CHAN HO YUEN v. MULTI CIRCUIT BOARD (CHINA) LTD

CACV 216/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 216 OF 2010

(ON APPEAL FROM DCEC NO. 549 OF 2008)

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BETWEEN

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J U D G M E N T

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Hon Tang VP:

1.  I have had the advantage of reading Fok JA’s judgment in draft. I agree with it and have nothing to add.

Hon Kwan JA:

2.  I agree with the judgment of Fok JA.

Hon Fok JA:

Introduction

3.  The appellant in CACV 216 of 2010 is Mr Chan Ho Yuen (“Mr Chan”) and the appellant in CACV 217 of 2010 is Mr Chan Wa Keung suing for himself and the other dependants of the late Mr Chan Chi Kai (“the Deceased”).  Mr Chan suffered serious personal injuries, and the Deceased was killed, in a road accident which occurred in the Mainland when they were travelling in a car belonging to and driven by a Mr Lee Yiu Leung (“Mr Lee”).

4.  Mr Chan and the dependants of the Deceased brought proceedings for employees’ compensation against their employer, the respondent, on the basis that the accident arose out of and in the course of the employment of Mr Chan and the Deceased.  By his Judgment on Liability dated 9 September 2010, His Honour Judge Lok held that the accident did not occur in the course of their employment and therefore dismissed their claims.  These appeals seek to challenge that ruling on liability.

The facts

5.  The following statement of the facts is summarised from the Judge’s findings of fact set out in the Judgment.

The respondent

6.  The respondent was in the circuit boards business.  It had an office in Kwun Tong in Hong Kong while its production line was in a factory in the Mainland in Shenzhen.  The Shenzhen factory employed about 500 to 600 workers and the respondent’s Hong Kong office had a total of about 10 employees, including Mr Chan and the Deceased who worked in the Sales Department.  The respondent also used to have another production line in a factory in Dongguan but that ceased operation in late 2007.

The 2008 Annual Dinner

7.  The respondent customarily organised an annual dinner on the eve of Chinese New Year.  In practice, unless a particular member of staff was sick or on leave, all of the staff of the respondent’s Hong Kong office would attend the annual dinners.  If a particular employee chose not to join the annual dinner, that employee could remain in the office to work, but that rarely happened.  The respondent would pay for the annual dinners and the travelling expenses of the staff of its Hong Kong office attending.

8.  In 2008, the respondent’s annual dinner was held in Ju Hao Hotel in the Songgang District on 5 February, one day before the eve of the Chinese New Year that year.  On 5 February 2008, the then CEO of the respondent, Mr Chu Hin Kwan Wilson, together with his wife and some other staff members of the respondent’s Hong Kong office including Mr Chan and the Deceased, set off from Hong Kong to attend the annual dinner in a 7-seater vehicle with a cross-border licence plate belonging to the respondent and driven by Mr Chu.  On the way to the annual dinner, the 7-seater vehicle stopped at the respondent’s factory in Dongguan and the group stayed in the factory for about an hour.

9.  The remaining staff members of the respondent’s Hong Kong office, who attended the annual dinner but did not travel in the 7-seater vehicle, took a cross-border bus in Kwun Tong.  This took them to the Huanggang Customs Port at the border, where another 7-seater vehicle, from the respondent’s Shenzhen factory, took them to the hotel where the annual dinner was to take place.  This was similar to transportation arrangements in previous years.  With the exception of one employee on annual leave and one on sick leave, all the staff members of the respondent’s Hong Kong office attended the annual dinner on 5 February 2008.

10.  The annual dinner was scheduled to start at 6.30 pm and to end at about 8.45 pm.  The respondent’s Shenzhen factory had two vehicles, one being a 7-seater vehicle and the other a 12-seater vehicle.  The arrangement was that all the staff members of the respondent’s Hong Kong office would travel back to Hong Kong, or at least to the border, after the annual dinner either in one of the vehicles of the respondent’s Shenzhen factory or in the respondent’s 7-seater vehicle which Mr Chu had driven to the annual dinner from Hong Kong.  These three vehicles provided more than adequate capacity to take all the staff members of the respondent’s Hong Kong office back to Hong Kong.  The respondent did not allow the drivers of the factory vehicles to consume alcohol at the annual dinner.

The accident

11.  Before the completion of the lucky draw at the annual dinner, when most of the staff members of the respondent’s Hong Kong office were preparing to leave, Mr Chan and the Deceased went to Mr Chu and told him that they were going to stay behind.  Mr Chu did not object to them doing so.  Mr Lee then drove Mr Chan and the Deceased in his car to a karaoke parlour about half an hour’s drive away from the hotel.

12.  A factual dispute that the Judge had to resolve on the evidence was the sobriety or otherwise of Mr Lee, Mr Chan and the Deceased at the end of the annual dinner.  In this regard, he accepted that they had drunk considerably and were quite excited near the end of the annual dinner, otherwise they would not have stayed behind for further entertainment that evening.

