HKSAR v. Fai Lung Exploitation Ltd

HCMA1189/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. 1189 OF 2005

(ON APPEAL FROM KCS 21476 AND KCS 21477 OF 2005)

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BETWEEN

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Before : Hon McMahon J in Court

Date of Hearing : 6 January 2006

Date of Judgment : 24 January 2006

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J U D G M E N T

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1.This is an appeal against both conviction and sentence.

BACKGROUND

2.On 23 November 2005, the appellant company, a contractor at a school building site, was convicted by Mr D.I. Thomas at Kowloon City Magistracy of failing to take adequate steps to prevent its workers falling from a height, contrary to Regulations 38B(1A), 68(1)(a) and 68(2)(g) of the Constructions Sites (Safety) Regulations made under the Factories and Industrial Undertakings Ordinance, Cap. 59 (“the Ordinance”).

3.The facts of the offences as found by the magistrate were that during a safety inspection of the site by an officer from the Labour Department (PW1), two workers were found working at an unfenced edge of the 3/F of a new school annex.  A scaffold was erected next to that side of the annex, but it was half a metre from the floor edge, leaving a void of that size from the 3/F to the G/F, a distance of 12 metres.  Workmen were expected to move across the void and carry articles such as planks in doing so.  There were no safety nets or harness anchorage points.  There was no warning notice (the 1^st offence).

4.An open lift shaft was also found by PW1, with workmen in the immediate vicinity.  The lift shaft was neither fenced off nor covered in any way.  No lifelines or safety nets were installed at or near the shaft.  No warning notices were posted.  A worker falling down the shaft would fall for 3.6 metres from the 3/F to the floor slab on the 2/F of the annex (the 2^nd offence).

5.The magistrate fined the appellant $37,750 in respect of each offence, that is, a total of $75,500. 

6.All that was in issue at trial was whether the appellant had responsibility for the two offending works.  It was not in issue that the unprotected floor edge and lift shaft breached the provisions of the Regulations.

GROUNDS OF APPEAL

7.The grounds of appeal against conviction may be summarized as follows :

(1) the appellant complains that the primary prosecution witness, PW2, an agent of Dickson Construction Co. Ltd (“Dickson”), the principal contractor, was allowed to give hearsay evidence as to the appellant being a contractor on the site in control of the two offending works (“the hearsay ground”);

(2) that PW2 was wrongly regarded by the magistrate as the deputy project manager of the construction site when it had been agreed pursuant to section 65C of the Criminal Procedure Ordinance that he was merely a sub-agent there (“the sub-agent ground”); and

(3) that the magistrate found, with no evidential basis, that the appellant was a subcontractor at the site and that a contract had been entered into to that effect (“the contract ground”).

The hearsay ground

8.So far as this ground is concerned, the appellant makes a number of separate complaints.  One of the most fundamental is that the sole evidence of the appellant being a subcontractor at the site, and additionally being responsible for the work at the two offending locations, came from the oral evidence of PW2.  To put the appellant’s complaint in context, it is as well to set out how the magistrate summarized the evidence of PW2 :

“13. PW2 gave evidence that he was a construction site manager and that he had been employed by Dickson since about July 2003.  The work at the construction site in question had begun in 2003 and should have been completed at the beginning of 2005.  However, at the date of the trial, the work had not yet been finished.  The witness had been involved with the project since February 2005 and was the site representative.  PW2 managed the progress at the site and was responsible for the administration of the site.  He worked personally on the site.  Although he was not on the site every single day, PW2 was usually on the site for two to three hours every day.  PW2 said that he knew who were the sub-contractors on the site, as he was given information by his employer.  As part of his duties, PW2 was required to keep in close contact with the sub-contractors.  PW2 said that Dickson had sub-contracted the bar-fixing, concreting and formwork to the appellant company and that they were still contracted to do this work on the day in question.  PW2 said that the appellant company had direct control over the bar-fixing, concreting and formwork on the site in general and at the locations in the summonses.

14. PW2 said the he accompanied PW1 on her inspection, but that he joined her only at a very late stage.  He was on the third floor when the locations were inspected.  The site foreman, Mr. Ma, was also there.  At the final stage, the foreman of the appellant company, ‘Ah Wai’ joined the party.  ‘Ah Wai’ was usually stationed inside the site.  PW2 looked at the agreed photographs showing the locations more particularly set out in the summonses and said that the appellant company would have been responsible for the work shown in those photographs.

15. In cross-examination, PW2 agreed that his knowledge of ‘Ah Wai’ was not his personal knowledge but was what he had been told.  He also agreed that his knowledge of the sub-contractor came from his employer.  However, he disagreed that he wrongly believed that the appellant company was a sub-contractor of Dickson and he disagreed that ….

16. …. PW2 said that access to the site was restricted and that authorised personnel had to wear their ‘green cards’ on their safety helmets.  He had nothing to do with the lists of authorised personnel as those were kept at the gate to the site.  He had received letters directly from the appellant company and such letters dealt with matters such as discrepancies in site plans and problems with progress of work at the site.  In further cross-examination, the witness said that those letters had not stated that the appellant company was a sub-contractor of Dickson.  PW2 again said that he had been told by his employer that the appellant company was a sub-contractor and for what work.”

