Xu Huaxian v. Chan Hok Lik Formerly t/a Wai Kon Sin Yu and Another
Read the full judgment text of DCEC 922/2006 on BabelCite. This District Court judgment.
1. The Applicant injured his left arm allegedly in the course of his employment with the 1 st Respondent as a worker transporting fish. At the material time, he was a visitor holding a two-way permit and was not lawfully employable in Hong Kong. He filed the present Application against the 1 st Respondent for compensation under the Employees’ Compensation Ordinance, Cap.282 (“the ECO”).
Cites 4 cases
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DCEC 922/2006 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO.922 OF 2006 -------------------- BETWEEN
-------------------- Coram: Deputy District Judge S. T. Poon in Court Date of Hearing: 14th – 15th May 2007 & 17th – 18th May 2007 Date of Handing Down of Judgment : 28th May 2007
______________________ J U D G M E N T ______________________
Introduction 1.The Applicant injured his left arm allegedly in the course of his employment with the 1st Respondent as a worker transporting fish. At the material time, he was a visitor holding a two-way permit and was not lawfully employable in Hong Kong. He filed the present Application against the 1st Respondent for compensation under the Employees’ Compensation Ordinance, Cap.282 (“the ECO”). 2.The 1st Respondent was adjudicated bankrupt and did not appear to contest the Application. Being potentially liable to any compensation awarded by this court under the Employees Compensation Assistance Ordinance, Cap.365 (“the ECAO”), the 2nd Respondent stepped in to defend the Applicant’s claims. 3.Under Section 2(2) of the ECO, the Court has a discretion to treat an illegal employment contract as if it were a valid one for the purpose of any proceedings under it. It reads as follows:
4.The 2nd Respondent asks this court not to exercise its discretion in the Applicant’s favour in that otherwise it would be against public policies. Mr. Horace Wong S.C., counsel for the 2nd Respondent, submitted, inter alia, that to allow an illegal worker to obtain compensations from the 2nd Respondent would encourage people in the Mainland to come to Hong Kong for illegal employment. Besides, the 2nd Respondent, being a statutory body established by public fund, is now in a very poor financial situation and the claims or potential claims from illegal workers would place an additional burden on the 2nd Respondent and render the situation even worse. 5.Apart from the above contentions, the 2nd Respondent also denies any employment relationship between the Applicant and the 1st Respondent and that the accident arose out of and in the course of the alleged employment. 6.As summarized by Mr. Andrew Li, counsel for the Applicant, in his opening submission, the issues before this Court are thus,
The Accident 7.This is what was pleaded in the Re-Amended Application :
The Employment 8.The Applicant was born in China and was 32 years old at the time of the accident. He resides in Guangdong Province of the Mainland with his wife and two children. Prior to September 2004, he worked as a fish delivery worker in the Mainland earning around RMB3,000 per month. 9.It is the Applicant’s evidence that he was introduced by his elder brother to the 1st Respondent and started working for the 1st Respondent from 22nd September 2004. The 1st Respondent carried on the business of selling fish to fish stalls of various food markets in Hong Kong. He was paid HK$200 per day and provided with lodging and two meals a day. His main duty was to load fishes bought at the Aberdeen Fish Wholesale Market onto the 1st Respondent’s lorry for delivery to the fish stalls. Upon arrival at the fish stalls, he would then unload and deliver the fishes. 10.According to the Applicant, the usual practice was that, after they have loaded the fishes onto the lorry in Aberdeen, the 1st Respondent would then drive to Chun Jar Café to buy some take away breakfast for them to be eaten in the Lorry. The Applicant’s Evidence 11.A few days after the accident, on 5th February 2005, the Applicant gave a witness statement to the police in relation to the accident. In this statement the Applicant said that at the time of the accident he did not know the driver of the 1st Respondent’s lorry. He also said that there was another passenger on the lorry named “Brother Three” (“三哥”) with surname “Chan” (“陳”). He was there “joy riding” (“遊車河”) and “having tea” (“飲茶”). The occupation of the Applicant recorded was “sailor” (“船員”). 12.Three months later on 23rd May 2005, the Applicant gave another witness statement to the police. In this statement he changed his version by saying that the 1st Respondent was in fact the driver and he drove the lorry from Kwun Tong to Aberdeen on the date of the accident. He explained in this second statement that he told the police he did not know the driver because the 1st Respondent told him to do so. 13.The Applicant told this court that as the 1st Respondent had been suspended from driving at that time, he told the Applicant not to tell the police that he was the driver. 