WONG MOON YUNG v. LUEN FAT TRANSPORT

IN THE DISTRICT COURT OF HONG KONG

CIVIL JURISDICTION

EMPLOYEES' COMPENSATION CASE NO. 713 OF 1996

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Reasons for Judgement

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On 19 December 1994, the Applicant sustained injuries arising out of and in the course of his employment with the Respondent as a result of which he was given sick leave for 21 months, suffered 100% loss of earning capacity and required constant care and attention. For the purpose of these proceedings, counsel for both parties made certain concessions which helped to shorten the proceedings. The issues for which I have to decide are the monthly earning of the Applicant, the period of temporary incapacity and interest.

2. The Applicant claimed that he was a permanent worker earning $7,200 per month plus $300 travelling allowance. In addition, he was paid a thirteenth month pay including the travelling allowance at the year end. However, according to Mr. Chung who was in charge of administration in the Respondent's business, the Applicant was a casual worker and was paid only $7,200 a month without the extra thirteenth month pay at the end of the year. Neither party can produce any documentary proof in support of their allegation.

3. Mr. Law, on behalf of the Respondent argued that Mr. Chung was in charge of administration and if there were other payments such as travelling allowance and thirteenth month pay, he would have known about it and urged me to accept Mr. Chung's evidence. He also relied on the accident report which did not mention about the thirteenth month pay. On the other hand, the solicitors for the Respondent had filed a list of the Applicant's earning from December 1994 to April 1996 and an amended list from November 1993 to November 1994 dated 18 June 1997 and 11 July 1997. The earlier list was obviously erroneous as it covered a period when the Applicant was incapacitated. The amended list showed a monthly earning of $6,000 from November 1993 to April 1994 and thereafter it was reduced to $4,800 per month. Be that as it may, under cross examination Mr. Chung admitted that he knew nothing about these lists and had not been consulted by his solicitors when the lists were prepared. He did not compile the accident report and knew nothing about payment. If he were in charge of the general administration of the business, he would have known about the lists and would have been consulted when the lists were prepared. In addition, the Applicant was given sickness allowance far in excess of a monthly earning of $7,200. This reflects that the Applicant's evidence about his travelling allowance and thirteenth month pay is closer to the truth. I accept the Applicant's evidence and find that his monthly income was $7,500 inclusive of an allowance which he called "travelling allowance"" though in essence it was not a travelling allowance as it was also paid together with the thirteenth month wages. I also accept his evidence that he was paid a thirteen month wages inclusive of the allowance at the end of the year. I therefore find that his average monthly income at the time of the accident was $8,125.

4. The next question for me to decide is the duration of the Applicant's temporary incapacity. He was given 21 months' sick leave. Miss Pinto on his behalf argued that the spirit of the Employees' Compensation Ordinance is that where total permanent incapacity results, an employee shall be entitled to compensation for temporary incapacity equivalent to 24 months' periodical payments, i.e. an employee would be treated as being temporarily incapacitated for 24 months before becoming permanently incapacitated. She based her argument on section 10(4) which provides that the amount of periodical payments received by an injured employee shall not be deducted from the compensation payable when the employee dies or suffers permanent incapacity as a result of the accident and on section 10(5) which provides that where an employee has received periodical payments for a period of 24 months from the date of commencement of the temporary incapacity or for such further period being not more than 12 months as the Court may allow, he shall be deemed to have suffered permanent incapacity.

5. I can see no nexus between her argument and section 10(4) and section 10(5). The deeming provision in section 10(5) does not operate in the reverse to deem an employee suffering permanent incapacity as having suffered temporary total incapacity for 24 months. The burden of proof that the Applicant is suffering from temporary incapacity and is entitled to periodical payment rests on the Applicant. To relieve him of the burden, section 10(2) provides that a period of absence certified to be necessary by a medical practitioner, a registered dentist, an Ordinary Assessment Board or a Special Assessment Board shall be deemed to be a period of total temporary incapacity irrespective of the outcome of the injury. Thus if the Applicant can produce the necessary certification in respect of a particular period of absence, that period shall be deemed to be a period of total temporary incapacity. If not, he has to prove by evidence that a period of absence is necessary. Failing that, total temporary incapacity must have either ceased or have crystallised into total permanent incapacity.

6. Miss Pinto further argued that it was unfair to the employee as the amount of compensation for temporary incapacity would then depend on when the Employees' Compensation (Ordinary Assessment) Board makes the assessment. I disagree. Though the Board may sit well after the expiry of any certified sick leave, the Board will include in its assessment under item (c) the period of absence from duty necessary as a result of the injury. It does not necessarily follow that the later the Board is convened, the longer is the period of temporary incapacity. If Legislature had intended a worker suffering permanent total incapacity should receive in addition to the compensation under section 7 another 24 months periodical, it could have easily expressed its intention clearly in section 7. For the above reasons, I rejected Miss Pinto's submission. I find that the Applicant's temporary total incapacity has crystallised into permanent total incapacity after 21 months and assess his compensation for temporary incapacity under section 10 to be 2/3 of his wages for 21 months.