9.It can be seen that PW2 admitted in evidence that he had been told certain things by his employer.  The appellant argues that these matters were important as they concerned who were the subcontractors on the site and, in particular, PW2’s identification of the appellant as the subcontractor in charge of the work at the location the subject of the offences, and of the person “Ah Wai” as being the foreman of the appellant at the site.

10.These matters had been argued before the magistrate, and in the course of arriving at his findings, the magistrate said of PW2 :

“23. …. He was giving evidence that was direct and within his own knowledge.  PW2 was the supervisor of the site in question on a day-to-day basis.  He attended that site almost every day.  The site was not open to the public and allowed only restricted access.  The witness had the direct responsibility of dealing with contractors of his employer.  His employer was the contractor responsible for the site.  The appellant company was directly known to the witness as the contractor with direct responsibility for the work in question.  PW2 knew the foreman of the appellant company and was able to bring him to the inspection meeting involving PW1.  Finally, PW2 had received direct communication from the appellant company.  The evidence of such direct communication was not to prove the truth or otherwise of the assertions contained therein.  That would have been evidence caught by the rule against hearsay.  That evidence was, however, evidence that the appellant company had a direct relationship with the construction site in question.  In my judgment, therefore, the evidence was fully admissible.”  (emphasis added)

11.It can be seen, the magistrate formed the view that though PW2 may have been told certain things concerning the appellant’s role at the site, that his evidence concerning the appellant was in any event from his own knowledge, and he was not giving evidence that came only second hand from another.

12.Regarding the further assertion of the appellant that PW2 had admitted in evidence that he obtained knowledge concerning the appellant from others, the magistrate said :

“25. I am also conscious that PW2 had accepted in evidence that his knowledge about the appellant company had come from others.  That may well have been the case, but it is also clear, in my judgment, that the evidence that PW2 gave was evidence of his direct, personal knowledge of the relationship between the construction site for which had had personal responsibility and the appellant company.  In those circumstances, therefore, it was clear, in my judgment, that the evidence PW2 gave was properly admissible.”

13.Nothing of substance was advanced before me to suggest the magistrate was wrong in his conclusions and, indeed, I respectfully agree with those conclusions and his approach to the evidence.

14.Obviously, an individual may see and observe something for himself.  If, additionally, he is told about that matter by another person, it does not render his own first-hand observations hearsay.  The fact that PW2 may have been told certain things by his employer as to the appellant being a subcontractor at the site does not mean that PW2 could not give evidence of his own knowledge based upon his own observations and experience as to the appellant company doing work at the site and being responsible for the work done at the offending locations.

15.As the magistrate said :

“…. The only question was whether there was evidence and, if there was, whether such evidence was sufficient to show that the appellant was a contractor who had direct control over the construction work in question. ….”

In my judgment, it is plain that the appellant was in fact responsible for the construction work at the offending sites.  That conclusion does not rely on any aspects of PW2’s evidence which were hearsay but is based on those parts of the witnesses’ evidence which were from the witnesses’ own observations.

16.It may well have been the case that it would have been better to have had in evidence, properly proven, documents going to the status of the appellant as the contractor at the site responsible for the work being done at the two offending locations.  That may well have been evidence which, if available, should have been produced.  But that does not mean PW2’s evidence, so far as it was taken into account, was inadmissible. 

17.The appellant complains before me also that PW2 may have been mistaken in his evidence.  But that is pure speculation.  Additionally, it must be remembered PW2’s evidence was not undermined by any evidence called by the appellant.  The appellant in fact called no evidence.  The prosecution case as presented through PW2 went unanswered, and the magistrate, who heard the evidence, was entitled to proceed on the basis that PW2’s evidence was reliable.

18.One further aspect of PW2’s evidence of which complaint is made is that he gave evidence, which was accepted by the magistrate, as to having received letters and correspondence from the appellant.  The magistrate, as seen from his excerpted reasons, regarded such evidence as going to prove only that PW2 had a relationship of a certain sort with the appellant, that is, that he was in communication with the appellant.  The purpose of this evidence was not to prove the truth of the contents of these communications, but simply to prove that PW2 was in regular communication with the appellant.  It was one more evidential step towards the magistrate’s acceptance of PW2 as being a person familiar with the appellant.  Again, I agree with the magistrate’s approach and conclusions in that regard.

The sub-agent ground

19.By paragraph 2 of the facts agreed pursuant to section 65C of the Criminal Procedure Ordinance between the prosecution and defence at trial, it was agreed that PW2 was a “sub-agent”.  That is as far as the agreement went.  It was not specified whose sub-agent PW2 was.

20.In his evidence, PW2 described himself as an assistant project manager employed by Dickson and as being the person in charge of the site on behalf of Dickson.

21.The appellant complains that the magistrate in accepting PW2’s description as to his role at the site was acting contrary to the agreed facts which he was bound by and which described PW2 merely as a sub-agent rather than as a project manger.

