Cheung Tak Hing v. 文佑德經營泉興裝飾公司 and Another
Read the full judgment text of DCEC 1809/2018 on BabelCite. This District Court judgment was delivered on 15 December 2020.
1. In this action, the applicant claims against the 1 st respondent for compensation under sections 9, 10 and 10A of the Employees’ Compensation Ordinance (Cap 282) ( “the Ordinance” ).
Cited by 1 case · Cites 5 cases
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DCEC 1809/2018 [2020] HKDC 1150 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO 1809 OF 2018 -------------------- IN THE MATTER OF AN APPLICATION BETWEEN
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--------------------- JUDGMENT -------------------- A. INTRODUCTION 1.In this action, the applicant claims against the 1st respondent for compensation under sections 9, 10 and 10A of the Employees’ Compensation Ordinance (Cap 282) (“the Ordinance”). 2.The accident occurred on 6 September 2016. According to the applicant, he was at the time employed by the 1st respondent as a renovation worker, and was working in Room 2902, Shun Hei House, Siu Hei Court, Tuen Mun, New Territories, Hong Kong (“Unit 2902”). The applicant claims that in the course of his work, a wall collapsed and crushed his left hand. 3.The 1st respondent disputes liability. He denies being the employer of the applicant, and contends that the applicant had all along been a self-employed independent contractor. Accordingly, the 1st respondent says that the applicant is not entitled to any compensation under the Ordinance. 4.Alternatively, even if the applicant was the 1st respondent’s employee (which the 1st respondent denies), the 1st respondent contends that “demolishing of wall” was not part of the applicant’s job duties, and that the injury was attributable to the serious and wilful misconduct of the applicant within the meaning of section 5(3) of the Ordinance. Accordingly, the 1st respondent submits that the applicant should not be entitled to any compensation under the Ordinance in any event. 5.Lastly, the 1st respondent disputes quantum if liability is established. His main dispute is on the applicant’s monthly earnings at the time of the accident. 6.The 1st respondent was legally represented from 4 July 2019 to 3 September 2019. During the said period, the 1st respondent had filed his supplemental witness statement and a supplemental list of documents. Apart from the aforesaid period, the 1st respondent has been acting in person throughout this action. 7.As there was no valid insurance policy in force for the alleged accident, and that the 1st respondent was not legally represented at the time and would likely appear in person at trial, the Employees Compensation Assistance Fund Board (“the Board”) has joined in as the 2nd respondent in this action since 21 May 2020. 8.The trial took place before me on 25 to 27 November 2020. The applicant was represented by counsel Mr Patrick Szeto. The 1st respondent was acting in person. The Board was represented by counsel Mr Tony Chow. B. ASSESSMENT BY THE EMPLOYEES’ COMPENSATION (ORDINARY ASSESSMENT) BOARD 9.The applicant was assessed by the Employees’ Compensation (Ordinary Assessment) Board on 20 June 2018. The assessment was subsequently reviewed on 22 September 2018. According to the Certificate of Review of Assessment (Form 9) dated 5 October 2018:-
10.There has been no further appeal against the above assessment. C. THE ISSUES 11.There are three main issues required to be determined in the present action, namely:-
12.Mr Chow indicated to me that the Board would assist the court in relation to the 1st Issue and the 3rd Issue, and would adopt a neutral stance in respect of the 2nd Issue. D. THE WITNESSES 13.There were only two witnesses at trial, namely the applicant and the 1st respondent. 14.I find the applicant generally to be an honest witness. It is true that in certain parts of his witness statements, his description of his past working history and income may not be entirely accurate in the light of his elaboration under cross-examination. However, I am of the view that his evidence is generally credible, especially when considering all the other relevant circumstances and evidence available. 15.Mr Chow drew my attention to the applicant’s two previous amendments in respect of his monthly earnings in the pleadings, and submitted that the fact that the applicant was prepared to lie about his earnings (by lowering the same) in this action to facilitate his application for public housing has undermined the credibility of his evidence as a whole. However, I note that the applicant has eventually come clean and explained the reasons behind the amendments. The applicant was lowering his claims at the time under the mistaken belief that this was necessary for his public housing application. I am prepared to accept his explanation in this regard. More importantly, as will be seen below, on the crucial issues, I find that the applicant’s evidence to be more credible and reliable than the 1st respondent’s evidence, and the applicant’s evidence is also generally supported by other collaborating evidence. 