CHUI KWONG CHUEN v. HIN INTERIOR & ASSOCIATE LTD

DCEC2237/2016

[2018] HKDC 377

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2237 OF 2016

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JUDGMENT

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Introduction

1.  This is the trial of an employees’ compensation application. The applicant claims that he fractured his left wrist in an accident which took place on 11 November 2015 while he was in the employment of the respondent.

2.  The respondent does not dispute that the accident occurred.  But it denies liability on the ground that at that time the applicant was self-employed and was not its employee.

3.  The parties also disagree on the amount of compensation payable under the Employees’ Compensation Ordinance, Cap 282, in the event that liability is established.

4.  At the trial, the applicant testified.  He also called Cheung Chun Kin, a co-worker, to give evidence.  The respondent had two witnesses – Luk Wai Wah and Lee Ping Kwun.  Luk is a director of the respondent.  Lee says he is a self-employed contractor who has worked for the respondent on its projects for over 10 years.

The applicant’s case

5.  The applicant’s case is as follows.

6.  He has over 30 years of experience as a painter. Like many manual labourers in Hong Kong, he has been working on a casual basis.  He works from one site to another as and when there is work.

7.  Through the introduction of Cheung, the applicant started to work for the respondent on 14 October 2015.  As instructed by Lee, whom the applicant described as the contact person of the respondent, the applicant worked initially at an office unit in Taikoo Shing.  After a few days, on 19 October, Luk paid a visit to the Taikoo Shing site.  He asked the applicant whether he would like to carry on working for the respondent.  The applicant replied that he needed to take a few days off as he was not feeling well.  Luk then asked him to resume work at a unit in Kwun Tong after that.

8.  A few days later, the applicant got in touch with Lee and indicated that he could resume work.  At Lee’s instruction, the applicant started to work at the Kwun Tong site from around 25 or 26 October.

9.  On 2 November, Luk visited that site and handed over some cash to Lee.  Lee then handed over $7,200 in cash to the applicant.  That was for the six days’ work he did in October.

10.  The accident happened in the morning of 11 November.  A co-worker of the applicant fell from a ladder causing paint to splash on the floor.  While the applicant was trying to clean up the floor, he slipped, lost balance and fell.  His left wrist was injured.

11.  In his witness statement and oral testimony, the applicant gave an account of his working relationship with the respondent. Throughout the time he worked for the respondent, he and Lee did not expressly discuss the terms of his engagement, including his daily wage and working hours. All was done in accordance with industry practice.  He was paid a daily wage of $1,200 and he worked from 9am to 6pm, with a lunch break of one hour from noon and a tea break in mid-afternoon every day.  That was also confirmed by Cheung in cross-examination. 

12.  The applicant worked according to the instructions given by Lee from time to time.  He had no say in what to do at the site but simply to finish the job as assigned to him by Lee.  He could not outsource his work to another person or hire another worker to assist him in his job.  When he was engaged by the respondent for the day, he could not work for another contractor.  He was not required to bring his own tool or equipment.  The respondent supplied the paint, brushes, pails, shovels and other tools needed for the painting jobs.  Apart from the daily wage, the applicant would not share any profits with the respondent or bear any loss out of the projects.

13.  Accordingly, the applicant contends that he was an employee of the respondent when the accident occurred.

The medical treatments

14.  Immediately after the accident, the applicant was seen by the doctor at the A&E Department of Kwong Wah Hospital.  The diagnosis was left wrist fracture.  He was referred to the Orthopaedics & Traumatology department for further consultation.  He attended a total of 31 physiotherapy treatment sessions since December 2015.  The last session took place in April 2016 and the progress was reported to be static.  He also attended the Occupational Therapy Department for work rehabilitation programme.  Sick leave was granted to the applicant from the day of the accident to 16 June 2016.

15.  The applicant was assessed by the Employees’ Compensation (Ordinary Assessment) Board.   The assessment as recorded in Form 9 was that the applicant suffered from left wrist fracture resulting in left wrist pain and weakness.  The loss of earning capacity permanently caused by the injury was assessed to be 3% and the sick leave period certified to be from 11 November 2015 to 16 June 2016.  The applicant now appeals against the assessment in respect of the loss of earning capacity.

The respondent’s case

16.  The respondent’s factual case is not vastly different from the applicant’s.  The real issue in contention is the status of the applicant – whether he was an employee or a self-employed person.

17.  The respondent is engaged in the business of refurbishment and decoration of offices and apartments.  In his oral evidence, Luk accepted that he is the “boss” of the respondent.  He would take care of the design of the projects and he would source new business opportunities.  On the actual execution of the works, he has partnered with Lee who would make arrangements for the execution of the projects, including hiring, assigning jobs to and supervising the workers and sourcing materials.  In his oral evidence, Luk sought to give an impression that he would leave it to Lee to handle the execution of the works and that he himself did not know much details.  He also said that he did not even know the applicant, whether by face or by name.

