LAU OI WING v. TSANG WING KONG t/a KIM YUEN RECYCLE CO (sued as a firm) AND OTHERS

DCEC 485/2023

[2025] HKDC 1019

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 485 OF 2023

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IN THE MATTER OF AN APPLICATION BETWEEN

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REASONS FOR DECISION

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The Summons

1.  The Applicant Madam Lau Oi Wing (“A”) was allegedly injured in an accident, the subject of these proceedings, that occurred on 12 February 2022 (“Accident”) at 48 Wang Lok Street, Yuen Long Industrial Estate, New Territories (“Site”).

2.  By a summons filed on 3 March 2025 (“Summons”), A seeks leave to join Chiho ECO Protection Limited, the Intended 3^rd Respondent (“IR3”) in this action.

3.  She also seeks leave to amend the Application filed on 28 February 2023 on the basis that, upon the latest discovery, it is revealed that IR3 was the principal contractor in relation to the construction work undertaken by A on the Site in the course of employment.

4.  The joinder application was made outside the 24-month limitation period, which had expired on 11 February 2024, under section 14(1) of the Employees’ Compensation Ordinance, Cap 282 (“ECO”). The joinder application was thus more than 12 months late.

5.  Mr Kelvin Wong of counsel appeared for A.

6.  The 1^st Respondent (“R1”), represented by Messrs Yip, Tse & Tang, took a neutral stance in respect of the Summons. His attendance at the hearing of the Summons was excused.

7.  Mr Alvin Lam of Messrs Woo Kwan Lee & Lo (“WKLL”), solicitors for the 2^nd Respondent Chiho Environmental Group Limited (“R2”) and IR3, appeared for them and opposed the Summons.

Issues before this Court

8.  A initially argues that she was not out of time in making the joinder application because the 24-month limitation period did not commence to run until she first had knowledge sometime in August 2023 of the involvement of IR3 or its being the principal contractor. This argument, without legal basis in support, was abandoned by A’s counsel at the hearing.

9.  A’s main contention is that there was reasonable excuse, as required under section 14(4), for his failure to make claim against IR3 within time.

10.  R2 and IR3 oppose the Summons on the basis that A has offered no reasonable excuse to justify his delay.

Legal Principles

11.  Section 14(1) of the ECO provides that an applicant has to make an application for employees’ compensation within 24 months from the occurrence of the accident that caused his injuries.

12.  Section 14(4) provides that the court may, despite lateness, receive and determine the application if it is satisfied that there was “reasonable excuse” for the applicant’s failure in making the application within the time required.

13.  In considering whether there was “reasonable excuse” for the lateness of the joinder application, the Court has an unfettered discretion, which should be exercised liberally (see Chan Siu Ling v Tonyear Investment Ltd (t/a Kwan Shing Restaurant) [1999] 2 HKC 348 at para 23, and Kaur Paramjit v Li On Na t/a 新長發快餐 & Ors, DCEC 1479 of 2012, 15 November 2018; [2018] HKDC 1388, HH Judge Levy, at paragraph 14).

14.  I have referred to the important guidelines laid down by the Court of Appeal in Tsang Loi Fat v Sun Fook Kong (formerly known as Sung Foo Kee Ltd) [2011] 4 HKLRD 344 at paras 10 to 12 in considering what constitutes “reasonable excuse” within the meaning of section 14(4).

15.  The factors to be considered include (i) the reason for the delay; (ii) the length of the delay; (iii) whether there is sufficient ground to support an award of employees’ compensation to the applicant; and (iv) whether the intended party to be joined will suffer any prejudice if an extension of time is granted by the court for it to be joined as a respondent at this stage of the proceedings.

16.  In considering the reason for the delay, the Court of Appeal has set out a non-exhaustive list of factors which the court should take into account. These factors include (a) the age, education level, intelligence and background of the applicant; (b) whether the applicant has sufficient knowledge for the making of a claim; (c) whether the failure to make the claim within the prescribed time was due to the claimant’s illness or not being aware of the extent of his injury; and (d) whether the failure was induced by the conduct of others.