22.There is nothing in this complaint.  Both descriptions are correct.  A sub-agent may well be a project manager on a building site, and an individual acting in the capacity of a sub-agent (in this case, presumably of Dickson) is not excluded from holding managerial or other responsibilities.  Indeed, to describe a person as a sub-agent is not to say very much at all.  That description is general in nature.  It is an inclusive rather than on exclusive term.  The magistrate was not prevented by the admitted facts from further finding that PW2 was the project manager at the site.  PW2 was never challenged on this aspect of his evidence and I agree with the magistrate’s conclusions in this regard also.  There is nothing in this ground.

The contract ground

23.The prosecution case had set out to prove that the appellant was a subcontractor at the work site the subject of the charges simply through the evidence of PW2.  As I say, no documentary proof, such as a contract to that effect, was produced in evidence.  Instead, the prosecution sought to establish that the appellant was a subcontractor at the site through the oral evidence of PW2, the person in charge of the site.  In the event, they succeeded in doing so.

24.The magistrate, at the time of conviction, made the following comments :

“I would pause to observe that it seems to me that the prosecution clearly could have obtained a contract between the principal contractor, that is, Dickson, and any other contractor or sub-contractor, and indeed could and should have taken a statement or called an appropriate person form Dickson if they wished to ensure that the case did not descend into arguments about technical matters, such as face me today.

There simply seems to be no excuse whatsoever for the prosecution having stopped, as it has, without calling any evidence in relation to the formalities of the relationship that they allege between the principal contractor and the defendant company.  No excuse has been proffered, no explanation given.  I assume that there would have been a contract.  I assume that there would have been a person at an appropriate level in Dickson who would have been able to have given the definitive answer in evidence – whether or not that was by way of oral evidence or by written statement or agreed facts. ….”

25.Mr Lee, for the appellant, complains that the magistrate in these statements had assumed for the purpose of his findings that a contract existed between the appellant and Dickson, the principal contractor, when there was no evidence of any such contract.

26.I do not think that the magistrate’s comments can be taken that way.  It is quite obvious from his findings, both at the time of conviction and in his written findings, that the magistrate spent some time analyzing PW2’s evidence as to whether that evidence was sufficient to prove the appellant was a sub-contractor at the site and responsible for the particular works the subject of the charges.  He was perfectly aware that the only evidence in that regard came from PW2 and that there was no documentary or other evidence which went to the issue.

27.It is quite obvious he had made no assumptions as to the appellant’s status for the purpose of the hearing.  On the contrary, he was aware that matter was a live issue and spent considerable time resolving it.

28.Taking the comments complained of in context, it is plain the magistrate simply wished to point out to the prosecution that there were better ways to prove the point than the course taken.  There is no merit in this final ground and the appeals against conviction are dismissed.

SENTENCE

29.I turn to sentence.

30.The appellant argues that the fines imposed, totaling $75,500, are too severe. 

31.I disagree.  The facts of the present case clearly established a genuine risk of serious injury to workmen in the vicinity of the two sites.

32.As an initial matter, the appellant complains that magistrate omitted to take into account its clear record in arriving at the level of fine imposed.

33.It is true in his reasons for sentence the magistrate did not refer to any reduction in the fine he imposed attributable to the appellant’s clear record, but that is not to say he had not borne that mitigating factor in mind when he imposed sentence.  Indeed, when he turned to consider sentence in his written reasons for sentence, the first matter he adverted to as relevant in that regard was the fact that “the appellant company was of clear record”.  Whilst not specifically referring to it as a mitigating factor, it is plain he regarded it as such.

34.The more fundamental complaint of the appellant is that the levels of fines imposed, both in respect of each individual offence and in their totality, were manifestly excessive.

35.There is no doubt in the present case the offences generated a real and significant risk to workmen at the site.  No steps had been taken to reduce the danger arising from the unguarded voids the subject of the two charges. 

36.It is no answer to say that no one was in fact injured.  It is an unfortunate fact that construction sites are, if not properly regulated, dangerous to those working there.  The purpose of the penal provisions of the Ordinance is purely deterrence.  That is an approach necessary to offer some guarantee to workmen that proper steps will be taken to ensure that their working environment will be reasonably safe.

37.It is true to say that with that principle in mind, the level of fines thought appropriate in recent years has shown a significant upward rise : see HKSAR v. Paul Y-ITC Construction Limited [1998] 2 HKLRD 35; HKSAR v. Teemway Engineering Limited, HCMA1081/2003 and HKSAR v. Chuen Kee Construction Co. Ltd, HCMA986/2005.

38.In my judgment, the fines imposed, given the nature of the offences and the risk they posed, cannot be said to be manifestly excessive even taking into account the clear record of the appellant.  For the reasons given by the magistrate, the fines individually and in their totality, in my view, are appropriate.

39.There was no suggestion either before me or the magistrate that the appellant was unable to pay the level of fines imposed and the appeal against sentence is also dismissed.

Mr Harish Melwaney, SGC of the Department of Justice, for HKSAR

Mr Lee Hung Sang of Messrs Johnnie Yam, Jacky Lee & Co., for the Appellant