Cheng Wai Yin Timothy v. Lung Fung Estate Agency O/B Legend Star Development Ltd.

DCEC000797/2000

DCEC797/2000

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 797 OF 2000

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Coram: H.H. Judge Li in court

Date of Trial: 20 and 21 August 2001

Date of Handing Down Judgment: 24 September 2001

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JUDGMENT

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In this matter, the Applicant claims against the Respondent compensation under sections 9, 10 and 10A of the Employee Compensation Ordinance, Cap. 282 ("the Ordinance") for injuries received when a gang (identities of its members unknown) barged into the Respondent's office and attacked the Applicant and some of his colleagues. The status of the Applicant as an employee of the Respondent is admitted.

2.According to the Respondent's written submission, the Respondent's defence is on the following grounds:-

" (a) the incident was occurred not in the course of the Plaintiff's employment but due to his personal grudge with the assailants.

(b) if the Court shall hold that the incident was occurred in the course of the Plaintiff's employment, the Respondent would rely on the fact that the Plaintiff had submitted resignation with effect from 31/12/1998 and had commenced his employment with a Ka Lok Realty Limited. It was an agreement between the Plaintiff and the Respondent that all claim would be "settled" in light of the advance given to the Plaintiff by the Respondent.

(c) if the Court shall hold that any agreement in respect of the compensation for the Plaintiff's claim under Section 10 of the Ordinance is void by virtue of Section 31 of the Ordinance, the amount paid by the Respondent to the Plaintiff shall be deducted from the compensation to be awarded. In addition, the amount so paid must be deducted as the same was paid for total failure of consideration if the agreement in respect of compensation is held to be void.

(d) The Respondent shall seek deduction from the compensation to be award by the income earned by the Plaintiff from the employment with Ka Lok Realty Limited."

Liability

3.At the time of the incident, the Applicant was 29 years old and was working as an estate agent for the Respondent who at all material times was and is running business as an estate agent company.

4.The incident occurred on 2nd October 1998 at about 9.30 p.m. while the Applicant was working in the Respondent's Branch No. 4 located at Shop No. 19, Ground Floor, Fortune Plaza, Tai Po, New Territories. Suddenly, three young males unknown to Applicant rushed in, each of them holding weapons of 2 to 3 feet long wrapped with white plastic bags. The Applicant tried to fetch the telephone set and dial 999. However, before he was able to do so, he was attacked by one or more of the said young males with heavy objects. He sustained injuries to his head and elbow. Although witnesses at the trial (who were not at the scene) called by the Respondent denied it, it is evident from a statement given by a manager ("Mr. Cheung") of the Respondent to the police that at least one colleague of the Applicant also received injuries during the same incident. It is said on behalf of the Respondent that the fact that no one else claimed employee compensation against the Respondent shows that no one other than the Applicant was injured in the same incident. The number of employees injured in an incident, in the particular context of this case, if more than one, may strengthen the Applicant's case that the attack was aimed at the Respondent's office rather than the Applicant alone. On the other hand, the fact that only the Applicant was injured does not necessarily lead to a reasonable inference that the Applicant was singled out for attack due to personal grudge. So the number of persons injured during the incident is only a minor factual issue. Still, I have no doubt that the statement by the manager (who was in charge of the branch office and present at the scene) to the police told the truth. That statement to the police, it should be noted, is agreed evidence and the Respondent did not call the manager to give evidence.

5.The Respondent's case that there was no accident but a deliberate assault on the Applicant for a personal grudge is, to say the least, very flimsy. The Respondent called only two witnesses in this regard - one Mr. Chung a director of the Respondent company who in fact owned and managed the Respondent company but was not based in the branch office where the incident occurred and had no direct dealings with the Applicant until after the incident.

6.Counsel for the Respondent summarized the evidence of Mr. Chung as follows:-

" (i) Mr. Chung was reported of the incident by the manager Mr. Cheung after the occurrence of the incident.

(ii) Mr. Chung asked Mr. Cheung to investigation into the matter.

(iii) Mr. Cheung reported that the incident was occurred due to the personal grudge with the husband of a female whom the Plaintiff was dating.

(iv) The Plaintiff admitted to Mr. Chung of the said personal grudge and asked for the transfer to employment location from Tai Po area to Fanling or Sheung Shui areas.

(v) Upon refusal of the said transfer of employment location, the Plaintiff submitted his resignation. The documentation of the resignation of the Plaintiff was handled by Miss Ma So Ching upon the instruction of Mr. Chung Fai Wing.

(vi) After the said resignation, Mr. Chung saw the Plaintiff working at the office of Ka Lok Realty Limited in Lung Fung Garden, Sheung Shui, New Territories, Hong Kong."

