LAU KIN WAI DANNY v. CHAN WAI SANG & ANOTHER

HCPI 1007/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1007 OF 2000

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J U D G M E N T

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The accident

1. The Plaintiff in this action worked as a delivery worker on 14 January 1999 when he met an industrial accident. On that day he was told by his supervisor to demolish a wall inside the Eastern Law Courts Building by kicking at it from a rack at a height of 11 to 12 feet from the ground. After he kicked once, the wall fell. Unbeknown to him, there were water pipes embedded in the wall and they burst when the wall was dismantled. Water and sand gushed at the Plaintiff and he lost his balance and fell to the ground. As a result, he suffered personal injuries. He now claims against the Defendants for damages. He said he was an employee of the Defendants at the time of the accident.

2. The Defendants deny that they were the employers of the Plaintiff. They said that the Plaintiff was an independent contractor. In the alternative, the Defendants said that the Plaintiff was acting outside the scope of his employment as a delivery worker when he undertook demolition work.

3. The trial took place before me on 28 and 29 January 2002. Both Defendants were present although they were not represented by lawyers. Although they have been directed by Master Cannon on 1 March 2001 to do file witness statements within 42 days, they did not do so. In fact, Master Cannon specifically directed them to file their own statements. They chose not to do so. Hence, it was a deliberate choice of theirs in not giving evidence. In those circumstances, they could not call any evidence at the trial. I must stress that all litigants are expected to comply with directions given by the court, whether he is acting in person or represented by lawyers. When directions were given by court to litigants in person, the court would invariably explain the significance of compliance with directions to such persons. Hence, failure to comply with directions would give rise to the same consequences for litigants in person as well as litigants represented by lawyers. At the trial, neither Mr Chan nor Ms Li indicated that they wished to give evidence. At one stage, Mr Chan applied to call a Mr Chau to give evidence. However, when that was met with opposition, he indicated that he would withdraw his application although with the consent of the Plaintiff, I offered to adjourn the case to enable him to call the witness the next day.

4. The Plaintiff gave evidence and was cross-examined by the Defendants. The Defendants did not challenge the Plaintiff as to how the accident happened. I find the Plaintiff to be a truthful witness with regard to the accident and I find the following facts on the basis of his evidence. On 14 January 1999, the Plaintiff went to work at about 8:00 a.m. After lunch, he was told to deliver material to the Eastern Law Courts Building with a supervisor Mr Chau. There were two other workers, one Mr Wu and the other one the Plaintiff knew by the name Ah Pak. There was also a driver. After making the delivery, the supervisor Mr Chau ["Chau"] told the Plaintiff and Mr Wu to assist him in the demolition of a wall. At first they used big hammers to knock at the lower part of the wall. After a while, only the upper part of the wall left. That part was attached to a glass wall. Chau instructed them not to use the hammers for fear of damaging the glass wall. Chau told the Plaintiff to climb to a rack at about 11 to 12 feet above the ground and to kick at the upper part of the wall. The headroom was about 3 feet between the rack and the ceiling. The Plaintiff followed the directions of Chau and kicked accordingly. Then the accident happened as described in Paragraph 1 above.

5. After he got up from the ground, the Plaintiff felt pain in his right leg and foot. He also had a small abrasion over his left frontal head region. He took a taxi to attend treatment at the Accident and Emergency Department of Kwong Wah Hospital. He was given some painkiller and told to attend the Department of Orthopaedics and Traumatology on the next day. The Plaintiff attended that department on 15 January 1999. According to the report of Dr Chan Ka Wah dated 8 April 1999, examination showed swelling and tenderness on the right heel of the Plaintiff. Movement of ankle was satisfactory. There was no external wound. X-ray showed fracture of the right calcaneum. He was treated conservatively and prognosis was satisfactory. He attended follow-up treatments several times. However, after a few times, he did not attend further treatments at the hospital. He sought treatments from bonesetters instead.

