CHAN CHUN SHING v. SILVER WAY ENTERPRISE LTD

DCEC 1955/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1955 OF 2011

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DECISION

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Introduction

1. This is an application of the respondent to strike out the applicant’s claim under Order 18 rule 19 of the Rules of District Court.

2. Leave was originally given to cross-examine the witnesses in view of the difference in evidence between the applicant and the witnesses of the respondent.

3. In an application under Order 18 rule 19, there should be no trial upon affidavit: see Hong Kong Civil Procedure 2014 at 18/19/4.  Dispute in facts, therefore, ought not be resolved by the court at the interlocutory stage. 

4. Mr Wong, counsel for the respondent, rightly accepted such is the position of the law and was happy to proceed with his application on the basis of legal submission.

Background

5. The applicant was injured in a restaurant called Macau Jockey Club Members’ Club House-Golden Dynasty on 24 December 2009 while in the course of employment by the respondent.

6. The applicant was examined by Dr Fung Ching Fai, a specialist in Neurosurgery, on 18 August 2010.

7. After a series of negotiation, a Settlement Agreement (“the agreement”) was signed on 27 January 2011 between the applicant, the respondent and Chong Hing Insurance Company Limited, the insurer of the respondent.

8. Under the agreement, the applicant accepted the sum of $431,365 in full and final settlement of the applicant’s claim under the Employees’ Compensation Ordinance (“the ECO”) and common law.

9. The applicant commenced the present proceedings on 20 December 2011.

10. By a Certificate of Assessment (“Form 7”) dated 7 June 2013, the loss of earning capacity was assessed at 1.5%.

11. By a Certificate of Review of Assessment (“Form 9”) dated 4 April 2014, the loss of earning capacity was assessed at 4%.

12. The applicant filed a Notice of Appeal against the Certificate of Review of Assessment on 15 April 2014.

Legal principle on striking out

13. It is trite law that only in plain and obvious cases that the court should exercise its discretion to strike out: see Hong Kong Civil Procedure 2014 at 18/19/4

The issue

14. The crux of the matter is whether the agreement is a valid agreement so that the applicant is barred from taking out the present proceedings.

Discussion

15. Section 31(1) of the ECO provides:-

“(1) Any contract or agreement whether made before or after the commencement of this Ordinance, whereby an employee relinquishes any right to compensation from an employer for personal injury by accident arising out of and in the course of his employment, shall subject to subsection (2), be null and void in so far as it purports to remove or reduce the liability of any person to pay compensation under the provisions of this Ordinance.”

16. In Shiu Ying Kwong v Po On [1990] HKDCLR 15 at 19, His Honour Judge Downey held that s (31)(1) does not disable the parties from coming to a settlement whereby the employee obtains compensation in an amount in excess of the minimum, but conceivably less than he or she might obtain after a full hearing.  By way of illustration, the learned Judge was of the view that the parties are free to settle at an amount in between the theoretical entitlements based on disputed facts such as the age of the employee. 

17. The principle in Shiu Ying Kwong was applied by Deputy District Judge Anthony To (as he then was) in Li Fook Sing v Chow Wing Fu & Anor [1997] 4 HKC 285.  In that case, loss of earning capacity was disputed.  The Employees Compensation (Ordinary Assessment) Board awarded a 6% loss of earning capacity.  The amount agreed was about 13% more than what the employee would have received at the level assessed at 6% loss of earning capacity.  The employee claimed 15% loss of earning capacity.  The learned Judge held the view that it was open to the parties to agree to any amount equivalent to a compensation for no less than 6% loss of earning capacity.  It was because if one introduces the question of uncertainty in litigation which might result in an award less than the amount agreed, and the consideration of time, costs and prompt payment etc, there is no reason why the parties should be prevented from agreeing an award which appears to be far less than what the employee seeking to prove so long as it is in excess of the minimum. 

18. In the present case, the applicant is arguing that his entitlement under the  ECO is as follows:-

Section 9 - Loss of earning capacity
$15,262 x 72 x 4%	$43,954.56
Section 10 - Periodical payments
$15,262 x 36 months x 4/5	$439,545.60
Section 10A - Medical expenses	$30,000.00
	__________
Total	$513,500.16

19. This is the potential maximum claim of the applicant, subject of course to the appeal against the assessment under Form 9.

