CHEUNG KA FAI v. FONG CHOW WO t/a SHING CHEONG RESTAURANT AND OTHERS

DCEC 859/2019

[2022] HKDC 605

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 859 OF 2019

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DECISION

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A.  Introduction

1.  In an earlier joinder application to join the 3^rd Respondent heard by this court, I set out in my decision (“Earlier Decision”)[1] the background of these proceedings as follows:-

“[1] On 15 April 2019, the Legally-Aided Applicant filed an Application for employees’ compensation (“Application”)  pursuant to the Employees’ Compensation Ordinance[2] against his alleged employer, Fong Chow Wo (“Fong”)  trading as Shing Cheong Restaurant (“Restaurant”), the 1^st Respondent.  In the Application, it was averred that he met an accident on 7 April 2018 while working for the 1^st Respondent at stall 29 of the Restaurant.

[2] … The 1^st Respondent’s non-participation in the proceedings led to an application by the Employees Compensation Assistance Fund Board (“ECAFB”)  to intervene in the proceedings. …the court granted leave to the ECAFB to be joined as the 2^nd Respondent.

[3] …the 1^st Respondent alleged that at the time of the alleged accident, the business of the Restaurant had already been transferred to a Fung Yuen Chiu (“Fung”), who was the Applicant’s friend.

[4] The 1^st Respondent’s alluding to Fung as the sole-proprietor of the Restaurant led to the issuance of this summons (“Summons”)  on 25 February 2021 for leave to join Fung as the 3^rd Respondent in these proceedings out of time.”

2.  Before this court granted leave to the Applicant to join Fung as the 3^rd Respondent, the Applicant issued another joinder application by summons (“Joinder Summons”)  on 5 November 2021 for leave to join Chan Wing Lok (transliteration)  (陳永樂)  (“Chan”)  as the 4^th Respondent out of time.

3.  Chan, who was unrepresented until after the adjournment of a substantive hearing on 16 May 2022 to enable him to file further affirmation evidence, opposed the Joinder Summons.  In his opposition, Chan altogether filed two affirmations – one was prepared by himself in Chinese, and a later one drafted in English by his solicitors, Messrs Ivan Tang & Co.

4.  At the resumed hearing on 7 June 2022, the Applicant was represented by the same Legal Aid counsel, Mr Chong, who had appeared in the earlier joinder application, and Chan by counsel, Mr Fong.

B. The grounds in support of the Joinder Summons

5.  The grounds in support of the Joinder Summons are stated in the Applicant’s 3^rd Affirmation filed on 5 November 2021 (“Supporting Affirmation”).  The evidence against Chan is mainly based on a witness of the 1^st Respondent, Lau Pak Hung (transliteration)  劉柏雄 (“Lau”).

6.  In Lau’s witness statement dated 2 June 2021 (at §§3 & 7), it was averred that since 2015 before the business of the Restaurant was transferred to Fung, he was already employed by the 1^st Respondent as a daily-wage dish washing worker/miscellaneous worker.  His wages were paid weekly in cash.

7.  Lau alleged that after the business of the Restaurant was transferred to Fung and his partner, Chan, in November 2017, Fung/Chan were the boss(es)  of the Restaurant, and he was employed by Fung. Later, Lau noticed that Chan came to the Restaurant frequently, and he learnt that Chan was Fung’s partner.  They continued to pay him wages in the same way as the 1^st Respondent.

8.  Referring to the above averments contained in Lau’s witness statement, the Applicant suggested in the Supporting Affirmation (§9)  that “Chan (together with Fung as partners)  may be the employer at the time of the accident.  Alternatively, Fung and Chan may only be agents of the 1^st Respondent who is [his] employer at the Restaurant.  There is also a possibility that the 1^st Respondent, Fung and Chan may be business partners and all three of them were [his] employer.”

9.  As for the reason for the 19 months’ delay to apply to join Chan, the Applicant attributed it to his complete lack of knowledge of Chan’s alleged relationship with the Restaurant until he had read the contents of Lau’s witness statement after the exchange of the witness statements with the 1^st Respondent on 4 June 2021.

