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DCEC 2240/2019
[2022] HKDC 306
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
EMPLOYEES’ COMPENSATION CASE NO 2240 OF 2019
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| IN THE MATTER OF AN APPLICATION BETWEEN |
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TSUI MING KI |
Applicant |
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and |
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AMAN GROUP LIMITED trading as |
1st Respondent |
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AMAN MOVING SERVICES |
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施君涵或施群涵 |
2nd Respondent |
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EMPLOYEES COMPENSATION |
3rd Respondent |
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ASSISTANCE FUND BOARD |
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| Before: |
Deputy District Judge Norman Nip, SC in Court |
| Dates of Hearing: |
27 September 2021, 27 October 2021 and 10 January 2022 |
| Date of Judgment: |
22 April 2022 |
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JUDGMENT
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INTRODUCTION
1. On 18 September 2019, the applicant filed an application with this court claiming employees’ compensation under sections 9, 10, 10A of the Employees’ Compensation Ordinance, Cap 282 (“ECO”) against the 1st respondent (Aman Group Limited 加零壹集團有限公司), a Hong Kong incorporated company.
2. By the Order of Her Honour Judge Levy dated 4 September 2020, the Employees Compensation Assistance Fund Board (“Board”) was granted leave to intervene into the proceedings to contest the issues of liability and quantum as the 3rd respondent. On the same day, the applicant was also given leave to join the 2nd respondent as a party to these proceedings.
3. Subsequent to the joinder of the additional parties, the applicant filed his amended employees’ compensation application on 23 September 2020 (“Amended Application”).
4. According to the Amended Application and the medical records produced by the Applicant:-
(1) The applicant was born on 16 August 1956 and was 62 years old when the accident took place on 30 October 2018 (“Accident”).
(2) The Applicant contends that he was employed by the 1st and/or 2nd respondent as a truck driver cum delivery worker at the time of the Accident. The applicant also contends in the alternative that the 1st respondent was the principal contractor of the 2nd respondent.
(3) On the day of the Accident, the applicant was instructed to assist in transporting 2 boxes of household goods upstairs by carrying them on his back at Kam Fai Building, Nos 125-129 Belcher’s Street, Kennedy Town, Hong Kong. When the applicant reached the top of the stairs, one of the boxes hit a pipe at the ceiling. The applicant then fell down the stairs and sustained back and hip injuries. He suffered low back pain but there was no fracture.
(4) The applicant was granted sick leave for a total of 375 days.
(5) On 5 December 2019, the Employees’ Compensation (Ordinary Assessment) Board assessed the applicant’s permanent loss of earning capacity at 3%.
5. In these proceedings, the applicant claims employees’ compensation totalling HK$260,745 against the 1st and/or 2nd respondents.
6. The 1st and 2nd respondents never took any part in these proceedings and did not attend the trial. The applicant himself was the only witness at trial.
7. As far as the Board is concerned, it is undisputed that its role in these proceedings is to test the applicant’s case and to assist this court in coming to a correct ruling (Wo Chun Wah v Employees Compensation Assistance Fund Board (2019) 22 HKCFAR 495 at §§43-45 per Ribeiro PJ).
8. In particular, in the Answer of the 3rd respondent filed on 15 October 2020, the Board stated that it was unable to verify from available sources that the applicant was an employee of the 1st and/or the 2nd respondent or that the 1st respondent was the principal contractor of the 2nd respondent. The Board also noted that the 1st and 2nd respondents had issued various statements to the Labour Department in 2019 asserting that the applicant was never their employee.
9. Whilst I do not place any weight on the veracity of the assertions contained in these statements written by the 1st and 2nd respondents to the Labour Department since neither of them took any part in these proceedings and that those assertions could not be tested under cross-examination, the existence of these statements at least explain why the Board saw fit to intervene in these proceedings to test the validity of the applicant’s case.
10. Subject to this question of liability concerning the alleged employment relationship between the applicant and the 1st and/or 2nd respondents, Mr Tony Chow, Counsel for the Board, has helpfully indicated to this court during his opening submissions that the Board otherwise has no objections to the quantum of the compensation claimed by the applicant.
11. The main issue in this case is therefore whether the applicant was acting in the course of his employment with the 1st and/or 2nd respondents when the Accident took place.
THE APPLICANT’S CASE
12. According to the applicant’s witness statements and oral testimony, his case on his alleged employment relationships with the 1st and/or 2nd respondents is essentially as follows.
