Wong Kim Fung v. Leung Wai Sun t/a Wai Kan Transportation Co

DCEC122/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 122 OF 2003

_____________________

IN THE MATTER OF AN APPLICATION

BETWEEN

_____________________

Coram : H.H. Judge Wong in Court

Dates of Hearing : 13^th - 15^th September 2004

Date of Handing Down Judgment : 27^th September 2004

JUDGMENT

The Issue

1.The Applicant drove the Respondent’s container truck and met an accident on 8^th September 2002 in Hoi Fung in China.  He sustained serious injuries.  He now claims compensation under the Employees’ Compensation Ordinance.  The only issue is whether the Applicant was an employee of the Respondent or an independent contractor. 

Applicant’s Case

2.The Applicant answered an advertisement in a newspaper for cross border container truck driver with or without China experience.  He telephoned and arranged for a meeting with the Respondent.  He met the Respondent who gave him a sub-contract form.  The Respondent told him his income would be 27% of the amount the Respondent received and that there would be no holiday or sick leave pay.  He was told that he should be able to earn $25-26,000 p.m.  The job would consist of deliveries of goods in Hong Kong and China.  The salary would be paid 2 months in arrear.  He said he was in need of money before that and Respondent told him Respondent could arrange to lend him money.  He said the Respondent told him that the 2 page contract had been prepared for a friend’s company.  He read the contract and said there were many problems.  The Respondent told him he should keep it for reference.  At no time did he agree to the terms. 

3.As the Respondent wanted someone to start the job quickly the Respondent told him to start work and work out the details later.  They never discuss the details and the contract was never signed. 

4.After exchange of document in the present proceeding he saw a contract which had his particulars filled in and the chop of the Respondent’s company was place at the place where signatures would be placed.  He said he had never received that document. 

5.He made his first trip to China on 26^th August 2002.  He kept a record of all the trips he made.  All toll fees and fuel expenses were paid in advance by the Respondent.  He did not get allowance to stay overnight in China and had to buy his own food. 

6.The Respondent would contact him by phone to let him know when he would be required to go to China.  The only money he received before the accident was $4,000 which the Respondent said was a loan. 

7.The accident happened on 8^th September 2002 in China.  He was taken to a hospital in China and was later transferred to a hospital in Hong Kong. 

8.In the hospital in Hong Kong the Respondent and his wife visited him several times.  The Respondent and his wife asked him how much he wanted by way of compensation.  He told the Respondent that the Respondent should talk to his mother.  His mother had discussed about compensation with the Respondent, his wife and one Mr. Lok.

9.The Respondent’s wife paid the first hospital bill and his mother had asked them to pay the outstanding salary.  The Respondent had paid $3,000 on 11^th September 2002 and $4,000 on 13^th September 2002.  He was not told how those sums were calculated.  Mr. Lok also gave him $1,000 as gift. 

10.The Respondent had on several occasions brought a paper for him to sign.  As he did not know what it was he refused to sign. 

11.The Respondent had taken his Home Visit Permit as the Respondent had to deal with the goods on the lorry.  It was not returned and the matter was reported to police. 

12.He had not received sick leave pay nor compensation.  He reported the accident to the Labour Department. 

Respondent’s Case

13.The Respondent’s case is that he placed an advertisement and the Applicant responded.  They had their first meeting inside his lorry for about 10 minutes.  He handed a copy of the sub-contract agreement to the Applicant and asked him to take it back to go through. 

14.They met again after 2 to 3 days in his lorry.  The Applicant gave him the particulars and he filled them in and placed his chop on the agreement.  He filled in 2 copies and handed one copy to Applicant for him to sign. 

15.He asked the Applicant whether he had gone through the agreement.  The Applicant said he had gone through the only objection was the payment which was 60 days in arrear.  He told the Applicant that he had to wait for 60 days for his client to pay.  He did not tell the Applicant he would get $25-26,000 p.m.  The Applicant asked how much he could earn and he told the Applicant that the harder he worked the more he would earn. 

16.The Applicant told him to speed up the necessary application in China so that he could start work soon as he was in financial difficulty. 