10.  Despite the lack of direct evidence against Chan, Mr Chong submitted that the Applicant’s intended claim against Chan is not bound to fail.  It was submitted that since Lau is an independent witness, his allegations that Chan was one of the owners of the Restaurant should provide sufficient factual basis for joining Chan in these proceedings.  Mr Chong cited the same Court of Appeal decision of Ng Chiu Wing v Yip Hoi Ching and anor[3] that he had already referred to when applying to join Fung as the 3^rd Respondent and submitted at joinder stage, that an applicant should be allowed to choose the person to sue.

C. The Opposition: no prima facie case against Chan

11.  Chan’s principal objection is primarily that the Applicant’s intended claim lacks merits.  It was contended that not only has the Applicant no direct evidence against him, the indirect evidence contained in Lau’s witness statement that the Applicant solely relied on was so tenuous and contradictory that the Applicant will be unlikely to be able to establish a prima facie case against him.

12.  In his opposing affirmations, Chan denied the allegations in Lau’s witness statement.  It was averred that Fung introduced him to work for the 1^st Respondent as an employee, working as “a barista or bartender, cashier and courier”[4] from December 2017 until his resignation in around May 2019.  Chan stated that he knew nothing about the alleged transfer of the business of the Restaurant to Fung, who appeared to him to have a managerial role. 

13.  Chan specifically denied Lau’s allegation of having paid Lau salaries in the capacity of a partner of Fung.  It was elaborated that Lau’s said perception might have been due to the work that Chan did as a cashier.  In the past, when Fung asked Chan to pay wages to employees, Chan had used the cash from the till to pay wages.

14.  Chan argued that as the Applicant’s intended claim on the basis of Lau’s bare allegations is devoid of merits, it followed that the Applicant’s “reasonable excuse for the delay” should also be untenable and not be accepted. Chan contended that this Joinder Summers is improper and fundamentally wrong, and that he will also suffer prejudice by the unnecessary incurring of costs should he be joined.

D. Discussion

15.  The legal principles governing an out-of-time application to join a party were already discussed in the Earlier Decision (at Section B), and they are equally applicable to this Joinder Summons. 

16.  There is little dispute that the Applicant only learnt of Chan’s alleged relationship with the business of the Restaurant from Lau’s witness statement after the exchange of witness statements on 4 June 2021.  As a consequence of Fung’s application for Legal Aid, these proceedings were further delayed by the statutory Legal Aid stay of 42 days from 30 August to 11 October 2021.  Before the Applicant issued the Joinder Summons, the legal aid counsel on behalf of the Applicant had on 15 October 2021 written to Chan to ask him to confirm if he was the boss of the Restaurant.  When no response was received, the Applicant issued the present Joinder Summons. 

17.  From the chronology of events outlined in the preceding paragraph, I’m inclined to accept that the Applicant’s reason for the delay is reasonable.  In fact, I do not think that Chan has seriously challenged the Applicant’s explanation for the delay. 

18.  Chan’s primary objection is his contention that the evidence the Applicant seeks to rely on in applying to join him in these proceedings is of such poor quality that it lacks merits. 

19.  Insofar as the contention on merits is concerned, it is important to bear in mind that this court should not embark on a mini trial when examining the merits of the Applicant’s intended claim.  No matter how tenuous Lau’s evidence may seem to be at this stage, this court is unable to resolve any factual disputes merely on Chan’s affirmation evidence.  The credibility of witnesses will have to be determined by a trial process of live evidence and cross-examination.

20.  In principle, unless a court “takes the view that the intended claim against the person sought to be joined is bound to fail or unless there are other special circumstances, the court should normally allow the plaintiff to choose his defendant”: see Ng Chiu Wing (supra.) at §15.

21.  From the evidence filed in these proceedings, I am under the broad impression that Chan’s relationship with the Restaurant might not have been as a mere employee as Chan asserted.