13. The applicant had been a casual mover and truck driver since 2009.
14. In about 2015, the applicant met the 2nd respondent. In around late 2015 or early 2016, the 2nd respondent introduced the applicant to a 陳少君 (“Mr Chan”). Mr Chan told the Applicant that he worked for the 1st respondent. Mr Chan asked the applicant if he also wanted to work for the 1st respondent as a truck driver cum delivery worker, to which the applicant answered in the affirmative.
15. On 23 May 2016, Mr Chan introduced the applicant to a Mr Lai Kong Sun (黎港新) (“Mr Lai”) at a restaurant in San Po Kong. Mr Chan told the applicant that Mr Lai was the “boss” of the 1st respondent. After discussions, Mr Lai on behalf of the 1st respondent employed the applicant and the parties entered into an oral employment agreement at the restaurant (“Alleged May 2016 Agreement”).
16. According to the Alleged May 2016 Agreement:-
(1) The Applicant would be employed by the 1st respondent as a long-term worker.
(2) As a truck driver and mover, he would receive a daily pay of HK$900 with overtime pay at HK$100/hour, and an additional income of HK$100 each time when the applicant needed to move items by staircases.
(3) The applicant’s working hours were 8 am to 6 pm.
(4) Lunch expenses would be covered by the 1st respondent.
17. Apart from the applicant, several other workers were hired by the 1st respondent on the same day, including the 2nd respondent.
18. The applicant commenced work for the 1st respondent on the same day and has never worked for other moving companies ever since.
19. As will be evident from the discussions below, a matter of some significance is that the 1st respondent’s sole director and shareholder at the time of entering into the Alleged May 2016 Agreement was a Ms Yu Chung Hung (“Ms Yu”). Mr Lai only became a director of the 1st respondent subsequently on 13 February 2017 in place of Ms Yu. He also only became a shareholder in the 1st respondent on 21 June 2019, when Ms Yu transferred all her shareholdings to Mr Lai, making him the sole shareholder since.
20. Nevertheless, the applicant’s understanding was that Mr Lai was the boss, owner and the only decision maker of the 1st respondent at the time of entering into the Alleged May 2016 Agreement.
21. In around July 2018, Mr Chan passed away. Before his death, both Mr Chan and the 2nd respondent would give the applicant work instructions. After Mr Chan’s death, only the 2nd respondent would provide such instructions.
22. The tools that the applicant used for his work were all provided by the 1st respondent, including pallets with wheels, adhesive tapes, cloth tapes, cardboard boxes etc. The applicant understood that the trucks that he drove were also owned by the 1st respondent.
23. After the Accident, the applicant allegedly approached Mr Lai to discuss compensation matters. However, Mr Lai told the applicant to approach the 2nd respondent instead as he had already instructed the 2nd respondent to handle it. According to Ms Alison Choy, counsel for the applicant, this shows that Mr Lai was still the 1st respondent’s decision maker and it appears that the 2nd respondent was merely executing directions given by the 1st respondent through Mr Lai. Indeed, the applicant’s testimony at trial was that he never considered himself to be an employee of the 2nd respondent. In the circumstances, Ms Choy did not in her closing submissions seriously pursue the applicant’s alternative pleaded case that he was an employee of the 2nd respondent. Her focus was very much on the applicant’s primary case that he was an employee of the 1st respondent. She submitted that in the event that I were to find that the applicant was in fact employed by the 2nd respondent and not by the 1st respondent, then both the 1st respondent being the principal contractor and the 2nd respondent being the subcontractor would be liable to pay compensation under s 24 of the ECO.
THE LAW
24. Section 5(1) of the ECO provides that:-
“Subject to subsections (2) and (3), if in any employment, personal injury by accident arising out of and in the course of the employment is caused to an employee, his employer shall be liable to pay compensation in accordance with this Ordinance.”
25. Section 2(1) of the ECO defines “employee” as:-
“any person who has … entered into or works under a contract of service … with an employer in any employment, whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, is oral or in writing: Provided that the following persons are excepted from the definition of employee … (b) any person whose employment is of a casual nature, and who is employed otherwise than for the purposes of the employer’s trade or business, not being a person employed for the purposes of any game or recreation and engaged or paid through a club and not being a part-time domestic helper: …”
26. The modern approach to the question of whether a person was an employee was laid down by the Court of Final Appeal in Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156. At §§9-18, Ribeiro PJ held that the court has to examine all the features of their relationship against the background of the indicia of employment with a view to deciding whether, as a matter of overall impression, the relationship was one of employment. This involves a nuanced and not a mechanical approach: painting a picture from the accumulation of detail. The indicia included the degree of control exercised by the ‘employer’; whether the person performing the services provided his own equipment; whether he hired his own helpers; what degree of financial risk he took; what degree of responsibility for investment and management he had; and whether and how far he had an opportunity of profiting from sound management in the performance of his task.