13.  The purpose of the gathering in the karaoke parlour that evening and whether Mr Chan and the Deceased were under any compulsion to go to the karaoke parlour with Mr Lee were two further factual disputes that the Judge had to resolve on the evidence.  He found that (i) the decision to go to the karaoke parlour was made on the spur of the moment; (ii) although some work-related matters were the subject of their conversations, attending the karaoke parlour was for private and entertainment purposes only and there was no specific agenda for the discussion in the gathering that evening; and (iii) Mr Lee had not instructed Mr Chan and the Deceased to go to the karaoke parlour with him and there was no pressure whatsoever for them to join Mr Lee that evening.

14.  Mr Lee, Mr Chan and the Deceased stayed at the karaoke parlour until shortly after midnight and they left at about 12.30 am.  Mr Lee’s intention was to drive them to the Huanggang Customs Port.  Unfortunately, at about 12.52 am, Mr Lee’s car crashed into a barrier at the Shajing section of the Guang-Shen Highway.  As a result, the Deceased was killed in the accident and Mr Chan suffered serious injuries and his left leg was amputated at the scene.  The Judge found that the return journey from the hotel where the annual dinner had taken place to the Customs Port and the return journey from the karaoke parlour to the Customs Port would have passed through the same spot on the Guang-Shen Highway where the accident occurred.

15.  After the accident, the Mainland Police found that the alcohol levels in the blood samples of Mr Lee, Mr Chan and the Deceased were 18.9 mg/100 ml, 52.7 mg/100 ml and 229.6 mg/100 ml respectively.  Mr Lee was detained by the Mainland Police for about 30 months from April 2008.  A Mainland court has made an order requiring Mr Lee to pay compensation in the sum of about RMB800,000 to the family of the Deceased. (The maximum blood alcohol level for driving in Hong Kong is 50 mg/100 ml and we were informed by counsel that the maximum blood alcohol level for driving in the Mainland is 52 mg/100 ml.  It would therefore appear that Mr Lee’s detention and the compensation he was ordered to pay were not based on a finding that he was driving in excess of the maximum blood alcohol level.)

Travel arrangements for respondent’s staff in the Mainland

16.  In order to facilitate the smooth operation of the production line, the respondent held regular liaison meetings attended by the relevant personnel from the Shenzhen factory, the Purchasing Department and the Sales Department.  Mr Chan and the Deceased had to travel to the Mainland once or twice a week to attend these meetings.

17.  Although not in writing, the respondent had a practice for the travelling arrangements for staff of its Hong Kong office attending business trips in the Mainland.  The Shenzhen Factory had a number of factory vehicles for use by staff members of the respondent’s Hong Kong office.  If Hong Kong staff members had to go for business trips, they would arrange for one of the factory vehicles to pick them up at the Customs Port at the border.  After they had completed their work, one of the factory vehicles would then take them back to the border.  If none of the factory vehicles was available, Hong Kong staff members would take appropriate public transport, usually a taxi for reasons of safety, and the respondent would reimburse them for the expenses concerned.  The respondent also had the 7-seater vehicle based in Hong Kong with a cross-border license plate and, if Mr Chu was driving that vehicle to the Shenzhen factory, he might also take some of the Hong Kong staff members with him.

18.  In the event staff members of the respondent’s Hong Kong office had to stay overnight on business trips, they could stay in staff quarters near the Shenzhen factory.

Mr Lee’s car

19.  Although a Hong Kong resident, Mr Lee worked for the respondent in the Mainland.  He had been the head of the respondent’s factory in Dongguan but, after the production line there was closed, he was demoted to the position of Purchasing Manager of the respondent’s Shenzhen factory.  Although higher in rank, Mr Lee was not the supervisor of Mr Chan or the Deceased.

20.  Mr Lee bought his car in the Mainland about one year before the accident.  The car only had a Mainland license plate and so could not enter Hong Kong.  At the end of his week’s work, Mr Lee would usually drive his car to the border and park it in a space near the Customs Port.  He would then cross the border and return to Hong Kong for the weekend.  At the beginning of the week, he would re-cross the border into the Mainland and drive his car from the Customs Port to the respondent’s factory where he worked.  It was the practice of the respondent to reimburse Mr Lee for the toll fees relating to these trips but not the parking fees.  If required, Mr Lee might use his car for business of the respondent, such as for carrying the respondent’s employees or even business clients to the border, and the car had been used for such purposes at least 10 times.

The relevant statutory provisions

21.  Liability to pay employees’ compensation is imposed by s. 5(1) of the Employees’ Compensation Ordinance, Cap. 282, (“the Ordinance”) which provides that:

“Subject to subsections (2) and (3), 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 this Ordinance.”

22.  The provisions of the Ordinance may apply to an employee injured outside Hong Kong.  By s. 30B(2), it is provided that:

“This Ordinance also applies where personal injury by accident arising out of and in the course of employment is caused to an employee outside Hong Kong where the employee’s contract of employment is entered into in Hong Kong with an employer who is a person carrying on business in Hong Kong.”

