Case Document

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CACV002232/2001

CACV2232/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 2232 OF 2001

(ON APPEAL FROM DCEC 243 OF 1999)

_________________________

BETWEEN
	LAU MAN KEUNG	Applicant

	AND

	YIU WING CONSTRUCTION CO LTD	Respondent

_________________________

Coram: Hon Leong CJHC, Cheung JA & Kwan J in Court

Date of Hearing: 31 May 2002

Date of Handing Down Judgment: 10 June 2002

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J U D G M E N T

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Hon Leong CJHC :

1.The applicant Lau Man Keung was a general worker employed by the respondent Yiu Wing Construction Co. Ltd and had been so employed since October 1997. As a general worker, he earned $9,421 per month. On 6 March 1998, he was hit by fallen objects and was injured while he was assisting a skilled worker to dismantle a rubbish chute at the respondent's construction site at Tseung Kwan O, New Territories.

2.The applicant was taken to United Christian Hospital. His right 8th, 9th and possibly 10th rib were found to have fractured. He also suffered pain on the right chest but no hospitalization was required. He was discharged after treatment. The applicant returned to the hospital several times for follow up examination and thereafter visited the Jockey Club out patient clinic a number of times. On these occasions, the doctors who examined him either certified that he was suffering from fractured ribs or he had chest pain. All the doctors recommended sick leave. The total period covered by the sick leave certificates was 24 months (from 6.3.1998 to 6.3.2000).

3.On 1 August 2000, the Employees' Compensation (Ordinary Assessment) Board (the "Board") after a review of previous assessments, issued a Certificate of Review of Assessment certifying that the applicant had rib fractures and neck injury resulting in right chest wall pain but his ear problem was not related to the accident. The Board assessed that the applicant suffered 1% permanent loss of earning capacity. The Board also assessed the period of absence from duty necessary as a result of the injury was 24 months, i.e. the total periods covered by the medical certificates.

4.In the District Court, the applicant claimed employees' compensation under sections 9, 10 and 10A of the Employees' Compensation Ordinance ("Ordinance"). The applicant also appealed against the assessment of the Board.

5.The respondent admitted liability at the trial. The issue before the court was the amount of compensation.

6.The applicant was born on 10 October 1938 and was 62 years of age at the time of trial. The applicant claimed that he had been assigned to do dismantling work since February 1998 and was given an additional $1,000 for dismantling each chute. For the month of February 1998 he had $3,000 in total extra payments. He claimed that this additional amount should be taken into account in calculating his monthly earnings. This was disputed by the respondent.

7.The applicant claimed that he also suffered injury to the mouth in the accident resulting in damage to his teeth. He had to attend the dental clinic of the United Christian Hospital for dental treatment. His hearing problem was compounded by the accident. For these injuries, the respondent should pay him compensation. The respondent rejected these claims.

8.Two orthopedic specialists Dr Au Ka Kau and Dr Lee Po Chin gave evidence at the trial on the injury of the applicant.

9.Dr Au who examined the applicant in June 1999, 15 months after the accident, said that fractures normally would heal solidly in three months and associate soft tissue injury could be the cause of the applicant's persistent chest wall pain. He said it would be advisable for the applicant to resume work after he finished his treatment but he should take up light work or work of sedentary nature. His assessment of the applicant's loss of earning capacity is 5%.

10.Dr Lee who examined the applicant in January 2000, 22 months after the accident said that fractures would normally heal in 6 months and the applicant's right chest pain should allow him to return to work as a casual worker in a construction site or work of a lighter nature. His opinion is that the applicant's residual pain will give him a 2% loss of earning capacity.

11.The judge accepted that the accident had caused injury to the applicant's mouth damaging his teeth for which treatment was required. However, the treatment had been successful. He concluded that there could be damages in a personal injury case, but no compensation is payable in an application of this nature. As to the applicant's hearing problem he accepted the report of the ENT specialist Dr Herman Tang and rejected the applicant's claim that the accident had compounded his hearing problem.

12.The judge considered that the extra payment of $3,000 which the applicant received in February 1998 were only "ad hoc payments" and were not earnings for the purpose of compensation under the Employees' Compensation Ordinance. He adopted $9,421 as the application's earnings as the basis for calculating compensation in the present claim.

13.As to the loss of earning capacity, the judge accepted the Board's assessment of 1%. The judge, however, did not accept the applicant's 24 months of temporary incapacity, albeit the whole period had been certified by the Board as being necessary. Based on a video showing that shortly before the trial the applicant was able to climb stairs and ride a bicycle and the medical evidence, the judge concluded that the applicant should have been back at work no later than 21 months after the accident.

