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DCEC 2917/2017
[2021] HKDC 1177
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
EMPLOYEES’ COMPENSATION CASE NO 2917 OF 2017
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IN THE MATTER OF AN APPLICATION BETWEEN
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LEUNG SIU KAM |
Applicant |
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and
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梁國強 |
1st Respondent |
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EMPLOYEES COMPENSATION ASSISTANCE FUND BOARD |
2nd Respondent |
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| Before: |
Deputy District Judge Tony Ko in Court |
| Dates of Hearing: |
18 and 19 March 2021 |
| Date of Judgment: |
6 October 2021 |
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JUDGMENT
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INTRODUCTION
1.The present application arose out of an accident (“Accident”) that occurred on 21 November 2016, in which the applicant was injured.
2.The applicant alleges that the 1st respondent was at the time of the Accident an employee of the 1st respondent, who operated a restaurant called “威記飯堂” (“Restaurant”).
3.According to the applicant, the Accident occurred in the following manner:-
(a) The applicant was a chef at the Restaurant employed by the 1st respondent at the monthly wage of $19,000.
(b) On 21 November 2016, the applicant was in the kitchen of the Restaurant preparing food.
(c) At around 9:00 am the applicant was descaling a fish weighted around 2 catties with a knife of around 20 cm long.
(d) While descaling, the applicant adjusted the position of his feet and stepped on some food debris on the floor. That caused the applicant to lose balance and slip momentarily.
(e) The knife in his right hand therefore cut his left hand, which was holding and stabilizing the fish.
4.As a result of the Accident, the applicant’s left palm suffered a 3-4 cm cut wound near the left thenar area.
5.The present application was dated 27 December 2017, seeking compensation under sections 9, 10 and 10A of the Employees Compensation Ordinance Cap 282 (“ECO”), and for an extension of entitlement of periodical payments for such further period as the court may allow pursuant to section 10(5) of the ECO. The application was subsequently amended on 24 June 2018 but the claims remain substantively the same.
6.In the applicant’s opening submissions, the claim under section 10A ECO was not pursued as the applicant’s medical expenses incurred in government hospitals have been waived since 2004 due to the applicant’s chronic illness.
7.The 1st respondent had not entered any appearance in these proceedings, apart from sending a letter to the applicant’s solicitors dated 23 February 2018 (“Letter”), informing them that full and final settlement had been reached between the applicant and the 1st respondent on 27 March 2017. The contents of the Letter is set out below:-
“致羅氏律師行
執事先生啟：
關於 LEUNG SIU KAM [ID Card No.]
意外日期：21/11/2016工傷索償問題，貴律師行未知道當事人：梁紹金先生已於27/3/2017與僱主：梁國強先生有和解協議已簽署接受梁國強支付港幣伍萬玖仟玖佰捌拾元正，互不追究的。
此致：
威記飯堂負責人簽署：
［梁國強之簽名］
簽署日期：23/2/2018”
8.The Letter enclosed a copy of the written settlement agreement dated 27 March 2017 (“Settlement Agreement”), signed by the applicant and the 1st respondent, whereby the parties purportedly settled the applicant’s employees compensation claim at a total of $59,980. For completeness sake I shall set out the full terms of the Settlement Agreement:-
“甲方為威記飯堂負責人，乙方為威記飯堂廚師，每月月薪為港幣壹萬玖仟元。乙方梁紹金於21-11-2016因工受傷，左手手板位鎅傷，工傷期間甲方支付給乙方薪金共伍萬伍仟元及醫葯費肆仟玖佰捌拾元，總數為港幣伍萬玖仟玖佰捌拾元正。
於25-3-2017年晚上約10時於洪水橋林旺餐廳給甲方發現於該餐廳廚房工作，並已給甲方錄影存案。
現在今天27-3-2017經甲乙雙方協議，無條件和解，互不追究責任及完結甲乙雙方僱傭關係。”
9.Clearly, although the 1st respondent was well aware of the present proceedings, he chose not to enter any appearance in these proceedings. By the order of HH Judge Levy of 11 September 2020, leave was given to the Employees Compensation Assistance Fund Board (the “Board”) to be joined as the 2nd respondent.
