Ou Xiyuan v. Lili Lili Company Ltd and Another

DCEC 302/2019

[2024] HKDC 1156

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 302 OF 2019

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IN THE MATTER OF AN APPLICATION BETWEEN

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ASSESSMENT OF COMPENSATION

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A. Introduction

1.This is the trial for assessment of compensation under the Employees’ Compensation Ordinance (Cap 282) (“ECO”).

2.Pursuant to sections 9, 10 and 10A of the ECO, the Applicant claims compensation against the 1^st Respondent in respect of the injury that he suffered in an accident that took place on 15 August 2018 (the “Accident”)

3.The 1^st Respondent was the Applicant’s employer. It did not contest the claims in the present proceedings. As such, interlocutory judgment was entered on 28 December 2023.

4.Pursuant to Her Honour Judge Levy’s order dated 28 December 2022, leave was granted to the Employee’s Compensation Assistance Fund (the “Fund”) to participate in the present proceedings in relation to the issues on quantum.

5.The Applicant was represented by Ms Linda Cho, and the Fund was represented by Ms Flora Lam.

B. Factual Background

6.The 1^st Respondent operated a plastic factory.

7.The Applicant started working for the 1^st Respondent on 29 July 2018. His job duties were concerned with operating a filtering machine. The Applicant says that he earned a daily wage of HK$1,200.

8.On 15 August 2018, the Accident took place. The Applicant was 42 years’ old at the time.

9.According to the Applicant, he was asked to remove trash with his hands from a filtering machine, and no screen filter was provided to him. In the circumstances, the Applicant’s right hand was crushed by the machine.

10.The Applicant attended the Accident and Emergency Department of Pok Oi Hospital immediately after the Accident occurred. He suffered from deep longitudinal lacerations of 4 cm over his right middle finger and ring finger with bone exposed. The X-ray examination further revealed that there was dislocation of right middle finger distal interphalangeal joint and fracture of right ringer distal phalanx.

11.In light of the severity of the injury, the Applicant was immediately transferred to Orthopedics Department of Tuen Mun Hospital. There, the Applicant underwent emergency operation for tendons repair and fixation of fractures. As revealed by intra-operative findings, there were extensor tendon laceration with substance loss at both middle and right fingers, radial digital nerve complete laceration, flexor digitorum profundus partial laceration, joint capsule substance loss and cartilage defect at right middle finger. The Applicant was discharged on 17 August 2018.

12.Due to wound infection with osteomyelitis of right middle finger and ring finger, on 26 August 2018 the Applicant was admitted to Caritas Medical Center. He was subsequently transferred to Tuen Mun Hospital where he was treated with multiple operations and medications. He was discharged on 5 November 2018.

13.On 14 November 2018, the Applicant was admitted to Tuen Mun Hospital where he underwent operation for iliac bone graft to his right and middle fingers.

14.As of 2 May 2019, the Applicant had attended no less than 21 sessions of physiotherapy sessions.

15.According to Dr Lau and Dr Ko who examined the Applicant and who prepared a joint medical report dated 15 April 2023 that was filed in these proceedings as expert evidence, the Applicant suffered the following disabilities:-

(1) Impaired mobility of the joints of the ulnar 4 fingers of his right hand, which was mild for the index and little fingers but significant for the middle and right fingers;

(2) Ankylosis of distal interphalangeal joint of middle and right finger;

(3) Hyperesthesia over proximal and distal phalanges of middle and right finger; and

(4) The power of the Applicant’s right hand grip being weaker than the power of his left hand grip.

16.However, Dr Lau and Dr Ko were not of the view that there was significant muscle wasting in the muscle bulk of the Applicant’s right forearm.

17.The Applicant was granted sick leave of 683 days during the period from 15 August 2018 to 26 August 2020.

18.According to the Form 9 dated 21 June 2021, the Employee’s Compensation (Ordinary Assessment) Board (the “Compensation Board”) assessed that the loss of earning capacity permanently caused by the injury was 6%.