MAIN ISSUES IN DISPUTE
27. As mentioned in paragraph 15 above, the applicant’s case of his employment relationship with the 1st respondent is premised on the existence of the Alleged May 2016 Agreement.
28. Although strictly speaking, the applicant only needed to demonstrate for the purpose of these employee compensation proceedings that he was an employee at the time of the Accident (as opposed to any earlier point in time), the only basis upon which the applicant has put his case is that the employment relationship with the 1st respondent was entered into on 23 May 2016 which continued up to the date of the Accident. Ms Choy has confirmed to me that apart from her case of the Alleged May 2016 Agreement, she is not advancing any alternative case that there was any subsequent occasion in which the applicant entered into a separate or different employment agreement with the 1st respondent. In the circumstances, Ms Choy has fairly accepted in her closing submissions that if I were to find that the 1st respondent did not enter into the Alleged May 2016 Agreement, the applicant’s case for compensation against the 1st respondent would fail.
29. In this regard, I asked Ms Choy during the trial to address me the basis upon which Mr Lai could allegedly enter into an employment agreement on behalf of the 1st respondent with the applicant in May 2016 when he was neither a director nor shareholder of the 1st respondent at that time. She submitted that:-
(1) Mr Lai had the apparent authority to contract on behalf of the 1st respondent. Relevantly, the applicant was entitled to presume regularity in the internal affairs of the 1st respondent and the indoor management rule was thus invoked.
(2) Alternatively, Mr Lai was a de facto director of the 1st respondent.
30. Although not pleaded or otherwise mentioned during her opening submissions, Ms Choy introduced a further alternative ground in her closing submissions, namely that the 1st respondent has subsequently ratified any unauthorised entering into the Alleged May 2016 Agreement by Mr Lai.
31. Apart from the issue of authority or capacity of Mr Lai, Ms Choy also contends that the relationship between the applicant and the 1st respondent bears the indicia of an employment relationship.
32. On the other hand, Mr Chow for the Board submits that the applicant has failed to prove that the Alleged May 2016 Agreement was properly entered into by Mr Lai on behalf of the 1st respondent. As to ratification, Mr Chow complains that this ground, which is clearly fact sensitive, was only introduced for the first time in Ms Choy’s closing submissions and that the relevant factual matrix was not properly explored at trial. He also expresses doubt that any purported arrangement between the applicant and the 1st respondent bears the necessary indicia of an employment relationship.
33. In light of the above, I shall in this judgment discuss my views on the contentions raised by Ms Choy as mentioned in paragraphs 29 to 31 above. I shall also briefly deal with her fallback contention that the 2nd respondent was the 1st respondent’s subcontractor and that both are thus liable to pay employees’ compensation.
34. Before doing so, as a preliminary point on the approach to assessing the evidence in this case, Ms Choy submits that adverse inference should be drawn against the 1st and 2nd respondents due to their absence from this trial. In this regard, she has referred me to the decisions in Li Sau Keung v Maxcredit Engineering Ltd & Anr [2004] 1 HKC 34 at §§28-29 and Ip Man Shan Henry & Anr v Ching Hing Construction Co Ltd (No 2) [2003] 1 HKC 256 at 307. Those decisions, however, deal with the situation where parties who participated in the proceedings failed to call witnesses whom the parties were reasonably expected to call. The situation in the present case is entirely different – the 1st and 2nd respondents simply did not attend the trial. The adverse inference principles enunciated in those decisions are plainly inapplicable here. In situations where the defendants have failed to attend trial, the relevant question for the court is simply whether the plaintiff has discharged his burden of proving his case on a balance of probabilities.
AUTHORITY AND CAPACITY OF MR LAI
Apparent Authority
35. The applicant contends that at the time of entering into the Alleged May 2016 Agreement, Mr Lai held himself out as the 1st respondent’s representative or agent who had the authority to enter into the employment contract on its behalf. By the doctrine of apparent authority, the 1st respondent is therefore estopped from denying that Mr Lai had the relevant authority to contract on its behalf.