Liability

6. I would first consider the issue whether the Defendants were the employers of the Plaintiff. In respect of the employment of the Plaintiff, one of the Defendants Mr Chan Wai-sang was prosecuted for the offence of failing to have an employees' compensation insurance policy in force to cover liability to the Plaintiff pursuant to Section 40(1) of the Employees' Compensation Ordinance. In Kwun Tong Magistracy Case No.KTS 9832 of 1999, Chan Wai-sang was convicted of the said offence after trial. At that trial, the Plaintiff gave evidence as a prosecution witness. Mr Chan and Chau also gave evidence at that trial.

7. Section 40(1) of that ordinance provides:

"...no employer shall employ any employee in any employment unless there is in force in relation to such employee a policy of insurance issued by an insurer ..."

8. Hence, it is essential for the prosecution to establish that the Plaintiff was an employee of Mr Chan. The magistrate had to be satisfied beyond reasonable doubt as to that before she could convict Mr Chan of the offence.

9. In these circumstances, as far as Mr Chan is concerned, Section 62 of the Evidence Ordinance comes into play. Section 62(2)(a) placed the burden of proof on Mr Chan to prove that he has not committed that offence. In the present context, the burden is on the Mr Chan to prove that the Plaintiff was not his employee.

10. As I said, the Defendants did not adduce any evidence at the trial. The Plaintiff gave evidence about his employment by the Defendants. He said he read an advertisement in the newspaper on 23 December 1998. A copy of that advertisement was in the Trial Bundle at C2. It was an advertisement for recruitment of delivery workers at a salary of $12,000. He attended an interview in which Mr Chan was present. The terms of employment was agreed. The salary was $12,000. The Plaintiff started work on 30 December 1998. He discovered that the salary of his co-workers were less. He enquired with Mr Chan. Later a Mr Hung of the Defendants' firm told the Plaintiff that his salary should be $10,000 instead of $12,000. Since the Plaintiff did not intend to stay on the job for very long, he did not protest against the cut in his salary. Each day, the Plaintiff reported duties at 8:00 a.m. and Mr Chan gave him instructions. The Plaintiff worked with other co-workers. Delivery was made by means of a lorry of the Defendants.

11. In cross-examination, Mr Chan suggested to the Plaintiff that at the interview, the Plaintiff had been told that he was only engaged as a contractor and there would not be insurance coverage for him. This was denied by the Plaintiff. I find the Plaintiff truthful in his answer and I accept his evidence. The suggestion of Mr Chan was not consistent with the newspaper advertisement. Further, all objective indicators suggested that the substance of the relationship was one of employment.

12. I hold that Mr Chan failed to discharge the burden to show that the Plaintiff was only a contractor. As against Ms Li Ah Man, since she was not a party to the criminal proceedings, the conviction of Mr Chan should not affect her. However, on the basis of the evidence of the Plaintiff, I find that he was employed by the Defendants at the time of the accident.

13. In the light of my finding as to how the accident happened in Paragraph 4 above, it is obvious to me that the Defendants failed to discharge their duties as employers towards the Plaintiff. To start with, the Defendants did not have a safe method of work as to the demolition of the upper part of the wall. The method adopted by Chau was unsafe. The Plaintiff was required to work at considerable height without any safety belt and there was no guardrail at the rack. No precaution was adopted to prevent the Plaintiff from falling from the rack. The method of demolition adopted by Chau was inherently unsafe and not a proper means for demolishing the wall. There was no checking as to whether there were any water pipes hidden within the wall. The Plaintiff was therefore caught off guarded when the water pipes burst. Since the Defendants had delegated the task of supervision and giving instructions to Chau, they are liable for the acts of Chau. The Defendants only have themselves to blame for their own failure to supervise Chau properly.

14. The Defendants argued that they only engaged the Plaintiff as a delivery worker and demolition works were outside the scope of his duty. That, however, could not stand in the light of the evidence. Under cross-examination, the Plaintiff denied that he had been told by Mr Chan that he needed not be concerned with demolition works. Instead, he was told to follow the instructions of Chau. Chau gave instructions to the Plaintiff to demolish the wall. I accept his evidence. The Plaintiff was therefore doing exactly what the Mr Chan told him to do, viz. to follow the instructions of Chau. It is unrealistic for the Defendants to suggest that the Plaintiff should have phoned Mr Chan when Chau told him to do demolition works.

