LIU AH SAI v. YIU LIAN DOCKYARDS LTD

1996, No. 174
(Civil)

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H E A D N O T E

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As long as it stands, an award of employees' compensation made by the Commissioner for Labour is a bar to the making of such an award by the District Court. If, however, the District Court cancels the Commissioner's certificate containing his award, then it may proceed to make its own award. That power of cancellation is contained in section 16B(1) of the Employees' Compensation Ordinance, Cap.282.

When it comes to whether the Commissioner's certificate should be cancelled under item (b) of that subsection (which provides for cancellation if it is "proved that ... the certificate was issued in ignorance of, or under a mistake as to, the true nature or extent of the injury") the mere fact that the Commissioner proceeded on a percentage loss of earning capacity less than the one established by the evidence in the District Court is not of itself enough.

The test is whether the difference is so great as to prove on a balance of probabilities and as a matter of fact and degree in all the circumstances that the assessment of the percentage loss of earning capacity on which the Commissioner proceeded must have involved ignorance of, or a mistake as to, the true nature or extent of the employee's injury.

In the percent case, the Commissioner proceeded on a four percent loss while the evidence before the District Court established an eight percent loss. And the Court of Appeal held that that difference was so great as to so prove such a mistake as to the extent of the employee's injury.

IN THE COURT OF APPEAL

1996, No. 174
(Civil)

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J U D G M E N T

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Litton, V.-P.:

1. The first judgment will be given by Mr Justice Bokhary, J.A.

Bokhary, J.A.:

Introduction

2. This appeal comes to us from employees' compensation proceedings in the District Court.

3. The appellant was involved in an accident at work six years ago on December 27, 1990. He was then aged 50.

4. At the time of the accident, he was a mechanic employed by the respondent. That afternoon, he was working on board a ship to which it, a dockyard company, was providing dry dock services.

5. A very heavy screw which he was trying to lift into position slipped. As a result, he sprained his left wrist.

6. In due course, the appellant's medical history will have to be considered in some detail.

7. At the moment, I am outlining the history of this piece of litigation.

8. On December 29, 1990, two days after the accident, the respondents duly notified the Commissioner for Labour ("the Commissioner") of the accident.

Compensation assessed by the Commissioner and paid

9. The claim for employees' compensation was dealt by way of an assessment of compensation by the Commissioner pursuant to section 16A of the Employees' Compensation Ordinance, Cap.282 ("the Ordinance").

10. When the Commissioner set about making an assessment of the compensation due to the appellant, he had before him a Certificate of Review of Assessment dated October 12, 1992, issued by the Employees' Compensation (Ordinary Assessment) Board ("the Board"). That certificate recited that the appellant was suffering from a "sprained left wrist with pain and numbness". And it put his loss of earning capacity at four percent.

11. Going by that assessment of loss of earning capacity, the Commissioner assessed the total compensation due to the appellant as $129,793.33. And, pursuant to section 16A(2) of the Ordinance, the Commissioner issued a Certificate of Compensation Assessment dated May 21, 1993, so certifying. On the 31st of that month, the respondents paid the appellant the $129,793.33 awarded by the Commissioner.

Proceedings in the District Court commenced

12. Five months later, on October 26, 1993, the appellant commenced proceedings in the District Court.

13. He asked the District Court for three things.

14. First, by way of an appeal under section 18 of the Ordinance against the Board's assessment of his loss of earning capacity, he asked the District Court to substitute for that assessment its own assessment of his loss of earning capacity.

15. Secondly, relying upon section 16B of the Ordinance, he sought the cancellation of the Commissioner's certificate. As provided in subsection (1), that can be done if it is proved that :

"(a) the sum paid or to be paid was or is not in accordance with the provisions of this Ordinance; or

(b) the certificate was issued in ignorance of, or under a mistake as to, the true nature or the extent of the injury; or

(c) the certificate was based upon any false or misleading information or statement given or made."

And the appellant sought to rely on each of those three alternatives.

16. Thirdly and finally, the appellant asked the District Court, once it had substituted its own assessment for that of the Board and cancelled the Commissioner's certificate, to award him employees' compensation under sections 9, 10 and 10A of the Ordinance. In other words, he sought awards : for partial incapacity; for temporary incapacity; and in respect of medical expenses.

