TSOI CHUNG KAK v. EMPLOYEES COMPENSATION ASSISTANCE FUND BOARD

DCMP 744/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 744 OF 2007

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Decision and Reasons for Decision

1.  The Plaintiff (“Mr. Tsoi”) took out an application by originating summons against the Defendant (“the Fund Board”) under S.25 of the Employees Compensation Assistance Ordinance Cap. 365 (“the Ordinance”) for leave to issue proceedings against the Defendant as if it were the employer.

2.  Section 25 of the Ordinance provides:

“25. Board liable in certain proceedings as if employer

(1)  This section applies to any claim against an employer for compensation where –

(a)  the employer –

(i)  cannot be identified or, if identified, cannot be found;

(ii)  is insolvent;

(iii)  is dead or in the case of a company, has been dissolved, wound up or struck off the register; or

(iv)  for any reason, cannot be served with proceedings; and

(b)  no policy of insurance is known to be in force in relation to the employee.

(2)  Subject to this section, proceedings for any claim against an employer to which this section applies may issue against the Board as if it were the employer.

(3)  Proceedings against the Board under this section shall not issue unless the court is satisfied, on application made on notice to the board, as to the matters specified in subsection (1)(a) and (b).

(4)  Where proceedings are brought against the Board under this section, the rights and liabilities of the employer in respect of the compensation the subject of the proceedings are vested in and transferred to the Board.”

Background of the case

3.  The Plaintiff, Mr. Tsoi, has been working as a casual construction worker since 1998.  In August and September 2004, he worked at a site in Western district and another site in Mongkok district for the same employer whom he called ‘the Boss’ (“the employer”).  During that period, he collected his wages in cash at the employer’s premises at Ground Floor, 14 Western Street, Hong Kong.  It was his understanding from co-workers that ‘the boss’ resided at the rear portion of those premises.

4.  On 9 March 2005, a co-worker ‘Ah Shing’ informed him ‘the boss’ has a job for the two of them at a site in Discovery Bay the next day.  He and Ah Shing met up the next day at the Tung Chung MTR Station; they were joined by ‘Ah Chung’ who took them to a house at 19 Costa Avenue in Discovery Bay.  At the house, they were introduced to a man who ‘Ah Chung’ said was the employer’s brother.  Mr. Tsoi was then instructed to commence work on the interior of the house.  While there, he saw and greeted ‘the boss’ whom he described as a medium built man of 50 with little hair.

5.  In the course of moving a large rock in the house in the afternoon with a co-worker, Mr. Tsoi’s right hand got caught between the rock and the wall, injuring two of his fingers.  He, nevertheless, continued to work until the day’s end.  He sought treatment that evening at the Pamela Youde Nethersole Eastern Hospital.  The doctor gave him 7 days sick leave for his injuries.

6.  Mr. Tsoi called the employer on the telephone number given to him by “Ah Shing” and informed the employer he was put on sick leave by the doctor and inquired about sick leave pay.  He called the employer again after 7 days informing him that the doctor had given him a sick leave extension.  The employer hung up on him.  Subsequently, he was not able to contact the employer further.

7.  Mr. Tsoi tried to find the employer by visiting the premises at 14 Western Street, ground floor, in an attempt to recover the sick leave pay, but he was not unable to find the employer on the 10 visits he paid to the premises.

8.  From enquiries made with former co-worker ‘Ah Kit’, he was told the employer was called 「祥强裝修公司」.  He reported the accident to the Labour Department on 21 March 2005 giving full details of the address and name of「祥强裝修公司」with details of the accident.

9.  An accident report was compiled by the Occupational Safety Officer Mr. Lo Yiu Keung on 2 September 2005.  The report was not disclosed to Mr. Tsoi until enquiries were made to the Labour Department by Mr. Tsoi’s solicitors.  The accident report revealed that officers from the Occupational Safety and Health Division had investigated the accident and visited the house at 19 Costa Avenue in Discovery Bay, but they were not able to locate the contractor/employer of Mr. Tsoi.  On 20 September 2005, the Labour Department informed Mr. Tsoi he should seek assistance from the Legal Aid Department.

10.  Inquiries made with the Labour Department by Mr. Tsoi’s solicitors revealed that there was no notification of construction work for the work at the Discovery Bay house on 10 March 2005, nor were there any record of the employer of the work at the house.

11.  Upon legal aid being extended to Mr. Tsoi, he became legally represented by his present solicitors from 28 February 2006.  His solicitors made further attempts to locate the employer but to no avail.  Subsequently, Mr. Tsoi through his solicitors gave notice to the Labour Department and the Employees Compensation Assistance Fund Board (“the Fund Board”) that he intended to join the Fund Board under S. 25 (2) of the Ordinance as if it were the employer.

12.  On 9 March 2007, Mr. Tsoi’s solicitors took out an originating summons for leave to issue proceedings against the Fund Board under S.25 of the Ordinance.  The summons was adjourned for affirmations to be filed and for a date to be fixed for hearing.

