Cheung Chi Ping v. King Tin Engineering & Transportation Ltd and Others
Read the full judgment text of DCEC 1321/2018 on BabelCite. This District Court judgment was delivered on 11 January 2021.
1. The is the trial of the applicant’s employees’ compensation claim arising out of an accident which happened on 26 September 2016 made pursuant to the Employees’ Compensation Ordinance (Cap 282) ( “the Ordinance” ).
Cited by 2 cases · Cites 6 cases
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DCEC 1321/2018 [2021] HKDC 12 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO 1321 OF 2018 ________________________ BETWEEN
________________________ Before: His Honour Judge H. Au-Yeung in Court Dates of Hearing: 7, 8, 9 and 17 December 2020 Date of Judgment: 11 January 2021 ________________________ J U D G M E N T ________________________ BACKGROUND 1.The is the trial of the applicant’s employees’ compensation claim arising out of an accident which happened on 26 September 2016 made pursuant to the Employees’ Compensation Ordinance (Cap 282) (“the Ordinance”). 2.It is undisputed that:-
AN OVERVIEW OF THE PARTIES’ RESPECTIVE CASES The applicant’s case 3.In a gist, the applicant’s case may be summarised as follows:-
4.On the other hand, the respondents contended as follows:-
THE ISSUES 5.The issues on liability which this court has to resolve in this case are as follows:-
6.The issues on quantum are as follows:-
7.For the claim made under section 10A of the Ordinance, despite their initial disagreement, parties have agreed quantum at $15,000. LIABILITY The relationship between the applicant and the 2nd respondent (a) The law 8.This court has been referred to the case of Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLRD 951, in which the Court of Final Appeal discussed the applicable principles which should be applied in deciding whether any employer-employee relationship existed. In paragraph 17 of the Judgment, Ribeiro PJ referred to what Cooke J held in Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173 at 184-185 which was quoted by the Privy Council in Lee Ting Sang v Chung Chi Keung[1990] 2 AC 374 at 382E-G as follows:-
9.Ribeiro PJ then had the following to say:-
10.His Lordship then referred to Hall v Lorimer [1992] 1 WLR 939, where Mummery J said at 944:-
11.Ribeiro PJ added that, in the context of casual employment, the courts have recognised that two types of contract may arise:-
(b) Tin Lee 12.Tin Lee was an unlimited company set up by the applicant in 2015. 13.Even though it was pleaded in the respondents’ Answer that the Yuen Long Project was done pursuant to a “partnership agreement” between the applicant and the 2nd respondent, it was Ng’s evidence in his witness statement that the partnership agreement was reached between Tin Lee and the 2nd respondent. 14.However, it is now clear that the business registration of Tin Lee had already been terminated on 28 April 2016. Ng further admitted during cross-examination that the applicant had not mentioned the words “Tin Lee” at all when he proposed his cooperation plan to Ng. There was also undisputed evidence that the bank account of Tin Lee had been closed by the time when the Yuen Long Project was undertaken. Hence, arguably, Tin Lee could not have been involved in the Yuen Long Project. Indeed, Mr Chan for the respondents had focused on arguing that the applicant was a contractor in his personal capacity rather than as the boss of Tin Lee at the trial. 15.Be that as it may, I am of the view that the applicant’s evidence on the operation of Tin Lee should still be considered, because this would affect the court’s assessment of:
16.In his first witness statement, the applicant stated that:-
17.In his supplemental witness statement, the applicant further explained that:-
18.The applicant had been cross-examined quite extensively by Mr Chan at the trial on the operation of Tin Lee. In a gist, he stated in court that even though he could be said to be a boss of Tin Lee, all decisions were made by Tse, who was responsible for the running and operation of the company, and all projects of Tin Lee were procured by Tse. 19.Insofar as it was the evidence of the applicant that he was a nominal owner of Tin Lee and that all decisions involving Tin Lee were made by Tse, such evidence is rejected. While I accept that Tse was one of the bosses of Tin Lee, and that he had accepted/negotiated on sub-contract work on behalf of Tin Lee, it is my finding that the applicant had deliberately played down his role in Tin Lee when he made his supplemental witness statement and when he gave evidence in court. Such a conclusion is reached for the following reasons:-
20.Hence, I hold that the applicant had played down his role in Tin Lee so as to give the court an impression that despite his status as a boss of a company, he had never been a real contractor as such. Apparently, this was done to strengthen his case that he had not done any business himself, and had only been an employee. (c) The applicant’s experience as a contractor 21.The next question which I will consider is whether the applicant had ever acted as a contractor in his personal capacity. 22.The applicant stated that he had never done so. I do not accept his evidence in this regard, as it is contradicted by contemporaneous documents:-
23.As far as Art Force is concerned, the applicant strenuously denied that he had ever been engaged as a sub-contractor. He gave the following explanation during cross-examination:-
24.Even if the applicant was telling the truth that he only received $20,000 from 森哥, taking his case to the highest that he had worked for 6 days at the Kwun Tong site, he would have earned more than $3,300 per day, not to mention that the daily rate would amount to $10,000 if he had indeed received $60,000 as reported by Art Force in the said Notification. Even the lower daily rate of more than $3,300 is far higher than the $800 daily wage which he said he and all those workers whom he introduced to the 2nd respondent were earning. This, as Mr Chan submitted (which I accept), demonstrates that the applicant was not just an employee, but a sub-contractor. 