23.  On the specific question of whether an employee is acting in the course of his employment whilst travelling, which as will be seen is the main issue in this appeal, the Ordinance relevantly provides by ss. 5(4)(d) and (g):

“For the purposes of this Ordinance –

…

(d) an accident to an employee shall be deemed to arise out of and in the course of his employment if it happens to the employee while he is, with the express or implied permission of his employer, travelling as a passenger by any means of transport to or from his place of work and at the time of the accident, the means of transport is being operated –

(i) by or on behalf of his employer or by some other person pursuant to arrangements made with his employer; and

(ii) other than as part of a public transport service;

…

(g)  an accident to an employee shall be deemed to arise out of and in the course of his employment if it happens to the employee while he is, with the express or implied permission of his employer, travelling by any means of transport for the purposes of and in connection with his employment between Hong Kong and any place outside Hong Kong or between any place outside Hong Kong and any other such place.”

24.  In the present case, as will be seen, we are concerned with s. 5(4)(g) of the Ordinance.

The judgment below

25.  The Judge summarised the respondent employer’s arguments as being two-fold.  First, that it was not compulsory for the staff members of its Hong Kong office to attend the annual dinner in Shenzhen and that attending the annual dinner was not incidental to the employment of Mr Chan and the Deceased, so that the journey to and back from Shenzhen was not in the course of their employment.  Secondly, even if attending the annual dinner was by itself within the course of employment, by not taking the transportation arranged by the respondent to go back to the border and in embarking upon a separate journey for entertainment at the karaoke parlour, there was a break in the course of employment of Mr Chan and the Deceased or there was a deviation from the return journey, so that the respondent is not liable to pay employees’ compensation to them.

26.  On the first submission, the Judge held that attending the annual dinner itself was incidental to the employment of Mr Chan and the Deceased and that the journey to and from the venue in Shenzhen should be treated as falling within the course of their employment.  There is no respondent’s notice challenging this conclusion.

27.  On the second submission, raising the question of whether there was a break in the course of employment or a deviation from the return journey, the Judge concluded that there was such a break or deviation.  He held that, given his findings of fact, it was certainly a break in the course of employment for Mr Chan and the Deceased to visit such a place of entertainment after the annual dinner.  The Judge considered that, by embarking on a separate journey to the karaoke parlour, Mr Chan and the Deceased deprived the respondent of any control over the safety of the return journey and that, in such circumstances, there was no reason why the journey from the karaoke parlour to the border should fall within the course of their employment.

28.  The Judge rejected the reliance by the employees on s. 5(4)(g) of the Ordinance holding that, for any means of transport to be covered by the section, the employer must expressly or impliedly permit that mode of transport.  He did not accept that the respondent had given implied permission for Mr Chan and the Deceased to travel in Mr Lee’s car as part of the return journey for the cross-border trip.

29.  Similarly, the Judge rejected the argument that, since Mr Lee was authorized to use his car for matters in connection with the respondent’s business, the respondent had given implied permission for Mr Chan and the Deceased to travel in Mr Lee’s car for the return journey.  He held it was one thing for Mr Lee to drive his colleagues to the border when the factory vehicles were not available or just for the sake of convenience but quite another for him to drive his colleagues to a karaoke parlour or a night club for entertainment late at night.  The latter had nothing to do with the business of the respondent and could not be said to be travelling for the purposes of or in connection with the employment within in the meaning of s. 5(4)(g) of the Ordinance.

30.  The Judge noted that the effect of the employees’ argument was that, provided the homeward trip remained necessary and was on the same route, it did not matter how long the break in the course of employment lasted.  He did not accept this argument, which he termed “the same route argument”.  In this connection, the Judge held that a number of factors would be considered, and concluded (at §110):

“In our present case, Mr Chan and the Deceased did not take the transport provided by the Respondent in travelling to the border. They also did not inform the Respondent as to how and when they would travel back to Hong Kong. Further, by not taking the Factory Vehicles back to the border and travelling in the Car driven by Mr Lee, who had consumed alcohol for some time, in the early hours of the morning, this significantly increased the risk of the return journey, and the Respondent simply had no control over the safety of the alternative transport taken by Mr Chan and the Deceased. In such circumstances, even if the accident happened on the same route of the planned return journey, the accident still fell outside the course of the employment.”

31.  The Judge therefore concluded that the car accident did not occur in the course of the employment of Mr Chan and the Deceased and accordingly dismissed the employees’ compensation claims.

The issues in this appeal

32.  In order for an employee to come within s. 5(4)(g) of the Ordinance, it is necessary for him to show, first, that he was travelling for the purposes of and in connection with his employment, and secondly, that he was travelling in a means of transport with the express or implied permission of his employer.

33.  As noted above, the Judge held in the present case that attending the annual dinner was incidental to the employment of Mr Chan and the Deceased and that the journey to and from the venue of the annual dinner in Shenzhen should be treated as falling within the course of their employment.  Subject to the issue of deviation addressed below, the first requirement of s. 5(4)(g) is therefore satisfied.

