Cheung Ka Hung v. Kok Tat Logistics Transportation Co Ltd

DCEC 310/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 310 OF 2006

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Coram:    Deputy District Judge J Ko in Court

Date of Hearing: 3 and 4 March 2008

Date of Judgment: 4 March 2008

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J U D G M E N T

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1.This is the applicant’s application for compensation under the Employees’ Compensation Ordinance. 

2.This case was originally put on the running list with direction that the trial should not come on before 13 November 2007.  The respondent’s former solicitors obtained an order to cease to act for the respondent.  The respondent then applied to postpone the trial. On 10 December 2007, the District Judge adjourned the trial to yesterday for a two days trial.

3.The respondent is absent at this trial.  The relevant accident happened on 19 May 2005 and the application was filed on 4 March 2006.  In view of the long time that has elapsed, the fact that the respondent has already postponed the trial once, and this trial was fixed in the presence of the respondent’s representative, I am satisfied that I should proceed with the trial in the absence of the respondent.

The Applicant’s case

4.According to the applicant, he was a China-Hong Kong cross-border lorry driver employed by the respondent at the time of the accident.  His employment with the respondent began on 29 May 2004 and the respondent provided him with the use of a lorry bearing registration number GK8600. 

5.On 19 May 2005, he met with an accident whilst driving the lorry to deliver goods from Shaoguan City (韶關市) to Hong Kong on the instruction of the respondent.  When he reached the junction of the Jihe Expressway (機河高速路,) a light goods vehicle suddenly cut into his lane.  He applied brake and swerved to the right and lost control of his lorry.  Eventually, the lorry tipped over on the expressway and he sustained personal injuries as a result.

6.Section 5 of the ordinance provides that if in any employment, personal injury by accident arising out of and in the course of the employment is caused to an employee, his employer shall be liable to pay compensation in accordance with the ordinance.

7.By his application, the applicant applied for compensation against the respondent under sections 9, 10, 10A and 10AA of the ordinance.  The applicant’s solicitor has confirmed at the trial that the applicant abandons his application under sections 10A and 10AA.

8.In the answer filed, the respondent denies liability.  It is alleged that the applicant was not the respondent’s employee but an independent contractor, and the accident is not admitted.  The respondent also filed a list of earnings which is at variance with the applicant’s pleaded case. 

9.The main issues in this case are therefore:

(a)  Whether the applicant was an employee of the respondent?

10.The modern approach to the question whether one person is another’s employee is to examine all the features of their relationship against the background of the indicia developed in the case law with a view to deciding whether, as a matter of overall impression, the relationship is one of employment, bearing in mind the purpose for which the question is asked.  It involves a nuanced and not a mechanical approach: per Ribeiro PJ at paragraphs 9-18 in Poon Chau Nam v Yim Siu Cheung trading as Yat Cheung Air-Conditioning and Electric Company [2007] 1 HKLRD 951.

11.Two influential English first instance decisions were noted by Ribeiro PJ.  In Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance [1968] 2 QB 497, MacKenna J identified three conditions for the existence of a contract of employment at p.515 as follows:

12.In Market Investigations Limited v Minister of Social Security [1969] 2 QB 173, Cooke J said at pp.184-185:

“… 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 own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.”

13.In the present case, the following features of the relationship between the applicant and the respondent are relevant:

14.The overall impression I derive from the above features is that their relationship is one of employment.  I therefore hold that the applicant was employed by the respondent at the time of the accident.

(b)  How did the accident happen?

15.The accident is evidenced by the photographs submitted. The applicant’s injuries are consistent with the medical evidence adduced.  No evidence has been adduced to challenge the applicant’s case.  I accept that the accident happened in the way alleged by the applicant, and the accident arose out of and in the course of the applicant’s employment with the respondent. 

16.Although the accident happened outside Hong Kong, the ordinance is still applicable as the contract of employment was entered into in Hong Kong and the respondent was carrying on business in Hong Kong at the material time:  see s.30B(2) of the ordinance.

(c)  What was the monthly earnings of the applicant at the time of the accident?

17.The applicant’s solicitor has taken me through the monthly statements issued by the respondent and calculated the applicant’s monthly earnings to be:

By section 11(1) of the ordinance, I shall adopt the figure of $16,521.24, which is more favourable to the applicant, for calculation of the compensation payable by the respondent.

18.The applicant’s solicitor has confirmed that since there is no evidence of any pay rise, the applicant is not pursuing any adjustment under section 11(1)(a) of the ordinance.

(d)  If the respondent is liable under the ordinance, what is the amount payable?

19.According to the certificate of assessment issued on 4 April 2007 by the Employees’ Compensation (Ordinary Assessment) Board, the applicant suffered from multiple injuries resulting in herniated discs L3/4, L4/5 and L5/S1.  The periods of absence from duty necessary as a result of the injury were from 23 May 2005 to 16 February 2006, from 7 August 2006 to 13 December 2006, and from 8 February 2007 to 26 March 2007.  The loss of earning capacity permanently caused by the injury was assessed to be 5%.

20.The certificate is evidenced of the matters stated therein:  see s.16H of the ordinance.  Moreover, the period of absence from duty certified by the board is deemed to be a period of total temporary incapacity irrespective of the outcome of the injury:  see s.10(2) of the ordinance.  Since there has been no appeal, the assessment is final and binding on the parties:  see Ng Ming Cheong v Mass Transit Railway Corporation [1997] 3 HKC 413 at 419.

21.The compensation payable under section 9 of the ordinance for the permanent partial incapacity resulting from the injury is therefore $79,301.95 (i.e., $16,521.24 x 96 x 5%).

22.The compensation payable under section 10 of the ordinance for temporary incapacity is $229,771.49 (i.e., $16,521.24 ¸ 26 x 452 x 4/5).

Conclusion

23.For the above reasons, the respondent as the applicant’s employer is liable to pay the applicant compensation in the sum of $309,073.44 (i.e., $79,301.95 + $229,771.49). 

24.Interest is awarded at half the judgment rate from the date of the accident. 

25.There shall therefore be judgment in favour of the applicant against the respondent in the sum of $309,073.44, together with interest thereon at half the judgment rate from the date of the accident.

(Discussion re costs)

26.Costs normally follows the event.  I order the respondent to pay the applicant’s costs of this case, to be taxed if not agreed. The applicant’s own costs is to be taxed in accordance with Legal Aid Regulations.

Mr Ng Man-kin, of Messrs Kwok, Ng & Chan, assigned by the Legal Aid Department, for the Applicant

Respondent, in person, absent