25.Mr Wong for the applicant argued that these Notifications cannot serve as strong evidence against the applicant because they were not prepared by the applicant himself, and he was not shown these documents before they were filed. It was also said that even if the 1st respondent and Art Force considered the applicant as a sub-contractor, it does not necessarily mean that he was indeed a sub-contractor as such. 26.In my view, the respondents’ case would of course be even stronger if there is evidence to prove that the applicant had seen the aforesaid forms before they were submitted. However, even if he had not seen them before, the fact remains that they are undeniably contemporaneous documents, in respect of which adequate weight should be attached. As for Mr Wong’s point on the inconclusive nature of the “label” given by the 1st respondent and Art Force, I reiterate my acceptance of Mr Chan’s argument on the high daily rate which Art Force paid the applicant. This is simply inconsistent with the applicant’s alleged status as Art Force’s employee. A similar argument is applicable to the applicant’s relationship with the 1st respondent. The 1st respondent’s Notification covers the period from 1 April 2015 to 31 March 2016, and it was reported that a total sum of $166,000 was paid to the applicant as sub-contracting fee. As Tin Lee started its business on 22 May 2015[9] and was closed in April 2016, it can be inferred that the applicant had earned the said $166,000 within April to May 2015 without the involvement of Tin Lee. In other words, the applicant had on average earned more than $80,000 monthly from the 1st respondent in those 2 months. He could not have done that by being just an employee as alleged. 27.Apart from the above arguments, Mr Wong had further attacked the reliability of Chan’s evidence and submitted that if the applicant had really been the 1st respondent’s sub-contractor as alleged, Chan would have been able to produce payment records in support, which he had failed to do so. Neither could he produce any copy of cheques in support. There is indeed some force in this attack. Be that as it may, having considered the matter carefully, I accept the 1st respondent’s case that the applicant had acted as its sub-contractor before, on the strength of the 1st respondent’s Notification. This is a document which was disclosed by the applicant himself. I have no reason to doubt the authenticity of this document. In my view, it should be inferred that the 1st respondent must have filled in the said Notification on the basis of its records. The inability on the part of the 1st respondent to produce such records for the purpose of these proceedings is just a matter which this court has to take into account, but it is not decisive. (d) Was the applicant an employee when he was injured? 28.I now turn to consider the crucial question, namely, whether the applicant was working as the 2nd respondent’s employee on 26 September 2016. 29.I should emphasize at the outset that despite this court’s findings that the applicant was not a nominal owner of Tin Lee and that he had been a sub-contractor in his personal capacity before he worked in the Yuen Long Project, it does not necessarily follow that he must be a business partner of the 2nd respondent rather than an employee in the Yuen Long Project. However, those findings are matters which this court has to take into account when deciding on the said crucial question. 30.Apart from the aforesaid matters, counsel had referred to many different aspects of the case in the course of their arguments. I will consider those aspects under different sub-headings below. (i) The circumstances under which parties’ agreement was reached 31.The circumstances under which the applicant and Ng alleged that they had reached their oral agreement are quite different. 32.The applicant alleged that the agreement was reached when he met Ng in a dinner gathering held in around June 2016. The applicant said that Ng invited him to work for the latter at the daily rate of $800 because Ng knew that the applicant did not have any work to do at that time; Ng said he had got some sub-contract work from the 1st respondent, and therefore he needed manpower. According to the applicant, Ng’s exact wordings were: “我接到D野，你過嚟幫我手啦”. At the same time, Ng also asked the applicant whether the latter could introduce some workers for Ng, and stated that he (Ng) would pay the same daily rate for the workers to be introduced by the applicant. The applicant asserted that he accepted Ng’s invitation there and then, and introduced his son’s friend who is a Pakistani to Ng. 33.Ng denied that there was such a meeting, nor was there such an agreement. Ng told the court that in fact it was the applicant who called him by phone in mid-2016, and suggested that they could cooperate. According to Ng’s witness statement, the applicant proposed that Tin Lee and the 2nd respondent could cooperate. However, as aforesaid, during cross-examination, Ng accepted that the applicant had not mentioned the name of “Tin Lee” when he made the proposal. The proposed way to cooperate was that whenever either of the party successfully obtained a project, the other party would finish the project together with the first-mentioned party. They (the applicant and Ng) would not take wages, but the net profit or loss earned or suffered out of the project would be shared between them equally. Ng stated that he agreed to such a proposal, and the Yuen Long Project was the second project in which they had “cooperated” in this way. 34.In my view, it is more likely than not that it was the applicant who suggested to Ng that they could “cooperate” and that the applicant and Ng had reached an agreement along the line as described by Ng in court. I do not accept the applicant’s evidence that it was Ng who invited the applicant to work for him at the daily wage of $800 back in June 2016. 35.I have made the above findings for the following reasons:-
(ii) The commercial sense of the alleged cooperation scheme 36.Mr Wong argued that it is inherently improbable that the applicant and Ng would have agreed on the alleged cooperation scheme because it would have been easier for Tin Lee (I assume he meant the applicant as well) or the 2nd respondent to simply sub-contract work to each other, like what Tin Lee did in the past. 37.With respect, I do not accept Mr Wong’s argument. In my view, this cooperation scheme would create a win-win situation for both the applicant and Ng, because:-