16.On the other hand, I do not find the 1st respondent to be a reliable witness. He admitted that he has poor memory. During cross-examination, he kept on introducing new evidence which he had not previously mentioned in his written statements. For instance, despite not mentioning a word in his previous witness statements, the 1st respondent kept on suggesting that the applicant’s work was of poor quality under cross-examination. When challenged by Mr Szeto that if the applicant was really that poor in performance as the 1st respondent had suggested, why the 1st respondent had kept given him work for the past 20 years, the 1st respondent could not provide any satisfactory answer. 17.I am also of the view that the 1st respondent may not have disclosed all the relevant documents in this action. For example, during cross-examination, the 1st respondent admitted that there may be other documents which may shed light on the monthly earnings of the applicant (for instance, from the 1st respondent’s alleged accountant). The 1st respondent also tried to adduce further evidence in his closing submissions (which I have indicated that I would not consider). In fact, I find it hardly convincing that the 1st respondent could have filed tax information to the Inland Revenue Department setting out the alleged annual payment to the applicant for the entire years without any documentary records. This either shows that the 1st respondent has not disclosed all the relevant documents, or that the figures stated in the documents submitted to the Inland Revenue Department may not be reliable. 18.When being challenged, the 1st respondent frequently explained that he is not familiar with legal matters and that he is not legally represented. However, as I have pointed out above, the 1st respondent was legally represented for a period of time (albeit short). Importantly, the 1st respondent had filed a supplemental witness statement and a supplemental list of documents when he was legally represented. He should accordingly be well aware of his duty of discovery in litigation. 19.The above are just examples (not exhaustive) to explain why I have concluded the 1st respondent’s evidence to be unsatisfactory. Overall, I find that the 1st respondent had not been telling the whole truth before the court. He had been trying very hard to portray the applicant as being a self-employed independent contractor. Some of his evidence is inherently contradictory. In so far as his evidence contradicts with the evidence of the applicant, I prefer the evidence of the applicant. E. THE 1ST ISSUE – WHETHER THE APPLICANT WAS AN EMPLOYEE OF THE 1ST RESPONDENT RELEVANT LEGAL PRINCIPLES 20.The relevant legal principles on determining whether a person was an employee are well-established. In Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLRD 951, the Court of Final Appeal emphasized that the court should examine all the features of the relationship against the background of the indicia of employment with a view to deciding whether, as a matter of overall impression, the relationship was one of employment. This involved a nuanced and not a mechanical approach. The indicia included the degree of control exercised by the “employer”; whether the person performing the services provided his own equipment; whether he hired his own helpers; what degree of financial risk he took; what degree of responsibility for investment and management he had; and whether and how far he had an opportunity of profiting from sound management in the performance of his task. 21.It is well settled that it is for the court and not the parties to evaluate the facts and determine their true legal relationship. The parties’ own view, even agreement, as to the relationship is just one of the factors that the court will take into account in such evaluation:- Leung Kam Wah v Fung Yuk Ching Yvonne t/a Hong Kong Transportation Co. HCLA 43/2006, 23 April 2008, at §19 (per Poon J, as he then was). THE PRESENT CASE 22.Having considered all the evidence, I have no hesitation in arriving at the conclusion that the applicant was an employee of the 1st respondent at the time of the accident for a number of reasons. 23.First, the 1st respondent had a high degree of control over the work of the applicant:-
24.The degree of control the 1st respondent had exercised over the applicant identified above is plainly inconsistent with the 1st respondent’s assertion that the applicant was only an independent contractor engaged by the 1st respondent. 25.Secondly, all the equipment used by the applicant for carrying out the work was supplied and owned by the 1st respondent. In this regard, I note that there is conflict of evidence between the applicant and the 1st respondent as to who owned and supplied the equipment. I have no hesitation in rejecting the evidence of the 1st respondent for the following reasons:-
