FENG JIANZHU v. HO SZE YEE

DCEC 2613/2018

[2019] HKDC 1687

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2613 OF 2018

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DECISION

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Introduction

1.  The applicant is a plasterer.  He claims that he met with an accident on 19 August 2017 when he was employed to carry out some plastering work in a residential flat in Kennedy Town (“the Flat”).  A piece of tile fell from the ceiling beam and stuck his left wrist, resulting in a laceration wound with tendon cut.

2.  On 13 November 2018, the applicant commenced the present employees’ compensation application, claiming that the respondent was his employer.

3.  Before me this morning is the joinder application taken out by the applicant by summons filed on 24 July 2019 to (a) join Mr Chan Wan Nin as the 2^nd respondent in these proceedings; and (b) to amend the application to claim that the applicant was “an employee employed by the 1^st and/or 2^nd Respondent”.

4.  Chan opposes the application.  The respondent takes a neutral stance. At the call-over hearing of the summons, the respondent was excused from attending today’s hearing.

Legal principles

5.  The summons was taken out within two years from the date of the alleged accident.  The proposed claim against Chan is therefore within time: section 14(1) of the Employees’ Compensation Ordinance, Cap 282.  Therefore, no limitation issue is engaged in the present application.

6.  The application is taken out pursuant to Order 15 rule 6(2) of the Rules of the District Court.

7.  The relevant question to ask is whether there is a bona fide claim and a proper question to be tried as between the applicant and Chan that is necessary or just and convenient for resolution between them as well as between the applicant and the respondent in the present proceedings: Pang Kwok Lam v Schneider Electric Asia Pacific LtdHCPI 90/2010, 5 January 2011 at para 73.

8.  Further, in Ng Chiu Wing v Yip Hoi Ching CACV 362/2008, 29 June 2009, an appeal on a joinder application in an employees’ compensation case, the Court of Appeal said this:-

“As has been pointed out by the editors of Hong Kong Civil Procedure 2009, Vol 1, para 15/6/6, prima facie, a plaintiff is entitled to choose the person against whom to proceed. It is for the plaintiff to decide whom he wishes to sue. He may or may not be successful in his claim. The fact that the court allows a plaintiff to join a person as an additional defendant does not mean that the court takes the view that the plaintiff is bound to succeed against that additional defendant. That is a matter for trial. At the joinder stage, unless the court takes the view that the intended claim against the person sought to be joined is bound to fail or unless there are other special circumstances, the court should normally allow the plaintiff to choose his defendant.” (para 15) (emphasis added)

9.  As presently pleaded, the applicant claims that the respondent was his employer when the alleged accident happened.  He now wishes to add two alternative claims, namely:-

(a)     Chan was his employer, not the respondent;

(b)     Both Chan and the respondent were his employers.

10.  Clearly, in the context of employees’ compensation, it is just and convenient for these alternative claims as between the applicant and Chan to be tried together with the applicant’s claim against the respondent.  Ultimately, the question is – who was the applicant’s employer (if any)?  The test in Pang Kwok Lam is therefore satisfied.

11.  The next question is whether, as contended by Chan, at this joinder stage, the court can come to the conclusion that the applicant’s claim against him is bound to fail.  If so, the court ought not to allow the joinder application.  Furthermore, are there any special circumstances in light of which the court ought to refuse the application as a matter of discretion?

The applicant’s purported claim against Chan

12.  The applicant’s case is as follows.

13.  He came to know the respondent in about 2015 when they worked together at a site.  He also did some casual work for him in 2017.  When the applicant worked for the respondent, the respondent would pay the applicant a daily wage in cash and the respondent would provide all the necessary tools and equipment.  The applicant would not be too concerned whether the respondent was his employer or not.  He would just go and work when asked (“每次他叫我開工，我便開工”).

14.  On 10 August 2017, while the applicant was working with the respondent on a site in MacDonnell Road, the respondent asked the applicant to do some plastering work in the Flat on the following day at a daily wage of $1,500.