38.Mr Wong further argued that the sensible way of partnership in construction projects is to split the contract fee rather than to split the profit, and that in this way, each party would be responsible for its own workers and expenses. 39.I agree that the way suggested by Mr Wong is also feasible, and may provide better protection to the parties involved, because each party would have to take care of its own part of receipt from a project. However, I do not think the partnership arrangement as alleged by Ng was so unreasonable that made it inherently improbable for it to exist. Neither do I think it can be said that because Ng did not think of a better scheme, “there had never been a serious thought about the partnership”[10]. (iii) The subcontracting fee of the Yuen Long Project 40.According to Ng’s evidence, Chan initially only offered to pay $25,000 for the 2nd respondent to take up the Yuen Long Project, which required the setting up of scaffolding and dismantling of some telecommunication facilities. However, having conducted a site visit, the applicant opined that the fee of $25,000 was too low, and that such fee should be raised to $35,000. Ng then called up Chan there and then, who eventually acceded to the request of Ng. Ng further stated that in the course of such negotiation with Chan, he had passed the phone to the applicant who had given further explanation to Chan as to why he took the view that the fee of $25,000 was too low. 41.The applicant denied that he had ever conducted any site visit before the work began, nor did he propose to Ng that the fee of $25,000 should be raised to $35,000. Indeed, the fact that he had not participated in the negotiation on the amount of subcontracting fee was one of the matters which was relied on to support his case that he was just an employee. 42.I do not accept Ng’s evidence that the applicant had talked to Chan directly on the phone as alleged, because:-
43.Having said that, I accept Ng’s evidence that the applicant did give his view on the proposed subcontracting fee in relation to the Yuen Long Project. This is because it is undisputed that Ng only specialised in scaffolding business but not in dismantling business. Therefore, unless he was assisted by the person who was going to do the dismantling work, he would not know whether it was profitable to accept the subcontracting work at the suggested fee. 44.Pausing here, I should also add that I do not accept Chan’s evidence given in court that he had sub-contracted the scaffolding work and the dismantling work separately in the Yuen Long Project. It might be that that was his original intention, but that was not what he eventually done. According to Ng’s evidence, it was Ng who asked Chan on his own initiative whether Chan had already found someone to do the dismantling job in the Yuen Long Project, and when Chan answered in the negative, Ng suggested that the applicant might be entrusted to do it. It was my finding that Chan had only talked to Ng all along and that Chan did not have any direct communication with the applicant during the negotiation stage of the project. Further, only one subcontracting fee of $35,000 was agreed on, and there is no evidence that there was any agreement reached by Ng/the applicant with Chan on how the said fee should be split between the 2nd respondent and the applicant. (iv) The “cooperation” in practice 45.Mr Wong had cross-examined Ng quite extensively on the precise operation of the “cooperation”, and it was Ng’s evidence that:-
46.Mr Wong argued that it was inherently improbable that Tin Lee and the 2nd respondent had any business partnership, as it is simply inconceivable that Ng would not care about the wages of Tin Lee’s workers. It was submitted that it does not make commercial sense. The same argument applies even if the alleged partnership was between the applicant (instead of Tin Lee) and the 2nd respondent. 47.With respect, I do not think this argument could assist the applicant in persuading the court that he was just an employee, because this criticism, if it is justified, would be equally applicable no matter whether the applicant was an employee of the 2nd respondent or a business partner of the 2nd respondent. In both cases, it would be important for the 2nd respondent to know its costs anyway. 48.Mr Wong gave an example while cross-examining Ng that if the applicant paid his wife at the daily wage of $2,000, such a high cost would eat into the profit which the 2nd respondent could have enjoyed. He was indeed right. But the 2nd respondent’s profit would be affected for the same reason even if the applicant was only an employee. 49.In any event, I am of the view that there is nothing inconceivable about it even if Ng did not know the wages of employees employed by the applicant. As Ng put it, he and the applicant were friends, and their cooperation was based on trust. If the applicant did anything dishonestly, for example, by paying his wife at an unreasonably high rate, Ng would not cooperate with him anymore. 50.Furthermore, it is not the case that Ng was totally in the dark on the daily rate of wages, because according to Ng, before they started to do the first project together at the Repulse Bay, the applicant had already made known to him that the Pakistani would be paid a daily wage of $800. (v) Working instructions 51.The applicant stated in his evidence that it was Ng who gave instructions for him to work at the site in the Yuen Long Project, in particular, Ng required him to squat on the kerb along the short wall from which place he eventually fell and injured himself. 52.On the other hand, Ng stated in his witness statement that he and the applicant had agreed as to where the scaffoldings should be erected. He also stated therein that it was the applicant who took the view that scaffolding need not be set up next to the short wall because his hand should be long enough to dismantle the wires attached to the wall if he stood on the top of the stairs. 53.As Ng accepted in court, it was impossible for the applicant to detach some of the cable ties (which tied the wires together) attached to the wall in the way as described in his own witness statement because it was just too far away for the applicant to reach out by his hand. I therefore reject Ng’s evidence that the applicant had indicated that he could do his work by reaching out by his hand as alleged. 54.However, I would also reject the applicant’s evidence given in the witness statement that Ng had instructed him to detach the cable ties by squatting on the kerb. There is no dispute that Ng’s expertise was only on scaffolding, and on the other hand, the applicant was experienced in dismantling telecommunication equipment and facilities, etc. It was therefore unlikely that Ng would give specific instructions on how the applicant should do the dismantling work. Indeed, when the applicant was cross-examined in court on the reason why he chose to squat as he did rather than waiting for the availability of the ladder at the site, he answered that he could not wait, otherwise he would be scolded. He did not answer that he was specifically instructed by Ng to do the work in this way. 55.Taking into account parties’ respective expertise, I accept Ng’s evidence that he and the applicant had discussed and agreed on the locations at the Rooftop at which scaffoldings should be erected. I think it is more likely than not that Ng would have discussed with the applicant as to where those scaffoldings should be erected (rather than deciding on such a matter by himself without consulting the applicant) because the applicant was the person who would be making use of the scaffoldings. I also accept Ng’s evidence that no scaffolding was erected next to the wall in question at the end of the day because they were not allowed by the “building”[11] to do so as the scaffolding, if erected, would be located at the fire escape route and that the applicant knew about this limitation at the material time. 56.Furthermore, I believe in Ng when he said that he did not instruct the applicant as to how he should do his dismantling work, as this was simply not his field of expertise. (vi) Tools and equipment 57.The applicant stated that apart from some small portable tools which he had brought along for his own convenience, it was Ng who provided the rest of the equipment. This was denied by Ng in his cross-examination. Ng said that they were provided by the applicant. 