17. The proceedings were heard by Her Honour Judge Kwan on July 23, 24 and 25 this year. Giving judgment on the 2nd of the following month, she refused to disturb the Board's assessment or the Commissioner's certificate; and she dismissed the appellant's claim for employees' compensation at her hands. In other words, the appellant was left to what he had got under the Commissioner's certificate.

Medical history

18. Before turning to the issues and evidence in the court below, the appellant's medical history should be noted.

19. The appellant's accident happened, as I have said, on December 27, 1990.

20. Next morning, he went to the Accident and Emergency Department at the Princess Margaret Hospital. There his left wrist was found to be tender and restricted in its range of movement. It was X-rayed. But no bony lesion was detected.

21. The doctors at the Princess Margaret Hospital saw him at their follow-up clinic on six occasions during the period January 4 to May 20, 1991. They gave him sick leave until May 31, 1991, being the day on which they referred him to the orthopaedic clinic at the Queen Elizabeth Hospital.

22. His orthopaedic history at the Queen Elizabeth Hospital is set out in a report dated January 12, 1995, from that hospital, saying this :

" The above Gentleman was first seen in our out patient clinic in May 1991 for sprain right wrist 4 months ago. X-ray revealed no bony lesion and he was treated conservatively with analgesic, splintage and physiotherapy.

2. In September 1991, there was about 50% improvement of the wrist pain, on the other hand, he complained of left shoulder pain at extreme range of movement. He was treated conservatively. There was about 80% improvement of wrist pain and shoulder pain also decreased with treated.

3. In January 1992, he complained on and off numbness of left index finger, middle finger and ring finger. A nerve conduction test was arranged for suspected early carpal tunnel syndrome. There was little progress then. The nerve conduction test done in May 1992 revealed mild left carpal tunnel syndrome. Option of surgical treatment was discussed with him and he refused surgery.

4. In November 1992, he still complained of wrist pain, and wasting of thener eminence was detected. He agreed for surgical treated, and operation was arranged on 2nd December 1992. However he did not turn up, appointment was re-arranged on 24th December 1992.

5. The operation was done under intravenous local anaesthesia. A volar incision was made on the wrist, the transverse carpal ligament was identified and splitted open on the ulnar side. The median nerve was identified, some flattening and narrowing of the middle portion was found, the epineurium was loose, the recurrent branch of median nerve was traced and was found intact and free from compression. The wound was closed and a short arm plaster slab was applied for 2 weeks.

6. On 8th January 1993, he complained of increase numbness over left middle 3 fingers and abscence of pin pick sensation over both dorsal and ventral side of the 3 fingers. He was referred for physiotherapy treatment.

7. In February 1993, he still complained of numbness of left middle 3 fingers, a nerve conduction test was arranged on 17th March. The nerve conduction test revealed no evidence of carpal tunnel syndrome.

8. In July 1993, he claimed there was no more numbness, there was no neurological deficit detected and the pin pick sensation was normal. He only complained of wound pain. In November 1993, he complained of numbness of left middle 3 fingers again, he was treated conservatively. In September 1994, he complained of left shoulder pain, he was treated conservatively with analgesic.

9. He was last seen on 9th December 1994, there was still left shoulder pain, X-ray of left shoulder revealed no abnormality. He was treated as subacute tendonitis with local steroid injection given."

23. Within the same period, he was also treated at the Queen Elizabeth Hospital for other ailments, as one sees from the report dated November 18, 1993, from that hospital, which reads :

" The above named was seen in our out-patient clinic on 13.10.1992 with complaint of on and off bleeding perrectum for 2 months. He gave a past history of having injury to his left wrist 2 years before and still required treatment with splint prescribed from a orthopaedic clinic. He also had one attach of passing tarry stool in January 1992 and had treatment given from a private hospital.

2. He is a chronic smoker and chronic drinker.

3. Physical examination of his abdomen was normal. A sigmoidoscopy and proctoscopy examination on 27.11.92 revealed that he had haemorrhold. A band ligation for the haemorrhold was done subsequently.