15.  On the following day, ie 11 August 2017, the two of them finished work at the MacDonnell Road site.  After that, they moved all the tools and equipment to the Flat.

16.  The applicant worked at the Flat for a few days.  While he was there, he once saw a Cheung Wang Yip and his mother.  He did not know who they were at that time.  Subsequently, he found out that Cheung was the owner of the Flat. Chan also visited the Flat when the applicant worked there.  The respondent would speak to Chan.  Chan never gave any work instruction to the applicant. All instructions were given to him by the respondent.

17.  Subsequently, the applicant learnt from the respondent that it was Chan who had asked the respondent to do the plastering work at the Flat.  Chan was also working in the renovation industry and Chan is Cheung’s uncle.

18.  On the day of the accident, Chan was at the Flat for a while.  But he had left before the accident happened.  Initially, the applicant thought that his injury was not serious and did not seek medical treatment immediately. Later, the applicant, the respondent and Chan had lunch together.  When Chan learnt of the accident, he asked if the applicant needed any medication.  Eventually, since the pain became more serious, the applicant finished work early that day and went to the A&E Department of Kwong Wah Hospital where his injured wrist was treated. 

19.  The applicant was granted sick leave.  He contacted the respondent regarding his sick leave.  In late August, the respondent paid him a sum of $11,000 as wages.

20.  Then on 10 September 2017, at the respondent’s request, the applicant went to meet with Cheung, Chan, the respondent and the boss of the MacDonnell Road project.  At the meeting, it was proposed that a sum of $128,000 be paid to the applicant in full and final settlement of his claim in respect of the accident.  A draft settlement agreement was given to the applicant.  In it, the applicant was stated to be self-employed.  The applicant later decided not to sign it because of that.

21.  The applicant’s solicitors then started to make enquiries trying to ascertain who the applicant’s employer was.  Based on the investigation and the information provided by Cheung, the applicant came to the view that the respondent was his employer (Cheung had alleged that he purchased the respondent’s service to carry out plastering work at the Flat.)  Hence the applicant commenced the present proceedings against the respondent. 

22.  What have prompted the applicant to make the alternative claims against Chan now are the allegations made by the respondent in his answer and witness statement filed pursuant to the standard directions given by the court.

23.  In his answer, the respondent denies that he was the applicant’s employer.  He says that all construction materials used were not provided by him.  He further says that Chan was the person who gave work instructions and supervised the work.  He and the applicant would approach Chan for instructions if they came across any problems.

24.  In his witness statement, the respondent gives a more detailed account:-

(a) He was 65 years old and was “half-retired”.  He did not actively find jobs but, if someone was in urgent need of workers, he would help work for a few days on a casual basis and receive a daily wage of around $1,500.

(b) The respondent came to know Chan a few years ago when they worked for the same boss.  Chan also did plaster-related work.  In August 2017, Chan told the respondent that his nephew’s property, ie the Flat, was under renovation and asked the respondent to help.  The respondent agreed and told Chan that he would work on a day job basis.

(c) On 9 August 2017, Chan and the respondent went to the Flat for inspection.  Chan explained to him in detail the works to be done and the requirements at various locations of the Flat.  In particular, Chan requested the respondent to install large pieces of marble on the windowsills.  The respondent told Chan that the marble would be too big for him to handle alone. Chan then asked the respondent whether he could introduce someone to help.  The respondent agreed to ask around.  The respondent later introduced the applicant to work at the Flat.

(d) On 11 August 2017, the respondent and the applicant arrived at the Flat in the afternoon.  All the renovation materials were already there.

(e) On 12 August 2017, Chan went to the Flat to explain to the respondent and the applicant the work requirements and gave them work instructions.  The respondent believed that Chan would take out employees’ compensation insurance.

(f) On 14 or 15 August 2017, Chan and Cheung went to the Flat to monitor the work and the progress.

(g) In the morning of 19 August 2017, Chan asked the respondent to buy some tools.  After buying the tools, the respondent gave the receipt to Chan (for about $140) and Chan reimbursed him in cash.  Chan also delivered some renovation materials to the Flat in the afternoon.