7.The Respondent also called one Ms. Ma, a business manageress based at the Respondent's head office. Ms. Ma said in evidence that the manager Mr. Cheung told her that the Applicant was assaulted because of his improper relationship with a woman.

8.Counsel also attacked the Applicant's case in these terms:-

"`(iv) in the Plaintiff's first statement to the Police, the Plaintiff gave a statement to the effect that he told the Police that three men came into the office and looked for someone. When one of them saw the Plaintiff, the man shouted that [he was] here and went forward to assault the Plaintiff.

(v) when the Plaintiff was cross examined on the said first statement, the Plaintiff denied he had given the said sentence to the police statement taker and alleged that the said sentence was written by the police statement taker without his prior knowledge and approval.

(vi) the Plaintiff further said that on about 13-01-1999, the police invited him to give another statement to clarify the position out of the own motion of the police but not initiated by the Plaintiff himself."

9.First of all, I should point out that Mr. Chung's performance in the witness box did not come across as convincing. Leaving aside demeanour, there are factors that make me highly skeptical of the veracity of Mr. Chung. It is undisputed fact that the Respondent did not have compulsory employee compensation insurance covering the employees of the branch office where the incident occurred. After the incident, the Respondent did not file the statutory Form 2 with the Labour Department. The Form 2 was eventually filed a year later; by that time, the Respondent according to its own case had learned that the incident was a personal matter unrelated to employment and yet in the Form 2 the Respondent stated that the cause was still under investigation.

10.As to Ms. Ma's evidence, plainly, there is no reason to give any weight to what she said in relation to the cause of the assault.

11.Bearing further in mind that Mr. Cheung, the manager, was not called to give evidence, I see clearly clumsy contrivance on the part of the Respondent to create a case to defeat the Applicant's claim. I do not believe Mr. Chung's evidence at all. Even if, and I stress he is considered an unreliable witness, Mr. Chung told the truth, the allegation of a personal grudge is hearsay upon hearsay from unattributed source or sources. It is quite dangerous to rely on bare assertions of rumours.

12.The Applicant stood firm in the witness box. He denied any personal grudge and denied that he made any admission to Mr. Chung as alleged by the latter. He was unshaken by cross-examination. His explanation as to the inconsistencies in his two statements to the police is that he was confused at the time of the giving of the first statement. The explanation is acceptable. He was injured in the head at some time after 9 p.m. He gave the first statement to the police less than 2 hours later at 11 p.m. when his mental state and physical condition could not be in the best form.

13.Even if the Applicant was singled out for attack, there is no admissible or reliable evidence that it was due to personal grudge. The Applicant might have unwittingly offended a business competitor who sought to ventilate his gall by violent means. The fact that the attack was carried out at the office, rather than the Applicant's home or outside the office, is ground to hold that on the balance of probabilities the attack was business related.

14.Counsel for the Applicant has helpfully referred me to a passage by Lewis which says:-

"In considering whether a claimant was acting within the course of employment the first question to be asked are whether the accident occurred at the place of work ... and whether it happened during working hours ... If the claimant's answers are satisfactory on these points a preliminary case for benefit is established."

(Butterworth's Hong Kong Personal Injury Service page IV [104])

15.As I understand it, compensation is payable for "accident" only. Whether an incident is an "accident" in the context of employee compensation should be determined by asking the question: could the incident occur to any other employee in the same position as the Applicant? The fact that the incident was the result of a planned or deliberate action is immaterial. For instance, if workers in a factory were injured as a result of an arsonist setting fire to the factory, clearly the workers cannot be denied compensation on the ground the fire was started deliberately. In the instant case, even if the Applicant was singled out for attack, it was more likely be due to a business dispute in the course of employment, such dispute leading to personal attack can happen to any colleague of the Applicant and indeed any employee.

16.Taking all factors and circumstances into consideration, I have little difficulty in finding that the incident was an accident in the course of the Applicant's employment.

17.Once the court finds that there was an accident, Section 5 (4) (a) of the Ordinance provides that "for the purpose of this Ordinance, 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 instant case is a classic example where the statutory presumption applies. There is no credible evidence from anywhere that rebuts this presumption.

18.Accordingly, I hold that the Respondent is liable.

Quantum

19.Mr. Chung and Ms. Ma of the Respondent gave evidence that the Applicant signed a resignation letter and has resigned from the Respondent with effect from 31st December 1998. If their evidence is believed, the Respondent argued, the Respondent is not liable to compensate the Applicant for sick leave or loss of earnings after 31st December 1998.