15. I therefore have no difficulty in holding that the Defendants were liable to the Plaintiff for the accident.

Quantum

16. I have set out the initial treatment received by the Plaintiff in respect of his injuries in Paragraph 5 above. He was examined further by Dr David Cheng on 26 March 2001. X-ray was taken by Dr Cheng and it revealed no evidence of fracture. Dr Cheng's observation was that if there had been a fracture, it has probably healed without a trace. When he gave evidence before me, Dr Cheng further explained that this meant that the fracture was probably a very minor one, in the category of a hairline crack. In his report (which was adopted as his evidence), Dr Cheng further observed that there was good range of motion, full muscle power and good function of the right ankle. There was only some residual discomfort and mild residue stiffness and weakness. Prognosis was good and no treatment was needed. The doctor regarded this as a minor impairment of ankle and assessed it as 5% lower limb impairment and 2% impairment of the whole person. The doctor was of the opinion that the Plaintiff could return to work as a delivery worker, but there was a reduction of 5% in terms of working efficiency. In his oral testimony, Dr Cheng explained to me that this meant that if the Plaintiff walked for a long time, say 3 to 4 hours, carrying heavy object, he would feel some pain. He regarded a sick leave period of 9 to 12 months to be reasonable. Dr Cheng also said in evidence that the Plaintiff could undertake heavy duty job like work at construction site although in that case, he would be affected by a 5% reduction in efficiency. I find the doctor to be a reliable witness and I accept his evidence.

17. The Plaintiff himself said that at present, he had no problem in walking although he would feel discomfort when he ran or stood for more than half an hour. He said he could no longer enjoy swimming, playing football, basketball or badminton. He felt unable to carry heavy objects.

18. He is now 32 years old, having been born on 20 October 1969. He is married and has a daughter of  7 years old. He received education up to Form 4 in Hong Kong. His wife is a clerk in a bank. His family lived with his parents. He started working since he was 17. Before his employment by the Defendants, he had worked as delivery workers, construction site worker and excavator operator. He worked mostly as excavator operator. It was due to lack of work at construction site that he became interested in the job offered by the Defendants.

19. He returned to work in July 1999, six months after the accident. From 1 July 1999 to 1 March 2000, he was employed by West Coast International (Parking) Limited as a technician. He was given a salary of $10,000 per month although he said that his co-workers were given a salary of $12,000. He said the reduction in his salary was due to his disability which he had revealed to West Coast at the time of his employment. His duties included picking up rubbish, fixing electrical wires and switches. However, he resigned on 1 March 2000. He said it was because he was asked to climb up a lamp post to install the wiring for a spot light and he could not handle it. Thereafter he worked as causal construction site worker and excavation operator. He said he earned on average $4,500 to $5,250 per month working about 15 days per month.

20. On pain, suffering and loss of amenities, Mr Tang counsel for the Plaintiff referred me to the following cases:

(a) Lam Kwai Yip v. Yuen Yun Kuk [1997] HKLY 436;

(b) Lobo v. Kripalani [1998] HKLY 321;

(c) Chan Ming v. Wayfine Investment Ltd. [2001] 2 HKLRD E12.

He submitted that the present case lies between the first two cases and suggested an award of $200,000 under this head. Whilst it is correct that there was a fracture in the present case and in Lobo the plaintiff only suffered a severing of the Achilles tendon, it does not necessarily follow that the injuries of the Plaintiff are more serious. A hairline crack which heals well does not necessarily bring more pain and inconvenience to a plaintiff than one who suffers from a severing of tendon. In Lobo, the plaintiff had to be hospitalized for 8 days and she was left with some scarring. There was some thickening around the tendon area and muscle wasting in the left calf muscle. Seagroatt J awarded $150,000 to that plaintiff under PSLA. In Chan Ming, Master de Souza awarded $200,000 to a plaintiff who had a fracture of the left lateral malleolus and underwent operations for open reduction, internal fixation and bone grafting. He was hospitalized for more than a month. Leg plaster was removed four weeks after his discharge. That was clearly a more serious case. I think it would be excessive to award $200,000 to the Plaintiff. The Plaintiff's ankle had been healed without leaving a trace of fracture. He could return to work after 6 months. Whilst I accept that he suffered from some residual discomfort, I think the appropriate award in the present case is $150,000.