26.Thirdly, the 1st respondent bore all the financial risk involved in the work. The applicant did not need to look for customers, and he was not involved in the negotiation with the customers directly. Further, the 1st respondent said in cross-examination that the applicant had once damaged a basin during his work and it had costed him several thousand dollars. If the applicant was merely an independent contractor, there is no reason why the applicant was not responsible for the damage. The applicant was only responsible for carrying out the instructions given by the 1st respondent and there is no evidence showing that the applicant bore any financial risk in respect of his work done for the 1st respondent. In fact, there is also no evidence that the applicant needed to incur any capital for his work. 27.Fourthly, it is the applicant’s evidence that he was paid every half a month in cash, and the salary was calculated on the basis on his daily rate and the number of days of work. On the other hand, the 1st respondent denies this. In this regard, despite the 1st respondent’s case that the applicant was not paid in the way described by the applicant, he has adduced no evidence to show how the applicant had been paid throughout the years. It is inconceivable that the 1st respondent did not maintain any documentary records showing payment to the applicant for each project if the applicant was indeed a self-employed independent contractor. It should also be noted that the applicant’s evidence is that he would not receive more if the 1st respondent obtained more profits in the project. The applicant’s evidence in this regard was not challenged in cross-examination. 28.Fifthly, the nature of the relationship between the applicant and the 1st respondent and the way the applicant carried out his work clearly pointed to the existence of an employment relationship:-
29.Last but not least, in one of the documents submitted by the applicant for the purpose of applying for public housing, the 1st respondent had signed and acknowledged that he was the employer of the applicant. Whilst under cross-examination, the 1st respondent claimed that he has no recollection as to the circumstances under which he signed the document, he admitted that he signed the document and wrote the Chinese characters “老板” (sic) underneath his signature. 30.Whilst some of the facts stated above, when viewed individually and separately, may be equivocal, when considered collectively, all these facts plainly point to the inevitable conclusion that the applicant was working as an employee of the 1st respondent at all material times. 31.In coming to the above conclusion, I have not overlooked the evidence submitted by the 1st respondent. For example, I note that the 1st respondent has produced a one-page document allegedly prepared by his accountant. On the said document, there was a self-serving statement that the applicant was an independent contractor. I have also noted that in the tax documents submitted, the 1st respondent had described and claimed the applicant to be an independent contractor. The applicant gave evidence that he was not aware of all these documents at the time, and his evidence was not challenged. In any event, such documents are only one of the factors I should take into account in the evaluation. The court always looks at substance rather than form, and the fact that the 1st respondent considered or described the applicant to be an independent contractor is not conclusive. In the light of the overwhelming evidence identified above, I am of the view that the applicant was clearly an employee of the 1st respondent at all material times. I should add that in so far as there is inconsistence between the evidence of the applicant and the 1st respondent on their working relationship, I prefer the evidence of the applicant and reject the evidence of the 1st respondent. F. THE 2ND ISSUE – SERIOUS AND WILFUL MISCONDUCT? 32.I have no hesitation in concluding that the subject accident occurred in the course of the applicant’s employment with the 1st respondent. The applicant was specifically instructed to work in Unit 2902 by Mok in one of the recorded messages. There is also no dispute that the applicant was instructed to carry out some work on the “collapsed” wall. It should be noted that the applicant had been asked to do demolishing work for the 1st respondent from time to time in the past. 33.Whilst there is dispute on whether the applicant was specifically asked to demolish the “collapsed” wall, there is no dispute that the applicant did so in the course of carrying out the work assigned to him. The conduct of the applicant can hardly be described as “serious and wilful misconduct” in any event:- see Leung Har Chai v Lamma Transportation Company Limited CACV 207/2012, 10 October 2013, at §69. 34.Under section 5(4)(b) of the Ordinance, it is stated that for the purpose of the Ordinance, “an accident to an employee shall be deemed to arise out of and in the course of his employment, notwithstanding that the employee was at the time when the accident happened acting in contravention of any statutory or other regulation applicable to his employment, or of any orders given by or on behalf of his employer, or that he was acting without instructions from his employer, if such act was done by the employee for the purposes of and in connection with his employer’s trade or business.” 35.In the premises, I find that the work carried out by the applicant at Unit 2902 which resulted in his injury was for the purposes of and in connection with the 1st respondent’s business. The accident arose out of and in connection with the applicant’s employment with the 1st respondent, and there is plainly no evidence in support of any alleged serious and wilful misconduct on the part of the applicant. G. THE 3RD ISSUE – MONTHLY EARNINGS OF THE APPLICANT 36.Under section 11(1) of the Ordinance, the monthly earnings of an employee at the time of the accident shall be the earnings:-