36. The doctrine of apparent authority was explained by the learned authors of Bowstead & Reynolds on Agency, 22nd ed at §8-009 as follows:-
“Where a person, P, by words or conduct, represents or permits it to be represented that another person, A, has authority to act on P’s behalf, P is bound by the acts of A with respect to anyone dealing with A as an agent on the faith of any such representation, to the same extent as if A had the authority that A was represented to have, even though A had no such actual authority.”
37. The representation could be express, implied or by conduct (Bowstead & Reynolds on Agency, 22nd ed at §8-013). But the representation must come from the principal. For a principal which is in the form of a corporation, the representation must be made by a person or persons who had “actual” authority to manage the business of the company either generally or in respect of those matters to which the contract relates. An agent cannot clothe himself with authority (Thanakharn Kasikorn Thai Chamkat (Mahachon) v Akai Holdings Ltd (No 2) (2010) 13 HKCFAR 479 at §70 per Lord Neuberger NPJ; Yip Lai Fong & Anr v Sin Tung Hng & Ors [2004] 3 HKC 153 at §25 per Lam J (as he then was); Freeman v Lockyer (A Firm) v Buckhurst Park Properties (Mangal) Ltd & Anr [1964] 2 QB 480 at 504-505 per Diplock LJ).
38. I therefore do not accept Ms Choy’s submission that the representations which Mr Lai made at the restaurant on 23 May 2016 were sufficient to clothe himself with apparent authority.
39. As to whether there was any representation from the principal in the present case, ie the 1st respondent, Ms Choy accepts that there is no evidence showing that the 1st respondent had made any express representation as to the authority of Mr Lai to the Applicant. So for example, there is no evidence suggesting that Ms Yu (the sole director and shareholder of the 1st respondent at the material time) had made any representation to the applicant that Mr Lai had the authority to enter into the Alleged May 2016 Agreement on behalf of the 1st respondent. In fact, the applicant frankly accepted in his testimony that he was not sure who Ms Yu was.
40. However, Ms Choy submits that the representation from the 1st respondent was implied. She contends that Mr Chan, who was present at the restaurant meeting on 23 May 2016, told the Applicant that Mr Lai was the “boss” of the 1st respondent and that the logical inference must be that either Mr Lai himself or the 1st respondent or both had represented that Mr Lai was the “boss” of the 1st respondent.
41. With respect, this contention is untenable:-
(1) There is no evidence to suggest that Mr Chan had the actual authority from the 1st respondent to make any representation to the Applicant as to Mr Lai’s authority to enter into the Alleged May 2016 Agreement.
(2) Even assuming that the applicant’s recollection of the events on 23 May 2016 is accurate, the source of Mr Chan’s understanding of the “boss” status of Mr Lai might not necessarily have come from Mr Lai or the 1st respondent. Mr Chan might have heard that saying from, for example, other delivery workers. I am not prepared to draw the inference as suggested by Ms Choy.
42. Ms Choy also submits that after the applicant joined the 1st respondent, Mr Lai had represented on numerous occasions in public that he owned the 1st respondent and that everyone in the company understood him to be its boss. Ms Choy further submits that when the applicant attended the 1st respondent’s office, he saw that staff working in the office treated Mr Lai as their “boss”. If Mr Lai had indeed employed the applicant into the 1st respondent without the company’s authority, it was most unlikely that Mr Lai would still allow the applicant to attend the 1st respondent’s office since this would reveal Mr Lai’s own unauthorised acts.
43. I do not accept Ms Choy’s submissions:-
(1) As mentioned above, the relevant representation of apparent authority must come from the principal, not the alleged agent himself. The applicant has not called or subpoenaed Ms Yu to give evidence of Mr Lai’s authority in May 2016. Representations from Mr Lai alone cannot clothe him with apparent authority.
(2) There is no evidence that the staff members who treated Mr Lai as the “boss” included Ms Yu. The understanding from general staff members as to who was the “boss” (which is a term open to interpretation in any event) is plainly insufficient to clothe Mr Lai with the necessary apparent authority.
(3) The applicant has not provided this court with the details of his attendances at the 1st respondent’s office and in particular whether Ms Yu was present at the office when he was there or was otherwise aware of the purported hiring of the applicant (or the other workers) by Mr Lai. In the absence of evidence from Ms Yu and the 1st respondent, this court is not in a position to speculate as to the reason why Mr Lai would allegedly allow the applicant to attend the 1st respondent’s office.
44. In the circumstances, I am not persuaded by the applicant’s contention that Mr Lai had the requisite apparent authority from the 1st respondent to enter into the Alleged May 2016 Agreement.
