CHANTEX ENGINEERING LTD. v. CHAN HEI TAI AND OTHERS

DCEC 571/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’COMPENSATION CASE NO. 571 OF 2002

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Ruling

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1. The three cases before me arise out of a building site accident on 29 October 2001, when a building collapsed, causing fatalities. In each case the family members of the deceased employee applied to the Commissioner of Labour for determination of compensation under section 6B of the Employees' Compensation Ordinance, Cap. 282 ("the Ordinance") and the Commissioner issued a Certificate of Compensation Assessment for Fatal Case. In each case of the family members were minors. The employer's solicitors were concerned as to how the minority interests were to be protected. On counsel's advice the employer applied to the court under section 6D (9) to have the Certificate made an order of the court, and paid into court the total compensation assessed by the Commissioner, with a view to having that part of it which the Commissioner had apportioned in favour of the minors dealt with by directions of the court under Order 80 Rule 12 of the Rules of the District Court, Cap. 336.

2. The new statutory scheme, introduced by amendments to the Ordinance in 2000, gives the parties the option of having the claim determined by the Commissioner or by the court. It allows the Commissioner to determine and apportion compensation payable to family members of the deceased in a fatal accident case, on application by the family members and with the consent of the employer. If the consent is withdrawn, or if various other circumstances apply, as provided for by section 6(2), the Commissioner must not determine or continue to determine the claim and the matter has to be determined by the court pursuant to section 18A(1). Once the Commissioner issues his Certificate then, subject to provisions for objection and review, the employer must pay the compensation to the family members not earlier than 42 days and not later than 49 days after the date of issue of the Certificate. In the event of failure, surcharges apply.

3. The new scheme unfortunately provides no mechanism for protection of minority interests, as there would automatically be under Order 80 if the compensation were determined and apportioned by the court, or if in proceedings brought before the court, the parties reached agreement. The employer's solicitor has obtained information from the Labour Department that in cases such as this the employer will normally issue crossed cheques to the family members including minors; sometimes banks do not allow a person under the age of 11 to open an account; and in such a case the Labour Department will advise the employer to make payment to the minor's guardian but to require the guardian to sign an undertaking that the compensation received on the minor's behalf will be used solely for the minor's benefit. Such an undertaking obviously provides little protection for the minor.

4. There are two mechanisms by which the Commissioner's determination and apportionment may be brought before the court, namely application under section 6D (9) for the Certificate to be made an order of the court, or appeal to the court under section 6H.

5. Section 6D(9) provides:

A Certificate of Compensation Assessment for Fatal Case or Review Certificate of Compensation Assessment for Fatal Case, other than a Certificate cancelled under subsection (7) may, on application to the Court by the employer, any person named in the Certificate, or the ECAFB, be made an order of the Court, and for the purposes of this subsection, the amount payable under any such Certificate shall include any surcharge payable under subsection (3).

6. Subsection (3) provides for surcharge in the event of late payment. The obvious primary intention of subsection (9) is to allow for enforcement of the Commissioner's certificate for the sums due thereunder, plus surcharges in cases of non-payment by making it an order of the court at the instance of a person named in the Certificate. However the employer may also apply, as it has done in these cases.

7. In DCEC 571 and 572 of 2002, the Certificates were issued on 8 May 2002 and the last day for payment was 26 June 2002. The employer applied to the court on that day and paid the assessed compensation into court on the following day; I am told that this was because the court could not accept payment in the late afternoon when the applications were filed. In DCEC 735 of 2002, the Certificate was issued on 2 July 2002. The employer filed its application and made payment into court on 17 August 2002, i.e. within the time limit.

8. In each case it is now argued on behalf of the family members that the payment into court was not valid; the employer should have paid the money direct to the persons named in the Certificate, or at least to those of them who were of full age. The effect is that the payment is now late; in any event it was late by one day in DCEC 571 and 572. Therefore the surcharges apply and should be paid by the employer. Further, the employer should bear the costs of these proceedings.

9. It is argued on behalf of the employer that it had every right to apply under section 6D(9). It is proper for the court to supervise the compensation paid to minors. The action was taken on counsel's advice. In any event if the payments are now late, there was a reasonable excuse for this.

10. It seems to me that the employer had every right to apply to the court under section 6D(9) and make payment into court. There was nothing invalid about the payment in. However it would have been open to the employer to pay direct to the adult family members within the time limit. Provision for payment on account of a claim which is pending settlement is made in section 13(3). Such payment would not have precluded the applications under section 6D(9); although the whole of the certificate would become an order of the court, there was no need for the whole of the compensation to be paid in. There was no question of apportionment to be done by the court as between the adults and the minors; the Commissioner had already done that.