37.The applicant’s evidence is that he was earning $1,250 per day for the month immediately preceding the date of the accident. The applicant also contended that he worked for 26 days per month at the time. 38.Mr Chow drew my attention to the fact that the figures of $1,250 and 26 days are self-serving, and there is lack of documentary evidence in support. He is correct, but that does not mean that the court cannot accept such evidence. It is not uncommon for renovation workers to be paid in cash and based on daily rate and the number of working days. It is also not uncommon for renovation workers not to have documentary evidence in support of such payment of salary. More importantly, I find that the applicant’s case to be supported by other evidence. 39.First, in respect of the figure of $1,250, the 1st respondent accepted under cross-examination that this was the then market daily rate for the equivalent job. The figure is also generally consistent with relevant average daily rate for the equivalent job published by the Census and Statistics Department. 40.Mr Szeto also drew my attention to the declaration made by the applicant to the Labour Tribunal dated 31 October 2016 (ie shortly after the accident). In the said declaration, the Applicant had already stated his daily rate to be $1,250. Whilst this may also be self-serving, Mr Szeto correctly pointed out that at the time, no litigation had been commenced and there is nothing to suggest that the applicant was not telling the truth at the time. Mr Szeto also pointed out that there was no suggestion put forward to the applicant to the effect that he was exaggerating the daily rate in the declaration at the time for any purpose. 41.Secondly, in so far as the figure of 26 working days is concerned, the applicant’s evidence is also generally consistent with the 1st respondent’s evidence that between April and June 2016, the applicant was working about 20 days a month. Mr Szeto pointed out to me that the telephone records produced also show that the applicant had had regular and frequent conversation with the 1st respondent and/or Mok in the few months preceding the accident. This also lent support to the applicant’s case that he worked for many days a month shortly before the accident. 42.In the premises, I am prepared to accept the applicant’s evidence that immediately preceding the accident, he was working for 26 days a month, at a daily rate of $1,250. In other words, the monthly earnings of the applicant for the month immediately before the accident should be $32,500 ($1,250 x 26). 43.In so ruling, I necessarily reject the 1st respondent’s evidence that the applicant was not paid by daily rate. As I have pointed out above, I do not find the 1st respondent’s evidence to be reliable. If the applicant was indeed paid other than based on fixed daily rate, there must be some documentary evidence to record the amount of payment made to the applicant in the month immediately preceding the accident. No such record has been produced in the present action, and no explanation has been provided on the absence of such evidence. 44.In the light of my finding above, it is not necessary for me to consider the average monthly salary of the applicant in the past 12 months immediately before the accident under section 11(1)(b) of the Ordinance. Mr Szeto agreed that the figure could not have been more favourable to the applicant than the figure above. 45.To complete the picture, I should also mention that the 1st respondent has also relied on the documents referred to in paragraph 31 above. On these documents, it was stated that a total of $163,300 was paid to the applicant for the financial year from 1 April 2015 to 31 March 2016. Mr Szeto criticized the figures to be highly unreliable and not supported by any documentary evidence. He submitted, and I agree, that it is very surprising that there is not a single document produced in support of the alleged figures, especially given that this is a very live issue in this action. Further, the 1st respondent admitted to have poor memory and it is inconceivable that the 1st respondent could have come up with the annual figures without any documentary records in support. I have reservation on the reliability of the figures stated on these documents. I note that even the 1st respondent was not able to explain how these figures came about under cross-examination. 