SHAH MEHBOOB v. WING FUNG CONSTRUCTION (H.K.) LTD. AND ANOTHER

DCEC 294/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’COMPENSATION CASE NO. 294 OF 2002

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Ruling

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The applicant was employed by the 1st respondent, which was a sub-contractor to the 2nd respondent, the principal contractor on site. He met with an accident at work on 24 September 2001. He filed his Application under section 18A of the Employees' Compensation Ordinance, Cap 282, on 11 April 2002, but without sending any letter before action to the respondents. Call-over was fixed for 21 June 2002 but by consent the hearing was vacated and directions given. Pursuant to those directions the respondents filed their Answer denying liability and their List of Earnings on 4 July 2002.

2. The Commissioner for Labour issued a Certificate of Assessment (Form 5) dated 30 July 2002 which shows that the applicant was absent from work as a result of his injuries from 24 September to 13 October 2001 and from 26 October 2001 to 30 April 2002, and that he now has a permanent loss of earning capacity of 1.5%.

3. The applicant claims that his average pre-accident earnings were $10,137 per month. The list of earnings filed by the respondents shows the same figure. By my calculations, therefore, if liability were proved the applicant's claim under section 10 of the Ordinance should be 4/5 x $10,137 x (8/31 + 19/31 + 6) = $55,712.95. He was aged 24 and his claim under section 9 should be 96 x $10,137 x 1.5% = $14,597.28. So his total claim would be $70,310.23.

4. On 30 October 2002 the parties filed a consent summons whereby the respondents agreed to pay total compensation of $63,833.00 and the applicant to give credit for advance payments of $44,440.00. However the parties could not agree costs. Now each side says that it should have the costs of the proceedings.

5. It is argued for the applicant that all claims under the Ordinance must be determined by the court under section 18A, save for those specifically exempted. The relevant exceptions in a non-fatal case are where there is an agreement under section 8, a certificate under section 16A, or an agreement under section 16CA. None of those exceptions applies in this case. Therefore the applicant had no option but to make his Application. That there was no letter before action is irrelevant because the applicant is in any event entitled to a determination by the court. Therefore, the applicant should have the costs of the action.

6. It is argued for the respondents that this case comes within the proviso to section 18A(2) which provides that no application shall be made

(a) in the case of a claim in respect of an injury to which section 16A applies, until after the expiry of the payment period within the meaning of subsection 11 of that section

7. The applicant however says that in any event the case does not come under section 16A which provides in subsection (1)

Where

(a) a claim for compensation arises in respect of an accident causing injury to an employee that results in temporary incapacity, whether total or partial, or

(b) a claim for compensation arises in respect of an accident causing injury to an employee that results in loss of earning capacity as assessed under section 16D(5), 16E(8) or (9), 16G(2) or 16GA(1)

the Commissioner may assess the compensation payable under sections 7, 9 and 10.

8. The argument for the applicant seems to be that section 16A is only applicable where there is either a claim for temporary incapacity, or a claim for loss of earning capacity but not both. Here there is a claim for both so the section can in any event not apply.

9. I do not think that this can be right, given that the Commissioner is empowered by the subsection to assess compensation under sections 7, 9 and 10; he is not restricted to assessing only one type of claim.

10. The employee can seek a determination in two ways. He can either seek a determination by the Commissioner under section 16A or he can apply to the court under section 18A. I do not know whether, in every case where there is an assessment of disability under section 16D, as here, the Commissioner will automatically make an assessment under section 16A. The parties have opposing views on that and I have no evidence from the Commissioner. However the Commissioner is under no statutory duty to make an assessment under section 16A and I cannot imagine that he would do so unless the parties requested it, given that his resources cannot be unlimited. I also cannot imagine that he would do it where, as here, the respondents denied liability.

11. The Commissioner has not issued a certificate of assessment under section 16A. It seems to me that proviso to section 18A(2) must be read in conjunction with section 16A(1) and can only apply where the Commissioner has exercised his power of assessment thereunder. To say that every applicant for compensation under sections 9 and 10 must wait for the Commissioner to assess his compensation, and for such compensation to go unpaid, before he can apply to the court, would produce absurdity given that there is no duty on the Commissioner to make such assessment.

12. In my view, therefore, there was nothing to stop the applicant from filing his Application when he did. However, he did not issue any letter before action beforehand. His solicitor argues that this does not matter because section 18A only allows for determination of a claim by agreement in the restricted circumstances of section 8 and section 16CA; as I understand it, if he had intimated his claim to the respondents, and they had agreed to settle it, he would still have had to apply to the court. With respect I do not agree. Section 18A (2) provides that the employee may make an application for enforcing his claim for compensation for the court. He does not have to do so. Obviously, if the employer pays up, there is no need for an application and to make one would be a waste of time and money.

13. In the normal case, if no letter before action is sent, the action is raised and then settled, the plaintiff or his solicitor will be at risk on costs because there was never any need to issue proceedings. In this case, however, the respondents did in fact deny liability. In practical terms therefore, had the applicant written a letter before action it would have made no difference.

14. It may be argued that the applicant was premature in issuing proceedings in April 2002 when his Form 7 assessment was only made in July 2002. Before that date the parties would have no basis for assessing permanent total incapacity, at any rate unless the applicant, who is not receiving legal aid, had himself examined and assessed by a specialist. If the applicant had been receiving his full entitlement to periodical payments under section 10 (1) I would agree; in those circumstances, there would be no point in applying to the court before the Form 7 was issued. But the applicant was not receiving four-fifths of his pre-accident earnings; he only received $44,440.00 and $18,036.00 of that was paid in a lump sum after the issue of proceedings. He had, all through his sick leave period, a claim under section 10 which he was entitled to bring before the court.

15. As I have indicated, in the normal way a letter before action should be sent before an Application under section 18A is filed, so as to give the respondent the chance to settle the applicant's claim without the need for proceedings. In this case, however, although this was not done, and for the reasons given above, it seems proper that the applicant should have his costs. The applicant is therefore awarded the costs of the action to be taxed if not agreed.