11. If I am wrong and the payment in is in some way invalid, and the payment is to be treated as late it seems to me that the employer has a reasonable excuse for it and is not liable to surcharge.

12. I will therefore order that in each case the Certificate be made an order of the court. The family members will in each case have liberty to apply for payment out of the compensation apportioned to the minor children. I have already ordered payment out to the adults.

13. There is a further complication in DCEC 735 in that the Certificate requires amendment because two stepsons have come to light and they need to be included in the apportionment. There is no dispute about this. The Commissioner could review his determination on his own initiative under section 6D(4) but this would take time. It would also be open to me to vary the Commissioner's determination on appeal under section 6H.

14. Section 6H provides:

(1) Subject to the provisions of this section, an appeal shall lie to the Court from a determination under section 6B(1)(a), 6C(1)(a) or (11), 6D(6)(b) or 6E(1)(a) or (12), as the case may be.

(2) No appeal shall lie after the expiry of 42 days from the date of issue of the certificate concerned under section 6B, 6C, 6D or 6E, unless the Court, as it thinks fit, extends the time for an appeal notwithstanding that the 42 days period has elapsed.

(3) On an appeal under this section, the Court may confirm or vary the determination of the Commissioner.

(4) Where the Court varies the determination of the Commissioner, the Court shall-

(a) in the case of a determination under section 6B(1)(a) or 6D(6)(b), make an order to apportion the amount of compensation payable under section 6(1) to the member of the family of the employee according to section 6A;

(b) in the case of a determination made under section 6E(1)(a) or (12), make an order to apportion the amount of reimbursement payable to each person who has paid the expenses of the funeral of the employee and the expenses of medical attendance on the employee taking into account section 6E(5).

(5) The Court shall-

(a) subject to section 6G, direct the employer to pay to the Court any amount of payment which is payable by the employer but not yet paid; and

(b) direct any person who has received the payment from the employer in accordance with a Certificate of Compensation Assessment for Fatal Case or Review Certificate of Compensation Assessment for Fatal Case, a Certificate of Interim Payment or Review Certificate of Interim Payment, a Certificate for Funeral and Medical Attendance Expenses or Review Certificate for Funeral and Medical Attendance Expenses to pay to the Court any amount which has been overpaid to the person taking into account the apportionment made by the Court; and

(c) make such order as to costs as the Court thinks fit.

(6) The amount apportioned to-

(a) any member of the family ; or

(b) any person who has paid the expenses of the funeral of the employee and the expenses of medical attendance on the employee, shall be paid to him, or be invested, applied or otherwise dealt with for his benefit in such manner as the Court thinks fit.

15. I have suggested to the parties that I treat this matter as a joint application for leave to appeal out of time under section 6H, and allow the appeal by varying the determination of the Commissioner to include the two stepsons. As I understood it they did not object to this. I therefore treat this matter as a joint application for leave to appeal out of time under section 6H, and allow the appeal by varying the determination of the Commissioner so that the compensation be apportioned in the following manner:

Vu Ngoc Dung be entitled to 50 % i.e. HK$357,798.84;

Tran Tien Trung be entitled to 2.5% i.e. HK$17,889.94;

Tran Khac Huy be entitled to 2.5% i.e. HK$17,889.94;

Le Thuy Linh be entitled to 45% i.e. HK$322,018.96.

16. As to costs, it seems to me that since in all those cases, both sides have succeeded in part they should bear their own costs. I therefore make no order as to costs. Since I am handing down this judgment in the absence of the parties, that order will be nisi.

17. I realise that there is a problem with the legislation, in that there is no provision as to what is to happen to compensation determined by the Commissioner in favour of minors. There is no protection for the minor interests, unless the matter is brought before the court. It would be possible, in any case where minor family members are involved, for the employer to refuse to consent to determination by the Commissioner or for the Commissioner to decline determination on the basis that the claim is not suitable for it. However this would in either case mean the inevitable delay and expense of bringing the matter before the court. The family members should not be put to that delay and expense.

18. At the same time the employer wishing to protect itself should not have to be put to the expense of issuing proceedings. I mentioned to the parties that I thought it might have been possible to bring the matter before the court by appeal under section 6H which gives the court power to confirm as well as vary the Commissioner's determination, but if that is so it would still involve expense to the employer. Perhaps the best plan would be to amend the legislation. I direct that a copy of this judgment be sent to the Commissioner for Labour, for his information.