HUANG HANHUA v. LAM CHE KUEN

DCEC 1684/2016

[2022] HKDC 53

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1684 OF 2016

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DECISION

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1.  The Respondent has taken 3 Summons which were heard before the court. Two were dated 4 September 2020 which were for setting aside a judgment entered 2 July 2019 and an interlocutory judgment entered 22 June 2019 with an interim stay of execution of both judgments (the “Two Set-aside Summons”).

2.  The third summons, dated 21 October 2021, was a late application to file an affirmation of Lai Hon Wa which the court had dismissed during the hearing with reasons and orders given.

3.  This is the decision for the Two Set-aside Summons.

Background

4.  This is an Employees’ Compensation claim arising out of an accident dated 15 August 2014. The Applicant fell off a ladder and suffered a dislocated left elbow. He claimed to be employed by the Respondent as a carpenter to work in a construction project at Tsiu Keng Tsuen in Sheung Shui, New Territories (“the Sheung Shui Project”) when the accident happened.

5.  The Applicant commenced these proceedings on 5 August 2016. Interlocutory Judgment on liability was entered on 22 February 2019 and Final Judgment was entered on 16 July 2019 after assessment of quantum.

6.  The Respondent never took part in any of the proceedings and only take out the current Summons after receiving a demand letter for payment of judgment sum and costs from the Applicant’s solicitors in December 2019.

The Respondent’s grounds

7.  The Respondent applied to set aside the judgments out of time on 2 grounds, namely, that

a.  he was not aware of this action until mid-December 2019 (paragraph 14, Affirmation of Lam Che Kuen (“R’s 1^st”), Hearing Bundle page 124); and

b.  he was not the employer of the Applicant and was not involved with the Sheung Shui Project at all.

The Respondent’s knowledge

8.  The Respondent claims that he has no knowledge of the accident. Although he was a sub-contractor and had employed the Applicant in a separate project in Yuen Long between April and early August 2014 (“the Yuen Long Project”), he was not involved in the Sheung Shui Project.

9.  The Respondent also claimed to have no knowledge of the proceedings. According to the Order made by HHJ Levy on 14 August 2018 (Hearing Bundle page 45-47), the documents were served to:

a.  No. 6 Yuen Kong Tsuen, Kam Sheung Road, Pat Heung, Yuen Long, New Territories (“the Pat Heung Address”) for delivery by Leung Kam Yee (“Leung”) by ordinary and registered post; and

b.  G/F, No. 1 Sai Tau Wai, Yuen Long (“the STW Address”) by ordinary posts and insertion through letter box.

10.  The Respondent claims that he does not know anything about Leung nor the STW Address and has failed to receive any such documents, thus the judgments are irregular.

11.  The Applicant’s evidence was that he has all along been the employee of the Respondent and the Respondent was aware of the accident because he overheard a telephone conversation between the Respondent and a colleague after the accident. More importantly, there was a meeting with the Respondent in a fast food restaurant in Yuen Long in early to mid-September 2014 when the Respondent paid him the salary owed on the Sheung Shui Project as well as HK$10,000 cash as medical expenses (paragraph 19 of the 5^th Affirmation of Huang Hanhua (A’s 5^th”), Hearing Bundle page149).

12.  The Respondent did not dispute this meeting (and agreed that the date of the meeting was mid-August to September 2014) but claimed that he was only giving the salary to the Applicant for the Yuen Long Project (and not for the Sheung Shui Project) and denied being aware that the Applicant was injured at work or that he paid HK$10,000 as medical expenses.

13.  On balance, I accept the Applicant’s version of the events.

14.  Firstly, both parties agreed that the Yuen Long Project only involved installing doors in two village houses. I agree with the Applicant that it could not have taken 4 months to complete the work: the Applicant’s evidence was that he could install two doors in one day and every village house would have 12-13 doors (paragraph 15 of A’s 5^th, page 148) and he also has exhibited his calendar to show that he worked on and completed Yuen Long Project on various days between 1^st and 27^th of April 2014. To these, the Respondent’s reply is no more than a bare denial, claiming that the Applicant was a sub-contractor in the Yuen Long Project that therefore had a very large degree of freedom for worktime and progress (paragraph 23 of the 2^nd Affirmation of Lam Che Kuen (“R’s 2^nd”), Hearing bundle page 167).

15.  I cannot see how being a sub-contractor means one can work on a project whenever he likes without any time pressure to complete. This simply does not make any sense.

16.  Secondly (and more importantly), the undisputed meeting took place only a few weeks after the accident. Even if, as the Respondent suggested (paragraphs 12 and 13 of the R’s 1^st, page 123-124 of the Hearing Bundle), that the Applicant “has make a mistake” in naming the Respondent as the employer (when, in fact, he was employed by Fully Investment Development Limited (“Fully”) or another of Fully’s subcontractor), the Applicant would likely still have mentioned his accident and attempted to discuss compensation with the Respondent during this meeting. And then of course, the Respondent would have been aware of the accident and the claim for compensation, and would have immediately told the Applicant there and then that he got the wrong employer and it should have been Fully.