25.  Based on the above revelations made by the respondent, Mr Damian Wong, counsel for the applicant, submitted that the respondent was more likely working as an employee of Chan than acting as a contractor undertaking the renovation work at the Flat.  The allegation that the respondent was paid a daily wage as opposed to a lump sum, he contended, is telling in this regard. Against that background (and based on the respondent’s account), Mr Wong further submitted that it is inherently improbable that the respondent, acting as an employee, would employ the applicant at his own costs.  It is more likely that the respondent simply introduced the applicant to work for Chan. There is therefore ground for saying that Chan was the employer of the applicant, based on the respondent’s version of events.

26.  In his affirmation, the applicant said that he had worked as a plasterer for over 10 years.  All along, he worked on a casual basis, whether for the respondent or some other contractors.  When he worked for the respondent, he would not care too much if the respondent was his boss and his capacity.  He just went to work when asked, and would be paid for his work in cash.  The applicant made it clear in his affirmation that he has no knowledge as to (a) the relationship between the respondent and Chan, (b) whether there was any agreement between them, or (c) what arrangement they had made for the work at the Flat.  As such, he has no means to know whether Chan was merely a purchaser of service, a principal contractor or indeed his employer.

Grounds of opposition

27.  Chan opposes the joinder application on two grounds.  First, the applicant’s intended claim against Chan is bound to fail on the basis of the evidence presently before the court.  Second, Chan would suffer prejudice if he is joined as a party.  Hence the court should decline to exercise its discretion in favour of a joinder.

28.  In his opposing affirmation, Chan has put forward a different version of events from the respondent’s.  The main area of difference is that Chan’s only involvement in the renovation was his introduction of the respondent to Cheung.  Cheung is his nephew.  In August 2017, Cheung asked Chan to introduce someone to do some plastering work at the Flat.  On 10 August 2017, Cheung met the respondent through Chan’s introduction.  Cheung explained to the respondent his requirements.  In the process, Chan did not participate in the discussion. Nor did he give any opinion.  Cheung was purchasing plastering service from the respondent.  The respondent and Cheung exchanged telephone numbers so that they could communicate with each other directly.  Chan said that he did not in the end know how much Cheung paid to the respondent for the work done.  Nor did he know of the work arrangements agreed between the two of them.

29.  Chan’s position is that in the entire process, he was only a family of Cheung and he had no interest in the renovation.  He did not know the applicant and had no means to contact the applicant.  There was no employment relationship between him and the applicant.

30.  Further, Chan disputes the factual allegations made by the respondent. As regards the respondent’s allegation that Chan gave him and the applicant instructions and supervised the works.  Chan criticises that as a baseless assertion and a distortion of facts (“這些指稱更加是無中生有，歪曲事實，毫無事實根據”).  Chan says that the respondent’s allegation is only his own bare assertion and is an attempt to shift his responsibility as employer to him. 

31.  Mr Jeffery Lee, counsel for Chan, submitted that Chan’s version of events is indisputably and fully supported by contemporaneous evidence.  And based on that factual account, it is, Mr Lee submitted, overwhelmingly clear and compelling that Chan was not the applicant’s employer, applying the approach in Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156.  Hence the applicant’s intended claim against Chan is bound to fail and must be disallowed.

32.  Secondly, and as a separate point, Chan would suffer prejudice if he is joined as a party.  Mr Lee argued that if the applicant fails in his claim against Chan after trial but succeeds against the respondent, there is “a huge likelihood that the applicant who is on legal aid will apply to the Court for a Sanderson order requesting the unsuccessful respondent to pay for Mr Chan’s costs of the entire proceedings”.  Given that the respondent had not taken out any employees’ compensation insurance and his financial status is questionable, there is “a real and serious likelihood that the respondent will become insolvent after having to pay for the applicant’s employees’ compensation as well as the applicant’s costs of the entire proceedings”.  In that case, Chan will not be able to recover all or any of his costs from the respondent.  Given this likely prejudice to Chan, Mr Lee invited the court not to accede to the joinder application as a matter of discretion.

