Lui Kim -hung v. Mcconnell Dowell Constructors (Asia) Ltd and Others

DCEC000167/1981

Employee's Compensation - claim for damages - deceased was crushed to death while driving his bulldozer which overturned - hire of bulldozer inclusive of its driver supervision by sub-contractor and payment by main contractor - whether deceased was under contract of service or for services. Held: the test of being an employee does not rest on direct remuneration from main contractor and submission to orders alone, the emphasis is upon the mechanical traction done by deceased's own property in his own possession and control. The deceased was a "small businessman" and an independent contractor.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

WORKMEN'S COMPENSATION CASE NO.167 OF 1981

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Coram: H. Wong, D.J. in Court

Date: 20 May 1982

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JUDGMENT

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1. This is an application by LUI Kim-hung, father of the deceased LUI Ching-ho, against the 3 Respondents for compensation under Section 6 of the Employee's Compensation Ordinance, Cap.282.

2. It is common ground that on 10th December, 1980 the deceased met his death at Au Tau site in Yuenlong while driving a bulldozer, or rather a loader, as disclosed by the agreed notes of the proceedings of the Coroner's Court. The inquest also discloses that the deceased was seen operating his bulldozer along an upward slope when the machine rolled down, overturned and Fatally crushed its operator. The verdict of the Coroner was one of accidental death.

3. The applicant claims that the deceased was in the employment of 1st Respondent at the material time, whereas the defence contends that the deceased was then an independent contractor.

4. It is pertinent to mention at the outset that the Respondents did not give evidence or call witnesses, although the proprietor of third Respondent testified as a witness for the applicant. The case thus entirely depends on the testimony of the applicant's side and documents produced by parties.

5. Facts were not really in dispute. First Respondent was the main contractor of the project at Au Tau for the construction of a service reservoir. It sub-contracted the site formation to a joint-venture of second Respondent and Express Drilling Contractors Limited (referred to as E.D.) and, although the date and terms of that sub-contract are not known, it can be inferred that the transaction involved took place in early 1980. In this connection, it should be noted that Express Drilling originally appeared in the pleadings as a respondent but, following its recent liquidation proceedings, was no longer one at the hearing. Be that as it may, Express Drilling, while being in existence, in turn sub-contracted, at the later part of 1980, the removal of rocks and earth from its blasting operation of the hill to third Respondent which levied their charges by truckloads.

6. LUI Kim-hung (PW1), the deceased's father, stated that the deceased, aged 19, had set up his own firm of Ching Kee Engineering Co. (referred to as Ching Kee Co.) and in November 1980 purchased by instalments a bulldozer Model D75s for general hire. Evidence from LAU Man-ching (PW3), then foreman of Express Drilling and LAU Ying-wo (PW4) proprietor of third Respondent, discloses that it was the practice of the building construction trade that the hire of a bulldozer would include its driver as well. Thus, for the purpose of loading boulders and soil into his trucks in November, 1980 LAU Ying-wo, on behalf of Express Drilling, hired from Ching Kee Co. a bulldozer at $500.00 a day, plus $50.00 in overtime allowance, making in all $550.00 a day. This hire is confirmed by LAU Man-ching and the relevant hiring charges are corroborated by LUI Kim-hung.

7. At first the adopted system was for the main contractor to pay its head sub-contractor who would pay the second-contractor and so forth down the line and finally to the workers. The deceased was one of the recipients in this chain of payment. However, a conflict occurred between first Respondent and Express Drilling. towards the end of 1980, as a result of which first Respondent directly made payment to Express Drilling's sub-contractors and workers. Evidence on this change of method of remuneration is substantiated by LAU Kiu, of Express Drilling, who thus formed the view, which found support from LAU Ying-wo, that thenceforth the deceased would appear to become first Respondent's employee. Further proof of this new arrangement can be found in (a) Ching Kee Co.'s invoices, which LAU Ying-wo knew to have come from the deceased, to the effect that they were addressed to third Respondent but had first Respondent's name added onto them by first Respondent's site agent and (b) payment by first Respondent, on behalf of second Respondent, to LUI Ching-fat, the deceased's younger brother on 15th January 1981, which was after the accident, of a sum of $7,700.00 for 14 days' hire of machine D75s.

8. LUI Ching-fat and his father were uncertain about the deceased's exact position vis-a-vis the Respondents but were of the opinion that since the. deceased hired out his bulldozer and drove it at first Respondent's site, he should be deemed to be first Respondent's servant. LAU Man-ching held a different view and said that the deceased was employed by the bulldozer's owner whose identity was not known to him.

9. The Employees' Compensation Ordance, Cap.282 says in Section 2 "In this Ordinance, unless the context otherwise requires, the expression "employee" ..... means any person who has ..... entered into or works under a contract of service or apprenticship with an employer in any employment, whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, is oral or in writing".