14.The judge was invited by the applicant's solicitor to adopt the formula in Hong Kong Paper Mills Ltd v Chan Hin Wu [1981] HKLR 556 in calculating the applicant's compensation for permanent partial incapacity but this was rejected by the judge. The judge did not explain in his judgment why he rejected the two doctors' assessments and preferred the assessment of the Board against which the applicant had also appealed. Nor did he explain why he did not consider it appropriate to use the Hong Kong Paper Mills formula in the present case.

15.The judge awarded compensation for permanent partial incapacity based on the applicant's monthly earnings of $9,421 and 1% loss of earning capacity and awarded compensation for temporary incapacity based on 21 months sick leave. Except the claim for medical expenses which was agreed, the remaining claims for compensation were rejected. The appeal against the assessment of the Board was also dismissed.

16.The applicant appealed. In his grounds of appeal, he complained that the judge was wrong not to have allowed 24 months sick leave since this was recommended as necessary by medical doctors. He also complained that the judge had ignored the assessment of loss of earning capacity by the medical experts and the judge was wrong in failing to award compensation for his dental damage and hearing problems. In all, his basic complaint was the total amount of compensation was too low.

17.Essentially in this appeal, we need to consider two issues: the permanent partial incapacity and the period of temporary incapacity suffered by the applicant as a result of his injury in the accident. The amount of compensation depends on these matters.

18.As to the applicant's other complaints, we do not think they are sustainable. On his dental claim, the applicant received treatment from a dentist in respect of the damage to his teeth. The damage is now successfully repaired with no residual impairment. Mr Sakhrani for the respondent has informed us that the applicant has already commenced an action against the respondent for damages in negligence and proceedings have reached the stage that it will be set down for trial soon. The applicant's claim, if any, lies in his claim for damages for personal injury and not in statutory compensation. On his hearing problem claim, we agreed with the judge's finding that there is nothing to support his claim that his hearing problem is attributable to the accident. On his claim for medical expenses under section 10A, this was agreed and an award was made accordingly. There should be no appeal from it.

19.On the two essential issues, Mr Sakhrani in his submission refers us to the judgment of the Privy Council in Lau Ho Wah v Yau Chi Biu [1987] HKLR 1061 where it was held that loss of earning capacity is not to be measured by some immediate and possibly quite fortuitous achievement but rather it was concerned with a continuing state, with the potential of an individual and that there should be a distinction between loss of earnings and loss of earning capacity. Mr Sakharni submits that the formula in Hong Kong Paper Mill should not be used without regard to this distinction.

20.Mr Sakhrani also submits that it was purely fortuitous that the applicant was able to earn $9,421 per month as a general worker in a construction site. It was an employment the applicant was not capable of undertaking. He submits that the applicant was a clerk in a department store in the Mainland for 30 years before he came to Hong Kong. When he came to Hong Kong, his earning capacity was only in the $6,500 to $7,500 range. However, Mr Sakhrani accepts that after the accident, the applicant was able to work as a watchman and that would enable him to earn $7,472 per month. But he submits that the applicant's actual earnings of $9,421 per month at the time of the accident was fortuitously high and should not be used for calculating his loss of earning capacity. Mr Sakharin contends that the applicant's earning capacity prior to the accident should be within the range of employments set out in paragraph 30 of the skeleton argument i.e. between $6,587 for a watchman/guard and $7,786 for a messenger/office assistant.

21.We do not agree that the applicant's employment at the construction site was some fortuitous achievement of the applicant. The applicant had been working for over four months at the site prior to his accident. If this were some kind of work not within his earning capacity, he would not have been there for so long. In any case, the judge in his calculation had accepted $9,421 per month as the applicant's earning capacity prior to the accident and there is no cross appeal on this.

22.As has been pointed out earlier in this judgment, the judge rejected both doctors' opinion on the applicant's loss of earning capacity but he accepted their opinion as to the physical state of the applicant and considered that the period of 24 months sick leave was over generous and that the applicant should have returned to work earlier. He concluded that the applicant was fit to return to work 21 months after the accident. The judge gave no reason for this conclusion.

23.We note, however, that the opinions of the two doctors on when the applicant should return to work do not entirely support the judge's conclusion. Dr Au said that it was "advisable for Mr. Lau (the applicant) to try to resume his job after he finished his treatment". Dr Lee said that the applicant's right chest pain should allow him to work at a construction site as a casual worker. Both doctors had reviewed the sick leave certificates and neither of them said the applicant's absence from work covered by the certificates as a result of his injury was not necessary.

24.In accepting the Board's assessment of 1% loss of earning capacity and in dismissing the appeal against the assessment, the judge gave no reason. The Board also gave no reason for the assessment of 1% loss of earning capacity. Thus, it is not known how the l% loss of earning capacity was reached.

