YU WING SUN v. HO WAI LEUNG t/a HIP WO ENGINEERING CO AND ANOTHER

DCEC 1242 of 2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1242 OF 2005

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JUDGMENT

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1.  This is an application for compensation under the Employees’ Compensation Ordinance, Cap. 282 (“the Ordinance”). The claim is for compensation under Section 9 (permanent partial incapacity; “Section 9 Compensation”) and Section 10 (temporary partial incapacity; “Section 10 Compensation”). A claim for medical expenses under Section 10A was abandoned.

By a Form 9 – Certificate of Review of Assessment dated 28 February 2004, the Employees’ Compensation       (Ordinary Assessment) Board (“the Board”) reassessed the loss of earning capacity permanently caused to the Applicant as 5%. The Applicant appeals against the reassessment (“the Appeal”, Trial Bundle page 18 to 21).

2.  I allow the Appeal. I make awards in favour of the Applicant against both Respondents jointly and severally for:

A)	Section 9 Compensation in the sum of $200,912
	and
B)	Section 10 Compensation in the sum of $375,840.

3.  I order that the Respondents jointly and severally pay interest on the total award of $576,752 at ½ judgment rate from the date of the accident (11 September 2004) to the date hereof and at judgment rate hereafter until full payment.

4.  I make an order nisi that the Respondents do jointly and severally pay the Plaintiff’s costs, to be taxed if not agreed. There will be certificate for Counsel. The Plaintiff’s own costs will be taxed in accordance with Legal Aid Regulations.

5.  I proceed now to explain my judgment.

6.  Witnesses

    The Applicant gave evidence himself. There were no other witnesses for the Applicant. Both Respondents gave evidence. Another 3 witnesses were called on their behalf (“DW3”, “DW4” and “DW5”).

7.  Applicant’s case

Sometime in July 2003 the Applicant came to know the 1^st Respondent. Since January 2004, the Applicant had been employed by the 1^st Respondent doing ironwork at various construction sites. The Applicant was paid $600 per day. For overtime work, i.e. working beyond 6 p.m., the Applicant was paid $300 every 2 hours.

8. When the Applicant worked for the 1^st Respondent, tools and materials used were supplied by the 1^st Respondent. This was except for small items like measuring tapes and working-gloves. The Applicant took instructions from the 1^st Respondent or a foreman called Ah Ping. When work to be done by the Applicant could not be carried out by him alone, the 1^st Respondent would arrange other workers to help out or work with the Applicant. The Applicant would not get others to perform the work the 1^st Respondent assigned to him. The Applicant did not have to shoulder any business risk. Whether the 1^st Respondent made a profit or incurred a loss from any work or project was not the concern of the Applicant (save, I suppose, in the pickwickian sense that if the 1^st Respondent incurred a loss then the 1^st Respondent might not pay the Applicant or he would be dilatory in making such payments). When the Applicant was required to travel from one work site to another, the 1st Applicant would either provide transportation or reimburse the Applicant for transportation fees.

9.  The 1^st Respondent did not purchase any mandatory provident fund (“MPF”) for the Applicant. In around February or March 2004, the Applicant did ask the 1^st Respondent about MPF and got the reply that the 1^st Defendant would deal with it later. The Applicant did not follow up on this because the economy was down but the 1^st Respondent was providing him work.

10.  There was no obligation on the 1^st Respondent to provide the Applicant with work and no obligation on the Applicant to accept work when offered. There was no need for the Applicant to seek permission from the 1^st Respondent for leave. He had, however, to inform the 1^st Respondent if he was not going to work on a particular day. The Applicant did not receive any bonus, travelling allowance or meal allowance from the 1^st Respondent.

11.  On the morning of 10 September 2004, the Applicant was working for the 1^st Respondent at the Hong Kong International Airport. The 1^st Respondent met the Applicant there and gave the Applicant cash $7,000. The 1^st Respondent told the Applicant to use the money and pay $3,100 to a Willington Transportation Limited located at Tai Kok Tsui (“Willington”, Trial Bundle page 313). The balance of $3,900 was to be used to buy materials (for work) specified by the 1^st Respondent. The Applicant was then to go to a Kwong Cheong Abrasive & Welding Suppliers Limited (“Kwong Cheong”) to purchase/ get tools. The 1^st Respondent even said that if necessary he would arrange other workers to deliver the required tools to the Applicant at Tai Kok Tsui. In any event, the Applicant was to proceed with the tools and materials to East Point Centre (“the Centre”) in King’s Road, Quarry Bay.  He was to take instructions from a foreman there called Ah Cheung (DW3) as to what work to carry out. The 1^st Respondent gave the Applicant the telephone number of DW3.

12.  The Applicant acted as instructed by the 1^st Respondent. After paying Willington, the Applicant received a cash invoice for $3,100 dated 10 September 2004 (“10 September invoice”, Trial Bundle page 313) as well as an earlier dated invoice of 6 September 2004 for $1,280 (“6 September invoice”, Trial Bundle page 307). The Applicant went to Wo Lee Steel Co. Ltd. (“Wo Lee”) and bought the specified materials viz. 15 steel channel sections (“sections”; Trial Bundle page 308). The sections were each 6 metres in length and each weighed about 43 kilogrammes. The Applicant also bought some accessories from 2 other hardware stores (Trial Bundle page 310 and 311). He went to Kwong Cheong and obtained the required tools (Trial Bundle page 305). The Applicant did not pay any money to Kwong Cheong. He merely signed for the tools because the 1^st Respondent had credit there. The staff at Kwong Cheong had telephoned the 1^st Respondent for confirmation before allowing the Applicant to sign for the goods. Kwong Cheong suggested transportation for all the materials and tools by a Siu Wing Lorry Transportation Company (“Siu Wing”, Trial Bundle page 312). The Applicant consulted the 1^st Respondent on this over the telephone. The 1^st Respondent acceded to using Siu Wing.