17.  Further, the Applicant suffered a dislocated left elbow which would not be completely cured in a few weeks and it is highly unlikely the Respondent failed to notice it at all even if, as the Respondent alleged, the meeting was for payment for the Yuen Long Project.

18.  In fact, if the Respondent’s version of events (that is, the meeting was only for payment of the Yuen Long Project and the Applicant did not mention the accident) is correct about this meeting, the only explanation for this scenario is a conspiracy: that the Applicant was aware that his employer was not the Respondent and he deliberately withhold telling him about the accident in order to “frame” him for employees’ compensation in the future. For this conspiracy to work, the Applicant clearly has predicted correctly at that stage that the Respondent would, in the future, ignore the telephone call and WhatsApp messages from the Applicant’s lawyers to seek the Respondent’s service address. The Applicant has also planned for the next step: to conspire to create the “back stories” of two false addresses for service in various affirmations under oath and put up the pretence to apply for various Court orders for service, all along knowing full well that the documents served to these addresses would never reach the Respondent.

19.  Of course, this scenario flies in the face of common sense.

20.  On balance, I think it is likely, as the Applicant alleged, that the Respondent deliberately exaggerated the duration of the Yuen Long Project, otherwise it would appear very odd that he was only paying the Applicant for a project some 4 or 5 months after its completion. I accept that this meeting was in fact for the payment of money owed for the Sheung Shui Project and medical expenses for the accident as the Applicant alleged.

21.  As for how the two service addresses came about, the Applicant claimed that, after that meeting, the Applicant had tried to contact the Respondent without success. He tried calling and even attended the STW Address (which he believed to be the Respondent’s temporary office) several times but failed to find the Respondent. So he believed that the Respondent was evading him after knowing that he was contemplating seeking employees’ compensation (paragraph 19 of A’s 5^th, Hearing Bundle page 149).

22.  The Respondent’s evasive behaviour was also demonstrated when the Applicant’s solicitors tried to contact the Respondent to seek his service address.

23.  After the commencement of these proceedings, the Applicant’s solicitors successfully got through to the Respondent on his phone (around September 2018). During the telephone conversation, the Respondent confirmed his identity and the Applicant’s solicitors informed him about the proceedings. The Respondent denied that he knew the Applicant nor that he was the employer of the Applicant (Affirmation of Ng Sin Hang, page 108-109 of the Hearing Bundle). As a follow-up, on 7 September 2018 the Applicant’s solicitors sent a WhatsApp message to the same telephone number giving the full names of the Applicant and the solicitors’ firm, the District Court case number of the EC claim etc., and sought the Respondent’s mail address for service of legal documents. In fact, the same message was sent twice and were received and read. (Hearing Bundle page 384-387).

24.  The Respondent admitted that he had received the telephone conversation and agreed that, during the conversation, he had denied knowing the Applicant. He claimed that he did not know the Applicant’s full name. He also admitted that he received the WhatsApp message but “decided to ignore the message because” he “only contracted out work rather than employ workers” and also he did not recognise the full name of the Applicant. He also thought it “strange” that if he had hired a person for a project, that person should know where to find him so this message must have been from a fraudster, so he blocked the number (paragraphs 20 and 21 of R’s 1^st, page 125-126 of the Hearing Bundle).

25.  The Respondent’s explanation does not make sense. He at once claimed that he had the perfect defence for any EC claim (that he did not employ anyone) but chose to ignore messages which informed him of an EC claim against him. It would not be difficult for the Respondent to verify the message with the solicitors’ firm and the EC claim with the court, but yet he chose to ignore the messages.

26.  As such, the Applicant provided the STW Address to his solicitors because this was the address where the Applicant had met the Respondent on many occasions and also the usual assembly point to collect tools (which were stored on site) before commencing work. As such, the Applicant believed that this was the temporary office of the Respondent (paragraph 26 of A’s 5^th Hearing Bundle page 151-152).

27.  As for the Pat Heung address, the Applicant explained that the Respondent had drove him and other workers to various construction site in the same motor vehicle “more than 10 times” and, with repeated instructions from the Respondent, the Applicant was able to memorise the registration number of the motor vehicle. The Applicant’s solicitors did a motor vehicle registration search and found that owner was Leung and the registered address was the Pat Heung Address. Thus the Order was sought for the service of documents to this address for delivery by Leung (paragraph 38 of A’s 5^th, Hearing Bundle page 154-155).

28.  Regarding these allegations, the Respondent offered little more than a bare denial.  He denied that STW Address was his office (but was the address of Fully, as shown in the various Annual Returns he exhibited) and he never drove the Applicant to any location of work and that he never provided or kept any tools. When compared to the evidence given by the Applicant, the Respondent’s evidence is lacking in details or documentary support as to his alleged work system, projects and payment systems.

