CHAN SZE YUEN v. TIN WO ENGINEERING CO LTD AND OTHERS

CACV 71/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 71 OF 2011

(ON APPEAL FROM DCEC NO. 193 & 750 OF 2007)

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JUDGMENT

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Hon Hartmann JA:

1. I agree with the judgment of Chu JA and have nothing to add.

Hon Chu JA:

2. This is the 2^nd and 3^rd respondents’ appeal against the Judgment of Acting Chief District Judge Poon dated 29 March 2011 ordering them to pay to the applicant employees’ compensation in the sum of $146,054 together with interest and costs.  The appeal is directed solely at the trial judge’s finding that the 2^nd and 3^rd respondents are liable to pay employees’ compensation, and not against the quantum awarded.

The action

3. The claim arose out of an industrial accident that happened on 24 June 2005 at the Venetian Hotel construction site in Macau (“the Site”), as a result of which the applicant sustained an injury to his right foot.

4. The applicant was a steel binder from Hong Kong. The 1^st respondent is a Hong Kong company.  The applicant was its employee working on its construction site in Hong Kong until he commenced work at the Site.  Both the 2^nd and 3^rd respondents are Macau companies.  The 3^rd respondent was the main contractor for the Venetian Hotel project and the 2^nd respondent was its sub-contractor.  It is not disputed that at the time of the accident, the applicant was an employee of the 2^nd respondent.

5. The trial judge dismissed the claim against the 1^st respondent on the basis that the applicant was not employed by the 1^st respondent when he worked at the Site.

6. The applicant’s claim against the 2^nd respondent is based on section 30B(5) of the Employees’ Compensation Ordinance, Cap. 282 (“the Ordinance”). It is the applicant’s case that he was recruited or engaged by the 2^nd respondent in Hong Kong.  In the case of the 3^rd respondent, it is common ground that if the 2^nd respondent was liable to the applicant, it would also be liable under the Ordinance as the principal contractor.  The 2^nd and 3^rd respondents dispute that the applicant was recruited or engaged in Hong Kong.  Their case is that the applicant was recruited or engaged in Macau and that he only became employed and enrolled by the defendant’s foreman when he was at the Site on 8 June 2005.

7. The trial judge accepted the applicant’s evidence which is to the following effect: On 7 June 2005, the applicant understood from Chan Pui Shing (“Chan”), another worker employed by the 1^st respondent, that a foreman named Wong Shu Ming (“Wong”) directed him and three other workers to go to Macau on the following day to work because there was urgent work that required their assistance.  Accordingly, on 8 June 2005, the applicant and the three workers arrived in Macau.  They contacted a foreman named Lam Chun Bun (“Lam”) and went to meet him at the Site.  Lam gave them the key to the workers’ quarter and told them to start work on the next day.  They rested in the quarter and duly started working on the Site on 9 June 2005.  The applicant continued to work on the Site until the accident happened.

8. The evidence called by the 2^nd respondent at the trial shows that Wong and Lam were the 2^nd respondent’s foremen from end of May 2005 until November 2008.  Neither of them was called to give evidence. 

9. The trial judge found that at the time the applicant set off to Macau, his employment to work at the Site had already been confirmed and that he was not going to Macau merely to see whether he would be employed.  Applying the ordinary English meaning of the word “recruitment”, he held that the applicant was recruited or engaged in Hong Kong and that section 30B(5) of the Ordinance applies.

The appeal

10. It is against these findings that the 2nd and 3rd respondents now seek to appeal.  A total of ten grounds[1] were raised in the Notice of Appeal.  In the course of his submissions, Mr Pirie sought leave to raise a further ground.  We agreed to hear the arguments on a de bene esse basis.  The grounds of appeal fall broadly into three aspects.  Firstly, they challenge the finding that the applicant was recruited or engaged in Hong Kong.  Secondly, they complain that the trial judge erred with regard to the burden of proof.  Thirdly, they seek to overturn several of the trial judge’s findings on the facts of the case.

Section 30B(5) of the Ordinance

11. Under grounds 1, 2 and 10, it is said that the trial judge was wrong in law and on the evidence to find the applicant had been recruited or engaged in Hong Kong to work in Macau. 

12. Section 30B(5) of the Ordinance provides:

“If an employer who is a person carrying on business outside Hong Kong submits or has agreed to submit to the jurisdiction of the Court, then, notwithstanding that the accident causing the personal injury occurred outside Hong Kong, this Ordinance shall apply to employees within the meaning of this Ordinance who have been recruited or engaged in Hong Kong.”

