Chung Yuk Sun v. Chap Shing Industrial Co Ltd and Others

DCEC 1109/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1109 OF 2014

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D E C I S I O N
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1.The applicant claims compensation pursuant to the Employees Compensation Ordinance, Cap 282 (“ECO”) for injury at work in June 2013 in the course of his employment with the 1^st respondent. The 2^nd and the 3^rd respondents were at the material times tiers of contractors further up. Besides stating their case in the Answer, the respondents put forward a counterclaim against the applicant. The applicant filed his reply and defence to counterclaim. This caught the court’s attention; and hence the present hearing for the parties to explain that.

2.The method of commencing employees’ compensation proceedings is set out in r.16 of the Employees’ Compensation (Rules of Court) Rules, Cap 282 (“the ECR”), which starts off by the lodging of an application in Forms 1, 2 or 3, as the case may be.  R.17 follows by setting out the procedure after the application has been lodged.  R.17(2) provides that if the respondent intends to oppose an application, he shall file an answer in Form 5 containing a concise statement of the extent and grounds of his opposition.

3.R.17(2) and Form 5 (in the Schedule to the ECR) do not cater for the lodging of a counterclaim.  This is not surprising, in view of the purpose of the statutory scheme of determination of the employees’ claim for compensation.  Any other dispute, even arising out of the employment relationship, is extraneous to such determination.

4.Further, the notice of application and the answer filed pursuant to the ECR are not meant to be formal pleadings.  Nor are they supposed to be drafted as if they were formal pleadings in any civil case.  It is only a matter of practice, and for the avoidance of doubt, that Practice Direction (“PD”) 18.2, §40, provides that the following documents are regarded as pleadings in an employees’ compensation case:

(1) The application filed pursuant to ECR, r.16(1);

(2) The answer filed pursuant to ECR, r.17(2); and

(3) Written reply or subsequent pleading filed/served with leave of the court.

5.Miss Masood submits that whilst the ECR and Form 5 are silent in respect of the lodging of a counterclaim, the Rules of the District Court (“RDC”) operate to fill in the gap.  Section 21 of the ECO provides that:

“Save as is provided in this Ordinance and any rules made thereunder, the District Court shall, upon or in connection with any question to be investigated or determined thereunder, have all the powers and jurisdictions exercisable by the District Court in or in connection with civil actions in such Court in like manner as if the Court had by the District Court Ordinance (Cap 336) been empowered to determine all claims for compensation under this Ordinance whatever the amount involved and the law, rules and practice relating to civil actions and to the enforcement of judgments and orders of the Court shall mutatis mutandis apply.” (emphasis added)

6.The powers and jurisdiction of the District Court in civil actions shall be exercisable, and thus the law, rules and practice relating thereto shall apply in employees’ compensation proceedings.  This is however subject to what is already provided in the ECO and its rules in the same respect; and that such power and jurisdiction must be exercised for the purpose of the determination of claims and questions under the ECO.

7.The forms and content of what are regarded as pleadings in an employees’ compensation case, as mentioned, are set out in the ECR.  This is reiterated by §40 of PD 18.2.  They do not sit well with the proposed simultaneous application of the detailed rules of pleading under O.18 of the RDC.  If anything, it would sound odd, if the respondent has the liberty to include a counterclaim in the answer whereas a reply, presumably also a consequential defence to counterclaim, may be filed only with leave of the court.

8.The assumption that the purported claim for overpayment is a matter that the court may determine under the ECO could not be lightly made.  In Kan Wai Ming v Hong Kong Airport Services Limited, CACV 240/2010 (26 May 2011), the Court of Appeal (at §§38-40) left open the question of whether it is open to the respondent to recover overpayment from the applicant.  The appellate court refrained from examining whether a claim for overpayment of periodical or advanced payment would be viable and, if so, on what basis.  The circumstances in which an excess payment might come to have been made are said to be fact sensitive and could arise in a variety of different scenario.  Assuming that recovery is viable, I would have thought that the factual scenario giving rise to such right of recovery would define the cause of action.  I doubt if such cause of action falls within the matters that the court may adjudicate under the ECO.

9.In any event, the purported claim by the respondents is objectionable insofar as its substance is concerned.  The respondents are claiming against the applicant for:

(1) Repayment of all excessive interim payments/periodical payments/advanced payments paid by the respondents to the applicant, if any;

(2) Set off the excessive interim payments/periodical payments/advanced payments paid by the respondents against the amount of compensation awarded, if any.

10.In Kan Wai Ming, the appellate court referred to the possibility of adjusting the payment of compensation with reference to interim payments made under O.29 of the RDC.  But I am not told that this is what the respondents could be after in the present case.

11.Section 10(4) of the ECO provides that no periodical or lump sum payments paid or payable under the section shall be deducted from any amount of compensation payable under sections 6, 7, 8 or 9.  The effect of that has been confirmed by the Court of Appeal in Kan Wai Ming.  The purported counterclaim of the respondents is precisely what the appellate court held to be impermissible pursuant to that subsection.

12.It should also be noted that judgment on liability for compensation to be assessed has recently been entered against the respondents.

13.In the circumstances, whether upon the oral application of the applicant or in any event on my own motion, I would and do order the counterclaim to be struck out.

[The applicant applies to withdraw the reply filed.]

14.Upon that, I give leave to the applicant to withdraw the reply filed.

[Discussion on costs]

15.Following this event and as sought, I order the costs of the hearing be to the applicant in any event to be taxed if not agreed.

Mr TAM Kam Tong of Messrs K Y Lo & Co for the applicant

Miss Selma MASOOD of Messrs Tsui & Co for the 1^st, the 2^nd and the 3^rd respondents