17.  As to the meaning of “reasonable excuse”, I have referred to the decision of HH Judge KC Chan in Ku Mui Ying for herself and on behalf of the members of the family of Yuen Chu Wing, deceased v W. Hing Construction Co Ltd & Ors, DCEC 2360 of 2020, 14 July 2021; [2021] HKDC 830 at para 8, in which reference to the often cited passage of HH Judge Charles in Wong Man Tak v Shaws & Sons Limited [1957] DCLR 85 at 88-89 was made:

“A reasonable excuse, in the ordinary sense of the phrase, means, in relation to a failure by an applicant to make his application for compensation within the prescribed period, that the failure was due to such cause or causes that it ought, as a matter of reason, to be excused. The phrase thus means the same as the phrase “reasonable cause” which occurred in section 14 of the Workmen’s Compensation Act 1925 of the United Kingdom. The numerous authorities upon that phrase show that a cause for failure to make a claim within the prescribed period was reasonable, and therefore excused the failure, if it were:- a reasonable belief on the part of the applicant that his injury was trivial; or a mistaken diagnosis of his injury; or a belief in the applicant that a claim for compensation was unnecessary, when the belief had been induced by the employer in such circumstances as reasonably warranted it; or the inability of the applicant to transact business because of his injury. On the other hand, a cause was not reasonable if it were a belief by the applicant that it would be to his interest to defer or not to make a claim. Moreover, an applicant was not excused if he had a reasonable cause which operated only for part of the period: he had to have reasonable causes for the whole period. Thus, while an applicant might delay making his claim until the last moment of the prescribed period, he was not entitled to be excused if his last moment claim was prevented by a reasonable cause unless he could show that he had good reason for not making his claim before that cause arose. The principle to be deduced from the foregoing is, I think, that an applicant has a reasonable excuse for not making an application to the court for compensation within the prescribed time if his failure were due to a cause or causes other than unreasonable conduct or an unreasonable decision on his part.”

[emphasis added]

18.  In Hong Chun Tak v Yip Kan Kee Contracting Co Ltd & Anor [2018] HKLRD 360 referred to by both A’s counsel and Mr Lam, HHJ Levy applied the above principles and on the facts of that case found that the applicant has provided a reasonable excuse in accordance with section 14(4). Coupled with the factor that the applicant’s claim against the intended respondent was not bound to fail, and there being sufficient evidence that the latter might be liable to the applicant therein as the principal contractor, leave for joinder was granted out of time.

19.  I have considered a number of authorities cited by both parties on the various considerations the courts have taken into account when determining the question of “reasonable excuse”.[1]

20.  As stated by HHJ Levy at para 18 of Hong Chun Tak (supra), since the question as to what constitutes “reasonable excuse” is largely fact-sensitive, and may vary from one case to another, it may not be helpful to rely on previous decisions in the court’s exercise of discretion.

21.  Bearing in mind the above legal principles, I now turn to the facts of this case.

Chronology of Relevant Events/Evidence

22.  In considering whether A had a reasonable excuse not to make the joinder application against IR3 within time in accordance with section 14(4), the following events and evidence are pertinent:

Date	Event/Evidence
12 February 2022	The Accident
13 December 2022	R1 submitted to the Labour Department a Form 2 Notice [88-93] stating R2 to be A’s employer
28 February 2023	The Application was issued against R1 and R2
14 August 2023	Letter from WKLL to A’s solicitors Messrs. Raymond Lam & Associates (“RLA”) [102-103] stating, inter alia, that: (i) A was the employee of R1, not R2 or IR3; (ii) R2 was not the principal contractor of the Site; (iii) IR3, a subsidiary of R2, had engaged R1 to work since 2021.
18 & 25 August 2023	RLA’s letters to WKLL [104-105] making enquiries of and requesting documents on the relationship between R1 and IR3 and works on the Site
28-29 August & 7 September 2023	Exchange of correspondence between WKLL and RLA [107-135] in which WKLL provided further information and documents about the relationship between R1 and IR3 including a sub-contract entered into between R1 and IR3 on 28 January 2021 covering works within a period of 60 days from 28 January to 31 March 2021 In particular, WKLL states that: (i) A should claim against R1 her employer only; (ii) There was no sub-contracting relationship between R1 and IR3; (iii) IR3 was not the principal contractor; (iv) IR3 will contest any joinder application and seek indemnity costs against A.
14 September 2023	Filing of R1’s Answer: R2 was the employer of A
19 October 2023	Filing of R2’s Answer: R1 was the employer of A, R1 was an independent contractor of IR3 who was an occupier of the Site; R2 was not involved in the works on the Site.
14-20 November 2024	Upon further enquiry of RLA, WKLL reiterated their stance as stated in their previous letters, denied liability or any involvement of R2 and IR3, and that any contract between R1 and IR3 had already completed on 31 March 2021, almost a year prior to the Accident.
15-16 January 2025	Exchange of witness statements (A, R1 and R2)
3 March 2025	A issued the Summons

23.  Notably R1 states in his witness statement dated 27 December 2024 (and exchanged with A and R2 on 15 or 16 January 2025) as follows:

(1) He had a 2-month contract signed on 28 January 2021 as the sub-contractor of works with IR3, a subsidiary of R2;

(2) After completion of the contract, the working relationship between R1 and IR3 continued. R1 assisted in the recruitment of workers for the works on the Site. R1 himself, like other workers, was the employee of R2/IR3. He was not the employer of any of the workers including A on the Site; and

(3) IR3 had control/supervision/management of the works on the Site and the workers including A, and provided all the work tools.

24.  On the other hand, A’s evidence as stated in his witness statement filed on 16 January 2025 is that he was employed by R1. After the Accident, he was informed by R1 that R2 was the principal contractor of the Site (as R1 had subsequently reported in the Form 2 Notice). A was required to wear at work either one of the 2 kinds of uniform printed with the name of “金源” , ie the Chinese name of R1, or “齊合” which is in fact the Chinese name of both R2 and IR3.

25.  Upon the information provided in R1’s witness statement, A issued the Summons on 3 March 2025 seeking to join IR3 in these proceedings in the latter’s capacity as the principal contractor.

Reasonable Excuse

26.  A as explained in her Affirmation in support filed with the Summons that she had sued R2 as the principal contractor on the basis of the Form 2 Notice filed by R1 – this is in my view reasonable conduct when A instituted the proceedings herein.

27.  There is no evidence that A ever had knowledge of there being another company (IR3) bearing the same name of Chiho, or “齊合” known to him in Chinese.

28.  The evidence shows that A’s solicitors RLA first became aware of the existence of another company named “Chiho”, ie IR3, and its relationship with R1 and R2 upon receipt of WKLL’s letter dated 14 August 2023.

29.  RLA immediately sent letters to WKLL on 18 and 25 August 2023 to make enquiry and request for relevant contract documents involving IR3 in respect of works on the Site.

30.  WKLL acting for R2 and IR3 had all along during the period from August 2023 to November 2024 in their correspondence taken a strong stance of denial of involvement of R2 and IR3. They denied that R2 or IR3 was the employer of A or principal contractor of the Site. They produced a relevant contract between R1 and IR3 covering a 2-month period up to 31 March 2021 only, almost a year prior to the Accident. They also threatened to seek indemnity costs against A should the latter take out an application to join IR3 in these proceedings.

31.  In the circumstances, it was in my view not unreasonable for RLA acting for A to take caution and withhold issuing a joinder application against IR3 during the period from August 2023 to November 2024.

32.  On such evidence, I do not consider it could be said properly, as argued by IR3, that A has been sleeping on its rights for more than a year since RLA first had notice in August 2023 of the existence of IR3, such that the much delayed joinder application should be refused.