Discussion

33.  The critical question before me is whether the applicant’s claim that Chan was his employer, whether solely or jointly with the respondent, at the time of the alleged accident is bound to fail.

34.  The starting point of any discussion on whether there was an employment relationship must be the guidance laid down by the Court of Final Appeal in Poon Chau Nam.

35.  It is recognised that in some cases the answer to the question whether an employer-employee relationship exists is elusive.  The relationship may bear features suggestive of employment, as well as features indicating some other type of relationship: paras 9 to 10.  The proper approach is to examine all the features of their relationship against the background of a range of well-recognised indicia 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.  The indicia include, among other things, the degree of control exercised by the alleged employer, any sharing of profit or risk of loss, the provision of equipment, the parties’ own views of their relationship.  The exercise involves a nuanced and not a mechanical approach: paras 18 to 20.

36.  In the present case, when conducting this exercise, the court needs to examine whether and which of the well-recognised indicia are present.  Needless to say, this turns on the facts. 

37.  The applicant has made it clear that he does not know whether Chan was indeed his employer for employees’ compensation purpose.  This is not surprising.  In the construction industry, many workers work on a casual basis and agreements are often made orally.  These often make the task of determining the employment issue less than straightforward.

38.  However, notwithstanding that, I am satisfied that the factual allegations made in the respondent’s answer and witness statement, if proved, do disclose at least a prima facie factual case which arguably points to an employment relationship between the applicant and Chan.  Mr Wong highlighted the respondent’s allegation that he himself was paid on a daily wage basis, as opposed to a lump sum basis.  The respondent also alleges that his works were supervised by Chan and Chan gave him detailed instructions.  All these point to an employment relationship between the respondent and Chan.  Given that it is the respondent’s case that Chan asked him to introduce someone to help with the installation of some big marble pieces, I agree with Mr Wong that it is at least arguable that the applicant was employed by Chan, the respondent being merely an introducer.

39.  Mr Lee’s main contention is that on the affirmation evidence before the court, the respondent’s factual allegations simply cannot stand.

40.  I am unable to accept Mr Lee’s submission.  I have outlined the respondent and Chan’s respective factual allegations above.  On the issue of instructions and control over the works, the respondent and Chan’s positions stand in stark contrast with each other.  It is effectively the respondent’s words against Chan’s words.  These factual disputes simply cannot be resolved at this interlocutory stage merely on the strength of the affirmation evidence.  This goes to the credibility of the individuals, which will have to be assessed by the court after hearing live evidence from them.

41.  In his submissions, Mr Lee undertook a detailed and minute analysis of the parties’ cases.  Because of the nature of the factual disputes, I do not consider that it is possible for me to come to any definitive factual finding, applying the standard of balance of probabilities, on the disputed issues.  It must be borne in mind that this is not an occasion to assess the relative strengths and weaknesses of the parties’ cases.  The question before me is whether I can say at this stage that the respondent’s factual allegations are bound to fail. This is a very high threshold and I am not satisfied that it has been met.

42.  I do not therefore think that it would be proper for me to discuss in detail the merits of the parties’ cases, save perhaps on the following matters.

43.  In the course of his submissions, Mr Lee made a number of criticisms of the respondent’s allegations. 

44.  For instance, he pointed out that on the issue of Chan’s supervision, the respondent’s case is in fact not aligned with the applicant’s.  The former says that both he and the applicant would approach Chan for instructions if there was any problem whereas the applicant says that all instructions were given by the respondent.  Mr Wong accepted that this may undermine the respondent’s reliability but that is not sufficient in itself to tilt the balance such that the court should disbelieve him altogether.  I accept Mr Wong’s submission.  The credibility of the parties is an issue for trial in the present case. 

45.  Mr Lee also relied on some WhatsApp messages exchanged between the respondent and Chan over the final payment apparently after the renovation was completed.  The messages read as follows:-

“[From the respondent to Chan]

2017年8月11日至2017年8月24日何师父 [ie the respondent] 十点五工（每工1500元）共15750元（恒生戶口…）。柱师父[ie the applicant]七点五工（每工1500元）共11250元（中銀戶口…）

[From Chan to the respondent]

阿何，你21號話我聽工程費$31000。等我話比阿業[ie Cheung]知，24號你又同我講工程費係19工加架撐費總數$31000。而家你又whatsapp呢個工數比我，到底你工程費加架撐費係幾多錢呀，你有阿業電話，你打電話問阿業攞工程費就得喇。

[From the respondent to Chan]

阿年，24號講19工是正確的

因為還有一工未做所以現在兩人共18工 (每工1500元) 共27000元 請把18工工資入戶口吧。＂(underline added)

46.  Mr Lee pointed to Chan’s request that the respondent should contact Cheung directly for the payment.  This goes, he argued, to support Chan’s case that he played no part in the renovation save for introducing the respondent to Cheung.

47.  However, solely on the face of the messages, it may also be suggested that even at a late stage, the respondent was still in contact with Chan, trying to discuss the payment.  This goes to support that the respondent’s contention that he would approach Chan concerning the project. 

48.  It is not for me to decide now whose evidence I should prefer, as I am simply not able to do so at this stage.  The documents, such as the WhatsApp messages, are equivocal.  The circumstances in which they were sent are unknown.  The weight that should be given to these documents must only be determined after trial.

49.  Mr Lee also set much store by the applicant’s own admission that he was paid his wages by the respondent and that the tools and equipment were provided by the respondent.  These facts, on their own, would go to point to an employment relationship between the applicant and the respondent.  However, Poon Chau Nam has made it clear that the court must form an overall impression from a survey of all the applicable indicia.  The exercise involves a nuanced approach, not a mechanical one.  Payment of wages by the respondent and the provision of tools by him will be some of the factors.  They may well turn out to be significant factors.  But at this stage, where other relevant facts are not yet known, the court is simply not in a position to undertake the exercise on an overall basis.

50.  To conclude, given the respondent’s denial that he was the employer and the allegations made by him, there is at least an arguable factual case to support the conclusion that Chan was the applicant’s employer on the day of the alleged accident.  At this interlocutory stage, on the materials before me, it cannot be said that the applicant’s intended claim against Chan is bound to fail.

51.  I now turn to the prejudice point.

52.  Even assuming that Chan will suffer the prejudice as submitted by Mr Lee, this does not amount to a good reason to refuse the joinder.  The short point here is that the prejudice would only arise if Chan is found not to be the employer.  I have ruled that there is an arguable case to the contrary.  If I do not allow the joinder in order to avert the prejudice which Chan may suffer, one must ask – what about the prejudice that the applicant will suffer if he is now shut out from pursuing an arguable case against Chan?

53.  On the whole, the prejudice relied on by Mr Lee does not amount to a special circumstance which would weigh in the exercise of my discretion.

Conclusion

54.  In summary, the applicant’s intended claim against Chan is arguable. There is no reason why the court should not join Chan as a party so that the claim can be tried. 

55.  I order that Chan be joined as the 2^nd respondent in these proceedings, the respondent be re-named as the 1^st respondent.  I grant leave to the applicant to amend the application as per the draft annexed to his summons.  I further make the following consequential directions:-

(a) The applicant do file and serve the amended application within 3 days from today;

(b) Within 28 days thereafter, the 1^st respondent do file and serve an amended answer, if any, and the 2^nd respondent do file and serve his answer;

(c) The directions hearing fixed for 3 January 2020 be vacated and adjourned to 27 March 2020 at 10:30 am at Court No 26.  The applicant do inform the 1^st respondent of the adjournment.

56.  I also order that the costs of the joinder application incurred up to and including the review of the applicant’s reply affirmation be in the cause. The applicant do have costs incurred subsequent to that, with certificate for counsel.  The applicant’s own costs be taxed in accordance with the Legal Aid Regulations.