13. There is no dispute that the 2nd and 3rd respondents have submitted to the jurisdiction of the Hong Kong Court. The only issue between the applicant and the 2nd and 3rd respondents at the trial is whether the applicant had been recruited or engaged in Hong Kong.

14. In the court below, counsel for the 2^nd and 3^rd respondents argued that simply providing information of job opportunity did not constitute recruitment and suggested that the usual activities in a recruitment involved placing advertisements, setting up recruitment centre and employing agencies.  The trial judge accepted that to amount to recruitment, there must be something more than just the provision of information of a job opportunity, but was of the view that recruitment could take different forms so that the lack of any of the activities suggested by the respondents’ counsel did not mean there was no recruitment. 

15. Before us, Mr Pirie submitted that there must be some positive act or recruitment or engagement carried out by a suitably authorized person and that the formalities prescribed by section 5 of the Contracts for Employment Outside Hong Kong Ordinance, Cap.78 have to be complied with.  Section 5(1) of Cap.78 requires contracts entered for employment outside Hong Kong to be in writing and signed by the employee and the employer or someone acting on his behalf before the employee’s departure from Hong Kong.  Section 5(2)(ia) further requires the contract to “provide that where the employee sustains personal injury by accident or occupational disease arising out of or in the course of employment, the employer shall … pay or arrange with the appropriate authority for payment of compensation in accordance with the law of the place of employment or, if no law on compensation exists, the employer shall pay compensation not less favourable than that laid down in the Ordinance …”

16. Section 30B(5) of the Ordinance refers to the employees “who have been recruited or engaged in Hong Kong”.  Mr Lam who appeared for the applicant submitted that “recruited” has a different meaning from “employed”.  I agree.  The effect of section 30B is to extend the application of the Ordinance to employees who are injured outside Hong Kong. The section draws a distinction between employers who carry on business in Hong Kong and those who carry on business outside Hong Kong.  The former is covered by subsection (2), which provides, inter alia, that the employee’s contract of employment must be entered into in Hong Kong.  The latter is covered by subsection (5), which makes no reference to contract of employment, but requires instead that the employee has to be recruited or engaged in Hong Kong.  It is clear that the legislature intends different requirements for the application of the two subsections. Unlike subsection (2), subsection (5) does not require the employee’s contract of employment to be entered into in Hong Kong. The word “recruited” in subsection (5) therefore must bear a meaning different from “employed”. 

17. It is impermissible to, as Mr Pirie sought to do, read the term “recruited or engaged” in section 30B(5) as requiring a contract of employment to fulfill the formalities prescribed by section 5 of the Contracts for Employment Outside Hong Kong Ordinance.  Moreover, given that Cap.78 has no application to an employee who does not perform primarily manual work and whose wages exceed an amount set by the Secretary for Labour and Welfare by notice in the Gazette (see section 4(2)(d)) whereas the application of the Ordinance and also section 30B(5) is not similarly restricted (see section 2(1) of the Ordinance), it cannot be right to read into section 30B(5) the requirement that the contract of employment must comply with the formalities prescribed by section 5 of Cap. 78.  

18. In my view, the trial judge is correct in holding that the mere provision of information of job opportunity will not be enough to amount to recruitment. Given that different trades and professions will have different practices and modes of recruiting employees, it will be difficult, if not impractical, to attempt to define what amounts to recruitment or when an employee is regarded as having been recruited.  It must depend on the facts of the case.  That said, however, I accept that the recruitment must be conducted by someone who is authorized to do so.  This is a matter of evidence.