19.The Applicant and the Fund respectively filed notices of appeal pursuant to sections 18 and 18A of the ECO, seeking to appeal against the assessment carried out by the Compensation Board. The Applicant initially suggested that his loss of earning capacity should be 7%, whereas the Fund suggested that the appropriate figure should be between 5% and 6%.

C. Section 9 Compensation

C1. The Stance of the Parties

20.It is not in dispute that for the purpose of computing compensation under section 9 of the ECO in the present scenario, section 7(1)(b) and the Sixth Schedule are applicable. Pursuant to these provisions, the Applicant is entitled to (i) a lump that is equal to 72 times of the statutory cap of HK$28,360; or (ii) a lump sum that is equal to 72 months’ earnings, whichever is the less.

21.In their written opening submissions, the parties engaged in a lengthy debate as to the appropriate basis for determining the Applicant’s monthly earning as well as the evidence in support of the Applicant’s claim.

22.Through the effort of Counsel, the parties eventually agreed that the Applicant’s monthly earnings were HK$25,200. This was on the basis that he worked 21 days a month and earned HK$1,200 each day. I am of the view that this consensus makes sense, and is consistent with the evidence before the Court.

23.The parties also agreed that the Applicant’s loss of earning capacity was 6%. With this consensus, the parties no longer pursue their respective appeal against the Compensation Board’s assessment.

24.The methods of calculating the employee’s monthly earnings at the time of the accident are set out in section 11 of the ECO. The provisions that are relevant for present purposes read as follows:-

“(1) Subject to this section, for the purposes of this Ordinance the monthly earnings of an employee at the time of the accident shall be the earnings ―

(a) for the month immediately preceding the date of the accident; or

(b) computed in such manner as is best calculated to give the rates per month at which the employee was being remunerated during the previous 12 months if he has been so long employed by the same employer, but, if not, then for any lesser period during which he has been employed by the same employer,

whichever calculation is more favourable to the employee.

(2) Where by reason of the shortness of the time during which an employee has been in the employment of his employer or of the casual nature of the employment, or of the terms of employment, it is impracticable to compute the rate of remuneration of such employee at the date of the accident, regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed at the same work by the same employer, or, if there is no person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district.”

25.As pointed out, whilst the Applicant started working for the 1^st Respondent on 29 July 2018, he was injured on 15 August 2018. The period of employment was less than 1 month.

26.At the hearing, Ms Cho indicated the Applicant accepted that it is not appropriate to invoke section 11(1)(a) in the circumstances of the present case.

27.This is correct. As pointed out by Cheung JA in Lai Cheung Kwong v Lo King Sum [2008] 3 HKLRD 643 at para 6, sections 11(1)(a) and 11(1)(b) of the ECO must be read in conjunction with each other. These provisions are concerned the scenario where the injured employee was employed by one single employer. It appears that there is no room to include the salaries paid by another employer before the employment commenced. In any event, the Applicant has not adduced any evidence as to his earning before he started working for the 1^st Respondent on 29 July 2018.

28.In my view, the appropriate basis for computing the Applicant’s monthly earnings is the 2^nd limb of section 11(1)(b).

29.In Or Wing Ming v Ho Bing Chi [2008] 2 HKCLRT 20 at paras 5-7 and 33-46, the majority of the Court of Appeal (ie Yeung JA and Chung J) held that the phrase “lesser period” under the 2^nd limb of section 11(1)(b) could be less than 1 month. It was held that an employee who was employed for less than 1 month could rely on this section so long as it is practicable to calculate his/her monthly earnings[1]. Chung J (with whom Yeung JA agreed) took the view that this approach accorded more flexibility, and could ensure that employees who suffer injuries at work would be given reasonable compensation (see para 4). As pointed out by Chung J (see paras 41-42), the salary of the employee was usually agreed when or before the employment commenced. In this scenario, it would not be necessary to invoke section 12, which is only applicable when it is impracticable to compute the employee’s rate of remuneration.