34.  As to the second requirement of s. 5(4)(g), Mr Neville Sarony SC, leading counsel for the appellants, advanced the appellants’ case as being that, at that time of the accident, Mr Chan and the Deceased were on the return leg of their journey to Hong Kong and as such were within that provision.  He submitted that, at the time of the accident, Mr Chan and the Deceased were travelling in Mr Lee’s car with the express or implied permission of their employer. Secondly, he submitted that Mr Lee, Mr Chan and the Deceased’s detour to the karaoke parlour only temporarily interrupted the return journey to Hong Kong, which was within the course of their employment, so that when they resumed their journey they were once again within the ambit of s. 5(4)(g).

35.  The issues in this appeal are therefore two-fold.  First, did Mr Chan and the Deceased have the express or implied permission of the respondent to travel back to Hong Kong in Mr Lee’s car?  Secondly, did the detour to the karaoke parlour operate so as to take the whole of the return journey out of the course of their employment?

Express or implied permission?

36.  It was not suggested that there was evidence of express permission on the part of the respondent to Mr Chan and the Deceased travelling back to Hong Kong after the annual dinner in Mr Lee’s car.  Therefore, the issue is limited to the question of whether Mr Chan and the Deceased were travelling in Mr Lee’s car with the implied permission of the respondent.

37.  As noted above, the Judge held to the contrary.

38.  Whether an employee can be said to have the implied permission of his employer to travel by a particular means of transport for the purposes of and in connection with his employment is to be determined by reference to all the surrounding facts.  In my view, the question is to be answered objectively by a review of whether those facts, including the past history between the particular employer and his employees, would reasonably lead an employee to believe that he is permitted by his employer to travel by the particular means of transport.

39.  In this regard, we were taken to passages in the transcript of the evidence in the hearing before the Judge below.  The evidence demonstrates that Mr Lee had express permission from the respondent to travel in his own car between his workplace in the Mainland and the Customs Port at the border.  When he did so, the respondent would reimburse him the toll fees he incurred.  Mr Chu confirmed that he knew this occurred and that, whilst he had never been asked specifically to approve this, he did not object to it.  Although Mr Chu said that he had not heard of Mr Lee giving other employees a lift in his car, he would not have objected to that practice.  He agreed that, if Mr Lee were driving back to the border, that would be one of the means for another employee to return to Hong Kong, to which the respondent would not object since it would save money.

40.  In respect of the annual dinner on 5 February 2008, Mr Chu said that he did not give specific instructions as to which employee was to travel by which particular vehicle.  Those staff members of the respondent’s Hong Kong office who did not travel in the vehicle driven by him to the Mainland took a cross-border bus from Kwun Tong to the Customs Port and their bus fees were reimbursed by the respondent.  Mr Chu confirmed that the respondent did not tell its Hong Kong-based employees, at the end of the annual dinner, that they must leave by the vehicles provided by the respondent.  This was simply an option for them to return to Hong Kong.  Finally, Mr Chu confirmed that he would have no objection if Mr Chan and the Deceased had said to him at the end of the annual dinner that they were not going to leave with him but instead would leave with Mr Lee.

41.  Mr Fung, the General Manager of the respondent’s factory, confirmed that there was no rule specifying that employees attending the annual dinner on 5 February 2008 had to go back in the vehicles arranged by the company.  In respect of the transport arrangements generally, Mr Fung said that there were two alternatives.  Employees returning to Hong Kong could either take a company vehicle or, if no company vehicle was available, they could arrange for a taxi either themselves or through the member of the respondent’s staff in charge of vehicle arrangements.  These general transport arrangements were confirmed by Ms Anna To, a Senior Sales Manager employed in the respondent’s Hong Kong office, who also confirmed that employees travelling by taxi would have their fares reimbursed by the respondent. Mr Chu confirmed that employees would not need to telephone him in advance to get his approval to either form of transport.

42.  In the light of that body of evidence, I would conclude, differing, with respect, from the Judge, that an employee of the respondent would reasonably conclude that he had the implied permission of the respondent to travel from the hotel where the annual dinner took place back to the border by means of Mr Lee’s car.  I accept that the majority of the Hong Kong-based employees of the respondent would likely have travelled in the respondent’s 7-seater vehicle which had travelled that day from Hong Kong or in one of the two vehicles of the respondent’s Shenzhen factory, but it is important, in my view, that the respondent never sought to make those means of transport compulsory or to issue any directive prohibiting the taking of any other form of transport.

43.  Mr Kumar Ramanathan SC, leading counsel for the respondents, submitted that the availability of the vehicles provided by the respondent to return Hong Kong-based employees to the Customs Port at the border negated any implied permission to travel by some other means, including Mr Lee’s car.