10. It was said at one time that there were four factors concerning the relationship between employer and employee :(1) the employer's power of selection of his employee, (2) the payment of wages and other remuneration, (3) the employer's right to control the method of doing the work and (4) the employer's right of suspension or dismissal. However, this test was revised in the light of decided cases and it is now clear that none of the tests used is of universal application, because an employer may have a complete control over the manner in which a worker is to work for him and the work may be of a kind usually done by employees, but the worker may nevertheless be an independent contractor. In "Ready-Mixed Concrete (South East) Limited v. Minister of Pensions and National Insurance" (1968) 2 Q.B. 497, it was ruled that control by the employer was not sufficient to identify the contract as one of employment and that the other aspects of the contract must not be inconsistent with the relationship of employment.

11. In the present case there is lack of proof of a written agreement between Express Drilling and the deceased, so that it can be inferred that their contract was an oral one. From facts, I believe that Express Drilling hired a bulldozer from Ching Kee Co. which sent the deceased to operate it as part of the service. It was unknown to LAU Ying-wo, who recommended the hiring of that bulldozer for a daily period from 8.00 a.m. to 6.00 p.m. and LAU Man-ching Express Drilling's foreman who did not care who the driver of that bulldozer would be, that the deceased owned Ching Kee Co. Inherent in LAU Man-ching's evidence was also that the charge of $550.00 by Ching Kee Co. covered the hiring of the bulldozer and its driver and could not be apportioned between the use of the machine and the wages of its operator. LAU Kiu, another foreman of Express Drilling, simply said that his duty included the supervision of the deceased's work but did not elaborate on that aspect. In this regard I am of the view that such supervision was a superficial one, since the deceased was his own master in operating his bulldozer.

12. On the question of control Denning, L.J. (as he then was) said in "Bank voor Handel en Scheepvaart N.V. v. Stafford" (1959) 1 Q.B.248, 295 and repeated in his Hamlyn Lectures:

"In this connection I would observe that the test of being a servant does not rest nowadays on submission to orders. It depends on whether the person is part and parcel of the organisation".

13. Dixon, J. in his judgment of "Humberstone v. Northern Timber Mills" (1949) 79 C.L.R. 389 said:-

"The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's order and directions. In the present case the contract by the deceased was to provide not merely his own labour but the use of heavy mechanical transport driven by power, which he maintained and fuelled for the purpose.  The most important part of the work to be performed by his own labour consisted in the operation of his own motor truck .....   The essence of a contract of service is the supply of the work and skill of a man. But the emphasis in the case of the present contract is upon mechanical traction.  This was to be done by his own property in his own possession and control. There is no ground for imputing to the parties a common intention that in all the management and control of his own vehicle, ..... he should be subject to the commands of the Respondents. In essence it appears to me to have been an independent contract and I do not think that it was open to the Board to find otherwise."

14. Dixon, J. also referred to "Queensland Stations Proprietary Limited v. Federal Commissioner of Taxation" 70 C.L.R. 539 in which it was decided that the driver's contract was an independent contract in that his obligation to provide the men, the horses etc., determined its nature and made it, notwithstanding his submission to control, something other than a contract of service. Lord Wright's opinion in "Montreal v. Montreal Locomotive works Limited" (1947) 1 D.L.R. 161, P.C. was:

"..... It has been suggested that a fourfold test would in some cases be more appropriate, a complex involving (1) control; (2) ownership of tools; (3) chance of profit; (4) risk of loss. Control in itself is not always conclusive. Thus the master of a chartered vessel is generally the employee of the shipowner though the charterer can direct the employment of the vessel ....."

15. In the present case it is clear that the deceased stood to make a profit or incur a loss on his charge of $550.00 a day for the hire of his bulldozer and his service thereto.

16. Mackenna, J. rounding up his judgment of Ready Mixed Concrete's case, said:

"I have shown earlier that Latimer must make the vehicle available throughout the contract period. He must maintain it in working order ....., must hire a competent driver to take his place if he should be for any reason unable to drive it any time when the company requires the service of the vehicle ..... These are obligations more consistent, I think, with a contract of carriage than with one of service. ....."

17. Chitty on Contracts in Volume 2 at page 530 paragraph 3508 says: "Once the relevant facts have been ascertained, the determination whether it is a contract of employment or not is a question of placing the correct legal interpretation upon those facts." In my view, the deceased's position is not dissimilar from that of the workers in Humberstone's case or that of Latimer in Ready Mixed Concrete's case. I thus hold that as the ownership of the bulldozer, the chance of profit and the risk of loss in the business of Ching Kee Co. were the deceased's, the deceased was what can be termed a "small businessman" and an independent contractor. His contract with Express Drilling was thus one for services and not of service. And since there is no employer and employee relationship between the Respondents and the deceased, this application on the basis that the deceased was an employee of Respondents must fail and is therefore dismissed.

Representation:

Mr. W.R. Marriner, instructed by Director of Legal Aid, for Applicant

Mr. F.K. Au (Johnson, Stokes & Master) for Respondents