Lee Ting Sang v. Chung Chi Keung and Another

CACV000006/1988

BETWEEN

Corams: Hon. Cons, V.-P., Clough & Power, JJ.A.

Date of hearing: 24th & 25th March 1988

Date of Delivery of Judgment: 26th April 1988

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J U D G M E N T

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Power, J.A.:

1. The applicant sought compensation in the District Court under the Employees' Compensation Ordinance alleging that he had on 19th September 1984 suffered personal injury by accident arising out of and in the course of his employment by the respondents CHUNG CHi-keung and Shun Shing Construction & Engineering Co. Ltd. The facts revealed that he suffered a head injury while working as a mason at a building site at Shan King Estate, Tuen Mun The respondents denied that the applicant was employed by them and alleged that between the 1st respondent and the applicant there was only a contract for services from time to time and not a contract of service.

2. At the trial before Judge Yam the only evidence was that of the applicant. The judge was satisfied upon that evidence that the probability was that the applicant was carrying on business on his own account and he dismissed the action. This appeal is brought from that decision.

3. Although there was no finding express terms, it seems clear, that the trial Judge accepted the facts sworn to by the applicant. These facts established:

1. that the applicant suffered a head injury in an accident when working as a mason chiseling concrete at the said construction site;

2. that he had been told to work at the site by the 1st respondent who was a sub-contractor of the 2nd respondent;

3. that the applicant was given a plan by the 1st respondent showing him where to chisel but he was not thereafter supervised in his work. (The foreman of the main contractor, the 2nd respondent did, however, from time to time check the work)

4. that the tools used by the applicant were provided by the 1st respondent.

5. that he had commenced to work at the site some 20 days prior to the accident;

6. that he was normally paid in accordance with the amount of concrete chiselled the measurement being done by the 1st respondent or his agent, but that on occasions, when the concrete was difficult to chisel or the work involved only a small area, he received a wage of $220 for an 8 a.m. to 5 p.m. day (This appears to have been done because the payment if calculaded in accordance with the area chiselled would have amounted to less than a fair day's wage)

7. that the applicant when he completed his work before 5 p.m. would assist the 1st respondent to sharpen chisels and would, after so doing, be paid for that work on an hourly basis.

8. that the applicant worked from time to time for other contractors but would, when the work of the 1st respondent was urgent, give priority to him telling any other employer for whom he was then working to engage another to finish the work

4. Mr. Sit who appeared for the respondents at the trial submitted:

1. That there was no obligation on the 1st respondent to select the applicant or upon the applicant to work for the 1st respondent.

2. that the remuneration paid was according to the work done.

3. that the period of work terminated when the job finished.

4. That the sharpening was incidental to the chipping; and

5. that the hours worked by the applicant from 8 a.m. to 5 p.m. were not worked on a strict basis but that the applicant just followed other workers at the site as a matter of convenience.

This last submission appears to rely upon speculation rather than upon the evidence.

5. The trial judge having set out the evidence of the applicant and the submissions of Mr. Sit said that he accepted the submissions and found that the contract between the parties was more consistent with a contract for services than a contract of service. It is unfortunate that the judge did not, when coming to this decision, set out the facts upon which he was relying and give an indication of the weight which he attached to each.

6. It is clear that he had in mind WGNG Po-sin v. New Universal Paper Co. Ltd.⁽¹⁾ and the 12 factors which have been held to point in the direction of a contract of service, i.e. an employer/employee (or in the old terminology, a master/servant) relationship" set out at p.73 of that report and taken from Mr. John Rear's article entitled "Self-Employment in the Building Industry",  at p.150 of Vo1.2 of the Hong Kong Law Journal. We emphasize again that each case or not a contract of service or a contract for services exists depends very much upon its own facts. None of the many reported cases to which we were referred are on all fours with the present instance, or indeed each other, and are of little assistance. The matter has perhaps never been better put than it was by Cooke, J. in United States of America v. Silk⁽²⁾ when he said at p.184:

"The fundamental test to be applied is this.

'Is the person who has engaged himself to perform these services performing them as a person in business on his own account ?'

If the answer to that question is 'Yes', then the contract is contract for services. If the answer is 'No', then the contract is a contract of service. No exhaustivelist has been compiled and perhaps no exhaustive list can be compiled of the consideration which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various consideration should carry in particular cases. The most that can be-said is that control will no doubt always have to be considered although it can no longer be regarded as the sole deter mining factor and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task."

Words which we wish to emphasize are "no exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. "We have been referred to a number of cases by Mr. Kat, who appeared for the respondents, in which the question of "umbrella contracts" has been canvassed. The most important of these is O'Relly & Others v. Trusthouse Forte P.L.C.⁽³⁾ While these are of general assistance in showing the approach of the courts to the problem of contract of service versus contract for services they have no direct application to the present facts as it is clear that there was no umbrella contract in existence covering the relationship of the applicant and the 1st respondent.

7. The broad attack of Mr. Mitchell for the applicant, was that the trial judge had failed to identify the relevant considerations. He is able to mount this argument in part because the trial judge did not, as we have already remarked, make clear findings in this regard. Having said this we must go on to say that what Mr. Kat characterized as the scoreboard approach is by itself of little assistance unless there is an indication of the weight given to the various factors

8. We, upon consideration, are satisfied that a better approach would be a statement of the facts accepted as established by the evidence and an indication of the weight attached to each.

9. Applying this approach we set out the following facts which, it seems to us clear, were accepted and acted upon by the judge.

10. The applicant was a mason whose work involved the chipping of concrete in new buildings to reduce its depth. He took whatever work was offered to him on sites by different contractors. He favoured the work offers of the 1st respondent and would drop other work if the 1st respondent told him that he had urgent work for him. There was, however, no evidence of any retainer or of anything else which would have placed him under an obligation to take the 1st respondent's work. The applicant was given a plan indicating the area to be chipped when he took up the work he was doing at the time of the accident. He, thereafter, did his day to day work using tools supplied by 1st respondent wholly without supervision except that the work was inspected from time to time by the site foreman employed by the 2nd respondent. The applicant was paid by measurement and the measurements were taken at irregular intervals by the 1st respondent or his agent. He worked an 8 to 5 day and at times assisted in sharpening tools when he finished his chipping work before 5 p.m. When he did this he was paid upon an hourly basis. He was also paid on hourly basis if the job was small or difficult.

11. The first factor to which, in our view, considerable weight must be given on the side of contract for services is that he was plainly a jobbing mason who worked on one job after another for different contractors. We see nothing of any real significance in the fact that he gave priority to a particular employer. He may well have had good reason for doing so but there is nothing in the evidence to suggest that he was in any way bound so to do. The fact that he used tools supplied by the contractor would tend to show a contract of service. On the other hand he did his work in an independent way without any supervision In the circumstances of this case, we think it important further on the side of contract for services that he was normally paid an amount calculated in relation to the amount of work that had been done. We do not think that the fact that he was occasionally paid by the hour is of any real significance when one looks at the overall picture. We are further satisfied that the trial judge was right to find, as he did, that the applicant was not part and parcel of the organization of the 1st respondent. We do not consider, as was urged upon us by Mr. Mitchell, that the trial judge's failure to consider whether there was an element of profit or risk pertaining to the applicant's work, was a misdirection Given the circumstances it was a factor of no weight and the failure of the trial judge to comment thereon is of no significance. We have no doubt that when the above facts are looked at in their totality they establish that he worker under a contract for services and that the conclusion of the trial judge was a correct one. The appeal must therefore be dismissed.

(1) (1973) H.K.L.R. 59

(2) (1946) 331 U.S. 704

(3) (1983) 3 W.L.R. 605

Representation:

Mr. Denis C. Mitchell (D.L.A.) for the Appellant/Applicant.

Mr. Nigel Kat (M/s Sit, Fung, Kwong & Shum) for the 1st & 2nd Respondents