Chung King Fung v. Faith Dental Supplies Co. Ltd. and Another
Read the full judgment text of on BabelCite. was delivered on 26 September 2000.
2. At about 7:45 p.m. on 12 June 1997, while walking back to his quarters from the workshop of Yue Cheng Dental Technology Development Co. Ltd. ("Yue Cheng") which was affiliated to the Guangdong Provincial Orthodontic Hospital in Guangzhou, Mr. Chung was robbed and attacked. As a result, he sustained serious injuries and was in a coma. Although immediately rushed to the Zhujiang Hospital in Guangzhou for emergency treatment, he remained unconscious in hospital for more than two months. In mid-A
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DCEC000427X/1999 [English Translation - 英譯本] DCEC427/99 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES' COMPENSATION CASE NO. 427 OF 1999 IN THE MATTER OF AN APPLICATION BETWEEN:-
Coram: Judge Z. E. Li Dates of Hearing: 11-12 September 2000 Date of Handing Down Judgment: 26 September 2000 ________________ JUDGMENT ________________ The Applicant Chung King Fung ("Mr. Chung") who was born on 7 December 1945 in Guangzhou, lived, worked and married on the Mainland. In the eighties, Madam Nip Siu-ha, his wife, moved to settle in Hong Kong. In 1993, Mr. Chung came to Hong Kong together with his daughter on a one-way permit for reunion with his wife. Six months later he went back alone to Guangzhou to make a living. 2.At about 7:45 p.m. on 12 June 1997, while walking back to his quarters from the workshop of Yue Cheng Dental Technology Development Co. Ltd. ("Yue Cheng") which was affiliated to the Guangdong Provincial Orthodontic Hospital in Guangzhou, Mr. Chung was robbed and attacked. As a result, he sustained serious injuries and was in a coma. Although immediately rushed to the Zhujiang Hospital in Guangzhou for emergency treatment, he remained unconscious in hospital for more than two months. In mid-August 1997, Mr. Chung was transferred to the Gangwan Hospital in Guangzhou after regaining consciousness. According to the medical certificate issued by Gangwan Hospital, Mr. Chung was diagnosed as having brain stem damage, brain contusion, cerebral haemorrhage and fracture at the base of skull, which were classified as serious brain damage. In late November of the same year, Mr. Chung went back to Hong Kong for treatment in hospital until February 1998. Upon discharge from hospital, he attended the Outpatient Department of the Prince of Wales Hospital for medical and physiotherapy treatment until mid- June 1998. 3.As Mr. Chung still had to be attended to after recovery from the injuries and received no income, his wife divorced him. With a broken marriage, he was also driven out of the matrimonial home by his (former) wife. Having nobody in Hong Kong to turn to for help, he returned to Guangzhou where he was maintained and looked after by his elderly father and brothers. Whilst he was in Guangzhou, he still attended the Gangwan Hospital and the Red Cross Hospital for treatment. At the trial, Mr. Chung attended court to give evidence. I observed that he could manage to walk when helped by the arm though he had a poor vision. He broke into tears in the witness box when he thought of how lonely, helpless and unfortunate he was. This shows that although there is obviously a general debility in his physical strength and his memory sometimes fails and response sometimes slow, he has more or less recovered mentally. It is indeed a fortunate break amidst misfortune. 4.After Mr. Chung had suffered injuries in the robbery, the Faith Dental Supplies Co. Ltd. in Hong Kong ("Faith") filed a notice ("Form 2") with the Labour Department in Hong Kong on 23 June 1997 pursuant to section 15 of the Employees' Compensation Ordinance to report the accident of its employee. It is stated therein that Mr. Chung was an employee of Faith employed in Hong Kong and his monthly salary was HK$15,000. Later, on 1 August 1997, Faith filed a "Notice of Change of Particulars" with the Labour Department in Hong Kong in which it is stated that the monthly salary taking into account year-end double pay of Mr. Chung should be HK$16,250 per month. Following specified procedure, the Employees' Compensation (Ordinary Assessment) Board issued a Certificate of Review of Assessment with the finding that the permanent loss of earning capacity of Mr. Chung arising out of the injury was assessed at 24%. As I understand it, all parties in the present proceedings accept the Certificate of Review of Assessment to be correct. 