45. Ms Choy has also referred me to the indoor management rule. With respect, I do not see the relevance of this rule in the present context. The rule merely entitles an outsider, in the absence of anything putting him upon inquiry, to presume regularity in the internal affairs of a company when confronted by a person apparently acting with the authority of the company; the rule cannot be used to create authority where none otherwise exists (see Thanakharn Kasikorn Thai Chamkat (Mahachon) at §59 per Lord Neuberger NPJ quoting with approval the passage in Northside Developments Pty Ltd v Registrar-General (1989-1990) 170 CLR 146 at 198 per Dawson J). Since I am not satisfied that Mr Lai had the requisite apparent authority to enter into the Alleged May 2016 Agreement on behalf of the 1st respondent, the indoor management rule does not assist the applicant.
De Facto Directorship
46. The applicant contends in the alternative that Mr Lai was a de facto director of the 1st respondent at the time of entering into the Alleged May 2016 Agreement and that Mr Lai therefore had sufficient authority to bind the 1st respondent to the agreement.
47. A convenient summary of the relevant principles on de facto directorships may be found in Cyberworks Audio Video Technology Ltd (in compulsory liquidation) v Mei Ah (HK) Company Ltd [2020] HKCFI 398 at §56 per Coleman J as follows:-
“(1) The essence of deciding whether a person has acted as a de facto or shadow director is to consider whether that person has acted in such a way that he is to be taken to have assumed – and for the Court to impose on him – a director’s duties and responsibilities in relation to the subject company.
(2) Each case gives rise to a question of fact and degree, where all relevant factors must be taken into account and looked at in their context. It is the cumulative effect of all relevant factors that guides the Court. But those who assume to act as directors and who thereby exercise the powers and discharge the functions of a director must accept the responsibilities of the office, whether they are validly appointed or not, and whether they claim to be a director or claim not to be.
(3) In order to make a person liable for misfeasance as a de factodirector, it must be shown that the person was part of the corporate governing structure, namely the system by which the subject company’s business is directed and controlled, and that he assumed a role sufficient to impose on him a fiduciary duty to the company. That may require the Court to consider the company’s business and whether the person’s acts were directorial in nature.
(4) Often, a de factodirector is held out as a director by the company, and claims and purports to be a director, although never actually or validly appointed as such. Though that is not a necessary feature, it may be weighty evidence in support of the conclusion that a person acted as a director in fact. So might the evidence that third parties considered that he was a director. The Court will not focus on what the person was called by the company or by himself, or (by extension) what others called him, but instead the Court will look to see what he actually did. The Court will consider if he was the sole person directing the affairs of the company, or acting on at least an equal footing with others in directing its affairs, whether those others were validly appointed or not.
(5) It is not sufficient to show that the person was concerned in the management of the company’s affairs, or undertook tasks in relation to its business, which can properly be performed by a manager below board level. Rather, it is necessary to plead and prove that the person undertook functions in relation to the company which could properly be discharged only by a director. That is because it is only the exercise of such functions which give rise to the corresponding duties and responsibilities. If it is unclear whether the acts of the person are referable to an assumed directorship or to some other capacity, and so long as the Court does not strain the facts on this question, the person is entitled to the benefit of the doubt.
…”
48. In support of her contention that Mr Lai was a de facto director at the time of entering into the Alleged May 2016 Agreement, Ms Choy submits that there is “ample” evidence that Mr Lai was directing the affairs of the 1st respondent and that its employees were treating Mr Lai as the “boss” and taking orders on management and daily operations from him. Given that these matters occurred publicly and continuously, the 1st respondent must have been aware of the same and permitted Mr Lai to act as the leader of the company, to make decisions and to enter into agreements on its behalf.
49. With respect, I do not agree with Ms Choy’s analysis:-
(1) There is in fact not much evidence before this court showing that Mr Lai was directing the affairs of the 1st respondent at or before the time when the restaurant meeting took place on 23 May 2016. Apart from company searches showing that Ms Yu was the sole director and shareholder of the 1st respondent at the time of entering into the Alleged May 2016 Agreement, there is no evidence before this court of the 1st respondent’s corporate governing structure at the time and how Mr Lai fit into that structure. I have not seen any board/shareholder resolution or meeting minutes which might suggest that Mr Lai was effectively controlling or managing the affairs of the 1st respondent as a director. The fact that Mr Chan introduced Mr Lai to the applicant as the “boss” at the restaurant meeting on 23 May 2016 is plainly insufficient to ground a de facto directorship allegation against Mr Lai.