58.In this regard, I prefer Ng’s evidence, as I am of the view that the applicant would give whatever evidence which would bolster his claim, even though such evidence is not the truth. His role in Tin Lee and his previous experience as a contractor serve as good examples. 59.Further, as I mentioned above, it is evident that the 2nd respondent and Ng only have expertise in scaffolding. It is more likely than not that they would not have tools for dismantling purpose. 60.It seems undisputed that at the material time, a ladder was used at the Rooftop. I hold that it was provided by the 2nd respondent, because it is evident that Ng also had to use it to erect scaffolding. (vii) The transportation arrangement 61.In Mr Wong’s Closing Submissions, he relied on the undisputed fact that the applicant had travelled to the respective sites of the two projects by the 2nd respondent’s van. Insofar as it was his argument that this shows that the applicant was only an employee, I must say, with respect, I cannot see the logic in this argument. (viii) Sharing of profits in the 2 projects 62.Mr Wong had made a number of points on the alleged sharing of profits. 63.First of all, he pointed out that there was no document at all in support of the alleged split of profit. Indeed, Ng admitted that the alleged sharing of profits was not reflected in the 2nd respondent’s audited accounts. He had given a number of reasons at the trial for this, for example, in relation to the Repulse Bay Project, he said there was no record because he did not receive the money from the main contractor immediately after the completion of the work, and when the money was received subsequently, it was mixed with the money from other projects. In the end, he even accepted that the subcontracting fee of $22,000 for the Repulse Bay Project was not recorded in the 2nd respondent’s accounting record. 64.I accept Mr Wong’s argument that if what Ng explained was true, he (and the 2nd respondent) were evading their tax liability, and this would cast doubt on Ng’s credibility. 65.Mr Wong then challenged the calculation of the alleged profits earned out of the Repulse Bay Project. He submitted that if the subcontracting fee was $22,000 as alleged, Ng could not have shared $11,000 with the applicant as alleged by Ng because this was contradictory to the respondents’ case that only the profits, but not the subcontracting fee itself, would be shared. Mr Wong said that $11,000 could not be the profit because wages had been paid to the Pakistani worker introduced by the applicant. As to Ng’s explanation that at the end of the day the Pakistani worker was paid by making use of the sale proceeds of the scrap materials dismantled (which, as alleged, were more or less the same as the wages payable), Mr Wong queried whether there could be such a coincident. 66.I would not reject Ng’s evidence on this matter only because there was an alleged coincidence. 67.On the other hand, while Ng stated in his evidence that it was the applicant who was responsible to pay the Pakistani worker, the applicant had never given any evidence as to when Ng paid the worker. If the applicant and the Pakistani were both the 2nd respondent’s employee, and if the applicant was truthful when he said that the 2nd respondent paid him $8,000 after the completion of the work, the likelihood is that the 2nd respondent would have paid the applicant and the Pakistani at the same time, and the applicant would have been able to witness that, and subsequently included this matter in his witness statement. However, he was totally silent on this matter. 68.Furthermore, Ng’s evidence that the partnership would rely on the sale proceeds of the dismantled scrap materials a source of revenue is also supported by Chan, who had also mentioned about this in his witness statement. 69.I therefore accept that Ng did share the profit of $11,000 with the applicant. (ix) The payments made by Chan and Ng after the accident 70.It is undisputed that the applicant, Tse, Ng and Chan had attended a gathering at a karaoke in Jordon around one month after the accident. The gathering was initiated by Tse. The applicant said he did not know that Chan and Ng would be there when he accepted Tse’s invitation to attend the gathering. The applicant thought that Tse arranged such a gathering out of his kindness to help. 71.Pursuant to the discussions held in this gathering, Chan and Ng had paid a monthly sum of $20,800 to the applicant for 5 months. Coupled with the amount of $35,000 which Ng had paid to the applicant (Ng said he had paid the applicant the entirety of $35,000 which the 2nd respondent received for the Yuen Long Project), it was agreed by the parties that Chan and Ng had paid the applicant a total of $139,000 after the accident. 72.The witnesses had given different reasons as to why the monthly payments were made:-