4. A oesophago-gastro-duodenoscopy done on 10.11.92 revealed a healed gastric ulcer in his stomach.

5. On his latest follow-up (16.2.93), he complained of shortness of breath, and cough with copious sputum. Physical examination of his chest revealed nothing abnormal and he was discharged with drugs and to be seen by physician in Pamela Youde Clinic.

6. In summary, Mr. Liu had suffered from haemorrhoid and healed peptic ulcer. These problems did not resulted from or related to his injury of wrist."

24. The "private" hospital referred to appears to be the United Christian Hospital, from whom the appellant's solicitors received a letter dated November 26, 1993, saying :

" The above named patient first presented to us with haemorrhoids in 1987, haemorrhoidectary was performed in April 1987. Since then, he was followed up by us twice; from May 1987 till May 1993, he did not return for follow up. He came back to see us recently because of constipation, which we are still investigating on.

He is otherwise well and we have no information on the matter about the accident you mentioned 27.12.90."

Issues and evidence before the judge

25. Coming now to the issues and evidence before the judge, one can begin by noting this observation in her judgment :

"The Applicant listed a catalogue of complaints he suffers from at present. Aside from the pain stemming from the injury to his left wrist, and pain due to a prolapsed disc at the C6-7 vertebra at the back of the neck, he suffers from gastro-intestinal bleeding from peptic ulcers, haemorrhoids, a frozen left shoulder, breathing problems described as 'chronic obstructive airway' disease, and psychiatric problems."

26. Two doctors - one for each side - gave evidence before the judge. They were Dr H.K. Lau for the appellant and Dr C.W. Tsoi. Of them, the judge said :

"These are two of the most eminent Orthopaedic Surgeons in Hong Kong. Both are highly qualified and vastly experienced in their chosen field. Both are well known to the Court."

27. Dr Lau and Dr Tsoi agreed that none of the appellant's complaints other than the one of pain in his left wrist stemmed from the accident on December 27, 1990.

28. In medical terms, the difference between them was this. Dr Lau was of the view that the appellant was still suffering from the residual effects of Carpel Tunnel Syndrome. Dr Tsoi was of the view that he was not.

29. The judge accepted Dr Tsoi's evidence and, accordingly, found that the appellant was not suffering any such residual effect. She said :

"The medical experts were ad idem in that none of the present complaints were caused by the wrist injury. In fact the difference between the doctors stem from whether the Applicant still suffers from the residual effects of 'Carpel Tunnel Syndrome'.

"The diagnostic difficulty in assessing whether residual effects of Carpel Tunnel Syndrome as I see it is this : the prolapsed disc causes the Applicant to feel pain all along his left arm, and this pain extends to the fingers of the left hand. Both doctors agree that the Applicant suffers considerable pain throughout the length of his left arm as a result of the prolapsed disc. The area affected by the prolapsed disc includes the left wrist. So, even if the Applicant has residual Carpel Tunnel Syndrome, the greater pain from the prolapsed disc might 'overshadow', mask or cover any residual pain he might have felt at the wrist.

Dr Tsoi relied upon the results of the three clinical tests to say that the Applicant was not suffering from the residual effects of the Syndrome. He based his opinion on the results of Phalen's test, Tinel's sign and the Nerve Conduction test. Dr Lau's opinion was based on his vast experience.

Having considered all the medical evidence carefully, I prefer the evidence of Dr Tsoi on the issue of residual Carpel Tunnel Syndrome. I found his reasoning to be clear, cogent and supported by Dr Fong's report."

(The Dr Fong referred to is Dr S.T. Fong who performed a nerve conduction test on the appellant in March 1993, which test revealed no evidence of Carpel Tunnel Syndrome).

30. In terms of loss of earning capacity, the difference between Dr Lau and Dr Tsoi was this. Dr Lau was of the view that the appellant's loss of earning capacity was anywhere from 10 percent to 30 percent. Dr Tsoi was of the view that it was much less than that. How much less is something which I will come to in due course.

31. Here, the judge said :

"Having considered all the evidence relevant to an assessment of loss of earning capacity, I accept Dr Tsoi's opinion, and find that the loss of earning capacity to be at most 5% or 6%."