5.Faith is the 1st Respondent of the present proceedings. Throughout it maintains the position that Mr. Chung was its employee. The 2nd Respondent is the insurer of Faith (1st Respondent) for employees' compensation. It was not brought into the present proceedings by Mr. Chung under section 44 of the Employees' Compensation Ordinance, rather it joined as a party on its own motion. Mr. Chan, counsel for the 2nd Respondent argued on three points. First, Mr. Chung was not an employee of Faith; secondly, he was not injured in the course of employment; thirdly, his salary was not as stated in the claim. Mr. Chan confirmed that it is not necessary for the court to have regard to, or to decide on, any dispute between Faith and the 2nd Respondent in relation to the employees' compensation insurance policy. If the court finds that Faith is liable to Mr. Chung for compensation, the 2nd Respondent is also similarly liable. Employment Relationship 6.It is the evidence of Mr. Chung that Mr. Li Si-kwong (Mr. Li), a director and the de facto boss of Faith, in 1995 offered to employ him as a staff stationed in Guangzhou to manage the said Yue Cheng Workshop on behalf of Faith. Board and lodging would be provided plus a monthly salary of $15,000 and year-end double pay. After inspection of the Yue Cheng workshop and careful consideration, he accepted the offer although he did not sign any written contract of employment with Faith. 7.He started to work in the Yue Cheng Workshop in early December 1995. At the time his position was Assistant to General Manager. He was also in possession of a Letter of Authorization issued by Mr. Li in which it is stated that he was the "person-in-charge vested with full authority for Faith in Yue Cheng". Mr. Li also arranged for name cards printed for him on which he is shown as Assistant to General Manager of Faith and Yue Cheng. 8.According to Mr. Chung's evidence, Faith did not have an office of its own in Guangzhou. As an employee of Faith stationed in Guangzhou, his job was mainly to manage the Yue Cheng Workshop. However, he frequently travelled between Guangzhou and Hong Kong, bringing materials to Yue Cheng Workshop for processing for Faith and taking back finished products to Faith. Occasionally, he was required to negotiate on behalf of Faith on the Mainland business that had nothing to do with Yue Cheng. 9.After working in the Yue Cheng Workshop for about 6 months, he was promoted in title by Mr. Li to director and Deputy General Manger. His salary remained unchanged, but he had an additional monthly allowance of $3,000. That allowance was said to reflect his achievements in the management of the Yue Cheng Workshop and for his expenses for travelling between Guangzhou and Hong Kong. The name cards which were arranged by Mr. Li to be printed for him also show his new position. Besides, it is also shown on a copy of the business license issued by the State Industry and Commerce Administration Bureau that Yue Cheng was a lawful enterprise and that Mr. Li was the Deputy Managing Director and General Manager of Yue Cheng while Mr. Chung was one of its Deputy General Managers. 10.As to payment of salary, the account books of Yue Cheng disclosed by Faith show that Yue Cheng each month paid Mr. Chung a salary of RMB$5,000. Mr. Chung claimed that Mr. Li each month gave HK$10,000 to his family in Hong Kong or brought the $10,000 to him in Guangzhou. The two amounts add up to a monthly salary of HK$15,000. In the aforesaid Form 2 submitted by Faith to the Labour Department in Hong Kong, Mr. Chung is of course stated to be an employee of Faith and he was paid 13 months salary a year at a monthly salary of HK$15,000. Besides, Faith produced 2 receipts signed by Nip Siu-ha which show that when Mr. Chung was in hospital after the injury, Mr. Li had paid the then wife a total of RMB$29,625 (RMB$30,000 less tax in China), representing part of the earnings during the 3 months from June to August 1997. That is to say, in the first three months after Mr. Chung had sustained injury, Faith was still paying $10,000 each month to Mr. Chung's family. 11.Turning to the quarters in Guangzhou which Mr. Chung resided during his employment, it is in fact a joint property of Mr. and Mrs. Li. Mr. Chung occupied one room while Mr. Li retained the other room for his own use. 12.As to the above factual evidence, there is not any rebuttal evidence from the 2nd Respondent. Mr. Chan for the 2nd Respondent however pointed out that, Mr. Chung was the Deputy General Manager of Yue Cheng, his principal duties were to manage the Yue Cheng Workshop in Guangzhou, and his salary of RMB$$5,000 was also paid out of the account of Yue Cheng. Besides, as Mr. Chung did not sign any written contract of employment with Faith and other evidence which tend to support an employment relationship between him and Faith are also flimsy, Mr. Chan argued, the court should not accept Mr. Chung as an employee of Faith. 