17.As the Applicant was not familiar with the work of container lorries so he introduced Mr. Lok Chi Keung to the Applicant for the Applicant to familiarize the procedure for delivery of goods to container terminal. 

18.By 23^rd August 2002 all necessary documents had been approved.  He asked the Applicant to return the agreement.  The Applicant said he left it at home and will return later.  He reminded the Applicant that the Applicant was self-employed.  He further told the Applicant that there was certain risk driving between Hong Kong and China and that he was self-employed it was necessary to miscue to protect his interest.  He also introduced an insurance agent to the Applicant.  The Applicant said that he had no means to pay for the premium.  He suggested to give him a loan to pay for the premium and deduct from the payment the Applicant was entitled in due course.  The Applicant did not agree. 

19.On 30^th August 2002 he again asked the Applicant to return the agreement, the Applicant said that he did not have it with him and would return in 2 days. 

20.He said as the Applicant was self-employed the Applicant has a right to refuse work.  After the 1^st assignment until the accident the Applicant had accepted 6 jobs and had refused to take on 2 job offers on one occasion because the Applicant had to see a doctor.

21.After the accident he and his wife met the Applicant’s mother in the hospital.  His wife did not raise the question of compensation.  It was the Applicant’s mother who raised this question and asked for $20-30,000.  He told the Applicant’s mother that the Applicant was self-employed there was no question of compensation. 

22.He paid the Applicant twice once $3,000 and 2^nd time $4,000 because the Applicant’s mother asked for living expenses of the Applicant.

Employed or sub-contractor

23.The only issue here is whether the Applicant was an employee of the Respondent or was he an independent contractor. 

24.Both the solicitor for the Applicant and the Counsel for the Respondent had engaged in elaborate cross-examination of the witnesses on the meetings before the Applicant started driving the Respondent’s lorry, whether there was any offer of compensation and other peripheral matters.  They did that on the basis that they thought credibility was in issue.  With respect I do not agree.  Whether the agreement was in the form of a sub-contract or whether there was any discussion of compensation is immaterial.  What I have to consider is on the undisputed facts whether the Applicant worked as an employee or sub-contractor.  In the circumstance I need not go into the credibility of the witnesses. 

25.In Market Investigations v. Minister for Social Security [1969] 1 QB 173 at p. 184G per Cooke J:-

“…… the fundamental test to be applied is this: ‘Is the person who has engaged himself to perform these services performing them as a person in business on his own account?’  If the answer to that question is ‘yes’, then the contract is a contract for services.  If the answer is ‘no’, then the contract is a contract of service.  No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases.  The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his tasks.”

This was approved by the Judicial Committee in Lee Ting Sang v. Chung Chi Keung [1990] 2 AC 374.

26.On the undisputed facts the Applicant was obliged to drive only the Respondent’s lorry to China.  He drove the lorry to destinations in China according to Respondent’ instructions.  The Applicant did not have to provide his own equipments to perform his work.  He did not have to invest to perform the job.  There was no risk factor because he was paid 27% of what the Respondent received from the consignor.  The amount was fixed by the Respondent.  The Applicant had no say as to how much the Respondent should get from the consignor.  The Applicant had no financial risk nor responsibility for investment and management.  As the container truck could only be driven by the Applicant and that the truck was provided by the Respondent, he had the exclusive service of the Applicant.  

27.Although the Labour Department did not prosecute the Respondent for failing to take out insurance, it only meant the Labour Department could not be satisfied beyond reasonable doubt for a criminal prosecution.

28.So according to the undisputed facts and applying the test in Marketing Investigations v. Minister for Social Security [1969] 1QB on balance I find that the Applicant worked for the Respondent as an employee. 

29.As H.H. Judge Lok had ordered a split trial on liability and quantum, I order the trial of quantum to be adjourned to a date to be fixed. 

30.Order nisi: Costs to the Applicant.

Mr. Simon Cleves of Messrs. Krishnan & Tsang for the Applicant.

Mr. Joeson K.Y. Wong instructed by Messrs. Chan & Chan for the Respondent.