13.  At about 2.30 p.m. the Applicant arrived at the Centre. He got in touch with DW3 who gave instructions where the tools and materials should be placed. With the help of the lorry driver, the Applicant did as instructed. DW3 then instructed the Applicant to install 4 sections at various locations in the ceiling of a (vacant) shop space/ unit (“Unit”) situated in the basement of the Centre (the Applicant learned from a cement worker the next day that the sections were installed for building partition walls. It is the Applicant’s case that the Unit was being set up as a model or mock-up unit. See paragraphs 24 and 28 below).

14.  The ceiling of the Unit was some 3 metres high. The Applicant had to install brackets in the ceiling. The sections would hang from these brackets. The Applicant asked DW3 if there was a working platform to use. DW3 indicated that the Applicant could use materials already in the Unit for building a working platform. DW3 then left.

15.  The Applicant set up the frame of the working platform. He borrowed some wooden planks from a worker (who was working in another unit) to form the standing surface for the working platform (see diagrams at Trial Bundle page 222 and 224). The working platform was about 1.9 metres in height.

16.  Sometime after 5 p.m. the Applicant finished setting up the working platform. He telephoned the 1^st Respondent and asked where he was required to work the next day. The 1^st Respondent asked whether the Applicant could work alone at the Centre. The Applicant gave an affirmative answer whereupon the 1^st Respondent told the Applicant to continue working at the Centre.

17.  At about 8.30 a.m. the next day (11 September), the Applicant returned to the Centre to continue his work. Sometime after 9 a.m. the Applicant met DW3 at the Centre. DW3 even helped the Applicant to make a mark for levelling. The Applicant made use of the working platform he built the day before to install the sections. In order to climb up the working platform, the Applicant borrowed from a cement worker (who was working at the Unit) a ladder that reached a height of about 1.8 metres. From the working platform the Applicant installed 2 brackets in the ceiling. He then cut one of the sections to the suitable length of 4.6 metres and then hung it from the 2 brackets. After installing the first of 4 sections, the Applicant dismantled the working platform and set it up at another location where the second section was required. Using the same ladder, he climbed the working platform to install the brackets. The Applicant then discovered that one of the holes he had drilled for installing a bracket was too big. He climbed down from the working platform and borrow ed something from the cement worker to plug the hole. He again climbed the ladder and to its top rung. He placed his right foot on the working platform. The ladder collapsed when he tried to step onto the working platform with his left foot. The Plaintiff fell to the ground and felt great pain in his left heel. This happened at about 11 a.m.

18.  The cement worker helped the Applicant up. The cement worker telephoned DW3. After a while, the 1^st Respondent telephoned the Applicant asking him about his injuries. The 1^st Respondent asked the Applicant to wait for another worker, Ah Mo, who would arrive to help. Ah Mo arrived. He did a bit of clearing up and then took the Applicant by taxi to Pamela Youde Nethersole Eastern Hospital.

19.  In about the middle of September 2004, the Applicant telephoned the 1^st Respondent asking him to report the accident to the Labour Department. The 1^st Respondent said he would follow up. Sometime in October 2004, the Applicant again telephoned the 1^st Respondent on the same matter. The 1^st Respondent mentioned that he had no company or business registration. Hence, he did not have MPF or employer’s liability insurance. The 1^st Applicant said he would transfer some money to the Applicant without explaining why.

20.  On 15 October, 4 November, 23 December 2004 and 24 (25) March 2005 the 1^st Respondent did transfer money into the Applicant’s bank account in the respective sums of $5,000, $5,000, $10,000 and $15,000 (see Trial Bundle page 273 and 273.1. In his evidence, the Applicant said that despite what is stated in his witness statement - Trial Bundle page 31, paragraph 28 - there was in fact no payment on 14 September 2004). Before the March transfer, the 1^st Respondent did say to the Applicant that he was going to transfer the balance of outstanding wages to the Applicant.

21.  On about 10 January 2005, the Applicant approached the Labour Department and a District Councillor for assistance in pursuing his claim in connection with his injuries. On 17 January 2005 the Applicant went to the Labour Department and made a statement (declaration, Trial Bundle page 220 to 226).

On the 18 or 19 or 20 January 2005 the 1^st Respondent telephoned the Applicant making an appointment to meet in Mongkok and go together to the 2^nd Respondent’s office.

Several days prior to 20 January the 2^nd Respondent had telephoned the Applicant. The 2^nd Respondent asked the Applicant why he was making an issue out of the accident by getting Labour Department officials and a District Councillor to visit the Centre. The 2^nd Respondent further said that only recently did he know that the 1^st Respondent did not purchase any employer’s liability insurance and that it was too late for him (the 2^nd Respondent) to turn to his own insurers. The 2^nd Respondent asked the Applicant to go to his office together with the 1^st Respondent to let the 2^nd Respondent understand what had happened and see how to resolve the situation. 