(2) I do not derive much assistance from the applicant’s evidence that many employees of the 1st respondent treated Mr Lai as the “boss”. The term “boss” is open to interpretation and is not necessarily synonymous with someone who is acting as a director.
(3) As to the so called evidence of employees taking orders on management and daily operations from Mr Lai, this is in fact no more than an unparticularised bare assertion in the applicant’s witness statement that the 1st respondent was managed by Mr Lai and his close relatives and that those relatives ultimately took orders from Mr Lai. None of these unnamed relatives was a director or shareholder of the 1st respondent at the material time. Further, as mentioned above, the applicant has conceded under cross-examination that he did not know who Ms Yu (the sole director and shareholder of the 1st respondent as at May 2016) was and had never heard of or met such a person. The applicant is plainly not in a position to give evidence as to who was the decision maker at the 1st respondent. This is unsurprising since the applicant was working as a truck driver/delivery worker and clearly had no role to play in the management of the 1st respondent.
50. In the circumstances, I am not satisfied that the applicant has demonstrated that Mr Lai was a de facto director of the 1st respondent at the time of entering into the Alleged May 2016 Agreement.
Ratification
51. As a further fallback contention, Ms Choy submits that even if her analysis above in relation to apparent authority and de facto directorship is wrong, the applicant can still rely on the doctrine of ratification.
52. The nub of her argument is that since the applicant was working closely in the 1st respondent’s business (attending the 1st respondent’s offices, serving the 1st respondent’s customers and using the tools provided by the 1st respondent) and there is no evidence that Ms Yu or anyone from the 1st respondent challenged the applicant’s engagement, the 1st respondent must have ratified the unauthorised employment of the applicant in May 2016 by acquiescence.
53. In support of the above, Ms Choy has referred me to the following passage on the principle of ratification by acquiescence in Gimex Development Ltd v Cua Wai Tai & Anr [2000] 1 HKLRD 14 at 25H-I per Cheung J (as he then was):-
“Although a ratification must be clear and must bear distinct reference to the facts of the particular case, it need not necessarily be proved by positive acts of adoption. In certain cases it is sufficient evidence of ratification that the intended principal, having all material facts brought to his knowledge and knowing that he is being regarded as having accepted the position of principal, takes no steps to disown that character within a reasonable time, or adopts no means of asserting his rights at the earliest time possible…”
54. As mentioned above, Ms Choy’s fallback case on ratification was never pleaded in the Amended Application or raised in her written or oral opening submissions. Mr Chow in his oral closing submissions complained of the advancement of this new case for the first time in Ms Choy’s written closing submissions.
55. I am of the view that Mr Chow’s complaint is justified. The question of ratification by acquiescence plainly calls for the inquiry of a number of pertinent factual issues at trial, such as whether Ms Yu had knowledge of the unauthorised acts of Mr Lai on 23 May 2016 and if so when she acquired such knowledge and whether she challenged Mr Lai’s purported employment of the applicant. In circumstances where the applicant had never run a case on ratification, it is hardly surprising that no evidence was led or presented for such purposes at trial.
56. I therefore do not think that it is fair for me to allow the applicant to introduce such a case for the first time via closing submissions. I accordingly reject the applicant’s contention on ratification.
Conclusion
57. In light of the above, I am not satisfied that Mr Lai had the requisite authority or capacity to enter into the Alleged May 2016 Agreement on behalf of the 1st respondent. Accordingly, I find that the 1st respondent has not entered into the Alleged May 2016 Agreement with the applicant.
INDICIA OF ALLEGED EMPLOYMENT RELATIONSHIP
58. In view of my finding above that there was no contractual nexus between the applicant and the 1st respondent, it becomes strictly unnecessary for me to proceed to consider whether any purported relationship between the applicant and the 1st respondent was one of employment in nature. Nonetheless, I will address this issue below in the event that I am wrong on the above.
59. As mentioned above, Poon Chau Nam has laid down the modern approach to the question of whether a person was an employee by examining all the features of their relationship against the background of the indicia of employment with a view to deciding whether, as a matter of overall impression, the relationship was one of employment.
Degree of Control exercised by the 1st Respondent
60. One of the key disputed issues is whether the 1st respondent had control of the applicant’s work.
61. The applicant’s evidence is that his instructions came from Mr Chan and the 2nd respondent before Mr Chan passed away and only from the 2nd respondent thereafter. That said, it would appear from the WhatsApp messages that the applicant has disclosed that his direct instructions would only come from the 2nd respondent at all times.