7. On interest, Mr. Law took the point that interest should not be awarded on what he considered as future loss. He submitted that compensation under section 7 and section 8, i.e. compensation for total permanent incapacity and compensation for employees requiring care and attention are compensation for future loss and should not attract interest. However, he conceded for convenience reasons that 20% of the compensation be regarded as pre-judgment loss and bears interest. Miss Pinto referred me to the following dicta of Roberts, C.J. in Ng Oi-wa v. Lamp's Co. Civil Appeal 129 of 1980:

"The nature of an award under the Ordinance is ambiguous. On the one hand, it may be looked upon as damages to compensate for future pecuniary loss. This view is particularly attractive where the plaintiff is the workman's widow or other dependent. In that case no interest ought to be awarded : Jefford v. Gee, [1970] 2 Q.B., 130 at 147.

"On the other hand, the award may be regarded as a sum which becomes automatically payable upon the occurrence of an accident, whether fatal or otherwise, in which case interest should be awarded as from that moment."

"We think the latter view is to be preferred. In the vast majority of cases the award is an arbitrary figure fixed simply in relation to the workman's wages. It is not a figure assessed by the trial judge with regard to actual or probable loss. Only in rare cases is the judge left with a discretion, for example, under section 6(b) or section 8. Even then his discretion is severely restricted. As we accepted in our judgment proper, an award is more in the nature of insurance monies than compensation.""

8. Basically, the scheme under the Employees' Compensation Ordinance is a statutory scheme. Maxima are prescribed by the Schedules and by the various provisions in the Ordinance. A trial judge's discretion is severely restricted. Even for compensation for permanent partial incapacity for non schedule injury, the trial judge's discretion is limited to assessing the percentage of incapacity and may only award compensation which would have been payable in the case of permanent total incapacity as is proportionate to the loss of earning capacity as assessed by the trial judge. Furthermore, a claim under the Ordinance is usually followed by a common law claim in which loss of future earning forms the basis of the claim. The award under the Employees' Compensation Ordinance will be deducted from the award under the common law claim. Thus in my view, the compensation under the Ordinance is a statutory scheme like an insurance. The award is an arbitrary amount automatically payable upon the occurrence of the accident and it is inappropriate to treat the award as a compensation for future loss. Therefore in respect of compensation under section 8, I order that interest be payable from the date of the accident.

9. Compensation under section 8, i.e. compensation in relation to care and attention, may be regarded as having an element of future loss as section 8(2)(a) provides that compensation shall be a lump sum payment calculated with regard to the probable duration and cost of the attention. However, this compensation also forms part of the statutory compensation scheme. Section 8(1)(a) limits the jurisdiction to the Court to award an amount not exceeding the amount specified in the Sixth Schedule. This compensation will also be deducted from the award under the common law claim. In view of the hybrid nature of the compensation, in deciding whether to award interest in respect of this head of compensation, the court should consider whether the award contains an element of compensation for future loss and the effect of the maximum imposed under the schedule.

10. In the present case, the cost of care and attention is substantial and for long duration, practically. for the life of the Applicant. It is not disputed that the Applicant's wife had to give up her employment, which was worth $6,000 per month, to look after the Applicant. Hence the cost of care and attention is assessed to be $6,000 per month. The maximum amount of compensation under the schedule is $297,000. This amount is only equivalent to the compensation by applying a multiplier of 4.125. As the Applicant was 54 years of age at the time of the accident and would require care and attention worth far in excess of the statutory maximum, I consider the compensation as an arbitrary amount and would treat the compensation as an event payment or an insurance payment rather than as a compensation for future loss. Accordingly, I award interest in respect of this head of compensation which is agreed to be the statutory maximum applicable at the time of the accident, i.e. $297,000.

11. Hence I assess the compensation to be $995,750 which is the sum total of:

(1) $585,000, being compensation for permanent total incapacity under section 7;

(2) $297,000, being compensation in relation to care and attention under section 8; and

(3) $113,750, being periodical payments while under temporary total incapacity.

As the Applicant admitted having received periodical payments of $145,939 during his temporary total incapacity, I enter judgment in favour of the Applicant against the Respondent in the sum of $849,811, being the total compensation net of periodical payments received. I award interest on this net amount from the date of accident until judgment at the agreed rate of 5.84 per cent per annum and thereafter at judgment rate. I also award costs in favour of the Applicant against the Respondent with certificate for counsel and order that the Applicant's own costs be taxed in accordance with Legal Aid Regulations.