29.  The Respondent also raised some minor arguments like the inconsistency in the Applicant’s evidence as to whether he knew the Respondent has the habit of reading newspapers, or that the Respondent has other companies and questions why the Applicant’s solicitors only managed to locate his home address in 2019. The Applicant explanation is that he was not aware of the names of the Respondent’s companies. Further, these are unlimited companies which meant that routine company search would not reveal such information. It was only when the Applicant applied for payment from the Employees’ Compensation Assistance Fund Board after the final judgment that the Applicant managed to locate the Respondent’s address on further search.

30.  Further, the Respondent claims that the Applicant could “try his best” to call him directly on his phone to ask for his correspondence address (paragraph 30 of R’s 1^st, Hearing Bundle page 127).

31.  These are nothing but desperate attempts by the Respondent to claim now that he has not actually been evasive at all.

32.  Such claims clearly fly in the face of common sense: if the Applicant could contact the Respondent so easily, it would be hard to see why both the Applicant and his solicitors went to such trouble to seek the service addresses and made such applications to court.

33.  Indeed, if the Applicant could simply pick up his phone and talk to the Respondent, it would be impossible for the Respondent not to know about the accident until December 2019 as he now claimed. That would have been the first thing the Applicant told him. Further, as discussed above, if the Respondent really had a perfect defence (that is, (a) the real employer was Fully and (b) he never employed anyone), he would have immediately informed the Applicant. One would also logically expect that the Respondent would be on high alert for any contacts from solicitors regarding EC claims (and would be all ready to defend such claims) instead of ignoring it without the simplest attempt to verify the messages.

34.  The only explanation for the Respondent’s (claimed) lack of knowledge of the accident was the conspiracy theory as stated above: that the Applicant somehow predicted his non-action and deliberately “framed” him knowing full well that he was not the employer. This is clearly nonsense.

35.  On balance, I find that the Respondent was indeed connected with the STW Address and Pat Heung Address as alleged by the Applicant, and his claim of not receiving any documents so served was caused by his own deliberate attempt to evade service.

36.  I also note that Section 14 of Employees’ Compensation (Rules of Court) Rule, Cap 282B stated that:

“Where any respondent to any application either does not come within the provisions made in the preceding rule, or cannot be served in any of the manners provide in that rule, the court may, upon application ex parte supported by an affidavit stating the circumstances, direct in what manner service shall be effected upon him, including service by newspaper advertisement; and service in accordance with such directions shall be valid and effectual.”

37.  Given the above and the facts that I find on the case, I am of the view that there is no issue of irregularity in both judgments. I find that the Respondent all along has knowledge of the accident and he has been evading contact and service ever since the meeting with the Applicant when he became aware of the Applicant’s intention to claim for employees’ compensation.

Real prospect of success

38.  The legal principles of setting aside a default judgment under Order 13 rule 19 and setting aside a judgment under Order 35 rule 2 are trite and need not be repeated in details here.

39.  In short, the court has discretionary power to set aside a regular judgment but the defendant has to satisfied the court that he has “a real prospect of success”.

40.  Given that the Respondent’s crucial claim that he was not involved in the Sheung Shui Project and that the meeting with the Applicant was only for payment for the Yuen Long Project which had gone on from April to August 2014, he has failed to provide any details of the Yuen Long Project including any documents or records showing the dates and duration that the Applicant had worked on this project, how much the payment was and when this payment was made. He has also failed to provide any documents to show how he was too busy at the time to take up the Sheung Shiu Project as alleged.

41.  The Respondent also claimed that he “contracted out all building works” and never had an office premises, never drove the Applicant and never provided any tools or construction materials, but there was a complete lack of details as to how his “sole subcontracting” work system operated under such circumstances: e.g. how he obtained jobs, assigned jobs, arranged for workers to attend, got paid and pay out to the workers, if at all. 

42.  Further, the Respondent claimed that Fully was the principal contractor for the Sheung Shiu Project and a certain “Siu Wah” working there was his acquaintance. Given my findings that the Respondent was aware of the accident all along, one would expect that the Respondent would be able to adduce some documents or evidence showing Fully was such and perhaps even provide the identity of the subcontractor from “Siu Wah”.

43.  In conclusion, I am of the view that the defence is nothing more than bare assertions lacking in details and evidence in support. I do not see any real prospect of success.

Other considerations

44.  In considering my decision, I also note the delay in the Respondent’s application of some 14 months after the judgment and 9 months after being aware of it (as claimed). I also consider the prejudice that would cause the Applicant given that this accident happened more than 7 years ago and he has yet to receive any compensation.

Order

45.  As such, I would dismiss the two Set-aside Summons with costs be awarded to the Applicant with certificate for counsel. The Applicant’s own costs be taxed in accordance with the Legal Aid Regulations.