44.  I am unable to accept this submission.  The respondent did not inform its employees that they were obliged to take the respondent’s vehicles to return to the border.  Nor did the respondent seek to prohibit the taking of any other form of transport to return to the border.  It could have done either of these things quite simply if it wished to exercise a greater degree of control over the return journey (for example, by way of an announcement at the end of the annual dinner) and, if it had done so, I accept that permission to travel in Mr Lee’s car could not be implied.  However, in the light of the previous practice generally and that in respect of Mr Lee’s car in particular, I would hold that an employee of the respondent, such as Mr Chan and the Deceased, would reasonably consider he had implied permission of the respondent to return to the border by means of Mr Lee’s car.

45.  It is, of course, right to recognise that the burden of establishing the express or implied permission must rest on the employee seeking to bring himself within s. 5(4)(g) of the Ordinance.  This he must do by evidence of facts from which the express or implied permission can be inferred.  Permission should not be lightly implied since such a finding will expose an employer to liability.  But, in my view, if all the surrounding facts, including any previous practice, are such as to lead an employee reasonably to believe, in the court’s opinion, that he has his employer’s implied permission to take that means of transport for the purposes of and in connection with his employment, then he will come within s. 5(4)(g).

46.  Mr Ramanathan also submitted, relying on Check Chor-ching v Wik Far East Ltd [1991] 2 HKLR 224, that s. 5(4)(g) of the Ordinance was an artificial extension to the meaning of the course of employment and therefore must be construed narrowly.  It should be noted that Check Chor-ching did not concern s. 5(4)(g) of the Ordinance.  Instead, it concerned the deeming provision in s. 5(5A) of the Ordinance which was the predecessor of s. 5(4)(d): see Hsu Shu Chiao v Lung Cheong Toys Ltd [2002] 1 HKC 479 at §41.  The issue in Check Chor-ching was whether an employee who was injured when walking across the street from one bus provided by her employer to another such bus was “travelling as a passenger by any means of transport”.  The Court of Appeal held that, as a matter of construction, it was impossible to hold that the employee was injured “while she was travelling as a passenger”.

47.  Even if one accepts that s. 5(4)(g) of the Ordinance is a further extension to the meaning of the course of employment so that it should be construed narrowly, I do not see any reason why a narrow construction of the provision should lead to a different conclusion on the question of whether, on the facts of this particular case, Mr Chan and the Deceased should be held to have the implied permission of the respondent to travel back to Hong Kong in Mr Lee’s car.

48.  In the course of argument, Mr Ramanathan accepted that Mr Lee himself had implied permission of the respondent to travel by means of his own car from the annual dinner back to the border.  He also accepted that Mr Lee’s implied permission meant that he was free to stay on after the annual dinner and to choose to return to the border at a later time while still remaining within the ambit of s. 5(4)(g). Further, he was constrained to accept also that, if Mr Lee had chosen to return directly from the annual dinner to the border and had given a lift to two other Hong Kong-based employees, those employees would have the implied permission of the respondent to travel in Mr Lee’s car.  The point at which, in Mr Ramanathan’s submission, the implied permission ceased to operate was when Mr Lee, Mr Chan and the Deceased took a detour from their return journey to go to the karaoke parlour for approximately 2½ hours.  This leads conveniently to the next issue to be considered.

Did the detour operate to take return journey out of course of employment?

49.  Smith v Stages [1989] 1 AC 928 is the leading English decision on whether, as a matter of common law, an employee is acting in the course of his employment whilst travelling to or from a place of work.  In that case, Lord Lowry, with whom the other Law Lords agreed, held (at p. 955G):

“The paramount rule is that an employee travelling on the highway will be acting in the course of his employment if, and only if, he is at the material time going about his employer’s business. One must not confuse the duty to turn up for one’s work with the concept of already being ‘on duty’ while travelling to it.”

50.  Lord Lowry then went on to illustrate this rule by formulating the following prima facie propositions (at pp. 955H-956F):

“1. An employee travelling from his ordinary residence to his regular place of work, whatever the means of transport and even if it is provided by the employer, is not on duty and is not acting in the course of his employment, but, if he is obliged by his contract of service to use the employer’s transport, he will normally, in the absence of an express condition to the contrary be regarded as acting in the course of his employment while doing so.

2. Travelling in the employer’s time between workplaces (one of which may be the regular workplace) or in the course of a peripatetic occupation, whether accompanied by goods or tools or simply in order to reach a succession of workplaces (as an inspector of gas meters might do), will be in the course of the employment.

3. Receipt of wages (though not receipt of a travelling allowance) would indicate that the employee is travelling in the employer’s time and for his benefit and is acting in the course of his employment, and in such a case the fact that the employee may have discretion as to the mode and time of travelling will not take the journey out of the course of his employment.

4. An employee travelling in the employer’s time from his ordinary residence to a workplace other than his regular workplace or in the course of a peripatetic occupation or to the scene of an emergency (such as a fire, an accident or a mechanical breakdown of plant) will be acting in the course of his employment.

5. A deviation from or interruption of a journey undertaken in the course of employment (unless the deviation or interruption is merely incidental to the journey) will for the time being (which may include an overnight interruption) take the employee out of the course of his employment.

