LAM CHEUK WAI v. HUNG MAN CONSTRUCTION CO LTD

DCEC 2447/2019

[2023] HKDC 1500

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2447 OF 2019

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JUDGMENT

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A.  Introduction

1.  This is an application by the applicant for employees’ compensation payable under Sections 9, 10 and 10A of the Employees’ Compensation Ordinance (Cap 282) (“the Ordinance”) for injuries sustained in an accident on 12 July 2018.

2.  The applicant was the only witness testifying at the trial. On the other hand, although Ho Tak Eng (何德英), sole director and shareholder of the respondent, had previously filed a witness statement in this case, the respondent had not called Ho Tak Eng (or any other witnesses) to testify at the trial.

B.  Issues

3.  The issues in this case are as follows:-

3.1  Whether the applicant was an employee of the respondent at the time of the accident (“Issue 1”);

3.2  Whether the accident was arising out of and in the cause of employment (“Issue 2”); and

3.3  If liability is established, the quantum of compensation under Sections 9, 10, and 10A of the Ordinance (“Issue 3”).

C.  Assessing evidence and Credibility

4.  In assessing the credibility of a party’s case, it is trite that the court should take into consideration the followings:-

4.1  Whether the party’s case is inherently plausible or implausible;

4.2  Whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable;

4.3  Where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests. This is relevant to the assessment of his overall credibility; and

4.4  The demeanour of the witnesses.

Lee Fu Wing v Yan Po Ting Paul [2009] 5 HKLRD 513 at [53]

5.  I have carefully examined the applicant’s evidence. He is obviously not a sophisticated person. At times, his evidence was unclear and what he meant was only understood after repeated clarifications. However, on the crucial issues, his evidence was coherent and not shaken in cross‑examination. I therefore found the applicant to be a credible and reliable witness.

D.  Issue 1: Employment relationship

6.  The respondent’s argument was two-fold:-

6.1  The applicant was an independent contractor; and

6.2  The identity of the applicant’s alleged employer was unclear.

D.1  Independent contractor or employee

7.  The modern approach to the question whether the applicant was a contractor or an employee was set out in Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156 where Ribeiro PJ held the following:-

“18. The modern approach to the question whether one person is another's employee is therefore to examine all the features of their relationship against the background of the indicia developed in the abovementioned case-law with a view to deciding whether, as a matter of overall impression, the relationship is one of employment, bearing in mind the purpose for which the question is asked. It involves a nuanced and not a mechanical approach, as Mummery J emphasised in Hall v Lorimer (in a passage approved by the English Court of Appeal):

“In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.””

8.  No single factor is determinative and a court will balance the various factors suggesting the existence of an employment relationship against contrary factors, and their relative strengths and weaknesses. Some factors may be neutral. Some may be entirely irrelevant in a particular case: Chitty on Contracts, Hong Kong Specific Contracts, 7^th edition, paragraph 12-008.

9.  After considering all the circumstances of the case, I am satisfied that the evidence points to the applicant being an employee instead of an independent contractor under the Ordinance for the following reasons.

10.  The respondent had a high degree of control over the work of the applicant. The daily work location and work procedures were decided by Ho Tak Eng. Ho Tak Eng would phone the applicant and give instructions as to his work location and responsibilities the evening before. The applicant only needed to follow Ho Tak Eng’s instructions and attended the work location designated by him. In case there were any problems with the construction, the workers (including the applicant) would report to Ho Tak Eng. The secretary, Ms Cheung (張小姐), would call the workers and ascertain the names of the workers who attended work that day, and the workers would report to Ms Cheung if they were off from work, or they had to work overtime.

11.  The applicant did not hire other helpers to assist his work, and he did not have to bear the financial risks of the work, nor did he profit from it. He did not have knowledge of the costs of the renovation projects, and he did not have to make any investments in relation to the renovation projects. Ho Tak Eng would choose the construction materials and would be responsible for the purchase. The applicant would occasionally help with the purchase of a small number of materials or items, like screws and glass adhesives. After making the purchases, he would hand the receipts to Ho Tak Eng, and Ho Tak Eng would reimburse him in cash. The applicant would have to acknowledge receipt and he would not profit from the purchase of materials.

12.  The applicant was not required to provide tools and equipment for the work. Ho Tak Eng would arrange for the tools and equipment.

13.  The applicant’s salary was calculated per day and paid per month, instead of on the basis of an agreed fee for a construction project. The applicant had an oral agreement with Ho Tak Eng of the respondent that he would work as a construction worker six days a week, from 9 am to 6 pm, and his daily wage was HK$1,100. He would be entitled to overtime pay and a pay of HK$1,100 would be made for every additional 6 hours. In addition, he would receive allowances depending on the nature of the work. He would also receive extra allowances for his help in organising and tidying up work equipment. If the work location was far away, he would receive transport allowances. The wages were paid in cash once a month.