22.  On 20 January 2004 the Applicant met the 1^st Defendant somewhere in Dundas Street, Mongkok. The 2 then proceeded to the office of the 2nd Respondent. During the meeting with the 2^nd Respondent, the latter basically repeated what he had said over the telephone. The 2^nd Respondent further told the Applicant to change his statement to the Labour Department to say that the Applicant did not fall whilst working, that the Applicant was having a look at the construction site and that the Applicant saw a metal frame, climbed up and fell. The Applicant merely mumbled something in reply and did not clearly say whether he agreed to the proposed course. The 2^nd Respondent than gave the Applicant a cash cheque for $30,000 (“the Cash Cheque”, Trial Bundle page 227. See also Trial Bundle page 228). The 2^nd Respondent said that it was for the Applicant’s living expenses. The Applicant did not have to sign any receipt for the Cash Cheque.

23. Respondents' Case

From July 2003 to August 2004, the Applicant had been working on and off for the 1^st Respondent at the daily wage of $600. If the Applicant had to work beyond 6 p.m., that would be considered overtime and he would be paid at the rate of $600 for every 4 hours (at trial the 1^st Respondent was willing to admit the Applicant was his employee during this period [cf. paragraph 25(a) and paragraph 34 at Trial Bundle page 42 and 46 respectively where the 1^st Respondent stated that the Applicant was not his employee but was self-employed]. The 1^st Respondent maintained, however, that he did not employ the Applicant on 10 or 11 September 2004).

24. Sometime towards the end of August 2004, the 2^nd Respondent was engaged by the owner (“Owner”) of the Centre to carry out renovation work to some 60 shop-units at the Centre. He was 1 of the Contractors engaged to renovate and was responsible for that part of work relating to ceilings and partition walls. Such renovation required ironwork (this involved “light” ironwork as opposed to “heavy” ironwork). The 2^nd Respondent’s part of the work had to be done before other contractors could carry out their work e.g. electrical and mechanical fittings. There was only an oral contract between the 2^nd Respondent and the Owner. There was not even a quotation or estimate on costs from the 2^nd Respondent. He had known the Owner for long and had carried out work for the Owner in other projects. Their business relationship rested on mutual trust. 

25. The 2^nd Respondent came to know the 1^st Respondent in the year 1999 or 2000. The 2^nd Respondent had since sub-contracted work to the 1^st Respondent. On this occasion, the 2^nd Respondent wanted a sub-contractor to do the ironwork. On about the 1 September, the 2^nd Respondent telephoned the 1^st Respondent and asked the 1^st Respondent to give a quotation for carrying out ironwork at the Centre. The 1^st Respondent obtained from the 2^nd Respondent the relevant floor plan. He went for a site inspection. The 1^st Respondent usually did heavy ironwork. He was not interested in carrying out the required light ironwork.

26. On the morning of the 10 September 2004

a) the 2^nd Respondent was at the Centre with DW3 who worked for him. That was the first time DW3 was there. The 2^nd Respondent briefed DW3 about the required renovation work and asked DW3 to perform some preliminary work like taking measurements.

The 1^st Respondent telephoned the 2^nd Respondent and said he found the work not suitable for himself but that he would get a “foki” to take a look and submit a quotation (so that the ironwork might be sub-contracted by the 2^nd Respondent to the “foki”). The 2^nd Respondent then told DW3 that the 1^st Respondent and his ironworker would arrive to inspect the Centre with a view to submitting a quotation for ironwork. The 1^st Respondent then left the Centre.

b) the 1^st Respondent did pay the Applicant $7,000 but the 1^st Respondent could not recall whether he met the Applicant to do this or whether he paid cash or by bank transfer. The 1^st Respondent could not recall whether the money was for wages or to pay bills/ reimbursement for the Applicant. The 1^st Respondent was adamant that he did not meet the Applicant anywhere at the Airport, he thought it should have been in Mongkok area. The 1^st Respondent said that the work he had at the Airport was completed in May 2004.

The 1^st Respondent had a telephone conversation with the Applicant that day. He mentioned briefly about the need for ironwork at the Centre. He told the Applicant he could go to the Centre and have a look to see if he (the Applicant) would be interested to take up the work. If so, the Applicant was to provide a quotation for the 1^st Respondent to pass on to the 2^nd Respondent. It was up to the Applicant to decide whether he even wanted to go to the Centre for inspection. The 1^st Respondent was told to contact DW3 at the Centre.

(It was not clear from the evidence whether the 1^st Respondent had this telephone conversation with the Applicant before or after his aforesaid telephone conversation with the 2^nd Respondent.)

The 1^st Defendant did not know whether the Applicant went to the Centre on 10 September.  He did not ask or instruct the Applicant to use the $7,000 as the Applicant alleged. He did not have any further telephone conversation with the Applicant later that day.

c) DW3 met the Applicant at the Centre. DW3 briefed the Applicant along the lines as indicated by the 2^nd Respondent emphasising that the object of the exercise was so that the Applicant might put in a quotation for ironwork. DW3 was with the Applicant for about 5 minutes before leaving the Centre. The Applicant remained saying that he would walk around and look at the Centre. DW3 did not see the Applicant with any tools or materials.

27. DW3 was not at the Centre on 11 September. DW3 did not receive any telephone call from a cement worker. Although a person called Ah Mo did work for the 1^st Applicant in the past, he did no work for the 1^st Respondent on 11 September. The 1^st Respondent did not know whether Ah Mo went to the Centre that day.

28. There were no vacant shop units at the Centre on the 10 or 11 September. No work could be carried out in any unit on those dates and neither the 1^st nor the 2^nd Respondent had in place any employer’s liability insurance. It was not until sometime in the middle of September that Management Office of the Centre informed the 2^nd Respondent that unit/s would be vacant in October. Only in October was any work done and this was to renovate one unit as a model or mock-up (“Model”) as required by the Owner.