21. On loss of earnings, Mr Tang referred me to the case of Li Wan Choi v. Choi Wan Hing [2000] 4 HKC 549. In that case, the Court of Appeal held that even where a plaintiff could go back to his pre-accident employment, if he could not be expected to earn the full salary for such job due to residual disability, he would be entitled to damages for loss of earnings on top of damages for loss of earning capacity. The Court of Appeal concluded on the material before it that the plaintiff in that case could not undertake all the duties of his pre-accident employment. Hence, there would be a reduction in his income (see p.554I to 555F).

22. The crucial issue is whether the Plaintiff suffered a loss in income due to his residual disability. In the present context, I would consider this question by reference to two pre-accident jobs undertaken by the Plaintiff. The first one is delivery worker. Dr Cheng was of the view that the Plaintiff could go back to that kind of work. From his answer given to Mr Tang in re-examination, it seems to me that the 5% reduction of working efficiency was by reference to more onerous duties although his report suggested otherwise. To some extent, it depends on the job requirements for delivery worker. On the evidence, I accept that if the job required frequent climbing up and down and the undertaking of heavy duties, the Plaintiff did suffer some residual disabilities affecting his performance. Hence, there was a reduction in his salary by $2,000 when he was employed by West Coast. It is fair to say that some delivery workers are required to carry heavy loads in the course of their works. The other job that is relevant is excavator operator. The Plaintiff did that both before and after the accident. He said he would feel discomfort when using his foot at the accelerator for a long time and he needed to have rest days. I therefore find that the Plaintiff did suffer from residual disabilities which affected his work performance.

23. I am however not satisfied with his reason for resigning from West Coast. The reason given by him in his testimony was different from what he said in Paragraph 16 of his first witness statement. Although he corrected his mistake in his supplemental witness statement with regard to his earnings during his employment with West Coast, he did not amend his evidence that he resigned due to the pain in his ankle. He said nothing about his employer requiring him to climb up a lamp post. To the contrary, he said in that paragraph that the job did not require heavy lifting or climbing up and down.

24. His evidence in the witness box in this regard is not satisfactory. He said he resigned although his employer did not suggest that he would be fired unless he climbed lamp post. He said he had told his employer about his disability when he was employed. He could not explain why he did not reiterate his difficulties to his employer when he was told to climb. He said the employer should know his difficulties. He agreed that in the past the employer did not insist that he had to perform any climbing duties.

25. Further, the Plaintiff said he worked as an excavator operator after he resigned. He said he was paid by cash and no record was kept as to his earnings. He did not even tell us the name of his employer. There is therefore no supporting evidence as to the level of his earnings after he resigned from West Coast. He has been shown to be wrong with regard to his earnings with West Coast in his first witness statement and I therefore do not feel able to rely on his oral evidence about his income as excavator operator. The Plaintiff did not place before me any statistics about the salary level of such operator.

26. On these evidence, I am not satisfied that the Plaintiff resigned for the reasons he told me or as set out in his witness statement. It is not for me to speculate the real reason for his resignation. Certainly, given the financial situation of the Plaintiff, it seems unlikely to me that he would resign if he could not get back another job with comparable income. I am also not satisfied that he earned as little as he told me when he worked as excavator operator. I find on the balance of probabilities that he earned an income commensurate with his income at West Coast (if not more) after his resignation. If there was a drop in income thereafter, it is probably due to the deterioration of the economy in Hong Kong instead of his disabilities arising from the accident. The Defendants should not be responsible for such drop. However, as I said, I am satisfied on the balance of probabilities that he did suffer some loss in income, irrespective of the job he undertaken, due to his residual disabilities. Doing the best that I can on the material before me, I would adopt the reduction in his salary when he was employed by West Coast as the benchmark for his loss of earnings. That would be at the rate of $2,000 per month.