20. It can be seen that the applicant is claiming periodical payments on the basis of 36 months of sick leave.

21. Section 10(5) of the ECO provides that:-

“An employee who has received periodical payments under this section for a period of 24 months from the date of the commencement of the temporary incapacity or for such further period being not more than 12 months as the Court may allow in any particular case shall no longer be entitled to periodical payments under this section but shall be deemed to have suffered permanent incapacity and the provisions of section 7 or 9, as the case may be, shall apply to the employee.”

22. In other words, whether the applicant is able to claim periodical payments for a period up to 36 months depends upon the exercise of the discretion of the court.

23. In the course of his submission, Mr Wong for the respondent pointed out that the treating doctors were of the opinion that there was an impression of malingering on the part of the applicant. 

24. The medical report of Dr Ho Lok Yan of Queen Mary Hospital dated 6 September 2010 stated that “Patient had inconsistent behaviour during examination, tried to pretend to have sciatic pain and weakness, which was not present in examination.  The impression was malingering …... He was last seen on 2/8/2010.  The patient did not demonstrate pain during talking and distraction, further support the possibility of malingering.”

25. Further, the medical report of Dr Wong Ping Hong, Derek of Queen Mary Hospital dated 5 January 2012 stated that “He persistently complained for lower limbs weakness and pain.  However weakness and pain were not consistent and not compatible with physical exam findings.”

26. In assessing the applicant’s entitlement under s10 of the ECO, the court will be required to consider whether or not his complaint is genuine.  Where it is found that there was malingering on the part of the applicant and that his complaint is not genuine, the court is entitled to disregard the sick leave certificates for the purpose of assessing the compensation under s 10 as in the case of Limbu Laxmi Prasad v Dragages (HK) Joint Venture, DCEC 1227/2006, 24 October 2007, unreported.

27. It is indeed not for this court to decide upon the merits of the applicant’s case at this stage and I express no view thereon at all.  However, the fact remains that the claim of 36 months of sick leave is open to challenge. 

28. Assuming that sick leave was calculated up to 2 August 2010 (the date Dr Ho found further support of the possibility of malingering), the periodical payments under s 10 would become $89,130.08 ($15,262 x 7.30 months x 4/5).  His total entitlement would become $163,084.64 ($43,954.56 + $89,130.08 + $30,000).  This is the potential minimum achievable.

29. In my view, the parties are free to agree upon an amount, though less than the potential maximum, but still higher than the potential minimum of $163,084.64.  By doing so, both parties achieved the mutual benefit of removing all the uncertainties of litigation, the saving of time and costs. 

30. In his opposition affirmation, the applicant alleged that he was misled into signing the agreement, that he was not explained the difference between of his entitlement under the employees’ compensation claim and the intended common law proceedings, and that he had no idea about the legal consequence of signing the agreement.  He also alleged that he did not have the benefit of legal advice before signing.

31. At the hearing, Mr Wong for the applicant informed this court that the applicant was not relying on the said argument any more.

32. Even if the applicant went on with the said argument, I do not think he would stand any chance of success because the agreement and the letter to the Labour Department informing them that he had reached agreement with his employer and the insurance company were both written in Chinese, the wordings were clear and unambiguous.  The applicant is not suggesting that there was a fundamental mistake made by him as to the character, nature or effect of the 2 documents.  Therefore, I do not see there is any basis of establishing the plea of non est factum: see Tsui Chi Hung Tony v Hsin Chong Construction Co Ltd and Taylor Woodrow Construction Ltd t/a Hsin Chong-Taylor Woodrow Joint Venture No 1 and ano, HCPI 145/2005, 17 March 2006, unreported.

Conclusion and Order

33. For the above reasons, I am driven to the conclusion that the agreement did not purport to reduce or remove the liability of the respondent to pay compensation under the ECO and is therefore a valid agreement.  The applicant's case is obviously unsustainable.

34. I therefore order that the applicant’s application be struck out.

Costs

35. I make an order nisi that the applicant shall pay the respondent’s costs of these proceedings including this application with certificate for counsel.  The applicant’s own costs be taxed in accordance with Legal Aid Regulations. 

36. The Order nisi shall become absolute in the absence of any application to vary the same within 14 days.