr Chak opined that the grip strength loss was moderate but the result depended on subjective effort. Endurance of the right forearm muscle might be affected and hence caused the right wrist pain with repetitive movement at work. Dr Chak considered the magnitude of residual pain mild and should not affect the Applicant’s activity of daily living but it might be increased by exertion and could cause reduction of work endurance. 54.Dr Chak estimated that the Applicant suffered from up to 3% of whole person impairment as a result of his residual pain of right wrist and forearm, right upper limb numbness, muscle atrophy of right forearm and arm and reduction of muscle endurance from the injury. His assessment was that the Applicant suffered from 3% loss of earning capacity. In respect of the sick leave granted from 25 October 2011 to 26 June 2012, Dr Chak opined that the period of sick leave was reasonable and should be endorsed. 55.Having considered all the relevant matters and noting that the injury suffered is not one of the injuries specified in the First Schedule of the Ordinance, I allow the Applicant’s appeal lodged under section 18 of the Ordinance and I assess that the Applicant suffers a permanent loss of earning capacity of 3% as a result of the injury he sustained on the day of the accident. Compensation under Section 9 56.The Applicant was born on 30 July 1965 and was 46 years of age at the time of the accident. There is no dispute that the Applicant’s monthly income was HK$13,000. In accordance with sections 7(1)(b) of the Ordinance, the compensation payable to the Applicant is:-
Compensation under Section 10 57.The Applicant was granted sick leave from 25 October 2011 to 26 June 2012. The sick leave period was considered reasonable by Dr Chak who opined that it should be endorsed. The compensation under section 10 of the Ordinance should therefore be:-
Medical Expenses under Section 10A 58.The Applicant makes a claim of HK$2,837 under section 10A of the Ordinance and there are receipts to support the expenses incurred. I therefore allow a sum of HK$2,837 under this section. Conclusion on quantum 59.The total amount of compensation can therefore be calculated as follows:-
60.The Applicant is entitled to interest on the sum of HK$107,117 at half the judgment rate from the date of the accident (25 October 2011) to the date of this judgment and thereafter, at the judgment rate until payment. Costs 61.As costs follow the event, I make an order nisi, to be made absolute in 14 days, that the costs of this application insofar as the Applicant is concerned be paid by the 1st Respondent, to be taxed if not agreed. 62.There was a dispute as regards who should pay the costs of the 2nd Respondent in opposing this application. Ordinarily, as costs follow the event, it would have fallen upon the Applicant’s shoulders to pay such costs. However, the Applicant demurred on the basis that the only reason why he added the 2nd Respondent to these proceedings was that in the 1st Respondent’s Answer, the latter denied he was the employer and the same stance was later enhanced by his witness statement which stated, inter alia, that in effect that he was engaging the 2nd Respondent as a de facto subcontractor and that the Applicant was the 2nd Respondent’s employee, and not his. This, the Applicant argued, put him into a difficult position. Assuming the 1st Respondent would turn up at trial, and also assuming the Court were to accept his evidence as regards the parties’ relationship, then the Applicant would have a valid claim against not only the 1st Respondent as principal contractor (under section 24 of the Ordinance), but also the 2nd Respondent as employee (several liability) (see Wong Leung Tak and another v Hip Hing Construction Co Ltd [1991] 2 HKLR 345). The Applicant argued that the 1st Respondent should pay the 2nd Respondent’s costs. 63.However, the point is, even had the Applicant not added the 2nd Respondent, he would still potentially have a claim against the 1st Respondent as either the employer or the principal contractor. In adding the 2nd Respondent as a party, he had a better chance of getting a favourable judgment (in the case where the Court held that the 2nd Respondent was the actual employer and the 1st Respondent was a mere principal contractor) satisfied. For this benefit, I believe that the Applicant has to pay a price – and that price is, in the case of a failed claim against the 2nd Respondent as here, he has the pay the costs of the 2nd Respondent. 64.In the premises, I make an order nisi, to be made absolute in 14 days, that the 2nd Respondent’s costs of opposing this application be paid by the Applicant, to be taxed if not agreed. 65.The Applicant’s own costs and the 2nd Respondent’s own costs are to be taxed in accordance with the Legal Aid Regulations.
Mr Stephen Fong instructed by Wong, Kwan & Co, assigned by the Director of Legal Aid, for the applicant The 1st respondent was not represented and was absent Mr Anthony Kwan of Anthony Kwan & Co, assigned by the Director of Legal Aid, for the 2nd respondent |
Cases cited in this judgment
Further hearings and rulings under DCEC 703/2012