62. However, as mentioned above, it is also the applicant’s evidence that the 2nd respondent was employed by the 1st respondent via Mr Lai at the same restaurant meeting on 23 May 2016 on the same employment terms as the applicant’s. The applicant is unable to explain why and how the 2nd respondent was later tasked to give him instructions on behalf of the 1st respondent if they were hired in the same role with the same terms to begin with.
63. It is also apparent from the applicant’s own evidence that the 2nd respondent might have given instructions to him which were not authorised by Mr Lai or the 1st respondent. For example, the 2nd respondent sent various WhatsApp messages to the applicant in August 2018 purporting to re-define the applicant’s understanding of the terms under the Alleged May 2016 Agreement. The applicant accepted under cross examination that such messages from the 2nd respondent were illogical. This casts doubt on whether the 2nd respondent was providing instructions to the applicant on behalf of the 1st respondent.
64. Overall, it does not appear to me that the degree of control indicia favours the applicant’s case against the 1st respondent.
Provision of own Equipment
65. There is no dispute that the applicant was provided with tools for his work.
66. The key question in dispute is whether the 1st respondent was the provider of such equipment.
67. The main pieces of equipment for the applicant’s work were the delivery trucks which he was provided to drive (with vehicle registration marks VA 7841, NH 8131, RL 9773, TG 6289 and UR 2101). The bodies of the NH 8131 and RL 9773 trucks bear the registered Chinese business name of the 1st respondent “加零壹專業搬屋服務” whilst the TG 6289 and UR 2101 trucks bear the name “A1專業搬屋服務”. According to the applicant, Mr Lai had mentioned that both “加零壹專業搬屋服務” and “A1專業搬屋服務” were under the “加零壹集團”. The applicant had understood that all these trucks were owned by the 1st respondent.
68. Whilst the fact that the NH 8131 and RL 9773 trucks bear the Chinese business name of the 1st respondent might tend to suggest that it was the provider of the tools and equipment to the applicant, the applicant’s evidence is not entirely satisfactory:-
(1) According to the certificates issued by the Transport Department in December 2018, the RL 9773 and VA 7841 trucks were owned by Easy Servicing Company Ltd (“Easy Servicing”) and the TG 6289 and UR 2101 trucks were owned by S&T Transport Ltd (“S&T Transport”). The 1st respondent or Mr Lai was never a shareholder in any of these companies. The applicant has not otherwise provided this court with the relevant Transport Department certificate for the NH 8131 truck. Nor has the applicant been able to explain why trucks not owned by the 1st respondent were provided to him for use in his daily work allegedly as an employee of the 1st respondent.
(2) The name “A1專業搬屋服務” is not the registered company or business name of the 1st respondent. The company and business registration searches conducted by the applicant reveal that there is a Hong Kong incorporated company by the name of “A1 Moving Service Limited” or “飛壹般專業搬屋服務有限公司” trading as “A1 Moving Service”. The shareholder of A1 Moving Service Limited was a Mr Lam Hiu Fai who was also one of the shareholders of S&T Transport. The applicant testified that he has never heard of this Mr Lam. It does not appear that the name “A1專業搬屋服務” was intended to be a reference to A1 Moving Service Limited. The applicant has not otherwise been able to demonstrate any linkage between “A1專業搬屋服務” and the 1st respondent.
69. The applicant says that he retrieved the other tools and equipment (such as pallets with wheels, adhesive tapes, cardboard boxes etc) from the office of the 1st respondent at the Kai Yip Factory Building in San Po Kong. However, according to the company searches produced by the applicant, this Kai Yip Building address was also the registered office address of Easy Servicing as mentioned in paragraph 68(1) above. I therefore do not think that much can be read into the fact that the applicant retrieved those tools and equipment from the Kai Yip Building address.
70. The applicant also points to the fact that the cardboard boxes bear the 1st respondent’s name as well as a “+01” logo and that the pallets with wheels bear the “+01” logo. Whilst the existence of the 1st respondent’s name on the cardboard boxes would tend to suggest that they were supplied by the 1st respondent, the significance of the “+01” logo is less clear since it was also used in conjunction with the advertising materials for a company known as Aman Relocation and Storage Limited which was engaged in the moving service business but was never owned by the 1st respondent.
71. Overall, whilst there is some evidence which would tend to suggest that the 1st respondent was the supplier of the tools and equipment used by the applicant in carrying out some of his work, the applicant has certainly not demonstrated that all of his tools and equipment were supplied by the 1st respondent only.