32. And then the judge decided the proceedings by the last two paragraphs of her judgment, which read :

"Since Dr Tsoi's assessment of loss of earning capacity is a difference of only one or two percent from the assessment made by the Board of Review, I am not satisfied that it would be just in all the circumstances to invoke the powers conferred by the Ordinance to allow an appeal against, or to cancel the Certificate of Assessment.

For all the reasons given, I would dismiss this Application with costs to the Respondent, such costs to be taxed if not agreed, together with Certificate for Counsel. The Applicant's own costs are to be assessed in accordance with Legal Aid Regulations."

(Strictly speaking, the appeal was against the Board's certificate rather than the Commissioner's certificate in respect of which cancellation was sought. But no slip of the pen or use of "shorthand" here in that regard would be material.)

33. The appellant now asks us to set aside the judgment below and award him compensation in such amount as we see fit together with costs here and below.

34. Four grounds of appeal are set out in the notice of appeal.

First ground of appeal : is ankylosis a comparable?

35. The first ground of appeal reads :

" the learned Judge erred in law in assessing the Appellant's percentage of compensation under Section 9(1)(b) in that :

(a) she failed to have any or proper regard to the statutory guidelines set out in Section 9(1)(b)(ii) of the Employee's Compensation Ordinance, Cap.282, in particular, failed to observe that the 4% loss of earning capacity prescribed by the Ordinary Assessment Board on 13th May 1993 was wholly not to the scale of the percentages specified in item 16 of the First Schedule of the said Ordinance;

(b) she approached the assessment of loss of earning capacity by reference only to Dr. Tsoi's estimate of 5% or 6% and failed to observe other relevant factors thereby failed to conduct a proper enquiry on and to assess and substitute a higher percentage so as to reflect the Applicant's true loss of earning capacity."

36. Section 9(1)(b) of the Ordinance provides that subject to subsection (1A), where permanent partial incapacity results from the injuries the amount of compensation shall be -

"in the case of an injury not specified in the First Schedule, such percentage of the compensation which would have been payable in the case of permanent total incapacity as is proportionate to the loss of earning capacity permanently caused by the injury in any employment which the employee was capable of undertaking at that time:

Provided that -

(i) in the case of injury to any part of the body specified in the First Schedule not amounting to the loss of that part, the loss of earning capacity permanently caused by that injury, expressed as a percentage, shall not exceed the appropriate percentage specified in the First Schedule in respect of the loss of such part;

(ii) in the case of injury not specified in the First Schedule, the loss of earning capacity permanently caused by such injury shall be assessed as a percentage having regard so far as possible to the scale of percentages specified in that Schedule and to the Note thereto."

37. Turning to item 16 of the First Schedule, one sees that it deals with "Ankylosis of wrist joint" specifying 30 percent loss of earning capacity where the ankylosis is in the "optimum position" and 40 percent loss of earning capacity where the ankylosis is in the "worst position".

38. The short answer to this ground of appeal is that the appellant was not suffering from ankylosis of the wrist joint or anything comparable to it. His wrist is not immobilized in any given position.

Remaining grounds : whether the Commissioner's certificate should be cancelled

39. There is no need to recite the remaining grounds of appeal. In essence, they query the judge's approach to the question of whether the Commissioner's certificate should be cancelled.

40. The $129,793.33 awarded by the Commissioner is made up of two figures : one of $110,393.33 in regard to periodical payments; and another of $19,400.00 as compensation for permanent incapacity.

41. Only the smaller of those two component figures is affected by the appellant's percentage loss of earning capacity. It is arrived at by taking four percent of $485,000.00, the 100 percent figure.

42. So each percent is worth $4,850.00.

The test

43. The test which the judge articulated at the end of her judgment came to this : having regard to small difference between the Board's assessment of the appellant's loss of earning capacity and the assessment which she favoured upon her acceptance of Dr Tsoi's evidence, was it just in all the circumstances to invoke the powers conferred upon her by the Ordinance to allow the appeal against the Board's assessment of the appellant's loss of earning capacity and to cancel the Commissioner's certificate as to the compensation due to the appellant?