73.Parties had also given different versions of events leading to the suspension of the above monthly payments. The applicant said Ng told him around 5 months after the first monthly payment that he (Ng) had no money to pay him anymore, and asked the applicant to request Chan to pay for Ng’s share as well as his own share. The applicant said he did not accede to Ng’s request, and therefore he did not approach Chan accordingly, because it was “not his business”. On the other hand, Chan said that the payment was stopped because Tse asked him to stop payment since the applicant was prepared to sue them for employees’ compensation, which was confirmed to be the case after Ng’s verification with the applicant. 74.I do not accept Chan’s evidence that he did not know how the amount of $20,800 was arrived at. The figure of $20,800 was an odd one. I am of the view that it would be natural for anyone on the receiving end of such a request for payment to ask why the monthly payment should be $20,800 instead of, for example, $20,000. I take the view that the calculation of this amount must have been made clear to both Chan and Ng at the karaoke. 75.However, subject to the above, it is my finding that it is more likely than not that Ng and Chan only made the monthly payments to the applicant as compassionate payment rather than by reason of their recognition that the applicant was an employee of the 2nd respondent. I also hold the view that this was clear to the applicant at the material time. This is because even on the applicant’s own case, he had only earned $8,000 from the 2nd respondent in August 2016. As far as the Yuen Long Project was concerned, the applicant said it was the 5th or 6th day of work when he met the accident on 26 September 2016. It was Ng’s undisputed evidence that the project was coming to the end at that time. In other words, on the applicant’s own case, he would be entitled to wages in the sum of $4,800 at most in the month of September 2016. Hence, the applicant’s monthly wages at the material time could not be more than $8,000. In my view, if the monthly payments were made on the basis that the applicant was an employee of the 2nd respondent, such payment would have been calculated on the basis of the wages received by the applicant at the material time, which, as demonstrated above, could in no way be as much as $20,800. 76.As for the reason why the monthly payment was suspended 5 months later, I accept that Chan was telling the truth, and reject the applicant’s evidence, because the applicant’s version of events could not explain why Chan had stopped his payment: It should be noted that while Ng said that he was unable to pay further, according to the applicant, Chan did not give any similar indication as such. Even if Ng could not pay further, and even assuming that the applicant was too scared to ask Chan to pay for Ng as well, there was nothing which stopped the applicant from asking Chan to keep paying him $10,400 a month which Chan had promised to do so and had been doing for 5 months. The applicant could also have asked Tse to assist him if he did not want to make the request to Chan directly. However, it appears that the applicant did not do anything about it upon being told by Ng that he could not make further payment. This, in my view, in inherently improbable, because half of the agreed sum of $20,800 is still quite a large sum of money. I therefore accept that no further monthly payment was made because Chan and Ng were told that the applicant was going to sue them. Having said that, it seems that this matter would not shed much light on whether there was or was not any employment relationship between the applicant and the 2nd respondent. (x) The submission of Form 2 by the 2nd respondent 77.It is undisputed that the 2nd respondent did submit a Form 2 to the Labour Department on 8 June 2017 (in other words, more than 8 months after the accident). 78.The question is, why did the 2nd respondent submit a Form 2 if the applicant was not its employee at all? 79.In his witness statement, Ng explained that in around April 2017, the applicant informed him that he had filled in a Notification of Accident, and the applicant requested Ng to fill in a Form 2 so as to assist him in getting more payment as 接濟金 from the main contractor. Ng did not agree to do so initially because the applicant was not the 2nd respondent’s employee. However, he eventually acceded to the applicant’s request in June 2017, and agreed to fill in a Form 2 by copying the applicant’s Notification of Accident. 80.During cross-examination, Ng gave a different account on the reason why he submitted a Form 2 in June 2017. He stated that he had received two telephone calls from an unknown male. In the first call, the male tried to induce him in filing a Form 2 by saying that his (Ng’s) interest would not be prejudiced by doing so because the applicant was only going to claim against the insurance company. In the second call, the male’s attitude had changed, and threatened Ng by saying that he would be in big trouble if he did not submit a Form 2. 81.Like many other issues, the applicant’s case was very different. He stated in his witness statement that Ng filled in the Form 2 on his own initiative, and denied that he had given any document for Ng to copy from. 82.Mr Wong had tried his very best in discrediting Ng by submitting that Ng would not have omitted to mention about his telephone conversation with the unknown male in his witness statement if that was the truth. 83.However, it seems to me that it was inherently probable that Ng had eventually decided to submit a Form 2 because of those calls made by the unknown male. It should be borne in mind that the applicant had requested Ng to make a report to the Labour Department for a long time (according to the applicant, he had made such a request after the accident in the hospital). Ng had refused to do so all along. In my view, something must have happened which prompted Ng to change his mind after such a long time. 84.I reject the applicant’s evidence that he had never given Ng any document to copy from while he filled in the 2nd respondent’s Form 2. In my view, unless Ng was copying from a document as provided by the applicant, it is impossible for the “description of accident” in the 2nd respondent’s Form 2 and the applicant’s Notification of Accident to read exactly the same: “在折卸電線途中因為空間太窄滑到受傷”. Such a finding is supported even more strongly by the fact that in both documents, the word “拆” had been incorrectly written as “折”, and “滑倒” written as “滑到”. 85.I take the view that if Ng considered that the applicant was the 2nd respondent’s employee, he would have filled in Form 2 much earlier. I accept Ng’s explanation why he eventually submitted the Form 2. I therefore would not place much weight on the filing of the 2nd respondent’s Form 2. (xi) The mode of operation of the 2nd respondent 86.It is Ng’s evidence that because of the dangerous nature of the 2nd respondent’s scaffolding business, no insurance company was willing to provide insurance protection for the 2nd respondent’s employees, and as a result, all workers who worked for the 2nd respondent were self-employed, and none of them was the 2nd respondent’s employee. 87.I do not think Ng is factually correct when he said that there was no way that the 2nd respondent could purchase employees’ compensation insurance for its workers. Even assuming he is right, this does not necessarily mean that the applicant could not, as a matter of fact, work as its employee. At the end of the day, the court would have to decide this question by reference to the legal principles set out above. 