19. Mr Pirie argued that on the applicant’s evidence, he had failed to discharge the onus of proving he had been recruited or engaged before he left Hong Kong for Macau.  It was said that the applicant was only asked by one co-worker to go to work in Macau and that it is not the function of a foreman to engage workers.  On the latter point, it should be noted that what Mr Pirie submitted about what was a foreman’s scope of duties and that recruitment or employment of workers is the responsibility of a site agent is not supported by the evidence in the case.  To the contrary, Mr Tsang Chun Fung, the manager of the 2^nd respondent, testified that he was assisted by others in the recruitment of workers (Transcript p.106E-F). Further, when he was explaining that there was no formal or rigid recruitment procedure, he stated that Wong and Lam might have done it differently (Transcript p.111I).  That aside, the evidence of the applicant is that he was given to understand by Chan that there was urgent work in Macau that required helping hands and that he and three other workers were directed by the foreman, Wong, to go to Macau on the next day to help with the work there.  The trial judge accepted his evidence and rejected the respondents’ suggestion that the applicant went to Macau merely to see whether he would be employed.  The trial judge found what was conveyed to the applicant through Chan was more than a supply of information of job opportunity, that it was a direction to him to work at the Site and that when he set off for Macau he was certain that he would be working at the Site.  On this basis, the trial judge concluded that the applicant had been recruited in Hong Kong.  In my view, on the evidence as accepted, there is ample room for the trial judge’s conclusion that the applicant was recruited or engaged in Hong Kong. 

Onus of proof

20. Ground 3 says that the trial judge was wrong to say that it was for the 2^nd and/or 3^rd respondents to refute the evidence and that he erred in reversing the onus of proof.  The complaint stems from paragraph 38 of the Judgment which reads:

“I note also Mr. Pirie’s submissions attacking the general credibility of the Applicant, particularly in relation to the incorrect evidence he has given initially on the dates of setting off to Macau and the hand-written entries in his diary. However, neither R1 nor R2 saw fit to adduce evidence from Wong Shu Ming or Lam Chun Bun to rebut the evidence given by the Applicant concerning what they did. I see no reason not to accept the Applicant’s evidence in this regard.”

21. The trial judge’s comment that the respondents had chosen not to call either of the two foremen was made in the context of dealing with the credibility of the applicant.  He did not reverse the onus of proof.  The fact that there was no contrary evidence adduced in the trial must be a relevant consideration when the trial judge assessed the credibility and reliability of the applicant’s evidence.  Moreover, Wong and Lam were the 2^nd respondents’ employees until November 2008 and they could have spoken on the circumstances under which the applicant went from Hong Kong to Macau and started work at the Site.  The respondents’ failure to call them as witnesses is a matter that the trial judge is entitled to take into account in deciding whether to accept the applicant’s evidence in these aspects; he may also draw adverse inference against the respondents’ case: see British Railway Board v. Herrington [1972] AC 877, at 930G-H; and Tam Po Kei v. Tam Bo Kin & Others [2011] 1HKLRD 537, at paras. 27 & 28.   

The trial judge’s findings of facts

22. Grounds 4 to 9 and the new Ground 12 all relate to the trial judge’s findings on the fact.  Ground 8 complains about the trial judge’s assessment of the applicant’s credibility.  Grounds 4 to 9 and 12 seek to overturn the trial judge’s findings that:  (i) the applicant understood from Chan that Wong “directed” him and three other workers to go to work in Macau (Ground 4); (ii) the applicant did not go to Macau to see whether he would be employed.  Instead, when he left for Macau, his employment to work at the Site had been confirmed (Grounds 5 and 9); (iii) the extra benefits that the applicant would earn in Macau were insignificant to cause him to leave his employment with the 1^st respondent in Hong Kong and risk not being employed in the end (Grounds 6 and 7); and (iv) during the relevant time, the demand for workers at the Site had been rapidly increasing and there was incentive for the 2^nd respondent to recruit more workers to work on the Site (Ground 12). 

23. The law relating to appeals against findings of fact is trite.  An appellant court must have regard to the advantage enjoyed by a trial judge who received evidence on the disputed issues of fact at first hand, and would only intervene if satisfied that the trial judge’s conclusion on the facts is plainly wrong.  But if it is not so satisfied, it should defer to the trial judge’s conclusion even if in some doubt as to its correctness: Ting Kwok Keung v. Tam Dick Yuen & Others (2002) 5 HKCFAR 336, at para.42. 

24. On the issue of the credibility of the applicant, the thrust of the complaint both in the court below and on appeal is that the applicant had made a mistake in his witness statement about the date he set off for Macau; he said he went on 7 June 2005 when it should have been 8 June 2005.  It was argued that the trial judge should have formed an adverse view of the applicant’s credibility, the reliability of his recollection and evidence that he was required to go to Macau “to save the fire” because there was urgent work at the Site.  In his evidence-in-chief, the applicant had alluded to and admitted this mistake.  The trial judge was therefore fully aware of it and had taken it into account when assessing the credibility of the applicant and the reliability of his evidence: see paragraph 38 of the Judgment.  The mistake (and the difference of one day) is, as Mr Lam pointed out, wholly immaterial to the core issues in the case.  There is no basis to interfere with the trial judge’s assessment on the credibility and reliability of the applicant and his evidence.