6. Return journeys are to be treated on the same footing as outward journeys.

            All the foregoing propositions are subject to any express arrangements between the employer and the employee or those representing his interests.  They are not, I would add, intended to define the position of salaried employees, with regard to whom the touchstone of payment made in the employer’s time is not generally significant.”

[Emphasis in original]

51.  Principle 5 above is of particular relevance in the present case.  Mr Ramanathan relies on this to contend that the detour to the karaoke parlour was of such a character and duration as to take the resumed returned journey out of the course of Mr Chan and the Deceased’s employment.  He submitted that, once Mr Chan and the Deceased went to the karaoke parlour together with Mr Lee to engage in a purely private matter on their own time, this was sufficient to take the resumed returned journey out of the course of their employment.

52.  In support of this submission, Mr Ramanathan relied on the judgment of Cheung JA in Hsu Shu Chiao v Lung Cheong Toys Ltd [2002] 1 HKC 479 at §31 where he held:

“Likewise, there must be a limit to [the employee’s] course of employment, eg a visit to the cinema at night while he was in Dongguan. As Ormrod LJ observed, a little commonsense is required in such a case. In Smith v Stage[s], Lord Goff stated that how one distinguishes the travelling cases in which a man is acting in the course of his employment from those in which he does not, depend on the circumstances of each case. In this case, [the employee] was entitled by his contract to go from Dongguan to Shenzhen on Saturday after work. His journey from Dongguan to Shenzhen must be within the course of his employment. A return journey from work is recognised to be on the same footing as [a] journey to work.”

53.  Mr Ramanathan also relied on the judgment of Deputy Judge A. To (as he then was) in Li Hoi Shuen v Man Ming Engineering Trading Co Ltd [2006] 1 HKLRD 84 in which (at §33) he commented on the above passage from Cheung JA’s judgment in Hsu Shu Chiao as follows:

“It is implicit from this passage that a cross-border employee does not remain continuously in the course of employment from the moment he crosses the border to the Mainland until the moment he returns to Hong Kong. … If a short visit to the cinema at night, ie outside normal duty hours, constitutes a break in the course of employment, there is no reason why breaks involving longer periods of absence from duty cannot constitute breaks in the course of employment. There can be other breaks in the course of employment of a cross-border employee, for example, when he visits other places of entertainment at night, or when he pays visits to his Mainland relatives or takes pleasure trips within the Mainland during holidays. If these can constitute breaks in the course of employment, there is no justification for the view that when an employee clocks off work he is still in the course of employment merely because he is in the Mainland.”

54.  On the other hand, Mr Sarony submitted that the detour to the karaoke parlour in the present case was neither of a character nor a duration to disqualify the resumed returned journey to the Customs Port as travel in the course of Mr Chan and the Deceased’s employment.  He referred in particular to the words “for the time being” in Lord Lowry’s proposition 5.  This, he submitted, emphasised that a relevant deviation from or interruption of a journey undertaken in the course of employment will only take the employee out of the course of his employment temporarily for the duration of the deviation or interruption.  Mr Sarony did not seek to argue that the detour to the karaoke parlour was merely incidental to the journey and accepted that it interrupted that journey.  However, his contention was that this interruption was only temporary and that the journey resumed when Mr Lee, Mr Chan and the Deceased got back in Mr Lee’s car to continue on their way.

55.  It is important to note that neither Hsu Shu Chiao nor Li Hoi Shuen decided that a deviation or interruption of a journey undertaken in the course of employment would be more than temporary.

56.  In Hsu Shu Chiao, the deceased employee was employed by a Hong Kong company to work in its factory in Dongguan during the week.  Accommodation was provided to him in Dongguan.  The employer provided a bus for the employee on Monday morning to take him from the railway station in Shenzhen to Dongguan and also in the afternoon on Saturday to take him from Dongguan to Shenzhen to catch the train back to Hong Kong.  If the employee worked late and missed the employer’s bus, he would have to arrange his own transport to Shenzhen and would be reimbursed the cost by the employer.  On the day in question, he worked overtime on a Saturday and hired a taxi to go from Dongguan to Shenzhen to meet his girlfriend, but was killed in a road accident in suburbs of Shenzhen.  The evidence showed that the employee was on his way to meet his girlfriend in a hotel in Shenzhen.

57.  On his claim for employees’ compensation, the Court of Appeal held, reversing the trial judge, that the deceased employee was killed in the course of his employment.  Mayo VP decided the case on the basis of s. 5(4)(g) of the Ordinance, namely that the accident had occurred while the employee was, with the express or implied permission of his employer, travelling for the purposes of and in connection with his employment between a place outside Hong Kong and any other such place.  Cheung JA, on the other hand, decided the case on the basis that the employee’s presence in the Mainland upon his arrival in Shenzhen was, for all practical purposes, on account of the employment and on the employer’s time. Therefore, his claim was within s. 5(1) of the Ordinance.  Cheung JA did also consider s. 5(4)(g), in respect of which he said:

“37. This section extends the course of employment to an employee who travelled outside Hong Kong so long as the travel is with the permission of the employer and for the purposes of and in connection with his employment. The phrase ‘for the purposes of and in connection with his employment’ clearly covers situations not considered to be ‘in the course of employment’, otherwise there is no need to use these words. These words must be wider than ‘in the course of employment’. They must be intended to cover situations like, for example, the present case where an employee may have difficulties in establishing his journey to the overseas destiny to be ‘in the course of employment’ in view of the stricture imposed by the decided cases.