30.In light of the consensus reached by the parties as well as the evidence before me, there is no question that it is practicable to calculate or determine the Applicant’s monthly earnings. He earned HK$1,200 each day, and was expected or required to work 21 days a month at the time when the Injury occurred. Thus, his monthly earnings were HK$25,200.

31.Accordingly, the Applicant is entitled to compensation of HK$108,864 (HK$25,200 x 72 x 6%) pursuant to section 9(1) of the ECO.

D. Section 10 Compensation

D1. The Stance of the Parties

32.Pursuant to section 10(1) of the ECO, an injured employee is entitled to a monthly payment of fourth-fifths of the difference between the monthly earnings which he was earning at the time of the accident and the monthly earnings which he is earning or capable of earning during the period of his temporary incapacity after the Accident.

33.In the Form 9, the Compensation Board certified a sick leave period of 683 days. Ms Cho submits that this aligns with Dr Lau’s opinion, and is appropriate.

34.Ms Lam for the Fund disagrees. She submits that the Applicant could have resumed employment on 2 September 2019, and hence the appropriate sick leave period should be 482 days.

35.In Tam Fu Yip Fip v Sincere Engineering & Trading Company Limited [2008] 5 HKLRD 210 at para 18, Le Pichon JA, in the context of a personal injury claim, held that the Court is not bound by the mere issue of sick leave certificates, and the same are no more than a piece of evidence that has to be evaluated in light of all the available evidence.

36.In Cheung Sau Lin v Tsui Wah Efford Management Ltd [2018] HKDC 941 at paras 18-22, His Honour Judge Harold Leong, following Tam Fu Yip Fip, also pointed out that the Court may scrutinize the circumstances in which the sick leave certificates were provided, and consider whether they were given reasonably in light of all other available evidence including the medical evidence before the Court.

37.Ms Lam draws my attention to a series of rehabilitation assessment reports prepared by occupational therapists:-

(1) According to the report dated 23 September 2019, the Applicant indicated that he was expected to resume working as a factory working after Chinese New Year. However, the occupational therapist who prepared the assessment report opined that the Applicant was not ready to meet job demands, and there was a “significant degree of limitation”.

(2) According to the report dated 1 November 2019, the Applicant could barely lift and carry a bag of plastic materials that was 25 kg, and he could not use shovel to transfer plastic beads to buckets. As such, the occupational therapist who prepared the report opined that the Applicant only “marginally match[ed]” work demands, and he could only “manage certain work tasks if special arrangement [was] offered”.

(3) According to the report dated 9 December 2019, the Applicant indicated that he attempted to hunt for jobs in plastic factories, but he found out that many factories had moved to India. The Applicant also stated that he planned to resume working in factories after Chinese New Year. Again, the occupational therapist who prepared this report opined that the Applicant only “marginally match[ed]” work demands, and he could only “manage certain work tasks if special arrangement [was] offered”.

38.The Applicant was extensively cross-examined by Ms Lam with regard to the contents of the aforesaid reports. He frankly admitted that he attempted to look for jobs in plastic factories as early as September 2019 but of no avail.

39.Based on the opinion expressed by the occupational therapists in the aforesaid reports, it appears that the Applicant was not fully ready to resume work as of September 2019. When the Applicant gave oral evidence, he, in tears, explained that he faced tremendous financial pressure at the time, and this caused problems to his family. He said that he was urgently in need of money at the time. This was why he ventured to look for jobs in factories (which offered decent wages) when he might not be completely ready.

40.I accept the Applicant’s evidence, which is largely consistently with the contents of the rehabilitation assessment reports. I am not of the view that the sick leave period shall only be extended to early September 2019

41.During cross-examination, the Applicant agreed with Ms Lam’s suggestion that around December 2019 he subjectively felt that he was capable of returning to work. This admission is consistent with contents of the rehabilitation assessment reports, which show the Applicant indicated to the occupational therapists that he would resume working after Chinese New Year.