25. As for the finding that there had been a rapid increase in the demand for workers at the Site in June 2005, Mr Pirie argued that this is contrary to the evidence of Tsang that the work at the two sites in Macau was only in the startup stage.  However, what Tsang was referring to was the time he joined the 2^nd respondent, namely, July 2005.  And while he said there was not a huge shortage of manpower, Tsang acknowledged the situation was tight, though not so tight (Transcript p.107K). Importantly, his evidence is that the number of workers had been expanding rapidly, increasing from 30 odd in June and July to 500 to 600 in late 2005 and beginning of 2006 (Transcript p.108H-L).  The trial judge’s finding in this regard is clearly supported by the evidence before him.

26. I turn next to the challenge made to the findings that the applicant went to Macau because he was directed by Wong to help with the work at the Site and that he had a confirmed employment when he left for Macau.  Mr Pirie contended that the findings were flawed because Macau is geographically not that far off, so it was “no big deal” for the applicant to go to Macau, and that he went to Macau on his own volition (as opposed to being directed by Wong) to see if he would be employed.  It was further suggested that the higher wages, the free accommodation and the saving on the daily transportation expenses would have attracted the applicant to look for employment in Macau.  Mr Pirie also made the point that the applicant was under no risk because work continued to be available at the 1^st respondent’s site in Sky Plaza and he could always return to work there. 

27. With respect, it is speculative to say that because Macau is geographically not very far from Hong Kong and there are people who go from Hong Kong to work in Macau on a daily basis, the applicant went to Macau not as a result of being directed to so by Wong through Chan and that he merely went there to see if he would be employed.   

28. As to higher wages, free accommodation and saving on transportation costs, the trial judge was fully entitled to conclude, on the basis of the evidence accepted by him, that they would not have been sufficient to attract the applicant to make a trip to Macau merely to see if he could find employment.  On the undisputed evidence, the applicant had a secure employment with the 1^st respondent in Hong Kong.  His family is in Hong Kong.  There is no evidence to suggest he was not happy with working at the 1^st respondent’s site in Tung Chung.  Further, the higher wages and savings on transportation expenses would only accrued to him if he was employed to work on the Site.  On these objective facts, there is sound basis for the trial judge’s reasoning that the applicant would not have gone to Macau had it not been certain that there was employment for him at the Site as the mere possibility of obtaining extra benefits would not have caused him to leave the 1^st respondent’s site in Hong Kong to go to Macau. Mr Pirie’s contention that the real inducement for the applicant to want to work in Macau is because he enjoyed gambling is pure conjecture.

29. Mr Pirie further referred to the evidence of Mr Au Yeung Sing that the work at the Sky Plaza site in Hong Kong was running at two shifts and the steel work continued until August 2006.  This, he submitted, shows there was continued availability of work at the Sky Plaza Site and the applicant could afford to leave to go to Macau because if it did not work out, he could always return to work on the site.  But, as Mr Lam pointed out, the continued availability of work at the Sky Plaza site should have been a disincentive, rather than an incentive, for the applicant to leave his employment with the 1^st respondent and to look for employment in Macau.  It should also be pointed out that, contrary to Mr Pirie’s submission, the evidence does not show that applicant had worked in Macau before.

30. In short, the 2^nd and 3^rd respondents have failed to demonstrate that the trial judge was wrong, let alone plainly wrong, in his findings that the applicant was directed to go to Macau and that before he went there, his employment to work at the Site had been confirmed. 

31. Grounds 4 to 10 and 12 therefore fail.

Conclusion

32. For these reasons, I would dismiss the appeal of the 2^nd and 3^rd respondents. 

33. Applying the normal rule of costs follow event, the 2^nd and 3^rd respondents should bear the applicant the costs of the appeal.  Mr Lam asked that the costs be taxed on indemnity basis.  He submitted that the appeal is unmeritorious as well as oppressive, having regard to the fact that it was a modest award of $146,054 for an accident that occurred in 2005 and that the applicant was on legal aid.  There is force in the submissions.  I would order that the applicant’s costs be paid and taxed on indemnity basis, if not agreed.  The applicant’s own costs shall be taxed in accordance with the Legal Aid Regulations.

Hon Lam J:

34. I agree and have nothing to add.