10.The Board’s role has been explained by the Court of Final Appeal in Wo Chun Wah v Employees Compensation Assistance Fund Board (2019) 22 HKCFAR 495at §45:-
“The Board’s role was properly recognized by the trial judge:
‘In participating in the proceedings, the Board’s function is neither to contest the employee’s claim in place of the employer nor to help save public funds, but is to ensure that employees in need can obtain such damages as they are entitled to. The Board has a duty to screen out unmeritorious or inappropriate claims to ensure (inter alia) that this assistance mechanism will not be abused, its recipients will not exaggerate their claims, and public funds will not be used for improper purposes. Therefore, unless it is necessary to contest false claims or suspected fraudulent claims, the Board should not adopt an antagonistic attitude in the proceedings. It should act as a filter and adopt an impartial attitude in the proceedings so as to assist the court in coming to a correct ruling.”
ISSUES
11.As is apparent from the Letter and the Settlement Agreement, the 1st respondent does not dispute the occurrence of the Accident and the existence of an employment relationship between the applicant and the 1st respondent. Further, there is no dispute as to the monthly earning of the applicant at $19,000.
12.The Board sensibly informed the court that these matters are not in dispute.
13.At trial, the Board seeks to argue that by reason of the Settlement Agreement, no further compensation under the ECO is payable.
14.Under s 31(1) of the ECO:-
“(1) Any contract or agreement whether made before or after the commencement of this Ordinance, whereby an employee relinquishes any right to compensation from an employer for personal injury by accident arising out of and in the course of his employment, shall, subject to subsection (2), be null and void in so far as it purports to remove or reduce the liability of any person to pay compensation under the provisions of this Ordinance.
(2) The Commissioner may, if satisfied that, by reason of old age or serious physical defect or infirmity, a person, if employed as an employee, is specially liable to meet with an accident, or, if he meets with an accident is specially liable to sustain injury, in connection with any contract of such employment, authorize the person and the employer to enter into an agreement in writing reducing or giving up the right of such person to compensation under the provisions of this Ordinance in respect of any accident which is caused or contributed to by the old age or serious physical defect or infirmity.”
15.The relevant principles have been considered in Chan Chun Shing v Silver Way Enterprise Limited DCEC 1955/2011, 4 June 2014:-
“16. In Shiu Ying Kwong v Po On [1990] HKDCLR 15 at 19, His Honour Judge Downey held that s (31)(1) does not disable the parties from coming to a settlement whereby the employee obtains compensation in an amount in excess of the minimum, but conceivably less than he or she might obtain after a full hearing. By way of illustration, the learned Judge was of the view that the parties are free to settle at an amount in between the theoretical entitlements based on disputed facts such as the age of the employee.
17. The principle in Shiu Ying Kwong was applied by Deputy District Judge Anthony To (as he then was) in Li Fook Sing v Chow Wing Fu & Anor [1997] 4 HKC 285. In that case, loss of earning capacity was disputed. The Employees Compensation (Ordinary Assessment) Board awarded a 6% loss of earning capacity. The amount agreed was about 13% more than what the employee would have received at the level assessed at 6% loss of earning capacity. The employee claimed 15% loss of earning capacity. The learned Judge held the view that it was open to the parties to agree to any amount equivalent to a compensation for no less than 6% loss of earning capacity. It was because if one introduces the question of uncertainty in litigation which might result in an award less than the amount agreed, and the consideration of time, costs and prompt payment etc, there is no reason why the parties should be prevented from agreeing an award which appears to be far less than what the employee seeking to prove so long as it is in excess of the minimum.”
16.Thus, in deciding whether the Settlement Agreement is null and void under section 31(1) of the ECO, the court will have to assess the potential minimum compensation payable to the applicant.
17.The applicant further alleges that he signed the Settlement Agreement under duress, and therefore the same is not binding on him.
18.The following issues are thus to be decided by the court:-
(a) Is the Settlement Agreement null and void in the light of the potential minimum compensation payable to the applicant?
(b) Whether the Settlement Agreement was procured by duress?
(c) What is the proper amount of compensation, if any?