42.Taking into account the totality of the evidence (including the opinion expressed by Dr. Lau and Dr. Ko, the opinion expressed by the occupation therapists, the contents of the rehabilitation assessment reports and the Applicant’s evidence), I am of the view that sick leave shall be granted up to 15^th January 2020, i.e. a period of 17 months since the date of the Accident (which was 15^th August 2018).

43.In the premises, the Applicant is entitled to a sum of HK$342,720 (HK$ 25,200 x 4/5 x 17 months) pursuant to section 10 of the ECO.

E. Section 10A Compensation

44.The medical expenses incurred by the Applicant are evidenced by the receipts and statements issued by Tuen Mun Hospital, Caritas Medical Center and United Christian Hospital.

45.The parties agree that the Applicant did incur medical expenses in the total amount of HK$17,007.

46.I hold that the Applicant is entitled to compensation of HK$17,007 pursuant to section 10A(1) of the ECO.

F. Advance Payments

47.The Applicant shall give credit in respect of the advance payments that he received.

48.According to the contemporaneous correspondence, records and documents, the Applicant received the following advance payments (which are set out to in paragraph 89 of Ms Cho’s opening submissions):

Date	Description	Amount
1 Sep 2018	Periodical Payment and Salary	HK$4,800
18 Sep 2018	Periodical Payment	HK$13,000
3 Oct 2018	Periodical Payment	HK$10,000
7 Nov 2018	Periodical Payment	HK$25,000
7 Dec 2018	Periodical Payment	HK$25,000
31 Dec2018	Medical Expenses	HK$10,043
1 Feb 2019	Medical Expenses	HK$4,685
27 Nov 2020	Periodical Payment	HK$54,130
	TOTAL:	HK$146,658

49.As stated in the letter dated 15 March 2021 from the 1^st Respondent’s former solicitors, the sum of HK$16,800 paid on 1 September 2018 represented periodical payments as well as salary. However, the letter was silent on the apportionment.

50.In light of this confusion, the question of apportionment was explored at the present trial.

51.Having considered the Applicant’s oral evidence and explanation, Ms Lam fairly (and in my view rightly) accepts that the figure as stated in paragraph 89 of Ms Cho’s opening submissions (ie HK$146,658) is correct.

52.I accordingly hold that there should be a deduction of HK$146,658.

G. Conclusion and Order

G1. Compensation

53.For the reasons set out above, I hold that the Applicant is entitled to compensation in the total sum of HK$321,933, the breakdown of which is as follows:-

Section 9	HK$108,864
Section 10	HK$342,720
Section 10A	HK$17,007
Sub-Total	HK$468,591
Less: Advance Payment	(HK$146,658)
TOTAL:	HK$321,933

G2. Interest

54.The Applicant is entitled to interest at half judgment rate from the date of the Accident (ie 15 August 2018) to the date of assessment and thereafter at judgment rate until the date of payment.

G3. Costs

55.I am of the view that the Fund did not take a hostile or adversarial stance in the present proceedings. Like the scenarios in other cases, the Fund participated in the present proceedings for the purpose of safeguarding public interest and ensuring that the assistance mechanism that involve public funding would not be abused: see Employees Compensation Assistance Fund Baord v Woo Chun Wah (2019) 22 HKCFAR 495 at para 45; Lee Wai Kin v. San Xing (China) Trading Limited [2019] HKCFI 361 at paras 107-109.

56.In the premises, I accept Ms Lam’s submissions that the appropriate costs order to made is that:-

(1) There be no order as to costs between the Applicant and the Fund.

(2) The 1^st Respondent do pay the costs (including all costs previously reserved) of Applicant and the Fund in these proceedings (with certificate for Counsel), to be taxed if not agreed.

(3) The Applicant’s costs (until the discharge of Legal Aid Certificate) be taxed in accordance with the Legal Aid Regulations.

H. Other Matters

57.I express my gratitude to Ms Cho and Ms Lam for their helpful assistance. 

Ms Linda Cho, instructed by C. M. Chow & Company, for the applicant

The 1^st respondent was not represented and did not appear

Ms Flora Lam, instructed by Cheng, Yeung & Co, for the 2^nd respondent