25.In Chan Kam v Standard Chartered Bank Hong Kong Trustee Ltd [1991] 2 HKLR 455, the Court of Appeal held that in an appeal against an assessment of the Assessment Board which had given no reason for its conclusion, "a court can only judge an assessment by testing the validity of its conclusions against the total available evidence." This case also decided that in assessing compensation under section 9(1) of the Ordinance, regards must also be had to section 9(1A) which requires the court to take into consideration the special circumstances of the applicant.

26.It is quite clear from the doctors' reports that the applicant probably would not be able to return to work at the construction site as a general worker doing strenuous work. The fractures were not regarded as minor and there is residual chest pain. Comparing the applicant's injury with injuries specified in the First Schedule of the Ordinance, where for example, the loss of the finger tip of the little finger without loss of bones gives rise to 2% loss of earning incapacity, it does not appear, in our opinion, that the doctors' assessments of 2% to 5%, despite these being clinical assessment, are unduly high whereas on the other hand the l% assessment of the Board does appear to be on the low side.

27.The judge was silent in his judgment as to whether he found no special circumstances exist in the present case or there were such circumstances, but he gave them no weight. Thus, we are unable to say that the judge in dealing with the appeal against the Board's assessment had tested the assessment against the total evidence available and had regard to section 9(1A). We are unable to agree with the judge's conclusion that on the evidence the loss of earning capacity should be 1%.

28.There is a diversity of opinions on the applicant's loss of earning capacity between the experts themselves and between them and the Board. The percentages range from 1% to 5%. In the absence of further investigation into how these assessments were reached, we are not in a position to say which is appropriate. In these circumstances, we conclude that the formula in Hong Kong Paper Mill as modified later by the Court of Appeal in Lui Kwong Yan v Shui Hing Decoration Works & Anor [1993]1 HKLR 168 should be adopted to ascertain the amount of compensation payable under section 9(1)(b). This formula is considered in Hong Kong Paper Mills as representing correctly the intention of the legislature in section 9(1)(b) of the Ordinance. The formula is :

Compensation payable = [(b - a)/b] x c

Where a =
wages for the work the employee is now capable of doing, but assessed at the date of the accident

b =
pre-accident wage of the employee

c =
compensation payable on permanent total incapacity

29.We see no special circumstances in the applicant's case as the applicant had no special skill and the only impact of the injuries on him was no more than that he probably would not be able to return to work at a construction site and would have to take up lighter work.

30.We agree with the judge that the $3,000 which the applicant received for assisting dismantling refuse chutes was not his regular monthly earnings. The applicant was assigned such work which gave him extra payment due to shortage of workers at the time. This was an ad hoc payment which should not be taken into account in calculating the applicant's compensation.

31.Adopting the formula, the compensation under section 9(1)(b) should be :

($9,421 - $7,472)/$9,421 x 48 x $9,421 = $93,552

32.Section 10 of the Ordinance provides that a period of absence from duty certified to be necessary by a medical practitioner or an Assessment Board shall be deemed to be a period of total temporary incapacity irrespective of the outcome of the injury. The judge based on the evidence of Dr Au concluded that the evidence of the medical certificates and the assessment Board's confirmation of the leave of absence had been rebutted. We do not agree that the evidence of Dr Au was sufficient to rebut the evidence of the medical certificates. The fact that Dr Au found that the applicant was able to take up light work and a video showed he could climb stairs and ride a bicycle does not mean the sick leave was not necessary. The sick leave was certified as necessary by a number of doctors and confirmed by the Board and no suggestion has been made that these medical certificates were issued without due consideration by the doctors. We conclude that section 10 compensation should be based on 24 months sick leave and it is :

24 x $9,421 x 4/5 = $180,883

33.The total compensation under sections 9 and 10 is :

$93,552 + 180,883 =$274,435

34.The appeal is allowed to the extent that the compensations under sections 9 and 10 are set aside and substituted by the following :

section 9 compensation $93,552

section 10 compensation $180,883

35.The total payable under these two heads should be set off by the amount of compensation the applicant has already received being $163,600.

36.Interest is awarded on the net amount of compensation to be received by the applicant, i.e. $274,435 plus agreed compensation under section 10A of $3,977 less $163,600, being $114,812. The period is 41 months from the date of the accident to the date of the judgment in August 2001. The rate of interest is 5.43% per annum, being half the judgment rate at the time of the judgment, and thereafter at the prevailing judgment rates until full payment. We further make an order nisi that the applicant is to have the costs of this appeal, to be taxed if not agreed.