88.Having taken all the above matters into consideration, my finding is that the applicant was not working as an employee of the 2nd respondent on 26 September 2016. 89.The applicant’s claim for employees’ compensation should therefore be dismissed. 90.However, for the sake of completeness, I would consider below the other issues identified at the beginning of this Judgment. Serious and wilful misconduct 91.There is no dispute that the applicant fell from a kerb and injured himself while he was removing some wires which were attached to a short wall on the Rooftop. 92.The respondents argued that the applicant should have used a ladder rather than squatting on the kerb which was quite a distance (around 8 to 9 feet according to the applicant) from the ground level, and that it should be taken as if Ng had instructed the applicant to use a ladder when he worked at the location in question. They further submitted that although the ladder was being used by others at the material time, there was no reason why the applicant should not have waited, and he could have removed other parts of the wires first. Indeed, the applicant admitted that he could stand safely at the top of the staircase for the purpose of removing such other parts of the wires. It was further said that even if the applicant had to remove the wires which were 8 to 9 feet from the ground level first, he should have adopted some safety measures, for example, by using a safety line. It was therefore submitted that the applicant’s injury was attributable to his “serious and wilful misconduct”, and that as a result he should not be entitled to any compensation by virtue of section 5(3) of the Ordinance. 93.In Leung Hak Chai v Lamma Transportation Company Limited (CACV 207/2012, unreported, 10 October 2013), Fok JA (as his Lordship then was) explained that:-
94.The applicant explained that he did not wait for the use of the ladder because he wanted to finish the work as soon as possible. While he could not give any satisfactory answer as to why he could not wait, or alternatively, to remove the other parts of the wires first by standing at the top of the staircase while he was waiting for the availability of the ladder, in my view, the applicant’s conduct plainly does not amount to “serious and wilful misconduct”. 95.The respondents’ reliance on section 5(3) of the Ordinance must fail. Added peril 96.Mr Chan for the respondents further argued that if the accident had arisen from some “added peril” to which the employee had exposed himself by his own conduct and which he was not allowed to encounter by any term of his contract of service, the accident cannot be said to arise out of his employment. To put his argument in context, perhaps I should quote what he stated in his Reply Submissions:-
97.In support, Mr Chan cited the House of Lords decision of Stephen v Cooper [1929] AC 570, in which Lord Hailsham had the following to say:-
98.It should be noted that Lord Shaw had in the same case warned against the adoption of “added peril” as the sole test in deciding whether the risk undertaken by the injured employee would take what the employee did out of the sphere of employment:-
99.In a subsequent case Thomas v Ocean Coal Company, Limited [1933] AC 100 before the House of Lords, Lord Buckmaster, while referring to Stephen v Cooper (supra), held that:-
100.In the same case, Lord Wright added:-
101.Relying on the above, I reject Mr Chan’s argument. With greatest respect, his suggested approach has complicated the matter unnecessarily. In my view, it is clear that at the end of the day, what the court has to decide is the question of whether the accident arose out of and in the course of the employment. Where it is said that the employee had taken an added risk while he was doing his job, the court has to consider whether by taken such a risk, the employee had done something which he was not employed to do, in the sense that he was doing someone else’s job. 102.In the event it is argued by the employer that the employee had, while doing his job, acted 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, the court has to consider whether the employee’s act was done for the purposes of and in connection with his employer’s trade or business. If so, section 5(4)(b) of the Ordinance would still provide protection for such an employee. 103.In the present case, I have no doubt that, at the material time, the applicant was doing something which he was employed to do, namely, to remove the wires attached to the short wall at the Rooftop. 104.Even though Ng said that he had discussed with the applicant that the latter could dismantle the wires attached to the short wall by making use of a ladder, there is no evidence that Ng had expressly instructed the applicant not to squat on the kerb along the short wall. Even if Ng had expressly instructed the applicant not to do so (or alternatively, even if (as suggested by Mr Chan) Ng should be taken to have instructed the applicant to use a ladder while working at the location in question), in my view, section 5(4)(b) of the Ordinance would take effect in giving protection to the applicant despite his breach of such an instruction, because, contrary to Mr Chan’s argument, the applicant’s dismantling work must be done for the purposes of and in connection with the 2nd respondent’s business. I do not accept the submission that since the 2nd respondent was a scaffolding company, its business had nothing to do with dismantling work, because it is clear from Ng’s evidence that the Yuen Long Project, which involved dismantling work, was sub-contracted as a whole to his company. 105.The respondents’ reliance on “added peril” is therefore to no avail. QUANTUM 106.I now turn to consider the question of quantum in case I am wrong in my conclusion on liability. The applicant’s monthly earnings 107.The first question which I have to consider is the amount of monthly earnings which should be adopted in the calculation of compensation under sections 9 and 10 of the Ordinance. 108.Section 11(1) of the Ordinance provides that:-
109.Section 11(2) of the Ordinance stipulates that:-