38.  I would respectfully adopt the purposive approach of interpretation said by this court in Check Chor Ching v Wik Far East Ltd [1991] 2 HKLR 224 and Tan Hua Ning v Tam Wah Sung [1999] 3 HKC 490.  In Tam Hau Ning this court further held that it was for the employee to prove that at the time of the accident he was travelling ‘for the purposes of and in connection with his employment’.  Further, so long as he was travelling for that purpose, it does not matter if the travel entails another or other purposes as well.  But whether one adopts this approach or not, it is clear that [the employee] was required by his employment to work in the Mainland. [The employee’s] presence in the Mainland during the week was for one purpose only, namely, to perform his contract of employment.  This clearly fits into the words ‘for the purpose of and in connection with his employment’.  His journey between Dongguan and Shenzhen comes within the words of ‘travelling between any place outside Hong Kong and any other such place’.  Any other such place means another place outside Hong Kong as well. [The employee] clearly was travelling with the express or implied permission of the employer in the light of the agreed transport arrangement which included [the employee] being allowed to take a taxi and reimbursed by the employer of the fare if he was unable to avail himself of the bus service.  In my view s 5(4)(g) is applicable and will bring the claim within s 5(1) as well.”

58.  Thus, Cheung JA’s primary basis for deciding in favour of the employee in Hsu Shu Chiao was not s. 5(4)(g) of the Ordinance, although he held that it was a further basis on which to find in favour of the employee. Lugar-Mawson J agreed with both Mayo VP and Cheung JA.  Cheung JA did not decide that a break in a journey in the course of employment for a non-work-related activity would be more than a temporary break.

59.  In Li Hoi Shuen v Man Ming Engineering Trading Co Ltd [2006] 1 HKLRD 84 an employee was employed to work as an air conditioning technician and was required to work in Jieying City in the Mainland supervising short-term labourers from out of the province to work on air conditioning projects for about eight months a year.  The employee was either provided with hotel accommodation or rented his own accommodation for which his employer reimbursed him.  In August 2000, he entered into a tenancy to rent a building in Jieying as a warehouse for storing company equipment.  In early April 2001, the employer sent him to work on a particular project in Jieying and the employee recruited two out of province workers to assist him.  Although the employer suggested that the employee rent a hotel, the employee decided to reside in the warehouse with the two co-workers to lower the employer’s costs.  This arrangement was known to the employer.  On 22 April 2001, the two co-workers, unhappy with the employee’s criticism of their work, beat the employee to death whilst he was asleep.

60.  The deceased employee’s father brought an action for personal injuries against the employer and one of the issues raised was whether the deceased employee was murdered in the course of his employment.  The trial judge, Deputy Judge To, held that the employee was not murdered in the course of his employment, but he found in favour of the plaintiff on the basis that the employer was in breach of its duty of care to provide safe accommodation for the deceased employee.  I have set out above the passage from Deputy Judge To’s judgment in which he addressed the question of interruptions in the course of a cross-border employee’s employment.  It is implicit in that passage that he accepted that a break in the course of employment would be temporary and that the course of employment could resume after a break.

61.  Reverting to the present case, I do not accept Mr Ramanathan’s submission that the detour to the karaoke parlour here was of such a character or duration as to prevent the resumption of Mr Chan and the Deceased’s journey in Mr Lee’s car from being a continuation of the course of their employment.  So far as duration is concerned, the detour was for a period of approximately 2½ hours.  I would not regard this as being of such a lengthy period as to constitute more than a temporary interruption to a journey undertaken in the course of employment.  So far as the character of the detour is concerned, I see no reason to regard the visit to the karaoke parlour as any different to a visit to a cinema, café or restaurant for the purposes of entertainment, a drink or a meal before commencing or resuming a work-related journey.  Indeed in some cases, a detour which is merely incidental to the journey (for example, a stop for a cup of coffee at a roadside petrol station) would not interrupt the course of employment.  Insofar as the detour to the karaoke parlour did interrupt the journey undertaken in the course of employment, as is accepted to be the case here, I would hold that it did so only on a temporary basis until the return journey was resumed.  That resumed journey was on precisely the same route that Mr Lee’s car would have taken if he had driven them straight from the annual dinner to the border without making the detour to the karaoke parlour and therefore it was, in my judgment, undertaken in the course of Mr Chan and the Deceased’s employment.