Degree of Financial Risk the Applicant took
72. There is no evidence to show that the applicant took on financial risk at work.
73. But the pertinent question is whether the applicant can demonstrate that it was the 1st respondent (as opposed to any other entities) who took on the financial risk?
74. The applicant says that all the monies he collected from the customers had to be handed over to Mr Chan and/or the 2nd respondent who would then forward them to the 1st respondent. However, the applicant does not say that he has personally witnessed Mr Chan and/or the 2nd respondent handing over such monies to the 1st respondent and to whom at the 1st respondent that such monies were handed over.
75. The applicant also recalls an incident in 2018 in which the TG 6289 truck that he was driving collided with a private motor car and that Mr Lai was willing to shoulder half of the compensation payable to the motor car driver. However, there is no evidence from the applicant as to whether Mr Lai paid this personally or received reimbursement and if the latter whether it was reimbursed by the 1st respondent or some other entity (such as S&T Transport, being the registered owner of TG 6289).
76. The applicant further says that if the customers’ properties were damaged during the moving process, the 1st respondent would be responsible for paying compensation to the customers. However, not only is this an unparticularised assertion, it is also not supported by any documentary evidence. I place little weight on this bare assertion.
77. The applicant’s evidence that the 2nd respondent had once instructed him not to hand the payments and tips collected from a customer to Mr Lai further complicates the picture as to who it was that took on the financial risk/benefit associated with the works undertaken by the applicant.
78. On balance, I am not satisfied that the applicant has demonstrated that it was the 1st respondent (and not other entities) who took on the financial risk in respect of the works undertaken by the applicant.
Other Matters
79. The applicant says that all the quotations that he had come across during his employment were issued by the 1st respondent.
80. However, out of the 3 sample quotations disclosed by the applicant, at least one of them specifies that the payment from the customer should be remitted to Easy Servicing. The applicant was not able to explain why this particular quotation demanded for payment to be made to Easy Servicing instead of the 1st respondent. This casts doubt on whether one can simply read the issuer of the quotations as being the party who received the benefit of the works carried out by the applicant.
81. As regards the mode of payment of the applicant’s earnings, the applicant’s evidence is that the worker who was assigned the duty on any given day to liaise with the customer (揸單人) would distribute the daily pay to the applicant and other workers at day’s end. Further, the 2nd respondent would pay any outstanding allowances or tips collected from the customers to the applicant and the other workers on a semi-monthly or monthly basis. It is evident that the 1st respondent or Mr Lai was not the one who made payments to the applicant. The applicant is otherwise unable to say what profit/fee sharing arrangement (if any) existed between the 1st respondent, the 2nd respondent and/or Mr Chan.
82. Finally, whilst by no means determinative, the applicant has not filed any tax returns and that no MPF payments were ever made in respect of his alleged employment with the 1st respondent.
Conclusion
83. Overall, and taking a nuanced approach in weighing up the above evidence, I am not persuaded that any purported arrangement between the applicant and the 1st respondent bears the indicia of an employment relationship as contended.
THE 2ND RESPONDENT
84. As mentioned in paragraph 23 above, Ms Choy did not seriously pursue the applicant’s alternative pleaded case that he was an employee of the 2nd respondent.
85. This is not surprising. The fundamental tenet of the applicant’s case is based on the Alleged May 2016 Agreement with the 1st respondent. On his own evidence, the applicant never considered himself an employee of the 2nd respondent. The applicant has also frankly accepted that he is not aware of any subcontractor relationship between the 1st and 2nd respondents. Indeed, the evidence discussed in the sections above do not suggest any employment relationship between the applicant and the 2nd respondent.
86. For the sake of completeness, I would record my finding that I am not persuaded that the applicant has demonstrated any employment relationship with the 2nd respondent.
DISPOSITION
87. For the reasons mentioned above, I dismiss the Amended Application brought against both the 1st and 2nd respondents.
88. I also make an order nisi that the costs of the Amended Application (including the hearings on 27 September 2021, 27 October 2021 and 10 January 2022) be paid by the applicant to the 3rd respondent, with certificate for counsel, to be taxed if not agreed. The applicant’s own costs shall be taxed in accordance with the Legal Aid Regulations. This order nisi shall become absolute unless an application is made to vary it within 14 days of this judgment.
89. I thank Ms Choy and Mr Chow for their assistance.
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( Norman Nip, SC )
Deputy District Judge
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Ms Alison Choy, instructed by the Director of Legal Aid, for the applicant
Mr Tony Chow, instructed by P.C. Woo & Co, for the 3rd respondent
1st and 2nd respondents were not represented and did not appear
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