13.  During the adjournment, Mr. Tsoi’s solicitors wrote to the registered owners of the house in Discovery Bay asking for the identity of the contractor of the works on 10 March 2005.  The reply received revealed the contractor was one Tsui Chun Yuen （崔峻源）and his mobile phone number.  It is not disputed that enquiries made by the Fund Board resulted in the same information being supplied.

14.  Investigations made by Mr. Tsoi’s solicitor on the registered owner of the premises at Ground floor, 14 Western Street at the Land Registry revealed the owner of the premises as one Tsui Chi Keung.  Upon enquiries made to Mr. Tsui Chi Keung, he replied in writing that during the months of August and September 2004, the premises were let to one Tsui Chun Yuen.

15.  Checks with mobile telephone service providers upon Court orders granted by the District Court to Mr. Tsoi on 27 February 2008 revealed negative results on the mobile number supplied by the registered owner of the house on Mr. Tsui Chun Yuen.

16.  Hutchison Telephone Company Ltd. (“Hutchison”) confirmed Tsui Chi Keung was the registered subscriber of the mobile phone number 9196 9428 with the register address at Ground Floor, 14 Western Street.  The said number was the number Mr. Tsoi had previously been contacting the employer.  Efforts made by Mr. Tsoi’s solicitors to contact Mr. Tsui Chi Keung at the said address were unsuccessful.

17.  There was confirmation by Hutchison of the full name and mobile number of Ah Chung to be Wong Kam Chung.  Mr. Tsoi’s solicitors contacted Ah Chung who confirmed that he had previously worked for the same employer in August and September 2004 in Western and Mongkok, and the contact address was G/F 14 Western Street.  But he was not able to supply the full name of the employer.

18.  Upon obtaining special permission from the Chief Secretary for Administration, the Registration of Persons Office supplied Mr. Tsoi’s solicitors with a copy of the photograph of Mr. Tsui Chi Keung.  Mr. Tsoi could not positively identify the person in the photograph as the employer though he admitted the employer resembled the person in the photograph. He recalled the person in the photograph also resembled the brother whom he met at the house on 10 March 2005.

19.  As the Registration of Persons Office could not supply any details on Tsui Chun Yuen without his ID card number, Mr. Tsoi’s Counsel, Miss Cheng, informed the Court the search for the employer came to a deadend.  Defence Counsel Miss Loh submitted the employer could be ‘Tsui Chun Yuen’ because he was the registered subscriber of the mobile phone number 9196 9428 which Mr. Tsoi had used to contact the employer, Miss Cheng argued it was not conclusive as the mobile phone number could be used by someone other than the registered subscriber.  Furthermore, it is contrary to the information obtained from the house owner who claimed the contractor was Tsui Chun Yuen.

20.  Miss Loh submitted that Mr. Tsoi should issue the proceedings against Tsui Chi Keung on the basis of the evidence that he was the registered subscriber of the mobile phone number 9196 9428.

Findings

21.  After considering the evidence in support of the search for the employer supplied by the Plaintiff, I cannot agree with Miss Loh that it can be concluded that Mr. Tsui Chi Keung was Mr. Tsoi’s employer.  Albeit, there is evidence that he was the registered owner of the mobile phone number 9196 9428 which Mr. Tsoi had used to contact the employer, and there is the evidence that he was (and still is) the registered owner of the premises at Ground Floor, 14 Western Street in Western where Mr. Tsoi had collected his wages in August and September 2004, 6 months before the accident.  On the other hand, there is evidence from the Discovery Bay house owner that the contractor for the works on 10 March 2005 was one Tsui Chun Yuen and further evidence that Mr. Tsui Chi Keung’s letter to Mr. Tsoi’s solicitor had stated that the premises were let to Tsui Chun Yuen in August and September 2004.  Whatsmore, Mr. Tsoi was unable to positively identify the photograph supplied by the Registration of Persons Office that Tsui Chi Keung was the employer.

22.  There may be circumstantial evidence which leads one to suspect Tsui Chi Keung may be related to Tsui Chun Yuen or may even be the same person as Miss Loh suggested.  It remains, however, a mere suspicion.  In spite of repeated efforts on the part of Mr. Tsoi and his solicitors, the true identity of Mr. Tsoi’s employer could not be confirmed.

23.  Miss Loh submitted that the Fund Board serves as a last resort for obtaining compensation or damages legally awarded to employees.  She argued that it is only after the employee has succeeded in establishing liability against the employer and has taken all reasonable proceedings to recover from the employer could he turn to the fund for payment of the unpaid compensation under S.16(1), (2) and (3) of the Ordinance.  She relied on the cases of Yu Nongxian v. Ng Ka Wing [2007] 4 HKLRD 159 pp 175 and 180; and Fok Por v. Sum Shuk Ching, the administratrix of the estate of Li Sing Keung dec’d DCEC 172 of 1991 (judgment of H.H. Downey D.J. on 25 March 1992).  There are no relevant cases on an application under S.25 of the Ordinance.