ANALYSIS
Potential Minimum Compensation
19.The applicant was born on 28 December 1957 and was 63 years old at trial. After the Accident on 21 November 2016, he was sent to the A&E Department of the Pok Oi Hospital, and thereafter transferred to the Tuen Mun Hospital and admitted into the Orthopedic ward for treatment.
20.According to the medical reports:-
(a) Emergency operation was performed on 22 November 2016. It was recorded that dirty fluid were collected beneath the wound. There was partial cut of the muscle part of the abductor pollicis brevis. There was a 20% partial cut of the recurrent motor branch of the median nerve. There was no tendon injury. Repair of wound was performed. Culture result of the wound showed no bacteria growth.
(b) The applicant was followed up on 6 December 2016, during which it was noted that the wound healed well, the power of the abductor pollicis brevis muscle was full. Sick leave was granted from 21 November 2016 to 13 December 2016.
(c) On 19 January 2017, the applicant attended the Tin Shui Wai Community Health Centre. Examination showed a Z shaped scar on the applicant’s left palm. The active range of motion was full for both writs. He was advised to continue with his own stock of analgesic. He attended the clinic multiple times subsequently for the same complaint, and multiple sick leaves were granted.
(d) On 19 February 2017, the applicant attended the Yuen Long Jockey Club Health Centre. Physical examination showed that the active range of motion was full for both wrists. He was advised to continue with taking his own stock of analgesic. Sick leave was granted.
21.According to the report of occupational therapist Ms Chan Wing Cheung Winky:-
(a) The applicant first attended the Occupational therapy department of Tuen Mun Hospital on 7 March 2017. He attended 3 sessions and defaulted since 20 March 2017. He was referred again for work rehabilitation and treatment restarted on 5 July 2017 and ended on 12 July 2017 after two sessions.
(b) In the initial assessment, the applicant had nearly full range of motion over the left wrist and full range of motion over his left thumb. He could make a full fist and the power grip of his right hand was 30 kgf while his left hand was 20 kgf. The pinch grip of his right hand was 6.4 kgf while his left hand was 4.4 kgf. His unilateral frequent lifting was 18 lb. In simulating wok handling, he tolerated 5 lb unilaterally. He was considered as marginally matching for his previous job demand as a chef for inadequate work endurance.
(c) In the latest assessment, the applicant showed the power grip over right hand was 33 kgf while left hand was 27 kgf. In simulating wok handling, he managed more than 5lb unilaterally, and was discharged.
22.On 18 November 2017, he attended the Tuen Mun Hospital for a left-hand infection. He was admitted to the Orthopedic ward, antibiotics were prescribed upon discharge.
23.The Medical Assessment Board (Form 7) and the Review Medical Assessment Board (Form 9) held on 20 August 2018 and 21 January 2019 respectively both assessed the applicant to have a 3% loss of earning capacity. The applicant filed a notice of appeal against these assessments on 25 June 2019, which means that the District Court will have to make an assessment afresh according to the evidence. See Chan Kit v Sum Wo Industrial Manufactory [1989] 2 HKLR 230 at 232A-H.
24.A joint Orthopedics Report dated 15 July 2020 was compiled, following a joint examination of the Application by Dr Fu Wai Kee (instructed by the applicant) and Dr Tio Man Kwun Peter (instructed by the Board) on 27 May 2020.
(a) Both doctors agree that the applicant could return to his original job, with reduced efficiency due to weakness to the applicant’s left hand.
(b) Dr Fu opines that the sick leave the applicant received in the total of 203 days (195 days exclusive of statutory holidays) was appropriate.
(c) Dr Tio opines that, with reference to the documented full recovery of his wound on 6 December 2016 and the full power of his APB muscles as documented in the medical report of the Tuen Mun Hospital, a period of sick leave of up to 3 months would have been adequate.
(d) Dr Fu opines that the loss of earning capacity and whole person impairment as a result of the Accident should both be 4%, while Dr Tio opines that the degree of impairment should be 1.5%.
25.According to the medical evidence, it is clear that applicant has suffered a permanent loss of earning capacity, ranging from 1.5% to 4%. At the time of the Accident, the applicant was 58.9 years old.
26.Accordingly, the minimum that the applicant could be awarded under section 9 ECO is $19,000 x 48 months x 1.5% = $13,680.
27.Under section 10(1) and 10(2) of the ECO:-
“(1) Where temporary incapacity whether total or partial results from the injury, the compensation shall be the periodical payments hereinafter mentioned, or a lump sum calculated accordingly, having regard to the probable duration, and probable changes in the degree, of the incapacity. Such periodical payments shall be, or shall be at the rate proportionate to, a monthly payment of four-fifths of the difference between the monthly earnings which the employee was earning at the time of the accident and the monthly earnings which he is earning, or is capable of earning, in some suitable employment or business during the period of the temporary incapacity after the accident.
(2) For the purposes of this section a period of absence from duty certified to be necessary by a registered medical practitioner, a registered Chinese medicine practitioner, a registered dentist, an Ordinary Assessment Board or a Special Assessment Board shall be deemed to be a period of total temporary incapacity irrespective of the outcome of the injury.”
28.The operation of these provisions has been considered by the Court of Appeal in Yu Tat Kam v Chu Tung Shing and Anor CACV 25/2008, 8 October 2009 at §§19-27. In gist, the employer has the burden of proof in demonstrating to the court that, despite the sick leave certificates issued by a registered medical practitioner, the employee had been earning an income or could be said to be capable of earning an income from some suitable employment or business. Circumstances under which this can be demonstrated was considered to be very rare.
29.According to the Settlement Agreement, the applicant was found to have been working on 25 March 2017. There is however no other evidence suggesting that the applicant had worked earlier than this date. This date therefore represents the date on which it could be argued that the applicant had been earning an income or could be said to be capable of earning an income from some suitable employment or business.
30.Regarding compensation under section 10, the minimum periodic payments is thus $19,000/30 x 113 days (from date of Accident to 24 March 2017) x 4/5 = $57,253.
31.The potential minimum compensation in this case is thus $13,680 + $57,253 = $70,933, which is above the settlement sum of $59,980 provided under the Settlement Agreement. The Settlement Agreement is consequently null and void under section 31(1) of the ECO.
Duress?
32.As I have found that the Settlement Agreement is null and void under section 31(1) of the ECO, whether there was duress or not does not bear on the validity of the Settlement Agreement. However, given that whether the applicant had acknowledged the contents of the Settlement Agreement (which, inter alia ,stated that the applicant was found to have worked on 25 March 2017) has some bearing on the issue of quantum, I shall decide on the issue.
33.In the original witness statement of the applicant dated 10 August 2020, there was no mention about any duress in relation to the Settlement Agreement. Indeed, it was said in §22 of the witness statement that the applicant had received a total of around $59,980 from the 1st respondent as periodic sick leave payment. The figure of $59,580 matched with that stated in the Settlement Agreement.
34.By the order of HH Judge Levy of 11 September 2020, the Board was joined as the 2nd respondent herein. On 18 November 2020, the Board file its Answer in these proceedings, raising the issue regarding the Settlement Agreement.
35.On 4 February 2021, the applicant made a Supplemental Witness Statement, stating that:-
(a) At around 9 pm on 25 March 2017, the applicant’s friend “Ah Lai” (who was the manager of another restaurant (“New Restaurant”)) called him and requested the applicant to assist her in finding a replacement chef, as the original chef suddenly resigned.
(b) The applicant therefore went to the New Restaurant and to assess the manpower needed.
(c) Shortly after the applicant arrived at the New Restaurant, the 1st respondent brought a few other people to the New Restaurant and took photographs of the applicant, accusing him of working during sick leave, and demanded him to return the sick leave periodic payments already paid to him.
(d) The applicant explained that he was not working but was just there to observe the environment for a friend. Ah Lai also helped to explain the situation to the 1st respondent, who then left.
(e) On 27 March 2017, at around 3 pm, the applicant was at the New Restaurant having tea, during which he received a call from the 1st respondent, accusing him of working at the New Restaurant during sick leave. The 1st respondent threatened to make a report to the police, and the applicant replied “no problem”, and asked the 1st respondent to go to the New Restaurant immediately.
(f) Soon after that the 1st respondent drove to the New Restaurant, whereupon the applicant boarded his car, thinking that the 1st respondent would drive them to the police station. Unexpectedly, however, the 1st respondent drove to the Restaurant. At the time they arrived, there were already more than ten fierce looking men inside the Restaurant.
(g) The 1st respondent gave the Settlement Agreement to the applicant in duplicate, and asked the applicant to sign on it after reading out briefly its contents. The 1st respondent said that the applicant could not leave unless he signed on the Settlement Agreement.
(h) At that time, the Settlement Agreement already contained the signature of the 1st respondent and the three witnesses. The applicant was fearful of threats to his own safety, and signed the Settlement Agreement as he considered there to be no choice.
(i) After signing the Settlement Agreement in duplicate, the 1st respondent gave one set to the applicant, who then left the Restaurant.
(j) After that incident, the applicant and the 1st respondent did not have any further contact.
(k) The applicant did not know how the $59,980 was calculated. According to the applicant’s calculation, the total should have been $19,000/30 x 115 days (date of Accident to 26 March 2017) x 4/5 = $58,267.
36.The applicant was cross-examined extensively. I must say that I am not impressed by the applicant’s evidence. In particular:-
(a) On the one hand (§22 of the applicant’s witness statement) he said that he had received around $59,980 as sick leave periodical payments without any qualification, which happened to tally with the amount stated in the Settlement Agreement to have been received in full and final settlement of the applicant’s employees compensation claim. On the other, the applicant said in the supplemental witness statement that the correct figure should have been $58,267, and he did not know how the $59,980 was arrived at. These two propositions appear to me to be difficult to square with each other.
(b) The applicant did not mention about the Settlement Agreement nor the alleged duress in the original witness statement. One asks rhetorically, why did the applicant said he received $59,980 in his witness statement without any qualification if firstly, he did not know how such sum was calculated and he did not agree to such sum as stated on the Settlement Agreement and, secondly, he was threatened into signing the Settlement Agreement involuntarily? Further, the applicant had not made a report to the Police at any time.
(c) The applicant in his oral testimony said that it was only his own thought that he could not leave the Restaurant if he did not sign the Settlement Agreement. However, contrary to that, it was stated in §7 of his supplemental witness statement that the 1st respondent demanded the applicant to sign the Settlement Agreement, or else he could not leave.
(d) In cross-examination, the applicant said that he had since 27 March 2017 not provided further sick leave certificates to the 1st respondent. This is consistent with the timing of the Settlement Agreement (27 March 2017) and the fact that the applicant had considered the Settlement Agreement to have had the effect of settling finally the applicant’s employees compensation claim.
37.After considering all the evidence and submissions, it appears to me that the alleged “duress” was merely an afterthought devised by the applicant, and I refuse to accept his evidence in this regard.
QUANTUM
38.As the Settlement Agreement is null and void under section 13(1) of the ECO, I shall now assess the quantum of compensation.
39.The applicant attended his last occupational therapy on 12 July 2017, and the last sick leave certificate was granted to until 13 July 2017. As recorded in the occupational therapy report prepared by the Tuen Mun Hospital, the applicant was ranked as matching with the job demand of a chef and was discharged from work rehabilitation program after the last session on 12 July 2017. That was around 8 months after the Accident. His behavior is consistent with a person who is anxious to get back to the workforce, rather than a person who was prepared to take advantage of the sick leave periodic payment unnecessarily.
40.Further, in the trial, the applicant demonstrated to the court how the left thumb had to be involved in holding the wok, with the thumb being placed on one side of the wok, and the other 4 fingers positioned on the other side of the wok, effectively “clipping” the wok with the thumb and the other fingers. This obviously puts much stress and demand on the applicant’s left thumb.
41.It must also be noted that while on the last occupational therapy, it was recorded that the applicant’s right hand grip force was 33kgf and left hand grip force was 27 kgf (12 July 2017), and during joint examination the right hand grip force was 24 kgf and left hand grip force was 18 kgf (27 May 2020), there was a 34-month time gap between the two examinations, during which the applicant aged from 59.5 years old to 62.5 years old. The reduced force is also consistent with the agreed opinion of the experts that there was mild wasting to the left hand thenar muscles.
42.In the circumstances, I do not believe Dr Tio’s criticism at §5 of the Joint Orthopedics Report that “underperformance was obvious” to be well founded. After considering all the evidence and submissions, I prefer Dr Fu’s assessment and shall adopt 4% as the permanent whole person impairment as a result of the Accident.
43.The award under section 9 of the ECO is therefore $19,000 x 48 months x 4% = $36,480.
44.It was also argued by the Board that the applicant had worked and therefore had earned or was capable of earning an income during the periods of sick leaves granted by treating doctors.
45.The parties agreed that the total period of sick leaves granted was 203 days (195 days exclusive of statutory holidays). The following matters are to be noted:-
(a) There is no direct evidence that the applicant had worked or received any income during the period of sick leaves granted. The 1st respondent did not appear and did not testify. The only evidence comes in the form of the Settlement Agreement, which stated that on 25 March 2017 at around 10 pm, the applicant was found by the 1st respondent to have been working in the New Restaurant, and the 1st respondent had kept a video recording of that. However, no such video recording has been adduced as evidence before the court.
(b) As stated above, it would be very rare for the court to come the conclusion that an employee was capable of earning an income from a suitable employment or business when a registered medical practitioner had issued a sick leave certificate indicating the unsuitability of the employee to undertake work.
(c) I am conscious of the fact that the applicant had attended a total of 5 sessions of occupational therapy from 7 March 2017 to 12 July 2017, and it was found to be able to match the job demand as a chef as his power grip over the left hand was 27 kgf and he managed to handle a wok of more than 5lb loading unilaterally. However, as the Court of Appeal noted in Yu Tat Kam v Chu Tung Shing and Anor CACV 25/2008, 8 October 2009 at §27:-
(i) An employee’s loss of earning capacity does not arise solely from his/her physical disability, but also because of discomfort or pain, districting him from work.
(ii) In order for section 10 of the ECO to bite, the employee must be capable of engaging in “suitable” employment or business.
46.In the circumstances, apart from being a chef (which required prolonged holding of a wok) it has not been suggested that there were other suitable employment or business that the applicant could have engaged in. The court is only prepared to accept that the 1st respondent had worked for one day on 25 March 2017, as recorded on the Settlement Agreement, but not otherwise. The court is also not prepared to accept that the applicant had the ability to work during the periods covered by the sick leave certificates.
47.The award under section 10 of the ECO is thus $19,000/30 x 194 days x 4/5 = $98,293.
CONCLUSION
48.For the aforesaid reasons, I hold the 1st respondent to be liable to make compensation to the applicant in the sum of $36,480 (under section 9 of the ECO) + $98,293 (under s 10 of the ECO) - $59,980 (sums already received by the applicant) = $74,793.
49.I also order interest to be paid by the 1st respondent on the sum of $74,793 from the date of Accident to the date of Judgment at 4% per annum, and thereafter at judgment rate until payment.
50.In relation to costs, as the Court of Final Appeal noted in Wo Chun Wah (supra) at §§46-47:-
“46. In my view, such recognition dictates that where the Board has been joined as a party and properly carries out its ‘filtering’ or monitoring functions, the appropriate starting-point should generally be no order as to costs, irrespective of whether the Board sought to test the case as to liability, quantum or both.
47. That is the starting-point and a different costs order might be warranted on particular facts. One naturally expects that, having intervened, the Board will behave in a responsible manner but if, in what will hopefully be a rare case, its conduct is unreasonable or misconceived or unjustifiably antagonistic, unnecessarily prolonging its intervention, or otherwise untoward, the court may, in the exercise of its discretion, consider ordering the Board to pay the plaintiff’s costs…”
51.There does not appear to be anything which could justify a departure from the starting-point. I shall therefore make a costs order nisi that:-
(a) The applicant is entitled to costs of the present proceedings against the 1st respondent (with certificate for counsel) to be taxed if not agreed.
(b) There be no order as to costs between the applicant and the 2nd respondent.
(c) The applicant’s own costs is to be taxed in accordance with the Legal Aid Regulations.
52.It remains for me to thank counsel on both sides for their assistance rendered to the court.
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( Tony Ko ) |
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Deputy District Judge |
Mr Dennis Law, instructed by Rita Law & Co, assigned by the Director of Legal Aid, for the applicant
The 1st respondent was not represented and did not appear
Ms Susanna Leong, instructed by P C Woo & Co, for the 2nd respondent
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