14.Mr. Wong cross-examined the Applicant on the above at some length. As pointed out by Mr. Wong in his final submission, the Applicant had given unsatisfactory answers to his queries. Particularly, in relation to why his occupation was recorded as “sailor” and what exactly the 1st Respondent had told him to tell the police. 15.I accept that the Applicant had not been wholly frank in giving evidence. The answer that the police had only asked about his previous or first occupation but not the present one is obviously unbelievable. As I observed the Applicant in giving his evidence, he could also be described as a reluctant witness. 16.Having said that, however, I do not think that I should then just rule out all the Applicant’s evidence, albeit that I should approach and consider his evidence with a lot of cautions. 17.As regard whether the Applicant was employed by the 1st Respondent as alleged, I note the following matters:
18.As reminded by Mr. Wong in his submission, the above factors are not sufficient to draw an inference that the Applicant was employed by the 1st Respondent as alleged. However, I am of the view that these factors can altogether suggest that the version of the Applicant in respect of the alleged employment is to a certain extent probable. 19.Mr. Wong also submitted that the Applicant was admittedly a liar. He had given different versions and we do not know which one is the truth or even all are not true. 20.I note that the task of this court is not just to compare the versions put forward by the Applicant and choose a better version to believe. I have to take into account all the evidence and conclude a version of fact that is more probable, bearing in mind that the burden of proof of an employment rests on the Applicant. 21.The Applicant had obviously told lies in his first statement to the police. I do not believe that one would go joyriding at the small hours in a lorry the driver of which one does not know. According to the police statement of the driver of the Partnshop truck, he had seen the driver of the 1st Respondent’s lorry at the scene but the driver disappeared before the arrival of the police. This supports the explanation given by the Applicant that the 1st Respondent told him not to disclose the 1st Respondent as the driver to the police. 22.I accept that the Applicant lied to the police on 5th February 2005 because he was told by the 1st Respondent to do so. 23.Mr. Wong also relied on the principle of omnia praesumuntur contra spoliatorem (the principle in Armory v Delamarie) that, adverse inferences should be drawn against the Applicant for his failure to produce his elder brother to give evidence, given that in his evidence his elder brother was the one who introduced him to work for the 1st Respondent. 24.I agree that the elder brother’s evidence might to a certain extent be supportive to the Applicant’s case to prove an employment. However, I do not think it would be obvious to the Applicant or his legal advisors to see the need to produce him as a witness. The 1st Respondent did not ever appear to contest the proceedings. One would not reasonably expect the 2nd Respondent who knew nothing about the alleged employment to produce much evidence to rebut the allegation of the employment in the proceedings. The crucial thing would at the outset obviously be whether the court would accept the Applicant’s evidence. It cannot be said to be unreasonable not to have produced the elder brother as a witness given the fact that he is not a resident in Hong Kong and effort had to be made to arrange him to come to give evidence. 25.Besides, explanations had been given by the Applicant in not producing his elder brother as a witness. Here I accept that in so doing the Applicant had included some unsatisfactory excuses, for example, that his elder would be denied entry to Hong Kong because his elder brother had previously come to Hong Kong too often. However, I am of the view that, as the Applicant had done it many times in giving evidence, he was trying to tackle whatever queries raised by the 2nd Respondent against him in cross-examination. In view of the reasons given in paragraph 24 hereinabove, I accept the explanation given by the Applicant in re-examination that neither he nor his legal advisers had appreciated the need to produce his elder brother as a witness as a genuine one. 26.As cited by Mr. Wong in his final submission the case Hong Kong and Shanghai Banking Corporation v. Chan Yiu-wah and another [1988] 1 HKLR 457, where Fuad JA quoted from Wigmore on Evidence at 467D-E in his judgment that:
27.In my opinion, the “hypothesis” as set out in paragraphs 24 and 25 hereinabove is “a more natural one than the party’s fear of exposure”. 28.There are some more points that Mr. Wong raised in attacking the Applicant’s evidence. Firstly, the Applicant did not mention in his second witness statement to the police about his employment with the 1st Respondent. Secondly, in a document known as “Particulars of Parties Involved in a Traffic Accident” prepared by the police, it was stated that the name of the driver of the 1st Respondent involved in the accident was one “凌汝燦”. Thirdly, the total wages of the Applicant appears not to be significantly lower than the average earnings of corresponding local workers in Hong Kong. 29.The witness statements to the police were for the purpose of investigating the traffic accident and the Applicant was not asked about his employment in Hong Kong. It is nothing unusual that the Applicant did not mention anything about his illegal employment in Hong Kong to the police. As regard the name “凌汝燦” being identified as the driver by the police, we do not have any information as to the basis of such finding and it is not sufficient to weigh over the evidence before this court that suggests the driver being the 1st Respondent. Concerning the wages of the Applicant, as pointed out by Mr. Li, we have no idea as to how difficult an employer could find similar workers with similar wages in Hong Kong. In any event, the alleged wages of the Applicant, leaving aside the value of the provisions of meals and lodging, which are in my view of little value to the employer, were much lower than the average earning of similar local workers. 30.To conclude, although the Applicant may not be a perfectly honest witness, on balance I accept his evidence that he was employed by the 1st Respondent as a fish delivery worker at the time of the accident. As I have mentioned before, the inadequacies of the Applicant’s evidence were due to the attitude he adopted to tackle or cope with whatever queries raised by the 2nd Respondent in this trial. This should not make his evidence totally incredible. 31.In arriving at the conclusion that there existed an employment relationship between the Applicant and the 1st Respondent, I had also in mind the fact that the 2nd Respondent took no issue on whether the relationship as described by the Applicant between himself and the 1st Respondent constituted an employment relationship in law. Arising out of and in the course of employment 32.It is not in dispute that whether an accident arose out of and in the course of employment is a highly fact-sensitive issue. A slight difference in facts may result in different conclusions. As observed by H.H. Judge Carlson in the case of Kong Hon Hung v Yuen Hing (China) Transportation Limited (2001) unrep, DCEC 150/1998, 5 January 2001:
33.Mr. Li cited the following paragraphs from the House of Lords decision of Smith v Stages [1989] AC 929, particularly paragraph 2 below, in support of his submission that the accident happened to the Applicant prima facie arose in the course of his employment with the 1st Respondent:
34.Mr. Li submitted that, where an employee ministers his own needs such as quenching his thirst, relieving his hunger, obeying the calls of nature or changing clothes, then such acts will likely be in the course of his employment (Yan Tong Kan Alice v Gammon (HK) Ltd (1981) DCLR 1 at 3D). He went on to submit that, at the time of the accident the Applicant and the 1st Respondent were en route to distribute the fish to various markets and although there was a short break in their journey when they stopped the lorry outside the café to get their take away breakfast, this interruption was incidental to the journey as they were just pausing there to relieve their hunger. 35.It is also submitted that, stepping out of the lorry to buy newspaper for the 1st Respondent was also incidental to the Applicant’s employment with the 1st Respondent as he was acting pursuant to the instruction of the 1st Respondent. 36.Whilst Mr. Wong has no dispute as to the above legal principles, he submitted that what the Applicant was doing (going to buy newspaper for the 1st Respondent) at the time of the accident had nothing to do with his duty to work as a fish delivery worker. 37.The Applicant had given clear evidence as to his duties as an employee of the 1st Respondent, firstly, to deliver fishes from the Aberdeen fish market to the fish stalls and secondly, to assist in selling fish at the fish stalls operated by the 1st Respondent. 38.It is the evidence of the Applicant that at the time of the accident, he was standing at the left side passenger door of the lorry holding the same with his left hand in order to get money from the 1st Respondent to buy newspaper. As submitted by Mr. Wong, if the Applicant was not doing this, he would not have been hit by the Parknshop truck. 39.Mr. Wong basically suggested that the event (getting money to buy newspaper for the 1st Respondent) was a deviation or interruption not incidental to the journey that took the Applicant out of the course of his employment. 40.I agree with Mr. Wong. Whilst it is reasonable to say that the needs of the employee such as “quenching his thirst, relieving his hunger, obeying the calls of nature or changing clothes” are “reasonably necessary to protect an employee’s health and comfort” (Yan Tong Kan Alice v Gammon (HK) Ltd (1981) DCLR 1 at 3D) and are incidental to the employment. To purchase newspaper can hardly be described as such. 41.If the nature of work of the Applicant is a different one necessitating the Applicant or his colleagues to acquire knowledge of current affairs or any kind of information available from newspaper (e.g. journalist, analyst, marketing…etc.); or even to use the newspaper physically for the purpose of their work (e.g. a decoration worker uses the newspaper to make a paper hat), the purchase of newspaper can said to be incidental to the employment. 