Case Document

100%Judiciary

DCEC 887/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 887 OF 2002

DCEC 317/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 317 OF 2004

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IN THE MATTER OF AN APPLICATION BETWEEN:

	CHIU KWOK HUNG BAN	Applicant
	and
	NG FU WING trading as WING KEE AQUARIUM ENG CO	1^st Respondent
	LAU PAK YIN (劉伯賢)	2^nd Respondent
	LEE CHI KWONG trading as HOYOH CONSTRUCTION & DECORATION CO.	3^rd Respondent
	SEEDTRON DEVELOPMENT CONSULTANTS LIMITED	4^th Respondent

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(Consolidated pursuant to the Order dated 5^th December 2005)

Coram: HH Judge E. Yip in Court

Dates of Hearing: 30^th & 31^st December, 2009 and 4^th January 2010

Date of Handing Down of Judgment: 1^st February 2010

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J U D G M E N T

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Background

1.The Applicant claims compensation arising out of injuries sustained in the course of his employment. There is no dispute that the 4^th Respondent was the principal contractor, and the 3^rd Respondent its sub-contractor of the project the Applicant was on. The 2^nd Respondent was throughout the present action. Default judgment was given against him.

Issues

2.This Court has to determine the following issues:

(1) Liability: whether the Applicant was an independent contractor or the employee of which respondent(s);

(2) Quantum.

Witnesses called

3.There are 4 witnesses who give evidence:

(1) The Applicant;

(2) The 1^st Respondent;

(3) The 3^rd Respondent;

(4) Li Chi-kan for the 4^th Respondent.

Facts not in issue

4.On 30 November 2000 at about 6:10 p.m., the Applicant, aged 33, was working as a painting worker for a renovation project (“the Project”) at a site situated at an automatic teller machine centre at Richland Gardens, Commercial Block (“the Site”). He fell from a height of 3 feet when climbing a wooden ladder. He sustained injuries as a result.

5.The 4^th Respondent was the principal contractor, and the 3^rd Respondent its sub-contractor, of the Project. The 3^rd Respondent sub-contracted the Project to the 2^nd Respondent.

6.The 1^st Respondent’s line of business was only for the construction and maintenance of fish tanks. It did not any take part in the Project. It did not have any projects in Richland Gardens. Upon the alleged representation of his insurance agent and the 2^nd Respondent, he filled out Form 2 to the Labour Department acknowledging to be the Applicant’s employer.

Facts in issue

7.The 4^th Respondent says that usually such projects, like the Project, would be practically completed by 4 p.m. It was unlikely to have anyone still working at the Site at, according to the Applicant’s evidence, 6:10 p.m. I do not find such bare allegation strong enough to challenge the Applicant’s evidence.

8.The 4^th Respondent says that there had been a standing reminder, albeit oral, to the sub-contractor against sub-contracting out. The 3^rd Respondent’s sub-contracting out, if ever, to the 2^nd Respondent would be a breach. The 4^th Respondent would not have allowed it. However, he was given to understand, from what the 2^nd Respondent had told him, that the 2^nd Respondent was the 3^rd Respondent’s project manager. I do not see how such agreement, if any, between the 3^rd Respondent and the 4^th Respondent, could affect the Applicant’s claim.

9.The 3^rd Respondent says that he had used his firm’s name to tender for Projects on behalf of the 2^nd Respondent on many occasions. He did not regard himself as the actual employer. I do not see how such private arrangement between himself and the 2^nd Respondent could affect the Applicant’s claim.

10.The Applicant challenges the 1^st Respondent’s explanation as to why he came to sign the Form 2 acknowledging to be the Applicant’s employer. The 1^st Respondent says that he was beguiled by the 2^nd Respondent into believing that the Applicant was a workman under him (the 1^st Respondent). The 2^nd Respondent used to cooperate with him (the 1^st Respondent) in various projects from time to time. Subsequently upon realizing such mistake, he wrote to the Labour Department in purported correction of the mistake. I believe that he was not the Applicant’s employer.

Liability: whether the Applicant was an independent contractor or the employee of which respondent(s)

11.The Applicant had 10 years’ experience in his trade and was a painting master. He knew his job well. He was not supervised by the 2^nd Respondent. The 2^nd Respondent would decide what work he was to do. He might go to work a bit later but he could not stall for time because it was the 2^nd Respondent who could decide how many days of work he would be given. He had to work with different people who were also working for the 2^nd Respondent. His daily wage was fixed at $800. He used the ladder supplied by the 2^nd Respondent. There is no challenge to such evidence and I find such proved.

12.Ribeiro PJ, who delivered the judgment of the Court of Final Appeal in Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLR 951 said:

18. The modern approach to the question whether one person is another’s employee is therefore to examine all the features of their relationship against the background of the indicia developed in the abovementioned 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, as Mummery J emphasised in Hall v Lorimer[26] (in a passage approved by the English Court of Appeal[27]):

“In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.” (952D)

13.Applying the principle to the present facts, bar insolvency on the part of the 2^nd Respondent, the Applicant had little risk of loss of income but equally very little scope of increasing his income through better management of his work. I am satisfied that he was being employed by the 2^nd Respondent.