62.  The Judge identified three special features which he considered made the present case different from the facts of the previous cases.  These were: first, the provision by the respondent of its own transport for use by Mr Chan and the Deceased for their return journey back to the border; secondly, the fact that the deviation to the karaoke parlour had nothing to do with the work of Mr Chan and the Deceased; and, thirdly, the fact the deviation “considerably increased the risk of the return journey” (Judgment §§93-95).

63.  I have already addressed the provision of transport above in the context of whether that negates the possibility that Mr Chan and the Deceased had implied permission to travel back to the border in Mr Lee’s car.  Since the provided transport for the return journey was not made compulsory for employees returning to Hong Kong but was merely optional and since there was no prohibition on taking Mr Lee’s car, I do not regard this factor as sufficient to distinguish this case from the principle endorsed in Hsu Shu Chiao that a return journey is to be treated on the same footing as an outward journey.

64.  As to the second feature, I would agree that the fact that the detour was not incidental to the employment of Mr Chan and the Deceased or their work-related journey does serve to interrupt the course of their employment represented by the return journey but, as Lord Lowry observed in Smith v Stages, it did so only “for the time being”.  On the facts of the present case, once the detour was over, the return journey continued and their course of employment resumed.

65.  The third feature involves the consumption of alcohol and various factors which the Judge considered increased the risk of the return journey.  As to the consumption of alcohol, the Judge placed some weight on the fact that Mr Lee “had been consuming alcohol the whole evening”.  In my view, and with respect to the Judge, this fact is not determinative.  As noted above, Mr Lee’s blood alcohol level was measured following the accident and found to be below the legal limit for driving in both the Mainland and Hong Kong.  There is no evidence that the accident was caused or contributed to by Mr Lee’s consumption of alcohol.  I do not consider that he was in a materially different position to the drivers of the respondent’s vehicles who had been instructed not to consume any alcohol at the annual dinner.  As to the risk factors, the Judge referred to the lateness of the hour and the possibility that the street “might not be safe so that the risk of encountering robbery or other kinds of criminal activities would be much higher after midnight”.  Again, and with respect to the Judge, there is no evidence to suggest that the lateness of the hour or the perceived increased risk of crime caused or contributed to the accident.

66.  Finally, the Judge considered that, without knowing when and how employees would travel back to the border, the respondent “simply had no control over the safety of the ‘return journey’” (Judgment §96).  In my view, this may be relevant to the question of whether permission to take a particular form of transport is to be implied (which I have addressed above) but it does not, on its own, lead to the conclusion that the detour itself so changes the character of the return journey as to take it outside the course of employment.  I would add, though, in this context, that I see no reason in principle why it would not be open to an employer to prohibit the making of detours for personal business or to limit the types of detours that might be made when travelling by any particular means of transport for the purposes of and in connection with employment so as to limit the extent of any express or implied permission to take that particular means of transport.

67.  In the course of argument, various scenarios were put to counsel to test the limits of the concept of a temporary interruption of a journey undertaken in the course of employment.  These included the scenarios of Mr Lee, Mr Chan and that Deceased (i) staying overnight in the hotel where the karaoke parlour was located before resuming their journey back to Hong Kong the next morning, (ii) staying overnight and then spending the weekend playing golf before resuming their journey back to Hong Kong, and (iii) deciding to embark the next day on a sightseeing tour within the Mainland for the duration of the holiday period and, only after completing that tour, resuming their journey back to Hong Kong.

68.  It is not necessary for the purposes of deciding these appeals to resolve which, if any of the hypothetical scenarios identified in the preceding paragraph might, or might not, so fundamentally alter the nature of Mr Lee, Mr Chan and the Deceased’s journey from the annual dinner back to the border as to take it out of the course of their employment.  Clearly, as Cheung JA recognised in Hsu Shu Chiao, there must be a limit to their course of employment and it may be necessary to apply common sense in deciding whether, on the facts of a particular case, the deviation in the journey in question operates as more than a temporary interruption.  Ultimately, each case will depend on its own facts.  Cross-border employment and work-related travel in the Mainland (and elsewhere) are now common features for Hong Kong employees and other scenarios based on different facts must await decision when they arise.  It is sufficient, in the present case, to hold that this interruption to this particular journey did not cause the resumed return journey to cease being one undertaken in the course of Mr Chan and the Deceased’s employment by the respondent.

69.  For all these reasons, and with respect to the Judge below, I would conclude that the detour to the karaoke parlour only operated as a temporary interruption to the journey undertaken in the course of Mr Chan and the Deceased’s employment and did not mean that they were no longer in the course of their employment when they resumed their journey in Mr Lee’s car and when the accident occurred.

Disposition

70.  For the reasons set out above, I would allow these appeals and hold that the car accident in which Mr Chan was injured and Deceased was killed occurred in the course of their employment with the respondent.

71.  I would make a costs order nisi that the respondent pay the costs of the respective appeals to the appellants, to be taxed if not agreed, and the appellants’ own costs be taxed in accordance with the Legal Aid Regulations.