33.  It suffices for me to mention at this stage that it is clear from the evidence that WKLL, solicitors for R2 and IR3, have not been forthcoming in identifying the principal contractor in this case, despite the evidence that IR3 was the occupier of the Site in question and was closely connected with R2 and the works in which A was engaged on the Site.

34.  On the contrary, WKLL strongly denied, coupled with the threat on indemnity costs, any sub-contracting relationship between R1 and IR3, and that IR3 was not the principal contractor. The information they provided was not helpful but rather confusing as to the identity of the principal contractor of the Site. I take the view that A’s failure to issue the joinder application within time was induced by the conduct and reply letters of the solicitors for R2 and IR3 to some extent.

35.  I consider it reasonable for A’s solicitors to take a cautious approach and not to issue the joinder application upon the letters of WKLL covering the period from August 2023 to November 2024, for such an application would have costs implications – This is the sentiment expressed by the court in Kwong Check Sing v Sky Field Construction Ltd and Ors, DCEC 2198 of 2013, 31 October 2016 at para 34 in which decision HHJ Levy exercised her discretion to grant the applicant’s joinder application out of time.

36.  It was not until A had sight of the witness statement of R1 in mid-January 2025 that the role of IR3 with regard to A’s works on the Site became clear. The Summons for joinder was issued on 3 March 2025.

37.  Mr Lam confirmed at the hearing that R2 and IR3 will not take issue on the one odd month of delay between mid-January 2025 and the date of the Summons.

38.  Considering all evidence, I am inclined that A has shown reasonable excuse for the delay in not issuing the joinder application before the 2-year time limitation expiring on 11 February 2024.

Prejudice

39.  R2 and IR3, despite their objection to the Summons, have not filed any affirmation in opposition.

40.  There is no evidence of prejudice against IR3 for it to be joined in these proceedings. No submission is made in this regard.

41.  In any event, IR3 would unlikely suffer any prejudice due to the late joinder when R2, its parent company, has all along had knowledge of the Accident and been made a respondent in these proceedings.

Merits

42.  There is no denial of the Accident in the course of work in which A suffered serious left forearm injuries resulting in multiple fractures and near amputation of the left distal forearm when his left hand was caught and dragged into a machine in operation.

43.  A’s claim for employees’ compensation is not bound to fail but on the contrary has merits, the main issues in dispute being the identities of the employer and/or principal contractor and who should be responsible.

Conclusion

44.  I find that the Applicant has satisfied the requirement of a reasonable excuse under section 14(4) of the ECO. In the interest of justice, this joinder application ought to be allowed.

45.  I made the following Order at the end of the hearing:

(1) Leave be granted for A to amend the Application out of time by joining IR3,Chiho ECO Protection Limited, as the 3^rd Respondent in this action;

(2) All other documents already filed shall stand and be deemed to have been so amended;

(3) A do file and serve the Amended Application on all respondents within 14 days from the date hereof; and

(4) Leave be granted for R1 and R2 to amend their respective Answers, if so advised, within 14 days after service of the Amended Application.

[ This Court heard the parties’ submissions on costs ]

46.  There is no reason why costs should not follow the event. Since R2 and IR3 have unsuccessfully contested the Summons, I made the following order on costs:

(1) Costs of the Summons including the costs of the hearing be to A, payable by R2 and IR3, with certificate for counsel; and

(2) Costs of the amendments to the Application and the consequential amendments to the respective Answers of R1 and R2, if any, be in the cause.

47.  I consider it appropriate to deal with the costs of the Summons by summary assessment. A’s counsel submitted a Statement of Costs after I gave my decision on costs.

48.  I gave a direction that R2 and IR3 do lodge and serve their List of Objections, if so advised, within 14 days from the date of the hearing. Summary assessment of the costs of the Summons will be conducted by paper disposal thereafter.

49.  This Court also gave further case management directions pursuant to the joinder of IR3 as the 3^rd Respondent towards the end of the hearing.