13.In my view, it cannot be ruled out that Mr. Chung was at the same time employed by Faith although he was the Deputy General Manager of Yue Cheng. No doubt Yue Cheng is a joint venture of Hong Kong and Mainland interets. If Mr. Chung was a management personnel appointed by the Hong Kong party to work for the joint venture, he must necessarily be given a position in the joint venture. The internal rules of Yue Cheng prohibit its staff from taking up other employment, but these rules naturally do not apply to the representative of the other party to the joint venture. For these reasons, even if he holds a position in Yue Cheng, and assuming that the RMB$5,000 monthly salary is paid to him by Yue Cheng, Mr. Chung can still be an employee of Faith. 14.The fact that his principal duty was to manage the business of Yue Cheng is insufficient to negate his status as an employee of Faith. If he was the resident representative of Faith in Yue Cheng, it stands to reason that his work was to manage the business of Yue Cheng. If Faith had not appointed him to station in Yue Cheng, why would it be necessary for him to put his main efforts on Yue Cheng? To assert that he was an employee of Yue Cheng because his principal duty was to look after the business of the joint venture as a representative of the Hong Kong party is no doubt putting the cart before the horse. 15.It is the evidence of both Mr. Chung and Faith that he was an employee of Faith. Is it credible? Having considered his demeanor, I see no reason to doubt Mr. Chung's oral testimony. The documentary evidence submitted by Faith are also timely and reasonable. I have no reason to find them unreliable. Further, it is not unusual for Mr. Chung to draw a monthly payment of RMB$5,000 for his living expenses in Guangzhou. As his wife and daughter were still in Hong Kong, how could he be content with merely a monthly salary of RMB$5,000 and not have regard to the livelihood of his family? It is reasonable that Faith each month paid HK$10,000 to him or his family for their maintenance. How would Faith be agreeable to pay an additional HK$10,000 if Mr. Chung was not its employee? Besides, as Mr. Chung already had right of abode in Hong Kong, it is nothing fanciful that he was employed by Faith in the capacity of a Hong Kong employee. 16.Having considered all the evidence and circumstances, I find that Mr. Chung was in the employment of Faith when he sustained injuries. Injuries arising out of employment 17.Mr. Chung was injured in the attack at about 7:45 p.m. At that time he had already left the Yue Cheng Workshop and was walking towards his quarters. Mr. Chan for the 2nd Respondent thus argued that Mr. Chung did not sustain injuries in the course of employment. It is the evidence of Mr. Chung that although he had left the Workshop, he had in fact not yet completed the work for the day since he was required to complete the tax return for Yue Cheng on that day. As the workshop was too noisy, he brought the documents back to his quarters in a briefcase with a view to completing them at home. That explains why he was carrying a briefcase when he was attacked. In the Form 2 submitted by Faith to the Labour Department, it is stated that he was injured in the robbery when he was on his way to Jiangyen Road to deliver documents. It should be noted that as he was still unconscious when Faith submitted Form 2, it is therefore impossible for him to make false statement to Faith. And Jiangyen Road is exactly where his quarters were located. Clearly, Faith inferred from the briefcase recovered at the scene of robbery, the location of the scene and the previous practice of Mr. Chung that he was on the way bringing documents back to his quarters. I fully accept Mr. Chung's evidence. As the Deputy General Manager, there is nothing unusual for him to bring home documents to work on. Even if Mr. Chung had already gone off duty and it was not his intention to work in his quarters, he should be regarded as being in the course of employment when he was still carrying company documents whilst on his way home because during such time he still had the responsibility to safeguard those documents. 18.The fact that they are tax documents of Yue Cheng does not, in my view, affect his claim in the present case. As earlier mentioned, he was the plenipotentiary of Faith stationed in Yue Cheng. He took part in the management of Yue Cheng. He was discharging his duty owed to Faith when he handled the tax matters of Yue Cheng. 