29. Around 11 or 12 September the Applicant telephoned the 1^st Respondent saying he had hurt his leg falling. No further details were provided. The Applicant asked the 1^st Respondent whether he could report/ claim under the insurance policy taken out by the 2^nd Respondent. The 1^st Respondent said it was not possible because work had not yet commenced.

30. The 1^st Respondent had a standing business relationship with Willington. The 1^st Respondent could sign Willington’s invoices, then use their services and pay later. The 1^st Respondent could mail Willington their payment but usually the 1^st Respondent himself would deliver cash cheques to their office. There was no need for the Applicant to pay Willington as alleged by the Applicant. The 1^st Respondent seldom patronised Woo Lee where he had no credit. The 1st Respondent would buy from Kwong Cheong where he enjoyed 1 month’s credit. Kwong Cheong would also arrange delivery. The 1^st Respondent had never used Siu Wing before (see paragraphs 11 and 12 above).

31. The 1^st Respondent did pay the Applicant arrears of wages on various dates after 11 September 2004. The Cash Cheque was also in payment of arrears of wages (see further paragraph 32 below). The 1^st Respondent paid the Applicant $15,000 on 25 March 2005. A day or 2 before 25 March, the Applicant telephoned the 1^st Respondent saying that he was in need of money and asked whether the 1^st Respondent could give him several thousand dollars (out of the amount of wages still due from the 1^st Respondent). Considering that he had been owing the Applicant several thousand dollars in the past and the Applicant had not pressed for payment, the 1^st Respondent acceded to the request. In fact, by making the payment of $15,000 the 1^st Respondent had not only paid off all outstanding wages but also paid an extra $10,000. In evidence, the 1^st Respondent said he paid this extra amount without motive and for no particular reason.

32. The circumstances of the Cash Cheque coming into existence were these: a day or two prior to 18 January 2005, the Applicant telephoned the 1^st Respondent saying that it was Chinese New Year and asked if the 1^st Respondent could pay him wages outstanding. The 1^st Respondent said he would collect his (sub-contracting) fees from the 2^nd Respondent and that whatever he received he would give the Applicant. On 18 January, the 1^st Respondent contacted the 2^nd Respondent for payment of sub-contracting fees. The 1^st Respondent went alone to the office of the 2^nd Respondent the next day (19 January) in the late afternoon or early evening and collected the Cash Cheque. The 1^st Respondent then made an appointment to meet the Applicant. Sometime between 10 and 11 a.m. on 20 January 2005, the 1^st Respondent and the Applicant met in a restaurant in Dundas Street, Mongkok. The Cash Cheque was handed over to the Applicant by the 1^st Respondent. The Applicant was not asked to sign any receipt as parties proceeded on the basis of trust.

(The sub-contracting fees were owed by the 2^nd Respondent to the 1^st Respondent for work previously done at the Far East Finance Centre. The invoices issued by the 1^st Respondent are found at Trial Bundle page 338 ($41,000) and 339 ($10,000 inspection fees). According to the 2^nd Respondent, he was not obliged to pay the $10,000 (inspection fees). The 1^st Respondent had, however, indicated that he did not make any money on the Far East Finance Centre project. The 2^nd Respondent concluded that the 1st Respondent should have incurred a loss. The 2^nd Respondent thus agreed to pay the inspection fees. The invoice for $10,000 was then issued by the 1^st Respondent. Due to this background, when the 2^nd Respondent made out the Cash Cheque he just rounded down the figure to $30,000 (instead of the whole outstanding figure of $31,600) as full and final payment to the 1^st Respondent. The 2^nd Respondent made it clear to the 1^st Respondent that he was not going to pay the shortfall of $1,600.) 

33. The 2^nd Respondent ultimately engaged workers himself to do the required ironwork (i.e. no sub-contractor was involved). The Model was set up at the end of September or beginning of October 2004. The 2^nd Respondent completed all renovation work at the Centre in August 2006.

34. Matters considered

There is no allegation or suggestion that the 2 invoices from Willington are forged documents. In fact, the 1^st Respondent identified the 6 September invoice as a genuine one bearing his own signature. The 1^st Respondent continued to say that it should have been mailed to himself and he could not explain how the Applicant got it. In any event, I do not think the Applicant will go to the extent of forging documents to further his claim in this case. It is clear that the Applicant merely signed for goods in the trade name of the 1^st Respondent at Kwong Cheong. There is no evidence or suggestion that the Applicant had so signed for goods at Kwong Cheong before. I think it more probable than not that the staff at Kwong Cheong did telephone the 1^st Respondent to confirm the identity of the Applicant before allowing the Applicant to proceed further with the transaction.

How and why did the Applicant get the 6 September invoice and 10 September invoice? Why did the Applicant sign for goods at Kwong Cheong in the name of the 1^st Respondent? I do not accept that the Applicant was perpetrating fraud of any kind. In all probabilities, the Applicant did make the purchases for tools as well as materials and arranged for their transportation to Quarry Bay on 10 September 2004 (as told by the Applicant and evidenced by the various invoices/ receipt). Why did he do all this?   I am satisfied that the Applicant was merely acting on the instructions of the 1^st Respondent as he (the Applicant) said in evidence.