Quantum

Section 9 (permanent partial incapacity)

14.There is no dispute that the Applicant was earning $800 per day as a painting worker and he had been working for 9 days on the date of the accident. The dispute is on how many days he had worked in either the month of the accident or the average month in the past 12 months, whichever most favourable to him. Although Form 2 reported an average of “22 working days” [p. 207], even the Applicant says that it is not the correct figure. He says that he worked 20 days on average in the past 12 months. He had not filed any tax return for his earnings, though. Mr. Kwong, counsel for the 4^th Respondent, criticizes “22 working days” as a bare allegation.

15.Whilst the 4^th Respondent has no duty to put up a positive case, Mr. Kwong submits that the Applicant’s income at the relevant time might be less than $9,000 a month (or $108,000 a year as the threshold of taxable salary tax) so that no tax return was filed. Mr. Wong assumes, in the absence of evidence, that there were reasons, not sinister ones, for the failure to file a tax return.

16.I do not believe the Applicant’s case of “22 working days”. He worked 9 days up to the date of the accident. His income for the purpose of the present action is therefore $7,200 (i.e., $800 x 9).

17.Mr. Wong refers to the government’s statistics on wages of unskilled workers for December 2000. The range was between $5,503 as a refreshment server [p. 279-11], $6,502 as a watchman/guard [p. 279-12], and $6,761 as an office assistant [p. 279-3]. Mr. Kwong submits that Dr. Lau (the Applicant’s own expert) regarded [p. 190] that he can work as a clerk. The range for a clerk was between $8,239 [p. 279-6] and $11,733 [p. 279-7]. I note that Dr. Lau was referring to “sedentary jobs such as office clerk, cashier, packaging factory worker, or car park attendant”. A refreshment server’s or office assistant’s job is not “sedentary”. From the jobs stated in the statistics for my consideration, I think he can work as a watchman/guard and earn $6,502 per month. Mr. Wong submits that the Applicant can only get a lower income for want of experience in the job. Mr. Kwong submits that such job requires little experience. I agree. The notional salary is $6,502.

18.The loss of earning capacity was assessed by the Assessment Panel as 14%, Dr. Lau as 20%, and Dr. Fu as 5%. In view of my finding that the Applicant can work as a watchman/guard and earn $6,502 per month (i.e., the equivalent of 9.7% loss of earning capacity), the application of the Hong Kong Paper Mill formula here will only result in less compensation.

19.I accept 14% as the appropriate figure for assessing the loss of capacity. Consequently, the calculations are as follows:

$7,200 (pre-accident income) x 14% x 96 (months) = $96,768

20.The sum is $96,768 under section 9 (permanent partial incapacity).

Section 10 (temporary incapacity)

21.Mr. Wong submits that sick leave is 801 days in total. Mrs. Yang, counsel for the 1^st Respondent, contends that the period (of 309 days) from 17 December 2001 to 26 September 2002 was due to the Applicant’s cardiac condition which was not related to the accident. It was only on 27 September 2002 that he underwent surgery as part of the treatment due to the accident. Dr. Lau regarded 9 months would be a reasonable period of sick leave after surgery. Dr. Fu regarded 1 year as reasonable. In my judgment a reasonable period due to the accident should be 492 days (i.e., 801 days minus 309 days). Consequently, the calculations are as follows:

$7,200 x 12 ÷ 365 x 492 (days) x 4/5 = $93,170

Section 10A (medical expenses)

22.The Applicant had 3 surgeries, 38 sessions of physiotherapy, and 42 sessions of occupational therapy. The claim is $7,491. The respondents are not in a position to dispute it. I allow the sum.

Deductions for payment already received from the 2^nd Respondent

23.The Applicant admits having received from the 2^nd Respondent $24,000 as compensation due to the accident [p. 141]. This sum will be deducted from the sum the Applicant can recover.

Interest

24.Mr. Kwong submits that the Applicant should not get interest for 2 length periods, during which he has not pursued his claim promptly, as follows:

(1) from 30 November 2000 to 1 January 2004;

(2) from 19 May 2006 to 22 June 2009.

25.I order interest for those 2 periods to be excluded.

Conclusion

26.The Applicant shall recover from the 2^nd, the 3^rd and the 4^th Respondents jointly and severally compensation but to be deducted $24,000 already received by the Applicant from the 2^nd Respondent. The net sum before interest is $173,429. The calculations are as follows:

(1) Section 9 (permanent partial incapacity) $96,768

(2) Section 10 (temporary incapacity) $93,170

(3) Section 10A (medical expenses) $7,491

(4) Deduction ($24,000)

27.The Applicant shall have interest of the net sum at judgment rate from the date of the accident until judgment but excluding those 2 periods as stated in paragraph 24 above.

28.I order nisi that the 2^nd, the 3^rd and the 4^th Respondents pay the Applicant’s costs with certificate for counsel and the Applicant pay the 1^st Respondent’s costs with certificate for counsel. The Applicant’s own costs shall be taxed in accordance with Legal Aid Regulations. This order shall be made absolute after 28 days.