19.All in all, I find that Mr. Chung was in the course of employment when he was injured during the attack. Basis of remuneration 20.Mr. Chan contended that as it is only in the account books of Yue Cheng that Mr. Chung regularly received from Yue Cheng a monthly salary of RMB$5,000, the amount of compensation should therefore be calculated on the basis of RMB$5,000 per month. I have already found that he was an employee of Faith earning a monthly salary of HK$15,000. Of this sum, HK$10,000 is supported by documents and evidence. The remainder of $5,000 was paid in RMB by Yue Cheng. This, in my view, is an arrangement between Faith and Yue Cheng which does not in any way diminish his right to be remunerated HK$15,000 monthly. In principle, as long as there was agreement between him and Faith to that effect, he was entitled to receive a monthly salary of $15,000. Even if Faith had not made payment to him according to the agreement, the amount of compensation should still be calculated on the basis of agreed monthly salary of $15,000. 21.Mr. Chung claimed that there was a subsequent additional allowance of $3,000. Although there is no record of such payments, Mr. Li of Faith did not cross-examine him on this point or refute his claim. Counsel for the 2nd Respondent did not cross-examine him on this point in detail either. The fact that there is not any record of payment is suspicious. I cannot rule out that there is some other arrangement between him and Faith. However, even if Faith had never paid him the subsequent additional monthly allowance of $3,000, this amount should still be included in the calculation of compensation, for the allowance forms part of his remuneration. 22.Mr. Chan for the 2nd Respondent also pointed out that in principle only remuneration that has been declared for tax is allowed in employees' compensation. In my view, this case does not involve the issue of the limit of earnings declared for tax purpose. The monthly income of RMB$5,000 received by Mr. Chung in Guangzhou was taxed. As to the $10,000 monthly payment made to Mr. Chung's family in Hong Kong for their maintenance, even if it was paid first to him in Guangzhou who then gave it to his family in Hong Kong, it should still be considered as remuneration paid in Hong Kong. There is not any evidence adduced or argument advanced by the 2nd Respondent to establish that this part of the remuneration had to be declared to the Mainland authorities for tax purpose. Since the whole of his remuneration was derived from services rendered outside Hong Kong, to my knowledge, Mr. Chung was not required under the laws of Hong Kong to declare his earnings to the authorities in Hong Kong for salary tax purpose. 23.In the calculation of Mr. Chung' claim for compensation, items of board and lodging benefits converted into cash are also included. These sums are not disputed by the 1st and 2nd Respondents. Sick leave compensation 24.In summary, Mr. Liu, counsel for Mr. Chung submitted that Mr. Chung is entitled to sick leave compensation under section 10 of the Employees' Compensation Ordinance as follows:
25.None of the Respondents disputed the above formula. Although the 2nd Respondent did not accept the monthly salary to be $18,000 as claimed by Mr. Chung, I have found this sum to be correct. As to the other variables in the formula, both Respondents accepted them all. Compensation for incapacity 26.Both parties agreed that the permanent incapacity of Mr. Chung is 24%. On this basis, Mr. Liu submitted that on the monthly salary determined and the statutory formula, Mr. Chung is entitled to compensation for incapacity under section 9 of the Employees' Compensation Ordinance in the following amount:
27.Unless I am wrong on his monthly salary basis, the amount of compensation under this head is beyond dispute. Medical Expenses 28.Mr. Chung also claims part of the medical expenses paid on the Mainland that amount to HK$57,508.33. Further, Mr. Li also claimed that he or Faith had paid for Mr. Chung's medical expenses of several ten thousand dollars on the Mainland during the period when he was unconscious. 29.The Employees' Compensation Ordinance provides as follows:
30.It can be seen from section 10AA(2) that none of the Respondents shall be liable to pay for Mr. Chung's medical expenses for medical treatment on the Mainland unless a certificate has been issued by the Commissioner for Labour under section 10B (1) (b) stating the amount of such medical expenses. Looking at section 10B carefully, the Commissioner has a duty not only to determine the amount of such medical expenses, but also the "liability". It is only after the Commissioner has made a determination that a party who is dissatisfied with the determination may apply to court for a review. 31.Solicitors for Mr. Chung had applied to the Commissioner for a determination under section 10B and an issue of the certificate referred to in section 10AA (2) (b). The Labour Department replied on 4 December 1999 as follows: -