35. The Applicant said that with the assistance of the lorry driver (from Siu Wing) he moved tools, materials and, in particular, 15 sections into the Centre. It is not in dispute that the sections were long and heavy. I am satisfied, however, that it is not improbable for 2 persons to be able to so transport the items.  The Applicant said that he alone set up the working platform. He said that he alone cut the sections to length, hauled them onto the working platform and hung them from brackets that he had installed in the ceiling. As far as hauling the cut sections onto the working platform is concerned, the Applicant explained that he would lift and place one end onto/ against the platform first before doing the same to the other end. I think it a difficult but not impossible exercise for one individual. These aspects of the Applicant’s evidence do not cause me concern. 

36. On the Applicant’s version, he did not indicate clearly to the 2^nd Respondent whether he agreed to changing his statement to the Labour Department. The 2^nd Respondent, however, did give him the Cash Cheque. The Applicant was not required to sign any receipt. I think the Cash Cheque was a sop to Cerberus. It is probable that the 2^nd Respondent proceeded with the expectation or hope that the Applicant would co-operate. I see nothing suspicious in the Applicant getting the Cash Cheque without making any explicit promice to the 2^nd Respondent or not having to sign a receipt.

37. The 1^st Respondent’s evidence was that he ran a small-scale business. He used his residential address as his business address. Due to the fact that he usually did only heavy ironwork, his business turnover was rather fluctuating (see Trial Bundle page 36, paragraph 6). DW4, Mr. Lee, said that when the 1^st Respondent found light ironwork to do, he would contact DW4 or other light ironworkers to submit a quotation. On the basis of such quotation, the 1^st Respondent would take on the work as contractor and sub-contract it to DW4 or the other light ironworkers (Trial Bundle page 78, paragraph 6). Given such evidence, I do not accept the 1^st Respondent’s assertion that he was not interested in the work at the Centre - here was an opportunity for business and he had the means to secure it. I also do not accept that he contacted the Applicant with a view to the Applicant submitting a quotation. There is no evidence that the 1^st Respondent had ever in the past asked the Applicant for quotations or that the Applicant had any experience or knowledge in submitting quotations.

38. The 1^st Respondent admitted that he had overpaid the Applicant about $10,000.  This was for no particular purpose and without motives. The 1^st Respondent tried to paint the picture that he did this because the Applicant had not been pressing him for payment of wages and that he (the 1^st Respondent) felt a bit bad that the Applicant got hurt because he had asked the Applicant to go to the Centre. I do not accept any of this. The 1^st Respondent did not come across as such a caring or altruistic person.

39. The 1^st Respondent admitted paying arrears of wages to the Applicant on dates in September 2004 both prior to and after the Applicant met the accident. The payments included the $7,000 made on 10 September (see paragraphs 11 and 26 b) above). The 1^st Respondent’s explanation was that on 1 September he found something was not right. He telephoned the Applicant on 2 September and was told that the Applicant had not been paid. Therefore the 1^st Respondent started paying by instalments of several thousand dollars. I do not know what the 1^st Respondent meant when he said he “found something was not right”. My view is that the payments before the Applicant’s accident merely illustrated and confirmed the Applicant’s evidence that the 1^st Respondent was not punctual in paying wages. After the Applicant’s accident, the 1^st Respondent was diligent in paying up all arrears and even threw in an extra $10,000. As already indicated, I do not find the 1^st Applicant a caring or altruistic person. I consider these payments after the accident were again sops to Cerberus.

40. In the witness statement of the 2^nd Respondent, he said that the Owner requested the setting up of the Model before works commenced in October. Therefore, the 2^nd Respondent was in urgent need of a quotation (on ironwork from the 1^st Respondent. See Trial Bundle page 54, paragraph 14). The 2^nd Respondent also mentioned that over the telephone conversation with the 1^st Respondent on the morning of 10 September, he told the 1^st Respondent to reply as soon as possible whether the ironwork would be taken up (by the 1^st Respondent’s contractor or sub-contractor. See Trial Bundle page 55, paragraph 18). Suffice to say that whilst giving evidence in Court, the 2^nd Respondent tried to explain that he was not really in any rush to set up the Model or get a quotation on ironwork. He even mentioned that the Owner knew he was working on a project elsewhere and did not want to put pressure on him. I consider the 2^nd Respondent in Court was merely trying to play down the need to set up the Model in September and thus discredit the Applicant’s case that he did work at the Centre on 10 and 11 September 2004.

41. I do not believe the 2^nd Respondent when he said there was only an oral agreement with the Owner to renovate. The 2^nd Respondent was strangely reticent about the identity of this Owner. In any event, according to the 2^nd Respondent, the project involved work to some 60 shop-units. The work of other contractors engaged by the Owner depended on the progress of work for which the 2^nd Respondent was responsible. The whole renovation project lasted more than 1.5 years. Given such circumstances, I find it most improbable that there would only be an oral agreement and no written one. I also find it improbable that the 2^nd Respondent did not even have to submit any quotation or estimate on cost.

42. The 2^nd Respondent said he agreed to pay the 1^st Respondent an extra $10,000 for inspection fees (see paragraph 32 above). The 2^nd Respondent did not appeal to be such a generous person.

43. One can see the cheque stubs of the 2^nd Respondent’s chequebook at pages 388-001 to 388-051 of the Trial Bundle. The one relating to the Cash Cheque is at page 388-025 (see also Trial Bundle page 227 and 228). It is noted that although the Applicant maintains he received the Cash Cheque on 20 January 2005, the Cash Cheque is dated the day before (i.e. 19 January). I think the Respondents want to say that the date on the Cash Cheque and the chronological sequence of the cheque stubs support their version that the Cash Cheque was given out to the 1^st Respondent on 19 January (see paragraph 32 above). My view is that the dating of the Cash Cheque as well as its stub and when they were made out do not preclude the Applicant’s version (see paragraphs 21 and 22 above).