D.2  Identity of the employer

14.  The issue was a narrow one. The respondent’s main argument was that the applicant had given inconsistent versions about whether he was employed by the respondent, or directly by Ho Tak Eng. As aforesaid, Ho Tak Eng was the sole director and shareholder of the respondent.

15.  As shown in his witness statement, his testimony in the witness box, and his declaration to the Labour Department, the applicant had mentioned his employer variously to be:-

15.1  the respondent;

15.2  Ho Tak Eng; or

15.3  Ho Tak Eng of the respondent.

16.  Ms Melinda Chiang, counsel for the respondent, therefore argued that the applicant’s evidence was not credible or reliable. With respect, there is nothing in this argument. I agree with the applicant that Ho Tak Eng was the director of the respondent and was responsible for the daily operation of the respondent. There is therefore nothing surprising for the applicant, who is apparently not a sophisticated person, to have used the name of Ho Tak Eng and the respondent interchangeably when statements were given on the matter concerned. Further, as aforesaid, he had on occasions clearly stated that his employer was Ho Tak Eng of the respondent. I have therefore no doubt that when he mentioned Ho Tak Eng as his employer, he was referring to the respondent, as represented by Ho Tak Eng, to be his employer.

17.  The respondent mounted a similar challenge to the capacity of the secretary who made the periodical payments to the applicant during the applicant’s sick leave period. There was no dispute that the payments were made by one Ms Cheung and she was a secretary. However, the respondent argued that the applicant’s evidence was contradictory as he sometimes described Ms Cheung as “老闆秘書”, and sometimes as “公司秘書”. Again, I cannot accept this argument. When his evidence was considered in context, I have no doubt that such semantic quibbles taken with the terminologies could not mask the fact that the applicant was referring Ms Cheung as the secretary of the respondent, who was paying the relevant periodic payments on the respondent’s behalf.

18.  Further, as stated above, Ho Tak Eng did not testify at the trial, despite the respondent having filed and served the witness statement of Ho Tak Eng before the hearing.

19.  When a party, without explanation, fails to call a witness who might reasonably be expected to call to give evidence, a court is entitled to draw an adverse inference against that party that the person’s evidence would not have helped that party in relation to any particular evidence that has been given for or against that party: Li Sau Keung v Maxcredit Engineering Ltd & Anor [2004] 1 HKC 434 at 443-444, per Le Pichon JA.

20.  Applying the above principle, this court is entitled to, and shall, infer that had Ho Tak Eng been called, his evidence would unlikely rebut the applicant’s allegations made against the respondent.

D.3  Conclusion on Issue 1

21.  Viewing the matter in the round, I found that the applicant was employed by the respondent at the time of the accident.

E.  Issue 2: The accident

E.1  The applicant’s case

22.  According to the applicant:-

22.1  At about 10:30 am on 12 July 2018, he was instructed by the respondent to take part in the relocation of an air­processing unit from House No 16 to House No 15 at Botanica Bay, 3 Cheung Fu Street, Lantau Island, Hong Kong (“the Site”). There was a retaining wall between the garden of House No 16 and the pavement outside which was about three metres in height. In order to move the air-processing unit out of House No 16, the applicant and his co-workers had to raise the air-processing unit over and across the retaining wall of the garden and had it lowered onto the road outside House No 16. The respondent provided the workers with a lifting pulley block to raise and to lower the air-processing unit.

22.2  The workers had the pulley block mounted on an I-beam which was placed on top of two metal racks. One of these metal racks was placed inside the garden of House No 16 supporting one end of the I-beam while the other metal rack was outside the garden on the pavement supporting the other end of the I­beam.

22.3  At that time, the applicant was inside the garden of House No 16 controlling the pulley block in lowering the air-processing unit onto the ground whilst his co-workers were outside the garden on the pavement stabilizing the air­processing unit manually. As the applicant continued to lower the air­processing unit onto the ground, his co-workers suddenly asked him to stop and requested him to climb over the retaining wall from the garden onto the pavement instead because they wanted him to assist them in pulling the air­processing unit together while it was still suspended in the air. The purpose of which was to have the air-processing unit be pulled closer to House No 15 while it was still suspended in the air as that could minimize the distance of moving the air-processing unit from House No 16 to House No 15 on the pavement manually.

22.4  The air-processing unit was about one ton in weight. The size of the air-processing unit was about 3.5 feet in length; 2.5 feet in width and 4 feet in height. Immediately prior to the accident, the air-processing unit had already been moved out of the garden and across the retaining wall by means of the pulley block. The unit was suspended in the air above the pavement. It had to be lowered down onto the pavement by means of the pulley block before the applicant and his co-workers were to push the air-processing unit into House No 15.