22.  According to Fong’s witness statement (§31), the stall (“Stall”)  where the accident allegedly happened was a market stall subject to the regulations of the Public Markets Regulation (Cap 132BO).  Fong, as the tenant of the Stall, was bound by the letting conditions of the Food and Environmental Hygiene Department (“FEHD”). He averred that after the business of the Restaurant was transferred to Fung, he no longer went to the Stall.  Due to his absence from the Stall, FEHD issued to him a warning letter telling him that he was found to have been in breach of

s 5(1)[5] of the Cap 132BO Regulation.  To satisfy the statutory requirements, Fong therefore caused Fung and Chan each to give a signed standard-form undertaking (“Undertaking”)  to the Director of FEHD.  In the signed Undertaking, Chan (and Fung)  confirmed that he was the registered assistant (登記助手)[6] of the Stall.  Fong stated that in fact that was not the case.  Chan and Fung were not his employees nor his assistants.

23.  The Undertakings signed by Chan and Fung exhibited to Fong’s witness statement were identical and they did not appear to have been properly completed.  The name of the tenant, the stall number and the date were all left blank.  Nonetheless, on the face of Fong’s allegation and the Undertakings each signed by Chan and Fung, it suggests that the signed Undertakings by Chan and Fung did not genuinely represent the true arrangement between Fong and Fung on the one hand, and Fung and Chan on the other.  Rather, the Undertakings were prepared for the sole purpose of satisfying the statutory requirements.

24.  The evidence discussed above in relation to the Undertakings will undoubtedly form part and parcel of Fong’s allegation against Fung, and to a certain extent Chan as well.  However, it is noted that when Fung filed his affirmation in opposition to the Applicant’s joinder application against him, Fung was completely silent in relation to the matter concerning his signed Undertaking.  Similarly, Chan has chosen not to adduce any evidence in relation to Fong’s allegations in relation to the Undertakings.

25.  In this case, there was no written employment agreement.  Neither was there any documentary evidence in relation to the alleged transfer of business of the Restaurant from Fong to Fung.  In the circumstances, it is reasonable for the Applicant to rely on the evidence of Lau’s witness statement to formulate his claim against Chan.

26.  At the trial, the Applicant will be required to prove his claim against Chan on the balance of probabilities, and in this Joinder Summons, to satisfy this court of the reasonable merits.  Thus the credibility of Lau would be a crucial issue at trial, which however cannot be determined at this interlocutory stage.  Although this court does not think that Lau was an independent witness as Mr Chong submitted, I believe that if his evidence is accepted by the court, it will likely be sufficient for a trial judge to find that Chan together with Fung were partners of the business of the Restaurant at the time of the accident.  In such case, Chan would likely be found jointly and severally liable together with Fung for paying the Applicant’s employees’ compensation.

27.  Notably, despite having been given an opportunity to file a second affirmation, Chan has not condescended to specificity.  Apart from his silence in relation to the Undertaking (see §24 above), Chan also appears to be evasive about the person who had paid him daily wages when it was averred at §12 of the 2^nd Affirmation that he “was just an employee of the Restaurant”.

28.  After having considered the evidence very carefully, I accept Mr Chong’s submissions that the intended claim is not bound to fail.  I am satisfied that it is reasonable to join Chan so that his true role can be resolved at the trial.

29.  Lastly, I also do not think that Chan’s complaint of the unnecessary incurring of costs will prejudice him because he will likely be awarded costs should the Applicant fail to prove his case against him.  Hence, I reject the prejudice argument.

E. Conclusion

30.  In conclusion, I am satisfied that the Applicant has provided reasonable excuse for the delay in seeking to join Chan in these proceedings.  I therefore grant leave to the Applicant to join Chan out of time as the 4^th Respondent.  There shall be a costs order nisi that the costs of the Joinder Summons be costs in the cause, which shall become an absolute order unless an application by summons to vary is issued within 14 days of the handing down of this Decision.  The Applicant’s own costs be taxed in accordance with the Legal Aid Regulations.

31.  I further direct the Applicant to write to this court within 14 days of the handing down of this Decision to seek consequential directions including the fixing of a date for a directions hearing.

32.  Lastly, I wish to thank Mr Chong and Mr Fong for their helpful submissions and assistance.