110.According to the applicant, although Ng invited him to work for the 2nd respondent in June 2016, at the end of the day he did not work as such until August 2016 when he worked in the Repulse Bay Project. He said he had worked thereat for 10 days, and had earned $8,000 in total. 111.He did not work since then at all until 20 September 2016, when he worked for the 2nd respondent again in the Yuen Long Project. He stated that it was the 5th or 6th working day when he was injured on 26 September 2016. 112.Mr Chan submitted that the applicant’s employment with the 2nd respondent, if any, should be taken to have started in June 2016. With respect, I disagree. In my view, in the circumstances of the present case, if there was any employment relationship at all, such a relationship had only started when the applicant started to work in the Repulse Bay Project. 113.On the other hand, I have no hesitation in rejecting Mr Wong’s argument that the monthly earnings of the applicant should be taken to be $20,800 ($800 x 26 days). This assertion is plainly unsupported by evidence. 114.In my view, since the applicant had worked for the 2nd respondent for more than 1 month, the court should follow section 11(1) of the Ordinance in ascertaining the applicant’s monthly earnings. The court should compare the amounts arrived at respectively by following the formula provided under sub-sections (a) and (b) thereof, and adopt the result which is more favourable to the applicant. 115.I do not accept Mr Wong’s argument that section 11(2) is applicable, because it is the applicant’s own case that he had worked for the 2nd respondent for more than one month, and he had not worked for any other employer during that period. In 柯永明 訴 何炳池 [2008] 4 HKLRD 337, Yuen JA had made it clear that:-
116.Pursuant to section 11(1)(a), the court has to find out the applicant’s earnings for the month immediately preceding the date of the accident. As the applicant met the accident on 26 September 2016, this means the earnings for the period between 26 August 2016 and 25 September 2016. 117.As aforesaid, the applicant stated that he started to work on around 20 September 2016, and it was the 5th or 6th day of work when he was injured. As 25 September 2016 was a Sunday, and it was the evidence of the applicant that he normally did not have to work on Sundays, I find that the applicant had worked for 5 days prior to the accident in the Yuen Long Project and earned $4,000 ($800 x 5). 118.The applicant could not recall when exactly in August 2016 that he worked in the Repulse Bay Project. He only maintained that he had worked there for 10 days. On the other hand, Ng stated that the whole project only lasted for 3 days. On this matter, I would accept Ng’s evidence, because according to the applicant’s evidence, a Pakistani worker who was a friend of the applicant’s son had also worked together with him. There is no evidence that that Pakistani worker had worked for a period shorter than that of the applicant. If both the applicant and the Pakistani worker had worked for 10 days as alleged, the total labour cost of the Repulse Bay Project would amount to $16,000. Judging from the undisputed evidence that the total subcontracting fee received by the 2nd respondent was just $22,000, I am of the view that it was more likely than not that Ng would not have agreed to take up the job at such a price. The total amount of cost borne by the 2nd respondent must have been much less than $16,000. 119.As mentioned, there is no evidence as to when exactly within the month of August 2016 that the work in the Repulse Bay Project was done. As it is more probable that the 3-day period during which the applicant had worked in the Repulse Bay Project had fallen within the period between 1 August 2016 and 25 August 2016 than the period between 26 August 2016 and 31 August 2016, I find that the applicant had done the work in the Repulse Bay Project within the first 25 days of August 2016. In other words, he had earned $2,400 ($800 x 3) from the 2nd respondent in that period in August 2016. 120.Hence, the applicant’s monthly earnings for the month immediately preceding the date of the accident should be $4,000[14]. His average monthly earnings while he was working for the 2nd respondent in August 2016 and September 2016 would be $3,200 [($2,400 + $4,000)/2][15]. As the calculation done pursuant to section 11(1)(a) of the Ordinance would be more favourable to the applicant, the figure of $4,000 should be adopted as his monthly earnings. The applicant’s loss of earning capacity 121.By virtue of a Form 9 dated 18 April 2019, the applicant had been assessed by the Employees’ Compensation (Ordinary Assessment) Board (“the Board”) to have suffered from 1% permanent loss of earning capacity by reason of the injury, namely, “right heel injury resulting in right heel pain”. 122.The applicant had filed a Notice of Appeal against the said Form 9. 123.As a result of the applicant’s aforesaid appeal, leave had been granted by the court for a joint expert report to be filed, in which Dr Lam Kwong Chin opined that:-
124.On the other hand, Dr Miu Yin Shun Andrew took the view that:-
125.I prefer Dr Lam’s assessment because he had explained that his assessment on loss of earning capacity was arrived at by reference to the American Medical Association’s Guide to the Evaluation of Permanent Impairment, whereas Dr Miu did not clarify where he got the figure of 7% from. Section 9 compensation 126.By reasons of the aforesaid, in the event the applicant is successful in establishing liability, compensation under section 9 of the Ordinance is assessed at $7,680 ($4,000 x 4% x 48). Section 10 compensation 127.It is undisputed that the applicant had been given sick leave for a total of 662 days, and that it had been certified in the Form 9 dated 18 April 2019 that those days of sick leave were necessary as a result of the applicant’s injury. 128.As aforesaid, the applicant had filed a Notice of Appeal under section 18 of the Ordinance against the said Form 9. In the Notice of Appeal, he did not specify whether he was minded to appeal against the assessment of his loss of earning capacity, or the length of sick leave, or both. He only informed the court and the respondents in his counsel’s Opening Submissions that his appeal was confined to the assessment of loss of earning capacity. 129.At the trial, the respondents sought to argue, on the strength of Dr Lam’s expert opinion that sick leave up to 1 year was appropriate in the circumstances, that the court should “substitute its view as against the assessment of the Board”[16]. 130.Mr Wong objected strongly against the respondents’ stance on sick leave. He submitted that the respondents were not entitled to make any submission on the length of sick leave because they had never filed any appeal against the assessment of the Board. 131.Mr Chan referred to the Court of Appeal case of Yu Tat Kam v Chu Tung Shing & Another [2009] 6 HKC 411 and argued that the respondents could seek to rebut the presumption under section 10(2) of the Ordinance even if they had not filed any section 18 appeal. 