27. Prior to 1 July 1999, he did not work. Hence, he suffered a total loss of income between 14 January 1999 and 30 June 1999. Although his salary was only $10,000 when he was employed by the Defendants, they originally agreed to pay him $12,000. It was likely that the Plaintiff would not stay on this job for long. Although there was evidence that the Plaintiff had applied for a job as an ambulanceman, it seems to me to be too speculative to say whether he would be successful in that regard. In the light of his post accident employment history, I would take $12,000 as his notional earning but for the accident. This is based on the salary of his colleague in West Coast. This is also consistent with the initial level of salary offered by the Defendants to him. Hence the loss during this period is:

$12,000 x 5.5 months = $66,000

28. From 1 July 1999, I would award him a loss of earnings in term of $2,000 per month. Up to the date of judgment, the pre-trial loss from 1 July 1999 is:

$2,000 x 31 months = $62,000

29. The Plaintiff also claims for loss in terms of employer's contribution to the Mandatory Provident Fund since January 2001. It would be 5% on his loss in earnings. Hence, the pre-trial loss under this head would be:

$2,000 x 5% x 13 months = $1,300

30. As to post trial loss, Mr Tang suggested a multiplier of 15 based on the case of Chan Tak-chi [1998] HKLJ 446. I agree that usually such a multiplier is appropriate. However, in the present case, given the nature of his injuries and its good recovery, I am not satisfied that the residual disabilities would affect him for the rest of his life. The Plaintiff himself said in his evidence that his condition has improved since he made his first witness statement. Further, even without the accident, the Plaintiff is likely to take up less onerous job as he grows older. Taking these into account, I would only give him a multiplier of 10. The post-trial loss (including MPF) is therefore:

$2,000 x 1.05 x 10 x 12 = $252,000

31. In Li Wan Choi v. Choi Wan Hing [2000] 4 HKC 549, the Court of Appeal awarded the plaintiff an additional sum for loss of earning capacity to compensate him for handicap in the job market. I agreed that in the light of the evidence in this case and the casual nature of employment at construction site, it is appropriate to give an award to the Plaintiff under this head. For the reasons given in Paragraph 30 above, I would calculate that loss by reference to a multiplier of 10. Further, given the mild nature of the residual disabilities and rest days being taken into account in giving him an award for loss of future earnings (see Paragraph 22 above), I do not think it is appropriate to adopt one month's salary as the multiplicand for each year. Instead, I propose to adopt half a month's salary (plus MPF contribution). The award is therefore:

$10,000 x 1.05 x 0.5 x 10 = $52,500

32. With regard to special damages, I find the items claimed by the Plaintiff to be reasonable and allow a total sum of $5,630.

33. Interest on pain, suffering and loss of amenities would be at the rate of 2% per annum from date of writ to date of judgment. Interest on special damages and accrued loss of earnings would be at half judgment rate, viz. 3.05%, from date of accident to date of judgment.

34. To sum up, the quantum is as follows:

(a)	PSLA	$150,000
(b)	Interest on PSLA	$ 4,500
(c)	Accrued loss of earnings	$129,300
	($66,000 + $62,000 + $1,300)
(d)	Special damages	$ 5,630
(e)	Interest on (c) and (d)	$ 17,943
(f)	Future loss of earnings	$252,000
(g)	Handicap in job market	$ 52,500
	Total	$611,873

The result

35. I therefore give judgment to the Plaintiff in the sum of $611,873. I also order the Defendants to pay the costs of the Plaintiff. However, since interest should not be taken into account in determining the jurisdiction of the District Court (see Section 49(7) of the District Court Ordinance, Cap.336), the Plaintiff's claim succeeds only to the extent of $589,430. Such a claim is now within the jurisdiction of the District Court (see Section 32 of the District Court Ordinance). On the other hand, at the time when the Writ was issued (viz.4 August 2000), the jurisdiction of the District Court has not yet been increased to $600,000. That increase took place on 1 September 2000. Hence, the Plaintiff did not act inappropriately when he commenced the action in the Court of First Instance. Having regard to the steps taken since September 2000, I do not think there has been substantial increase in costs due to the fact that the action was continued in the Court of First Instance instead of the District Court. The difference, if any, may not justify an application for transfer. I also take into account of the marginal difference between the sum I awarded to the Plaintiff and the upper limit of the District Court jurisdiction. With all these factors in mind, I am of the view that it is appropriate in the present case to give the Plaintiff costs of the action on the High Court Scale. However, since this point has not been argued before me, I will make an order nisi to that effect. That means that if either party wishes to argue otherwise, they can come back before me by making an application within 14 days.