24.  In the Yu Nongxian case, the Court of Appeal was asked to decide if the Court should exercise its discretion under S.2(2) of the Employees’ Compensation Ordinance (Cap. 282) to treat the deceased as if he was employed under a valid contract (the deceased was an illegal worker from the mainland).  The passage Miss Loh relied on is para. 105 of Cheung J.A.’s judgment at p.180:

“105.  An employee or his family must exhaust all attempts to recover the award against the employer before he could seek payment from the Employees’ Compensation Assistance Fund Board (the Fund)”

25.  In the District Court case of Fok Por, Judge Downey held in para. 10:

“10.  In my judgment, the general scheme of the Ordinance is that the Board should serve as a last resort for obtaining payment of compensation or damages legally awarded to employees, only after it has been shown that attempts to obtain satisfaction have failed because of the insolvency of the employer or his insurer.  Even then, the amount to be paid from the Fund, and whether any payment should be made, are matters left to the discretion of the Board.  With the exception of cases which fall within section 25, there is no question of any entitlement on the part of employees to a payment from the Fund.  In my view, section 25 is really designed to deal with the situation where an employee has an indefeasible claim against an employer, who is uninsured, and cannot be effectively sued.  The section relieves an employee of the pointless task of proceeding against the employer or his estate, and enables him to obtain an order against the board, which the Board must honour like any other party.  In my view, this is the only exception to the discretionary feature of the Board’s function; and is probably justified by the fact that the Board will have ample opportunity to carry out inquiries of the kind envisaged by section 22 by reason of the fact of being a party to the proceedings.”

in para. 11, he further held:-

“The matter is not free from doubt but I consider that the words: “subject to section 25 in section 21 indicate a legislative intention that sections 21 to 23 only apply to “applications” under sections 16 to 18 and not to “proceedings” brought against the Board under section 25.  In my view, the Board must honour in full any order or award made by virtue of section 25; subject only to the priority provisions of section 26.”

26.  I am in total agreement that the burden is on the employee to exhaust all attempts to recover the award against the employer before he could seek payment from the Fund.  By the same token, the employee should exhaust all reasonable course to identify and locate the employer before issuing proceedings under S.25.

27.  Miss Loh submitted that S.25 is the guard door preventing employees from suing the Board direct indiscriminately or for convenience without suing the employer first.  The Board will upon notice take the initiative to join as an intervenor or party to the proceedings under S.25A where it is shown that the employer is insolvent or for any reason liable under s.16 for payment of unpaid compensation.

28.  I do not agree it is the legislative intent that the Fund Board would only intervene after liability has been proved and upon the insolvency of the employer under S.16(1), (2) and (3) of the Ordinance.  S.25 is clearly included in the Ordinance for the protection of employees who were injured or killed in the course of employment in situations where the employer could not be identified or found; or if identified and found is insolvent or dead or if it was a company had been dissolved or cannot be served for any reason; and there was no insurance coverage for the employee (S.25(1)(a) and (b)).

29.  Miss Loh informed me that this is the first application of this kind under S.25 and a floodgate would be opened if Mr. Tsoi’s application is allowed.

30.  The fact that the legislation had provided for cases which come under the requirements set out in S.25 means that it had intended to cover employees who may not be protected otherwise.

31.  I refer to the dictum of Cheung J.A. in para. 100 of his judgment (p.179) in the Yu Nongxian case:

“100.  Under the Ordinance a worker would only be entitled to make a claim for employees’ compensation when he sustained injuries or death.  The Ordinance is an ordinance which allows an employee to recover compensation on a “no fault” basis so long as the injury or death was the result of an incident that arose out of and in the course of the employment.  The authority obviously recognized the social need for this type of legislation: an employee who met such a misfortune should not be without redress.”

32.  Protection against abuse has been built in under S.25(3) of the Ordinance.  It requires the applicant to make an application to the Court before issuing proceedings against the Fund Board as if it were the employer.

33.  Further, the Court has to be satisfied that the applicant had shown the employer could not be identified or if identified cannot be found; or the employer is dead or is insolvent or if it is a company, had been dissolved; or cannot be served and there is no insurance policy cover the employee.  In the present case, I am satisfied, on a balance of probabilities that Mr. Tsoi and his solicitors had in the last 4 years since the accident made repeated attempts to locate the identity of the employer and his whereabouts.  I am satisfied that they have exhausted all reasonable course in doing so.

34.  I do not agree with Miss Loh’s suggestion that Mr. Tsoi should take out proceedings against Tsui Chi Keung unless and until there are strong evidence proving he was the employer.  To do so without strong and positive evidence would be a waste of public funds for Mr. Tsoi is legally aided.  Mr. Tsoi’s injury was minor as he was assessed by MAB to suffer 1.5% loss of earning capacity.  A great deal of efforts had been made and costs expended on the efforts to identify and locate the employer in the last four years by Mr. Tsoi and his solicitors.  I am satisfied the search has come to a deadend.  Further public funds expended in an attempt to issue proceedings against Tsui Chi Keung, which seemed unlikely to succeed, would be folly.

35.  For the aforesaid reason, I grant leave to the Plaintiff to issue proceedings against the Defendant as if it were the employer.

36.  Costs to be in the cause of the proceedings to be taxed if not agreed.  The Plaintiff’s own costs to be taxed in accordance with legal aid regulations.