In other words, the Commissioner has not made any determination, nor has he issued any certificate. The words on the face of the reply of the Labour Department say that liability for the employer should rest with the court. It seems to suggest that the court is liable for compensation. Indeed, the Government of the Hong Kong Special Administrative Region may be liable to Mr. Chung in damages if he fails to receive all that due to him because of the Commissioner's neglect of his duty. But, I believe the reply of the Labour Department means to say that because liability is not admitted, Mr. Chung's claim shall be dealt with by the court. As earlier mentioned, Faith (i.e. the employer) filed the Form 2 notice a long time ago. How could Faith refuse to admit liability? As I understand it, in fact it is solicitors for the 2nd Respondent who informed the Labour Department that they would not admit liability. 32.This case has now come before me. No matter how difficult the issues are, I have to resolve them as long as it is within my power and duty to do so. However, Mr. Chan for the 2nd Respondent pointed out that since Mr. Chung does not have the certificate referred to in section 10AA (2) (b), neither Respondent is "liable" to pay the medical expenses in question. That is to say, in law I do not have the power to find against the two Respondents in respect of the claim for medical expenses not supported by a certificate. Mr. Chan contended that in respect of the medical expenses incurred on the Mainland, Mr. Chung's claim should be dismissed. 33.In my view, although Mr. Chung is entitled to bring a claim under section 10A (8), the right to claim and liability are different matters. A defendant does not become liable simply because the opposite party has the right to claim. Otherwise, every defendant in each case is bound to be found liable. Section 10AA (2) (b) clearly provides that one shall not be liable unless the Commissioner has issued a certificate. Section 10B also provides that the Commissioner shall on application by an employee give a determination on liability and quantum. How on earth could the Commissioner refuse to discharge his statutory duty on the ground that Mr. Chung had brought a claim to court or that someone does not admit liability! 34.It might be said that since the Labour Department is an administrative department while the court's duty is to adjudicate, when a claim has already been brought to court it is reasonable for the Commissioner to shift his duty to make determination onto the court whose duty is to adjudicate. However, in deciding to assign to the Commissioner the duty to make determination and to the court the duty to review, the legislature should have already considered the separate roles played by them. As such distinction of functions is clearly provided by law, I am unable to act in breach of the law and usurp the Commissioner's authority to make determination. 35.Perhaps one may take the view that Mr. Chung has already suffered a lot since he sustained injury 5 years ago, and as all the receipts for medical treatment are now available, why does the court adhere strictly to the letters of the law? Even if the court usurps the authority of the Commissioner to make determination, the Commissioner would not raise any objection. However, I cannot overlook the point of law raised by the 2nd Respondent. Meanwhile, having given it careful thought, I believe there are far more important policy and practical implications in these provisions under sections 10A and 10B. Judges should not undermine the rule of law in a moment of kindness. 36.I observe that the Commissioner has the power and duty to determine employees' compensation in two situations only. First, the claim is of a small amount. Second, the employee's claim is for expenses of medical treatment given outside Hong Kong for injury sustained outside Hong Kong in the course of employment. Why is the Commissioner given the duty to determine the amount of expenses for treatment outside Hong Kong in respect of the employees' injury suffered during the course of employment? One may look at it from the intention of the legislature. Even if an employee who has sustained injury in the course of employment in a foreign land may not be required to make advance payment before he can receive medical and nursing services there, he is often required to make some payment before he can continue treatment. Or he is required to make full payment before he can be discharged from hospital