44. I am not the least impressed by DW3 particularly when he initially professed not to understand what was meant by “supervisor” or “foreman”. I will simply say that I do not think the evidence of DW4 and DW5 (person who did work for the 2^nd Respondent at the Centre) helpful to the Respondent’s case. This is, of course, not to say that the Respondents have to prove their case. 

45. Mr. Chu, Counsel for the Respondents, in closing submission mentioned that neither the 1^st Respondent nor 2^nd Respondent was prosecuted by the Labour Department and that the Applicant did not make a report to the police. I can only guess that in the former instance Mr. Chu was thinking about, for example, prosecution for not having employer’s liability insurance at the material time (see Section 40 of the Ordinance). I am not sure what Mr. Chu had in mind in the latter instance. I consider, however, that there is really nothing relevant here.

46. I accept the evidence of the Applicant. Where the evidence called by the Respondents differed from that of the Applicant, I prefer that of the Applicant. I find, in particular, that on the 10 and 11 September 2004 the 2^nd Respondent was Principal Contractor and the 1^st Respondent was his sub-contractor to carry out certain renovation work at the Centre. On both those dates, the 1^st Respondent instructed the Applicant to work at the Centre, work that the 1^st Respondent had sub-contracted from the 2^nd Respondent. Based on matters stated in paragraph 8 above, I find the Applicant was the employee of the 1^st Respondent at all material times. The fact that the 1^st Respondent did not purchase MPF for the Applicant is neither here nor there. In any case, the Applicant did ask the 1^st Respondent about it and the latter replied that he would deal with it later. The fact that the Applicant did not receive from the 1^st Respondent any bonus, travelling or meal allowance merely reflects the terms of employment. The other matters stated in paragraph 10 above show the Applicant to be a casual worker (but still an employee). 

47. Liability

The 1^st Defendant is liable to pay compensation to the Applicant under the Ordinance. Liability, if any, on the part of the 2^nd Respondent rests on the application of Section 24 of the Ordinance. In this context, Mr. Chu raised the point in closing submission that no notice in writing had been given by the Applicant to the 2^nd Respondent in compliance with Section 24(6). Therefore, it was submitted, the claim against the 2^nd Respondent could not succeed in any event. Section 24(6) reads:

“An employee shall, before making any claim or application by virtue of this section against a principal contractor, serve on the principal contractor a notice in writing stating-

(a) the name and address of the employee;

(b) the name and address of the sub-contractor by whom he is employed;

(c) the address of the place of employment of the employee;

(d) the particulars of the accident and the injury suffered; and

(e) the amount of compensation to be claimed.”

(The Applicant is the “employee” and the 2^nd Respondent is the “principal contractor” for purposes of Section 24(6).)

48. There is no evidence before me of any Section 24(6) notice. Mr. Ho, Counsel for the Applicant, could not tell me whether such notice had been given. I feel entitled to proceed on the basis that no notice had been given.

49. Mr. Ho objected to Mr. Chu taking this point. Mr. Ho argued, inter alia, that the objection had not been pleaded in the Respondent’s Answer. The point involves a question of law. I do not think there is requirement for matters of law to be pleaded. I am entitled to consider the point. It appealed to me, however, that Mr. Chu was struck with sudden belated afflatus and thus came up with this point. I adjourned the case for Counsels to properly prepare their arguments. As it turned out, there was no application by anyone (the Applicant in particular) to reopen the case (e.g. to adduce evidence concerning the Section 24(6) notice). 

50. My attention is drawn to the case of Mohammad Munir v Yau Kei Tak, Unison Contracting Limited, DCEC 251 of 2006. In that case, notice in writing was given to the principal contractor. The notice was lacking in certain details stipulated by Section 24(6). The absent details were, however, considered by the Court to be “minor in nature” and were such as would not cause prejudice to the principal contractor. Though it was not necessary for his decision, Deputy District Judge Cheung made the observation that Section 24(6) had to be strictly complied with and the notice given was fatal to the claim against the principal contractor.

51. One must, however, bear in mind that the Ordinance is “a piece of social legislation designed for the protection of employees and since its introduction in 1953 the legislature’s consistent policy has been to enlarge its provisions in favour of employees”, that the Ordinance should be considered “in the light of s.19 of the Interpretations and General Clauses Ordinance (Cap. 1)” and that Section 24 should be given “a fair and liberal construction as a provision in legislation clearly intended to insure an employee against an accident taking place in the course of his employment” (see Clough JA in Wong Leung-tak and Another v Hip Hing Construction Co. Ltd. (1991 2 HKLRD 345 at 356 and 361).

52. I refer to the part of Section 24(1) of the Ordinance which reads: “…where compensation is claimed from or proceedings are taken against the principal contractor, then, in the application of this Ordinance, references to the principal contractor shall be substituted for references to the employer…” This means, in my view, that Section 14 of the Ordinance applies mutatis mutandis in the situation concerning a principal contractor. In other words, it is not necessarily fatal when no notice has been served on the principal contractor e.g. when the principal contractor already has notice of the accident or the principal contractor is not prejudiced by the want of (or any defect or irregularity in) a notice (see proviso to Section 14(1)). Section 24(6) must be read in conjunction with and in the light of Section 14. Such an approach will be consistent with what was said by Clough JA as mentioned in the immediate preceding paragraph.