18.  The respondent’s position is that all the workers hired to work on its projects, including the applicant, are self-employed.   They do not enjoy any employee benefit such as mandatory provident fund, paid leave, sick leave or medical insurance.  Also, the workers are free to work for other companies.

19.  According to Lee’s account in his witness statement, the applicant first started to work for the respondent on about 1 November 2015 at the Kwun Tong site.   (However, in cross-examination, Lee seemed to accept that the applicant first worked at the Taikoo Shing site in around mid-October.  That would be in line with the applicant’s account of events.)  On that occasion, he specifically informed the applicant that his earnings would be around $1,100 per day.   In his witness statement, Lee said that he informed the applicant that he was to work with the respondent on a self-employed basis as a contractor.  Yet, in cross-examination, Lee changed his evidence slightly and said that he “probably” had so informed the applicant.

20.  Lee also told the applicant that if he required to take any day off, he simply needed to verbally inform Lee and that the applicant was entitled to work for other companies at the same time while working for the respondent.  He also told the applicant that if further equipment was needed, the applicant should inform him and Lee would purchase the equipment and such costs would be borne by the respondent. 

21.  As to payment of the applicant’s earnings, Lee said in his witness statement that the applicant would be paid in a lump sum by cheque at the end of the project or when the applicant finished working for the respondent, whichever is earlier.  However, in cross-examination, both Lee and Luk accepted that the workers would normally be paid roughly on a 15-day cycle, in accordance with industry practice.

Discussion

22.  As remarked above, the factual disputes are not extensive.  The major dispute would appear to be when Lee hired the applicant, whether he specifically informed the applicant that he was taken on as a self-employed contractor.  The applicant denies that there was such a conversation.  The credibility and reliability of the evidence is to be tested by inherent probabilities, consistency (eg as between a witness’ oral and written evidence) and the demeanour of the witnesses.  Contemporaneous documents do not feature in this case.

23.  I consider that the factual case put forward by the applicant is straightforward, consistent and inherently plausible.  The evidence of the applicant and Cheung remains firm and unshaken under cross-examination. 

24.  On the other hand, Lee’s evidence is not as coherent or consistent.  At one point, Lee suggested that all casual workers in the industry are self-employed and he gained this understanding from some workers’ association.  This suggestion is obviously far-fetched and inherently improbable.  As noted above, his oral evidence differs from his witness statement in three respects – see paras 19 and 21.  His demeanour as a witness does not inspire confidence at all.  He appeared evasive throughout his testimony. 

25.  As for Luk, it is apparent that there was a deliberate effort on his part to distance himself from the responsibility over the respondent’s workers.  He even denied that he knew the applicant at all. The applicant’s evidence was that he met Luk on a few occasions, including at tea breaks when working at the Kwun Tong site.

26.  Having weighed the inherent probabilities and plausibility of the parties’ cases and considered the consistency of their evidence as a whole, I consider that the evidence of the applicant and Cheung are more credible and reliable than that of Luk and Lee.  I find, on a balance of probabilities, that the applicant’s account of events is a truthful account.  Where the respondent’s account of events is in conflict with it, it ought to be rejected.

27.  On the facts as found, applying the approach laid down by the Court of Final Appeal in Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLRD 951 at 961A-F, it is overwhelmingly clear in my view that at the time of the accident, the applicant was an employee of the respondent for the purpose of employees’ compensation.

28.  The matters relied upon by the applicant, as set out in paras 11 and 12 above, are typical indicia pointing to an employer-employee relationship in the context of manual workers in Hong Kong. The fact that there was no commitment on the applicant’s part to take up the job or on the respondent’s part to hire the applicant is beside the point. This is the very nature of casual works in Hong Kong.  Here, when the applicant worked for the respondent, he was to follow the instructions of the respondent (through Lee).  He was provided with the necessary tools to do his job, as assigned. He was to work regular hours.  He earned his wage by the day and was paid his earnings regularly around every 15 days.

29.  Notwithstanding the absence of any MPF arrangement, paid or sick leave entitlement, insurance cover, all the other indicia all point to the relationship of employment and I so hold.

30.  Being an employee, the applicant is entitled to compensation in respect of his left wrist injury under the Ordinance.

Quantum

31.  The applicant attended a joint examination conducted by the parties’ orthopaedic experts, namely Dr Lam Chi Keung Johnson (for the applicant) and Dr Chan Wai Fu (for the respondent), on 22 September 2017. A joint medical report dated 2 December 2017 was filed with the court.  It is admitted into evidence without cross-examination of the experts.

32.  The experts agree that the diagnosis is “left wrist injury with fracture left distal radius” and this is consistent with the mechanism of the injury as described by the applicant.  In the joint examination, the applicant complained of residual left ulnar wrist pain with weakness and reduced tolerance with exertion, eg, when supporting a tray of filler or clay for a long duration.