46.In any event, I am of the view that it is not necessary for me to decide whether the figures stated on such documents are accurate or not, as these documents covered a separate period of employment. The fact that the applicant was earning less for the previous financial year (2015-2016) does not mean that he could not have earned more in the subsequent month of August 2016, especially it is the applicant’s evidence (which was agreed by the 1st respondent) that the amount of work may vary from month to month over a year (the applicant said there is “淡旺季” in a year). H. THE AMOUNT OF COMPENSATION AWARDED 47.Based on my findings above, the amount of compensation awarded to the applicant under the Ordinance should be as follows. SECTION 9 48.As the monthly salary of the applicant at the time of the accident exceeded the statutory limit, the statutory limit applicable at the relevant time (ie $26,070) should be applied. 49.The amount of compensation awarded under section 9 of the Ordinance should accordingly be as follows:-
SECTION 10 50.A total of 713 days of sick leave was granted by the Employees’ Compensation (Ordinary Assessment) Board on Form 9 (the figure was agreed to be accurate by Mr Szeto and Mr Chow). Accordingly, the amount of compensation awarded under section 10 of the Ordinance should be as follows:-
SECTION 10A 51.The 1st respondent should also be liable to pay the medical expenses of the applicant for the medical treatment in respect of the injury. Based on the documents adduced, and taken into account the $800 the 1st respondent had paid on behalf of the applicant, the compensation awarded to the Applicant should be $12,316. TOTAL AWARD 52.In the premises, the 1st respondent is liable to pay compensation of $794,429.60 to the applicant under the Ordinance. 53.The applicant should also be awarded interest on the above sum at half judgment rate from the date of the accident (6 September 2016) to the date of this judgment, and thereafter at judgment rate until full payment. I. COSTS 54.As the applicant has succeeded in the present application, I make an order nisi that the 1st respondent should pay the costs of the applicant, to be taxed if not agreed, with certificate for counsel. 55.In respect of the position of the Board, it is important to recognise the role of the Board in this type of proceedings. In Wo Chun Wah v Employees Compnesation Assistance Fund Board (2019) 22 HKCFAR 495, Ribeiro PJ stated the following at §45:-
56.Ribeiro PJ further stated (at §§46-47) that the general starting point should be no order as to costs between the applicant and the board, irrespective of whether the board sought to test the case as to liability, quantum or both. A different costs order might be warranted on particular facts. For example when the board’s conduct is unreasonable or misconceived or unjustifiably antagonistic, unnecessarily prolonging the intervention, or otherwise untoward, the court may order the board to pay the applicant’s costs. 57.In the present case, I find the Board’s intervention to be necessary. This is particularly so given that the 1st respondent has been acting in person. The Board has a duty to ensure that the applicant would not exaggerate his claims and that the public funds would not be used for improper purposes. 58.I am also of the view that the Board has assisted the court in testing the applicant’s case on both liability and quantum. In particular, Mr Chow has fairly pointed out the evidence which I should pay attention to in respect of both the applicant’s case and the 1st respondent’s case. The fact that the Board ultimately did not recommend the court to accept the applicant’s entire case does not mean that the Board has been acting unreasonably. I find that there is nothing in this case which warrants the departure from the general position. 59.Accordingly, I make an order nisi that there be no order as to costs as between the applicant and the Board. 60.Mr Chow has not sought costs against the 1st respondent, and accordingly I make an order nisi that there be no order on costs as between the 1st respondent and the Board. 61.I further order that the applicant’s own costs be taxed in accordance with the Legal Aid Regulations. 62.As both Mr Szeto and Mr Chow have specifically reserved their position on costs, the above costs orders are made on nisi basis. Such order nisi will become absolute 14 days after the date of this judgment unless an application for variation has been made within the said period. J. OTHER MATTERS 63.At the conclusion of the trial, I had indicated to the parties that the judgment would be written in English. I also informed the 1st respondent that an interpreter would be available at the time of delivery of the judgment, if the 1st respondent requires such service. 64.Lastly, I thank counsel for their assistance to the court.
Mr Patrick Szeto, instructed by Ambrose Ng & Co, assigned by the Director of Legal Aid, for the applicant The 1st respondent appeared in person Mr Tony Chow, instructed by Cheng, Yeung & Co, for the 2nd respondent | ||||||||||||||||||||||
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