53. The case of Ng Yick & 14 others v Tunis Ltd. etc. HCLA 90/1986 concerned interpretation of provisions in the Employment Ordinance, Cap.57. In certain circumstances, a principal contractor is liable to pay wages owed by his sub-contractor to employees of  the sub-contractor. In order to attach liability, Section 43D stipulates that a notice in writing containing certain particulars be served on the principal contractor. The main argument on appeal of the principal contractor was that Section 43D required absolute compliance. In rejecting this argument, Mr. Justice Nazareth spoke thus: “In my view a notice obviously intended to meet the requirements of section 43D and which complies with virtually all those requirements must, prima facie, be a notice under that section. It would not cease to be such simply because of some minor omission or deficiency, unless that was expressly provided or necessarily implied. There is no such express provision nor, in my view, as I have said any such necessary implication. A requirement for absolute compliance would mean that notices that might contain inaccurate details or that might inadvertently omit detail inconsequential in the particular circumstances would nonetheless be vitiated. That would not only be an absurd result, it would be a result that would be contrary to the obvious intention of the legislation to secure payment of workers’ wages. Finally…strict compliance is not necessary to achieve the equally clear object of section 43D i.e. to alert principal contractors to the claims of workers of their sub-contractors…”

I consider the principle and rationale enunciated to be equally applicable when considering notice under Section 14 and 24 of the Ordinance.

54. In view of matters stated in paragraphs 51 to 53 above, I beg to differ from the observations made in Mohammad Munir (supra).

55. No notice was ever given by the Applicant to the 2^nd Respondent pursuant to Section 24(6) of the Ordinance. According to the Applicant’s evidence, however, the 2^nd Respondent was well aware of what had happened and who was involved by January 2005. In any event, I do not see any prejudice caused to the 2^nd Respondent by the absence of notice from the Applicant. The 2^nd Respondent cannot even say that he had been deprived of the chance of claiming under any insurance policy – the fact is there was no insurance policy in place on the material dates. There is nothing before me to show prejudice to the 2^nd Respondent in any other aspect. The absence of notice in the present case does not prevent the Applicant from claiming against the 2^nd Respondent.

56. The 1^st Respondent and the 2^nd Respondent are jointly and severally liable to pay the Applicant compensation under the Ordinance. I turn now to consider quantum.

57. Monthly earnings 

I need to ascertain the monthly earnings of the Applicant at the time of the accident in order to compute Section 9 Compensation and Section 10 Compensation.

58. Section 11(1) is applicable in this case. The relevant part reads: “…the monthly earnings of an employee at the time of the accident shall be the earnings-

(a) for the month immediately preceding the date of the accident; or

(b) computed in such manner as is best calculated to give the rates per month at which the employee was being remunerated during the previous 12 months if he has been so long employed by the same employer, but, if not, then for any lesser period during which he has been employed by the same employer,

whichever calculation is more favourable to the employee.”

59. The Applicant gave evidence on his earnings from the 1^st Respondent for periods prior to the accident (see Trial Bundle pages 23 and 24). Trial Bundle pages 315 to 323 show the Applicant’s own notebook record of work done for the 1^st Respondent. The Applicant extracted as well as “translated” information from this notebook and compiled the tables at Trial Bundle pages 273 and 273.1. The 1^st Respondent challenged this evidence of the Applicant by maintaining that he employed the Applicant up to July 2004 only and that the Applicant had not worked at some sites. As earlier mentioned, I prefer the evidence of the Applicant to that called by the Respondents. For this particular aspect, I accept the evidence of the Applicant as well. The amount of $17,400, being earnings of the Applicant for August 2004, is also the figure more favourable to the Applicant. I adopt this amount as the monthly earnings of the Applicant at the time of the accident. 

60. Section 10 Compensation

The claim is for 433 days based on the period of sick leave certified by the Board (Trial Bundle page 247. See written Opening and Closing submissions of Mr. Ho. See also Section 10(2) of the Ordinance). The period certified is from 12 September 2004 to 8 November 2005 and 10 January 2006. This, however, only covers a total of 432 days. The medical report of Dr. Patrick Wong (“Dr. Wong”) dated 1 September 2006 (“Medical Report”, Trial Bundle pages 103 to 111) mentions one more sick leave day covered by medical certificate i.e. 4 April 2006 (see Trial Bundle page 104 item 25). The Respondents did not really challenge the number of sick leave days. I will calculate Section 10 Compensation based on 433 days. The award here is thus $200,912 ($17,400 x 433/30 x 4/5).

61. Section 9 Compensation

The Applicant is a male born in Hong Kong on 30 May 1957. He studied up to Primary 5 level. All along he had been working as a construction site worker (mainly ironwork).

62. Dr. Wong was jointly appointed by solicitors representing the Applicant and the Respondents to examine the Applicant. He did this around September 2006. According to the Medical Report, the Applicant fractured his left heel bone from the fall on 11 September 2004 at the Centre. Open reduction and plating were performed on 16 September. He was discharged from hospital on 30 September. The Applicant attended physiotherapy for more than 6 months. It took him about 9 months to be able to walk independently. Apart from receiving treatment from government hospitals, the Applicant also consulted private medical practitioners including bonesetters.

