Cheung Ka Fai v. Fong Chow Wo t/a Shing Cheong Restaurant and Another

DCEC 859/2019

[2021] HKDC 1549

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 859 OF 2019

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Before:  Her Honour Judge Levy in Chambers (paper disposal)

Date of Applicant’s Skeleton Submissions:  29 October 2021

Date of Decision: 15 December 2021

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DECISION

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A. INTRODUCTION

1.On 15 April 2019, the Legally-Aided Applicant filed an Application for employees’ compensation (“Application”) pursuant to the Employees’ Compensation Ordinance[1] against his alleged employer, Fong Chow Wo (“Fong”) trading as Shing Cheong Restaurant (“Restaurant”), the 1^st Respondent.  In the Application, it was averred that he met an accident on 7 April 2018 while working for the 1^st Respondent at stall 29 of the Restaurant.

2.At the first directions hearing on 4 October 2019, the 1^st Respondent was absent.  The 1^st Respondent’s non-participation in the proceedings led to an application by the Employees Compensation Assistance Fund Board (“ECAFB”) to intervene in the proceedings.  On 29 May 2020, the court granted leave to the ECAFB to be joined as the 2^nd Respondent.

3.It was only until 5 November 2020 that the 1^st Respondent was legally represented, and on 7 December 2020 it filed an answer denying that the Applicant was the former’s employee.  Significantly, the 1^st Respondent alleged that at the time of the alleged accident, the business of the Restaurant had already been transferred to a Fung Yuen Chiu (“Fung”), who was the Applicant’s friend.

4.The 1^st Respondent’s alluding to Fung as the sole-proprietor of the Restaurant led to the issuance of this summons (“Summons”) on 25 February 2021 for leave to join Fung as the 3^rd Respondent in these proceedings out of time.  Fung opposed the Summons, and his former solicitors had prepared and filed an affirmation in opposition (“Fung’s Affirmation”) before Fung acted in person after the Applicant filed his 2^nd affirmation in reply to Fung’s Affirmation.

5.The 1^st and the 2^nd Respondents having taken a neutral stance, this court ordered paper disposal of the Summons and directed the Applicant and Fung to lodge skeleton submissions.

6.Since Fung became a litigant in person, he has not participated in the proceedings.  No skeleton submissions were lodged by Fung.  Hence, only the written submissions and the table of chronology were submitted by the Applicant’s Legal Aid counsel, Mr Chong.

B. THE LEGAL PRINCIPLE

7.This out-of-time joinder application was issued in pursuance of s 14(4), which empowers this court to grant leave to the Applicant to join Fung out of time if it is satisfied that there was reasonable excuse for the delay.

8.The criteria for the determination as to what constitutes  “reasonable excuse” are authoritatively laid down in the Court of Appeal decision of Tsang Loi Fatv Sun Fook Kong (formerly known as Sung Foo Kee Ltd)[2]. The relevant criteria are:-

(a)  The reasons for delay;

(b)  The length of delay;

(c)  Whether there is sufficient ground to support an award; and

(d)  Prejudice to a Respondent.

C. THE GROUNDS OF OPPOSITION

9.Four grounds of opposition can be found in Fung’s Affirmation, namely:-

10.First, there was insufficient evidence to prove Fung’s liability.

11.Apart from denying the existence of any employment relationship and the occurrence of any accident, Fung denied that he had any legal liability for the reason of his admitted purchase of the chattels of the Restaurant from Fong on or about 19 November 2017.  This was because there was no transfer of the ownership of the business of the Restaurant.  Fong is still the registered sole-proprietor of the Restaurant.

12.Fung further averred that the Applicant was a retired self-employed person, and was not his employee but his friend who had previously helped him do some repair and renovation work. As an expression of gratitude, Fung would buy him meals or give him some money.

13.Second, there was no reasonable excuse for the delay.

14.Fung stated that since the Applicant already knew of him before the alleged date of the accident; and that he has been legally represented all along, there was no reasonable excuse for him to only issue the Summons 10 months after the limitation period had expired.

15.It was suggested that since the Applicant / his legal advisers had had ample time before the expiry of the limitation period to do the necessary inquiries to ascertain his relationship with the Applicant, the delay was inexplicable.

16.Third, joining him to the existing proceedings is procedurally improper.

17.It was suggested that the Applicant should have issued fresh proceedings against him instead of seeking to join him in the existing proceedings. He complained that by seeking to join him in the same proceedings, the Applicant is effectively denying him time bar and estoppel defenses.  Further, the adding of an additional party would escalate costs and prolong the case brought about by the amendments needed to be made to the Application.

18.Fourth, Fung alleged that once he is joined in the proceedings, the costs and time that he would be required to spend would cause him prejudice.

D. DISCUSSION

D.1 Sufficient evidence to connect Fung

19.Fung’s main ground of opposition is based on his assertion that the Applicant’s intended claim against him lacks merits as he was not the registered sole proprietor or a partner of the business of the Restaurant.

20.According to the Business Registration records between the period of March 2019 and May 2020 of the business of the Restaurant exhibited as “CKF-1” to the Applicant’s supporting affirmation, Fong is the registered owner of stalls 18, 28 and 29 of the Restaurant.  The business commencement date for stalls 18 and 28, according to these records, was stated to be 1 November 2018, which was after the date of the alleged accident.

21.However, it is pertinent to note that the commencement date of stall 29, where the alleged accident occurred, was 10 April 2000, which was before the date of the alleged accident.  Thus, in spite of the undisputable evidence that Fong was the registered owner of the business of the Restaurant at the time of the alleged accident and that there was an alleged transfer of the business between Fong and Fung[3], Fong appears to still be the registered sole-proprietor of the business of the Restaurant.  Based on all the available evidence, I consider that there is sufficient evidence to materially implicate Fung on liability despite the lack of documentary evidence that links Fung to the business of the Restaurant.

22.At the joinder stage, as the Court of Appeal in Ng Chiu Wing v Yip Hoi Ching and another[4] has held in §15 that unless a court “takes the view that the intended claim against the person sought to be joined is bound to fail or unless there are other special circumstances, the court should normally allow the plaintiff to choose his defendant”.  The Court of Appeal further elaborated that:-

“…a plaintiff is entitled to choose the person against whom to proceed. It is for the plaintiff to decide whom he wishes to sue. He may or may not be successful in his claim. The fact that the court allows a plaintiff to join a person as an additional defendant does not mean that the court takes the view that the plaintiff is bound to succeed against that additional defendant. That is a matter for trial.”

23.In the circumstances, I consider that the Applicant has provided sufficient grounds to show that Fung might likely be the actual owner of the Restaurant, and the employer of the Applicant.  Pertinently, it is noted that Fung’s allegations were entirely unsupported.  I do not consider that the intended claim against Fung is bound to fail.

D.2 Good reason shown

24.After having looked at the evidence in the round, I am satisfied that the Applicant has shown reasonable excuse for the 10 months’ delay.  From the chronology of events and the business registration records of the Restaurant, I accept the Applicant’s explanation that it was only after the 1^st Respondent had filed the answer averring an alleged transfer of the business of the Restaurant to Fung did the Applicant have knowledge of the alleged transfer of business.  Despite the alleged transfer of the catering business of the Restaurant from Fong to Fung in November 2017, neither party has notified the Business Registration Office of the alleged transfer or updated the relevant business registration certificate.

25.In the circumstances, I accept Mr Chong’s submissions that the Applicant had no way to find out that there was an alleged transfer of business to Fung when he commenced the present proceedings.

26.In a similar out-of-time joinder application in Kaur Paramjit v Li On Na T/A 新長發快餐 & Ors[5] heard by this court, there was a delay of 3 years and 10 months.  The reason given for the delay was the Applicant’s ignorance of the alleged change of ownership of the restaurant where she worked.  I acceded to the Applicant’s joinder application and accepted her reason for the delay in the joinder application.

27.A joinder application is undoubtedly fact-sensitive.  A previous decision has very little probative value.  However, Mr Chong’s reference to the above case, in my view, helps to show that the delay of 10 months in the present case, when viewed in context, is relatively short by comparison.

28.I am satisfied that that the Applicant’s issuance of the Summons within two months after new materials were disclosed by the 1^st Respondent’s averments in the answer was done with reasonable promptitude.  In the circumstances, I am satisfied the Applicant has provided good and reasonable excuse.

29.Since I am satisfied that the Applicant has provided reasonable excuse for his delay, I should allow the joinder application unless I am persuaded by Fung’s arguments of procedural impropriety and prejudice against the exercise of discretion.

30.The prejudice argument is a short point, and I can dispose of it quickly.  I am not persuaded that Fung has suffered any prejudice as alleged.  I do not think that Fung has suffered any additional costs and delay by the joinder.  He will be subject to the same litigation burden as a normal respondent.

31.Neither do I find that Fung’s objection on procedural impropriety has any merits.  In the case of Hong Chun Tak v Yip Kan Kee Contracting Company Limited & Anor[6], this court has rejected similar arguments by an intended respondent that commencing a fresh action was a better course.  At §48, I stated that:-

“The institution of a fresh action is, in my view, not only inconsistent with the spirit of the underlying objectives of the Civil Justice Reforms of saving costs and of promoting procedural economy if a new party could be joined in the same proceedings, it is, more importantly, not in line with the spirit of the ECO regime of informality and simplicity so that employees’ compensation proceedings can be resolved speedily.”

32.Hence, I reject this ground of opposition.

E. CONCLUSION

33.For the reasons stated above, I grant an order in terms of §§1 to 4, 6 to 8, and 11 of the Summons.  There shall be a costs order nisi in terms of §10, which shall become an absolute order unless an application by summons to vary is issued within 14 days of the handing down of this Decision.

34.A directions hearing be held on 25 January 2022 at 3:00 p.m. at Court No. 26 of the District Court.

35.Lastly, I wish to think Mr Chong for his assistance.

36.If Fung requires interpretation of this Decision, he should contact my clerk to make the arrangement.

Mr Nic Chong, Legal Aid Counsel of the Legal Aid Department, for the applicant

Winnie Leung & Co, for the 1^st respondent, excused from participating

P C Woo & Co, for the 2^nd respondent, excused from participating

The intended 3^rd respondent is not represented