132.I am of the view that as far as the respondents’ challenge of the assessment of the Board is concerned, Mr Chan’s reliance on Yu Tat Kam was misconceived, because the issue in that case was the extent to which the four-fifths of the employee’s pre-accident earnings during the certified sick leave period should be deducted by reason of the earnings that he was earning, or was capable of earning, during the period of temporary incapacity pursuant to section 10(1) of the Ordinance (see further below). The case has nothing to do with arguing against the sick leave period certified by the Board. 133.As mentioned above, the applicant had only made it clear at the beginning of the trial that his section 18 appeal was limited to the Board’s assessment on his loss of earning capacity. I have thus considered whether it would be unjust if the respondents were not allowed to proceed with their challenge against the Board’s assessment on sick leave only because of the said very late move on the part of the applicant. However, having considered the matter carefully, I am of the view that the respondents would only have themselves to blame if they did not take adequate steps (to file a section 18 appeal within time) in protecting their own interest. They should therefore be debarred from arguing that only sick leave of up to one year should have been certified. 134.However, that is not the end of the matter, because it seems to me that there is an alternative route by which the respondents may argue that the compensation payable under section 10 of the Ordinance should be reduced. In the case of Yu Tat Kam, it was held by the Court of Appeal that:-
135.Having said that, it is important to note what Yuen JA stated in paragraphs 26 and 27 of the same Judgment:-
136.In the present case, Mr Chan argued that the applicant “should have been capable to return to workfield and work say as a car park attendant”[17] after August 2017 because:-
137.I do not think the respondents had successfully discharged their burden in proving that this is one of those rare cases in which it could be said that the applicant had potential earnings during the certified sick leave period. As Yuen JA pointed out, it is not only physical disability that incapacitates an employee from working. The treating doctors of the applicant must have considered whether the applicant had the capability to work despite his complaint of discomfort and pain. They had thought fit to grant sick leave to the applicant after having assessed his condition at the material time. I cannot see any reason why I should come to a different conclusion. 138.Hence, in the event liability is established, the applicant would be entitled to compensation under section 10 of the Ordinance in the sum of $70,613.33 (HK$4,000 x 4/5 x 662/30). Section 10A compensation 139.As aforesaid, parties have agreed that the award under this section should be $15,000. Advance payment 140.If liability can be established, the total amount of compensation is $93,293.33 ($7,680.00 + $70,613.33 + $15,000.00). 141.Mr Chan argued that since it is undisputed that Ng and Chan had paid a total of $139,000 to the applicant, the latter should not be entitled any further payment. 142.In reply, Mr Wong submitted that Mr Chan was not right by reason of section 10(4) of the Ordinance, which provides that:-
143.He further drew my attention to the case of Kan Wai Ming v Hong Kong Airport Services Ltd [2011] 3 HKLRD 497, in which it was held at paragraph 32 that:-
144.The position seems to be very clear. 145.However, Mr Chan submitted that when Ng and Chan made the monthly payments to the applicant, they did not have section 10 of the Ordinance in mind, and therefore such payments could not have been made under section 10. As a result, it was said that the limitation imposed by section 10(4) is not applicable to the present case, and therefore such monthly payments could be used to set off the compensation payable under section 9 as well. On the other hand, Mr Wong argued that if those payments were gratuitous payments (as Chan and Ng claimed to be), then such payments could not be set off against any compensation at all - not even compensation payable under section 10 of the Ordinance. 146.On my part, I take the view that the monthly payments made by Chan and Ng must be “payable under section 10” if Ng is found to be an employer. Hence, in the event the applicant is successful in establishing liability, the respondents should be ordered to pay $7,680 only, as the remainder of the compensation would have been set off. ORDER 147.By reasons of the aforesaid, the applicant’s claim against the respondents is dismissed. COSTS 148.I make a cost order nisi that the applicant shall bear the costs of the respondents (including all costs reserved, if any), with certificate for one counsel, to be taxed if not agreed. The applicant’s own costs shall be taxed in accordance with the Legal Aid Regulations. The above order nisi shall become absolute in the absence of application to vary within 14 days hereof.
Mr Simon Wong, instructed by Raymond Luk & Co., for the applicant Mr Pakco Chan and Mr Stephen Siu (7-9 December 2020 only), instructed by Li, Chow & Company, for the 1st to 3rd respondents [1] Paragraph 18 of the Judgment [2] The applicant said during cross-examination that Tse was at liberty to share with him whatever amount which Tse thought fit. [3] In the applicant’s own words: “本人亦曾嘗試過在2015年年中開始以‘天利工程’的名義接工程” (at paragraph 2 of his first witness statement) [4] Paragraph 2 of the applicant’s first witness statement [5] For example, the deposit of $40,000 on 18 December 2015 was withdrawn within a week thereafter at one go; the deposit of $265,600 on 26 January 2016 was withdrawn in its entirety 2 days later; and the deposit of $105,000 on 29 March 2016 was withdrawn in 2 tranches within around 1 week thereafter. [6] Pages 154-155 of the Trial Bundle [7] Page 157 of the Trial Bundle [8] It is evident that these cheques were deposited into Tin Lee’s bank account on the dates of the cheques. [9] See Tin Lee’s business registration [10] Paragraph 17(5) of the applicant’s Closing Submissions [11] Ng said in court that “the building” did not allow any scaffolding to be erected next to the wall, but he did not make it clear whether he was referring to the owner, the manager or any other person concerned. [12] Paragraph 69 of the Judgment [13] Paragraphs 26 and 27 of the respondents’ Reply Submissions [14] Calculated pursuant to section 11(1)(a) of the Ordinance [15] Calculated pursuant to section 11(1)(b) of the Ordinance [16] Paragraph 168 of the respondents’ Closing Submissions [17] Paragraph 166 of the respondents’ Closing Submissions |
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