63. When the Applicant was examined and interviewed by Dr. Wong, he complained of “residual pain, reduced ambulatory capacity, inability to return to previous job and sports.” Physical examination revealed “left calf muscle wasting, mildly reduced left ankle movement and much reduction of subtalar joint movement, mild weakness left ankle.” Updated x-ray showed “satisfactory fracture healing with mild post-traumatic arthritis subtalar joint and calcaneo-cuboid joint.” Dr. Wong expressed the view that the Applicant “was expected to have mild residual pain, stiffness and weakness of his left ankle.” He would “have difficulty with prolonged walking, especially on uneven ground or climbing up and down stairs or steep slopes. Routine use of a walking stick, however, should not be necessary” (see Trial Bundle page 110).

64. Based on the American Medical Association’s Guides to the Evaluation of Permanent Impairment (5^th ed), Dr. Wong considered there was 6% impairment of the whole person.

65. Dr. Wong estimated there was loss of 8% earning capacity.  In Tang Shau Tsan v Wealthy Construction Company Limited, CACV 58 of 2000, Rogers JA expressed the view that the opinion of medical doctors (and occupational therapists) in relation to earning capacity was inadmissible. The learned judge went on to say that such statements of opinion were confusing at best and meaningless at worst. The learned judge said that it was for the court to draw its own conclusions on earning capacity. Mayo VP agreed with this and continued to say that it was not permissible for doctors (and occupational therapists) to give opinions relating to the labour market, a subject upon which they were not competent to express an opinion. Although that case was concerned with assessment of damages in a personal injuries action, the views on inadmissibility of statements of opinion from medical doctors on earning capacity have been adopted in employees’ compensation cases (see, for example, Kwan Yee Chor v Hung Fau Metal Construction Company Limited and others, (2002) 2 HKLRD 768). I will ignore the estimate of Dr. Wong concerning loss of earning capacity.

66. Dr. Wong thought the Applicant would “not be able to resume full duties of his pre-accident job for duties he described as efficient as before.” The Applicant could “either resume his pre-accident (sic) with reduced efficiency such as with restricted duties, working slower and taking more frequent rest in-between work (if acceptable to his employer), or change his job to more sedentary type such as security guard, machine operator, cleaning worker, etc.” (see Trial Bundle page 111).

67. It is clear that the pre-accident work of the Applicant required a lot of walking, standing and climbing up or down. It was work that required physical exertion. The legs of the Applicant would be subjected to extra pressure when he worked. The Applicant’s activities on 10 and 11 September 2004 illustrated what his work might involve. After the sick leave period, the Applicant did try to resume work as an ironworker. He did it for 2 days at most before the employer said he was not suitable and told him to “rest”. It is not realistic to think that there will be employers  willing to employ the Applicant (as a construction site worker/ ironworker) on restricted duties as well as tolerate his working slower and taking more frequent rest in-between work. I think the reality is that the Applicant will have to seek alternative employment of a “more sedentary type such as security guard, machine operator, cleaning worker, etc.”

68. Mr. Ho referred to the Quarterly Report of Wage and Payroll Statistics for September 2004 issued by the Census and Statistics Department of the Hong Kong Government (Trial Bundle page 333.1 to 333.3). The average monthly salary for a male building attendant/guard was $7,245; for a guard (in security and detective services), it was $6,681 and that for a cleaner was $5,193. Mr. Ho adopted the higher figure of $7,245 to be what the Applicant could earn in alternative employment. I find this figure reasonable and accept it.

69. In view of matters stated in paragraphs 67 and 68 above, I think it apposite to follow the approach adopted in Hong Kong Paper Mills Ltd. v Chan Hin Wu (1981) HKLR 556 as modified by Lui Kwong Yan v Shu Hing Decoration Works and Another (1993) 1 HKLR 168. The percentage loss of earning capacity thus calculated is 58% (17,400 less 7,245 divided by 17,400 and then converted into a percentage figure).

70. It is clear that the injury to the Applicant is not an injury specified in the First Schedule of the Ordinance. The amount of compensation payable falls to be determined under Section 9(1)(b) of the Ordinance. Section 9(1)(b) is, however, subject to 2 provisos which read:

“(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 caused by such injury shall be assessed as a percentage having regard so far as possible to the scale of percentages as specified in that Schedule and to the Note thereto.”

71. Under the First Schedule, the percentage of loss of earning capacity for loss of a foot is 55% (Item 35) and the percentage for loss of all toes of one foot is 20% (Item 37). Despite the outcome of calculations using the Hong Kong Paper Mills – Lui Kwong Yan approach (see paragraph 69 above), I think the 58% figure cannot stand in the light of the provisos. Up to this point, I am inclined to think that a 10% figure will be appropriate. I need, however, to consider Section 9(1A) of the Ordinance. My view is that 10% will be “substantially less than the percentage of the loss of earning capacity permanently caused by the injury…in the special circumstances of” the Applicant. The special circumstances of the Applicant are that he has had rather limited formal education. He trained himself for construction site work (see Trial Bundle page 210 to 217) and had been pursuing such a career his whole working life up to the time of the accident. The injury suffered has forced the Applicant to retrain or readjust himself for work of a different nature, work that would yield remuneration at a much discounted level. I will increase the 10% figure to 30%. It follows that the Appeal is allowed (see paragraph 1 above).

72. The award I make for Section 9 Compensation is $375,840 ($17,400 x 72 x 30%; see also Section 7 of the Ordinance).

73. The 1^st Respondent did pay the Applicant $10,000 extra. The 2^nd Respondent did pay the Applicant $30,000 “living expenses” (the Cash Cheque). I find, however, that these were sums paid to buy off the Applicant. I do not think the Respondents should be given credit for these sums. 

Representation: