Lau Kam Nui v. Sau Kee Co. Ltd.

CACV000065/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1998, No. 65
(Civil)

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Coram: Nazareth, Atg CJHC, Mortimer, V.-P. and Liu, J.A. in Court

Date of Judgment: 21 July 1998

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J U D G M E N T

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Mortimer, V.-P.:

1. This is an appeal against the decision of Her Honour Judge C.B. Chan given on 18 February 1998 when she rejected the applicant's claim for employee's compensation under s. 6 of the Employees Compensation Ordinance, Cap. 282.

The background

2. The deceased was a maintenance worker, aged 54, employed by the Sau Kee Company Ltd (the Company) which maintained and repaired boats at its shipyard 45 Praya Road in Apleichau. It also had nearby premises at 29 Praya Road where there was a pier and office. The deceased drowned when he tried to recover a gas cylinder which had fallen into the sea off the pier in about four metres of water.

3. There is little dispute about the salient facts. The pier was used by customers of the company among others. It charged when boats were moored there. The deceased was unskilled. His duties were cleaning hulls and painting. He assisted Mr Chan, a director of the company, his employer who was apparently a qualified diver. The deceased did not do any underwater work but he would go into the water when required to assist.

4. A witness, Wong Yan, was a skilled welder employed by the company. The accident happened on 3 January 1995. The deceased's working hours were 8 am to 5 pm. In the afternoon of that day, he was working in the cabin of a yacht. He usually took his tea break from 3 to 3.15 pm with the welder, Mr Wong. The yacht in which he was working was under maintenance at 45 Praya Road. Mr Wong was also at the yacht. He took his tea break as usual on that day but not with the deceased. When Mr Wong returned to work at the yacht at about 3.30 pm, the deceased was not there but he came a few minutes later and asked Wong to get a rope to help him to retrieve the gas cylinder which had fallen into the sea off the pier at 29 Praya Road.

5. It seems that the gas cylinder had been hired by Mr Yeung for work in a fishing boat which at one time had been moored at the company's pier. He had put the cylinder on the pier on 31 December. The company was closed for the next two days and Mr Yeung was going to pick up the cylinder sometime after the holidays. He had no idea, when asked later, when it had fallen into the sea.

6. Upon the deceased's request, Wong went to him to the pier with the rope. The deceased took one end and Wong held the other. The deceased dived in. He surfaced after a minute or so but then dived under again. He never re-surfaced. He had drowned. Before drowning however he had succeeded in attaching the rope to the cylinder. The actual details are not very clear but the cylinder was lying somewhere near the pier from which it had fallen in about 4 meters of the water.

At trial

7. Mr Ho, a causal worker who had worked at the company in the 1980s, gave evidence. Also Mr Wong, the welder and Madam Sin, a co-director of Mr Chan whom I have mentioned. She apparently had a part in running the business. Mr Chan did not give evidence as he was in Mainland China at the time. Not surprisingly Mr Ho's evidence did not prove to be helpful to the judge. She did not rely upon any of it, describing it as speculative.

8. Mr Wong said that the deceased's duties did not require him to dive and indeed he had been told not to dive. There was other evidence, however, that part of the deceased's duties as a general worker was to recover tools and equipment which fell into relatively shallow water. There was a suggestion that meant anything up to ten feet.

9. Mr Wong, being a skilled worker, was senior to the deceased. He said he helped the deceased and went along with the deceased's suggestion holding the rope without giving him any instructions not to do that which he was doing because the deceased had worked for 20 years for the company whereas he only worked for six. He admitted that he could tell the deceased what to do.

The judge's decision

10. The judge accepted that Mr Chan had told the deceased not to dive into the water but did not accept the reason given by Wong as to why he had helped the deceased by holding one end of the rope in the enterprise of lifting the cylinder from the sea.

11. The judge's finding is clearly set out:

"The Deceased was employed as an unskilled maintenance worker by the Respondent which is a company that repaired and maintained boats. The Deceased's responsibility was to help clean the bottom of boats, clean the hull of the boat and help paint the boat. The Deceased was told not to dive into the water by his employer Mr. Chan. The Deceased had been seen by Madam Sin to work in the water together with her husband Mr. Chan but his head was above the water. Mr. Chan was a skin diver and did all the work that entailed diving.

The accident occurred whilst the Deceased dived into the sea at the pier outside No. 29 Praya Road to retrieve an air cylinder which had dropped into the sea. The air cylinder did not belong to the Respondent but belonged to one Mr. Yeung The Respondent stored their air cylinders at No. 45 Praya Road No 29 Praya Road was where the Respondent had an office The pier is an illegal structure. The Respondent charged boats that moored there at a sum of between $200 to $300 per day. The Deceased returned from his tea break at sometime past 3:30 p.m. on the date of the accident. In the morning he had helped to paint a boat at No. 45 Praya Road. Upon returning to No. 45 Praya Road, he told Mr. Wong he would go to No. 29 Praya Road and dive into the sea to retrieve the air cylinder which had dropped into the sea. Neither Mr. Wong, nor any of the Deceased's employers asked him to do so. The Deceased did so of his own initiative. He asked Mr. Wong to assist him. Mr. Wong did so by holding the rope. The Deceased drowned whilst doing so."

She then made her decision:

"Having considered the above, I regrettably am not able to find that what the Deceased did arose out of and in the course of his work nor can I find that what he did was reasonably incidental to his work. Regrettably, I have to dismiss the Application."

12. Having reviewed the salient facts, she found that the applicant had not satisfied the necessary criteria.

The Ordinance

13. The claim was made under the Employees Compensation Ordinance (Cap 282). Provisions on liability are to be found in s.5 which reads:

"(1) Subject to subsections (2) and (3), if in any employment, personal injury by accident arising out of and in the course of the employment is caused to an employee, his employer shall be liable to pay compensation in accordance with this Ordinance."

There is a presumption on the meaning of "arising in the course of an employee's employment" in sub-s.4 which reads:

"(4) For the purposes of this Ordinance

(a) an accident arising in the course of an employee's employment shall be deemed, in the absence of evidence to the contrary, also to have arisen out of that employment;"

The issue and the presumption

14. The real issue in this case is whether this injury and the deceased's death also arose out of his employment. The judge considered the provision and a passage in R v Industrial Injuries Commissioner Ex Carte Richardson [1958]1 WLR at 851 to which her attention had been invited by counsel. The effect was simply this. If there is evidence to the contrary in relation to the presumption, then the applicant has to simply prove the point in the ordinary way. As Devlin J (as he then was) said the word "evidence" meant "was there evidence fit to be left to the jury".

15. Applying that test, the judge decided that it was necessary for the applicant to prove the case in the ordinary way and the presumption did not apply.

16. In due course I will examine some of the findings of the judge on the primary facts. It is clear to me that the presumption did not apply in this case. There was evidence for the judge's consideration. The only question, therefore, was had the applicant proved that this accident not only arose in the course of the deceased's employment but also out of that employment?

17. When considering that question, the judge recognised that it was not necessary for the applicant to prove that the accident arose directly out of the employment. As many of the cases under the old Workmen's Compensation Acts in England demonstrate, all that is necessary is to show that the workman was doing something which was an incident of his employment or was incidental to it. The judge rightly cited a passage in Charles R. Davidson and Co v M'Robb or Officer [1918] AC 304 which reads:

" 'In the course of the employment' does not mean during the currency of the engagement, but means in the course of the work which the workman is employed to do and what is incident to it; . . ."

The judge cited the above and other cases which demonstrate the same principle. Finally. she cited Reg v Insurance Come, Ex p. Michael (C.A.) [1977]1 WLR 109 where Lord Roskill said at p. 118:

"If the injury is not suffered in the actual course of the work which the employee is engaged to do, it must have at least been suffered by reason of some event incidental to that work."

That was the correct test which the judge sought to apply.

The appellant's case

18. The appellant submits that the judge was wrong in her conclusion, which she inferred from the salient facts. Mr Wong, for the appellant, points out that the deceased was employed in general work. It was clear on the evidence that, although he was instructed not to dive, part of his work was to recover tools and equipment which fell into water provided that it was not more than 10 feet deep. He, therefore, submits that the deceased was employed to do the general kind of work which was involved in recovering the cylinder from the seabed. Although he concedes that the deceased was not instructed to recover the cylinder, he submits that the recovery of the cylinder from the seabed was at the very least incidental to his employment. He points out that the cylinder was left on the employer's property. It does not matter whether it actually belonged to his employer or whether it had been left on his employer's property. Either way, the employer was responsible for it. He submits that Mr Yeung left the cylinder on the pier and the employer was therefore a gratuitous bailee. Of course the deceased would not be aware of that. But he might well have been aware that the employer would be answerable for the equipment. He is likely to have thought that it was in his employer's interest to recover that property from the sea.

The respondent's case

19. The respondent, both at trial and on appeal through its counsel, Mr Sham, submits that the evidence does not come near showing that this accident arose out of the deceased's employment. He points out that No. 29 Praya Road was not a place where the deceased usually worked. He usually worked nearby at No. 45 where the maintenance was done. So far as the pier was concerned, normally there were no tools on the pier and no work was being carried out on that day. The evidence was that he was not working at the pier on that day. He had not been instructed to go to the pier and he had never been instructed to recover the cylinder. He had dived in the sea when his instructions were not to dive into the sea. This was not on any view part of his duties. He did what he did entirely on his initiative. Further, the cylinder was not his employer's. It had been hired by Mr Yeung. Finally, he submits that this was a question of fact; the judge made her decision on the facts and that this Court should be very slow to disturb the judge's finding.

The arguments considered

20. Of course, this Court will not disturb the judge's finding of fact, but if her findings of the salient facts are accepted, this Court is in just as good a position as the judge herself to determine the question before her whether the accident was an accident which was in the course of his employment and arose out of it. To that question I now turn.

21. It is not the sort of question which always can be answered with ease. It is sometimes difficult and there are borderline cases. It would follow that this Court would not reverse a judge in a borderline case.

22. Some assistance can be found from other cases helpfully cited to us by Mr Sham. One is R v Industrial Injuries Commissioner, Ex Carte Amalgamated Engineering Union [1966]1 All ER 97. The facts are not helpful but Lord Denning MR gave some examples which are useful. At p. 103D he said:

"What is the position when a man overstays his tea-break or his meal-break? I do not think that the mere fact of overstaying his time takes him out of the course of his employment: certainly not when it is done without thinking. Even if it is done negligently or disobediently, it does not automatically take him outside the course of his employment. It is only taken out of the course of his employment when the circumstances show that he is doing something of a kind different from anything he was employed to do."

Mr Sham points out Lord Denning gave some further illustrations. First, where a man goes from one end of a factory to the other to compare notes on football pools, he is not acting in the course of his employment. Secondly, if a guard of a train takes it on himself to drive the train and is injured whilst driving he is outside the course of his employment. Thirdly, if a man is employed to hook goods on to a crane and instead took it on himself to drive a forklift truck, he is outside the course of his employment. But, of course, even those cases are dependent upon the whole of the circumstances.

23. But here, as Mr Wong has pointed out, there are wider considerations because of the circumstances and the property which concerned in this case. Mr Wong submits that an employee who seeks to protect or preserve the employer's property, if it is at risk, may have implied authority of the employer to do things which normally would be outside the scope of his usual work. He cites in support the case of Poland v John Parr and Sons [1927]1 KB 237. He relies upon the headnote which reads:

"A servant has implied authority to make reasonable efforts to protect and preserve his master's property in cases of emergency endangering it. For acts done by the servant within the scope of that authority, the master is responsible. The servant's acts may exceed the authority. Whether they do or not is a question of degree.

A carter in the employment of the defendants on his way home in the middle of the day was following close behind a waggon laden with sugar in bags and being driven by one of his employers. He saw a boy walking beside the waggon with his hand upon one the bags. Honestly and reasonably thinking that the boy was stealing sugar from the bag, he gave him a blow with his hand on the back of the neck. The boy fell and the wheel of the waggon injured his foot:

Held, that in the circumstances the carter had implied authority to make reasonable efforts to protect and preserve the defendant's property, that the violence exerted was not so excessive as to take his act outside the scope of the authority, and the defendants were liable."

Of course, the principles concerning liability for the acts of the servant do have a bearing on the scope of employment. Scrutton LJ at p. 243 said:

"In cases of emergency any servant is bound to take reasonable steps to protect his employer's property. In Rees v Thomas [1985]1 QB 742 A.L. Smith LJ said: 'The deceased was acting in the interest of his master in an emergency which suddenly arose, and in which any one would, I should think, have tried to do the same thing. I think, therefore, that the accident arose out of his employment.' The Lord Justice lays stress upon the act being done 'in the interest of his mater.' That shows that an act is not placed beyond the scope of the servant's duty by the mere fact that it is not one of the class of acts which he is specially employed to do or that the time is not an hour at which he is ordinarily at work.... In the present case the man Hall, a carter in the employment of the respondents, saw his employer's waggon, with regard to which he had no special duty at the time, apparently being robbed by boys. He honestly and reasonably believed that his employer's property was being stolen. He took action either to prevent the theft or a repetition of it. Maybe his action was mistaken and maybe the force he used WAS excessive; he might have pushed the boy instead of striving him. But that was merely acting in excess of what was necessary in doing an act which he was authorized to do. The excess was not sufficient to take the act out of the class of authorized acts. and therefore the learned judge was wrong and the appeal must be allowed"

Atkin LJ (as he then was) gave a judgment supporting the proposition.