33.  The experts are divided on their assessment of loss of earning capacity. 

34.  Dr Lam, the applicant’s expert, is of the opinion that it is likely that the applicant still has some genuine pain and impairment in the left wrist (weakness, DRJU instability, decreased endurance with exertion).  He would be able to cope with many duties of his pre-accident job but would not be able to cope with too heavy tasks (eg, tasks requiring frequent or prolonged heavy lifting of over 20 kg, or a very strong grip with his left hand), or tasks that require prolonged exertion with his left hand. His estimate is that the residual pain and impairment and reduction in work capacity is mild to moderate and his loss of earning capacity is 5%.

35.  On the other hand, Dr Chan, the respondent’s expert, considers that the applicant’s residual pain and reduction in work capacity is not as serious as estimated by Dr Lam.  Dr Chan expects the applicant’s residual left wrist pain to be mild to minimal.  He should be able to return to his pre-accident work with mild reduction in work capacity. Dr Chan would estimate his loss of earning capacity to be 2%.

36.  In respect of the sick leave period, the experts agree that the period as certified by the treating doctors is appropriate.

37.  In his witness statement, the applicant describes that he would still experience pain and numbness in his left wrist from time to time and the pain is worse when the weather changes.  Also, he resumed doing casual work as a painter at a daily wage of $1,200 but he is no longer able to move or carry heavy objects.  In his oral evidence, he mentioned that he can no longer take on those jobs which require a long period of strenuous work, such as spreading filler or clay.

38.  I have found that the applicant’s evidence is generally credible.  I accept his testimony in respect of how his injuries have affected his work.  This is also consistent with what he told the experts during the joint examination.  I consider that it is a relevant factor which should be taken into account in assessing his loss of earning capacity.  Dr Lam has specifically mentioned this factor in arriving at his opinion whereas Dr Chan does not appear to have commented on it at all.  Furthermore, unlike Dr Lam, Dr Chan’s conclusion has been reached with very brief reasoning and not much reference to the complaints made by the applicant.  It is not clear what view Dr Chan in fact took of those complaints.

39.  Accordingly, I would prefer Dr Lam’s assessment to Dr Chan’s.  The reduction in the applicant’s work capacity is clearly more than “mild”.  I hold that he has suffered from loss of earning capacity of 5%.

40.  The applicant was 58 years old when the accident happened.  It is common ground that his daily wage then was $1,200.  On the facts as found, the applicant worked for the respondent from 14 October to 11 November 2015, initially at the Taikoo Shing site and from around 25 or 26 October onwards at the Kwun Tong site.  He received six days’ wages for October and 11 days’ wages for November.  Accordingly, he worked for a total of 17 days during a period of about a month before the date of accident.

41.  The monthly earnings should be calculated in a way which is most favourable to him under section 11 of the Ordinance.  In opening submissions, the applicant confirmed that he would rely on section 11(1)(a) to calculate his monthly earnings.  Accordingly, I hold that his monthly earnings at that time would be $20,400 ($1,200 x 17). 

42.  The compensation payable under section 9 is therefore $48,960 (ie $20,400 x 48 x 5%).

43.  The sick leave period is agreed to be 219 days.  The compensation payable under section 10 is $119,136 (ie $20,400 x 219/30 x 4/5).

44.  Having taken into account the daily cap of $200 (which applies at the time of the accident), the applicant claims a total sum of $1,280 for medical expenses under section 10A, which comprises (a) $280 paid to Kwong Wah Hospital, and (b) $1,000 paid to a bonesetter in private practice. 

45.  The respondent opposes item (b) on the ground that there is inadequate evidence to show that the bonesetter whom the applicant consulted is a registered Chinese medical practitioner as required under section 10A(3).  At the trial, there was a late application by the applicant to adduce as evidence a printout from the website of the Chinese Medicine Council of Hong Kong showing the name and registration number of the bonesetter.  These details match with the information shown on the receipts which were issued to the applicant in 2016.  The only discrepancy is the address of the bonesetter.  A trial, I allowed the document to be admitted. Notwithstanding the difference in address, I am satisfied that the printout relates to the same bonesetter and that is sufficient proof of his registered status as required under the Ordinance.  I therefore allow the claim of $1,280 under section 10A.

46.  In summary the applicant is entitled to compensation as follows:

Section 9	$48,960
Section 10	119,136
Section 10A	1,280
Total:	$169,376

Orders

47.  Accordingly, there shall be judgment in favour of the applicant in the sum of $169,376.  Interest shall accrue on this sum at half the judgment rate from the date of the accident until the date of judgment and after that at judgment rate until payment in full.  The applicant’s appeal against Form 9 is allowed in respect of the loss of earning capacity as held above.

48.  I further make an order nisi that the respondent do pay the applicant’s costs of the action, to be taxed if not agreed, with certificate for counsel and that the applicant’s own costs be taxed in accordance with the Legal Aid Regulations.