20.Counsel for the Applicant suggested that the Respondent's case regarding the "resignation" is a vain attempt to reduce quantum by fabricated evidence. As a matter of fact, counsel contended, the Applicant was tricked into signing the resignation letter.

21.The Applicant gave evidence that at the time of signing of the resignation letter with the Respondent, he was requested by the Respondent to transfer from Branch No. 4 to Branch No. 3. The Respondent then gave him two documents: one was to record that he would resign from Branch No. 4 and the other was to record that he would start working in Branch No. 3 after he had recovered from his injuries. Relying on the inducement and representations of the Respondent, the Applicant signed on those two documents. In the premises, he had not resigned from the employment of the Respondent and no agreement to settle the employees' compensation claim as alleged had ever been reached. However, after signing on those two documents, the Applicant was not given the documents or any copy thereof by the Respondent and therefore he could not adduce any documentary evidence to prove his case in that respect.

22.For reasons already given, I do not regard Mr. Chung and Ms. Ma as credible witnesses. Moreover, there is absolutely no reason for the Applicant to resign, thereby giving up compensation, when he had not fully recovered. I am inclined to, and do, believe the Applicant told the truth with regard to the circumstances in which he signed the resignation letter.

23.Even if the Applicant did resign, there are at least two legal grounds on which the Respondent must be held liable to compensate the Applicant after 31st December 1998. First, as counsel for the Applicant pointed out, Section 31 of the Ordinance reads:

"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 and in so far as it purports to remove or reduce the liability of any person to pay compensation under the provisions of this Ordinance."

Section (2) provides that the Commissioner for Labour could authorize the injured person and the employer to enter into an agreement in writing to reduce or give up the right of receiving compensation by the injured person if the accident was caused or contributed to by the old age or serious physical defect or infirmity of that person. Since there has been no involvement of the Commissioner for Labour in any matter relating to any alleged agreement, the resignation letter which is in the effect an agreement purported to reduce or relinquish the Respondent's liability is null and void.

24.Secondly, as I pointed out in court, it is common fallacy that compensation ceases upon termination of employment. The whole scheme of compensation under the Ordinance is designed to secure compensation for work related injury. The injury does not diminish upon termination of employment. Suppose an injured worker has to have 2 years' sick leave, he would be entitled to stay off work for 2 years. Of course if the employee resumes working for another employer during the sick leave period, his earnings will be taken into account in reduction of compensation. The reduction is not based on the ground of his changing employment, but on the ground of reduction in losses. Termination of employment, per se, does not result in reduction of loss of earnings. The Ordinance actually envisages compensation under section 10 to be payable even after termination of employment:-

10. Compensation in case of temporary incapacity

(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 medical 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.

(3) Periodical payments under this section shall be payable on the same days as wages would have been payable to the employee if he had continued to be employed under the contract of service or apprenticeship under which he was employed at the time of the accident:

Provided that-

(a) by agreement or by order of the Court, the periodical payments may be made at shorter intervals; and

(b) the interval between periodical payments shall not exceed 1 month. (Emphasis added)

25.The Respondent alleged that the Applicant worked for Ka Lok Realty for a period of time after he had resigned and so his earnings from Ka Lok Realty should be taken into account. The basis of the allegation is no more than an assertion by Mr. Chung in the witness box. There is no document in support. No attempt was made to subpoena Ka Lok Realty to verify the allegation. The Applicant flatly denied ever having worked for Ka Lok Realty. I find that the Ka Lok Realty Employment is another red herring.

26.The Respondent further contended that the length of sick leave is not 183 days as the Applicant claimed because the Certificate of Assessment issued by the Employees' Compensation (Ordinary Assessment) Board shows sick leave for a total of 140 days only. Clearly the Board was misinformed. The Applicant has produced a set of sick leave certificates that add up to 183 days.

27.The Respondent claimed credit for $15,000 advanced to the Applicant. This is admitted by the Applicant.

Judgment

28.Accordingly, I give judgment for the Applicant for:-

(1) compensation under section 9 of the Ordinance at HK$10,362.24 as admitted by the Respondent;

(2) compensation under section 10 of the Ordinance at

$415.15 x 183 x 4/5 = $60,777.96;

(3) compensation under section 10A of the Ordinance at $2,762 as admitted by the Respondent;

(4) interest on the total of (1), (2) and (3) above at half judgment rate from the date of accident to the date of judgment and thereafter at full judgment rate until payment;

(5) costs of the action to the Applicant be taxed if not agreed;

(6) the Applicant's own costs be taxed in accordance with legal aid regulations.

Representation:

Ms. Marie Tsang of M/S Marie W.Y. Tsang &Co. assigned by DLA for the Applicant.

Mr. Ko Kowk Fai of M/S Ko & Chow for the Respondent.