22.5  The applicant climbed down as requested. As he reached the pavement outside the garden of House No 16, the co-workers were already in the course of pulling the air-processing unit towards House No 15 by means of the pulley block. Just as they were doing so, the I-beam on which the pulley block was placed, suddenly toppled and dropped from the metal rack. In the course of dropping, the I-beam hit against the applicant's neck and jaw bone accidentally, causing the applicant to suffer serious injury as a result.

E.2  The respondent’s argument

23.  The respondent disputed that the accident happened as the applicant alleged. It argued there was a discrepancy between the aforesaid account of the applicant and the “A&E Clinical Documentation Form” of the North Lantau Hospital which recorded that the applicant had fallen from a ladder.

24.  The following information was stated on the said form:-

“Triage Assessment
…
Informant:	Self, Others: colleague
Chief complaint:	IOD at 10:15am, fall from step ~ 10 feet, Neck injury hit on ground, …
…
History & Clinical Findings
…
Present symptoms:	fell from ladder at 10:15 this morning, about 8ft
	right facial and neck hit by ladder
	right face, right shoulder hit on step”

25.  Regarding this discrepancy, the applicant explained that he was in severe pain after the accident and could not speak. He was also afraid and dizzy. He was taken to the hospital by his colleagues Ah Hung and Ah Wang. He heard his colleague Ah Wang telling the nurse and the doctor at the A&E Department of North Lantau Island that he had fallen from height. That was the reason for the said record. However, the applicant said that he was in fact hit by the I-beam.

26.  I accept the applicant’s explanation. I agree with Ms Julia Lau, counsel for the applicant that the clinical condition of the applicant at that time was critical. As can be seen from the medical records, the applicant was suffering from severe pain and had swelling over his right jaw and right shoulder. He had hemoptysis and neck emphysema. Various investigations were done upon arrival at the A&E Department of North Lantau Hospital including blood test; chest x-ray, shoulder x-ray and neck x-ray. He was intubated by Dr Chu Siu Sha at 1133 hours and he was immediately transferred to Prince Margaret Hospital under the escort of Dr Chu and a nurse. Apparently, the applicant was not in a condition which could account for how he suffered the injury in any details at the time. It was recorded in the record that his colleague was an informant. The relevant “discrepancies” could be a result of the emergency unfolding before the parties at the time for which the medical staff could have no luxury to elicit and confirm information as one would have in a calm atmosphere. There was also no evidence from the respondent in rebuttal.

E.3  Conclusion on Issue 2

27.  I found that the accident had happened as claimed by the applicant, and was therefore arising out of and in the course of his employment with the respondent.

F.  Quantum

F.1  Quantum of damages under section 9

28.  The applicant claimed that his daily wage was agreed at $1,100. He was also entitled to receive overtime allowance, travelling allowances as well. On average, he worked not less than 25 days per month at the material time and his average monthly earnings during the preceding 12 months was $32,135. A summary of his earnings during the preceding 12 months prior to the accident is prepared and disclosed at page 208 of the trial bundle. Those figures were supported by contemporaneous written work records prepared by the applicant which I accept as true and accurate.

29.  The applicant was born on 18 December 1962. He was still 55 years old at the time of the accident which happened on 12 July 2018. In the circumstances, the amount of Section 9 compensation payable is thus:-

$32,135 x 35% x 72 = $809,802

F.2  Quantum of damages under section 10

30.  There is no dispute that the applicant was granted 506 days of sick leave as a result of the injuries he sustained.

31.  The amount of compensation payable under Section 10 is thus:-

$32,135 x 506/30 x 4/5 = $433,608.27

F.3  Quantum of damages under section 10A

32.  The respondent does not dispute the figure of $7,080 as medical expenses incurred by the applicant as a result of the injuries sustained in the accident.

F.4  Conclusion on Quantum

33.  The amount of compensation payable to the applicant is thus:-

Section 9:	$809,802.00
Section 10:	$433,608.27
Section 10A:	$7,080.00
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Sub-total:	$1,250,490.27
Less Advanced Payment:	$126,225.00
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Total:	$1,124,265.27	(with interest)
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G.  Order

34.  Judgment is entered against the respondent. I grant an award in the total sum of $1,124,265.27 with interest at half of the judgment rate from the date of the accident to the date of judgment, thereafter at judgment rate until full payment.

35.  I also make an order nisi that the respondent shall pay the applicant’s costs (including all costs reserved, if any) to be taxed if not agreed, with certificate for counsel. The applicant’s own costs be taxed in accordance with the Legal Aid Regulations.

36.  It remains for me to thank counsel for their assistance.