42.Mr. Li stressed that the Applicant was instructed by the 1st Respondent to go to buy newspaper. The Applicant was illiterate and the newspaper would not be for his personal use. 43.In his final submission I asked Mr. Li if it would make any difference if the Applicant were instead asked by a third person not being his employer to go to buy the newspaper. With some hesitations Mr. Li replied that there should be a difference. 44.I do not appreciate any such difference. To buy the newspaper was not within the scope of work of the Applicant. In agreeing to buy the newspaper for the 1st Respondent the Applicant was in fact doing a favour to the 1st Respondent the same as the 1st Respondent buying the breakfast for him. There could be no obligation on the part of the Applicant under the employment to buy the newspaper for the 1st Respondent. The Applicant did not give evidence that he would be fired or punished in any way if he refused to buy the newspaper for the 1st Respondent. 45.It is understandable that sometimes it would be difficult for an employee to refuse a request from his employer to do him personal favours. However, it does not follow that such requests render the employee’s act incidental to the employment. 46.In the premises, I find that the accident did not occur in the course of the Applicant’s employment. By the same token, I find also that the accident did not arise out of the employment. Discretion under Section 2(2) of the ECO 47.Assuming that I ruled in favour of the Applicant on all the previous issues, I should move on to determine whether I should exercise my discretion in favour of the Applicant under Section 2(2) of the ECO. 48.Section 2(2) of the ECO had been considered by the Court of Appeal in Chan Cheuk Ting v. Analogue Engineering Co. Ltd & Another [1986] HKLRD 935. In that case, the applicant was the father of an illegal immigrant who had obtained employment in Hong Kong using a false identity card and was electrocuted while working as a life installation mechanic. At first instance, the learned judge exercised his discretion under the section against the applicant on the ground that the insurers would be able to avoid indemnifying the employer and the burden of meeting the claim would thus fall on the innocent employer who did not know the employee was an illegal worker. Having the view that the insurance company would not have been able to avoid paying out on the policy, the Court of Appeal overturned the learned judge’s decision. 49.It was argued before the Court of Appeal that “public policy” required that the discretion not be exercised in favour of the applicant. However, the Court of Appeal held that there was “no consideration of policy of such weight as would require the court to refuse to exercise its discretion”. (942D-E) 50.In Lee Mui Fong v Wong Kit Man & Others (2005) unrep, DCEC 455/2002, 18 November 2005, H. H. Judge To also exercised his discretion under the section in favour of the applicant. In this case the fatally injured worker involved was a visitor from China holding a two-way permit. In paragraph 9 of his judgment, the learned judge had this to say:
51.Counsel for the respondent in that case drew to the attention of the learned judge the consideration of immigration policy to discourage illegal immigrants or two-way permit holders from taking up illegal employment to the prejudice of local workers in Hong Kong. 52.Dismissing such argument as misconceived, the learned judge said in paragraph 15 that:
53.I agree with H.H. Judge To that the consideration of immigration policy to discourage illegal immigrants or two-way permit holders from taking up illegal employment can play little part in exercising the discretion under Section 2(2) of the ECO. In my opinion, in exercising the discretion either way there would equally be an effect of encouraging illegal employments. On one hand, to exercise the discretion in favour of the employee would provide additional incentive to the illegal workers to come. On the other hand, however, to exercise the discretion against the employee would also provide additional incentive to the illicit employers to engage more illegal workers to avoid possible liabilities under the ECO and the costs of insurance. I cannot tell, with confidence, which one would have a more significant effect on encouraging illegal employments. 54.Mr. Wong has referred me to the recent case of Chan Xiu Mei v. Li Siu Wo and the Employees’ Compensation Assistance Board, unrep, DCEC 645 of 2005, 5 January 2007 decided by Deputy Judge E. Yip. In that case the learned Deputy Judge attached paramount importance to the immigration policy consideration and exercised his discretion against the applicant. With respect, I tend to differ the learned Deputy Judge’s view on this point due to the reasons given under paragraph 53 hereinabove. 55.Having said that however, it does not mean that the court shall have no regard to public policy in exercising its discretion under Section 2(2) of the ECO. As clarified by Mr. Li in his final submission, he did not go so far as to suggest that the court ought not to consider public policy at all in exercising the discretion. 