Conclusion

24. In this case the fact that the property, the cylinder, was on the employer's premises and was known by the deceased to have fallen into the sea and therefore was at risk is a significant matter. It seems to me that it signifies nothing if he thought that the property belonged to someone else. The employer was in due course going to be answerable to Mr Yeung, a customer who would have paid for the use of the jetty. The employer may well have been answerable to him. The above principle was, therefore, relevant to this appeal.

25. This approach, it seems to me, is also supported by the Ordinance itself. I refer to s.5(4)(b), the relevant part of which read:

"(b) an accident to an employee shall be deemed to arise out of and in the course of his employment, notwithstanding that the employee was at the time when the accident happened acting in contravention of any statutory or other regulation applicable to his employment, or of any orders given by or on behalf of his employer, or that he was acting without instructions from his employer, if such act was done by the employee for the purposes of and in connection with his employer's trade or business,"

The principle advanced by Mr Wong, supported by Poland's case and the above sub-section of the Ordinance, is sufficient to demonstrate that the judge ought to have found on the salient facts as proved by the applicant that the deceased in seeking to recover the cylinder was not only acting in the course of his employment but he also had an accident which arose out of that employment.

26. For my part, for those reasons, I would allow this appeal.

Liu, J.A.:

27. As to whether the accident arose out of the deceased's employment, there was evidence to the contrary, but that is not to say that on the balance of probabilities in the final analysis, the very limited evidence there was would support the contention that the accident did not arise in the course of the deceased's employment or out of his employment.

28. The judge placed, so it would seem, undue weight on Mr Wong's evidence of the employer's instructions not to dive into sea without taking into account Madam Sin's concession that the deceased could enter the water, less than 10-foot deep, for retrieving the company's equipment. Moreover, there was no evidence whether ownership of the cylinder was known to the deceased, and it would seem to be quite immaterial, as it later transpired, that the cylinder was not the property of his company. This, the judge also seemed to have overlooked. These are the salient facts on which the judge made her erroneous findings adverse to the appellant. The features of this case before the judge are now before us, and there would seem to be no obstacle to this court's attempted re-visit of the situation on the same but largely undisputed material.

29. A worker, just coming back from tea-break, taking a colleague to a place where his employer operated, with very little said between them but tacit understanding, for the purpose of retrieving a cylinder - on these telling primary facts given in the judgment of my Lord, Mortimer V.P., the only realistic probability is that the deceased was seeking to serve his master within the scope of his employment. The predominantly logical conclusion from the scanty evidence is, clearly, that in attempting to retrieve the cylinder after tea-break the deceased's action was taken in or incidental to his employment.

30. I agree that the appeal should be allowed. I would set aside the order made by the judge and I would further order assessment of compensation to proceed.

Nazareth, Atg CJHC:

31. I agree with my Lords. I would add the following.

32. The central question in the appeal, as I see it, is whether the action of the deceased in diving to recover the cylinder falls within the course of his employment, or was incidental to his contract of service. I have no doubt that it does. As to the instruction not to dive which emerge as the major factor against that view, it simply converted the deceased's action to recover equipment which was part of his duties on the evidence and in the judge's finding, from an authorised to an unauthorised way of performing that duty. Moreover, all employees are deemed to have a discretion to act for the protection of their employer's property, see Clerk and Lindsell on Torts, 17th Edn paragraph 531 and Poland v John Parr & Sons [1927] 1 KB 236. That principle, it seems to me, must apply equally to the protection of property for which the employee thinks his employer is responsible which seems to me on the facts found by the judge to be the position here. That would bring the deceased's action in diving to recover the cylinder and the resulting accident within the scope and course of his employment. If that were not so, then it could not be other than incidental to his contract of service. It remains to say that if that action of the deceased was in the course of his employment and contract of service, then upon the particular facts here, the accident must have arisen out of the employment.

33. The appeal is accordingly allowed, and the matter remitted to the District Court for assessment of the compensation claimed.

[After hearing counsel]

34. The appellant is to have his costs of the appeal and below, and the appellant's own costs of the appeal and below to the extent that he was legally aided are to be taxed in accordance with the Legal Aid Regulations.

Representation:

Mr H. Y. Wong (M/s Lau Pau & Co) for Applicant/Appellant

Mr Walker Sham (M/s Hastings & Co) for Respondent/Respondent