or can leave the territory. In the meantime, it would take quite some time for his claim to be resolved by the court. In these cases, is the employee's further necessary treatment to be delayed until he has obtained a court award. Or is he to be detained in a foreign place until his claim has been determined by the court in Hong Kong? Moreover, circumstances vary in different parts of the world. It is often beyond the abilities of those employees who have suffered serious injury and employers of small or medium enterprises to verify the facts of the incident that happened outside Hong Kong in which employees had sustained injury and the required medical expenses. Employers or insurance companies with strong financial background which engage solicitors to investigate on their behalf often have to pay high costs. The legal fees involved may exceed the amount of medical expenses. Courts do not have the power and mechanism to conduct such verification. I therefore believe that the legislature imposes the duty on the Labour Department to determine medical expenses for treatment outside Hong Kong of employee's injury sustained whilst at work outside Hong Kong in the hope that the Department can be flexible and liaise with foreign authorities directly for verification. When necessary, standards can be ascertained and assistance can be obtained through the Hong Kong representative Office abroad, the Chinese Embassy or international labour organizations. Further, the experience of the Labour Department in the verification of cases of employee claiming medical expenses incurred outside Hong Kong can be accumulated in a central database. With the availability of this central database, verification of other cases in future would be a lot easier than in the scenario where: in the year before last, a staff member of a company was injured whilst he was in Beijing for business negotiation, the company incurred money and manpower to verify the medical expenses and the standard of services; last year, a newspaper reporter was injured when he was in Beijing to cover certain events, his employer again had to do all the checks; this year, a decoration sub-contractor led a team of workers to work in Beijing, one of his workers was injured whilst at work; again, the principal contractor has to take the troubles to do all the investigation. 37.All in all, to give effect in the long run to the good intentions and policy of the legislature, I must insist that the duty to determine medical expenses incurred outside Hong Kong for injury sustained whilst at work outside Hong Kong rests with the Commissioner. Further, I believe it is in line with the spirit of the aforementioned provision that the Commissioner has a duty to give the required determination as soon as possible, instead of dealing with such matter leisurely and having it dragged on for a year or so. If it is determined by the Commissioner that no liability arises or the amount as determined by the Commissioner is unreasonable, either party may apply to court for review of the determination. I have advised Mr. Chung that in the event the Commissioner further declines to make determination, he might consider applying to the Court of First Instance for judicial review on the ground that the Commissioner has neglected his responsibility and declined to discharge his statutory duty. 38.Meanwhile, how should the medical expenses in the present claim be dealt with? Mr. Chan submitted that it should be dismissed. I do have the power to dismiss it. However, that does no good to either party. In respect of the claim under this head, the 2nd Respondent has succeeded on a technicality by a forceful argument on points of law. As a prestigious insurance company, the 2nd Respondent probably is not deliberately trying to avoid payment. Even if I dismiss the claim for medical expenses, it would not be difficult for Mr. Chung to obtain the required certificate eventually through procedure prescribed by law. By the time when he is in possession of the certificate, he can still bring a claim to court. Is it the 2nd Respondent's wish to spend money further on another suit? 39.Accordingly, I exercise my discretion to adjourn the claim by Mr. Chung for medical expenses sine die so that he can resolve the problem about the certificate. Liberty to either party to apply in this respect. Judgment 40.For the above reasons, I order that judgment be entered in favour of Mr. Chung against the two respondents to the following extent:-
Representation: Mr. Michael Liu instructed by Tam & Co for the applicant Mr. S.K. Li represented the 1st Respondent in person Mr. Daniel Chan instructed by Cheng, Yeung & Co for the 2nd Respondent |