44. That is not the right test.

45. Maintaining a steady focus on the statutory scheme, the question is whether or not the certificate is liable to cancellation. If it is not, then it would be a complete bar to an award of compensation at the judge's hand. Section 18A(1)(b) of the Ordinance provides that "except where otherwise provided under this Ordinance, all claims for compensation, except to the extent that such claims are determined ... by a certificate under section 16A ... shall be determined by the District Court."

One award

46. There is no provision for parallel awards, one by the Commissioner and one by the District Court, to exist at the same time. What there is, as we have seen, is power in the District Court to cancel the Commissioner's certificate. Such cancellation does away with the Commissioner's award, leaving the District Court free to make its award as the only award.

47. As we have seen, the Commissioner's certificate is liable to cancellation under section 16B(1) of the Ordinance if, but only if, it is proved that :

"(a) the sum paid or to be paid was or is not in accordance with the provisions of this Ordinance; or

(b) the certificate was issued in ignorance of, or under a mistake as to, the true nature or the extent of the injury; or

(c) the certificate was based upon any false or misleading information or statement given or made."

Two bases for cancellation

48. In the present case, there appears to be two bases on which to cancel the Commissioner's certificate.

First

49. The first is under item (a) of section 16B(1). Even on the judge's findings, the appellant is entitled to have his loss of earning capacity pitched at six percent. But at the time when the Commissioner gave his certificate in the present case, his power to assess compensation under section 16A of the Ordinance was (by reason of the wording of the section at the time) confined to cases where the loss of earning capacity did not exceed five percent. Accordingly, nothing which he did or made - and that includes the sum which he awarded - is in accordance with the provisions of the Ordinance.

50. Even on its own, that clears the way for a determination by the District Court.

Second

51. But when I look at what I think the judge should have done when making her determination, I find another basis on which the Commissioner's certificate ought to be cancelled.

52. It arises from Dr Tsoi's evidence. A fair summary of his evidence on the point would be as follows.

53. Thinking that the appellant's left hand was not his preferred hand, Dr Tsoi put his loss of earning capacity at six percent. On the basis that it was his preferred hand - which is the fact - Dr Tsoi would put his loss of earning capacity at eight percent. But, continued Dr Tsoi, if one looks at the work he was doing, the fact that his injured wrist was his preferred wrist, made no difference.

54. Now, what sort of work the appellant was doing is irrelevant for present purposes, however relevant it might have been to a claim for damages at Common Law. For present purposes, he is to be compensated purely for the loss of earning capacity itself without reference to what actual loss of earnings might result from it.

55. The judge was entitled to accept Dr Tsoi's evidence. But for the purposes of what she had to decide, his evidence is that the appellant's loss of earning capacity is eight percent rather than six percent.

56. That is double the loss of earning capacity assessed by the Board and acted upon by the Commissioner.

57. The difference is so great as to prove on a balance of probabilities and as a matter of fact and degree in all the circumstances that the Board must have been mistaken as to the extent of the appellant's injury. Not every difference in the assessment of an employee's loss of earning capacity should be taken to prove such a mistake as that. But here, I am satisfied that there must have been such a mistake. It follows that the Commissioner's certificate was issued in ignorance of, or under a mistake as to, the extent of the appellant's injury.

58. So one has there a second basis for cancelling the Commissioner's certificate.

What the judge ought to have done

59. One also has there what the judge ought to have done, which is to make an award greater than Commissioner's award by $4,850.00 multiplied by the difference between eight percent and a four percent : in other words by ($4,850.00 x 4) $19,400.

Result

60. I would allow this appeal to award the appellant that sum on the basis that he is entitled to an award of $149,193.33 but must give credit for the $129,793.33 which he has already received.

61. As to costs, I would make an order nisi awarding him costs here and below. And I would order legal aid taxation of his own costs.

62. Finally, I would echo now the thanks extended to both counsel by my Lord, the Vice President at the conclusion of the hearing.

Ching, J.A.:

63. I agree.

Litton, V.-P.:

64. I agree with both the reasoning and conclusion in Mr Justice Bokhary, J.A.'s judgment.

65. The result is that the appeal is allowed. The award in the appellant's favour is $149,193.33 and he is entitled to that sum after deducting the sum of $129,793.33 already received.

66. There will be an order nisi that the appellant shall have the costs of the appeal and in the court below, with a certificate for legal aid taxation of his own costs.