56.Instead, Mr. Li put much emphasis on the last sentence of paragraph 16 of H.H. Judge To’s judgment of Lee Mui Fong. He submitted that the policy consideration of whether the burden of paying compensation to illegal workers has to be met by public funds should be, as mentioned by the learned Judge, “a matter for the legislature”. 57.With respect, I do not see the rationale behind this submission. The learned Judge in the same paragraph expressly stated that it was an important policy consideration and he saw no reason why public funds should be used to compensate those illegal workers. Nonetheless, he gave no explanation as to why this should only be a matter for the legislature. I can only understand those words in the context of that case that the 2nd Respondent was not involved in the litigation and there was no risk for the 2nd Respondent to compensate out of the public funds since the insurance company would be paying. 58.The 2nd Respondent is a statutory body set up under the Employees Compensation Assistance Ordinance, Cap. 365. It was set up as a last resort for those employees who could not recover compensation from their employers or insurers. The 2nd Respondent would only be required to make payment in those relatively rare cases where the employer defaults in complying with his statutory obligation to obtain insurance cover for his employee or where the insurer itself becomes insolvent. 59.Under the statutory scheme, the 2nd Respondent is largely funded by a levy on all those employers in Hong Kong collectively who have obtained insurance for their workers. Due to the collapse of the HIH group of insurance companies and hence a significant rise of claims, the 2nd Respondent had been facing a drastic financial situation that required to seek substantial loans from the Government. 60.The 1st Respondent is bankrupt. There is no insurance policy covering the Applicant. If any compensation were to be awarded to the Applicant, the 2nd Respondent would be liable to pay. By working in Hong Kong illegally the Applicant had already done harm to local people. It would be very unfair to the law-abiding local employers who have contributed to fund the 2nd Respondent and Hong Kong taxpayers if this Court is to allow money to be paid out of their pocket to compensate illegal workers for accidents which would not have happened but for their own illegal acts. 61.I do not think Section 2(2) of the ECO intends to confer this court a discretion to allow the above happens. In the circumstances, I would not exercise my discretion in the Applicant’s favour under the section. The employment of the Applicant was illegal and he is not entitled to be compensated under the ECO. 62.Mr. Li in his submission mentioned about the injury of the Applicant that he needs money to do a surgery as soon as possible, and that the Applicant has a family to feed. 63.Although I have much sympathy on the Applicant’s situation, I do not think that this constitutes a humanitarian ground that can outweigh the policy consideration I have mentioned. As observed by Deputy Judge Yip in Chan Xiu Mei, “given the disparity of wealth and wages difference between China and Hong Kong, in almost every case of illegal workers there are bound to be some humanitarian grounds in the family or financial background of the illegal worker” (p.24 L-P). In any event, the Applicant may consider seeking compensation under common law. Quantum 64.For completeness, I would also assess the amount of compensation to be awarded should the Respondents be held liable to the Applicant. 65.It is accepted by the Applicant that for the purpose of calculation under the ECO, the monthly earning of the Applicant should be HK$5,605. 66.I agree with Mr. Wong that this is not an appropriate case to apply the Hong Kong Paper Mill formula. 67.As regard the loss of earning capacity, taking into account the medical opinion of Dr. Wong that the Applicant would have 3-5% whole person impairment, I would adopt a figure more favourable to the Applicant as 5%. However, I agree that it should be the Applicant’s income in Mainland that should be used for calculation. The amount under this head is HK$3,000 x 96 x 5% = HK$14,400. 68.For the claim under Section 10 of the ECO, I agree with Mr. Wong that the appropriate sick leave period should be 28.5 months and the amount under this head is HK$5,605 x 4/5 x 28.5 = HK$127,794. 69.As there is no particulars provided by the Applicant for medical expenses and there is no provision under the ECO for future medical expenses, nothing shall be awarded under Section 10A of the ECO. Conclusion 70.In the premises, I order that the Application be dismissed. 71.Costs should follow the event, I make an order nisi that costs of this action be to the 2nd Respondent to be taxed if not agreed. With certificate of counsel. This order nisi shall become absolute after 14 days upon handing down of this judgment. 72.The Applicant’s own costs be taxed in accordance with Legal Aid Regulations.
Mr. Andrew Li instructed by Messrs Munros for the Applicant. 1st Respondent, in person, absent. Mr. Horace Wong S. C. instructed by Messrs Gallant Y. T. Ho & Co. for the 2ndRespondent. |
Cases cited in this judgment